The Evolution of “New” in the "Substantial New Question" Standard in Patent Reexamination

Authors

Matthew P. Metzger Jason D. Eisenberg

As the Patent Trial and Appeal Board and the Acting USPTO Director refocus challengers, and with them Patent Owners, towards reexamination from inter partes review proceedings, the need to understand the nuance of “new” in the substantial new question of patentability within the ex parte reexamination statute has never been more critical for the patent bar. In this article we explore the history and Congressional intent, the case law development, and the current standard for what is “new” prior art that is proper and necessary to obtain a grant of a reexamination request and thus how a patent owner can argue that it’s not “new.”

Introduction: The Economic Crisis and Patent System Reform of the 1970s

The 1970s marked a pivotal moment in American economic history. After decades of rising productivity, the economy suddenly reversed course. The United States was perceived as losing its competitive edge in the technology field, and the U.S. standard of living had declined.[1] President Carter hinted that systemic problems in the patent system played a role in this decline, observing that “patents can provide a vital incentive for innovation, but the patent process has become expensive, time-consuming, and unreliable.”[2]

In response to these concerns, Congress sought to rebuild investor confidence and the public’s trust in new technologies by strengthening the patent system.[3] A key component of this initiative was the reexamination statute—35 U.S.C. § 302.

Congressional Response: The Reexamination Statute and Its Foundational Balancing Act

The reexamination statute involved an intricate balancing act. Proponents emphasized several key benefits. First, the reexamination statute benefited stakeholders. Stakeholders gained from resolving validity disputes faster and for less money compared to litigation. Second, the statute benefited courts. Courts could leverage the expertise of the PTO for prior art that was not previously of record. Third, the reexamination statute enhanced patent quality.[4] Having this quality control measure was crucial in rebuilding the public’s trust in the patent system, particularly for patents whose validity was uncertain due to relevant prior art that was previously not considered.

Congress had to balance these benefits with a very real threat—that reexamination could create new opportunities for abusive tactics. Unwarranted reexaminations were a serious concern because they could lead to new ways to harass patentees and waste a patent’s enforceable life.

Balancing the advantages with the threat of abusive tactics led to the establishment of the “substantial new question of patentability” (SNQ) requirement. The SNQ requirement provides that reexamination is only authorized when there is a substantial new question of patentability affecting any claim of the patent. This requirement carefully limits reexaminations to new prior art, shielding patent owners from the threat of unjustified reexaminations.

Defining the Substantial New Question Standard

The “Substantial” Threshold: A Deliberately Low Bar

A “substantial” question of patentability is raised “where there is a substantial likelihood that a reasonable examiner would consider the prior art (patent or printed publication) important in deciding whether or not the claim is patentable.”[5] The “substantial” threshold is a low one and is established when prior patents and/or publications would be considered important to an Examiner. This is consistent with an underlying benefit of the reexamination statute—to increase certainty for patents whose validity was uncertain due to relevant prior art that was previously not considered. However, to balance this low “substantial” threshold and avoid the threat of unwarranted reexaminations, the substantial question of patentability must also be “new.”

The “New” Requirement: Protecting Against Harassment

Three general categories have emerged for evaluating whether a question of patentability is “new.” The first category is an entirely new ground of unpatentability. There is widespread agreement that reexamination may be appropriate when a ground of unpatentability is wholly unlike any matter that the original prosecution or a previous challenge evaluated. The second category is duplicate grounds of unpatentability. Again, there is agreement that reexamination should not take place when the same question of patentability has already been decided by the Office or by a Federal Court.[6] For example, there is no “new” SNQ when an argument relies on the same facts and same rationale as a rejection applied during original prosecution or in another challenge to the patent. Challenges arise in a third category, which falls between entirely new grounds and duplicate grounds.

In this third category, the scope of the “new” requirement has been contentious in two areas: (1) when the ground relies on references that were before the original examiner, PTAB, or Court, but not expressly discussed, and (2) when a reference was in front of the original examiner, PTAB, or Court, but the analysis in the reexamination request differs from the previous analysis. There has been an adjudicatory power struggle between courts and the PTO over the proper forum for deciding these issues. Generally speaking, if reexamination is more broadly acceptable, then the PTO has a larger role in determining the validity of issued patents, diminishing the role of courts on this issue.

