THE JOHN MARSHALL REVIEW OF INTELLECTUAL PROPERTY LAW

Transcription

1 THE JOHN MARSHALL REVIEW OF INTELLECTUAL PROPERTY LAW UNITED STATES REEXAMINATION PROCEDURES: RECENT TRENDS, STRATEGIES AND IMPACT ON PATENT PRACTICE GREG H. GARDELLA AND EMILY A. BERGER ABSTRACT Reexamnaton s playng a sgnfcant role n the patent landscape. The Unted States Patent and Trademark Offce s reexamnng and nvaldatng more patent clams than ever before. Potental nfrngers, aware of ths trend, can beneft from reexamnaton proceedngs ntated before, durng, and after ltgaton. Moreover, a prevalent reexamnaton system benefts both the publc and ndustry. Effcent reexamnaton enables partes to challenge overly broad patents at a reasonable cost whch reduces transacton costs, promotng nnovaton. Patent holders have responded by craftng narrow clams whch far well before the patent offce and n court. The current reexamnaton trend, f contnued, wll have a strong and postve effect on nnovaton n the Unted States. Copyrght 2009 The John Marshall Law School Cte as Greg H. Gardella and Emly A. Berger, Unted States Reexamnaton Procedures: Recent Trends, Strateges and Impact on Patent Practce, 8 J. MARSHALL REV. INTELL. PROP. L. 381 (2009).

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3 UNITED STATES REEXAMINATION PROCEDURES: RECENT TRENDS, STRATEGIES AND IMPACT ON PATENT PRACTICE GREG H. GARDELLA AND EMILY A. BERGER* INTRODUCTION Reexamnaton has recently emerged as the leadng mechansm for challengng patent valdty n the Unted States. 1 Whle reexamnaton was used sparngly n the 1990s and early 2000s, there have been an ncreasng number of requests for reexamnatons snce that tme due n large part to the percepton that the new nter partes reexamnaton procedure s hghly effectve (from a challenger's perspectve).2 The Unted States Patent and Trademark Offce (USPTO) s now much more lkely, on ts second revew, to nvaldate patents whch do not represent sgnfcant advances over the prevously developed technology. 3 Corporate strateges have lkewse evolved. 4 Some are flng more reexamnaton requests n an effort to crcumvent the hgh cost of Unted States patent ltgaton; ths strategy s enabled by the wllngness of many dstrcts courts to postpone ltgaton whle the reexamnaton s pendng. 5 Others, confronted wth lcensng demands, may force lcensng companes to substantally lower ther demands wth a request that the patents be reexamned. 6 Many busnesses have found that more techncal or complcated arguments fare better n the USPTO. 7 * Greg H. Gardella s a prncpal at Fsh & Rchardson P.C. Emly A. Berger s Regstered In- House Counsel at Appled Materals, Inc. The vews and opnons expressed are those of the authors and do not necessarly reflect the vews and opnons of ther respectve employers. The authors wsh to thank Paul Kuo, an Assocate of Fsh & Rchardson P.C., for hs contrbutons to ths artcle. I Robert Greene Sterne et al., Reexamnaton Practce wth Concurrent Dstrct Court Patent Ltgaton, 9 SEDONA CONF. J. 53, 53 (2008). 2 U. S. PATENT AND TRADEMARK OFFICE, JINTER PARTEs REEXAMINATION FILING DATA- DECEMBER 31, 2008, at 1 [herenafter 2008 INTER PARTES DATA], avalable at YAR R. CHAIKOVSKY & FIRASAT ALI, CHAIKOVSKY AND ALI ON THE CHANGING FACE OF INTER PARTES REEXAMINATION 1-4 (Dec. 4, 2007), avalable at2008 Emergng Issues 1289 (Lexs). 3 See Sterne et al., supra note 1, at 62 (ndcatng that the Central Reexamnaton Unt "almost always" ntally rejects all of the clams of a patent under nterpartes reexamnaton). See generally Paul L. Sharer & John E. Mauk, Usng the U.S. Patent & Trademark Offce to Resolve Technology Dsputes Before Tral, n RESOLVING TECHNOLOGY AND MEDIA DISPUTES BEFORE TRIAL 165 (PLI Pats., Copyrghts, Trademarks, & Lterary Prop., Course Handbook Ser. No. 914, 2007), avalable atwl, 914 PLI/Pat 165 (llustratng patent management technques other than ltgaton). 5 See Sterne et al., supra note 1, at 66 (ndcatng that courts do grant stays for reexamnatons). But see NTP, Inc. v. Research n Moton, Ltd., 397 F. Supp. 2d 786, (E.D. Va. 2005) (denyng Research n Moton's fourth attempt to stay ltgaton pendng reexamnaton, lke the prevous three). (3 Sterne et al., supra note 1, at RAJIV P. PATEL, UNDERUTILIZED PATENT REEXAMINATIONS CAN IMPROVE BUSINESS STRATEGY 1 (2004), avalable at PatentReexamnatons.pdf.

4 The John Marshall Revew of Intellectual Property Law These and other strateges have contrbuted to the growng "kll rate" occurrng n certan types of reexamnaton proceedngs.8 The ncreased use of patent reexamnaton promses to beneft both ndustry and the publc nterest. 9 Reexamnaton permts overly broad patents to be challenged at reasonable cost. 10 Ths encourages nnovaton by reducng the transacton costs assocated wth developng new technologes. 11 Patent holders are adaptng, and wll contnue to adapt, to the ncreased use of reexamnaton by narrowng the scope of the patent rghts they request. 12 More narrowly talored patents wll enjoy heghtened respect from compettors because such patents are much harder to nvaldate. 13 If the current trend contnues, reexamnaton wll have a strong and postve effect on nnovaton n the Unted States. 14 I. REEXAMINATION BASICS Reexamnaton s a Patent Offce procedure for correctng an ssued patent by reexamnng the scope of the patent n lght of new evdence or argument concernng prevously developed technologes. 15 Whle the Commssoner of Patents may ntate reexamnaton proceedngs sua sponte, most reexamnaton requests are fled by the patent owner or, more often, thrd partes. 16 The Unted States Patent and Trademark Offce (USPTO) revews reexamnaton requests to determne f they 8 See Sterne et al., supra note 1, at (suggestng three reasons for what appears to be a hgh rate of clam rejectons for reexamned patents: (1) greater resources of the Central Reexamnaton Unt, (2) the mpact of KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398 (2007), on obvousness, and (3) the presence of a thrd party requester n nterpartes proceedngs). 9 See Sterne et al., supra note 1, at 67 (ndcatng that reexamnaton va the Central Reexamnaton Unt mproves patent qualty and reduces patent pendency). 10 Compare Sharer & Mauk, supra note 4, at 172, 176 (projectng the costs of exparte and nter partes reexamnaton proceedngs respectvely), wth Jeffery T. Zachmann, Controllng the Cost of Resolvng Intellectual Property Dsputes.* Proactve Strateges to Enforce and Defend Intellectual Property Rghts & Contan Ltgaton Costs, n 14TH ANNUAL INSTITUTE ON INTELLECTUAL PROPERTY LAW 391 (PLI Pats., Copyrghts, Trademarks, & Lterary Prop., Course Handbook Ser. No. 947, 2008), avalable atwl, 947 PLI/Pat 387 (dsplayng average ltgaton costs). 11 See Sterne et al., supra note 1, at (llustratng that the "pocket reexamnaton request" can fuel settlement, thereby deferrng expensve ltgaton). 12 See James W. Hll & M. Todd Hales, Patent Reexamnaton After KSR, ORANGE COUNTY LAW., Aug. 2008, at 30, 32 (ndcatng that practtoners are recognzng the reexamnaton process as a strategc nstrument to narrow the scope of clams n a patent). 13 See Matthew Sag & Kurt Rohde, Patent Reform and Dfferental Impact, 8 MINN. J.L. Sc. & TECH. 1, 50 (ndcatng that better qualty patents are more lkely to survve post-grant opposton and cost much more for a potental nfrnger to challenge). 14 See Kevn R. Davdson, Retoolng Patents. Current Problems, Proposed Solutons, and Economc Implcatons for Patent Reform, 8 HOuS. Bus. & TAX L.J. 425, 442 ("[E]xcessve numbers of low-qualty patents can prevent healthy rates of nnovaton."). 15 U.S. PAT. & TRADEMARK OFFICE, U.S. DEP'T OF COMMERCE, MANIJAL OF PATENT EXAMINING PROCEDURE 2209, 2609 (8th ed., 7th rev. 2008) [herenafter MPEP] U.S.C. 303(a) (2006); accord 37 C.F.R (2009); MPEP, supra note 15, 2239 (explanng the stpulatons of the statute and the regulaton); see also Sterne et al., supra note 1, at 71 (notng that snce creaton of the Central Reexamnaton Unt, the USPTO has stopped Drector ntated reexamnatons).

