Federal Circuit Holds The Reexamination Door Open In In Re Baxter

When the Federal Circuit denied the Request for Panel Rehearing and Rehearing en banc in In re Baxter, the court let stand its two decisions that affirmed conflicting rulings on the validity of the same patent. In Fresenius USA, Inc. v. Baxter Int'l, Inc., 582 F.3d 1288 (Fed. Cir. 2009), the court affirmed the district court decision that upheld the validity of claims 26-31 of U.S. Patent 5,247,434, while in its May 17, 2012 decision in In re Baxter, the court affirmed the USPTO Board decision that the claims were invalid as obvious. Parallel litigation and USPTO proceedings involving the same patent may become more rare now that the America Invents Act (AIA) has replaced inter partes reexamination with inter partes review and placed restrictions on parallel litigation proceedings, but still could arise from pending inter partes reexamination proceedings or from ex parte reexamination proceedings, which are not subject to the same restrictions.

Are the Decisions Really Inconsistent?

Judge O'Malley wrote an opinion concurring with the denial of rehearing, which was joined by Chief Judge Rader and Judge Linn. Judge O'Malley explains that the district court and USPTO Board decisions are not as conflicting as they first may appear. The district court did not find that the claims were valid per se, only that Fresenius had not carried its burden of establishing invalidity. Indeed, the Federal Circuit's decision in Fresenius v. Baxter is carefully worded:

[W]e affirm the district court's judgment that Fresenius failed to prove that claims 26-31 of the '434 patent are invalid.

Further, Judge Dyk wrote a concurring opinion in which he stated:

I join the majority opinion on the understanding that it does not foreclose the district court in its discretion from staying further proceedings pending the outcome of the reexamination before the U.S. Patent and Trademark Office. While Fresenius did not establish the invalidity of claims 26–31 of the '434 patent in the district court proceeding, those claims on their face are of dubious validity in light of our holding that claims 1–3 and 13–16 of the '131 patent and claim 11 of the '027 patent are invalid. It is entirely possible that the U.S. Patent and Trademark Office will finally conclude that claims 26–31 of the '434 patent are also invalid.

On the other hand, the Federal Circuit decided in In re Baxter that the USPTO Board decision of invalidity (rendered in an appeal in an ex parte reexamination...