December 1st, 2009
On November 23, 2009, District Judge Judge Dale S. Fischer partially granted defendants’ Tacoda, Inc., AOL, LLC, and Platform-A, Inc.’s motion and stayed the litigation until May 24, 2010. The patents-in-suit are Patents Nos. 5,848,396 (Patent ‘396) and 5,991,735 (Patent ‘735). The complaint was filed July 15, 2008, ex parte requests for reexamination were filed on May 18, 2009, and the motion to stay pending reexamination was filed October 26, 2009. Both ex parte proceedings were granted by the USPTO on July 30, 2009 and are awaiting first office actions on the merits.
The Court laid out the factors for determining whether to grant a stay pending reexamination as (1) the stage of litigation, including whether discovery is completed or nearly completed, (2) whether a stay will cause undue prejudice or tactical advantage to the non-moving party, and (3) whether a stay will facilitate resolution of the action. (See Stays)
The Court concluded that all three factors favor granting a stay. With respect to the first factor, the Court noted that “the case is at a somewhat advanced point with non-expert discovery complete, but expert discovery has not commenced and trial is still eight months away.” Despite these facts NOT seeming to indicate that the litigation was in its early stages, the Court nonetheless concluded that the circumstances favored a stay.
ValueClick argued that a stay would allow the defendants to sell infringing products in competition with ValueClick for a longer period of time. The Court discounted this argument, noting that “this kind of harm is suffered by many patent plaintiffs when a stay pending reexamination is granted. If this consideration were given much weight, stays pending reexamination would rarely be granted.”
Finally, the Court reasoned that “there is a reasonably good chance that a stay will facilitate the resolution of the litigation.” The Court noted that the PTO either cancels or requires modifications to a patent in 75% of reexaminations. The Court further stated that “[e]ven if the claims at issue were not altered or canceled, the Court will be provided with a more extensive prosecution history that will likely shed light on why the PTO believes the claims should have been issued.”
In granting the six-month stay, the Court indicated that “[w]hile the Court finds that a stay is appropriate, it does not believe that the stay should be open ended.”
The case is Valueclick, Inc. v. Tacoda, Inc., case number 2-08-cv-04619, in the United States District Court of in the Central District of California. Patent ‘396 is associated with 90/010,543 (filed on 05-18-2009) and 90/010,544 (filed on 05-18-2009). Patent ‘735 is associated with the 90/010,543 request.