Friday, August 17, 2012, 9:28 AM

Successive USPTO Reexaminations Preclude Lifting Litigation Stay

On August 13, 2012, Judge Richard W. Story of the Northern District of Georgia denied a plaintiff's motion to lift a stay even though the reexamination that had been the basis for the stay was resolved.

Plaintiff Xpedite Systems, LLC ("Xpedite") filed an action alleging that Defendant J2 Global Communications, Inc. ("J2 Global") infringed U.S. Patent Nos. 5,872,640 (the "'640 Patent") and 7,804,823 (the "'823 Patent").  On July 26, 2011, J2 Global filed a request for ex parte reexamination of the '640 Patent with the United States Patent and Trademark Office ("PTO").  The PTO granted the reexamination request, finding 20 substantial new questions of patentability.  J2 Global also filed a petition seeking inter-partes reexamination of the '823 Patent.  On September 8, 2011, the PTO granted the inter-partes reexamination request, but the next day it issued an Action Closing Prosecution that rejected each of J2 Global's arguments and confirmed the patentability of every claim in the '823 Patent.

On October 14, 2011, Judge Story granted J2 Global's motion to stay the litigation while the ex parte reexamination of the '640 Patent was pending.  On February 2, 2012, the PTO issued a certificate of reexamination confirming the patentability of all of the '640 Patent claims without amendment.  On March 13, 2012, Xpedite filed a motion to lift the stay.

On March 22, 2012, J2 Global launched another attack through the PTO, filing an appeal of the PTO's decision to close the inter-partes reexamination of the '823 Patent and filing a second request for ex parte reexamination of the '640 Patent.  The PTO granted the second reexamination request on June 2, 2012.  Xpedite argued that the basis for the stay was the first reexamination filing, which has now been resolved.  Xpedite also argued that J2 Global's second round of filings were delay tactics to avoid litigating the matter.  Judge Story expressed some concern about not wanting "to encourage piece-meal litigation or delay tactics."  Nevertheless, Judge Story found that the original reasons for granting the stay were still valid -- the resolution of the reexamination proceedings would likely simplify the issues, promote judicial economy, and is not outweighed by the prejudice felt by Xpedite.

Under the America Invents Act ("AIA"), inter partes reexamination will be replaced by inter partes review on September 16, 2012.  In addition, while ex parte reexamination will still be available, the new option of post-grant review will be instituted.  The new rules for these proceedings can be found here.  For more information on this transition, the PTO has information on the changes brought about by the AIA on its website.

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