Stays Pending Reexamination

The following guest post is by Matthew Smith

The grant rate of motions to stay is highly judge-dependent and (somewhat less obviously) district-dependent. The table below shows the approximate grant rate of contested motions to stay in major patent litigation districts since about the beginning of 2008. These data included around 150 motions, after excluding follow-on or duplicate motions on the same facts (e.g., in parallel cases against different defendants), stipulated motions, patent-owner-initiated motions, and motions initiated by declaratory judgment plaintiffs. The districts below are listed in order of decreasing frequency of the occurrence of such motions.

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The Eastern District of Virginia, Western District of Wisconsin, and Northern and Middle Districts of Florida had relatively few orders, and were excluded.

A review of the orders confirms a relatively clean division into favorable and unfavorable judges for stays. This division is often flawlessly mirrored in the reasoning of written orders. Courts usually analyze three factors when considering stays: prejudice, timing and simplification. Where stays are disfavored, courts focus on the prejudice that delay may cause to the patent owner, find excessive delay in filing the request a few months after service of the complaint, and identify a plethora of issues that will be left unresolved by reexamination. Courts where stays are favored search in vain for particularized prejudice to the plaintiff (e.g. deteriorating evidence), find that requests submitted on the eve of trial are timely, and focus on the possibility that the claims could be canceled by the PTO when analyzing simplification.

Despite this division, some courts are breaking out of the paradigm of binary yes-or-no orders. The relatively few stays granted in East Texas pending ex parte reexamination, for example, have usually required the defendant to forego defenses on the merits of prior art considered in reexamination (see QPSX Dev. v. Ciena Corp., Case No. 2:07-CV-118-CE (E.D.Tex. Aug. 27, 2009) or submitted to reexamination unless combined with new art (see Premier Int’l Assoc. LLC v. Hewlett Packard Co., Case No. 2:07-CV-395 (DF)(E.D.Tex. May 18, 2009). One court has required non-requesting defendants to agree to be bound by inter partes estoppel (see Riparius Ventures LLC v. Skype Technologies, S.A., Case No. 07-cv-00812 (N.D.Ill. June 6, 2009). Some courts are also more flexible with timing, granting stays even prior to the PTO’s decision on the request for reexamination, (see, e.g. CTC Cable Corp. v. Mercury Cable & Energy, LLC, Case No. SACV 09-261 DOC (C.D.Cal. Aug. 3, 2009), or pending some specific event in reexamination (see, e.g. HTC Corp. v. Technology Properties Ltd., Case Nos. C 08-00882 JF and C 08-00877 JF (N.D.Cal. June 16, 2009)).

There also appears to be a recent trend favoring stays pending inter partes reexamination, as opposed to ex parte reexamination. The estoppel associated with inter partes reexamination is sometimes viewed as a simplifying factor for issues in litigation. See, e.g., Anascape Ltd. v. Microsoft Corp., Case No. 9:06-CV-158 (E.D. Tex. Feb. 23, 2007); see also Ceiva Logic Inc. v. Frame Media Inc., Case No. SACV 08-00636-JVS (C.D.Cal. June 9, 2009); Wall Corp. v. Bonddesk Group LLC, Case No. 07-844 GMS (D.Del. Feb. 24, 2009).

The data for this study were helpfully provided by the Docket Navigator.

76 thoughts on “Stays Pending Reexamination

  1. “I’m pretty sure I have nothing to tell you that you don’t already know about this subject.”

    I agree.

    “If you don’t see it by now then I doubt I can help you see it any better.”

    I agree.

    “And to be 100% honest with you, I don’t necessarily think it will solve anything either. I simply think it is the only hope.”

    If I could possibly entertain the notion of understanding this mass of self contradictory gibberish, I would agree.

    I think it’s pretty clear that you have no idea what “fee setting authority” is and what it would entail. I also think you have no idea how “fee setting authority” would in any way help the PTO to reduce the backlog and pendency.

    I most definitely think that “fee setting authority” is just another buzz phrase you’ve picked up from this site and others and throw into a post every now and then to give yourself the appearance of somebody who knows what he’s talking about.

    That strategy is not working.

  2. “In any event, we’ll just have to wait and see the secret weapon.”

    I thought I caught a glimpse when Kappos and Locke sent that letter to Congress in support of the patent reform bill. Or is that standard operating procedure for every administration?

  3. “If I remember correctly, all three judges, Prost, Bryson, and Rader, found proposed Rule 78 to be beyond the PTO’s rule making authority.”

    For a different reason, I’m pretty sure you will recall.

    “I don’t see how giving the PTO fee setting authority is going to solve anything.”

    I’m pretty sure I have nothing to tell you that you don’t already know about this subject. If you don’t see it by now then I doubt I can help you see it any better. And to be 100% honest with you, I don’t necessarily think it will solve anything either. I simply think it is the only hope. And to be clear, even if it is done then it isn’t the only thing that must be done in order to really solve most of the big issues.

    In any event, we’ll just have to wait and see the secret weapon.

  4. “Even if you don’t believe me, you should at least believe a couple of CAFC judges that held, for all practical purposes, thus.”

    If I remember correctly, all three judges, Prost, Bryson, and Rader, found proposed Rule 78 to be beyond the PTO’s rule making authority.

