Effective Date: The procedure set forth in this notice is effective on August 17, 2010.

Applicability Date: The procedure set forth in this notice is applicable to any appeal brief (regardless of whether it is an appellant’s brief, a respondent’s brief, or a rebuttal brief) that is filed in an inter partes reexamination proceeding on or after August 17, 2010.

Brief Summary:  The Chief Judge of the Board of Patent Appeals and Interferences (BPAI) or his designee (collectively, “Chief Judge”), will have the sole responsibility for determining whether appeal briefs filed in inter partes reexamination proceedings (i.e., appellant’s briefs, respondent’s briefs, and rebuttal briefs) comply with the applicable regulations, and will complete the determination before the appeal brief is forwarded to the examiner for consideration. The examiner will no longer review appeal briefs for compliance with the applicable regulations.

SUPPLEMENTARY INFORMATION: Under the streamlined procedure, upon the filing of an appeal brief in an inter partes reexamination proceeding (i.e., an appellant’s brief, a respondent’s brief, or a rebuttal brief), the Chief Judge will review the appeal brief to determine whether the appeal brief complies with 37 CFR 1.943(c) and 37 CFR 41.67, 41.68, or 41.71 before it is forwarded to the Central Reexamination Unit (CRU) or other Technology Center examiner for consideration. The Chief Judge will endeavor to complete this determination within one month from the filing of the appeal brief. To assist parties in complying with 37 CFR 1.943(c), 41.67, 41.68, and 41.71, the BPAI has provided a checklist for notices of appeal and appeal briefs and a list of eight reasons appeal briefs have been previously held to be noncompliant on the USPTO Web site at: http://www.uspto.gov/ip/boards/bpai/procedures/guidance_noncompliant_briefs.jsp.

For several years now, both houses of Congress have debated legislation that would significantly increase a party’s ability to challenge its competitors’ patents in actions before the U.S. Patent and Trademark Office.  A newly-proposed proceeding, known as a Post-Grant Review proceeding will provide an early and comprehensive basis for challenging patents.  Additionally, the current inter partes reexamination process may be replaced by, or supplemented with, an Inter Partes Review proceeding for challenging patents. 

The National Law Review posted an article this week titled, “Challenging Patents Before the USPTO: Looking Ahead to a World of Patent Reexaminations, Post-Grant Reviews and Inter Partes Reviews” by Eldora L. Ellison and Robert Greene Sterne, both directors at Washington, DC-based IP specialty firm Sterne, Kessler, Goldstein & Fox P.L.L.C., that takes a closer look at this topic.  

Click here to read further about these mechanisms for challenging patents and their potential substantial impact on corporate competitors and patent rights.

On October 13, 2009, Pitney Bowes sued Zumbox, Inc. alleging infringement of Pitney Bowes’s U.S. Patent Nos. 6,690,773 (“the ’773 patent”), 7,058,586 (“the’586 patent”), and 7,478,140  (”the ‘140 patent”), each directed to delivery systems for digital mail.  On January 22, 2010, Zumbox submitted requests at the USPTO for inter partes reexamination of all claims in each of the three patents-in-suit.  One month later, Zumbox moved the district court to stay the litigation pending the reexaminations.  On March 15, 2010, the USPTO granted the inter partes reexamination of the ’140 patent and issued a first non-final Office action that rejected all 20 claims in the ’140 patent.  On April 16, 2010, the USPTO granted inter partes reexaminations of the ’586 and ’773 patents but issued Office Actions that same day preliminarily confirming the claims in those patents.

In granting Zumbox’s motion to stay, the court found three factors weighed in its favor.  First, the case was “in its earliest stages—the Case Management Conference was held in February 2010. Second, the court found that the reexaminations would likely result in a simplification of the issues.  The court observed that all of the claims in the ’140 patent were preliminarily rejected by the USPTO meaning the parties would not need to litigate any issue relating to the ’140 patent infringement.  The Court also stated that the USPTO’s confirmation of the patentability of the claims in the remaining two patents (if made final) also would benefit the litigation by allowing the court to rely on the “office’s expertise, analysis of the claims, and evaluation of the relevant prior art.”  The court also noted that the absence of counter-claims brought by defendant weighed in favor of staying the litigation and that the high likelihood that some claims would be canceled or amended in the reexaminations likely would narrow or clarify the issues for claim construction and trial.

