Post-Judgment Rejection of Asserted Claims During Reexam Warrants Termination of Permanent Injunction

Defendants' motion to stay execution of judgment, to stay post-judgment discovery, and to terminate a permanent injunction was granted where the judgment in the case was on appeal and the PTO issued a post-judgment Advisory Action stating plaintiff had failed to overcome all of the rejections in a final rejection of the patent-in-suit. "[H]ere the Court's decision to grant summary judgment [of no invalidity] was based on a number of disclosure violations committed by Defendants in the lead up to trial. . . . [T]he Court finds that the PTO's Advisory Action is not only the most recent decision regarding the [patent-in-suit's] validity, it is a decision made after a thorough examination of the matter conducted by a body which holds particular expertise in such issues. . . . The Court concludes that the PTO's proceedings should govern Defendants' actions rather than the Court's Permanent Injunction which is based on a patent which has been declared invalid."

Flexiteek Americas, Inc. et al. v. Plasteak, Inc. et al., 0-08-cv-60996 (FLSD July 20, 2010, Order) (Cohn, J.)

Failure to Assert Invalidity Defense Undermines Request for Stay Pending Reexam

The court denied defendants' motion to stay pending reexamination in part, because defendants failed to raise invalidity as a defense and therefore a reexamination would not simplify any issue in the pending litigation. "[T]he Court finds that the case would not be streamlined by a PTO reexamination because defendants never alleged invalidity as a defense in their Answer nor did they disclose . . . any prior art by [the deadline stated in] the Pretrial Scheduling Order. In other words, there is nothing to streamline where invalidity is not an issue in this case."

J. Blazed SKLO Podebrady S.I.O. et al v. Burton International Enterprises et al., 0-08-cv-02354 (DMN June 11, 2010, Order) (Mayeron, M.J.)

Claim Construction Revised in Light of Plaintiff's Inconsistent Arguments During Reexam

Defendants' motions to reconsider claim construction were granted. "The Court rejects [plaintiff's] arguments that this Court should ignore the arguments and remarks made to the USPTO during reexamination, particularly in light that its arguments to the USPTO are contradictory to arguments it made to this Court. The Court will not allow [plaintiff] to make arguments as to the interpretation of claims in this Court and then to make contradictory arguments to the USPTO in distinguishing the prior art without any effect on the scope of the claim." In the earlier claim construction order, the court had adopted plaintiff's proposed construction of the term "unrequested," but upon reconsideration in light of plaintiff's arguments during reexamination, the court adopted a construction that was similar to defendant's proposed construction.

Beneficial Innovations, Inc. v. AOL, LLC. et al., 2-07-cv-00555 (TXED June 3, 2010, Memorandum Opinion & Order) (Ward, J.)

Stay Pending Reexam Lifted Prior to Issuance of Reexam Certificate

Plaintiff's motion to lift a stay following the PTO's Notice of Intent to Issue Ex Parte Reexamination Certificate was granted. "Defendant is correct that the patent remains under review by the PTO until the Reexamination Certificate issues. But as Defendant also acknowledges, the NIRC terminates the prosecution stage of the reexamination. As Bob Dylan sang in 'Subterranean Homesick Blues,' 'You don’t need a weatherman to know which way the wind blows.' And you don’t need a Reexamination Certificate to know that this case is now poised to move forward."

Cook Inc. v. Endologix, Inc., 1-09-cv-01248 (INSD June 2, 2010, Order) (Baker, M.J.)

Stay Pending Reexam Denied Because Reexam "May Actually Complicate" the Case

The court denied defendant's motion to stay pending ex parte reexamination. "[U]nless all claims of the patents-in-suit are invalidated through reexamination, the reexamination process may actually complicate the above-captioned case by creating additional prosecution history estoppel and disavowal arguments that must likely be addressed, such as during claim construction. To convince this Court that a stay will actually simplify a case, the requesting party must do more than merely proffer oft-cited reexamination statistics and generic judicial efficiency arguments. [Defendant] has not done so."

Parallel Networks, LLC v. Microsoft Corp., 2-09-cv-00172 (TXED May 10, 2010, Order) (Folsom, J.)

Reexam Statistics Favor Denial of Stay Pending Reexam

In denying defendant's motion to stay pending ex parte reexamination, the court concluded that reexamination statistics weighed against a stay. "According to the PTO’s Ex Parte Reexamination Filing Data dated June 30, 2009, upon reexamination all claims in a patent are cancelled 11% of the time and the patent claims are changed 64% of the time. The statistical unlikelihood that the patent will be cancelled weighs in favor of denying the stay. The probability that some of the claims may change after reexamination weighs in favor of staying the case, but that can be handled if and when it occurs."

Gator Tail, LLC v. Mud Buddy, LLC d/b/a Mud Buddy Manufacturing, 3-08-cv-00125 (LAMD April 5, 2010, Order) (Lemmon, J.)

