Stay or Dismissal of Litigation

Historical Patent Reexamination Statistics Belie Modern Practices

When considering whether or not to stay a parallel litigation in view of a pending patent reexamination a district court will consider several factors. While delay is common to all stayed cases, the degree of delay caused by patent reexamination can be considered prejudicial. For this reason, especially when it comes to inter partes patent reexamination, the average length of the proceeding can be instructive to the Court.

Hoping to convince the Court of a prejudicial delay, Patentees will argue that inter partes patent reexamination takes on the order of 5-7 years to complete through appeal, citing those cases that have been fully contested through appeal. Defendants, on the other hand, will cite to published USPTO statistics that indicate inter partes patent reexamination pendency to be an average of 36 months, including appeal. (As pointed out previously, the 36 month statistic is skewed by the small number of completed inter partes patent reexaminations that have been fully contested through appeal).

However, regardless of the statistical theory advanced to the court, what neither theory considers is that historical statistics are weighed down by years of past USPTO practices. As one plaintiff found out recently, the USPTO has greatly streamlined the processing of inter partes patent reexamination relative to past practices.

Continue Reading Patent Reexamination Speed Impresses District Court

Court Favors Staying Troll Suit

The existence of a competitive relationship between the litigants is often times an important consideration to district court judges considering a stay pending patent reexamination. When weighing the equities whether or not to grant a motion to stay the court action pending USPTO reexamination the trend has been to deny motions for direct competitors. This is because, when staying a litigation dispute between competitors, there is a danger that the delay could cause erosion of market share, customer loyalty, or other intangible business factors….not so with patent trolls.

Patent trolls, also known as “non-practicing entities” to some, do not compete with their infringement targets in the marketplace. Not surprisingly, courts have begun to emphasize the “troll” factor as favoring a stay of the litigation.
Continue Reading Patent Reexamination Can Stop Patent Trolls in Their Tracks

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.
Continue Reading 500 New Claims in Patent Reexamination Backfire on Plaintiff

District Court Stay Pending Patent Reexamination By-passed Via ITC

The initiation of patent reexamination parallel to a district court patent infringement proceeding has become quite routine over the past few years. The use of such a parallel reexamination proceeding offers many benefits to defendants, such as helping prove objectively reasonable behavior to avoid a finding of willful infringement, creating a further prosecution history estoppel/disclaimer record for Markman purposes, establishing an intervening rights defense, or demonstrating materiality of a reference underlying an inequitable conduct defense. Yet, one of the most common defendant uses of a parallel patent reexamination is the ability to shut down a district court proceeding altogether in favor of USPTO reexamination proceedings.

Stays pending patent reexamination are granted quite routinely, albeit inconsistently. Depending upon the court, a case may be stayed based upon the mere filing of a request for reexamination, or upon grant even though such requests are granted in roughly 95% of cases. Likewise, once a case is stayed, serial requests for patent reexamination, if tolerated by the judge, can ensure that the validity case remains with the USPTO indefinitely.

So, for those plaintiffs subject to a stay that are being damaged by continued infringement, aside from battling the a continuous stream of patent reexaminations requests for years on end, is there a way to resume the litigation battle without waiting for the reexamination(s) to end?
Continue Reading Un-Staying Litigation Despite Ongoing Patent Reexamination

Is the USPTO Obligated to Follow a District Court Order?

Last Friday, the patent infringement action MONKEYMedia Inc. v. Apple Computer, et al (WDTX) was stayed pending the outcome of several patent reexaminations (U.S. Patents 6,393,158; 7,467,218; and 7,890,648). Interestingly, the stay is of a limited duration, 3 months, to allow time for the reexaminations to progress. In order to ensure that the reexaminations advance, the Court ordered the parties to expedite their submissions to the USPTO. What sets this decision apart from other is that the Court also ordered the USPTO to “expedite” the reexamination proceedings. (Order here)

Aside from the legal debate about whether or not the Judge has jurisdiction over the PTO, and whether or not the USPTO will follow the Order….lost on many is the fact that the USPTO would already do what the judge is asking, Order or not.

Continue Reading Court Orders “Extra Special” Dispatch in Patent Reexamination

Success in Halting Infringement Case Varies Across Courts/Judges

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. For this reason, patent reexamination parallel to a district court/ITC litigation is often initiated in an attempt to stay the more cost prohibitive court proceeding.

Perceptions as to whether or not a stay is warranted will vary significantly, even though the same analysis is performed by each court. (See factor based analysis here). Attitudes vary across courts (ITC v. EDTX, v NDCA), even amongst judges of the same court.