Third, the court found a stay would not unduly prejudice the plaintiff.  Pitney Bowes waited over six months from the filing of its lawsuit to seek any injunctive relief and in its Complaint asked for only permanent injunctive relief, not preliminary injunctive relief.  Pitney Bowes fought the stay motion by citing to the Central District’s decision in Allergan v.Cayman Chemical Co. denying a motion to stay pending reexamination. Allergan Inc. v. Cayman Chemical Co., No. SACV 07-01316-JVS (C.D. Cal. Apr. 9, 2009). The court distinguished this case from the decision in Allergan because Pitney Bowes unlike the Allergan plaintiff was not exploiting the patents-in-suit:  “non-patent exploiters” or NPEs “have a more difficult time obtaining injunctions” because they cannot adequately demonstrate irreparable harm under the Supreme Court’s recent decision in eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).” That is, any delay could be addressed by monetary damages.  This decision and the Allergan case are among a small number of stay decisions where a court considered whether a patent-owner plaintiff was currently exploiting its patents, even where the patent-owner plaintiff does not fit the traditional definition of NPE as a “non-practicing entity.”  Neither decision clarifies whether exploitation of a patent includes practicing the patent, licensing the patent, or both.

The Foundation filed the inter partes reexamination request in July 2006. The Office ordered the reexamination in September 2006 as to all three claims in the patent.  The substantial new question of patentability was based on multiple references and the adopted rejections included section 102 and 103 rejections.  After several amendments to the challenged claims,  the examiner allowed all the challenged claims as amended, and WARF prevailed before the Central Reexamination Unit (“CRU”).  The Foundation appealed to the Board. 

In a 41-page opinion, the Board grappled with a range of issues, including anticipation, the proper standard of obviousness, product-by-process limitations and enablement questions.  In the end, the Board reversed most of the examiner’s decisions in favor of patentability, affirming only the examiner’s decision not to adopt one of the proposed grounds of rejection in the original request.  The Board’s reversal of the examiner’s determinations not to make proposed rejections is characterized as a “new ground of rejection” pursuant to 37 C.F.R. § 41.77(a).  As a result, the case is not ripe for judicial review by the U.S. Court of Appeals for the Federal Circuit.  Rather, WARF must either reopen prosecution with an amendment or new evidence or request rehearing.  Only after exhausting those options may WARF appeal to the Federal Circuit.

Merits of the case aside, this inter partes reexamination is notable in several respects.  First, the case highlights the ability of third parties, such as the Foundation, that are not involved in any active or threatened dispute with the patent owner, to use reexamination as a vehicle to challenge the validity of a patent for its own purposes.  Other entities have availed themselves of reexamination in a similar fashion, including, for example, the Electronic Freedom Foundation through its Patent Busting project.  Second, the case highlights the difficulties a patent owner faces on appeal to the Board, even if it achieved success before the CRU.  Third, it shows the difficulty of obtaining judicial review in inter partes reexamination.  As occurred here, if the Board reverses an examiner’s decision that is favorable to patentability, the reexamination must at least go through another round of briefing or even prosecution before an appeal may be taken to the Federal Circuit.  This is but one reason why no appeal from an inter partes reexamination has yet made it all the way through the Federal Circuit.  The complete case cite is The Foundation for Taxpayer & Consumer Rights v. Wisconsin Alumni Research Foundation, No. 2010-1854 (B.P.A.I. Apr. 29, 2010).

Wednesday, March 3, 2010

Presented By

David Cushing, Sughrue Mion, PLLC
David Emery, Sughrue Mion, PLLC

An important webinar on the fundamentals of US reexamination practice and procedure before the USPTO, sponsored by the American Intellectual Property Law Association was held on Wednesday, March 3, 2010.  David J. Cushing and David Emery of Sughrue Mion, PLLC, of Washington, DC were the presenters. The seminar lasted for 90 minutes and was accompanied by a useful Powerpoint presentation and article. The seminar is available through the AIPLA website for a fee and can be accessed here.

