Friday, February 24, 2006

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.

5 Comentários:

Henry T said...

"It appears that NTP has many valid beefs over their treatment at the USPTO."

It appears that I, also, have many beefs with the USPTO over their treatment of NTP. For example, THAT THEY GRANTED THESE INCREDIBLEY SILLY PATENTS IN THE FIRST PLACE.

But point well taken about special treatment -- the USPTO is obviously set up to give preferential treatment to those same special interests that run our Congress and Senate. The fact that NTP's patents are getting special treatment when tons of other terrible patents are sitting there like landmines is a shame. All these bad patents should be treated equally, and all should be equally demolished and invalidated.

Maybe we can just do away with any patent whose claims can be exercised entirely by writing a software program?

Anonymous said...

Call me paranoid, but it seems to me that the fix is in. I see the same invisible hand hosing NTP as proposing the rule changes related to continuations.

Oh and the judge just postponed his ruling on an injuntion.


Some big time lobbying is going on.

Tim B said...

Peter, you're right on the money here. These proceedings with NTP raised my eyebrows as well. The PTO's refusal to follow the FedCir's claim construction is baffling. Are they now going remove all cites to the FedCir from the MPEP and just do what they want (as they are doing in the proposed internal reforms)?

Deene W. Lindsey said...


Do you take requests for follow-up posts? ;-)

*How does a reexamination get started? The media reports make it appear that compaining to the PTO is a "cheap alternative" for an infringer. If a company is accused of infringing a patent, to a layman it seems rather odd that they have the right to complain to the agency that issued the patent in the first place, and to instigate a reexamination. Isn't there a legal presumption of [issued] patent validity?

*Going forward: what is NTP's recourse in court to the PTO's reexamination?

*Most interestingly, if NTP prevailed in prior federal court hearings, whether "final" or "temporary" or whatever, the fact is that a federal court upheld the patents. Quesion: under Marbuy v Madison isn't the executive branch prohbited from countermanding the court's finding? (I really would love to read your coments on this one.)

Anonymous said...

I don't see how 35 USC 317(b) would proscribe a reexamination: that statute specifically allows for reexamination based on prior art not considered at trial. In the NTP case, that would be the Finnish prior art.

By the way, where does one get primary sources for the PTO's rulings and the transcripts of the hearings? I'd like the transcript of the injunction hearing Friday as well as the famous "bad prior art" demo testimony at the district court trial that supposedly derailed RIM's case in the first place.


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