Patent lawyers have mixed views of a recent proposal by the U.S. Patent and Trademark Office to overhaul the patent re-examination process, which involves asking the agency to review issued patents and has become a key part of patent litigation.

The PTO announced its proposed overhaul, “Streamlined Patent Re-examination Proceedings; Notice of Public Meeting,” on April 25 and published it in the Federal Register.
The agency also announced plans to hold a June 1 public meeting about the proposal at PTO headquarters. It is accepting written comments about the proposal until June 29.

Anyone may request an ex parte re-examination of an issued patent, based on prior patents or printed publications, but third-party requesters have only limited rights to participate.

Inter partes re-examinations can be initiated by anyone who is not the patent owner, including an alleged infringer, for patents based on applications filed after Nov. 29, 1999. Both the patent owner and the third party participate in the PTO’s review of the patent, including the appeal.

Re-examinations are on the upswing because patent case defendants are increasingly requesting PTO review of their opponents’ patents. According to PTO data, ex parte re-examinations increased in most years from fiscal year 2005 to fiscal year 2010. This type of re-examination jumped by 49% overall to 780 in fiscal year 2010, which ended on Sept. 30, compared with 524 in fiscal year 2005. Inter partes re-examinations increased each year between fiscal year 2005 and fiscal year 2010, with an overall 376% jump to 281 from 59.

Also according to PTO statistics, ex parte re-examination had an average pendency of 25.7 months and a median pendency of 20 months as of Dec. 31. Inter partes re-examinations had an average pendency of 36.5 months and a median pendency of 33 months.

The PTO’s notice described the proposed changes as follows: “standardizing the way information is presented in re-examination requests; focusing examiners’ attention on the best prior art; reducing the need for late submission of evidence and amendments; clarifying petitions practice; allowing patent owners to waive their optional ex parte statement; consolidating the inter partes action closing prosecution and right of appeal notices; and reducing unnecessary briefings in inter partes appeals.”

The re-examination process “needs to be speeded up but not at the expense of quality,” said Robert Greene Sterne, founder of Washington-based Sterne, Kessler, Goldstein & Fox.

Sterne said he’s involved in more than 100 active re-examinations right now, including about 50 for patent owners and about 50 for third-party requesters. He is also known for his re-examination work for i4i L.P.

Last May, the PTO confirmed the validity of i4i’s patent that underpinned the company’s $290 million infringement judgment against Microsoft Corp.

The Microsoft v. i4i case is now pending at the Supreme Court, which heard oral arguments on April 18.

Sterne has two major concerns about the proposals. First, he believes that patent owners should have several opportunities to present arguments to support their claims in both ex parte and inter partes re-exams, not just one.

The present process “is clearly unfair to the patent owner and the patent in re-exam,” and the proposal wouldn’t change that, Sterne said.

Sterne also believes that either the patent owner or the third-party requester in an inter partes re-exam should be able to request an interview. “The patent examiners must be given the opportunity to ask fundamental questions about what is going on,” Sterne said. “Without that ability the process is fundamentally flawed.”

Despite these caveats, Sterne said the proposal is a good start overall and he intends to participate in the comment process. “The patent office is starting to wake up to the fact that re-examinations are a very, very critical part of the patent enforcement process,” he said. “It’s a great indication that the patent office is really focusing attention on the process it should and must do.”

Changes to the patent re-examination process are “totally necessary,” said Soyeon (Karen) Laub, a partner in McDermott Will & Emery’s Irvine, Calif., office. “I like the proposal,” Laub said. “It will definitely streamline the process and take care of a lot of issues that we have had in the past for re-examinations. I’m happy that we have this.”

Laub cited several parts of the proposal that would require requesters to be more precise, point out what they’re trying to prove and have all the evidence upfront. “I think that will really expedite the process,” she said.

Rajiv Patel, an intellectual property partner at Fenwick & West in Mountain View, Calif., pointed to a couple of changes in the proposal that he believes would help reduce the amount of time in which patent re-examination applications are pending.

The first is the change that would require the person requesting the re-examination to more precisely define the substantial new question of patentability. “What the patent office is saying is: ‘If you’re going to request that we look at this again, you’ve got to show that there is a new question that has arisen since the time the original patent was granted,’ ” Patel said.

The second helpful change would require the person requesting re-examination “to more specifically point to where in the particular reference, the particular elements are located,” Patel said.

In the past, it seems like that there were some requests that were filed that didn’t quite precisely break down how a particular printed reference applied against a claim,” Patel said. “Now the patent office is looking to ask the requester to be more precise and show exactly where the particular claim element you’re alleging is within the printed publication.”

Although the proposed changes would likely reduce the pendency of re-examinations by a couple months or a few months, “it’s just not clear to what extent it will bring down that equation,” Patel said. He noted that ex parte and inter partes re-examination filings have increased during the past few years and the PTO has undergone recent budget cuts.

The recent cut limits the PTO’s fiscal 2011 budget to $2.09 billion, which means the agency can’t spend $85 million to $100 million in collected fees.

“While these changes will help streamline the process, the impact in helping reduce the pendency may be difficult to measure if they’re unable to fully staff re-examination units,” Patel said.

Sheri Qualters can be contacted at