    The reason I ask about “fee setting authority” is because I hear/see that term thrown around a lot, for example by academics, as some sort of panacea (sp?) to the PTO’s problems. Unless 35 USC 41(d)(1) and (2) are amended to remove the requirement that the fees be set to only recover the PTO’s costs, I don’t see how giving the PTO fee setting authority is going to solve anything.

    That was one, of many, problems with several of the rule packages proposed by the PTO (e.g. the IDS rules, the Markush rules, the appeal rules, the claims and continuation rules). The PTO had no data to support the rule changes they wanted to make. It was all made up. Good folks like David Boundy and Ron Katznelson very clearly showed that, for example in their opposition to the appeal rules.

    The PTO can’t even justify its current fee structure. How on earth are they going to justify a fee structure they would cook up out of thin air?

  5. “6,

    Please explain what you mean by “fee setting authority.” I hear this term thrown about quite a bit, but I’m not sure anybody has ever fully explained it. Are you, and they, referring to a statutory amendment to 35 USC 41(d)(1) and (2), or something else?”

    It has been so long since I first looked into the matter I cannot remember the specifics. It is completely beyond my power, and will probably remain beyond the power of the director so I don’t particularly concern myself with it.

    If I had to take a wild guess, I would suppose that they would probably like changes to 35 USC 41(a-d)

    And JD, the DC ruling on that particular portion is horribly untenable, by any court, even the DC itself, when someone simply points out the horrible out of context quoting from Henrikson. It dam near makes my eyes bleed to see a court of law pull something so completely out of context (indeed an opposite context to that which they are applying it to). Even if you don’t believe me, you should at least believe a couple of CAFC judges that held, for all practical purposes, thus.

    Decisions that bad can be overturned. Winning one case does not necessarily win the war. Heck, we’ve got Ned plotting to overturn Benson as hilarious as an attempt to do so would be.

  6. From J. Cacheris’s opinion:

    As the Court described in Part I of this Opinion, under the existing patent system an applicant may file an unlimited number of continuation or continuation-in-part applications, RCEs, and claims. As to continuation and continuation-in-part applications, Section 120 provides that such applications “shall have” the benefit of the priority date of the initial application. 35 U.S.C. §120. The CCPA has interpreted this language to mean that “there is no statutory basis for fixing an arbitrary limit to the number of [continuing] applications” that may be filed and that retain the benefit of the priority date. In re Henriksen, 399 F.2d 253, 254 [158 USPQ 224] (C.C.P.A. 1968); see also In re Hogan, 559 F.2d 595, 604 n.13 [194 USPQ 527] (C.C.P.A. 1977)(finding that “a limit upon continuing applications is a matter of policy for the Congress”). Though Final Rule 78 does not completely prohibit applicants from filing more than two continuation or continuation-in-part applications, because the USPTO intends to deny additional applications in almost all circumstances, see 72 Fed. Reg. at 46769-77, 5 the “could not have been submitted” standard of the petition and showing requirement effectively imposes a hard limit on additional applications. Moreover, while the USPTO may presently wield the doctrine of prosecution laches to prohibit the use of dilatory tactics in the prosecution of applications, see In re Bogese II, 303 F.3d at 1368 & n.6; Symbol Techs., Inc. v. Lemelson Med., Educ. & Research Found., 277 F.3d 1361, 1364-66 [61 USPQ2d 1515] (Fed. Cir. 2002) (“Symbol II”), the mechanical rule adopted here goes far beyond simply prohibiting unreasonable delays. Instead, Final Rule 78 and the hard limit it imposes changes existing law and deprives applicants of their valuable rights under 35 U.S.C. §120 to an unlimited number of continuation and continuation-in-part applications as a matter of right. By so doing, it may also impact applicants’ rights under Sections 102 and 103 and result in the denial of otherwise meritorious patents. For these reasons, the Court finds that Final Rule 78 is a substantive rule.

  7. Malcolm,

    Thanks. That’s about what I expected from you.

    But to answer your question with slightly less deliberate obtuseness than which you answered mine, feel free to peruse any of the comments submitted in response to the original proposed rules.

    And anytime you want to provide what I asked for, feel free to post your version of whatever rule limiting continuations you think could be implemented by the PTO that would not run afoul of 35 USC 2(whateversubsections), the APA, and the relevant precedent. Some specificity, heck any specificity, would be appreciated.

  8. JD: “You know as well as I do that any rule that imposes any requirements on the filing of a continuation beyond those specified by section 120 (i.e. co-pendency and making the priority claim) is going to be struck down by any court that hears the challenge.”

    Why do “we” know that, JD? Was there a case that addressed this and issued a holding stating that “any rule that imposes any requirements on the filing of a continuation beyond those specified by section 120 (i.e. co-pendency and making the priority claim)” is invalid? I don’t recall reading anything quite that plain.

  9. 6,

    Please explain what you mean by “fee setting authority.” I hear this term thrown about quite a bit, but I’m not sure anybody has ever fully explained it. Are you, and they, referring to a statutory amendment to 35 USC 41(d)(1) and (2), or something else?

  10. “Is that going to be your epitaph, 6?”

    It might be on my inaugural address to the nation. But we’ll have to see won’t we?

