Reexamination as a Limited Alternative to Litigation

Historically, patent litigation has ranked among the most expensive types of litigation. Congress has listened and experimented with several types of administrative proceedings before the United States Patent and Trademark Office (USPTO) in search of a faster, less expensive proceeding that allow challenges to patent validity. The latest incarnation is called "inter partes" reexamination, and it stands alongside the established "ex parte" reexamination action as viable methods for competitors and would-be defendants to challenge a patent’s validity.

Every strategy has its counter-strategy, and reexamination is no different. Both types of proceeding have something for both the Owner and the potential Requester to like and dislike. On the whole, the proceedings are intended to even the economic playing field when patent validity is involved. Even with some fairly significant limitations and a questionable future, the current reexamination proceedings can be an effective alternatives to litigation.

An Overview

Reexamination proceedings currently come in two flavors: ex parte and inter partes. Both proceedings are conducted like a normal patent examination proceeding with a couple of added procedures to address the heightened need to resolve the validity questions. In that regard, reexamination is readily integrated into the existing USPTO examination infrastructure with the addition of a small office of experienced staff who oversee the reexamination proceedings. Reexamination also fits well into existing IP law firm infrastructure.

Unfortunately, neither proceeding is a full and adequate substitute for litigation. They are better described as limited administrative actions that allow validity challenges under highly limited circumstances. Whether either makes sense or provides an adequate form of challenge must be weighed and balanced against the spectrum of issues likely to be raised in a litigation, if one is or can be started, against the costs of doing so.

Ex Parte Reexamination

Ex parte reexamination is authorized by 35 U.S.C. '' 302-307 and allows a Requester a single opportunity to file a Request to reexamine a patent. Any unexpired patent can be a target of the Request. Only patents or printed prior art publications can be cited in support of the Request, so the proceeding is limited to challenges for invalidity due to novelty (35 U.S.C. ' 102) or obviousness (35 U.S.C. ' 103). A senior examiner other than the original examiner then determines whether a "substantial new question of patentability" is presented in the Request.

If a new question is presented, and the evaluation system is weighted to find that a substantial new question of patentability is presented, the examiner institutes the reexamination. The examiner will send the Owner a letter that sets out all the reasons why the claims are believed to be invalid. The Owner can then respond with narrowing amendments to the claims and arguments against the examiner’s reasoning. This process continues without any further input from the Requester until the claims are deemed patentable by the examiner or the Owner seeks an appeal to the USPTO Board of Patent Appeals and Interferences and, from there, up to the Court of Appeals for the Federal Circuit.

Please note the terminology: A unpatentability@ is the term used before the USPTO and "invalidity@ is the term used in court. While not a key issue, the different terminology reflects the absence of any presumption of validity before a USPTO examiner.

Ex parte reexamination has distinct advantages and drawbacks for the Requester that should be factored into process of selecting a forum to challenge a patent’s validity:

Benefits to the Ex Parte Reexam Requester:

• Requesters can file the Request anonymously. This can be very important when there are fears of retaliation or targeting among existing competitors. Anonymity can also be important for a potential competitor who wants to challenge a dominant patent before risking capital in new equipment that might be unnecessary if the patent is valid and the likelihood of a license is remote. Anonymity assures that an existing situation is not worsened. Indeed, some companies who are known to use a particular firm for their IP work have used a second IP firm for the reexamination as a further layer of anonymity.

• Reexamination does not have jurisdiction or standing requirements. Anybody can request reexamination. Such a situation is valuable for Requesters who cannot sue or be sued in court, such as potential new manufacturers.

• Reexamination is generally less expensive than litigation. The cost savings to a Requester is due to the assumption of spectator status after the initial Request. On average, an ex parte reexamination Request would typically cost no more than about $25,000 to prepare and file the Request. This is minimal compared to litigation: the 2001 AIPLA survey notes a national median cost of patent infringement litigation to be $300,000 to $1 million. Ex parte reexamination would cost about 1-5% that of a judicial proceeding and within the reach of even small competitors. This low barrier of challenge does not make Owners comfortable, but the defense of a challenge to validity by way of ex parte reexamination has corresponding low costs for the Owner with the possible gain of a strengthened patent.

• Because there is no discovery or opportunity for live testimony, reexamination proceedings are less intrusive for executives and research personnel.

