This train don't stop until the close of fact discovery (... unless the Court stops it)Jed Dela Cruz, Unsplash
The Court issued an oral order in airSlate, Inc. v. Inkit, Inc., C.A. No. 23-1307-RGA-SRF (D. Del.) yesterday, and it's a good reminder of a general rule that frequent D. Del. practitioners already know: once discovery starts, it generally proceeds even while a Rule 12 motion is pending.
The Court's order yesterday described how the defendant in airSlate had objected to producing its source code solely on the basis that a Rule 12 motion for judgment on the pleadings was pending:
Defendant agreed to produce source code in its response to Request for Production …
Before you get too excited, defendants, this case involved a scheduling order using Judge Connolly's form, which provides only a single round of infringement and invalidity contentions, and explicitly requires good cause to amend.
Most District of Delaware scheduling orders include two rounds of contentions (initial and final), with the second round typically coming around the close of fact discovery. It is unlikely to be as difficult to amend in cases like those.
Regardless, I thought this was an interesting result worthy of a post. In Cognipower LLC v. Fantasia Trading, LLC, C.A. No. 19-2293-JLH-SRF (D. Del.), the Court stayed the case …
As we've noted in the past, it's fairly routine to stay cases once an IPR is instituted. But the Court has at least once denied a stipulated stay where the IPRs were not yet instituted.
Last week the visiting Judge Choe-Groves denied a stipulated stay where the PTAB had instituted an IPR for two out of three patents-in-suit—leaving one patent not subject to an IPR, as the parties explained in the stip:
WHEREAS, Teladoc filed three petitions for inter partes review (“IPR”) (Nos. IPR2024-00618, IPR2024-00616; and IPR2024-00617) of the Asserted Patents;
WHEREAS, the Patent Trial and Appeal Board (“PTAB”) instituted IPRs on the ’554 and ’142 Patents on September 16, 2024 and September 17, 2024; …
Visiting Judge Murphy decided a stay motion in a patent action yesterday, and included language that could be helpful to any patent plaintiffs who are opposing an early stay.
In Ignite Enterprise Software Solutions, LLC v. NGData, US Inc., C.A. No. 23-1209 (D. Del.), the defendant moved for a 30-day stay after its lead counsel suffered a head injury in a car accident.
The Court moved shockingly fast (for a busy Court), requesting that the plaintiff respond within two days, and then ruling on the motion the same day the plaintiff responded—just two days after the initial paper.
The Court denied the stay due to prejudice to the patentee:
Writing this blog, I sometimes feel like an especially jaded film critic. Having seen so much, I can no longer get a thrill from from a well-constructed plot and competent acting. I can only be excited by Croatian claymation about murderous cetaceans, or a silent black and white documentary about a cat who eats figs.
All this is that I love a novel theory, and by Jove I've got one for you today.
In Samsung Elecs. Co., Ltd. v. Technical Consumer Prods., Inc., C.A. No. 23-186-JNR (D. Del. May 2, 2024), Samsung sued both the overseas manufacturer and seller of allegedly infringing products in one action. The seller moved to sever and stay the claims against it under the "customer suit" exception, arguing that the manufacturer was the "true defendant," while its role was "merely peripheral."
This was a bit odd, because the customer suit exception normally applies to cases where the actions are proceeding in different venues:
[C]ustomer-suit exception cases “typically arise” in the context of forum-shopping, “when related patent infringement actions are pending in different jurisdictions[.]” Basically, courts have concluded that the normal first-filed priority will give way when a suit against the re-seller was the first one filed. . . .Though courts have applied the exception when the manufacturer and re-seller are defendants in the same suit, they still do so with principles of forum selection in mind. For example, the customer-suit exception would apply if it would mean staying the case as to the re-seller to then transfer the case to a different and more appropriate venue for the lawsuit against the manufacturer.
Id. at 2-3 (internal citations omitted).
Judge Ranjan denied the motion, finding that the customer-suit exception did not provide a "general exception to a lawsuit against a manufacturer and re-seller":
The circumstances of this case don’t concern dueling lawsuits or forum selection issues, as there are no separate competing lawsuits, and no Defendant has contested venue or jurisdiction or would seek transfer to a different venue. Moreover, HGC and TCP are represented by the same counsel, so the inefficiencies created by forcing a “true defendant” and an unrelated “peripheral defendant,” such as one among many customers of the “true defendant,” to litigate together are absent here. In short, HGC hasn’t proffered a reason for the Court to grant its motion that furthers the spirit of the customer-suit exception.
