1. Reexamination and Reissue as Tools in Business and Litigation Presentation at KAIST October 2010 Bruce D. Sunstein Sunstein Kann Murphy & Timbers LLP Boston www.sunsteinlaw.com ©2010 Sunstein Kann Murphy & Timbers LLP

2. Current US patent practice offers three tools for reevaluating issued patents Reissue Ex parte reexamination Inter partes reexamination 2

3. The three tools 1. Reissue—enables the patent holder to correct a patent that inadvertently has a defect, for example, in claiming too much or too little 2. Ex parte reexamination—enables anyone to cause a patent to be reexamined, in a proceeding involving only the USPTO and the patent holder, on the basis of published prior art that raises a new question of patentability 3. Inter partes reexamination—enables a challenger to cause a patent to be reexamined, in a proceeding in which the challenger participates, on the basis of published prior art that raises a new question of patentability 3

4. 1. Reissue The provision authorizing a reissue application requires the patent to be “wholly or partly inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent.” 35 USC § 251 A declaration filed with a reissue application must take into account these specific requirements under the statute 4

5. The declaration must recite that the patent is “wholly or partly inoperative or invalid” Attorney failure to appreciate the full scope of the invention qualifies as an error correctable through reissue. In re Wilder, 736 F.2d 1516, 1519 (Fed. Cir. 1984); MPEP § 1402 The attorney prosecuting the patent of In re Wilder declared that his error was misunderstanding the scope of the invention, and it arose because no prior art search was done and he assumed without justification that limitations were required by the prior art 5

6. Where this comes up In a case of claiming too much or too little, the declaration filed with the reissue application will need to address the source of the error Therefore the declaration will probably need to specifically recite the attorney’s failure (or other source of the error)! An attorney does not like to admit error, but it is often needed in this context 6

7. When claims were inadvertently too narrow The reissue application must be filed within two years after issuance of the patent in order to broaden the scope of the claims The reissue application can be a powerful way to improve a patent’s coverage, and is often overlooked 7

8. What if I do not want to broaden the claims? Then the reissue application can be filed at any time But the patent holder must still show that that the patent is “wholly or partly inoperative or invalid Useful when one discovers prior art after patent issues  Can use a reissue application to narrow the claims and to tell the USPTO about the prior art 8

9. Telling the USPTO about the prior art Can strengthen the patent It is difficult to challenge validity of a patent on the basis of prior art already considered by the USPTO  KSR v. Teleflex invalidated a patent based on prior art that had not been considered by the USPTO A patent having more prior art considered is generally a stronger patent 9

10. Any kind of prior art can be used in a reissue proceeding Example: maybe there is a question whether a product demonstration, before filing of the application for the patent, put the invention “on sale”  This circumstance can be made of record  The USPTO can consider the circumstance  But to trigger the right to file a reissue application it is still necessary to show that that the patent is “wholly or partly inoperative or invalid” 10

11. Reissue example: Patent 4,927,421 11 Prior art references cited in obtaining the patent

12. Our client, David McGuire, MD, is a co- inventor of a patented process for replacing a ligament of the knee 12 Replacement ligament Interference screw Knee

13. The process uses a “cannulated” interference screw to hold the ligament in place in the knee 13 Screw has a bore along its length Screw has a hex head to receive driver

14. The screw is inserted by sliding it onto and along a guide wire (like a bead onto a necklace) 14 Guide wire Screw slides along guide wire Driver slides along guide wire into head of screw

15. The inventors get a royalty Every ligament replacement requires insertion of two cannulated screws The cannulated interference screws have no purpose other than to secure the ligament Securing the ligament requires following the patented procedure So the inventors get a royalty on every screw sold 15

16. The screws are expensive (medical devices) So the royalty can be substantial 16

17. One manufacturer refused to pay a royalty The inventors sue the manufacturer for patent infringement One defense asserted by the manufacturer is that the patent is invalid  In the litigation, the manufacturer identifies prior art said to invalidate the patent 17

18. We had filed an application for reissue of the patent We filed within two years after the patent issued, so we could seek broader claims  We had to say that the patent is “wholly or partly inoperative or invalid”  The patent attorney who obtained the original patent signed a declaration to that effect But prior art cited by the manufacturer required us to drop some claims, and we also added new claims 18

