USPTO to Revise Reexam Practice, Is Patent Reform Dead?

USPTO Headquarters, Alexandria, Virginia

The United States Patent and Trademark Office (USPTO) is seeking public comment on a proposal to streamline the procedures governing ex parte and inter partes patent reexamination proceedings. The timing of this announcement, which appeared in the Federal Register on April 25, 2011, seems curious to me. With patent reform circulating in the House of Representatives does this signal a belief that on the part of the Patent Office that patent reform is dead?  The patent reform passed by the Senate and that being considered by the House has revised post-grant review proceedings, so wouldn’t it be wise to wait to revamp reexamination until after patent reform passes, that is if it seems likely to pass?

Truthfully, I think patent reform is in severe jeopardy.  That won’t bother many people, and if we had to live with the changes imposed by the House Judiciary Committee it won’t bother me either. The revised post-grant review in the House bill are a step in the wrong direction compared with the Senate bill, and I am not all that thrilled with the post-grant provisions in the Senate bill anyway.  The inclusion of prior user rights in the House bill make it completely unacceptable in my opinion.

Add these two key “poison pills” together with the austerity measures adopted by the USPTO, necessitated by the Fiscal Year 2011 budget deal, and the Office informing patent examiners that the budget crisis is likely to continue indefinitely, and it seems patent reform is indeed dead or at least being administered last rights.  You see, patent reform would fix the USPTO budgetary woes by letting them keep 100 cents of user fees on the dollar, and allow them to set their fees at an appropriate level to recoup the cost of the services provided.  So if budgetary woes will continue indefinitely and if the USPTO is moving forward with revamping reexamination prior to patent reform being enacted, it would seem to signal that patent reform is unlikely.

In any event, returning to the proposed changes to reexamination, according to the USPTO press release, “the new procedures are aimed at reducing the time it takes to resolve disputes between patent owners and the public regarding the validity of issued patents.” The proposed changes, identified below, present significant changes to how reexamination is handled by the Patent Office, so those who have a reexamination practice should stand up and take notice, as should patent litigators and clients who might be interested in using reexamination either on its own or in concurrent proceedings alongside patent litigation in the District Courts or proceedings at the International Trade Commission.

“We recognize that patent reexamination is one of the most important functions of the USPTO, because these patents often have significant commercial value and are usually involved in concurrent litigation,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos. “By resolving these disputes more quickly, we can make patent reexamination a better mechanism for reviewing patent validity.”

The Patent Office says the proposed changes include: standardizing the way information is presented in reexamination requests; focusing examiners’ attention on the best prior art; reducing the need for late submission of evidence and amendments; clarifying petitions practice; allowing patent owners to waive their optional ex parte statement; consolidating the inter partes action closing prosecution and right of appeal notices; and reducing unnecessary briefings in inter partes appeals.  Some of the changes, however, seem to go beyond these goals and even counterproductive. For example, I cringe when I see that examiners will be able to make “representative rejections.” If the patent owner overcomes the representative rejection then another rejection can be inserted in its place. That seems completely contrary to Office initiatives to engage in compact prosecution and almost certain to string out reexamination, making it a moving target for some patent owners who are continually facing rejection after rejection having overcome the previous rejection.

Without further ado, here are the proposed changes, which some additional explanation where the bullet-point wouldn’t suffice to give you a clear picture of the change.

Proposed Changes to BOTH Ex Parte and Inter Partes Reexaminations

1. Requester must separately explain how each significant new question of patentability (SNQ) presented in the request is “new” relative to other examinations of the patent claims.

2. Requester must explain how the references apply to each limitation of every claim for which reexamination is requested.

3. Requester must explain how multiple SNQs raised in the same request are non-cumulative of each other; cumulative SNQs will be deemed to constitute a single SNQ.

4. The patent examiner may select one or more representative rejections from among a group of adopted rejections. For each SNQ for which reexamination is granted, the examiner will identify each of the Requester’s proposed rejections as either “adopted” or “not adopted.” Where multiple rejections are adopted against a single claim, the
examiner may select one or more “representative” rejections from the group of adopted rejections. If the Patent Owner subsequently overcomes the representative rejections of a claim, then the examiner will consider whether any other rejection within the group overcomes the deficiency of the representative rejections, and will do so prior to confirming the patentability of that claim.