5 Unted States Reexamnaton Procedures present a "substantal new queston of patentablty." 17 If such a queston s presented n the request, the USPTO ntates a reexamnaton proceedng. 8 Reexamnaton requests must be based on patents and prnted publcatons, such as artcles from techncal perodcals or conference proceedngs. 19 The USPTO wll not consder other types of pror nventon n reexamnaton proceedngs. 20 Accordngly, evdence that others prevously nvented the patented devce, sold t, used t n publc, or dsclosed t to the patent owner wll not be consdered n a patent reexamnaton unless the evdence takes the form of a patent or a prnted publcaton. 21 The USPTO wll not consder evdence or argument that the scope of the ssued patent s ambguous or that t fals to adequately teach how to make or use the patented nventon. 22 Durng the proceedng, a patent "examner" determnes f the patent should be cancelled, narrowed or confrmed. 23 A patent may not be broadened n a reexamnaton proceedng. 24 The procedure s smlar to tradtonal patent prosecuton: an examner ssues an "offce acton" that usually sets forth varous rejectons and the patent owner responds wth arguments (and sometmes evdence) refutng the examner's poston. 25 That process repeats at least one tme and then a panel of three examners ssues a fnal determnaton. 26 The patent owner has a rght to appeal to the USPTO's Board of Patent Appeals and Interferences and thereafter to the Unted States Court of Appeals for the Federal Crcut. 27 In a recently created type of reexamnaton procedure known as nter partes reexamnaton, 28 the party requestng reexamnaton s gven the opportunty to respond to each submsson made by the patent owner as well as the rght to appeal the fnal determnaton. 29 The tradtonal reexamnaton procedure s now commonly referred to as exparte reexamnaton. 3 0 Perhaps the most sgnfcant dfference between nter partes and ex parte procedures s that after the concluson of an nter partes proceedng the requester s thereafter precluded from challengng n a dstrct court proceedng the valdty of the patent on any evdence that was rased or could have been rased durng the U.S.C. 303(a), 312(a); accordmpep, supra note 15, 2216, 2242(I) U.S.C. 304, 313; neordmpep, supranote 15, 2246, U.S.C , 311(b)(2); accordmpep, supra note 15, 2217, U.S.C , 311(b)(2); accordmpep, supra note 15, 2217, U.S.C , 311(b)(2); accordmpep, supra note 15, 2217, MPEP, supra note 15, 2216, 2217, 2616, U.S.C. 307(a), 316(a); 37 C.F.R (rectng the typcal patent applcaton examnaton procedure); accordmpep, supra note 15, 2260, U.S.C. 305, 314(a); 37 C.F.R (b), 1.906(b); accord MPEP, supra note 15, 2258, But see 35 U.S.C. 251, 1, 4 (allowng the broadenng of clams va ressue proceedngs f fled wthn two years of the patent ssung). 25 See 37 C.F.R (settng forth the tradtonal patent examnaton procedure); MPEP, supra note 15, 2254, 2654 (descrbng the conduct of the reexamnaton procedures). 26 MPEP, supra note 15, , U.S.C. 306, 315; 37 C.F.R ; accordmpep, supra note 15, 2273, U.S.C (enacted Nov. 29, 1999) U.S.C. 315(a)-(c); 37 C.F.R ; acco-rdmpep, supra note 15, See generally, 35 U.S.C (regardng Pror Art Ctatons to Offce and Ex Parte Reexamnaton of Patents); 37 C.F.R (regardng Subpart-D Ex Parte Reexamnaton of Patnets); MPEP, supra note 15, (regardng Ctaton of Pror Art and Ex Parte Reexamnaton of Patents).

6 The John Marshall Revew of Intellectual Property Law reexamnaton. 3 1 Accordngly, the requester cannot use any addtonal patents, artcles and other prnted publcatons to challenge the patent's valdty. 2 However, the requester can rely on varous other defenses such as pror nventon by another, dervaton of the nventon from a thrd party, pror publc use or sale of the nventon, nequtable conduct by the patent applcant n procurng the patent, msuse, nonenablement, ndefnteness, lack of utlty, and the lke. 33 The nter partes procedure also dffers from ex parte practce n that an nter partes petton may only be fled concernng patents that ssued from a patent applcaton fled on or after November 29, The patent owner s not permtted to conduct ntervews wth the examner, a technque that has hstorcally proved to be qute effectve n securng the allowance of a patent. 3 5 In nterpartes proceedngs, all responses to an examner's rejectons must be n wrtng, and the requester s gven an opportunty to reply to each response. 3 6 Another nherent dfference s that a patent owner may not request nter partes reexamnaton, whereas ex parte requests may be fled by ether the patent owner or a thrd party. 37 Another procedural dfference s that nter partes requesters cannot reman anonymous as n exparte proceedngs. 38 The governng statute requres that the real '1 35 U.S.C. 315(c); 37 C.F.R ; accord MPEP, supra note 15, ; see DAVID L. MCCOMBS & DAVID M. O'DELL, THE NEW ROLE OF REEEXAMINATION IN PATENT LITIGATION 9 (2006), avalable at odell (follow "The New Role of Reexamnaton n Patent Ltgaton" hyperlnk) (explanng that there s currently some uncertanty concernng when the extoppel provsons of 35 U.S.C 315(c) attach, but they may be deemed to attach after the decson of the Board of Patent Appeals and Interferences or rather only after all appeals are exausted) U.S.C. 315(c) (the requester cannot assert nvaldty n a cvl sut followng a determnaton of valdty n an nter partes proceedng unless the new asserton of nvaldty s based on newly dscovered pror art unavalable at the tme of the reexamnaton). 33 See 35 U.S.C. 282, 315(c) (lstng the statutory defenses to patent nfrngement, but by statute, the scope of reexamnaton may not be revewed n a later cvl sut once valdty s determned by nter partes reexamnaton); see also 37 C.F.R (c) (assertng the scope of nter partes reexamnaton proceedngs); accord MPEP, supra note 15, 2658 (explanng the scope of nter partes reexamnaton proceedngs). M 37 C.F.R ; accordmpep, supra note 15, C.F.R (c), 1.955; accordmpep, supra note 15, 2654, U.S.C. 314(b)(2); 37 C.F.R ; aeeordmpep, supra note 15, '37 Compare 35 U.S.C. 311(a) ("Any thrd-party requester at any tme may fle a request for nter parte reexamnaton by the Offce of a patent on the bass of any pror art cted under the provsons of secton 301"), 37 C.F.R (specfcally dsallowng a patentee from flng an nter partes reexamnaton request), and MPEP, supra note 15, 2612 (explanng the restrctons on flng requests for nter parte reexamnatons on patent owners), wth 35 U.S.C. 302 ("Any person at any tme may fle a request for reexamnaton"), 37 C.F.R (a) (usng smlar language as 302), and MPEP, supra note 15, 2212 (explanng the lmted restrctons on flng a request for ex parte reexamnatons). 38 Compare 35 U.S.C. 311(b)(1), (c) (requrng the dentty of the real party n nterest be dsclosed and then sent to the patent holder), 37 C.F.R (b)(8) ("A statement dentfyng the real party n nterest to the extent necessary for a subsequent person flng an nter partes reexamnaton request to determne whether that person s a prvy."), and MPEP, supra note 15, 2612 ("The name of the person who fles the request wll not be mantaned n confdence"), wth 35 U.S.C. 302 (never specfcally requrng the dsclosure of the party n nterest), 37 C.F.R (f) (requrng an attorney or agent flng such a request to have power of attorney for the requestng party), andmpep, supra note 15, 2213 ("If an attorney or agent fles a request for reexamnaton

7 Unted States Reexamnaton Procedures party n nterest be dentfed n the request. 3 9 Ths tends to deter use of nterpartes procedures where a company beleves a patent s troublesome but s unwllng to dentfy tself and potentally attract the attenton of the patent holder. 40 A sgnfcant practcal dfference between nter partes and ex parte proceedngs arses from the tmng of the decson of whether to declare a reexamnaton and the tmng of the examner's offcal actons. 41 In an exparte proceedng, a determnaton grantng a reexamnaton request s ssued wthn three months of the request but wll not be accompaned by an actual rejecton of the clams. 42 Rather, the patent owner s gven a chance to respond to the order grantng reexamnaton. 43 The offcal acton rejectng the clams s maled about sx to twelve months after the reexamnaton request was fled. 44 In nter partes practce, by contrast, an order grantng reexamnaton wll ssue wthn about two months of the reexamnaton request 45 and often be accompaned by an offcal acton n whch the examner rejects or confrms the clams. 46 for another entty (e.g., a corporaton) that wshes to reman anonymous, then that attorney or agent s the thrd party requester.") U.S.C. 311(b)(1). 40 See Sterne et al., supra note 1, at (suggestng that the tmng of the nter partes reexamnaton request s of vtal mportance). 41 Compare MPEP, supra note 15, 2660(l) (statng that the frst offce acton for an nter partes proceedng wll generally be maled wth the order grantng reexamnaton), wth MPEP, supra note 15, 2260 (statng that the examner's frst acton on the merts should not be sent untl after the requester's reply has been fled or after the patent owner's statement has been fled, f the patent owner requested the exparte reexamnaton) U.S.C. 303(a); 37 C.F.R (a); accordmpep, supra note 15, U.S.C. 304; 37 CFR 1.931; aeeordmpep, supra note 15, Patent owners rarely fle responses to the order grantng reexamnaton because USPTO gves the requester an opportunty to respond to any such submsson. See Roger Shang & Yar Chakovsky, Inter Partes Reexamnaton of Patents: An Empreal Evaluaton, 15 TEX. INTELL. PROP. L.J. 1, 5 (2006) ("A smart patent owner, however, would normally forego the flng of the statement to prevent the thrd party response."). 44 See MCCOMBS & O'DELL, supra note 31, at 5 (estmatng that t takes 6 to 11 months for an offce acton to ssue). 45 See 35 U.S.C. 312(a) (provdng a 3 month deadlne for an order grantng reexamnaton); 37 C.F.R. 1,923; ac ordmpep, supra note 15, MPEP, supra note 15, 2641(C).