19. The USPTO considers more prior art In applying for the reissued patent, we cite to the USPTO all of the prior art asserted by the manufacturer in seeking to invalidate the patent We give the USPTO all of the arguments made by the manufacturer in the litigation The USPTO considers all of the prior art that we cite 19

20. We obtain reissue of the patent 20 Prior art references considered in obtaining the reissued patent

21. Reissued patent, page 2 21 More prior art references!

22. Reissued patent, page 3 22 More prior art references!

23. Effect: powerful patent All the prior art asserted by the manufacturer as invalidating the patent was considered by the USPTO and the reissued patent was approved How can the manufacturer defend? The manufacturer settles The inventors get royalties from the manufacturer 23

24. 2. Ex parte reexamination Anybody can request ex parte reexamination of a patent; 35 USC § 302 The request must disclose at least one item of published prior art that raises a “substantial new question of patentability”; 35 USC § 303  The only information sources considered in whether to begin reexamination are patents and “printed publications”; 35 USC § 301  Declarations about lectures or product offerings do not count 24

25. Ex parte reexam is different from a reissue application Unlike a reissue application, there is no requirement to show a defect in the patent Unlike a reissue application, one can never expand the scope of claims in a reexamination; 37 CFR § 1.552, MPEP § 2258 Unlike a reissue application, anyone can request reexamination of a patent Unlike a reissue application, the proceeding will not go forward without a showing of a “substantial new question of patentability” 25

26. Content of the request for reexamination The request for reexamination must include a detailed explanation of the pertinence of the prior art, and the USPTO suggests a chart matching elements of the claim against relevant parts of the prior art; MPEP § 2014 Note that this requirement is much more stringent than in the case of a reissue application, the main requirement of which is a proper declaration about the defect 26

27. What is a “substantial new question of patentability”? “It must first be demonstrated that a patent or printed publication that is relied upon in a proposed rejection presents a new, non- cumulative technological teaching that was not previously considered and discussed on the record during the prosecution of the application that resulted in the patent for which reexamination is requested, and during the prosecution of any other prior proceeding involving the patent for which reexamination is requested.” MPEP § 2216 27

28. What happens after the request is filed? Decision by USPTO on the request within three months after filing; 35 USC § 303, MPEP § 2240 In the event of a decision to grant reexamination, the patent owner will have a period of two months thereafter within which to file statement on the new question of patentability, including any proposed amendments; 37 CFR § 1.530, MPEP § 2249 28

29. What happens after the request is filed? (cont’d) The party requesting reexamination can reply to the patent owner’s statement within two months after the patent owner has served the patent owner’s statement, and can include additional prior art if appropriate; 37 CFR § 1.535, MPEP § 2251 In an ex parte reexamination, the requester cannot further participate; id. Thereafter examination proceeds in a fashion similar to regular examination of an application; 35 U.S.C. § 305, MPEP § 2254 29

30. When is USPTO in ex parte reexam bound by the courts? In a reexamination proceeding, the USPTO is not bound by a court determination upholding patent validity; Ethicon, Inc. v. Quigg, 849 F. 2d 1422, 1429 (Fed. Cir. 1988); MPEP § 2242 However, the USPTO is bound by a final court determination of invalidity of a patent; id. 30

31. What about stays in proceedings? The USPTO has no power to stay a reexamination pending outcome of a related litigation in court; Ethicon, Inc. v. Quigg, 849 F. 2d 1422 (Fed. Cir. 1988) On the other hand, a court can decide in its discretion whether to stay a reexamination pending the outcome of a litigation; TouchTunes Music Corp. v. ROWE INTERN. CORP., 676 F. Supp. 2d 169, 176-177 (SDNY 2009) and cases cited therein 31

32. Uses of ex parte reexamination: the patent owner A patent owner can use reexamination as an alternative to a reissue application when:  there is a problem in showing a defect in the application (so reissue will not work) and  there is prior art that the owner would like to have considered The patent owner can even file a proposed claim amendment with the request; 37 CFR §§ 1.510(e) and 1.530(d) Might be used when the patent owner has started litigation and wants to obtain a favorable ruling on prior art asserted by defendant 32

