Sloan Valve Co. v. Zurn Indus., No. 10 C 204, Slip Op. (N.D. Ill. Mar. 8, 2011) (St. Eve, J.).
Judge St. Eve granted plaintiff Sloan’s motion to lift the stay pending reexam of the patent-in-suit to modify the Protective Order. The Patent office required production of all information material to patentability, even if it is subject to a Protective Order. MPEP 724. But the Protective Order was silent as to whether Sloan could provide the Patent Office with confidential information.
The Court noted case law holding that MPEP 724 could not override district court orders. Telecomm. Sys., Inc. v. Mobile 365, Inc., No. 06 C 485, 2009 WL 594 3235 (E.D. Va. Mar. 31, 2009). As a result, the proper method for a patentee was exactly what Sloan did – seek a modification to the governing Protective Order.
So, the Court modified the Protective Order to allow disclosure to the Patent Office, so long as MPEP 724.02 procedures for maintaining documents as confidential.

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Genzyme Corp. v. Cobrek Pharms., Inc., No. 10 C 112 (N.D. Ill. Feb. 17, 2011) (Dow, J.).
Judge Dow used the Court’s inherent power to grant plaintiff Genzyme’s motion to stay the case pending the reexamination of Genzyme’s patent related to its pharmaceutical drug Hectorol. The Patent Office had already issued an Office Action rejecting all of Genzyme’s claims. The Court also noted that reexams were valuable, during the initial stages of a case, because they either remove an issue for trial, when claims are rejected, or focus the issue by providing the Court with the PTO’s expert view on the claim issues. The Court noted that in this case only limited discovery had occurred — no depositions had been taken — and a trial date had not been set. Finally, it was the Defendant that filed the reexamination request and then opposed the motion to stay. And to the extent that the delay created by a stay would harm the Defendant, that was mitigated by the fact that the case(s) had already been pending for three years.

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Card Activation Techs. V. Bebe Stores, Inc., No. 09 C 406, Slip Op. (N.D. Ill. Nov. 20, 2009) (Gottschall, J.).
Judge Gottschall stayed the case pending reexamination of plaintiff’s patent. The fact that the asserted claims were not being reexamined did not weigh against a stay. The reexamined claims were narrower than the asserted claims. So, if the narrower claims were rejected the broader claims could be found invalid as well. And all of the claims used similar language. As a result, the reexam’s prosecution history would, at a minimum, be pertinent to the case. And delay caused by a stay would not prejudice plaintiff because it could be compensated with money damages. Additionally, the Court allowed either party to move to begin full or limited discovery at a status conference eight months after the opinion issued, if the reexam was still pending at that time.

