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Supplemental Examination: Potential Benefits vs. Guaranteed Risks

Aaron V. Gin, Ph.D.Eric R. MoranSummer 2016 (snippets)

The America Invents Act of 2011 introduced supplemental examination of patents as a post-grant process intended to limit expensive and unpredictable inequitable conduct litigation[1] and improve patent quality.[2] As codified, 35 U.S.C. § 257(c)(1) states:

A patent shall not be held unenforceable on the basis of conduct relating to information that had not been considered, was inadequately considered, or was incorrect in a prior examination of the patent if the information was considered, reconsidered, or corrected during a supplemental examination of the patent.[3]

The statute allows the owner of an issued patent to provide to the U.S. Patent and Trademark Office (“USPTO” or “Office”) items of information (e.g., patents, publications, or other materials) that were not previously considered in an effort to “inoculate” itself against future charges of inequitable conduct and build a stronger case for validity.

For all of its potential benefits, however, supplemental examination may also introduce new risks and uncertainties. By analyzing USPTO data about the number of requests, the pendency of proceedings, and the frequency of finding a substantial new question of patentability (“SNQP”), this article seeks to identify trends that will help patent owners thoughtfully weigh the risks and rewards of supplemental examination.[4]

The Procedure

A supplemental examination requires a patent examiner to make a threshold determination as to whether a new item of information raises an SNQP. A new item will raise an SNQP if, “a reasonable examiner would consider the prior art, patent, or printed publication important in deciding whether or not the claim is patentable.”[5] If the examiner determines that the new material raises an SNQP, the examiner orders an ex parte reexamination to determine if the patent remains valid.[6] If an SNQP is not found or the patent is deemed valid upon reexamination, the patent is protected from allegations of inequitable conduct as to the information considered during the supplemental examination.

Those considering supplemental examination should note that rejections of the request itself are commonplace, and likely due to non-compliance with USPTO requirements. Since the USPTO began accepting applications for supplemental examination on September 16, 2012, approximately 29% have not received a filing date, as illustrated in Figure 1.[7] Accordingly, patent holders interested in supplemental examination should understand what is required to submit a proper request.

 

Figure 1: Supplemental Examinations by Year and Discipline.[8]

To comply with regulations, a supplemental examination must be filed by an owner having the entire right, title, and interest in the patent and should include the following elements:[9]

a)     An identification of the patent for which supplemental examination is requested;

b)     A list of the items of information that are requested to be considered, reconsidered, or corrected;

c)     A list identifying any other prior or concurrent post-patent Office proceedings;

d)     An identification of each claim of the patent for which supplemental examination is requested;

e)     A separate, detailed explanation of the relevance and manner of applying each item of information to each claim of the patent for which supplemental examination is requested;

f)      A copy of the patent for which supplemental examination is requested;

g)     A copy of each item of information;

h)     A summary of the relevant portions of any submitted document over 50 pages in length;

i)      An identification of the owner(s) of the entire right, title, and interest in the patent requested to be examined; and

j)      The supplemental examination fee of $16,500 (if an SNQP is not found, the USPTO will refund $12,100).[10]

If a request for supplemental examination lacks one or more of these elements, the Office may deem the request non-compliant and require the patent owner to file a corrected request. The patent owner will have a specified period (“generally 15 days”) to file the corrected request.[11] The corrected request must address each and every identified defect. If the corrected request is deemed proper by the Office, the filing date of the supplemental examination request will be the receipt date of the corrected request.[12]

Absent “extraordinary circumstances,” the patent owner will only have one opportunity to correct the original request.[13] If a proper corrected request is not filed or not timely received, the Office will not grant the request for supplemental examination and will terminate the proceedings.[14]

While the opportunity to file a corrected request may exist, requesters are advised to file a proper request for supplemental examination on the first-filing. An improperly filed request may add months to the examination process and will result in the loss of the date of original deposit as a filing date.[15]

Within three months of the filing date of a proper request, a patent examiner will conduct the supplemental examination and issue a certificate indicating whether the information presented in the request raises an SNQP.[16] If so, the USPTO will order an ex parte reexamination of the patent, which need not be limited to patents and printed publications. By statute, the patent owner may not file a statement about any of the SNQPs or an amendment to the patent claims until after the first action on the merits.[17] If an SNQP is not found or a reexamination certificate is issued, the patent can no longer be deemed unenforceable due to inequitable conduct with respect to the identified items of information.

A significant number of supplemental examinations result in an SNQP, however. As shown in Figure 2, over the first three years, approximately 70% of all accepted applications were deemed to raise at least one SNQP.[18] Therefore, patent owners must determine if the benefits of “immunity” outweigh the potential for invalidity.

Figure 2: Rates of Finding a Substantial New Question in Supplemental Examination, By Year.[19]

Finally, as illustrated in Table 1, the USPTO required approximately 12 months, on average, to complete a supplemental examination.[20] Since this timeframe includes requests that raised an SNQP as well as those that did not, the actual amount of time for receiving a final certificate may vary considerably. If an SNQP is not found, a final certificate may be obtained within a few months, directly after the Examiner reports the result. However, if an SNQP is found, an ex parte reexamination will be required.[21] In fiscal year 2015, the USPTO required approximately 25 months, on average, to issue an ex parte reexamination certificate.[22] Therefore, in some cases, the entire process may require more than 2 years to complete.

