Reexamination does not Rescue Lawson from Injunction

Scott Daniels | June 2, 2011

Last week we speculated that the results to date in three reexaminations might save Lawson Software from being enjoined in the ePlus v. Lawson case in the Eastern District of Virginia.  After a trial in January, the jury found that ePlus’s U.S. Patent Nos. 6,023,683 and 6,505,172 relating to electronic sourcing systems were valid and infringed, whereupon ePlus asked Judge Robert Payne to enjoin Lawson from future acts of infringement. 

Lawson replied that no injunction should issue because it was likely to prevail on the validity and infringement issues, either in the co-pending reexamination proceedings or at the CAFC.  Indeed, the PTO Board of Appeals had recently affirmed the examiner’s rejection in the reexamination of the ‘683 claims, and rejections had issued in the other reexaminations. 

Despite the pending reexaminations, Judge Payne decided to enjoin Lawson.  He began by noting that on three previous occasions he had refused attempts by Lawson to use the reexaminations to affect the litigation.  Critically, he held that a patent “claim is not invalidated unless and until the entire reexamination process, culminating in an appeal to the Federal Circuit, has occurred, a final decision is reached adverse to the patentee, and a certificate is issued by the PTO cancelling the patent claims”  (emphasis added).  The Judge added that he was troubled by “uncertainty of both the outcome of those appeals and the length of time until the last reexamination proceeding is concluded…” (emphasis added).  He also noted that the ePlus patents will expire in a few years, so that a “grant [of] a stay of the permanent injunction based on the reexamination proceedings would put into doubt whether ePlus would ever enjoy the remedy to which it has proven it is entitled.” 

Incidentally, in a non-precedential decision yesterday involving preliminary injunctionsKimberly-Clark v. First Quality – the CAFC vacated a preliminary injunction because the accused infringer had raised substantial questions regarding the validity of three of the four patents-in-suit.  In footnote 3, the panel cited the PTO’s reexamination rejection of the claims of one of the patents as indicating that a substantial question of validity had been raised: “the examiner’s decision regarding patentability can be considered when discerning the [accused infringer’s] likelihood of success.”  The panel affirmed, of course, the portion of the preliminary injunction related to the fourth patent for which no substantial question of patentability had been raised.

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