Patent Law | Expert Legal Commentary

October 11, 2012

In re Baxter Intl.: Federal Circuit Allows Patent Reexamination After a Final Court Judgment

In re Baxter Intl.

By Tom Zuber and Jeff Zuber of Zuber Lawler & Del Duca

In re Baxter Intl.: Federal Circuit Allows Patent Reexamination After a Final Court Judgment

The Federal Circuit recently supported the PTO’s authority to overrule a judicial decision on patent claim validity. In In re Baxter Intl., Inc., 673 F.3d 1357 (Fed. Cir. 2012), the Court upheld a PTO reexamination decision to invalidate patent claims, even though the Court previously upheld a district court’s contrary holding in the same matter which sided with the patent owner.


Baxter owns the ‘434 patent, which describes a hemodialysis machine.  The patent’s claims include control of temperature, concentration, and other parameters of a solution used during hemodialysis.  Id. at 1358.

In 2003, Fresenius, a competitor, filed for a declaratory judgment in the district court against Baxter.  Fresenius sought to declare the ‘434’s claims as invalid.  Under a clear and convincing standard, a jury agreed with Fresenius and determined that the relevant claims would have been obvious at the time of invention.  However, on Baxter’s motion, the court granted judgment as a matter of law, concluding that Fresenius did not prove by a clear and convincing standard that its evidence was prior art of the ‘434’s claims.  Id. at 1360.

Fresenius appealed to the Federal Circuit, which upheld the district court’s JMOL on different grounds.  Specifically, the Federal Circuit found that Fresenius did not present any evidence to show that a structure described in one of the ‘434’s claims existed in prior art. Id.

Meanwhile, the U.S. Patent and Trademark Office (“PTO”) reexamined the ‘434 patent.  The PTO ultimately rejected the relevant claims as obvious in light of evidence previously unanalyzed by the district court during trial.  Id.

Baxter appealed to the Board, citing the favorable holding from the district court trial which had just been decided.  However, the Board affirmed the examiner’s rejection of the claims.  This created a discrepancy between the holdings of the district court and the Board.  In justifying its authority to come to its own conclusions, the Board spoke that “a lower standard of proof and the broadest reasonable interpretation standard of claim construction apply at the PTO and therefore the agency is not bound by the court’s determination.”  Id. at 1361.  The Board then rejected the relevant claims on the merits.  Baxter ultimately appealed the Board’s decision to the Federal Circuit. Id.

Federal Circuit Allows PTO Reexamination Even After Final Judicial Decision

The main issue before the Federal Circuit was whether it would uphold the Board’s rejection of the ‘434 patent’s claims in light of the parallel judicial process, including the Court’s own holding, that sided with Baxter.  Central to the court’s analysis was the distinction between issues and burdens of proof between the judicial process and the PTO.  In judicial litigation, Fresenius failed to prove invalidity by clear and convincing evidence.  In reexamination, however, the examiner was able to prove that the claims were not patentable by a preponderance of the evidence, citing prior art not fully addressed at trial. Id. at 1364.  In the view of the Court, “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 reached a different decision than the courts.  Id. at 1365.

The Court warned that “the PTO ideally should not arrive at a different conclusion” than that of a completed trial and appeal in these circumstances. Id. However, the Court noted 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.”  Id.  Further, the Court buttressed the validity of the reexamination by noting that Fresenius raised a new question of patentability when it offered evidence to the PTO that was not analyzed by the district court, thus entitling the examiner to conduct the analysis.  Id.

In the end, the Court affirmed the Board’s decision to deem the relevant claims as not patentable.  Id. at 1366.

Dissent Finds No Support for PTO’s Authority to Overrule the Judicial Branch

Judge Newman strongly dissented, arguing that the case had been litigated to final judgment in the district court and appealed to the Federal Circuit, thus concluding the case and binding the hands of both the courts and the PTO to the judgment in favor of Baxter.  She cited a number of constitutional and judicial doctrines, in sum declaring that “when a judicial decision is final as to the issue before the agency, the decision is binding on the agency.  Finality is reflected in the law of the case doctrine.”  Id. at 1367.

She also cited legislative and practitioner concerns, saying that Congress did not intend to “violate the constitutional strictures” when it enacted the reexamination statutes. Id. at 1368.  Problematic to her was the possibility of harassment and abuse of the reexamination system, which commentators noted could be used against patent owners in order to gain leverage in patent litigation and settlement.  Id.  While she supported reexamination as an “efficient and economical alternative to litigation” in some cases, she clearly voiced that it was “not intended to undermine the finality of judicial process.”  Id. at 1369.