8 The John Marshall Revew of Intellectual Property Law Tmng SteDs Tmng 3 mot1hs 05 USC.303) 2 monthfls (35 USC 304) 2 lolthsfls 0-3f C 1.535) The grant order and the frst Offce acton are usually provded at the same tme No Ore 4 K (Grant) Yes Offce Acton 3 months (35 USC 312) 0-2 months. (35 US,. 313, XPU 2660) 2 months ( U 2662) 6-18 moltlhs (estmate) 3 o days (35 USC 314) 1 2 k (M0PF2263) - & mntnhs -4 WO Certfcate (or Appeal) Fgure 1 Interpartes procedure typcally yelds an early substantve decson; ths creates potental benefts but also poses substantal rsks. 47 An early offcal acton fndng that the patent clams are nvald over the pror art rased by the requester can be extraordnarly useful n co-pendng ltgaton. 48 Courts facng such scenaros are typcally more nclned to grant a request that the ltgaton be stayed pendng the outcome of the reexamnaton n the nterests of judcal economy. 49 Moreover, an early offce acton rejectng the clams makes t qute dffcult for a patent holder to obtan a prelmnary njuncton because the offce acton suggests that the patent holder s not lkely to succeed on the merts of the case. 50 Permanent njunctons requested by a patent holder after a successful tral may be stayed or dened entrely where the patent stands rejected n a copendng reexamnaton proceedng See Paul Morgan & Bruce Stoner, Reexamnaton vs. Ltgaton-Makng Intellgent Decsons n Challengng Patent Valdty, 86 J. PAT. & TRADEMARK OFF. SOC'Y 441, (2004) (dscussng the pros and cons of reexamnaton). 48 See MCCOMBS & O'DELL, supra note 31, at 30 (notng that an early flng for reexamnaton may brng about early resoluton of a dspute). 49 Shang & Chakovsky, supra note 43, at 23; see ROBERT A. SALTZBERG & MEHRAN ARJOMAND, REEXAMINATIONS INCREASE IN POPULARITY (2007), avalable at (search "Reexamnatons Increase n Popularty"; then follow "Reexamnatons Increase n Popularty" hyperlnk) (notng the ncreasng trend toward partes n patent dsputes to fle for reexamnatons along wth ltgaton). 5o Joshua D. Sarnoff, Blcare, KSR, Presumptons of Valdty, Prelmnary Relef and Obvousness n Patent Law, 25 CARDOzO ARTS & ENT. L.J. 995, (2008). 51 Shang, supra note 43, at

9 Unted States Reexamnaton Procedures II. WHY PARTIES FILE REEXAMINATIONS Thrd partes generally seek reexamnaton to remove the threat posed by a patent they beleve to be demonstrably overbroad. 52 Because courts are often nclned to postpone, or stay, ltgaton pendng the outcome of reexamnaton where the reexamnaton was fled before the lawsut or shortly thereafter, many companes fle reexamnaton requests wth the prncpal am of reducng the rsk that the company gets ted n an expensve and tme-consumng lawsut. 53 Ths strategy s often employed where the challenger beleves that the patent owner s lkely to ntate ltgaton aganst the challenger. 54 Another common reason for flng reexamnaton requests s the reducton of potental lablty assocated wth hstorcal sales of allegedly nfrngng products or servces. 55 A patent holder s permtted to collect damages for up to sx years of prevous sales so long as the patent holder has dscharged ts duty to mark wth the patent number any patented products dstrbuted by the patent holder or ts lcensees. 56 However, f a patent s substantvely narrowed durng a reexamnaton, there s an rrebuttable presumpton that the patent was fatally defectve pror to reexamnaton and accordngly the patent holder s barred from collectng any money damages for alleged nfrngements that occurred pror to the concluson of the reexamnaton proceedng. 57 Ths strategy s partcularly valuable where a patent s near expraton. 58 Unless the patent owner s able to persuade the examner to allow at least some of the patent's "clams" wthout substantve amendment, all potental lablty for prevous nfrngement s elmnated. 59 Reexamnaton requests are also fled n connecton wth co-pendng ltgaton n order to provde the challenger a "second bte at the apple." 60 In a recent case, the Court of Appeals for the Federal Crcut vacated a verdct of nfrngement n lght of 52 Robert H. Ress, Request for Reexamnaton: To Fle or Not to Fle? That Is the Queston, PAT. J., Oct. 2002, at 2, avalable at Reexamnaton%20(Ress).pdf. 53 Gregory V. Novak, An Overvew and Prmer on Intellectual Property for the Insurance Jndusty, n UNDERSTANDING THE SECURITIES PRODUCTS OF INSURANCE COMPANIES 2008, at 859, 873 (PLI Comm. Law and Prac., Course Handbook Ser. No. 902, 2008), avalable at WL, 902 PLI/Comm 859 (explanng how an accused potental nfrnger can beneft from flng a reexamnaton early n ltgaton because courts are lkely to provde a stay pendng the outcome of the reexamnaton). 54 See Steven E. Lpman, Patent Reexamnaton Fundamentals, n PARALLEL PATENT LITIGATION AND REEXAMINATION PROCEEDINGS 2007: KEEPING YOUR CASE ON TRACK 9, 30 (PLI Pats., Copyrghts, Trademarks, & Lterary Prop., Course Handbook Ser. No. 908, 2007), avalable at WL, 908 PLI/Pat. 9 (dscussng how nterpartes reexamnaton s probably best used when the other party s lkely to ntate ltgaton). 55 See MCCOMBS & O'DELL, supra note 31, at 23 (descrbng the scope of ntervenng rghts) U.S.C. 286, 287(a) (2006). 57 See, e.g., Bloom Eng'g Co. v. N. Am. Mfg. Co., 129 F.3d 1247, 1249 (Fed. Cr. 1997). 58 See Lpman, supra note 54, at 15 (statng that once a patent has expred t s no longer possble to narrow the scope of any clam beng examned). 59 See ROBERT A. SALTZBERG, INTERVENING RIGHTS: PROTECTION FROM LIABILITY AFTER REEXAMINATION (2008), avalable at (3o See generally Betsy Johnson, Comment, Pluggng The Holes In The Ex Parte Reexamnaton Statute: Preventng A Second Bte At The Apple For A Patent Infrnger, 55 CATH. U. L. REV. 305, (2005) (dscussng potental abuse of reexamnaton proceedngs by defendants).

10 The John Marshall Revew of Intellectual Property Law ts contemporaneous decson to affrm the USPTO's decson to nvaldate the patent n a reexamnaton proceedng. 61 Even when a patent s nvaldated by the USPTO after all appeals are exhausted n the nfrngement ltgaton the challenger may seek to have any njuncton lfted and have any ongong oblgaton to pay royaltes nullfed. 62 Challengers sometmes choose to fle reexamnatons due to the techncal complexty of "pror art" publcatons and the lower burden of proof faced n reexamnaton proceedngs. 63 Because USPTO examners have techncal degrees and often years of experence analyzng nventons n a narrow techncal nche, they should be better equpped to understand the complex technologes descrbed n the documents presented by the challenger, especally as compared to a judge or jury. 64 More complete comprehenson of the evdence presented by the challenger typcally translates nto a hgher lkelhood that that the patent wll be deemed nvald n vew of that pror technology. 65 That result s amplfed by the tendency of examners to read publcatons and patents broadly n the sense that the examner wll read the publcaton as teachng features not expressly mentoned n the publcaton f those features would be understood to be ncluded n the system or product by an engneer or scentst sklled n that feld. 66 Ths tendency, n turn, s further amplfed by the fact that examners use a "preponderance of the evdence" standard n determnng whether the pror publcatons teach the nventon as clamed n the patent In re Translogc Tech., Inc., 504 F.3d 1249, 1262 (Fed. Cr. 2007). 2 See Lpman, supra note 54, at 26 (statng that n a ex parte reexamnaton a thrd party requester s not precluded from rasng the same ssues n subsequent ltgaton between t and the patent owner). 6 Shang, supra note 43, at MPEP, supra note 15, 2636; Shang, supra note 43, at Shang, supra note 43, at 19 (dscussng the mportance of a thorough pror art search n order for the challenger to have a reasonable chance of nvaldatng the patent); see Sag & Rohde, supra note 13, at (dscussng the heghten standard of proof for a challenger to nvaldate a patent). 66 See In re Omeprazole Patent Ltgaton, 483 F.3d 1364, 1378 (Fed. Cr. 2007) (dscussng nherent dsclosure). 67 MPEP, supra note 15, 706(I). In ltgaton a challenger must show that the patent s nvald by "clear and convncng evdence" due to a statutory presumpton of valdty that attaches to ssued patents. 35 U.S.C. 282 (2006); In -r Etter, 756 F.2d 852, 857 (Fed. Cr. 1985). Patents subject to reexamnaton do not enjoy ths presumpton. Id. at 856.

