Guest Post: Supplemental Examinations and the Client-Practitioner Relationship

Guest Post by Professor Lisa A. Dolak

Pursuant to the America Invents Act, supplemental examination will be available as of September 16, 2012.  Patent owners will be able to ask the U.S. Patent and Trademark Office “to consider, reconsider or correct” information that was not considered (or was inadequately considered) during a prior prosecution.  And the courts will be barred from holding a patent unenforceable based on information that was considered during a supplemental examination (and any resulting USPTO-ordered reexamination).

The introduction of supplemental examination raises many questions, and our understanding of the implications of this new opportunity will develop as the USPTO rule-making unfolds and as patent owners, litigants and the courts gain experience with it.  But some potential implications concern the relationship between practitioners and their clients, and may prompt new thinking about that relationship on the part of each.

Inherent in the design of supplemental examinations is the opportunity for the patent owner to liberate the patent from any taint resulting from misconduct in its procurement.  The supplemental examination proceeding is designed, in fact, to divorce the patent owner’s property right from any actual or alleged past misconduct on the part of the patent owner or its representative.  In particular, as illustrated by the legislation’s “carve out” for USPTO-detected “material fraud”, the enforceability of a patent that has undergone supplemental examination is a separate issue from the obligations of registered practitioners, inventors, and others who participate substantively in patent prosecution to disclose (and refrain from misrepresenting) known material information to the USPTO.   It is this opportunity to detach the enforceability of the patent from any misconduct in its procurement, in particular, that has the potential to impact the client-practitioner relationship.

From the perspective of the patent owner, supplemental examination provides an opportunity to have the USPTO consider, reconsider or correct information relating to patentability, and to remove that information as a potential basis for a viable inequitable conduct challenge in the courts.  In some cases, at least, it can be expected that the patent owner’s primary or even sole consideration, then, will be the “cleansing” of the patent.

However, as noted above, the very legislation that creates this opportunity for patent owners requires the USPTO to refer suspected material fraud to the United States Attorney General.  And, as is expressly preserved by the AIA, the USPTO retains its authority to discipline registered practitioners.  Thus, where misconduct such as an intentional candor violation did occur or might reasonably be suspected to have occurred, supplemental examination could lead to disciplinary or even more serious consequences for practitioners.  Accordingly, the interests of patent owners and the practitioners who assisted in the procurement (or a prior examination) of the patent as they relate to the use of supplemental examination have the potential to diverge – significantly.

For those patent owners who are themselves not potentially subject to criminal or disciplinary investigation or sanction, this possibility should not present a problem.  Patent owners are free, of course, to hire different counsel for supplemental examination than they used to prosecute the patent in the first place.  And, given that deceptive intent is irrelevant to supplemental examination and that any consequences for misconduct unearthed in supplemental examination will effect only the person(s) suspected of being involved in that misconduct, a patent owner (it appears) need not be concerned about whether a supplemental examination request suggests such misconduct.  But practitioners may find such a situation disconcerting, as they may have concerns about being thrown under the proverbial bus, even where the patent owner did not so intend.

For one thing, by definition, a practitioner who is not asked file a supplemental examination request relating to a prior prosecution in which she was involved will not have the opportunity to participate in the development of such a request.  But a practitioner who is engaged to request supplemental examination regarding a patent he prosecuted may have an additional or different concern, namely, whether the circumstances create a conflict between his client’s interest in cleansing the patent and his personal interest in his reputation and good standing.

Much in this regard will depend on what information the USPTO requires or permits (or receives) in supplemental examination requests, and whether supplemental examinations ultimately lead to any conduct-related investigations or charges.  Although we’ll learn something about the former from the upcoming USPTO rule-making, the latter, at least, will take some time to develop.  In the meantime, the potential effects of supplemental examination relating to the relationship between clients and practitioners are among the questions raised by this proceeding.

22 thoughts on “Guest Post: Supplemental Examinations and the Client-Practitioner Relationship

  1. Not sure on what grounds you raise the “politically palatable” buzz-buzz. I see these provisions as entirely practical and praise-worthy.

    We’ve now got a long over-due way to correct honest errors that occur in a patent prosecution without getting skewered w/ an IC charge. That’s a good thing.

    But because the profession is swimming with venal prcks who would misuse the new procedures to dishonestly acquire a patent and then sanitize it, that “loop-hole” needs attention. How is that political?

