Free Opening Brief in Support - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE ROCHE DIAGNOSTICS OPERATIONS, INC. and CORANGE INTERNATIONAL LIMITED, Plaintiffs, v. ABBOTT DIABETES CARE INC., ABBOTT DIABETES CARE SALES CORPORATION, BAYER HEALTHCARE, LLC, DIAGNOSTIC DEVICES, INC., LIFESCAN, INCORPORATED, and NOVA BIOMEDICAL CORPORATION, Defendants. Civil Action No. 07-753-JJF

OPENING BRIEF IN SUPPORT OF DEFENDANTS ABBOTT DIABETES CARE INC.'S AND ABBOTT DIABETES CARE SALES CORP.'S MOTION TO STAY PENDING REEXAMINATION OF THE PATENTS-IN-SUIT

OF COUNSEL: Edward A. Mas II Stephen F. Sherry Kirk Vander Leest James M. Hafertepe McAndrews, Held & Malloy, Ltd. 500 West Madison Street, 34th Floor Chicago, Illinois 60661 (312) 775-8000

Frederick L. Cottrell, III (#2555) [email protected] Anne Shea Gaza (#4093) [email protected] Richards, Layton & Finger, P.A. One Rodney Square P.O. Box 551 920 N. King Street Wilmington, DE 19899 (302) 651-7700 Attorneys for Abbott Diabetes Care Inc. and Abbott Diabetes Care Sales Corp.

Dated: January 9, 2008

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TABLE OF CONTENTS

TABLE OF AUTHORITIES .......................................................................................................... ii NATURE AND STAGE OF THE PROCEEDINGS .......................................................................... 1 SUMMARY OF THE ARGUMENT................................................................................................... 2 STATEMENT OF FACTS ................................................................................................................... 3 ARGUMENT ........................................................................................................................................ 5 A. B. The PTO's Reexamination Of The Asserted Patents Is Grounds For A Stay ................................................................................................................5 Traditional Factors All Greatly Favor Granting A Stay ..........................................7 1. 2. 3. A Stay Will Narrow The Issues And Conserve Judicial Resources .....................................................................................................8 The Early Stage Of This Proceeding Strongly Supports Granting The Stay During Reexamination ................................................10 A Stay Will Not Prejudice Roche ..............................................................12

CONCLUSION ...................................................................................................................................14

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TABLE OF AUTHORITIES CASES Alloc, Inc. v. Unilin Décor N.V., 2003 U.S. Dist. LEXIS 11917 (D. Del. July 11, 2003) ........................................................ 7, 10 ASCII Corp. v. STD Entm't USA, Inc., 844 F. Supp. 1378 (N.D. Cal. 1994) ..................................................................................... 6, 10 Canady v. Erbe Elektromedizin GmbH, 271 F. Supp. 2d 64 (D.D.C. 2002).............................................................................................. 6 Dentsply Int'l, Inc. v. Kerr Mfg. Co., 734 F. Supp. 656 (D. Del. 1990)................................................................................................. 7 Essex Group, Inc. v. Southwire Co., 1986 U.S. Dist. LEXIS 29761 (N.D. Ga. Jan. 31, 1986)............................................................ 7 Ethicon, Inc. v. Quigg, 849 F.2d 1422 (Fed. Cir. 1988) .................................................................................................. 6 Gould v. Control Laser Corp., 705 F.2d 1340 (Fed. Cir. 1983) .................................................................................................. 9 GPAC Inc. v. D.W.W. Enters. Inc., 23 U.S.P.Q.2d 1129 (D.N.J. 1992) ............................................................................................. 6 Guthy-Renker Fitness L.L.C. v. Icon Health & Fitness, Inc., 48 U.S.P.Q.2d 1058 (C.D. Cal. 1998) .................................................................................. 6, 10 KLA-Tencor Corp. v. Nanometrics, Inc., 2006 U.S. Dist. LEXIS 15754 (N.D. Cal. Mar. 16, 2006).................................................. 12, 13 Lear, Inc. v. Adkins, 395 U.S. 653 (1969).................................................................................................................. 13 Lentek Int'l, Inc. v. Sharper Image Corp., 169 F. Supp. 2d 1360 (M.D. Fla. 2001)...................................................................................... 6 Patlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985) ............................................................................................ 5, 6, 7 Pegasus Dev. Corp. v. DirecTV, Inc., 2003 U.S. Dist. LEXIS 8052 (D. Del. May 14, 2003).......................................................... 9, 13 Robert H. Harris Co. v. Metal Mfg. Co., 1991 U.S. Dist. LEXIS 16086 (E.D. Ark. June 20, 1991).......................................................... 7 - ii -

