On December 30, 2009, Magistrate Judge John D. Love granted Plaintiff Realtime Data, LLC’s motion in limine to exclude any evidence relating to the pending reexamination of Realtime’s patents.  The matter is before the United States District Court for the Eastern District of Texas, styled Realtime Data, LLC v. Blue Coat Systems, Inc., et al.

Read the full motion here: Realtime Memorandum Opinion and Order

In Realtime, the Defendants first learned of the patent-at-issue six days before the filing of the lawsuit by reviewing a letter from an attorney stating that the patent-at-issue was invalid.  Thereafter, Defendants initiated a reexamination proceeding against the patent-at-issue, which the USPTO granted.  The USPTO issued a first Office Action rejecting the claims of the patent-at-issue.

Plaintiff Realtime argued that evidence relating to the pending reexamination should be excluded because such evidence was highly prejudicial, considering that the reexamination proceedings were incomplete.  Realtime further argued that the jury would be confused as to the relevance of the reexamination proceeding and, therefore, give undue weight to that evidence.

Defendants intended to use the evidence in defense of Realtime’s assertion of willful infringement.  Defendants argued that evidence of the reexamination proceeding and the USPTO’s first Office Action may assist the jury in determining whether Defendants acted objectively reckless — the standard set forth by the Federal Circuit in In re Seagate.  Specifically, Defendants argued “the jury may consider the objective fact that the PTO has granted a reexamination request and has provided an initial rejection of the claims of the [patent-at-issue]…”

In granting Plaintiff’s motion in limine to exclude any evidence of the pending reexamination, the Court reasoned, “even if a reexamination proceeding is somewhat probative of invalidity, the probative value of this evidence is ’substantially outweighed by its prejudicial effect,’” citing i4i v. Microsoft Corp., 2009 WL 2449024 at *17 (E.D. Tex. Aug. 11, 2009).  With regard to Defendant’s argument that ongoing reexaminations are relevant as to willfulness, the court disagreed, finding such proceedings, even if relevant, to be unfairly prejudicial, citing Presidio Components, Inc. v. Am. Technical Ceramics Corp., 2009 WL 3822694 at *2 (S.D. Cal. Nov. 13, 2009) (specifically considering the effects of reexamination proceedings on a willfulness determination).

The court found that a USPTO Office Action containing preliminary findings of invalidity carries a substantial risk that a jury will give such evidence undue deference.  Significantly, the court noted that a court could consider evidence of the pending reexamination and the USPTO’s actions therein at the summary judgment stage, during trial in a request for judgment as a matter of law as to willful infringement, and/or post-verdict.