Anascape, Ltd v. Microsoft Corp. et al

Filing 58

AFFIDAVIT in Support re 56 MOTION to Stay Litigation Pending Reexamination of the Patents-in-Suit by the Patent Office - Declaration of J. Christopher Carraway filed by Microsoft Corp.. (Attachments: # 1 Exhibit 1# 2 Exhibit 2# 3 Exhibit 3# 4 Exhibit 4# 5 Exhibit 5# 6 Exhibit 6# 7 Exhibit 7# 8 Exhibit 8# 9 Exhibit 9# 10 Exhibit 10# 11 Exhibit 11# 12 Exhibit 12# 13 Exhibit 13# 14 Exhibit 14# 15 Exhibit 15# 16 Exhibit 16# 17 Exhibit 17# 18 Exhibit 18# 19 Exhibit 19# 20 Exhibit 20# 21 Exhibit 21# 22 Exhibit 22# 23 Exhibit 23# 24 Exhibit 24# 25 Exhibit 25# 26 Exhibit 26)(Carraway, J)

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EXHIBIT 12

DECLARATION OF J. CHRISTOPHER CARRAWAY IN SUPPORT OF DEFENDANT MICROSOFT'S MOTION TO STAY PROCEEDINGS PENDING COMPLETION OF THE REEXAMINATION OF THE PATENTS-IN-SUIT

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United States District Court, D. Delaware. ABBOTT DIABETES CARE, INC., Plaintiff, v. DEXCOM, INC., Defendants. C.A. No. 05-590 GMS. Aug. 16, 2006. Mary B. Graham, James Walter Parrett, Jr., Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE, James F. Hurst, Stephanie S. McCallum, Pro Hac Vice, for Plaintiff. John W. Shaw, Melanie K. Sharp, Young, Conaway, Stargatt & Taylor, Wilmington, DE, Brian M. Kramer, David C. Doyle, M. Andrew Woodmansee, Morgan S. Adessa, Pro Hac Vice, for Defendants. MEMORANDUM GREGORY M. SLEET, District Judge. I. INTRODUCTION *1 On August 11, 2005, Abbott Diabetes Care, Inc. ("Abbott") brought this declaratory judgment (Count I) and patent infringement (Count II) action against DexCom, Inc. ("DexCom"). Presently before the court are the following motions: (1) DexCom's Motion to Dismiss Abbott's Complaint (D.I.5); (2) DexCom's Motion to Strike the "Amended Complaint" and Renewed Motion to Dismiss Abbott's Complaint (D.I.61); and (3) DexCom's Motion to Stay Pending Reexamination of the Patents-in-suit (D.I.25). For the reasons that follow, the court will grant in part and deny in part DexCom's motion to dismiss. The court will grant the motion to dismiss Abbott's declaratory judgment count and will deny the motion to dismiss the infringement count. Additionally, the court will grant DexCom's motion to strike the "amended complaint," deny the renewed motion to dismiss the complaint as moot, and grant the motion to stay pending reexamination of Abbott's patents. II. BACKGROUND Abbott owns U.S. Patent Nos. 6,175,752 (the " 752 patent"), 6,284,478 (the " 478 patent"), 6,329,161 (the " 161 patent"), and 6,565,509 (the " 509 patent") (collectively, the "patents-in-suit"). The patents-in-suit are directed to methods, systems, and devices for continuously monitoring glucose levels in humans. (Compl.¶ 7.) The patented technology at

issue offers an alternative monitoring system for diabetics, who currently monitor their glucose levels by pricking their fingers to draw blood several times a day. (D.I. 32, at 3; see 752 patent, Col. 1, ll. 2126; 509 patent Col. 1, ll. 21-26.) According to the background of the invention sections of the 752 and 509 patents, the pricking technique does not permit the continuous monitoring of glucose, is painful and inconvenient, and results in inconsistencies in monitoring among individuals with diabetes. (See 752 patent, Col. 1, ll. 26-38; 509 patent, Col. 1. ll. 26-38.) Therefore, the technology described in the patents-in-suit was invented to address the need for a small and comfortable device that could continuously monitor glucose levels for days at a time, while permitting a patient to engage in normal activities. ( 752 patent, Col. 2, ll. 1-4; 509 patent, Col 2., ll. 5-8.) Each of the patents-in-suit relate to an aspect of the continuous glucose monitor, which involves implanting a glucose sensor in a patient and monitoring signals over the life of the sensor.FN1 (D.I. 32, at 3.) The monitoring device provides patients with feedback regarding their glucose levels, and may even include an alarm to warn patients of dangerous glucose levels. (Id. at 3-4.) FN1. The 752 and 509 patents relate to glucose monitoring devices and their methods of use, while the 478 and 161 patents relate to subcutaneous glucose sensors. Abbott alleges that DexCom intends to market its STS TM Continuous Glucose Monitoring System, which will infringe one or more claims of the patentsin-suit. The complaint states that DexCom filed a premarket approval application with the Food and Drug Administration (the "FDA") in March 2005, seeking approval to sell its product. (Compl.¶ 12.) The complaint further states that DexCom expects FDA approval by the second quarter of 2006.FN2 (Id. ¶ 15.) In Count I, Abbott seeks declaratory relief in the form of a judicial declaration that DexCom's product will infringe one or more claims of each of the patents-in-suit. (Id. ¶ 25.) FN2. As previously mentioned, Abbott filed its complaint on August 11, 2005. The FDA subsequently approved DexCom's glucose monitoring product, in March 2006. *2 Further, Abbott alleges that, prior to filing its premarket approval application with the FDA, DexCom attended two "trade shows" where it

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publicized and displayed its glucose monitoring product. (Compl.¶ 16.) The complaint alleges that the products DexCom displayed at the trade shows were manufactured for the purpose of showcasing rather than for gathering information for submission to the FDA. (Id. ¶ 17.) Abbott alleges that DexCom's manufacture and display of its product constitutes an act of patent infringement. (Id. ¶ 28.) On August 31, 2005, DexCom filed a motion to dismiss Abbott's complaint for lack of subject matter jurisdiction and failure to state a claim. Additionally, on February 22, 2006, DexCom filed a motion to stay the litigation pending reexamination of the patentsin-suit. On June 27, 2006, Abbott filed an amended complaint, which alleges further infringing acts on the part of DexCom and adds several patents to the suit. On July 12, 2006, DexCom filed a motion to strike the "amended complaint" and renewed motion to dismiss. III. DISCUSSION A. Motion to Dismiss for Lack of Subject Matter Jurisdiction Dexcom first contends that the court should dismiss Abbott's declaratory judgment claim because there is currently no "accused device" to compare against the claims of the patents-in-suit and, therefore, Abbott's claim is premature. In other words, DexCom contends the court lacks subject matter jurisdiction over Count I of Abbott's Complaint. A motion to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure contests the jurisdiction of the Court to address the merits of a plaintiff's complaint. Such a challenge may present either a facial or a factual contest to subject matter jurisdiction. See Mortensen v. First Fed. Sav. and Loan Ass'n, 549 F.2d 884, 891 (3d Cir.1977). When asserting a facial challenge, a defendant contends that the complaint alleges facts that, even if true, would be insufficient to establish the Court's jurisdiction. Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir.2000). The present motion presents a facial challenge to the complaint because the jurisdictional facts are not in dispute. Such a motion requires the court to consider the allegations of the complaint as true and to make all reasonable inferences in the plaintiff's favor. See id. Additionally, the court must test the existence of jurisdiction as of the time the complaint was filed. Lang v. Pacific Marine and Supply Co., 895 F.2d 761, 764 (Fed.Cir.1990).