11 Unted States Reexamnaton Procedures III. HISTORIC DATA REGARDING THE EFFECTIVENESS OF REEXAMINATION By md-2006, 10% of patents subjected to ex parte reexamnaton were completely nvaldated. 68 About two-thrds of the patents emerged from reexamnaton wth some or all of the clams narrowed. 6 9 One quarter of the patents survved, the reexamnatons renderng the patents unchanged. 70 / Confrmed M Canceled Changed Fgure 2: Patents Subjected to Ex Parte Reexamnaton- -md-2006 After a reexamnaton n whch the relevant patent clams survve ntact, the challenger s substantally worse off than before the reexamnaton began. 71 The patent wll thereafter be "armor plated" n the sense that a judge or jury wll consder that the patent clams have been examned twce and that both tmes the examner found the clams to be patentable. 72 When taken wth the evdentary burden n ltgaton of provng nvaldty by clear and convncng evdence, ths can make t qute dffcult to successfully challenge a reexamned patent's valdty on the bass of 68 Soo U.S. PATENT AND TRADEMARK OFFICE, Ex PARTE REEXAMINATION FILING DATA- DECEMBER 31, 2007, at 2 [herenafter 2007 EX PARTE DATA], avalable at http ://w2.eff.org/patent/reexam-stats-dec-2007.pdf. 69 Id. 70 Id, 71 See, e.g., Moore Bus. Forms, Inc. v. Wallace Computer Servs., Inc., No. S88-359, 1989 U.S. Dst. LEXIS 16989, at *24-25 (N.D. Ind. Aug. 28, 1989) (fndng the patent n sut vald and statng that the clams had been examned by the Unted States Patent and Trademark Offce twce and found patentable both tmes and were then reexamned and found patentable). 72 See, e.g., d.

12 The John Marshall Revew of Intellectual Property Law patents and prnted publcatons, partcularly the ones consdered by the examner. 7 3 Some refer to ths as a "strengthened presumpton of valdty." 74 Because the hstorc data suggested that patents were lkely to survve reexamnaton n some form, most shed away from the nterpartes procedure. 7 5 The challenger's concern was that, n subsequent ltgaton, he would be barred from argung that the patent was nvald based on any patents or publcatons that could have been rased n the reexamnaton proceedng. 76 IV. RECENT DEVELOPMENTS AND TRENDS Recent developments n reexamnaton procedure have altered the general landscape and percepton of reexamnaton procedures as a whole. 77 When nter partes reexamnaton was frst mplemented n 1999, the requester of the nter partes proceedng could only appeal an adverse decson from the examner as far as the USPTO Board of Patent Appeals and Interferences ("Board").78 In contrast, the patent owner, whether n an ex parte or nter partes proceedng, mantaned the rght to appeal to the USPTO Board of Patent Appeals and Interferences and thereafter to the Unted States Court of Appeals for the Federal Crcut See, e.g., Superor Freplace Co. v. Majestc Prods. Co., 270 F.3d 1358, 1367 (Fed. Cr. 2001) (dscussng how challenges to the valdty of clams "[w]hether regularly ssued, [or] ssued after a reexamnaton.., must meet the clear and convncng standard of persuason"). 74 See, e.g., Oglebay Norton Co. v. Unversal Refractores Corp., 195 U.S.P.Q. (BNA) 569, (E.D. Ws. 1977) (statng that an examners consderaton of nformaton wth regard to a patent strengthens the presumpton of valdty). 75 Compare U.S. PATENT AND TRADEMARK OFFICE, EXPARTE REEXAMINATION FILING DATA- DECEMBER 31, 2008, at 2 [herenafter 2008 Ex PARTE DATA], avalable at (reportng that eleven percent of clams are canceled after an ex parte reexamnaton), wth 2008 INTER PARTES DATA, supra note 2, at 1 (reportng that seventy-three percent of clams are canceled after an nter partes reexamnaton). 76 See 35 U.S.C. 315(c) (2006). A thrd-party requester whose request for an nter partes reexamnaton results n an order under secton 313 s estopped from assertng at a later tme, n any cvl acton arsng n whole or n part under secton 1338 of ttle 28, the nvaldty of any clam fnally determned to be vald and patentable on any ground whch the thrd-party requester rased or could have rased durng the nter partes reexamnaton proceedngs. Ths subsecton does not prevent the asserton of nvaldty based on newly dscovered pror art unavalable to the thrd-party requester and the Patent and Trademark Offce at the tme of the nter partes reexamnaton proceedngs. Id. 77 See generally Sterne et al., supra note 1 (dscussng modern developments regardng reexamnaton). 78 Compare 35 U.S.C. 315 (allowng appeals from an nterpartes reexamnaton decson to the BPAI, and to the Unted States Court of Appeals for the Federal Crcut under 141), wth Act of Nov. 29, 1999, Pub. L. No , 1000(a)(9), 113 Stat. 1501, 1536 (enactng the provsons of S of the 106th Congress, as ntroduced on November 17, 1999, whch appears at 113 Stat. 1501A521 to -603 and specfcally, S. 1948, 106th Cong. 4605(b) whch appears at 113 Stat. 1501A-571) (restrctng appeals from an nterpartes reexamnaton decson to the BPAI). 7) 35 U.S.C. 141 (authorzng appeals from a decson of the BPAI to the Unted States Court of Appeals for the Federal Crcut); 1000(a)(9), 113 Stat. at 1536 (enactng the provsons of S of the 106th Congress, as ntroduced on November 17, 1999, specfcally, S. 1948, 106th Cong.

13 Unted States Reexamnaton Procedures Furthermore, f the patent owner appealed an nterpartes reexamnaton decson to the Federal Crcut, the challenger was not permtted to partcpate. 8 0 The dfference n appeal opportuntes between patent holder and challenger only further dscouraged potental challengers from ntatng nter partes reexamnaton proceedngs. 8 1 In November 2002, however, the statutes governng nter partes reexamnatons were amended to allow both the patent holder and the thrd party challenger to appeal decsons of the Board of Patent Appeals and Interferences to the Federal Crcut. 82 Moreover, both partes could now partcpate n appeals to the Federal Crcut brought by the other party. 8 3 The legslatve measures n November 2002 that balanced the rghts of appeal of thrd party challengers also addressed another controversal ssue related to reexamnatons-whether a reexamnaton proceedng could consder pror art prevously consdered by the USPTO. 8 4 In 1997, the Federal Crcut, n In re Portola Packagng, Inc., held that the USPTO could not. 85 The court dscussed the concern that patentees would be harassed by thrd partes requestng reexamnaton wthout a "substantal new queston of patentablty." 8 6 The Federal Crcut was effectvely overruled n 2002, however, when the statute governng reexamnaton was amended to provde that "[the exstence of a substantal new queston of patentablty s not precluded by the fact that a patent or prnted publcaton was prevously cted by or to the [USPTO."87 The current practce s that a challenger may allege that a substantal new queston of patentablty arses from a reference that was dsclosed to the examner so long as the same aspect of the reference was not specfcally consdered and addressed by the examner. 88 The reexamnaton procedure was further altered n 2005 when the USPTO mplemented a new process for handlng reexamnaton proceedngs. 89 Specfcally, reexamnaton proceedngs ntated after 2005, accordng to the USPTO, are to be completed wthn two years. 90 Furthermore, a newly formed Central Reexamnaton Unt now handles all reexamnaton cases regardless of technology. 91 The Central Reexamnaton Unt (CRU) s comprsed of hghly sklled prmary examners who 4605(b) whch appears at 113 Stat. 1501A-570 to -571) ("A patent owner n any reexamnaton proceedng may appeal from the fnal rejecton of any clam by the admnstratve patent judge to the Board of Patent Appeals and Interferences..."); accordmpep, supra note 15, See Patent and Trademark Offce Authorzaton Act of 2002, Pub. L. No , , 116 Stat. 1758, (2002) (amendng 35 U.S.C. to nclude 315(b)(2) allowng thrd party partcpaton n appeals to the Federal crcut for actons commencng after Nov. 2, 2002). 81 See 2008 INTER PARTES DATA, supra note 2, at I (ndcatng that zero nter partes reexamnaton requests were fled n 2000, only one was fled n 2001, and only 4 were fled n 2002) , 116 Stat. at Id. 84 Id , 116 Stat. at 1900; MPEP, supra note 15, In re Portola Packagng Inc., 110 F.3d 786, 791 (Fed. Cr. 1997). 8,0 Id. at , 116 Stat. at 1900 (codfed as amended at 35 U.S.C. 303(a) (2006)); In re Swanson, 540 F.3d 1368, (Fed. Cr. 2008). 88 See MPEP, supra note 15, (provdng that "old art" can be the sole bass for a rejecton durng reexamnaton f the "old art" s vewed n lght of "new art"). 89 Press Release, U.S. Patent and Trademark Offce, USPTO Improves Process for Revewng Patents (July 29, 2005), avalable at 90 Id 91 MPEP, supra note 15, 2236, 2636.

