United States District Court, E.D. Wisconsin
STADTMUELLER U.S. DISTRICT JUDGE.
November 26, 2018, Plaintiff Russo Trading Company, Inc.
(“Russo”) filed this lawsuit claiming
infringement of claims 6 and 7 of United States Patent No. 9,
279, 259 (the “'259 Patent”). See
(Docket #1). On March 8, 2019, the parties filed a joint
motion to stay all proceedings in this case. (Docket #22).
Their motion indicates that on March 1, 2019, Defendant
Donnelly Distribution LLC (“Donnelly”) filed a
petition for inter partes review (“IPR”)
with the Patent Trial and Appeal Board (“PTAB”)
seeking invalidation of the patent claims on which this
infringement action is based. Id. The parties seek a
stay of this case while the PTAB considers Donnelly's IPR
place this request in context, the Court first outlines the
probable timeline for resolution of Donnelly's IPR
petition. When such a petition is filed, the patent owner, in
this case Russo, has three months from “the date of a
notice indicating that the request to institute an inter
partes review has been granted a filing date” to
file a preliminary response. 37 C.F.R. § 42.107(b). The
date of that notice in this case was March 8, 2019,
see (Docket #23-6), meaning Russo's preliminary
response is due in early June 2019. Although there is an
avenue for the patent owner to expedite the proceeding-by
filing an election to waive its preliminary response-there is
no provision for extending the deadline. See id.
the deadline for the PTAB to determine whether to institute
an IPR is three months after the patent owner's
preliminary response to the petition is due. 35 U.S.C. §
314(b). Therefore, the latest date on which the parties in
this case could expect a decision on Donnell's IPR
petition is early September 2019.
Court has authority, and broad discretion, to stay a case
pending inter partes review before the PTAB.
See, e.g., Procter & Gamble Co. v. Kraft Foods
Global, Inc., 549 F.3d 842, 848-49 (Fed. Cir. 2008)
(citing 35 U.S.C. § 318). District courts typically
analyze a request for a stay under a three-factor test:
“(i) whether a stay would unduly prejudice or present a
clear tactical disadvantage to the non-moving party; (ii)
whether a stay will simplify the issues in question and trial
of the case; and (iii) whether discovery is complete and
whether a trial date has been set.” Murata Mach.
USA v. Daifuku Co., Ltd., 830 F.3d 1357, 1361 (Fed. Cir.
2016) (internal quotations and citation omitted).
Court has the “discretionary prerogative to balance
considerations beyond those captured by the three-factor stay
test. The burden litigation places on the court and the
parties when IPR proceedings loom is one such consideration
that district courts may rightfully choose to weigh.”
Id. at 1362. A stay of patent litigation is
“particularly justified when the outcome of a PTO
proceeding is likely to assist the court in determining
patent validity or eliminate the need to try infringement
issues.” Intellectual Ventures II LLC v. BITCO Gen.
Ins. Corp., 2016 WL 4394485, *2 (E.D. Tex. May 12, 2016)
(internal quotations and citation omitted).
Simplification of Issues
strongest factor weighing in favor of a stay in this case is
the potential for significant simplification of the issues.
The IPR asserts that claims 6 and 7 of the ‘259 patent
are unpatentable. See (Docket #23-1). Those are the
precise claims being challenged in this lawsuit. If the PTAB
cancels claims 6 and 7, there will be no issue to try in this
case. If the PTAB finds claims 6 and 7 valid, Donnelly will
be estopped from raising prior art invalidity arguments that
could have been raised in the IPR. 35 U.S.C. §
315(e)(2). Finally, the PTAB's claim construction rulings
would inform the analysis required of the Court in this case,
should it continue. See 37 C.F.R. § 42.100(b)
(in a IPR proceeding, “a claim of a patent . . . shall
be construed using the same claim construction standard that
would be used to construe the claim in a civil action under
35 U.S.C. § 282(b).”).
Lack of Prejudice
parties agree that a stay would be beneficial. Russo, the
non-moving party, has jointly requested the stay and has
indicated that it will not suffer prejudice if the stay is
granted. The Court has not independently identified any
reason why a stay would prejudice either party. Therefore,
this factor weighs in favor of the stay.