Patent Reexamination

Paul Allen, former Microsoft co-founder recently brought a patent infringement suit based upon 4 of his patents against many notable companies including Apple, Google, Facebook, NetFlix, AOL and others.  Last week the district court granted a stay while the patents are being reexamined.

Two of the reexamination requests (those for patents 6263507 and 6034652) were filed as ex parte reexamination requests. That means the requesting party has submitted what they believe to be relevant prior art, but it is entirely up to the patent examiner to assess the relevance of that prior art and apply it with no further input from the requesting party. In the other two cases (patents 6788314 and 6757682) the requests are for inter partes reexaminations, meaning the requesting party is an on-going participant to the reexamination process. Because two of the patents were issues after November 11, 1999, the requesting parties could only request ex parte examination on those patents.

A patent reexamination offers several benefits over traditional court litigation, including helping the defendant’s avoid costly discovery during the course of the USPTO proceeding, which can be rather lengthy.

In addition to deferring discovery costs, a reexamination proceeding can make it easier to challenge a patent because in a USPTO reexamination proceeding, there is no presumption of validity, unlike in the courts. In addition, the USPTO does not require that the requesting party only needs to demonstrate patent invalidity by a “preponderance of the evidence” standard rather than the  “clear and convincing” standard required by the courts.

In considering if Plaintiff’s interests would be prejudiced by the delay in litigation which may be required for the USPTO to conclude the reexamination process, the court emphasized the fact that Plaintiff is a holding company ( generally referred to as a Patent Troll).

In deciding whether the Plaintiff would be prejudiced by a stay, the court explained:

[T]he Court is not able to find undue prejudice to [Plaintiff] by granting the stay. [Plaintiff], a holding company, does not compete with Defendants and there is no danger it will lose customers, market share, or other intangible benefits. Rather, it can likely be compensated for damages suffered even if a stay is issued. The Court also does not believe that the stay will produce a clear tactical disadvantage to [Plaintiff].

The full decision may be found (Here).