The cancellation of claims in a patent by the PTO, pursuant to the agency’s statutory reexamination authority, is binding in any pending infringement litigation that has not been made sufficiently final, and is grounds for dismissal of the underlying suit. This case highlights the potential advantages for an accused infringer of pursuing reexamination in parallel with district court proceedings.
Background / Facts: The patent on appeal here from the district court is directed to a hemodialysis machine. Hemodialysis machines are used in the place of kidneys to cleanse the blood of toxins. Validity of the patent was previously upheld by the Federal Circuit and the case remanded for further consideration of infringement. While the litigation was pending on remand, however, the PTO completed a reexamination of the patent and determined that all asserted claims were invalid. In a separate decision, the Federal Circuit upheld the PTO’s reexamination determination as complying with their standard of review.
Issue(s): Whether cancellation of the asserted claims by the PTO, pursuant to the agency’s statutory reexamination authority, is binding in pending infringement litigation.
Holding(s): Yes. While “the cancellation of a patent’s claims cannot be used to reopen a final damages judgment ending a suit based on those claims,” “[t]he [PTO’s] intervening decision invalidating the patents unquestionably applies in the present litigation, because the judgment in this litigation was not final.” Further, while it is true that different standards apply in a PTO reexamination and a validity proceeding before the district court, “there is no basis for distinguishing between the effects of a final, affirmed court decision determining invalidity and a final, affirmed PTO decision determining invalidity on a pending litigation. The latter is binding not because of collateral estoppel, but because Congress has expressly delegated reexamination authority to the PTO under a statute requiring the PTO to cancel rejected claims, and cancellation extinguishes the underlying basis for suits based on the patent.”