Stays Pending Inter Partes Review - New Strategies For The New Rules


As the Patent Trials and Appeals Board (“PTAB”) works through the first wave of filings under the new inter partes review (“IPR”) procedures,1 district courts are addressing an increasing volume of requests for stays pending those IPRs. Under the previous ex parte and inter partes reexamination rules, many courts were reluctant to grant stays because of reexamination’s uncertain length and effect.2 The new IPR process attempts to address those concerns by sharply limiting the time from institution-to-decision to a single year and imposing a broader estoppel on petitioners.

In the cases to date where a motion to stay pending post-grant review has been decided, the overall success rate of such motions has remained unchanged from requests to stay under pre-AIA reexamination proceedings (approximately 60%).3 However, the new procedures create different strategic considerations for litigants regarding when and how to seek a stay.

Timing of the Stay Motion

Courts give significant consideration to the progress of litigation when evaluating stay requests. For example, they are often reluctant to enter a stay once the case has progressed past the Markman stage.4 Accordingly, litigants must decide whether to move for a stay immediately after filing a petition for IPR—when the effect of the petition is still unclear—or to wait and see if the PTAB institutes review.

Under the old reexamination rules, litigants typically waited until the PTO had found a “substantial new question of patentability” and granted the reexamination request before requesting a stay.5 But the new procedures make a decision to wait more difficult because evaluation of the petition is one of the few aspects of IPR proceedings slower than the traditional reexaminations; the old rules gave the PTO only three months to decide whether to grant review, while the new rules double that limit to six months.6 Further, the threshold for initiating review has also been raised and now requires that the petition demonstrate a “reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims.”7

Given the current mixed state of the caselaw, parties should likely err toward moving for a stay shortly after filing their petition. Some courts have entered a stay immediately upon such a request made at this stage, stating that they will revisit the stay based on the scope of any eventual IPR grant.8 Other courts have been unwilling to stay until the PTAB decides whether it will grant review; but those courts typically deny the request without prejudice to it being refiled after the PTAB’s decision.9 Thus, at least while the caselaw is still developing, a party benefits from moving to stay quickly and taking advantage of the possibility of a stay at an earlier stage of the litigation.

Non-Petitioning Defendants

In multi-party patent cases, some parties may choose not to join an IPR petition—typically to avoid the broadened IPR estoppel, which prevents petitioners from later arguing invalidity in court on “any ground that the petitioner raised or reasonably could have raised during that inter partes review.”10

When only a subset of parties request IPR, the petitioning defendants may have difficulty obtaining a stay given court concern about inconsistent case management. For example, in January 2014, one judge in the Eastern District of Texas denied a request to stay on behalf of one defendant in five consolidated cases. The Court explained that staying the entire litigation would unduly prejudice the other cases and that granting the stay only as to the moving defendant would cause an “incongruent schedule” that “must be considered against its impact on the Court’s docket.”11

The emerging consensus appears to be that stays may be granted as to non-petitioning defendants if they are willing to consent to at least a “weak” estoppel. Specifically, courts increasingly require non-petitioning defendants to waive their right to reargue invalidity positions decided by the PTAB.12 This is a “weak” estoppel because, unlike petitioning defendants, the non-petitioning defendants retain the right to argue other grounds that were not presented to the PTAB.

This jurisprudence is still developing. At least one judge, for example, has granted a stay even where a defendant expressly declined to be bound.13 On the other hand, some courts go a step further and demand that the non-petitioning defendants stipulate to the full estoppel that would apply to petitioning defendants.14

Claims Not Addressed by the IPR

A similar issue arises when the IPR does not cover all of the asserted claims, whether from an intentionally limited petition or because the PTAB only granted particular grounds of a petition. Little consensus on the approach for such cases has emerged. Instead, courts generally weigh the scope of the IPR against the remaining issues in the case in order to determine how much is likely to be resolved through the IPR. As one court explained, “the simplification issue is best considered holistically, and not with regard to each individual patent.”15

Generally, courts tend to allow a stay even where a handful of claims are not included in the IPR.16 But the situation becomes more complex in large multi-defendant, multi-patent cases. For example, in a recent 22-patent case in the Eastern District of Texas, the court stayed only the patents subject to the IPR and allowed the remaining patents to go forward on schedule.17 By comparison, in a similar litigation in Delaware where only one patent was subject to an IPR proceeding, Chief Judge Sleet stated that “the existence of other patents-in-suit [not subject to IPR] does not influence the court’s calculus.”18

Proving Prejudice

In opposing a stay, parties must show that they would be prejudiced by a delay in the case. Courts typically give little credence to generic arguments that evidence could be lost during the pendency of the stay or that a delay in resolution of the case is harmful.19 Courts have also been dismissive of non-practicing entities’ arguments that a stay would prejudice their licensing efforts. As Judge Sparks in the Western District of Texas bluntly stated, “it is unclear why anyone would license a patent currently undergoing inter partes review given the PTAB's high standard for granting review in the first instance.”20