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** Guest Post by Scott A. McKeown of Oblon Spivak & PatentsPostGrant.com **
The face of patent litigation in the U.S. has evolved greatly in the last 5 years with respect to patent reexamination. For patent litigators, throughout the U.S. and especially the Northern District of Illinois, the emergence of this now seemingly reliable strategic option is an important case management consideration. Indeed, if not adequately considered in the course of litigation counseling, reexamination ignorance may create malpractice opportunities for unsuccessful defendants.
Defendants, as well as those concerned with patents clouding their competitive landscape are increasingly requesting patent reexamination at the USPTO. When prior art patents and printed publications can be effectively presented to enable the USPTO to reject original patent claims, the expectation is that the prosecution of the reexamination proceeding will result in cancellation or amendment of original patent claims.
The sudden growth in reexamination filings can be attributed to several factors. These factors include, the emergence of the “non-practicing entity”(NPE) problem, the eligibility of inter partes reexamination for post 1999 patent application filings, and the efforts of the USPTO and Congress to overhaul the reexamination process, first with legislation overruling the Portola Packaging decision in 2002, and with creation of a special USPTO unit in 2005.
In 2005, the USPTO established the Central Reexamination Unit (CRU) to exclusively handle all reexaminations, whether ex parte or inter partes within the Office. The CRU created a procedure by which every reexamination proceeding is processed by a team (3) of experienced primary examiners. The CRU has greatly improved the responsiveness and quality of patent reexamination.
With respect to NPEs, reexamination is an attractive strategy as an active reexamination may shut down (i.e., stay) an otherwise costly litigation by forcing the dispute away from the high cost battle of district court litigation, back to the PTO. At the PTO, the NPE’s leverage of contingency litigation counsel and forced discovery costs are removed. Moreover, the standard of review in reexamination for proving unpatentability is much more favorable to a challenger as compared to the district court action. In federal district court the standard to invalidate a U.S. patent is “clear and convincing evidence.” Whereas, in reexamination, the US PTO can establish unpatentability by a “preponderance of evidence,” and unexpired claims are given their broadest reasonable interpretation. See 37 C.F.R. 1.555(b)(2)(ii).
Upon conclusion of a reexamination, canceled or amended claims will present the challenger with freedom to operate either through non-infringement of the altered claims, or decrease liability through the doctrine of intervening rights.
With this background in mind, a review of a recently asserted malpractice claim is presented along with a discussion of the new Local Patent Rules of the Northern District of Illinois as they pertain to concurrent reexaminations.
In Ecast Inc. v. Morrison & Foerster L.L.P. (Superior Court for the State of California, County of San Francisco) Ecast, a former client of MoFo, sued the firm for malpractice. The compliant stemmed from MoFo’s defense of Ecast in a patent infringement suit in the Northern District of Illinois. In the suit, six patents were asserted against Ecast by Rowe International Corp and Arachnid Inc. (Rowe International Corp., and Arachnid, Inc. v. Ecast, Inc., Rockola Mfg. Corp., and View Interactive Entertainment Corp. (click here for much more about this case from the Chicago IP Litigation Blog’s archives).
Notably, at paragraph 25 of the complaint, it is alleged that:
Once Defendants undertook to represent Ecast in the Rowe case, Defendants failed to sufficiently explain and advise Ecast of the benefits Ecast could have derived by filing a request for reexamination of the patents-in-suit. Proper pursuit of a patent reexamination could have resulted in a stay of the Rowe litigation for a substantial period of time. Although technically a stay, the reexamination process often serves to effectively end the patent litigation in many cases and could have terminated the Rowe case. (emphasis added)
Paragraphs 28-29 go on to allege that:
Had Ecast been properly advised of the benefits to be gained by the reexamination process, mainly a significant stay of the Rowe case possibly leading to avoidance of all further litigation risks, legal fees and expenses, then Ecast would have chosen to pursue reexamination. Ecast would have pursued reexamination and it would likely have been successful because approximately one month after new counsel substituted in as counsel of record for Ecast in the Rowe case, a reexamination of the Arachnid patents was sought by Ecast and granted by the Patent and Trademark Office. The reexamination resulted in a finding that there was a substantial question as to the patentability on all the Arachnid patents. Under these circumstances, the claims are often modified or cancelled.
Because the reexamination was pursued at such a late date and in such close proximity to the commencement of trial, no stay of the Rowe case was imposed because Ecast’s request came too late. (emphasis added)
Surely, whether or not reexamination would have truly benefited Ecast is speculative, likewise, the likelihood of obtaining a stay is quite subjective, varying significantly in accordance with the stage of reexamination as well as the perception of reexamination efficacy/efficiency in each forum. Nevertheless, a failure to properly counsel a client on the potential benefits of reexamination, as alleged here, appears to be a significant risk going forward.
With respect to the timing discussion of the complaint, a late filing of a reexamination request may have become even more critical in view of new local patent rule, LPR 3.5, which requires:
Absent exceptional circumstances, no party may file a motion to stay the lawsuit pending reexamination in the U.S. Patent Office after the due date for service of the Final Contentions pursuant to LPR 3.2. (emphasis added)
In other words, since the request for a stay must be presented in the above time frame, and as reexamination may take time to advance to a point favorable to a challenger (i.e, final rejection or appeal stage) it is n ow of even greater importance that reexamination be explored and if necessary instituted at the earliest possible point in a dispute.
Patent Reexamination, concurrent with, or even in place of more traditional litigation practices is becoming increasingly commonplace. While patent reexamination was once viewed as an ineffective procedure, and critics may still cite inefficiencies, significant strides have been made at the USPTO to present a viable post grant challenge mechanism. In view of recent developments in the Northern District of Illinois, practitioners would be well advised to explore reexamination options with clients early in the representation.
Scott A. McKeown is a partner with Oblon, Spivak, McClelland Maier & Neustadt and a team leader of the Reexamination and Reissue Practice Group. He is a founder and frequent contributor to patentspostgrant.com
* If you are interested in writing a guest post for the Chicago IP Litigation Blog, send an email by clicking here.

