THE REEXAMINATION GAMBLE

Requesting a reexamination of a patent by the U.S. Patent and Trademark Office?questioning whether a patent should have been granted in the first place?was until recently an arcane administrative procedure. But over the last few years this back-office process has emerged as a key weapon in high-stakes corporate patent litigation. Defendants now frequently seek reexams of patents they’re alleged to have infringed. And here’s the key part: They have started asking for?and sometimes winning?stays from trial judges while the PTO proceedings run their course. Counting appeals, a reexam can take four or five years, by which point much of the urgency, and potential for damages, of the original litigation may have disappeared. The strategy of reexamination-and-stay and its related tactics are reshaping how lawyers approach patent infringement suits [see "Which Way to Go?," page 36]. “It is a sea change,” says Yar Chaikovsky, a veteran litigator and co?managing partner in the Menlo Park, California, office of Sonnenschein Nath & Rosenthal. Reexamination requests related to litigation have more than tripled over the past four years, to 450 in 2007.

One important consequence of the change is that federal district court judges, rarely reluctant to use their powers, now have a potent new prerogative: near absolute authority to grant or reject those motions as part of their right to manage their dockets. A judge’s decision to grant or deny such a stay is increasingly pivotal to the outcome of litigation. So even before deciding whether to seek a reexam, for instance, Michael Jacobs, a litigator at Morrison & Foerster, researches the stay-granting proclivity of the judge. “Each district and judge within a district is different,” says Jacobs. “Of course, we study the record of each judge in question.”