    “So how is the PTO going to “achieve the result” sought by the previous administrators without limits on continuations? ”

    An even better question is “how is the PTO going to “achieve way better results than the previous administration ever dreamed possible” without fee setting authority?

    And I’ll tell you right now that while some people actually expect Kappos to pull a magic trick this is one that has no chance of happening. Never the less, it appears that mgmt is confident they have something up their sleeve. What ever this secret weapon is, I cannot even take a guess at what it might be.

  11. Malcolm,

    I agree 100% that the rules were a mess. If there’s anything that demonstrates the utter incompetence of the lifer (mis)management at the PTO over the past, oh say 5 years, I can’t think of it.

    I also agree that the timeline was a mess. Again, if anything demonstrates the utter contempt the lifer (mis)management of the PTO had (has?) for the law, I can’t think of it.

    The PTO received HUNDREDS of comments on the rules. Practitioners far, far, far, far, far, far, more knowledgeable on the law told those tin eared hacks over there that the rules were contrary to law. And what did the hacks over there do? They told the applicants, the patent bar, and everyobdy else, “We don’t care.”

    Go review the statements from Toupin and Whelan et al. Hardly proper. Hardly professional.

    Just so we’re clear, here’s your post:

    “A very similar set of rules could be properly and professionally drafted and promulated to achieve the result sought by the previous administrators.”

    You know as well as I do that any rule that imposes any requirements on the filing of a continuation beyond those specified by section 120 (i.e. co-pendency and making the priority claim) is going to be struck down by any court that hears the challenge. You also know that without the limits on continuations, the rest of the rules are useless. Applicants will circumvent them with no problem.

    So how is the PTO going to “achieve the result” sought by the previous administrators without limits on continuations? Any specificity you can provide would be greatly appreciated.

    And if you have time, please give me the name of one, just one, current “administrator” at the PTO who could possibly draft these new rules.

  12. JD, I’ve previously admitted that my August 2007 comment was premature insofar as it referred to *the actual rules* because I hadn’t read them myself but only read *about* them.

    As for the rest, I stand by my comments upthread. If anyone thinks that the failing of the rules had nothing to do with their incomprehensibly or their internal contradictions or the rushed timeline in which the rules were to be implemented, that person is naive.

  13. Malcolm,

    Over-parsing and over-pretentious and just simply wrong. You and 6 do have the same instructors don’t you?

    Ned: “…accomplish the same objectives”
    Malcolm: I said “very similar”, not “same”

    Except, Malcolm, Ned was talking about objectives with the adjective same, not “set of rules”. Since you said “the result sought…”, the use of “same” by Ned would be correct.

    Putting aside from the smokescreen you fabricated, you sidestepped the issue that Ned brings up “Two cents disagreed, and you say he misunderstood you. I side here with Two Cents.”

    So quick you are to disparage anyone who speaks against your views. “…not the statutory issue[s]” You should re-read the Law (the Cacheris decision).

    6, Kappos is not my beloved. He IS your Lord and Master. Chop chop – get in step, you have customers waiting.

  14. “I said ‘A very similar set of rules could be properly and professionally drafted and promulated to achieve the result sought by the previous administrators.'”

    So that’s your position now?

    It may be fun to review your initial reactions.

    When the final rules were published in August, 2007, you posted (and I’m paraphrasing here, because, like I said, we’re having fun), “Face it folks, these rules are going into effect whether we like it or not.”

    On October 31, 2007, after J. Cacheris entered the PI, you posted (again, paraphrasing), “I knew all along these rules were DOA.”

    Still want to be thought of as one of the serious commenters on this site?

    BWWWWAAAAAHHHHHHHAAAAAAAAHHHHHHHAAAAAAAAA

  15. Ned: “You said the Office could accomplish the same objectives using new rules drafted in a more competent way. Two cents disagreed, and you say he misunderstood you. I side here with Two Cents.”

    First, I said “very similar” not “same.” More specifically, I said “A very similar set of rules could be properly and professionally drafted and promulated to achieve the result sought by the previous administrators.”

    The “result” I was referring to was a decrease in continuation application filings and a decrease in the number of claims that applicants present for examination.

    The biggest problem with the rules was not the statutory issue. The biggest problem was the implementation. They were rushed and they were incompetently drafted such that they were incomprehensible or internally contradictory. Had the rules been drafted competently and had the implementation been more gradual, the uproar generated by the rules would have been minimized and the so-called “statutory issue” would have seemed like much less of a big deal.

  16. Posted by: Malcolm Mooney | Nov 04, 2009 at 02:06 PM: “TwoCents, undoubtedly a sockpuppet of one of the regular patent-worshipping PTO-abusing trolls who lurk here, is unsurprisingly confused about what I said and thus finds itself unintentionally beating a strawman.”

    You said the Office could accomplish the same objectives using new rules drafted in a more competent way. Two cents disagreed, and you say he misunderstood you. I side here with Two Cents.

    Personally, I think the Office could have limited the number of claims in an application by jacking the fees on excess claims through the roof. The central problem with the requirement for an applicant search and its continuation rules was statutory. The Office rules were substantive and beyond its power.

