Supplemental Examination: Looking at the First Supplemental Examination Request

By Dennis Crouch

Supplemental examination has been seen by many as a complete replacement for the filing of ex parte reexaminations. The process offers an added level of legal benefits to patentees for a relatively small additional cost and no change to the timing structure. The America Invents Act of 2011 (AIA) created the supplemental examination option but delayed implementation until the one-year anniversary of AIA enactment in order to allow the USPTO sufficient time to finalize its procedures and prepare for the influx of supplemental examination requests. Thus, on September 16, 2012 (the one-year anniversary) supplemental examination became an option available to all patent owners.

Supplemental examination requests become public as soon as they are given a filing date by the USPTO. However, prior to today, no supplemental examination request has been given a filing date. The first public request is 96/000,007, filed on October 31, 2012 by a company known as "Merchandising Technologies" asking for supplemental examination of its U.S. Patent No. 7,909,641 that claims a cable-management system that swivels, extends, and retracts. The product is used for electronic device displays in retail stores such as Best Buy and Target. Earlier this year, a competitor sued MTI asking for a declaratory judgment of noninfringement, invalidity and unenforceability. Invue Security Products Inc v. Merchandising Technologies, Inc,.C. Docked No. 3:12cv88 (filed February 9, 2012, W.D. N.C). The judge dismissed that case without prejudice for lack of case or controversy. If the same case arises again, this supplemental examination should prevent a recurrence of the unenforceability claim.

Now, it appears from the serial number given to this particular supplemental examination number that it was the seventh one filed by now – at the two month point – we may be up to ten on file. In its final rules, the USPTO had estimated a filing rate more than twenty-times this. See Changes To Implement the Supplemental Examination Provisions of the Leahy-Smith America Invents Act and To Revise Reexamination Fees; Final Rule, 77 Fed. Reg. 48827 (2012) (Estimating 1,430 supplemental examination requests per year). The seemingly low number of actual filings may be due, in part, to the glut of ex parte requests filed just before the seven-fold fee increase in September 2012. Other explanations involve the high cost of supplemental examination; novelty of the program; and weakening of the inequitable conduct doctrine by the courts.

A second concern is why this supplemental reexamination is the first to publish. I have communicated with attorneys who filed some of the non-published cases. Apparently many of those are being rejected for failing to comply with the supplemental examination rules. I don't have any further information at this point on why those were rejected. Unfortunately we may never have that information if the PTO continues its practice of providing no public access to supplemental examinations prior to awarding a filing date.

The petition filed in this case is quite simple:

  • $21,260 filing fee ($16,120 reimbursed if there is no reexamination ordered);
  • Submission of seven prior art documents;
  • An explanation of what is provided by the prior art with relation to the patent and a claim chart showing that relationship; and
  • An explanation of how the claims are still valid over the prior art.

The request itself is six pages long. [Download 96000007]. There is no admission that these references were improperly withheld during prosecution since that statement is not called for even if it were true.

Now, the USPTO has until December 31, 2012 to determine whether the identified references raise a substantial new question of patentability and, if so, order a reexamination. If not, the PTO will issue the first supplemental examination certificate.

26 thoughts on “Supplemental Examination: Looking at the First Supplemental Examination Request

  1. Then, Malcolm, we need something new. Perhaps a gazette notice announcing the PTO’s intent to allow claims, with a short two week window for the public to provide comments, 500 words or less in English, in a PTO controlled window, and free of charge. At the end of the comment period, allow the applicant 30days to respond to the comments if they choose. (They could shorten the period by simply waiving their right to comment.) After that, the PTO can react in an appropriate manner.

  2. right for the public to anonymously comment on “allowed claims,” for a small fee.

    Unless the USPTO is forced to at least read those comments and actually act on them when it is clear that they screwed up, I don’t see why anyone would pay (?!?!?) the USPTO for the “privilege” of exercising their First Amendment rights.

  3. I think that possibly this is a trial ballon floated up to see if making an admission can still skirt the invocation of reexamination.

    Do you mean they are testing to see if they can perform an an end-around and avoid paying for a “real” re-exam? Or …?

  4. SE was an idea that arose before Therasense where, if you recall, any non disclosure of a possibly material reference would guarantee an IC charge. But Therasense thoroughly undercut IC in the case of simple non disclosure.

    Still, if a reference exists that clearly anticipates claims in a patent, and that was both known and not disclosed, why not simply disclaim those claims and then file a SE on such dependent claims that are arguably patentable over the reference?

    The last thing one should ever do is get into a full blown reexamination knowing you are going to have to cancel or amend your broader claims.

  5. Malcolm, you make a number of great points here.

    Perhaps what we need is an right for the public to anonymously comment on “allowed claims,” for a small fee.

