SCOTUS asked to consider proper scope of ex parte reexamination proceedings at USPTO

An inventor obtains a patent by applying to the U.S. Patent & Trademark Office (PTO). During patent prosecution, a patent examiner considers whether, among other things, the inventor’s claims are patentable in light of the relevant prior art.

On some occasions, the patent examiner may not be aware of relevant prior art, or the patent examiner may not understand how certain prior art relates to the claimed invention. As a result, Congress has created mechanisms by which the PTO may later review issued patent claims. Relevant here, any party (including the PTO Director) may submit prior art references and request the PTO to institute an ex parte reexamination of issued patent claims.

Cognizant that an unbridled review system could impose enormous burden and undue harassment on patentees, Congress crafted a threshold safeguard to protect patentees against complete review of patents against their will. The PTO may initiate an ex parte reexamination only if it first determines that the request raises a “substantial new question of patentability.” 35 U.S.C. § 303(a). That is a demanding standard: it requires a showing of a new question not previously considered by the Patent Office.

If the Director finds that there is a “substantial new question of patentability,” then the Director must issue an order for “reexamination of the patent for resolution of the question.” 35 U.S.C. § 304 (emphasis added). Ex parte reexaminations are not, therefore, complete patentability reviews.

An ex parte reexamination thus differs materially from a reissue proceeding. That form of post-grant review is a complete patentability review. But the threshold for institution is far higher than an ex parte reexamination—a reissue proceeding begins only if the patent holder agrees to surrender the patent.

Pactiv, LLC v. Lee presents a question fundamental to all ex parte reexaminations: whether, after the PTO initiates an ex parte reexamination, that proceeding is limited in scope to the question determined to qualify as the “substantial new question of patentability.”

[Supreme-Court]

Here, the PTO Director initiated ex parte reexaminations of two patents owned by Pactiv LLC, a subsidiary of Reynolds Group Holdings. The patents relate to novel means of packaging meat to keep it from turning brown.

The “substantial new question of patentability” identified by the Director included certain prior art references. But the examiner subsequently rejected several of Pactiv’s claims due to wholly different prior art references. There was never any determination under 35 U.S.C. § 303 that these other references raised a “substantial new question of patentability,” nor did the Director issue the order required under Section 304 identifying a “substantial new question of patentability” based on these wholly different prior art references. The patent examiner, Patent Trial and Appeal Board, and the Federal Circuit all rejected petitioner’s argument that the examiner’s final office action exceeded the proper scope of ex parte reexamination.

The petition for certiorari I recently filed on behalf of Pactiv contends that the Supreme Court’s review is warranted for three reasons.

First, this question is quite significant, as its answer will determine the framework for the several hundred ex parte reexaminations conducted annually. The approach taken by the PTO—and affirmed below—guts important safeguards Congress has imposed to protect patentees from undue burden.

Second, the Federal Circuit has deviated from the plain language of the Patent Act. When the PTO Director “finds that a substantial new question of patentability affecting any claim of a patent is raised,” the Director shall then issue an order “for reexamination of the patent for resolution of the question.” 35 U.S.C. § 304 (emphasis added). The statute is unambiguous: the scope of an ex parte reexamination is limited to those issues identified in the Director’s order as raising a “substantial new question of patentability.”

Third, the Federal Circuit’s summary affirmance in this case heightens the need for review. In recent years, the Federal Circuit has resolved a significant portion of its docket via use of its Circuit Rule 36, which provides for summary affirmance. The Federal Circuit may not avoid scrutiny of thorny questions of statutory interpretation through persistent use of its Circuit Rule 36.