Stays Pending Litigation

Subscribe to Stays Pending Litigation via RSS
Virtual CLE Program January 24 – 27th

IPWatchdog’s PTAB Masters 2022 (PTAB-palooza if you prefer), is coming next week!

The free, 4-day CLE program is virtual, and will focus on the PTAB from the viewpoint of both the patent owner and petitioners challenging patents.  Topics will explore political and legislative developments impacting the agency in…

Pending Prelminary Injunction Dispute Avoids StayAs 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.The court explained:Medicis filed a Motion for Preliminary Injunction on December 10, 2010. (Doc. 53.) The parties have submitted their Proposed Findings of Fact and Conclusions of Law (Docs. 122 & 123), and the Court set a hearing on the Motion for Preliminary Injunction for February 23, 2011. If the Court stayed the case pending reexamination, the Court effectively would deny the Motion for Preliminary Injunction without first addressing the merits, which would be inappropriate. Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 849 (Fed. Cir. 2008)(holding the district court erred in granting a stay pending reexamination when the plaintiff had filed a motion for preliminary injunction). Because the Court has not yet ruled on the merits of the injunction motion, the Court declines to enter a stay at this time.Further, the court noted that the defendant chose to seek ex parte patent reexamination rather than inter partes. See the earlier post on the importance of this decision. (here)This case was brought to my attention by the great Docket Navigator.

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.
Continue Reading Pending Motion for Preliminary Injunction Precludes Stay

Setting the Stage for a Showing of PrejudiceObtaining 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.Patent Owners often select patent friendly forums for their perceived reluctance to invalidate U.S. Patents, such as the Eastern District of Texas. Such forums are oft times equally reluctant to stay an ongoing infringement action in favor of a patent reexamination proceeding. However, for those Patent Owners forced into less friendlier fora, what steps can be taken to avoid a stay pending patent reexamination?One of the factors generally considered when ruling on a  motion to stay is whether or not the stay will unduly prejudice, or present a clear tactical disadvantage to, the non-moving party. In the case of direct competitors, court’s will often give greater weight to the potential business prejudice in delaying the court action. Therefore, to emphasize this potential for prejudice, and to anticipate the need to demonstrate such, it is imperative that Patent Owners move for a preliminary injunction.In weighing the relative merits of staying an ongoing court action between competitors, the Patent Owners request for injunctive relief is given significant weight. As recently discussed in Osmose, Inc. v. Arch Chemicals, Inc., et al., 2-10-cv-00108 (VAED, Norfolk) (previous post here)Although Osmose has not filed a motion for a preliminary injunction, the complaint does seek injunctive relief. Osmose therefore might be prejudiced by a multi-year stay that could allow defendants to both continue selling the allegedly infringing products and further increase their market share.   Further, last week it was emphasized that the timing of the request for injunctive relief may also impact the relative equities of staying the case. In Richtek Technology Corp., et al., v. uPI Semiconductor Corp. et. al., 3-09-cv-05659 (NDCA), the court emphasized that:Richtek has not filed a motion for a preliminary injunction in this year-and-change-old district court action. Although Richtek expressed intent to eventually file a preliminary injunction motion at the October 2010 case management conference and in its early January discovery dispute letter brief, it did not even request permission to file such a motion until nearly a week after motion practice was suspended in mid-January (Dkt. Nos. 108 at 14, 229 at 2, 242). If the threat of irreparable harm truly were imminent, then Richtekwould not have dragged its feet this long. Richtek has not shown that it would suffer irreparable harm or clear tactical disadvantage as a result of a stay of this action.For Patent Owners anticipating a motion to stay pending patent reexamination, an early motion for preliminary injunction can go a long way in demonstrating potential prejudice relative to a direct competit

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.
Continue Reading Avoiding a Stay Pending Patent Reexamination

