Terms and Concepts

Substantial New Question (SNQ)

Fundamental to every reexamination request is the substantial new question of patentability or the SNQ.  The SNQ is the cornerstone of patent reexamination and every reexamination request—both inter partes and ex parte—must include at least one SNQ.  The purpose of the SNQ requirement is to create a threshold for reexamination to prevent serial reexamination proceedings on the same references, and to prevent harassment of the patent owner [H.R. Rep. No. 96-1307 (1980)].  The SNQ requirement was included in the original 1980 ex parte reexamination statute as “a balance between curing allegedly defective patents [via reexamination] and preventing harassment of patentees” [H.R. Rep. No. 107-120, at 1; In re Recreative Technologies, 83 F.3d 1394, 1397 (Fed. Cir. 1996)].

While it may sound relatively simple, presentation of a SNQ is more subtle than many practitioners realize.  This section remains a hot topic because it is an often misunderstood area of reexamination practice that is ripe for litigation–where the parties challenge the existance of a SNQ in a reexamination request through the Administrative Procedures Act or through appeal to the Federal Circuit.

Review of SNQ Determination

On June 25, 2010 the PTO published a notice in the Federal Register “clarifying the procedure for seeking review of a determination that a substantial new question (SNQ) has been raised in an ex parte reexamination proceeding [75 Fed. Reg. 36357 (June 25, 2010)]. The notice announced that Director Kappos delegated to the Chief Judge of the BPAI the authority to review issues relating to the grant of a request for reexamination, specifically a SNQ finding. The Chief Judge can further delegate the SNQ review to a panel of Administrative Patent Judges who are deciding the appeal in the ex parte reexamination proceeding. As is currently the case, the notice identifies that separate from the BPAI’s consideration of the SNQ issue, a patent owner may file a petition under 37 CFR 1.181(a)(3) to vacate an ex parte reexamination as “ultra vires.”

This right of appeal is not interlocutory.  Instead, for an ex parte reexamination ordered before June 25, 2010, the patent owner may include a challenge to the finding of a SNQ as a separate ground in an appeal to the BPAI, even if the patent owner did not request that the CRU reconsider the finding of the SNQ during prosecution.  For ex parte reexaminations proceedings ordered on or after June 25, 2010, the patent owner must request that the CRU reconsider the grant of the SNQ as part of a full response to the Office action in order to preserve the issue for appeal.  Notably, the procedures do not apply to inter partes reexamination proceedings.  A determination by the PTO in an inter partes reexamination either that no SNQ has been raised or that a reference raises a SNQ is final and non-appealable. (See 35 U.S.C. 312(c)).

A recent BPAI decision issued June 30, 2010 cited the clarification claiming jurisdiction to review a CRU examiner’s SNQ finding (See BPAI Appeal No. 2008-005992, Reexamination Control No. 90/006,572 (June 30, 2010). Here the appellant argued that a particular reference was previously considered during original prosecution and thus not qualified to form the basis of a SNQ. One issue addressed by the BPAI was whether it had jurisdiction to review a CRU examiner’s SNQ finding (and order granting a request for reexamination). Citing the June 25, 2010 clarification as the source of its authority, the BPAI sided with the examiner that during original prosecution the reference was not reviewed with “any reasonably detailed analysis,” nor was it applied as a principal prior art reference, nor was the issue forming the basis of rejection during reexamination the same as that examined during original prosecution.  Thus the reference was not “old” art and raised a valid SNQ.  The panel further noted that the appellant did not timely file a 1.181 petition to review the original determination and instead brought the issue up on appeal after the claims had been finally rejected on a variety of grounds including lacking written description, indefiniteness, anticipation, and obviousness.  The panel affirmed the examiner’s determination on all remaining issues.

Burden to Establish a SNQ

Congress envisioned the SNQ as a primary gate-keeping function to prevent harassment of a patent owner. “As part of the original 1980 reexamination statute, Congress struck a balance between curing allegedly defective patents and preventing the harassment of patentees.  It adopted a standard requiring a request for reexamination to raise a ‘substantial new question of patentability.’” (See H.R. Rep. No. 107-120, at 1; See also In re Recreative Technologies, 83 F.3d 1394, 1397 (Fed. Cir. 1996)). Many practitioners argue that this protection is illusory due to the implementation of the SNQ review by the PTO.  Specifically, practitioners point to the lack of evidentiary burden placed on the requester to establish a SNQ in the request.

