Virginia Patent Foundation’s Motion for Reconsideration Denied – Intervening Rights Still Absolve GE of Damages for Activities before Reexamination Certificate Issue Date

On Tuesday, Judge Moon denied Virginia Patent Foundation’s (“VPF”) Motion for Reconsideration of his decision dated November 9, 2010 in which he had granted partial summary judgment for General Electric (“GE”) based on intervening rights stemming from VPF’s amendment “in effect” of claim 1.  The effect of a reexamined patent on alleged infringers during the period prior to issuance of the reexamination certificate is governed 35 U.S.C. § 307(b) that triggers 35 U.S.C. § 252.

Judge Moon decided in his original Opinion that this statute applies because Claim 1 was “amended in effect” as a result of the statements the patent owner made in reexamination, together with its cancellation of Claim 4, which altered the scope of Claim 1.  See Opinion 43-44.

The Patent Foundation predictably took issue with Judge Moon’s interpretation of §307(b), arguing that the term “amended” in the statute requires explicit change of the wording of a claim in reexamination, and that §252 is not triggered by §307(b) because the wording of Claim 1 was never explicitly changed during the reexamination.

Judge Moon defends his interpretation by answering what he defines as an “issue of first impression” in the negative:

Whether the term “amended” limits the application of §307(b) to only explicit wording changes, as opposed to changes through other means–such as prosecution disclaimer–appears to be an issue of first impression.  No reexamination case law on this topic has been located, and the parties have supplied no definitive evidence bearing on Congress’s intent.

Judge Moon admits that there is little legislative history on §307(b), but contends that his interpretation is consistent with the House Report, which states:

Subsection 307(b) provides intervening rights similar to those provided by patent law section 252 with respect to reissued patents. Thus, a person practicing a patented invention would not be considered an infringer for the period between issuance of an invalid patent and its conversion through reexamination to a valid patent. 

(Emphasis in Opinion).   Fortel Corp. v. Phone-Mate, Inc., 825 F.2d 1577, 1579 (Fed. Cir. 1987) (quoting H.R. Rep. No. 96-1307 (1980), reprinted in 1980 U.S.C.C.A.N. 6460, 6467) (emphasis modified). Thus, Judge Moon states that although no amendment was made, “the Patent Foundation’s actions obtained the “conversion through reexamination” of the ’282 Patent to a valid patent.”

Judge Moon also finds that “[i]t is unlikely that Congress would shield infringers from liability where there has been an explicit change in claim language, but not where argument and the cancellation of a dependent claim changes the meaning of the claim.”

So, I ask again, given the above scenario, can the Court justify granting intervening rights to GE?