In re Swanson: Reaffirming a Substantially Old Question

According to the legislative history accompanying 35 U.S.C. '303(a), Congress intended the re-examination procedure to provide an important “quality check” on patents that would allow the government to remove defective and erroneously granted patents. Indeed, Congress amended 35 U.S.C. '303(a) in 2002 because it disagreed with the restrictive scope of re-examination imposed by the Federal Circuit in In re Portola Packaging Inc., 110 F.3d 786 (Fed. Cir. 1997). In a panel decision by Judge Arthur J. Gajarsa, joined by Judges Alan D. Lourie and William C. Bryson, the court in In re Swanson, 540 F.3d 1368, (Fed. Cir. 2008), held that a piece of prior art relied on for a prior rejection could, nevertheless, create a new question of patentability sufficient to warrant a re-examination. In so ruling, the court made it easier for third parties to invoke the re-examination statute by broadening the ability of prior art, cited or un-cited, to support a re-examination request.

The Case

In re Swanson is an appeal from a decision of the U.S. Patent and Trademark Office's (“PTO”) Board of Patent Appeals and Interferences (“Board”), which upheld an examiner's rejection of claims 22-25 of U.S. Patent No. 5,073,484 (“the '484 patent”) in a re-examination proceeding.

The '484 patent discloses a method of quantitatively analyzing small amounts of biological fluids to detect the presence of a particular substance (the “analyte”). Claim 22, the independent claim at issue, is characteristic of the patent and claims a method of detection in which one or more “reaction zones” containing a bound reactant are spaced out on a test strip. When a solution containing the requisite analyte reaches each of the reaction zones, a predetermined product forms, such as ligand-antiligand pairs. '484 patent col.2 at ll. 6-14 and col.3 at ll. 32-35.

The primary piece of prior art under contention was U.S. Patent No. 4,094,647 (“Deutsch” or “the '647 patent”), which also disclosed a method of detecting ligand-antiligand binding pairs in order to determine the presence of an analyte in a biological fluid sample. In Deutsch, a test strip including a reagent immobilized in a downstream portion of the strip is disclosed. A developing fluid progresses upstream toward the test solution, where the two liquids can combine and advance through the reaction zone(s) to the terminating end. If an analyte is present, a detectable product is formed. '647 patent, col.3 at ll. 59-64.

The examiner initially rejected all of the claims in the application that resulted in the '484 patent as obvious under 35 U.S.C. '103, in light of various combinations of references, including Deutsch. The claims were amended, and the '484 patent was granted and subsequently assigned to Surmodics, Inc. Several years later, Abbott Laboratories (an exclusive licensee) sued Syntron Bioresearch, Inc. for infringement of the '484 patent. The case eventually made its way to the Federal Circuit, which affirmed the judgment of the lower court that the Deutsch reference did not anticipate the claims of the '484 patent.

Following the appeal, Syntron filed a request for an ex parte re-examination of the '484 patent, claiming that there was a substantial new question of patentability per 35 U.S.C. '303(a). The examiner rejected claims 22, 23, and 25 as anticipated by Deutsch, and claim 24 as obvious in light of Deutsch. The Board affirmed the examiner's rejections. In re Swanson, No. 2005-0725, Re-examination No. 90/006,785 (B.P.A.I. May 29, 2007). Surmodics appealed to the Federal Circuit.

The Decision

In its decision, the Federal Circuit began by noting that while any person may file a request for an ex parte re-examination of an issued patent based on prior art patents or printed publications (per 35 U.S.C. '302), the PTO may only grant a re-examination request if it determines that “a substantial new question of patentability affecting any claim of the patent concerned is raised by the request.” In re Swanson, 540 F.3d at 1375. Section 303(a) was most recently amended in 2002 to state, in pertinent part, “the existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.”

