Posted On: April 30, 2013 by Gregory J. Brodzik

Judge Sleet adopts report and recommendation, denies defendant’s renewed motion to stay pending inter partes reexamination

In a recent memorandum opinion, Chief Judge Gregory M. Sleet adopted Magistrate Judge Thynge’s report and recommendation, denying defendant’s renewed motion to stay the patent litigation proceedings pending inter partes reexamination. ImageVision.Net, Inc. v. Internet Payment Exchange, Inc., C.A. No. 12-054-GMS-MPT (D. Del. Apr. 22, 2013). In June 2012, after filing for inter partes reexamination, defendant had filed its first motion to stay. Id. at 1. Judge Sleet adopted in part the magistrate judge’s report and recommendation and denied that motion. Id. After the PTO granted defendant’s request for inter partes reexamination in December 2012, defendant filed a renewed motion to stay—the motion at issue in Judge Sleet’s recent memorandum opinion. Id. at 1-2.

First, Judge Sleet held that “the granting of an inter partes reexamination under the AlA” should not “displace the three-factor test that has been traditionally employed in assessing a motion to stay.” Id. at 5. The three-factor test, as Judge Sleet explained, “is capable of incorporating any changes resulting from the AlA.” Id. Specifically, Judge Sleet noted that to the extent defendant “focus[ed] on the more searching standard applied by the PTO in granting a reexamination request” under the AIA, the court could account for that standard pursuant to the three-factor test’s “issue simplification factor.” Id.

Having determined that application of the three-factor test was appropriate, Judge Sleet then assessed whether the magistrate judge erred in her application of that test in her report and recommendation (the “R&R”). First, with respect to prejudice to the non-moving party, Judge Sleet noted that while “delay does not, by itself, amount to undue prejudice,” Magistrate Judge Thynge properly based her finding of undue prejudice on the “potential for delay” and “the parties’ competitive relationship.” Id. at 6-7. Second, with respect to the “simplification of the issues,” defendant argued that Magistrate Judge Thynge had not given enough weight to the PTO’s grant of the reexamination request, since “[i]f . . . all claims of the [the patent-in-suit under reexamination] are invalid, then every other issue in the case will be moot.” Id. at 8-9. Judge Sleet explained that “[w]hile this may be true,” the R&R was still not in error--defendant “fail[ed] to recognize the speculative nature of its reexamination predictions, and the PTO's published statistics [that] suggest that at least some claims will survive intact or in an amended form.” Id. at 9. Third, with respect to the “stage of the ligation,” defendant emphasized that discovery was not complete and that no exact trial date was set. Id. at 9-10. Judge Sleet explained, however, that Magistrate Judge Thynge “properly examined this factor in light of other decisions from this district and found it significant that the parties have already engaged in substantial discovery.” Id. at 10. Judge Sleet adopted the R&R, finding that Magistrate Judge Thynge’s “treatment of the three factors” was “neither clearly erroneous nor contrary to law.” Id.

ImageVision.Net, Inc. v. Internet Payment Exchange, Inc., C.A. No. 12-054-GMS-MPT (D. Del. Apr. 22, 2013).