Thus, a threshold determination for any defendant becomes:

How does Court/Judge X view requests for patent reexamination?…and is there somewhere I can find this information?
Continue Reading Judge-by-Judge Statistics on Stays Pending Patent Reexamination

Interval Licensing Litigation Stayed Pending Patent Reexamination

Former Microsoft founder Paul Allen has made headlines recently by asserting the patents of his company, Interval Licensing against the 11 industry stalwarts (Apple, Google, Facebook, NetFlix, AOL and others). The case was initially stalled when the court found the opening complaint lacking in detail, but this formality was quickly corrected. Last week, however, a much more significant roadblock was placed in the path of Mr. Allen’s litigation endeavor—-patent reexamination. A judge in the Western District of Washington has halted the proceedings against all 11 defendants pending patent reexamination.

As most readers of this blog realize, obtaining a stay of an ongoing district court infringement action is one of the many benefits of patent reexamination parallel 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, which can be rather lengthy. 

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. So, in essence, Interval Licensing is now facing a new challenge that must be overcome before the litigation resumes, and at much longer odds.

In considering if Interval Licensing’s interests would be prejudiced by a delay in the litigation of a length necessary to reexamine the patents at issue, the court  emphasized the fact that Interval licensing is a holding company (known as a patent troll to some).

The full decision
Continue Reading Paul Allen’s Infringement Campaign Halted by Patent Reexamination

Recently Filed Reexaminations Sway California Court to Halt ProceedingTiVo’s patent battles have been making headlines for quite some time now. Last week, the battle with EchoStar finally concluded with a $500 million dollar payout. During this dispute, TiVo’s “Time Warp” patent (6,233,389) escaped two separate challenges in patent reexamination relatively unscathed.TiVo continues to battle AT&T and Microsoft over the same digital video recorder technology. In 2009 TiVo sued AT&T in Eastern District of Texas for infringement of several patents, including its Time Warp patent. As a result of that lawsuit, Microsoft has stepped in to the fray in Texas in an attempt to aid their customer AT&T. Perhaps more interestingly, in addition to joining forces with AT&T in Texas, Microsoft has sought to pound TiVo into submission in Texas by initiating multiple retaliatory suits of their own. Since January of 2010, Microsoft has pursued TiVo at the International Trade Commission (ITC), and Western District of Washington on 4 of their patents. In a separate suit filed the Norther District of California another 7 Microsoft patents are asserted against TiVo.  The Washington case is now stayed pending the ITC action, which is set for trial this November.Last week, the California court stayed further proceedings pending the ex parte patent reexamination of the seven Microsoft patents. The decision to stay this case highlights the difficulty of being a plaintiff the size of Microsoft.Typically, staying a district court action pending patent reexamination is disfavored when direct competitiors are involved. Rather than considering  the potential loss of market share, customers, and the like, the court emphasized the aggressive, and concurrent actions taken by Microsoft in other fora. The court explained: (full decision here). . .Microsoft claims that it will suffer undue prejudice as a result of a stay because staying this case alone will not increase the likelihood of settlement. Opp‟n 11-12. According to Microsoft, because the ITC Investigation and TiVo‟s suit against AT&T will still continue, Microsoft will have no reason to resolve this case. Id. at 11-12. The Court is not persuaded. If the Court were to stay this case, Microsoft is still asserting against TiVo, in the ITC and in the Western District of Washington, patents related to those at issue here. Those actions also involve the same accused TiVo products as those accused in this case. Moreover, the ITC Investigation is set for trial in November 2011, much sooner than trial in this matter would be possible. Therefore, even if this case is stayed, the parties will go to trial against each other twice within the next seven months, as the Eastern District of Texas case is set for trial in October of 2011, and each trial carries with it the potential for injunctive relief. Thus, it is still possible that Microsoft and TiVo will resolve their broader dispute without this litigation. This, in turn, could lead to settlement here.Prejudice is a hard sell when you have the legal resources and market power of Microsoft.This case was brought to my attention by the great Docket Navigator.

TiVo’s patent battles have been making headlines for quite some time now. Last week, the battle with EchoStar finally concluded with a $500 million dollar payout. During this dispute, TiVo’s “Time Warp” patent (6,233,389) escaped two separate challenges in patent reexamination relatively unscathed.

TiVo continues to battle AT&T and Microsoft over the same digital video recorder technology. In 2009 TiVo sued AT&T in Eastern District of Texas for infringement of several patents, including its Time Warp patent. As a result of that lawsuit, Microsoft has stepped in to the fray in Texas in an attempt to aid their customer AT&T. 