Court's Prior Experience With Patents and Technology "Weigh Heavily Against Transfer"

Defendants' motion to transfer was denied. "This Court previously adjudicated a lawsuit involving the same patents with the same plaintiff. In that prior case, this Court construed twenty-five patent terms. Defendants argue that reexamination proceedings might result in different constructions for those. . . . Claim construction requires a court to develop an in-depth understanding of the patented technology, which reexamination does not change. This Court has already performed much of the heavy lifting involved in claim construction and the interests of justice weigh heavily against transfer."

Red River Fiber Optic Corp. v. Verizon Comm. Inc. et al., 2-08-cv-00215 (TXED March 23, 2010, Memorandum Opinion & Order) (Everingham, M.J.)


Defendants' motion to transfer was denied. "The Court is intimately familiar with the asserted patent and the related technology. The Court has previously reviewed related technology tutorials, held a Markman hearing, and issued an extensive claim construction opinion construing several claim terms. . . . Thus, the interest of judicial economy weighs heavily against transferring this case."

Colorquick, LLC v. Vistaprint Ltd. et al., 6-09-cv-00323 (TXED March 23, 2010, Memorandum Opinion & Order) (Love, M.J.).

Delay Filing Suit and Failure to Seek Preliminary Injunction Negate Claim of Prejudice from Stay Pending Reexam

In granting defendant's renewed motion for a stay pending reexamination, the court rejected plaintiff's claim that "it will be irreparably harmed if a stay is granted because [defendant] continues to release products that use . . . the accused product to the open source community on an ongoing basis. . . . The Court has . . . found it telling that [plaintiff] had not sought an injunction and waited nearly three years after [defendant] announced [the accused product] and two years after its release to file suit."

Network Appliance Inc. v. Sun Microsystems Inc., 3-07-cv-06053 (CAND February 11, 2010, Order) (Laporte, M.J.)

Delay of Five to Seven Years Does Not Create Undue Prejudice Sufficient to Deny Stay Pending Reexam

In granting defendant's motion to stay pending reexamination, the court rejected plaintiff's argument that it would be prejudiced by a 2-3 year stay and a 3-4 year appeals process. "'[T]he prejudice claimed by Plaintiff applies equally to any case where reexamination is sought. It is for that reason that courts have found that 'delay inherent in the reexamination process does not constitute, by itself, undue prejudice.' Moreover, Plaintiff ignores that the reexamination process was enacted by Congress to provide certainty in the validity of patent rights and to provide a faster, less expensive remedy than litigation when the validity of a patent is at issue."

Spectros Corp. v. Thermo Fisher Scientific, Inc., 4-09-cv-01996 (CAND January 20, 2010, Order) (Armstrong, J.)

Stay Pending Reexam Granted Prior to PTO's Grant of Petition for Reexam

The court granted defendant's motion to stay pending reexamination even though the PTO had not yet granted reexamination. "95% of reexamination requests have been granted. The Court finds that were the patent-in-suit to be denied reexamination, staying this case [for approximately two months], at the latest, would have a minimal effect on the litigation schedule. Accordingly, the Court is not persuaded that the motion should be denied merely because PTO has not yet accepted [defendant's] application for reexamination. . . . If the PTO decides to decline reexamination of the . . . patent, the stay may be lifted and litigation will resume upon motion by either party."

E-Z-GO, et al. v. Club Car, Inc., 1-09-cv-00119 (GASD January 12, 2010, Order) (Hall, J.)

TXED Denies Stays Pending Ex Parte and Inter Partes Reexam

Defendant's motion to stay pending inter partes reexamination was denied based upon "the [trial setting in 10 months] and timing of the request for reexamination."

Zapmedia Services, Inc. v. Apple, Inc., 2-08-cv-00104 (TXED January 7, 2010, Order) (Everingham, M.J.).

Defendants' motion to stay pending ex parte reexamination was denied based on "the lack of a final rejection in the proceeding, the fact that the plaintiff and defendants are competitors, and the uncertain timeframe in which the reexamination will be completed."

Satellite Tracking of People, LLC et al v. Pro Tech Monitoring Inc et al., 2-08-cv-00116 (TXED January 7, 2010, Order) (Everingham, M.J.).

Stay Pending Reexam Denied Where Parties Are Direct Competitors

Defendant's motion to stay pending reexamination was denied even though the case was "in the early stages of litigation and discovery [had] not yet begun." "Plaintiff contends that a stay would delay the possibility of them obtaining an injunction to prevent ongoing infringement by the defendant and that the defendant is a thinly capitalized company without great resources. The parties are direct competitors and a denial of timely enforcement of either party’s patent rights would indeed unduly prejudice that party."