Table 1: Pendency of Supplemental Examination (SE) Proceedings by Year.[23]

 

Impact on Inequitable Conduct

As stated above, 35 U.S.C. § 257(c) mandates that a patent cannot be held unenforceable in litigation based on information considered, reconsidered, or corrected during a supplemental examination.[24] Such protection is unique to supplemental examination, as neither ex parte reexamination nor inter partes review grant immunity to successful patent owners.[25] Accordingly, supplemental examination may provide a useful means of preventing inequitable conduct allegations after a patent has been issued.

However, immunity takes effect only upon conclusion of the supplemental examination proceeding. As a result, supplemental examination cannot be used to defend against an allegation of inequitable conduct that has been raised in litigation with regard to an item of information submitted in a still-pending supplemental examination.[26]

Consequently, given the length of supplemental examination proceedings, it may be possible for an adverse party to learn of a supplemental examination during litigation proceedings and raise new allegations of inequitable conduct based on references listed in the supplemental examination.[27] Through either litigation discovery or by searching USPTO records, the adverse party may obtain access to the items of information and remarks filed with the request for supplemental examination. Under such a scenario, if new allegations are raised before the close of the supplemental examination proceeding, the requester may lose the benefit of 35 U.S.C. § 257(c)(1) protection with regard to those new allegations. Accordingly, a patent owner should carefully weigh the possibility of allegations of inequitable conduct in pending litigation against the benefits of future immunity.

Conclusion

With only three years of data, it may be difficult to discern the long-term impact of supplemental examination on patent litigation and prosecution. However, the increasing number of requests suggests a growing interest in the procedure in these first few years. It is evident that the potential benefits of supplemental examination should be weighed carefully against the risks. Specifically a patent owner should:

1.     Determine whether the risk of finding an SNQP is worth the potential benefit of immunity;

2.     Determine whether the length of supplemental examination proceedings introduces an undue risk of inequitable conduct allegations being brought in pending litigation; and

3.     Ensure that all elements of the request for supplemental examination are meticulously completed so as to reduce the risk of rejection.

By considering these factors and their associated risks, one can best utilize this new post grant process.



[1]157 Cong. Rec. S5319 (daily ed. Sept. 6, 2011) (statement of Sen. Kyle) (“[E]ven minor and inadvertent errors in the patent application process can lead to expensive and very unpredictable . . . inequitable conduct litigation.”).

[2]157 Cong. Rec. S1097 (daily ed. Mar. 2, 2011) (statement of Sen. Hatch) (“This process enhances the quality of patents, thereby promoting greater certainty for patentees and the public.”).

[3] 35 U.S.C. § 257(c)(1) (2014).

[4] U.S. Patent and Trademark Office, Performance and Accountability Report Fiscal Year 2015 (2015), http://www.uspto.gov/sites/default/files/documents/USPTOFY15PAR.pdf; U.S. Patent and Trademark Office, Reexamination Operational Statistics (2015), http://www.uspto.gov/sites/default/files/documents/
Website_Operational_Statistics.pdf
.

[5] M.P.E.P. § 2242.

[6] 35 U.S.C. § 257(a).

[7] U.S. Patent and Trademark Office, Performance and Accountability Report Fiscal Year 2015 (2015), http://www.uspto.gov/sites/default/files/
documents/USPTOFY15PAR.pdf
.

[8] See id.

[9] 37 C.F.R. §§ 1.601(a)-1.601(b).

[10] 37 C.F.R. § 1.610(b); U.S. Patent and Trademark Office, http://www.uspto.gov/learning-and-resources/
fees-and-payment/uspto-fee-schedule
(last visited July 8, 2016).

[11] M.P.E.P. § 2812.03.

[12] Id.

[13] Id. at § 2812.04.

[14] Id.

[15] Id. at § 2812.02.

[16] 35 U.S.C. § 257(a).

[17] Id. at § 257(b); M.P.E.P. § 2823(2).

[18] U.S. Patent and Trademark Office, Performance and Accountability Report Fiscal Year 2015 (2015), http://www.uspto.gov/sites/default/files/documents/USPTOFY15PAR.pdf.

[19] See id.

[20] U.S. Patent and Trademark Office, Reexamination Operational Statistics (2015), http://www.uspto.gov/sites/default/files/documents/Website_Operational_Statistics.pdf.

[21] 35 U.S.C. § 257(a).

[22] U.S. Patent and Trademark Office, Reexamination Operational Statistics (2015), http://www.uspto.gov/sites/default/files/documents/Website_Operational_Statistics.pdf.

[23] See id.; In Table 1, FAOM is an abbreviation for First Action on the Merits, NIRC is an abbreviation for Notice of Intent to Issue a Reexamination Certificate, and EP is an abbreviation for ex parte.

[24] 35 U.S.C. § 257(c)(1).

[25] Merely citing a previously undisclosed reference in an ex parte reexamination request does not make a reference “immaterial.” Furthermore, even where two reexamination proceedings of a patent resulted in certificates and a finding that the claims were patentable as amended, a court may still make an adverse inference of intent to deceive. Ohio Willow Wood Co. v. Alps S., LLC, 813 F.3d 1350 (Fed. Cir. 2016).

[26] 35 U.S.C. § 257(c)(2)(B).

[27] M.P.E.P. § 2803.02 (“After a filing date has been accorded the request, supplemental examination files are open to inspection by the general public.”)

 

 

Sanat Bhole was a 2016 summer associate at MBHB.

 

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