Much attention has been paid in the past week to the recently released PTO statistics on inter partes reexamination. These statistics show a high success rate for third party Requesters. In particular, 60% of all cases surveyed resulted in all claims being canceled.
As has been recognized by a number of observers, however, the PTO statistics are based on a sample population (the 77 issued inter partes reexam certificates) that is systematically biased. This is demonstrated by the absence of any Federal Circuit decision on the merits in an appeal from an inter partes reexamination. As a matter of logical necessity, every single one of the 77 reexam certificates resulted from a proceeding where someone either missed a hard deadline or gave up.
This has obvious implications for the PTO’s overall pendency statistics. Barring a change in the way reexams are handled, the average and median pendencies should rise as more certificates issue. The effect on Requester success rates is not so clear, however. Ideally, a potential Requester would like to have data that predict the outcome of cases that are fully contested. Do the PTO’s statistics provide that?
At the end of 2008, the author studied Requester success rates while attempting to avoid the systematic bias introduced through the use of reexam certificates. The study was done in two different ways, both of which yielded similar results. First, Right of Appeal Notices were examined. Right of Appeal Notices, although they reflect a result that is alterable on appeal, are a potentially more accurate predictor of the outcome of fully contested reexaminations. This is because the PTO will not issue a Right of Appeal Notice where there is no right to an appeal,i.e., where someone missed a hard deadline or gave up at the Examiner level.
At the time of the study, 99 such notices had issued. The results are detailed in the attached excerpt. Briefly summarized, about 47% of the cases resulted in all claims being rejected, with about 70% of all cases resulting in cancelation or amendment of all independent claims. Of course, the effect of an amendment on the Requester’s overall position is not easy to judge. An amended claim may be a victory for a Requester, but can also be a disaster if past damages are unimportant, and the Patent Owner manages amend the claims to preserve infringement while excluding prior art.
The second approach attempted to capture some of these subtleties by examining the respective probabilities that the Patent Owner and Requester will be the primary appellant. The “primary” appellant is one that files a Notice of Appeal, as opposed to a Notice of Cross-Appeal, or no notice at all. The status as the primary appellant tends to indicate a party’s subjective dissatisfaction with the result before the Examiner. This study demonstrated that appeals were initiated three times more often by the Patent Owner than by the Requester. In a significant number of cases (35%), however, no appeal was filed by either party.
The results of these studies tend to support the effectiveness of inter partes reexamination as a tool for the Requester. Such statistics may also ultimately have an impact on whether events from reexamination are admissible in court. For example, the Federal Circuit’s decision in Hoechst Celanese Corp. v. BP Chemicals Ltd.,78 F.3d 1575 (Fed. Cir. 1996), affirming a district court’s exclusion from evidence of a PTO grant of ex parte reexamination, was based on 1994 ex parte reexam statistics. This decision is still being followed by district courts, but a significant uptick in requester success rates may change the way such cases are decided.