Intellectual Property – Requests for Stay

February 22, 2011

Publication| Intellectual Property

Judge Robinson Denies Motion to Stay
In Belden Technologies, Inc. & Belden CDT (Canada) Inc. v. Superior Essex Communications LP & Superior Essex Inc., C.A. No. 08-63-SLR (D. Del. Sept. 2, 2010), Judge Robinson denied Defendants’ motion to stay. After this action was commenced, Defendants filed requests for reexamination of many of the patents-in-suit, and the Central Reexamination Unit of the PTO rejected the claims of all but one of the patents before it during inter partes and ex parte proceedings. As infringement of all the patents-in-suit had been resolved by motion, Defendants moved to stay litigation on the validity of all the patents whose claims were rejected. The Court considered the status of the case, whether reexamination would simplify the issues for trial, and whether the non-moving party would be prejudiced by a stay. Discovery was complete and trial was scheduled to begin on September 7. These factors militated against a stay. The reexamination concerned invalidity, however, which was the only issue remaining in the case; a stay therefore had the potential to simplify the issues for trial. In considering any potential prejudice, Judge Robinson noted that Defendants moved for the stay eleven days before trial, though they had known for months about the PTO claim rejections. Judge Robinson also explained that a reexamination should be substantially complete to weigh in favor of a stay, yet no reexamination appeal had been docketed. Ultimately, Judge Robinson found that the above factors did not favor either party and denied Defendants’ motion to stay.

Judge Robinson Denies Motion to Stay
In Oracle Corp. & Oracle U.S.A., Inc. v. Parallel Networks, LLP, C.A. No. 06-414-SLR (D. Del. Sept. 8, 2010), Judge Robinson denied Oracle Corp. & Oracle U.S.A., Inc.’s (“Oracle”) motion for a stay pending reexamination. Oracle was seeking a declaratory judgment of non-infringement. The Court considered the status of the case, whether reexamination would simplify the issues for trial, and whether the non-moving party would be prejudiced by a stay. Fact discovery and claim construction had been completed, and the case had been up to the Federal Circuit and back once, both of which facts weighed against a stay. In addition, the issues for trial and the issues before the PTO during reexamination did not completely overlap. Consequently, Judge Robinson found that reexamination was unlikely to simplify the issues for trial. The Court also found that the filing of the request for reexamination after the filing of the suit weighed against a stay, as did the decision to seek a stay more than a year after the PTO had rejected the claims of the patents-in-suit in the reexaminations and six months since the PTO received appeal briefs. Oracle claimed, however, that Parallel was delaying the appeal by adding claims in reexamination, filing documents improperly, and missing deadlines, and the Court agreed that these facts made Parallel’s claims of prejudice less persuasive. Finally, the parties were not direct competitors, a fact that weighed in favor of a stay. After having considered all of these factors, Judge Robinson determined that a stay would be inappropriate and denied Oracle’s motion.

Judge Robinson Grants Motion to Stay Pending Reexamination
In Vehicle IP, LLC v. Wal-Mart Stores, Inc., et al., C.A. No. 10-503-SLR (D. Del. Nov. 22, 2010), Judge Robinson granted Defendants’ motion to stay pending reexamination by the PTO of the patents-in-suit. Nearly two months after this action was filed, the PTO rejected the claims of the patents-in-suit as obvious in an ex parte reexamination initiated by a third party. Defendants moved for a stay within several months after the filing of the action. Judge Robinson analyzed the status of the suit, simplification, and prejudice factors to determine whether a stay would be proper. On the third factor—whether there was even a “fair possibility” that a stay would prejudice Plaintiff—Judge Robinson cited her recent articulation of the considerations relevant to this standard from Belden Techs. Inc. v. Superior Essex Commc’ns LP, 2010 WL 3522327 (D. Del. Sept. 2, 2010) (discussed above). The Court held that the status of the case favored a stay, since discovery had not begun and there was not yet a final scheduling order. But the simplification factor favored neither party: the reexamination concerned only one of several grounds for invalidity at issue in the litigation, and there was not a complete overlap between the issues in the reexamination and the issues in the litigation, yet considerations that disfavor a stay were not present. The prejudice analysis supported staying the action. A third party requested the reexamination, and Defendants moved for a stay soon after the filing of the lawsuit. Judge Robinson concluded that the early stage of the litigation and several of the prejudice factors warranted a stay, but noted that she would check on the status of the PTO proceedings in six months to determine whether the stay should be lifted.

Judge Stark Denies Defendants’ Motion to Stay Litigation Pending Reexamination
In Cooper Notification, Inc. v. Twitter, Inc., et al., C.A. No. 09-865-LPS (D. Del. Dec. 13, 2010), Judge Stark denied Defendants’ motion to stay pending resolution of an inter partes reexamination. The Court reasoned that some of the disputes in the litigation would not be resolved in the reexamination, and although the case was still at a relatively early point, so, too, was the reexamination. The Court noted that Defendants’ failure to articulate a clear hardship or inequity that would be suffered in the absence of a stay weighed against granting the stay, but was not by itself fatal to Defendants’ motion to stay.
 

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