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DataQuill Limited v. High Tech Computer Corp.

May 14, 2009

DATAQUILL LIMITED, PLAINTIFF,
v.
HIGH TECH COMPUTER CORP., DEFENDANT.
HIGH TECH COMPUTER CORP., COUNTERPLAINTIFF,
v.
DATAQUILL LIMITED, COUNTERDEFENDANT.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER GRANTING HTC'S MOTION TO STAY THE PROCEEDINGS PENDING PATENT REEXAMINATION [Doc. No. 21]

In this patent infringement action, Defendant High Tech Computer Corp. ("HTC") has filed a motion to stay the proceedings pending the U.S. Patent and Trademark Office's ("PTO") ex parte reexamination of the patents-in-suit. (Doc. No. 21.) Plaintiff DataQuill Limited ("DataQuill") opposed and HTC replied. After considering the parties' submissions, and for the reasons set forth below, the Court GRANTS HTC's motion.

BACKGROUND

On May 2, 2000, the PTO issued U.S. Patent No. 6,504,304 ("the '304 patent") to DataQuill.

The technology at issue relates to handheld mobile devices with remote access capability and optional features such as a touch sensitive screens or integrated cameras.

In November 2006, the PTO issued U.S. Patent No. 7,139,591 ("the '591 patent") to DataQuill. The '591 patent also claims inventions in the field of handheld mobile devices. From May 2006 to late 2008, DataQuill pursued infringement counterclaims against a third party to enforce the '304 and '591 patents in the Northern District of Texas (the "Texas Action").

Currently, the PTO is conducting an ex parte reexamination of both the '304 patent and the '591 patent. The reexamination of the '304 patent began on January 25, 2007, at the request of a third party. The PTO found a substantial question of patentability existed and rejected all of the '304 patent's claims. DataQuill responded to this rejection and now awaits further PTO action.

On February 9, 2007, a third party requested the PTO re-examine the '591 patent. The PTO found a substantial question of patentability existed and rejected all claims of the '591 patent. However, the PTO reopened the prosecution after a March 4, 2009 meeting with DataQuill. On April 8, 2009, the PTO issued a "Notice of Intent to Issue a Reexamination Certificate," finding the '591 patent's claims to be patentable.

DataQuill alleges HTC infringed both the '304 patent and the '591 patent. HTC answered and filed counterclaims on December 8, 2008. On January 27, 2009, DataQuill received a 60-day extension to respond to HTC's counterclaims. (Doc. No. 4.) The Early Neutral Evaluation Conference occurred on February 9, 2009.*fn1 On April 1, 2009, HTC filed this motion to stay the proceedings. The Court has delayed scheduling the Case Management Conference pending resolution of this motion.

LEGAL STANDARD

A court has the inherent power to stay an action pending conclusion of PTO reexamination proceedings. Ethicon, Inc. v. Quigg, 849 F.2d 1422,1426-27 (Fed.Cir.1988). "The decision whether to grant or deny a motion to stay proceedings pending PTO reexamination rests within the sound discretion of the court." SKF Condition Monitoring, Inc. v. SAT Corp., 2008 WL 706851 at *6 (S.D. Cal. February 27, 2008). When faced with parallel PTO reexamination proceedings, courts generally favor granting the stay. ASCII Corp. v. STD Entertainment USA, Inc., 844 F. Supp. 1378, 1381 (N.D.Cal.1994). Courts consider three factors when evaluating the propriety of a stay: "(1) the stage of litigation, i.e., whether discovery is almost complete and whether a trial date has been set; (2) whether a stay would cause undue prejudice or present a clear disadvantage to the non-moving party; and (3) whether a stay will simplify the issues in question and trial of the case." SKF Condition Monitoring, 2008 WL 706851 at *6 (citing Xerox Corp. v. 3Com Corp., 69 F. Supp. 2d 404, 406 (W.D.N.Y.1999)).

DISCUSSION

A. Stage of the ...


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