In early December 2014, Blue filed U.S. Patent Application No. 14/559,777 which claims the benefit of the Blue’s initial patent application filing. This application is not yet available for public viewing thus is contents are not known, but educated guesses can be made. It was filed one day before Blue was invited to respond to SpaceX’s challenges to the Sea Landing Patent. It was also filed after the Sea Landing Patent issued and thus cannot be a traditional continuation or continuation in part application. Given the strength of SpaceX’s prior art and the difficulty of amending patents under the type of challenge SpaceX filed, it is likely, though not completely certain, that this application is a “reissue” application.

What is a reissue application and what does it mean for SpaceX and other would be barge landing launch services providers? A reissue patent application is filed to correct “errors” arising in a parent patent which render that patent “wholly or partially inoperative or invalid.” Reissue patent applications go through the same review and approval process as other types of patent applications and may alter the scope of the claimed invention. If the reissue patent application is approved, the parent patent is surrendered and the reissue patent goes into effect. Essentially, if Blue’s December 2014 filing is a reissue patent application, it gives them a shot before USPTO examiners to alter the scope of their claimed invention in light of the prior art SpaceX filed in their challenge, in the hopes of maintaining at least some patent protection.

Notably, the IPR process SpaceX used to challenge the Sea Landing Patent does not automatically grant a patent holder the right to amend their patent during the challenge process! In fact, the vast majority of motions to amend under IPR have been denied. Thus, when a patent is challenged via IPR, it is not unheard of for a challenged party to file a reissue application early on and fight the challenge, but then give up in the challenge after the reissue patent application is filed or the reissue patent is granted.

Assuming for the moment that Blue did file a reissue patent application in December of 2014, what happens if the Sea Landing Patent survives in one form or another? Obviously, if the Sea Landing Patent is invalidated via SpaceX’s IPR challenges and Blue doesn’t get a reissue patent granted, the public (including SpaceX) doesn’t have to worry about infringing the Sea Landing Patent. Conversely, if one or more of the Sea Landing Patent’s claims is confirmed as patentable and that claim reads on SpaceX activities, it is likely that SpaceX and Blue would continue battling over the Sea Landing Patent and/or reach some settlement. But what happens if some or all of the Sea Landing Patent’s claims survive in a substantially altered form (e.g., they contain additional limitations) via an IPR decision or issuance of a reissue patent?

Prior art found by SpaceX.

First, in light of the prior art that SpaceX brought to the USPTO’s attention, the scope of any surviving claims is likely to be substantially reduced. In fact, the surviving patent’s scope (whether the original patent or a reissue) may be reduced so much that SpaceX’s particular take on landing a rocket at sea will not be covered! In that case, SpaceX likely tells their legal team good job and Blue must content itself with covering a narrower slice of the sea landing game. In this scenario, Blue would certainly hope that such a patent covers how they plan on utilizing the technology, thus providing them some value for their troubles!

If, as part of a reissued patent or as a result of an IPR decision, substantially altered patent claims survive and those claims read on what SpaceX plans on doing (i.e., landing first stages of rockets on sea-based platforms for later reuse), there is the matter of enforceability of those claims (“New Claims”).

Legal and equitable intervening rights are available to would be infringers such as SpaceX which insulate them from liability for activities carried out before the New Claims issue. 35 USC §252 provides for certain absolute intervening rights, stating that the New Claims cannot “affect the right of any person… who, prior to the grant of [New Claims], made, purchased, offered to sell, or used within the United States, or imported into the United States, anything patented by the [New Claims].” In other words, for goods, systems and other physical objects produced before the New Claims are granted, there is no liability for infringement! There is a catch, however: Blue secured process claims and is likely to vigorously pursue process-type New Claims. A careful reading of the absolute intervening rights clause does not explicitly provide for intervening rights for processes. Some courts have interpreted this clause to only apply to goods, applying only equitable intervening rights to processes.

Equitable intervening rights arise from the last sentence of 35 USC §252 and allow a court, in its discretion, to provide for continued and potentially royalty free infringement of both process and goods-type New Claims even after the New Claims issue if the court finds such activities to be equitable. Examples where such rights are granted are where substantial preparations were made before the New Claims issued, if there were existing orders or contracts the cost of producing non-infringing goods or using non-infringing processes, and whether the infringer has made sufficient profits to recoup its investment. Courts have broad discretion in crafting such equitable intervening rights and may limit permitted use of infringing articles or processes to goods on hand at the time the New Claims issue.