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Federal Circuit Decides En Banc that Intervening Rights only Apply when Text of Claims were Amended during Reissue and Reexamination

By Jason W. Rhodes

The doctrine of intervening rights serves, under certain circumstances, to protect an accused infringer’s right to continue using, selling, and offering to sell specific products that are covered by reissued or reexamined claims. Particularly, the accused infringer may be entitled to such intervening rights when the scope of the claims at issue have “substantially changed” during the reissue or reexamination proceeding. The recent panel decision by the CAFC in Marine Polymer Tech. Inc. v. Hemcon Inc.1 seemed to upend the traditional application of the intervening rights doctrine by holding that intervening rights could apply when the scope of a claim changes based on patentee’s arguments during reissue or reexam, even though the actual claim text was not amended. However, the Federal Circuit reconsidered the Marine Polymer ruling en banc, ruling that intervening rights are only created when the text of the claim is amended during reissue or reexam.

Doctrines of Absolute and Equitable Intervening Rights

Under the doctrine of absolute intervening rights, the accused infringer may continue using, selling, and offering to sell any infringing products that were made before the date of the reissue or reexamination. The statutory basis for absolute intervening rights can be found in 35 U.S.C. § 252, 2nd paragraph, which states:

A reissued patent shall not abridge or affect the right of any person…who, prior to the grant of a reissue, …made…anything patented by the reissued patent, to continue the use of, to offer to sell, or to sell to others…the specific thing so made…unless [it] infringes a valid claim of the reissue patent which was in the original patent…,

and 35 U.S.C. §§ 307(b) and 316(b) which state in relevant part:

Any proposed amended or new claim…incorporated into a patent following a [ex parte or inter partes] reexamination proceeding will have the same effect as that specified in section 252 of this title for reissued patents on the right of any person who made…anything patented by such proposed amended or new claim…prior to issuance of a [reexamination] certificate….

When absolute intervening rights are triggered, the accused infringer could also be entitled to equitable intervening rights. Under the doctrine of equitable intervening rights, an accused infringer may be entitled to continue using, selling, or offering to sell additional infringing products that were made after the date of reissue or reexam. Whether or not equitable intervening rights are triggered in a particular case is a fact-intensive inquiry involving numerous factors, including:  (1) whether the accused infringer made “substantial preparations” to manufacture such products prior to the date of reissue/reexam, (2) whether the accused infringer relied on the original claim scope in making such preparations, (3) whether there are existing orders for the products, and (4) whether the inventory used for making the infringing products could also be used to make non-infringing products.2

Federal Circuit Considers Scope of Intervening Rights in Marine Polymer

On the face of the statutory language of §§ 252, 307(b), and 316(b) it would appear that intervening rights would only apply to products that are covered by claims that were amended or added during the reissue/reexamination proceeding. However, the Federal Circuit had seemingly expanded the scope of intervening rights in its initial decision in Marine Polymer Technologies, Inc. v. HemCon, Inc., 100 USPQ2d 1257 (Fed. Cir. 2011) (withdrawn), rev’d by en banc rehearing (March 15, 2012). Specifically, in Marine Polymer I, a divided panel of the CAFC held that intervening rights could also be triggered by a narrowing claim interpretation due to patentee’s arguments, rather than amendment, during reexam.3 However, upon rehearing the case en banc in Marine Polymer II, a majority in the Federal Circuit reversed the earlier decision and held that intervening rights cannot be invoked against a claim whose language remained unchanged during reexam.4

In Marine Polymer, the patentee (Marine Polymer) sued the defendant (HemCon) for infringement of a patent covering a polymer used in accelerating hemostasis, i.e., a process causing bleeding to stop. At dispute in Marine Polymer was the meaning of the term “biocompatible,” which was used to characterize the polymer in each of the asserted claims.5 In Markman proceedings, the district court construed “biocompatible” to mean that the polymer exhibited “no detectable biological reactivity as determined by biocompatibility tests”,6 and entered judgment against HemCon on the basis of this construction.7

During a concurrent reexam of the patent, however, the examiner refused to adopt the district court’s construction of the term because it was inconsistent with various dependent claims requiring the polymer to exhibit some reactivity when tested according to a specific type of biocompatibility test.8 Instead, the examiner interpreted “biocompatible” to mean that the polymer exhibited “little or no detectable [biological] reactivity,” and based on this interpretation rejected the claims in view of prior art.9 [It is worth noting that claim construction for a reexamination proceeding is under the broadest reasonable interpretation standard,10 which is different from the claim construction in a Markman hearing in a district court.]  Marine Polymer responded to this rejection by arguing that the district court’s construction of “biocompatible” was correct, and cancelling each of the dependent claims asserted by the examiner as being inconsistent with such construction.11 In view of these cancellations, the examiner decided to adopt the district court’s interpretation, and issued the reexam certificate based on the remaining unamended claims.12

