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Tyco Fire Products Lp v. Victaulic Company

October 4, 2011


The opinion of the court was delivered by: Eduardo C. Robreno, J.



Plaintiff Tyco Fire Products LP ("Plaintiff") brings this patent infringement suit against Victaulic Company ("Defendant"). Plaintiff alleges that Defendant has infringed various claims in two of Plaintiff's patents (the "Asserted Patents"): (1) United States Patent Number 7,793,736 ("'736 Patent"), entitled "Ceiling-Only Dry Sprinkler Systems and Methods for Addressing a Storage Occupancy Fire"; and (2) United States Patent Number 7,819,201 ("'201 Patent"), entitled "Upright, Early Suppression Fast Response Sprinkler." Pl. Second Am. Compl. ¶¶ 14-15, 24-25. Defendant's answer pleads five affirmative defenses and asserts two counterclaims. Def. First Am. Answer ¶¶ 29-39. Before the Court is Plaintiff's motion to stay this action pending the United States Patent and Trademark Office's ("PTO") resolution of reissue proceedings of the Asserted Patents.

For the reasons set forth below, Plaintiff's motion will be denied.


Plaintiff avers that Defendant's manufacture and sale of the Model LP-46 V4603 K25 Standard Response Storage Upright Sprinklers with varying temperature ratings infringes its patents. See Pl. Second Am. Compl. ¶¶ 14, 24. Defendant acknowledges manufacturing and marketing the products in question, see Def. First Am. Answer ¶¶ 13, 23, but denies Plaintiff's averments of patent infringement, see id. ¶¶ 14-18, 24-28. Defendant further raises a series of affirmative defenses and two counterclaims, both of which assert, in relevant part, that Plaintiff's '736 and '201 patents are invalid for failure to comply with the patentability requirements in 35 U.S.C. §§ 101, 102, 103, 112 (2006). See id. ¶ 39.

This Court set a scheduling order on March 29, 2011. ECF No. 30. Parties exchanged proposed claim constructions on July 29, 2011, and they filed a joint statement of terms to be construed with the Court on August 19, 2011. That same day, Plaintiff filed applications with the PTO seeking reissue of both the '736 and '201 patents to correct "inadvertent errors" in the claims of those patents. Pl. Br. 4. Shortly thereafter, Plaintiff moved to stay the present litigation pending the outcome of these reissue proceedings. ECF No. 41. Defendant opposes this motion, and it is ripe for disposition.


A. Applicable Law A reissue proceeding is an ex parte procedure that allows a patent owner to correct errors in a patent that make the patent either inoperative or invalid. 35 U.S.C. § 251 (2006). Possible errors are defective drawings, a defective specification, or the patentee claiming more or less than the patentee had a right to claim. Id. During this process, the patentee may add new claims or correct claims that were made in error. Id. Moreover, the patentee may broaden claims within two years of the patent's issue date. Id. When reviewing the new application, the PTO reviews the entire patent, not just the claims at issue. See Examination of Reissue, 37 C.F.R. § 1.176(a) (2010); Manual of Patent Examining Procedure § 1445 (8th ed. 2001) (revised July 2010). Accordingly, all claims of the patent, not just those sought to be amended or added, are subject to possible invalidation. Thus, reissue proceedings may be used as an alternative to litigation when a patent is alleged invalid.

Indeed, recently the Federal Circuit affirmed the practice of using reissue proceedings to add dependent claims for the purposes of hedging against possible invalidity. See In re Tanaka, 640 F.3d 1246, 1251-52 (Fed. Cir. 2011). In the event a litigant seeks to avail itself of this hedging alternative, that litigant may request a stay in litigation pending the PTO's action. This stay is not automatic; it is up to the Court to decide if such a stay is best under the facts of that particular case.

In this regard, it is undisputed that a district court has the inherent power to control its docket and stay proceedings. See Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). While some courts have a policy in favor of granting a stay pending a PTO reexamination or reissue, other courts have recently reconsidered this policy. See Network Appliance, Inc. v. Sun Microsys., Inc., No. 07-06053, 2008 WL 2168917, at *3 (N.D. Cal. May 23, 2008) ("[T]here appears to be a growing concern among at least some judges in this district that, on balance, staying a case even in its early stages pending reexamination has not led to the just, speedy, and efficient management of the litigation, but instead has tended to prolong it without achieving sufficient benefits in simplification to justify the delay."). Irrespective of a policy either way, "[a] court is under no obligation to delay its own proceedings by yielding to ongoing PTO patent reexaminations, regardless of their relevancy to infringement claims which the court must analyze." NTP, Inc. v. Research In Motion, Ltd., 397 F. Supp. 2d 785, 787 (E.D. Va. 2005) (citing Viskase Corp. v. Am. Nat'l Can Co., 261 F.3d 1316, 1328 (Fed. Cir. 2001)).

Thus, courts have discretion to grant a stay when a party requests such a stay because of a pending reexamination or reissue in front of the PTO. In the exercise of this discretion, district courts balance the following three factors (the "Xerox test"): "(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." Xerox Corp. v. 3Com Corp., 69 F. Supp. 2d 404, 406 (W.D.N.Y. 1999); see In re Laughlin Prods. Inc., 265 F. Supp. 2d 525, 530-31 (E.D. Pa. 2003).

B. Analysis Predictably, the parties dispute each of these factors. Plaintiff contends there will be no prejudice from the stay, that the reissue proceedings will clarify the claims in the Asserted Patents and simplify the litigation here, and the litigation is in its infancy. Defendant contends that it will suffer great harm from a stay, that the reissue proceedings will actually add to the complexities before the court, and that, at worst, the stage of ...

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