Stay of Litigation Pending Reexamination – Impact on Damages

When a patent is the subject of pending litigation, the party accused of infringing the patent may seek reexamination of the patent in the PTO. At the same time, the accused infringer may also ask the district court to stay the litigation pending the outcome of the PTO’s reexamination. The accused infringer would argue, in essence, that the court should wait to see whether the PTO invalidates the patent during reexamination, obviating the need for further litigation.

The grant of a stay by the court will impact damages if the patent ultimately emerges from the reexamination and is then litigated. During the period of the stay, damages will have been mounting if the accused infringer continues to manufacture or sell the accused products. A reexamination can take several years, meaning that additional years of damages would accrue during the reexamination. One way the accused infringer can avoid accrual of damages would be to redesign the product to avoid infringement, rather than continuing sales of the accused product during the reexamination stay. Of course, if the case is stayed for reexamination and afterward the accused product is found not to infringe, then this issue would become moot.