In this case, Judge Newman rejected the court’s rationale that the different burdens of proof between the PTO and the courts supported the PTO’s authority to overrule a judicial decision.  Id. at 1370.  Instead, she noted that “obviousness is a question of law, and the PTO, like the court, is required to reach the correct conclusion on the correct law.” Id.  Any diversion between the two, she noted, would not authorize the PTO to overrule a final judicial decision. Id.  In the alternative, if the Federal Circuit believed it erred in a prior decision, the proper mechanism would be a judicial reopening, not “administrative disregard.”  Id.


The Federal Circuit has opened the door for parties facing litigation threats from patent owners to push the PTO for reexamination, even if the matter has already been adjudicated up to the Federal Circuit.  Parties involved in patent litigation should contact experienced patent counsel to see how Baxter may affect your case.

About the Authors

Tom Zuber is a Partner of Zuber Lawler & Del Duca, focusing on intellectual property protection and exploitation.

Jeff Zuber is a Partner of Zuber Lawler & Del Duca, focusing on intellectual property litigation and arbitration.

Image Credit: ©

View a PDF of the judicial opinion

Connect on Linkedin®

Tom Zuber
Jeff Zuber

Companies Mentioned

Baxter International Inc.

Also See:

MDS (Canada) Inc. v. RAD Source Technologies: 11th Circuit Finds Federal Circuit Does Not Have Exclusive Jurisdiction When Patents at Issue in Breach of Contract Claim

AMP v. Myriad Genetics, Inc.: Unanimous Supreme Court Limits Patentability of Human Genes

CLS Bank Intl. v. Alice Corp. Pty. Ltd.: En Banc Federal Circuit Cements Confusion Over Patent-Eligibility for Software

Bowman v. Monsanto Co.: Growing Patented Soybeans for Replanting is Infringement

Gunn, et al., v. Minton: Supreme Court Denies Federal Jurisdiction for Patent-Related Malpractice Suit

The most advanced document                
         management system in the world.

Only $59 / person / month
FeaturesLawLoop Demo
FeaturesWelcome to the Future
Play LawLoop Demo

Companies Mentioned

Patent Law

The following companies are mentioned in Patent Law Updates:

Boston Scientific Corp.

Microsoft Corp.

Boston Scientific Scimed, Inc.

U.S. Patent and Trademark Office

Samsung Electronics America, Inc.

Stryker Corp.

Cordis Corp.

Johnson & Johnson, Inc.

Smithkline Beecham Corp. (d.b.a. GlaxoSmithKline, plc.)

Honeywell International, Inc.

United States Patent and Trademark Office

HT Window Fashion Corp.

Mylan Laboratories, Inc.

Mylan Pharmaceutical, Inc.

Ortho-McNeil Pharmaceutical, Inc.

Acumed, LLC

Stryker Sales Corp.

Teva Pharmaceuticals USA, Inc.

Glamourmom LLC

Audiovox Communications Corp.

Stryker Orthopaedics

Target Corp.

McKesson Information Solutions, Inc.

Howmedica Osteonics Corp.

Kohl’s Department Stores, Inc.

Bridge Medical, Inc.

J.C. Penney Company, Inc.

Smith & Nephew, Inc.

Cohesive Technologies, Inc.

Waters Corp.

Elizabeth Lange LLC d.b.a. Liz Lange Maternity

Association for Molecular Pathology

LG Electronics, Inc.

Quanta Computer, Inc.

Federated Department Stores

Egyptian Goddess, Inc.

Swisa, Inc.

K-Mart Corp.

Motorola, Inc.

Dror Swisa

Sears Holding Corp.

Ranbaxy, Inc.

Nokia, Inc.

SmithKline Beecham Corp. d.b.a GlaxoSmithKline

SmithKline Beecham PLC

Prometheus Laboratories, Inc.

Sanyo North America Corp.

Glaxo Group Limited d.b.a. GlaxoSmithKline

Mayo Collaborative Services d.b.a. Mayo Medical Laboratories

Scimed Life Systems Inc.

Additional Resources

Patent Law

Further Reading in Patent Law

Other Recent Expert Legal Commentaries

More Patent Law Expert Legal Commentaries

Recent Summaries

More Patent Law Summaries