Judge Sleet denies motion to stay pending inter partes reexamination

Judge Sleet recently adopted in part and overruled in part the Magistrate Judge’s Report and Recommendation recommending denial of defendant’s motion to stay pending reexamination. ImageVision.net, Inc. v. Internet Payment Exchange, Inc., C.A. No. 12-054-GMS-MPT (D. Del. Nov. 15, 2012).

While the case was in its early stages, defendant filed an inter partes reexamination request with the PTO and then moved the court to stay pending the reexamination. Id. at 1. At that time, the PTO had yet to decide whether to grant the reexamination. Id. Judge Thynge ultimately recommended that the Court deny the motion because “the scope of the issues to be resolved during litigation substantially exceeds the scope of the issues that can be resolved during the reexamination proceedings,” (R&R at 6-8), because the status of the reexamination would prejudice the plaintiff, and because the parties were direct competitors. R&R at 10-12.

While Judge Sleet adopted Judge Thynge’s ultimate recommendation, Judge Sleet did not accept Judge Thynge’s conclusion that the “simplification of issues before the court” factor disfavored granting the stay. Mem. at 2, n.2. Regarding that factor, Judge Sleet agreed that even if the PTO granted reexamination many issues would remain that the PTO could not address, such as infringement, damages and equitable defenses. Id. at 7. However, Judge Sleet disagreed that this factor disfavored a stay because “a stay could yield some measure of issue simplification.” Id. In fact, Judge Sleet noted that “w]hile the ‘issue simplification’ factor is sometimes neutral, the court is aware of no decision from Delaware concluding that this factor weighed against a proposed stay. . . . The only conceivable scenario in which the ‘issue simplificaiton’ factor might weigh against a stay would arise where the reexamination process somehow was likely to complicate the litigation, and that is certainly not the case here. Id. at 7-8, n.5.

ImageVision.net, Inc. v. Internet Payment Exchange, Inc., C.A. No. 12-054-GMS-MPT (D. Del. Nov. 15, 2012)

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