14 The John Marshall Revew of Intellectual Property Law exclusvely handle only reexamnaton cases and are gven specal tranng n reexamnaton procedures and relevant case law. 9 2 Thus, reexamnaton cases are no longer assgned to examners accordng to technology, as was the case pror to the 2005 ntatve, but to the specal CRU unt specalzng n reexamnaton procedure. 93 Also n 2005 the USPTO mplemented a "panel revew" procedure to ensure the qualty of reexamnaton proceedngs. 94 All reexamnaton decsons that dspose of the case, such as fnal rejectons or decsons to allow the clams, now requre a thorough revew by a panel of supervsors and senor patent examners. 95 As declared by the USPTO, the new procedures serve to "enhance the qualty and reduce the tme of reexamnatons by allowng the USPTO to montor more effectvely the reexamnaton operatons. ' 96 The developments n reexamnaton procedure correspond wth changng trends n reexamnaton pendency and effcacy. 97 Reexamnaton pendency, for example, has been decreasng n duraton. 98 Recently, average ex parte reexamnaton pendency (flng date to rght to appeal notce) has been shrnkng to about two years. 99 Inter partes reexamnaton has been speedng up qute a bt as well. In several nter partes reexamnatons fled n early 2008, actons closng prosecuton were receved wthn eght months. 100 Takng nto account appeals to the Board of Patent Appeals and Interferences decsons, whch typcally takes from 12 to 18 months, 10 1 recent reexamnatons should be concluded n two to four years That 92 Revew of US. Patent and Trademark Offce Operatons, Includng Analyss of Government Accountablty Offce, Inspector General, and Natonal Academy of Publc Admnstraton Reports: Hearng Before the Subcomm. On Courts, the Internet, and Intellectual Property of the H Comm. on the Judcary, 109th Cong (2005) (prepared statement of Jon W. Dudas, Drector of the U.S. Patent and Trademark Offce) [herenafter Revew of USPTO Operatons]; see UNITED STATES PATENT AND TRADEMARK OFFICE, PERFORMANCE AND ACCOUNTABILITY REPORT FOR FISCAL YEAR 2005, at 19, avalable at 93 Press Release, U.S. Patent and Trademark Offce, supra note 89. W Id. 9 Id. 9 Jd 97 Revew of USPTO Operatons, supra note 92, at Press Release, U.S. Patent and Trademark Offce, supra note Id.; see Oho Wllow Wood Co. v. Alps South Corp., No. 04CV 1223, 2008 U.S. Dst. LEXIS 89287, at *9 (S.D. Oho Oct. 21, 2008) (estmatng a reexamnaton to take about two years), reconsderaton granted, 2008 U.S. Dst. LEXIS (S.D. Oho Nov ). 100 USPTO Control No. 95/000,342 (fled Feb. 11, 2008) (recevng acton closng prosecuton wthn eght months); see USPTO Control No. 95/000,336 (fled Jan. 11, 2008) (recevng acton closng prosecuton wthn nne months); see also USPTO Control No. 95/000,340 (fled Jan. 30, 2008) (recevng acton closng prosecuton wthn fourteen months); see also USPTO Control No. 95/000,345 (fled Feb. 11, 2008) (recevng acton closng prosecuton wthn twelve months); see also USPTO Control No. 95/000,336 (fled Jan. 11, 2008) (recevng acton closng prosecuton wthn nne months). 101 ROBERT GREENE STERNE, OPTIMIZING REEXAMINATION PATENT STRATEGY AT THE U.S. PATENT OFFICE FOR YOUR IP BUSINESS MODEL meda/pnc/6/meda.916.pdf. 102 See d. (estmatng months). 11 (2008), avalable at

15 Unted States Reexamnaton Procedures compares favorably to the medan tme to tral n federal dstrct court, 24.8 months Greater effcency n the reexamnaton process has also corresponded wth an ncrease n the number of cases n whch all clams of the patent subjected to reexamnaton are canceled The percentage of patents that were completely nvaldated (.e., all clams were canceled) as a result of exparte reexamnaton from July 1, 1981 to June 30, 2006 was approxmately 10%.105 In 2008, about 19% of patents subjected to ex parte reexamnaton were completely nvaldated The percentage of patents that were partally changed due to exparte reexamnaton has remaned approxmately the same at about 64%.107 Confrmed N Canceled Changed Confrmed N Canceled Changed Fgure X. Patents Subjected to Ex Parte Reexamnaton-md-2006 Fgure 4: Patents Subjected to Ex Parte Reexamnaton-2008 Inter partes reexamnaton, snce ts ncepton n 1999, has resulted n a much hgher yeld of nvaldated reexamned patents. 108 Specfcally, between 1999 and 10 3 ADMINISTRATIVE OFFICE OF THE U.S. COURTS, 2008 ANNUAL REPORT OF THE DIRECTOR: JUDICIAL BUSINESS OF THE UNITED STATES COURTS 189, avalable at http :// 104 Compare 2007 EXPARTEDATA, supra note 68, at 2 (ndcatng that 636 of the 6,066 exparte reexamnaton certfcates ssued from 1981 through 2007 resulted n all clams beng canceled), wth 2008 EX PARTE DATA, supra note 75, at 2 (ndcatng that 739 of the 6,595 ex parte reexamnaton certfcates ssued from 1981 through 2008 resulted n all clams beng canceled). 105 U.S. PATENT AND TRADEMARK OFFICE, EXPARTE REEXAMINATION FILING DATA-JUNE 30, 2006, at 2, avalable athttp:// partes to pdf. 106 Compare 2007 EXPARTEDATA, supra note 68, at 2 (ndcatng that 636 of the 6,066 exparte reexamnaton certfcates ssued from 1981 through 2007 resulted n all clams beng canceled), wth 2008 EX PARTE DATA, supra note 75, at 2 (ndcatng that 739 of the 6,595 ex parte reexamnaton certfcates ssued from 1981 through 2008 resulted n all clams beng canceled). 107 Comparo 2007 EX PARTE DATA, supra note 68, at 2 (ndcatng that 3,874 of the 6,066 ox parte reexamnaton certfcates ssued from 1981 through 2007 resulted n changed clams), wth 2008 EXPARTEDATA, supra note 75, at 2 (ndcatng that 4,213 of the 6,595 ex parte reexamnaton certfcates ssued from 1981 through 2008 resulted n changed clams).

16 The John Marshall Revew of Intellectual Property Law 2007, nter partes reexamnaton resulted n 75% of the patents under revew beng completely nvaldated, 17% of the patents undergong some change n the clams, and 8% of the patents escapng any form of change n nterpartes reexamnaton In 2008, the percentage of patents that were completely nvaldated as a result of nterpartes revew actually decreased to 70% whle 21% of the patents were changed and 9% of the patents were confrmed. 110 Confrmed W Canceled Changed / Confrmed Canceled Changed Fgure 5: Patents Subjected to Inter Partes Reexamnaton Fgure 6-" Patents Subjected to Inter Partes Reexamnaton-2008 Perhaps most ndcatve of the changng atttude toward reexamnatons, and toward nter partes reexamnatons n partcular, s the dramatc ncrease n the number of reexamnaton flngs. 111 Between 2006 and 2008, the number of exparte reexamnaton flngs jumped from 511 to 680, a 33% ncrease. 112 Durng that perod, the number of nter partes reexamnaton flngs jumped 140%, from 70 n 2006 to 168 n The percentage of reexamnaton requests granted for ex parte reexamnatons has been approxmately 90% snce July 1981, whle the percentage of, Compare d. (establshng that 11 percent of the exparte reexamnaton certfcates ssued between 1981 and 2008 resulted n all clams beng canceled), wth 2008 INTER PARTIESDATA, supra note 2, at 1 (ndcatng that 70 percent of the nte±rpa±rtes reexamnaton certfcates ssued between 1999 and 2008 resulted n all clams beng canceled). 109 U.S. Patent and Trademark Offce, INTERPARTESREEXAMINATION FILING DATA-December 31, 2007, at 1 [herenafter 2007 INTER PARTES DATA], avalable at INTER PARTESDATA, supra note 2, at 1. "I See 2008 EX PARTE DATA, supra note 75, at 1 (ndcatng that there were 296 ex parte reexamnaton flngs n 2001 and 680 flngs n 2008); see also 2008 INTER PARTES DATA, supra note 2, at 1 (notng only 1 nterpa±rtes reexamnaton flng n 2001 and 168 flngs n 2008) EXPARTEDATA, supra note 75, at 1; 2008 INTER PARTESDATA, supra note 2, at 1. 11:32008 INTER PARTESDATA, supra note 2, at 1.

