June 2012
CIPA Journal
Authored by Elliot C. Cook and C. Gregory Gramenopoulos
For patent litigants, intervening rights can be an important tool for minimizing liability based on patents that undergo post-grant examination at the U.S. Patent and Trademark Office (USPTO). When a patent's claims are substantively amended during a post-grant procedure, an accused infringer may be shielded from liability under the original claims. Because the effect of intervening rights can be to erase liability for past damages, years of damages—and in some cases many millions of dollars—can hang in the balance.
Before the enactment of the Leahy-Smith America Invents Act (the "AIA") on September 16, 2011, the three available types of post-grant examination before the USPTO included reissue, ex parte reexamination, and inter partes reexamination. Each of these procedures allows for claim amendments and hence is capable of triggering intervening rights. Some portions of the AIA went into effect immediately upon enactment, other portions taking effect on September 16, 2012, and still others becoming enforceable on March 16, 2013. The AIA has already altered the substantive law of existing post-grant examination procedures, and more changes will result as the new law continues to be implemented. In addition to these changes to existing procedures, the AIA has created new post-grant mechanisms, including inter partes review, post-grant review, and supplemental examination. In the wake of the AIA, patentees must carefully consider the application of intervening rights before they decide to pursue a post-grant procedure.
Reissue Proceedings
The purpose of reissue is to correct "errors" arising without "deceptive intention" in a patent and rendering the patent "wholly or partly inoperative or invalid."1 During reissue, a patentee may amend its claims, add or cancel claims, or amend its specification or drawings. If the examiner still finds the modified version of the patent allowable, the USPTO will issue a "reissue patent." At that point, the original patent is "surrendered" and the reissue patent takes effect.
Reissue may involve broadening or narrowing a patent's claims. A request for broader claims must be filed within two years of the original patent grant.2 This time period is limited so that, following the two-year period, the public may rely on the scope of the patent.3 The U.S. Court of Appeals for the Federal Circuit (the "Federal Circuit") recently clarified that a patentee may file a broadening reissue application within the two-year window, and a continuation of that application outside of the two-year window with broadened claims unrelated to the claims in the first reissue application.4
Courts have long recognized that reissue is a remedial tool based on "fundamental principles of equity and fairness."5 Thus, there is no requirement that the error being corrected must have been unavoidable or unknowable.6 Although reissue can help fix unintentional errors in a patent, the procedure comes with some risk. "Reissue is essentially a reprosecution of all claims," which means that all claims of a patent may be rejected by the examiner even if reissue was sought for fewer claims.7 Further, unlike in litigation, patents are not presumed valid during reissue proceedings.8
Ex Parte and Inter Partes Reexamination
Reexamination is a type of "quality check" that serves to nullify or cure erroneously issued patents.9 Because the patent examination process, like any administrative process, is not perfect, reexamination allows the public to "remedy perceived shortcomings in the system by which patents are issued."10
There are currently two types of reexamination, ex parte and inter partes. For patents issuing from original applications filed in the United States on or after November 29, 1999, both types of reexamination are available.11 But for earlier-filed applications, only ex parte reexamination is available. In both types of reexamination, claims may be amended or added, although the scope of the claims may not be broadened vis-à-vis the original patent claims.12 And in both types of reexamination, only certain types of prior art—patents and printed publications—may be used to challenge the claims of a patent.13
Ex parte reexamination allows a person, called the "requestor," to cite prior art that raises a "substantial new question of patentability."14 The Federal Circuit has interpreted this standard to refer to "a question which has never been considered by the PTO."15 Thus, a decision by a court upholding the validity of a patent based on certain prior art does not prevent that prior art from raising a substantial new question of patentability during reexamination.16 The requestor may file the request anonymously, if desired. If the request is granted, the patentee may elect to file a statement, with or without claim amendments, responding to the decision to grant reexamination. In that event, the requestor may file a reply.17 But beyond that reply, the requestor may not participate in the reexamination proceedings before the USPTO. Accordingly, only the patentee―not the requestor―has the right to appeal from the examiner's decision. Generally, no estoppel arises from ex parte reexamination that would bar the requestor from challenging the validity of the reexamined patent in litigation.