The Declaratory Judgment Act (the "Act") provides that "[i]n a case of actual controversy ... [a court of competent jurisdiction] may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." 28 U.S.C. § 2201(a). Thus, before a court may exercise jurisdiction over a declaratory judgment action, the Act requires an "actual controversy between the parties ." Medimmune, Inc. v. Centocor, Inc., 409 F.3d 1376, 1378-79 (Fed.Cir.2005) (citing Teva Pharms. USA, Inc. v. Pfizer, Inc., 395 F.3d 1324, 1331 (Fed.Cir.2005)). "If the controversy requirement is met by a sufficient allegation of immediacy and reality ... a patentee [is able] to seek a declaration of infringement against a future infringer ... [just as] a future infringer is able to maintain a declaratory judgment action of noninfringement under the same circumstances." Telectronics Pacing Sys., Inc v. Ventritrex, Inc., 982 F.2d 1520, 1526 (Fed.Cir.1992) (citing Lang, 895 F.2d at 764). *3 However, a district court does not have jurisdiction to hear the action when there is no actual controversy. Spectronics Corp. v. H .B. Fuller Co., 940 F.2d 631, 634 (Fed.Cir.1991), cert. denied, 112 S.Ct. 658 (1991). Moreover, "even assuming [the existence of] an actual controversy, the exercise of a court's jurisdiction over a declaratory judgment action is discretionary." Telectronics, 982 F.2d at 1526 (citations omitted). Two elements must be present in order to meet the controversy requirement in a declaratory judgment action brought by a patentee against an alleged future infringer: (1) the defendant must be engaged in an activity directed toward making, selling, or using subject to an infringement charge under 35 U.S.C. § 271(a), or be making meaningful preparation for such activity; and (2) acts of the defendant must indicate a refusal to change the course of its actions in the face of acts by the patentee sufficient to create a reasonable apprehension that a suit will be forthcoming. Lang, 895 F.2d at 764. In addition, the declaratory judgment plaintiff bears the burden of proving the existence of facts underlying its allegations of the existence of an actual controversy. Jervis B. Webb Co. v. S. Sys., Inc., 742 F.2d 1388, 1399 (Fed.Cir.1984). Applying the above-discussed elements to the present case, it is clear to the court from the record before it that Abbott's complaint did not present an actual controversy under the Act at the time it was filed. That is, Abbott has not demonstrated that DexCom

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produced or has prepared to produce a product that would be subject to an infringement charge under 35 U.S.C. § 271. At the time Abbott filed its complaint, the FDA had not approved DexCom's product and Abbott could not predict when, or if, the FDA would approve the product. Indeed, Abbott states as much in its complaint, alleging that "DexCom ... expects FDA approval for marketing by the second quarter of 2006...." (Compl.¶ 15) (emphasis added).FN3 Additionally, Abbott did not, and could not, allege with any certainty that "the device when approved would be the same device that began clinical trials[,]" as "product changes during testing are contemplated by statute, 21 U.S.C. § 360j(g)(2)(C)(iii) (1988)." Telectronics, 982 F.2d at 1527. Most important, Abbott did not allege nor does it now contend that DexCom has distributed sales literature, prepared to solicit orders, or engaged in any sales or marketing activity with regard to its glucose monitoring product. See Lang, 895 F.2d at 765; Benitec Australia Ltd. v. Nucleonics, Inc., Civil Action No. 04-0174 JJF, 2005 U.S. Dist. LEXIS 22008, at *9 (D.Del. Sept. 29, 2005); Interdigital Tech. Corp. v. OKI Am., Inc., 845 F.Supp. 276, 284 (E.D.Pa.1994) ("Activity directed towards advertising or marketing the accused device is particularly important to a finding of a justiciable controversy.") Therefore, the court concludes that no controversy of sufficient immediacy and reality existed, at the time Abbott filed its complaint, to support declaratory judgment jurisdiction in the present case. As such, the court will dismiss Count I of Abbott's complaint. FN3. The court agrees with the argument Abbott makes in its answering brief, namely that FDA approval is not the standard by which it should evaluate whether an actual controversy existed at the time the complaint was filed. However, the court finds that the absence of FDA approval is evidence that the dispute between the parties is neither real nor immediate. B. Motion to Strike Abbott's "Amended Complaint" *4 DexCom next argues that the court should strike the "Amended Complaint" because Abbott failed to seek leave of court to file what correctly should be termed a "supplemental pleading." Conversely, Abbott asserts that it properly amended its complaint under Federal Rule of Civil Procedure 15(a) to allege additional acts of infringement that occurred prior to and after it filed the initial complaint. The court is unpersuaded by Abbott's argument and will,

therefore, strike its "Amended Complaint." As Abbott points out in its briefing, "[a]n amended pleading generally is a modification to incorporate events that were unknown but occurred prior to the filing of the original pleading." (D .I. 66, at 7) (emphasis added) (citing 3 James Wm. Moore et al., Moore's Federal Practice § 15.02 (3d ed.1999)). On the other hand, "a supplemental pleading refers to additions to include transactions or occurrences that take place after the filing of the original pleading." (D.I. 66, at 7.) By Abbott's own words, it amended its complaint "to allege additional acts of infringement that occurred prior to and after " its initial complaint. (Id .) Because Abbott's "Amended Complaint" contains allegations regarding events that occurred after August 11, 2005-the filing date of the original complaint-it is governed by Federal Rule of Civil Procedure 15(d). Pursuant to Rule 15(d), "[u]pon motion of a party the court may, upon reasonable notice and upon such terms as are just, permit the party to serve a supplemental pleading setting forth transactions or occurrences or events which have happened since the date of the pleading sought to be supplemented. Fed.R.Civ.P. 15(d); see GAF Bldg. Materials Corp. v. Elk Corp. of Dallas, 90 F.3d 479, 483 (Fed.Cir.1996) (holding that district court did not abuse its discretion when "adhering to the motion requirement of Rule 15"); Bronson v. Horn, Civil Action No. 02-663, 2006 U.S. Dist. LEXIS 38791, at *5 (W.D. Pa. June 12, 2006) (dismissing supplemental complaint because it was not filed pursuant to a motion). Accordingly, because Abbott did not file a motion to supplement its complaint in the present case, the court will strike it from the docket for failure to comply with Rule 15(d). C. Motion to Dismiss for Failure to State a Claim Finally, with respect to dismissal, DexCom contends that Count II of Abbott's complaint fails to state a claim for which relief can be granted. According to DexCom, its display of glucose monitoring products at two scientific conferences is exempt under 35 U.S.C. § 271(e)(1).FN4 Therefore, DexCom argues that Abbott has failed to state a claim for patent infringement. FN4. Section 271(e)(1) states, in pertinent part: It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention ... solely for uses

