Decision On Whether To Re-Open 01-Citrix Patent Case Could Be Near

An Ohio judge could decide as early as this week whether to lift the stay in the 01 Communique Laboratory Inc. (ONE.T)-Citrix Systems Inc. (CTXS) patent dispute.

If judge Sara Lioi re-opens the case, which has been on hold for 2.5 years, 01 could be in line for a windfall that reaches into the hundreds of millions if it prevails. If it loses, it could end up with nothing. As well, if the stay is upheld for another prolonged period, 01's stock could retreat.

Lioi has scheduled a telephone conference with lawyers for both parties on Wednesday. The reason for the call wasn't provided, but the judge is likely to consider 01's request to re-open the case. "It's very common for a judge to do this type of call when considering lifting a stay," said John Rabena, a patent lawyer at Sughrue Mion PLLC. Rabena is not involved in the case.

Officials from Citrix weren't immediately available, while officials from 01 declined to comment.

01, a tiny Toronto software company, alleges Citrix's "GoToMyPC" product infringes on patented technology in 01's "I'm In Touch" product. The products allow users remote access to their personal computers. The suit was filed in 2006 in a U.S. District Court in Ohio.

In March 2008, just weeks before the trial was scheduled to begin, judge Ann Aldrich stayed the case pending the outcome of the U.S. Patent and Trademark Office's re-examination of the disputed patent. Aldrich passed away in May.

In July 2010, the USPTO reaffirmed the patent, prompting 01's request to re-open the case and leading to a surge in 01's stock. The stock is up eight-fold this year, to C$1.58 in Toronto on Tuesday.

Citrix has appealed the USPTO ruling and it has asked the court to maintain the stay until the appeal is complete. An appeal to the USPTO's Board of Patent Appeals and Interferences can take two years, Rabena said. Even then, the re-examination may not be complete, as the board's decision can be appealed to the U.S. Court of Appeals for the Federal Circuit, adding more years to the process, he said.

Judge Lioi will have to decide whether another multi-year delay is warranted. She could base her decision on Wednesday's phone conference or hold a hearing on the matter before rendering a decision, Rabena said. "Just because it's been decided once, doesn't mean this new judge can't undo that decision," he said.

In its August court filing, Citrix, which makes computer network products and has a market cap of nearly US$11 billion, hinted at its next moves if the stay is lifted. For instance, it said "substantial additional work," including a new round of discovery and a reconsideration of the claims in the disputed patent, would be required before the case could proceed to trial.

If the judge lifts the stay and sets a trial date, the pressure on Citrix to settle could increase. That's because at a key 2007 hearing, the court upheld 01's interpretation of 19 out of 20 claims in the disputed patent. In addition, because the the USPTO reaffirmed 01's patent, it will be difficult for Citrix to argue at trial that the patent is invalid.

Company Web Site: http://www.01com.com

-By Stuart Weinberg; Dow Jones Newswires; 416-306-2026;

stuart.weinberg@dowjones.com

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