The reissue and reexamination procedures of the U.S. Patent and Trademark Office (USPTO) are valuable tools for businesses that want to strengthen their patent portfolio or weaken that of their competitors. Reissue allows patent owners to correct errors in U.S. patents. Reexamination allows anyone to test the validity of a U.S. patent. Neither procedure affects the original patent until either a reissue patent is granted or a reexamination certificate is issued.

Pfizer Inc., a U.S. biomedical and pharmaceutical company, recently took advantage of the reissue procedure to correct a defect in one of its prized patents covering Lipitor®—a popular drug prescribed by doctors to treat high cholesterol. In 2003, Pfizer sued Ranbaxy Laboratories Ltd., an Indian drug manufacturer, for making a generic version of Lipitor® that infringed its patents, successfully blocking Ranbaxy from selling the generic version in the United States. Ranbaxy, however, won a partial victory in the lawsuit by invalidating one of Pfizer's patent claims that did not meet certain requirements under U.S. patent law. The invalidated claim was in a Pfizer patent due to expire over a year later than Pfizer's main patent covering Lipitor®. Pfizer sells billions of dollars of Lipitor® annually, and losing over a year of patent protection posed a major problem. Pfizer's solution? Use the USPTO reissue procedure to correct the defective claim. In early 2007, Pfizer filed a reissue application. Two years later, Pfizer received the corrected—and now enforceable—claim.

Electronic Frontier Foundation (EFF), a civil-liberties group in San Francisco, regularly uses reexaminations to challenge the validity of patents it believes limit free expression online or suppress innovation in the software and Internet fields. EFF's so-called patent-busting project identifies the questionable patents and collects prior art to prove invalidity. Once it identifies the patents and publications, it files reexamination requests at the USPTO. According to EFF, these requests create a forum to affirmatively invalidate patents rather than force technology users to await the threat of a patent-infringement lawsuit. EFF has successfully challenged the validity of such patents as Clear Channel's live concert-recording patent and NeoMedia Technologies' barcode-lookup patent. It continues to target other patents, such as Amazon's one-click patent, Nintendo's hand-held software-emulation patent, and Acacia Technologies' streaming-media patent.

Benefits of Reissue

Reissue allows a patentee to correct a wide variety of errors in a patent. An error may include inadvertently obtaining a patent that does not cover all of the disclosed inventions the patentee intended to protect. In 2003, Brady Construction Innovations, Inc., a construction-supply company based in Beverly Hills, California, lost a patent-infringement lawsuit to its competitor Metal Lite, Inc. because the U.S. district court ruled that Metal Lite's products did not infringe Brady's patent. Brady, however, believed its patent should have covered Metal Lite's products and applied for a reissue patent to correct the deficiency. The USPTO granted Brady the reissue patent on January 9, 2007. Brady filed a new patent-infringement lawsuit against Metal Lite the same day.

Just as a patent can suffer the defect of not covering all of the inventions the patentee intended to protect, a patent can also inadvertently cover too much subject matter, such as an invention already known in the prior art, which would render the patent invalid. Reissue can correct such error. In 1991, Keith Manufacturing Co., a conveyer manufacturer located in Oregon, U.S.A., lost a patent-infringement suit against its competitor Hallco Manufacturing Co. because certain claims in Keith's patent covered an old Hallco conveyor system that predated Keith's claimed invention. Keith requested a reissue patent from the USPTO to narrow the original claims to exclude the old Hallco conveyor system. After receiving the reissue patent, Keith resued Hallco, eventually reaching a favorable settlement.

In reissue, patentability issues may be submitted based on any type of prior art, such as patents, printed publications, and prior knowledge, use, or sale of the claimed invention. Reissue applications are handled by examiners in the same patent-examining group that issued the original patent; thus, they are likely to have technical expertise relevant to the claimed invention. Further, in reissue, a patent owner can request automatic extensions of time for a fee, file additional continuation applications, and request continued examination (RCE) of a patent, each providing the patentee additional time and opportunity to address any problems in the patent.

Other types of errors correctable through reissue include significant typographical errors in a patent's specification and drawings, incorrect listings of inventors, or inadvertent procedural errors made by the patentee during the patent-application process.

Limitations of Reissue

To be eligible for reissue, the patent owner must acknowledge and identify an error in the patent. But there are limits to the types of errors correctable through reissue.

First, if a patent fails to cover all of the inventions a patentee intended to protect, the patentee may correct that error only within two years of the patent's original issue date. In the Brady v. Metal Lite case, Brady's reissue patent was eventually invalidated because Brady used the reissue process to broaden its original patent to cover Metal Lite's products more than two years after the original issue date.

Second, even if a patentee requests a broadening reissue within the two-year time limit, the patentee may not broaden the original patent to recapture disclaimed subject matter. For example, during the patent-application process, a patentee may narrow the coverage of a patent to exclude certain prior art. If the patentee later decides it did not really need to narrow the patent to exclude the prior art or that it narrowed it too much, the USPTO might not allow the patentee to recapture the disclaimed subject matter.

