Pauline, You're Killing Me.

It's no secret that I'm a fan of Judge Newman. I have remarked on many occasions that I find her opinions to be consistently cogent, and correct.  

But now, I'm feeling a bit let down.  Mind you, it's not anything she wrote, or said.  But she recently joined Judge Plager in the Federal Circuit's 2-1 decision in Senju v. Apotex and, I have to say, I think they got it wrong.  Really wrong.  And the frustrating thing for me is that she could just as easily have joined O'Malley's dissent, and gotten it right.

Here's the scenario.  Senju sues Apotex for patent infringement.  The district court finds Senju's patent claims to be infringed, but invalid as obvious over prior art.  OK so far?  Good.

During the course of the suit, Senju puts its patent into reexam. based on the prior art that Apotex relied on to invalidate the claims.  in reexam, Senju narrows the claims that the district court held invalid, so that they're free of the prior art.  A reexamination certificate issues, and Senju files a new suit against Apotex based on the reexamined patent claims.

The district court dismisses the case, on motion from the defendant that the case was barred by "claim preclusion."  For those of you who aren't civil procedure wonks, essentially "claim preclusion" means that this case has already been tried -- it's the same case as the first one.  You get one chance to try a case.  If you don't get it right the first time, you don't get to come back at the same defendant again on the same cause of action.  It's over.

I have to admit, the claim preclusion argument has a certain superficial appeal in this case.  The parties are the same.  The alleged acts of infringement are the same.  Event the asserted patent is the same.

Except the asserted patent isn't the same.  It's been through reexamination. 

Now, those of you who know a thing or two about reexamination know that you can't broaden your claims in reexamination.  Only narrowing amendments are permitted.  So, OK, you might guess at this point that the district court looked at the claims and ruled that, since they had been narrowed in reexamination to avoid the prior art, they now didn't cover the accused products. 

If you guessed that, you'd be wrong.

In fact, the district court didn't make any comparison between the reexamined claims and the accused product.  Instead, it based its ruling on the fact that, because none of the reexamined claims were broader than the original patent claims, no new rights had been created that would support a new cause of action.  In his decision, joined by Judge Newman, Judge Plager agrees, relying heavily on the court's 2012 decision in Aspex Eyewear Inc. v. Marchon Eyewear, Inc.  .

But as Judge O'Malley helpfully points out in her dissent, because the original claims were invalid over prior art, in fact, they conveyed no rights at all.  Only a valid claim conveys a right to exclude.  This is why the majority's reliance on Aspex is inapposite - in Aspex, the claims were held not infringed, so the new, narrower reexamined claims could not possibly create a new cause of action.  In Senju, the claims had  been found to be infringed, but were held invalid over prior art.

The really unfortunate part of the majority decision is this bit:

"Whether it is possible that a reexamination could ever result in the issuance of new patent claims that were so materially different from the original patent claims as to create a new cause of action, but at the same time were sufficiently narrow so as to not violate the rule against reexamined claims being broader than the original claims, is a question about which we need not opine -- that is not the case before us.  We hold that, in the absence of a clear showing that such a material difference in fact exists in a disputed patentable reexamination claim, it can be assumed that the reexamined claims will be a subset of the original claims and that no new cause of action will be created.  This applies whether the judgment in the original suit was based on invalidity of the claims or simply on non-infringement."

Yikes.

If there's a silver lining here, it's that this decision should encourage plaintiffs to employ the reexamination strategy earlier in litigation, and seek a stay from the district court while the reexamination is pending.  That's the best way to make sure that they don't caught in the claim preclusion trap that got Senju .