To Stay or Not to Stay: The Federal Circuit Weighs In

Author: Shaton C. Menzie
Editor: Michael J. McCabe, II

In a 2-1 decision, the Federal Circuit in VirtualAgility, Inc. v., Inc., held that the district court abused its discretion in denying a motion to stay pending CBM review.

Specifically, the Court determined that the district court misapplied the four-factor test codified in AIA Section 18(b)(1) as follows:

  • Simplification of Issues: This factor heavily weighed in favor of granting a stay because the PTAB “expressly determined that all of the claims are more likely than not unpatentable” when it instituted CBM review. The Court held that “[t]he district court erred as a matter of law to the extent that it decided to ‘review’ the PTAB’s determination that the claims of the [] patent are more likely than not invalid in the posture of a ruling on a motion to stay,” deeming the district court’s challenge of that determination an “improper collateral attack on the PTAB’s decision to institute CBM review.”
  • Whether Discovery is Complete and a Trial Date Set: The district court correctly found that this factor favored a stay because the litigation was “still at its infancy.” Though not impacting the decision, the Federal Circuit clarified that “the time of the motion is the relevant time to measure the stage of litigation,” not the time of the ruling.
  • Undue Prejudice: The district court “erred in finding that the undue prejudice factor weighed heavily against a stay … at best, this factor weighs slightly against a stay.” The Court noted that “the evidence of competition [between the parties] is weak and the patentee’s delays in pursuing suit and seeking preliminary injunctive relief belie its claims that it will be unduly prejudiced by a stay.”
  • Reducing Burden of Litigation: While confirming that this factor must be separately weighed, the Court held that this factor weighed heavily in favor of a stay for many of the same reasons outlined in the first Simplification of Issues factor.

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PTAB Judge Issues First Dissent on Claim Construction

Author: Jonathan R.K. Stroud
Editor: Michael J. McCabe, II

In a PTAB first, an administrative law judge concurred with the majority’s unpatentability conclusions while disagreeing with the majority’s construction of a key term in the patent.

The decision, Smith & Nephew, Inc. v. Convatec Technologies, Inc., held unpatentable thirteen claims directed to methods of enhancing photostability of silver in antimicrobial material useful for wound dressings and medical devices. IPR2013-00102, Paper 87 (P.T.A.B. May 29, 2014). Though agreeing on the ultimate result of unpatentability, the panel disagreed on the construction of the term “substantially photostable.”

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“Technical Invention” Exclusion Tempers Broad “Financial Service” Interpretation in CBM Institution Decision

Author:  Justin N. Mullen
Editor:  Jeffrey C. Totten

When is a patent directed at financial services not a “covered business method” under Section 18(d) of the AIA? When it claims a “technological invention.” Experian Mktg. Solutions, Inc. v. RPost Commc’ns Ltd., CBM 2014-0010 (Paper No. 20) (Apr. 22, 2014), the first PTAB decision denying institution of Covered Business Method (CBM) Patent Review, illustrates how the “technological invention” exception limits the scope of CBM review.

Experian involved U.S. Patent Number 8,224,913 (the ‘913 patent), directed to “a method of transmitting a message from a sender to a recipient through a server.” The exemplary claim involves method of authenticating e-mail messages using digital signatures.

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