The interplay between the duty of disclosure in a reexamination proceeding and a protective order in a concurrent litigation is a critical issue facing not just the patent owner, but also the third party requester (who is often the defendant in the concurrent litigation), the PTO and the courts. How should parties craft a Protective Order in a concurrent district court litigation or ITC investigation to prepare for a possible reexamination proceeding at the PTO? Is it possible for a patent owner to satisfy its duty of disclosure while adhering to the guidelines of a protective order? What limitations does a protective order place on the resources available to a patent owner to prosecute the reexamination proceeding?
Duty of Disclosure in a Reexamination Proceeding
In a reexamination proceeding, each individual associated with the patent owner has a duty of candor and good faith in dealing with the PTO. The duty of candor includes a duty to disclose to the PTO all information known to that individual to be material to patentability in a reexamination proceeding [37 C.F.R. §§ 1.555(a) and 1.933(a)]. Individuals who have a duty to disclose to the PTO all information known to be material to patentability in a reexamination proceeding. “[T]he patent owner, each attorney or agent who represents the patent owner, and every other individual who is substantively involved in a reexamination proceeding” is bound by the duty of candor [37 C.F.R. §§ 1.555(a) and 1.933(b)].
Some practitioners argue that the scope of the duty of disclosure in 37 C.F.R. § 1.555 is ambiguous. Are all employees of the patent owner as well as every attorney or agent that represent the patent owner subject to the duty of disclosure regardless of their involvement in prosecution activities? For example, are litigation counsel covered by the duty of disclosure? Are retained experts? Additionally, a patent owner also must consider to what extent their reexamination expert may be considered to be “substantively involved in the preparation or prosecution of the patent application.” This consideration may influence whether a patent owner utilizes that same expert for the litigation as in the reexamination proceeding.
Several district courts have limited the scope of the duty of disclosure to only those attorneys or agents substantively involved in preparation or prosecution. In Intelli-Check v. Tricom Card Techs., Inc. [2005 U.S. Dist. LEXIS 38794 at *14 (D. N.J. Nov. 10, 2005)] the district court for District of New Jersey subscribed a duty of candor on each named inventor, prosecuting attorney, other individual who is substantively involved in the preparation or prosecution of the patent application. Similarly, Judge Spencer in the Eastern District of Virginia found that a “party is only bound by the duty of candor, and therefore can only be penalized for failure to disclose material information, if they are substantively involved in the preparation and prosecution of the patent application ” [Memorandum Order, March 31, 2009, in TeleCommunication Systems, Inc. v. Mobile 365, Inc., C.A. No. 3:06CV485, p. 8].
Therefore, a key question facing a patent owner is who can be called upon to prosecute and/or consult on strategy for the reexamination proceeding or the prosecution of other pending applications. To what extent may the patent owner’s trial team participate in prosecution of its pending patent applications, reexaminations, reissues, or interferences using information derived from the litigation? To what extent may the accused infringer’s trial team participate in prosecution of their own patent applications in the same subject matter as the patents in suit, in reexaminations of the patent owner’s patents, or in interferences involving the patent owner? Many litigation attorneys take a conservative approach to this issue and strictly avoid any involvement or discussions related to the prosecution of pending applications or reexaminations. Other litigation attorneys take a less conservative approach and participate in consultation on specific reexamination issues.
Considerations for Crafting a Protective Order
When crafting a protective order for district court litigation or ITC investigations, the parties must consider the possibility of a reexamination being filed when crafting the protective order for the litigation. For example, the parties may establish procedures to allow the filing of materials obtained during discovery that are subject to a protective order in the PTO reexamination proceeding. Absent sufficient procedures, a patent owner may be barred by the protective order from presenting materials to support patentability (e.g., evidence of secondary considerations of nonobviousness) to the PTO. Similarly, the third party requester may be barred from submitting evidence supporting its obviousness position to the PTO.
Another important consideration is a prosecution bar. As a general matter, no party having access to another party’s highly confidential technical information under a protective order should be allowed to amend or supervise the amendment of pending claims in applications or claims under reexamination in the same technical space, nor should they be allowed to draft new claims. Note, the protective order should explicitly and separately address applications and reexaminations. A reexamination is not an “application” and if the order simply addresses “applications,” then reexaminations would not expressly be covered.
In-depth knowledge of a competitor’s highly confidential technical information, combined with the ability to amend or draft claims, may convey a dangerously unfair advantage to the claim drafter. This applies equally to patent infringement plaintiffs and defendants, and applies equally whether the highly confidential information is received from an adversary or a party with temporarily aligned interests such as a co-defendant. Unresolved questions remain regarding the interplay between non-prosecution clauses in a protective order and a patent owner’s duty of disclosure under 37 C.F.R. §§ 1.555 and 1.933.
Handling Conflicting Duties
In a concurrent litigation, a patent owner may be faced with the circumstance in which it has the duty to disclose materials to the PTO under the duty of disclosure but has a conflicting duty to maintain the confidentiality of these materials under the protective order. How does a patent owner handle these conflicting duties? Several practitioners have argued that the duty of disclosure to the PTO takes precedence over a protective order of a district court. Judge Spencer of the Eastern District of Virginia addressed the issue of whether the PTO’s duty of disclosure over-rides the protective order of a district court such that the party does not have to obtain authorization to file materials subject to the protective order in the PTO [Memorandum Order, March 31, 2009, TeleCommunication Systems, Inc. v. Mobile 365, Inc., C.A. No. 3:06CV485, p. 9].
Judge Spencer found that there was “no evidence – legal or logical – to support” the patent owner’s (plaintiff’s) contention that the Protective Order is overridden in its entirety by the PTO’s disclosure requirements. A patent owner must therefore carefully consider the provisions of the district court’s protective order before submitting materials covered by the protective order to the PTO.
In sum, both parties must consider the possibility of concurrent reexamination and must pay close attention to the protective order. Patent owners must understand their disclosure obligations under the reexamination rules. Patent owners should also consider carefully the duties and restrictions imposed upon them by receipt of such confidential or classified information. Accused infringers likewise need to be concerned about the impact of disclosing highly confidential technical information to other parties capable of drafting and amending patent claims.
Concepts
- Court Protective Order
- Duty of Disclosure [37 C.F.R. §§ 1.555(a) and 1.933(a)]
- Prosecution Bar
Cases
- Intelli-Check v. Tricom Card Techs., Inc. (D. N.J. Nov. 10, 2005)
- TeleCommunication Systems, Inc. v. Mobile 365, Inc. (C.A. No. 3:06CV485)