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Sabert Corp. v. Waddington N. Am., Inc., 2007 U.S. Dist. LEXIS 68092 (D.N.J. Sept. 14, 2007) ...................................................... 11, 12 Tap Pharm. Prods. Inc. v. Atrix Labs., Inc., 70 U.S.P.Q.2d 1319 (N.D. Ill. 2004) .................................................................................... 9, 10 Target Therapeutics Inc. v. SciMed Life Systems Inc., 33 U.S.P.Q.2d 2022 (N.D. Cal. 1995) ...................................................................................... 12 United Sweetener USA, Inc. v. Nutrasweet Co., 766 F. Supp. 212 (D. Del. 1991)................................................................................................. 7 Vitronics Corp. v. Conceptronic, Inc., 36 F. Supp. 2d 440 (D.N.H. 1997)............................................................................................ 10 STATUTES 35 U.S.C. § 305............................................................................................................................... 5 35 U.S.C. §§ 301-307 ..................................................................................................................... 5 OTHER AUTHORITIES Manual of Patent Examining Procedure § 2261 (8th ed., rev. 5, Aug. 2006)............................ 5, 12 Manual of Patent Examining Procedure § 2286 (I.) (8th ed., rev. 5, Aug. 2006)...................... 5, 12

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NATURE AND STAGE OF THE PROCEEDINGS On November 21, 2007, Plaintiffs Roche Diagnostics Operations, Inc. and Corange International Limited (collectively "Roche") filed this action against Abbott Diabetes Care Inc. and Abbott Diabetes Care Sales Corporation (collectively "Abbott"), as well as several other entities, asserting infringement of two recently-issued patents: United States Patent Nos. 7,276,146 ("the 146 patent") and 7,276,147 ("the 147 patent") (collectively "the patents-insuit").1 On December 14, 2007, less than one month after it was served with Roche's Complaint, and approximately two months after the patents-in-suit issued, Abbott filed two requests with the United States Patent and Trademark Office ("PTO") seeking ex parte reexamination of all the claims in the patents-in-suit.2 As of the filing date of this opening brief, none of the defendants has answered or otherwise responded to the Complaint. The Court has granted Abbott an extension of time to January 11, 2008, to file an answer or other response to the Complaint. At this time, the Court has not entered a scheduling order or set a trial date. The Court has ordered the parties to appear for a scheduling conference, pursuant to Federal Rule of Civil Procedure 16(b), on February 8, 2008, at 11:30 a.m. The parties have not yet exchanged the information required by Federal Rule of Civil Procedure 26(a)(1) and District of Delaware Local Rule 16.2, nor has any party requested or taken any discovery.
1

The other defendants are: (i) Bayer HealthCare, LLC; (ii) Diagnostics Devices, Inc.; (iii) LifeScan, Inc.; and (iv) Nova Biomedical Corp. Copies of the ex parte reexamination requests for the 146 and 147 patents accompany this brief as Exhibits A and B, respectively. -1-

