DID NTP GET "HOSED" ON THE REEXAMINATION? Yesterday, NTP released a press release, effectively saying that the USPTO took NTP's patents behind a dark alley and thrashed them with rubber hoses. Whatever you think about NTP, they may have a point. Few can deny that the reexamination proceedings, when considered in light of the pending litigation, have a certain alacrity to them on the PTO's side. While the PTO purportedly assigns special examiner teams to "high profile" reexaminations, it's rather amazing that the PTO produced concurrent 111 and 200-page decisions in one month's time from NTP filing responses to each of the Office Actions. And one can't help but wonder if the timing was somehow pre-conceived. Furthermore, regarding the '592 patent, it was unusual to see the USPTO closing prosecution, even though additional prior art was cited in the examiner's rejection.

The perceived transgressions are numerous according to NTP, and include:

(1) The USPTO unilaterally ignored the claim construction of the Federal Circuit. This to me is a big issue. There's scant legal authority that precisely defines how court claim constructions are to be handled by the USPTO during reexamination, and what level of deference must be given. If the USPTO's position in the NTP reexam is correct (i.e. regardless of court rulings, the USPTO is free to apply a "broadest reasonable interpretation" of the claim terms), then it appears that the statutory purpose of reexaminations will eventually be frustrated. Instead of reexams being an alternative to litigation, reexams would now become a supplement to litigation for all defendants, since they all get a free and independent validity ruling on reexam. And since appellate review of PTO decisions are taken under the more deferential standard of "substantial evidence" (see Supreme Court decision In re Zurko), one can envision the possibility of the Federal Circuit being "trumped" by a PTO rejection on a claim they previously held as valid.

(2) Even though NTP prevailed through the Federal Circuit (the Supreme Court denied certiorari), the PTO refused to dismiss the pending inter-partes reexam, claiming that a "final" determination was not yet made on claim validity (see 35 U.S.C. 317(b) here). The rationale given by the PTO was somewhat strange. The denial of NTP's petition essentially stated that, while validity was not an issue in the remanded proceeding, it was "entirely possible" that new claim construction issues could arise in the district court (see 271 blog post here). This begs the question: if the USPTO is not bound to follow court rulings on claim construction, why would they care if a "possibility" existed that the court may take up a different claim interpretation on remand, even though the Federal Circuit has already ruled on the issue?

(3) The USPTO treated NTP "vastly different" for other similarly situated parties. At least one other reexamination proceeding I reviewed tends to support this contention. In reexamination proceeding 95/000093, the defendant requested reexamination after losing at the district court level. While the case was being appealed to the Federal Circuit, the patent holder moved to terminate the proceeding. While the examiner initially refused to terminate the reexamination, the examiner subsequently found that other developments and the pending action before the Federal Circuit was sufficient "good cause" that warranted suspending the reexamination in the PTO. Moreover, the decision indicated that "[a]n affirmance by the Federal Circuit will terminate these inter partes reexamination proceedings based in the estoppel provision of 35 U.S.C. 317(b)" (see "reexam Petition Decision - Granted" dated 11/17/05 here, page 6).

It appears that NTP has many valid beefs over their treatment at the USPTO. And, from an academic standpoint, it will be interesting to see how their arguments will play out at the Federal Circuit (I'm not expecting the BPAI to do anything different from the examiners). And depending on what the Federal Circuit holds, the NTP reexamination appeal could be a watershed for all future reexaminations at the USPTO.