DELAY INHERENT IN REEXAMINATION IS NOT “UNDUE PREJUDICE”

Scott Daniels | March 15, 2010

As instances of reexamination taking several years are reported in the media, it might be expected that the judges would be less willing to stay infringement cases pending completion of reexamination.  Judges, however, seem to be staying cases at the same rate as before.

A case decided this past week – 1st Technology v. Digital Gaming Solutions, 2010 U.S. Dist. LEXIS 20181 (E.D. Mo. 2010) – is an interesting example.  There, the accused infringer filed a motion to stay the litigation based on a reexamination where the PTO had already rejected the patent claims. The judge identified the three factors commonly cited in rulings on stay motions: (1) whether discovery has been completed and the case was ready for trial, (2) whether reexamination would simplify the issues, and (3) whether the stay would “cause undue prejudice or create a tactical disadvantage” for the patentee.

The facts tended to favor a stay.  The case was filed a year and a half ago, but discovery on the substantive issues had not yet begun.  Also, the reexamination was advanced, with the patentee already having filed its answer to the pending rejections.

The patentee, however, opposed the stay because it would constitute a lengthy delay in the law suit.  The judge disagreed with the patentee and granted the stay.  In doing so, he commented on the issue of reexamination delay, specifically finding that “the delay inherent to the reexamination process does not constitute, by itself, undue prejudice” (emphasis added).

A magistrate in the Northern District of California made a similar last month comment in granting a stay.  Network Appl. V. Sun Microsystems, 2010 U.S. Dist. LEXIS 20732 (N.D. Cal. 2010).

Clearly, patentees opposing stays cannot rely on the length of the reexamination process, but must convince the courts that they will be injured, perhaps irreparably, during a stay.

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