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The U.S. Patent and Trademark Office’s overhaul of its patent re-examination system to review issued patents is prompting lawyers to embrace a process once shunned as too risky for adverse parties. The patent office’s central patent examination unit � established two years ago and staffed with seasoned patent examiners � has helped restore faith in the re-examination system as a way to potentially avoid or delay costly patent litigation, some lawyers note. Patent re-examinations involve a patent office panel review of any claim in a patent based on prior art, or technical information about a patentable subject available publicly or in another patent filing. The patent office offers so-called ex parte re-examinations, which involve only the patent holder and the patent office but can be initiated by a third party. It also offers inter partes re-examinations, which are akin to a paper trial and allow third parties, who are usually adversarial, to participate in the process. The creation of the examination unit has altered perceptions that a patent re-examination was a rubber stamp of the work the patent office had already done, said Bob Asher, a partner at Boston intellectual property firm Bromberg & Sunstein. “It’s a matter of evolving strategies,” Asher said. “In the past, these re-examinations were filed when litigations started looking like they need help, now [lawyers are] bringing them at the start or before litigation.” Re-exams have spiked Both types of patent re-examinations have spiked in recent years. Ex parte re-examinations have climbed by 30% from 392 in fiscal 2003 to 511 in fiscal 2006. The patent office counted 477 ex parte filings as of June 30, for the first three quarters of fiscal 2007. Inter partes re-examinations have jumped by 233% from 21 in fiscal 2003 to 70 in fiscal 2006, with 90 filings in the first three quarters of fiscal 2007. Issues brought up in inter partes re-examinations are barred from being raised in future lawsuits. Scott E. Kamholz, an associate at Boston’s Foley Hoag, has worked on at least 10 patent re-examinations in the past few years for various strategic reasons. In one case, Kamholz filed a request for ex parte re-examination of a patent for small interfering RNA, which is a technique for silencing a gene, held by Sirna Therapeutics Inc., a company acquired by Merck & Co. Inc. last year. Kamholz, who declined to name the client, noted that lawyers can file ex parte re-examination requests without disclosing their client to the patent office. He said his client was concerned about the broadness of the patent granted to Sirna. During the re-examination, the patent office rejected Sirna’s original patent claims. The company responded by filing amended patent claims with the patent re-examination panel. The patent office also rejected those claims. Sirna can still appeal, but Kamholz said the company’s patent prospects are dim. “At this point the patent owner’s options are limited,” Kamholz said. “They can try to wheedle the examiner to let them make more amendments, [but] if the examiner stands firm, their only option is to appeal.” Lisa Hillman, a Chicago lawyer at McDonnell Boehnen Hulbert & Berghoff who represented Sirna in the patent re-examination, declined to comment. Reassessing the option One of Frederick Whitmer’s corporate clients is currently reassessing a policy to never use the re-examination process unless it has an extremely powerful argument. Whitmer, a New York partner at Thelen Reid Brown Raysman & Steiner, declined to name the client, but he described the company as a “household name.” “Now people are more willing to do it,” Whitmer said. “They think there’s some history of successfully challenging [patents].” Companies typically request re-examination of other parties’ patents as a defensive measure when they’re being sued for patent infringement. A patent infringement lawsuit prompts the accused to launch a “worldwide intense prior art search,” to uncover every scrap of material about the accuser’s patent, an exercise that can run $20,000 to $30,000, Kamholz said. The idea is to make a case that even if the defendant’s patent infringes the plaintiff’s, the plaintiff’s patent claims are in question because there’s prior art. Some companies file re-examination requests before bringing a patent infringement lawsuit against competitors, said Dave Cochran, a partner in Jones Day’s Cleveland office. If the competitor files a countersuit, an ongoing patent re-examination often means a court will stay the counterclaim litigation, which cuts the client’s litigation spending for a couple of years, Cochran said. Ex parte patent re-examinations take an average of 23 months, compared with 29 months for inter partes re-examinations, according to the patent office. Patent re-examination is one more weapon in a patent lawyer’s arsenal, but attorneys caution that it’s not a magic bullet. If it’s used as part of a litigation strategy, an adverse party that drags a patent holder into a re-examination process risks a patent office decision that affirms the patents. According to patent office statistics, all patent claims are confirmed in 26% of ex parte re-examination filings, compared with 10% of cases where all claims are canceled and 64% that emerge with changes to one or more claims. In inter partes re-examinations, all claims are confirmed in 12% of cases and completely canceled in 88%. Worries about juries In ex parte re-examinations, patent litigators worry that jurors will consider the patent unchallengeable if the patent office upholds all the patent’s claims, even though different legal arguments for invalidity can be raised in the patent litigation. “Although the law says there is no increased presumption of validity [following patent re-examination], human nature is what human nature is,” Whitmer said. “Everyone worried about having [the opposing] litigator saying, ‘They said it was invalid once before to the patent office,’ ” he added. Even winning on re-examination may not always lead to court victory. BlackBerry maker Research in Motion Ltd., for example, asked the patent office to re-examine two patents held by NTP Inc. during NTP’s lawsuit against the company. The patent office independently decided to examine six other NTP patent and rejected all NTP claims in the patents. Yet despite this favorable outcome, Research in Motion still ended up paying NTP $612.5 million to settle the case. NTP Inc. v. Research in Motion, No. 01-767 (E.D. Va.). NTP is appealing the patent office’s re-examination decisions and has filed several new patent lawsuits against cellphone carriers based on the same patents.

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