To establish a SNQ, the requester must demonstrate that a patent or printed publication presents a new, non-cumulative technological teaching that was not previously considered and discussed on the record during the prosecution of the application that resulted in the patent for which reexamination is requested, and during the prosecution of any other prior proceeding involving the patent for which reexamination is requested (MPEP § 2216).  Additionally, the reexamination request “must point out how any questions of patentability raised are substantially different from those raised in the previous examination of the patent before the Office (MPEP § 2216).

Thus, the burden is placed on the third party requester to demonstrate that the questions of patentability raised are substantially different than those raised in previous examinations. However, many practitioners argue that the PTO accepts statements that a patent or printed publication presents a new, non-cumulative teaching without requiring any evidence or discussion of the prior prosecution record to support the statement.  This practice effectively shifts the burden to the patent owner to disprove the existence of a SNQ adopted by the PTO in an ex parte reexamination.  In an inter partes reexamination, the patent owner is left with no recourse for challenging that determination.

The Substantial New Question (“SNQ”) Generally

Both the ex parte and inter partes statute require that a request for reexamination include at least one new substantial new question of patentability (“SNQ”) [35 U.S.C. §§ 303 and 312].  The legislative history of the ex parte reexamination statute describes the SNQ as new, non-cumulative, information about preexisting technology that may have escaped review at the time of the original examination of the patent application and in subsequent reexaminations of the patent, if there have been any.  The SNQ could therefore be more aptly named a “substantial new technical teaching.”

The establishment of an SNQ has tripped up many practitioners.  It is not enough for a reference to be “new,” the reference must also be non-cumulative to the technological teachings previously considered by the PTO during prosecution.  Therefore, even a newly discovered reference may not raise a SNQ if the reference merely is cumulative to similar prior art already fully considered by the PTO in a previous examination (and previous reexaminations) [MPEP § 2242].  This is an important point when determining whether to file a reexamination request or what references to use.

The Central Reexamination Unit rejects many reexamination requests on first filing for failure to clearly point out an SNQ.  Specifically, it’s noted that there has been a perceived increase in the number of reexamination requests that are receiving Notice of Incomplete Reexamination Request or requests being denied because the requester has failed to establish the reference used as a basis for an SNQ is “non-cumulative.”

Further, there is a common but fundamental misunderstanding by many as to the difference between an SNQ and a proposed ground of rejection.  A reexamination request must include both at least one SNQ in addition to a detailed explanation of the pertinency and manner of applying the cited prior art to every claim for which reexamination is requested (the ground of rejection) [37 C.F.R. §§ 1.510(b) and 1.915(b)].  An SNQ is therefore separate and distinct from the proposed ground of rejection (a “prima facie” case of unpatentability).

Additionally, not all previously considered references (“old art”) are ineligible to support an SNQ.  Old art previously considered in original or prior prosecution may be used to support an SNQ if shown in a new light.  Second, previously unconsidered art may not provide de facto support for an SNQ if it is merely cumulative to art already considered by the Office.

In re Swanson and the SNQ

The Federal Circuit in In re Swanson [In re Swanson, 540 F.3d. 1368 (Fed. Cir. 2008)] recently clarified what it takes to support an SNQ where a reference was previously used to reject the claims in original prosecution.  The ex parte reexamination statute sets forth the universe of references that can be used to raise a SNQ [35 U.S.C. § 303(a) (patents and printed publications)].

In addition to a newly-discovered reference, a previously applied reference can raise a SNQ if the previously applied reference is presented in a “new light”.  Section 303(a) makes this explicit — “[t]he existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the PTO or considered by the PTO.” This sentence was added in the 2002 amendment to 35 U.S.C. § 303 to specifically address In re Portola Packaging, Inc., 110 F.3d 786 (Fed. Cir. 1997).

In Portola, the Federal Circuit “interpreted the statutory intent [of the ex parte reexamination statutes] as precluding reexamination based on ‘prior art previously considered by the PTO in relation to the same or broader claims.’”  In re Swanson, p. 11 (citing Portola, 110 F.3d at 791).  Congress explained that the amendment to 35 U.S.C. § 303(a) “overturns the holding of In re Portola Packaging, Inc., a 1997 Federal court decision imposing an overly-strict limit that reaches beyond the text of the Patent Act” (H.R. Rep. No. 107-120, at 2).

