Free Letter - District Court of Delaware - Delaware

Case 1 :07-cv-00057-l\/I PT Document 54 Filed 07/05/2007 Page 1 of 3
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O1`1`1S_l8.1T1€S LLP
Mary B. Matterer
$02888.6960
[email protected]
July 5, 2007
H VIA ELECTRONIC FILING
AND HAND DELIVERY
The Honorable Mary Pat Thynge
United States District Court _
for the District of Delaware
844 King Street _
Wilmington, Delaware 19801
RE: Venetec International, Inc. v. Nexus Medical LLC
Case No. 1:07-cv-0057
Your Honor:
Nexus Medical LLC ("Nexus") hereby requests a Protective Order, pursuant to
Fed. R. Civ. P. 26(c), postponing discovery while the Court rules on Nexus’s Motion to Stay All
Proceedings Pending Reexamination of U.S. Patent No. 6,447,485 by the United States Patent
and Trademark Office. The Protective Order is necessary to conserve resources of both parties
until the Court has ruled on the Motion to Stay. Since Nexus filed its Request for
Reexamination, Plaintiff Venetec International, Inc. ("Venetec") has significantly increased its
participation in discovery. Nexus strongly believes that any further discovery will be a complete
waste of time and resources because of the Request for Reexamination and the invalidating prior
art cited by Nexus in the Request. A Protective Order temporarily postponing discovery is a
reasonable compromise that will not unduly prejudice Venetec and will allow time for the Court
to rule on the Motion to Stay.
This case was filed on January 29, 2007. Discovery began on April 16, 2007, and
is currently scheduled to be completed by February 15, 2008. On June 25, 2007, Nexus filed a
Request for Reexamination of the ’485 patent by the United States Patent and Trademark Office
("PTO”). On the same day, Nexus filed a motion with this Court to stay the entire case pending
the reexamination. The Motion to Stay is currently pending before this Court. Nexus intends
within the next two weeks to further file a Request for Reexamination of U.S. Patent No.
6,213,979, which is the remaining Patent-in-Suit.
500 Delaware Avenue, Suite 1500 | Wilmington, DE 19801-1494 T302.888.6800 F302.571.1750
Mailing Address P.O. Box 2306 | Wilmington, DE 19899-2306 www.morrisjames.com

Case 1:07-cv-00057-IVIPT Document 54 Filed 07/05/2007 Page 2 of 3
The Honorable Mary Pat Thynge
July 5, 2007
Page 2
The Request for Reexamination identifies four prior art references that anticipate
or render obvious the claims of the ’485 patent. One of the references was never considered by
the PTO during its original examination of the ’485 patent. As explained in greater detail in the
Motion to Stay Pending Reexamination, the PTO cancels all claims of a patent in reexamination
12% of the time and requires the patent owner to amend its claims 64% of the time. The effect
of an amendment in this case is significant because claims altered in reexamination can only be
asserted against future conduct. See, e.g., Bloom Engg Co. v. North Am. Mfg. Co., 129 F.3d
1247, 1250 (Fed. Cir. 1997). Thus, if the PTO grants the Request for Reexamination, there is a
high probability that this entire action will be moot. Moreover, the PTO grants such requests
approximately 91% of the time. (See PTO’s Performance and Accountability Report: Fiscal
Year 2006, Tables 13A and 13B; D.I. 41, p. 9, Ex. P).
The only discovery that had taken place when Nexus first informed Venetec of
the Request for Reexamination and asked for its consent to the Motion to Stay was the serving of
written discovery and responses. Now, within the past two weeks and only after Nexus put
Venetec on notice of the Reexamination has Venetec actively begun discovery. It has, since
June 25th, served two deposition notices, nine subpoenas ducus tecum of third-party distributors
for Nexus, additional written discovery, including Requests for Admission and Document
Requests, and over thirty thousand pages of documents. It is understandable that the Request for
Reexamination puts considerable pressure on Venetec because of the very probable expectation
that the claims of the Patents-in-Suit will be cancelled or drastically amended. However, now
Nexus is prejudiced by Venetec’s sudden interest in active discovery.
It is inconceivable that Nexus will not be harmed by having to continue discovery.
Nexus is a small company with less than eight employees, only three of whom are full-time
employees. Nexus anticipates that continuation of discovery during the pendency of its Motion to
Stay will likely cost tens of thousands of dollars in attomey time and a significant disruption in
the business of this small entity. Moreover, Nexus will now need to deal with each of its third-
party distributors who have been served with subpoenas, prepare for depositions, and prepare
responses to the second round of written discovery. This will be very expensive and very
disruptive to Nexus.
Nexus views this sudden ramp-up in discovery activity as a cynical attempt by
Venetec to interfere with Nexus and its partners in the marketplace. Nexus spent a great deal of
attomey time in reviewing hundreds of prior art references and preparing the eighty-eight page
Request for Reexamination. The prior art cited in the Request is very strong, and Nexus firmly
believes that any discovery that takes place now will be completely mooted by the
reexamination. For Venetec to continue litigating patent claims that will likely be ruled
unpatentable by the PTO borders on bad faith, especially considering the aggressiveness that
Venetec has shown only since Nexus informed Venetec of the Reexamination.

Case 1:07-cv-00057-IVIPT Document 54 Filed 07/05/2007 Page 3 of 3
The Honorable Mary Pat Thynge
July 5, 2007
Page 3
There is good cause to postpone discovery in this case because neither the Court nor the
parties should expend additional resources when there is a high probability that the asserted
patent claims will not survive the reexamination process in their current state. Because the
administrative proceedings before the PTO may moot or resolve the issues presented in this case,
the law firmly recommends staying this action as a prudential matter pending conclusion of the
PTO’s review of the ’485 patent. See Pegasus Development Corp., L.L. C. v. DirecTK Inc., No.
Civ.A. 00-1020-GMS, 2003 WL 21105073, at *1 (D. Del. May 14, 2003).
Moreover, Fed. R. Civ. P. 26(c) specifically permits the Court to issue an order protecting
the parties from "undue burden or expense." FED. R. CIV. P. 26(c); see also, Crawford - El v.
Britton, 523 U.S. 574, 598 (1998); Heron v. Potter, No. CIV A 03-313-JJF, 2006 WL 3703693,
at *1 (D. Del. Oct. 23, 2006); SmartSignal Corp. v. Expert Microsystems, Inc., No. 02 C 7682,
2006 WL 1343647, at *2 (N.D. Ill. May 12, 2006). A temporary stay of discovery at this
juncture until the court rules on the Motion to Stay of the proceedings is appropriate.
Nexus requests that the protective order remain in effect only until the Court rules on
Nexus’s Motion to Stay All Proceedings Pending Reexamination of U.S. Patent No. 6,447,485
by the United States Patent and Trademark Office. Briefing on the Motion to Stay is presently
scheduled to be completed by mid-July. Even if the Court ultimately denies the Motion to Stay
Pending Reexamination and does so in the normal course, the entry of a protective order until
such a decision is made should not delay trial of this case. No trial date or date for a pre-trial
. conference has been set and no judge has been assigned. Moreover, discovery is not set to close
until February 15, 2008, and there is no deadline set for expert discovery. There is no practical
need for any discovery prior to the resolution of the Motion to Stay Pending Reexamination.
For the forgoing reasons, Nexus requests the Court order postponement of discovery until
the Court has ruled on the pending Motion to Stay.
Respectfully,
Mary . Matterer
cc: Dr. Peter T. Dalleo, Clerk of the Court (via electronic filing)
Maximilian A. Grant, Esq. (via electronic filing)
Jack B. Blumenfeld, Esq. (via electronic filing)