Maryland Court Denies Patentee's Use at Trial of Favorable Reexamination Results

          In IA Labs v. Nintendo, the U.S. District Court for the District of Maryland granted Nintendo’s motion to exclude evidence at trial pertaining to the outcome of a reexamination proceeding involving one of IA Labs' patents. In doing so, the district court agreed with Nintendo that evidence related to IA Labs’ reexamination proceedings would have little or no probative value and could be prejudicial in front of a jury. Moreover, the district court found that Nintendo was not judicially estopped from arguing that the reexamination determinations were not probative evidence even though Nintendo’s litigation counsel had previously lauded the expertise of the U.S. Patent Office.

          IA Labs, LLC, based in Potomac, MD, sued Nintendo in April 2010 in the U.S. District Court for the District of Maryland alleging infringement of U.S. Patent Nos. 7,121,982 and 7,331,226. In its complaint, IA Labs alleged that Nintendo’s “Wii Fit” and related game consoles and other products infringed those patents. 

          In November 2010, Nintendo initiated an inter partes reexamination of the ‘982 patent, raising 11 alleged substantial new questions of patentability. The Patent Office agreed that there were questions of patentability, and ordered the reexamination.  On April 11, 2011, after receiving the patent owner’s and Nintendo’s arguments and evidence, the Patent Office confirmed the patentability of the claims of the ‘982 patent. Nintendo appealed, which is now pending.

          On January 9, 2012, Nintendo filed a motion under Local Rule 107.6 to exclude from trial any evidence of the reexamination of the ‘982 patent. Rule 107.6 states that counsel are under an obligation to anticipate evidentiary objections and, whenever possible, bring them to the attention of the Court before they are formally asserted so that they can be resolved when the jurors are not present. 

          In its motion, Nintendo asserted that IA Labs intends to introduce evidence to the jury regarding the Patent Office’s reexamination determination to support its argument that the ‘982 patent is valid. Nintendo argued that the non-final determination was not probative and would mislead the jury, and that the Examiner’s comments during the reexamination were inadmissible hearsay. In response, IA Labs argued that Nintendo had previously lauded the expertise of the Patent Office and the importance of the reexamination process, and therefore should be estopped from arguing that the evidence lacked “trustworthiness” merely because the reexamination was not final.

          The District Court disagreed with IA Labs, noting that judicial estoppel was not appropriate, and finding Nintendo’s position in seeking to exclude the reexamination evidence was not clearly inconsistent with early statements by its counsel touting the experience of the Patent Office. As for the probative value and potential prejudice of such evidence, the District Court followed the majority of courts who have found reexamination evidence to have little relevance to the jury’s independent deliberations on the factual issues underlying the question of obviousness and the risk of jury confusion is high. Presenting the jury with the reexamination document entitled “Action Closing Prosecution” issued by the Patent Office, would, the District Court stated, run an unnecessary risk that jurors would accord undue weight to what appears to be a final documents and might improperly defer to the Patent Office’s initial determination (the District Court did not substantively address the hearsay argument).

          The District Court ordered that evidence related to the reexamination of the ‘982 patent be excluded under Fed. Rules Evidence 402 and 403.

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