The Pending Legislation: What It Means for Oppositions & Reexaminations

Darrin Auito | January 21, 2010

The proposed Patent Reform Act of 2009 introduces a post-grant opposition procedure, as well as several changes to the current inter partes reexamination system.

Post-grant oppositions would be similar to the procedure currently used in Europe, which allows a third party to challenge the validity of a patent within one year of issuance. Here are the key points of this new procedure:

• Third-party can petition, during a 12-month “window” after a patent issues, to cancel one or more claims;

• Third-party can raise any ground of invalidity available in litigation except best mode and prior sale/use (deleted in Senate amendment to bill);

• The PTO would institute a post-grant review if “a substantial question of patentability” existed;

• Limited discovery may be permitted (and only for evidence directly related to factual assertions by either party);

• No statutory presumption of validity (“preponderance of evidence” standard applies), but burden of proof is on the party initiating the proceeding;

• Ordinarily concluded within one year (extendible by PTO Director, of course);

• If the PTO finds in favor of patentee, petitioner is estopped from later seeking reexamination or even raising invalidity as a defense in subsequent litigation.

• If post-grant review is terminated, the petitioner is not estopped to asserted invalidity in subsequent litigation.

The inter partes reexamination process would become more like that of the district court. Here are some of the other changes that may be coming:

• Reexamination is available throughout the life of a patent (no “window”);

• Requestor can raise any ground of invalidity available in litigation, except best mode and prior sale/use;

• Process would be handled by administrative patent judges instead of patent examiners;

• If PTO finds in favor of patentee, requestor would be barred: (1) from asserting invalidity of any claim determined to be valid in inter partes reexamination on any ground raised in the reexamination; and (2) from instituting an inter partes reexamination proceeding after a district court judgment on patent validity.

This last point must not be overlooked. It makes the prospect of filing an inter partes reexamination request much less risky, because the requestor is not prevented in a subsequent litigation, for example, from asserting potentially invalidating patents that he “could have raised” during reexamination. Under current law, estoppel applies to any ground that “could have been raised” during the reexamination. Because of this, parties factor the risk of an unintended estoppel in later litigation into their decision of whether to file an inter partes reexamination request.

If the Patent Reform Act of 2009 is enacted, the new post-grant opposition procedure and the revised inter partes reexamination would allow a party to challenge issued patents more readily by way of the Patent Office, instead of through the district court. Unfortunately, nobody knows if (or when) it will be enacted.

Will 2010 be the year the legislation passes? There are positive signs, not the least of which is the Obama Administration signaling that it generally supports the current Senate version (S. 515) of the bill. Plus, many of the controversial provisions of previous versions of this bill have been deleted from this bill (e.g., no AQS provision, no automatic publication after 18 months, no provisions on inequitable conduct, etc.). We must wait and see.

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