Reexamination as an Alternative to Patent Litigation or a License
Due to changes in the tests for obviousness and patent eligible subject matter established in recent decisions by the U.S. Supreme Court, many existing patents having claims that were issued using previous tests may be invalid or too broad. See KSR Intl’l. Co. v. Teleflex, Inc., 550 U.S. 398 (2007) (See link below) and Bilski v. Kappos, 561 U.S. ____; 130 S.Ct. 3218; 95 U.S.P.Q. 2nd 1001 (2010) (See link below). Recent research reveals that while the applicant in a patent application submits over 75% of the art in the examination of the patent application, only 12.7% of the art used by Examiners to reject claims comes from the art submitted by the applicant. See Cotropia, Christopher Anthony; Lemley, Mark A.; and Sampant, Bhauers N. Do Applicant Patent Citations Matter? Implications for the Presumption of Validity (August 10, 2010), available at Social Science Research Network. Therefore, the presumption of validity of an issued patent over all of the art cited in its corresponding application is called into question. Consequently, defendants and potential licensees are using reexaminations more frequently than in the past to challenge the validity of the claims in issued patents.
There are two (2) types of reexaminations. One type is an Ex Parte Reexamination. A request for an Ex Parte Reexamination can be filed by the patent owner or a third party or may be ordered by the Commissioner of the U.S. Patent and Trademark Office (USPTO). If the USPTO grants a request filed by a third party and the patent owner does not file a patent owner’s statement in response to the granted request, then the third party requestor is not permitted to participate in the reexamination process. If the patent owner does file a patent owner’s statement, the third party requestor may file a response to the patent owner’s statement before the patent is reexamined by the Examiner. However, after filing the response, the third party requestor is not permitted to participate any further in the reexamination process.
The other type of reexamination is an Inter Partes Reexamination. Inter Partes Reexamination is a newer form of reexamining an issued patent that was enacted by Congress in 1999. A request for an Inter Partes Reexamination can only be filed by a third party. If the USPTO grants an Inter Partes request, the third party requestor can then participate in the reexamination process similar to the patent owner.
According to the USPTO, the number of requests for Ex Parte Reexaminations has increased from 524 in 2005 to 539 in the first six (6) months of 2010 (extrapolated to 1078 by the end of the year 2010). The number of these requests filed by the patent owner during the same time period has steadily decreased, thereby indicating that the growth in the use of reexaminations is by third parties. Further, the number of filings for Inter Partes Reexaminations has increased from 59 in 2005 to 189 in the first six (6) months of 2010 (extrapolated to 378 by the end of the year 2010).
Comparing the results of Ex Parte Reexaminations for requests filed by third parties between 1981 and June 30, 2010, all claims were cancelled in 13% of the reexaminations and claims were changed in 63% of the reexaminations. Therefore, in over 75% of the Ex Parte Reexaminations the claims for the reexamined patents were either cancelled or changed. For requests for Inter Partes Reexamination filed by third parties between 1999 and June 30, 2010, all claims were cancelled (or disclaimed) in 49% of these reexaminations and claims were changed in 43% of these reexaminations. Therefore, in 92% of the Inter Partes Reexaminations, the claims of the reexamined patents were either cancelled or changed.
The result of cancelling or changing claims during a reexamination can eliminate the threat of an infringement claim or the need for a license. The cost of either an Ex Parte or Inter Partes Reexamination can be substantially less than patent litigation or payments made under a license agreement for the life of a patent, and therefore one should strongly consider filing a request for reexamination as a cheaper and effective alternative to patent litigation or a license. If you have any questions regarding reexaminations, please contact James A. Coles (Indianapolis Office), John Mueller (Cincinnati Office), Michael Diamant (Cleveland Office), or any one of Taft’s attorneys.
Contributors: James A. Coles and Stephen F. Rost
KSR Intl’l. Co. v. Teleflex, Inc., 550 U.S. 398 (2007)
Bilski v. Kappos, 561 U.S. ____; 130 S.Ct. 3218; 95 U.S.P.Q. 2nd 1001 (2010)
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