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reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products. 35 U.S.C. 271(e)(1). The purpose of a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) is to test the sufficiency of a complaint, not to resolve disputed facts or decide the merits of the case. See Kost v. Kozakiewicz, 1 F.3d 183 (3d Cir.1993). Thus, in deciding a motion to dismiss, the factual allegations of the complaint must be accepted as true. See Graves v. Lowery, 117 F .3d 723, 726 (3d Cir.1997); Nami v. Fauver, 82 F.3d 63, 65 (3d Cir.1996). In particular, the court looks to "whether sufficient facts are pleaded to determine that the complaint is not frivolous, and to provide defendants with adequate notice to frame an answer." Colburn v. Upper Darby Twp., 838 F.2d 663, 666 (3d Cir.1988). However, the court need not "credit a complaint's `bald assertions' or `legal conclusions' when deciding a motion to dismiss ." Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3rd Cir.1997). A court should dismiss a complaint "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." See Graves, 117 F.3d at 726; Nami, 82 F.3d at 65 (both citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). Thus, in order to prevail, a moving party must show "beyond doubt that the plaintiff can prove no set of facts in support of his claim [that] would entitle him to relief." Conley, 355 U.S. at 45-46. *5 After having reviewed Abbott's complaint, the parties' submissions and relevant case law, the court concludes that DexCom cannot show that "beyond doubt" there exists "no set of facts" in support of Abbott's patent infringement claim. The language of section 271(e)(1) exempts potentially infringing activities "if performed solely for uses reasonably related to the development of information for FDA approval." Telectronics, 982 F.2d at 1523. Here, Abbott's complaint alleges that "[u]pon information and belief, the [DexCom] products displayed at the [two] trade shows were manufactured for the purpose of showcasing at the trade shows rather than for the purpose of gathering information." (Compl.¶ 17.) Abbott's complaint, therefore, alleges that DexCom's manufacture and display of products at scientific conferences or trade shows falls outside the safe harbor of section 271(e)(1). Based upon this allegation, and viewing the complaint in the light most favorable to Abbott, the court is unwilling to conclude at this juncture that no relief could be

granted under any set of facts that Abbott could prove consistent with its patent infringement allegations.FN5 Therefore, the court will deny DexCom's motion to dismiss Count II of the complaint. FN5. DexCom contends that the facts of the present case are on "all fours" with the facts of Telectronics. The court, however, finds that DexCom's reliance is misplaced because, in Telectronics, the Federal Circuit reviewed a district court's grant of summary judgment for the defendant, while here the court must decide a motion to dismiss. As DexCom well knows, the standard for granting a motion to dismiss is markedly different from the summary judgment standard. When deciding a Rule 56 motion, the court reviews "the pleadings, depositions, answers to interrogatories, and admissions on file, together with [any] affidavits," to determine whether "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c) (emphasis added). In contrast, when deciding a motion to dismiss, the scope of the court's review is limited to the complaint. See Pryor v. Nat'l Collegiate Athletic Ass'n, 288 F.3d 548, 560 (3d Cir.2002) ("As a general rule, the court may only consider the pleading that is attacked by an FRCP 12(b)(6) motion in determining its sufficiency.") Therefore, Telectronics is distinguishable in that the court made its determination after reviewing a more complete record than that which the court is permitted to review here. That is not to say that DexCom could not successfully attack Abbott's claim at a later stage of these proceedings. For example if, through discovery, DexCom adduces facts indicating that its conduct at the scientific conferences or trade shows falls within the section 271(e)(1) safe harbor, the court will likely entertain a motion for summary judgment at the appropriate time. D. Motion to Stay DexCom has also filed a motion to stay the litigation pending reexamination of the patents-in-suit by the Patent and Trademark Office (the "PTO"). The decision to stay a case is firmly within the discretion of the court. See Cost Bros., Inc. v. Travelers Indem. Co., 760 F.2d 58, 60 (3d Cir.1985). This authority

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applies equally to patent cases in which a reexamination by the PTO has been requested. Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed.Cir.1988) (noting that "[c]ourts have inherent power to manage their dockets and stay proceedings, including the authority to order a stay pending conclusion of a PTO reexamination.") (internal citations omitted). In determining whether a stay is appropriate, the court's discretion is guided by the following factors: "(1) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether discovery is complete and whether a trial date has been set." Xerox Corp. v. 3 Com Corp., 69 F.Supp.2d 404, 406 (W.D.N.Y.1999) (citing cases); cf. United Sweetener USA, Inc. v. Nutrasweet Co., 766 F.Supp. 212, 217 (D.Del.1991) (stating a similar test). In opposing DexCom's motion, Abbott maintains that a stay would prevent it from seeking a preliminary injunction and enforcing its patent rights, thereby unduly prejudicing it and presenting it with a clear tactical disadvantage in the marketplace. The court is not persuaded. First, Abbott's argument is premised on its filing of a motion for preliminary injunction. Abbott, however, did not, and has not, filed any such motion, even though the FDA has recently approved DexCom's glucose monitoring product for marketing. Because Abbott has not filed a motion for preliminary injunction, its arguments relating to the court's rendering of an opinion on such a motion are moot. As such, the only other argument Abbott asserts with respect to undue prejudice is that it will be unable to enforce its patents while in reexamination. Abbott's position, however, assumes that the PTO will leave all of the more than 200 claims of the four patents-in-suit unaltered after reexamination. See Applera Corp. v. Thermo Electron Corp., No. C.A. 04-1230 GMS, (D.Del. Dec. 28, 2005) (04-1230 D.I. 81 ¶ 6). Further, while Abbott may suffer some prejudice from a stay, the court is not persuaded that a stay would unduly prejudice Abbott, or present any clear tactical disadvantage. Accordingly, the first factor militates in favor of granting the requested stay. *6 With respect to the second factor, Abbott argues that a stay will not simplify the issues, but prolong the litigation. According to Abbott, the only way to avoid prolonging the litigation would be if the reexamination resulted in the PTO invalidating all of the asserted claims of all of the patents-in-suit. The court cannot agree. Contrary to Abbott's position, the court finds that granting the stay will simplify the

issues and focus the litigation. For example, if the PTO determines that some or all of the claims of the of the four patents undergoing reexamination are invalid, then many of the issues in the litigation will become moot. Additionally, it is beyond dispute that the court, as well as the parties, would benefit from a narrowing of the variety of complex issues relating to the numerous claims at issue, which, if clearly defined, would streamline the discovery process and the remainder of the litigation. A stay, therefore, will conserve the resources of the parties and the court, thereby promoting efficiency. Moreover, the court would not run the risk of inconsistent rulings or issuing advisory opinions. See Gioello Enters. Ltd. v. Mattel, Inc., No. C.A. 99-375 GMS, 2001 WL 125340, at *1 (D.Del. Jan. 29, 2001). The second factor, therefore, weighs in favor of granting the motion to stay. Finally, the court finds that the third factor it must consider in its determination, i.e. whether discovery is complete and whether a trial date has been set, weighs in favor of granting the motion. In the present case, fact discovery is not scheduled to close until January 31, 2007 and, although already set, the trial is not scheduled to begin until October 9, 2007. FN6 Thus, given its findings with respect to the first two factors, the court concludes that the balance of harms weighs in favor of granting a stay of this action. Accordingly, the court will grant DexCom's motion to stay. FN6. See Amended Scheduling Order, D.I. 71 ¶ ¶ 2, 8. ORDER For the reasons stated in the court's Memorandum of this same date, IT IS HEREBY ORDERED that: 1. The defendant's Motion to Dismiss Abbott's Complaint (D.I.5) is GRANTED in part and DENIED in part. The motion is GRANTED with respect to Count I of Abbott's complaint and DENIED with respect to Count II of Abbott's complaint. 2. The court shall dismiss Count I of Abbott's complaint without prejudice. 3. The plaintiff's Motion For Limited Jurisdictional Discovery and for a Corresponding Extension of the Briefing Schedule on DexCom's Motion to Dismiss (D.I.9) is DENIED as moot.

