Judge Newman Rejects Reexamination following Validity Verdict (in Dissent)

by Dennis Crouch

There is a significant and growing overlap between patents in reexamination and patents in litigation.  These parallel processes raise practical issues priority and precedence between decisions by a court compared with actions by an executive agency.  In her recent dissent in the appellate decision of In re Construction Equipment Company (CEC), —- F.3d —-, 2011 WL 6224539 (Fed. Cir. 2011), Judge Newman argued that a reexamination proceeding requested by an accused infringer (PowerScreen) after a court had already finally rejected the accused infringer's obviousness defense should be considered an an unconstitutional violation of separation of powers and a violation of principles of res judicata and issue preclusion.  The majority (Judges Prost and O'Malley) affirmed the PTO determination on reexamination that CEC's claimed invention is obvious and therefore unpatentable.

The facts of the case are simple:

Litigation: In 1996, CEC sued PowerScreen for infringement. PowerScreen argued that the patent was invalid as both obvious and anticipate. However, the district court rejected those arguments and upheld the patent's validity and issued a permanent injunction. The Federal Circuit affirmed that decision in 2000. Powerscreen then unsuccessfully petitioned the Supreme Court for a writ of certiorari.

Reexamination: In 2007, PowerScreen decided to take another bite at the apple and filed a reexamination request - identifying the same prior art references rejected in the district court decision as well as a few others. See Reexam No. 90/008,447 (Fed. Cir. 2011).  The examiner rejected the claim, BPAI affirmed, and CEC appeal to the Federal Circuit. 

Back to Litigation: Based upon the reexamination results, PowerScreen would like for the district court to lift the permanent injunction.

Judgment:

The Majority rejected Judge Newman's contentions largely based upon the Federal Circuit's 2008 Swanson decision.  In that case, the court allowed a reexamination to proceed even though the requesting party had unsuccessfully asserted some of the same prior art in litigation of the same patent.  There, the court explained the general principle that issue preclusion does not apply to patent validity judgments (although it does apply to patent invalidity judgments).

Open door to estoppel: Although the majority agreed that the patent was properly invalidated during the reexamination, it refused to opine on whether the adjudged infringer “might or might not be entitled to seek abrogation of the injunction” based upon the reexamination results.

Invalidity affirmed.

Notes on the Case:

  • As an aside, at oral arguments, Judge O'Malley asked the patentee to explain the “points of novelty” of the invention.
  •  Scott A. McKeown writes that under this case “the infringer could attempt to 'undo' the effect of the earlier, final, court judgement by invalidating the patent via the EXP filing.”
  • Michael Barclay writes “Judge Newman sure likes patents.”
  • PHawk writes that the “ruling is merely exemplary of the present policy to eviscerate patent protection for all but large corporations.”

110 thoughts on “Judge Newman Rejects Reexamination following Validity Verdict (in Dissent)

  1. do not have an inherent advantage

    No, we only have the underpinning of our adversarial system because we like to snipe, and there is no hint of any advantage to having such a system.

    Someone needs to relearn the basics.

  2. To clarify – in the court reference B was found not to have B’ – and that finding of fact was necessary to the judgment – affirmed and final decision of the courts. subsequently in the same patent in ex parte rexam – the pto revisits whether B discloses B’ and says yes we think it does – even in the face of the court decision – which had the full advantage of adversarial proceedings to determine that issue

    Adversarial proceedings between two opposed private parties do not have an inherent advantage over government proceedings where both proceedings are dedicated to determining the veracity of a particular allegation.

  3. sockie: pto is open hostile to the courts

    Right, hence the lack of citations to court decisions in the MPEP.

    Better trolls please.

  4. To clarify – in the court reference B was found not to have B’ – and that finding of fact was necessary to the judgment – affirmed and final decision of the courts. subsequently in the same patent in ex parte rexam – the pto revisits whether B discloses B’ and says yes we think it does – even in the face of the court decision – which had the full advantage of adversarial proceedings to determine that issue. This is ‘relitigating the case in the guise of reexamination.” Which BTW there are two reported uspq decisions saying the pto would not do that – and would apply administrative estopple to that issue. But after congress overturned portola packaging – on other and unrelated grounds – the pto – feels free to relitigate everything, at any time in ex parte reexam. Under the patent reforms, that eliminated 35 usc 145 review of pto – it is now a case of first impression – as to whether and when pto needs to at the very least apply administrative estopple to facts determined by a court. Of course, in my view, even that can’t save the ex parte statute now – as we have Hayburns case writ large – the tyranny of mixed judicial and executive power – as scotus has put it.

  5. 6, irrebuttable?  Yes, at least insofar as an SNQ is concerned.  Even in court, where new defendants have a right to raise old issues, later courts should follow earlier courts unless they are pursuaded that there has been clear error.

  6. “Malcolm, but the power to pardon is in the constitution.

    So is the power to pass lawls governing patents. Or so I’m told. Or perhaps you construe that particular clause narrowly and perhaps you think reexams as a whole are unconstitutional? I note that I would not necessarily disagree with you based on what I see in the constitution. But, our Federal Gov. does all kinda of crp that it has no constitutionally granted power to do.

  7. Otherwise, you might say that any question of invalidity over patent publications could/should have been raised by the examiner in the first instance and therefore cannot be new.

    one can only dream of examination so rightuous.

  8. The PTO’s jurisdiction is premised on an SNQ. There is none if the same issue was before the court or the Office and decided and especially when it was affirmed by the Federal Circuit.

    I agree (provided that it is in fact the same issue), but it’s not a question of estoppel. Which means it doesn’t matter who the requester is, and also means that “could/should have been raised in the inter partes proceeding” is not a reason to deny the request if the issue was not actually raised.

    Otherwise, you might say that any question of invalidity over patent publications could/should have been raised by the examiner in the first instance and therefore cannot be new.