5. Requester’s declaration and other evidence will be mainly limited to the request.

6. Patent owner’s amendments and evidence will be mainly limited to the First Action response. This proposed change is intended to encourage compact prosecution by ensuring that the Patent Owner’s amendments and evidence (including declarations, affidavits, and test data) are presented early in reexamination. Amendments filed after a Final Office Action would only be admitted to (1) cancel claims, (2) rewrite dependent claims into independent form, (3) comply with requirements or suggestions set forth in a final Office action, or (4) respond to any new ground of rejection designated in an examiner’s answer or Board decision.

7. Claim amendments will not be entered unless accompanied by a statement explaining how the proposed new claim language renders the claims patentable in light of an SNQ.

8. Petitions practice will become more clearly defined. The Patent Office has created a table that identifies what would be petitionable and what would be capable of being opposed. For example, one could petition under Rule 1.183 for an extension of time to file a notice of appeal or brief on appeal by any part in inter partes reexam, but such a petition would not be opposable.

Proposed Changes Specific to Ex Parte Reexamination

1. Make permanent the pilot that allows the patent owner to optionally waive the patent owner’s statement.

2. Where the patent owner does not waive the statement, the Order Granting Reexamination will include a provisional First Action on the Merits, which may be made Final in the next action.

Proposed Changes Specific to Inter Partes Reexamination

1. Third party requester may dispute the examiner’s designation that a rejection is “representative” of other rejections in the group.

2. Final Office Action closes prosecution and triggers appeal rights.

Specific Questions USPTO Seeks Comment On

The USPTO is inviting comments on the proposed changes, as well as to the specific questions below:

1. Should the USPTO proceed with any efforts to streamline the procedures governing ex parte and/or inter partes reexamination proceedings?

2. Should the USPTO place word limits on requests for ex parte and/or inter partes reexamination?

3. Should the USPTO revise its existing page or word limits in inter partes reexamination following the request?

4. Should the USPTO place any limitation or criteria on the addition of new claims by a Patent Owner in reexamination? If so, what kind of limitation or criteria?

5. Should the USPTO change its interpretation of “a substantial new question of patentability” to require something more than “a substantial likelihood that a reasonable examiner would consider the prior art patent or printed publication important in deciding whether or not the claim is patentable”? See MPEP Sec. Sec. 2242, 2642. If so, how should it be interpreted?

6. How much time should Patent Owners and Third Party Requesters ordinarily be given to submit a statement, response, or appeal where the time for filing the statement, response, or appeal is set by the USPTO rather than by statute?

7. Under what conditions should the USPTO grant a Patent Owner’s request for an extension of time under 37 CFR 1.550(c) or 1.956, both of which provide that extensions of time may only be granted for “sufficient cause and for a reasonable time specified”?

8. Should the USPTO require that any information disclosure statement (IDS) filed by a Patent Owner in a reexamination comply with provisions analogous to 37 CFR 1.97 and 1.98, and further require that any IDS filed after a Notice of Intent to Issue a Reexamination Certificate (NIRC) or notice of appeal be accompanied by: (1) an explanation of why the information submitted could not have been submitted earlier, and (2) an explanation of the relevance of the information with regard to the claimed invention?

9. Under what conditions should a reexamination proceeding be merged with another reexamination or reissue proceeding?

10. What relief can and should be given to a Third Party Requester that shows that it did not receive a Patent Owner’s statement or response within a certain number of days after the date listed on the Patent Owner’s certificate of service? How many days and what kind of showing should be required?

11. Should the USPTO encourage and/or require that all correspondence in reexamination proceedings be conducted electronically (e.g., e-filing parties’ documents, e-mailing notices of Office actions and certificates)?

12. Should reexamination proceedings remain with the Board in cases where the Board has entered a new ground of rejection on appeal and the Patent Owner seeks to introduce new evidence and amendments? In particular, is it more efficient for three administrative patent judges or a single examiner to decide issues involving new evidence and amendments?

