Final Rules Released For Supplemental Examination - What You Need To Know

The supplemental examination procedure provides patent holders the opportunity to have the USPTO consider, reconsider, or correct information believed to be relevant to the patent. If the USPTO determines that there is a substantial question regarding patentability in light of the information presented, it orders an official ex parte reexamination. If not, the USPTO closes the matter and issues a supplemental examination certificate. A key benefit available under supplemental examination is to prevent others from using the information presented as a basis for a charge of inequitable conduct. The government cost to file the supplemental examination is $21,260 (however, $16,120 of the cost will be refunded if the USPTO decides not to order ex parte reexamination).

Charges of Inequitable Conduct

Patent owners can be vulnerable to allegations of “inequitable conduct” that may be raised in litigation as a defense to patent infringement. Parties accused of patent infringement may attack the asserted patent not only by searching for evidence of prior invention, but also by searching for evidence that the patent was obtained unfairly. For example, those involved in obtaining a patent from the United States Patent and Trademark Office (PTO) have a duty to disclose to the PTO information known to them that may affect patentability. This information may include prior references such as existing patents, previously-published scientific articles, early marketing materials, etc.

After a patent is issued, the patent owner may identify a prior art reference that may be relevant to patentability but was not disclosed to the PTO. Before the enactment of the America Invents Act (AIA), even if such a discovery were made before the patent was asserted against a potential infringer, the patent owner simply bore the risk that the reference would be used to assert “inequitable conduct” in the litigation. Even if the patent owner re-opened prosecution through “reexamination” and provided the reference to the PTO, that prior reference could still form the basis of a later inequitable conduct charge, which could result in the patent being held unenforceable.

A Change To The Law

A recent change to federal law provides a new way for the United States Patent and Trademark Office (PTO) to help patent owners insulate themselves from charges of inequitable conduct. The AIA, signed into law on September 16, 2011, provides for a “supplemental examination” procedure to address this issue. On August 14, 2012, the PTO took the final step toward implementing supplemental examination by issuing its “final rules” on the procedure.

Benefits and Risks

Supplemental examination can greatly benefit a patent owner if the PTO agrees that the patent claims are still patentable, notwithstanding the existence of the newly-disclosed reference. In that event, supplemental examination provides immunity from charges of “inequitable conduct” based on that reference by appending a certificate to the patent. However, under the new rules, there is also a substantial risk that the PTO will consider that the new reference raises a “substantial new question of patentability” and therefore order a formal ex parte reexamination of the patent. This proceeding could narrow the patent’s scope or even cancel the patent completely.

The PTO has now provided the following guidance for supplemental examination:

What Can Be Submitted?

In a supplemental examination, a patent owner may submit patents, published patent applications, or any information which the patent owner believes to be relevant to the patent (e.g., transcripts of audio or video recordings, etc.), and which was not considered, was inadequately considered, or was incorrect during the prior examination of the application. An explanation must be provided regarding the relevance of each item (or a portion of each item) to the claims.

When Can the Supplemental Examination Be Filed?

A patent owner may file a supplemental examination at any time while a patent is still enforceable. However, there are exceptions—circumstances where the protective benefit against a charge of inequitable conduct is not available.

Exceptions—When Is the Immunity Effective?

One such circumstance is that the protective effect does not apply to prior allegations. Prior allegations can be set forth in a civil action, or in a notice for an abbreviated drug application provided to the patent owner, prior to the date of the supplemental examination request. Moreover, the protective effect does not apply to any defenses raised in enforcement actions (i.e., an infringement action or ITC proceeding) unless the supplemental examination and any resulting ex parte reexamination are concluded prior to the date on which the enforcement action is brought. In general and aside from these exceptions, the immunity afforded by supplemental examination is effective when the supplemental examination (or the related ex parte reexamination) has concluded.

When Will the Patent Office Complete the Supplemental Examination?

Within three months of the filing date of the request for supplemental examination, as required by the AIA. By this deadline, the PTO will determine whether to issue a supplemental examination certificate or whether to order an ex parte reexamination.

What to Do Now?

In view of the new procedures available, patent owners should consider reviewing patents that may be asserted in an infringement action or ITC proceeding, or that may be subject to a declaratory judgment complaint, to identify any potential prior references or other relevant information that was not submitted to the PTO during prosecution. Before asserting the patents, patent owners should consider requesting supplemental examination from the PTO in an effort to immunize and strengthen the patents. For parties threatened with patent infringement suits, it may be wise to preemptively ask a court for declaratory judgment, raising any potential inequitable conduct issues and identifying relevant references before the patent owner files for supplemental examination based on those references.

What does the PTO Charge for Supplemental Examination?

The PTO fee for supplemental examination is $21,260, with $16,120 refundable if ex parte reexamination is not ordered. Thus, the lowest government fee may ultimately be $5,140. The PTO has commented that it may lower these fees soon as part of a larger adjustment of PTO fee structures.

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