David J. Cushing, Sughrue Mion, PLLC

David Emery, Sughrue Mion, PLLC

As summarized on the AIPLA website: “Ex parte and inter partes reexamination practice is an important tool for both patent owners and non-patent holders.  It is extremely important to anticipate how a reexamination will impact your intellectual property rights whether you are a patent owner engaged in a reexamination or a third party requestor challenging a patent.  The presenters, based on their extensive experience, will provide insights into ex parte and inter partes reexamination practice … Those new to reexamination and those wishing to keep pace with this evolving practice will benefit from this online program.”

Presentation Topics

• Introduction to reexamination;
• Tradeoffs between ex parte and inter partes reexamination;
• Reexamination in the context of litigation;
• Practical aspects of reexamination procedure at the USPTO.

Summary

David Emery begins the seminar with an overview of ex parte reexamination practice and procedure. It is a good basic tutorial that provides relevant statistics and practice tips. He then proceeds to discuss the basics of inter partes reexamination.  At various points in the program polls were taken to assess audience attitude about ex parte and inter partes reexaminations both before and after the Supreme Court KSR decision.  He presents USPTO statistics showing the rapid increase in filings of inter partes re-examinations since 2001. David Cushing is a noted reexamination attorney with considerable experience and the public is fortunate that he shares his practical insights in this seminar. These observations and others are important for successful reexamination practice.

David Cushing

The statistics posted on the USPTO web site show substantial year-over-year increases in reexamination filings as parties become increasingly wary of the very high cost and extremely low success rates for patent litigation.  The good news is that inter partes reexamination is an attractive enough alternative to cause that increase.  The bad news is that the same statistics show that there are 556 pending inter partes reexams (the net of reexamination orders less reexamination certificates) as of the end of 2009, 270 of those from reexamination orders issued in the previous 15 months.  This recent increase in the caseload is stressing the system.

David Cushing, then addresses important practice tips centered on inter partes reexaminations.  He warns practitioners to be careful with their reexamination requests to avoid an unintended “bounce” that could occur for mere administrative informalities. He comments that in his opinion the significant work overload at the Central Reexamination Unit is resulting in a very critical eye being brought to reexamination requests in terms of filing formalities. He also comments on the 50 page requirement for responses to inter partes office actions and how the use of declarations can count in the page limit when it is denominated as part of “attorney argument.”  He also addresses the role of the Substantial New Question (SNQ), particularly with regard to serial reexaminations.

David Cushing

Because the inter partes reexamination rules and proceedings are relatively new, there will be a lot of clarification occurring over the next decade, by interpretation and sometimes revision of the rules and MPEP, and perhaps some PTO policy changes as well.  While this is occurring, there will be frustrations.  But in the meantime, even with its imperfections, inter partes reexamination is a very attractive alternative to litigation. This seminar warrants review by anyone interested in a good overview of reexamination practice and procedure at the USPTO.

The statutory basis for appeals to the Federal Circuit for ex parte reexamination is 35 U.S.C. § 306.  Therein, the statute states that the patent owner may seek court review of Board decisions “under the provisions of sections 141 to 145 of this title.” (see 35 U.S.C. § 306)  Sections 141-144 deal with appeals to the Federal Circuit.  Section 145, on the other hand, appears to permit a civil action against the Director in the United States District Court for the District of Columbia.

However, allowing a civil action in ex parte reexamination appears to be inconsistent with Section 141 itself.  Specifically, Section 141 states that “[a] patent owner, or a third-party requester in an inter partes reexamination proceeding, who is in any reexamination proceeding dissatisfied with the final decision in any appeal to the [Board] under section 134 may appeal the decision only to the United States Court of Appeals for the Federal Circuit.” (See 35 U.S.C. § 141).  Section 141 thus appears to foreclose any civil action under section 145.

