Opinion
No. 03 C 7822
March 4, 2004
MEMORANDUM OPINION AND ORDER
On November 3, 2003, Plaintiff's Tap Pharmaceutical Products Inc. ("TAP"), Takeda Chemical Industries, Ltd. ("Takeda"), and Wako Pure Chemical Industries, Ltd. ("Wako") filed suit against Defendants Atrix Laboratories, Inc. ("Atrix") and Sanofi-Synthelabo, Inc. ("Sanofi") alleging infringement of United States Patent No. 4,728,721 ("721 patent"). Prior to filing this suit, Plaintiffs successfully pursued a similar claim against Oakwood Laboratories, L.L.C. ("Oakwood") who have subsequently requested reexamination of the `721 patent by the Patent and Trademark Office ("PTO"). A second request for reexamination was made by an independent, undisclosed party. Both of these requests were granted before the instant suit was filed. Because of these two pending reexaminations, Defendants now move to stay these proceedings pending the resolution of the PTO's proceedings.
Takeda and Wako are joint owners of the `721 patent and TAP is their exclusive licencee.
Determining whether to grant a stay pending the outcome of the PTO's reexamination is a matter soundly within my discretion. Gould v. Control Laser Corp. 705 F.2d 1340, 1341 (Fed. Cir. 1983); Emhart Industries, Inc. v. Sankyo Seiki MFG. Co., LTD. 3 U.S.P.Q.2d (BNA) 1889 (N.D. Ill. 1987). When ruling on such a stay, courts have considered the following factors: (1) whether a stay will unduly prejudice or tactically disadvantage the non-moving party, (2) whether a stay will simplify the issues in question and streamline the trial, and (3) whether a stay will reduce the burden of litigation on the parties and on the court. Wireless Spectrum Techs., Inc. v. Motorola Corp. 57 U.S.P.Q.2d (BNA) 1662, 1663 (N.D. Ill. 2001). I find each of these factors weighs in favor of staying these proceedings.
1. Prejudice to the Plaintiff
Plaintiffs have known from the start of this case three months ago that the pending reexaminations could create grounds for a stay. As of yet, this case has not progressed beyond the initial pleadings stage; the parties have not engaged in any discovery and have not filed any other substantive motions. Since the litigation is at such an early stage and since Plaintiffs had notice of the pending reexaminations, I find they will not be unduly prejudiced by a stay. See Wireless Specturm 57 U.S.P.Q.2d (BNA) at 1664; Implant Innovations v. Noblpharma AB, No. 93-C-7489, 1994 U.S. Dist. LEXIS 2033 at *9-10 (N.D. Ill. Feb. 24, 1994).
Plaintiffs argue that despite this, they still will suffer irreparable harm from the ensuing delay, Plaintiffs point out that the `721 patent may expire before the PTO's reexamination is completed, depriving them of any injunctive remedy. However, even if I deny the stay, the patent may still expire before a trial is completed. This is a large and likely complicated patent case with a potential damage award that could reach into the hundreds of millions of dollars (P. Resp. p. 12). In my experience, it is not unusual for such cases to remain in the pretrial stages for two to three years. Alternatively, it is possible that the reexamination will simplify these proceedings and ultimately make up for any delay that has been caused.
The `721 patent is set to expire on May 1, 2006, a little more than two years from today's date.
Next, the Plaintiffs argue that the delay will allow the alleged infringing product to gain market share, making damages greater and more difficult to collect. Given that Atrix is a company with relatively few assets, Plaintiffs must have already considered the difficulties involved with enforcing a damages award against Sanofi, a French corporation. Any period of delay will not materially alter the need to pursue damages from Sanofi.
2. Simplification of the Issues
As the Federal Circuit has explained, "[o]ne 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. The validity or invalidity of the `721 patent and its underlying claims is at issue both in this court and in the reexamination. Generally speaking, the PTO invalidates 10% of the patents it reexamines and amends the claims in 64%. If these proceedings are not stayed, there is a substantial risk of expending substantial resources on trying the validity of patent claims that may ultimately be cancelled or amended by the PTO. A stay will allow both the parties to take advantage of the PTO's expert analysis of prior art and may limit or narrow the remaining issues. 3, Reduction of the Burden Created by Litigation,
There is a significant chance that the PTO will either invalidate this patent or drastically decrease its scope. This creates a very real possibility that the parties will waste their resources litigating over issues that will ultimately be rendered moot by the PTO's findings. Simplification of the issues will allow both parties to conserve time and resources. Emhart 3 U.S.P.Q.2d (BNA) at 1890.
For these reasons, Defendants' Motion for Stay is GRANTED.