Scott McKeown on Which Comes 1st: The USPTO or the Court?


The hierarchy of the U.S. court system is well established, but recent patent law cases have challenged this hierarchy with the power of government agency – the USPTO to be exact. Scott McKeown, Partner at Oblon, Spivak, Practice Center Contributor and author of Patents Post Grant Blog, recently wrote two articles concerning the USPTO’s reexamination process and how its parallel nature to patent infringement cases resulted in conflict that’s occurred with the U.S. Court of Appeals of the Federal Circuit (CAFC) as well as with the U.S. District Court in the District of Connecticut. Scott explains the patent law issue:

Patent reexamination is often initiated in parallel with an ongoing infringement litigation. In the case of a parallel inter partes proceeding (IPX), the first of the proceedings to conclude (litigation or IPX) controls the outcome of the other by operation of statutory estoppel. As such, a final holding in the parallel court proceeding will end an ongoing IPX. Moreover, the losing party would be precluded from seeking IPX at a later date.

On the other hand, ex parte patent reexamination (EXP) has no such statutory “shut off valve.” Thus, even a party that was bound by IPX estoppel could file a request for ex parte patent reexamination. In this way, the infringer could attempt to “undo” the effect of the earlier, final, court judgement by invalidating the patent via the EXP filing.

The first case involving the above issue was In re Construction Equipment, where the CAFC considered whether it was fair to essentially re-litigate issues from a court proceeding by requesting a reexamination process. Ultimately, the result of the reexamination served as the impetus for the appeal of the CAFC’s initial decision from 2001.

Check out Scott’s first explanation of the case, “CAFC Validity Determination Undone by Appellant Via Patent Reexamination?” as well as his follow up on the appeal, “Judge Newman Questions Constitutionality of Second Chance Patent Reexamination”.

The second case involving the reexamination issue was within the U.S. District Court of Connecticut, Jacobs Vehicle Equipment Co. v. Pacific Diesel Brake Co. et al. (D.Conn). This case differs from In re Construction Equipment in that the court disregarded the USPTO’s reexamination analysis. According to Scott:

The Court decided that the earlier ex parte patent reexamination analysis of U.S. Patent 4,848,289 was flawed in two major respects.

First, the Court explained that the non-obviousness determination of the USPTO in 2005 predated KSR. In this regard, the Court determined that the patent reexamination analysis may have been too rigid an application of the teaching/suggestion/motivation test (TSM).

The second, and perhaps more troubling rationale, was that the USPTO simply did not have the time or robust record to consider the issues in full during patent reexamination as compared to that of the District Court.

The Court noted in footnote 8 of the decision that:

The record before me on issues relating to obviousness is far more complete than the one before the PTO. The ex parte reexamination interview lasted about forty-five minutes. The trial, which was more about invalidity than infringement, lasted several weeks. Nearly all the prior art was before the examiner. But he did not have the benefit of the extensive evidence and arguments submitted to me.

(decision here)

Under the above rationale, a Patentee can either lose their patent in ex parte patent reexamination outright, or simply survive to fight the very same battle on another day, at additional expense. All the while, an ongoing infringement action may even be stayed pending the outcome of the reexamination for seemingly no good reason.

For  the rest of this article, “District Court Rejects USPTO Analysis in Patent Reexamination”, click here.

Scott will also be co-chairing a PLI seminar entitled, “Post-Grant USPTO Proceedings 2012 – The New Patent Litigation” on February 3, 2012. The seminar will be focusing on the role of post-grant USPTO proceedings as a component of a litigation strategy, including pre-trial and post-trial options.  Although the course will focus on strategic considerations, common procedural traps for the unwary will be identified. The relative advantages and disadvantages of the various proceedings will be explained from both the perspective of the Patentee and Third Party, as well as from the judiciary. Insight to the organization, operation and procedures of the USPTO’s Central Reexamination Unit will be discussed, including statistical performance and perceived trends, along with ethical considerations of post-grant practice.

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