Reexamination is a means by which a patent may be challenged. Both flavors, inter partes and ex parte, have the distinct advantage that they are much lower in cost than any type of litigation.
Both flavors are similar, except that inter partes reexamination allows the requestor to review and respond to every input from the patent holder.
Both require that a substantial new question of patentability be raised. This standard is met when “there is a substantial likelihood that a reasonable examiner would consider the prior art patent or printed publication important in deciding whether or not the claim is patentable.” This does not mean that the examiner must find that a claim is rejected, only that the new information would be “important.”
Generally, a prior art patent or other publication that was not considered by the examiner is the ticket into reexamination.
One of the big perceived drawbacks are that the reexam proceedings is essentially asking the patent office to find fault with its previous work. While the reexamination process is supposed to be performed by a different examiner, it goes back to the same art unit or division within the PTO that first examined the patent. Even if it is another examiner, the reexam examiner must still work with his colleague who first examined the patent.
The risk for reexamination is that the patent will come out of reexam with either a confirmation or invalidity that is very hard to overcome. In other words, if you lose at reexam, you are in a very deep hole. However, should you win, you are in a much better position.
I am personally interested in any war stories with inter partes reexamination. Since it is only available for patents that issued after November 29, 1999, there are only a few cases out there. If anyone has a good/bad war story, please let me know.