Recent Impact of Reexams on Stays in E.D. Texas
A district court’s inherent powers to control its docket and to stay proceedings are well-settled, harkening back to at least Landis v. N. Am. Co., 299 U.S. 248 (1936). Within the Eastern District of Texas, in determining whether a stay is warranted pending reexamination in a patent litigation, district courts typically consider factors such as whether a stay will unduly prejudice one party; whether a stay will simplify the issues in the case; and whether discovery is complete and a trial date has been set. E.g., Soverain Software LLC v. Amazon.com, Inc., 356 F.Supp.2d 660, 662 (E.D.Tex.2005). A survey of 2012 patent decisions rendered on the topic in the Eastern District of Texas has yielded the following:
Ambato Media, LLC v. Clarion Co., Ltd. Judge Gilstrap denied defendant’s motion to stay pending an ex parte reexamination requested nearly 18 months after the case began. The Court ruled that all three of the Soverain Software factors favored denying the stay. Of note as to the prejudice factor, the Court determined that a stay would unduly prejudice the patentee, commenting that the reexam had barely entered its merit stage and that in all likelihood, could take several years and would not conclude until after the trial date. The Court also remarked that when a case is stayed “witnesses may become unavailable . . . and evidence may be lost while the PTO proceedings take place.” The Court found this possibility of witness and evidence loss “heightened” because defendant admitted that it had discontinued some of the accused products. The Court also determined it was “speculative” for defendant to suggest that reexamination might simplify the case, and noted that granting a motion to stay under such provisional grounds would invite derailment of patent cases by reexamination instead of promoting efficient and timely resolution of patent cases. Lastly, the Court noted that extensive discovery, involving millions of pages of documents, had taken place already, and thus found the third factor to disfavor a stay, as well.
Adrain v. Vigilant Video, Inc. Judge Gilstrap denied plaintiff’s emergency motion to stay where during the ex parte reexamination (initiated by defendant), the PTO had finally rejected all pending claims, and issued an Advisory Action rejecting the subsequently amended claims. Confronting what it referred to as an “atypical” situation, the Court found that the Soverain Software factors still applied, and militated against a stay. The Court found that defendant had a “justiciable interest in the timely resolution of the case” and would be prejudiced by the stay. The Court further noted plaintiff’s chosen timing to file the motion to stay -- after Markman briefing was completed -- weighed against stay. The Court again held that the possibility that some of the claims may be affected was unavailing, preferring to deal with that contingency if and when it occurred, rather than putting the case on hold indefinitely. As to the discovery and trial posture of the case, the Court found this factor to slightly favor denying the stay, noting that claim construction had shifted and discovery was still on-going.
