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Potential advantages of re-examination as a litigation strategy

The greatest advantage of re-examination as a litigation strategy is that re-examination may decrease the time and resources of both parties to a litigation. Specifically, re-examination may limit the amount of resources expended in deciding whether a patent is valid, as it requires no discovery or other related litigation expenses. By simplifying or resolving the validity issue, re-examination may reduce the number of issues to be tried and may alleviate many discovery problems related to prior art. A patent that survives re-examination emerges as a stronger patent. Indeed, the results of the re-examination may encourage settlement without further litigation of the issues. Alternatively, if the patent is held invalid, the patent litigation will likely be dismissed. At a minimum, all prior art presented to the court will have been first considered by the USPTO, with its particular expertise.

Additional advantages of re-examination as a litigation strategy include the following:

• The re-examination process is accomplished by experienced examiners within the USPTO, who also have access to internal re-examination experts, and the process itself is expedited through the USPTO.

• During re-examination, there is no presumption of validity of the patent under 35 USC § 282, as in litigation. Instead, there is a subjective examination of the claims in light of the prior art (see In re Etter, 756 F 2d 852, 855-858 (Fed Cir 1985), cert denied, 474 US 828 (1985)).

• During re-examination, claims are given the broadest reasonable interpretation consistent with the specification (see In re Yamamoto, 740 F 2d 1569, 1571 (Fed Cir 1984)).

• The scope of the claims may be narrowed by the patent owner’s arguments, admissions, amendments to the claims and chosen claim interpretation (the scope of the claims may not be broadened during re-examination (see 35 USC §§ 305 and 314(a))).

• If substantive changes to the claims are made, such that the scope of the claims is changed, infringement damages may only be collected from the issue date of the re-examination certificate – that is, the issuance of the re-examined claims (see 35 USC §§ 252 and 307(b); and Laitram Corp v NEC Corp, 163 F 3d 1342, 1345 (Fed Cir 1998)).

• Re-examination may enable the court to focus on legal rather than technical issues.

• Re-examination is generally governed by well-established patent law principles and practice.

Potential disadvantages of re-examination as a litigation strategy

The risk to the patent owner is that the scope of the claims of the patent may be narrowed or even cancelled. Such a risk is based mostly upon the pertinence of the asserted prior art patent or printed publication. Meanwhile, a third-party requestor risks the affirmation of the patent’s validity, thereby strengthening the patent holder’s litigation position.

Additional disadvantages are present if inter partes re-examination is requested. As noted above, the requestor is precluded from contesting validity in a later proceeding based upon arguments or evidence that was known or should have been known at the time of the inter partes re-examination (see 35 USC § 315(c)).

Further disadvantages may include the lengthy delay in acquiring a determination from the USPTO. As noted above, if a stay in litigation is not granted, the re-examination is unlikely to affect the present litigation. However, the result of the re-examination may provide either party with an opportunity to re-open litigation. Alternatively, if a stay is granted, re-examination may unnecessarily delay final judgment on the merits of a matter critical to the financial wellbeing of both parties. Such prolonged uncertainty can be harmful both in terms of long-range financial planning and short-term market stability.

Conclusion

From the standpoint of an investor, a patent is an important asset that is essentially surrendered to the USPTO during the re-examination process. Thus, the decision to utilise the litigation strategy of re-examination must be carefully considered, weighing all of the advantages and disadvantages.