In re Swanson provides some guidance on what constitutes a “new light” for old art.  For example, an SNQ based on previously applied art could arise because the examiner in the original examination misunderstood the actual technical teaching, because the examiner failed to consider a portion of the reference that contained the now cited teaching, or if the examiner applied the reference to a different limitation or claim than the reference is currently being applied.  But a reference does not raise an SNQ if the examiner in the original examination understood the actual technical teaching, but got it “wrong” in the rejection.  This is a subtle but critical distinction.

KSR and the SNQ

A further unsettled issue for many practitioners is the impact of KSR on reexamination practice.  Did KSR open the door to reexamination challenges based on prior art overcome during original prosecution by arguing lack of teaching, suggestion, or motivation to combine?  When KSR was decided at the end of April 2007, the PTO feared an avalanche of reexaminations based solely on an argument that the obviousness standard applied in the original prosecution had been relaxed.

This argument was advanced by the third party requester in ex parte reexamination Control No. 90/008,949. In this request, the third party requester argued that the Supreme Court’s decision in KSR provided a “new light” in which to view the references under the doctrine of obviousness.  The ex parte reexamination request was denied by the PTO.  In the denial, the PTO clarified the standard for determination of whether an SNQ exists based on “old art.”  The feared avalanche did not materialize but there is no doubt that KSR spawned more reexaminations than would have occurred otherwise.  The PTO pondered this critical issue for over 16 months and then addressed this question explicitly in Rev. 7 of the MPEP (Manual of Patent Examining Procedure), which became publicly available in August 2008.  The MPEP now states:

“The clarification of the legal standard for determining obviousness under 35 U.S.C. § 103 in KSR International Co. v. Teleflex Inc. (KSR), 550 U.S. 550, 82 USPQ2d 1385 (2007) does not alter the legal standard for determining whether a substantial new question of patentability exists.  The requirement for a substantial new question of patentability remains in place even if it is clear from the record of a patent for which reexamination is requested that the patent was granted because the Office did not show ‘motivation’ to combine, or otherwise satisfy the teaching, suggestion, or motivation (TSM) test.  Thus, a reexamination request relying on previously applied prior art that asks the Office to look at the art again based solely on the Supreme Court’s clarification of the legal standard for determining obviousness under 35 U.S.C. § 103 in KSR, without presenting the art in new light or different way, will not raise a substantial new question of patentability and reexamination will not be ordered” [MPEP § 2216, Rev. 7, July 2008].

KSR states that patent examiners, as well as the courts, can review the factual predicates underlying the obviousness calculus and reach the ultimate legal conclusion whether the subject matter is obvious [KSR, 540 U.S. at 413 (“While the sequence of [the Graham factors] might be reordered in any particular case, the factors continue to define the inquiry that controls.  If a court, or patent examiner, conducts this analysis and concludes the claimed subject matter was obvious, the claim is invalid under § 103.”)].  Thus, it makes logical sense that it would be of great interest to the reexamination examiners to know what a person of ordinary skill in the art would have known at the time of filing of the original application for which reexamination is requested.

The third party requestor is advised to consider providing a description of what the POSITA would have known preferably in the reexamination request (or less preferably in a later response to an Office action).  This POSITA technical description can be presented in a separate section of the reexamination request, but regardless of how it is provided, it is necessary that the SNQ basis be set forth for each technical reference referred to in this technical description and that each of these SNQs be used in a least one proposed rejection.  What is believed to be the first reexamination request that employed such a POSITA technical description is found in inter partes reexamination Control No. 95/000,353 (“the ‘353 request”).

The ‘353 request provided a extensive discussion of the various factors, articulated by the Federal Circuit and discussed in the examination guidelines, which may be considered in determining the level of ordinary skill in the art [See e.g., In re GPAC, 57 F.3d 1573, 1579 (Fed. Cir. 1995); Customer Accessories, Inc. v. Jeffrey-Allan Indus., Inc., 807 F.2d 955, 962 (Fed. Cir. 1986); Envtl. Designs, Ltd. v. Union Oil Co., 713 F.2d 693, 696 (Fed. Cir. 1983)].

The specific factors addressed in the ‘353 request included the types of problems encountered in the art, prior art solutions to those problems, rapidity with which innovations are made, the sophistication of the technology, and the educational level of active workers in the field.