• A continuing duty of disclosure under 37 C.F.R. ' 1.56 applies to the Owner but not the Requester. This duty would require the Owner to come forward with any new evidence or information that might affect validity at the risk of rendering the patent unenforceable (regardless of validity) due to a failure to give the information to the examiner. There is no corresponding duty of disclosure on the Requester, who may even remain anonymous. The high stakes of nondisclosure are a significant matter for Owners.

• Once started, the reexamination process cannot be stopped until a final decision is rendered. Settlement and licensing has no effect on the examiner’s duty to reach a final decision either for or against patentability of the claims. A fully prepared Request can be a powerful incentive to begin an advantageous licensing negotiation.

• There is no presumption of validity in reexamination. See In re Etter, 756 F.2d 852, 225 USPQ 1 (Fed. Cir. 1985). The value of this lower standard can be a key factor in the resolution of doubts or ambiguities in the strength or teaching of a reference.

• Claims are given the broadest reasonable interpretation that is consistent with the specification. (MPEP ' 2258(I)(G)). The examiner is not required to construe the claims in a manner that tries to preserve patentability unless the patent under reexamination is an expired patent during its six year period of enforceability. (Id.)

• New arguments presented by the Owner can introduce new prosecution history estoppel and may force the Owner to choose among claim interpretation options that limit the claims. Omissions or misrepresentations to the examiner can be the basis for a defense of unenforceability based on inequitable conduct. In general, the more the patent owner says, the better are the chances that a defendant will find a defect in the file that may give rise to new defenses or find representations that may restrict the claims to a less favorable interpretation.

• Legislation in November 2002 [PL 107-273, 116 Stat. 1758, 1899-1906] overruled In re Portola Packaging, 110 F. 3d 786, 42 U.S.P.Q.2d 1295 (Fed. Cir. 1997) so that Requesters may rely on prior art that was originally cited during the original examination proceeding. A court will tend to give deference to the original examiner= s experienced interpretation of the patent until that original interpretation is proved to be wrong. In reexamination, however, examiners tend to review each reference de novo and without significant predisposition for the initial examination. The ability to rely on previously cited prior art without a presumption of patent validity or deference to the original examiner’s interpretation represent two significant advantages to the Requester that are not available to a defendant in court.

Drawbacks for the Ex Parte Reexam Requester:

• Apart from the initial Request, ex parte reexam does not allow the Requester any input into the examination proceeding or provide any right of appeal if the examiner determines that the claims are patentable. This "file-it-and-pray" posture requires that the Request has to anticipate and address issues that the Owner might raise. The lack of Requester input also means that there is nobody to correct the examiner if the technology or the meaning of a reference is misunderstood.

• The Requester has no opportunity to appeal or contest a decision for patentability. In view of the potentially strengthened posture of a patent that emerges from the reexamination proceeding, the risks of misinterpretation or an understanding of how the technology interacts with the teachings of the prior art heighten the need for a thorough initial Request that fully anticipates all amendments and arguments for patentability.

• Because the Owner has the right to amend the claims to a narrower scope (and possibly broaden the claim scope if the reexam is filed within the two year window allowed for a broadening reissue), the Requester may be giving the Owner an opportunity to clean up a possible validity problem and strengthen the patent. The strengthened patent will emerge from the proceeding with a somewhat stronger presumption of validity by having faced the best prior art and been deemed patentable by the new examiner.

• The Owner can have an interview with the examiner, the nature of which may not be completely recorded in the written summary placed in the file despite admonitions to do so. This may allow for a less complete record of the basis for the patentability decision. Alternatively, if the Owner files a summary of the interview, there exists the possibility that the interview summary may inadvertently include a somewhat slanted view of the details. There isn’t much the Requester can do to correct or fill in the patent prosecution record: the best art has been cited with the best arguments, but the examiner found a patentable invention anyway.

Despite the drawbacks and limitations, ex parte reexamination has gained a reputation as an important tool for patent challengers. The USPTO’s 21^st Century Plan recognizes the value of the proceeding and has announced its intention to retain the ex parte reexamination proceeding.

Ex parte reexamination is not really a viable alternative to litigation. With no voice in the reexamination process, few litigation counsel would suggest that the client would be better served by a reexamination proceeding in which only the Owner can speak with the examiner. Thus, ex parte reexamination is best suited for Requesters who could not yet sue or be sued due to standing and jurisdictional requirements.

