Authored by Jeremy P. Bond and Eric P. Raciti
Intervening rights can shield an alleged infringer from patents whose claims are modified by a post-grant proceeding conducted at the U.S. Patent and Trademark Office ("PTO"). If the claims of the patent are substantively amended during the post-grant proceeding, the liability of the alleged infringer may be limited to the date the amended claims issue and not the issue date of the original unamended claims. The theory being that a third party cannot be liable under claims that are modified post-grant where the third party reasonably believed they did not infringe the claims as originally issued.
The U.S. Court of Appeals for the Federal Circuit ("CAFC") in Marine Polymer Technologies, Inc. v. HemCon, Inc.1 considered what constitutes an "amended" claim for purposes of determining if intervening rights apply under 35 U.S.C. § 307(b). During reexamination of the patent at issue, the patentee successfully narrowed the claim scope to avoid prior art without formally amending the remaining claims. This was accomplished through a combination of argument and deletion of several dependent claims. An evenly divided court held that because the remaining claims were not textually "amended" as required by the statute, no intervening rights accrued.
Marine Polymer appears welcome news to patentees whose patents undergo reexamination. If the patentee can preserve claims through argument rather than amendment, an accused infringer is deprived of an intervening rights defense. Without the threshold "amended or new" claim requirement, an alleged infringer could have argued that intervening rights are created by any statement made during reexamination by the patentee that defines or characterizes a claim term. Because such a statement, arguably, affects claim scope, the CAFC was concerned that virtually all future reexaminations would include an intervening rights defense. With these considerations in mind, and by following a strict reading of the statute, Marine Polymer provides a strong incentive for patentees to argue for distinctions over the prior art rather than amend claims during reexamination.
Marine Polymer will also likely affect more than just intervening rights arising from reexamination proceedings. Other unintended consequences of Marine Polymer may catch parties unprepared, especially with the changes to post-grant proceedings ushered in by the America Invents Act (the "AIA"). While a previous article in the journal focused on intervening rights and post-grant examination under the AIA,2 here we focus on the practical consequences of the Marine Polymer decision.
Review of Marine Polymer
U.S. Patent 6,864,245 ("the '245 patent") is assigned to Marine Polymer Technologies ("MPT") and claims "biocompatible" forms of poly-β-1→4-N-acetylglucosamine ("p-GlcNAc"). Highly purified p-GlcNAc polymers find use in a number of biomedical applications, including wound treatment, drug delivery, and tissue encapsulation. But not all p-GlcNAc polymers are pure enough for these applications. To ensure sufficient purity, the '245 patent describes four biocompatibility tests, including include an elution, implantation, intracutaneous injection, and systemic injection test. Scores for these tests can range from zero to four. A test score of zero represents no reactivity, and one to four represent increasing reactivity from slight to severe. Three sets of originally granted claims each included three dependent claims, each dependent claim reciting an elution test score of zero, one, or two. No claims explicitly recited any other type of test or any test score greater than two.
A district court found the '245 patent valid, infringed by HemCon, and awarded MPT almost $30 million in damages. In reaching its decision, the district court construed "biocompatible" p-GlcNAc to mean p-GlcNAc with "low variability, high purity, and no detectable biological reactivity as determined by biocompatibility tests." Interestingly, neither MPT nor HemCon had argued for such a construction. MPT argued that "biocompatible" p-GlcNAc should mean "biomedically pure [p-GlcNAc] that reproducibly exhibits acceptably low levels of adverse bioreactivity, as determined by biocompatibility tests." HemCon argued for a much broader construction, "suited for biomedical applications."
HemCon appealed the district court's decision to the CAFC and also initiated an ex parte reexamination of the '245 patent at the PTO. During reexamination, the examiner construed "biocompatible" more broadly than the district court to mean "low variability, high purity, and little or no detectable reactivity" (emphasis added). Based on the broader construction, the examiner rejected the claims as invalid in light of prior art that disclosed at least some biological reactivity. In response, MPT urged the examiner to adopt the district court's narrower construction of "biocompatible" and cancelled the dependent claims reciting non-zero scores for the elution test. MPT neither added any new claims nor amended any existing claim. Based on MPT's arguments and cancellation of the claims drawn to test scores greater than zero, the examiner agreed with the district court's narrower construction of "biocompatible." A final reexamination certificate confirmed the patentability of the non-cancelled original claims.
