Baxter (NYSE:BAX) lost its bid for another hearing of its long-running hemodialysis patent war with Fresenius (NYSE:FMS), leaving in place the precedent that the U.S. Patent & Trademark Office can over-rule the judicial system.
The U.S. Court of Appeals for the Federal Circuit denied Baxter’s petition for a rehearing and for en banc review, voting 10-1 against. The lone holdout, Judge Barbara Newman, does not believe that the USPTO has the authority to over-ride the courts.
The patent spat has volleyed in each party’s favor, but now hinges on a decision reached by the USPTO in Fresenius’ favor, which reversed a Federal Circuit ruling in Baxter’s favor. The Oct. 26 ruling by the Federal Circuit court means that the panel bureau’s decision stands pending any further appeals.
Fresenius sued in 2007, alleging that some of Baxter’s patent claims for dialysis machines and their user interfaces were obvious at the time of construction.
A jury ruled for Fresenius, invalidating the patent, but a U.S. district court judge overruled, finding that Fresenius hadn’t presented enough evidence. The Federal Circuit later reaffirmed the decision, after Fresenius appealed the lower court’s decision.
In conjunction with the patent lawsuit, however, Fresenius had filed a challenge with the USPTO against the patent. An initial examination by the USPTO deemed Baxter’s patents obvious prior to the Federal Court’s decision.
A USPTO director ordered the agency’s ruling board to take into consideration the Baxter’s court win when making the final decision on the obviousness of the claims, and the board ruled against Baxter. The board wrote that the court’s decision did not deem Baxter’s patent claims valid, but had merely demonstrated that they had not been found invalid.
The federal court later agreed to uphold the USPTO’s decision to strike down certain of Baxter’s patents, despite having found in their favor originally, on the grounds that the USPTO has a different standard of evidence than does the court.