The Early Power Struggles between the PTO and the Federal Circuit (1990s)

The PTO and Federal Circuit first clashed in In re Recreative Technologies Corp. Here, a competitor requested reexamination based on five patents and three publications that the PTO did not previously consider, and the PTO agreed.[7] The PTO ultimately rejected the claims based on a new ninth reference, which was not provided by the competitor and had already been applied against the claims during prosecution and overcome.[8] The reexamination rejection was ultimately appealed to the Federal Circuit, and the Court held that this did not involve an SNQ.[9] The Court tied the rational back to the reexamination statute’s legislative history, explaining that applying an old ground of rejection as the only ground of rejection went against the legislative history of the statue, and the PTO should have terminated reexamination because there was no SNQ, nothing was “new.”[10]

After Recreative Technologies, the PTO amended MPEP 2258 to interpret the holding narrowly. Amended MPEP 2258 stated:

Once reexamination is ordered based on a proper substantial new question of patentability, grounds of rejection previously considered by the [PTO] may not be raised by the examiner. For this purpose, a ground of rejection was “previously considered” if it: (1) is applied to the same claimed subject matter as a previous rejection in the examination of the original patent or earlier concluded reexamination; (2) relies on the same combination of patents and printed publications as the previous rejection; and (3) applies the same statutory basis as the previous rejection.

Tensions continued to rise between the Federal Circuit and the PTO in In re Portola Packaging, Inc., where a patent owner made narrowing claim amendments during reexamination to overcome a new reference.[11] The PTO rejected the amended claims as obvious based on a combination of two references.[12] The two references were applied separately during prosecution, but had not been applied in combination.[13] The Federal Circuit concluded that in this instance there was no SNQ of patentability, because it was not “new.” Again, relying on the legislation history of the reexamination statute, the Federal Circuit held that a rejection made during reexamination does not raise an SNQ patentability if it was supported only by prior art previously considered by the PTO in relation to the same or broader claims.[14] Notably the Federal Circuit stated that “the PTO was authorized to reexamine an issued patent only within strictly defined limits.”[15]

Modern Application: The New Lowered SNQ Threshold and Cellect

After Portola Packaging, Congress stepped in. Congress addressed this ongoing disagreement between the PTO and Court by amending 35 U.S.C. § 303. Amended § 303 remains controlling, and states, “[t]he 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.”[16] This amendment reversed the holding in Portola Packaging.

Recently, the Court recognized this new lower standard of SNQ in Cellect. In Cellect, there were four challenged patents that were all interrelated and each claimed priority to a single application.[17] Reexamination was instituted based on obviousness double patenting (ODP), which was not raised during prosecution.[18] Patent Owner argued there was nothing “new”, e.g., no SNQ because during original prosecution the same Examiner analyzed the entire family of patents, and issued ODP rejections for other applications in this family owned by the Patent Owner, but did not issue ODP rejections for the challenged patents.[19] Therefore, Patent Owner argued the original Examiner was aware of the ODP rejections, so requesting one in the reexamination was not “new” and thus there was no SNQ.[20] The Court disagreed with the Patent Owner, holding that the SNQ threshold was met when the prosecution history may on infer what an Examiner thought, but lacked explicit evidence that an Examiner considered a specific issue during original prosecution.[21]

Conclusions and Takeaways

The historical evolution of what is “new” as the threshold of what is an SNQ continues even today. The 35 U.S.C. § 325(d) standard, which we have discussed in other articles, just adds more need for clarification where it requires the art and arguments to not be substantially the same as anything seen by the PTO. Patentees need to understand where the Courts and PTO have drawn the line on what is “new” and need to be ready to challenge the Request. At the same time, to mitigate the patent owner challenges, the requester should have a section clearly calling out why the prior art and arguments are “new” and not leave to chance that the Central Reexamination Unit Examiners will glean that answer from the Request.

[1] Congressional Budget Office, The Productivity Slowdown: Causes and Policy Responses, U.S. Congress, 1 June 1981.

[2] 15 Weekly Comp. of Pres.Doc. 2069, 2070 (Oct. 31, 1979).

[3] 126 Cong. Rec. 29,895 (1980).

[4] In re Recreative Techs. Corp., 83 F.3d 1394, 1396 (Fed. Cir. 1996).

[5] M.P.E.P. § 2242

[6] Id.

[7] In re Recreative Techs. Corp., 83 F.3d 1394, 1395 (Fed. Cir. 1996).

[8] Id.

[9] Id. at 1397.

[10] Id.

[11] In re Portola Packaging, Inc., 110 F.3d 786, 787 (Fed. Cir. 1997).

[12] Id.