On appeal, a panel of three judges at the CAFC overturned the district court decision. The panel agreed that HemCon had acquired intervening rights because the asserted claims were substantially changed during reexamination. MPT then petitioned for an en banc rehearing at the CAFC. In a 6-4 decision, the majority reversed the panel decision and held that HemCon had not acquired intervening rights because no claims were amended or added during the reexamination proceeding. The majority reasoned that intervening rights apply to only an "amended or new" claim patented and incorporated into a patent during reexamination. Only after determining if a claim is "amended or new" does the inquiry move on to determine whether or not the claims have been substantively changed. If the asserted claim is not "amended or new," intervening rights do not apply.
In an evenly divided (5-5) decision, the CAFC upheld the district court's narrower construction of "biocompatible" and affirmed the district court's infringement finding. HemCon argued for a broader construction of "biocompatible" based on the six dependent claims originally granted (later cancelled in reexamination) that required elution test scores of one or two, and the specification’s explanation that some biocompatibility tests are satisfied despite detectable bioreactivity. The CAFC disagreed, reasoning that the specification's discussion of non-zero test scores passing the biocompatibility test was merely part of generalized descriptions of test methods. "[W]hen read as a whole, the specification makes clear that the p-GlcNAc of the invention outperforms baseline standards and shows 'no detectable biological reactivity as determined by biocompatibility tests'" (emphasis in original).3
Impact of Marine Polymer
Challenging a Patent Via Reexamination
The result of Marine Polymer highlights a possible danger to a third party requestor of initiating an ex parte reexamination; you have very little influence on the claim construction. Specifically, because the reexamination was ex parte, HemCon was unable to participate in the proceeding once it was initiated by the PTO. HemCon therefore could not rebut MPT's arguments regarding claim scope or comment on the examiner's claim construction.4 As a result, MPT was able to overcome the prior art rejection using arguments of claim interpretation and thereby avoiding an amendment.
In hindsight, an inter partes request for reexamination of the '245 patent may have been more effective. In an inter partes reexamination, HemCon could have perhaps helped the PTO to apply the broadest reasonable interpretation ("BRI") standard to construe the claims of the '245 patent to its advantage, thereby forcing an amendment. In contrast to the federal district courts, which consider the prosecution history during judicial claim construction, the PTO should apply the BRI standard during reexamination proceedings. There is also no presumption of validity in PTO proceedings.
HemCon could have avoided the narrow and unfavorable claim construction applied by the PTO and possibly forced an amendment through use of the greater participation of a third party in an inter partes proceeding. In other words, by applying the BRI standard, an additional claim limitation arguably should have been incorporated into the independent claims of the '245 patent to distinguish over the prior art. For example, HemCon could have suggested that a narrow interpretation of "biocompatible" requires additional claim language to reflect the narrowed scope. Any claim amendments made during reexamination would have met the "amended or new" threshold of the statute, moving the intervening rights inquiry to the substantive nature of the amendments. It follows that any claim that is amended to avoid prior art and gain allowance has been substantively changed. In summary, an inter partes proceeding would provide a challenger more opportunities to force the patentee to amend the claims and possibly create intervening rights.
Defending a Patent During Reexamination
The message here for patent holders is clear—don't amend your claim language unless absolutely necessary. In stark contrast, a challenger in a reexamination proceeding should strive for claim amendments. The challenger should focus on claim limitations that they believe provide the strongest support for their non-infringement positions. Amendments to these limitations will bolster their intervening rights defense.
Marine Polymer clearly shows that arguing for a limited claim construction or canceling claims in support of that construction removes the defense of intervening rights. What is less clear is the effect, if any, of obtaining allowable claims during reexamination though other means. For example, assuming a patent holder meets all the statutory requirements, could text or drawings be added or deleted from the specification to affect claim scope? What about submission of an expert declaration stating how one of ordinary skill would construe a particular claim term? Based on Marine Polymer and a strict reading of the statute, if none of these introduce an "amended or new" claim during reexamination, no intervening rights would be available to the accused infringer.
In general, patent applicants are reluctant to amend claims during prosecution. However, there is also little incentive to provide arguments regarding claim terms or scope because of the prosecution history estoppel that may attach. This limits the ability of patent applicants to hide the true claim scope and provides the public with clear notice of the metes and bounds of the invention.