  6. Ned,

    I think that possibly this is a trial ballon floated up to see if making an admission can still skirt the invocation of reexamination. Now if they so get. A clearance even in the face of their admission, we may see that this supplemental examination is a bit of a joke. I just wonder if they are charging the client for that $5K portion they just p1ssed away…

  7. By admitting that there is a substantial new question of patentability, regardless of any other statements in their request, they (should) be headed towards a reexamination – even if that is, as the pundits have suggested, that is something that they do not want.

    This seems correct to me. The statement in the request about the “substantial question” strikes me as rather odd here.

  8. Why can’t there be a substantial question of patentability to which the answer is clearly and convincingly in favor of the patentee?

    No one said that there cannot be. But that is not the question. By admitting that there is a substantial new question of patentability, regardless of any other statements in their request, they (should) be headed towards a reexamination – even if that is, as the pundits have suggested, that is something that they do not want.

    Remember, this first quick turn-around supplemental examination is ONLY to determine IF a substantial new question of patentability exists, so as to move to reexamination if such exists, and to give a clearance opinion if there is not.

    As to FRE, take your pick of words of legal significance and/or admissions against interest.

  9. So even if the applicant inartfully (and plainly very poorly in the instant case) makes an admission that “a substantial new question of patentability is believed to exist” in his request, that admission, per the Office, is not relevant to unenforceability.

    And correctly so, in my view. Why can’t there be a substantial question of patentability to which the answer is clearly and convincingly in favor of the patentee? If the answer was preordained, there wouldn’t be a question at all.

    Not sure I follow you on the FRE issue, anon. Which rule is the PTO suspending?

  10. Actually Paul, it was a test.

    More on point is this quote from the final rules: “35 U.S.C. 257(c)(1) also provides that the making of a request for supplemental examination under 35 U.S.C. 257(a), or the absence thereof, shall not be relevant to enforceability of the patent under 35 U.S.C. 282.

    So even if the applicant inartfully (and plainly very poorly in the instant case) makes an admission that “a substantial new question of patentability is believed to exist” in his request, that admission, per the Office, is not relevant to unenforceability.

    One does have to wonder though, does the Office really have the authority and power to suspend the Federal Rules of Evidence? (notwithstanding the fact that the law as passed by Congress seemingly does permit such, see 35 U.S.C. 257(d)(2)). Perhaps this is just a baby elephant in a mouse hole.

  11. Yes, this patent owner expressly admitted “A substantial new question of patentability is believed to exist…” That piqued my curiousity as to whether that was actually required or not, since, as Ned notes, a reexamination is not what the patent owner really wants. The only express content requirement for the supplimental exam request on that subject I could find in the final PTO Rules was:
    “(4) An explanation of why each item of information submitted with the request does or does not raise a substantial new question of patentability.”
    Note the “or does not” ?

  12. and do not create a SNQ

    Sorry Ned, this is simply not true.

    From the very words of the patentee on page one of the request:

    A substantial new question of patentability is believed to exist…

    That they go on to argue against the art they provide does not at all change the fact that they make an admission in order to gain access to the supplemental examination process.

  13. Paul, Regarding immunity, yes I do.  That is the way the statute reads.
     
    Do not forget, the PO is arguing that the claims define over the reference and do not create a SNQ. 
     
    Anon, there is no admission whatsoever.
     

     

  14. your vitriolic towards examination begs the question, why have examination at all

    No “vitriol”, just extreme disappointment.

    I think in many cases (maybe even most, although probably just barely) examination achieves exactly what it should achieve: invalid inventions and poorly claimed inventions are replaced with valid and more clearly claimed inventions.

    The problem for the public is that the number of applications being filed on a monthly basis is staggering, as is the number of patents being granted. This necessarily means that reams and reams of j-nk are getting through the system.

    As far as a “better way” to spend a couple of billion dollars, a great way would be hire to more and better examiners so that each examine has more time to examine the applications that are put before him/her and time to think creatively (and reasonably) about the issues presented by each case. I’ve said it before but it’s a troubling development when people who would never, ever be considered to have “ordinary skill” in a given art can neverthless look at a claim and identify very good reasons that the claim should never have issued (reasons that were missed by the Examiner) or, similarly, read through the prosecution history and recognize where an “argument” was really just a bunch of indefensible baloney.

    And then there’s the termites at the PTO who simply “don’t get it.” I know for a fact that there are claims being rejected under 101 and citing Prometheus that have nothing to do with Prometheus. But I’m also reasonably certain that claims with the identical problem as Prometheus’ claims are still issuing. As for these latter patents, what bothers me is that there isn’t an easy way to simply flag them for the Office, have some look at them for a minute, revoke the grant and axe the offending claim(s). It shouldn’t cost a lot of money but it’s necessary because it’s the only way to get people to stop trying to patent information and methods of accessing/collecting information (where the methods are distinguished from the prior art solely on the basis of the identity of the source/accessors, the timing of retrieval/transmittal and/or nature of the information).