17 Unted States Reexamnaton Procedures nter partes reexamnaton requests granted has been closer to 95% snce November Fgure 7. Number ofex Parte Reexamnaton Fngs t A Fgure 8: Number ofinter Partes Reexamnaton Flngs " EXPARTEDATA, supra note 75, at 1; 2008 INTER PARTESDATA, supra note 2, at 1.

18 The John Marshall Revew of Intellectual Property Law Several factors have contrbuted to the mpressve effcacy of nter partes reexamnatons. 115 The most sgnfcant s the challenger's opportunty for partcpaton n the reexamnaton and appeals process The challenger may respond to amendments and arguments made by the patent holder. 117 Frequently, patent holders present a broad array of new clams durng reexamnaton 1 8, and challengers are permtted to submt new references and address each of the new proposed clams Furthermore, durng nter partes reexamnaton, the patent holder must submt arguments and amendments n wrtng only and may no longer utlze the tradtonally effectve tactc of conductng ntervews wth the examner to obtan allowance of the pendng clams The newly formed Central Reexamnaton Unt also appears to be carefully and competently scrutnzng patents under reexamnaton, provded the requester s able produce relevant pror art Requesters have been attracted to the nter partes procedure not only by ts effcacy but also by developments n ts nterplay wth ltgaton. 122 Stays of ltgaton are granted more readly n vew of co-pendng nter partes reexamnaton, 123 gvng ncentve for a defendant to quckly fle for an nterpartes reexamnaton to argue for a stay of ltgaton pendng reexamnaton. 124 Fnally, requesters, whle barred from rasng the same nvaldty attacks they could have rased durng nter partes reexamnaton, are often unaffected n the other possble types of defenses they mght rase at tral after a fnal nterpartes decson such as pror publc uses and offers for sale, dervaton, or pror nventon Moreover, requesters are now permtted to appeal adverse decsons all the way to the Federal Crcut.126 V. DECIDING WHETHER AND WHEN TO FILE A REEXAMINATION REQUEST In vew of the recent data on reexamnaton practce, there are several factors a party should take nto consderaton when decdng whether and when to fle exparte or nter partes reexamnaton requests. 127 A potental challenger who s accused of nfrngng a patent but s not yet nvolved n a lawsut has several ncentves for 115 See Erc E. Wllams, Patent Reform." The Pharmaceutcal Industry Prescrpton for Post- Grant Opposton And Remedes, 90 J. PAT. & TRADEMARK OFF. SOC'Y 354, 358 (2008) (notng benefts of nterpartes reexamnaton). 116 Id. (hghlghtng challenger nvolvement as a specfc advantage of nter partes reexamnaton over exparte reexamnaton) U.S.C. 314(b)(2) (2006); 37 C.F.R (2009); accordmpep, supra note 15, See 35 U.S.C. 305 (allowng patent holders to present new clams durng reexamnaton) U.S.C. 314(b)(2); 37 C.F.R ; acco-rdmpep, supra note 15, C.F.R (c); accordmpep, supra note 15, See Sterne et al., supra note 1, at (dscussng how the Central Reexamnaton Unt mproves qualty and reduces pendency). 122 Tun-Jen Chang, The Advantages oflnter Partes Reexamnaton, 90 J. PAT. & TRADEMARK OFF. SOCY 579, (2008). 123 Id. at Id U.S.C. 315(c) (2006); 37 C.F.R ; aeeordmpep, supra note 15, U.S.C See Morgan & Stoner, supra note 47, at (lstng the pros and cons of reexamnaton).

19 Unted States Reexamnaton Procedures flng for reexamnaton An accused nfrnger greatly ncreases the chance for a grant of a stay of ltgaton f reexamnaton s commenced even before a lawsut s brought aganst the accused nfrnger. 129 Courts wll wegh three factors n decdng whether to stay ltgaton pendng reexamnaton: (1) whether a stay would unduly prejudce or present a clear tactcal dsadvantage to the non-movng party; (2) whether a stay wll smplfy the ssues n queston and the tral of the case; and (3) whether dscovery s complete and whether a tral date has been set. 130 Partes that successfully present arguments to the court concernng prejudce or smplfcaton of ssues may have a better chance of obtanng a stay. 131 Lkewse, the tmng of the reexamnaton relatve to ltgaton greatly nfluences a dstrct court's decson of whether to grant a stay A reexamnaton proceedng that was ntated before the lawsut wll be much more lkely to result n a stay of the ltgaton Chang, supra note 122, at (dscussng economc and ltgaton-related advantages for challengers). 129 Matthew A. Smth, Stay, Suspenson, and Merger Consderatons for Concurrent Proceedngs InvolvngInter Partes Reexamnaton, 90 J. PAT. & TRADEMARK OFF. SOC'Y 657, (2008) (notng that courts consder the stage of ltgaton n evaluatng a moton to stay). 130 Target Therapeutcs Inc. v. ScMed Lfe Sys. Inc., 33 U.S.P.Q.2d (BNA) 2022, 2023 (N.D. Cal. 1995). 131 See Smth, supra note 129, at Chang, supra note 122, at See d. at 580 (notng a potental nfrnger's many benefts, and few detrments, of flng for nterpartes reexamnaton n antcpaton of ltgaton).

20 The John Marshall Revew of Intellectual Property Law The venue of the ltgaton s also mportant n determnng the lkelhood of a grant of a stay A few courts, such as Delaware and the Eastern Dstrct of Vrgna, generally refuse to stay. 135 Among the courts that wll consder grantng stays pendng reexamnaton, certan courts are much more lkely to grant stays than others The Northern Dstrct of Calforna, for example, granted 68% of stays from 1981 untl 2009 whle the Eastern Dstrct of Texas granted 34% of stays durng the same tme % 60% 5 0 % - 40% % 4. 20% $ 10% 0% E.D. Tex. N.D. Cal. D. Del. E.D. Va. Fgure 9: Percentage of Stays Granted n Reported Cases See, e.g., Henz Kettler GMBH & Co. v. Indan Indus., Inc., 592 F. Supp. 2d 880 (E.D. Va. 2009) (denyng a stay of ltgaton pendng patent reexamnaton); Power Integratons Inc. v. Farchld Semconductor Int'l. Inc., No JJF-LPS, 2008 U.S. Dst. LEXIS , at *3 (D. Del. Dec. 19, 2008) (denyng a stay of ltgaton pendng patent reexamnaton); Spa Syspatronc, AG v. Verfone, Inc., No. 07-CV-416, 2008 U.S. Dst. LEXIS 34223, at *14 (E.D. Tex. Apr. 24, 2008) (grantng Verfone's moton to stay proceedngs pendng a reexamnaton of the patent-n-sut); Teradyne, Inc. v. Hewlett-Packard Co., No. C MHP, 1993 U.S. Dst. LEXIS 14601, at *28 (N.D. Cal. Jan. 7, 1993) (grantng Hewlett-Packard's moton to stay ltgaton pendng reexamnaton of the patent-n-sut). 1,35 See, e.g., Henz Kettler, 592 F. Supp. 2d at 880 (denyng a stay of ltgaton pendng patent reexamnaton); Power Integratons, 2008 U.S. Dst. LEXIS , at *3 (denyng a stay of ltgaton pendng patent reexamnaton). 136 Compare Henz Kettler, 592 F. Supp. 2d at 880 (denyng a stay of ltgaton pendng patent reexamnaton), wth Teradyne, 1993 U.S. Dst. LEXIS 14601, at *3 (grantng Hewlett-Packard's moton to stay ltgaton pendng reexamnaton of the patent-n-sut). ' 7 See, e.g., Henz Kettler, 592 F. Supp. 2d 880 (denyng a stay of ltgaton pendng patent reexamnaton); Power Integratons, 2008 U.S. Dst. LEXIS , at *3 (denyng a stay of ltgaton pendng patent reexamnaton); Spa Syspatronc, 2008 U.S. Dst. LEXIS 34223, at *14 (grantng Verfone's moton to stay proceedngs pendng a reexamnaton of the patent-n-sut); Teradyne, 1993 U.S. Dst. LEXIS 14601, at *28 (grantng Hewlett-Packard's moton to stay ltgaton pendng reexamnaton of the patent-n-sut).