Perhaps more interestingly, in addition to joining forces with AT&T in Texas, Microsoft has sought to pound TiVo into submission in Texas by initiating multiple retaliatory suits of their own. Since January of 2010, Microsoft has pursued TiVo at the International Trade Commission (ITC), and Western District of Washington on 4 of their patents. In a separate suit filed the Norther District of California another 7 Microsoft patents are asserted against TiVo.  

The Washington case is now stayed pending the ITC action, which is set for trial this November.

Last week, the California court stayed further proceedings pending the ex parte patent reexamination of the seven Microsoft patents. The decision to stay this case highlights the difficulty of being a plaintiff the size of Microsoft.

Continue Reading Tivo Shuts Down Microsoft Case

Stay of California Litigation Extended to Await USPTO ClarificationTypically, once a case is stayed pending patent reexamination, periodic status updates are provided to the judge. Depending upon the progress of the patent reexamination proceedings, the judge may consider lifting the stay to move forward with the litigation. For example, where claims are confirmed/allowed, a judge is likely to consider lifting the stay.Recently, in Cellectricon AB and Gyros AB v. Fluxion Biosciences Inc. (NDCA) a status report was provided to the juge noting the progress of four patent reexamination proceedings corresponding to the patents-in-suit. (7,470,518; 7,390,650; 7,563,614; and 5,376,252) The ‘252 was subject to ex parte patent reexamination and recently concluded with its claims being confirmed, the other three patents were subjected to inter partes patent reexaminations that are still in progress. In one of these three cases claims were also confirmed by the examiner, but subject to appeal to the BPAI. Based on the positive developments, the plaintiff patentee sought to lift the stay. However, in determining whether or not to lift the stay, the judge was troubled  by the seemingly inconsistent inter partes patent reexamination results.Two of the three patents ininter partes patent reexaminations were related, one was the parent of the other. Both patents included the same claim language, and were rejected based upon the same prior art reference. Yet, the parent was allowed over the reference, while the child was not, the court pointed out this seeming inconsistency, noting: (full decision here)The PTO has initially rejected the ‘518 patent claims while simultaneously upholding the reexamined ‘614 patent claims. Notably, the ‘614 patent is the parent of the ‘518 patent, and they share a common specification. Both patents also share a claim limitation requiring application of fluids through three or more outlets. In the ‘518 Office Action, the examiners determined that the U.S. Patent Publication No.2002/0182627 by Wang et al. (“Wang”) anticipates the claims at issue because Wang discloses “multiple reagent channels feeding the portion of the channel where the biosensor is located.” Dkt. No. 131-2 at 9. Nine days later, the same examiners issued an Office Action in the ‘614 patent reexamination. But this time, the examiners confirmed the validity of the ‘614 patent claims, noting that “[w]hile Wang does appear to teach sequential application of multiple fluids through a single outlet, Wang does not clearly teach or suggest application through 3 or more outlets . . . .” Dkt. No. 120-3 at 5. In other words, the examiners appear to reach conflicting conclusions as to whether the Wang prior art reference discloses “multiple outlets.” The parties note that briefing and Office Actions in 2011 should clarify the inconsistency. Although the court is generally reluctant to stay a case because of the potential delay in obtaining a final resolution from the PTO or the Federal Circuit, here, the court finds that there is a legitimate basis for temporarily staying the case to see how the reexamination process will resolve the apparent conflict.The stay was lifted as to the ‘252 Patent, the court will monitor the progress of the inter partes cases further before lifting the stay with respect to those patents.This case was brought to my attention by the great Docket Navigator.

Typically, once a case is stayed pending patent reexamination, periodic status updates are provided to the judge. Depending upon the progress of the patent reexamination proceedings, the judge may consider lifting the stay to move forward with the litigation. For example, where claims are confirmed/allowed, a judge is likely to consider lifting the stay.

Recently, in Cellectricon AB and Gyros AB v. Fluxion Biosciences Inc. (NDCA) a status report was provided to the juge noting the progress of four patent reexamination proceedings corresponding to the patents-in-suit. (7,470,518; 7,390,650; 7,563,614; and 5,376,252) The ‘252 was subject to ex parte patent reexamination and recently concluded with its claims being confirmed, the other three patents were subjected to inter partes patent reexaminations that are still in progress. In one of these three cases claims were also confirmed by the examiner, but subject to appeal to the BPAI. Based on the positive developments, the plaintiff patentee sought to lift the stay. However, in determining whether or not to lift the stay, the judge was troubled  by the seemingly inconsistent inter partes patent reexamination results.

Continue Reading Court Confused by Patent Reexamination Results