This anomaly is the result of amendments to the statutes as a result of passage of the American Inventors Protection Act of 1999 (“AIPA”).  The AIPA created the inter partes reexamination procedure.  The AIPA amended 35 U.S.C. § 141 to state that appeals from any reexamination may be taken only to the Federal Circuit.  Notably, it left unchanged § 306, which still permitted the patent owner in ex parte reexamination to seek review under § 145.  Thus, the cross reference in § 306 to § 145 is in tension with the AIPA amendment to § 141.

The PTO rules governing review of Board decisions are 37 C.F.R. §§ 1.301-304.  Notwithstanding the above noted anomaly, the PTO has interpreted the statutes to foreclose § 145 actions for any ex parte reexamination filed after November 29, 1999.  Specifically, Rule 303 states that “for an ex parte reexaminations filed on or after November 29, 1999, and for any inter partes reexamination proceeding, no remedy by civil action under 35 U.S.C. § 145 is available.”

The Rule 303 provision was recently challenged in the U.S. District Court for the Eastern District of Virginia in the case styled Sigram Schindler Beteiligungsgesellschaft MBH v. Kappos, No. 1:09cv935.  The plaintiff Sigram Schindler (“SSBG”) is a patent owner in the middle of an ex parte reexamination appeal to the Board.  It challenged PTO Rule 303 as being “in excess of [the PTO’s] statutory jurisdiction, authority, or limitations, or short of statutory right.”  Despite the fact that the Board had not yet rendered a decision in its appeal, SSBG sought a declaratory judgment action because the challenged Rule 303 currently purports to deprive SSBG of it right under § 306 to file a civil action in a D.C. District Court, thereby causing SSBG harm.  According to SSBG, it would have been forced to appeal to the Federal Circuit under § 141 and thereby waive its right to appeal under § 145, or file a civil action under § 145 and risk losing its right to appeal to the Federal Circuit under § 141 if the D.C. District Court determined that it lacked jurisdiction to hear the case after expiration of the sixty-day deadline for appealing to the Federal Circuit.

The PTO, on the other hand, challenged the ripeness of SSBG’s declaratory action because there was currently no justiciable “case” or “controversy” under Article III of the Constitution.  For instance, a favorable Board decision that reversed the examiner’s finding of unpatentability could preclude SSBG from seeking any review of the Board’s decision.  The PTO also challenged SSBGs standing to bring the suit.

In a memorandum decision dated December 18, 2009, the court ruled in favor of PTO, finding that SSBG’s request for judgment was “unripe because: (i) the BPAI has not yet rendered an adverse decision that would allow SSBG to seek court review of that determination, making the purported hardship contingent and speculative, and (ii) plaintiff has not demonstrated that the challenged regulation creates an immediate, direct, and significant hardship altering its day-to-day activities; and (iii) any hardship is remediable by 28 U.S.C. § 1631.”   28 U.S.C. § 1631 relates to “Transfer to cure want of jurisdiction.”  It provides a court finding that it has no jurisdiction to, in the interest of justice, “transfer such action or appeal to any other court in which the action or appeal could have been brought at the time it was filed or noticed, and the action or appeal shall proceed as if it had been filed in or noticed for the court to which it is transferred  on the date upon which it was actually filed in or noticed for the court form which it is transferred.”  Therefore, the court determined there was no “justiciable case or controversy, and thus no jurisdiction to reach the merits of whether 37 C.F.R. § 1.303 contravenes 35 U.S.C. § 306.”  (Id. at 22.)

Despite the fact that the court did not reach a decision on the merits, it appears clear that 2002 amendments to Section 141 did intend to foreclose Section 145 actions for ex parte reexaminations.  As noted above, this is how the Office construes these provisions.  Until such time as the issue is properly raised, it would behoove patent owners to assume that appeals in ex parte reexamination will go straight to the Federal Circuit.

The statutory basis for appeals to the Federal Circuit for inter partes reexamination is straightforward.  It is governed by 35 U.S.C. § 315.  Unlike the anomalous ex parte reexamination appeal statute, Section 315 states that the patent owner and the third party requester “may appeal under the provisions of sections 141-144.”  Thus, there is no ambiguity for inter partes reexamination and appeals from the Board may only be taken to the Federal Circuit.

