Stays/District Courts : US PTO Litigation Alert™

It’s Still the Trial Judges Who Decide Reexamination Stay Motions

Scott Daniels | February 16, 2012

We were initially excited to see CAFC’s recent order in Synqor v. Artesyn Techs., denying the accused infringer’s motion to stay the appeals, pending completion of inter partes reexaminations of two of the five patent-in-suit.  A jury had found the five patents to be valid and infringed, and awarded damages to the patentee.  In the meantime, the patentee is appealing to the PTO Board of Appeals the reexamination rejection of the claims of two of those patents.  Reexaminations of the other three patents are still pending before the reexamination examiner.

In its motion to the CAFC appeals, the accused infringer argued that those appeals would be best considered once the five reexaminations had been completed.  Judge Moore, speaking for the CAFC, took a hard stance against the accused infringer, characterizing the remaining 10-14 month pendency of the two appeals to the PTO Board as “lengthy” and the requested stay as “unwarranted.”  The possibility of simplification of issues from the reexaminations was not even mentioned.

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CAFC Denies Petition for Mandamus to Stay Infringement Case

Scott Daniels | January 13, 2012

Trial judges uniformly apply the same standard to decide whether to stay an infringement action pending completion of a reexamination of the patent-in-suit.  And yet, the decisions of individual judges vary enormously: judges for whom potential simplification is appealing tend to grant stays, whereas judges more concerned with potential prejudice to the patentee tend to deny them.  The main impediment to more uniform treatment of stay motions is the difficulty that a losing party faces in obtaining review by the CAFC of the grant or denial.  That difficulty was illustrated by Judge Linn’s denial of a mandamus petition in In re SDI Technologies 

There, Bose sued five companies – including Memorex – for infringing a patent related to sound reproduction systems.  In November 2009, one of the defendants requested reexamination of Bose’s patent.  After reexamination was granted, the initial trial judge stayed the case “as long as [the] PTO proceedings were not taking too long.”  Bose later asked that the stay be lifted in view of the length of the reexamination, but the second judge in the case decided to continue the stay “until resolution of summary judgment motions based at least in part on the prior art before the PTO in the reexamination.”  The judge eventually denied the summary judgment motions and refused to continue the stay.

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Judge Randa Refuses to Lift Reexamination Stay despite Patentee’s Success (so far) with Examiner

Scott Daniels | December 1, 2011

Courts cite 35 U.S.C. § 316(a) for the proposition that a reexamination is “complete” only when the PTO issues its reexamination certificate, canceling, confirming, amending original claims, and/or adding new claims.  It is common for a patentee to cite § 316(a) for the proposition that the court should not consider developments in a reexamination until the proceeding is complete, i.e., until the PTO issues its certificate.  On Tuesday, however, in Generac Power Systems v. Kohler, it was accused infringer who invoked § 316(a), in this case to maintain a reexamination stay despite a decision by the reexamination examiner in favor of patentability. 

This past July, Judge Rudolph Randa of the Eastern District of Wisconsin stayed the infringement action pending resolution of the reexamination of the patent-in-suit, U.S. Patent No. 7,230,345 (related to a specific method of operating engine-driven electrical generators).  In September, the reexamination examiner issued an Action Closing Prosecution, indicating that the patentability of all claims had been confirmed.  Armed with this victory at the PTO, the patentee asked Judge Randa to lift the stay and allow the infringement action to proceed.

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How Long Does Reexamination Take?

Scott Daniels | November 21, 2011

A critical issue in cases with parallel District Court infringement actions and PTO reexaminations is whether the court will stay its proceeding pending completion of the reexamination.  A court’s ruling on whether to stay often turns on how long it expects the reexamination to last.  A judge is quite likely to stay a case when he or she expects a short reexamination, but is  just as likely to deny a stay when a long reexamination is anticipated. 