  9. The public is entitled to nothing. They have a right only to request a reexamination. The PTO’s jurisdiction is premised on an SNQ. There is none if the same issue was before the court or the Office and decided and especially when it was affirmed by the Federal Circuit.

    That is my opinion. It appears to be shared by Armitage and by the ABA IP section, albeit, they are concerned that the results of an inter partes decision not be undermined by a losing participant requesting ex parte reexamination anonymously.

  10. in the exact same way on the merits of the request itself

    Except they do not, they will not.

    Hence the crackdown by Congress.

  11. the PTO should deny the request on that basis

    Except they do not, they will not.

    Hence the crackdown by Congress.

  12. Since we agree on the SNQ question, there should be no reconsideration of a court decision on the exact same issue, PERIOD! How the PTO decides the issue of patentability once a reexamination begins (burden of proof) is hardly the issue if the PTO has no jurisdiction in the first place to conduct a reexamination.

    Swanson has to be be wrong.

  13. When the issues are the same, there is no substantial new question of patentability.

    That’s not an estoppel issue anymore, that’s an issue of whether there’s a new question. If there is no new question, the PTO should deny the request on that basis, not on the basis of who is presenting the question.

    However, the PTO would still not be “second-guessing” the court unless it made explicitly contradictory findings of fact, because it is completely possible and consistent for a patent to be valid over art on a clear and convincing basis while also being invalid over the same art on a balance of probabilities basis. If this were not the case, i4i would never have been appealed at all, and we never would have talked about it.

  14. I beg to differ, IANAE. When the issues are the same, there is no substantial new question of patentability. Otherwise, the patent office will be second-guessing the Article III court.

  15. And are you justifing the Executive interference on the Executive’s ignoring of the the statutory presumption of validity!!!!!

    The requirement of a “substantial new question” is, IMHO, a statutory recognition of the presumption of validity enacted in 35 USC §282. The patent office should not ever reconsider an issue of patentability litigated and decided by a court. Whatever doubts there may have been regarding the validity of the patent with respect to certain prior art, that issue was decided by the court and should not be re-decided by the patent office. There has to be presumption that the court got it right.

  16. This is an ex parte proceeding initiated by an anonymous request. The Executive branch sits in judgment only of a patent right previously granted by the Executive branch.

    It’s completely irrelevant for this purpose whether there has been a decision by an Art. III in which the existence of that right happened to be a material fact.

  17. Devil, I think the real issue here is whether Executive branch should sit in judgment of a judgement by an Art. III court. What kind of nonsense is that?

  18. Ned, the key point you’re still missing is that the identity of the requester is legally immaterial. Even if the requester would have been estopped, I could personally file the very same request in my own name, without any showing that I have any interest or case or controversy, and I would not be required to account for what might have been reasonably available at any previous inter partes proceeding to which I was not a party. The PTO would consider the request in the exact same way on the merits of the request itself, and the only fact about the requester (me) that would interest the PTO would be whether I had enough money in my deposit account. In that context, estopping any particular requester simply makes no sense.

    The public (all of it) is entitled to PTO consideration of questions of patentability with respect to any issued patent. As long as a sufficiently new and material question is presented, it doesn’t matter where that question came from, and it’s no more “harassment” than the existence of an invalid but enforceable patent (which has by assumption already been litigated for infringement) is a harassment of the public at large.

    Unless you can find a direct contradiction between the re-exam results and the previous inter partes decision, estoppel simply does not matter.

  19. IANAE, this is ridiculous, and you know it.  After a litigated interpartes reexamination, the should simply refuse to conduct any further ex parte re-examinations unless there is a demonstration by the requester that the art forming the basis of the request was not reasonably available at the time of the inter partes proceeding. Otherwise, we are in the realm of pure harassment of the patent owner for no good purpose whatsoever.

  20. You are not welcome. Try reformulating your 9:37 AM post so that it makes sense. You haven’t made any points, yet.

  21. the estoppel provisions (interparte proceedings) could not effectively be enforced if the estopped party could simply anonymously request a reexamination.

    He’s half right.

    The estoppel provisions can be effectively enforced against the estopped party requesting an inter partes re-exam.

    As for ex parte re-exam, we might ask whether estoppel should apply at all. The estopped party isn’t asking the PTO to invalidate the patent based on an adversarial proceeding to which it would be a party. It’s simply asking the PTO to check its work and do its own job over again, with no participation by the estopped party.

    Ex parte re-exam is a function the PTO performs in the public interest, and it doesn’t matter whether the party asking the PTO to take another look a patent is estopped from doing anything at all. Which, incidentally, is the whole reason the requesting party is anonymous in the first place. And the reason the PTO could re-examine the patent on its own initiative. And the reason re-exam is not precluded by the fact that references were previously considered by the PTO.

    Yes, it’s impossible to apply estoppel to ex parte re-exam, except insofar as the art doesn’t raise a new question of patentability. That’s not a bug, it’s a feature.

  22. an issue of fact that is does not depend on the ‘standard or proof.”

    I don’t see how that’s relevant, unless that’s somehow the only question of fact in the entire case.

    More to the point, I don’t see how it’s necessarily true. What a reference discloses depends on what can be understood from that reference by a person of ordinary skill in the art, whose knowledge is itself a potentially disputed question of fact subject to conflicting expert testimony.

    And then there’s the question of fact of whether embodiment B’ is within the scope of the claim as construed. And the question of fact of whether a person skilled in the art would have modified embodiment B’ to meet the claim in view of what he might understand from reference C.

    Those aren’t exactly the most Boolean questions of fact in the world.

    Go read all the whining in one of the i4i threads. I think you’ll see lots of compelling arguments from both sides about what a difference the standard of proof makes.

  23. Armitage, on behalf of the ABA IP section, noted that the estoppel provisions (interparte proceedings) could not effectively be enforced if the estopped party could simply anonymously request a reexamination.