33. Uses of ex parte reexamination: a competitor of the patent owner A competitor may find a patent posing a minor problem to the competitor in the marketplace The competitor files a request for ex parte reexamination along with a good prior art reference:  To force the patent holder to narrow the claims or  To force the patent holder to distinguish the prior art in a way helpful to the competitor A useful strategy when the competitor is not heavily invested in the outcome of the proceeding, because it may be helpful and it is not expensive 33

34. 3. Inter partes reexamination: some provisions are similar to ex parte reexam: Anybody (but here not the patent owner) can request inter partes reexamination of a patent; 35 USC § 311, MPEP § 2612 The request must disclose at least one item of published prior art that raises a “substantial new question of patentability”; 35 USC § 312, 37 CFR § 1.915  The only information sources considered in whether to begin reexamination are patents and “printed publications”; 35 USC § 301  Declarations about lectures or product offerings do not count 34

35. Provisions special to inter partes reexamination The party requesting reexamination always has the last word, and can file comments to any document filed by the patent owner within thirty days thereafter; 35 USC § 314 Substantive interviews with examiners (encouraged in normal prosecution) are prohibited; 37 CFR § 1.955; § MPEP 2685  So all contact of the patent owner with the USPTO in an inter partes reexamination must be in writing 35

36. These features change dramatically shift the balance of power in the proceedings The vast majority of inter partes reexaminations narrow or invalidate some or all of the claims of patents involved Of the total of 167 inter partes reexamination certificates issued over the period 1999 – 2010:  Only 14 (8%) confirmed all claims  82 (49%) canceled or disclaimed all claims  71 (43%) changed some claims  Source: USPTO 36

37. Other provisions special to inter partes reexamination Current fee is $8800 Available only against patents applied for after November 29, 1999; Cooper Techs Cos. V. Dudas, 536 F. 3d 1330 (Fed. Cir. 2008), MPEP § 2609 37

38. The time periods in an inter partes reexamination Request for inter partes reexamination is decided within three months and typically includes an office action when the request is granted; 35 U.S.C. § 312(a), 37 CFR § 1.923, and MPEP § 2641 The patent owner must typically respond to the office action within two months; MPEP § 2662 But response period for an action closing prosecution (which can often be the second action) is only 30 days; MPEP § 2662 38

39. The time periods in an inter partes reexamination (cont’d) But response period for the patent owner to an action closing prosecution (which can often be the second action) is only 30 days; MPEP § 2662 Remember, every time the patent owner responds, the party requesting examination can file comments within 30 days thereafter 39

40. Effect of an inter partes reexamination in court Pendency of an inter partes reexamination enables a patent owner to seek a stay to a related patent litigation, and obtain it subject to a court’s discretion; 35 USC § 318  However, given the odds against the patent owner in inter partes reexamintation, why seek a stay? Both the requester and the patent owner may appeal an adverse result to the Board of Patent Appeals and Interferences and thereafter to the Federal Circuit Court of Appeals or to a federal trial court; 35 U.S.C. § 315 40

41. Effect of an inter partes reexamination in court (cont’d) The requester is estopped from asserting in civil litigation any ground for invalidity of a claim determined to be valid in an inter partes reexamination if the ground was raised or could have been raised in the reexamination proceeding; 35 U.S.C. § 315(c) and see also § 317(b) 41

42. Strategic considerations in inter partes reexaminations Given the statistics, a patent owner receiving notice of a request for inter partes reexamination should regard the patent as under a serious threat to its life Because the patent owner is precluded from any informal contact with the patent examiner, the patent owner should build into the response to the office action a powerful story about the invention that is the subject of the patent 42

43. Telling a powerful story about the invention in the response in an inter partes reexamination Requires more than just argument against the rejection Almost always important to engage an expert witness who can set the stage and credibly attack the positions asserted in the request for reexamination Although one has only two months to respond to the office action, the request for reexamination is served on the patent owner before the USPTO acts on the request: then is the time to engage the expert and begin work 43

44. From the standpoint of the party requesting inter partes reexamination: The USPTO is a happy place in which to oppose the patent owner (even compared to court), for the patent owner has: 44

