Historical Development of Substantial New Question contrasted with the new Section 325(d) Criteria

Takeaways:

• Over the years, the meaning of “substantial new question” of patentability has evolved and broadened.
• While SNQ and Section 325(d) are different, their differences are still being developed in the case law.

Ex parte reexamination proceedings have been available for over 40 years. The reexamination statutes, Public Law 96-517 of July 1, 1981 (also known as the Bayh-Dole Act), included 35 U.S.C. § 303, which codified, in part, that “[w]ithin three months following the filing of a request for reexamination under the provisions of section 302 of this title, the Director will determine whether a substantial new question of patentability affecting any claim of the patent concerned is raised by the request.” Thus, the criteria for granting reexamination was established: a substantial new question (SNQ) of patentability affecting any claim of the patent. Unfortunately, the phrase “substantial new question” was not defined in the statute. Rather, that has been left to the Office and Courts to decide.

The legislative history illuminates the phrase’s intent: to protect patentees from having to respond to, or participate in, unjustified reexaminations and bar reconsideration of any argument already decided by the U.S. Patent and Trademark Office (USPTO). See H.R.Rep. No. 96-1307, 3 (1980). Over the years, the Board of Patent Appeals and Interferences, the Patent Trial and Appeal Broad (PTAB), and the Court of Appeals for the Federal Circuit have heard many arguments exploring the boundaries of the criteria for determining the presence of an SNQ.

During reexamination’s first 20 years, it was believed that prior art previously considered during the original prosecution could not serve as a basis for creating an SNQ. As of November 2002, Public Law 108-273 made clear that an SNQ may be based solely on old art where the art is being presented or viewed in a new light or in a different way, as comparted with its use in the earlier examination or concluded reexamination. The new light may be evidenced by a materially new argument or interpretation of the art presented in the reexamination request. Thus, Congress broadened the body of prior art that could raise an SNQ.

During development of the law, the USPTO and the Court looked to a combination of the reexamination statutes and the materiality standard of 37 C.F.R. § 1.56, and arrived at a working conclusion that, for an SNQ to be present, it is necessary that: 1) the prior art be such that a reasonable examiner would consider the teaching to be important in deciding whether or not the claims was patentable; and 2) that the same question of patentability as to the claim has not been decided by the Office or in any final holding of invalidity by the Federal Courts, or raised to the Office in any pending reexamination or supplemental examination of the patent. MPEP 2242. Note that this standard does not rise to the level of a prima facia case of unpatentability, as explained in In re Etter, 759 F.2d 852, 857 (Fed. Cir. 1985).

While it may be argued that we still do not clearly know what constitutes an SNQ, we do have some boundaries. For example, a final Court holding that a claim is “not invalid” does not mean that no SNQ is present based upon that same art (alone or in combination with new art) or based upon wholly new art. This is partially because the Court and the Office operate on different standards of proof, with the Office standard of “preponderance of evidence” being an easier threshold than the Court’s “clear and convincing” standard. We also know that prior art rejections by the Office on the same or substantially identical prior art references in the same patent, which was never overcome, usually points to an SNQ being present. For example, an SNQ could arise from prior art applied in a reissue application that was subsequently abandoned by the patent owner, if the rejection was based upon patents or printed publications applied under 35 U.S.C. §§ 102 or 103.

More recently Congress introduced a new wrinkle when enacting the American Invents Act (AIA), namely 35 U.S.C. § 325 (d). Section 325(d) states in relevant part the Office has the ability to discretionarily deny any post-grant proceeding when the same or substantially the same prior art or arguments were previously present to the Office. This statute has created complexities for the CRU, requesters, and patent owners. Section 325 (d) serves a similar intent to the SNQ requirement: to prevent patentees from having to respond to, or participate in, unjustified reexaminations and bar reconsideration of any argument already decided by the USPTO.

However, it was not long before these two limitations on reexaminations collided when failed PTAB review petitions were repackaged and submitted as requests for reexamination – many of which were (and are) granted by the CRU. This tension in the law has given rise to a cottage petition practice under Section 325(d) where a patent owner requests termination of reexaminations based upon prior art raised in failed PTAB review petitions that was merely repackaged as a reexamination request.

To date, we have limited guidance from the Court. There is a very narrow holding in In re Vivint, Inc., 14 F.4th 1342 (Fed. Cir. 2021) (“the Patent Office, when applying § 325(d), cannot deny institution of IPR based on abusive filing practices then grant a nearly identical reexamination request that is even more abusive.”). Besides this one 325(d) precedential decision, there are two non-precedential Federal Circuit opinions (IN RE KNAUF INSULATION, INC., No. 2022-166 (Fed. Cir. Nov. 22, 2022) and IN RE SOUND VIEW INNOVATIONS, LLC, No. 2022-161 (Fed. Cir. Nov. 22, 2022)) both generally upholding the Office’s discretion to determine that the prior art and arguments are not the same or substantially the same as previously presented to the Office and order reexamination. The line between the new question of patentability and abusive filing practices remains fuzzy.

In the end, practitioners need to understand this interplay and strategic use of all available avenues or defenses. Counsel with deep experience in all post-grant proceedings are critical to success, regardless of which side of the case one is on.