Inter Partes Reexamination

In recognition of the one-sided limitations of an ex parte reexamination, there was a desire to allow Requesters more opportunity for involvement in the reexamination process. As with a traditional adversarial litigation process, the theory goes that greater involvement by an adversarial party should result in a more complete, more accurate USPTO resolution of any prior art validity questions. The hard part is crafting limitations so as not to tax the employee resources of the USPTO while still providing an attractive proceeding for validity challenges.

Inter Partes reexamination first became available for use at the end of April 2001 under 35 U.S.C. 311 et seq. This proceeding was intended to augment conventional ex parte reexamination with third party involvement under carefully proscribed conditions.

Several of the statutory limitations have restricted the usefulness of inter partes reexamination as an alternative to litigation. Notably, the for use against patents filed on or after November 29, 1999. If we consider that most patents take at least 2-3 years to work through the examination process (with biotechnology and computer software cases often taking much longer), only a relatively small number of patents would be eligible for challenge under the new procedure. This is seen in the relatively modest number of 41 inter partes reexam requests filed to date.

Procedurally, inter partes reexamination is substantially the same as an ex parte reexamination. The original Request looks the same except for a much bigger filing fee ($8800 v. $2520), an ability for the Requester to file Comments within 30 days from the filing date of any Owner Amendment or Response, and some details at the end of prosecution that allow either the Owner or the Requester to appeal an unfavorable decision to the Board of Patent Appeals and Interferences and then up to the Court of Appeals for the Federal Circuit.

The recent publication of MPEP Chapter 2600 dated May 2, 2004 (three years after the proceeding became available for use) is specifically directed to the procedural details of inter partes reexamination. Some of these provisions may help relieve the uncertainty that has surrounded the proceeding and which may have prevented more active use of the proceeding. Other provisions will produce new heartburn.

For example:

• MPEP ' 2612 lists possible Requesters as licensees (actual and potential), patent litigants, interference applicants, and Respondents to International Trade Commission proceedings. The reference to ITC Respondents is interesting since US ITC proceedings tend to take 15-18 months to complete, far faster than the inter partes reexam proceedings have taken to date and without a statutory estoppel against issues that could have been raised.

• MPEP ' 2616 makes it clear that all claims will be subject to reexamination if a substantial new question is raised as to even one claim in the patent.

• MPEP ' 2617 clarifies that section 112 issues can be raised to the extent they implicate the ability of the issued patent to gain the benefits of an earlier US filing date under 35 U.S.C. ' 120 and, by extension, foreign origin applications under 35 U.S.C. ' 119. Double patenting under 35 U.S.C. '101 and obviousness-type double patenting can also be raised in a validity challenge, and party admissions can be accepted in combination with documentary prior art to support a validity challenge. Section 2658(IV) also notes that priority claims and inventorship can be corrected during an inter partes reexamination.

• MPEP ' 2633 describes some of the various substantive and procedural checks on quality that will occur within the USPTO throughout the reexamination proceeding. The involvement of reexam legal advisers (RLA) and a Special Program Examiner (SPRE) represent institutional procedural expertise as a complement to the technically trained examiner. This combination represents a high degree of expertise that begins the learning curve far ahead of any trial court for patent validity challenges and which goes a long way towards an economical proceeding.

• MPEP ' 2636 establishes a general policy of assigning the reexamination to the art unit who normally handles the technology albeit assigned, when possible, to a different examiner. An objection system is described if one of the parties has a concern about the examiner assigned to the case.

• A definition of what constitutes a "substantial new question of patentability" is set forth in MPEP ' 2642 and follows the duty of disclosure standard: "A prior art patent or printed publication raises a substantial question of patentability where there is a substantial likelihood that a reasonable examiner would consider the prior art or printed publication important in deciding whether or not the claim is patentable." No prima facie case of unpatentability is required thereby leading to the possibility that an inter partes reexamination could be started but include a First Action determination of patentability for all claims. This happened in Reexam No. 9 (Serial No. 95/000,009) and is now involved in a petition-based process of establishing a factual record by declaration for appeal to the Board.