45. No Interviews

46. No Discovery, No Oral Testimony, No Motion Practice

47. No Continuations

48. No Presumption of Validity of the Patent: Claims are given their broadest reasonable interpretation by the examiner

49. Inter partes reexamination: example We had a client seeking to clear patent roadblocks in the marketplace We analyze a series of patents in the marketplace and decide that some key ones of them are vulnerable For a number of vulnerable patents, we file requests for inter partes reexamination The USPTO grants all requests and issues first office actions rejecting all claims of all of the patents, forcing the patent holders to drastically narrow claim scope of their patents 49

50. Reexamination offers a one-two punch for the challenger

51. One: Left Jab Reexamination First, claims are attacked without benefit of presumption of validity in reexamination The claims are construed broadly in reexamination In reexamination claims can be cancelled or, if the prior art is avoided, narrowed

52. Two: Right Hook Narrowed claim construction can be asserted by the challenger in litigation to avoid infringement completely, and the narrowed construction may not have been possible without reexam A narrowed claim establishes intervening rights  Meaning that it will operate only prospectively and may exclude actions taken before it was in effect

53. Example of the reexamination one-two punch In 2007, Beneficial Innovations, Inc. launches suit against numerous defendants in the Eastern District of Texas for infringement of patents including 6,183,366 An ex parte reexamination proceeding is requested on October 6, 2009 for various claims of the patent In the course of reexamination, the patent owner cancels certain of the claims and makes remarks in prosecution 53

54. Example of the reexamination one-two punch (cont’d) Defendants ask the trial court to change the court’s interpretation of the claims on account of arguments made by the patent owner in the reexamination, and the court modifies the claim interpretation Beneficial Innovations, Inc. v. Blackdot et al., 2010 WL 2246291 (ED Tex 6/3/2010)(ruling on claim interpretation) 54

55. Example of the reexamination one-two punch (cont’d) The court rules in favor of the defendants and modifies the claim interpretation “Further, the Court finds that Beneficial's arguments to the Examiner that the prior art is not “unrequested,” in which the search engine returns both the search results and a banner advertisement in response to a user's search query, is contradictory to its arguments to this Court that a web page responsive of Google search results combined with an advertisement is “unrequested.” 55

56. Example of the reexamination one-two punch (cont’d) “The Court finds that the construction for the term ‘unrequested’ should be modified in light of Beneficial's remarks and arguments to the USPTO during reexamination of the '366 patent. The Court adopts the construction set forth in this opinion for the ‘unrequested’ term in the '366 patent.” 56

57. Ex Parte Reexamination Inter Partes Reexamination ReissueLitigation ForumPTO Federal Court Statutes & Rules35U.S.C. 301-307 37C.F.R. 1.501-1.570 35U.S.C. 311-318 37C.F.R. 1.902-1.997 35U.S.C. 251-252 37C.F.R. 1.171- 1.179 28U.S.C. 1295, 1338, 1391, 1400, 1498, 1694, 1928, Fact-FinderThree Technically Trained Examiners At least one Technically Trained Examiner Lay jury Claim ScopeBroadest reasonable interpretation Broadest reasonable interpretation Claim construction tending toward preserving validity Presumed Valid?No Yes IssuesPrior Art Publications and Patents All patentability issues All validity and infringement issues Subject patentsAny enforceable patentPatents filed after 11/29/99 Unexpired patents but for broadening reissue only patents within 2 years of issuance Any enforceable patent © Robert M. Asher, Bruce D. Sunstein 2003 Judicial & Administrative Challenge and Review of Patents (1 of 2)

58. Ex Parte Reexamination Inter Partes Reexamination ReissueLitigation ForumPTO Federal Court Who may useAnyoneAnyone except patent owner Patent owner, inventorPatent owner, exclusive licensee, an accused infringer threatened with suit AppealNo appeal by third party requester, but appeal by patent owner to BPAI and Federal Circuit or civil action BPAI and Federal CircuitAppeal by patent owner to BPAI and Federal Circuit or civil action Federal Circuit Scope of challenger involvement Written request for reexamination, response if patent owner statement filed Written request and responsive comments within thirty days of patent owner filings ProtestDiscovery, live testimony, motion practice, multi-million dollar budget Patent owner Interviews with examiner YesNoYes---------- © Robert M. Asher, Bruce D. Sunstein 2003 Judicial & Administrative Challenge and Review of Patents (2 of 2)

59. Thank you. Bruce D. Sunstein bsunstein@sunsteinlaw.com www.sunsteinlaw.com