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4. The defendant's Motion to Strike the "Amended Complaint" and Renewed Motion to Dismiss Abbott's Complaint (D.I.61) is GRANTED in part and DENIED in part. The motion to strike the "amended complaint" is GRANTED and the renewed motion to dismiss is DENIED as moot. 5. The plaintiff's Amended Complaint (D.I.55) shall be stricken from the court's docket. 6. The defendant's Motion to Stay Pending Reexamination of the Patents-in-suit (D.I.25) is GRANTED. D.Del.,2006. Abbott Diabetes Care, Inc. v. DexCom, Inc. Slip Copy, 2006 WL 2375035 (D.Del.) END OF DOCUMENT

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United States District Court, E.D. Texas, Lufkin Division. ALZA CORPORATION Plaintiff, v. WYETH and Wyeth Pharmaceuticals, Inc. Defendant. No. Civ.A. 9:06-CV-156. Nov. 21, 2006. Jenner & Block LLP, Chicago, IL, for Plaintiff. David J. Beck, William Bradley Coffey, Beck Redden & Secrest, Houston, TX, Amy Kreiger Wigmore, Thomas F. Connell, William G. McElwain, Wilmer Cutler Pickering Hale & Dorr, Washington, DC, William F. Lee, Wilmer Cutler Pickering Hale & Dorr, Boston, MA, for Defendants. ORDER GRANTING DEFENDANT'S MOTION TO STAY CLARK, J. *1 Before the court is Defendant's Motion to Stay [Doc. # 15] seeking to stay this case until the United States Patent and Trademark Office ("PTO") concludes its reexamination of the patent-in-suit. I. Facts and Procedural History Plaintiff Alza Corporation ("Alza") is the owner of United States Patent No. 6,440,457 B1 ("the '457 patent"). On July 26, 2006, Alza filed a suit against Defendants Wyeth and Wyeth Pharmaceuticals, Inc. (collectively, "Wyeth") alleging that Wyeth infringed Claim 1 of the '457 patent by selling Effexor® XR, a pharmaceutical product which Wyeth has sold since 1997. On July 28, 2006, Wyeth filed a request for reexamination with the PTO of the '457 patent. On October 2, 2006, the PTO granted the request and ordered reexamination of the '457 patent. Reexamination is a procedure that allows the PTO to reconsider the validity of an existing patent. 35 U.S.C. § § 301, et seq. Wyeth now moves to stay this litigation pending the outcome of the reexamination proceeding. II. Analysis Reexamination of patent validity in the PTO is a "useful and necessary alternative for challengers and for patent owners to test the validity of United States patents in an efficient and relatively inexpensive

manner." H.Rep. No. 96-1307(I), at 4. As the Federal Circuit has explained, "[o]ne purpose of the reexamination procedure is to eliminate trial of that issue ... or to facilitate trial of that issue." Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed.Cir.1983). This court has the inherent power to control its own docket, including the power to stay proceedings. Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426 (Fed.Cir.1988). In deciding whether to stay litigation pending reexamination, this court considers: 1) whether a stay would unduly prejudice or present a clear tactical disadvantage to the nonmoving party; 2) whether a stay will simplify the issues in question and trial of the case; and 3) whether discovery is complete and whether a trial date has been set. EchoStar Technologies Corp. v. Tivo, Inc., 2006 WL 2501494 (E.D.2006). 1. Prejudice or Disadvantage to Plaintiff Plaintiff argues that "the PTO reexamination proceeding cannot resolve the entire dispute between the parties and will take years to resolve." In addition, Plaintiff contends that a stay is not warranted because certain evidence of the nonobviousness of the '457 patent is in Defendants' possession and discovery would be unavailable to Plaintiff in the reexamination proceeding. Reexamination does not threaten protracted or indefinite delay. The reexamination statute directs the PTO to conduct reexamination proceedings with "special dispatch." 35 U.S.C. § 305. Additionally, because the patent is involved in litigation, the reexamination proceeding will "have priority over all other cases." Manual of Patent Examining Procedures § 2261. This case is still in its infancy. Discovery has not begun and the scheduling conference is set for December 8, 2006. The parties have not yet submitted a Rule 26(f) Joint Conference Report. Therefore, this is not a case in which the parties have already invested substantial time and resources in litigation. Cf. Soverain Software LLC v. Amazon.com, 356 F.Supp.2d 660, 662 (E.D.Tex.2005)(denying stay where the case was a year old and the court had already held a Markman hearing). Furthermore, if the parties continue to litigate the validity of claims in this court and the PTO subsequently finds that the claim in issue is invalid, this action would be moot and the parties will have wasted all of its time and resources. Thus, granting the stay will maximize the likelihood that assets need not be expended to

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address invalid claims. *2 Although Plaintiff claims that it will be prejudiced because the PTO does not allow discovery in its reexamination proceeding, this court will not second-guess a system designed by Congress that has operated without discovery for many years. Therefore, this factor weighs in favor of granting a stay. 2. Simplification of Case Plaintiff contends that reexamination will not simplify issues for trial because the PTO will address only the obviousness of the '457 patent whereas this court is able to resolve this dispute in its entirety. Plaintiff fails to consider the potential positive effects a PTO reexamination. Allowing issues of validity to be evaluated by the PTO makes sense because "the PTO may be in a better position than the Court to evaluate the validity of a patent in view of prior art references. GPAC v. D.W.W. Enterprises, Inc., 144 F.R.D. 60, 63 (1992). Also, regardless of the reexamination result, allowing the PTO to reexamine first should simplify and streamline the issues in this litigation. Put simply, "courts need not expend unnecessary judicial resources by attempting to resolve claims which may be amended, eliminated or lucidly narrowed by the patent reexamination process and the expertise of its officers." Hewlett-Packard Co. v. Acuson Corp., 1993 WL 149994, at *2 (N.D.Cal. May 5, 1993). Statistically, 71% of reexamination proceedings result in amended or cancelled claims. Therefore, as a matter of judicial efficiency and economy, it makes sense to await the conclusion of a reexamination before resuming the instant litigation. Furthermore, the issue of claim construction will be simplified if a stay is granted. Because statements made during the reexamination proceedings become part of the prosecution history, a stay will allow the intrinsic evidence to be fully developed before this court begins the claim construction process. See E.I. du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1439 (Fed.Cir.1988)(holding that statements made during reexamination proceeding are relevant prosecution history when interpreting claims .) Therefore, this factor weighs in favor of granting a stay. 3. Completion of Discovery and Trial Date Plaintiff admits that this case is in the early stages of litigation. However, Plaintiff argues that because this

court has set a trial date, the factor weighs heavily in its favor. Here, the scheduling conference has not been held and discovery proceedings have not commenced. No dispositive motions have been submitted and no significant issues have been resolved. Perhaps most importantly, the claim construction process has not begun. None of the parties have proposed claim construction definitions or submitted claim construction briefs and a Markman hearing is not until October 26, 2007. Although a trial date has been proposed to the parties, it is March 10, 2008, about sixteen months from now. Therefore, this factor also weighs in favor of granting a stay. III. Conclusion *3 Based on the foregoing, this court finds that the benefits of granting Defendant's Motion to stay outweigh the burdens of delay caused by a reexamination proceeding in this case. IT IS THEREFORE ORDERED that Defendant's Motion to Stay is GRANTED. The case shall be stayed pending a decision by the PTO or until further order of this court. The parties shall notify this court of any significant change in the status of the proceeding before the PTO, and of any decision by the PTO. IT IS FURTHER ORDERED that the Case Management Conference scheduled for December 8, 2006 is CANCELLED. E.D.Tex.,2006. Alza Corp. v. Wyeth Slip Copy, 2006 WL 3500015 (E.D.Tex.) END OF DOCUMENT

