USPTO Report on Inter Partes Reexamination Seeks Broader Post-Grant Review Power

The American Inventors Protection Act (AIPA) of 1999 required the United States Patent and Trademark Office (USPTO) to "submit to the Congress a report evaluating whether the inter partes reexamination proceedings established under the amendments made by this subtitle are inequitable to any of the parties in interest and, if so, the report shall contain recommendations for changes to the amendments made by this subtitle to remove such inequity." The USPTO issued its report on December 17, 2004 recommending that the Patent Act be amended in three areas to improve inter partes reexamination by:

• Clarifying the inter partes reexamination estoppel provisions.
• Permitting the requester of an inter partes reexamination additional opportunities to provide input as to Office actions.
• Extending the requester’s statutory 30-day period for comment after the patent owner responds to an Office action, or to permit the USPTO Director to set the period for comment by rule.

Although the USPTO’s post-grant review role in the patent system has grown, according to the report "none of these post-grant review procedures alone, or collectively, has proven sufficient to optimize the USPTO’s post-grant review capability." The introduction of inter partes reexamination practice had a negligible effect on the number of ex parte reexaminations filed:

Internal reviews and customer roundtables led the USPTO to identify the following seven areas of "systematic unfairness":

1. The most-frequently identified inequity was the high risk of estoppel attaching to a third-party requester with regard to all issues which were raised or “could have been raised� during the inter partes reexamination proceeding, except for “newly discovered prior art unavailable to the third-party requester.� The statute thus leaves open whether prior art that was not discovered in a search performed by the third party will be deemed prior art that was “unavailable� or “not known,� or if the “unavailable� standard only applies to prior art that was not published at the time the inter partes reexamination request was filed.
2. It may be desirable to permit the requester to present input on Office actions even if the patent owner fails to respond so as not to precluded from presenting input on the Office actions until the appeal stage of the inter partes reexamination proceeding.
3. The requirement that a third-party requester submit comments within 30 days after the date of service of the patent owner's response may pose an undue burden because, in its haste to prepare comments within that period, the requester may inadvertently not adequately raise an issue and would then be estopped from later raising the issue that was not adequately raised.
4. A reexamination requester’s challenge to a patent is limited to prior art patents and printed publications. "To address this shortcoming of inter partes reexamination, a proposed post-grant review process for validity-related issues which include, in addition to prior art issues, those of enablement, written description, and prior use or sale. With an effective post-grant review process in place, all validity-related issues could be addressed during a time period at the beginning of a patent's term where third parties may request a Post-Grant Review of the patent. If this comes about, inter partes reexamination would become a more effective vehicle for addressing the fact that new relevant prior art patents and printed publications can very well surface at any time during a patent's life. Accordingly, the USPTO does not support expanding the grounds of challenging the validity of a patent in the reexamination process beyond prior art patents and printed publications, since such issues should be resolvable at the front end of the patent's term via the proposed Post-Grant Review process."
5. A small entity fee for inter partes reexaminationcould encourage more small entities to file inter partes reexaminations. The internal cost associated with processing and acting on inter partes reexaminations is already greater than the fee charged for handling the processing and examination of a reexamination proceeding.
6. The legislation was not made retroactive to applications filed before November 29, 1999; therefore, inter partes reexamination cannot be used to challenge most patents that are currently in effect.
7. Prior to May of 2004, a third party could achieve an alternative to inter partes reexamination not having any attachment of estoppel (which exists for inter partes reexamination, but not for ex parte reexamination) by filing multiple, sequential reexamination requests based on the same substantial new question of patentability as the original request. To address this inequity, the Office amended § 2240 of the Manual of Patent Examining Procedure in May 2004 whereby the same prior art may be used to start a second reexamination during the pendency of the first reexamination "only if the prior art cited raises a substantial new question of patentability which is different than that raised in the pending reexamination proceeding." In addition, a proposed rule package currently under development would implement, by regulation, this policy change. It is too soon to evaluate the effects of this change made by the USPTO.

In response to these inequities, the USPTO made three recommendations:

"[First t]he USPTO recommends retaining, in some form, an estoppel provision for inter partes reexamination. With an effective Post-Grant Review process in place, inter partes reexamination requests would only be appropriate for parties in limited circumstances; for example, that have discovered prior art outside the time period for requesting reconsideration under the Post-Grant Review process. It is therefore essential to place an estoppel provision with a high burden on third parties requesting inter partes reexamination in order to avoid requests intended to stall or hinder the development of a patentee’s invention late in a patent's life.

However, the current estoppel provisions do require further clarification of the requirement for third parties to raise all issues that “could have been raised� except for new prior art that was “unavailable.� Accordingly, the USPTO recommends that Congress further define the extent and nature of the estoppel risks imposed upon third parties requesting inter partes reexamination of a patent.

"The USPTO [also] recommends that Congress amend current inter partes reexamination practice to permit the third-party requester to present input on Office actions even if the patent owner fails to respond. This amendment would provide an independent right to the requester to comment once for each Office action generated by the USPTO.

[Finally] the USPTO recommends that Congress extend the third-party requester’s comment period to be more than 30 days, or alternatively, to authorize the Director of the USPTO to set the period for response by rule.