CAFC in IN RE BAXTER INTERNATIONAL, INC.
Baxter appealed an obviousness finding from a re-examination proceeding. The CAFC noted Because the Board did not err in determining that those claims would have been obvious to one of ordinary skill in the art, we affirm.
From the decision:
First, as recounted above, the Board expressly considered our decision in Fresenius. More fun- damentally, the PTO in reexamination proceedings and the court system in patent infringement actions “take different approaches in determining validity and on the same evidence could quite correctly come to different conclusions.” Swanson, 540 F.3d at 1377 (quoting Ethi-
con, 849 F.2d at 1428). In particular, a challenger that attacks the validity of patent claims in civil litigation has a statutory burden to prove invalidity by clear and con- vincing evidence. Id. (citing 35 U.S.C. § 282); see also Microsoft Corp. v. i4i Ltd., 131 S. Ct. 2238, 2242 (2011). Should the challenger fail to meet that burden, the court will not find the patent “valid,” only that “the patent challenger did not carry the ‘burden of establishing inva- lidity in the particular case before the court.’” Swanson, 540 F.3d at 1377 (quoting Ethicon, 849 F.2d at 1429 n.3 (internal citations omitted)). In contrast, in PTO reex- aminations “the standard of proof—a preponderance of the evidence—is substantially lower than in a civil case” and there is no presumption of validity in reexamination proceedings. Id. at 1378.
This case thus illustrates the distinction between a reexamination and a district court proceeding. In Fresen- ius, we upheld the district court’s grant of judgment as a matter of law because the patent challenger failed to meet its burden to prove invalidity by clear and convincing evidence—it “failed to present any evidence . . . that the structure corresponding to the means for delivering dialysate limitation [in claim 26], or an equivalent thereof, existed in the prior art” and did not identify “the structure in the specification that corresponds to the means for delivering dialysate” or compare the identified structure to those structures present in the prior art. Fresenius, 582 F.3d at 1299. Ultimately, we concluded that the clear and convincing burden of proof in the “means plus function” context “cannot be carried without clearly identifying the corresponding structure in the prior art.” Id. at 1300.
In contrast, during the reexamination, the examiner sufficiently identified the corresponding structure recited in the ’434 patent and identified the structures in the prior art such that a reasonable person might accept that evidence to support a finding that claim 26 is not patentable under a preponderance of the evidence standard of proof. Moreover, in addition to relying on the CMS 08 Manual, the examiner based those rejections on prior art references that were not squarely at issue during the trial on the invalidity issues, such as Lichtenstein and Thomp- son. See Fresenius, 2007 WL 518804, at *7–8 (discussing the Cobe C3 Manual, the CMS 08 Manual, the Sarns 9000, and the Seratron System). Thus, because the two proceedings necessarily applied different burdens of proof and relied on different records, the PTO did not err in failing to provide the detailed explanation now sought by Baxter as to why the PTO came to a different determina- tion than the court system in the Fresenius litigation.
Lest it be feared that we are erroneously elevating a decision by the PTO over a decision by a federal district court, which decision has been affirmed by this court, the following additional comments must be made. When a party who has lost in a court proceeding challenging a patent, from which no additional appeal is possible, provokes a reexamination in the PTO, using the same presentations and arguments, even with a more lenient standard of proof, the PTO ideally should not arrive at a different conclusion.
Judge Newman, in dissent:
Today, reexamination is part of the tactical armory of litigators. However, throughout this history, including the current legislative proposals to make reexamination more useful as a less costly alternative to litigation, we have uncovered no suggestion that reexamination is intended to deprive a final judgment of the full faith and credit atten- dant upon final judgments. We have found no hint that reexamination of the question of patentability is intended to override judicial resolution of the question of patentability.
From the decision:
First, as recounted above, the Board expressly considered our decision in Fresenius. More fun- damentally, the PTO in reexamination proceedings and the court system in patent infringement actions “take different approaches in determining validity and on the same evidence could quite correctly come to different conclusions.” Swanson, 540 F.3d at 1377 (quoting Ethi-
con, 849 F.2d at 1428). In particular, a challenger that attacks the validity of patent claims in civil litigation has a statutory burden to prove invalidity by clear and con- vincing evidence. Id. (citing 35 U.S.C. § 282); see also Microsoft Corp. v. i4i Ltd., 131 S. Ct. 2238, 2242 (2011). Should the challenger fail to meet that burden, the court will not find the patent “valid,” only that “the patent challenger did not carry the ‘burden of establishing inva- lidity in the particular case before the court.’” Swanson, 540 F.3d at 1377 (quoting Ethicon, 849 F.2d at 1429 n.3 (internal citations omitted)). In contrast, in PTO reex- aminations “the standard of proof—a preponderance of the evidence—is substantially lower than in a civil case” and there is no presumption of validity in reexamination proceedings. Id. at 1378.
This case thus illustrates the distinction between a reexamination and a district court proceeding. In Fresen- ius, we upheld the district court’s grant of judgment as a matter of law because the patent challenger failed to meet its burden to prove invalidity by clear and convincing evidence—it “failed to present any evidence . . . that the structure corresponding to the means for delivering dialysate limitation [in claim 26], or an equivalent thereof, existed in the prior art” and did not identify “the structure in the specification that corresponds to the means for delivering dialysate” or compare the identified structure to those structures present in the prior art. Fresenius, 582 F.3d at 1299. Ultimately, we concluded that the clear and convincing burden of proof in the “means plus function” context “cannot be carried without clearly identifying the corresponding structure in the prior art.” Id. at 1300.
In contrast, during the reexamination, the examiner sufficiently identified the corresponding structure recited in the ’434 patent and identified the structures in the prior art such that a reasonable person might accept that evidence to support a finding that claim 26 is not patentable under a preponderance of the evidence standard of proof. Moreover, in addition to relying on the CMS 08 Manual, the examiner based those rejections on prior art references that were not squarely at issue during the trial on the invalidity issues, such as Lichtenstein and Thomp- son. See Fresenius, 2007 WL 518804, at *7–8 (discussing the Cobe C3 Manual, the CMS 08 Manual, the Sarns 9000, and the Seratron System). Thus, because the two proceedings necessarily applied different burdens of proof and relied on different records, the PTO did not err in failing to provide the detailed explanation now sought by Baxter as to why the PTO came to a different determina- tion than the court system in the Fresenius litigation.
Lest it be feared that we are erroneously elevating a decision by the PTO over a decision by a federal district court, which decision has been affirmed by this court, the following additional comments must be made. When a party who has lost in a court proceeding challenging a patent, from which no additional appeal is possible, provokes a reexamination in the PTO, using the same presentations and arguments, even with a more lenient standard of proof, the PTO ideally should not arrive at a different conclusion.
Judge Newman, in dissent:
Today, reexamination is part of the tactical armory of litigators. However, throughout this history, including the current legislative proposals to make reexamination more useful as a less costly alternative to litigation, we have uncovered no suggestion that reexamination is intended to deprive a final judgment of the full faith and credit atten- dant upon final judgments. We have found no hint that reexamination of the question of patentability is intended to override judicial resolution of the question of patentability.
posted by Lawrence B. Ebert at 9:37 AM
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