In Carrier Corporation v. Goodman Global, Inc. et al., C.A. No. 12-930-SLR (D. Del. May 8, 2014), Judge Sue L. Robinson denied defendants’ motion to stay pending reexamination of U.S. Patent No. 7,243,004. At the time of the Court’s decision, the PTO had rejected all claims and an Action Closing Prosecution was expected to issue. Id. at 2.
As Judge Robinson explained, defendants had reasoned that granting stay would conserve judicial resources “based on two assumptions: (a) the administrative process will likely conclude prior to judgment being entered; and (b) the claims will likely be cancelled and deemed unpatentable.” Id. at 2.
Judge Robinson was not persuaded by either of these assumptions. Judge Robinson first observed that the Federal Circuit in Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1334 (Fed. Cir. 2013) “confirmed that Congress, in enacting the reexamination statute, 35 U.S.C. § 302, expected reexaminations to take place concurrent with litigation.” Id. at 3. Addressing the first assumption above, Judge Robinson explained that “cancelled claims are deemed unpatentable only if the time for appeal has expired or any appeal proceeding has terminated.” Id. (citing 35 U.S.C. § 307(a); Fresenius, 721 F.3d at 1339). As to the second assumption, Judge Robinson explained that “reexamination does not proceed at all absent the finding of a substantial new question of patentability by an examiner; thus, the second assumption applies to every reexamination proceeding once instituted.” Id.
Judge Robinson ultimately determined that “[w]ithout an end to the administrative process in sight, and with different (but equally significant purposes) being served by litigation, the court declines to stay the litigation unless [plaintiff] fails to pursue its administrative remedies once the Action Closing Prosecution issues.” Id. at 4.