Friday, May 18, 2012

In re Baxter International - Federal Circuit Affirms Ex Parte Reexamination Invalidity Over Litigation Validity

In the recent case In re Baxter International, the Federal Circuit affirmed the Board's decision in an ex parte reexamination that claims 26-31 of U.S. Patent No. 5,247,434 (the '434 patent) are invalid despite the fact the Federal Circuit previously affirmed a federal court's decision that claims 26-31 were not invalid. That's startling! Doesn't the Federal Circuit agree with its previous decision? And no, it is not a matter of a different CAFC panel.

The Federal Circuit explained as follows:

"Lest it be feared that we are erroneously elevating a decision by the PTO over a decision by a federal district court, which decision has been affirmed by this court, the following additional comments must be made. When a party who has lost in a court proceeding challenging a patent, from which no additional appeal is possible, provokes a reexamination in the PTO, using the same presentations and arguments, even with a more lenient standard of proof, the PTO ideally should not arrive at a different conclusion. However, the fact is that Congress has provided for a reexamination system that permits challenges to patents by third parties, even those who have lost in prior judicial proceedings. Usually one would expect that any such reexamination, such as the one before us, would raise new issues. In this case, the patent examiner relied on new prior art that had not been raised in the prior district court proceeding. Why Fresenius [the defendant in related litigation] did not present that prior art before the district court we do not know. But the Director apparently found that a substantial new question of patentability had been raised and the examiner was then entitled to conduct a reexamination on the basis of the new art presented and her search of the prior art. Thus, this case is not about the relative primacy of the courts and the PTO, about which there can be no dispute. Finally, we could not conclude that the PTO was barred from conducting the reexamination of the ’434 patent because of the final judgment in Fresenius without over-ruling Ethicon and Swanson, which we cannot do."

In re Baxter International highlights ex parte reexamination is not subject to a legal estoppel from the court decision such as applies to inter partes reexamination. Further, it reminds that patent challengers have a lower evidentiary standard in ex parte reexamination than in federal court. In ex parte reexamination, the challenger must only prove invalidity by a preponderance (i.e., it's more likely than not); in court, the challenger must prove invalidity by clear and convincing evidence. Accordingly, ex parte reexamination may be preferably over litigation if you seek to prove a US patent is invalid over written prior art.

Copyright © 2012 Robert Moll. All rights reserved.