Friday, January 27, 2006

Inter Partes Reexamination

Another possible method for reducing the number of bad patents being issued is to expand the ability for third-parties to participate in patent reexamination (inter partes reexamination). Currently, any third party who has some written prior art reference that would call into question one or more claims of an issued patent can request the PTO to reexamine those claims in light of the prior art reference. Until recently, a third-party requesting reexamination was not involved in the reexamiantion process after the intital request for reexamiantion, and the actual procedure was conducted ex parte between only the patent holder and the PTO.

Congress has since changed the law to allow third-parties to remain involved in the reexamiantion process. In this inter partes reexamination, interested third-parties can make their own arguments and counterarguments to the exmainer questioning the validity of the patent. The third-party also now has the right to appeal an adverse decision up to the Federal Circuit. Moreover, a patent owner cannot expand his claims during reexamination, so there is little risk involved in requesting reexamination.

However, few parties are willing to engage in inter partes reexamiantion because the law as currently written applies a sort of estoppel to prevent the third-party challenger from asserting any defenses or claims in subsequent litigation that were raised or could have been raised during reexamination. Hence, many interested third-parties are fearful that their participation in inter partes reexamination could prevent them from raising important claims or defenses in a subsequent infringement action based on the same patent. Instead, they choose to avoid inter partes reexamination so as not to "tie their hands" in subsequent infringement litigation.

Therefore, a change to the law allowing parties to participate in inter partes reexamination without giving up virtually all of their defenses would encourage more interested parties to challenge the validity of patents through reexamiantion. The benefits include lower litigation costs, validity determinations made by patent examiners who are presumably more experienced in the relevant technology than most judges, and reducing the number of bad patents. Although there are some collateral estoppel concerns involved in such a rule, these could be alleviated by only barring those defenses and claims that were "actually litigated." Thus, the third-party requesting reexamaination at least has some way of knowing which defenses he is actually surrendering. Furthermore, the benefits of defeating "bad" patents probably outweigh the costs of allowing some re-litigation of issues in the future.

This may not be the best solution, but it would at least provide some mechanism for reducing the number of bad patents while using a system that is already established and in-use in the PTO. I'm not sure how this differs from post-grant opposition in Europe...so maybe this proposal isn't any different from what's already on the table???

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