Id. at 3.
Well it was a nice try anyway. The whole opinion is worth a read and goes into greater depth on the efficiencies that might be gained or lost by severance in similar situations.
Motions to stay are common as dirt, and about as interesting.
The factors are exactly what you expect them to be, and the Court has broad discretion to apply them. Most of these motions could be reduced to a checklist:
Where IPRs are concerned, post-institution stays are fairly routine. But there are also instances where cases are not stayed, and it can lead to surprising results. For example, we talked last year about a case where where a defendant won on invalidity in an IPR, but had to proceed to trial anyway—and faced estoppel on their prior art.
We saw an order in a somewhat similar category this week, when Judge Williams denied a post-trial motion to stay following the invalidation of the asserted claims by the PTO in an ex parte reexamination:
ORAL ORDER: Having reviewed the Joint Status Report, D.I. 1856, filed by the parties on October 23, 2023, the Court …
I'm not sure if "Ddrops" stands for "dew drops." But this is a nice picture regardless.Aaron Burden, Unsplash
We've talked about how pre-institution stays can be tough (but not impossible) to achieve, and about how Judge Burke has sometimes responded to a pre-institution motion to stay by asking for a status report and abbreviated briefing after the institution decision:
Therefore, no later than five business days after the PTAB rules on whether it will institute IPR as to the last of the petitions at issue, the parties shall provide the Court with a status report of no more than two single-spaced pages, indicating the outcome of the petitions and whether Defendant wishes to renew its Motion. If Defendant does wish to renew the Motion then, the Court will set a further (truncated) briefing schedule.
eBuddy Technologies B.V. v. LinkedIn Corporation, C.A. No. 20-1501-RGA-CJB, D.I. 108 (D. Del. Mar. 4, 2022) (Burke, J.).
Last week, Judge Williams adopted a similar view, denying a pre-institution motion to stay but offering to revisit the issue after the institution decision—and to take the previous briefing into account:
ORAL ORDER: Having reviewed Defendant MOM Enterprises, LLC's ("MOM") Motion to Stay Pending Inter Partes Review ("IPR") . . . , IT IS HEREBY ORDERED that the Motion is DENIED WITHOUT PREJUDICE to renew the request if the IPR is instituted. A court has discretionary authority to grant a motion to stay. . . . Because no institution decision has yet been issued, the Court will decline to stay the case until it hears from the PTAB. . . . By no later than five (5) business days after the PTAB issues its institution decision as to the IPR petition relating to the asserted patent, the parties shall file a joint letter updating the Court on the results of the PTAB's decision. If the PTAB grants the IPR petition, and if MOM then wishes to renew its Motion, MOM should include in the joint letter a statement that it intends to renew its Motion. The Court will then set a letter briefing schedule on the renewed Motion. When reviewing the renewed Motion, the Court will take into account the briefs already filed as to the instant Motion. ORDERED by Judge Gregory B. Williams on 8/25/2023.
Ddrops Company v. MOM Enterprises, LLC, C.A. No. 22-332-GBW, D.I. 108 (D. Del. Aug. 25, 2023). This mirrors Judge Burke's previous order, although Judge Williams' order doesn't state whether the later briefing will be truncated—that may depend on the circumstances.
Judge Williams' practice is useful to know because, obviously, it affects the calculus of whether it is worthwhile to bring a pre-institution stay motion at all.
We wrote last week about how Judge Andrews—somewhat surprisingly—declined to lift a stay after the PTAB left just 4 of 83 patents standing, and invalidated the rest.
After that decision, the parties filed a series of letters that clarified that the plaintiff had intended to proceed only on the four valid patents, not the rest, but wanted to check with the Court regarding how they should proceed:
[Plaintiff] Cytiva understood that the litigation would proceed only with regard to the four claims that the PTAB upheld as valid, and until JSR’s submission, was not aware that JSR had a contrary view. Cytiva had no intention, and has no intention, …
On Friday, Judge Andrews addressed what happens when an IPR results in just 4 valid claims—and 79 invalid ones:
ORAL ORDER: I read the letters about lifting the stay. . . . The parties agreed to a stay through PTAB resolution of the IPRs. (D.I. 66 ). The PTAB resolution determined seventy-nine claims unpatentable and four patentable. Both sides have appealed. It does not make much sense to go forward with the overwhelming number of asserted claims likely invalid. I think it is probable that there will be a final decision from the Court of Appeals within a reasonable amount of time. That decision will, one way or another, greatly simplify this case. The …
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