Third, if a patentee made misrepresentations or intentionally failed to submit relevant prior art to the USPTO during the patent-application process, the patentee may not use reissue to correct such inequitable conduct. Finally, only a patent owner can request a reissue of the patent, but once the reissue process has begun, a third party may file a protest arguing why a patent claim is not patentable. Other than the protest, a third party cannot participate in the reissue process.

Benefits of Reexamination

In the United States, businesses can challenge a patent's validity through a lawsuit before a federal court or through reexamination at the USPTO. There are, however, a number of advantages to reexamination.

First, reexaminations are much cheaper than patent lawsuits, which can cost millions of dollars. One of the main reasons for the high litigation costs is the extensive discovery permitted in U.S. federal courts. Reexaminations, on the other hand, are more focused, discovery more limited or nonexistent.

Second, in federal court, an issued patent is automatically presumed valid. Judges and juries in federal court can declare the patent invalid only if there is "clear and convincing" evidence. But in reexaminations, there is no such presumption; thus, it can be easier to invalidate a patent at the USPTO.

Third, most reexaminations can be requested anonymously. If a requester fears the patent owner is targeting the requester for a patent-infringement suit, then he can file a reexamination request anonymously through a third party, such as a patent attorney. In contrast, lawsuits in federal court require identification of the real party in interest.

Fourth, reexamination can be requested during litigation. Judges will often stay a patent litigation pending the outcome of a reexamination. The stay benefits a defendant because it gives the defendant time to prepare the case and search for additional prior art to use in an invalidity defense. The likelihood that a judge will grant a stay depends greatly on each judge's preference. Judges in the district courts of California regularly grant stays pending the outcome of a reexamination, whereas judges in the Eastern District of Texas rarely grant stays.

Fifth, even if a patent is not completely invalidated during reexamination, the USPTO will often reduce the scope of patent claims. Thus, a device or process that might have infringed a patent before reexamination might not infringe the same patent after reexamination. For example, in the case of Amazon's one-click patent currently undergoing reexamination, Amazon reduced the scope of patent claims to sustain patent validity.

If, after the USPTO reduces the scope of patent claims, a device or process still falls within the scope of the patent, then the defendant may have "intervening rights," which eliminate liability for certain types of activities that occur before the change in the scope of the patent claims. For example, BIC Leisure Products, Inc., a manufacturer of sailboards, used "intervening rights" to avoid paying damages to Windsurfing International, Inc. (WSI), a competing manufacturer, for sailboards that BIC already had in its inventory or on back-order before WSI reduced the scope of its patent claims.

Limitations of Reexamination

Reexamination does pose some risks. Before the USPTO grants a reexamination request, it reviews the request and the prior art submitted with the request to determine whether the request raises a substantial new question of patentability. If the USPTO denies the request, it has, in effect, determined that the prior art submitted with the request would not invalidate the patent. The USPTO, however, rarely denies a reexamination request—only about eight percent of the time. Alternatively, the USPTO may grant the reexamination request but confirm the validity of the patent during reexamination. In both cases, the reexamination strengthens the patent, making it harder to assert invalidity later on. Thus, reexamination can backfire on a requester who intended to invalidate the patent but must instead deal with a stronger patent that survives reexamination. This is why patent owners often file reexamination requests for their own patents after learning of prior art that may affect validity. Indeed, approximately 40% of ex parte reexaminations—one type of reexamination at the USPTO—are filed by patent owners.

Only patentability issues based on prior patents or printed publications may be submitted for reexamination. The central reexamination unit at the USPTO handles reexaminations. It deals with a broad variety of technologies, so examiners working on a reexamination may not always have the technical expertise most relevant to the claimed invention. Lastly, like reissue, reexamination cannot be used to correct inequitable conduct.

It can take from less than a year to several years for the USPTO to complete a reexamination, which can cause much uncertainty for companies waiting to make business decisions based on the outcome. The USPTO is charged to handle all reexaminations with special dispatch, especially for patents already in litigation. But if the reexamination unit is busy or if the patent under reexamination is in a popular technology area, the reexamination process can often be slow. Further, if the patent owner disagrees with the outcome of the reexamination, he can appeal to the USPTO's Board of Patent Appeals and Interferences, then later to the U.S. Court of Appeals for the Federal Circuit, each of which may take several years to resolve.

Conclusion

Reissue and reexamination are important tools in the U.S. patent system. When used properly, reissues and reexaminations can effectively strengthen a company's patents and reexaminations can knock out or limit the scope of a competitor's patents. Moreover, reissue and reexamination are relatively inexpensive when weighed against the gains they can provide. Accordingly, reissue and reexaminations can be attractive alternatives to litigation and provide strategic business value.