Reexaminations Offer Alternative to Patent Litigation

Reexaminations Offer Alternative to Patent Litigation

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Litigation can be a costly and time-consuming approach to solving a legal dispute. But in the arena of intellectual property law, an alternative method for challenging a patent—known as reexamination—is garnering more attention and use, at times proving to be more cost- and time-efficient for the parties involved.

“With many patent litigation proceedings starting at $5 million, and increasing from there, it’s an expensive process that is often drawn out, and as a defendant, you don’t really get anything out of it,” says WilmerHale partner Wendy Verlander, who co-chairs the firm’s IP litigation alternatives practice with partner Emily Whelan.

For many years, the United States Patent and Trademark Office (USPTO) has had a procedure to reexamine patents, offering parties an alternative to costly litigation. During the past several years, however, the USPTO has seen an increase in these requests. Given the current state of the economy those numbers are sure to continue to climb.

“The benefits of seeking a reexamination are, assuming you’ve done your homework, that it’s a very inexpensive way to cause the patentee to possibly lose his or her patent, or have some amendment to the claims happen,” says WilmerHale partner Jane Love, co-vice chair of the firm’s Intellectual Property Department. She adds that reexaminations are a way for a defendant, a party being sued, to take control of the situation for a relatively low cost—on the order of tens or hundreds of thousands of dollars, not millions.
The downside, according to Love, is that you don’t necessarily know where you’re going to end up, though USPTO data shows that, to date, over 6,600 ex parte reexamination certificates have been issued.

In an ex parte reexamation proceeding, any person (including the patentee) can request the USPTO to take another look at the patentability of the patent. The reasons for the request can include newly discovered prior art or a change in the law that makes already known prior art more important to patentability. From there, the only participants are typically the patent holder and the patent examiner. The ex parte process essentially allows the filing party one chance to make its case. Ex parte reexaminations are relatively inexpensive, often ranging from $20,000 to $50,000, according to Verlander.

At times, patent owners will seek reexamination if they uncover a weakness in their patent. But in most instances, it is a party concerned about patent infringement that will file a reexamination request, in the hope of knocking out the patent altogether. However, Love cautions, “in the course of reexamination, a patent holder may change the claims of the patent in such a way as to fix the problem that was the basis for the reexamination request. So there’s a risk that the patent will come out stronger.”

Another alternative is inter partes reexamination, a procedure where two parties dispute the validity of a patent without spending the money required in a litigation. An inter partes reexamination request is not filed by the patent holder, but rather by a third party, and that third party is involved in every step of the proceeding. Verlander says that while inter partes proceedings are more expensive than ex parte, the filing party has far more control, like a miniature version of a litigation.

Inter partes reexaminations have not seen the same level of popularity as their ex parte counterparts, and come with a caveat: “If you decide to go down that road and you get a decision, you are estopped, meaning you are not able to do something later that you could have done in the inter partes reexamination,” says Love. “If there’s some issue that you could have raised in that inter partes reexamination, you’re not permitted to raise it later. You’re in a proceeding that’s a little more limiting than a litigation; you’re spending less money, but you may not be digging as deep.”

That is perhaps why a lot of people are afraid to go there, explains Love. “Sometimes the dispute centers on a product that is the core of a business. That business would rather spend a lot more money on litigation, where you’re really vetting everything, rather than something a little more limiting in the USPTO, even though it’s much cheaper.”

The bottom line, says Verlander, is that you need to decide what is most important in your particular circumstance. Approximately 60 percent of cases that go into the reexamination process come out with changes to the patent. In the multi-million dollar world of patent litigation, it’s often a worthwhile process to get some of what you want in a more cost-effective manner.

For more information on WilmerHale’s Intellectual Property Department, click here.