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SUMMARY OF THE ARGUMENT As described above, Defendant Abbott has requested reexamination for each of the two patents-in-suit. In view of these requests, Abbott now respectfully moves this Court to stay these proceedings until the requests are either denied or until reexamination of the asserted patents is concluded.3 The Court should enter the requested stay for the following reasons: 1. The historical evidence regarding past reexaminations demonstrates that the PTO

will most likely invalidate or substantially alter the claims of the patents-in-suit. Such an outcome will likely narrow or resolve the issues in this case. 2. Abbott has made its request for a stay at the very outset of this action ­ before the

Court has entered a discovery and/or trial schedule, before the parties have taken or requested any discovery, and before the defendants have even answered or otherwise responded to the Complaint. Thus, granting the stay will conserve the maximum amount of resources that would otherwise be expended on prosecution of this action. 3. This is purely a patent infringement case. It does not involve any claims requiring

a trial that are not linked to the patent infringement claim. Plaintiff Roche will not be prejudiced by the entry of a stay pending the outcome of the two reexamination proceedings. Indeed, in prior litigation, Roche has conceded that a stay is appropriate where the patent-in-suit is involved in a reexamination proceeding.

3

Alternatively, the Court in its discretion could dismiss this case without prejudice pending the reexaminations. In order to keep the Court apprised of the status of the reexaminations, the parties could provide the Court with a status report at regular intervals. -2-

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STATEMENT OF FACTS On October 2, 2007, the PTO issued the patents-in-suit. Both patents are directed to electrodes used in an electrochemical sensor as well as methods of determining the concentration of glucose in a blood sample. The sensors which incorporate the technology described in the patents are used by diabetics to test blood sugar levels. These sensors include a disposable biosensor test strip with a capillary chamber that can hold a volume of between about 0.1 µl and about 1.0 µl of the blood sample. (Ex. A at 5-6; Ex. B at 6-7.) The method described in the patents involves applying a blood sample containing glucose into the capillary chamber. Once the blood is applied, the capillary chamber directs capillary flow of the blood into contact with a chemical reagent to cause the blood to at least partially solubilize or hydrate the reagent. The sensor then detects the blood sample in the capillary chamber. (Ex. A at 6; Ex. B at 7.) According to the patents-in-suit, blood is detected using a "drop detect" system, which senses current flow between working and counter electrodes when blood covers the nearest working and counter electrodes. The sensor can determine and provide a readout of the glucose concentration in the blood sample within 10 seconds after the blood sample is detected in the capillary chamber. More specifically, determining the glucose concentration in the blood

includes correlating the electrooxidized or electroreduced electroactive reaction product to the concentration of glucose in the blood sample. (Ex. A at 6; Ex. B at 7.) On December 14, 2007, Abbott filed two requests with the PTO seeking ex parte reexamination of all the claims in the patents-in-suit. In the reexamination request for the 146 patent, Abbott identified a prior art reference (WO 00/20626, also referred to as WO 626) that

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discloses every element of claims 1-14, 16-54, and 59-62.4 Abbott also identified the WO 626 reference in its reexamination request for the 147 patent as disclosing every element of claims 1, 3-11, 16-60, and 65-69 of that patent.5 Notably, during prosecution of both patents-in-suit, Roche repeatedly emphasized that the prior art allegedly failed to demonstrate a readout of a blood glucose concentration in less than 10 seconds. However, contrary to Roche's

representations, WO 626 does disclose a method for determining and displaying the concentration of glucose in a blood sample smaller than 1.0 µl in a time period less than 10 seconds. There is no indication that the PTO appreciated this critical disclosure during the original examination of the application for either the 146 or 147 patent. To the contrary, Roche specifically represented that this disclosure was not present in WO 626 or elsewhere in the prior art. (Ex. A at 7-12; Ex. B at 8-13.) With respect to remaining claims 15 and 55-58 of the 146 patent and remaining claims 2, 12-15, and 61-64 of the 147 patent, Abbott pointed out that the combination of WO 626 and U.S. Patent No. 6,153,069 ("the 069 patent") renders obvious the subject matter of all those claims. Specifically, the 069 patent discloses a drop-detect measurement method that would be obvious to use in combination with the method disclosed in WO 626. (Ex. A at 12; Ex. B at 13.) Thus, in its two ex parte reexamination requests, Abbott demonstrated that the prior art invalidates each and every claim of the two patents-in-suit. There is a very high probability that the PTO
4