    Given the unpopularity of the junked rules package, I think it will be a cold day in Hades before Congress grants the PTO substantive power in this area. But, as I have said before, a limitation on the number of claims is in reality occurring now because the examiners liberally use their power of restriction.

  17. I’m not completely sold on your assumptions NAL. Federal rulemaking has been demonstrably outside of your grasp on a number of occasions and I’m not 100% sure I have the whole story just yet.

    Furthermore, the ol’ rumormill, that is fairly reliable, says that new rules are on the way. Your man Kappos is the one attempting to put them in place. Are you telling me that you believe that your beloved and exalted Kappos himself would make this blunder? Certainly you do not believe that about your beloved.

    “A pig in a dress is still a pig.”

    Did you connect those dots this morning when you saw yourself in the mirror after putting on your dress this morning?

  18. There may be differences between Europe and the United States with respect to monitoring competitor patents, but in the United States large companies typically do not sue each other for patent infringement. Instead they resolve their differences by cross licenses in one form or another. The real problem major corporations have are from failed or failing businesses in their technological area with whom they have no cross licenses, particularly when the reason for failing has something to do with the major corporation. Some major companies seem to have a significant number of problems in this area, because they seemingly ignore, at least according to publicly available information, the intellectual property rights of third parties as a business practice even while implementing into their operating systems or other products the core functionality of these third-parties flagship products.

    There are exceptions to these rules of course. If a company actually uses its patents to differentiate itself from its competition, there will be lawsuits with its competitors. With these companies, it would be foolhardy not to carefully monitor the patents of its competitors as they are published.

  19. TwoCents, undoubtedly a sockpuppet of one of the regular patent-worshipping PTO-abusing trolls who lurk here, is unsurprisingly confused about what I said and thus finds itself unintentionally beating a strawman.

  20. Connect the dots 6. As vacatur is NOT obtained, the DC opinion counts for absolutely everything. As losing party, it is immaterial what jurisdiction a new challenge to rules put forth by the Office comes under. The Office must abide by the Cacheris Ruling.

    (The CAFC panel opinion is no longer on the books – it was wiped out at the decision to go en banc).

    The Content of any rules put forth, no matter how dressed up the Office makes them, will be compared to the rules deemed, and held by Law, to be illegal. A pig in a dress is still a pig.

  21. Mr Hutz, thanks. Interesting. When I go on about monitoring I meant by reference to IPC classes, not Applicant names. Your competitors create new filing entities faster than you can keep up with, these days. Search by name and you might miss some particularly significant, even ground-breaking, development.

  22. “Do you understand the significance of “vacatur”, and why it is important whether or not the Office obtains it?”

    Yes, and yes. The later reason is because with it, res judicita has no power, and the DC opinion counts for absolutely nothing. In other words, it makes it a lot simpler to pass more new rules.

    Pretty much it?

  23. 6,

    Do you understand the significance of “vacatur”, and why it is important whether or not the Office obtains it?

    Perhaps broje could look into it and help you out.

  24. “Hmmm… Do you think Mr. Kappos is aware that this kind of stuff is being posted online by his own employees?”

    Who says I’m an “employee” of Kappos?

    Besides that, if me and him were to be discussing his past behavior I might sugar coat it a little, but I would say the same thing.

    “Do you understand the significance of the “Boundy Point”?”

    Yes, it has none. Don’t hold your breath waiting for “sanctions”.

  25. Max,

    I believe Paul is concluding that because so many suits are being brought by noncompetitors these days, simply searching the published applications of your competitors will not yield the state of the art.

  26. Nal,

    “It doesn’t have to be persuasive – the USPTO as losing party is enjoined by Res Judicata. You can’t double dip.”

    I’m just a patent prosecutor, but I don’t see why Res Judicata would prevent the PTO from trying to implement a different rules package that has even slightly different rules. What is the result if they change one rule, add a rule, leave out a rule, etc.? What if they slightly change each rule in the package?

  27. One day I’ll have something named after me, too. I can see it now… The Jules Theory. I’d also settle for a plaque in dedication of Anonymous.

  28. 6,

    Care to add anything Reifensteinesque about the “Boundy Point”? Do you understand the significance of the “Boundy Point”?

  29. “Let’s be clear NAL, the rules were not ill-fated but for the appointment of an Reifenstein syndrome sufferer to the post of undersec.”

    Hmmm… Do you think Mr. Kappos is aware that this kind of stuff is being posted online by his own employees?

    And to think I’ve lived almost fifty years blissfully unaware of “Reifenstein syndrome.” Man, you’ve got to love teh interwebz.

  30. “saying PRE-Kappos produced the minions of mine and bragged, and wouldn’t listen to the patent bar, and got smacked down, yet again, and spent how much on pushing the ill-fated rules.”

    – fixed it for you 6. New day – new program, better keep in step with your new leader and get to serving your customers. And yes, that would be the patent bar.

  31. Paul Morgan helpfully writes above:

    “Re: “I thought it axiomatic that each corporation monitors the A publications of its competitors and drafts with that knowledge of the state of the art.”
    That used to be more common years ago, before the exponential increases in prior art in so many fields, the ubiquity of electronics, software and business methods [and their patents] used in so many different and increasingly complex products, etc., made effective art searching much more difficult and/or excessively expensive. It is certainly less common now. Look at how many patent suits are not even brought by competitors these days.”

    to which I reply:

    Paul, I can grasp the point that monitoring the PTO output (WO and A publns) of business method apps is futile and excessively expensive. True there is also a lot of stuff these days to monitor in, say, medical devices, but it’s all correctly classified by the EPO and (with modern electronic information handling) relatively cheap and easy to monitor.

