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Old 02-01-2006, 07:34 PM   #21 (permalink)
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Originally Posted by BluePolaski
So back to the question at hand...does anyone know how the Judge could just press on with the case leaving out what seems to me to be pretty vital information coming from the patent office. I mean it seems as though he wants this to be done and over with. But if he rules before the Patent Office issues its final ruling and RIM appeals, isnt he actually dragging this on further for himself?
Because the Federal courts and the Patent Office are two different fora with different standards.

Here is how it generally works in the courts: an issued patent is presumed to be valid for purposes of litigation. When a patentee brings an infringement suit, there are generally two defenses: (1) the patent is invalid (anticipated, obvious, bad inventorship, inequitable name it) and (2) even if the patent is valid, I don't infringe (that is, I do not literally or equivalently meet each and every limitation of one or more claims of the patent). The judge first has to decide what the claims mean (the Markman process). There are (reasonably) clear standards for doing this. Then, the jury (or the judge, in a bench trial) compares the accused device to the interpreted claims to see if each and every element of the claim is present in the accused device either literally or equivalently. Then, for purposes of validity, the court can basically consider anything it wants--prior patents, public demonstrations, etc.--including prior art examined by the PTO during original prosecution! Assuming the patent is found valid, and that the comparison reveals an infringement, a judgment is entered against the infringer, who can then appeal as a matter of right to the Federal Circuit and, from there, to the Supreme Court, in the Supreme Court's discretion (the Supreme Court takes relatively few patent cases, believing--correctly, IMHO--that the specialized judges on the Federal Circuit are much better at patent law than they are). When all appeals are exhausted, that's it--the judgment is final. You pay, you get enjoined, whatever.

Over in the patent office, a reexam is available when a patent or printed publication raises a substantial new question of patentability of an enforceable patent (patent term + six years). In other words, during a reexam, the PTO CAN'T look at anything it wants--it can only look at patents and printed publications, and only if the document raises a substantial NEW question of patentability. Further, the PTO applies a different claim interpretation standard than do the courts. The PTO will take the BROADEST possible reading of the claims, whereas the court will (or is supposed to, anyway) read the claims in light of the specificaiton. Generally speaking, reexam proceeds just like regular patent examination. There are a number of outcomes of a reexam--the originally issued claims could be found valid, in which case the presumption of validity in litigation gets even stronger; amended (narrower) claims could be issued; no patentable claims could be found.

The important thing to realize is that it is not totally crazy for the courts and the PTO to differ in their opinions of validity. Often, a judge will stay a litigation in the face of a parallel reexam in the PTO. Why? Because he wants the benefit of the PTO's expertise on the interpretation of the claims and the validity of the patent, since that may allow him to get rid of the case on summary judgment. If the PTO concludes that the original claims were invalid before the court says anything, it's a pretty good bet that the court will, too. Why wouldn't the court want to stay the case? Perhaps because the legal remedy ($$$) is insufficient to make the plaintiff whole, and an equitable remedy (an injunction) is required. Of course, that can't possibly be the reason in NTP, since NTP is ONLY interested in the legal remedy (they're using the equitable remedy to hold RIM hostage for more $$$)--it's not like they want RIM shut down so they can claim the market for themselves.

What do the current reexams mean for NTP and RIM? IMHO, at present, their biggest meaning is settlement value. NTP has said that they would have been willing to settle for $25M at first. RIM held out. The closer we get to enforcement of the injunction, the higher the settlement value goes. The more claims get struck by reexam, the lower it goes. I think the judge just wants to make it go away. What's the holdup in the settlement? I'd bet that it has something to do with a clause requiring NTP to cough up any settlement if the claims are rejected by the PTO.

Suppose the judgment goes final and then there's a final conclusion by the PTO that there is no patentable subject matter. What changes? It's a pretty safe bet that the injunction gets vacated, since there's nothing to prospecitvely enforce. And any prospective license wouldn't be worth the paper it's written on. Past damages? RIM is probably SOL--it would take a re-litigation of patent validity issue, which isn't likely to happen. Remember, a court of competent jurisdiction has already decided that the patent is valid AND infringed.

One last point: appeals in the PTO do have a place in this process. This is separate from appeal in the courts, though you can appeal from the PTO to the courts.

Last edited by BBDummy : 02-01-2006 at 08:06 PM.