HemCon appealed the district court’s judgment of infringement to the Federal Circuit. Specifically, HemCon argued that it was entitled to intervening rights because Marine Polymer had changed the scope of the asserted claims on reexam, even though the actual claim language had not changed.13

In Marine Polymer I, a divided panel ruled in favor of HemCon, finding that Marine Polymer’s arguments before the PTO during reexam had indeed created absolute intervening rights by further limiting the original claims as to require “no detectable biological reactivity.”14 The majority opinion in Marine Polymer I, written by Judge Timothy Dyk,15 pointed out that the CAFC had repeatedly held that arguments during reexam can create estoppel or disavowal which changes the scope of the claims, even though the claim language did not change.16 Judge Dyk saw no reason why the rule giving disclaimer to claim scope during reexam should not also apply in the context of intervening rights.17

On January 10, 2011, the Federal Circuit granted a petition by Marine Polymer for en banc review of this decision.18 In Marine Polymer II, an evenly divided court affirmed the district court’s interpretation of “biocompatible” had always been correct, and thus the claim scope had not changed as a result of the reexam.19 However, the majority opinion (written by Judge Lourie) included an alternative holding in that, even if the district court’s interpretation was erroneous, intervening rights cannot apply to any claim whose actual language was unchanged during reexam.20 The majority said that the plain and unambiguous language of 35 U.S.C. § 307(b) makes clear that only “amended or new” claims incorporated into a patent during reexam are subject to intervening rights.21 Further, the term “amended” in § 307(b) cannot be interpreted as including a disavowal or disclaimer by argument alone – there must be “formal changes to the actual language of the claim” to invoke intervening rights.22

It should be noted, however, that only ten of the CAFC judges participated in the Marine Polymer II decision.23 While only five of the judges joined the majority opinion in regard to the claim construction issue, a sixth  (Judge Linn) joined in part on the intervening rights issue.24 However, since the holding on intervening rights in Marine Polymer II was part of an “alternative ground for decision”, it is unclear whether this will be treated as binding precedent by the CAFC in future cases.

If intervening rights were to be expanded according to the original Marine Polymer I decision, this would likely have ramifications not only in reissues and reexams, but also inter partes and post-grant reviews under the Leahy-Smith America Invents Act (AIA).25 This would provide added incentive for an accused infringer to request either reexamination, inter partes review, or post-grant review of an asserted patent. In this scenario, a patentee would need to be careful that any arguments presented during reissue, reexam, or inter partes or post-grant review are consistent with the original claim scope.

  1. Marine Polymer Technologies, Inc. v. HemCon, Inc., Appeal No. 2010-1548 (Fed. Cir., March 15, 2012).
  2. See Marine Polymer Technologies, Inc. v. HemCon, Inc., 100 USPQ2d 1257, 1264 (Fed. Cir. 2011) (withdrawn), citing to Seattle Box Co. v. Indus. Crating & Packing Inc., 225 USPQ 357, 361-62 (Fed. Cir. 1985).
  3. See id. at 1263-64.
  4. See Marine Polymer Technologies, Inc. v. HemCon, Inc., No. 2010-1548, slip op. at 26 (Fed Cir. March 15, 2012) (en banc).
  5. See 100 USPQ2d at 1258-59.
  6. See id. at 1259.
  7. See id. at 1259-60.
  8. See id. at 1260.
  9. See id.
  10. In re Yamamoto, 222 U.S.P.Q. 934 (Fed. Cir. 1984).
  11. See Marine Polymer I at 1260.
  12. See id.
  13. See id.
  14. See id. at 1261.
  15. Judge Arthur Gajarsa joined the majority opinion. Judge Alan Lourie was also on the panel and wrote the dissenting opinion.
  16. See id. at 1262.
  17. Id.
  18. See Sheri Qualters, “Full Federal Circuit to Reconsider Intervening Rights Patent,” National Law Journal (January 26, 2012), available online at https://www.law.com/corpcounsel/almID/1327262214898/?slreturn=20180610091603.
  19. See slip op. at 14, 20.
  20. See id. at 20, 26.
  21. See id. at 20-21.
  22. See id. at 23.
  23. Id. at 3.
  24. Id.
  25. These provisions of the AIA start to take effect on September 16, 2012. 35 U.S.C. §§ 318(c) and 328(c) of the AIA include the following language, which is very similar to §§ 307(b) and 316(b):  “Intervening Rights. –Any proposed amended or new claim determined to be patentable and incorporated into a patent following [an inter partes or post-grant] review…shall have the same effect as specified in section 252 for reissued patents on the right of any person who made purchased or used…or who made substantial preparation therefor, before issuance of [an inter partes or post-grant review] certificate….”