Can the USPTO invalidate a patent during reexamination that had
been upheld during litigation? Yes, according to the Court of
Appeals for the Federal Circuit in In re Baxter
International, where the Federal Circuit addressed the
potential conflict predicted since Congress established ex
parte reexamination procedures at the United States Patent
& Trademark Office (USPTO). At least in some circumstances, the
USPTO can find a patent invalid, even after a court has upheld its
Baxter International, Inc. owns U.S. Patent No. 5,247,434,
directed to hemodialysis machines. In 2003, Fresenius Medical Care
Holdings filed for declaratory judgment of noninfringement and
invalidity. In 2005, two years after the declaratory judgment suit
was filed, Fresenius requested reexamination of the '434. In
2007, the district court granted judgment of validity and
infringement, affirmed by the Federal Circuit in 2009. Between 2006
and 2010, the USPTO reexamined the patent. The Board of Appeals at
the USPTO, even after consideration of the Federal Circuit
decision, found the claims obvious. The Federal Circuit upheld the
Board of Appeals in In re Baxter.
The Federal Circuit denied that the USPTO could directly
overrule a judicial decision, but left a substantial hole. The
court noted that if a losing litigant provoked reexamination
"using the same presentations and arguments," then
"the PTO ideally should not arrive at a different
conclusion." During litigation, Fresenius failed to identify
structural features in the prior art corresponding to
means-plus-function elements of the patent claims, and therefore
failed to meet the burden of proof in the district court. Relying
on substantially the same references argued by Fresenius at the
district court, the USPTO Examiner provided the information
Fresenius failed to provide. This was sufficiently different, the
Federal Circuit held, to justify the alternative outcome.
Burden of proof doesn't explain the outcome, however. Only
factual determinations by the USPTO Board of Appeals are entitled
to deference at the Federal Circuit, not the ultimate conclusion of
obviousness. The USPTO determines obviousness by a
"preponderance of the evidence," while a litigant must
prove obviousness by "clear and convincing evidence"
because a patent has no presumption of validity before the USPTO.
The Federal Circuit in In re Baxter upheld the Board's
factual findings that structural features corresponding to
means-plus-function elements of the patent claims were present in
the prior art. However, the Federal Circuit did not discuss (or
Baxter did not contest) why structural features from different
prior art references rendered the claims obvious. Considering the
outcome at the Federal Circuit, if Fresenius had pointed to the
same structural features during litigation that the USPTO
identified during reexaminaton, the claims would have been found
obvious in the district court as well. In this case, reexamination
at the USPTO corrected an apparent misstep made during the
proceedings at the district court.
Following In re Baxter, reexamination after successful
litigation may become more common and may become an even more
powerful tool available to patent challengers. involved ex parte reexamination, where a USPTO Examiner
reviews the claims without input from a third party. But In re
Baxter may also influence inter partes reexamination,
where a third party – even a losing litigant –
may be involved. If, for example, the USPTO adopts arguments
provided by a third party during inter partes
reexamination to find claims unpatentable, In re Baxter
may provide a second chance for losing litigants to invalidate
patents upheld in court. As such, In re Baxter may
encourage patent challengers to pursue reexamination and new
arguments for unpatentability, even when patents have been upheld
Patent holders may find themselves rearguing
references presented during litigation, and face reexamination
proceedings even after successful litigation. Because of the
differences between USPTO and federal court procedure, arguments
and tactics that succeed in court may not succeed before the USPTO.
Counsel with experience before the USPTO is crucial. Patent holders
may want to coordinate efforts between litigation counsel and
patent counsel to harmonize arguments or prepare for reexamination
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