Cancellation Of Claims By The PTO During Reexamination Is Binding In Concurrent Infringement Litigation

In Fresenius USA, Inc. v. Baxter International, Inc., Nos. 12-1334, -1335 (Fed. Cir. July 2, 2013), the Federal Circuit vacated and remanded with instructions to dismiss the district court's judgment of noninvalidity and infringement, concluding that cancellation of asserted claims in a reexamination proceeding is given effect in pending infringement litigation.

Baxter International, Inc. and Baxter Healthcare Corporation (collectively "Baxter") own U.S. Patent No. 5,247,434 ("the '434 patent"), which covers hemodialysis machines with touchscreen interfaces. In 2003, Fresenius USA, Inc. and Fresenius Medical Care Holdings, Inc. (collectively "Fresenius") filed a DJ action against Baxter for invalidity and noninfringement of claims 26-31 of the '434 patent. Fresenius counterclaimed for infringement. In February 2007, the district court entered judgment against Fresenius, finding claims 26-31 infringed and not invalid. On appeal, both parties stipulated to infringement, but Fresenius argued that the '434 patent was invalid. In September 2009, the Federal Circuit affirmed the determination that claims 26-31 of the '434 patent were not invalid, but remanded to the district court to reconsider its postverdict damages.

While the district court litigation was pending, in 2005, Fresenius requested ex parte reexamination of claims 26-31 of the '434 patent. In December 2007, the PTO examiner completed the reexamination of the '434 patent and determined that claims 26-31 were invalid. In March 2010, the Board affirmed the examiner's decision. On May 17, 2012, the Federal Circuit affirmed the PTO's invalidity determination of claims 26-31 of the '434 patent. Meanwhile, on March 16, 2012, the district court entered final judgment against Fresenius. Both parties appealed, disputing the effect of the PTO's cancellation of claims 26-31 on the infringement litigation, as well as issues related to damages. The primary question for the appeal was therefore whether, under the reexamination statute, the cancellation of claims by the PTO was binding on pending district court infringement litigation.

"As with the reissue statute, the language and legislative history of the reexamination statute show that Congress expected reexamination to take place concurrent with litigation, and that cancellation of claims during reexamination would be binding in concurrent infringement litigation." Slip op. at 16.

"No hint can be found in the legislative record for an...