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October 26, 2012

Cruel Hoax Reexamined

Under the current regime, a patent grant is always provisional. Most any patent can be invalidated by a competent party with deep pockets - deep enough to tear apart the slight edge of innovation that a patent claims; if not by fact, by confusion. With an erstwhile IBMer at its helm, the USPTO is open for business to help large corporations kill small-fry patents. Even if a patent determined valid by a court ruling can still be invalidated through reexamination at the PTO. Res judicata has a hollow ring.

In re Baxter International (CAFC 2011-1073) precedential; en banc, per curiam

In this matter, a patent held valid in litigation is still subject to reexamination. Judges O'Malley, Rader, and Linn opine with aplomb:

[A] prior court decision in which a party has failed to prove a patent invalid does not bar the Patent and Trademark Office (PTO) from subsequently reexamining that same patent. And, it concludes that, despite a final court judgment reaching a contrary conclusion as between the patent holder and one alleged infringer, the PTO is free to conclude that the patent is, indeed, invalid. That proposition is an unremarkable one.

Judge Newman, the only judge on the CAFC with any relatively uncorrupted sense of reality:

Baxter requests rehearing en banc, for the court holds that a final judgment of this court, after trial and appeal, has no preclusive effect on administrative agency review of the same issue on the same evidence - and also has no preclusive effect on our judicial redetermination of the same issue on the same evidence. Thus the loser in the initial adjudication need only seek reexamination of the patent that was finally adjudged to be infringed, and the agency is authorized to start again, again encumbering the patent. This principle is critically at odds with the tenets of repose and conclusiveness of judicial determination:

This general rule is demanded by the very object for which civil courts have been established, which is to secure the peace and repose of society by the settlement of matters capable of judicial determination. Its enforcement is essential to the maintenance of social order; for the aid of judicial tribunals would not be invoked for the vindication of rights of person and property if, as between parties and their privies, conclusiveness did not attend the judgments of such tribunals in respect of all matters properly put in issue, and actually determined by them.

Southern Pac. R.R. v. United States, 168 U.S. 1, 49 (1897).

Nonetheless, the Federal Circuit today again endorses this departure from established judicial and administrative process. This departure directly confronts the Constitution, for "[j]udgments, within the powers vested in courts by the Judiciary Article of the Constitution, may not lawfully be revised, overturned or refused faith and credit by another Department of Government." Chi. & S. Airlines, Inc. v. Waterman S.S. Corp., 333 U.S. 103, 114 (1948).

Posted by Patent Hawk at October 26, 2012 4:59 PM | Case Law