Pending Prelminary Injunction Dispute Avoids Stay
As discussed last week, defendants are increasingly employing patent reexamination as a mechanism to stay a district court action. For this reason, patent owners must adapt their game plan. Last week’s post explained that an early motion for preliminary injunction can go a long way in demonstrating potential prejudice relative to a direct competitor. Additionally, while pending, an injunctive dispute may forestall the ability to stay the court action altogether.
In Medicis Pharmaceutical Corp., v. Acella Pharmaceuticals Inc. (DCAZ), the court explained that a motion to stay pending patent reexamination is inappropriate where a request for injuctive relief remains pending. Read the rest of this entry »
Setting the Stage for a Showing of Prejudice
Obtaining a stay of an ongoing district court infringement action is one of the many benefits of patent reexamination concurrent with litigation. Defendants that are able to obtain a stay pending patent reexamination can avoid cost prohibitive litigation discovery during the course of the USPTO proceeding.
In addition to cost savings, there are also tactical advantages to the USPTO proceeding. Unlike the courts, in patent reexamination, the USPTO does not recognize the presumption of validity. Moreover, the USPTO does not require the “clear and convincing” standard to demonstrate invalidity in patent reexamination, but employs the more liberal ”preponderance of the evidence” standard. As such, defendants can enhance the strength of their invalidity defense via patent reexamination.
As defendants increasingly employ patent reexamination as a litigation tool, patent owners must adapt their game plan. Read the rest of this entry »
Request Ex Parte Patent Reexamination, Lose, Repeat
For Patent Owners, one of the more frustrating aspects of ex parte patent reexamination is that the experience can be never ending. That is to say, even when an ex parte patent reexamination is favorably concluded, the same challenger can simply refile a second request to take another shot at the patent. Of course, the second request must present new, non-cumulative questions of patentability. Still, as the SNQ standard is a relatively low bar, seriatim filings are fairly commonplace. (In inter partes patent reexamination, estoppel provisions effectively prevent this tactic).
Practically speaking, in the case of a parallel litigation, seriatim requests are not viewed favorably by courts. After all, you can’t simply present new invalidity contentions in court should the first set fail. Read the rest of this entry »
Stay of Parallel Litigation Denied Due to Lack of Estoppel?
When implementing a patent reexamination strategy, a threshold determination is whether or not to initiate ex parte or inter partes patent reexamination, or both. This decision is very straight forward for older patents (i.e., those patents that did not mature from an application filed on or after November 29, 1999). This is because applications filed prior to the 1999 date are not eligible for inter partes patent reexamination.
Yet, as the years progress, fewer and fewer patents are outside of the inter partes date provision. So, where both options are available, which is the better option?
Like most legal inquiries, the answer is “it depends.” For those seeking a stay of a parallel litigation, the answer will vary in accordance with the practice of the presiding judge. Read the rest of this entry »
Change of Fortune Emboldens Defendant
When it comes to staying a district court litigation pending concurrent patent reexamination, defendants are always arguing to halt the proceedings while plaintiffs urge the court to continue. Yet, in Se-Kure Controls, Inc. vs. Sennco Solutions, Inc. et al. (ND.Ill) the tables were turned.
Plaintiff, Se-Kure asserted three patents against Sennco RE37,590, 5,861,807 and 7,081,882. In an unrelated litigation, the ‘590 was determined to be invalid by another district court and on appeal to the CAFC. Sennco then requested a stay of the litigation based on the ‘590 development. The court granted the stay as to the ‘590 patent only. Shortly thereafter, Sennco pursued patent reexamination of the ‘807 and ‘882 patents at the USPTO (Spring of 2010). As a result of the initiation of the reexamination proceedings, both Sennco and Se-Kure agreed that the ongoing case should be stayed; the court obliged.
In May of 2010, the ‘590 patent was determined invalid at the CAFC, in July of 2010 both the ‘807 and ‘882 patent were being actively reexamined at the USPTO.
In updating the status of the case to the judge in October 2010, Sennco explained to the judge that the PTO is going to gut the claims of the 807 and 882 [Patents] as an expert hunter guts deer. (Who knew Hannibal Lecter was a patent litigator). At the same time, Sennco then asked the judge to lift the stay…wait, what? Read the rest of this entry »
Nevada Court Rules Patent Owners Control Delay
Back in 2009, TableMAX IP Holdings sued Shufflemaster for infringement of U.S. Patent 6,921,337. The ‘337 Patent relates to a multi-player card gaming system. In June of 2010, Shufflemaster filed an ex parte request for reexamination citing various prior art references, including an Atari Blackjack game manual. (The Atari art is not especially relevant to this post. But, it makes me happy that I can now prove to my parents that I was not wasting my youth. Turns out I was a young visionary preparing for my career as a patent attorney through intense study of future prior art systems, take that mom!!)
The request was granted on August 2, 2010. Shortly thereafter, Shufflemaster moved to stay the case. In granting Shufflemaster’s request, the court went through the familiar factors, and dismissed the plaintiff’s prejudice argument based on the nature of the ex parte proceeding. The court reasoned that Patent Owners control ex parte reexamination pendency, noting that defendants do not participate, and that appeal shouldn’t be necessary if the patent is valid. Read the rest of this entry »
Giving Up What You Never Had
On September 20, 2010, Judge Ward of the Eastern District of Texas stayed the case of Microlinc LLC., v. Intel Corp et al. 2:07-CV-488. The patent at issue, 6,009,488 was asserted in 2005, but the action was voluntarily dismissed at the request of Microlinc to allow a first reexamination to conclude. Once this reexamination was terminated Microlinc reasserted the ‘488 Patent in 2007 against the same defendants. About the same time, Intel sought a second reexamination of the ‘488 Patent. A final rejection was issued in the second reexamination on May 26, 2010. On July 26, 2010, Microlinc filed a response adding 25 new claims.
Judge Ward stayed the case (decision here). While the case is now stayed, in his decision, Judge Ward offered the plaintiff an option to lift the stay that will necessitate the Patent holder give up, well….nothing. Read the rest of this entry »
As discussed previously, defendants accused of patent infringement that are hauled before a plaintiff friendly Texas court, not surprisingly, tend to seek transfer to a less favorable venue where possible. Often times, the “favorability” of an alternative venue may be driven in part by the tendencies of the alternative venue to stay a litigation pending patent reexamination. I previously identified this tactic as the “New Texas Two-Step.”
After a few years of dancing around a first plaintiff initiated suit in Texas, followed by a second defendant initiated suit in Virginia (later consolidated to Texas), Juniper Networks was able to successfully execute the Texas Two Step. On Monday, the Northern District of California (receiving the dispute by transfer from Texas) stayed the dispute between Juniper Networks and Graphon Corp pending the outcome of patent reexamination. Read the rest of this entry »
On 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. Read the rest of this entry »
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).
Federal courts have often found jurisdiction to review stays in favor of state court suits when the state court judgment would have a fully preclusive effect on the federal action or moot the federal action entirely. See , e.g. , Cone
, 460 U.S. at 10; Terra Nova Ins. Co. v. 900 Bar, Inc.
, 887 F.2d 1213, 1218-21 (3d Cir. 1989). Stays in favor of administrative proceedings are similarly reviewed on an “effectively out of court” standard. See Gould
, 705 F.2d at 1341
; Hines v. D’Artois
, 531 F.2d 726, 730-32 (5th Cir. 1976).
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. Read the rest of this entry »