Stays/District Courts : US PTO Litigation Alert™

Using Reexamination to Turn up the Heat on the Patentee

| November 22, 2010

Reexamination is often touted as part of a strategy for an accused infringer to reduce the intensity and risk of litigation, and rightfully so.  For instance, a company sued for infringement in the patent-friendly Eastern District of Texas might consider seeking transfer to a more convenient forum.  It might then request reexamination, followed by a motion to stay the court case pending completion of the reexamination. If successful, this strategy shifts the action from the court to the less expensive, more defendant-friendly Central Reexamination Unit at the PTO.
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Patentee’s Litigation Counsel Allowed to Participate in Reexamination, but with Limitations

| November 17, 2010

The recent trend among the trial courts is to draft protective orders to permit the patentee’s litigation counsel to participate in any reexamination involving the patent-in-suit.  Magistrate Judge Edward Chen of the Northern District of California continued that practice this past Friday in Shared Memory Graphics v. Apple et al., 3-10-cv-02475 VRW-EMC.

The parties agreed that the protective order should contain a “prosecution bar” preventing litigation counsel for the patentee Shared Memory from participating in the prosecution of new applications related to the patents-in-suit.  The parties disagreed, however, on whether Shared Memory’s litigation counsel, who had access to Defendants’ confidential information pursuant to the protective order, would be barred from participating in any reexamination proceedings regarding those patents.
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TiVo Files New Requests to Extend Reexamination of EchoStar Patents

| November 12, 2010

TiVo is now testing in EchoStar v. TiVo, (E.D. Tex., 5:05-cv-00081) the limit to which an accused infringer may stay litigation pending completion of the reexamination process.

EchoStar sued TiVo in 2005 for infringement of U.S. Patent Nos. 5,774,186 and 6,208,804 related to direct access TV technology.  TiVo replied by requesting reexamination of the patents, and the trial court stayed the litigation pending completion of the reexaminations. After vigorous and prolonged prosecution, the PTO issued Notices of Intent to Issue a Reexamination Certificate (NIRC) for the ‘186 and ‘804 patents, in August and July respectively.  It appeared that the patents were on their way out of reexamination, and on October 29th, EchoStar asked the trial judge to lift the stay and resume the litigation.

TiVo, however, moved quickly to keep the patents in reexamination and the litigation in check.
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Precision BioSciences Wins Victory over Cellectis

| November 1, 2010

The PTO has issued a Right of Appeal Notice (RAN) in the inter partes reexamination of Cellectis’ U.S. Patent No. 7,309,605 entitled “Nucleotide Sequence Encoding the Enzyme I-SceI and the Uses Thereof.”  The ‘605 patent now joins three other related Celectis patents – U.S. Patent Nos. 6,610,545, 6,833,252 and 7,214,536 – that have been rejected in reexamination and are now on appeal before the PTO Board. The reexamination proceedings were requested by Precision BioSciences.

Cellectis had filed a Complaint against Precision in the Eastern District of North Carolina in March 2008 for infringement of the ‘605 and ‘545 patents.  Precision’s accused product is called a “Directed Nuclease Editor” (DNE). According to Cellectis, Precision’s DNE makes Group I intron coded endonucleases used to target site-specific DNA breaks and modify the genome of plants.  The ‘605 and ‘545 patents are owned by Institut Pasteur and Universitie Pierre et Marie Currie; Cellectis is the exclusive licensee.
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Developments at the End of October

| November 1, 2010

1.  Judge Refuses to Consider “Gamesmanship” Remarks in Claim Construction

Last week we reported the Dura Global case in which Judge Cox defined the standard by which a court may determine whether to construe claim terms in light of a patentee’s remarks in a reexamination proceeding.  The patentee’s remarks in the reexamination of the patent in Beneficial v. Blockdot et al., 2:07-cv-263-TJW-CE, clearly failed that standard.

There, the patentee responded to a rejection in the reexamination of the patent-in-suit, stating that there was no disclosure in the cited reference of “‘unrequested’ advertising (e.g., advertising that just appears and is not in response to any immediately previous user input, e.g. a pop-up ad).” A week later, Judge Ward construed the claims.  The accused infringer then requested reconsideration of that claim construction, and Judge Ward changed his construction of “unrequested” to mean “not in response to any immediate previous input by the user,”  relying upon the patentee’s statements in reexamination.
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When can the Patentee use the Reexamination Prosecution History for Arguing Claim Construction?

| October 28, 2010

Accused infringers in District Court and ITC litigation often rely upon remarks made in the prosecution history of reexamination proceedings to argue for favorable construction of the claims in dispute.  But can a patentee rely upon its own remarks from the reexamination history?  The answer – according to Judge Sean F. Cox of the Eastern District of Michigan – depends on whether the patentee’s remarks in the reexamination were made for the purpose of affecting the litigation.