21 Unted States Reexamnaton Procedures Pendng reexamnatons may also be nfluental n determnng whether a prelmnary njuncton s granted aganst an accused nfrnger, dependng on the stage of the ltgaton and reexamnaton. 138 The Federal Crcut has acknowledged that when a patent "has already been subjected to reexamnaton, [the patentee] has at ths pont n the case shown that t s reasonably lkely to wthstand such a valdty challenge" and s more lkely to succeed on the merts. 139 The current stage of the pendng reexamnaton also weghs on the outcome of a prelmnary njuncton determnaton. 140 A reexamnaton that s merely pendng but pror to offcal acton by the examner may not be enough for an accused nfrnger to avod a prelmnary njuncton For example, n Erco Int' Corp. v. Docs Mktg., Inc., the court declned to remove a prelmnary njuncton order after the USPTO granted a request for reexamnaton of the asserted patent, statng "the PTO readly grants reexamnaton requests." 142 The court further opned, "[s]ubstantve conclusons... cannot be drawn from the PTO's mere wllngness to perform a reexamnaton" and "[t]he PTO's order s not a merts determnaton, nor does t suggest what the outcome of ts ultmate merts determnaton wll be." 143 Some courts, however, may consder the mere grant of a reexamnaton request as castng enough doubt on the valdty of a patent to justfy denal of a prelmnary njuncton. 144 Indeed, the Federal Crcut has artculated the valdty consderatons at the prelmnary njuncton stage, statng that "[v]aldty challenges durng prelmnary njuncton proceedngs can be successful, that s, they may rase substantal questons of nvaldty, on evdence that would not suffce to support a judgment of nvaldty at tral." 145 In resstng a prelmnary njuncton, [ one need not make out a case of actual nvaldty. Vulnerablty s the ssue at the prelmnary njuncton stage, whle valdty s the ssue at tral. The showng of a substantal queston as to nvaldty thus requres less proof than the clear and convncng showng necessary to establsh nvaldty tself." E.g., Henz Kettler, 592 F. Supp. 2d at Oakley, Inc. v. Sunglass Hut Int'l, 316 F.3d 1331, 1342 (Fed. Cr. 2003). 140 Id. at 'I Erco Int'l. Corp. v. Doc's Mktg., Inc., No. 05-CV-2924, 2007 U.S. Dst LEXIS 1367, at *33-34 (N.D. Oho Jan. 9, 2007). 142 Id. at * Id. at * See, e.g. Pergo, Inc. v. Faus Group, Inc., 401 F. Supp. 2d 515 (E.D.N.C. 2005) (denyng prelmnary njuncton based partly on pendng reexamnaton proceedng concernng patent-nsut); see also, Eugene R. Qunn, Jr., Abusng Intellectual Property Rghts n Cyberspace." Patent Msuse Revsted, 28 WM. MITCHELL L. REV. 955, 988 (2002). "Although the denal of a prelmnary njuncton certanly does not speak to the ultmate merts of the nvaldty defense proffered by Barnesandnoble.com, t does brng nto substantal doubt the vablty of the Amazon.com one-clck patent." Id. 145 Pergo, 401 F. Supp. 2d at Amazon.com, Inc. v. Barnesandnoble. com, Inc., 239 F.3d 1343, 1359 (Fed. Cr. 2001).

22 The John Marshall Revew of Intellectual Property Law A thrd ncentve for an accused nfrnger to fle a reexamnaton request s to render a judgment of nfrngement moot. 147 Specfcally, a fnal judgment of nvaldty of a patent resultng from a reexamnaton proceedng may overcome a judgment of nfrngement nvolvng the patent. 148 In the Transloge par of cases, the Federal Crcut revewed two parallel cases-the appeal of an exparte reexamnaton proceedng from the Board of Patent Appeals and the appeal of a dstrct court jury verdct of valdty and nfrngement concernng the same patent. 149 The patent-nsut n the dstrct court ltgaton was smultaneously subjected to ex parte reexamnatons. 150 In the dstrct court ltgaton, the jury returned a verdct of valdty and nfrngement In contrast, n the reexamnaton proceedng, the patent-n-sut was nvaldated by the examner on the bass of obvousness. The Board then affrmed the nvaldty fndng The Federal Crcut revewed the reexamnaton and dstrct court appeals at the same tme and affrmed the fndng of nvaldty by the Board and remanded the dstrct court judgment for dsmssal Under the facts of Translogc, t appears that the tmng of a reexamnaton proceedng s essental n determnng whether a fnal judgment of nvaldty n the reexamnaton proceedng wll effectvely render a judgment of nfrngement as "moot." 154 The lkely effect of Transloge s that decsons that are ssued by the Federal Crcut frst are the controllng decsons concernng patent valdty and may act to nullfy any verdct or decson n the parallel proceedng Another factor to consder n decdng whether to fle a reexamnaton request s the ablty to elmnate potental lablty for hstorcal sales The Patent Act provdes for "ntervenng rghts" for those who may nfrnge the newly amended clams. 157 In general, ntervenng rghts, applcable to both reexamned and ressued patents, permt nfrngers of amended clams to avod damages for makng, purchasng, or usng products that nfrnge the amended clams resultng from 117 See also Mddleton, Inc. v. Mnn. Mnng & Mfg. Co., No. 03-CV-40493, 2004 U.S. Dst. LEXIS 16812, at *34 (S.D. Iowa Aug. 24, 2004); Goello Enters. Ltd. v. Mattel, Inc., No GMS, 2001 U.S. Dst. LEXIS 26158, at *1 (D. Del. Jan. 29, 2001). 118 See, e.g., Translogc Tech., Inc. v. Htach, Ltd., 250 F. App'x 988 (Fed. Cr. 2007) (vacatng a verdct of nfrngement n the parallel ltgaton to the affrmance of the examner's rejecton). But see In re Swanson, 540 F.3d 1368, 1379 n.5 (Fed. Cr. 2008) ("[A]n attempt to reopen a fnal federal court judgment of nfrngement on the bass of a reexamnaton fndng of nvaldty mght rase consttutonal problems."). 149) In re Translogc Tech., Inc., 504 F.3d 1249, 1251 (Fed. Cr. 2007); Translogc Tech., Inc v. Htach, Ltd., 250 F. App'x 988, 988 (Fed. Cr. 2007). 150 In re Translogjc Tech., 504 F.3d at Translogc Tech., Inc. v. Htach Am., Ltd., 404 F. Supp. 2d 1250, 1251 (Dst. Or. 2005), vacated, Transloge Teeh., 250 F. App'x at In re Translogc Tech., 504 F.3d at Id.; Translogc Tech., 250 F. App'x at Compare Translogc Teeh., 250 F. App'x at 988 (vacatng an nfrngement verdct based on the smultaneous reexamnaton nvaldaton of the patent), wth In re Swanson, 540 F.3d 1368, 1379 n.5 (Fed. Cr. 2008) ("[A]n attempt to reopen a fnal federal court judgment of nfrngement on the bass of a reexamnaton fndng of nvaldty mght rase consttutonal problems."). 155 Compare Translogc Tech., 250 F. App'x at 988 (holdng that the nvaldty determnaton vacates the nfrngement determnaton n smultaneous actons), wth In re Swanson, 540 F.3d at 1370 n.5 (statng that reopenng a fnal judgment of nfrngement n lght of a reexamnaton fndng of nvaldty may present consttutonal ssues). 156 See 35 U.S.C. 252, 307(b) (2006) (lmtng potental lablty to the date of ressue). 157 Id.

23 Unted States Reexamnaton Procedures reexamnaton or ressue for the perod pror to the ssue of a certfcate of reexamnaton or ressue1 5 8 In fact, any clam that s substantvely amended durng reexamnaton proceeds s rrebuttably presumed to have been nvald pror to ssuance of the reexamnaton certfcate and thus such clams cannot be used to recover damages for actvtes that occurred pror to the reexamnaton certfcate. 159 Accordngly, some partes fle reexamnaton requests wth the prncpal am of elmnatng lablty for hstorcal sales of allegng nfrngng products or servces Intervenng rghts also permt a court, at ts dscreton, to allow contnued nfrngement of the amended clams to the extent that the nfrnger has made "substantal preparaton" pror to ssue of the certfcate of reexamnaton or ressue to make, purchase, or use products that nfrnge the amended clams of the patent. 161 In other words, ntervenng rghts protect thrd partes' relance on the scope of the orgnal clams of an ssued patent so that thrd partes may make nvestments n products that do not nfrnge the orgnal patent wthout fear that a later admnstratve proceedng may adversely alter the clams of that patent. 162 Where a patent nfrngement sut s consdered mmnent t s also mportant to consder whether the court or the USPTO wll provde a better forum for the defendant's case. 163 Some arguments, such as arguments nvolvng complex technology or complcated, techncal arguments, are better suted for the USPTO than a jury For example, an obvousness argument for nvaldatng a patent has tradtonally had more success n the USPTO because of the prevalent use of a rgd obvousness test that many jurors may have found confusng The Supreme Court's recent decson n KR, 166 however, may have altered the tradtonal dynamcs of obvousness arguments, and t now seems to be a closer call as jures and judges may now be much more nclned to fnd a patent "obvous" n lght of the revsed standards set forth by the Supreme Court In addton, challengers must also consder that most examners are reluctant to completely nvaldate a patent and tend to allow at least some form of amendment to the patent clams. 168 In contrast, judges and jures tend to vew patent valdty as an all-or-nothng 158 Soo Engneered Data Prods., Inc. v. GBS Corp., 506 F. Supp. 2d 461, (D. Colo. 2007) (summarzng the statutory provsons); see also InTest Corp. v. Red-Ashman Mfg., Inc., 66 F. Supp. 2d 576, (D. Del. 1999) (detalng the prncple of ntervenng rghts). 159 Bloom Eng'g Co. v. N. Am. Mfg. Co., 129 F.3d 1247, 1249 (Fed. Cr. 1997). 160 See d. ('[35 U.S.C. 252 and 307(b)] releves those who may have nfrnged the orgnal clams from lablty durng the perod before the clams are valdated.") U.S.C. 252; see also TnTest, 66 F. Supp. 2d at 582 (dscussng the underlyng prncple of ntervenng rghts). 162 See 35 U.S.C See Davd L. McCombs & Theodore Foster, Patent Reexamnaton: Earnng Its Keep n the Ltgator's Toolbox, n 3RD ANNUAL PATENT LAW INSTITUTE 685, (PLI Pats., Copyrghts, Trademarks, & Lterary Prop., Course Handbook Ser. No. 964, 2009), avalable atwl, 964 PLI/Pat W Id. 1 5 See KSR Int'l. Co. v. Teleflex Inc., 550 U.S. 398, 415 (2007) (rejectng the Federal Crcut's "rgd" teachng, suggeston, motvaton test for obvousness). 166 See generallyd. (explanng a less rdged standard for obvousness). 107 Id. at See 37 C.F.R. 121(g) (2009) (permttng examner to make or suggest amendments); accord MPEP, supra note 15, 714(I)(E).

