Judge Gilstrap in the Eastern District of Texas has denied defendants’ motion to stay the post-trial phase of a patent infringement litigation pending ex parte reexamination where the request for reexamination was filed four months after the jury returned a $400 million verdict in favor of plaintiff.
KAIST IP US LLC sued several companies for infringement of U.S. Patent No. 6,885,055 (the “’055 Patent”). At the completion of trial, the jury found that defendants had infringed at least one asserted claim of the ’055 Patent and that none of the asserted claims were invalid. Four months later, one of the defendants filed a request for ex parte reexamination of the ’055 Patent, which was granted by the U.S. Patent and Trademark Office (PTO). On reexamination, the PTO rejected the asserted claims. Given that KAIST had not yet exhausted its appeals of that decision, the PTO’s rejection had not yet been deemed final.
Defendants subsequently moved to stay the post-trial phase of the litigation pending completion of the reexamination. The court denied the motion on the basis that: (1) a stay would prejudice KAIST’s right to rely on a jury verdict it expended substantial resources to obtain; (2) the litigation had reached an advanced stage, in that the case had reached trial and both the jury and court had rendered decisions on the merits; and (3) any simplification to the case would be de minimis because only post-trial motions remained, which the court decided contemporaneously with the motion to stay.
In deciding against a stay, two tactical decisions by defendants were of particular importance to the court. First, defendants waited months until after the jury returned a verdict in favor of KAIST before filing the ex parte reexamination request. Second, defendants asserted unpatentability grounds in that request which were not presented to the jury. In the court’s view, filing a request for reexamination post-trial with new unpatentability grounds amounted to a “manipulat[ion] [of] an administrative process designed to streamline disputes to avoid the need for a jury trial.” The court also characterized defendants’ tactics as “a fourth bite at the apple” because defendants had failed on multiple occasions to obtain institution of inter partes review of the ’055 Patent during the pendency of the litigation. Finally, the court cautioned that the administrative remedies afforded by the Patent Act “should not be used to effect a collateral attack on the verdict of a jury empaneled pursuant to the Seventh Amendment or the judgments of an Article III court.” Indeed, the court noted that if the case were stayed and no final judgment issued, “the issuance of a final reexamination certificate would effect the destruction of this lawsuit.”
Practice Tip: A defendant will face significant obstacles justifying a stay during the post-trial phase of a patent infringement litigation where a jury has rendered a verdict in favor of the plaintiff. Such a stay may be even less palatable to a district court if the basis for seeking the stay is the cancellation of the asserted patent claims via ex parte reexamination on unpatentability grounds not presented to the jury. Thus, accused infringers seeking prompt resolution in a patent infringement dispute should exercise diligence in pursuing multiprong patent challenges.
Kaist IP US LLC v. Samsung Elecs. Co. et al., 2:16-cv-01314-JRG (E.D. Tex. Feb. 13, 2020) (Gilstrap, J.)
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