    And, of course, he is right.

  24. Whether or not for example reference B discloses embodiment B’ is an issue of fact that is does not depend on the ‘standard or proof.”

  25. Clearly the shift to first to file with the ability to steal another inventors invention by claiming dual conception witch is astronomically impossible then winning awarding by claiming improved description is so corrupt its arrestable. The fact that only 20 cases per year are involved is testimony to the fall of marketable inventions entering the office with good reason of being one of the forty methods of invention theft that are shuttering the system and the economy

  26. the mpep provides that pto will give = deference- to a courts finding of fact.

    For those of us who made so much noise about the potentially catastrophic implications of i4i, would it not be completely reasonable for the PTO to occasionally come to a different conclusion by applying a different standard of proof to the exact same findings of fact?

  27. There is an excellent tax court case affirmed at length by cafc concerning fact finding, conclusions of law, necessary for the judgment etc in the context of administrative estopple – collateral estoppel – as applied by an admin court in the context of an art III already having determined facts and conclusions of law. The scotus nextwave communication case is also a case where an admin agency attempted to reexamine the ‘facts’ giving rise to a spectrum auction – in an attempt to do-over the auction – that conflicted with the ability of a bankrupcty court (a creature of art iii court power) to render a judgment concerning the license.

    the mpep provides that pto will give = deference- to a courts finding of fact. In practice it is a dead letter – as pto is open hostile to the courts. So also in re perne and whichardly (sp)

    Of course, the case most on point is simply hayburns case. A federal right was created for a person to bring a claim in court to determine dates, ranks etc for service in the revolutionary war – the remedy was to court to place the person on the pensioner rolls. Independently the sec of state court remove a person from the rolls if a substantial mistake had been found in the persons inclusion in the rolls. I assume the sec of state could also put a person on the rolls. Court said this was unconstitutional. So you dont’ even need to reach the 7th amendment. Sans 35 usc 145 ex parte reexamination is now a situation exactly like hayburns case. The court is issuing advisory opinions. Newman is right.

  28. MM,

    Regarding your comment of “And what about changes in the law? Surely they create new opportunities for a reexamination of a patent “found valid” by a court.“, I have always thought that changes in the law would create such opportunities, with the largest of such stemming from the KSR case.

    I have been repeatedly told by many (including the Office) that such changes in the law do not present any such opportunity for reexamination.

  29. MM, maybe.  If the court is truly convinced that the art was newly discovered and raised a substantial new question, the court probably would permit the defendant to request reexamination.  
     
    But the facts in Swanson were to the effect that the art was the same art and the issue was the same issue.  I think the losing defendant was estopped to do what he did.  However, since the Feds did not see it that way in Swanson, I would now think that courts should order  a preliminary review so that the losing defendant respects the judgment of the court and does not engage in what amounts to a collateral attack on the judgment. 
     

     

  30. Ned: I would request that the final order specifically direct the losing defendant not seek a reexamination of the patent without leave of court. I think a court would grant such an order.

    Maybe. But surely if the losing defendant discovers new art (and of course by “new” I mean non-cumulative) creating a substantial question of patentability, he can’t be prevented from seeking re-exam.

    And what about changes in the law? Surely they create new opportunities for a reexamination of a patent “found valid” by a court.

    Regarding identical issues, Swanson clearly involved identical issues. This case did as well, at least with respect to the art litigated in court.

    As a practical matter, then, how can a re-exam possibly change the result? Any PTO finding which contradicts the court findings will be automatically reversed by the court(s).

  31. iwasthere, regarding the 7th amendment, I presume that “findings of fact” that cannot be reviewed by other courts include mixed questions such as obviousness. With that assumption in place, is there a Supreme Court case on whether an executive agency can “reexamine” facts found by a jury because an executive agency is not a court? You spoke of administrative estoppel, but is the 7th Amendment not involved as well?

  32. What about jurisdiction? The PTO requires an SNQ for jurisdiction. How can they ignore the prior holding of the Federal Circuit on the same claims and with respect to the same art and with respect to the same issue of patentability and validity?

  33. Malcolm, two points.

    1) A patentee in court should have the right to at least bind the defendant from conducting a collateral attack on the judgment. In the future, I would request that the final order specifically direct the losing defendant not seek a reexamination of the patent without leave of court. I think a court would grant such an order.

    2) Regarding identical issues, Swanson clearly involved identical issues. This case did as well, at least with respect to the art litigated in court. If the new art, combined with the litigated art raises a substantial new issue, then we have an entirely different situation altogether. The most important consideration is not whether the art is new, but whether the issue of patentability/validity is new. The so-called new art often times is cumulative, raising the same issues as old art.

  34. Judge Newman is on the right track. Ned, you are falling into what I would call the patent lawyer “over thinking it” trap that befell (befalls) Judge Bryson in this matter. A couple of points missed by Judge Newman (who btw was the writer of patlax (lexpat?) decision.

    First, the commission herself can sit as an apa judge and pick her other two panelist to sit on the board in judgment of a reexam in the scenario of this case. This is exactly the same issue found unconstitutional in the land patent cases, i.e., in our framework – you cannot have a system wherein a first political appointee can issue a right, have an election, and a second commissioner appointee decides there was a ‘mistake” and revokes the right.

    Second, there was a good argument that under the original reexamination scheme that 35 usc 145 provided the constitutionally saving ‘safety value” of de novo judicial review in a reexam. In that case, after all, the commission would sit essentially in no greater standing than any private party in challenging the validity of the patent. In any event, the district court under 35 usc 145 could give comity to the other court opinion(s) and pto position, have full blown hearing on fact evidence, expert testimony etc etc. Under the new law 35 usc 145 is appeals are gone. Now you have a situation where the commission can sit as judge and jury and is given deference as to his findings of fact under Zerko Just call him the patent zcar and drop the facade. Congress had conjured away the 7th amendment under the new statutory scheme.