• Section 2642 also notes that a preclusive judicial holding on validity does not occur until all appeals have been had or abandoned. This standard presents defendants with a new opportunity to have a validity challenge resolved before the examiner while a motion for summary judgment is pending, particularly if the court is known for extended pendency on motions. Section 2686.04(II) discusses the estoppel effects on a litigant Requester in seeking inter partes reexamination but not ex parte reexamination.

• The Owner and Requester do not automatically become able to participate in the oral hearing on appeal to the Board of Patent Appeals and Interferences. MPEP ' 2680 notes that each party must file its own Request for an Oral Hearing and pay the hearing fee.

• Similarly, those seeking to appeal a Board decision to the Court of Appeals to the Federal Circuit or participate in an appeal by the other party must file a Notice of Election to Participate at the Board as well as at the Court within 14 days of the Board’s decision.

• The Board cannot indicate that a claim would be allowed if it was amended in a particular way. This differs from the normal examination and ex parte reexam powers of the Board. See, MPEP ' 2682(III).

• MPEP ' 2684 confirms that the duty of disclosure continues to apply to Owners during an inter partes reexamination. There is no corresponding duty of disclosure on the Requester.

Like ex parte reexamination, inter partes reexamination has a number of advantages and disadvantages that give it a viable place in USPTO proceedings. Some of the disadvantages are minor. Others are more significant and will cause counsel to consider well whether inter partes reexamination is best suited for the client’s needs.

Advantages for the Requester

• An Opportunity to Respond B Inter partes reexamination allows the Requester to respond to the Patentees arguments with supplemental arguments and evidence. Requester has 30 days to respond, and there is no additional time allowed for service by mail.

• Appeal B Inter partes reexamination allows the Requester to appeal an examiner= s decision for patentability to the Board as well as the Federal Circuit. Cross appeals are permitted so both parties can appeal adverse decisions (interferences model).

• Fast B The entire process is expedited and treated with A Special Dispatch@ : two months for the examiner to decide whether to proceed (one month if in litigation), two months for the Patentee to respond, and 30 days for Requester rebuttal comments. There are no extensions of time other than for A sufficient cause@ and by no means automatic.

• The Owner is subject to the continuing duty of disclosure of information material to patentability. The Requester is not although the estoppel provisions should be more than sufficient to elicit all relevant information.

• No presumption of validity B In re Etter, 756 F.2d 852, 225 U.S.P.Q. 1 (Fed. Cir. 1985). The value of the prosecution standard rather than the litigation standard can be a key factor in the resolution of doubts or ambiguities in the strength or teaching of a reference.

• Claims are given the broadest reasonable interpretation that is consistent with the specification. [MPEP ' 2258(I)(G)]. The examiner will not try to construe the claims in a manner that tries to preserve patentability unless the patent under reexamination is an expired patent, which cannot be amended. [MPEP ' 2666.01]

• Reexams Are Easy To Start B Reexamination only requires a A substantial new question@ rather than a A prima facie@ case of unpatentability in order to initiate the reexamination. (See, MPEP 2242 - defining standard in context of ex parte reexam).

• In re Portola is overruled B Requesters may once again use and cite the art originally considered or at least cited into the file. A court will tend to give deference to the original examiner= s experienced interpretation of the patent. In reexamination, however, an equally skilled examiner may view the same reference differently. With the help of an explanatory declaration in the Request, the chances are better that a good, but previously unappreciated, reference of record may be given the importance it deserves.

• There are no interviews with the examiner by any party. Everything is on the record.

• A More Complete Record B New arguments presented by the Owner can introduce new prosecution history estoppel and may force the Owner to choose among claim interpretation options that limit the claims. Omissions or misrepresentations to the examiner can be the basis for a defense of unenforceability based on inequitable conduct. In my view, the more the patent owner says, the better are the chances of finding a defect for use later as a defense or in restricting the claims.

• Amendments to the claims provide intervening rights. Your client might not be able to expand the business much, but it the availability of intervening rights may buy enough time to help redesign the product, find alternatives, or negotiate a license.

• New examiner B There is no fight against the original examiner= s ego or emotional need to confirm the original examination. Additionally, examiners have access to internal reexamination experts as an added quality measure.

• Cost B Inter partes reexamination thru the USPTO can address the issue of patentability, including the enhanced filing fee, for less than $50,000 before experts in the technology and the law. The 2003 AIPLA survey notes a median cost of patent infringement litigation on a national average to be about $1 million and $4 million. Inter partes reexamination costs much less.

