In previous posts, we have outlined the details of Supplemental Examination, a post-grant proceeding introduced by the America Invents Act (AIA):

• AIA Supplemental Examination Nuts and Bolts: Get it in your toolbox and don’t leave home without it!

• A Tale of Two Supplemental Examinations: Part 1: Unraveling Confusion

• A Tale of Two Supplemental Examinations, Part II: Surprising Events When Citing Art That, but for a Clerical Error, Would Have Been Cited During Original Prosecution

• Supplemental Examinations and Alice: The Bare Essentials of When Not to Poke the Bear

• In Supplemental Examination, Discretion Is the Better Part of Valor

In this article, we check in on the status of supplemental examination to determine whether the procedure is being used more by patent owners and to try to discern any trends.

What is Supplemental Examination?

Supplemental examination (SE) gives patent owners a proactive tool to have the USPTO “consider, reconsider, or correct information” that the patent owner believes is “relevant to the patent.” 35 U.S.C. § 257(a). The information that may be submitted with a supplemental examination request is not limited and includes any and all information that could be relevant to an allegation of inequitable conduct or unclean hands.

The benefit of supplemental examination is that any information “considered, reconsidered, or corrected during a supplemental examination of the patent” cannot be the basis for a holding of unenforceability. 35 U.S.C. § 257(c)(1). In other words, once a patent survives supplemental examination, any information cited during that proceeding can never be used as the basis for a finding of inequitable conduct unless that information itself is tainted by inequitable conduct occurring during the Request for Supplemental Examination.

That said, SE (and any subsequent ex parte reexamination) is a proceeding before the USPTO. Thus, the duty of disclosure under 37 C.F.R. § 1.56 applies. As indicated above, any information presented during the SE and subsequent reexamination might itself be subject to assertions of inequitable conduct. In sum, claims that are confirmed, added, or amended through a SE or ex parte reexamination enjoy protection against any future unenforceability challenges based on the submitted information—but only if the information submitted does not itself raise enforceability issues.

Although SE has in effect since September 16, 2012, the procedure is still not widely used by patent owners. Based on the USPTO’s public Patent Application Information Retrieval (“PAIR”) system, only 337 SEs have been filed since their inception in 2013 through the end of FY2020, averaging about 42 SEs filed per year. As seen in Fig. 1, however, there was an uptick in requests for SE in FY2020 compared to FY2018 and FY2019.

Fig. 1: Supplemental Examination Requests Filed by Year

Source: USPTO Annual Reports 

The USPTO categorizes SE requests into four broad technological categories: electrical, mechanical, chemical, and design. Compared to FY2018 and FY2019 filings, the electrical-related requests filed in FY2020 still comprise almost half of total requests filed (161/337 (48%)). In FY2020, chemical-related requests moved ahead of mechanical-related requests to become the second-most common with 93 (28%) requests. Mechanical-related requests come in third with 75 (22%). Lastly, design requests are still the least common with just 8 (2%).

Fig. 2: SE Requests Filed by USPTO Technology Grouping

Source: USPTO Annual Reports 

What Materials Are Submitted with SE Requests?

35 U.S.C. § 257 (and the USPTO) allows a patent owner to submit “information believed to be relevant to the patent” that the patent owner wishes the USPTO to consider, correct, or reconsider. Note that the standard is “relevant to the patent,” not “material to patentability,” as required to comply with the duty of disclosure under Rule 56. 35 U.S.C. § 257(a); 37 C.F.R. § 1.605(b).

The types of information submitted for SEs have thus not been limited to just patents and patent applications. In fact, in approximately 1/3 of requests for SE, the information submitted included case law, district court or PTAB litigation documents; printed publications; declarations; posters or presentations; and webpages. The remaining 2/3 of requests include U.S. and foreign patents or patent applications.

Fig. 3: What Kinds of Materials Are Submitted with SE Requests?

Source: Finnegan research using USPTO PAIR considering all 301 SE requests as of Dec. 2, 2020. Note: there may be more than one type of information submitted per SE request.

Substantial New Question of Patentability and Ex Parte Reexamination

Based on the USPTO’s Annual Reports from 2013 to 2020, a substantial new question of patentability (SNQ) was found in 68% (203/299) of SE requests granted a filing date. This is down just slightly from 72% in 2019.

In other words, in 32% of the cases, no SNQ was found.  In these cases, unless inequitable conduct occurred during the Supplemental Examination, the patent owner received the protection of 35 U.S.C. § 257(c)(1) without having to undergo ex parte reexamination.  A finding of no SNQ, and thereby avoiding the uncertainties of reexamination, can be the best-case scenario for the patent owner.

Fig. 4: Percentage of SEs Granted Filing Date in Which SNQ Found

Source: USPTO Annual Reports

The number of SE requests where an SNQ was found can be further broken down by technology areas. The data shows an SNQ is more likely to be found in the electrical and mechanical fields than chemical.  As of December 2, 2020, SNQs were found in 59% (39/66) of chemical-related SE requests.  In contrast, SNQs were found in 73% (170/234) of electrical and mechanical-related SE requests.

Fig. 5: Substantial New Question of Patentability (“SNQ”) Found by Technology

Source: Finnegan research using USPTO PAIR, as of Dec. 2, 2020

If an SNQ is found, the USPTO Director will order ex parte reexamination of the patent. 35 U.S.C. § 257(b). At the conclusion of an ex parte reexamination, the Office publishes an ex parte reexamination certificate, indicating whether the reexamined patent claims are confirmed without change, cancelled, amended, or newly added.

