Resolving Differences: How the Federal Circuit Treats Divergent USPTO and District Court Rulings


The following article discussing what happens when the Federal Circuit is faced with conflicting USPTO and district court determinations comes courtesy of Lisa Dolak, Professor of Law at Syracuse University and Practice Center Contritor.

Concurrent litigation and reexamination proceedings, although related in that they concern the same patent(s) and (typically, presumably) at least some of the same claims, proceed independently. And, different standards govern validity and claim construction in the two venues. As the Federal Circuit explained in In re Swanson, 540 F.3d 1368 (Fed. Cir. 2008):

In civil litigation, a challenger who attacks the validity of patent claims must overcome the presumption of validity with clear and convincing evidence that the patent is invalid. . . . In [USPTO] examinations and reexaminations, the standard of proof – a preponderance of evidence – is substantially lower than in a civil case; there is no presumption of validity.

Id. at 1376. Additionally, “unlike in district courts, in reexamination proceedings ‘[c]laims are given ‘their broadest reasonable interpretation, consistent with the specification. . .’’” Id. at 1377-78 (quoting In re Trans Texas Holdings Corp., 498 F.3d 1290, 1296-97 (Fed. Cir. 2007) (quoting In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984))). Accordingly, as the Federal Circuit has noted, “the two forums take different approaches in determining validity and on the same evidence could quite correctly come to different conclusions.” Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1428 (Fed. Cir. 1988).

So what happens when the Federal Circuit is faced with (arguably) conflicting USPTO and district court determinations? Here’s how the court has ruled in various circumstances:

• First, on the often critical issue of claim construction, the Federal Circuit has ruled that the USPTO is not bound by a district court’s claim construction. In Trans Texas Holdings, 498 F.3d at 1298, the Federal Circuit rejected the patent owner’s argument that the Board should have given preclusive effect to the district court’s Markman order, noting that the USPTO was not a party to the district court litigation at issue. Id. at 1297-98.

• What if the proceedings at the district court have gone beyond claim construction to a judgment that the claims at issue are valid and infringed, while reexamination of those same claims is pending? We have only non-precedential guidance from the Federal Circuit at this point, but in Standard Havens Prod., Inc. v. Gencor Indus., Inc., 996 F.2d 1236, 1993 WL 172432 (Fed. Cir. 1993) (unpublished disposition), a Federal Circuit panel reversed a district court’s refusal to stay a permanent injunction and damages proceedings, stating:

As a matter of law, . . . if the reexamination decision of unpatentability is upheld in the court action under 35 U.S.C. § 145 (1988), the injunction would thereby immediately become inoperative. In addition, if a final decision of unpatentability means the patent was void ab initio, then damages would also be precluded. Therefore, the injunction should have been stayed. Thus in either event, . . . the reexamination proceeding “would control” the infringement suit.

• Changing the facts just a bit, what if the Federal Circuit has already upheld a district court determination that certain claims are not invalid, but the Board subsequently affirms a rejection of those claims in reexamination? On the patentee’s appeal from such a Board decision in Swanson, the Federal Circuit affirmed the Board decision affirming the USPTO rejection. According to the court:

[the relevant statutory] language and legislative history, as well as the differences between the two proceedings, lead [to the conclusion] that Congress did not intend a prior court judgment upholding the validity of a claim to prevent the [USPTO] from finding a substantial new question of validity regarding an issue that has never been considered by the [USPTO]. To hold otherwise would allow a civil litigant’s failure to overcome the statutory presumption of validity to thwart Congress’ purpose of allowing for a reexamination procedure to correct examiner errors, without which the presumption of validity would never have arisen.  Swanson, 540 F.3d at 1382.

• How would the court treat an attempt to reopen a final federal court judgment of infringement on the basis of a reexamination finding of invalidity? The Federal Circuit avoided this potential constitutional problem in its rulings on appeals in parallel district court and USPTO proceedings concerning the same patent in In re Translogic Tech., Inc., 504 F.3d 1249 (Fed. Cir. 2007), and Translogic Tech., Inc. v. Hitachi, Ltd., 250 Fed. Appx. 988, 2007 WL 2973955 (Fed. Cir. 2007) (unpublished disposition). In the former, the Federal Circuit affirmed a Board decision affirming a USPTO holding of obviousness. Then, in a non-precedential opinion issued on the same day, the court held that “[i]n light of this court’s decision in [the former], this court vacates the district court’s decision [that the patent was not invalid and infringed] and remands this case to the district court for dismissal.” Translogic Tech., 2007 WL 2973955 at *1.

• Each of the above discussed cases involved district court decisions upholding validity. What, by contrast, is the effect of a court determination of invalidity or unenforceability? The USPTO is not bound by a non-final decision, but a final court decision of invalidity or unenforceability will preclude a USPTO determination that a substantial new question of patentability exists as to the affected claims in reexamination. MPEP §2286 (II) (“A non-final holding of claim invalidity or unenforceability will not be controlling on the question of whether a substantial new question of patentability is present. A final holding of claim invalidity or unenforceability (after all appeals) is controlling on the Office. In such cases, a substantial new question of patentability would not be present as to the claims held invalid or unenforceable.”) (emphasis in original); Ethicon, 849 F.2d at 1428-29.

Although open questions remain, such as how the court would treat a litigant’s attempt to reopen a final judgment of infringement in light of a reexamination determination of unpatentability, and whether the USPTO is bound by a Federal Circuit (as opposed to a district court) claim construction, the court has thus far skillfully mediated the somewhat thorny thicket that has grown out of the Congress’s creation of separate venues for the resolution of questions relating to patent validity. The jurisprudential challenges of this area of the law seem likely to grow, however, as litigants and potential litigants continue to make creative use of the tools Congress, the courts, and the USPTO have given them, making an already quite complicated area even more complex.

Tags: , , , , ,

Leave a Reply

You share in the PLI Practice Center community, so we just ask that you keep things civil. Leave out the personal attacks. Do not use profanity, ethnic or racial slurs, or take shots at anyone's sexual orientation or religion. If you can't be nice, we reserve the right to remove your material and ban users who violate our Terms of Service.

You must be logged in to post a comment.