Texas Patent Litigation Monthly Wrap-Up - July 2022

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This post reviews three July 2022 opinions from the Western and Eastern Districts of Texas resolving motions to stay. The first case involves the denial of a stay pending reexamination proceedings issued by the Honorable Alan D. Albright. In the second case, the Honorable Amos L. Mazzant, III, granted the patent owner’s motion for stay pending resolution of the defendant’s petitions for inter partes review (IPR). Finally, the Honorable J. Rodney Gilstrap denied the defendants’ motion for a partial stay of claims concerning patents set for trial in a separate case set for trial in Delaware.

In each case, the courts considered the following three factors to determine the appropriateness of a stay: (1) whether the stay will unduly prejudice the nonmoving party, (2) whether the proceedings before the court have reached an advanced stage, including whether discovery is complete and a trial date has been set, and (3) whether the stay will likely result in simplifying the case before the court.

VideoShare, LLC v. Meta Platforms Inc., No. 6-21-CV-00254-ADA, 2022 WL 2718986 (W.D. Tex. July 12, 2022)

In VideoShare, the defendant requested a stay pending ex parte reexamination of the asserted patent. The Patent Office instituted reexamination of all asserted claims of the patent a few weeks after the court’s claim construction hearing and ruling in January 2022. The case is set for trial to begin in May 2023. On balance of the three stay factors, Judge Albright denied the defendant’s request for a stay.

First, the court determined that a stay “would result in some but minimal undue prejudice to Plaintiff.” VideoShare, 2022 WL 2718986 at *4. The court found the prejudice to plaintiff resulting from a delay in resolution of its claims was tempered by the plaintiff’s own delay in filing the case until more than a year after the patent had expired. Id.

With regard to the stage of the proceedings factor, the court analyzed the stage of the case as of the filing of the defendant’s motion. Because the court had resolved claim construction and discovery had begun, Judge Albright found the case was “approximately midway through, which neither weighs for nor against a stay.” Id.

The court focused most of its attention on the “most important factor,” i.e., simplification of the issues. Id. Judge Albright noted that the asserted patent had already survived IPR filed by Google as well as an invalidity challenge in a jury trial against Google. Id. These facts, together with the court’s assessment that some asserted claims would likely survive litigation, led the court to conclude that a stay would not simplify the issues in the case. Id.

Onpoint Sys., LLC v. Protect Animals With Satellites, LLC, No. 4:20-CV-657, 2022 WL 2704166 (E.D. Tex. July 12, 2022)

The plaintiff-patent owner in Onpoint sought a stay pending IPR filed by the defendant. The defendant had filed IPR petitions on three of the four patents asserted against it. Of those three petitions, the Patent Trial and Appeal Board had instituted one petition and had not made an institution decision on the remaining two. Judge Mazzant weighed the stay factors and determined a stay was appropriate.

Judge Mazzant found that a stay would not result in prejudice to the defendant. Onpoint Sys., 2022 WL 2704166 at *2. In particular, the court found that a stay could result in multiple trials involving the same accused product and closely related patents. Id. The court also noted that the defendant’s actions suggested it believed no prejudice would result from a delay. Id. at *3. The defendant had requested in the alternative that the court dismiss the plaintiff’s claims without prejudice pending IPR, and the defendant had previously offered to agree to a stay pending one of its petitions. Id.

On the second factor, the court noted that “there can be no dispute that this case is in an advanced stage.” Id. Fact discovery had closed over a month before the court issued its stay decision, and the dispositive motion deadline was set a month later. Id. The court found this factor weighed against a stay. Id.

Finally, the court found that a stay would simplify issues in the case regardless of the outcome of the IPRs. Id. at *4. Judge Mazzant noted that a decision on the instituted petition “will generally aid in resolving the parties’ other disputed claims,” because the court may benefit from the “PTAB’s insight and expertise.” Id. Together with the other factors, the court determined that a stay pending reexamination was appropriate.

TQ Delta, LLC v. CommScope Holding Co., Inc., No. 2:21-CV-00309-JRG, 2022 WL 2872993 (E.D. Tex. July 21, 2022)

The defendants in TQ Delta requested a partial stay pending a jury trial in a separate patent infringement litigation filed by the same plaintiff in Delaware. The Delaware litigation involves some but not all of the same patents and claims asserted by the plaintiff in the Texas litigation. Judge Gilstrap denied the defendants’ request for a stay.

Considering the first factor of prejudice to the nonmoving party, Judge Gilstrap determined this factor weighed against a stay. TQ Delta, 2022 WL 2872993, at *3-4. The court emphasized that a partial stay of claims related to the overlapping patents would likely result in separate trials on the overlapping and non-overlapping patents and claims. Id. at *4. The court found the delay in resolution of the plaintiff’s claims on the non-overlapping patents and claims weighed against a stay. Id.

The court also found that the advanced stage of the proceedings weighed against a stay. Id. At the time defendants filed their motion, claim construction was about a week away, and the fact and expert discovery deadlines were just a few months away. Id. Trial is set for January 2023. Id.

With regard to the last factor, Judge Gilstrap again found that “a partial stay would subdivide this case without material benefit” and thus would not simplify the issues. Id. at *5. The court found the differences between the asserted patents and claims in the Delaware and Texas litigations determinative on this point. Id. Judge Gilstrap therefore denied the defendants’ request to stay the case pending resolution of the Delaware trial.

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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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