HORTON, INC. v. KIT MASTERS, INC. (D.Minn. 6-5-2009)

PATRICK SCHILTZ, District Judge

After consolidating separate suits brought by plaintiff Horton, Inc., against defendants Kit Masters, Inc. and Concepts ETI, Inc. into case number 08-CV-6291 (PJS/RLE), the Court stayed the consolidated case pending reexamination by the United States Patent and Trademark Office ("PTO") of two of the three patents-in-suit. Case No. 08-CV-6291 (PJS/RLE), Order Apr. 1, 2009 [Docket No. 25]. Soon after the Court entered its stay order, Horton filed a separate suit against Kit Masters, case number 09-CV-0912 (PJS/RLE), accusing Kit Masters of infringing U.S. Patent No. 5,636,719 (the `719 patent).

In the stayed case (number 08-CV-6291), in Count IV of the complaint, Horton asserted the `719 patent against Concepts ETI only. Thus, the `719 patent is being asserted in one non-stayed case (number 09-CV-0912) against Kit Masters, and in one stayed case (number 08-CV-6291) against Concepts ETI. The `719 patent is the only one of the three patents being asserted in the stayed case that is not in reexamination.

Horton now moves in case 08-CV-6291 to dismiss without prejudice Count IV, the count that charges Concepts ETI with infringing the `719 patent. Horton apparently plans to add a claim against Concepts ETI for infringing the `719 patent to case number 09-CV-0912.

Meanwhile, both in case 08-CV-6291 and in case 09-CV-0912, Kit Masters moves for a stay pending the PTO's decision whether to grant Kit Masters' request that it reexamine the `719 patent. Kit Masters opposes Horton's motion to dismiss Count IV in case 08-CV-6291, although Kit Masters apparently agrees that if the PTO denies its request to reexamine the `719 patent, Horton should then be allowed to dismiss Count IV in case 08-CV-6291 and to add a claim to case 09-CV-0912 accusing Concepts ETI of infringing the `719 patent. Case No. 08-CV-6291 (PJS/RLE), Def. Mem. Opp. Pl. Mot. Dism. Count IV at 2 [Docket No. 33] ("[I]f the Patent Office denies Defendants' reexamination request, Defendants will consent to Horton dismissing the count relating to the `719 patent without prejudice and to Horton amending its Complaint in the new case to add Concepts as a defendant.").

The Court denies Kit Masters' motion for a stay with respect to the `719 patent. The fact that Kit Masters has asked the PTO to reexamine the `719 patent proves nothing about the patent's quality and is therefore not a sufficient reason to grant a stay. Anyone can ask that a patent be reexamined; the mere fact that a litigant has asked the PTO to reexamine a patent does not mean that the patent is likely to be found invalid. By contrast, when the PTO grants a reexamination request, this means that the PTO has determined that the request raises "a substantial new question of patentability" with respect to the challenged patent claims. 35 U.S.C. § 303(a); MPEP § 2209 (8th ed. rev. 7, July 2008) ("If such a new question [i.e., a substantial new question of patentability] has been presented, reexamination will be ordered."). If the PTO grants Kit Masters' reexamination request with respect to the `719 patent, Kit Masters may then move in case 09-CV-0912 for a stay pending reexamination and for consolidation of case 09-CV-0912 with case 08-CV-6291.

Based on the foregoing and on all of the files, records, and proceedings herein, IT IS HEREBY ORDERED THAT: 1. The motion of plaintiff Horton, Inc. in case number 08-CV-6291 (PJS/RLE) to dismiss Count IV without prejudice is [Docket No. 27] is GRANTED. a. Count IV is DISMISSED WITHOUT PREJUDICE. b. Concepts ETI's corresponding declaratory-judgment claim with respect to the '719 patent is DISMISSED WITHOUT PREJUDICE. 2. The motion of defendant Kit Masters, Inc. in case number 08-CV-6291 (PJS/RLE) to stay and later consolidate related cases [Docket No. 31] is DENIED WITHOUT PREJUDICE. 3. The motion of defendant Kit Masters, Inc. in case number 09-CV-0912 (PJS/RLE) to stay and later consolidate related cases [Docket No. 9] is DENIED WITHOUT PREJUDICE.