    Third, the test: There is no other federal admin court that does not or would not apply administrative estopple in this case. See tax court, contract review board, compensation baord, etc, etc – the pto stands alone – the anomaly. Note, pto did apply admin estopple in reexaminations – until congress overturned portola packaging (for a different reason), i could go on, but you get the drift. Pto fails the non-politcal test and has over reached in getting 35 usc 145 repealed.

  35. In full disclosure, I still haven’t read the opinion yet. I’ve given this issue some thought though and looked into it several years back.

    My thought is that Judge Newman is wrong. I think the “injunction” issue that’s now being teed up for the lower court though is actually the more interesting constitutional issue. There, I think there is a good argument that injunction stays in place regardless of the reexamination. Otherwise, an Executive agency would have essentially reversed an Article III court.

  36. Malcolm, but the power to pardon is in the constitution.

    Indeed it is. And many states have voluntarily included such power to “strip courts of authority” in their own constitutions.

    The PTO becomes a necessary party. It is really the “owner” of the patent to the extent it can revoke the patent on the very same grounds at issue in court and regardless of the outcome.

    I don’t see how the power to revoke a patent makes the PTO an “owner” of the patent. And is it really the case that the PTO invalidated the patent based on the identical art and arguments presented to the court? i.e., is it the case that the PTO identified an error in the court’s reasoning or was that their scale was adjusted differently?

    Such impleading of the PTO would be completely unnecessary if the PTO were in fact bound by the outcome.

    Again, if the arguments/facts are identical, isn’t the PTO effectively bound by the outcome? Why can’t the patentee appeal the PTO’s decision and cite the court case? Isn’t it all but guaranteed that the PTO will ultimately lose the appeal under those circumstances? Why would the PTO bother to fight for the invalidity of a patent when the identical arguments for invalidity have already beeen considered and rejected by the court of appeal? Something doesn’t add up.

  37. Malcolm, but the power to pardon is in the constitution.

    Consider this as well. The PTO is on notice of the patent case. Shouldn’t the law deem the PTO bound by the outcome of the case — at least to the extent of the validity issues actually litigated and decided? If the PTO is not bound, and can independently revisit the very same patentability issues decided by the courts and of which the PTO is informed, it seems to me that the patent owner should have the right to implead the PTO as a real party in interest so that it is bound by the outcome of the case. The PTO becomes a necessary party. It is really the “owner” of the patent to the extent it can revoke the patent on the very same grounds at issue in court and regardless of the outcome.

    Such impleading of the PTO would be completely unnecessary if the PTO were in fact bound by the outcome.

  38. EG, read the opinion, friend, and I don’t mean just skipping down to Pauline’s part.

    Blonder-Tongue has nil to do with this opinion. The infringer got two bites here because CEC had brain ded counsel. The basis for the majority opinion was that collateral estoppel & etc. issues were not raised below.

    I agree w/ Pauline 100% that that doesn’t matter. This is almost like you can raise subject matter jurisdiction at any time, including first on appeal. Nevertheless, the opinion was based on not raising collateral estoppel below — not Blonder-Tongue or any other two-bites arguments.

    I cannot in my worst nightmare imagine not having raised collateral estoppel before the examiner, BPAI, CAFC, and anyone else who would listen. What were they thinking? How much did CEC pay these stiffs to bungle this thing?

    Thank goodness Pauline was good enough to write their en banc petition for them. My crystal ball says it will be granted, Sharon and Kim will be reversed 15-2, and they will immediately retire to a Benedictine nunnery where they will be handed pooper-scoopers and tasked with walking St. Bernards along the tow-path. Very large pooper-scoopers, BTW.

  39. Without addressing or confirming the validity of any of the other issues you raise, Ned, I want to make sure you are aware that in many states (at least) and at the Federal level, certain elected officials have been given the power to “strip courts of authority” (your words). See, e.g., the act of pardoning a person found guilty by a court.

    Patents aren’t people. They may be owned by people but the patents themselves aren’t immune from “double jeopardy” type situations.

    There is surely an issue of judicial economy at play here but it seems unlikely that the issue will trump the rights of the public to be free from harassment by patent owners asserting junk. Of course, we are all aware of a contingent of folks who never saw a patent they couldn’t fluff.

  40. Swanson, a Federal Circuit panel decision relied upon by the majority here, held the exact same issue of patentability decided by the Federal Circuit in a final decision could form the basis of an SNQ if the issue arose from a district court and not from the PTO.

    The Swanson panel rationale was based on the different standards of proof (of facts?) between the Courts and the PTO.

    But, if one drills deeper, one can legitimately ask whether there a material difference between the two? We have before both tribunals the exact same art and the exact same issue of patentability/validity. The art in question is a patent. At least with respect to this patent, there were no “facts” in controversy. The decision of obviousness, based on uncontested facts, is/was one of law. Just how then are the issues of patentability/validity different even considering the different standards of proof (of facts)?

    Did Congress really intended for the PTO to revisit the exact same issue of patentability decided in court? Even when affirmed by the Federal Circuit. Even when affirmed even by the Supreme Court?

    Really?

    That is hard to fathom. If that issue were squarely presented to Congress for a vote, I hardly think that Congress would authorize the PTO to sit in judgment on the rulings of the courts where the issues are identical. But that is what we have to believe if Swanson is correct.

    Surely this question has broader ramifications than patents and SNQ. It really is a matter of Congressional power and whether Congress can strip courts of authority. Prevailing Supreme Court precedent suggests that Newman is right.

    I believe the Swanson panel had it wrong on the SNQ issue, and its decision should be reconsidered by taking this case en banc.

  41. Assymetry is good and “equitable” when it comes to patents. You all are lucky to have any patents at all, and any patent that appears before me is sure to be an invalid one.

