Early August Developments

Scott Daniels | August 11, 2010

1.  Special Master Recommends Denying Stay

The Special Master Paul Beck has recommended in Grant Street v. Realauction.com (Civ. No. 2:09-cv-01407-DWA) that Judge Donnetta Ambrose deny Defendant’s motion to stay the case pending completion of reexamination of the patent-in-suit, U.S. Patent No. 7,523,063.  Special Master Beck recites the familiar three-part test for determining whether to grant a stay: whether there would be prejudice to the patentee, whether a stay would simplify the issues, and the stage of the litigation. 

What makes his recommendation interesting is his focus on the fact that the parties are “direct competitors in a two-supplier market.”  Accordingly, the patentee would face a potential loss of market share during the delay created by a stay, with a resulting injury that would be difficult to calculate or prove.  Thus, a stay could “cause irreparable injury [to the patentee] that is not remediable by money damages.”  

Special Master Beck concluded that the potential prejudice to the patentee trumped all other considerations and recommended denial of the Defendant’s stay motion.  

2.  Accused Infringer Moves to Admit Reexamination Results into Evidence

One of the Defendants in Tesco v. Weatherford Int’l (Civ. No. 08-cv-2531), Frank’s Casing Crew, has asked Judge Keith Ellison of the Southern District of Texas to admit at the trial currently scheduled for October “the entire contents” of the pending reexaminations of the two patents-in-suit.  Frank’s intends to use these reexamination results to show that the two patents are invalid, that any infringement was not objectively willful, and that the allegedly withheld prior art was material to the original prosecution of the patents. 

Judge Ellison, however, has denied Frank’s’ motion as “premature,” but left open the possibility that Frank’s may renew its motion at trial.   He explains that he prefers “to rule on evidentiary matters as they arise at trial” where he will know “the context in which the evidence will be offered” and “the purpose for which it will be used.”   Judge Ellison’s denial is noteworthy in that he does not describe the reexamination results as “unduly prejudicial” and thus seems to be open to admitting them at trial. 

Frank’s also filed a motion to stay case pending completion of the reexamination proceedings, which motion Judge Ellison denied because of the imminent trial date.  The Judge was also skeptical of the parties’ predictions – based on the published PTO statistics – of how the reexaminations would conclude.    At present, five of the asserted claims of one patent have been rejected and two confirmed; for the second patent, five claims have been rejected and one confirmed.  Right of Appeal Notices have not yet issued for either patent.  Despite the PTO statistics, Judge Ellison found that “neither party has provided competent evidence from which the Court can estimate the probability that the claims currently rejected or confirmed by the PTO will ultimately be rejected or confirmed by the BPAI.” 

3.  Federal Circuit Denies Mandamus Petition in Interference

Quite a number of litigants have recently petitioned the Court of Appeals for the Federal Circuit for a writ of mandamus directing a lower court or agency to take certain action.  Chief Judge Rader signaled last week, in In re Allvoice Developments, that he would not allow the mandamus relief to become an alternative vehicle to the normal paths of appellate review. 

Allvoice, the patentee in a pending interference, petitioned the Federal Circuit for a writ of mandamus directing the PTO to vacate the declaration of that interference.  Allvoice argued that the PTO had acted arbitrarily by declaring the interference without “a lawful opinion.”  Chief Judge Rader denied the petition, stating that “Allvoice has not demonstrated any error by the PTO [that] cannot be corrected through an ordinary appeal after the PTO proceedings are concluded.”

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