Accused Infringer Uses Reexamination to Defeat Willfulness Allegation

Scott Daniels | June 14, 2010

A party accused of patent infringement requests reexamination at the PTO to attack the patent as being anticipated or obvious in view of a prior art patent or printed publication.  An accused infringer, however, may also achieve other less obvious goals by seeking reexamination, such as creating an estoppel, creating a disclaimer limiting claim scope, or establishing the materiality of a prior art reference for an inequitable conduct defense.  Or, as in Plumley v. Mockett, the accused infringer may use reexamination to obtain summary judgment of no willful infringement.  2010 U.S. Dist. LEXIS 57254 (C.D. Cal. May 26, 2010).

Plumley sued Mockett in 2004 for infringement of U.S. Patent No. 5,167,047 (for a wire management grommet), initiating six years of litigation which has featured an interference, two Section 146 actions, four reexamination requests, and state claims for unfair competition and maliciousness prosecution.  Of special interest, however, is that the PTO granted each of the four reexaminations, and in the second reexamination, the PTO rejected the ‘047 claims over Mockett’s prior art.  On the basis of those reexaminations, Mockett moved for summary judgment that even if there were infringement, it was not willful.

Judge George King agreed with Mockett and granted the motion.  He began by noting the “objective recklessness standard” of In re Seagate Tech., 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc) (to show willfulness the patentee must present “clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent”).  “[B]oth legitimate defenses to infringement claims and credible invalidity arguments demonstrate the lack of an objectively high likelihood that a party took actions constituting infringement of a valid patent.”   Black & Decker, Inc. v. Robert Bosch Tool Corp. 260 Fed. App’x 294, 291 (Fed. Cir. 2008).

Judge King acknowledged the case law to the effect that the PTO’s finding of a “substantial new question of patentability … is not dispositive in a willfulness inquiry,” but only one factor to be considered.  Still, he found that it was “of particular note” that the PTO rejected Plumley’s claims as unpatentable over the prior art in the second reexamination.  He then concluded that Plumley had failed to “proffer evidence sufficient to create a triable issue of fact on a clear and convincing standard that there was an objectively high likelihood that … the ‘047 patent is nonobvious.”  2010 U.S. Dist. LEXIS 57254, at *11.

Earlier District Court decisions have all adopted the refrain that the PTO’s grant of a request for reexamination is “only one factor” to be considered, but they have given different weight to that factor.  In Lucent v. Gateway, the court granted summary judgment of no willfulness, relying heavily upon the PTO’s finding a substantial new question of patentability.  2007 U.S. Dist. LEXIS 95934, at *17-21 (S.D. Cal. 2007).  The trial judge in Safoco v. Cameron, on the other hand, denied a motion for summary judgment of no willfulness; he first acknowledged the reexamination grant as a factor suggesting no willfulness, but found more persuasive the fact that the claims of the two patents-in-suit survived reexamination without substantive amendment.  2009 U.S. Dist. LEXIS 66187, at *77-78 (S.D. Tex. 2009).  Interestingly, in the principal decision relied upon by Judge King in Plumley, the PTO’s grant of reexamination and the later requirement of substantive changes to the claims were of only secondary importance – far more important to the court were favorable opinion letters from the defendant’s lawyers and the fact that it was the “patentee [itself who] was concerned enough [about patent validity] to ask for reexamination ….”  TGIP v. AT&T, 527 F. Supp. 2d 561, 579 (E.D. Tex. 2007).

My personal opinion is that the grant of reexamination (and perhaps subsequent rejection of claims) is, in fact, only one factor for a judge to consider in determining willfulness, but under the Seagate objective standard it should normally be the most important factor – just as in the pre-Seagate cases applying a subjective standard, an opinion of counsel was only one factor, but commonly the dispositive factor.

As a concluding thought, it must be emphasized that each of these rulings arose in the context of a motion for summary judgment.  Trial courts have been almost uniform in excluding the fact of reexamination from trial, for fear of unduly prejudicing the jury on the issue of patent validity.  A case to watch is Tyco Healthcare Group LP v. E-Z-EM, Inc., (E.D. Tex., Case No. 2:07-CV-262) where Judge T. John Ward has denied defendants’ motion for summary judgment of no willful infringement based on a pending reexamination, but last week he allowed defendants to use that reexamination at trial for the limited purpose of rebutting an allegation of willful infringement.

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