Court Lists Practical Efficiencies of Patent Reexamination
In attempting to stave off a motion to a district court litigation pending patent reexamination, the opposing party (almost always the Patentee) will often characterize a parallel patent reexamination as an “all or nothing proposition.” That is to say, in the face of the argument that the patent reexamination is likely to simplify issues for trial (almost always a defendant argument), the opponent will insist that USPTO statistics demonstrate that it is very unlikely that all claims will be canceled.
In Genzyme Corp., v Cobrek Pharmaceuticals Inc., (NDIL, Order 2/17/11), the relatively rare case of a Patentee requested stay was at issue. In deciding to stay the district court proceeding based on the familiar factor based analysis, the court found that simplification of issues was likely. In doing so, the court created a list of discovery efficiencies, potential cost savings, and case management benefits to be gained from awaiting the outcome of the USPTO action.
The court seemingly reasoned that public policy favored stays pending patent reexamination, noting:
Although the Court acknowledges that certain issues may remain in dispute even upon conclusion of the reexamination proceedings, it also is cognizant of the many advantages to which courts have pointed that often merit a stay:
1. All prior art presented to the Court will have been first considered by an expert PTO examiner;
2. The reexamination may alleviate discovery problems relating to the prior art;
3. The suit will likely be dismissed if the reexamination results in effective invalidity of the patent;
4. The outcome of the reexamination may encourage settlement;
5. The record of the reexamination would likely be entered at trial and thus reduce the complexity and length of the litigation;
6. The reexamination will facilitate limitation of issues, defenses, and evidence in pretrial conferences;
7. Litigation costs to the parties and the Court will likely be reduced.
With respect to the factor (1) , the defendants have pursued an inter partes patent reexamination (95/001,245) of the Genzyme patent. Of course, ex parte patent reexamination would be a different story due to the lack of estoppel provisions. The remaining factors, are not as fact specific.
Interestingly, the defendant argued that if the case were stayed, the pendency delay of the patent reexamination they requested would be prejudicial; the court was not sympathetic to this argument.
The Genzyme patent relates to “Hectorol,” a highly lucrative drug for chronic kidney disease.
So why would the defendant want to go forward with the litigation while the Patentee sought a stay? The answer to that question relates to the nature of ANDA (Abbreviated New Drug Application) disputes. As long as the patent remains on the books, investment in a generic drug subject to a patent dispute is not attractive for investors, likewise, entry into the market may not be a prudent for Cobrek until the patent is officially dead. With expiration of the patent in three years, it appears that the cover offered by reexamination pendency is more attractive to Genzyme.