The standard for granting inter partes reexamination also requires the requestor to raise a "substantial new question of patentability."18 Unlike in ex parte reexamination, however, an inter partes requestor has the right to be involved in the reexamination process.19 Both the patentee and the requestor have the right to appeal from the examiner's decision. The requestor must identify the real party in interest, and thus the party advancing the reexamination may not remain anonymous. While the requestor has greater participation in inter partes reexamination than in ex parte, the requestor also has greater risk: if the patent successfully emerges from inter partes reexamination, the requestor and its privies are estopped from relying on any prior art in litigation that was raised, or could have been raised, during the reexamination.20
The enactment of the AIA on September 16, 2011 was the most significant overhaul to the U.S. patent system in over 50 years. The AIA has already affected some post-grant procedures and will result in further changes on September 16, 2012, when additional portions of the law take effect. In addition to the changes to existing post-grant procedures, the AIA will create new procedures to challenge or alter patents after they have issued.
Phase Out of Inter Partes Reexamination
With respect to inter partes reexamination, the AIA immediately replaced the previous standard for granting an inter partes reexamination request. Effective September 16, 2011, an inter partes requestor must show that the request possesses a "reasonable likelihood" of prevailing on at least one claim.21 No official guidance has been provided by the USPTO on this new threshold, but some commentators have concluded that it appears to be a more stringent standard than that for showing a "substantial new question of patentability." More significantly, after September 16, 2012, inter partes reexamination will no longer be available. On that date, a new procedure called "inter partes review" will become effective at the USPTO.
Inter Partes Review
Inter partes review will be available to challenge the validity of patents after nine months of their issuance, or upon termination of a post-grant review proceeding, as discussed further below. Like reexamination, inter partes review will be limited to challenges based on patents or printed publications.22 And consistent with the post-September 16, 2011 standard for granting inter partes reexamination, a requestor must demonstrate a "reasonable likelihood" of prevailing on at least one claim. Unlike inter partes reexamination, however, which was available only for applications filed in the United States on or before November 29, 1999, inter partes review is available for all patents, with the one caveat that the AIA bars inter partes review for patent litigants where the request is submitted to the USPTO more than one year after the complaint is filed.23 Also, under the AIA, unsuccessful petitioners are estopped from later raising invalidity positions that were raised, or reasonably could have been raised, by the petitioner.
Post-Grant Review
Beginning on September 16, 2012, patents may be challenged or modified using a new procedure known as "post-grant review." To be eligible for post-grant review, a patent must have an effective filing date of March 16, 2013 or later. Also, a request for this procedure must be filed within nine months after a patent is granted.24 The standard for granting post-grant review is whether the petition, if not rebutted, would demonstrate that it is "more likely than not" that at least one challenged claim is unpatentable, or an important or unsettled legal question is presented.25 Unlike inter partes reexamination and inter partes review, post-grant review allows patents to be challenged on any ground of invalidity, including patent eligibility, enablement, written description, and definiteness. As with inter partes review, estoppel applies to the petitioner. Specifically, petitioners are estopped from raising invalidity positions (including those based on patent eligibility, enablement, written description, and definiteness) that were raised, or reasonably could have been raised, during the post-grant review.26
Supplemental Examination
Another new post-grant procedure created by the AIA is "supplemental examination," which becomes available on September 16, 2012. This procedure is available only to patentees, not third parties.27 Patentees may request supplemental examination so that the USPTO can "consider, reconsider, or correct information believed [by the patentee] to be relevant to the patent."28 This "information" is not limited to patents and printed publications and the procedure can be used to clear information that could otherwise be used to challenge the enforceability of a patent.29 The USPTO will consider the request and issue a certificate confirming whether a "substantial new question of patentability" was demonstrated.30 If so, the patent will be subjected to ex parte reexamination.31 While claims may not be amended during supplemental examination itself, a patent that proceeds from supplemental examination to ex parte reexamination may undergo claim amendments in the latter procedure.
Intervening Rights Based on Post-Grant Proceedings
The doctrine of intervening rights antedates the Patent Act of 1952. Courts recognized that if patentees were able to modify their claims through post-grant procedures, "a third party, having already begun to make, use, or sell a given article, [may find] its previously lawful activities rendered newly infringing under a modified patent."32 Intervening rights originally emerged as a doctrine applicable to patents modified during reissue procedures but was later applied to patents modified during reexamination as well.33
The logic of intervening rights is the assumption that "a patentee having valid claims in a patent will retain those claims in the reissued patent."34 Stated differently, "the making of substantive changes in the claims is treated as an irrebuttable presumption that the original claims were materially flawed."35
There are currently two types of intervening rights that parties may invoke, each stemming from different language in 35 U.S.C. § 252. "Absolute" intervening rights shields a party from liability for infringement of new or modified claims if the accused products were made or used before the patent reissues.36 "Equitable" intervening rights is a matter of judicial discretion and protects a party from liability based on infringement of new or modified claims even for accused products made or used after the patent reissues, if the party made substantial preparations for the infringing conduct before reissue.37 Although § 252 applies specifically to reissue proceedings, absolute and equitable intervening rights can also derive from ex parte and inter partes reexamination procedures by virtue of § 307(b) and § 316(b), respectively.