National Oilwell Varco, L.P. v. Auto-Dril, Inc., 5-09-cv-00085 (TXED January 5, 2010, Order) (Ward, J.)

Stay Pending Reexam Denied Because a Stay Would Result in "More Significant" Prejudice Given the Court's Overall Speed in Disposing Patent Cases

Defendant's motion to stay pending inter partes reexamination was denied. "[T]he average pendency for an inter partes reexamination is 41.7 months. . . . [Defendant] is correct, of course, that some courts have granted stays pending reexamination despite the prospect of a drawn-out PTO proceeding. But the prejudice to the non-moving party must be measured not only by the delay attendant to a PTO examination, but also in terms of the length of an alternative proceeding in a district court. This judicial district holds the record for the fastest disposition of patent cases, resolving cases on average within half a year. Thus, the prejudice which would result from a stay in the present case is more significant than it would be if the parties were litigating in a district where judicial proceedings take longer to resolve."

Telecommunication Systems, Inc. v. Sybase 365, Inc., 2-09-cv-00387 (VAED December 23, 2009, Order) (Doumar, J.)

Defendants' Delay Sinks Bid to Stay Pending Reexam

The court denied defendant's motion to stay pending reexamination even though a parallel lawsuit involving the same patents was stayed pending reexamination. "[Defendant] unreasonably delayed in seeking a stay, causing undue prejudice to [plaintiff]. . . . [Defendant] waited approximately ten months [after the reexamination requests for two of the six patents-in-suit were granted] to request a stay in this case. During that time, [plaintiff] prepared for and participated in a tutorial and claim construction hearing, noticed or defended 50 depositions, filed or responded to more than twenty briefs relating to [defendant's] failed transfer motion and [defendant's] multiple motions to amend its invalidity contentions, pursued fact discovery, and is now conducting expert discovery. . . . For these reasons, the Court finds a stay at this time would be highly prejudicial to [plaintiff] and would waste the time, effort, and expense expended by [plaintiff] since the reexaminations were filed."

Motorola Inc. v. Vtech Communications, Inc. et al., 5-07-cv-00171
(TXED November 17, 2009, Order) (Craven, M.J.)

Inter Partes Reexamination Estoppel does not Arise Until Reexamination Certificate Issues

The court denied plaintiff's motion for summary judgment that defendant was "estopped under 35 U.S.C. § 315(c) from asserting in this action that the ‘605 patent is invalid based on grounds that [defendant] asserted or could have asserted in the inter partes reexamination proceeding" because the reexam proceeding remained ongoing. "Neither party cites any case, and the court could not locate one, in which a court has determined when an inter partes reexamination becomes final for the purposes of § 315(c), thereby triggering its preclusive effect. . . . [T]he court concludes that a patent claim is not 'finally determined to be valid and patentable,' 35 U.S.C. § 315(c), in an inter partes reexamination proceeding until the USPTO issues a reexamination certificate."

Safoco Inc. v. Cooper Cameron Corp., 4-05-cv-00739
(TXSD July 31, 2009, Memorandum Opinion & Order) (Lake, J.)

General Allegations of Harm are Insufficient to Oppose Stay Pending Reexam

"Although [plaintiff] asserts that facts relating to (1) the development and functionality of the accused products; (2) Defendants’ knowledge of the [plaintiff's patents]; and (3) actions taken in response to learning of the [plaintiff's patents], may either be lost or more difficult to obtain, it has said so in a summary fashion, and has not provided any explanation about why this would be the case. Neither has [plaintiff] stated why these risks are of particular concern here -- as they are inherently present whenever a stay is being considered."

Graywire, LLC v. Ciena Corp. et al., 1-08-cv-02993
(GAND July 17, 2009, Order) (Martin, J.)

"[Plaintiff] maintains that because [defendant] is a larger company, continued infringement by [defendant] will threaten [plaintiff's] ability to remain in business. This contention . . . is unsupported by any specific factual allegations in the record, including affidavits or business records. . . . In the absence of more particularized factual allegations, I find that [plaintiff's] claim of undue prejudice is too conclusory to justify denying the requested stay."

K.G. Motors, Inc. v. Specialized Bicycle Components, Inc., 6-08-cv-06422
(NYWD, July 17, 2009, Order) (Payson, J.)

Petition for Reexam Alone Does Not Warrant Stay of Litigation

Plaintiff's motion to stay pending ex parte reexamination was denied. "At the present time there is no pending reexamination. What is pending is a request by Plaintiff to the USPTO that it commence reexamination proceedings. Thus, at some time in the future -- be it a week, a month or more from now - there might be a reexamination proceeding. . . . Under the circumstances, the Court will not now, over the Defendants objections, stay this case."

Walter Kiddie Portable Equip., Inc. v. Universal Security Instruments, Inc. et al, 1-08-cv-02202
(MDD June 19, 2009, Order) (Garbis, J.)