There Was a Simpler Way to Decide Fresenius v. Baxter!

There Was a Simpler Way to Decide Fresenius v. Baxter!

 by Charles L. Gholz and W. Todd Baker

Excerpt:

In Fresenius USA, Inc. v. Baxter International, Inc., 721 F.3d 1330, 107 USPQ2d 1365 (Fed. Cir. 2013) ( opinion for the court by Circuit Judge Dyk, joined by Circuit Judge Prost; dissenting opinion by Circuit Judge Newman), the majority held (1) that a previous judgment of a district court, affirmed on appeal to the Federal Circuit, that the claims in a patent involved in an infringement action were not invalid did not preclude a later judgment by the Patent Trial and Appeal Board (hereinafter referred to as "the PTAB") in an ex parte reexamination initiated by Fresenius cancelling those same claims on the ground that those same claims were unpatentable and (2) that the judgment of the PTAB cancelling those claims "trumped" the final judgment of the district court in the sense that it voided the patent ab initio, resulting in the Federal Circuit's vacating the district court's judgment in favor of the patentee [an enhanced version of this opinion is available to lexis.com subscribers].

Judge Newman dissented with her customary vehemence. According to her, (1) the judgment of the district court could not be "overrid[den] and void[ed]..." by a subsequent judgment (by either a court or an administrative agency) and (2), in any event, it is un-Constitutional for a mere "administrative agency...[to] revise[], overturn[] or refuse[] faith and credit..." to the "final judgment of a federal Article III Court of Appeals."

WHAT THE MAJORITY SAID

Initially, the majority went to considerable pains to emphasize that, in the reexamination proceeding, the board had "affirmed the examiner's determination that the relevant claims would have been obvious in light of prior art overlooked in the initial examination...." However, we believe that the majority would have reached the same ultimate decision even if the board's decision in the reexamination had been based on the same prior art that was considered in the initial examination. Accordingly, we do not linger over this portion of the majority's opinion.

Next, the majority discussed the legislative history of the reissue and reexamination statutes, holding that, in the case of both cancellation of patent claims pursuant to reissue and cancellation of patent claims pursuant to reexamination, "suits based on cancelled claims must be dismissed." For the reasons set forth in a previous article, Gholz and Gardella, Cancellation of Patent Claims in an Interference After Those Claims Have Been Held Not Invalid in an Infringement Action, 19 Intellectual Property Today No. 4 at page 21 (2012), we believe that the same rule applies to the cancellation of patent claims in an interference. However, we also do not linger over this portion of the majority's opinion. [footnotes omitted]

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Charles L. Gholz is a Partner in Oblon, Spivak, McClelland, Maier & Neustadt, LLP; Alexandria, Virginia. His direct dial telephone number is 703/412-6485, and his email address is cgholz@oblon.com.

W. Todd Baker is a Partner in Oblon, Spivak, McClelland, Maier & Neustadt, LLP. His direct dial telephone number is 703/412-6383, and his email address is tbaker@oblon.com.