Absolute Intervening Rights
The language of 35 U.S.C. § 252 makes clear that absolute intervening rights extend only to anything made, purchased, sold, or used "before the grant of a reissue" patent. In other words, the doctrine of absolute intervening rights "covers products already made at the time of reissue."38 These rights are considered "absolute" because of the statutory command that a reissued patent "shall not" limit the rights of an accused infringer that practices the original claims before reissuance of the patent.
The statute also limits absolute intervening rights to a "specific thing" existing before the patent reissues.39 Seizing on this language, some courts have suggested that absolute intervening rights may not apply to methods or processes. As one court noted, "[t]he first sentence and one-half of the second sentence of 35 U.S.C. § 252 appears not to relate to a patented process. The only reference to a patented process occurs in the last half of the second sentence," which addresses equitable intervening rights.40
Equitable Intervening Rights
Three important features of equitable intervening rights distinguish it from absolute intervening rights. First, the equitable form of the doctrine is discretionary, not mandatory.41 Second, equitable intervening rights explicitly applies to both "processes" and "things."42 Third, the doctrine can apply to processes and things both before and after issuance of a reissued patent, as long as "substantial preparation was made" in their development "before the grant of the reissue" patent.43 Thus, "one may be able to continue to infringe a reissue patent if the court decides that equity dictates such a result."44 In these respects, the second sentence of § 252, which allows for equitable intervening rights, "provides for the court to grant much broader rights than does the first sentence," which defines absolute intervening rights.45
The rationale underlying equitable intervening rights is to allow a court, as "dictated by the equities, [to] protect investments made before reissue."46 But "[t]his equitable right is not absolute," and courts have placed limits on the doctrine.47 For example, courts may refuse to allow an alleged infringer to continue its infringing activities in perpetuity, or to "expand its operations throughout the remainder of the life of the . . . [r]eissue without royalty fees or damages."48 In determining whether to grant equitable intervening rights, courts generally consider the following factors:
Implications for Post-Grant Proceedings
The application of intervening rights varies among the different types of post-grant procedures. For reissue proceedings, intervening rights arise under 35 U.S.C. § 252. For ex parte and inter partes reexamination, however, the Federal Circuit recently confirmed that intervening rights involves a two-step analysis: first the requirements of 35 U.S.C. §§ 307(b) (ex parte) and 316(b) (inter partes) must be met; second, the requirements of § 252 are considered.
Under 35 U.S.C. §252, a patentee may recover damages for the period between issuance of the original claims and issuance of the modified claims if the original and modified claims are "substantially identical." The Federal Circuit has clarified that the term "substantially identical" requires that the modified claims be "without substantive change" vis-à-vis the original claims.50 This analysis focuses on "whether the scope of the claims [is] identical, not merely whether different words are used."51 "If substantive changes have been made to the original claims, the patentee is entitled to infringement damages only for the period following the issuance of the" modified claims.52
For ex parte and inter partes reexamination, however, the Federal Circuit has clarified that application of 35 U.S.C. § 252 is not the first step in the analysis. For claims that undergo reexamination, the "threshold statutory requirement" appears in 35 U.S.C. §§ 307(b) and 316(b), which provide for intervening rights under § 252 only if "amended or new" claims are incorporated into a patent during reexamination.53 Thus, "[o]nly if the claim at issue is new or has been amended may the court proceed to the second step in the analysis and assess the substantive effect of any such change pursuant to § 252."54 Merely cancelling claims, or presenting arguments to the examiner, is insufficient to trigger intervening rights, even if such actions "may have affected the remaining claims' effective scope."55
Inter partes review, once it becomes available on September 16, 2012, should give rise to intervening rights in the same manner as ex parte and inter partes reexamination. Like 35 U.S.C. §§ 307(b) and 316(b), which provide for intervening rights under § 252 if the claims at issue are "amended or new," the new statutory framework for inter partes review uses the same "amended or new" language.56 Likewise, the statute governing post-grant review also uses the "amended or new" standard, and should allow for intervening rights under the same two-step analytical framework.57 As noted above, supplemental examination itself does not allow for claim amendments and is therefore unlikely to trigger intervening rights. But a supplemental examination request that presents a substantial new question of patentability will lead to ex parte reexamination, which may involve claim amendments that could trigger intervening rights.
The following table summarizes the relationship between the possible outcomes of a post-grant procedure (including reissue proceedings, ex parte and inter partes reexamination, inter partes review, and post-grant review) and the availability of intervening rights.
