Patents Post Grant Blog

Creative Motions Undermine Delay Prejudice

Earlier this week, we explored an often overlooked rule that could be used by creative defendants to accelerate inter partes patent reexamination. The rule, 37 CFR 1.953(b), allows parties to an inter partes patent reexamination to essentially skip directly to the appeal stage after first action. Assuming, the parties were to agree to an expedited RAN practice, for example, as a component of an order staying a pending district court action, the examination phase of inter partes reexamination would be accelerated. Thus, the thinking is that creative defendants may seek to leverage this rule to undermine Patentee opposition to a stay. (i.e. based upon the argument that the necessary delay to conduct inter partes reexamination is unduly prejudicial).

Consistent with our suggestion to creatively address delay concerns, last week, a decision of the Federal District Court for the Western District of Pennsylvania demonstrated the general effectiveness of this tactic. (although a bit more “brute force” than our proposal)

In TDY Industries Inc., v. Ingersoll Cutting Tool Co., (W.D.P.A) Ingersoll filed a request seeking inter partes patent reexamination of TDY’s U.S. Patent 7,244,519 (95/001,417). The request for patent reexamination was made only two months after filing of the complaint with the court. The defendant moved to stay the case shortly thereafter, but the determination on the reexamination request remained outstanding. To address the issue of prejudicial delay, Ingersoll stipulated to a self imposed restraining order of sorts. Essentially, Ingersoll agreed not to deal in products allegedly covered by the ‘519 Patent for a predetermined time frame. In granting the stay, the court explained the weight given to the offer, noting:

Turning to undue prejudice, the Court finds TDY’s complaints substantially mitigated by Ingersoll’s agreement to “no longer make, use, offer to sell, sell, import or distribute any [of the allegedly infringing] products in the United States, until the earlier of: (a) the date on which the [Patent] Examiner issues a Right of Appeal Notice . . . in the pending Reexamination, or (b) September 15, 2013, [i.e.,] 3 years away, a period longer than the average time between the filing of a reexamination request and issuance of a reexamination certificate.”

Clearly, it is a rare defendant indeed that would offer a self imposed injunction in favor of a stay. Still, creative undermining of the Patentees most powerful argument, especially with respect to inter partes reexamination, may be a growing trend.