13. What other changes can and should the USPTO make in order to streamline reexamination proceedings?

Public input on additional ways to streamline reexamination proceedings is also welcome. The Federal Register Notice says that written comments must be submitted by June 29, 2011. There will be a public meeting at USPTO Headquarters in Alexandria, Va., on June 1 at 1:30 p.m., and those interested in attending must register by 5 p.m. EDT May 11, 2011.


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Join the Discussion

8 comments so far.

  • [Avatar for Cuckoo]
    May 24, 2011 02:55 pm

    You meant “last rites” not “last rights”! (paragraph 3)

  • [Avatar for patent enforcement]
    patent enforcement
    May 2, 2011 09:11 pm

    Interesting that, since the House version of the bill started circulating, the pending patent reform legislation has plummeted in popularity, so much so that it could now be doomed. Patent reform may indeed be a pipe dream, after all…which likely comes as a relief to some.

  • [Avatar for Paul F. Morgan]
    Paul F. Morgan
    April 27, 2011 10:33 am

    There is not anything in this PTO FR Notice to suggest patent reform legislation is dead. Rather, it specifically states that if that legislation is enacted, normal ex parte reexamination would remain unchanged and there will also be an extensive transitional time period before [the 4] new reexaminations changes and additions go into effect, thus needing improvements in current reexam practice now. [There is no question that too many reexaminations have been pending far too long to achieve the “special dispatch” required by the reexamination statute and the Congressional intent to reduce or avoid litigation by getting timely-filed reexaminations finished BEFORE trials.]

  • [Avatar for Blind Dogma]
    Blind Dogma
    April 27, 2011 10:26 am

    If the requestor were required to prove the patent invalid, you would not have a “reexam”, but rather, a third party exam.

    Would such a “third party exam” even be legal, given the mandate that it is the government that is requred to perform the examination? Would such third party examiners be required to “play by the rules” of examination?

    In a sense, the system you indicate already exists (it is called the court system). Something is indeed backwards, I just don’t think it is the present practice.

  • [Avatar for justcause]
    April 27, 2011 09:25 am

    “Truthfully, I think patent reform is in severe jeopardy.”

    ding-dong, the witch is dead…we hope

    “new procedures are aimed at reducing the time it takes to resolve disputes between patent owners and the public ”

    As presently conducted, reexams are not a dispute between owners and the public but rather between owners and the PTO. The present practice is backwards. Rather, it should be the burden of the requestor to prove the patent is invalid, not the Office. That way the Office can be more neutral. It would also save much time and resources for the PTO. But of course all this makes to much sense for the present management.

  • [Avatar for Ernie Beffel]
    Ernie Beffel
    April 27, 2011 09:22 am

    Commissioner Stoll explained the reexam initiative when he spoke in San Francisco in mid-April at SFIPLA. He said that he considered the pending reexam cases among some of the most important in the Office. Pre-budget crisis, he planned to expand the CRU substantially and supplement the CRU ranks with detailees. Processes would be streamlined and delay reduced. Neil Smith asked about the process and concluding reexams in a more reasonable time, which prompted the Commissioner’s remarks.
    IMHO, this is part of the PTO’s continuing effort to improve its processes, looking at a level of detail that Congress expects the PTO to handle.

  • [Avatar for Bemused]
    April 27, 2011 06:58 am

    The best revision that could be impledment to reexamination practice is to impose deadlines on when the examiner must respond to the patent holder’s briefs. I personally know of one ex parte reexamination where the patent holder filed an appeal brief in January 2010 (i.e. get the final CRU rejection up to the BPAI for further adjudication) and more than one year later the examiner has yet to file a response. There is no timeline on when the examiner has to file (if ever) a response. Impose response deadlines on the examiners and I’d strongly suspect that we’d all be surprised on how quickly things will start moving in the reexamination area.

  • [Avatar for Dave Korpi]
    Dave Korpi
    April 26, 2011 11:38 pm

    If nothing else it is nice that the USPTO seeks input.
    Anything that can be done to streamline the process will be good as long as it does not harm the quality of the review process.