Although Roche submitted the WO 626 prior art reference as one of 183 total references during prosecution of the 146 patent, the patent examiner apparently did not appreciate the scope of that particular reference during prosecution. During prosecution of the 147 patent, Roche submitted WO 626 as one of 267 total references. Again, the patent examiner apparently did not appreciate the scope of that reference. -4-

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will grant reexamination and cancel or amend the claims of the patents-in-suit. In fact, since 1981 5,902 ex parte reexamination certificates have been issued, and of them, claims were cancelled or amended 74% of the time.6 ARGUMENT A. The PTO's Reexamination Of The Asserted Patents Is Grounds For A Stay

By statute, the PTO provides a special procedure ­ reexamination ­ to review the validity of issued patents based upon prior art patents and printed publications. The purpose of

reexamination is to reduce the burden on an already overly burdened judiciary. See 35 U.S.C. §§ 301-307. Additionally, the PTO is bound by statute to resolve reexamination requests "with special dispatch." 35 U.S.C. § 305.7 The legislative purpose underlying the patent reexamination statute is to avoid the potentially unnecessary and wasted expenditure of resources in a concurrent district court patent infringement proceeding. PTO reexaminations offer an opportunity to resolve validity disputes more quickly and less expensively than traditional patent litigation. See Patlex Corp. v.

Mossinghoff, 758 F.2d 594, 602 (Fed. Cir. 1985) (reexamination could "could settle validity

6

A copy of the PTO's statistical data on ex parte reexaminations (as of September 2007) is provided as Exhibit C. Further, the PTO is sensitive to the urgency of a request related to patents presently in litigation. The PTO examination guidelines state: "Any cases involved in litigation, whether they are reexamination proceedings or reissue applications, will have priority over all other cases." (Manual of Patent Examining Procedure ("M.P.E.P.") § 2261 (8th ed., rev. 5, Aug. 2006) (emphasis added) (Ex. D).) In addition, where a litigation involving a patent being reexamined has been stayed, the PTO will expedite the reexamination. (M.P.E.P. § 2286 (I.) (8th ed., rev. 5, Aug. 2006) (Ex. E).) Abbott stated in its reexamination requests that the 146 and 147 patents are involved in this litigation. -5-

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disputes more quickly and less expensively than the often protracted litigation involved in such cases"), rev'd in non-pertinent part, 771 F.2d 480 (Fed. Cir. 1985); see also Canady v. Erbe Elektromedizin GmbH, 271 F. Supp. 2d 64, 78 (D.D.C. 2002) (finding that Congress specifically "instituted the reexamination process to shift the burden o[f] reexamination of patent validity from the courts to the PTO."). Consistent with the legislative purpose of avoiding expense and wasted resources, courts have recognized "a liberal policy in favor of granting motions to stay proceedings pending the outcome of USPTO reexamination . . . proceedings." ASCII Corp. v. STD Entm't USA, Inc., 844 F. Supp. 1378, 1381 (N.D. Cal. 1994); see also Guthy-Renker Fitness L.L.C. v. Icon Health & Fitness Inc., 48 U.S.P.Q.2d 1058 (C.D. Cal. 1998) ("There is a liberal policy in favor of granting motions to stay proceedings pending the outcome of reexamination proceedings."); GPAC Inc. v. D.W.W. Enters. Inc., 23 U.S.P.Q.2d 1129, 1131 (D.N.J. 1992) ("Congress noted its approval of district courts liberally granting stays . . . ."); Lentek Int'l, Inc. v. Sharper Image Corp., 169 F. Supp. 2d 1360, 1362 (M.D. Fla. 2001) ("[T]he sponsors of the patent reexamination legislation clearly favored the liberal grant of stays by the district courts when patents are submitted for reexamination as a mechanism for settling disputes quickly and less expensively and for providing the district courts with the expertise of the patent office."). Moreover, the Federal Circuit has affirmed district court decisions to stay further proceedings pending the PTO's reexamination of patents. See, e.g., Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) ("Courts have inherent power to manage their dockets and stay proceedings . . . , including the authority to order a stay pending a conclusion of PTO

