On September 26, 2011, the a three-judge-panel of the United States Court of Appeals for the Federal Circuit issued a ruling in Marine Polymer Technologies, Inc. v. HemCon, Inc., which found intervening rights due to certain patent claims due to the fact that Marine Polymer made arguments about claim language during reexamination, but without actually amending the claims. See Marine Polymer vacated opinion. On January 20, 2012, the full Federal Circuit decided to hear this case en banc and ordered that the original panel decision be vacated and the appeal reinstated. No additional briefing by the parties was requested, but on January 26, 2012, the Federal Circuit issued an Order allowing amicus briefs to be filed on or before February 10, 2012. On February 10, 2012 the Biotechnology Industry Organization and Pharmaceutical Research and Manufacturers of America filed a joint Amici Curiae Brief supporting the appellee and seeking affirmance of the district court decision.
Before getting into the arguments made by the Bio/Pharma brief, let’s go over the now vacated original panel decision to set the table.
In the initial appeal HemCon argued that the district court’s finding of patent infringement should be reversed because Marine Polymer changed the scope of claims in the U.S. Patent No. 6,864,245 during reexamination. This, HemCon argued, made it entitled to intervening rights.
There are two types of intervening rights: (1) absolute intervening rights, which bar claims for infringement based on specific products that were manufactured before the reissue or reexamination; and (2) equitable intervening rights, which bar claims for infringement for new products and newly manufactured versions of prior existing products made after the reissue or reexamination. See 35 U.S.C. §§ 252, 307. Even though the United States Patent and Trademark Office did not issue a reexamination certificate until after the District Court entered its final judgment, the three-judge-panel still nevertheless went on to decide the issue of whether HemCon was entitled to absolute intervening rights because it is a pure question of law.
It was undisputed that the claims in question were not amended during reexamination, although Marine Polymer did make certain arguments about the claim language, which ultimately allowed the claims to emerge unamended. The fact that the claims were not amended was of no consequence.
The panel majority, citing, American Piledriving Equipment, Inc v. Geoquip, Inc. (Fed. Cir. 2011), explained that the Federal Circuit recently held that a patentee disclaimed claim scope on reexamination by arguing that certain claims should be allowed over the prior art because the claimed “integral” components were comprised of “one piece.” This lead the panel majority to extrapolate, writing:
We see no reason why this rule, giving effect to disclaimer of claim scope during reexamination or reissue, should not also apply in the context of intervening rights. In fact, a contrary rule would allow patentees to abuse the reexamination process by changing claims through argument rather than changing the language of the claims to preserve otherwise invalid claims and, at the same time, avoid creating intervening rights as to those claims. Therefore, if the scope of the claims actually and substantively changed because of Marine Polymer’s arguments to the PTO, the claims have been amended by disavowal or estoppel, and intervening rights apply. This is so even though Marine Polymer did not amend the language of its claims on reexamination.
Ultimately the original panel reversed the district court’s grant of judgment of infringement to Marine Polymer on the ground of absolute intervening rights and, as a consequence of that holding, both the injunction and damages award were vacated.
As you might expect, Judge Lourie did not see eye to eye with Judge Dyk (who authored the panel majority) and Judge Gajarsa who joined. Judge Lourie would have not even addressed the issue of intervening rights, finding it best to have it addressed first by the District Court, which even the majority agreed would have to first rule on equitable intervening rights before Federal Circuit review. Judge Lourie wrote:
We should have the benefit of the district court’s view on the effect of the reexamination proceeding rather than review it ourselves in the first instance. Procedurally, the reexamination proceeding could have been appealed here, and our taking into consideration the results of that proceeding, which may not have been final, could have unfairly deprived the patentee of its right to have its infringement proceeding decided separately from a non-final PTO proceeding.
Yet even if it were proper for us to consider the issue in our review of the district court’s decision, I believe that intervening rights should not apply here. Intervening rights under 35 U.S.C. §§ 307(b) and 316(b) apply only to “amended or new claims.” Thus only “amended or new claims” have the effect specified in 35 U.S.C. §252. Claims 12 and 20 were not new or amended. They are claims from the original patent and their language was not in any way changed. An unchanged original claim should not be considered to be changed for intervening rights purposes based in part on the cancellation during a separate reexamination proceeding of other claims in the patent.