• There is no discovery or cross examination B I consider this to be an advantage to the Requester because the Requester= s Comments are filed after the Owner= s Response, and the Owner has no right to file another response. The Requester and any declaration submitted with the Comments get the last word before the examiner makes a decision. In my case, the examiner apparently found the declaration useful and used it in his 2^nd Action. Perhaps out of recognition that the Owner had not responded to that declaration, the examiner did not make the 2^nd Action an A Action Closing Prosecution.@ Had the Owner elected to proceed, a nonfinal status allowed the Owner to respond and rebut the facts in my declaration with his own declaration challenging any facts or assertions believed to be inaccurate.

• Admissions Can Be Used B If you do get into a litigation and happen to get an admission as to one or more facts that you believe sufficient to resolve validity, a reexam request can be filed for unpatentability based on the key patents or publications in view of the Owner= s admission. See, MPEP ' 2617.

Disadvantages for the Requester

• Broad Estoppel by Statute B Inter partes reexamination codifies an estoppel against the Requester that precludes the Requester from contesting validity in a later proceeding on issues that were or could have been raised at the time of the reexam. 35 U.S.C. ' 135(c). The estoppel rule expresses, and exceeds, the practical effects of unsuccessfully contesting the patent by any other proceeding and then trying to re-visit the issue later. These estoppel provisions are not found in ex parte reexamination and represent the single most important deterrent to use that was expressed at the USPTO’s February 17, 2004 Round Table Discussion on Inter Partes Reexamination. [http://www.uspto.gov/web/offices/pac/dapp/opla/comments/reexamproceed/news_and_notice.htm[

• Very Short Period to File Rebuttal Comments B There is no allowance for delay in mail delivery for service of the Owner= s Response. A short rebuttal period and the need for documented rebuttal evidence requires a Requester who is willing to devote the technical resources necessary to file a complete rebuttal.

• No District Court Review B Inter partes reexamination does not permit the Requester to pursue an appeal by way of a district court review as in Section 145. (This is consistent with the desire for written proceedings on limited patentability issues.) Thus, the original case for unpatentability needs to be made as completely as possible with supporting explanatory declarations to explain nuances in the technology, details of the ordinary skill level, and possible commercial reaction to the invention if commercial success is likely to support patentability. Declarations can also be submitted in the rebuttal Comments to explain or disprove allegations made to the examiner by the Owner.

• Owner can file a broadening reissue during the reexam and have it suspended pending the outcome of the reexamination. This suspended application represents a measure of "insurance" against an adverse outcome in the reexam and provides the affirmative opportunity to seek even broader claims after the best art is presented.

In the right set of circumstances, inter partes reexamination can be a very effective procedure to counter the potential costs of the patent litigation process or avoid being named in the first instance. Inter partes reexamination is best suited for cases in which:

1. There is only one patent involved and its validity resolves the case. If the conflict also includes trademark, unfair trade, contract, or other business matters, reexam can still help by lowering the overall cost, reducing number of issues to be tried, and decreasing possibility that the hard technical issues in the patent might get lost among the more conventional legal issues.
2. Requester has a good, clear, simple case for invalidity.
3. The Requester does not need discovery to make a case for unpatentability. For a well-documented case of unpatentability, no discovery should be needed. Ambiguous publication dates or facts in the possession of third parties can be resolved by some advance investigation and a declaration. The lack of discovery means that Requesters must be prepared to perform and present an affirmative set of examples or tests to prove or disprove key facts, where the technology and issues of patentability warrant. Any such tests should be accurate because they will likely be subject to dispute in a subsequent Owner response.
4. The relationship between the Owner and the Requester should not be damaged. Reexamination is one step removed from the interactivity necessitated by litigation. This distance helps reduce the development of animosity and A bad blood@ between the parties and can minimize additional harm to the relationship. Reexam is well-suited for patent conflicts involving customer-supplier, friendly competitors, and joint developers of a technology where the development continues.
5. The Requester cannot sue or be sued. If there are no judicial alternatives due to standing requirements, the choices get fairly simple: (a) proceed and wait to get sued at the time and place of the Owner’s choosing, (b) try to get a license and negotiate for its value based on the strength of your prior art, or (c) decide whether one of the reexamination proceedings would be sufficient. For those situations where the client-competitor cannot or does not desire to wait for the patent Owner to act, a reexamination may be the best (and only) option.

