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Judge Sleet grants motion to lift stay and grants motion for leave to file sur-reply

In Fifth Market, Inc. v. CME Group, Inc., et al., C.A. No. 08-520-GMS (D. Del. June 19, 2013), Chief Judge Gregory M. Sleet considered motions related to a stay the Court had issued in May 2011 following defendants’ filing of a request for ex parte reexamination of one patent (“the ‘419 Patent”) and the filing of a draft request for inter partes reexamination of a different patent (“the ‘387 Patent”). Id. at 1-2.

The PTO issued a reexamination certificate for the ‘419 Patent in February 2013 and granted inter partes reexamination of the ‘387 Patent in September 2012. The Court explained that “[t]hese developments principally affect the court’s assessment of the undue prejudice factor, as [plaintiff] complains of the defendants’ ‘excessive delay’ in seeking reexamination of the ‘387 Patent and the resulting delay of this litigation.” Id. at 3 n.1. The timing of defendants’ inter partes reexamination request and its intent to file a request for post-grant review of the ‘419 Patent as a covered business method patent “indicate that they have adopted a strategy of raising piecemeal PTO challenges to [plaintiff’s] patents,” which was “impermissibly tactical.” Id. (internal quotation marks omitted). The status of the reexamination and the fact that the defendants had not yet filed their request for post-grant review also “concern[ed] the court” in terms of potential delay. Id. Finally, “[w]hile the final ‘relationship between the parties’ sub-factor [of the undue prejudice analysis] remains both unchanged and untroubling given [plaintiff’s] status as a non-practicing entity, the defendants’ timing and the status of the ‘387 reexamination-as well as the planned ‘419 CBM review-suggest that the broader undue prejudice factor now favors lifting the stay. The defendants appear to have sought an inappropriate tactical advantage, and denial of this motion would expose [plaintiff’s] suit to the various evidentiary risks associated with prolonged stays.” Id. (internal citations omitted). As a result, the Court granted the plaintiff’s motion to lift the stay.

In the context of plaintiff’s motion to lift the stay, defendants had moved to strike plaintiff’s reply brief or, in the alternative, for leave to file a sur-reply, which they had filed along with this motion. The Court agreed with defendants that the plaintiff had violated Local Rule 7.1.3(c)(2) when it had “include[ed] [in its reply] a discussion of the stay factors entirely ignored in its opening brief.” Id. at 4 n.2. But the Court “exercise[d] its discretion and grant[ed] the defendants’ alternative motion to file a surreply rather than strike [plaintiff’s] reply brief. While [the] opening brief was deficient, the defendants have acknowledged that the three traditional ‘stay factors’ are well known, and they were able to address them in their own answering brief. Moreover, any prejudice that might have resulted from [plaintiff’s] improper reply is remedied by the court’s consideration of the defendants’ sur-reply.” Id. (internal citations omitted).

Fifth Market, Inc. v. CME Group, Inc., et al., C.A. No. 08-520-GMS (D. Del. June 19, 2013)

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