Reexamination pendency is a perennial hot topic for a number of reasons.  First, for reexamination to be an effective post-grant venue for challenging patent validity, it must be concluded in a timely and efficient manner—i.e., with the “special dispatch” required by statute.  To avoid prejudice, however, the PTO must nonetheless act in a deliberate and fair manner by giving the patent owner a full opportunity to defend the patentability of its claims.  Second, reexamination pendency is an important factor weighed by the courts when deciding whether to stay concurrent litigation.  Third, predictable reexamination timetables are enormously helpful to both third-party requesters and patent owners when they work reexamination strategies into dynamic district court litigation and ITC investigation timetables.  In short, uncertainty in pendency of a reexamination proceeding diminishes the fairness and effectiveness of reexamination and litigation for all involved parties.

Statutory Mandate of Special Dispatch

By statutory mandate, all reexaminations are to be handled with “special dispatch” [35 U.S.C. §§ 305 and 314].  Nonetheless, the CRU does prioritize pending reexaminations.  For instance, higher priority is afforded to reexaminations of patents involved in litigation.  Even higher priority is afforded when trial proceedings have been stayed pending the outcome of reexamination.  Further, if there is a concurrent litigation and the reexamination proceeding has been pending for more than one year, the PTO may further expedite a reexamination proceeding by setting a one-month or thirty day period for responses to Office Actions [MPEP §§ 2263 and 2663(L)].  Litigation notwithstanding, the highest priority is assigned reexaminations that have been pending for two or more years.

The rules require patent owners to notify the PTO of prior or concurrent proceedings and the CRU has dedicated paralegals that search litigation databases for case status periodically during the pendency of the reexamination proceeding [37 C.F.R. §§ 1.565 and 1.985].  The CRU thus assigns priority based on its own statistics and research, and based on patent owner notifications.  However, it is still critical for the parties to keep the PTO informed of the existence and status of related co-pending district court or ITC proceedings.  Pendency at the CRU has been the subject of much previous analysis and discussion.  Overall, the CRU has established an internal goal to issue a final office action or an Action Closing Prosecution within two years of the filing date of a request for reexamination.

Board of Patent Appeals and Interferences (BPAI)

The issue currently gaining the most attention with respect to reexamination pendency is the rapidly growing backlog at the Board of Patent Appeals and Interferences (“BPAI” or “Board”), which takes appeals from the CRU in much the same way it does for regular prosecution.  The recently released numbers for May 2009 are sobering.  For all appealed cases (including those from the CRU), there were 9,809 pending appeals at the beginning of May 2009 [See http://www.uspto.gov/web/offices/dcom/bpai/docs/receipts/fy2009.htm].  By the end of May 2009 that number had grown to 10,927 with over 1600 new appeals filed.  Over that same time period, the Board disposed of only 523 cases.  Assuming the Board can dispose of about 520 appeals a month, it would take the Board 22 months just to work through its pending cases, assuming no further requests are filed.

But if the activity in May is any indication of the future, the Board is facing a nearly insurmountable hurdle.  Other commentators have noted a nearly exponential increase since mid-2005 [See Dennis Crouch’s chart on the Patently O' blog at: http://www.patentlyo.com/patent/2009/06/timeline-of-the-bpai-backlog.html].  One possible reason for the increase may be additional appeals due to increased obviousness rejections in view of the KSR decision.  Looking to the future, if the proposed PTO rules limiting continuations and requests for continued examinations are allowed to go into effect, appeals to the BPAI will likely increase far beyond the current numbers.  If enacted, proposed legislation including additional post-grant patent review options will further exacerbate the BPAI backlog.

From the most recent statistics, it appears that the BPAI bottleneck is growing with little relief in sight.  It is unclear, however, how or whether the statutory mandate for “special dispatch” will factor into the BPAI’s prioritization of cases.  Will reexaminations be shunted to the head of the line over cases from regular prosecution?  Will the Board establish a separate team of ALJs to expeditiously handle cases from the CRU?  These issues are coming to a head and it’s hopeful that the new PTO leadership will address these serious issues.

Requirements, Realistic Timetables, Statistics

A realistic timetable for an reexamination is a crucial data point for third-party requesters, patent owners and judges as they navigate the parallel universe.  For these reasons, we provide below some insight into external and internal PTO and CRU procedures, as well as the latest information regarding reexamination pendency.  Upon filing, reexamination requests first undergo review by the CRU staff to ensure compliance with the rules.  For instance, the staff will ensure that each reference cited by requester is used to support at least one SNQ.  Further, the staff recently began ensuring that the requester properly and affirmatively demonstrated that each SNQ is non-cumulative of the art previously considered during original prosecution or previous reexaminations.  If the reexamination request passes muster under the CRU staff, a notice of the request is made public in the Official Gazette.

When a request is deemed to satisfy all the requirements of the ex parte or inter partes rules, the filing date becomes the reexamination filing date [35 U.S.C §§ 510 (ex parte reexaminations) and 919 (inter partes reexaminations)].  Just because the notice of request is published in the Official Gazette does not necessarily mean that the reexamination request was satisfactory.  Roughly 10% of requests are later vacated by the examining panel for informalities.  While this number has fallen from roughly 15% in previous years, it’s noted a recent uptick in denial rates based on the requester’s failure to adequately prove that the proposed SNQ is not cumulative to the art considered during original prosecution.