Outcome of Post-Grant Procedure |
Impact on Intervening Rights |
No claim amendments, successful non-limiting arguments | No intervening rights |
No claim amendments, but successful limiting arguments, |
No intervening rights (unclear for reissue proceedings) |
Non-substantive claim amendments | No intervening rights |
Substantive claim amendments | Intervening rights |
Unsuccessful proceeding | Patent no longer enforceable |
The above table highlights a possible exception for intervening rights applying to reissue proceedings, where no claim amendments are made but successful arguments are advanced, claim constructions are applied, or amendments to the specification are made, that change the effective scope of the claims. As indicated above, the Federal Circuit has confirmed that no intervening rights would apply in these scenarios for claims that undergo reexamination. The reason for the Federal Circuit's decision, however, was the "plain and unambiguous language of § 307(b)," which allows for intervening rights under § 252 only if the reexamined claims are "amended or new."58 It is unclear whether the Federal Circuit would reach a similar conclusion for a reissue patent. While § 252 contemplates that a reissue patent may result in "amended form," there is no counterpart language to that identified by the Federal Circuit in § 307(b) (i.e., "amended or new claim"). Instead, § 252 focuses on whether the claims are "without substantive change." But, an argument could be made that unamended claims in a reissue could trigger intervening rights if there is nonetheless a substantive change in their scope resulting from narrowing arguments or asserted claim constructions made during a reissue proceeding. In addition, it is arguable that amendments to a patent's specification during a reissue proceeding may affect the scope of the patent's claims, thereby leading to intervening rights.59
Given the AIA's significant changes to existing post-grant procedures, and its addition of entirely new procedures, it is critical to consider how intervening rights may apply under the new or modified post-grant procedures before deciding whether pursue them. These considerations are important both for patentees and for third parties wishing to challenge patents.
Ex parte and inter partes reexamination, inter partes review, and post-grant review will all trigger application of intervening rights according to the same two-step analysis. First, it must be determined whether the claims at issue are "amended or new." If so, the analysis turns to 35 U.S.C. § 252, and its requirement that intervening rights only be available for claims that undergo a "substantive change." Claims involved in a reissue proceeding are subject to the "substantive change" standard of § 252, but it is unclear whether intervening rights for reissued claims necessarily requires that they be "amended or new," as with other post-grant procedures. The Federal Circuit may well resolve this ambiguity in the near future.
Endnotes
135 U.S.C. § 251 (2006).
235 U.S.C. § 251.
3In re Fotland, 779 F.2d 31, 33 (Fed. Cir. 1985).
4In re Staats, 671 F.3d 1350, 1352-53, 1355 (Fed. Cir. 2012). The court in In re Staats recognized that it was bound by the decision of the Federal Circuit’s predecessor court in In re Doll, 419 F.2d 925 (C.C.P.A. 1970), which held that "after a broadening reissue application has been filed within the two year statutory period, an applicant is ‘not barred from making further broadening changes’ after the two year period ‘in the course of the prosecution of the reissue application.’" See In re Staats, 671 F.3d at 1355 (internal brackets and citations omitted).
5 Application of Oda, 443 F.2d 1200, 1203 (C.C.P.A. 1971).
6In re Wilder, 736 F.2d 1516, 1519 (Fed. Cir. 1984).
7 Hewlett-Packard Co. v. Bausch & Lomb, Inc., 882 F.2d 1556, 1563 (Fed. Cir. 1989).
8In re Sneed, 710 F.2d 1544, 1550 n.4 (Fed. Cir. 1983).
9In re Swanson, 540 F.3d 1368, 1375 (Fed. Cir. 2008).
10 Patlex Corp. v. Mossinghoff, 758 F.2d 594, 603 (Fed.Cir.), reh’g granted in part, 771 F.2d 480 (Fed. Cir. 1985).
11 Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1331, 1343 (Fed. Cir. 2008).
12 35 U.S.C. § 305 (2006) (ex parte); 35 U.S.C. § 314 (2006) (inter partes).
13 35 U.S.C. §§ 301, 302, 311(a) (2006).
14 35 U.S.C. § 303(a) (2006).
15 In re Swanson, 540 F.3d 1368, 1379 (Fed. Cir. 2008).
16Id.
