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Declaratory judgment actions, covenants not to sue, and bad patents: a call to allow the judiciary to weed out bad patents while adhering to the "case or controversy" requirement.

c. Staying Litigation

Another issue surrounding ex parte reexamination, post-grant review, and inter partes review is whether litigation is currently occurring or may begin while the reexamination or review is instigated. In an ex parte reexamination, the patentee is under a duty to disclose any co-pending proceedings to the Director, including litigation. (223) Additionally, the examiner is required to perform a litigation check to ensure that the USPTO is aware of any co-pending litigation. (224) When litigation is instituted after the commencement of an ex parte reexamination, the Director may suspend the reexamination. (225) The Director will generally not stay reexamination and the ex parte reexamination will continue unless the court finds a claim or claims invalid or unenforceable. (226) If this occurs, the ex parte reexamination with respect to these claims is suspended. (227) However, if a claim is found to be valid, this has no bearing on the ex parte reexamination and the reexamination will continue. (228)

On the opposite side, if an ex parte reexamination is requested after litigation has begun, the Director will not approve the petition until a stay is issued. (229) Courts will generally stay litigation until the Director has accepted or denied the petition. (230) However, "[t]he court is not required to stay judicial resolution in view of the reexaminations." (231)

Courts generally weigh three factors when deciding whether to grant a stay pending ex parte reexamination of the patent at issue: "(1) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether discovery is complete and whether a trial date has been set." (232) If the petition for reexamination is denied, the litigation proceeds as usual. (233) If the petition is accepted, the court will continue to stay the proceeding until the reexamination is completed.

With respect to post-grant review and inter partes review, the co-pendency rules for these are much stricter. (234) These rules dictate that a review will not be instituted if a civil action has been filed with respect to the claims of the patent. (235) In the opposite case,
 If the petitioner or real party in interest files a civil action
 challenging the validity of a claim of the patent on or after the
 date on which the petitioner files a petition for inter partes
 review of the patent, that civil action shall be automatically
 stayed until either--(A) the patent owner moves the court to lift
 the stay; (B) the patent owner files a civil action or counterclaim
 alleging that the petitioner or real party in interest has
 infringed the patent; or (C) the petitioner or real party in
 interest moves the court to dismiss the civil action. (236)


However, this automatic stay of civil litigation provision is tempered by the provision that an inter partes review must be instituted within one year of receiving a complaint of patent infringement. (237)

d. Estoppel Issues

As with any concurrent litigation and administrative proceedings, estoppel issues abound. (238) The general concept of estoppel in this context is that it bars a petitioner from re-litigating a patent that has already undergone reexamination or review by the USPTO. (239) It also bars a petitioner who has previously litigated a patent from having the USPTO reexamine or review the patent with respect to the same issues. (240) While an entire series of articles may be written on the topic of estoppel issues surrounding ex parte reexamination, post-grant review, and inter partes review, the authors believe that the following presents a sufficient overview for the purposes of this article.

Generally speaking, ex parte reexamination does not carry with it the estoppel issues that the other two types of review do. (241) Indeed, the main issues surrounding estoppel, or the lack thereof, in ex parte reexaminations are strategic. If the ex parte reexamination is instigated by the patentee, estoppel does not apply because the patentee is never the adverse party to its patent. (242) However, there exists a caveat in that anytime a patentee provides arguments or narrows the claims of a patent undergoing reexamination, this becomes part of the patent record and may be used by future parties in litigation. (243)

If the ex parte reexamination is instigated by a third party, this lack of estoppel is a double edged sword. On the one hand, a third party may benefit from the fact that it can have the USPTO review a patent that has already been litigated, thus giving it a second bite at the apple. (244) On the other hand, the reexamination may result in a stronger patent that potentially enjoys a greater presumption of validity be the courts. (245)

Post-grant review and inter partes review on the other hand have codified estoppel provisions that limit third parties from re-litigating issues brought to the attention of the USPTO or the court, depending on which was instigated first. (246) A third party attempting to instigate either a post-grant review or inter partes review is estopped from raising issues that were raised in a previous proceeding before the office. (247) In fact, a party instigating a inter partes review is required to attest that they have standing to institute a proceeding which includes certifying that the petitioner is not barred or estopped from requesting the review. (248) Similarly, a third party attempting to invalidate a patent via a civil action is estopped from raising issues that were, or could have been, raised in a prior post-grant review or inter partes review. (249)

With respect to the predecessor of post-grant review and inter partes review, inter partes reexamination, the estoppel provision was seen as "the quid pro quo for a third-party's enhanced opportunities to participate in reexamination." (250) One of the goals of the estoppel provisions of inter partes reexamination was to prevent harassment of patentees by limiting the number of administrative and judicial challenges that may be brought by third parties. (251) This has been continued with the enactment of post-grant review and inter partes review. (252)

Of particular importance is the provision in both post-grant review and inter partes review that estops a petitioner from asserting a claim "on any ground that the petitioner raised or reasonably could have raised during that ..." review proceeding. (253) This language is a holdover from inter partes reexamination (254) and has been discussed extensively by commentators. (255) Commentators and the USPTO have noted that "could have been raised" is unclear and could be interpreted as meaning "that if all possible anticipatory features of a reference, and all possible permutations of obviousness combinations and their motivations to combine, are not explicitly argued in reexamination then they are not later assertable in litigation." (256) Thus a petitioning party should be wary when they challenge a patent using post-grant review and inter partes review procedures.

On the whole, ex parte reexamination, post-grant review, and inter partes review appear to be exceptionally powerful vehicles for parties seeking to invalidate all or part of patent, if only for the fact that it is many orders of magnitude less expensive than litigation. (257) For instance, patent litigation may easily exceed $1 million while the filing fees for ex parte reexamination are currently set at $17,750, post-grant review at $35,800, and inter partes review at $27,200 (258) exclusive of attorneys fees mind you.
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Title Annotation:I. Background B. Ex Parte Reexamination, Post-Grant Review, and Inter Partes Review Before the United States Patent and Trademark Office 3. Using Ex Parte Reexamination, Post-Grant Review, or Inter Partes Review in the Context of Litigation c. Staying Litigation through d. Estoppel Issues, p. 46-54
Author:Tiedeman, Jason Scott; Gorman, Eric D.
Publication:The Journal of High Technology Law
Date:Jan 1, 2013
Words:1237
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