Once a satisfactory request has been made, the CRU has a three month deadline to issue a decision on the request based on whether a substantial new question of patentability (“SNQ”) has been raised in the request.  For ex parte requests, the grant starts a two month window in which the patent owner may respond to the request.  In that response, the patent owner may amend claims or argue that the claims under reexamination are patentable.  If the patent owner elects to file a statement, then the third party requester may reply. This the only opportunity a third party requester gets to participate in an ex parte reexamination proceeding.  Most reexamination practitioners advise against filing a patent owner’s response for this reason.  For inter partes requests, CRU procedures suggest that a first office action on the merits accompany the grant, but that is not required.  Overall, the CRU has established an internal goal to issue a final office action or an Action Closing Prosecution (“ACP”) within two years of the filing date of a request for reexamination.

Once prosecution closes, an appeal to the BPAI is available to the patent owner in ex parte reexamination and to both the patent owner and the third party requester in inter partes reexamination.  After hearing an appeal, the BPAI has a stated goal of then rendering a reexamination decision in six months.  The apparent BPAI bottleneck notwithstanding, as yet there are no reliable statistics on the pendency of reexaminations appealed to the BPAI.

High Level Scrutiny by Judiciary and Legislature

In an April 2008 briefing on inter partes reexaminations, the Institute for Progress estimated the average pendency for an un-appealed inter partes reexamination as more than 3.5 years, and the expected pendency for appealed inter partes reexamination as at least 6.5 years.  Chief Judge Paul R. Michel commented on the ability of the PTO to handle post-grant proceedings in an Address at the Federal Trade Commission Hearing on the Evolving IP Marketplace, held on December 5, 2008:

“To me, the proposed alternative for weeding out bad patents is convincing.  Can we really get a faster, better, and cheaper review of challenged patents at the PTO than in the courts?  Experience with the existing PTO reexamination procedures raises doubts.  And the PTO is already overwhelmed by ex parte examination with average pendencies over three years, in some arts, far longer.  Is it realistic to expect the PTO to be able to conduct a new form of inter partes reexamination faster and cheaper than the courts?  And more accurately?  Unless its new procedures, competencies, and powers can be clearly defined, how will we know what consequences would follow?  How will we know this is not a mirage in the desert that looks like an oasis, but has no water?”

At present, the apparent BPAI bottleneck threatens to dwarf any pendency driven by the CRU or even briefing before the Board.  However, some practitioners note that at least seven months can pass between the filing of a notice of appeal, the patent owner’s brief, the third party requester response (if inter partes), and the examiner’s answer.  In the inter partes reexaminations we analyzed, this time period is often longer due to the period of time between Respondent’s Brief and the Examiner’s Answer [See e.g., 95/000,006 and 95/000,017 (5 months between Respondent’s Brief and Examiner’s Answer); and 95/000,018 (18 months between Respondent’s Brief and Examiner’s Answer)].  It is noted that these early filed cases may not be representative because each of these reexaminations was filed prior to the institution of the CRU.  At this time, there is no way to determine whether the CRU will increase the speed of the appeal briefing process.

Operational Statistics and Pendency

The USPTO releases quarterly operational statistics, available here. According to these statistics, overall pendency is calculated from the filing date accorded (e.g. upon meeting the requirements of 37 CFR 1.510 or 1.915) to issuance of a certificate. Notice of Intent to Issue a Reexamination Certificate (NIRC) informs the parties that a reexamination proceeding has been terminated, whether by failure of a party to timely file a required response, or by the natural resolution of all outstanding issues of claim patentability.

Preprocessing

The average time from filing of the request to assignment of a reexamination control number; the request undergoes review of compliance with 37 CFR 1.510 and 1.915; a Notice of Incomplete Request for Reexamination may be issued during this time, which provides detailed description of why the request cannot be processed; a fully compliant response must be received within 30 days or else the filing date will be vacated.

Order/Denial

The average time it takes to receive substantive grant or denial of request by an Examiner at the CRU; Orders Granting or Denying a request are not determinations of claim patentability, rather they decide whether it has established the existence of at least one SNQ based upon prior patents and or printed publications (MPEP 2247.01).

Grant to FOAM

The average time between grant of a request and receipt of the First Office Action on the Merits (FOAM); as noted above, Granting of Reexamination is not a determination of claim patentability, it means that one or more claims of a U.S. Patent will be reexamined because the request has established the existence of at least one SNQ based upon prior patents and or printed publications (MPEP 2247.01).

FOAM to NIRC

The average time from receipt of a FOAM to Notice of Intent to Issue a Reexamination Certificate (NIRC); the NIRC lists the status of all claims that were subject to reexamination, including any patent claims that have been canceled and any claims added during the proceeding that were not part of the patent that were reexamined and determined to be patentable; if the reexamination is “abandoned” a NIRC automatically issues.

NIRC to Certificate

The average time from NIRC to publication of the certificate in the Official Gazette (OG); notice to the public regarding issuance of a Reexamination Certificate is announced in the Official Gazette (MPEP 2691) under Granted Patents.

Concepts

• Special Dispatch [35 U.S.C. §§ 305 and 314]
• Office Actions [MPEP §§ 2263 and 2663(L)]
• Concurrent Proceedings [37 C.F.R. §§ 1.565 and 1.985]
• Board of Patent Appeals and Interferences (BPAI)
• Request Requirements
• SNQ Requirements
• Action Closing Prosecution (ACP)
• Right of Appeal Notice (RAN)
• Notice of Intent to Issue Reexamination Certificate (NIRC)
• Appeal to the BPAI
• Subsequent (Court) Appeals
• Expedited Proceedings