    You write of the costs of monitoring what your competitors are up to, but isn’t it more expensive in the long run NOT to keep an eye on where your competitors are going?

    I put it to you: leading edge Asian and European companies do continue to monitor the WO publns of their competitors. If Americans don’t, then here are three suggestions why:

    i) fear of being caught infringing willfully (but I know. Seagate)

    ii)Asians think long term. American CEO’s think about the accounts for the next quarter year

    iii) Europeans copy. Americans don’t.

    Readers, I’m happy to be disabused, if I’m wrong.

    Finally, Paul, I don’t understand your last sentence. You write as if an A publication is an infringement. What am I not getting?

  32. “Res Judicata”

    I’ve looked into the matter, and there appears to be quite a few exceptions.

    But, all of those aside, Red Judicata may not apply to a totally new rules package, especially one which takes into account the panel’s decision.

    “- never stopped you before.”

    Actually that stops me all the time.

    “- much like 6 responding to one of my challenges”

    LOLOLOLOL, I think you got the actors transposed there Noise.

    “- the same five year old that swaggered and bragged and produced the minions of 6 and Malcolm. The same five year old that wouldn’t listen to the patent bar. The same five year old that got smacked down, yet again. The same five year old that spent how much (?) on pushing the ill-fated rules?”

    You’re saying Kappos produced the minions of mine and bragged, and wouldn’t listen to the patent bar, and got smacked down, yet again, and spent how much on pushing the ill-fated rules?

    Let’s be clear NAL, the rules were not ill-fated but for the appointment of an Reifenstein syndrome sufferer to the post of undersec.

  33. Broje and 6,

    It doesn’t have to be persuasive – the USPTO as losing party is enjoined by Res Judicata. You can’t double dip.

    Now, the persuasive may be important for a different federal agency…

    6,

    “My relative silence is simply because I don’t really know what happens in this kind of situation.”
    – never stopped you before.

    “it curled up into a little ball and cried for its mommy so to speak.”
    – much like 6 responding to one of my challenges

    “Congratulations Tafas/GSK, you just pulled off the equivalent of beating up a shy, introverted and pacifist 5 yr old.”
    – the same five year old that swaggered and bragged and produced the minions of 6 and Malcolm. The same five year old that wouldn’t listen to the patent bar. The same five year old that got smacked down, yet again. The same five year old that spent how much (?) on pushing the ill-fated rules?

    Keep bringing the rope 6.

  34. Re: “I thought it axiomatic that each corporation monitors the A publications of its competitors and drafts with that knowledge of the state of the art.”
    That used to be more common years ago, before the exponential increases in prior art in so many fields, the ubiquity of electronics, software and business methods [and their patents] used in so many different and increasingly complex products, etc., made effective art searching much more difficult and/or excessively expensive. It is certainly less common now. Look at how many patent suits are not even brought by competitors these days.

  35. “broje,

    The standing Law is the district level (Cacheris) which struck down everything. That’s why the Office needs vacatur. Without vacatur, and as losing party, the Office is dead in the water.

    The CAFC level was eliminated when it went en banc. The Office lost whatever it had gained in that first CAFC decision.”

    Unfortunatly for you “standing” law that results from something like this situation is going to be about as persuasive to a court as my flipping them my middle finger.

    While you might have “precedent” on your side, that will hardly persuade another CAFC panel, or en banc court.

  36. “The Office took a beating because the rules were drafted and promulgated with breathtaking incompetency”

    On the contrary the office only took any “beating” at all because it did not have the balls to simply stand up for itself, it curled up into a little ball and cried for its mommy so to speak.

    Congratulations Tafas/GSK, you just pulled off the equivalent of beating up a shy, introverted and pacifist 5 yr old.

  37. “Even 6 and malcolm in their absence of comments seem to recognize just how bad a beat the Office has taken.”

    LOL WUT? I’ve heard a variety of opinions on the impact of the withdrawal of the rules that resulted from the lack of balls on Kappos. My relative silence is simply because I don’t really know what happens in this kind of situation. This is my first foray into the realm of cases where one party’s balls simply drop off mid-suit. The very idea of it is revolting and to think that my place of employ would be involved in such a deplorable action is to my deepest chagrin.

  38. “A very similar set of rules could be properly and professionally drafted and promulated to achieve the result sought by the previous administrators.”

    Mooney’s comment demonstrates an unsurprisingly poor understanding of why the rules failed. Hint: it had nothing to do with draftsmanship.

  39. Unfortunately, I think the “very similar set of rules” is forthcoming. That’s what someone allegedly inside the PTO posted here recently in the comments. And just because the Appelate decision is no longer precedent does not mean that it is not persuasive to the District Court. What District Court judge wants to make a ruling that he or she knows is likely to be overturned on appeal? I think mandatory ESDs may be in our future in one form or another.

  40. “Even 6 and malcolm in their absence of comments seem to recognize just how bad a beat the Office has taken.”

