Fresenius v. Baxter Related Quiz

SPIN Meetings

July 22 & July 23, 2013


By Tatsuo YABE


Effect of Reexamination (PTO Proceeding) on Judgment of Court:


Fresenius U.S.A. v. Baxter Intfl Inc.

Fed. Cir. July 02, 2013



1. What are the PTO procedures to attack validity of U.S. Patent?


-          Ex-Parte Reexamination;

-          Inter-Partes Review;

-          Post Grant Proceeding (for Business Model and other technology patents);


1A.  Can you file a request of reexamination based on the prior art that was already reviewed by the examiner during the original examination (the examiner found claims patentable over the prior art)?


Based on Portola decision (In re Portola: Fed Cir. 1997), the same prior art reference that was reviewed by the examiner during the initial examination can be used against the validity of the patent.  Threshold for the reexamination is if there is SNQ (Substantial New Question of Patentability). The examiner may not have reviewed some more relevant portions in the prior art reference, thus SNQ can be raised if the requester (Challenger) can locate the relevant portions in the prior art reference.


1B. Can you file a request of reexamination based on the prior art that was used during the court proceeding (the court found claims are not invalidated based on the prior art)?


According to In re Swanson (Fed. Cir. 2007), it would be possible to file a request of reexamination based on the same prior art reference.  The standard of proof in order to attack validity of claims during the court proceeding is gC&C evidence STDh whereas that is gPreponderous evidence STDh (lower than C&C evidence STD) during the PTO proceeding.  Thus, the issues are different, i.e., effectiveness of the prior art reference to invalidate claims by PTO proceeding is different from that during the court proceeding.


2. Can you file a lawsuit to attack someonefs patent at Federal District Court?


The procedure to attack validity of someonefs Patent is called a declaratory judgment action (DJ-Action).


3. What is a DJ Action?


DJ Action is a court procedure in that a challenger asks the court to determine the invalidity of claims in question, non-infringement of claims or unenforceability of patent.


4. Under what conditions can a party file a DJ Action?


The challenger must be put into a condition that he/she will be likely sued by patentee unless he/she does something. In other words, there must exist a substantial controversy of sufficient immediacy and reality. For instance, you cannot simply file a DJ Action to check and see validity of someonefs patent without any causes.  For instance, in order to be a DJ-Action plaintiff, you probably need to receive a strongly worded warning letter, i.e., use of the words such as infringement and possible lawsuits.


5.  How about a licensee of the Patent?  Can the licensee file a DJ Action while maintaining licensor-licensee agreement?

Yes, in light of MedImmune (U.S. Sup Ct. 2007), the licensee can file a DJ Action without breaking a license agreement.


6. Which procedure is easier to invalidate the Patent?  Art. III procedure or Art. II procedure?


Art. II procedure (PTO Procedure).


7.  Why is it known to be easier to invalidate the patent in Art. II (PTOfs) procedure?


There are several reasons, that are:


-       Standard of proof invalidity in PTO procedure is lower than that during the court proceeding (i.e., Preponderous evidence v. C&C evidence);

-       In PTO Proceeding, scope of claim is interpreted as a broadest reasonable interpretation STD whereas that is done by Markman Hearing.  The broader the scope of claim interpretation is, the easier to find the relevant prior art references.

-       PTO procedure is still much less expensive that that during the court proceeding.

-       Re-exam could be slow proceeding, but IPR and PGR are rocket-dockets proceedins, i.e., unless there exists proper convincing reasons, IPR (or PGR) procedure must end within a year according to the statutes in AIA.

-       The PTOfs final decision (when it invalidates claims and Fed. Cir. affirms the decision) binds any subsequent proceeding.


8. Can you file a request of reexamination after you are brought to an infringement court proceeding?


Yes, concurrent procedures (one is at PTO and the other is at court) are common. In fact, many of IPR proceedings at PTAB (PTO) under AIA were commenced by the accused infringers during the court proceedings.


9. If the results (PTOfs decision & Court Judgment) are not in agreement, which one trumps the other?


In general, the invalidity decision by PTO (final: when affirmed by Fed Cir) trumps the decision by the court.  On the other hand, although it is unlikely that the validity decision by PTO (final decision: when affirmed by Fed Cir) does not trump the invalidity decision by the court.  However, the invalidity decision by the court only binds the parties in the court proceeding.  It is called gres-judicateh.


10.  Under what condition, PTOfs decision trumps the Court Judgment?


As long as the court proceeding is still pending (not yet gfinalh), the invalidity decision by the PTO trumps the court decision (see Freseinus v. Baxter: July 02, 2013). 


11. What is the definition of gfinalh in the court decision in light of Freseinus v. Baxter?


gFinalityh in this context is the stage of the litigation where all the issues have been decided, which leaves only execution of judgment.


12.  What will happen when the patent in question is completely invalidated by reexamination at PTO, well after the final court decision (damages for infringement of the patent)?


As long as the court judgment is final, even though the US Patent in question is later invalidated, a defendant of the earlier court proceeding must execute the final judgment of the court.  In other words, the former infringer must execute the damages for infringement of invalidated patent.  That is to say that the timing to file a request of PTO procedure is important.  It is likely that the court will stay till the PTOfs decision issues thus the timing of commencement of the concurrent PTO proceeding during the court proceeding should not be a problem.  However, as viewed in timeline of Freseinus v. Baxter (July 2013), sometimes, the court may exercise its discretion not to stay even after the commencement of the PTO proceeding.  In fact, this case (Freseinus v. Baxter) could have gone either way because the stage of the court proceeding was so close to the final when the Fed. Cir. affirmed the PTOfs decision of invalidity of claims in question.