The court took some pains to note that the language added in the amended statute specifically discusses references “previously cited by or to the Office or considered by the Office” to suggest that Congress was concerned only with the consideration of issues in prior PTO examinations, and not with prior civil litigation. Id. at 1375. The court concluded that the Board did not err in holding that the prior district court litigation did not prevent the Deutsch reference from raising a “substantial new question of patentability” under '303(a). Specifically, a “substantial new question of patentability” refers to a question that has never been considered by the PTO. Thus, a substantial new question can exist even if a federal court previously considered the question. In re Swanson, at 1379.

Further, '303(a) as amended requires a more context-specific approach based on an analysis of what the PTO actually did. Indeed, a single reference might, alone or in combination, create multiple possible grounds of rejection and thus raise more than one “question of patentability.” Thus, the court stated that the PTO should evaluate the context in which the reference was previously considered and the scope of the prior consideration, and determine whether the reference is now being considered for a substantially different purpose. Id. at 1380.

The court then concluded that under '303(a) as amended, a reference may present a substantial new question even if the examiner considered or cited a reference for one purpose in earlier proceedings. Nothing in the statute creates an exception to this rule for references considered in the context of a rejection of prior claims.

Analysis

The court agreed with the Board that Deutsch raised a substantial new question of patentability under amended '303(a), and then held that Deutsch anticipated the method disclosed in claims 22, 23, and 25 of the '484 patent. Specifically, the court found that Deutsch was originally cited only to reject dependent claims, and was not evaluated as a primary reference that taught or made obvious the specific analytical method claimed. Nowhere in the record did the initial examiner consider the particular analytical method disclosed by Deutsch. Id. at 1381.

However, in reaching this holding, the court dodged the fact that claim 22 differed from the rejected claims in the initial patent. In a footnote, the court posited that while the difference between rejected claims and the claims at issue during a re-examination may be relevant to whether there is a substantial new question of patentability, a change in the scope of a claim will not, in itself, make all questions of patentability of the revised claim “substantial new question[s].” Id. at fn. #6.

Similarly, though also not discussed, it is doubtful that the court would find that a change in the substantive law governing patentability would automatically warrant a finding of a “substantially new question.” For example, in light of the recent KSR v. Teleflex, 550 U.S. 398 (2007) decision (“KSR“) that appears to have unseated the teaching, suggestion, and motivation obviousness patentability standard of the past several decades, it seems unlikely that the court would want to open a Pandora's Box to re-evaluate such a large body of rulings. However, taken one step further, once a party is able to show a “substantially new question,” all of the KSR case law and its progeny will now be available to the examiner performing the re-examination proceeding. If recent PTO examination trends continue, use of KSR during re-examination will likely lead to a greater finding of claims being found non-patentable as obvious.

Recent re-examination statistics provided by the PTO in its Performance and Accountability Report for 2008, released Nov. 17, 2008, show that the PTO granted about 94% of all requests for re-examination in fiscal year 2008. This is generally consistent with the aggregate numbers from fiscal years 2003-2008, in which about 95% total determinations were granted, with only 163 of 3,473 total being denied. Moreover, ex parte requests by third parties are solidly on the rise, at about 87% of the total ex parte requests in 2008, as compared with only 75% in 2006. Additionally, through fiscal year 2007, the PTO indicates that between 60-70% of all issued re-examination certificates have resulted in at least one claim being changed.

Thus, though it may have always been the standard since 2002, In re Swanson reaffirms the proposition that now, more than ever, any particular piece of prior art of record may come back to haunt a patent holder. Indeed, with a historical average showing there to be a 95% chance of finding a “substantial new question” and at least a 60% chance of having a claim changed, it is logical to extrapolate that the initial examiner cannot fully consider and apply any amount of prior art of record to a patent application during prosecution. As a result, especially in light of the fact that KSR will now apply for obviousness rejections, In re Swanson will likely have the effect of encouraging even more third-party ex parte re-examination requests, while only discouraging an applicant's incentive to perform a patent search to provide the best art to the PTO.

Bryan Gallo is an associate in the Cleveland law firm of Pearne & Gordon, LLP, where he specializes in patent preparation and prosecution. He can be reached at [email protected].

