United States: Final Really Does Mean Final In The Federal Circuit

Defendants in patent infringement lawsuits often request that the United States Patent and Trademark Office ("PTO") reexamine the patent-in-suit. Patent reexamination is a process where the validity of an issued patent is again reviewed by the PTO. Patent infringement litigation, of course, takes place in federal district courts. Often, a patent infringement action brought by the patentee in federal district court and a reexamination proceeding initiated by the accused infringer in the PTO proceed at the same time. In Fresenius USA v. Baxter International1, the Federal Circuit ruled that where a reexamination and a patent infringement lawsuit involving the same patent are concurrently proceeding, the first action to reach true finality may render the other moot2. In the litigation, the Federal Circuit had earlier affirmed the trial court's judgment that the patent was infringed and not invalid, but remanded the case back to the trial court to determine damages and entitlement to injunctive relief. Before the issues of damages and entitlement to injunctive relieve were finally resolved, the PTO determined in the reexamination proceeding that the patent is invalid and the PTO determination was affirmed by the Federal Circuit. In a subsequent appeal, the Federal Circuit ruled that the reexamination trumped the litigation because the reexamination was finalized before the litigation was finalized.

Two Forums, Three Appeals, and a Complicated Procedural Background

In 2003, Fresenius filed a declaratory judgment action in federal court, seeking a judicial determination that, among other things, certain claims of the Baxter patent were invalid3. In 2006, a jury found the claims of the Baxter patent invalid4. However, the district court granted Baxter's post-trial motion for a judgment as a matter of law, finding that Fresenius had not presented sufficient evidence to support a jury verdict of patent invalidity5. The district court entered judgment in favor of Baxter. On Fresenius' appeal to the Federal Circuit in 2009, the Federal Circuit affirmed the district court's decision and remanded the case back to the district court to determine the proper amount of damages and whether to enter an injunction against Fresenius (hereinafter Fresenius I)6. In response to the Federal Circuit's remand, the district court entered a second judgment in favor of Baxter in March of 20127, and Fresenius again appealed to the Federal Circuit (hereinafter Fresenius II)8.

While the federal court litigation was proceeding, Fresenius was also pursuing a reexamination of the patent in the PTO. In 2005, two years after Fresenius filed its declaratory judgment action in federal court, Fresenius filed for ex parte reexamination of the Baxter patent9. In 2007, a PTO patent examiner issued a final rejection, finding that the claims at issue in the Baxter patent were invalid as obvious10. The examiner's decision was affirmed by the PTO's Board of Patent Appeals and Interferences ("BPAI") in 201011. Baxter timely appealed the BPAI's decision to the Federal Circuit, which, in May 2012, held that the PTO's determination of invalidity was correct12. At that time, Fresenius' appeal of the March 2012 second judgment was pending before the Federal Circuit.

On appeal in Fresenius II, Fresenius contended that Baxter no longer possessed a valid claim for patent infringement as a result of the Federal Circuit's decision to affirm the PTO's determination that the Baxter patent was invalid13. After all, if the patent was invalid, Baxter had no right to enforce it in a federal court infringement action. Thus, Fresenius asserted that Baxter's infringement action was now moot and the district court's March 2012 final judgment in favor of Baxter should be vacated and Baxter's infringement case dismissed. In contrast, Baxter noted that the issue of patent validity was previously litigated by Fresenius in the district court, and decided in Baxter's favor in the first appeal, Fresenius I. Thus, according to Baxter, because Fresenius litigated, and lost, the issue of the invalidity of the Baxter patent in Fresenius I, and because the remand to the district court was only to resolve issues unrelated to patent validity (specifically Baxter's damages and its right to an injunction), Fresenius was precluded by res judicata from using the PTO's recent determination of patent invalidity to moot Baxter's infringement case14.

The Majority Opinion – Fresenius I is Not a Final Judgment Because Other Issues Remained

As an initial matter, it is worth noting how the federal court and the PTO could reach opposite conclusions regarding the validity of the same patent. When an issued patent is challenged in federal court, the challenger, in this case Fresenius, must prove that the patent is invalid by clear and convincing evidence15. Federal courts do not actually determine whether a patent is valid –because there is already a statutory presumption of validity16 – but rather determine whether the challenger has met its burden of proving that the patent is invalid.

In contrast, in reexamination proceedings, the PTO determines invalidity (or unpatentability) by a "preponderance of the evidence" standard, a standard significantly easier to meet than the clear and convincing standard applied by federal courts17. In addition, the claim scope in a PTO reexamination may be broader than the scope determined by a federal court, because the PTO is directed by statute to give claim terms the "broadest reasonable interpretation."18 Thus, given the different burdens of proof and potential variations in claim scope, it is not surprising that in some circumstances a federal court and the PTO will come to different conclusions regarding the validity of the same patent.

