Parallel Litigation Stayed in View of “Tremendous” Reexamination Claim Count
When faced with the assertion of a patent of dubious validity, prospective defendants increasingly resort to patent patent reexamination. Patent reexamination can be a cost effective mechanism to dissolve the dispute, or at the very least, shift some leverage to the prospective defendant relative to willfulness, intervening rights, claim construction, etc.
Once a suit is filed, the opportunity to obtain a stay of an ongoing district court infringement action pending a parallel patent reexamination is a major benefit of the USPTO proceeding. Courts have the inherent power to manage their dockets, including the authority to stay patent infringement litigation pending the conclusion of a USPTO patent reexamination. A stay of the court proceeding enables defendants to halt, or altogether avoid cost prohibitive litigation discovery, which can be rather lengthy and painful.
For this reason, patent reexamination parallel to a district court is often initiated in an attempt to stay the more cost prohibitive court proceeding. In deciding whether or not to stay the court proceeding the courts look to many factors. (See factor based analysis here) Perceptions as to whether or not a stay is warranted will vary significantly, even though the same analysis is performed by each judge/court. Attitudes vary across courts (ITC v. EDTX, v NDCA), even amongst judges of the same court.
Often times, the conduct of the litigating parties can be another factor impacting the court’s analysis.
Recently, in Dura Global Technologies LLC. et. al., v. Magna International Inc. et al. (EDMI), the court considered staying an ongoing litigation between the parties based on a pending ex parte patent reexamination of the patent at issue (U.S. Patent 6,766,617). In considering the factors, the court noted the unusual claim additions made during the ongoing USPTO proceeding:
After considering the parties’ arguments and the facts of this case, the Court finds that staying this case will simplify the issues and allow the Court to handle this case more efficiently. Dura has added a tremendous number of new claims to the ‘617 Patent and over 500 claims remain at issue in the reexamination. It makes sense for the USPTO to determine the patentability and final language of these claims before the parties continue with the case. Many of these claims could be amended or canceled during the reexamination proceeding. While the Court’s current Scheduling Order provides that claim construction will not begin until the results of the reexamination are reasonably known (i.e., the USPTO issues a “notice of allowance”), the parties would still have to expend money conducting discovery when the claims in the patent are not yet final.
Interestingly, the new Inter Partes Patent Review statute attempts to address this issue by providing that an amendment may be introduced to propose “a reasonable number of substitute claims”, which would seem far less than 500.
This case was brought to my attention by the great Docket Navigator.