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United States District Court, D. Colorado. BROADCAST INNOVATION, L.L.C., and IO Research Pty, Ltd., Plaintiffs and CounterDefendants, v. CHARTER COMMUNICATIONS, INC., Defendant and Counter-Plaintiff. Civil Action No. 03-CV-2223-ABJ-BNB. July 11, 2006. Barry Alan Schwartz, Kamlet, Shepherd, & Reichert, LLP, Denver, CO, Corby R. Vowell, Edward W. Goldstein, Goldstein & Faucett, LLP, Houston, TX, Edward R. Nelson, III, Jonathan Tad Suder, Friedman, Suder & Cooke, Fort Worth, TX, for Plaintiffs and Counter-Defendants. David C. Doyle, Jose L. Patino, Morrison & Foerster, LLP, San Diego, CA, J. Eric Elliff, Morrison & Foerster, LLP, Denver, CO, Robert M. Harkins, Morrison & Foerster, San Francisco, CA, for Defendant and Counter-Plaintiff. ORDER GRANTING DEFENDANT'S MOTION FOR STAY PENDING REEXAMINATION OF U.S. PATENT 6,076,094 BY UNITED STATES PATENT AND TRADEMARK OFFICE ALAN B. JOHNSON, District Judge. *1 The above-captioned matter comes before the Court on Defendant Charter Communications, Inc.'s Motion to Stay Pending Reexamination of the U.S. Patent 6,076,094 By United States Patent and Trademark Office. Plaintiffs Broadcast Innovation, LLC and IO Research Pty, Ltd. have resisted this motion, timely filing a response on June 29, 2006. After careful consideration of the motion, briefs and governing authorities, and being otherwise fully advised in the premises, the Court FINDS and ORDERS as follows: Background I. Procedural History In this patent infringement and validity action, Plaintiffs Broadcast Innovation, LLC and IO Research Pty, Ltd. (hereinafter "Plaintiffs") allege that Charter Communications, Inc. (hereinafter "Charter") infringed directly or indirectly claims 8, 15, 22, 29 of United States Patent No. 6,076,094 (hereinafter " 094 patent"), a patent Charter claims is invalid for numerous reasons, not the least of which

being anticipation and obviousness based on prior art.FN1 The 094 patent claims a complex distributed database system with applicability to data broadcasting and data casting communications media.FN2 FN1. The Court also notes that Charter has joined in and adopted a host of pleadings filed both in the present action and in the case of Broadcast Innovation, L.L. C. v. Echostar Communication Corp., 01-cv2201-ABJ-BNB (D.Colo), a case also involving the 094 patent which has been stayed pending final resolution of the present case. FN2. The Court eschews an exhaustive recitation of the adjudicative facts surrounding the merits of this case, focusing instead on the posture of the present motion and response. On June 8, 2006, Charter requested that the United States Patent and Trademark Office (PTO) reexamine the 094 patent to determine whether the four asserted claims in the present case-claims 8, 15, 22 and 29-are invalid. The information provided to the PTO as a basis for reexamination includes, among other materials, three prior art references that form the basis of Charter's summary judgment motion before this Court: (1) the 1989 World System Teletext and Data Broadcasting Technical Specification; (2) a 1986 article entitled "BBC Datacast-A New Generation of Data Transmission Networks Using Broadcast Video"; and (3) a 1988 article authored by John Lilley entitled "Can Data Broadcasting Actually Sell Itself?" It is undisputed that this art was not before the PTO during its original examination of the application that eventually issued the 094 patent. Unsurprisingly, Charter asks this Court to stay the case awaiting the fully-informed, expert view of the PTO. II. Patent Reexamination A. Overview Reexamination is a procedure by which any person can request that the PTO reexamine or reevaluate the patentability of an unexpired U.S. patent. 35 U.S.C. § 302. A request for patent reexamination must be based upon prior art patents or publications which raise "a substantial new question of patentability." Id. § 303(a). Typically, the cited prior art patents or

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printed publications upon which such a request is based were not considered by the patent examiner during the processing of the patent application that resulted in the patent-in-suit. Once a reexamination request is granted, a patent examiner who is familiar with the technology involved with the patent conducts the reexamination. The examiner is obligated to do so "with special dispatch." 35 U.S.C. § 305; 37 C.F.R. § 1.550(a). *2 Within approximately three months of the filing of the reexamination petition, the PTO will determine whether the request raises a "substantial new question of patentability" affecting any claim or claims of the patent. Kaufman Co. v. Lantech Inc., 807 F.2d 970, 976 (Fed.Cir.1986). The examiner, utilizing his expertise, determines if such a "new question" exists by comparing the prior art of record in the original patent application with the prior art cited in the request for reexamination (although the examiner is not limited to that information). 35 U.S.C. § 303(a). If the prior art patents and/or printed publications are "material" to the reexamination of at least one claim of the patent, a substantial new question of patentability exists. FN3 Thereafter, the parties are given the opportunity to provide position statements to the PTO, and the PTO reexamines the patent claims in ex parte fashion. If the Commissioner decides not to institute a reexamination proceeding, the decision is final and nonappealable. FN3. The materiality standard is fairly deferential to the PTO. Prior art is "material" to the examination of a claim of the patent if "there is a substantial likelihood that a reasonable examiner would consider the prior art patent or printed publication important in deciding whether or not the claim is patentable." United States Patent and Trademark Office, Manual of Patent Examination Procedure § 2294 (8th ed., rev.1, October 2005) (emphasis added). Importantly, a decision by the Patent Office that the reexamined claims of an issued patent are canceled as unpatentable renders the claims unenforceable in the pending litigation and in any future disputes. 35 U.S.C. § 307(a). Cancellation through reexamination, however, is available only when the claims at issue are unpatentable over prior art patents and publications. 35 U.S.C. § § 301-02. Although not binding, a decision by the PTO upholding the validity of reexamined patent claims is strong evidence that a district court must consider in assessing whether the party asserting invalidity has