Against that background, in Fresenius II, the Federal Circuit majority (Judges Dyk and Prost), framed the question presented as whether, under the patent reexam statute, the cancellation of claims by the PTO in the reexamination is binding in pending district court litigation. Whether the issue of validity was still pending in the district court turned on the issue of whether the first appeal in Fresenius ("Fresenius I"), was sufficiently "final", even though issues regarding the proper amount of damages and Baxter's right to an injunction remained pending, to preclude Fresenius from asserting the PTO's decision that the patent was invalid. The majority began its analysis by reviewing the patent reissue and reexamination statutes, and drawing out the general rule that when a claim is cancelled by the PTO in reexamination, the patent holder loses its cause of action for infringement of such claim.19 The majority also noted that there are several concepts of finality, and that the judgment in Fresenius I may be "final" for purposes of appeal, or application of res judicata in another infringement case between the same parties, but this type of finality was not dispositive of the issue presented.20

In looking at the issue of finality, the majority applied a strict standard, finding that a judgment is not sufficiently "final" to preclude an intervening PTO invalidity determination from being applied unless the earlier judgment "leaves nothing for the court to do but execute the judgment."21 The majority rejected Baxter's argument that the Fresenius I appeal was sufficiently final to prevent the PTO reexamination final judgment from being applied. According to the majority, "it could hardly be clearer that Congress meant for cancellation to terminate pending suits."22 Thus, because the Fresenius litigation in federal court was still pending, the judgment in Fresenius I (and remand solely for issues unrelated to the question of patent validity) was not "sufficiently final" to preclude Fresenius from asserting the PTO's determination of patent invalidity in the federal litigation. According to the court, "[t]he intervening decision invaliding the patents unquestionably applied in the present litigation, because the judgment in this litigation was not final."23 Because Baxter's patent was determined to be invalid, Baxter no longer possessed a viable claim against Fresenius, the infringement case was moot and the Federal Circuit remanded to the trial court with instructions to dismiss Baxter's infringement claim.24

The Dissenting Opinion – So What, Fresenius I Was a Final Decision on the Issue of Validity

Judge Newman wrote a lengthy and strongly-worded dissent. In her view, the PTO, as a non-Article III tribunal, does not have the power to overturn a final decision of the judicial branch.25 Judge Newman believes that the question of patent validity, which was decided in favor of Baxter and against Fresenius at the district court level, and then affirmed by the Federal Circuit in Fresenius I, was sufficiently "final" to preclude Fresenius from relying upon the PTO's subsequent determination of patent invalidity in the ex parte reexamination to terminate Baxter's infringement lawsuit. She noted that "Fresenius contested liability and lost, by declaratory judgment action brought in the district court, and on appeal to Federal Circuit ... The judgment of validity of the '434 patent was not subject to redetermination, and was final in all respects."26 Thus, because the issue of invalidity had been decided in Fresenius I, Judge Newman believes that the judgment is also binding upon the PTO, which can "neither invalidate, nor revive, a patent whose validity the court has adjudicated."27

Denial of Petition for Rehearing and Rehearing En Banc

Baxter subsequently petitioned the Federal Circuit for rehearing and rehearing en banc.28 The petition was denied, with several judges authoring opinions concurring or dissenting in the denial.29 Writing in support of the original panel decision (and the denial of the rehearing petition), Judges Dyk and Prost noted that under Supreme Court and Federal Circuit precedent, there are multiple concepts of "finality" of judgments.30 They further suggested that while there may have been sufficient "finality" in Fresenius I for application of res judicata to another infringement action, this type of "finality" does not support the collateral estoppel of the PTO's reexamination proceedings.31

In contrast, Judges O'Malley, Rader, Wallach and Newman dissented from the denial.32 In their view, the original panel decision was grounded on an "inapplicable and antiquated view of finality" because "none of the critical questions regarding Fresenius' liability for its past infringement of Baxter's patents remained undecided or open to debate when the PTO cancelled the '434 patent."33 "While Baxter lost its right to bring an infringement action against anyone else once the PTO acted[,] ... its right to enforce its judgment in Fresenius I was inviolate."34

Judge Newman also dissented separately from the denial, noting that an administrative agency, such as the PTO, does not have the power to override the judgment of an Article III court.35 She expressed her concern that the original panel decision "destabilizes issued patents, by ignoring the rules of finality" which may impact the value of issued patents and, thus, inventors' financial incentives to invest in ongoing research and development activities.36


In light of the Federal Circuit's decision, and the fractured denial of the rehearing en banc petition, counsel representing both patent holders and alleged infringers alike will need to weigh certain considerations, which may include venue issues (based, for example, upon the estimated length to trial in the venue), whether to seek inter partes review, and, if so, the nature and scope of the prior art selected for the inter partes review due to estoppel concerns. And if Baxter files for a writ of certiorari in the Supreme Court, we will certainly update you in our next Inside IP column.


1 Fresenius USA, Inc. v. Baxter International, Inc., Nos. 2012-1334, 1335, 2013 WL 3305736 (Fed. Cir., July 2, 2013). For ease of use, the parties will be referred to simply as "Fresenius" and "Baxter".

2 Id. at *15.

3 Id. at *1.

4 Id.

5 Id. at *2.

6 Id.

7 Id. at *3.

8 Id.

9 Id.

10 Id.

11 Id. at *4.

12 Id.

13 Id.

14 Id. at *9.

15 See, e.g., Eli Lilly and Co. v. Teva Pharmaceuticals USA, Inc., 619 F.3d 1329, 1336 (Fed. Cir. 2010).

16 35 U.S.C. § 282.

17 MPEP § 706.1.

18 See, e.g., In re NTP, Inc., 654 F.3d 1268, 1274 (Fed. Cir. 2011).

19 Id. at *5-8.

20 Id. at 9.

21 Id. at 10 (internal citations omitted).

22 Id. at 14.

23 Id. at 12.

24 Id. at 15.

25 Id. at *16-17.

26 Id. at 27.

27 Id. at 17.

28 Fresenius USA, Inc. v. Baxter Int'l, Inc., 733 F.3d 1369, 1370 (Fed. Cir. 2013).

29 Id.

30 Id. at 1371.

31 Id.

32 Id. at 1372.

33 Id. at 1381.

34 Id.

35 Id. at 1382.

36 Id.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.