The Software IP Report

Stays Pending Reexamination: Timing Matters

By Charles Bieneman

Categories: The Software IP Report

As demonstrated by the recent opinion in Interwoven, Inc. v. Vertical Computer Systems, Inc., No. C 10-04645 RS (N.D. Cal. Mar. 8, 2012), timing and circumstances can be very important when seeking a stay of litigation pending a patent reexamination proceeding.  Long used as a defense tactic in patent litigation generally, reexaminations have become a relatively common tactic in software patent cases.  One reason for filing a reexamination request is of course to attempt to have patent claims narrowed, if not canceled.  In addition, defendants, seeking delay, often like to use a reexamination as the basis for requesting a stay in litigation.   Interwoven is a good illustration that, in general, accused infringers seeking to use reexamination as a means to a stay are well-advised to seek reexamination earlier, rather than later, in litigation.

In this case, Interwoven, a declaratory judgment action plaintiff, had moved for a stay pending the reexamination of the two patents-in-suit (U.S. 6,826,744 and U.S. 7,716,629).  However, “Interwoven waited a year and three months into litigation to file for reexamination, only doing so after receiving the Court’s claim construction order.”  The court was unpersuaded by Interwoven’s argument that it had deliberately waited to file a reexamination request until after claim construction was complete to avoid filing multiple reexamination requests.

Thus, considering the relevant factors, the court found that a stay would impose undue delay and tactical disadvantage on the patent owner, especially because the parties were direct competitors.  The court did not believe that the reexamination would simplify the issues, especially because Interwoven had filed for ex parte and not inter partes reexamination.  The case was not in its infancy, as Interwoven had suggested; instead, discovery was well underway and, as noted above, a Markman ruling had issued.  Therefore, the court denied Interwoven’s motion for stay.

Different courts — and different jurisdictions — exhibit varying degrees of receptivity to motions for stay.  However, in any court, as the Interwoven case demonstrates, timing and circumstances can be very important.