On the other hand, practicing entity plaintiffs frequently establish prejudice by showing that they are competitors and that delay may cause a loss of market share.21 The prejudice may be particularly strong where the asserted patent expires soon and “a stay would erode the limited period for which Plaintiff may claim permanent injunctive relief if liability is established.”22

Although reluctance to stay competitor suits existed under the old reexamination procedures, some courts have softened that rule in light of the new IPR procedures. For example, at least one court granted a stay filed very early in litigation, reasoning that the new IPR procedures are fast and allow for some discovery, and so “entry of a stay in this case may not significantly impact the current trial date.”23 Given the speed of IPR, another court was less sympathetic to a competitor plaintiff’s delay arguments where the record showed that the plaintiff waited to bring the lawsuit in the first place.24

Compromising on Partial Stays

Even where the circumstances make a complete stay unlikely, litigants should still consider pursuing a partial stay. For example, Judge Alsup in the Northern District of California criticized a defendant for waiting until the last possible day of the statutory period to file the petition for IPR and then waiting a further two months to move for a stay, saying that “this reeks of gamesmanship.”25 But he nonetheless allowed a partial stay, halting discovery while the PTAB decided whether to grant the petition but ordering the parties to proceed with invalidity and infringement contentions. Similarly, in a case where the two parties were competitors but all of the asserted claims were being reviewed by the PTO, the Northern District of New York allowed discovery to proceed but stayed further action in the case.26


Although the IPR procedures remain relatively new, it is already evident that courts are revisiting their approach to stay motions in view of the new procedures. In light of these developments, parties seeking the benefit of the new IPR procedures should also carefully consider how best to seek stays in their co-pending litigation, including when to request the stay, how to address patents or claims not subject to IPR, whether non-petitioning co-defendants will agree to some degree of estoppel, and whether a compromise position may be acceptable .

