You Can Use Interferences to Save Big Bucks in Patent Litigation

by Charles L. Gholz *

I. Factual Background

Company X (my client) and company Y (its major competitor) have been involved in patent litigation and incipient patent litigation for some time. (Regrettably, company X has refused to authorize me to disclose the identity of either party to this story.) Company Y is the owner by assignment of twelve patents obtained by company Z. Those twelve patents all stem from four applications filed on the same day, and company Z continues to own four patents that stem from the same four original applications -- plus, presumably, a plurality of pending applications that stem from those same four applications.

In anticipation that company Y and/or company Z would some day sue company X on one or more of those sixteen patents, we requested an interference between an application owned by company X and each of the sixteen patents owned by companies Y and Z. In addition, we suggested that, instead of declaring separate interferences, the Board of Patent Appeals and Interferences should declare a single interference between the application owned by company X and all of the patents owned by companies Y and Z. (In our estimation, company Z patented the same basic invention fifteen times using slightly different language each time. Counsel for company Y and company Z disagree.)

While the requests for interferences were pending, company Y sued company X for infringement of eight of the patents that company Z had assigned to it. Shortly thereafter, APJ Jameson Lee declared an interference between the application owned by company X and eleven of the patents stemming from the original four applications -- six owned by company Y and five owned by company Z.

We then moved for a stay of the patent infringement litigation until after conclusion of the interference. Counsel for company Y agreed to a stipulated stay of the infringement action for a term of months, and we anticipate that that stipulated stay will be extended periodically. Apparently counsel for company Y is also content to litigate the validity and enforceability issues in the PTO rather than in the court.

In addition, we are filing 37 CFR 1.642 requests to bring five of the remaining six patents stemming from the original three applications into the interference.

II. Why This is Important

The reason that all of this is important to you, gentle reader, is that it offers the possibility of saving big bucks in patent litigation. The board will decide any question of validity and enforceability that could be decided in the patent infringement litigation, and, if it decides one of those issues in favor of company X, its decision will result in cancellation of the relevant claims from the patents owned by company Y and company Z pursuant to 35 USC 135(a). That will, of course, moot the patent infringement litigation pro tanto. Moreover, the decision will be made by APJs (all of whom have technical training and most of whom have years of experience as patent examiners) in a jury-free environment. As a rule of thumb, the cost of a patent interference is approximately one tenth the cost of patent infringement litigation.

To the best of my knowledge, the PTO has never declared a multi-patent interference like this one before. However, what it has done once, it could do again. If this becomes a regular practice, it could be very good news indeed for all patent-sensitive industries.

Published in 17 Biotechnology Law Report 737 (1998).

* Mr. Gholz is a partner in and head of the interference section of Oblon, Spivak, McClelland & Neustadt, P.C. of Arlington, VA. His E-mail address is cgholz@oblon.com.