United States District Court, W.D. Wisconsin
OPINION AND ORDER
WILLIAM M. CONLEY DISTRICT JUDGE.
Sierra Pacific Industries filed suit alleging that the
VistaLuxe® Collection of windows and doors infringes U.S.
Patent No. 8, 561, 365 (the “'365 patent”).
(Compl. (dkt. #1) ¶ 1.) Defendant-counterclaimant Kolbe
& Kolbe Millwork Co., Inc. filed an expedited motion to
stay the litigation because it sought inter partes
review of the patent-in-suit. (Expedited Mot. Stay (dkt.
#20).) Specifically, Kolbe argues that all relevant factors
weigh in favor of a stay and requests that the court: (1)
immediately stay the litigation pending a decision from the
Patent Office on whether to institute inter partes
review; and (2) continue the stay if the Patent Office
chooses to institute review. (Id. at 1.)
Pacific “largely agrees that the factors . . . favor a
stay in the present case, with one exception.” (Resp.
(dkt. #22) 1.) Specifically, Sierra Pacific contends that
an immediate stay should . . . be conditioned on Kolbe
agreeing that, should Kolbe's Petition for Inter
Partes Review of the patent in suit be denied, Kolbe
should be estopped from challenging validity on the grounds
asserted and the grounds that could have been asserted in an
inter partes review proceeding.
(Id.) In reply, Kolbe opposed this condition arguing
that it “should not be pressed to forego due process in
exchange for what amounts to a six-month stay pending an
institution decision, ” since it will not be fully
heard during the petition stage. (Reply (dkt. #24) 2, 4.)
Kolbe also notes that the Patent Office can decline to
institute inter partes review “for reasons
other than meeting the burden to show a reasonable likelihood
that at least one claim is invalid.” (Id. at 5
(citing Deeper, UAB v. Vexilar, Inc., IPR2018-01310,
Paper 7 (Jan. 24, 2019)).)
parties recognize, there are four factors the court considers
in analyzing the appropriateness of a stay:
(1) whether the litigation is at an early stage; (2) whether
a stay will unduly prejudice or tactically disadvantage the
non-moving party; (3) whether a stay will simplify the issues
in question and streamline the trial; and (4) whether a stay
will reduce the burden of litigation on the parties and on
SCA Hygiene Prods. Aktiebolag v. Cascades Canada,
ULC, No. 17-cv-282-wmc, 2017 WL 4484495, at *2 (W.D.
Wis. Oct. 6, 2017) (quoting Grice Eng'g, Inc. v. JG
Innovations, Inc., 691 F.Supp.2d 915, 920 (W.D. Wis.
2010)). In this case, there can be no dispute that litigation
is still in the early stages: plaintiff filed this case in
mid-October 2018; the bulk of discovery -- both fact and
expert -- has yet to occur; the parties have not exchanged
their proposed claim constructions; and the present deadline
for dispositive motions is January 2020.
the other factors, Kolbe contends that they all favor a stay:
(1) the delay alone is not prejudicial, particularly in light
of Sierra Pacific's approximately five-year delay in
bringing suit and the large number of other competitors in
the marketplace (Expedited Mot. Stay (dkt. #20) 12-15); (2)
if granted, inter partes review would likely
simplify or moot issues in the litigation, both because Kolbe
requested review of all claims in the '365 patent
and in the vast majority of reviews, the Patent
Office invalidates some or all challenged claims
(id. at 8-11); and (3) continuing the case while
inter partes review proceeded would risk the court
“expend[ing] significant time and resources addressing
issues and claims that could . . . be rendered moot by an IPR
decision” (id. at 11-12).
other hand, Sierra Pacific contends that these factors depend
in substantial part on “whether Kolbe's IPR
petition will eliminate validity issues.” (Resp. (dkt.
#22) 2.) Specifically, Sierra Pacific concedes that a final
written decision “could narrow the issues and reduce
the burdens of litigating invalidity in court, ” but
notes that such a decision would only result if the Patent
Trial and Appeal Board first grants the request for
inter partes review, a decision both sides agree is
not likely to occur until October 2019. (Id.).
Accordingly, Sierra Pacific argues that Kolbe's request
to stay litigation now is premature, and any unconditioned
stay should wait until after PTAB agrees to
institute inter partes review. (See Id. at
Sierra Pacific contends that entering an unconditioned stay
at this point would give Kolbe “the tactical advantage
of a six-month delay in the lawsuit based on the mere filing
of an untested petition that turns out to be
unmeritorious” and a second opportunity to
present invalidity arguments that failed under a lower burden
of proof. (Id. at 4.) Alternatively, if Kolbe were
to agree to be bound by PTAB's decision not to
institute inter partes review, and thereby be
estopped from challenging the patent-in-suit on the grounds
raised (or those that could have been raised), Sierra Pacific
explains that would simplify the issues, reduce the burden of
litigation, and prevent undue prejudice from befalling Sierra
Pacific. (Id. at 3-4.) Kolbe argues that this would
amount to being forced to acquiesce to estoppel and the
forfeiture of its due process rights before the Patent
Office. (Reply (dkt. #24) 4.)
granting a stay in SCA Hygiene, this court has
generally denied requests to stay litigation until the Patent
Office has agreed to institute inter partes review
for a variety of reasons. First, allowing a stay
without any consequence to a party requesting
inter partes review has the risk of encouraging
frivolous or near frivolous petitions to the Patent Office --
essentially offering defendants two kicks at the cat.
Second, whatever merit defendant may have in its
argument about not waiving “due process right to a full
hearing” is offset by the fact it has those rights
before this court already if it withdraws the petition to the
Patent Office. Likewise, plaintiff is correct that a grant of
review by the Patent Office requires defendant to clear a
lower bar than it would need to clear before this court.
Third, a stay may not substantially simplify the
issues or reduce the litigation burden because the Patent
Office may decline to institute review or grant such a narrow
review that a trial will be necessary regardless of the
outcome. See Ultratec, Inc. v. Sorenson Commc'ns,
Inc., No. 13-cv-346-bbc, 2013 WL 6044407, at *3 (W.D.
Wis. Nov. 14, 2013) (“[T]he fact that the Patent Office
has not yet granted the petitions to review the nine patents
adds an additional layer of doubt whether the inter
partes review will even occur, let alone whether it will
simplify the issues or reduce the burden of litigation for
the parties or the court.” (internal citations
omitted)). Fourth, even if the Patent Office
institutes review, “it is not clear that the inter
partes review would address the issues that will be
determinative in this case” because “validity is
only one of many issues that may be raised in a patent
case.” Id. at *4 (citations omitted).
Fifth, a stay at this point is not warranted because
of the short period of time between now and the Patent
Office's decision whether to institute review.
parties acknowledge, the Patent Office has until October to
decide whether to institute inter partes review.
(Expedited Mot. Stay (dkt. #20) 2; Resp. (dkt. #22) 2.)
Continuing to litigate for approximately the next six months
will not prejudice either side, and doing so will keep this
case on track should the Patent Office decline to institute
review. Moreover, the court sees no meaningful risk that it
will “expend significant time and resources” on
this case. If Kolbe is concerned the parties will
unnecessarily expend resources because a ...