Re-examination as a tool for US patent litigation: Waymo vs Uber

Re-examination can be a useful tool to address United States (US) patent litigation. The utility of re-examinations in US patent litigation was demonstrated recently in the Waymo vs Uber case. Waymo sued Uber for patent infringement and trade secret misappropriation on its Light Detection and Ranging (LIDAR) technology. Uber agreed to settle the lawsuit by redesigning its LIDAR technology so as to avoid the Waymo patent, and giving Waymo USD 245 million of equity and a commitment not to copy Waymo technology.

       

The main patent in question in this infringement case was US Patent 9,368,936 to Lenius et al (the “’936 patent”). Eric Swildens, an engineer working for a cloud computing startup, then decided to challenge the ‘936 patent by requesting the United States Patent and Trademark Office (USPTO) to undertake an ex parte re-examination .

Briefly, in an ex parte re-examination request, the challenger can submit prior art patent and other printed publications to the USPTO to show that a patent’s claims were either anticipated or obvious in light of the prior art. The USPTO then decides if a substantial new question (SNQ) of patentability has been raised. If an SNQ has been raised, and the USPTO agrees with the challenger’s assertions, then the patent claims are rejected. The patent owner can make arguments, add new claims or amend existing claims to address these rejections.

Mr. Swildens submitted the prior art against the ‘936 patent in August 2017. In December 2017, the USPTO issued an office action rejecting all the claims of the ‘936 patent. After a response by Waymo, followed by another USPTO rejection and a further Waymo response, in September 2018 a final office action was issued by the USPTO rejecting all but 3 claims of the ‘936 patent. Waymo can still act to defend the ‘936 patent but has not done so as yet.

While the final outcome is unclear at this moment, it points to the utility of re-examinations as a tool against litigation. Based on USPTO statistics from December 2017, ex parte re-examinations have resulted either in all claims cancelled or claims having to be amended around 79% of the time. This makes them a potentially useful and low-cost weapon in litigation, as long as the claims can either be cancelled completely or are amended sufficiently to allow noninfringement arguments to be made. This will depend on factors such as the quality and scope of the prior art.

A competently filed ex parte re-examination costs around USD 50,000 including both USPTO and legal fees. Mr. Swildens did a prior art search, drafted and filed the re-examination request himself, keeping the cost down to USD 6,000.

There is a good chance that Uber may 

- not have had to undertake a costly redesign of its LIDAR technology, or 

- have had to pay Waymo less than USD 245 million in equity. 

It is interesting that Uber did not challenge the ‘936 patent. Mr. Swildens expressed surprise that Uber had not filed a re-examination.

In short, re-examination can be a useful and potentially low-cost tool to address US patent litigation. Even the threat of re-examination using relevant prior art can act as a deterrent or be used as a negotiating tool to obtain a more favourable settlement. To mount an effective re-examination, the defendant should make sure that a high quality prior art search is performed, and that a strong written submission is made to the USPTO.

Disclaimer: The above is not meant as legal advice. The author is not a lawyer. In the event of litigation, the author recommends seeking out legal advice from a lawyer.