Marine Polymer clearly tilts the scales in favor of argument versus amendment from the patentee's perspective. If possible, patentees will strongly favor arguing for a particular claim construction rather than amend a claim during reexamination in order to remove any intervening rights defense. Consequently, issued claims of a reexamined patent need careful consideration. Any assessment should now include a thorough review and consideration of the prosecution history of the reexamination proceeding in order to properly determine possible claim scope.
Drafting a Patent Application
A savvy applicant may use Marine Polymer to draft an application with an eye toward post-grant challenge. Chemical or pharmaceutical applications including numerous examples could be described, to varying degrees, as "the invention." An application could also include various examples containing inconsistent use of a claim term or data supporting different constructions of a particular term. Using such ambiguous language later during court or reexamination proceedings could narrow or broaden a specific claim construction. Arguments highlighting a particular example described in the specification or deletion of claims in conflict with the "invention" could provide additional support to a particular claim construction.
Patent prosecutors often avoid the term "invention" for the very reason that a court may focus on that description in construing a claim term. The '245 patent suffers the opposite problem as the term "invention" is used over one hundred times in the specification. Numerous aspects of the p-GlcNAc of the '245 patent are described as "the invention." Consequently, the majority's assertion that the p-GlcNAc of the "invention" clearly shows "no detectable biological reactivity" appears dubious at best.
AIA Considerations for Post-Grant Review
Under the AIA, third parties will have expanded access to challenge patents post-grant. While ex parte reexamination remains unchanged by the AIA, inter partes reexamination will be phased out and effectively replaced with inter partes review and post-grant review. Inter partes review will be available nine months after a patent grants, while post-grant review is only available up to nine months post-grant. The procedures are similar, but HemCon could have also challenged the patent on grounds such as clarity, written description, and enablement of the '245 patent under post-grant review, rather than only novelty or obviousness based on patents or printed publications under inter partes review. It seems likely that HemCon could have made even stronger arguments for invalidity under written description or enablement requirements.
The AIA also affects the stay provisions in the new PTO proceedings. Here, the ex parte reexamination here occurred in parallel with the litigation and did not conclude until after trial. A stay could have provided HemCon with a more favorable claim construction while the litigation was on hold. If the new inter partes review or post-grant review were available, the district court case could have been stayed if the requirements of the AIA were met. For example, a civil action filed on or after the date of filing a petition for post-grant review will be automatically stayed unless: (1) the patentee moves to lift the stay, (2) the patentee files a civil action or counterclaim alleging infringement by the requestor, or (3) the requestor moves to dismiss the civil action.5 Similar stay provisions also apply to inter partes review.
Marine Polymer provides clear guidance to patent holders and third party requestors of reexamination regarding intervening rights. The strict threshold inquiry requires that an amended or new claim be added during reexamination. Any intervening rights analysis is terminated if neither an amended nor a new claim issues with the reexamination certificate.
Marine Polymer also highlights possible pitfalls of initiating an ex parte reexamination as opposed to using an inter partes procedure. Clearly an inter partes proceeding provides a requester with more opportunities to force the patentee to amend the claims. And without these amendments, the ability of any alleged infringer to invoke the defense of intervening rights is squashed.
With the continuing changes to U.S. patent law brought about by the AIA, patent holders and requestors alike will likely face more complicated reexamination proceedings. The unpredictability of reexamination proceedings will rise as it becomes more difficult to foresee how claim scope may or may not be modified. Patent holders will be less willing to amend claims, instead relying on argument, amendments to the specification, or other means. Requestors, to the extent possible, will push more strongly for claim amendments to preserve possible intervening rights.
1 Marine Polymer Techs., Inc. v. HemCon, Inc., 672 F.3d 1350 (Fed. Cir. 2012).
2 Divine Intervention: Intervening Rights Based On Post-Grant Examination, Before and After the Leahy-Smith America Invents Act (AIA), CIPA June 2012.
3 Marine Polymer Techs. v. HemCon, 672 F.3d 1359.
4 While HemCon could have filed another ex parte reexamination request in an attempt to force an amendment, a decision by the PTO on any subsequent reexam likely would not have been completed in time to affect the litigation between the parties.
5 Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 325 (2011).
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.