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reexamination."); Patlex, 758 F.2d at 606 ("The stay of pending litigation to enable PTO review of contested patents was one of the specified purposes of the reexamination legislation."). Indeed, many courts have issued stay orders, like the one requested here, before the PTO has granted the request for reexamination. See, e.g., Robert H. Harris Co. v. Metal Mfg. Co., No. J-C-90-179, 1991 U.S. Dist. LEXIS 16086, at **5-10 (E.D. Ark. June 20, 1991) (stay issued pending the PTO's response to a reexamination request); Essex Group, Inc. v. Southwire Co., No. C-85-1923-A, 1986 U.S. Dist. LEXIS 29761, at *3 (N.D. Ga. Jan. 31, 1986) (same). B. Traditional Factors All Greatly Favor Granting A Stay

The decision to grant a stay is within the district court's broad range of discretionary powers. See Dentsply Int'l, Inc. v. Kerr Mfg. Co., 734 F. Supp. 656, 658 (D. Del. 1990). In weighing the competing interests of the parties and attempting to maintain an even balance, courts generally evaluate a number of factors, including: (1) whether a stay will simplify the issues raised by the parties; (2) whether discovery is complete and a trial date has been set; and (3) whether a stay would unduly prejudice or present a clear tactical disadvantage to the nonmovant. See Alloc, Inc. v. Unilin Décor N.V., No. 03-253-GMS, 2003 U.S. Dist. LEXIS 11917, at *5 (D. Del. July 11, 2003) (granting motion for stay); United Sweetener USA, Inc. v. Nutrasweet Co., 766 F. Supp. 212, 217 (D. Del. 1991) (granting motion for stay). As explained below, all of the factors traditionally considered in deciding a motion to stay weigh greatly in favor of granting Abbott's request.

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1.

A Stay Will Narrow The Issues And Conserve Judicial Resources

A stay in this case will likely eliminate and/or narrow the issues the parties may need to litigate as well as conserve judicial resources because: (1) a reexamination proceeding can eliminate one or more issues for trial when a patent claim is cancelled or amended; and (2) even if a claim remains asserted, the Court and the parties can benefit both from the view of the PTO as to that claim and because pretrial preparation and discovery efforts will not have been wasted on patented subject matter that did not survive reexamination. First, one benefit of the reexamination process is the elimination of issues for fact discovery, expert discovery, dispositive motions, and trial when a patent claim is cancelled or amended. According to PTO statistics, the PTO grants reexamination requests about 92% of the time. (See Ex. C at ¶ 5a.) Further, in at least 74% of situations where reexamination is granted and a reexamination certificate is issued, the PTO cancels or amends the claims. (Id. at ¶ 9.) In about 10% of reexamination proceedings, all of the claims of a patent are cancelled. (Id. at ¶ 9b.) Abbott has provided the PTO with substantial prior art evidence that it believes entirely invalidates Roche's patents. Given that a skilled patent examiner will review that prior art, consider the reasons presented by Abbott for why the patent claims are not patentable over that prior art, and make determinations as to the validity of Roche's patent claims, it would be wasteful to engage in duplicative proceedings before this Court. If this case is stayed and the claims of the Roche patents-in-suit are cancelled or amended during reexamination, then this lawsuit will likely become moot, thus conserving extensive resources of the Court and the parties.

