Patents Post Grant Blog

Where an order has been granted to stay a patent litigation pending the outcome of a reexamination of the patent-in-suit, there is little likelihood that patent owner will be able to successfully appeal the decision ordering the stay of litigation.  Such orders are generally not appealable, because they are not considered final decisions.  See Gould v. Control Laser Corp., 705 F.2d 1340 (Fed. Cir. 1983).  There is an exception where the stay “effectively could put one of the appellants out of court” or if some “patent issue would escape review by a federal court if the case is stayed.”  See Slip Track Sys., Inc. v. Metal-Lite, Inc., 159 F.3d 1337, 1340 (Fed. Cir. 1998).

It is difficult to identify many circumstances in which an “effectively out of court” situation would be presented for substantive issues based on concurrent reexamination.  One possible example may be the need to litigate priority of invention issues in a  reexamination proceeding (assuming the Patent Owner needed to swear behind an anticipatory reference claiming the same invention).  Under those circumstances, the reexamination, if carried to completion, is likely to result in the cancellation of all of the claims of the Patent Owner’s patent. That in turn would require a dismissal of a interfering patents suit under 35 U.S.C.  291, since a necessary condition for such an action is the existence of two valid and interfering patents. As a result, the district court would have no occasion to consider the issue of priority of invention following the resolution of the PTO reexamination proceeding. Such a consequence provides sufficient finality to make the stay order a “final decision” for appealability purposes.

Outside of such unique situations, the delay associated with patent reexamination may significantly undermine the value of injunctive relief. For example, where Patent Holder market share is being eroded, significant delay may effectively moot the controversy to the Patent Holder’s detriment, especially in quickly advancing areas of technology. While the Patent Owner may be able to pursue infringement claims once the stay is lifted, where money damages are inadequate, the redressability aspect of the dispute may be lost.

Likewise, as noted in our post last week, “rolling ex parte reexamination requests” are often times abused by district court defendants. Where a concurrent litigation is under stay, rolling reexamination requests effectively keep the Patant Owner out of court. In such cases, appelate review may be in order for defendants gaming the system.