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Fellowes, Inc. v. Aurora Corp. of Am., No. 07 C 7237, Slip Op. (N.D. Ill. Feb. 10, 2009) (Kocoras, J.).
Judge Kocoras granted defendants’ motion to stay the litigation as to U.S. Patent No. 7,311,276 (“‘276 patent”) pending the ‘276 patent’s reexamination. The Court previously denied defendants’ motion to stay the case as to the two other patents in suit. But the Court granted a stay as to the ‘276 patent based upon the substantial new question of patentability identified by the Patent Office in granting the reexam. The Court acknowledged that defendants would be able to challenge the ‘276 patent’s validity after the reexam, but held that a stay would still reduce the burden of the litigation on all parties and the Court.

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As promised, the new Patent Reform Acts were introduced in Congress this week — click here for the Senate bill and here for the House bill. While I have not yet done a comprehensive review, I understand that the bills are largely similar. Here are some highlights of the bills:
They move from the current first to invent system to the international norm, first to file.
Expanded reexamination and a new period of post-grant review.
Damages provisions require that the specific contribution over the prior art be considered and allow consideration of licensing terms for similar noninfringing substitutes. As Dennis Crouch points out, for alternatives in the public domain the comparable license could be free.
Specifically allows for Federal Circuit jurisdiction of interlocutory claim construction appeals where the district court approves the appeal.
Federal Circuit judges would no longer be required to live within fifty miles of the District of Columbia.
The venue provisions are changed to narrow possible venues.
There is plenty of commentary in the blogosphere. Here are some of the best:
271 Patent Blog (giving highlights, noting changes from the last version and do not miss Peter Zura’s blog makeover);
Patent Docs (discussing the Senate press conference announcing the Senate bill and noting BIO’s response to the bills); and
Patently-O (giving highlights and noting changes from the most recent attempted reforms) and here (reposting comments from Google’s Head of Patents and Patent Strategy, Michelle Lee).

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Global Patent Holdings, LLC v. Green Bay Packers, Inc., No. 00 C 4623, Slip Op. (N.D. Ill. Apr. 23, 2008) (Kocoras, J.).
Judge Kocoras reassigned a related case consolidating it with this case and stayed the patent infringement cases pending a second reexamination proceeding. New defendant CDW argued that reassignment of the second case pursuant to Local Rule 40.4 was not appropriate because the first case, which was dismissed without prejudice in light of the first reexam, was filed by TechSearch LLC, instead of the current plaintiff Global Patent Holdings (“GPH”). But original plaintiff TechSearch reopened the case before moving to substitute GPH, the current assignee of the patent in suit and TechSearch’s parent, as plaintiff. Because TechSearch reopened the case, the first case retained its first-filed status. The fact that TechSearch and GPH were no longer related entities when the case was reopened was not relevant.
The Court also held that the two cases were related because both accused defendants’ websites of infringing the patent because they downloaded or induced others to download JPEG and other files.
Finally, reassignment benefited the judicial economy. Neither case had begun significant discovery, so neither would be delayed. Additionally, consolidation would allow one judge to hear the summary judgment motions, which were expected to be numerous, that would apply equally to all parties. The Court, therefore, reassigned the related case to itself.
The Court also stayed the cases pending the reexam. The first reexam resulted in cancellation of each of the original sixteen claims and the issuance of a single, new claim. GPH argued that a second reexam was unlikely to yield new rejections because the patent had been vetted twice. But the Court noted that the original ex parte reexam acted as a first examination of the single, new claim that issued from the reexam. Additionally, the original ex parte reexam did not allow for third party participation. The current inter partes reexam does, generating a more rigorous review of the claim. Finally, the case was delayed four years for the first reexam. Significant judicial resources would have been wasted had the case proceeded on the original sixteen claims, which the PTO ultimately rejected. The Court did not want to risk wasting judicial resources during the second reexam. And with only a single claim, the Court did not expect the second reexam to take four years. The case, therefore, was stayed pending the reexam.

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