met its burden of clear and convincing evidence. Custom Accessories, Inc. v. Jeffery-Allan Indus., Inc., 807 F.2d 955, 961 (Fed.Cir.1986). After a decision sustaining the validity of the claims, this burden becomes more difficult to satisfy. Id.FN4 FN4. Relevant are the Federal Circuit's comments in American Hoist v. Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350 (Fed.Cir.1984): [I]t is clearly appropriate that the jury be instructed that because the PTO has now held the claims in suit patentable in light of the additional art discovered by Sowa, its burden of proof of unpatentability has become more difficult to sustain-a fact likewise to be taken into account by the trial judge. Id. at 1354. During the course of a stay, the court retains jurisdiction to respond to changing factual circumstances with appropriate orders. Thus, if a stay is granted prior to the decision from the Patent Office as to whether a substantial new question of patentability exists, the court can issue an order lifting the stay upon a negative determination, thereafter deciding all pending motions and, if necessary, proceeding to trial. See, e.g., Grayling Indus. v. GPAC Inc., 19 U.S.P.Q.2d 1872, 1874 (N.D.Ga.1991); Brown v. Shimano American Corp., 18 U.S.P.Q.2d 1496, 1496 (C.D.Cal.1991). Similarly, the court may dissolve the stay when preliminary reports from the Patent Office reveal that some of the claims at issue will survive reexamination. The court would then await the PTO's decision for guidance on pending motions and, if necessary, trial. See, e.g ., Purolite Int'l, Ltd. v. Rohm and Haas Co., 24 U.S.P.Q.2d 1857, 1860 (E.D.Pa.1992); Rohm and Haas Co. v. Brotech Corp., 24 U.S.P .Q.2d 1369, 1372 (D.Del.1992). If no claims survive, neither does the court's work. B. Scope and Purpose: Expertise *3 "Congress instituted the reexamination process to shift the burden or reexamination of patent validity from the courts to the PTO. Patent validity is a commonly asserted defense in litigation and courts are cognizant of Congress's intention of utilizing the PTO's specialized expertise to reduce costly and timely litigation." Canady v. Erbe Elektromedizin GmbH, 271 F.Supp.2d 64, 78 (D.D.C.2002) (citing H.R. Rep. No. 1307, 96th Cong., 2d Sess., pt. 7 at 4

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(1980), reprinted in 1980 U.S.C.C.A.N. 6460)); see also Wayne O. Stacy, Reexamination Reality: How Courts Should Approach A Motion to Stay Litigation Pending the Outcome of Reexamination, 66 Geo. Wash. L.Rev. 172, 172 (1997) ("Congress decided that the often-asserted validity issue, which can involve intricate technological questions, deserved special treatment. Thus, Congress established a patent reexamination procedure that allows the Patent and Trademark Office, instead of a district court, to consider validity issues that the PTO overlooked during the initial examination."). Shifting the patent validity issue to the PTO has many advantages, including: 1. All prior art presented to the Court will have been first considered by the PTO, with its particular expertise. 2. Many discovery problems relating to prior art can be alleviated by the PTO examination. 3. In those cases resulting in effective invalidity of the patent, the suit will likely be dismissed. 4. The outcome of the reexamination many encourage a settlement without the further use of the Court. 5. The record of reexamination would likely be entered at trial, thereby reducing the complexity and length of the litigation. 6. Issues, defenses, and evidence will be more easily limited in final pretrial conferences after a reexamination. 7. The cost will likely be reduced both for the parties and the Court. Emhart Indus., Inc. v. Sankyo Seiki Mfg. Co., 3 U.S.P.Q.2d 1889, 1890 (N.D.Ill.1987). Early drafts of the reexamination statute expressly provided for a stay of court proceedings during all reexamination proceedings. See S. Rep. 1679, 96th Cong., 1st Sess. § 310 (1979); H.R. Rep. 5075, 96th Cong., 1 st Sess. § 310 (1979); S. Rep. 2446, 96th Cong., 2d Sess. § 310 (1980). However, an express provision was ultimately deemed unnecessary because courts already had the power to stay civil actions "to prevent costly pretrial maneuvering which attempts to circumvent the reexamination procedure." Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed.Cir.), cert. denied, 464 U.S. 935 (1983).FN5 "When a district court stays patent validity proceedings before it until completion of a reexamination proceeding, that stay must be accepted if the purpose of the reexamination statute is to be preserved." Id. To no surprise, courts frequently note that "[t]he legislative history surrounding the establishment of the reexamination

proceeding evinces congressional approval of district courts liberally granting stays." Robert H. Harris Co. v. Metal Mfg. Co., 19 U.S.P.Q.2d 1786, 1788 (E.D.Ark.1991). FN5. The pertinent House report explained as follows: The bill [35 U.S.C. § § 301-07] does not provide for a stay of court proceedings. It is believed by the committee that stay provisions are unnecessary in that such power already resides with the Court to prevent costly pretrial maneuvering which attempts to circumvent the reexamination procedure. It is anticipated that these measures provide a useful and necessary alternative for challengers and for patent owners to test the validity of United States patents in an efficient and relatively inexpensive manner. H.R. Rep. No. 1307 Part I, 96th Cong., 2d Sess. 4 (1980), reprinted in 1980 U.S.C.C.A.N. 6460-6463). C. Relevant Factors Weighing For Or Against A Stay *4 "A motion to stay an action pending the resolution of a reexamination proceeding in the United States Patent and Trademark Office is directed to the sound discretion of the court." Braintree Laboratories, Inc. v. Nephro-Tech, Inc., 1997 WL 94237 (D.Kan.1997); see also Ethicon, Inc. v. Quigg, 849 F.2d 1422, 142627 (Fed.Cir.1988) ("Courts have inherent power to manage their dockets and stay proceedings, including the authority to order a stay pending conclusion of a PTO reexamination.") (internal citations omitted). As mentioned above, there exists a "liberal policy in favor of granting motions to stay proceedings pending the outcome of reexamination proceedings." Whatley v. Nike, 54 U.S .P.Q.2d 1124, 1125 (D.Or.2000); see also In re Laughlin Products, Inc., 265 F.Supp.2d 525, 530 (E.D.Pa.2003) (same). "In deciding whether to grant a stay, the court must weight the benefits of the stay against the costs." Motson v. Franklin Covey Co., 2005 WL 3465664, *1 (D.N.J.2005). Courts consider a number of factors in determining whether to stay litigation pending PTO reexamination, including: (1) whether a stay will simplify the issues in question and streamline the trial; (2) whether discovery is complete and whether a trial date has been set; (3) whether a stay would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and (4)

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"whether a stay will reduce the burden of litigation on the parties and on the court ." Tap Pharm. Prods. Inc. v. Atrix Labs., Inc., 70 U.S.P.Q.2d 1319, 1320 (N.D.Ill.2004); Nexmed Holdings, Inc. v. Block Inv., Inc., 2006 WL 149044, *1 (D.Utah Jan. 19, 2006) (citing In re Laughlin Prods., 265 F.Supp.2d at 530); Brown, 18 U.S.P.Q.2d at 1496 (detailing the expertise factor).FN6 No one factor is controlling-the totality of the circumstances governs. FN6. While the Tap Pharmaceuticals court created a fourth category examining the "burden of litigation on the parties and on the court," see 70 U.S.P.Q.2d at 1320, most courts merge this inquiry with the "simplification of issues" factor. Accord Xerox Corp. v. 3Com Corp., 69 F.Supp.2d 404, 406 (W.D.N.Y.1999) (collecting cases); Versa Corp. v. Ag-Bag Intern. Ltd., 2001 WL 34046241, *1 (D.Or.2001) (describing this factor as "the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay") (emphasis added). Analysis I. Will A Stay Simplify the Issues Before the Court? Courts routinely consider the expertise of the Patent Office, under which claim validity will be rigorously reevaluated, as an important factor in determining whether to stay its proceedings. Accord Gould, 705 F.3d at 1342; Middleton, Inc. v. Minn. Mining & Mfg. Co., 2004 WL 198669, at *3 (S.D.Iowa 2004); GPAC Inc. v. D. W.W.Enter. Inc., 23 U.S.P.Q.2d 1129, 1134 (D.N.J.1992); see also Bausch & Lomb Inc. v. Alcon Labs., Inc., 914 F.Supp. 951, 953 (W.D.N.Y.1996) ("Because the PTO is considered to have expertise in deciding issues of patentability[,] many courts have preferred to postpone making final decisions on infringement until the PTO rules on issues before it."). The technical nature of the patent claims in question increases the utility of PTO expertise, which is further amplified by the need to examine prior art and publications not before the PTO during its original patent examination. See Brown, 18 U.S.P.Q.2d at 1496 ("[R]eexamination by the PTO when issues relevant to prior art are involved is especially helpful given the PTO's expertise."). In turn, patent cases not hinging upon the consequences