The PTO keeps statistics on the average length of reexaminations, and those statistics are routinely cited by patentees and accused infringers alike, as support for their respective positions.  But there is no “average” reexamination and the length of pendency varies widely.  Two PTO Board reexamination decisions from last week illustrate the point.  Both reexaminations were inter partes and both resulted in cancelation of the claims at issue.  Yet one lasted two years and eight months (95/000,444), and the other, six years and five months (95/000,099).  Moreover, there is at least anecdotal evidence that the PTO is now handling reexaminations a good deal more expeditiously than its historical data would suggest.

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Facebook Motion to Stay Indacon Case Denied

Scott Daniels | November 1, 2011

Last month Facebook persuaded its judge in Pragmatus AV. v. Facebook (2011 U.S. Dist. LEXIS 117147) to issue a reexamination stay despite the fact that Facebook’s request for reexamination had not yet been granted.  Facebook has now attempted to replicate that feat in Indacon v. Facebook, but Judge John Primono of the Western District of Texas was not buying.

Where judges grant reexamination stay motions, it is generally because of the prospect of simplifying the issues for trial; and where judges deny stay motions, it is generally because of undue prejudice to the patentee.  In the Indacon case, simplification from reexamination seemed unlikely to Judge Primono because “Facebook has requested review of only one of the two patents and of five of the ten claims alleged to have been infringed upon.”  For the Judge, this likely failure of the reexamination to simplify the issues meant prejudice to the patentee: “Delaying the entire case for up to two years based on only one of the two patents alleged to have been infringed upon would appear to present a clear tactical disadvantage to Indacon.” 

Judge Primono therefore denied Facebook’s motion without even touching on the point that the reexamination request had not been granted.

Reexamination stays are not automatic.  At a minimum, an accused infringer seeking a stay must seek reexamination of a sufficient number of patent claims, so that simplification of issues is at least a realistic possibility. 

Facebook Request for Reexamination of Data Review Patent among those Requested Week of October 10, 2011

Scott Daniels | October 17, 2011

A Markman hearing is currently scheduled for the beginning of November in Indacon’s case against Facebook for infringement of two patents related to storing and reviewing data.  But on Friday Facebook requested reexamination of one of the Indacon patents (see inter partes Request No. (9)) and on the same day, asked Judge Orlando Garcia of the Western District of Texas to stay the infringement action “until Indacon files its response to the PTO’s first Office Action in the reexamination.”  At that time, Facebook says, Judge Garcia could assess the effect that the reexamination might have on the case and whether the case should be stayed pending completion of the reexamination.  Facebook focused on the imminent Markman hearing, noting that the reexamination could provide additional evidence that might affect Judge Garcia’s claim construction of both patents-in-suit.  “No matter what the outcome of the reexamination, claim construction will surely be affected.” 

In 2007 the U.S. International Trade Commission (ITC) issued a general exclusion order prohibiting the entry into the United States of ink cartridges that infringed any of ten Seiko Epson patents, plus a cease and desist order stopping the sale of infringing ink cartridges already in the United States.  The principal target of these orders was Ninestar Technology.  In March Ninestar asked the ITC for an advisory opinion whether its R-Series ink cartridges infringe any of the ten Seiko Epson patents.  Ninestar has now expanded its challenge to the Seiko Epson patents by requesting reexamination of the ‘053 patent (see inter partes Request No. (1)).  It will be interesting to see how Ninestar coordinates its challenges to that patent at the ITC and at the PTO, respectively.

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Facebook Infringement Case Stayed Prior to Reexamination Grant

Scott Daniels | October 14, 2011

Trial judges continue to apply their individual concepts of fairness to motions to stay infringement actions pending completion of co-pending reexaminations of the patents-in-suit.  Accordingly, there is wide variation in how such motions are treated.  On Tuesday, for instance, Judge Edward Davila of the Northern District of California granted a stay motion in Pragmatus AV. v. Facebook, 2011 U.S. Dist. LEXIS 117147, despite the fact that the PTO had not yet determined whether to grant reexamination.   

Judge Davila emphasized the prospect of simplification of issues, relying heavily on the PTO statistics showing that a substantial percentage of reexamination requests are granted and that a substantial percentage of patents in reexamination result in claims being canceled or amended.  The Judge therefore found that “Facebook’s request[s] for reexamination include[] all claims at issue in this litigation and there is a high statistical likelihood that reexamination will be granted and the claims will either change or be canceled,” thereby simplifying issues for trial. 