  15. I think you, Paul, I (and even Prof. Crouch) would all agree that the new system has serious flaws and at the least the estimates of use are way out of line.

    But more so than that, your vitriolic towards examination begs the question, why have examination at all? There’s gotta be a better way to spend a couple of BILLION dollars.

  16. P.S. Furthermore, don’t you think CRU examiners getting a supplemental reexamination request with a prior art reference or other issue from the patent owner [not a third party] are going to logically think it must be raising a “substantial new question of patentability,” or otherwise the patent owner would not be risking its patent in a reexamination? [With no presumption of validity, a broader claim construction than in litigation, and no lay jury to be impressed with the ribbon and seal or confused by claim language and technology.]

  17. Ned, given the previous extremely high inter partes reexamination initiation rates by the CRU, why would you conclude that the CRU will now start refusing most supplimental reexamination requests, even though they have the same low “substantial new question of patentability” test?

    Also, do you think a patent owner will get full IC immunity for material missrepresentations of issues or facts made in a[completely one-sided, because it entirely ex parte] supplimental reexamination request?

  18. My point is similar to Paul’s, below: the only possible reason I can think of for doing this is to avoid an otherwise obvious (and therefore difficult to overcome) inequitable conduct charge.

    But other than that, the idea that a patent is “strengthened” or “immunized” against a piece of prior art simply because it was “put before” an Examiner at the USPTO is poppycock. Yes, there is case law suggesting re deference and such but as a practical matter if a strong case of anticipation/obvious can be made against a patent claim, it hardly matters that the USPTO put its stamp of approval on that claim. One big reason for this result is that applicants often make absurd arguments that are accepted by the USPTO as “good enough” for one reason or another but which collapse catastrophically when a reasonable person dissects the argument in front of a judge.

  19. It’s a bit more nuanced than that, given that IC is “but for,” but that “but for” is evaluated at the preponderance level of pre-patent status.

    The whole “I see a substantial new question of patentability” is fraught with danger.

    In essence, in order to even submit the case to the Office, the patentee is surrendering their “clear and convincing” status. They must aver that they believe that, at the very least, a substantial new question of patentability exists (where along the spectrum from/between/beyond the range of preponderance to clear and convincing the level of substantial falls, I am not sure – supposedly, substantial was supposed to be a tight standard and thus arguably is higher than clear and convincing, but I have not made up my mind on this yet.

    Such an admission against interest can be at the least a possibility that such is to be taken as true, and that there thus must be more than a preponderance that the art provided makes a but-for case, no? After all, even if something is not prior art, but stated by the applicant as prior art in his application, the Office will legally treat the admission as prior art.

    If in fact the Office grants a re-examination, how will there be anything but a rejection on the art submitted?

    If in fact the Office does not grant a re-examination, can an opposing party in court still take the admission as at least a brick in the wall of a case? This whole voluntarily using the supplemental examination process smacks of purposefully wetting your powder (by the applicant) for all but the most egregious cases of not submitting art. I see this tool as vastly being underused, far, far, far, under the Office estimates, which should make for any fee-adjustments in the next budget cycle an item of heightened scrutiny.

  20. Paul, I dare say, you may have it wrong.

    No one in their right mind would file a supplemental reexamination request hoping for an actual reexamination. What they really want is clearance. That can be given if the reexamination is not ordered. That whole procedure takes 3 months. At the end, if reexamination is not ordered, they get the bulk of their money back and immunity from IC for the references subject to the request.

  21. As noted in a comment in the earlier blog on this subject, the PTO’s anticipated usage projections for Supplemental Examinations had been ridiculously high for reasons in addition to those noted in this blog. One reason was a comparison to ex parte reexaminations that was apparently ignoring the fact that only a small percentage of all ex parte reexaminations in recent years were being requested by patent owners, as opposed to adverse parties. Yet only patent owners can request a supplemental reexamination.
    A related reason, if not the main reason, is that patent owners who have identified someone they think they can sue are unlikely to want the time delay or the risk of invalidating any claims, or narrowing claims with prosecution history estoppels, in any reexamination, knowing that the vast majority of defendants will pay to get out of patent litigation long before a court ever even consider any ivalidity or inequitable conduct issues.

  22. It is unclear from the paragraph you quote why you make the deferential comment.

    You might have a point here, but it is far too murky to jump to that conclusion.

  23. Now, it appears from the serial number given to this particular supplemental examination number that it was the seventh one filed by now – at the two month point – we may be up to ten on file. In its final rules, the USPTO had estimated a filing rate more than twenty-times this.

    LOL. Because courts give soooooooo much deference to the USPTO.

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