This Tuesday in Dura Global v. Magna Donnelly, Judge Cox issued a Markman ruling construing patent claims that were the subject of pending reexamination proceedings.  Dura had filed a complaint against Magna in 2007 accusing it of infringing two patents for power slidable rear windows in cars.  Magna later requested reexamination of the two patents.
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Stay Pending Reexamination Denied, where Request was Ex Parte

| October 26, 2010

A recent trend in trial judges’ consideration of motions to stay litigation pending completion of reexamination at the PTO, has been for the judge to be suspicious of ex parte requests, as opposed to inter partes requests.  Judge Stadtmueller of the Eastern District of Wisconsin expressed such suspicions last week, when he denied a stay motion filed by the accused infringer in Adaptor v. Sealing Systems, 09-cv-1070.

Adaptor filed a complaint in November 2009 seeking a declaratory judgment that Sealing Systems’ U.S. Patent No. 5,876,533 was invalid and not infringed.  Sealing Systems counter-claimed, asserting infringement by Adaptor.  In April 2010 Adaptor filed a request for ex parte reexamination of the ‘533 patent, and in May the PTO granted the request.  Adaptor then moved to stay its own declaratory judgment action and Sealing Systems’ counter-claim, pending completion of the reexamination.
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Judge Acknowledges Shift of “Validity Issue” to PTO in Staying Court Case

| October 19, 2010

Judge Larry Alan Burns of the Southern District of California has stayed the case DJO v. VitalWear, pending completion by the PTO of reexaminations of the two patents-in-suit.  He applied the traditional three-part test for considering such stays – the stage of the litigation, possible prejudice to the patentee, and potential for simplification of the issues.  It was Judge Burns’ comments on the issue of simplification, however, that were noteworthy.

First, he found that no one “can predict which claims, if any, will be cancelled, which will be amended, and which will emerge unscathed.”  Accordingly, any litigation of the patents now would “likely be duplicative” of the reexamination proceedings.

More significantly, Judge Burns held that the patentee’s assertions (1) that the prior art cited in the reexamination proceedings is cumulative over the art cited in the original prosecution and (2) that the accused products would infringe any narrowed claims, “are precisely the types of disputes that the PTO is better equipped to resolve” than a trial court (emphasis added).
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Surviving Reexamination May Help Patentee Prove Willful Infringement

| October 6, 2010

The CAFC’s 2007 decision In re Seagate contains a passage suggesting that a patentee must successfully move for a preliminary injunction in order to show that the defendant’s infringement, after the filing date of the complaint, was willful.  In dicta, the Court stated that a “patentee who does not attempt to stop an accused infringer’s activities in this manner [by seeking a preliminary injunction] should not be allowed to accrue enhanced damages based solely on the infringer’s post-filing conduct”).

Since Seagate numerous trial courts have considered this question of whether the patentee must seek preliminary relief.  The consensus appears to be that there is no per se rule – whether post-complaint acts of infringement were willful depends on the facts of the individual case.  Of special interest to us is the holding of the trial court in St. Clair Intellectual Prop. Consultants, Inc. v. Palm, Inc., specifically that when a patent has emerged from reexamination without narrowing amendment of the claims, the patentee had thereby established sufficient likelihood that the defendant infringed a valid patent, so that the patentee could assert willful infringement without first seeking a preliminary injunction.
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Reexamination Counsel For Both Patentee and Accused Infringer May Access Protective Order Information

| September 28, 2010

Judge Howard R. Lloyd of the Northern District of California has resolved a protective order dispute in Vasudevan Software, Inc. v. IBM, et al., by allowing the patentee’s in-house counsel to participate in a reexamination for the patent-in-suit, despite having access to the accused infringer’s “Highly Confidential” information.

The parties had agreed to a “prosecution bar,” so that the in-house counsel for the patentee – Vasudevan – (with access to the accused infringer’s protective order information) could not prosecute patents or patent applications related to the patent-in-suit.  The parties also agreed that the in-house counsel for the accused infringers – IBM and Oracle – could sign the protective order, thereby gaining access to the patentee’s highly confidential information, and still participate in a reexamination of the patent.    The accused infringers, however, strongly objected to the patentee’s in-house counsel defending the reexamination for the patentee.
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