In the case of Bortex Industry Company v. Fiber Optic Designs, Inc.1, Bortex sought a declaration invalidating patents owned by Fiber Optic Design ("FOD"). In return, FOD claimed that Bortex infringed the patents and asserted a number of defenses of the patents' validity. During discovery, FOD sought Bortex's information about a request for reexamination filed by New England Pottery, one of Bortex's customers. Presumably, if Bortex had been a real party in interest for New England Pottery's inter partes reexamination, FOD would seek to preclude Bortex from raising certain invalidity theories in the district-court proceedings. The statute authorizing reexamination includes estoppel provisions, which trigger estoppel after a final reexamination decision, preventing repeated attempts to prove invalidity by a single party.

The Bortex Decision

When FOD was apparently unable to obtain information from Bortex about the role Bortex had played in New England Pottery's reexamination request, FOD sought relief from the court. Ruling in favor of FOD, the district court first noted that the statute authorizing reexamination includes estoppel provisions, which trigger estoppel to prevent a party that has petitioned for reexamination of a patent at the USPTO from raising invalidity arguments in a separate district-court proceeding when it did raise, or could have raised, them at the USPTO. It then reasoned that FOD sought reasonable discovery even though Bortex was not the actual party in the USPTO proceeding. According to the district court, financial involvement, if extensive, could implicate estoppel. Additionally, the court recognized that Bortex had admitted that its customers requested indemnification and that Bortex had reimbursed New England Pottery for litigation and reexamination expenses.

Accordingly, the district court ordered Bortex to produce all documents and to respond to all other discovery requests about Bortex's participation in New England Pottery's inter partes reexamination request. The court did note, however, that after it had drafted its opinion, Bortex had informed the court that it neither controlled nor participated in the reexamination request and did not pay New England Pottery's costs for the reexamination. But the court nonetheless invited FOD to indicate whether such indications satisfied FOD's discovery requests.

Strategy and Conclusion

Companies facing district-court proceedings often use reexamination or post-grant review proceedings at the USPTO to challenge patents. Certain proceedings—inter partes review and covered-business-method review—implicate estoppel provisions in their governing statutes. Thus, parties should be aware that participating in a USPTO proceeding, whether by providing financial means or by having decision-making power, may implicate those estoppel provisions and, as a result, also possibly create obligations for discovery in district-court proceedings.