Scott Daniels | December 15, 2010
Court rulings on motions to stay patent litigation pending completion of a reexamination proceeding are at least a weekly occurrence. And almost without exception, the trial judge applies the familiar three-part test for stay motions: whether the reexamination is likely to simplify the issues for trial, the stage of the litigation, and whether the stay would unduly prejudice the patentee. Still, it is interesting to see how an individual trial judge applies his or her own subjective impressions to these three considerations.
The subjectivity of judges’ analysis of stay motions was demonstrated by Judge Leonard P. Stark’s denial of a stay in Cooper Notification v. Twitter et al., Case No. 09-865-LPS, December 13, 2010 (D. Del.). Cooper had sued Twitter and several others in January for infringement of a single patent. In August the defendants requested inter partes reexamination of the patent, and in November the PTO granted reexamination and simultaneously rejected all claims.
With respect to whether reexamination would simplify issues for trial, Judge Stark noted that defendants had raised a number of issues – both as affirmative defenses and as counter-claims for declaratory judgment – that would not be addressed in the reexamination, specifically patent validity under §§ 101 & 112, patent enforceability, and declarations of non-infringement and unenforceability. Also, in an unusual step, the patentee Cooper stated that it would not amend its claims in reexamination, thereby eliminating the possibility of the court needing to construe the claims a second time in light of any reexamination amendments.
Judge Stark acknowledged that the case is in its early stages, with trial not scheduled until August 2012. On the other hand, he saw “no justification” in discarding a case schedule that had been determined only after some difficulty. Also, the reexamination proceeding is at an early stage and might continue for quite a number of years.
On the factor of prejudice to the patentee, Judge Stark noted that a stay would deprive the patentee of its forum of choice. It would also put at risk the patentee’s ability to present a case because of the potential for “stale evidence, faded memories, and lost documents.” Further, Judge Stark was clearly annoyed with the defendants’ attempt to use an offer by the patentee to settle as a basis for arguing that the patentee was not concerned with injunctive relief. Finally, the Judge pointed out that the parties were competitors, even if “in only a small percentage of their transactions.”
Balancing the three considerations, Judge Stark decided to deny the motion to stay. Another judge looking at the same facts might have arrived at a different conclusion. For instance, another judge might have concluded from the fact that only a single patent was in issue that simplification weighed in favor of staying the case. Another judge might have dismissed the length of the reexamination proceeding as being true in every case. And so on.
But the subjectivity that judges bring to stay motions is likely to be permanent since it is unlikely that the Federal Circuit will change the three-part standard, even if presented with the opportunity.