Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-05568/USCOURTS-cand-3_07-cv-05568-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

JENS ERIK SORENSEN,

Plaintiff,

 v.

DIGITAL NETWORKS NORTH AMERICA

INC.; LEGACY SUPPORT SERVICES, LTD.

d/b/a S2G; and DOES 1 through 100,

Defendants. /

No. C 07-05568 JSW

ORDER GRANTING

DEFENDANT’S MOTION TO

STAY LITIGATION

PENDING REEXAMINATION

OF PATENT-IN-SUIT

Now before the Court is Defendant Digital Networks North America Inc.’s (“DNNA”)

motion to stay litigation during the pendency of reexamination of United States Patent

4,935,184 (the “’184 Patent”). The Court finds that this matter is appropriate for disposition

without oral argument. See N.D. Civ. L.R. 7-1(b). Accordingly, the hearing set for January 18,

2008 is HEREBY VACATED. Having considered the parties’ pleadings and the relevant legal

authority, the Court HEREBY GRANTS DNNA’s motion to stay litigation. 

BACKGROUND

In this action, plaintiff Jens Erik Sorensen (“Sorensen”) brings a claim for patent

infringement of the ’184 Patent. Sorensen filed this action on November 1, 2007 and served

DNNA on November 12, 2007. On October 11, 2007, before this lawsuit was filed, the Patent

and Trademark Office (“PTO”) granted a request to reexamine the ’184 Patent. (Declaration of

Kurt W. Rhode (“Rhode Decl.”), Ex. C.) The PTO notified Sorensen that newly submitted prior

art resulted in thirteen “substantial questions of patenability” regarding the ’184 Patent. (Id.) 

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United States District Court

For the Northern District of California

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Maria DNNA now moves the Court to stay litigation in the above-captioned matter pending the

PTO’s reexamination of the ’184 Patent. The Court shall address additional facts as necessary

to its analysis in the remainder of this Order.

ANALYSIS

A. Legal Standards Applicable to a Motion to Stay Proceedings Pending

Reexamination.

The patent reexamination statute provides in pertinent part that “[a]ny person at any time

may file a request for reexamination by the [PTO] of any claim of a patent on the basis of any

prior art cited under the provisions of section 301.” 35 U.S.C. § 302. The PTO must

“determine whether a substantial new question of patentability affecting any claim of the patent

concerned is raised by the request . . . .” 35 U.S.C. § 303(a). The reexamination statute further

provides that “[a]ll reexamination proceedings . . . including any appeal to the Board of Patent

Appeals and Interferences, will be conducted with special dispatch.” 35 U.S.C. § 305.

The determination of whether to grant a stay pending the outcome of the PTO’s

reexamination is soundly within the Court’s discretion. See Tap Pharm. Prods. Inc. v. Atrix

Labs. Inc., 70 U.S.P.Q. 2d 1319, 1320 (N.D. Ill. 2004) (citing Gould v. Control Laser Corp.,

705 F.2d 1340, 1341 (Fed. Cir. 1983)). When ruling on such a stay, courts consider several

factors: (1) the stage of the litigation, including whether discovery is or will be almost

completed and whether the matter has been marked for trial; (2) whether a stay will unduly

prejudice or tactically disadvantage the nonmoving party; and (3) whether a stay will simplify

the issues in question and streamline the trial, thereby reducing the burden of litigation on the

parties and on the court. Id.; Methode Elecs., Inc. v. Infineon Techs. Corp., No. 99-21142, 2000

U.S. Dist. LEXIS 20689, at *5-6 (N.D. Cal. Aug. 7, 2000). There is a “liberal policy in favor of

granting motions to stay proceedings pending the outcome of USPTO reexamination or

reissuance proceedings.” ASCII Corp. v. STD Entertainment, 844 F. Supp. 1378, 1381 (N.D.

Cal. 1994).

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B. Early Stage of the Litigation Favors a Stay.

Here, the early stage of this litigation weighs in favor of granting a stay pending

reexamination. See Target Therapeutics, Inc. v. SciMed Life Sys., Inc., 33 U.S.P.Q. 2d 2022,

2023 (N.D. Cal. 1995) (holding that the absence of “significant discovery” or “substantial

expense and time . . . invested” in the litigation weighed in favor of staying the litigation); see

also ASCII Corp., 844 F. Supp. at 1381 (granting stay where parties had undertaken little or no

discovery and the case had not yet been set for trial). Here, discovery has not even begun and

DNNA has not yet responded to the complaint. The Court has not yet set any deadlines in this

action regarding discovery, motions, or trial. Therefore, the fact that this case is still in the

early stages and the parties have not yet conducted “significant discovery” or invested

“substantial expense” into the litigation weighs in favor of granting a stay. See Target

Therapeutics, 33 U.S.P.Q. 2d at 2023.

C. A Stay Will Not Unduly Prejudice Sorensen.

In determining whether to grant a stay, courts also consider any resulting undue

prejudice on the nonmoving party. See Methode Elecs., 2000 U.S. Dist. LEXIS 20689, at *7. 

Granting a stay does not cause the nonmoving party undue prejudice when that party has not

invested substantial expense and time in the litigation. Id. The delay inherent to the

reexamination process does not constitute, by itself, undue prejudice. Pegasus Dev. Corp. v.

DirecTV, Inc., 2003 WL 21105073, at *2 (D. Del. May 14, 2003). 

Courts also consider evidence of dilatory motives or tactics, such as when a party unduly

delays in seeking reexamination of a patent. Methode Elecs., 2000 U.S. Dist. LEXIS 20689, at

*7. This is not a case where reexamination is sought on the eve of trial or after protracted

discovery. Cf. Agar Corp., Inc. v. Multi-Fluid, Inc., 983 F. Supp. 1126, 1128 (S.D. Tex. 1997)

(finding that “courts are inclined to deny a stay when the case is set for trial and the discovery

phase has almost been completed”). Rather, another party filed the request to reexamine the

’184 Patent, and the request was granted even before Sorensen filed the instant lawsuit. DNNA

promptly sought to stay this action pending the reexamination proceedings. The Court finds

that Sorensen has not presented any evidence of dilatory motives or shown that he would be

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unduly prejudiced or tactically disadvantaged if this Court were to grant a stay. Although

Sorensen presents concerns that his ability to conduct discovery may be impaired by the delay

in litigation, the Court finds that DNNA has submitted sufficient evidence to allay such

concerns. Accordingly, the Court finds that a stay will not unduly prejudice Sorensen, and thus,

this factor also weighs in favor of granting a stay

D. A Stay Will Simplify the Issues, Streamline the Trial, and Reduce the Burden of

Litigation on Both Parties and the Court.

Because the patent-in-suit is currently being reexamined, the Court finds that this patent

infringement action should be stayed during the pendency of the reexamination. The Court

finds that such a stay will simplify the issues and streamline the trial, thereby reducing the

burden on, and preserving the resources of both the parties and the Court.

Therefore, having considered the factors relevant in determining whether to grant a stay

pending reexamination, the Court hereby GRANTS DNNA’s motion to stay all proceedings

pending reexamination of the ’184 Patent. 

CONCLUSION

For the foregoing reasons, the Court GRANTS DNNA’s motion to stay pending

reexamination of the ’184 Patent. The proceedings are stayed from the date of this Order until

further notice. The Court HEREBY ORDERS the parties to submit a joint status report

regarding the status of the reexamination proceedings every 120 days, or sooner if the PTO

issues a final decision with respect to the ’184 Patent, until the stay in this case is lifted.

IT IS SO ORDERED.

Dated: January 16, 2008 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

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