Re-examination: The Tail that Wags the Dog

The $500 million verdict in the Eolas v. Microsoft case is threatened by a USPTO re-examination of the patent-in-suit. A similar cloud hangs over the $55 million verdict in the NTP v. Research in Motion case involving the Blackberry handheld device. When it comes to patent litigation, the USPTO should not be overlooked. This is not new. On Nov. 6, 1989, Gencor Industries, Inc. appealed a jury's award of $6 million for patent infringement damages. At the time of the appeal, the patent-in-suit was the subject of a re-examination proceeding in the USPTO. By May of 1991, the Board of Patent Appeals upheld a rejection of the claims. The Federal Circuit offered to consider staying the litigation in view of the re-examination. Both parties declined the invitation.

On Dec. 31, 1991, the Federal Circuit affirmed the verdict of infringement and validity on behalf of patent owner Standard Havens Products, Inc., but remanded the damages award. Gencor, having failed to eliminate the patent infringement claim in the appeal, then moved to stay the permanent injunction and the damages proceeding in view of the re-examination then pending on appeal. The district court denied the stay. However, the Federal Circuit reversed, stating that “contrary to the assumption of the trial court, the re-examination proceeding “would control” the infringement suit.” Standard Havens Products, Inc. v. Gencor Industries, Inc., 996 F. 2d 1236 (Fed. Cir. 1993) (unpublished). If claims are cancelled in re-examination, a court cannot enforce those claims.