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Rubbing the Court the Wrong Way in Seeking a Stay Pending Patent Reexamination

blindersOn August 20, 2010, a motion to stay the litigation between 3M Innovative Properties Co., et al. and Envisionware, Inc. (0-09-cv-01594) (NDM) pending the outcome of a parallel patent reexamination was denied. At issue in the litigation are three of 3M’s patents relating to RFID technology, namely 6,232,870, 6,486,780 and 6,857,568. Envisionware requested inter partes reexamination of the ‘780 and ‘568 Patents. Curiously, since the third patent, the ‘870 Patent does not qualify for inter partes reexamination, reexamination of this patent was not sought at all. A non-final office action rejecting  the ’568 Patent claims was issued by the USPTO, the ‘780 Reexamination has yet to begin. On August 2, 2010, Envisionware filed the motion to stay the litigation.

The court denied the motion to stay the litigation citing familiar factors, noting that (1) the stay would prejudice the plaintiff, (2) the stay would not likely simplify the issues in litigation and facilitate trial, and (3) discovery will soon be complete. Yet, clearly, of more interest to the court was why Envisionware chose to ignore the ‘870 Patent altogether.

In explaining his decision, the magistrate judge expressed concern that Envisionware was seeking a stay for purely tactical reasons. The Court explained that, with respect to the ‘870 Patent, there would still need to be an infringement analysis, claim construction, expert discovery and fact discovery despite the fact that the ’870 Patent shares a common specification with the ’780 Patent. At the hearing counsel for Envisionware explained that inter partes reexamination of the ‘870 Patent was not possible. Envisionware offered no clear answer as to why ex parte reexamination of the ‘870 Patent was not pursued.

PPG Comment: Third parties are reluctant to pursue ex parte reexamination believing that the lack of third party participation will lead to an unfavorable result. Yet, as pointed out by the court in this case, if the USPTO were to conclude that the claims in the reexamination were patentable, this would not bind the Court from reaching a contrary determination. Indeed, as we noted last week, courts do not even give deference to the decisions of the USPTO. By deliberately choosing to avoid the risk of a favorable ex parte patent reexamination result, Envisionware seemingly failed to see the forest for the trees.

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