Inter Partes Reexam: Under Utilized Patent Litigation Defense

Earlier today Scott Daniels of Westerman Hattori Daniels & Adrian wrote on his Reexamination Alert™ blog about his review of 100 requests for inter partes reexamination filed between December 2010 and the end of March 2011.  See The PTO’s Recent Treatment of Reexamination Requests.  Daniels’ review of these cases demonstrates that there was a slight drop in the percentage of reexaminations order compared with historical numbers.  Out of this sampling 90% of the requests were granted, compared to a historical grant rate of 95%.

A 5% drop in the percentage of inter partes reexamination requests isn’t in and of itself interesting. What is extremely interesting, however, is what Daniels concluded was the cause of the denials.

According to Daniels, any request for reexamination should focus on the patent examiner’s reasons for allowance.  If you can come up with prior art that calls into question the examiner’s rationale that should considerably assist your request for reexamination.  Daniels writes:

[The] PTO’s determination of whether an [significant new question of patentability] is raised depends heavily on the original prosecution history, especially the examiner’s stated reason for allowance.  Thus, the PTO’s denial of reexamination is usually based on the requester’s failure to present prior art disclosing the claimed feature that had been lacking in the references cited during the original prosecution.

But what is reexamination, specifically an inter partes reexamination?

Any third-party requester, at any time during the period of enforceability of a patent issued from an original application filed on or after November 29, 1999, may file a request for an inter partes reexamination at the United States Patent and Trademark Office challenging any claim of the patent based on prior patents or printed publications.  The trigger date, November 29, 1999, is owed to the fact that inter partes reexaminations were first authorized upon enactment of the American Inventor’s Protection Act (AIPA), which was signed into law by President Clinton on November 29, 1999.

Prior to the AIPA any request for reexamination would need to be an ex parte request, which would allow any individual or party to request reexamination based on prior patents or printed publications.  The fundamental difference between ex parte and inter partes reexamination is the fact that in an ex parte proceeding the requester cannot participate past the request for reexamination, with only one exception.  In an ex parte reexamination the patent owner may make what is called a “patent owner’s statement.”  See MPEP 2249.  If the patent owner is going to make such a statement it must be filed within two months of the order initiating the reexamination and cannot be extended for any reason.  If a patent owner statement is made the requesting party may reply, but from that point forward would not participate.

In an inter partes reexamination proceeding the requesting party participates throughout the process and may even appeal adverse determinations, first to the Board of Patent Appeals and Interferences (BPAI) and ultimately to the United States Court of Appeals for the Federal Circuit.

The “period of enforceability” requirement mentioned about relates to the time within which a request for reexamination can be made.  The period of enforceability of the patent requirement, was set by rule since there is no useful purpose for expending USPTO resources on deciding patent validity questions in patents which cannot be enforced. The period of enforceability is determined by adding 6 years to the date on which the patent expires because the statute of limitations in a patent infringement action is 6 years, which means a patent infringement action could be brought up until 6 years after a patent expires.  Of course, generally speaking damages can only be awarded for the period of time that overlaps between the statute of limitations and the time the patent was not yet expired.

According to Daniels, who I reached via e-mail for comment:

In almost all cases, inter partes reexamination is better than ex parte reexamination, except of course where the requester wants to stay anonymous or the application from which the patent issued was filed before November 1999.  The opportunity to reply to the patentee’s arguments and to address the specific concerns of the examiner is quite valuable.  This is especially true where the examiner cites his or her own prior art.  Issues commonly evolve over the course of reexamination, so that arguments in an ex parte request often are no longer persuasive by the end of the proceeding. I would add that some of the frequent users of reexamination, such as Apple and Google, almost always select inter partes reexamination when it is an option.

Nevertheless, Daniels says that even given the advantages of inter partes reexamination “only half of the requests that are eligible for inter partes treatment, are actually filed as inter partes requests.”

Reexamination is becoming a larger part of the patent world as an effective and economical means to challenge patents that are being enforced or which may soon be enforced.  In the situation where reexamination is pursued as part of an overall litigation strategy, “inter partes reexamination can be more effective than ex parte reexamination,” Daniels says.  One particular benefit in the concurrent or parallel reexamination scenario is the admissions that can be forced by the third-party requester who is the defendant in ongoing litigation.  In inter partes reexamination “inducing comments from the patentee that might be useful in a parallel infringement litigation, for instance on non-validity issues such as willfulness or materiality, for example.”

Through the first 6 months of fiscal year 2011, which ended on March 31, 2011, only 392 requests for ex parte reexamination were filed at the United States Patent and Trademark Office, and a mere 180 requests for inter partes reexamination were filed.  See Reexaminations FY 2011.  During that time period there were at least 3 times the number of patent infringement litigations commenced.  As you can see from the chart below, which covers FY 1980 through FY 2010, patent litigation is only on the rise.

For the life of me I don’t understand why reexamination, particularly inter partes reexamination is not more popular.  Defending a patent infringement lawsuit is extremely expensive and there is always a lot on the line.  So why does such a useful tool for challenging the validity of an asserted patent continue to be tremendously under utilized?

For those who are serious in defending a patent infringement litigation you really must consider a reexamination strategy.