TC's inside IP - Winter 2013: Final Really Does Mean Final in the Federal Circuit

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Defendants in patent infringement lawsuits often request that the United States Patent and Trademark Office (“PTO”) reexamine the patent-in-suit. Patent reexamination is a process where the validity of an issued patent is again reviewed by the PTO. Patent infringement litigation, of course, takes place in federal district courts. Often, a patent infringement action brought by the patentee in federal district court and a reexamination proceeding initiated by the accused infringer in the PTO proceed at the same time. In Fresenius USA v. Baxter International, the Federal Circuit ruled that where a reexamination and a patent infringement lawsuit involving the same patent are concurrently proceeding, the first action to reach true finality may render the other moot. In the litigation, the Federal Circuit had earlier affirmed the trial court’s judgment that the patent was infringed and not invalid, but remanded the case back to the trial court to determine damages and entitlement to injunctive relief. Before the issues of damages and entitlement to injunctive relieve were finally resolved, the PTO determined in the reexamination proceeding that the patent is invalid and the PTO determination was affirmed by the Federal Circuit. In a subsequent appeal, the Federal Circuit ruled that the reexamination trumped the litigation because the reexamination was finalized before the litigation was finalized.

Two Forums, Three Appeals, and a Complicated Procedural Background

In 2003, Fresenius filed a declaratory judgment action in federal court, seeking a judicial determination that, among other things, certain claims of the Baxter patent were invalid. In 2006, a jury found the claims of the Baxter patent invalid. However, the district court granted Baxter’s post-trial motion for a judgment as a matter of law, finding that Fresenius had not presented sufficient evidence to support a jury verdict of patent invalidity. The district court entered judgment in favor of Baxter. On Fresenius’ appeal to the Federal Circuit in 2009, the Federal Circuit affirmed the district court’s decision and remanded the case back to the district court to determine the proper amount of damages and whether to enter an injunction against Fresenius (hereinafter Fresenius I). In response to the Federal Circuit’s remand, the district court entered a second judgment in favor of Baxter in March of 2012, and Fresenius again appealed to the Federal Circuit (hereinafter Fresenius II).

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