Request Ex Parte Patent Reexamination, Lose, RepeatFor 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.Recently, in Voda v. Medtronic Inc., et. al. (OKWD) (here) the defendants were able to secure a stay pending a first request for patent reexamination. Shortly thereafter, the reexamination concluded favorably to the Patent Holder and the stay was lifted. Next, the defendants filed a second request for ex parte patent reexamination, and then a third request along with a second motion to stay the case. The court denied the second motion to stay, explaining: The court finds the first factor weighs against granting a stay. The first reexamination request resulted in a fourteen-month delay, and notice of the USPTO’s decision on that request was further delayed by defendants’ filing a second ex parte request for reexamination. Moreover, defendants’ filing of the third reexamination request and concomitant request for a stay has already resulted in additional delay as the court had to reschedule the status conference set for January 2011. Simplification of the issues to be tried in this action is likely to occur only if the USPTO issues a decision rejecting the patent’s claims. Given the recent confirmation of the ‘213 patent, that outcome is not certain and therefore this factor does not weigh in favor of granting a stay. Finally, defendants’ argument that this matter is in its early stages ignores the fact that the case has been pending for two years. This factor, therefore, also weighs in favor of denying defendants’ second motion to stay. (emphasis added)USPTO statistics indicate that inter partes patent reexaminations are far more effective for Requesters (i.e., claims amended and/or cancelled). Of course, such proceedings are not available for all patents, as was the case in Voda.The greater success rate of inter partes patent reexamination is often attributed to Requester participation; yet, this only be  part of the story. Due to the estoppel provisions of inter partes patent reexamination, the number of SNQs presented relative to ex parte patent reexamination tend to be higher. In other words, there is no “holding back” of art as is often the case with initial ex parte filings. Additionally, inter partes requests tend to be of a much higher quality due to the estoppel risk involved.For those Requesters seeking to employ an ex parte patent reexamination for stay purposes, the first shot might need to be your best shot.This case was brought to my attention by the great Docket Navigator.

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.
Continue Reading Ex Parte Patent Reexamination as an Endless Loop

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.As detailed previously, a Nevada judge found that ex parte patent reexamination pendency is controlled by the Patentee, and determined that a stay is appropriate. The judge reasoned that any potential delays in the ex parte proceeding could be controlled by the Patentee.Last week, in eComSystems Inc., v. Shared Marketing Sevices Inc., and Ace Hardware Corp (MDFL), the judge found that the potential for an ex parte patent reexamination to simplify issues for trial was limited compared to inter partes patent reexamination. The judge explained that estoppel provisions of inter partes patent reexamination would prevent a defendant from arguing the same art in the parallel litigation.Inter partes reexaminations provide a third party the right to participate in the reexamination process and, thus, have a res judicata effect on the third party requester in any subsequent or concurrent civil action. See 35 U.S.C. §§ 314-315. . . .. Ex parte reexaminations, on the other hand, do not bar the requestor from relitigating the exact same issues in district court.Accordingly, the Court does not find that judicial economy will be served by a stay because the pending ex parte reexaminations of the patents-in-suit would still leave Shared Marketing and Ace free to relitigate the exact same issues before this Court.In this case, the patents were subject to inter partes patent reexamination; yet the defendants opted for the lower risk, ex parte option. While the Order is silent as to the perceived  gamesmanship of this choice, the decision may be more about this choice then the loss of estoppel. Indeed, as pointed out by the judge, even had estoppel applied, patent reexamination will not defeat all invalidity defenses (e.g., public use, on-sale bar, inequitable conduct).This case was brought to my attention by the great Docket Navigator.

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.…

Continue Reading Choosing Between Ex Parte & Inter Partes Patent Reexamination

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?
Continue Reading Defendant Seeks to Undo Stay Pending Patent Reexamination

Nevada Court Rules Patent Owners Control DelayBack 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.TableMAX IP Holdings, Inc. v. Shuffle Master, Inc. (D. Nev., 2009). Stay granted (here)Specifically, the court stated:Plaintiffs argue that the reexamination takes time which would cause unnecessary delay. However, this is an ex parte application by Defendant, which means that the Defendant is not permitted to have any further input. The deadlines are all in the control of the Plaintiffs. They are not required to take the maximum time to file the necessary documents or appeals. Any undue delay in the reexamination will not be caused by Defendants. If Plaintiffs’ patents are upheld, there will be no need to appeal–and Defendant may not appeal. (emphasis added)It is true that delay will not be caused by the defendants (assuming they don’t file additional requests). Yet, undue delay in the reexamination will also not be caused by the plaintiff. Patentees complain about the patent reexamination pendency of the USPTO. Only the USPTO controls the timing of office action issuance in patent reexamination and appeal pendency. Likewise, extensions of time are not granted as a matter of right in reexamination, and there is no continuation/RCE practice.Still, with such new programs as the Pilot Program for Waiver of Patent Owner’s Statement in Ex Parte Reexamination Proceedings, the court’s rationale may become more compelling going forward. (the ‘337 Patent was filed prior to the effective date of the pilot progra

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.
Continue Reading Patent Owner Control Over Ex Parte Patent Reexamination Pendency?

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.
Continue Reading Illusory Sacrifice in Patent Reexamination to Avoid Stay in Marshall Texas?

horiz_2stepAs 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.
Continue Reading Juniper Network’s Texas Two Step a Success

blindersOn 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.
Continue Reading Rubbing the Court the Wrong Way in Seeking a Stay Pending Patent Reexamination