Fresenius USA Inc. v. Baxter Intl., Inc., Nos. 2008-1306, -1331 (Fed. Cir. Sept. 10, 1009)

In Fresenius, the majority opinion centered on whether the asserted claims of Baxter’s three patents were obvious.  In Judge Gajarsa’s majority opinion, the Court determined that most, but not all, of the asserted claims were obvious over the prior art.  With respect to reexaminations, this case is interesting because the other two panel members each wrote separate concurring opinions dealing with the role of reexaminations in concurrent district court proceedings.

Judge Dyk’s single paragraph concurrence suggested that the remaining asserted claims were of “dubious validity in light of our holding [on the other asserted claims].”  He also noted that the majority opinion did “not foreclose the district court in its discretion from staying further proceedings pending the outcome of the reexamination before the [USPTO].”  He concluded by stating that “[i]t is entirely possible that the [USPTO] will finally conclude that [remaining claims] are also invalid.”  Judge Dyk thus appeared to suggest that a stay of the district court proceedings would be appropriate in this case.

Judge Newman forcefully responded to Judge Dyk’s suggestion.  First, she highlighted the irregularity of Judge Dyk’s concurrence noting that the reexamination issue was raised sua sponte by Judge Dyk and was “neither briefed nor debated.”  Second, she noted that the litigation, which began in 2003, is nearly complete, while the reexamination has yet to be finally decided by the PTO and still faces possible appeal to both the Board and the Federal Circuit.  Third, Judge Newman noted the PTO’s own statistics regarding the lengthy reexamination pendency.  Given these factors, she stated that reexaminations “if routinely available to delay the judicial resolution of disputes, [are] subject to inequity, if not manipulation and abuse….”  She concluded by stating that “[t]he suggestion that the district court should now stay the proceedings, at this final stage, is contrary to the precepts of expeditious and just resolution of disputes.”

These dueling concurrences at least reflect the fact that the Federal Circuit Judges are not of one mind when it comes to the proper relationship between reexamination and concurrent district court litigation.  As Judge Newman noted, PTO statistics reflect the fact that the number reexamination proceedings that also have concurrent district court litigation is on a rapid rise.  It will not be long before the propriety of a stay comes before the Federal Circuit.  Until then, district court judges have great latitude in controlling their dockets.

Appealed from: United States District Court for the Northern District of California, Judge Saundra Brown Armstrong.

Read the final decision here: Final Decision