Federal Judiciary

Motion for Stay Pending Reexam Granted

By Michael Smith

Spa Syspatronic, AG v. Verifone, Inc., 2008 WL 1886020(E.D.Tex. Apr 25, 2008) (NO. CIV.A. 2:07-CV-416)
Judge: John Love
Holding: Motion for Stay Pending Reexam GRANTED
Yes, you read it right - the request for a stay pending reexam was granted.  Judge Love cited a couple of factors as specifically supporting a stay in this case.  First, he was not persuaded Spa would suffer any undue prejudice or tactical disadvantage, because while Spa argued that VeriFone unduly delayed in seeking reexamination, he found that VeriFone acted diligently.  "Moreover," he wrote, "Spa's argument regarding VeriFone's delay is somewhat disingenuous. While Spa contends that it has been negotiating with VeriFone, it nonetheless brought its lawsuit late in the '862 patent's life, which ultimately resulted in a trial date after the expiration of the patent's twenty year term . . .  Since Spa will apparently be unable to enforce its exclusive intellectual property rights in the '862 patent post-trial, a permanent injunction to prevent future infringement will be unavailable as a remedy, and therefore damages and pre-judgment interest provide an adequate measure of relief to Spa for any infringement finding.  Moreover, the parties are apparently not direct competitors in the marketplace, and therefore a stay is also unlikely to directly prejudice Spa's standing in the market during the remainder of the '862 patent's life, making any harm from delay even less acute."
"Awaiting a reexamination is particularly pertinent in this case," he continued "since the '862 patent's European counterpart was recently revoked after reexamination for lack of novelty. While the Court is cognizant of the differences between the United States and European patent systems, and also cognizant that the invalidation of the European patent on its own has little bearing on the validity of the '862 patent in the United States, proceeding with litigation on a patent whose counterpart has already been invalidated is a questionable expense of the Court and parties' resources, particularly when considering the frequency with which the PTO modifies claims in some manner. Aside from the European invalidation, VeriFone also presented other potentially invalidating prior art to the PTO which the PTO stated raised substantial questions of patentability. The risk of proceeding through a trial only to have the PTO modify the claim terms (or revoke the patent entirely) and force the parties to relitigate vastly outweighs any benefits of continuing litigation currently in its infancy."

Full post as published by Eastern District of Texas Federal Court Practice on May 05, 2008 (boomark / email).