The Federal Circuit Court of Appeals has denied a request for an en banc rehearing by a medical-device patent holder which argued that the U.S. Patent and Trademark Office’s (USPTO’s) Board of Patent Appeals had effectively nullified a previous Federal Circuit decision on the validity of its patent. In re Baxter Int’l, Inc., No. 2011-1073 (Fed. Cir., decided October 26, 2012).
As dissenting Judge Pauline Newman framed the issue, “The patent was granted in 1993. The [patent invalidity] litigation was initiated by [admitted infringer] Fresenius in 2003 by declaratory action. The action was decided by the district court in 2007, sustaining patent validity, and the appeal to the Federal Circuit was decided in 2009, sustaining patent validity. [A jury had determined that the patent was obvious, but the courts determined that Fresenius failed to show the patent was obvious, and it was ordered to pay $23.5 million in damages.] A reexamination request was filed by Fresenius in 2005, and in 2012 the Board of Patent Appeals and Interferences, stating that ‘the agency is not bound by the court’s determination,’ decided the same issues of patent validity on the same evidence, to contrary result.”
Newman continued, “The appeal is again in the Federal Circuit, with this court deferring to the PTO’s decision as ‘substantially’ supported, and refusing to recognize our own final decision three years earlier on the same evidence. Although patent validity is a question of law, the court declines de novo review, refuses to be bound by our prior decision, and authorizes the agency to overrule the court, all without a nod to finality, or correctness, or res judicata, or the Constitution.”
According to the three judges concurring in the Federal Circuit’s denial of rehearing, “the panel opinion [upholding the board’s finding of obviousness] does not, as the dissent claims and the petition for rehearing en banc assumes, endorse ‘administrative nullification of a final judicial decision.’” The concurrence contends, “The majority here concludes—rightly in my view—that a prior court decision in which a party has failed to prove a patent invalid does not bar the Patent and Trademark Office (PTO) from subsequently reexamining that same patent. And, it concludes that, despite a final court judgment reaching a contrary conclusion as between the patent holder and one alleged infringer, the PTO is free to conclude that the patent is, indeed, invalid. That proposition is an unremarkable one.”
The concurring judges maintain that a patent is not found “valid” in a court proceeding. “A judgment in favor of a patent holder in the face of an invalidity defense or counterclaim merely means that the patent challenger has failed to carry its burden of establishing invalidity by clear and convincing evidence in that particular case—premised on the evidence presented there. If the PTO later considers the validity of that same patent, it does so based on the evidence before it and under the lesser burden of proof that applies in reexamination proceedings.”