Baker Hostetler Patent Watch: In re Baxter Int'l, Inc.

Alerts / May 18, 2012

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.

On May 17, 2012, in In re Baxter Int'l, Inc., the U.S. Court of Appeals for the Federal Circuit affirmed the USPTO Board of Patent Appeals and Interferences decision upholding the patent examiner's rejection during reexamination of the claims of U.S. Patent No. 5,247,434, which related to hemodialysis machines that can function in place of a patient's kidney to cleanse the blood of toxins using a solution called a dialysate, as obvious under 35 U.S.C. § 103(a). The Federal Circuit stated:

Although the ultimate determination of obviousness under 35 U.S.C. § 103 is a question of law, it is based on several underlying factual findings, including the differences between the claimed invention and the prior art. Similarly, the determination of what a reference teaches is a question of fact. Thus, we review those factual determinations for substantial evidence. In contrast, claim construction is a legal issue that we review de novo. To ascertain the scope and meaning of the asserted claims, we look to the words of the claims themselves, the specification, the prosecution history, and, lastly, any relevant extrinsic evidence. . . .

We agree with the PTO that substantial evidence supported the Board's findings on claim 26. Regarding Baxter's arguments that the examiner did not specifically determine the corresponding structure for the "means plus function" limitations in limitation (a), the record indicates that both the examiner and Baxter agreed that the corresponding structure disclosed in the specification for the "means for controlling" limitation included a microprocessor and a concentrate pump. Similarly, rather than engage in a purely functional analysis of the "means for delivering the dialysate" limitation, the examiner identified a pump, the same type of structure that Baxter contends is the corresponding structure for the "means for delivering the dialysate" limitation.

Turning to Baxter's specific arguments regarding the teachings disclosed in the references, we conclude that substantial evidence supports the Board's finding that the prior art discloses limitation (a) of claim 26. Regarding the "means for controlling" limitation, the CMS 08 Manual discloses a "computer modeling system" with a "[p]rocessor" and describes that "electrolyte concentrations" are delivered via "stepper motor driven line pumps" that can be "programmed in ten minute intervals." Even if Baxter could overcome the Board's express finding that Baxter "did not assert that Lichtenstein lacks any structure corresponding" to limitation (a) of claim 26 that reference, in any event, discloses a "microcomputer" that is programmable to carry out specific procedures, including hemodialysis. The descriptions in both references are similar to the microcontroller and concentrate pumps identified by Baxter as the corresponding structure for the "means for controlling" limitation.

Substantial evidence also supports the Board's finding that the prior art disclosed structure corresponding to the "means for delivering the dialysate" limitation. While Baxter argues that the specific pumps in the CMS 08 Manual do not deliver dialysate to a dialysate compartment of a hemodialyzer but instead perform other functions, the reference discloses a "dialysate mixing system" that must be connected to a hemodialyzer, which necessarily requires the dialysate to be pumped between the machines. In addition, on their face, the pumps identified by the examiner in the CMS 08 Manual appear similar in structure and functionality to the "concentrate" pumps and pump lines that Baxter identified as corresponding structure in the '434 patent for this "means plus function" limitation. Further, even if Baxter's arguments regarding [the Lichtenstein prior art reference] are properly before us, that reference also teaches that a pump delivers dialysate through a flow meter into the dialysate side of a dialysis container used in connection with hemodialysis equipment.

[T]he 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." In particular, a challenger that attacks the validity of patent claims in civil litigation has a statutory burden to prove invalidity by clear and convincing evidence. Should the challenger fail to meet that burden, the court will not find the patent "valid," only that "the patent challenger did not carry the 'burden of establishing invalidity in the particular case before the court.'" In contrast, in PTO reexaminations "the standard of proof -- a preponderance of the evidence -- is substantially lower than in a civil case" and there is no presumption of validity in reexamination proceedings."

This case thus illustrates the distinction between a reexamination and a district court proceeding. In [the parallel Fresenius litigation], we upheld the district court's grant of judgment as a matter of law because the patent challenger failed to meet its burden to prove invalidity by clear and convincing evidence -- it "failed to present any evidence . . . that the structure corresponding to the means for delivering dialysate limitation [in claim 26], or an equivalent thereof, existed in the prior art" and did not identify "the structure in the specification that corresponds to the means for delivering dialysate" or compare the identified structure to those structures present in the prior art. Ultimately, we concluded that the clear and convincing burden of proof in the "means plus function" context "cannot be carried without clearly identifying the corresponding structure in the prior art."

In contrast, during the reexamination, the examiner sufficiently identified the corresponding structure recited in the '434 patent and identified the structures in the prior art such that a reasonable person might accept that evidence to support a finding that claim 26 is not patentable under a preponderance of the evidence standard of proof. Moreover, in addition to relying on the CMS 08 Manual, the examiner based those rejections on prior art references that were not squarely at issue during the trial on the invalidity issues . . . . Thus, 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 Fresenius litigation.

Lest it be feared that we are erroneously elevating a decision by the PTO over a decision by a federal district court, which decision has been affirmed by this court, the following additional comments must be made. 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.

However, the fact is that Congress has provided for a reexamination system that permits challenges to patents by third parties, even those who have lost in prior judicial proceedings. Usually one would expect that any such reexamination, such as the one before us, would raise new issues. In this case, the patent examiner relied on new prior art that had not been raised in the prior district court proceeding. Why Fresenius did not present that prior art before the district court we do not know. But the Director apparently found that a substantial new question of patentability had been raised and the examiner was then entitled to conduct a reexamination on the basis of the new art presented and her search of the prior art. Thus, this case is not about the relative primacy of the courts and the PTO, about which there can be no dispute.

If you have questions about the material presented above, please contact Dr. Lawrence M. Sung ( or 202.861.1537) or any member of our Intellectual Property Team.

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