1735 U.S.C. § 304.
1835 U.S.C. § 312(a).
1935 U.S.C. § 314(b)(2).
2035 U.S.C. § 315(c).
21 Sec. 6(c)(3), 125 Stat. 304-05.
22 Sec. 6(a), § 311(b), 125 Stat. at 299.
23 Id., § 315(b), 125 Stat. at 300.
24 Sec. 6(d), § 321(c), 125 Stat. at 306.
25 Sec. 6(d), § 324(a), 125 Stat. at 306.
26 Sec. 6(d), § 325(e)(1), (2), 125 Stat. at 308.
27 Sec. 12(a), § 257(a), 125 Stat. at 325.
28 Id.
29 Id., § 257(c)(1), 125 Stat. at 326.
30 Id., § 257(a), 125 Stat. at 325.
31 Id., § 257(b), 125 Stat. at 325-26.
32 Marine Polymer Techs., Inc. v. Hemcom, Inc., 672 F.3d 1350, 1361 (Fed. Cir. 2012).
33 Id. at 1362.
34 Seattle Box Co. v. Indus. Crating & Packing, Inc., 731 F.2d 818, 830 (Fed. Cir. 1984).
35 Bloom Eng’g Co. v. N. Am. Mfg. Co., 129 F.3d 1247, 1249 (Fed. Cir. 1997).
36 See 35 U.S.C. § 252 (2006) ("A reissued patent shall not abridge or affect the right of any person or that person’s successors in business who, prior to the grant of a reissue, made, purchased, offered to sell, or used within the United States, or imported into the United States, anything patented by the reissued patent, to continue the use of, to offer to sell, or to sell to others to be used, offered for sale, or sold, the specific thing so made, purchased, offered for sale, used, or imported unless the making, using, offering for sale, or selling of such thing infringes a valid claim of the reissued patent which was in the original patent.").
37 See id. ("The court before which such matter is in question may provide for the continued manufacture, use, offer for sale, or sale of the thing made, purchased, offered for sale, used, or imported as specified, or for the manufacture, use, offer for sale, or sale in the United States of which substantial preparation was made before the grant of the reissue, and the court may also provide for the continued practice of any process patented by the reissue that is practiced, or for the practice of which substantial preparation was made, before the grant of the reissue, to the extent and under such terms as the court deems equitable for the protection of investments made or business commenced before the grant of the reissue.").
38 Bic Leisure Prods., Inc. v. Windsurfing Int’l, Inc., 1 F.3d 1214, 1221 (Fed. Cir. 1993).
39 35 U.S.C. § 252.
40 Rohm & Haas Co. v. Chem. Insecticide Corp., 171 F. Supp. 426, 432 (D. Del. 1959); see also Univ. of Va. Patent Found. v. Gen. Elec. Co., 792 F. Supp. 2d 904, 916 (W.D. Va. 2011) ("No provision for a patented process is made in the absolute intervening rights section. By comparison, the statutory language governing equitable intervening rights explicitly allows ‘for the continued practice of any process. . . .’").
41 See 35 U.S.C. § 252 ("The court . . . may provide for the continued manufacture, use, offer for sale, or sale of the thing . . ." and "may also provide for the continued practice of any process patented by the reissue. . . .").
42 See id.
43 See id.
44 Seattle Box Co. v. Indus. Crating & Packing, Inc., 756 F.2d 1574, 1579 (Fed. Cir. 1985).
45 Bic Leisure Prods., Inc. v. Windsurfing Int’l, Inc., 1 F.3d 1214, 1221 (Fed. Cir. 1993).
46 Id.
47 Id.
48 Plastic Container Corp. v. Cont’l Plastics of Okla., Inc., 607 F.2d 885, 902 (10th Cir. 1979).
49 Visto Corp. v. Sproqit Techs., Inc., 413 F. Supp. 2d 1073, 1090 (N.D. Cal. 2006).
50 Laitram Corp. v. NEC Corp., 163 F.3d 1342, 1346 (Fed. Cir. 1998).
51Id. (emphasis in original).
52 Id.
53 Marine Polymer Techs., Inc. v. Hemcom, Inc., 672 F.3d 1350, 1363 (Fed. Cir. 2012).
54 Id.
55 Id.
56 Leahy-Smith America Invents Act, sec. 6(a), § 318(c), 125 Stat. 284, 304 (2011).
57 Sec. 6(d), § 328(c), 125 Stat. at 310.
58 Marine Polymer Techs., 672 F.3d at 1363.
59 See id. at 1375 (Dyk, J., dissenting) ("[A] change in the specification broadening the scope of the patent, just as a change to claim language, could lead to intervening rights.") (citing Battin v. Taggert, 58 U.S. 74, 83 (1854); Ficklen v. Baker, 47 App. D.C. 587, 596 (D.C. Cir. 1918); Manly v. Williams, 37 App. D.C. 194, 201 (D.C. Cir. 1911)).
Originally printed in CIPA Journal. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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