    The Office took a beating because the rules were drafted and promulgated with breathtaking incompetency, not because the Office can’t make rules or even rules with sweeping impact on current prosecution strategies.

    So I don’t see this as a “New Coke” moment for the Office. A very similar set of rules could be properly and professionally drafted and promulated to achieve the result sought by the previous administrators.

  41. broje,

    As you pointed out, the status of whether something is truly voluntary may impact a requirement that otherwise has been ruled illegal. Watch the patent bar jump if the Office tries to repackage anything related to its illegal powergrab.

    Without vacatur, the rules fiasco is a complete and utter loss for the Office. Even 6 and malcolm in their absence of comments seem to recognize just how bad a beat the Office has taken.

    I am still expecting sanctions against the Office GC for his pursuit after the critical point and neglect to share critical developments (the “Boundy Point”, if I may coin a phrase) with the courts and opposing counsel.

  42. I see. And I also see that it was the requirement for Applicants to perform a search that made the ESD “substantive” in the eyes of the Court. But I doubt that there is anything to prevent the PTO from requiring ESDs for references submitted “voluntarily.” I place “voluntarily” in quotes because of the Duty of Candor. In any Continuation Application filed after Examination of the Parent case, there will have to be an IDS submitting the art cited in the parent. I think it possible that simply requiring ESDs for “voluntarily” submitted references could have a big impact on Continuation filings. What do you think are the odds that the USPTO will include this or a similar requirement in the new rules package that is rumored to be under development?

  43. NAL, my perspective is that of an agent who drafts for a corporate client who pushes the envelope of protection steadily forward and monitors how its competitors are pushing their respective envelopes. I thought it axiomatic that each corporation monitors the A publications of its competitors and drafts with that knowledge of the state of the art. What the PTO search finds should be stuff we know about already, with no surprises. I can see that not everybody has my perspective.

    On the failed new Rules, I observe, but I don’t really have a view. Not my business really, is it?

    I had supposed that one could still keep a pending app from being published until after issue, by relinquishing the thought of filing foreign.

    As for the rest of your missive, I am lost for words.

  44. broje,

    The standing Law is the district level (Cacheris) which struck down everything. That’s why the Office needs vacatur. Without vacatur, and as losing party, the Office is dead in the water.

    The CAFC level was eliminated when it went en banc. The Office lost whatever it had gained in that first CAFC decision.

  45. *******The welcome death of the claims and continuation rules witnessed the illegality of the movement of responsibility from the Office to the applicant for a de facto examination (search and analysis per the Office standards). As Tafas has stuck by his position, the vacatur sought by the Office is not likely to happen and the Office will be enjoined from making such a switch, unless and until Congress changes the rules.*********

    I don’t think that’s right. I seem to recall taht the Court struck down the limit on Continuations, but affirmed the right of the Patent Office to require ESDs for claims over x number or references over x number.

    I’m told that it used to be required that Applicants provide ESDs for submitted references, but the USPTO voluntarily stopped requiring ESDs. What, then, is to stop the Office from requiring ESDs, either conditionally or in every case?

    I’m not clear on whether the Office ever required that Applicants perform a search, or if Tafas v Dudas addressed whether the Office can require that Applicants perform a search. Does anyone know the answer to that question?

  46. Thanks MaxDrei,

    I wanted to make sure I didn’t needlessly “assail” you on point 2. As your lead-in touched on presumption, I thought perhaps you were going to make a case for validity to be decided by the public, rather than decided (as in the US) as a matter of Law. (I will resist the attempt to bite on the “submarine” hook, as the Law has eliminated the true submarine patent, and I will chide you for misunderstanding the legal right of preserving the quid pro quo choice of non-publication – that is a basic of US Law).

    We are in agreement that one aspect of promotion is the necessity of design around prompted by the monopoly right. If you don’t have the right, and you don’t want to pay your competitor for a license, the prompting for you to find a better way is often overlooked by the anti-patent crowd. For some reason, they think that merely giving up is the only option.

    As to searching, I want to make sure you understand the difference between good practice and legal requirement. The issue of equity is NOT to be placed on the practice side. Equity is a legal concept, not one grounded in best practices. In the US, by Law, the equity portion of what you are looking at rests with the Office. Plain and simple, they are the designated experts in the arts and experts in the searching of those arts. It is their legal duty, not the applicants, to examine, which includes search. It is a job that the applicants pay the Office to do. The biggest complaint from the patent bar is that the Office is failing to do its job (I could through in my thought about the job is NOT to rubber stamp either reject or accept without the hard work of examination – but I think you get my view on that). I am not sure why you don’t understand the furor over the now defeated rules package, and the illegal attempt to shift that burden. Surely, you must have a view, or at least a semblance of understanding on the patent bar view on that topic.

    As to the best practice portion of the discussion, I highly recommend to my clients that a thorough search be undertaken. In my mind it is a best practice to understand what you are up against at the beginning and to be able to start strong. However, there are multiple issues and distinctions between Law and practice.

    First is that a client’s search may have absolutely no relation to what an examiner will use in the legal process. An applicant must respond to what the examiner finds and uses and has no right to dictate which art the application is judged against. An applicant can only provide art to the Office (and is required by law to provide art that is known).

