Judge Lifts Stay of Case against Facebook

Scott Daniels | November 29, 2010

There is now a substantial body of case law on the issue of whether a court should stay a case pending completion of reexamination, but there is much less law on when a stay should be lifted.  Last week Judge John R. Padova of the Eastern District of Pennsylvania, in a very thoughtful decision in Cross Atlantic Capital Partners v. Facebook, 2010 U.S. Dist. LEXIS 124120, chose the date the examiner files an answering brief on appeal to the PTO Board as a suitable moment to lift a reexamination stay.

Cross Atlantic sued Facebook for patent infringement in 2008.  Facebook replied by requesting inter partes reexamination of the patent, and Judge Padova shortly thereafter stayed the law suit pending completion of the reexamination proceeding.  The PTO initially rejected the claims over the prior art cited by Facebook, but later changed her mind and confirmed the patentability of most of the original claims and of the remaining claims after amendment. Cross Atlantic then moved to the lift the stay, but Judge Padova said no, finding that “each party [still] had the opportunity to submit comments, which the examiner was obligated to consider,” and that further reexamination “could result in additional complexities.”  The PTO issued a Right of Appeal Notice (RAN), and Facebook filed its Appeal Brief with the Board. 

When the examiner filed her answering brief, Judge Padova determined that the time was right to lift the stay.  “With the issuance of her Answer to Appeal Brief, the Examiner has given her final word affirming the validity of the pending claims.”  He acknowledged that the appeal to the Board was not complete, and that there could be appeals to the CAFC.  Balancing the conflicting interests of the parties, he concluded that the examiner’s decision to confirm the validity of the claims despite Facebook’s Appeal Brief “constitutes a substantial change in circumstances diminishing the basis for any further continuance of the stay.”  Judge Padova explained that it was no longer “fair to continue to deny Plaintiff the opportunity to proceed with its claims.”

Of course, future motions to lift a reexamination stay should be decided on the basis of the special facts of each case.  Yet Judge Padova’s decision last week, made after a thoughtful balance of the parties’ interests, is a valuable guide.  A generally accepted standard for lifting reexamination stays would greatly assist judges, such as Judge Sue Robinson of Delaware, for whom reexamination pendency is an important, even decisive, factor in deciding when to stay a case in the first place.

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