The Reexamination Center is committed to providing the most comprehensive and neutral knowledge site on patent reexamination that includes opinions and analysis from many sources.  We continually look to augment the site with news and analysis that enables users of The Reexamination Center to have a single source of high quality content related to the evolving practice of patent reexamination.

Location: PLI New York Center; New York, NY

Session Title: “Inter Partes Reexamination – Earning Its Way in the Litigator’s Toolbox”

Speakers:
David L. McCombs, Haynes and Boone, LLP
Scott A. McKeown, Oblon, Spivak, McClelland, Maier & Neustadt, P.C.

Session Description:
This panel discussion will focus on the following elements of inter partes patent reexamination: trends and success rates, cutting-edge strategies, interplay with litigation, and potential effect of pending legislation.

To learn more about this event, click here.

Notably, reexamination control number 95/001,216, associated with Monaghan Medical Corp.’s request, was issued a “Notice of Incomplete” by the Central Reexamination Unit (CRU) the same day their motion to stay was denied. Read the notice specifying non-compliance with 37 C.F.R. 1.915(b) dated October 15, 2009 (PDF): 95001216 – Notification of Incomplete Inter Partes Reexam Request – Dated 10-15-2009. In setting forth the reasons for vacating the filing date, the CRU specified that the request failed to “clearly and separately identify” each proposed new rejection, known as “lumping” of multiple proposed grounds. See, Mistakes to Avoid, No. 2. To cure the defect, the Office advised that the requester choose the most relevant proposed rejections and withdraw any remaining which are not “clearly and separately” identified.

The Case is Pre Holding, Inc. v. Monaghan Medical Corporation, et al., case number 3:09CV458-HEH, in the United States District Court of the Eastern District of Virginia.

The SAFOCO Inc. inter partes reexaminations are believed to be the first inter partes reexaminations to reach the Federal Circuit.  The third party requester Cooper Cameron brought the appeal from the Board.  The appeal was docketed on July 8, 2009, and styled by the Federal Circuit as Cooper Cameron v. SAFOCO Inc., as is normal in inter partes cases such as interferences.  On July 14, the Patent and Trademark Office Solicitor Raymond Chen sent a letter to the Clerk of the Federal Circuit asking that the USPTO be a party to the case.  On July 21, 2009, the patent owner SAFOCO filed a notice of intent to participate in the appeal.

Prior to the Cooper Cameron case, it was unclear what role, if any, the PTO would play in appeals of inter partes reexamination proceedings.  In the July 14 letter from the Solicitor, the PTO sought to amend the official caption to show it as a party to the proceedings.  In support, Solicitor Chen noted that such an appeal is conducted under the provisions of 35 U.S.C. § 143.  Section 143 states that “[i]n any ex parte case or any reexamination case, the Director shall submit to the court in writing the grounds for the decision of the [USPTO], addressing all the issues involved in the appeal.”  Therefore, according to the Solicitor’s letter, “the Director [of the USPTO] is a party to this appeal, just as in an ex parte appeal.”

On August 31, 2009, the Court granted permission for the Director to participate in the appeal, but it did not amend the official caption.  Specifically, the Director was ordered to file its brief after appellant Cooper Cameron’s brief, but before appellee SAFOCO’s brief.  The SAFOCO brief would have been due 14 days after the Director’s brief.  Thus, the briefing order would have been (i) Appellant, (ii) PTO and , (iii) Appellee.

However, Cameron Cooper filed a motion to voluntarily withdraw its appeal on October 2, 2009.  The Court granted the motion on October 7, 2009.  The appeal has therefore been dismissed.  Despite the dismissal, Cameron Cooper illustrates that the Solicitor’s office will be permitted to at least file a brief and presumably participate in oral argument for any inter partes reexaminations appealed to the Federal Circuit.  As in ex parte cases, the Solicitor is expected to advocate in support of the Board’s final decision.  It is therefore possible that the Solicitor will be advocating FOR patentability where appeals are taken by the third party requester—a position that, to our knowledge, would be first for the PTO solicitor.