Patent Reexamination Makes a Judge’s Blood Boil

Judge's Blood BoilsIn re Baxter International, No. 2011–1073 (Fed. Cir. May 17, 2012) (Judges Newman, Lourie, and Moore)

Patent Reexamination Is Normally Such a Peaceful Neighborhood…

At first glance, this opinion doesn’t seem like a big deal. Fresenius Medical Care Holdings sued Baxter for a declaratory judgment of invalidity on Baxter’s patent in 2003 and, as often happens as a result of litigation, the patent ended up in reexamination at the USPTO in 2006.

While the reexamination was pending, a jury in 2007 found the patent invalid as obvious over the prior art. But the district court granted Baxter’s motion for judgment as a matter of law that the defendant hadn’t met its burden to show obviousness by clear and convincing evidence. The Federal Circuit affirmed in 2009, but it actually found that the defendant hadn’t produced any evidence at all that a particular structure was disclosed in the prior art.

The USPTO reexamined the patent in light of prior art that included some of the art from the district court, but some new art as well submitted by Fresenius. In 2010, it found the reexamined claims were obvious over the prior art.

The Court affirmed the USPTO’s decision. It wasn’t concerned about any potential conflict with its earlier decision, because that decision had been based on the defendant’s failure to identify a particular structure. Plus, there was new art in the reexam.

When the Explosion Happened

Judge Newman, however, strongly dissented. As she did in In re Construction Equipment Co., Judge Newman argued that this was a case of the USPTO nullifying a decision by the Federal Circuit. In her opinion, the validity of Baxter’s patent was settled, and the USPTO had no business deciding otherwise. She went on at some length about why she believed this decision was wrong.

I actually think that this is less about administrative overreach and more about Judge Newman expressing her frustration with accused infringers using reexamination as a back-up plan if litigation doesn’t go the way they’d like. She clearly doesn’t care for that strategy at all. In Judge Newman’s opinion, you get one shot, and you shouldn’t go running to the USPTO for a second chance if you lose in the district court.

Personally, while I see Judge Newman’s point, ex parte reexamination (that is, a reexamination that’s between the patent owner and the USPTO) isn’t another litigation by the accused infringer. The accused infringer doesn’t get a say or get to respond to the USPTO; the USPTO represents the public interest, not the accused infringer. Certainly, we wouldn’t want to prevent a different party from filing a reexamination request if it never got the chance to litigate. In a perfect world, we don’t want invalid patents being enforced, so there is real public benefit to having the USPTO reexamine a potentially valuable patent. I don’t think that the public should have to tolerate an otherwise invalid patent because one litigant failed to meet its burden of proof. It’s a trade-off, to be sure.

What do you think? Should accused infringers get a second chance through reexamination?

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