Monday, August 18, 2014

Different Standards For Deciding Whether To Stay?

You may recall that Judge Covington denied a defendant's request to stay litigation, rejecting that defendant's argument that it was merely a "peripheral" defendant since it had only bought the accused product from another defendant.  While the Court noted in that decision that cases are generally stayed against peripheral defendants, that general rule does not apply where the peripheral defendant and the plaintiff are competitors.  In denying the peripheral defendant's request for stay, the Court required that defendant to put forward "an undue hardship or inequity."  Because that defendant couldn't, a stay was not appropriate.

The other defendants in that case separately moved to stay the litigation in favor of the inter partes reviews of the three patents-in-suit those defendants had instituted.  Here, for the primary defendant who had instituted inter partes reviews, the standard for granting a stay is different, relying on a "liberal policy" in favor of granting them:

“Courts have inherent power to manage their dockets and stay proceedings, including the authority to order a stay pending conclusion of a PTO” proceeding.  Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988). The party moving for a stay bears the burden of demonstrating that a stay is appropriate. See Landis v. N. Am. Co., 299 U.S. 248, 255 (1936). As acknowledged in Automatic Manufacturing Systems, Inc. v. Primera Technology, Inc., No. 6:12-cv-1727-RBD-DAB, 2013 WL 1969247, at *1 (M.D. Fla. May 13, 2013), “In patent cases, a number of courts reason that such stays should be liberally granted when there is a pending administrative proceeding pending before the USPTO.” (citing Sabert Corp. v. Waldington N. Am., No. 06-5423, 2007 WL 2705157, at *5 (D.N.J. Sept. 14, 2007)(highlighting the “liberal policy in favor of granting motions to stay proceedings” because review by the USPTO “might assist the court in making a validity determination or [] eliminate the need to make an infringement determination.”); WABCO Holdings, Inc. v. Bendix Commercial Vehicle Sys., LLC, No. 09-3179, 2010 WL 2628335, at *2 n.2 (D.N.J. June 28, 2010)(“the liberal policy towards stays . . . arises due to the potential waste in using a court’s time and energy when a USPTO decision could drastically alter the nature of the case.”))
The Court then addressed the typical factors: (1) whether the stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2) whether the stay will simplify the issues in question and trial of the case; and (3) whether a stay will reduce the burden of litigation on the participants or the court.   Here, the Court appeared persuaded in part because of the "highly technical component" of the case.  Importantly, while the Court previously rejected the peripheral defendant's request to stay because the peripheral defendant was a competitor, that same logic did not carry the day here:
The Andersons, Inc. also opposes the requested stay on the grounds that it is in direct competition with Defendants, and any stay of the proceedings will allow Defendants to continue their allegedly infringing activities unabated.  Defendants correctly counter that The Andersons, Inc. has not sought a preliminary injunction and that any damages The Andersons, Inc. incurs may be remedied with money damages.  See Tomco Equip. Co. v. SE Agri-Sys., Inc., 542 F. Supp. 2d 1303, 1308 (N.D. Ga. 2008)(rejecting the argument that plaintiff's damages "will intensify during a stay" because "the availability of money damages is sufficient to protect plaintiff from prejudice.").
Motion for stay, granted.  Case administratively closed and parties obligated to file a status report every 90 days.

The Andersons, Inc. v. Enviro Granulation, LLC., Case No. 8:13-CV-3004 (M.D. Fla. Aug. 14, 2014) (J. Covington)

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