Inter partes reviews (IPRs) are administrative proceedings before the U.S Patent & Trademark Office. These proceedings are available to accused patent infringers or any other party seeking an assessment of whether an otherwise valid, issued U.S. patent, should, in fact, be struck down as invalid. Once instituted, IPRs have invalidated patents at a statistical rate of 70 percent. Patent litigations in federal district courts may be suspended or “stayed,” based on a number of factors. Such factors include the existence of parallel or related legal proceedings, such as IPRs, which, once decided, would aid in the efficient disposition of the litigation in which a stay is being sought. Accordingly, if an accused infringer is faced with defending a patent litigation, staying such patent litigation by instituting an IPR may be a boon to such defendants seeking to avoid litigation expenses, but may likewise be a bane to plaintiffs seeking to expediently enforce patents through the Federal Courts.
One important factor in a court’s deciding a motion to stay is having the request for stay be relatively early in the patent litigation, but that is not the only factor. An often quoted standard for deciding a motion to stay contains three factors: “(1) whether discovery is complete and whether a trial date has been set; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether a stay would unduly prejudice or present a clear tactical advantage to the nonmoving party.” Universal Electronics, Inc. v. Universal Remote Control, Inc., 943 F. Supp. 2d 1028, 1031 (C.D. Cal. 2013) (internal citations omitted). Despite this seemingly straightforward standard, legal filings and related litigation strategies of both plaintiffs and defendants may become part of the factual underpinnings in determining the propriety of a stay; accordingly, litigants may wish to consider the potential effects of their court filings and other litigation conduct on a grant or denial of a stay.
The recent U.S. Supreme Court case on venue in patent infringement cases, TC Heartland v. Kraft Foods Group Brands, 581 U.S. ____ (2017), means that, rather than plaintiffs having wide freedom to file suit in jurisdictions deemed “patent friendly,” patent enforcers will target defendants in either (1) their state of incorporation or (2) where defendants’ infringing acts have occurred and the defendant has a regular and established place of business. As such, a plaintiff may be considering a broader choice of possible forums, and defendants may be able to succeed in transferring venue to other forums. Forum choice may influence the likelihood of success in being granted a stay in several ways. If the forum proceeds quickly, and if it is important to move for a stay early on, then such forums may take up a request for stay when the litigation has proceeded too far to make a stay appropriate. Conversely, other forums where cases proceed more slowly may review motions to stay earlier, and thus be more favorably disposed to a request. In addition, regardless of the relative speed of a district’s docket, litigants may wish to consider the extent that certain federal judicial districts or judges are likely to grant (or deny) stays, and whether certain of the factors in granting or denying a stay are accorded greater weight than other factors in such districts.
In conclusion, patent enforcers and accused infringers may wish to formulate a strategy with their patent litigation counsel which factors in the interplay of the district court in which the patent case is pending, the availability of an IPR, and the possibilities of a motion to stay.
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