24 The John Marshall Revew of Intellectual Property Law proposton. 169 In any event, the facts of the partcular case are unque to each defendant, and defendants must consder the benefts and drawbacks of the USPTO and dstrct court as a forum for nvaldatng a patent. Where ltgaton s pendng or mmnent, challengers wll generally want to fle for reexamnaton as soon as possble. The sooner a reexamnaton proceedng s ntated, the more lkely a dstrct court wll grant a stay of ltgaton. Furthermore, as evdent n the Translogc case, a judgment of nfrngement at tral may be completely rendered moot by a successful challenge to a patent's valdty through a fnal reexamnaton judgment affrmed by the Federal Crcut. 170 The outcome may turn on whch path reaches a fnal judgment at the Federal Crcut frst-the verdct at tral or the reexamnaton determnaton by the USPTO.171 Agan, the sooner the defendant ntates the reexamnaton process, the more lkely the reexamnaton wll become fnal by the tme a verdct s reached n dstrct court. Fnally, a defendant who fles for reexamnaton mmedately after the lawsut commences may have better arguments aganst a prelmnary njuncton. 172 In partcular, a defendant who fles for an nter partes reexamnaton wll lkely receve a frst offce acton along wth a grant for reexamnaton wthn two months of flng the request for reexamnaton The quck turnaround allows the defendant who successfully obtans an offce acton rejectng the patent's clams to persuasvely argue that the patent holder s unlkely to succeed on the merts of the case Partes to nfrngement lawsuts may also beneft from flng for reexamnatons later n the lawsut If the defendant fles for reexamnaton before tral, the request for reexamnaton may be supported by arguments developed throughout the lawsut Furthermore, there s less of a fear of estoppel from nter partes reexamnatons when the tral s near because the defendant's pror art searchng 169 See 35 U.S.C. 282 (2006) (lstng nvaldty as two out of the four enumerated defenses). 170 See Translogc Tech., Inc., v. Htach, Ltd., 250 F. App'x 988 (Fed. Cr. 2007) (reversng a holdng of nfrngement n accordance wth a smultaneous affrmance of the PTO's nvaldaton of the clams at ssue). But see In re Swanson, 540 F.3d 1368, 1379 n.5 (Fed. Cr. 2008) (reopenng a fnal judgment of nfrngement based on a reexamnaton fndng of nvaldty may be unconsttutonal). 171 In re Translogc Tech., Inc, 504 F.3d 1249, 1251 (Fed. Cr. 2007). Defendant Htach fled fve thrd party requests for reexamnaton of the '666 patent between June 1999 and September Id. In October 2003, a jury found the '666 patent vald. Id. In March 2004, the PTO Board merged the Htach reexamnaton requests and rejected certan clams n the '666 patent for obvousness. Id. In May 2005, the Dstrct Court entered a permanent njuncton aganst Htach, the jury found nfrngement and awarded Translogc $86.5 mllon n damages, and the U.S. Court of Appeals stayed. Id. In July 2005, the PTO Board affrmed the rejecton, dened Translogc a rehearng, and Translogc appealed to the US Court of Appeals. Id. In October 2007, the U.S. Court of Appeals affrmed the PTO Board's rejecton of the patent as obvous and vacated the Dstrct Court's decson for permanent njuncton and damages. Id. 172 Eg., d 173 MCCOMBS & O'DELL, supra note 31, at 5. 17" See Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 847 (Fed. Cr. 2008) (holdng that the dstrct court had to consder the posture of nter partes proceedngs when evaluatng the lkelhood success of the merts). 175 Contra Amado v. Mcrosoft Corp., 517 F.3d 1353, 1363 (Fed. Cr. 2008) (the dstrct court dd not abuse ts dscreton n denyng a moton to vacate judgment when the reexamnaton was fled after an unfavorable judgment was entered). 176 Translogc Tech., Inc., v. Htach, Ltd., 250 F. App'x 988 (Fed. Cr. 2007).

25 Unted States Reexamnaton Procedures has been completed The reexamnaton proceedng may also be nfluental n post-tral proceedngs such as n determnng whether permanent njunctons are approprate. 178 Even after the tral verdct, defendants may stll beneft from reexamnaton. 179 The defendant may, for example, seek to nullfy an nfrngement verdct wth a fndng of nvaldty n reexamnaton A post-verdct reexamnaton may also enable a party to persuade a court to lft an njuncton or vod an ongong oblgaton to pay royaltes to a patentee who prevaled n the ltgaton. 181 After a party has decded to fle a reexamnaton request, the next decson s between exparte and nterpartes procedures The prmary beneft of nterpartes reexamnaton s ts effcacy, whch as noted above arses from the fact that the challenger may respond to arguments and amendments made by the patent holder The challenger must also consder, however, the drawbacks of nter partes reexamnaton An accused nfrnger who s unknown to the patent holder may fle for an ex parte reexamnaton and mantan hs anonymty, but would necessarly dsclose hs dentty f flng for an nter partes reexamnaton Furthermore, the estoppel provson of nterpartes reexamnatons mght prevent an accused nfrnger or defendant from makng any arguments n ltgaton whch were made or could have been made durng nter partes reexamnaton Thus, challengers generally fle for nterpartes reexamnaton only f they are confdent that they have dentfed most or all of the relevant patents and publcatons that descrbe relevant preexstng technology. 187 Another factor that mltates n favor of flng for an nter partes reexamnaton s the avalablty of varous other defenses that cannot be rased durng reexamnaton (such as dervaton or pror sale) and thus are not subject to the estoppel provson. 188 Due to these and other factors, ex parte reexamnaton requests stll outnumber nter partes reexamnaton requests by about four to one See 35 U.S.C. 315(c) (2006) (notng an nterpartes estoppel provson). 178 See, e.g., Standard Havens Prods., Inc. v. Gencor Indus, Inc., 27 U.S.P.Q.2d (BNA) 1959 (Fed. Cr. 1993) (reported n table at 996 F.2d 1236) (reversng the dstrct court's refusal to stay a permanent njuncton n lght of reexamnaton). 179 Id. 180 Contra In re Swanson, 540 F.3d 1368, 1379 n.5 (Fed. Cr. 2008) ([A]n attempt to reopen a fnal federal court judgment of nfrngement on the bass of a reexamnaton fndng of nvaldty mght rase consttutonal problems."). 181 See Sarnoff, supra note 50, at (suggestng that patents that have survved reexamnaton may have a heghtened presumpton of valdty). 182 See Chang, supra note 122, at (dentfyng the advantages of nter partes reexamnaton) C.F.R (b) (2009); MPEP, supra note 15, See, e.g., 35 U.S.C. 311(b)(1) (2006) (requrng the request for examnaton nclude the dentty of the real partes n nterest). 185 See 35 U.S.C 302 (omttng any dentfcaton requrement for the requestng party of an ex parte examnaton); see also 35 U.S.C. 311(b) (requrng a request for nter parte examnaton to nclude the dentty of the real partes n nterest) U.S.C. 315(c). 187 See 35 U.S.C. 311(b)(2) (requrng the requester to "set forth the pertnency and manner of applyng cted pror art" relevant to the dentfed clams). 188 See 35 U.S.C. 315(c) (defnng the nter parte reexamnaton estoppel provson). 189 UNITED STATES PATENT AND TRADEMARK OFFICE, PERFORMANCE AND ACCOUNTABILITY REPORT FISCAL YEAR 2008, at 127 [herenafter 2008 PTO PERFORMANCE AND ACCOUNTABILITY REPORT], avalable at annualreport.pdf.