of prior art references have less of a need for the PTO's expertise. See Emhart Indus., Inc., 3 U.S.P.Q.2d at 1892 n. 3 (distinguishing the matter before it on such grounds, explaining that if "the issue of prior art was involved, the PTO's opinion [would] be invaluable.") (quotation omitted). *5 Confronted with a motion to stay pending PTO reexamination after significant discovery, pretrial conference and trial dates set, a neighboring district court concluded as follows: The technical expertise provided by the reexamination proceeding ... will be extremely helpful to this Court should further consideration of this matter be necessary. Indeed, the Court invites a final determination by the PTO as to the validity of plaintiff's patent claims. The reexamination procedure has the potential to eliminate trial on the issue of patent infringement, should all of the patent's claims be cancelled. It is equally possible for all of the claims in plaintiff's patent to be upheld, or to be narrowed in some degree. In any event, the expert view of the Patent Office examiner will certainly benefit this Court. Thus, the Court is of the opinion that a stay of the trial of this matter should be granted to allow the PTO to complete the reexamination proceeding. Loffland Bros. Co. v. Mid-Western Energy Corp., 225 U.S.P.Q. 886, 887 (W.D.Okla.1985) (staying trial pending conclusion of the reexamination proceedings).FN7 FN7. Also interesting to note is that the patent at issue in Loffland appears quite simple when compared to the 094 patent presently before the Court-the technology in Loffland consisted of patent covering an elevating catwalk used on drilling rigs. See Loffland Bros., 225 U.S.P.Q. at 886. Indeed, some courts consider this factor of primary importance. See, e.g., Dresser Indus., Inc. v. Ford Motor Co., 530 F.Supp. 309, 316 (N.D.Tex.1981) ("The major benefit of staying litigation pending reconsideration of a patent under [reexamination] is that it affords the Court the assistance of the Patent Office's specialized expertise on technical questions of validity."); cf. Pegasus Development Corp. v. Directv, Inc., 2003 WL 21105073, *2 (D.Del.2003) (deciding that by staying a highly technical case involving computer programming communication systems, "the court will gain the benefit of the PTO's particular expertise, in that all prior art presented to the court will have been first considered by that

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agency"). The Loffland Bros. court also understood the PTO's expertise to have benefits beyond educating the court. That is, simplification may occur by the very nature of the reexamination procedure itself, as claims, arguments and defenses can be narrowed or entirely disposed of, preserving the resources of the parties and the court. The Federal Circuit has explained that a major "purpose of the reexamination procedure is to eliminate trial of that issue (when the claim is canceled) or facilitate trial of that issue by providing the district court with the expert view of the PTO (when a claim survives the reexamination proceedings)." Gould, 705 F.2d at 1342 (Markey, C.J.); see also Canady, 271 F.Supp.2d at 68 ("[C]ourts often stay proceedings, such as in the instant case, to wait for reexamination results that will simplify litigation by eliminating, clarifying, or limiting the claims."). "If not found invalid, the reexamination will at least likely result in a narrowing and simplifying of the issues before the Court." Middleton, Inc., 2004 WL 1968669 at *3. "This is because the scope of the patent claims, which the PTO may narrow or otherwise limit, controls the outcome of any subsequent infringement analysis." Id.; see also, e.g., Allen Eng'g Corp. v. Bartell Indus., Inc., 299 F.3d 1336, 1344 (Fed.Cir.2002). *6 Combining these benefits, countless courts have touted the value of streamlining voluminous and complicated patent cases. For example, the court in Motson found that the benefits derived from the PTO's reexamination outweighed the fact that much effort had already been expended by the parties: [E]ntry of a stay, pending reexamination by the PTO, may simplify or even eliminate the need for trial on the remaining validity challenge in this matter. The reexamination procedure has the potential to either uphold or narrow the claims in the plaintiff's patent. In any event, the technical expertise of the PTO examiner may be helpful to the Court should further consideration of the matter be necessary after reexamination.... Although discovery and briefing expenses have already been incurred, a trial at this point on the sole remaining issue in the case may compound those costs unnecessarily if the PTO reexamination eliminates the need for a trial or creates a need to relitigate other issues. Motson, 2005 WL 3465664 at *1-2. Despite being less than two-and-a-half months from trial and despite the substantial monetary expenditures by each party, the court in Gioello

Enterprises provided a similar explanation for granting a stay: Presently, this case is scheduled for trial on April 13, 2001. According to the PTO's order granting the request for reexamination, it is possible that submission of statements will not be complete until April 12, 2001. Additionally, the outstanding motions for summary judgment by Mattel claim invalidity and non-infringement-two issues the PTO's decision could render moot. Since the court must decide the summary judgment motions well in advance of trial, it would have to address the arguments raised before the PTO. Such a situation raises resource questions. Gioello Enterprises, Ltd., 2001 WL 125340 at *1. This question of "resources" was detailed by the Southern District of New York in Softview Computer Products Corp. and Ergo View Technologies Corp. v. Haworth, Inc., 56 U.S.P.Q.2d 1633 (S.D.N.Y.2000), a case bearing many resemblances to the matter sub judice. There, the court addressed a stay pending PTO reexamination of allegedly relevant prior art. While the motion was brought by the plaintiff in that case, the instructiveness of the court's language applies equally to the present matter: Although [defendant] correctly notes that plaintiffs have not acted with dispatch in seeking reexamination and that plaintiffs have pursued an extremely burdensome discovery program, the cost to [defendant] of the litigation to date will not be affected by the grant or denial of a stay; denying the stay will not, without more, entitle [defendant] to recover fees it has already spent litigating this case. In addition, if the parties continue to litigate the validity of the claims in this Court, and the PTO subsequently finds that some or all of the claims in issue here are invalid, the Court will have wasted time and the parties will have spent additional funds addressing an invalid claim or claims. Thus, although the denial of a stay can have no effect whatsoever on past events, the grant of a stay will maximize the likelihood that neither the Court nor the parties expend their assets addressing invalid claims. *7 Second, although there has been a great deal of activity in this litigation to date, much remains to be done before the case is ready for trial. Discovery is not yet completed, extremely voluminous summary judgment motions have been served ... and the Pretrial Order has not yet been prepared. I[t] would be a serious waste of both the parties' and the Court's resources if the ... summary judgment proceedings went forward and the claims were subsequently declared invalid or were amended as a result of the reexamination proceeding. Third, a stay will necessarily simplify the issues. If

