If at first you don’t succeed ….

Darrin Auito | May 18, 2012

In Re Baxter International, Inc.

(Reexamination No. 90/007,751)

May 17, 2012

Panel: Newman, Lourie, Moore.  Opinion by Lourie.  Dissent by Newman


The CAFC’s decision in In re Baxter Int’l, Inc. (Fed. Cir. 2012) highlights the distinction between a reexamination and a district court proceeding.  Specifically, the CAFC affirmed the Board of Patent Appeal and Interferences (“Board”) determination in a reexamination proceeding that claims 26-31 of U.S. Patent No. 5,247,434 (“the ‘434 patent”) are invalid – despite having previously held in a parallel litigation proceeding that the same claims were not invalid – because the courts and the USPTO use different standards to address validity.  However, the CAFC cautioned that had the claims been found to be invalid in the litigation proceeding after all appeals had been exhausted, then the PTO “ideally should not arrive at a different conclusion” during a parallel reexamination proceeding when presented with the same arguments.


In Fresenius Med. Care Holdings, Inc. v. Baxter Int’l, Inc., No. C 03-1431 SBA, 2007 WL 518804 (N.D. Cal. Feb. 13, 2007), the district court concluded that Fresenius failed to show by clear and convincing evidence that claims 26-31 were not valid.  The CAFC affirmed the district court’s decision, explaining that Fresenius “failed to present any evidence … that the structure corresponding to the [claimed function], or an equivalent thereof, existed in the prior art” and did not identify “the structure in the specification that corresponds to the [claimed function] or compare the identified structure to those structures present in the prior art.  Fresenius USA, Inc. v. Baxter Int’l, Inc., 582 F.3d 1288 (Fed. Cir. 2009).  The CAFC held that the clear and convincing burden of proof “cannot be carried without clearly identifying the corresponding structure in the prior art.”

In a parallel reexamination proceeding, the PTO rejected the same claims as being obvious over references raised in the prior litigation and new references.  Baxter appealed this decision to the BPAI.  Prior to issuance of the BPAI’s decision, in the parallel litigation, the CAFC decided that the claims were not invalid.  The Director of the PTO then ordered the BPAI to consider the CAFC decision prior to issuing its own decision.  After considering the CAFC decision, the BPAI affirmed the rejection of claims 26-31 and remarked: “Although claims 26-31 were not proven invalid in court, a lower standard of proof and the broadest reasonable interpretation standard of claim construction apply at the PTO and therefore the agency is not bound by the court’s determination.”  Board Decision, 2010 WL 1048980, at *12 (citing Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1429 (Fed. Cir. 1988); In re Swanson, 540 F.3d 1368, 1377 (Fed. Cir. 2008)).  Baxter appealed the BPAI’s decision to the CAFC.

The CAFC affirmed and explained that its scope of review in an appeal from the BPAI is “limited” because the BPAI’s factual findings are reviewed for substantial evidence (e.g., if a reasonable mind might accept the evidence to support the finding).

The CAFC rejected Baxter’s argument that the BPAI erred because it “ignored” and “failed to give serious consideration” to the CAFC’s earlier decision.  The CAFC explained that “fundamentally, the PTO in reexamination proceedings and the court system in patent infringement actions ‘take different approaches in determining validity and on the same evidence could quite correctly come to different conclusions.’”  Swanson, 540 F.3d at 1377.   The CAFC explained that “because the two proceedings necessarily applied different burdens of proof and relied on different records, the PTO did not err in failing to provide the detailed explanation now sought by Baxter as to why the PTO came to a different determination than the court system in the [parallel] litigation.”

The CAFC added:  “When 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.”

The CAFC affirmed the Board’s determination that claims 26-31 were not patentable.

Full opinion

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