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Patent Owner Stay Motion Successful Based on Defendants' Reexam Requests Filed on Eve of Markman

In Fifth Market, Inc. v. CME Group Inc, et al., (1-08-cv-00520, D. Del), the Patent Owner/Plaintiff (Fifth Market, Inc.) sued multiple Defendants on two patents (U.S. Pat. No. 6,418,419 and U.S. Pat. No. 7,024,387) in 2008.  Three amended complaints were subsequently filed, the last one on January 10, 2011.  The Defendants answered on February 7, 2011, asserting affirmative defenses and counterclaims to the thir amended complaint.  A Markman hearing was held on April 5, 2011 and on April 21, Patent Owner/Plaintiff filed a motion to stay the litigation pending the outcome of the reexaminations.  According to the Court’s order, the timing of events was this:

  • March 28 – Defendants’ counsel, Banner & Witcoff, files an ex parte reexamination request of the ‘419 patent
  • April 1 – Defendants’ counsel, Brinks Hofer Gibson & Lione, files an ex parte reexamination request of the ‘419 patent
  • April  4 – Plaintiff discloses that Defendant provided it a copy of a request for ex parte reexamination of the ‘419 patent filed on April 1, 2011 by Defendants’ counsel Brinks Hofer Gibson & Lione; Plaintiff also discloses that it received a copy of a draft request for ex parte reexamination of the ‘387 patent (and that Defendants informed Plaintiff that it would be filed by Defendants).
  • April 5 – Markman Hearing
  • April 15 – Plaintiff received a copy of the second ex parte reexamination request for the ‘419 patent from Defendants’ counsel, Banner & Witcoff, that had been filed on March 28, 2011.
  • April 21 – Motion to Stay by Patent Owner/Plaintiff

The motion to stay was opposed by the Defendants; however, the motion was ultimately granted by Chief District Judge Sleet after the traditional three factor test was applied (state of discovery, whether a stay will simplify issues, and prejudice to nonmoving party).  The Order for the stay, dated May 20, 2011, stated:   

The court understands the plaintiff’s concern about the defendants’ timing and tactics.  The facts and procedural history of this case are interesting.

In particular, the Court found:

  • prior to the Markman hearing, Defendants had already filed two separate requests for reexamination of the ‘419 patent and were “contemplating filing” a reexamination request of the ‘387 patent;
  • no persuasive evidence of undue prejudice or clear tactical disadvantage to Defendants;
  • that the stay would simplify the issues in the case;
  • that both patents-in-suit may be before the Patent Office, and that numerous prior art challenges in the requests will simplify issues for the court for any claims that survive and streamline the litigation;
  • that although the trial date of March 26, 2012 was indeed set, discovery is not yet complete; and
  • that Plaintiff timely filed its motion within weeks of learning about the reexamination requests.

What is not clear from the record is why the reexamination request of March 28 was not known or served on Plaintiff sooner than April 15.  And the record shows that the reexamination request filed on April 1 was actually filed electronically on April 2, and was accorded an April 29 filing date due to a defect in the filing.  Regardless, this case shows yet another example of the fact-dependent analysis involved in decisions to stay litigation pending reexamination.

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Timothy Bianchi
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