  42. EG: Instead, SCOTUS almost always tilts the playing field in favor of the alleged infringer and against the patentee. That’s not consistent or equitable in applying the law, be it patentee or alleged infringer.

    Just when I think I’ve heard everything, now the txxbxggxrs want to argue that a losing record before the Supreme Court means that patentees have been treated “inequitably” by the court. Good grief.

  43. because having patent examiners consider previously PTO-missed prior art

    And thus, massive IDS submissions are still called for, even in the face of retrenched IC rules (which, btw, were also put on hold by the Office).

    Methinks, this topic could support a thread of its own.

  44. I take it, Non Seq., that you either did not read my post or that you did not understand it.

    You and I are in substantial agreement.

    On the SNQ issue, the only question is whether the PTO considered the prior final Fed. Cir. decision in making its decision. If it did not, that, IMHO, was legal error and is not a matter of opinion.

  45. I think this is something of a “tempest in a teapot.” Already by this September the AIA legislation will re-define the relationship between inter partes patent reexaminations and patent litigation, and inter partes reexaminations are far more valuable for patent suit defendants.* Ex parte reexamination is far less dangerous for patent owners than inter partes reexaminations because no one other than the patent owner can participate in any way. It is an in rem proceeding, not any kind of litigation. The claim scope interpretation in reexaminations is also different from that in patent litigation, not just proof different burdens, and the patent owner can amend its claims to avoid the new prior art. Furthermore, ex parte reexamination can and should be requested annonimously or by another party.
    Also, congress has just demonstrated, in the AIA, by creating what will now be FIVE reexaminations, that reexaminations are here to stay [whether patent owners and lawyers losing billing hours like them or not], because having patent examiners consider previously PTO-missed prior art is considered the best way to reduce patent litigation and its costs on invalid patents, as compared to a technology and claim challenged jury deciding between the testimony of paid experts in multi-million dollar jury trials.

    *inter partes reexaminations have statistically demonstated, in spades, that the majority of the necessarily very limited prior art searches done by PTO exmaminers these days have missed the most relevant prior art patents and publications.

  46. whether a losing party in a court case can petition the the executive branch to effectively overturn the judgment of the court

    Losing a court case is different from losing the ability to petition the government. The basis for the judgment is no longer valid, but the judgment itself is still in place. Whether or not the court grants relief from judgment is a separate issue that hasn’t been determined.

    Moreover, an ex parte reeexamination is between the patentee and the PTO. The PTO wasn’t a party to the previous litigation, so it isn’t bound by the earlier decision.

    There in truth is no substantial new question of patentability

    This is a matter of opinion. The PTO reached a different conclusion.

  47. If it is so abundantly clear that the company is practicing the old technology, that can be proven with the one bite at the apple that that tradition provides. If it is not that clear, then maybe… the company is practicing the technology not so legitimately.

    That would be a compelling argument, if we weren’t currently discussing an actual real-world case that illustrated the exact opposite.

  48. “What if the “investment” is at the expense of some other for-profit company that is legitimately practicing the old technology?”

    If it is so abundantly clear that the company is practicing the old technology, that can be proven with the one bite at the apple that that tradition provides. If it is not that clear, then maybe… the company is practicing the technology not so legitimately.

  49. your propensity to see patents as bad.

    Now you stoop to stawmen.

    Nice chatting with you, anon. Same time next year?

  50. IANAE,

    Now you stoop to stawmen.

    My point is not: “Your point is that having ways to invalidate a legitimately invalid issued patent diminishes the strength of all patents.

    Not even close.

  51. More kernels of half-truths, IANAE.

    Still does not address the points I made.

    Still does not address your propensity to see patents as bad.

  52. OK, anon, what I’m saying is “be consistent and equitable” whether it’s the patentee or the alleged infringer. Instead, SCOTUS almost always tilts the playing field in favor of the alleged infringer and against the patentee. That’s not consistent or equitable in applying the law, be it patentee or alleged infringer.

  53. We are mixing concepts. Litigation between two parties decides issues between the parties. In rem litigation decides questions against all parties.

    The PTO decided patent issues in rem. The courts decide issues between parties.

    The question, though, is whether the PTO should even undertake to re-decide issues of patentability already decided by the courts. That seems to be bad policy, even if it might not be ultra vires.

  54. Here too, you miss the point.

    Your point is that having ways to invalidate a legitimately invalid issued patent diminishes the strength of all patents.

    I think you’ll agree that it has a disproportionately greater weakening effect on the invalid ones. And arguably a strengthening effect on the valid ones that weather the procedure unscathed.

  55. Malcolm, indeed. If this were an old combination, there would be a point of novelty in some improvement in one of the old elements. If this is a new combination, every element could be old, and the novelty could lie in the combination. Here there would be no “point” of novelty, yet the combination could still be patentable.

    I haven’t studied the case, so I don’t know what the right answer is here, but the question is apropos to some degree to determine the differences over the prior art.

  56. Why is it that you are quick to assume that any examination that leads to the verdict of invalid is autoamtically the “right” one, while any that leads to a verdict of valid, cannot be the right one?

    A decision of invalidity is always the “right” one, at least in the sense that it is dispositive of any and all proceedings regarding that patent.

    There is no such thing as a “verdict of valid”, only a verdict that invalidity has not been proved. That’s why we presume patents valid in the first place, and it’s also why we allow subsequent challenges to the validity of the same patent in subsequent litigation.

    It’s the same for patents as it is with any other asserted legal right. A single defect in the right means you have no right to assert, whereas the failure to identify a defect in the right doesn’t foreclose further challenges.