According to USPTO data on the resolved SEs as of December 2, 2020, SEs in the chemical field resulted in 13% of the claims being confirmed, 30% of the claims being cancelled, 37% of the claims being amended, and 21% of the claims being newly added. In the electrical and mechanical fields, 21% of the claims were confirmed, 30% of the claims were cancelled, 32% of the claims were amended, and 17% of the claims were newly added.

These data indicate that SE-generated ex parte reexaminations are generally riskier than ex parte reexaminations, i.e., result in more claims canceled.” Specifically, in ex parte reexaminations from July 1, 1981­–Sept. 30, 2020, 21% of the claims were confirmed, 13% of the claims were cancelled, and 66% of the claims were amended.

Fig. 6: Closer Look at SE Outcomes When SNQ Found and Ex Parte Reexamination Ordered

Source: Finnegan research using USPTO PAIR on the resolved SEs as of Dec. 2, 2020, including 39 resolved chemical SEs; 154 resolved mechanical/electrical/design SEs. More than one outcome may apply per SE. Also, in the 92 SE requests where no SNQ was found, the original claims remain. See Ex parte reexam stats from www.uspto.gov July 1, 1981 – Sept. 30, 2020, “all claims confirmed, all claims canceled, claims changed.”

Litigation after SE

Patent owners may wish to gain the protection offered by SE prior to litigation to bolster the presumption of validity and enforceability. Litigation may be brought after SE and any subsequent ex parte reexamination concludes. During litigation, patent owners can rely on 35 U.S.C. § 257(c)(1) to eliminate invalidity grounds raised during SE. Consider two district court cases, summarized below, in which supplemental examination played a role.

In Schlumberger Tech. Corp. v. BICO Drilling Tools, Inc., No. H-17-3211, 2018 U.S. Dist. LEXIS 161158 (S.D. Tex. Sept. 20, 2018), the court considered the impact of 35 U.S.C. § 257(c)(1).  The patent owner filed an SE request, in which the USPTO found no SNQ.  The patent owner then brought suit alleging patent infringement.

The defendant argued there was no infringement because the patent owner “specifically disclaimed a portion of its invention while prosecuting the patent.” Schlumberger, 2018 U.S. Dist. LEXIS 161158, at *2. In response, the patent owner argued that the alleged disclaimers were actually erroneous statements that it corrected during the request for SE. Id. at *3. The patent owner argued that the court must consider the entire prosecution history, “including the USPTO’s determination with regard to its request for supplemental examination.” Id.

The defendant disagreed, arguing that “no court has ever held that a supplemental examination can be used to affect claim scope in any way” and “the effect of [supplemental] examinations is limited to curing inequitable conduct.” Id. at *23–24. Because there was no SNQ and therefore no reexamination, the defendant argued that the patent owner was unable to retract its alleged “erroneous statement.” Id. at *24.

In what was evidently a case of first impression, the district court agreed with the patent owner.  The court considered the SE proceedings as part of the prosecution history and interpreted the Office’s Reexamination Denial to mean that “the statements made in the Alleged Disclaimer were not a disclaimer and that the claims should be construed as they are written.” Id. at *23, *26, *27. The case was later dismissed.

Similarly, in Sunoco Partners Marketing & Terminals, L.P. v. U.S. Venture, Inc., 339 F. Supp. 3d 803 (N.D. Ill. 2018), the patent owner filed an infringement suit after pursuing SE.  During the SE procedure, the Director found a SNQ with respect to certain claims and ordered an ex parte reexamination.  In that reexamination, those claims were canceled, but many of the patent’s remaining claims were untouched.

During the infringement action, the defendant raised a defense of unenforceability for inequitable conduct, alleging that the information submitted by the patent owner in the SE was false. The court disagreed, and without mentioning 35 U.S.C. § 257(c)(1), granted the patent owner plaintiff’s motion for summary judgment of no inequitable conduct. Id. at 848.

The defendant appealed. On appeal, the defendant again argues that the patent is unenforceable for inequitable conduct because, among other things, the declaration filed with the SE request was allegedly false.  See U.S. Venture, Inc. v. Sunoco Partners Mktg. & Terminals, L.P., Nos. 2020-1640 and 2020-1641, Opening Brief (Aug. 14, 2020). Oral arguments will be heard later this year.

So far, no patent owner has successfully used SE to overcome alleged inequitable conduct occurring during the original prosecution and then successfully enforced the claims.  In other words, no patent owner has yet enjoyed the protection of 35 U.S.C. § 257(c)(1) in litigation.

Conclusion

We expect the use of SE by patent owners to increase with time. That increase may be reflected in the data for FY2020.  Cases in the electrical field continue to dominate SE requests, and we see no reason why that would change.

SE’s ability to quickly cover a wide range of documents and related issues may benefit patent owners. When a patent owner foresees patent litigation on the horizon, the short statutory deadline for finding an SNQ may be a benefit, particularly in the pharmaceutical field where potential litigation has a more predictable timeline.  The benefits of SE, of course, must be sought carefully, because there is a risk of total disaster.  If an SNQ is found, and all claims are canceled in the subsequent ex parte reexamination, the patentee will be left with nothing to enforce.

This post was also written by Stacy Lewis.