According to the legislative history accompanying 35 U.S.C. '303(a), Congress intended the re-examination procedure to provide an important “quality check” on patents that would allow the government to remove defective and erroneously granted patents. Indeed, Congress amended 35 U.S.C. '303(a) in 2002 because it disagreed with the restrictive scope of re-examination imposed by the Federal Circuit in In re Portola Packaging Inc., 110 F.3d 786 (Fed. Cir. 1997). In a panel decision by Judge Arthur J. Gajarsa, joined by Judges Alan D. Lourie and William C. Bryson, the court in In re Swanson, 540 F.3d 1368, (Fed. Cir. 2008), held that a piece of prior art relied on for a prior rejection could, nevertheless, create a new question of patentability sufficient to warrant a re-examination. In so ruling, the court made it easier for third parties to invoke the re-examination statute by broadening the ability of prior art, cited or un-cited, to support a re-examination request.

The Case

In re Swanson is an appeal from a decision of the U.S. Patent and Trademark Office's (“PTO”) Board of Patent Appeals and Interferences (“Board”), which upheld an examiner's rejection of claims 22-25 of U.S. Patent No. 5,073,484 (“the '484 patent”) in a re-examination proceeding.

The '484 patent discloses a method of quantitatively analyzing small amounts of biological fluids to detect the presence of a particular substance (the “analyte”). Claim 22, the independent claim at issue, is characteristic of the patent and claims a method of detection in which one or more “reaction zones” containing a bound reactant are spaced out on a test strip. When a solution containing the requisite analyte reaches each of the reaction zones, a predetermined product forms, such as ligand-antiligand pairs. '484 patent col.2 at ll. 6-14 and col.3 at ll. 32-35.

The primary piece of prior art under contention was U.S. Patent No. 4,094,647 (“Deutsch” or “the '647 patent”), which also disclosed a method of detecting ligand-antiligand binding pairs in order to determine the presence of an analyte in a biological fluid sample. In Deutsch, a test strip including a reagent immobilized in a downstream portion of the strip is disclosed. A developing fluid progresses upstream toward the test solution, where the two liquids can combine and advance through the reaction zone(s) to the terminating end. If an analyte is present, a detectable product is formed. '647 patent, col.3 at ll. 59-64.

The examiner initially rejected all of the claims in the application that resulted in the '484 patent as obvious under 35 U.S.C. '103, in light of various combinations of references, including Deutsch. The claims were amended, and the '484 patent was granted and subsequently assigned to Surmodics, Inc. Several years later, Abbott Laboratories (an exclusive licensee) sued Syntron Bioresearch, Inc. for infringement of the '484 patent. The case eventually made its way to the Federal Circuit, which affirmed the judgment of the lower court that the Deutsch reference did not anticipate the claims of the '484 patent.

Following the appeal, Syntron filed a request for an ex parte re-examination of the '484 patent, claiming that there was a substantial new question of patentability per 35 U.S.C. '303(a). The examiner rejected claims 22, 23, and 25 as anticipated by Deutsch, and claim 24 as obvious in light of Deutsch. The Board affirmed the examiner's rejections. In re Swanson, No. 2005-0725, Re-examination No. 90/006,785 (B.P.A.I. May 29, 2007). Surmodics appealed to the Federal Circuit.

The Decision

In its decision, the Federal Circuit began by noting that while any person may file a request for an ex parte re-examination of an issued patent based on prior art patents or printed publications (per 35 U.S.C. '302), the PTO may only grant a re-examination request if it determines that “a substantial new question of patentability affecting any claim of the patent concerned is raised by the request.” In re Swanson, 540 F.3d at 1375. Section 303(a) was most recently amended in 2002 to state, in pertinent part, “the existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.”