  57. To me, there are two different issues:

    – Whether there is a significant new question of patentability when the same issue of patentability has already been decided by the Federal Circuit albeit in a case originating in court; and

    – Regardless of whether there is a significant new issue of patentability, whether a losing party in a court case can petition the the executive branch to effectively overturn the judgment of the court? That party is legally estopped vis-à-vis the other party, but not necessarily in rem against the patent. But a collateral attack on the patent essentially is an attack on the judgment and should be recognized as such. If the defendant now seeks to vacate the prior judgment against it based upon the new result in the patent office, I would hope that the District Court would not only deny the request, but would impose sanctions of some kind on the defendant for essentially ignoring the court’s judgment in its collateral attack.

    Regarding the issue of significant new question of patentability, I think the patent office cannot ignore the prior judgment of the Federal Circuit regarding the same patent and the same prior art. If, considering the new arguments and or the new art, there remains a substantial new question of patentability, I would think that the patent office would have jurisdiction to conduct the re-examination. But, if the new arguments and the new art are not sufficient to tip the balance, I believe the patent office does not have the jurisdiction to declare a re-examination based upon its its independent reconsideration of the same issue of patentability already decided by the Federal Circuit in a final judgment. There in truth is no substantial new question of patentability and, for this reason, no subject matter jurisdiction for the re-examination.

    And as we know, subject matter jurisdiction is an issue that can be raised at any time. I think the Federal Circuit should take this case en banc and to reconsider whether the re-examination in this case was ultra vires, i.e., not based upon a substantial new question of patentability. I would reserve the question of res judicata to the district court if the “defendant” there seeks to overturn or vacate the prior judgment against it.

  58. J. Newman: The invention in the ’564 patent channels oversized material in a novel way

    What is this “novel way” of “channeling oversized material” alluded to by Newman? Can someone articulate it plainly?

  59. If swift enforcement and swift “vaporisation” are of paramount concern, then why allow multiple bites at the same apple, EVEN AFTER LITIGATION?

  60. IANAE,

    Why is it that you are quick to assume that any examination that leads to the verdict of invalid is autoamtically the “right” one, while any that leads to a verdict of valid, cannot be the right one?

    So wrapped up you are that you miss the point of my 11:18 post.

  61. Dennis: •As an aside, at oral arguments, Judge O’Malley asked the patentee to explain the “points of novelty” of the invention.

    Good for her. That’s a perfectly reasonable question to ask a patentee/applicant when trying to determine the differences between the invention and the prior art.

  62. EG : the unfortunate doctrine set forth by SCOTUS in Blonder-Tongue

    Nothing at all “unfortunate” about that doctrine. Blonder-Tongue is a very reasonable decision. Just because this case makes the pxtxtnt txxbxggrs sad doesn’t mean that Blonder-Tongue is unreasonable or “unfortunate”. It’s not. And it’s not going to be overturned, ever.

    As IBP noted upthread, the real issue here is simply whether or not there were new arguments for obviousness. Certainly there were new references there were considered.

  63. •PHawk writes that the “ruling is merely exemplary of the present policy to eviscerate patent protection for all but large corporations.”

    LOL

  64. Upon a cursory reading, this case seems simple: it wasn’t the same issue.

    Even Newman admitted that there were new references, and that they DID contribute to the new argument for obviousness:

    “Seven years later Powerscreen requested reexamination on the ground of obviousness, citing the same references and additional references, placing strongest reliance on the same references that had been cited in the litigation.”

    This statement acknowledges implicitly that reliance WAS placed on the new references; at that point, it is within the PTO’s discretion to determine whether or not a substantial new question of patentability arises as a result. The form of Newman’s statement was likely chosen to downplay the weakness of the position it tries to articulate.

    It’s like Newman shaved her ugly dog’s butt, and taught it to walk backwards. Pauline is not fooling anybody.

    Her real problem with the decision was based on her distaste for “hindsight combination”, as described in the latter portion of her dissent–fair enough…but the “same issue” position is so weak as to be untenable.

  65. I agree that a surfeit of patent-bashing is not good for innovation.

    I put it to you though, that for innovation a surfeit of patent-issuing is worse.

    I further put it to you that, for fostering innovation, speed to issue is of paramount importance.

    Now more than ever, we need swift enforcement of all those swiftly issued claims that, under the spotlight meet the criteria of patentability, and equally swift vaporisation of those that don’t.

    I just don’t know how to achieve all that, at tolerable cost and within the foreseeable future. Do you?

  66. And ask yourself, who benefits from weaker patents…?

    Who benefits from the enforcement of invalid patents? Should they?

    The focus should be on the role of patents in the economy of enabling investment to flow to new technologies.

    What if the particular technology turns out not to be new at all? Should investment still flow in that direction? What if the “investment” is at the expense of some other for-profit company that is legitimately practicing the old technology?

  67. Re-exam was asked for by a third party.

    So what? If it had been a fourth party, there would have been no problem at all in re-examining the very same patent based on the very same art. What if a re-exam is filed by a law firm in its own name? By a recently-incorporated company with no discernible connection to the previous litigation? By the PTO which is unable to un-remember the litigation defendant’s re-exam request? By a well-meaning individual you might characterize as a “re-exam troll”?

    All that matters is whether or not the patent is valid before the PTO. Just like in the first examination that was requested by the patentee.

    I would think that you, IANAE, the king of equity, would be championing the patent holder on this issue.

    Why would I (or anyone of sound mind) champion the holder of an invalid patent?

  68. All of this patent-bashing is not good for innovation.

    But it is good for those who wish to see patent strength diminished, is it not?

    And ask yourself, who benefits from weaker patents…?

  69. It’s an ex parte re-exam. The only party involved is the patentee.

    True – but only to a certain extent. Re-exam was asked for by a third party. It is that request that Shilling’s point pertains to.

    They say the best lies have a kernel of truth…

    I would think that you, IANAE, the king of equity, would be championing the patent holder on this issue.

  70. OK, thanks. Perhaps I am failing to grasp that there is a difference between just any old presumption of validity and THE Presumption of Validity.