    The problem of fraud is not so much in discovering after issue that attorney knew of PA that was not disclosed prior to issue. Any attorney would instantly recognize that killer-PA prior to issue is still going to be killer-PA in a SupplExm, and so there is no advantage to playing that foul game of hide the ball until after issue and then shoot.

    With respect to PA disclosures, the conflict of interest will come, fer instance, when the honest lawyer later discovers killer-PA with the client’s name on it that was never disclosed to the lawyer. (Or more likely when the infringer’s lawyer makes this discovery.) Does the patentee’s lawyer have a duty to initiate the SupplExm to correct the record, impugn the client, and sink the patent?

    I’m not sure I know what candor duty a lawyer in such a situation has now — you know, after issue of the patent is the attorney obliged to report the fraud of his client or the killer-PA that should have been disclosed? My understanding is that once the patent issues the PTO no longer considers the attorney to be of record but Harvey still has the power to pull his/her ticket.

    The intentional fraud issues in SupplExm will more likely be related to fraudulent declarations or inventorship, etc. where the applicant himself is the sole source of the misinformation. These issues are based on information that is given to the attorney by the client — or, more likely, withheld by the client — and not based on the attorney’s work product such as a patent search.

    In any case, to return to the point, what is the grounds for going political on this? Since when is it political to hold people accountable to intentional misconduct?

  2. Ned, see my response to MM [just posted way above] re the extreme un-likelihood of any such an optional PTO referral to the JD resulting from this new ex parte reexamination. This “Supplimental Examination reexamination provides no statutory authority to even make findings of or decisions on inequitable conduct, but can totally remove them as defenses just by claim re-patentability determinations. That House-added provision of an optional JD referral where “fraud” [undefined and not distinguished from IC] is found was apparently to make this system for “pre-laundering” inequitable conduct issues somewhat more politically palatable. [Not that anyone other than its key supporters and Prof. Dolak seemed to even be paying attention to this particular provision of the AIA before it was enacted.] [In my view most people were too obsessed with other provisions of the AIA that will have far less practical effect on patent enforceability to even note this one.]

  3. Probably not, with Dudas and Toupin gone.

    But in any case the point of Supplimental Examination is to just to determine [pre-litigation] if the subject original claims are still patentable [re-allowable] over previously unconsidered art or erronious prior declarations reconsidered in this proceeding. [If so, the patent owner gets to avoid inequitable conduct rendering the patent unenforceable for any issue so raised.] There is no mechanism in the Supplimental Examination statute itself to punish anyone other than for a highly unlikely optional PTO referal of “fraud” [undefined] found to the Justice Department for [also unlikely] possible JD prosecution. But only IF any “fraud” can even be found, in what is a purely ex parte proceeding with all the evidence controlled by the patent owner, and further assuming PTO employees will risk calling it “fraud” and making such an unusual and PR-sensitive referral to another agency.
    There is no express requirement to refer anything to the PTO’s own attorney or agent disciplinary process, so it will be interesting to see what the enabling PTO rules for this brief but patent-litigation-revolutionary legislation will look like, as Prof. Dolak notes. They will need to be published for public comments in a relatively few more months.

  4. This is an interesting point, Paul. While the prosecuting attorney may be off the hook for an unpleasant experience in court as the object of a inequitable conduct fishing expedition, he may still face prosecution by the attorney general if he filed a false affidavit, or by the Office of Enrollment and Discipline. Regardless, any statement that the former prosecuting attorney made that was less than honest will now be on the record for all to see.

    So if he believes that his statement was not dishonest, what is his remedy? How can he clear his name?

    We face the same situation right now when a patent attorney is accused in court in one of those unpleasant fishing expeditions.

  5. She has indeed actually practiced.

    And having good prosecution practices does not insulate you or any other PTO practictioner from typical and unpleasant inequitable conduct fishing expedition depositions by defense trial counsel if one of the patents you prosecuted to allowance is fully litigated. This new proceeding might actually reduce such pratitioner harassment if the subject claims are re-allowed over the (previously uncited) prior art, withdrawn prior declarations, etc.

