USPTO Patent Reexamination Process Is Flawed, Think Tank Says10/06/2008 by Dugie Standeford for Intellectual Property Watch 1 CommentShare this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)Much of our best content is available only to IP Watch subscribers. We are a non-profit independent news service, and subscribing to our service helps support our goals of bringing more transparency to global IP and innovation policies. To access all of our content, please subscribe now.By Dugie Standeford for Intellectual Property Watch A United States Patent and Trademark Office procedure for third-party patent challenges is in turmoil and needs rethinking, an investigation by an independent think tank has found. Though few in number so far, inter partes reexaminations are increasingly used in conjunction with, rather than as an intended replacement for, patent infringement litigation. On top of that, the USPTO is taking years to resolve the cases, leaving business plans in disarray.The USPTO said it is working to cut delays in the system.The report [pdf] marked the launch of the Institute for Progress, which bills itself as an independent think tank seeking to provide insight and analysis about the role of intellectual property in promoting “the progress of science and the useful arts.” One of its fellows, Kevin Rivette, is the chairman of the USPTO’s Patent Public Advisory Committee. Other fellows have not yet been named.“Misleading” StatisticsInter partes reexamination was created by US law as a “less expensive and speedier alternative to decide patent validity concerns,” the report said. It allows third parties unconnected to a particular patent dispute to ask the USPTO to review the validity of the patent. Although there has been much debate over the US patent system in connection with patent reform efforts, reexamination has received “relatively little attention,” it said. Several trends, however, suggest it is time to revisit reexamination, the report said.Requests for inter partes reexamination have jumped six-fold, from 24 in 2003 to 142 last year, the institute said. From the first request, in 2001, through mid-April 2008, there have been 396 inter-partes requests, it said. The increase appears to result from the growing use of the procedure as an integral part of litigation strategy by defendants or potential defendants in lawsuits, it said.The report cited a case involving Microsoft and Avistar as “a particularly telling example.” After six months of licensing talks, Microsoft requested reexamination of 24 of Avistar’s 29 US patents. Although Avistar’s key patents had already survived two major lawsuits, Microsoft’s actions “have delayed its licensing program and placed the company into financial distress resulting in a 25 percent reduction in its US and European workforce,” the report said.Some courts stay patent litigation pending reexamination results, but the lack of information about the reexamination process itself makes it difficult for judges to decide whether to stay a case or not. The uncertainty can “strongly influence litigation strategy,” the report noted.Using USPTO data to track the process and timeline for every inter partes reexamination, the institute found that essentially all requests are granted although the standard requires that the requester show “a significant new question” of patentability. It also discovered that one quarter of all inter partes reexamination decisions are appealed, but none has ever made it to the end of the appeal process.The most damaging finding concerned USPTO pendency statistics. As of December 2007, the agency said the average time from filing date to certificate issue date was 28.5 months. But the report called the statistic “misleading,” saying its research showed average pendency for an un-appealed inter partes reexamination is actually more than 3.5 years, and at least 6.5 years for an appealed reexamination.Patent law requires that reexaminations be handled with “special dispatch,” the report said. Although the USPTO has set a target of 24 months to handle such cases, the actual time is far beyond it, raising serious doubts about the efficient administration of justice in the US patent system, the report said.Business ImpactWhat does this leave patent holders embroiled in an inter partes reexamination?Any time the validity of a patent is clouded, whether through litigation or a reexamination, it disrupts business, said William Smith, of counsel to Woodcock Washburn and a former administration patent judge at the Board of Patent Appeals and Interferences.Everyone thought reexaminations would mean faster resolution of patent grant challenges but that has not been the case, Smith told Intellectual Property Watch. To shorten the timelines, the USPTO in 2005 created the Central Reexamination Unit to which all reexamination requests are now assigned, he said. Even that does not seem to be working, he said.Another disturbing development is the growing tendency of alleged infringers to view reexamination as just another piece of litigation strategy, Smith said. Some may use the process to counter a perceived bad position in an infringement lawsuit, others as a “belt and suspenders” (all-encompassing) way to reinforce a perceived litigation advantage, he said. But no one benefits from patent challenges dragging on for years, he said; parties with business interests want to make business decisions.USPTO Eyes ChangesThe nature of inter partes reexaminations gives third parties greater participation in the process, said Marian Knode, who oversees the USPTO’s Central Reexamination Unit. “The back and forth filing of papers and responses to papers complicates and lengthens the process,” she told Intellectual Property Watch.To deal with the problem, the agency is boosting the number of senior staff assigned to the unit to handle such requests, and also is developing better management information systems and analysing the process to identify areas where the process can be made more efficient, Knode said.The USPTO also advocates the statutory creation of a post grant opposition process that would be conducted more like a judicial proceeding that an examination proceeding, Knode said. Both parties would set out their cases upfront in their entirety for consideration by an administrative judge. “This would lead to fewer delays and a speedier resolution of the case,” she said.Another practical alternative would be to allow the Board of Patent Appeals and Interferences to conduct reexaminations as well, Smith said. Board judges have a proven track record of keeping contested proceedings on schedule and also have specialised training, he said.“There is no way to read” the report to reach “any conclusion other than that the PTO has grossly mismanaged reexamination,” Foley & Lardner patent attorney Harold Wegner wrote in an email message. He urged the agency to “promptly provide whatever defence it has to this most damning report.”Dugie Standeford may be reached at email@example.com.Share this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)Related"USPTO Patent Reexamination Process Is Flawed, Think Tank Says" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.