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How not to Ask for a Stay?
| August 25, 2010
Last Friday, in 3M Innovative Properties v. Envisionware, a court in Minnesota denied the accused infringer’s motion to stay the case pending completion of two reexaminations.
In June 2009 3M Innovative sued Envisionware for infringement of three patents related to RFID electromagnetic systems that help libraries to oversee the location of their books. Envisionware filed its Answer and five months later, in April 2010, it requested reexamination of two of the three patents-in-suit. In August it asked the Court for a stay, noting that reexamination had been ordered for one patent and that all the claims of the other patent had been rejected.
The Court has now denied that motion. It began with the standard three-part test for determining whether to grant a stay: whether there would be prejudice to the patentee or some tactical advantage to the movant, whether a stay would simplify the issues, and the stage of the litigation. But it was the first question – whether the request for a stay was made with some tactical advantage in mind – that controlled the court’s reasoning. Specifically, the court was very concerned that reexamination was requested for only two of the three patents, even though the third patent had a specification “nearly identical” to the specification of one of the patents in reexamination, and even though Envisionware relied upon the same prior art references in support of its validity contentions against the two patents.
The Court explained that “even if the reexamination invalidates the ‘780 patent, this Court will still have to conduct infringement analysis, claim construction, expert discovery, and fact discovery with respect to the [third patent] once the stay is lifted.” This scenario, the Court concluded, would be unfair to the patentee 3M: “…a stay would provide Envisionware with a tactical advantage as Envisionware would retain its litigation options” by defending against the third patent in court. The Court also found that by requesting reexamination five months after filing its Answer, Envisionware had unjustifiably “tarried.”
The Court’s reasoning, frankly, does not make sense. In the event that the PTO invalidates the 3M patent in reexamination, the possibility suggested by the Court, 3M could still pursue its infringement litigation with respect to the third, unreexamined patent. The advantage is clearly to 3M. Perhaps the Court regarded Envisionware’s failure to request reexamination of the third patent with suspicion, and assumed that Envisionware was seeking an unfair tactical advantage.
The lesson for future parties seeking a stay pending reexamination is (1) to avoid doing anything unusual that suggests tactical maneuvering and (2) to file the request very, very quickly.