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Second, even if some patent claims survive the reexamination process and litigation proceeds, the record of the reexamination proceedings will be relevant to and assist the Court and jury in resolving the case, particularly where highly technical subject matter is at issue. The trial can be facilitated by having the focused view of the PTO as to that claim. See Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir. 1983). Additionally, a stay pending reexamination contributes to narrowing the issues and streamlining the litigation process (if it proceeds) in numerous ways: (1) many discovery problems relating to the prior art may be alleviated; (2) the record of the reexamination likely would be entered at trial, reducing complexity and length of the litigation; (3) the issues, defenses, and evidence will be more easily limited in pre-trial conferences following a reexamination; (4) the outcome of the reexamination process may encourage a settlement without further involvement of the court; and (5) if the patent is declared invalid, the suit likely will be dismissed as to that patent. These efficiencies will result in a reduced cost of litigation for the parties and more effective utilization of the limited resources of the court. Pegasus Dev. Corp. v. DirecTV, Inc., No. 00-1020-GMS, 2003 U.S. Dist. LEXIS 8052, at **5-6 (D. Del. May 14, 2003) (internal citations omitted); see also Tap Pharm. Prods. Inc. v. Atrix Labs., Inc., 70 U.S.P.Q.2d 1319, 1320 (N.D. Ill. 2004) (granting stay and noting "a very real possibility that the parties will waste their resources litigating over issues that will ultimately be rendered moot by the PTO's findings."). For example, if this Court were to hold a claim construction hearing before the resolution of the reexaminations, the Court would have to construe as many as 131 patent claims while the scope of those claims was at issue in the PTO. These claims include numerous elements involving detailed steps of a process for determining blood glucose levels using an electrochemical sensor. If any claims are cancelled or amended, the time and effort invested by -9-

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both the Court and the parties in such a claim construction process would be either moot or would have to be repeated with respect to any amended claims. Courts have recognized that it is inefficient for a district court to expend time and resources conducting claim interpretation while the scope of the claims at issue is still under review at the PTO. See Vitronics Corp. v. Conceptronic, Inc., 36 F. Supp. 2d 440, 442 (D.N.H. 1997). Thus, it is in both the Court's and the parties' interest to stay this litigation pending the outcome of the PTO's reexamination to eliminate and/or narrow the issues while conserving judicial resources. 2. The Early Stage Of This Proceeding Strongly Supports Granting The Stay During Reexamination

The fact that this lawsuit is in its earliest stages is another factor that weighs heavily in favor of staying this case. Indeed, district courts routinely grant stays deferring to PTO

reexamination when there has been no discovery taken and no trial date set. See, e.g., Tap Pharm., 70 U.S.P.Q.2d at 1320 (staying litigation pending reexamination because litigation was at an "early stage"); Alloc, 2003 U.S. Dist. LEXIS 11917, at *8 (staying litigation pending reexamination in part because discovery had not yet begun and the court had not set a trial date); Guthy-Renker, 48 U.S.P.Q.2d at 1060 ("First, this case is in its incipient stages."); ASCII, 844 F. Supp. at 1381 (stay granted in part because "the parties are in the initial stages of the lawsuit and have undertaken little or no discovery. Moreover, the case has not been set for trial."). A stay granted at an early stage of a case, like the one requested here, conserves the maximum amount of resources: Pausing for a stay, at this point, is more advantageous than a later respite because the issues may be narrowed before discovery begins, allowing the parties to - 10 -