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the reexamination proceeding invalidates or narrows a claim or claims, the issues at trial will be simplified. Similarly, if the reexamination proceeding reaffirms all the claims as issued, the Court will then have the benefit of the PTO's expert analysis of the prior art that allegedly invalidates or limits the claims. Softview Computer Prods. Corp., 56 U.S.P.Q.2d at 1636; see also Bausch & Lomb Inc., 914 F.Supp. at 953 ("If this Court were to deny the stay and proceed to trial, it is possible that the time, resources, and significant efforts of all those involved in such a trial would be wasted. Because a finding by this Court that the 607 patent is not invalid would not bind the PTO, the PTO could reach the opposite conclusion at any time thereafter. Not only would such a scenario cause Alcon significant harm[,] but it also would be a tremendous waste of the time and resources of all those involved in a trial before me. Such an outcome is unacceptable. Because the reexamination is to be conducted "with special dispatch" (35 U.S.C. § 305), I find that a stay of the proceedings before me will not greatly prejudice any party and will serve to promote judicial economy."). In the present matter, Charter argues that a stay "will simplify the issues, avoid inconsistent rulings and conserve the resources of the Court and the parties." Defendant's Motion, at 7. Broadcast and IO Research, on the other hand, summarily state that the possibility of simplification is "equivocal." Plaintiff's Response, at 3. For the reasons detailed above as well as those to follow, the Court finds that this factor weighs heavily in favor of granting a stay. The heart of this complicated patent case involves the impact of several prior art references-an issue the PTO is far better suited to address given the technology at issue in this case. Ethicon, Inc., 849 F.2d at 1427. Moreover, because this prior art was not before the PTO during its original patent examination, the Court would benefit immensely from the PTO analysis of it. Accord Softview Computer Prods. Corp., 56 U.S.P.Q.2d at 1636; Emhart Indus., Inc., 3 U.S.P.Q.2d at 1890, 1892 n. 3; Indust Wireless Spectrum Techs., Inc. v. Motorola Corp., 57 U.S.P.Q.2d 1662, 1663 (N.D.Ill.2001); Brown, 18 U.S.P.Q.2d at 1496 (noting that "[t]he PTO is in a better position than the Court to evaluate the validity of the patent [at issue] in view of the prior art references."). *8 Judged solely by this factor, a stay would further the interests of judicial economy and the conservation of the parties' resources, as well as that of the court.

Charter's pending reexamination petition involves the same issues currently before this Court. If the PTO, utilizing its unique expertise, determines that all or some of the 094 claims are invalid, that determination will either dispose of this litigation entirely or at least aid the Court in adjudicating this case. See In re Cygnus Telecomms. Tech., LLC, Patent Litig., 385 F.Supp.2d 1022, 1023 (N.D.Cal.2005) ("A stay is particularly justified where the outcome of the reexamination would be likely to assist the court in determining patent validity and, if the claims were canceled in the reexamination, would eliminate the need to try the infringement issue."). Moreover, "[s]ince the PTO cannot stay the reexamination once a request has been granted, the court's issuance of a stay is the only way to avoid the potential for conflict." Gioello Enterprises, Ltd., 2001 WL 125340 at *2; see also Bayer AG v. Novartis Crop Prot. Inc ., 55 U.S.P.Q.2d 1509, 1511 (M.D.La.2000) (holding that simultaneous litigation of patent issues "would create an economic hardship on the parties and also result in the ineffective administration of justice"); HewlettPackard Co. v. Acuson Corp., 1993 WL 149994, *2 (N.D.Cal.1993) ("Ordinarily, courts need not expend unnecessary judicial resources by attempting to resolve claims which may be amended, eliminated, or lucidly narrowed by the patent reexamination process and the expertise of its officers."); Childers Foods, Inc. v. Rockingham Poultry Mktg. Co-op., Inc., 203 F.Supp. 794, 796 (D.Va.1962) (noting that simultaneous proceedings in federal district court and the PTO are "wasteful and extravagant" where issues to be decided are very similar). The Court, unlike the PTO, can exercise its direction to avoid this conflict and potential for waste.FN8 FN8. The Court is also cognizant of the fact that the PTO grants more than nine of every ten petitions for reexamination. See United States Patent and Trademark Office, Ex Parte Reexamination Filing Data, at 1, ¶ 5 (Sept. 30, 2005) (noting 91% acceptance out of 7,510 requests). If and when the PTO grants Charter's petition, history also teaches that there is a 74% likelihood that the PTO will eliminate, amend or otherwise limit the claims at issue, which will significantly alter the nature and amount of work for the attorneys, the court and the jury. See id. at 2, ¶ 9; Tap Pharm. Prods. Inc., 70 U.S.P.Q.2d at 1320. II. Time and Timing

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Broadcast and IO Research argue that this factor "is decidedly pro-Plaintiffs," as "[t]rial is less than three months away. Plaintiffs' Response, at 5.FN9 Charter acknowledges the trial setting, but insists that the proximity of trial, standing alone, is not a reason to blindly deny an otherwise appropriate stay. FN9. Indeed, Plaintiffs' entire argument regarding this factor consists of that single statement. This factor, at first glance, likely weighs in favor of the Plaintiffs and thus against a stay. Although discovery is not complete, see Stipulation Regarding Additional Discovery at 2, a trial date has been set for September 11, 2006. If these two litigation aspects were all that courts considered when assessing this factor, it might lean towards Broadcast and IO Research. However, courts considering this factor do not stop at discovery and trial settings, but rather, routinely inquire as to the occurrence summary judgment arguments, rulings on summary judgment, and the status of the final pretrial order, among other elements. See, e.g., Gioello Enterprises, Ltd., 2001 WL 125340 at *1 (noting trial was set, but expressing concern for pending summary judgment motions); Softview Computer Prods. Corp., 56 U.S.P.Q.2d at 1636 (same concern as to "extremely voluminous summary judgment motions" and unfinished final pretrial order); Bausch & Lomb Inc., 914 F.Supp. at 953 (same); Middleton, Inc., 2004 WL 198669 at *4 (same). *9 In sum, the proximity of the trial date does not preclude entry of a stay. "Courts have granted stays even where discovery has been completed, and even when a trial date has been scheduled or is forthcoming." Ralph Gonnocci Revocable Living Trust v. Three M Tool & Mach. Inc., 68 U.S.P.Q.2d 1755, 1757 (E.D.Mich.2003); see also Perricone v. Unimed Nutritional Services, Inc., 2002 WL 31075868, *3 (D.Conn.2002) (noting that courts "have granted stays pending re-examination proceedings notwithstanding the well-developed posture of the litigation"). For every court that yields to completed discovery and a looming trial date, another court finds these dates outweighed by other factors-be it the complexity of the suit, the value of PTO expertise, simplification of the issues, lack of hardship to the nonmovant, or the overall burden of duplicitous litigation on the parties and on the court. Put simply, trial time doesn't always tell the tale. See, e.g., Gould, 705 F.2d at 1342 (order granting motion to stay proceedings five years into litigation and twenty days before scheduled trial date); Middleton,

Inc., 2004 WL 198669 at *10 (granting motion to stay proceedings eight years after start of litigation and less tha