Are Ex Parte Reexaminations An Overlooked Method of Challenging Patents?

Jackson Walker
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In the wake of the September 16, 2011, enactment of the America Invents Act (“AIA”), many third-party individuals and organizations began utilizing the newly created post-grant proceedings to challenge the validity of issued patents. In particular, petitioners began filing post-grant reviews and covered business method challenges – both newly created by the AIA – as well as inter partes reviews, the effective post-AIA replacement of inter partes reexaminations, at rates that greatly exceeded expectations. While these newly established post-grant proceedings have enjoyed immense popularity over the last few years, one often-overlooked option remains a viable, and often more desirable, candidate for third-party challenges to issued patents:ex parte reexaminations.

Some of the intricacies of ex parte reexaminations have changed over the years; however this specific type of post-grant proceeding has been available since the early 1980s.1 In general, ex parte reexaminations allow patentees or anonymous third-party challengers to present new evidence – printed publications and other published patents – to an examiner in the Central Reexamination Unit (CRU) of the U.S. Patent & Trademark Office (“PTO”) in order to invalidate or modify the scope of issued patents. Unlike the various other post-grant proceedings, which are administrative trials before the Patent Trial and Appeal Board (PTAB), once an ex parte reexamination has been instituted the only remaining interaction is between the CRU examiner and the patent owner.

In general, third-party petitioners have experienced substantial success when utilizing ex parte reexaminations. Of the 12,429 petitions for ex parte reexamination filed since 1981, nearly 92 percent have been granted.2 This is likely due to the fact that petitions for ex parte reexaminations are reviewed for a “substantial new question of patentability,”3 as opposed to the more rigorous tests for inter partes review (“reasonable likelihood that petitioner will prevail on at least one claim”4) and post-grant review (“more likely than not to be deemed unpatentable.”5) In nearly 78 percent of the ex parte reexaminations that have been instituted, all claims were either cancelled or required some narrowing in order to avoid being invalidated.6 Similarly, because of the deference to the PTO’s expertise, the Court of Appeals for the Federal Circuit has upheld 86-92 percent of these decisions, with many affirmations coming in expedited Rule 36 opinions.7

The institution rate is one of the leading benefits of ex parte reexamination over other post-grant processes, where the grant rate has dropped from an initial rate of 80 percent to less than 70 percent following the Federal Circuit’s decision in In re Cuozzothat the institution decision cannot be reviewed.7 This drop is particularly unusual, because it would be reasonable to anticipate that institution rates would increase and not decrease as practitioners and the PTAB become more skilled at selecting, preparing and handling these post-grant proceedings. The PTAB is also under a statutory mandate to complete the post-grant reviews within one year after filing, and the combined effect of that requirement and the holding in Cuozzo is that the PTAB may feel some pressure to deny institution simply to control its own workload. It is conceivable that the net result of these combined factors is the denial of up to 10 percent of otherwise valid petitions, resulting in the loss of substantial filing and legal fees and one year of time. When compared with the grant rate of over 90 percent for ex parte reexamination, with an institution decision that is typically within several months of filing, serious consideration should be given to filing an ex parte reexamination request.

Another benefit of ex parte reexaminations is the cost. In terms of governmental filing fees, the cost of filing an ex partereexamination is $12,000 compared to $23,000 for inter partes reviews and $30,000 for covered business method challenges.9Aside from this upfront cost savings, the only other cost incurred by the third-party challenger is the cost to prepare the ex partereexamination request. Because the requester is not allowed to be involved in the prosecution of instituted ex partereexaminations, they do not incur any of the costs and legal fees associated with discovery, briefing, and various hearings. In contrast, the cost associated with other post-grant challenges to a patent can be quite substantial.

There are additional benefits which are unique to ex parte reexaminations. For example, the average pendency of ex partereexaminations is 22.3 months from filing date to final decision and the median pendency is roughly 15.9 months.10 When compared with the average pendency of other post-grant proceedings, ex parte reexaminations are far more likely to result in an expedited final decision. In addition, while petitioners for other post-grant proceedings are limited in the number of proceedings they may file, there is no limit on the number of ex parte reexamination requests that can be filed, as long as each one presents a substantial new question of patentability. Similarly, while certain estoppel provisions apply in the other post-grant proceedings, no such estoppel attaches to third-party petitioners for ex parte reexamination. As a result, a third-party petitioner may rely on the same prior art in subsequent ex parte reexaminations, other post-grant proceedings, or later-arising civil litigation in District Courts.

Ex parte reexamination can also benefit parallel litigation in district court, even where a stay of litigation is not initially granted. For example, in Downhole Products LTD. v. Summit Energy Services, Inc., Case No. 4:13-cv-00444, S.D. Tex., Jackson Walker was successful in getting a stay of litigation after all issued claims of the patent-in-suit were cancelled by the examiner, even though the patent owner substantially amended the claims. The decision of the examiner was subsequently appealed by the patent owner to the Patent Trial and Appeal Board (PTAB), which upheld the rejections, and then to the Federal Circuit, which affirmed the decision of the PTAB without opinion. The litigation was voluntarily dismissed with prejudice by the patent owner shortly thereafter, saving Jackson Walker’s start-up client what would have likely cost more than ten times the cost to invalidate the patent at trial or in other post-grant proceedings.

For these reasons, serious consideration should be given to seeking to invalidate or weaken a troublesome patent using ex parte reexamination, even if suit has already been filed. While any decision will depend on the specific facts of a given case, ex parte reexamination can cost substantially less than other alternatives, and produce the same results.

Situational Analysis of Possible Ex Parte Reexaminations

Possible Instances to File:

Possible Instances Not to File:
1. Patent specification contains minimal disclosure which fails to support additional, narrower claims 1. Patent specification contains robust disclosure of unclaimed subject matter which could be used as support for narrower claims that read more closely on the accused goods/services

2. Patent claims are unreasonably broad based on vague and/or unsupported claim language

2. Patent and prior art are particularly complex technology, and would benefit from AIA review
3. Patent term has expired 3. Client desires continued involvement in the post-grant proceedings
4. Patent is a continuation-in-part which contains substantial new matter missing from parent application 4. Expert testimony necessary to explain technology/invalidity arguments and resolve potential claim construction issues

1See MPEP 2200.
2Link. It is also worth noting that the CRU was created in 2005, which moved responsibility for ex parte reexaminations from the art units where the patent originally issued to an independent branch of the PTO, and which also reduced the chance that the original examiner might have some influence on the outcome of an ex parte reexamination.
3MPEP 2216.
435 U.S.C. § 314(a).
537 C.F.R. § 42.208(c).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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