Earlier this month, the Federal Circuit in Belkin Int’l, Inc. v. Kappos, 2012-1090, published an important decision potentially limiting the scope of both ex-parte and inter-partes reexaminations.

Traditionally during reexamination, practitioners submit information disclosure statements (IDS) to the Patent Office disclosing patents and printed publications with the understanding that the examiner would consider those references in relation to the claims subject to reexam. Very often, if the references were properly submitted, the examiner would record that the references were considered, but would not apply the references against the claims. The benefit to the patent owner is that this could create a heavy burden for subsequent defendants to show that the claims were invalid in view of this prior art. Belkin v. Kappos may change this practice and understanding.

As background, Belkin filed a request for inter-partes reexamination on 32 claims of U.S. Patent No. 7,035,281 in view of four prior art references. The Director determined that the first three references did not raise a substantial new question of patentability, but the fourth did. After the examiner issued an action closing prosecution, Belkin appealed, challenging the examiner’s failure to make rejections over the three references that the Director determined did not raise a substantial new question of patentability. The Board of Appeals determined that it did not have jurisdiction to decide whether a substantial new question of patentability existed with respect to the three references and affirmed the examiner.

Belkin took its case to the Federal Circuit and argued that once the Director found there was a substantial new question of patentability in view of one reference, then the examiner must review the claims in view of all of the prior art provided to it, including the three other references. In support of its position, Belkin relied on the fact that the Patent Office instructs the examiner in the Code of Federal Regulations (CFR) and Manual of Patent Examination and Procedure (MPEP) to conduct a “thorough investigation of the available prior art” during reexamination and to conduct reexamination “in view of all prior art.” (See 37 CFR §1.104; MPEP §2648.)

The Court, analyzing the statutory provisions for inter-partes reexam (pre-amendment under the America Invents Act) noted that 35 USC §312(a) provides that:

The Director must make a determination “whether a substantial new question of patentability affecting any claim of the patent is raised by the request [under § 311], with or without consideration of other patents or printed publications.” 

The Court also noted that 35 USC §313 provides that:

After the Director has determined that there is a substantial new question of patentability affecting a claim with respect to prior art, an inter partes reexamination is ordered “for resolution of the question.” 35 U.S.C. § 313. The question to be resolved is the substantial new question of patentability determined by the Director.

Based on the statute, the Court first concluded that the examiner could not apply prior art that the Director determined did not raise a substantial new question of patentability. The Court then went on to conclude that inter-partes reexam “may not include other prior art than what constituted the basis of the Director’s determination of a substantial question of patentability.” However, the Court did reserve judgment on whether such a standard would apply if the patent owner amended the claims during reexamination.

As to Belkin’s reliance on the MPEP and the CFR, the Court responded that a “casual reference to ‘all prior art’ in the MPEP or the regulations cannot be interpreted to trump the statutory command. Statutes rank higher than regulations, which rank higher than the MPEP.”

This decision not only affects the scope of inter partes reexam, but may also affect the scope of ex-parte reexam. Like inter-partes reexam, the statue for ex-parte reexam §303 provides that:

The Director will determine whether a substantial new question of patentability affecting any claim of the patent concerned is raised by the [reexamination request or the Director’s own determination].

The statute for ex-parte reexam §304, similar to the inter-partes section, provides that if:

The Director finds that a substantial new question of patentability affecting any claim of a patent is raised, the determination will include an order for reexamination of the patent for resolution of the question.

As a result, per the Federal Circuit’s analysis, it appears that the scope of ex-parte reexamination is also limited to the prior art that the Director determines raises a substantial new question of patentability. This may mean that an examiner may not apply additional prior art submitted during any reexamination proceeding against the claims subject to reexam, whether ex-parte or inter-partes. If an IDS disclosing additional prior art references is submitted to an examiner during reexamination, the examiner may be precluded from considering those references.

This decision may also affect the burden a defendant faces when relying on prior art that the examiner considered during reexamination. If the Director did not identify the prior art as the basis for reexamination, a defendant may argue that the burdens traditionally associated with asserting invalidity based on such prior art cannot apply because the examiner was acting outside the scope of his or her jurisdiction.

Gibbons will continue to monitor developments on this important front.

Christopher H. Strate is an Associate in the Gibbons Intellectual Property Department.