The Next Chapter – History Will Shape the Future

Unfortunately, the USPTO has declared inter partes reexam to be a failure in its 21^st Century Plan and has announced its support for a new, post-grant opposition proceeding that will allow discovery and live testimony but with a limited nine month period to file the challenge following the issue date. No details have yet been released of how the proposed new proceeding might be conducted.

The proposed new opposition proceeding seems to be ill-suited as a remedy for the perceived shortcomings of inter partes reexamination. Without appropriate limiting regulations on the submissions, the proposed opposition proceeding may overtax the resources of the USPTO while the limited nine month filing period may make the proceeding unavailable for effective use by competitors. Instead, greater consideration should be given to efforts for modifying the existing inter partes reexamination statutes to strengthen issued patents while providing a better alternative to litigation.

Third party validity challenges have had a hesitant and troubled history at the USPTO. Those mechanisms include and have included protests, protested reissue (now repealed), and interference motions on validity.

Protests and public use proceedings for pending applications are controlled by 37 C.F.R. '' 1.291-1.292 (2002). Because applications are examined ex parte and under confidentiality, it is rare that either proceeding is used. [Janis, "Rethinking Reexamination: Toward a Viable Administrative Revocation System for U.S. Patent Law", 11 Harv. J. Law & Tec 1, 16 (1997).]

Protests have, however, played a more important role in USPTO history. In 1978, liberalized reissue proceedings were tried as a possible alternative to litigation with the expressed goal of seeking enhanced quality and reliability of issued patents. [42 Fed. Reg. 5588 (1977).] Reissue applications could be filed under 37 C.F.R. ' 1.175(a)(4) (1978) without an admission of error in the patent so that new prior art could be tested for its possible impact on the patent’s validity. Because the original patent did not have to be surrendered, the PTO proceedings were advisory. While this did not bode well for appellate review, the liberalized reissue proceedings were open to the public involvement by way of protest under Rule 291 and were essentially unlimited: the rules allowed diverse challenges to the patent’s validity, requests to participate in interviews, and submissions of legendary quantities of paper. [See, Rohm & Haas Co. v. Mobil Oil Corp., 525 F.Supp. 1298, 212 U.S.P.Q. 354 (D. Del. 1981). Now repealed MPEP '' 1902-1903 (1986) addressed the details of inter partes participation in interviews while MPEP ' 1904 (1986) was directed to inter partes participation in appeals to the Board.] Such flexibility and a tacit suggestion by the USPTO caused several courts to stay their proceedings so the USPTO could rule on the validity issues. [See, Chisum on Patents, 4:15.03(1)(e)(ii).] Personal conversations with those in the USPTO at the time established that protested reissue proceedings were neither fast nor cost effective for the Owner or the USPTO. The "18-by-87" goal of 1982 was the demise of "no defect" reissue applications and their attendant protests.

Interference proceedings currently allow inter partes challenges to validity. [37 C.F.R. ' 1.641] Interferences are used to determine inventorship for identical or nearly identical inventions filed on substantially contemporaneous applications. With so many qualifications, interferences are still a fairly rare proceeding. Nonetheless, interferences are now used with more frequency by the junior party to challenge the validity of the senior party’s invention claims. This type of "scorched earth" tactic allows the challenger to raise any type of basis for invalidity with full right of comment. The rules provide for limited discovery and introduction of deposition testimony as well as documentary evidence.

The interference model works – validity questions are resolved between private parties without resort to court and with opportunities for discovery, deposition, and cross examination. The process is, however, neither fast nor inexpensive for the parties or the USPTO. The USPTO has acknowledged that interference proceedings represent its most costly proceeding. Estimated costs for an interference proceeding are now on the order of $150,000 to $750,000 with a $300,000 median. (AIPLA Report 2003-nationwide average)

With such a background, it is not entirely surprising that ex parte reexamination included so many limitations on both the scope of its issues and the absence of participation by third parties. The pendulum of post-grant challenges swung back to the opposite extreme to protect limited USPTO resources while still affording some opportunity for challenge, albeit narrowly proscribed and with no involvement apart from the initial request. Its chief advantages included (a) an ability to file the challenge anonymously (so as not to become a target or signal a competitive interest) (b) at any time during the enforceable period of the patent’s term while (c) not necessarily precluding later defenses if litigation arose although there might be a practical preclusion for defenses based on the same art and arguments.