    Another issue is that my clients are not required by law to spend the extra money up front for a SECOND search – a first search is paid for as part of the US process. Since, in truth (and much to the annoyance of the anti-patent crowd), litigation actually only happens to a small percentage of patents, the better payback edges in favor of reduced search activity. It is more cost effective, on average and in total process costs, to not search – at least that is what my clients tell me.

    Some of my smaller clients, by necessity take the minimalist approach, and paying for a search twice (since they must pay the Office for a search anyway) is viewed as a redundancy they cannot afford.

    Personally, I think it insane not to take advantage of what is out there. Not only in your particular field, but like the omni-knowledgeable PHOSITA, it makes sense to explore other fields where the question you are engaged in may have presented itself in tangential ways. So, not only in regards to the application at hand, but as a general business practice, I recommend staying abreast of the patent landscape. I do have clients that tell me that the risk involved in treble damages outweighs this apparent value.

    To summarize, equity is a matter of law, and the law is well established just who has what responsibility. Various factors (such as cost and actual or theoretical expertise) affect the options of the applicant, and the fact that an applicant HAS options is supported by the Law and simply outweighs the benefit of changing the Law.

  47. So, NAL, further:

    When I wrote “the public” I had in mind my client, who looks at the published app and the EPO search report, and then must perforce form a view, what product to make and what process to run in order to preserve or increase market share rather than fade away. For me, this process of A publication, followed by “design around” activity is what “Promotes the Progress”. I think it promotes it better than submarine patents do.

    As to Applicants acquainting themselves with knowledge of the state of the art, I had supposed that this is one of the things that an intelligent corporation must do. Don’t they scrutinise emerging A publications in your country? And if they do, well then they know the art. And if they don’t tell the Examiner about that art they take a big risk, no? In that sense, I see equity as achieving an “offloading” onto the Applicant of the task of putting the best art on the PTO file, which “the public” can then use, in the context of making investment decisions about promoting the progress.

    I wonder what you will write next. I’m curious.

  48. Thanks and you are welcome MaxDrei,

    Some further clarifiation, if you don’t mind:
    2. Does the public form the view which claims are valid? – I think not.
    3. I’m still at a loss by your use of “offloading”. In the US, the applicant is not required to do ANY searching – that’s simply not the applicant’s role.

    The welcome death of the claims and continuation rules witnessed the illegality of the movement of responsibility from the Office to the applicant for a de facto examination (search and analysis per the Office standards). As Tafas has stuck by his position, the vacatur sought by the Office is not likely to happen and the Office will be enjoined from making such a switch, unless and until Congress changes the rules.

  49. Noise:

    1. Yes, you’re right about the burr.

    2. By “Horses for Courses” I was meaning that one chooses the tools that fit with the underlying legal system. With English common law there is equity. So, use the “inequitable conduct” tool to bring the art forward, from the Applicant to the PTO. With Roman civil law there is no equity, so the PTO has to do a high quality search and publish it with the application, so the public can form a view, which claims are valid.

    3. See (2) above.

    Thanks for inviting me to elucidate. nobody else did.

  50. Re: “Paul, what you say is true. But wasn’t Phillips supposed to solve all that?”
    Sadly, yes, but all the en banc Phillips decision really decided was to make less use of dictionaries.
    In spite of its [ignored] actual holding [a broader, not narrower, claim interpretation] Phillips provided a loophole big enough to drive a Mack Truck through for any CAFC judges who want to either continue to read limitations from the spec into the claims to narrow them, or, now, even to hold claims invalid under 112 as overbroad compared to the spec [and no longer just in chemical cases].

    Re: “If the alleged infringer thinks that the prior art is invalidating prior art but the patentee does not, why not use the much cheaper reexamination venue to fight it out?”
    A good question for all the clients and lawyers who regularly avoid making that decision [sometimes not even considering it] until well into costly and dangerous jury trial reality [i.e., too late].

  51. if the alleged infringer thinks that the prior art is invalidating prior art but the patentee does not, why not use the much cheaper reexamination venue to fight it out

  52. …and for the record, I doubt the alleged infringer would not have brought the prior art to the attention of the patentee prior to filing suit.

  53. A confident patentee would not seek a stay during ex partes re-exam, even if precipitated by a third party. A less confident patentee who was afraid of re-exam shouldn’t be in court in the first place.

    I believe this is the wisdom of the ED Texas regarding rules for stays in ex partes cases. It keeps uncertain patentees from using the re-exam process as a test range, and settling the suit (which perhaps should not have been brought in the first place) if the re-exam does not go well.

    Makes sense to me.

  54. Note to the shrill anti-patent types: Both broad interpretation at the PTO (BRI) and narrow interpretation in the courts is actually biased slightly against patentees.

  55. PTO claim construction, including re-exam claim construction and litigation claim construction are necessarily different. The BRI is the guide at the PTO (this ensures that the broadest net is cast over the prior art). The claim construction in litigation is necessarily narrower and held to a different standard. PTO examination is NOT litigation.

  56. Considering the widespread panel [and inter-panel dissents] differences in claim constuction views at the CAFC itself in recent years, and in many District Courts, that would hardly be a great role model for PTO clairity even IF the legal tests WERE the same for claims back IN the PTO for reexamination or reissue [for which corrective amendments and/or much lower cost Board and CAFC appeals are available].

