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Bausch & Lomb Inc. v. Rexall Sundown

May 19, 2008

BAUSCH & LOMB INCORPORATED, PLAINTIFF,
v.
REXALL SUNDOWN, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Marian W. Payson United States Magistrate Judge

No. 03-CV-6620T

Bausch & Lomb Incorporated commenced this patent infringement lawsuit in December 2003, alleging that defendants Rexall Sundown, Inc., Rexall, Inc. and NBTY, Inc. (collectively, "Rexall") have infringed its patent pertaining to compositions for nutritional supplements used in the prevention and treatment of visual acuity loss, United States Patent No. 6,660,297 ("the '297 patent"). (Docket # 1). Specifically, the Complaint alleges that defendants infringed the '297 patent by manufacturing, marketing and selling a product marketed under the trademark Vuemax Intensive Product. Rexall represents that it does not currently manufacture or sell that product and has not done so for several years.

Although Rexall filed an Answer in May of 2004, no other activity occurred in this case until three years later. At that time, in May 2007, the Honorable Michael A. Telesca, United States District Judge, referred the matter to this Court for the supervision of pretrial discovery and the hearing and disposition of all non-dispositive motions, pursuant to 28 U.S.C. §§ 636(b)(A) and (B). (Docket # 31). This Court held a Rule 16 conference in June 2007 and thereafter issued a Scheduling Order requiring the parties to comply with their mandatory disclosure obligations by July 23, 2007 and to complete discovery by April 7, 2008. (Docket ## 42, 43). After only limited discovery had been conducted, on September 4, 2007, Rexall filed the pending motion to stay this action. (Docket # 46).

Rexall contends that a stay is appropriate because it has filed a request with the United States Patent and Trademark Office ("PTO") for inter partes reexamination of the '297 patent. (Docket # 46-7). Oral argument of Rexall's motion was conducted on October 31, 2007, and this Court reserved decision. (Docket # 54). Rexall since has advised the Court that on December 21, 2007, the PTO granted its request and has instituted an inter partes reexamination proceeding, finding that prior art raised a "substantial new question of patentability" as to each of the claims for which Rexall requested reexamination. (Docket # 58 at ¶ 2; Exhibit ("Ex.") A). For the following reasons, Rexall's motion for a stay is granted conditioned upon its agreement not to reintroduce for sale the Vuemax Intensive Product during the pendency of the reexamination proceedings before the PTO.

DISCUSSION

The procedure for patent reexamination is set forth by statute in Title 35 of the United States Code. In pertinent part, the statute provides:

Any third-party requester at any time may file a request for inter partes reexamination by the [PTO] of a patent on the basis of any prior art cited under the provisions of section 301. The request shall be in writing, include the identity of the real party in interest . . . and set forth the pertinency and manner of applying cited prior art to every claim for which reexamination is requested. The Director promptly shall send a copy of the request to the owner of record of the patent.

35 U.S.C. § 311. "One purpose of the reexamination procedure is to eliminate trial of the issue of patent claim validity (when the claim is canceled by the [PTO]), or to facilitate trial of that issue by providing the district court with the expert view of the PTO (when a claim survives the reexamination proceeding)." Synder Seed Corp. v. Scrypton Sys., Inc., 1999 WL 605701, * 1-2 (W.D.N.Y. 1999) (citing Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir.), cert. denied, 464 U.S. 935 (1983); Ingro v. Tyco Indus., Inc., 1985 WL 1649, *1 (N.D. Ill. 1985)). "The procedure was intended 'to provide an inexpensive, expedient means of determining patent validity which, if available and practical, should be deferred to by the courts ...,' especially where the infringement litigation is in the early stages." Id. (citing Digital Magnetic Sys., Inc. v. Ansley, 1982 WL 52160, *1 (W.D. Okla. 1982)). Resort to the reexamination procedure should not be sanctioned through the issuance of a stay, however, where it is pursued for tactical advantage after substantial and costly discovery has been conducted or where trial is imminent.

Although the commencement of reexamination proceedings does not operate as an automatic stay of federal court litigation involving identical claims, a district court retains the authority, pursuant to its inherent power to control and manage its docket, to stay an action pending the outcome of reexamination proceedings before the PTO. Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988); Xerox Corp. v. 3Com Corp., 69 F. Supp. 2d 404, 406 (W.D.N.Y. 1999) (citing Gould v. Control Laser Corp., 705 F.2d at 1340), appeal dismissed by, 243 F.3d 554 (Fed. Cir. 2000). "A motion to stay an action pending the resolution of a related matter in the [PTO] is directed to the sound discretion of the court." Xerox Corp. v. 3Com Corp., 69 F. Supp. 2d at 406 (quoting Braintree Labs., Inc. v. Nephro-Tech., Inc., 1997 WL 94237 (D. Kan. 1997)). Neither party in this matter disputes the Court's authority to order a stay; rather, they dispute the merits of exercising that authority in this case.

As various judges have observed, courts "routinely" issue stays pending the outcome of reexamination proceedings, particularly in cases where the litigants have not made substantial progress towards trial. Middleton, Inc. v. Minnesota Mining and Mfg. Co., 2004 WL 1968669, *3 (S.D. Iowa 2004); Softview Computer Prods. Corp. v. Haworth, Inc., 2000 WL 1134471, *2 (S.D.N.Y. 2000) (collecting cases). See also Card Tech. Corp. v. DataCard Corp., 2007 WL 551615, *4 (D. Minn. 2007) ("a stay is usually warranted unless other factors outweigh the potential benefits of awaiting the outcome of reexamination"); Bausch & Lomb Inc. v. Alcon Labs., Inc., 914 F. Supp. 951, 953 (W.D.N.Y. 1996) (noting that "[b]ecause the PTO is considered to have expertise in deciding issues of patentability[,] many courts have preferred to postpone making final decisions on infringement until the PTO rules on issues before it"). Deferring determinations of patent validity to the PTO offers many advantages, including the following:

1. All prior art presented to the Court will have been first considered by the PTO, with its particular expertise.

2. Many discovery problems relating to prior art can be alleviated by the PTO examination.

3. In those cases resulting in effective invalidity of the patent, the suit ...


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