Inter partes reexamination represents a small step away from the extremes of the ex parte proceedings. Requesters can still start the proceeding and frame the issues with limited involvement in the examination process. These are good and useful advances that include reasonable restrictions that control the amount and type of documents that can be submitted for consideration.

Fiscal year statistics from the USPTO Commissioner’s published Annual Reports helps to put the degree of use of inter partes reexamination in context with the more established ex parte reexamination proceedings and district court patent litigation:

Table 2

Action	CY 2000	CY 2001	CY 2002	CY 2003
Utility patent applications filed	311,807	344,717	353,394	355,418
Utility patents issued	164,490	169,576	160,843	171,500
Ex parte reexam requests filed	318	296	272	392
Ex parte requests related to litigation	80	80	52	109
Inter partes requests filed	0	1	4	21*
Civil patent litigation actions filed (selected courts)	NA	5	15	18
Patent litigation appeals filed	NA	16	18	13
Notices of suit filed (all types of patent cases)	NA	7290	4334	2897

The significant increase in the number of inter partes reexam requests in CY 2003 is clearly linked to new legislation that allowed the Requester to appeal a decision of patentability to the US Court of Appeals for the Federal Circuit. 35 U.S.C. ' 315(b)(1). This change also resulted in the filing of more inter partes reexam requests than the number of patent litigation cases filed in the district courts selected by the PTO for comparison. The numbers appear to establish a level of demand for an administrative inter partes litigation alternative for challenging a patent’s validity that might be enhanced by relatively minor changes to the existing reexamination statutes.

Pointedly, the disadvantages built into the proceeding have discouraged potential use of inter partes reexamination as an effective tool for challenging patent validity. Notably, the November 1999 filing date limitation on eligible patents and the scope of a statutory estoppel reaching to issues that "could have been raised" are the lodestones on inter partes reexamination.

The filing date restriction limits the population of patents eligible for challenge by inter partes reexamination to those that have been only recently issued. The underlying commercial products on many of these patents may not have been thru the development and marketing processes for a sufficiently long period to create a motivated competitive interest that would challenge the patent thereby suggesting that the early cases considered for inter partes reexamination would tend to favor those that could be brought to market more quickly. The early statistics tend to support this view. The distribution of the technologies involved with inter partes reexam requests to date follows a trend that considers the relatively faster speed of commercialization in the mechanical technologies compared to the other technologies:

Table 1

Technology	Number of Requests Filed Thru June 2004
Mechanical	26
Chemical	7
Electrical/Software	6
Biotechnology	2

The estoppel provisions are really more onerous than apparent at first consideration. The estoppel preclude later defenses that "could have been raised" and represent a standard guaranteed to increase the costs of any subsequent litigation. The estoppel becomes particularly difficult to accept when considered in combination with the limited 30 day (minus service delivery delays) to file an adequate and fully sufficient set of Comments that addresses all current issues and all potential issues. Such a limited response period raises the risk that all issues that could have been raised might not either be raised or inadequately addressed.

Curiously, there is no estoppel provision that applies to Requesters in ex parte reexaminations or even in full-blown ITC proceedings that involve discovery, testimony, a written opinion, and full right of appeal. See, Texas Instruments v. Cypress Semiconductor Corp., 90 F.3d 1558, 1569 (Fed. Cir., 1996). There is, however, no movement afoot or any case established for including estoppel provisions in the statutes. Could it be that the "practical estoppel" effects of trying to convince an overworked district court judge of error in an earlier, unsuccessful attempt to challenge a patent’s validity in another forum is a sufficient deterrent? I believe that most litigators would think so and thereby avoid the types of Owner abuse that seems to be built into the inter partes reexamination statutes.

I suspect that there would be much more interest in inter partes reexamination as a viable administrative proceeding for patent challenges if the filing date limitation and/or the estoppel provisions were removed.

Conclusion

Reexamination can be effective and useful. For the right clients in an amenable factual situation, reexamination may be the only avenue short of bet-the-company patent litigation.

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.