Walker Digital v. Google: Stay Pending CBM Review Denied Where Discovery Was Complete and Stay Would Prejudice the Plaintiff

by Jeffer Mangels Butler & Mitchell LLP

After the PTAB instituted a CBM review of the patents-in-suit, Google sought a stay of the litigation pending resolution of CBM review by the PTAB. The district court explained that "[c]ourts consider four factors when deciding whether to stay litigation pending CBM review: (1) whether a stay will simplify the issues, (2) whether discovery is complete and a trial date is set, (3) whether there will be undue prejudice to the non-moving party, and (4) whether a stay will reduce the burden on the Court and the parties. See AIA § 18(b)(1)."

With respect to the first factor, the district court found that some "simplification of the issues could result from cancellation of the asserted claims or, failing that, from the estoppel effects on Google arising from presenting its arguments to the PTAB in the CBM process. See AIA § 18(a)(1)(D)." But the district court also found that the "estoppel only goes so far, especially as the PTAB rejected several of the grounds for CBM review articulated by Google. Thus, unless the PTAB invalidates all of the asserted claims on a basis on which it has initiated CBM review, it is likely that the Court will have to address at least some of Google's invalidity defenses. Therefore, while the simplification factor favors a stay, it does not do so by much."

Turning to the second factor, the stage of the proceedings, the district court found that this factor strongly disfavored a stay. "Even though a trial date has not been set (but will be very soon), discovery is complete and all case-dispositive and Daubert motions have been fully briefed. (D.I. 233) Over the course of more than three years of litigation, the parties have briefed and the Court has decided claim construction and there have been several discovery dispute teleconferences. The Court is today scheduling a hearing for argument on the pending motions and will also be scheduling the pretrial conference and trial. These are the only substantive matters left to do in the instant case. By contrast, the CBM review is in its infancy. The review was granted two months ago and it may be another two years before a final decision on patent validity is issued (this assumes an appeal would be taken to the Federal Circuit). (D.I. 273 Ex. A)"

On the third factor, undue prejudice to the non-moving party, the district court also found that this factor disfavored a stay. "Although it is true that Plaintiff Walker Digital ("Walker") does not actively practice the patents and, therefore, does not compete with Google, it is also true that the longer Google is allowed to engage in allegedly infringing activity, the lower the value of the patents becomes as licensing assets. Moreover, the patents-in-suit are set to expire in 2016 and any delay in determining their validity significantly prejudices Walker's ability to license the patents."

With respect to the fourth factor, whether a stay will reduce the burden on the parties the district court also concluded that this factor disfavored a stay. "Considerable resources have already been expended to bring this case to its present late stage. With the additional investment of resources to decide the pending motions and proceed through the pretrial conference, this case should be ready for trial within approximately six months, about the same time that the CBM review is currently scheduled to be argued."

Accordingly, the district court denied Google's motion to stay pending the CBM review by the PTAB.

Walker Digital, LLC v. Google, Inc., Case No. 11-318-LPS (D. Del. June 2014)

Written by:

Jeffer Mangels Butler & Mitchell LLP

Jeffer Mangels Butler & Mitchell LLP on:

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