Stop in the Name of the PTO! A Review of the Fresenius Saga and PTO-Judicial Interplay

– Wayne A. Kalkwarf

Currently, the USPTO does not have the authority to stay patent litigation in federal courts during the pendency of its administrative reexamination, which may result in invalidation of the same patent. Further, verdicts on patent litigation must be vacated if the patent is invalidated by the USPTO before the appeals process is exhausted and the judgment is finalized. This is exactly what happened in Fresenius USA, Inc. v. Baxter International Inc., 721 F.3d 1330 (Fed. Cir. 2013), cert. denied, 134 S. Ct. 2295 (2014), which shows that the unavailability of such a stay often encourages costly, duplicitous, and unnecessary litigation. This Article examines the Fresenius case, a heartbreaking illustration a flaw in the current system of concurrent reexamination and infringement litigation, to show this friction. The Article argues that the USPTO should have the authority to stay concurrent proceedings in federal court during the pendency of examination periods because of the judicial costs and lake of fairness required by defendants fighting this “two-front” battle. Some, such as Benjamin J. Christoff in Blurring the Boundaries: How the Additional Grounds for Post-Grant Review in the America Invents Act Raise Issues with Separation of Powers and the Administrative Procedure Act, 39 U. Dayton L. Rev. 111, 114 (2013), have suggested that such a stay could offend Article III of the Constitution by impermissibly shifting judicial power to administrative agencies. However, Kalkwarf presents a compelling argument that, because the stay does not allow USPTO to usurp judicial authority, and only allows it to pause proceedings in order to exercise authority that everyone agrees the agency has, such a stay does not offend Article III. Since the Fresenius case, courts have acknowledged the problems with these concurrent proceedings, but congress has not yet acted to remedy the flawed system.

Abstract Written by Ryan A. Patrick and Cody L. Shubert, 2018