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LG Electronics, Inc. v. Eastman Kodak Co.

May 22, 2009


The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court


Before the Court is Defendant's motion for discretionary stay of this action based on the mandatory stay of Case No. 09-CV-0343 H (BLM). (Doc. No. 23.) Defendant filed the motion for stay on April 20, 2009. (Id.) Plaintiff filed an opposition to Defendant's motion on May 4, 2009. (Doc. No. 27.) On May 11, 2009, Defendant filed a reply in support of its motion to stay. (Doc. No. 33.) On May 18, 2009, the Court heard oral argument on Defendant's motion for discretionary stay. Christopher Marchese and Michael Rosen appeared on behalf of the Plaintiff. Mark Selwyn and James Dowd appeared on behalf of the Defendant. For the following reasons, the Court denies Defendant's motion and declines to stay the case at this time.

Factual & Procedural Background

On February 20, 2009 Plaintiff LG Electronics, Inc. ("LGE") filed three complaints against Defendant Eastman Kodak Company ("Kodak") -- two in this district and one with the International Trade Commission ("ITC"). The Complaint commencing this action alleges that several of Kodak's digital camera products infringe LGE patents, namely U.S. Patent Nos. 6,885,407 ("the '406 Patent") and 5,077,612 ("the '612 Patent"). (Doc. No. 1.)

LGE's complaint commencing Case No. 09-CV-0343 H (BLM) ("the '343 case") alleges that certain Kodak's digital camera products infringe three of its patents: U.S. Patent Nos. 5,995,767 ("the '767 Patent"), 5,774,131 ("the '131 Patent"), and 6,281,895 ("the '895 Patent").

LGE also filed a complaint with the International Trade Commission ("ITC") on February 20, 2009, requesting that the ITC institute an investigation against Defendant regarding its alleged infringement of these same three patents -- '767, '131, and '895. (Walker Decl. ISO Mot. for Stay ["Walker Decl."] Ex. J.)

The '343 case is subject to a mandatory stay under 28 U.S.C. § 1659(a) pending resolution of the ITC investigation. Kodak argues that this action is sufficiently related to the '343 case that the Court should exercise its discretion to stay it as well. Kodak estimates that such a stay would last for approximately eighteen to twenty months. (Mot. at 6.)


I. Motion for Discretionary Stay -- Legal Standard

The Supreme Court explains that "the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. North American Co., 299 U.S. 248, 254 (1936). In determining whether to stay an action, courts must weigh competing interests that will be affected by the granting or refusal to grant a stay. CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). "Among these competing interests are the possible damage which may result from the granting of a stay, the hardship or inequity which a party may suffer in being required to go forward, and the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay." Id. (citing Landis, 299 U.S. at 254-55).

"The proponent of a stay bears the burden of establishing its need." Clinton v. Jones, 520 U.S. 681, 708 (1997) (citing Landis, 299 U.S. at 255). "If there is even a fair possibility that the stay for which [the movant] prays for will work damage to someone else," the movant "must make out a clear case of hardship or inequity in being required to go forward." CMAX, 300 F.2d at 268 (quoting Landis, 299 U.S. at 255).

Subject to these standards, "[a] trial court may, with propriety, find it is efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings which bear upon the case." Levya v. Certified Grocers of California, Ltd., 593 F.2d 857, 863 (9th Cir. 1979). "This rule applies whether the separate proceedings are judicial, administrative, or arbitral in character, and does not require that the issues in such proceedings are necessarily controlling of the action before the court." Id. at 863-64. However, the Federal Circuit recognizes the existence of a "strong public policy favoring expeditious resolution of litigation." Kahn v. General Motors Corp., 889 F.2d 1078, 1080 (Fed. Cir. 1989). With these principles in mind, the Court considers the relevant Landis factors as they relate to this case.

II. Possible Damage Resulting from a Stay

In opposing Defendant's motion for discretionary stay, Plaintiff LGE argues that a stay would cause it severe prejudice for several reasons. (Opp. at 7.) The ITC has set a target date of July 30, 2010 for completion of its investigation regarding Kodak's alleged infringement of the '767, '131, and '895 Patents. (Rosen Decl. in Opp. to Mot. for Stay ["Rosen Decl."] Ex. J.) Even if the parties decline to appeal the ITC's decision to the Federal Circuit, a stay until that date will delay trial in this matter by more than a year. Plaintiff argues that such a delay could aggravate harm caused by Defendant's alleged infringement of the '407 Patent, as a stay would postpone Plaintiff's ability to obtain injunctive relief against Defendant. (Opp. at 8.)*fn1 Defendant points out that Plaintiff is currently seeking equitable relief from the ITC; Plaintiff's ITC complaint requests an exclusion order barring the importation of the accused products and a cease-and-desist order barring post-importation ...

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