Motion to Stay Pending Inter Partes Review Denied Where Inter Partes Petition Did Not Challenge Two of the Asserted Independent Claims of the Patent-in-Suit

by Jeffer Mangels Butler & Mitchell LLP

Otto Bock HealthCare LP ("Otto Bock") filed a patent infringement against Defendants Össur hf and Össur Americas, Inc. (together, "Össur"). Otto Bock alleged that a number of Össur's infringed four claims of United States Patent No. 6,726,726 (the " '726 Patent"). Otto Bock moved for a preliminary injunction, seeking to enjoin Össur from infringing the '726 Patent, and the Court denied Otto Bock's, holding that Otto Bock was unlikely to prove that the accused combination of products satisfied the '726 Patent's "means for sealing" and "means for maintaining a vacuum" limitations.

After the preliminary injunction was denied, Össur petitioned the U.S. Patent and Trademark Office (the "Patent Office") to institute an inter partes review of 19 claims of the '726 Patent. Össur's petition asserted that certain claims of the '726 Patent are invalid because they would have been obvious to a person of ordinary skill in the art. Össur's petition did not seek review of two of the four independent claims at issue in the case. Össur's moved to stay the district court case pending the inter partes review. At time of the motion to stay, the Patent Office had not yet decided whether to institute an inter partes review.

After reviewing the standards for granting a case, the district court found that a stay was not warranted under the totality of the circumstances. "Össur has petitioned for inter partes review, but at this point the Court can only speculate as to whether the Patent Office will grant review and, even if it does, whether the review will encompass any of the claims at issue in this case. The Court thus agrees with other courts that have held that the stay of a patent infringement action is not warranted when based on nothing more than the fact that a petition for inter partes review was filed in the [Patent Office]." Automatic Mfg. Sys., Inc. v. Primera Tech., Inc., No. 6:12-CV-1727-ORL-37, 2013 WL 1969247, at *3 (M.D. Fla. May 13, 2013); see also 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."); Comcast Cable Commc'ns Corp., LLC v. Finisar Corp., No. C 06-04206 WHA, 2007 WL 1052883, at *1 (N.D. Cal. Apr. 5, 2007) ("If litigation were stayed every time a claim in suit undergoes reexamination, federal infringement actions would be dogged by fits and starts. Federal court calendars should not be hijacked in this manner.").

The district court also found that it was significant that the inter partes review did not challenge two of the independent claims at issue in the case. "The fact that Össur's petition for inter partes review encompasses only two of the four asserted claims in this case further weights against granting a stay. Had Össur petitioned for review of each of the asserted claims in this case, the review could have eliminated the need for a trial. See Pragmatus AV, LLC v. Facebook, Inc., No. 11-CV-02168-EJD, 2011 WL 4802958, at *3 (N.D. Cal. Oct. 11, 2011) (staying action pending inter partes reexamination in part because defendant's petition encompassed all claims at issue in the action). Here, however, the requested inter partes review is incapable of completely resolving the case in Össur's favor."

The district court also found that even though discovery had only just commenced, this factor was less weighty because the parties had already submitted expert declarations regarding the construction of all four asserted independent claims and have fully briefed Otto Bock's motion for a preliminary injunction.

Finally, the district court noted that "'prejudice [to the patentee] is heightened when parties to litigation are direct competitors; in such cases, courts presume that a stay will prejudice the non-movant.' ADA Solutions, Inc. v. Engineered Plastics, Inc., 826 F. Supp. 2d 348, 351 (D. Mass. 2011); see also Ultratec, 2013 WL 6044407, at *4 (noting that "defendants have the burden of proof backwards" -- to show "that the stay will not prejudice plaintiffs and will not give defendants a tacit advantage"). Össur does not dispute that the parties are direct competitors in the field of prosthetics, (see Mot. to Stay at 2−4), nor does it offer evidence that persuasively rebuts the presumption that a stay would prejudice Otto Bock. This factor thus weighs against granting a stay."

Thus, the district court concluded that the totality of the circumstances counsels against granting a stay.

Otto Bock Healthcare LP v. Ossur HF, et al., Case No. SACV 13-00891-CJC (ANx)

Written by:

Jeffer Mangels Butler & Mitchell LLP

Jeffer Mangels Butler & Mitchell LLP on:

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