In re Baxter International, Inc.


Docket No. 2011-1073

NEWMAN(D), LOURIE, MOORE
May 17, 2012

Brief summary: The panel affirmed the BPAI decision of invalidity for obviousness even though the district court had concluded the opposite. The panel explained that this was acceptable as the burden of proof in front of the court (clear and convincing) was different from that required at the USPTO (preponderance of the evidence).

Summary: Baxter appealed from BPAI decision that it’s re-examined U.S. Pat. No. 5,247,434 (Reexamination No. 90/007,751) relating to hemodialysis machines was obvious; the panel affirmed the BPAI decision. The ‘434 patent had been the subject of prior litigation with Fresenius (N.D. Cal., 2007) in which the jury found the patent obvious but the DC granted JMOL that the proffered prior art was not clearly and convincingly shown to describe the claimed “means for controlling” and “means for delivering” limitations (affirmed by FC (2009) for “somewhat different reasons”). In parallel with the Fresenius litigation, the USPTO began to reexamine the ‘434 patent as requested by Fresenius. The examiner found a number of references rendered Baxter’s claims obvious and the BPAI affirmed that conclusion. Baxter first attacked the procedure used in the reexamination, but the panel pointed out that the PTO and the courts “take different approaches in determining validity and on the same evidence could quite correctly come to different conclusions” (citing In re Swanson, FC 2008) and that “the standard of proof – a preponderance of the evidence” (required in a reexamination, “is substantially lower than in a civil case”. Thus, the examiner was only required to show (and, the panel concluded, did show) “that a reasonable person might accept that evidence to support a finding that claim 26 is not patentable under a preponderance of the evidence standard of proof.” However, the panel also explained that “[w]hen a party who has lost in a court proceeding challenging a patent, from which no additional appeal is possible, provokes a reexamination in the PTO, using the same presentations and arguments, even with a more lenient standard of proof, the PTO ideally should not arrive at a different conclusion.” In this case, however, different references were presented to the BPAI. Baxter also argued that the BPAI erroneously construed the term “soliciting…in an overbroad manner” but the panel disagreed and concluded that the decision was correct. Thus, the BPAI decision that the disputed ‘434 claims are obvious was affirmed. Judge Newman’s dissent aruged that the panel improperly “appear(s) unperturbed by the agency’s nullification of this court’s final decision” as “[n]o authority, no theory, no law or history, permits administrative nullification of a final judicial decision” (“no hint that reexamination of the question of patentability is intended to override judicial resolution of the question of patentability”).

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