The U.S. Court of Appeals for the Federal Circuit recently held that “a ‘substantial new question of patentability’ [under 35 U.S.C. § 303(a) (2002)] refers to a question which has never been considered by the PTO; thus, a substantial new question can exist even if a federal court previously considered the [same] question.” In re Swanson, No. 2007-1534, 2008 WL 4068691, at *8 (Fed. Cir. Sept. 4, 2008).

U.S. Patent No. 5,073,484 (“the ‘484 Patent”) claims a method for quantitatively analyzing small amounts of biologic fluids using ligand-antiligand binding pairs. A prior-art patent, U.S. Patent No. 4,094,647 (“Deutsch”), also discloses a method of detecting ligand-antiligand binding pairs in order to determine the presence of a ligand in a biological fluid sample. During the initial examination of the application that resulted in the ‘484 Patent, the examiner originally rejected all the claims of the application as obvious under 35 U.S.C. § 103. In relevant part, the examiner rejected several dependent claims of the application in light of Deutsch. These dependent claims were later amended, and the ‘484 Patent was granted. Subsequently, the ‘484 Patent was asserted in litigation, and the accused infringer counterclaimed that the patent was invalid in light of Deutsch. A jury found that the asserted claims of the ‘484 Patent were not infringed and that the accused infringer had failed to prove by clear and convincing evidence that the asserted claims were invalid. On appeal, the Federal Circuit affirmed these rulings.

After the Federal Circuit affirmed the non-infringement and validity findings, the accused infringer requested ex parte reexamination of the ‘484 Patent claming that there was a substantial new question of patentability. The examiner granted the request and, after reviewing the art, rejected the method-of-detection claims of the ‘484 Patent as anticipated by Deutsch. On appeal to the Board of Patent Inferences and Appeals (“Board”), the examiner’s rejection was affirmed.

In addition to arguments directed to the merits of the reexamination, the Board rejected the patentee’s argument that reexamination “was improper [] because Deutsch does not raise ‘a substantial new question of patentability’ as required by 35 U.S.C. § 303.” Id., at *4. “The Board found that [Deutsch] did raise a substantial new question of patentability despite having been cited in the original office action because it was not cited in regard to the presently rejected claims and it was not relied upon for the same reason the examiner now relied upon it.” Id. “The Board also dismissed the patentee’s argument that Deutsch could not raise a substantial new question of patentability because a jury had affirmed a finding of validity over [Deutsch] and the Federal Circuit had affirmed.” Id.

On appeal to the Federal Circuit in Swanson, the patentee only challenged the Board’s finding that Deutsch raised a substantial new question of patentability under § 303; the patentee did not challenge the merits of the Board’s decision on invalidity. The Court held that a substantial new question of patentability under § 303(a) exists when the PTO has not previously considered the question presented even if a federal court has made rulings on the same question. Id., at *8.

The Court explained that any person may file a request for reexamination of an issued patent but the PTO may only grant the request if it determines that “a substantial new question of patentability affecting any claim of the patent concerned is raised by the request.” Id., at *4 (citing 35 U.S.C. § 303(a)). Reexamination is a “quality check” that allows the government to remove defective and erroneously granted patents. Id. “The ‘substantial new question of patentability’ requirement prevents potential harassment of patentees by ‘act[ing] to bar reconsideration of any argument already decided by the [PTO], whether during the original examination or in an earlier reexamination’ ” Id. (citing H.R. Rep. No. 96-1307 (1980)).

The Court noted that it had previously held in another case that reexamination based on “prior art previously considered by the PTO in relation to the same or broader claims” is not permitted. Id. (citing In re Portola Packaging Inc., 110 F.3d 786, 791 (Fed. Cir. 1997)). But in 2002 Congress acted to overrule this rule and added a sentence to § 303(a) providing that “ ‘[t]he existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.’ ” Id., at *5 (quoting 35 U.S.C. § 303(a) (2002)). The reports accompanying the 2002 amendments explained that the test to determine whether a substantial new question of patentability exists should “not merely look at the number of references or whether they were previously considered or cited but [should view them] in the appropriate context [] as [they] bear[] on the question of the validity of the patent.” Id. (quoting H.R. Rep. No. 107-120, at 3).

The Court also explained that the determination of whether a substantial new question of patentability exists is not affected by prior federal court decisions finding that an accused infringer failed to show that the asserted claims of the ‘484 Patent were invalid by clear and convincing evidence. Id., at *5–*6. The Court concluded that the legislative history of § 303 makes clear that in enacting the original and amended reexamination statute “Congress was concerned only with the consideration of issues in prior PTO examinations, not prior civil litigations.” Id., at *6. Moreover, “PTO examination procedures have distinctly different standards, parties, purposes, and outcomes compared to civil litigation.” Id.

In litigation, a challenger must overcome the presumption of validity with clear and convincing evidence that the patent is invalid. Id. If this burden is not met, courts do not find the patent valid but rather only find “that the patent challenger did not carry the ‘burden of establishing invalidity in the particular case before the court.’ ” Id. (internal quotations and citations omitted). In PTO examinations and reexaminations, the standard of proof (preponderance of the evidence) is substantially lower than in a civil case, there is no presumption of validity, and the examiner is not attacking the validity of the patent but is conducting a subjective examination of the claims in light of prior art. Id., at *7. “Thus, considering an issue at the district court is not equivalent to the PTO having had the opportunity to consider it.” Id.

The Court found that § 303’s language and legislative history, and the differences between the PTO and district court proceedings, lead to the conclusion that “Congress did not intend a prior court judgment upholding the validity of a claim to prevent the PTO from finding a substantial new question of validity regarding an issue that has never been considered by the PTO.” Id. According to the Court, holding otherwise “would allow a civil litigant’s failure to overcome the statutory presumption of validity to thwart Congress’ purpose of allowing for a reexamination procedure to correct examiner errors, without which the presumption of validity never would have arisen.” Id.

The Court also rejected the argument that allowing the PTO, an executive branch agency, to find patent claims invalid after an Article III court has upheld their validity violates the constitutionally mandated separation of powers. The Court found that rejection of claims in reexamination does not disturb the federal courts’ earlier holdings. Id., at *8. The examiner did not find that the accused infringer had met its burden to show that the claims were invalid by clear and convincing evidence; instead, the examiner evaluated the ‘484 Patent in light of the prior art and found that there was a preponderance of evidence supporting invalidity. Id.1

Finally, the Court considered the PTO’s initial examination of the application that resulted in the ‘484 Patent. Id., at *9–*10. During the original examination, “Deutsch was not evaluated as a primary reference that taught or made obvious the specific analytical method claimed” in the ‘484 Patent. Id., at *10. Given the limited purpose for which Deutsch was initially considered, the Court held that “the Board is correct that the issue of whether Deutsch anticipates the method disclosed [in the ‘484 Patent] was a substantial new question of patentability, never before addressed by the PTO.” Id.