Perhaps the strongest argument made by the Bio/Pharma amici brief is the fact that the original panel majority decision contradicts the express statutory language relating to intervening rights. The Bio/Pharma amici brief explains:
The panel decision is inconsistent with the express statutory language that intervening rights arise only when there is an “amended or new claim… incorporated into a patent following a reexamination proceeding,” but not where the infringer “infringes a valid claim of the reexamined patent which was in the original patent.” 35 U.S. C. §§ 307(b), 316(b). Therefore, an express statutory prerequisite to the applicability of intervening rights under Sections 252 is the existence of an amended or new claim that is incorporated into a patent following a reexamination proceeding — there is no basis for finding that Congress intended intervening rights under Section 252 to apply except where the patentee amended or added new claims.
Pretty persuasive if you ask me, and if I were on the Federal Circuit I think this would be completely dispositive of the issue.
The Bio/Pharma amici brief goes on:
Reexamination proceedings almost always result in arguments by the patentee to either distinguish the claims from the pario art, or to point to support for the claims in the specification. A patentee subject to reexamination must usually make arguments of this sort, since the USPTO often adopts the requester’s proposed rejections in its first Office Action on the merits in reexamination. Even if amendment is not needed, a patentee must necessarily make some statements on the record to seek confirmation of the claims. May such arguments could, with hindsight, be recast as having changed the scope of the claims.
I’ll go one step further. In virtually every patent application argument are made about claims. But why does patent prosecution reality matter when this case is about reexamination? Simply put, the only way the Federal Circuit can logically and in an intellectually honest way find that intervening rights apply in this reexamination is to find that argumentation is an amendment to a claim. If were to happen it would have repercussions beyond reexamination or this case and would, in fact, impact all patent practice.
I personally think it is foolish to attempt to draft patent applications with an eye toward the doctrine of equivalents. The Supreme Court says that the doctrine of equivalents is alive and well, you just have to demonstrate that you couldn’t have foreseen the equivalent at the time you filed the patent application, which means that you were not in possession of the invention under 35 U.S.C. § 112 and not entitled to make the claim, but no one has ever said the Supreme Court really understands patent law or what they say in these cases. Nevertheless, the Federal Circuit has gone one step further, picking up on the Supreme Court prohibition against equivalent infringement when a claim has been amended. The Federal Circuit has said that amending a claim to put it into independent format, even when nothing in the claim substantively changed, is enough to prevent the application of the doctrine of equivalents. Ridiculous I know, but what is even more ridiculous is that the Federal Circuit and Supreme Court continue to believe that the doctrine of equivalents still exists.
In whatever minuscule manner the doctrine of equivalents still exists, if making an argument during prosecution is determined to be an amendment then every claim that isn’t written in independent format and allowed in a first action allowance would no longer be entitled to the doctrine of equivalents. At that point could we all agree that the doctrine of equivalents is dead?
I know this case has nothing to do with the doctrine of equivalents. Having said that, decisions have consequences. One of the reasons I am always so critical of the Supreme Court, aside from them getting so many intellectual property issues wrong, is that when it comes to patent law they don’t understand enough of the law to really appreciate the ripple effects of their decisions. It sounded good in Festo when Justice Kennedy said you couldn’t have been able to write the claim at the time of filing, but he and the others had no clue what that meant. Did they intend to stand disclosure requirements on their head? Doubtful. Here we have the same problem. When you start mucking with express statutory language and say that this is really the same as that and force a square peg into a round statute hold then that has ripple effects.
Judges are supposed to be small-c conservative. They are not legislatures and if they want to write the law they should resign and run for Congress. Interpret the statute thank you very much, don’t re-write them.
I expect that either the full Federal Circuit will uphold the District Court rulings and follow Judge Lourie’s dissent, or in the alternative they will remand the case to the District Court for further consideration.