  71. So, what is the answer…? Do the principles from eBay override the principles from Blonder-Tongue? Should the application of equity be, well, equitable?

  72. Those who say that public policy favors extraordinary procedures to allow the invalidation of invalid patents assume that there is some cosmological concept of what a good patent or a bad patent is. Frankly, that is a bunch of hooey. The evidence is put forward by people and judged by people and subject to the frailties of the human condition. Granted, using group decisionmaking reduces the errors by something approaching crowd-sourcing, but still the decisions are human, and the standards by which the decisions are made are man-made, so the result is NECESSARILY subjective.

    The focus should be on the role of patents in the economy of enabling investment to flow to new technologies. Patents that are subject to multiple rounds of second-guessing do not serve that purpose as well as those that are given strong respect from their inception.

    All of this patent-bashing is not good for innovation.

  73. Max. I think he’s saying that you should not be able to slip your claims by the examiner in the first place, but that our case law has long held the import of giving credence to the Office having performed its duty.

    “Do the job right the first time” rings strongly here.

  74. Max, I think he’s saying that once you slip your claims by the examiner the first time, being certain is more important than being correct.

  75. And yes, it is relevant (and least to the party involved) if that party had attempted to use the same art in the same matter.

    It’s an ex parte re-exam. The only party involved is the patentee. Either the claims are valid in the PTO’s estimation or not.

    With the different standards of proof, and with a court determination of invalidity being dispositive, there’s virtually no way for the PTO and court decisions to be inconsistent.

    Blame whoever set up the parallel systems, but so long as we consider re-exam to be a valid recourse at all, this is going to happen from time to time. Unless you want the PTO to examine based on a clear-and-convincing standard, in which case prosecution should be a lot more fun.

  76. OK, but (so I can follow you) are you then saying that Newman is wrong to argue that the last word, on the issue of any degree of presumption of validity, is the certification of the claim by the court?

  77. AC, the alleged infringer gets “two bites” in Construction Equipment because of the unfortunate doctrine set forth by SCOTUS in Blonder-Tongue, which says that collateral estoppel regarding invalidity only applies against the patentee, but not against the alleged infringer. This incongruity becomes glaring when you consider that SCOTUS in eBay deemed that general principles of equity apply to patent infringment cases granting permanent injunctions. But this incongruity in applying those general principles of law never seems to bother SCOTUS when comes to how many “bites at the apple” the alleged infringer gets to assert invalidity of the patent.

  78. The fact that it was filed by a party that failed to prove invalidity in the district court isn’t relevant.

    I wonder if that filing party made the Office aware of its loss at the Federal Circuit…

    And yes, it is relevant (and least to the party involved) if that party had attempted to use the same art in the same matter.

  79. Your point “The infringer didn’t bother” strikes me as the strong one, and one that chimes with Paul Cole’s “controversies should not go on for ever” point above.

    But then again, I also like Non Seq’s point below.

  80. “Seems to me, when the court considers the validity of a claim, in relation to art not earlier addressed by the PTO, it should don the mantle of a PTO Examiner. Is that what happened here?”

    You’re missing my point, Max: the art WAS CONSIDERED by the court in Construction Equipment and deemed INSUFFICIENT to overcome the validity of the patent. Again, the only difference was the STANDARD for validity applied in the respective forums. And again, the alleged infringer didn’t bother to request reexam UNTIL AFTER THE TRIAL was over.

  81. The PTO doesn’t have the authority to ignore an ex parte reexamination request based on who submitted it. We would not be having this discussion if a third party had filed the exact same reexamination request. The fact that it was filed by a party that failed to prove invalidity in the district court isn’t relevant.

    A third party isn’t barred from asserting invalidity in a separate litigation. Why should the PTO be any different?

  82. Isn’t the really problem here a patent that was a close enough call to have a split decision that could be simply chalked up to the different standards in the courts and at the PTO? And if the patent is invalid, what public policy would favor keeping it valid?

    On the point of whether there is a SNQP that seems to be moot since the question is not one that focuses on whether the question has been put to the courts, but rather one presented to the office. MPEP 2216.

    Finally, I’d argue that if you want to take away reexam from the defendant’s in cases like this, then we should also take away the right for the patent owner to amend or add claims to patents in reexamination or reissue. It has the consequence of keeping previously invalid patents alive. You can look to any recently reexamined patents to see patent owners doing essentially that: argue the original claims but add new claims that add limitations that get around the cited art.

  83. Note the asymmettry: If the patent had been held invalid in litigation, would the patentee have had recourse thereafter to the PTO or the courts to get a second opinion? No said the SCOTUS in the Blonder Tongue decision.

    Why does the non-inventor alleged infringer get two bites at the apple when the person who invented and disclosed and albeit obvious, but novel, invention gets the week old dead fish? What a lovely meal the CEC majority have cooked up!

  84. MaxDrei – your point three is out of whack regarding when the Presumption has actually been earned.

  85. Can’t quite put my finger on it here but is there not an element of circularity here? Thus:

    1. There needs to be a strong Presumption of Validity, so people know not to mess with a duly issued patent.

    2. As a consequence, the PTO must examine patentability scrupulously and painstakingly.

    2. And, as a further consequence, courts are not free to revoke on a preponderance standard. Rather, nothing less than C+C will do.

    3. But, if any patent is entitled to a Presumption of Validity, then one as here, that has been tested in the fire of litigation.

    Seems to me, when the court considers the validity of a claim, in relation to art not earlier addressed by the PTO, it should don the mantle of a PTO Examiner. Is that what happened here?

