IP Alerts

IP Alert
IP Alert: Intervening Rights Can Exist Even in the Absence of a Claim Amendment

October 4, 2011

On September 26, 2011, the Federal Circuit issued an important decision relating to intervening rights based on reissued and reexamined patents. In Marine Polymer Technologies, Inc. v. HemCon, Inc., in a case of first impression and in a split decision, the court found that absolute intervening rights can apply to claims that have not been amended during reexamination where arguments during the prosecution of the reexamined claims cause the scope of the claims to change. With this finding, the court overturned a $29 million damages award against HemCon, Inc. 

The dispute involved the interpretation to be given to the claim term “biocompatible” in each of the asserted claims of U.S. Patent No. 6,864,245. The specification of the ’245 patent discloses four tests to be used to determine the biocompatibility of the claimed polymer based on the polymer’s bioreactivity. One of the tests is the elution test, with results based on a scale from zero to four. Zero represents no reactivity, one represents slight reactivity, two represents mild reactivity, and three or four represents moderate or severe reactivity. The other three tests use similar scales for their results. The specification indicates that the claimed polymer can be biocompatible while exhibiting some bioreactivity (i.e., no more than two on the reactivity scale).

Three of the originally issued dependent claims (3, 12, and 20) called for an elution test score of zero, while six originally issued dependent claims (4, 5, 13, 14, 21, and 22) specified elution test scores of one or two.

Nonetheless, the district court adopted a claim construction ruling for the term “biocompatible” that required no detectable biological activity. This narrow construction paved the way for the district court’s conclusion on summary judgment that HemCon was liable for infringement of the ’245 patent and that the ’245 patent was valid.

During the district court action, HemCon initiated a parallel reexamination proceeding of the ’245 patent. In the preliminary rejection, the examiner disagreed with the district court’s narrow claim construction, concluding that this construction was inconsistent with dependent claims that called for an elution test score of one or two. In arguing for the narrower district court construction, Marine Polymer cancelled the inconsistent dependent claims. The examiner then allowed the claims, noting that he now agreed with the district court’s construction of “biocompatible,” based on the cancellation of the inconsistent dependent claims.

On appeal, Marine Polymer took the position that the doctrine of absolute intervening rights is not applicable because the actual language of the asserted claims was left intact during reexamination. However, the Federal Circuit disagreed, indicating that the critical question was not whether the words of the claims have changed, but rather whether their scope has been changed. The court then cited its prior cases finding that arguments in support of the patentability of claims being reexamined can create an estoppel or disavowal, thereby changing claim scope. From this, the court held that the basic principle of changing claim scope by arguments made to the U.S. Patent and Trademark Office in reexamination proceedings also applies in the context of intervening rights. The court held that HemCon had absolute intervening rights, and vacated the $29 million damage awarded to Marine Polymer.

Judge Lourie dissented. In his dissenting opinion, he argued that the plain language of the relevant sections of the statute allowed for intervening rights only where claims are amended or newly added as a result of the reexamination. He argued that an amendment  or claim addition was a threshold requirement before a court may consider whether claim scope has changed for purposes of an intervening rights analysis.

This decision is significant for those Fitch Even clients dealing with reissued or reexamined patents. The decision is also significant for clients with patents involved in reissue or reexamination proceedings, because the decision focuses on attorney arguments as potentially creating intervening rights for accused infringers.

For more information on this decision, please contact Fitch Even partner Stephen S. Favakeh, the author of this alert.

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