As explained in my earlier post entitled Effectively Presenting a Request For Reexamination (Part I), I pointed out that requests for reexamination commonly include argumentation that is irrelevant to a proper SNQ analysis. For example, these arguments relate to inequitable conduct, litigation infringement positions, and 112 issues of original claims. However, in the case of reexamination concurrent with litigation, there is a clear tactical advantage to including such argumentation as a litigation tactic.
In other words, the Office may be, unknowingly, encouraging this behavior. The reason being, while much of reexamination is not admissible (see our four part series on this topic) as evidence at trial, when seeking a stay of a concurrent litigation, Office communications will be thoroughly reviewed.
For example, in a recent reexamination concurrent with litigation that was stayed, the requestor attacked the original patent claims as reciting subject matter not supported by the specification. Read the rest of this entry »
Guest Posting by Scott McBride of McAndrews Held & Malloy [1]
Courts have the inherent power to manage their dockets, including the authority to stay patent infringement litigation pending the conclusion of a Patent Office reexamination. Moreover, the decision to stay litigation is generally discretionary. Decisions granting stays of patent litigation are typically reviewed under an abuse of discretion standard. Such decisions can, in certain circumstances, be quite difficult to reverse on appeal. Although a patent owner has a statutory right under 35 U.S.C. § 318 to seek a stay of patent litigation pending the outcome of an inter partes reexamination proceeding, such requests can be denied if the judge does not believe that a stay would serve the interests of justice.
Factors generally considered by district court judges when ruling on motions to stay include whether (1) a stay will unduly prejudice, or present a clear tactical disadvantage to, the nonmoving party; (2) a stay will simplify the issues and trial of the case; and (3) discovery is complete and a trial date has been set. In ITC proceedings, Administrative Law Judges also consider the stage of the reexamination proceedings, efficient use of the Commission’s resources, and alternative remedies available in federal court.
Prejudice
Delay arguably should not be a dispositive issue, Read the rest of this entry »
On December 15, 2009, Chief Judge William K. Sessions III of the United States District Court for the District of Vermont denied a stay in the patent litigation between Synventive Molding Solutions, Inc. (“Synventive”) v. Husky Injection Molding Systems, Inc. (“Husky”), Case No. 2:08-cv-136. Husky had filed a motion to stay the patent litigation based on requests for reexamination of the three patents-in-suit. However, as of the time of Judge Sessions’ decision denying Husky’s motion to stay the litigation pending the outcome of the reexamination proceedings, the requests for reexamination has not yet received filing dates.
In deciding whether to grant Husky’s motion to stay the patent litigation, Judge Sessions considered whether (1) a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2) a stay would simplify the issues in question and trial of the case; and (3) discovery is complete and whether a trial date has been set.
The judge held that actual prejudice to Synventive does not appear to be significant given the availability of money damages for past and ongoing infringement. In the ruling, the judge stated that “[r]eexamination will still leave this Court with triable issues however, even if the reexamination is granted and some claims are amended or canceled upon reexamination. Were the case to be stayed pending reexamination, in all likelihood the parties would require additional discovery on the issues remaining to be tried….Granting a stay would therefore substantially increase the total time necessary to resolve the litigation. The reexamination proceeding may or may not simplify the issues remaining for trial….The parties have engaged in unusually acrimonious discovery practice, which is now drawing to a close. A trial date has been set. The Court can perceive no advantage to delaying the resolution of this litigation.”
Weighing heavily in favor of denying the stay were the closeness of the trial, the potential two year delay in resolving the patentability issues in reexamination, and that the reexamination proceedings would not resolve all the issues in the litigation.
In a growing trend, district courts are using their discretion to deny motions to stay patent infringement litigation in light of concurrent proceedings at the USPTO. In an earlier post, we commented on the Northern District of California’s deviation from that trend. In Advanced Analogic Technologies, Inc. v. Kinetic Technolgies, Inc., the concurrent proceeding was an inter partes reexam. In LG Electronics USA Inc. et al (“LG”) v. Whirlpool Corporation (“Whirlpool”) (Case No. 1-08-cv-00234), the defendant’s motion to stay was denied consistent with the trend to deny such motions and the concurrent proceeding was an interference.
Judge Gregory M. Sleet of the District Court of Delaware denied Whirlpool’s motion to stay pending the outcome of an interference involving LG’s patents-in-suit. The patents-in-suit are Read the rest of this entry »
The U.S. District Court for the Southern District of Georgia in E-Z-GO v. Club Car, Inc. (Case No. 1:09-cv-119) has stayed the litigation of E-Z-GO’s patent pending the outcome of inter partes reexamination. E-Z-GO asserts that two of Club Car’s currently marketed electric vehicles infringe U.S. Patent No. 7,332,881, entitled “AC Drive System for Electrically Operated Vehicle.”
The court granted Club Car’s motion to stay the litigation pending the outcome of reexamination despite the fact that the PTO has not yet granted Club Car’s request for inter partes reexamination of the ‘881 patent. In granting the stay, the court noted that the PTO grants 95% of all requests for inter partes reexamination, and that the stay could be lifted if the PTO declines to grant Club Car’s request for inter partes reexamination.
The competitive relation between the litigants is a recurring theme of E.D. of Texas determinations on whether or not to grant a motion to stay the infringment action in view of a pending reexamination. In other words, where the litigants are direct competitors, the trend has been to deny motions for staying the litigation.
As noted in Motorola Inc v. Vtech Communications, Inc. et al (5-07-cv-00171) E.D. TX,(Order) (Craven, C.)
Stays of proceedings are not favored when parties are competitors. Nidec Corp. v. LG Innotek, Co., 2009 WL 3673433, * 4 (E.D. Tex. Apr. 3, 2009); O2 Micro Int’l Ltd. v. Beyond Innovation, 2008 WL 4809093, *2 (E.D. Tex. Oct. 29, 2008) (“The parties are direct competitors in the market and a denial of timely enforcement of the plaintiff’s patent rights does indeed Read the rest of this entry »
In recent posts, we have discussed the Northern District of California’s surprising stay of a patent infringement suit in view of an undecided reexamination request. Likewise, our colleagues at the ITCblog have discussed the opposite extreme, the International Trade Commission (ITC). The ITC seems to grant stays pending reexamination in only the most extreme of circumstances due to their statutorily mandated time to decision.
In the Eastern District of Texas, stays although historically disfavored, are beginning to emerge in stipulated form. Read the rest of this entry »
The face of patent litigation in the U.S. has evolved greatly in the last 5 years with respect to patent reexamination. For patent litigators, throughout the U.S. and especially the Northern District of Illinois, the emergence of this now seemingly reliable strategic option is an important case management consideration. Indeed, if not adequately considered in the course of litigation counseling, reexamination ignorance may create malpractice opportunities for unsuccessful defendants.
For a more detailed discussion of these issues, see my guest post on ChicagoIpLitigation.com
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