  6. Unless the PTO rules for this new ex parte reexamination soley for patent owners require the patent owner [which may well be a troll purchasor]to at least notify the patent’s prosecuting attorney or agent they may well not even find out about it. Even if they did, they could not file any papers in it or otherwise participate. But on the other hand if the subject claims are re-allowed in this reexamination they may be off the hook for what could otherwise be unpleasant inequitable conduct fishing expedition depositions in subsequent litigation of the patent.

  7. ? The statistics are indisputable that a vastly higher percentage of claims are invalidated in reexaminations than in patent litigation. Especially inter partes reexaminations.

    However, this particular reexamination will be entirely ex parte, and by and for only patent owners, so unless the PTO makes effective use of Rule 105 all the examiners will ever see is whatever information the patent owner choses to give them.

  8. so even if the practitioner did nothing inequitable in the first instance, the practitioner may be committing inequitable conduct if he/she does not recommend to client that the client should retain other counsel for this supplemental examination?

  9. much fuss over so little, it is hard to imagine these “cleansings” will occur with any significant frequency – unless the PTO suddenly becomes suspicious

  10. Unlike accused infringers, the PTO doesn’t have a built-in incentive to view supplemental examination requests as evidence of misconduct.

    Does the USPTO have a “built-in incentive” to identify and punish practitioner misconduct?

  11. To this observer looking in from outside, the tail of inequitable conduct has seemed in recent years to have been wagging the dog of validity. Observer’s instant reaction to this notion of “supplemental examination” is that it will wash away much of the focus on IC (both in prosecution and litigation) and will encourage concentration on matters of patentability/validity.

    Is this what it is intended to achieve, I wonder?

    District Courts in Germany want to see the results of supplemental examination before they enforce 10 year utility patents. Will US District Courts be more willing to enjoin after they have seen a supplementary examination certificate?

  12. Giving every benefit of the doubt to the good academic that she has never actually practiced, every practitioner should know that one’s first and foremost duty is to oneself. If a client, any client asks you to behave in a manner that would induce the “under the bus”
    potential, or the “potential to diverge – significantly” to begin with, advocate’s responsibility is to say “NO to the client on that request.”

    While in actuality, the AIA may be as problematic as the good academic indicates (because there are those who do not practice appropriately), to those with good practices, this is a complete non-issue.

  13. But practitioners may find such a situation disconcerting, as they may have concerns about being thrown under the proverbial bus, even where the patent owner did not so intend.

    Possibly, but if I understand correctly, the practitioner is only on the hook if the PTO thinks there’s been actual misconduct. A request for supplemental examination may naturally raises the question of why the new information wasn’t disclosed to the PTO, why the error occurred, or why reconsideration is necessary, but unless there’s reason to believe that the answer is misconduct, what’s the problem?
    Sometimes people discover more prior art, or discover miscommunications between applicant and counsel, or think differently about what they said to the PTO with the benefit of hindsight.

    And this seems to me to be highly preferable to the current system where every potential infringer has an incentive to spin every imperfection and incongruity in the prosecution history into a case of inequitable conduct that wipes out the entire patent. Unlike accused infringers, the PTO doesn’t have a built-in incentive to view supplemental examination requests as evidence of misconduct.

  14. And what is the value of patent prosecution as a profession, again?

    Time to switch to litigation…or welding.

    I’m going to increase my rates to stay viable.

    I’m not at all worried about supplemental examination–but it may take that most precious commodity, time, away from other things like blogging…and billing.

    As it is, I could spend all day on the administration of my small enterprise, and never end up actually doing any substantial, billable work.

    The costs of doing business just continue to rise.

  15. Very astute point, Ned. Somewhat akin to patent counsel authoring a validity/infringment opinion on a patent, and then trying to enforce it/defend against it, but without the potential “conflict of interest” issue you point out.

  16. Lisa,

    Thanks for your thoughtful review of the supplemental examination portion of the AIA (which I still call the Abominable Inane Act). While supplemental examination may be a “blessing” for patent owners, it may be, as you astutely point out, a “curse” for patent owners, as well as practitioners like us.

  17. Good points, Lisa.

    Methinks there may be a conflict of interest when the same patent attorney/firm handles, recommends or recommends against the supplemental. The prosecuting attorney will naturally want to minimize damage to his reputation; but this may not be in the best interest of the client who needs to “polish” a patent for potential litigation and who needs to get all the cards on the table.

    Litigation firms may wish to advise their clients to seek alternative patent prosecution counsel when considering supplemental examination.

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