  86. I’m agreement with Judge Newman’s dissent. The precedent that In re Construction Equipement sets makes me cringe.

    The problem I have with both In re Construction Equipment and In re Swanson is the very fact that you’re now letting the alleged infringer go over the same ground again, after an adjudication at trial. The PTO can call it a “new substantial question of patentability” but you’re still essentially redoing the same issue with same evidence. The only thing that’s really changed is that the standard for invalidity has changed: from clear and convincing at trial to preponderance of the evidence in the PTO reexam. Like Newman observed, the fact that someone can simply go to an agency and go over the same ground (again) based on a different standard seems to me to violate the principles underlying res judicata, collateral estoppel, etc. (Note: I would feel differently if the alleged infringer had requested reexam during litigation but had the reexam request stayed by the court, but that’s not the case in In re Construction Equipment, where the reexam appears to have been brought after adjudication on the merits.)

    I also think this issue is so big and critical that it needs resolution by the Federal Circuit en banc. We’ve already got one Federal Circuit Judge who has expressed concerns (vociferously) with these rulings. That suggests the entire Federal Circuit needs to consider the holdings in Swanson and Construction Equipment.

  87. MaxDrei,

    And it complements Paul Cole’s comment doesn’t it?

    Yes it does:

    I am not sure that the difference is sufficient to justify re-opening a case.

    What exactly was the difference that an examiner (assuming for the moment – and not at all necissarily a good assumption – that the art was good enough for the court, yet still met the S-New-Q standard?

    Perhaps what is needed for the standard to have any meaning (the old standard or the new standard) is for the Office to comply with its own directions and fully put the case in writing. By this, I mean that the Office should be clear – precisely and in writing – capturing exactly what about the request for re-exam met the SNQ or new likelihood standard to divest a patent holder of his “earned” C&C status.

    To me, this is a crucial point that is suspect to an unconsciousable level of arbitrariness.

  88. Good point about the substantial new issue of patentability. I had overlooked that point. And it complements Paul Cole’s comment doesn’t it?

  89. But but but…

    The PTO asks itself a quite different question, whether the evidence of obviousness amounts to a preponderance.

    But the PTO is supposed to ask that question only after a significant new question (old standard) had been met. The problem – as recognized by Congress who winched tighter the standard in the AIA – is that the Office rubber stamps the opportunity to divest a patent of its C&C standing and that infringers are only too willing to play all the cards.

    On a side note, when IBS awakes, I fully expect his Mother Goose tale to be applied to this thread. I wonder how he feels about the res judicata angle.

  90. When you start looking at different degrees of proof you end up asking how many angels can dance on a pin. I am not sure that the difference is sufficient to justify re-opening a case.

    The opinion of the BPAI, unfortunately, does not record much worthwhile to be said in favour of the patent. So what we may be looking at is a shift in the balance of argument as to inventive step post-KSR. The earlier decision of the CAFC on this patent would also merit study – if the CAFC was wrong in upholding the patent in 2000, what has changed that they should make a different decision on the same patent over (apparently) the same reerences in 2011. Silence on that point appears deafening. At which time was the court hoodwinked, then or now?

  91. Could it be that Pauline Newman is deliberately forcing the interested circles to stare reality in the face? Good for her

    Careful there MaxDrei, cheering for her honor may land you in the pro-patent camp.

    But it is naive in the extreme to suppose that validity can be fixed in ex parte proceedings. Only with inter partes proceedings can an expert tribunal judge validity on a sound basis.

    Funny, for the 98% of patents that never see a courtroom, the validity of ex parte proceedings seems to work just fine.

  92. But but but….

    Paul, the court is asked if the evidence against a claim is clear enough and convincing enough to find it obvious. The PTO asks itself a quite different question, whether the evidence of obviousness amounts to a preponderance. When a court correctly answers its question with a No, even while the PTO correctly answers its different question with a Yes, where is the error? If the controversy should be ended expeditiously, don’t arrange matters that the PTO can legitimately find a claim invalid even while a court cannot.

    Judge Newman, by asserting that the obviousness argument relied upon by the PTO and the majority does not stand up to scrutiny, you strike me as the lady that doth protest too much. Suppose instead that the PTO scrupulously avoids re-addressing the question put to the court, and instead confines itself to conscientious and competent implementation of the core task of examining patentability according to the Rules laid down for it by the Congress, ie does its job. What is so unConstitutional about that?

    Meanwhile, tell me readers, what’s going to happen to pendency, going forward from here?

  93. As lawyers used to say: Interest civitas est ut sit finis litium, or words to that effect.

    So I am with Judge Newman. A system where controversies continue for ever cannot be in the interests of the parties or of the public. There is no reason why the USPTO should go where the courts do not: it has much other work it could do in preference.

  94. > These days, the EPO is much more critical of patentability than it used to be in the days when it saw its duty as giving its fee-paying customers, the applicants for patents, everything they asked for.

    When was this? These days it can be quite a battle, inch by inch.

  95. Thanks for putting up this item Dennis. It is, for a European who has witnessed the shifting balance on patent validity, since 1978, between the EPO and the national courts of EPC-land, a wonderful topic.

    Should the PTO have the final word, or should the courts? The situation in Europe is much clearer now, but it did take 30+ years to get there and, even now, the EPO still hasn’t quite got itself sorted out on whether the standard of proof it operates should be a mere preponderance or a much more demanding “up to the hilt” standard.

    Mind you, if ever the EPC ever gets a supra-national Patents Court up and running, I would expect a drop in the level of certainty about patent validity. With our trademark cases, where the IP-ignorant EU Supreme Court has long had the final word, we don’t know where we are.

    Could it be that Pauline Newman is deliberately forcing the interested circles to stare reality in the face? Good for her. Whenever the opportunity presents itself, the CAFC stimulates progress by publishing a debate-provoking minority opinion.

    These days, the EPO is much more critical of patentability than it used to be in the days when it saw its duty as giving its fee-paying customers, the applicants for patents, everything they asked for. I suppose Judge Newman would say “Of course. Quite right too”. But it is naive in the extreme to suppose that validity can be fixed in ex parte proceedings. Only with inter partes proceedings can an expert tribunal judge validity on a sound basis.

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