The court took some pains to note that the language added in the amended statute specifically discusses references “previously cited by or to the Office or considered by the Office” to suggest that Congress was concerned only with the consideration of issues in prior PTO examinations, and not with prior civil litigation. Id. at 1375. The court concluded that the Board did not err in holding that the prior district court litigation did not prevent the Deutsch reference from raising a “substantial new question of patentability” under '303(a). Specifically, a “substantial new question of patentability” refers to a question that has never been considered by the PTO. Thus, a substantial new question can exist even if a federal court previously considered the question. In re Swanson, at 1379.

Further, '303(a) as amended requires a more context-specific approach based on an analysis of what the PTO actually did. Indeed, a single reference might, alone or in combination, create multiple possible grounds of rejection and thus raise more than one “question of patentability.” Thus, the court stated that the PTO should evaluate the context in which the reference was previously considered and the scope of the prior consideration, and determine whether the reference is now being considered for a substantially different purpose. Id. at 1380.

The court then concluded that under '303(a) as amended, a reference may present a substantial new question even if the examiner considered or cited a reference for one purpose in earlier proceedings. Nothing in the statute creates an exception to this rule for references considered in the context of a rejection of prior claims.

Analysis

The court agreed with the Board that Deutsch raised a substantial new question of patentability under amended '303(a), and then held that Deutsch anticipated the method disclosed in claims 22, 23, and 25 of the '484 patent. Specifically, the court found that Deutsch was originally cited only to reject dependent claims, and was not evaluated as a primary reference that taught or made obvious the specific analytical method claimed. Nowhere in the record did the initial examiner consider the particular analytical method disclosed by Deutsch. Id. at 1381.

However, in reaching this holding, the court dodged the fact that claim 22 differed from the rejected claims in the initial patent. In a footnote, the court posited that while the difference between rejected claims and the claims at issue during a re-examination may be relevant to whether there is a substantial new question of patentability, a change in the scope of a claim will not, in itself, make all questions of patentability of the revised claim “substantial new question[s].” Id. at fn. #6.

Similarly, though also not discussed, it is doubtful that the court would find that a change in the substantive law governing patentability would automatically warrant a finding of a “substantially new question.” For example, in light of the recent KSR v. Teleflex , 550 U.S. 398 (2007) decision (“ KSR “) that appears to have unseated the teaching, suggestion, and motivation obviousness patentability standard of the past several decades, it seems unlikely that the court would want to open a Pandora's Box to re-evaluate such a large body of rulings. However, taken one step further, once a party is able to show a “substantially new question,” all of the KSR case law and its progeny will now be available to the examiner performing the re-examination proceeding. If recent PTO examination trends continue, use of KSR during re-examination will likely lead to a greater finding of claims being found non-patentable as obvious.

Recent re-examination statistics provided by the PTO in its Performance and Accountability Report for 2008, released Nov. 17, 2008, show that the PTO granted about 94% of all requests for re-examination in fiscal year 2008. This is generally consistent with the aggregate numbers from fiscal years 2003-2008, in which about 95% total determinations were granted, with only 163 of 3,473 total being denied. Moreover, ex parte requests by third parties are solidly on the rise, at about 87% of the total ex parte requests in 2008, as compared with only 75% in 2006. Additionally, through fiscal year 2007, the PTO indicates that between 60-70% of all issued re-examination certificates have resulted in at least one claim being changed.

Thus, though it may have always been the standard since 2002, In re Swanson reaffirms the proposition that now, more than ever, any particular piece of prior art of record may come back to haunt a patent holder. Indeed, with a historical average showing there to be a 95% chance of finding a “substantial new question” and at least a 60% chance of having a claim changed, it is logical to extrapolate that the initial examiner cannot fully consider and apply any amount of prior art of record to a patent application during prosecution. As a result, especially in light of the fact that KSR will now apply for obviousness rejections, In re Swanson will likely have the effect of encouraging even more third-party ex parte re-examination requests, while only discouraging an applicant's incentive to perform a patent search to provide the best art to the PTO.

Bryan Gallo is an associate in the Cleveland law firm of Pearne & Gordon, LLP, where he specializes in patent preparation and prosecution. He can be reached at [email protected].