Monday, November 30, 2009

SD Cal.: Evidence Relating to Reexamination Proceedings Excluded Fom Trial

Presidio  Components Inc., v. American Technical Ceramics Corp., No. 08-CV-335 (S.D. Cal., November 13, 2009, order)

During litigation, ATC submitted a request for reexamination to the USPTO, which was subsequently granted.  Soon thereafter, Presidio moved the court to exclude all evidence relating to the reexamination proceedings, arguing that the evidence is irrelevant and not probative of unpatentability.  The district court granted the motion:

Presidio argues persuasively that “the grant by the examiner of a request for reexamination is not probative of unpatentability.” . . . “The grant of a request for reexamination, although surely evidence that the criterion for reexamination has been met (i.e., that a ‘substantial new question of patentability’ has been raised, 35 U.S.C. § 303), does not establish a likelihood of patent invalidity.” . . . On the contrary, although it appears that the USPTO grants about 92% of the requests for reexamination, in only 12% of cases does that reexamination result in all claims being cancelled. . . . There is thus a “substantial likelihood” that, despite the grant of reexamination, the USPTO will uphold the patentability of some or all of Presidio’s claims.

Moreover, even if the reexamination proceedings are somehow relevant on the issues of obviousness or willfulness, they are nevertheless unfairly prejudicial. See FED. R. EVID. 403. As noted above, because the reexamination proceedings before the USPTO are still incomplete and based solely on the evidence provided by ATC in its replacement request for reexamination, there is very little probative value to the grant of reexamination. On the other hand, the prejudicial effect as well as potential for jury confusion is great. Thus, because the prejudicial potential of the evidence “substantially outweigh[s]” any probative value, it should be excluded.
Interestingly, the court granted ATC’s earlier motion to exclude from trial any reference to the “presumption of validity”  based on the reexamination.  The court remarked that "[w]ith any reference of the 'presumption of validity' excluded, allowing the jury to hear about incomplete USPTO proceedings will be unfairly prejudicial to Presidio, and could potentially confuse the jury as to who has what burden throughout the trial."

Read/download a copy of the order here (link)

3 Comentários:

Daniel Ballard, Esq. said...

It would be interesting to know why the patent owner was (previously) precluded from admitting evidence that its patent is presumed valid.

The overlap (if any) of concurrent inquiries into the validity of patents by way of reexamination and litigation confuses me.

As for ex parte reexams, In re Etter is still good law which holds that the presumption of validity afforded to patents does NOT apply during reexamination.

If you marry that with 37 CFR 1.555(b)(2) which states that "[a] prima facie case of unpatentability of a claim pending in a reexamination proceeding is established when the information compels a conclusion that a claim is unpatentable under the preponderance of evidence ... and BEFORE any consideration is given to evidence which may be submitted ..." that should go a long way toward convincing a court that the Patent Office's finding of a “substantial new question of patentability” is enough to burst the presumption of validity.

Smarter folks than I discussed a similar situation at

Anonymous said...

Dan said:
"It would be interesting to know why the patent owner was (previously) precluded from admitting evidence that its patent is presumed valid."

Not really when you look at the underlying motion papers. The defendant wasn't disputing that a presumption of validity attached to an issued patent. It was simply arguing that the plaintiff shouldn't be allowed to argue that the presumption carries actual weight as evidence at trial, because it obviously doesn't. The presumption of validity simply establishes the burden of proof and is not a piece of evidence the plaintiff can present to weigh against the defendant's evidence of invalidity. There's nothing to suggest that the jury wouldn't be properly instructed on the presumption of validity at closing arguments.

A more interesting question is presented if the plaintiff "opens the door" to reexam evidence being admitted at trial. For example, if the plaintiff tries to argue about how great a job the USPTO did in examining the patent, how thorough it was in searching for prior art, or makes any argument beyond simply noting the existence of a presumption, a good argument can be made that the plaintiff opened the door to have reexamination evidence submitted to rebut those arguments.

Daniel Ballard, Esq. said...

Got it, that makes a lot of sense. Thanks for the insight.


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