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Judge Sparks Changes His Mind

Scott Daniels | July 29, 2011

Tuesday we reported that Judge Sam Sparks had granted a limited, three-month stay of the infringement action, MONKEYmedia v. Apple et al., A-10-CA-319 (W.D. Tex.), pending completion of reexaminations of the three patents-in-suit.  And he ordered the PTO to expedite the reexaminations. 

Now, however, Judge Sparks has had second thoughts.  Someone informed him that the patentee MONKEYmedia had filed motions at the PTO for extensions of time to answer pending rejections, and that when the PTO denied the motions, MONKEYmedia had asked the PTO for reconsideration.  (In fact, MONKEYmedia requested two-month extensions in two of the reexaminations and a one-month extension in the third). 

In a second order dated Wednesday, Judge Sparks stated the obvious: “the PTO cannot expedite its reexamination if the parties drag their feet.”  The Judge indicated that he had limited the stay in his first order to three months because “MONKEYmedia in particular was adamant [that] any delay would be both wasteful and inequitable.”  The patentee’s requests for extensions of time in the reexaminations, however, have changed his sympathies on the matter.  “[B]ecause MONKEYmedia is apparently no longer in a hurry, neither is the Court.”  Accordingly, the Judge has extended the stay until the reexaminations “come to a final conclusion, a process whose length will be dictated primarily by the actions of the parties before the PTO.” 

Clearly, Judge Sparks was irritated with what he perceived to be contradictory positions taken by MONKEYmedia in his court and at the PTO on the effect of reexamination delay.  Still, the deadlines faced by a patentee in reexamination are often severe.  And it is not necessarily inconsistent for a patentee to want extensions at the PTO and to resist a stay of its infringement litigation.  In any event, all parties must consider the effect that their arguments in one forum would have in other forums.

Broadcast Electronics Requests Reexamination of Mission Abstract Data Patents

Scott Daniels | July 28, 2011

In March, Mission Abstract Data (which also does business as Digimedia) sued a host of broadcast companies in Delaware – including CBS and Cox – for infringing two patents, U.S. Patent Nos. 5,629,867 and 5,809,246.  The ‘867 and ‘246 patents concern the selection and retrieval of music from databases; specifically, music to be broadcast over the air waves is stored and played from a computer hard drive rather than a CD player.  According to assignment records at the PTO, Mission Abstract obtained the ‘867 and ‘246 patents in 2007, assigned them in February of this year to Intellectual Ventures who reassigned them back to Mission Abstract seven day later.  

Yesterday, Broadcast Electronics – who is not a party to the infringement action – requested reexamination of the ‘867 patent, and this morning it sought reexamination of the ‘246 patent.  Also yesterday, the Defendants moved to stay the case pending completion of the two reexamination proceedings. 

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Judge Sparks Orders PTO “to Expedite Reexamination”

Scott Daniels | July 26, 2011

Yesterday’s two-page stay order by Judge Sam Sparks in the MONKEYmedia cases is noteworthy in two respects.  First, he takes an interesting “compromise” approach to the issue of whether to stay a patent infringement action pending completion of reexamination proceedings at the PTO. 

MONKEYmedia sued Apple, Walt Disney and a series of other entertainment companies last year for infringement of three data storage patents, U.S. Patent Nos. 6,393,158, 7,467,218, and 7,890,648. Apple replied to the suit by requesting reexamination of MONKEYmedia’s patents.   The PTO granted reexamination for each patent, and as of July 8th, has issued non-final rejections against all the MONKEYmedia claims.  On the basis of those rejections, Apple and the other defendants filed motions to stay the infringement actions. 

This issue of whether to stay pending completion of reexamination has come to have an enormous impact on the outcome of infringement litigation.  The issue has also sharply divided the nation’s trial judges, many tending to deny stays because of the significant delays inherent in reexamination, with others leaning toward granting stays because of the potential for simplification of issues at trial. 

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