1The PTAB issued its first decision on the merits in November. See Garmin v. Cuozzo Speed Tech, IPR2012-00001, Paper 59 (Nov. 13, 2013).
2See, e.g., EMG Tech. v. Apple, Inc., Case No. 6:09-CV-367, D.E. 270 at 5 (E.D. Tex. Nov. 15, 2010) (Davis, J.) (“Although some of the claims may change in this case [during inter partes reexamination], the interests of justice will be better served by dealing with that contingency when and if it occurs, rather than putting this case indefinitely on hold.”).
3See here (retrieved March 24, 2014) (showing a 58.8% success rate since 2008 for 1368 motions to stay under pre-AIA procedures and a 58.4% success rate for 257 motions to stay under post-AIA procedures).
4See, e.g., Universal Elecs. v. Universal Remote Control, Case No. 8:12-CV-329, D.E. 78 at 6 (C.D. Cal. May 2, 2013) (Guilford, J.) (“Defendant did not file its inter partes review petitions until almost a year after being served with the complaint, and during that time the Court spent substantial effort construing the claims. The Court’s expenditure of resources is an important factor in evaluating the stage of the proceedings.”).
535 U.S.C. § 303(a) (pre-AIA) (requiring director to “determine whether a substantial new question of patentability affecting any claim of the patent concerned is raised by the request”).
635 U.S.C. § 314(b) (requiring decision within three months of (1) receiving patent holder’s response to the petition or (2) the deadline for patent holder to file response); see also 37 CFR § 42.107 (allowing patent holder three months to file response to petition).
735 U.S.C. § 314(a); see also H.R. Rep. No. 112-98 (Part 1), at 47 (2011) (“The threshold for initiating an inter partes review is elevated from ‘significant new question of patentability'’—a standard that currently allows 95% of all requests to be granted—to a standard requiring petitioners to present information showing that their challenge has a reasonable likelihood of success.”).
8See, e.g., Evolutionary Intelligence v. Facebook, Inc., Case No. 3:13-CV-4202, D.E. 148 at 5 (N.D. Cal. Jan. 23, 2014) (Illston, J.) (“[A]ny concern that the motions are premature is alleviated by the short time frame of the initial stay and the Court’s willingness to reevaluate the stay if inter partes review is not instituted for all of the asserted claims.”)
9See, e.g., Overland Storage, Inc. v. BTD AG, et al., Case No. 3:10-CV-1700, D.E. 56 at 7-8 (S.D. Cal. Dec. 10, 2013) (Sammartino, J.) (denying motion “because the requested stay is premature given that the PTO has yet to grant inter partes review” but acknowledging that “should the PTO grant inter partes review, the Court will entertain a renewed” motion); Id., D.E. 66 (Feb. 11, 2014) (granting renewed motion after PTAB instituted review as to one of two asserted patents).
1035 U.S.C. § 315(e).
11Lennon Image Techs. v. Lumondi Inc., Case No. 2:13-CV-238, D.E. 24 at 3 (E.D. Tex. Jan. 6, 2014) (Gilstrap, J.).
12See, e.g., Evolutionary Intelligence v. Sprint Nextel Corp., et al., Case No. 5:13-CV-4513, D.E. 123 at 9 (N.D. Cal. Feb. 28, 2014) (Whyte, J.) (conditioning stay on party “submit[ting] to a weaker estoppel foreclosing it from relitigating claims made and finally determined in the IPR proceedings”); Unifi Scientific Batteries v. Sony Mobile Commc’ns, Case No. 6:12-CV-224, D.E. 81 at 7 (E.D. Tex. Jan. 14, 2014) (Love, M.J) (requiring non-petitioning parties to “stipulate to the same estoppel effect” as the moving party “or some variation thereof”).
13See Evolutionary Intelligence v. Groupon, Inc., Case No. 3:13-CV-4204, D.E. 104 at 4 (N.D. Cal. Jan. 23, 2014) (Illston, J.) (“[E]ven if Groupon is not bound by the petitions, simplification of the issues could still occur[.]”).
14See, e.g., Personal Web Techs., et al. v. Facebook, Inc., Case No. 5:13-CV-1356, D.E. 55 at 11 (Davila, J.) (N.D. Cal. Jan. 13, 2014)(“This grant is contingent on each defendant’s agreement to be bound by the same estoppel that limits IPR petitioners[.]”).
15Overland Storage, supra note 9, D.E. 66 at 14.
16See, e.g., Princeton Digital Image Corp. v. Konami Digital Entm’t, Case No. 1:12-CV-1461, D.E. 70 at 5 (D. Del. Jan. 15, 2014) (Burke, M.J.) (granting stay where “all but six of the 23 patent claims are at issue in the IPR request”).
17See American Vehicular Sciences v. Toyota Motor Corp., Case No. 6:12-CV-404, D.E. 221 at 3 (E.D. Tex. Feb. 19, 2014) (Love, M.J.) (“The stay is only granted as to Toyota and the patents in which the PTO has granted review. . . The claim construction hearings . . . will proceed as scheduled as to the non-IPR patents.”). See also Encap v. The Scotts Co., Case No. 1:11-CV-685, D.E. 84 (E.D. Wis. Nov. 7, 2013) (Griesbach, J.) (staying two out of four asserted patents subject to IPR review while moving forward on the other two).
18AIP Acquisition v. Level 3 Commc’ns, Case No. 1:12-CV-617, D.E. 63 at 6 (D. Del. Jan. 9, 2014).
19See, e.g., Personal Web Techs., supra note 14, D.E. 55 at 10 (dismissing plaintiff’s arguments that during a stay “they are impeded from protecting their property rights in the asserted patents and risk losing evidence, witnesses, and memory of key facts”).
20Click-to-Call Techs. v. Ingenio, Inc., et al., Case No. 1:12-CV-465, D.E. 147 at 3 (W.D. Tex. Dec. 5, 2013) (Sparks, J.).
21See Verinata Health v. Ariosa Diagnostics, Case No. 3:12-CV-5501, D.E. 108 at 5-6 (N.D. Cal. Jan. 13, 2014) (Illston, J.).
22The Proctor & Gamble Co. v. Team Techs., Inc., Case No. 1:12-CV-552, D.E. 64 at 5 (S.D. Ohio Sept. 10, 2013) (Black, J.).
23Automatic Mfg. Sys. v. Primera Tech., Inc., Case No. 6:12-CV-1727, D.E. 58 at 6 (M.D. Fla. Nov. 21, 2013) (Dalton, J.).
24Riverbed Tech. v. Silver Peak Sys., Case No. 3:13-CV-2980, D.E. 42 at 4 (N.D. Cal. Mar. 14, 2014) (White, J.) (“[T]he length of the time that Riverbed waited to initiate this lawsuit against Silver Peak on the [asserted patents] undermines any claim of prejudice by delay”).
25Evolutionary Intelligence v. Apple, Inc., Case No. 3:13-CV-4201, D.E. 123 at 6 (N.D. Cal. Jan. 9, 2014) (Alsup, J.).
26PPC Broadband, Inc. v. Corning Gilbert, Inc., Case No. 5:12-cv-911, D.E. 90 at 26 (N.D.N.Y. Mar. 13, 2014) (Peebles, M.J.) (“I will permit the parties to complete discovery in this action, but will stay any proceedings beyond the completion of discovery pending the PTAB's IPR decisions[.]”).



Topics:  Inter Partes Review Proceedings, Motion To Stay, Patent Trial and Appeal Board, Post-Grant Review

Published In: Civil Procedure Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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