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curtail their discovery activities. Requesting a stay early also decreases the likelihood of prejudice to the nonmoving party. Sabert Corp. v. Waddington N. Am., Inc., No. 06-5423 (JAG), 2007 U.S. Dist. LEXIS 68092, at *21 (D.N.J. Sept. 14, 2007). A stay is particularly appropriate for this matter since it is unquestionably at its earliest stage in the proceedings ­ the parties have not even completed their initial pleadings. To date, no party has served discovery requests, produced any documents, or taken (or even requested) any depositions. The Court has not yet set a schedule or trial date, and has not had even a single case management conference. As in most complex patent cases, a large portion of the trial evidence is likely to involve experts on numerous technical and economic issues, requiring the parties to invest significant amounts of time and resources to prepare for trial. There is no escaping the reality that a trial in this case will be lengthy and costly, and will likely consume considerable federal resources. To the extent that the PTO's actions will limit or eliminate the parties' and/or the Court's need to address any of the issues currently implicated by the allegations of the Complaint, a stay will undoubtedly conserve valuable time and resources. Moreover, given the early stages of this lawsuit and the recent issuance of the patents-insuit, the Court should have no serious concern that an abuse or manipulation of the reexamination process may be occurring in an attempt to delay an impending trial. Under these circumstances, deferring to the PTO's reexamination of the patents-in-suit provides the best opportunity to take advantage of the expertise and cost efficiencies for which the reexamination procedure was created. On the other hand, charging ahead with a lengthy, complex and

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expensive patent infringement lawsuit, when there are significant questions regarding patentability of the claimed technology, is not in the best interest of justice. 3. A Stay Will Not Prejudice Roche

Roche will not suffer any prejudice, let alone undue prejudice, if a stay is granted in this matter. The patents-in-suit issued very recently ­ on October 2, 2007 ­ and Abbott filed both requests for reexamination on December 14, 2007. As stated above, PTO reexaminations are conducted with "special dispatch," and the PTO gives further priority to patents involved in litigation. Once the PTO grants the reexamination request, it proceeds expeditiously and without delay. (Ex. D, MPEP § 2261; Ex. E, MPEP § 2286 (I.); Ex. F at 2-3.) Granting the requested stay of this litigation does not provide an unfair, tactical advantage to Abbott or the other named defendants. Abbott filed the requests for reexamination as early as practicable following the issuance of the patents-in-suit and after being served with the Complaint in this action. There has been no unreasonable or undue delay. See KLA-Tencor Corp. v. Nanometrics, Inc., No. C 05-03116 JSW, 2006 U.S. Dist. LEXIS 15754, at **8-9 (N.D. Cal. Mar. 16, 2006) (party moving for stay did not engage in dilatory tactics where requests for reexamination and motion for stay were filed within one to three months of patents being asserted); Target Therapeutics Inc. v. SciMed Life Systems Inc., 33 U.S.P.Q.2d 2022, 2023 (N.D. Cal. 1995) (no delay where party moved for stay within two months of case filing). A stay cannot cause Roche undue prejudice when it has not invested substantial expense and time in the litigation. See Sabert, 2007 U.S. Dist. LEXIS 68092, at *21. Indeed, in prior litigation, Roche has conceded that a stay is appropriate where the patent-in-suit is involved in a reexamination proceeding. (Ex. F.) - 12 -

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In addition, the limited delay inherent to the reexamination process cannot, by itself, constitute undue prejudice to Roche. "[P]arties having protection under the patent statutory framework may not `complain of the rights afforded to others by that same statutory framework.'" KLA-Tencor, 2006 U.S. Dist. LEXIS 15754, at *7 (quoting Pegasus, 2003 U.S. Dist. LEXIS 8052, at *8). Abbott is "legally entitled to invoke the reexamination process," and its exercise of that entitlement does not, in this case, prejudice Roche. See id. The public will also benefit if this litigation is stayed to allow the PTO's reexamination to run its course. By deferring to the PTO and permitting it to reconsider its patentability

determination in view of prior art the examiner did not specifically consider during prosecution, the Court will strengthen the public's respect for the patent system by allowing the PTO to correct its earlier error in granting the Roche patents. The Supreme Court has long recognized the substantial public interest in challenging invalid patents. See, e.g., Lear, Inc. v. Adkins, 395 U.S. 653, 670 (1969) (describing "the important public interest in permitting full and free competition in the use of ideas which are in reality a part of the public domain").

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