  57. Presumption is one heck of a bur under your saddle MaxDrei.

    Not sure what you mean by “horses for courses”.

    What are you referring to with “concentrate on examination and ofload the searching task to the Applicant?”

  58. Thanks Ned. Of course, I think that the PTO should concentrate its resources on top quality searching and let users decide whether any given claim is valid. But, with the Presumption of Validity, the idea is to concentrate on examination, and offload the searching task to the Applicant. Horses for courses.

  59. Max, the vastly more expensive search and examination FEES in the EPO, as compared to those in the U.S., are the main reason for less prior art being missed in the EPO to begin with, as compared to the U.S. where that prior art is thus more likely to be cited for the first time in reexaminations or litigation.
    However, the practical and political question is whether or not imposing such a huge cost burden for all patent applications is economically justified when only a very small percentage of patents are ever asserted against anyone? Even patent academics have come down on the “no” side of that question. However, some of these academics seem to think that those applications which WILL be asserted later can somewhow be identified while still pending and subject to much more costly and thorough (“gold plated”)searches and examinations. Most experienced practitioners do not think such technological and commercial future “crystal ball projections” of future usages, alternatives, obsolescence, consumer fads, etc, is possible for most patent applications. Furthermore, the vast majority of U.S. patents in suit are only sued on years after their issuances, often to the surprise of the defendants.

  60. Mr Heller, I concede immediately that I don’t fully understand the issues. I’m not making myself clear either.

    I was suggesting that the reasonable EPO “reasonable” claim construction standard is the direct result of all that inter partes post-issue stuff that the EPO ordinary foot soldiers are doing, all the time. I was wondering whether ordinary USPTO Examiners would benefit in the same way, if they were to be given responsibility for such high level professional tasks, with such momentous consequences for the patent owner and the petitioner for revocation. Pointless dreaming, I suppose. Pie in the sky, I guess. But is it thinking outside the box?

    What’s ” AFAIK” BTW? Sorry, that’s another thing I don’t know.

  61. Thanks for these useful statistics. In defense of some of the judges who refuse stays of patent litigation for reexaminations, some of them do so expressly in view of, with experience of, the inexcusable PTO delays of reexaminations in violation of the express statutory requirement of “special dispatch”, lawyers or clients who delay filing reexaminations, and faster trials in their courts.
    The above comment that “Seagate held that without a preliminary injunction, there can be no willful infringement during litigation” is overstated. It can be a factor, but there is not such an absolute rule.

  62. MaxDrei, AFAIK, the claim construction standard in European patent offices is equivalent to our claim construction standard in court. Reasonable. Until you fully understand the difference between this and BRI as it is conducted in the USPTO, you really will not fully understand the issues.

    It would be nice if a reexamination was conducted by a court using the USPTO as a special master.

  63. Kudos to Ned Heller for so cogently framing the issues. Reexamination has become the preferred “second bullet” of infringers because they know that the reexamination unit is so flooded with requests/reexams that it takes years and years to get a patent out of the CRU.

    Don’t take my word for it. Take a look at the Sedona Conference Report which notes that ex parte reexaminations can take 4-6 years to get through an appeal at the BPAI (and then add another 18-24 months if the appeal goes to the CAFC). So much for “special disptach” of reexaminations.

    Bemused

  64. Ned, I don’t understand how a PTO Exr with zero “real life” experience of claim construction can do pre-issue examination competently.

    Suppose there was a world in which ordinary PTO Examiners spent 25% of their time hearing inter partes post-issue cases, in which the validity of the claim can be disputed on grounds of prior art or insufficiency or whether subject matter was added during prosecution but NOT on the clarity of the issued claims. Those Examiners have to decide who “wins”, the patent owner or the Opponent.

    The remaining 75% of their time, they do pre-issue examination on the merits, free to object to any and all points where the app fails to attain the statutory requirements.

    Suppose there were thousands of such post-issue inter-partes re-examinations (called “oppositions” in the EPO) each year so that, when one has to be done fast, because of co-pending litigation in the courts, it can be done fast.

    How else is the PTO to acquire those essential claim construction skills?

  65. Seagate held that without a preliminary injunction, there can be no willful infringement during litigation. A quid pro quo for a stay pending a reexamination could be the entry of a preliminary injunction if the claims were confirmed in reexamination, or if the defendant infringed reexamined claims.

    I find it interesting that courts “focus on prejudice that delays cause patent holders” while ignoring the prejudice caused by reexamination itself: the loss of two constitutional rights (trial by jury on fact issues and the right to have validity decided by an Art. III court), the loss of the statutory presumption of validity, and the loss of a proper claim construction standard.

    Anyone who has compared district court proceedings to the kangaroo court (primarily due to BRI and the lack of presumption of validity) that exists in the patent office knows just how valuable the rights lost really are. Most of the time, claim construction is half the case, but this is exactly where reexamination is weakest. The idiocy of the claim construction of the examiners is mind boggling, until one understands that this stupidity is actually a feature, not a flaw, of a reexamination system that fully intends that patent owners unnecessarily amend their claims to combat the Office’s claim construction.

    So sayeth the almighty Federal Circuit.

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