The opinion of the court was delivered by: David O. Carter United States District Judge
ORDER DENYING MOTION TO STAY
Before the Court is a Motion to Stay Pending Reexamination of Patent filed by Defendants Bio Rich Medical, Inc. and Edward Mills Rich ("Defendants") in the above-captioned case ("Motion to Stay") (Docket 47). After considering the moving and opposing papers and oral argument, and for the reasons described below, the Court hereby DENIES the Motion to Stay.
Biomet Biologics, LLC and Plasmaseal have filed an Amended Complaint alleging that Defendants infringe upon U.S. Patent No. 5,585,007 for "Plasma Concentrate and Tissue Sealant Methods and Apparatuses for Making Concentrated Plasma and/or Tissue Sealant" ("the '007 patent") (Docket 38). On August 11, 2011, Defendants filed an ex parte request for reexamination of the '007 patent with the U.S. Patent and Trademark Office ("PTO"). Defendants generally contend that the '007 patent is invalid because the claims asserted by Biomet are anticipated and rendered obvious by prior art not considered by the PTO during its examination of the application for the '007 patent. The prior art references allegedly raise substantial new questions of patentability of the claims issued in the '007 patent. The PTO has not yet determined whether it will grant Defendants' request for reexamination. On August 17, 2011, Defendants filed the present Motion to Stay, seeking to stay the entire case pending the resolution of the '007 patent in the PTO. Plaintiffs oppose the Motion to Stay.
A court's inherent power to "manage [its] dockets and stay proceedings" encompasses "the authority to order a stay pending conclusion of a PTO reexamination." Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988). A stay may allow courts to take advantage of the PTO's specialized expertise in patents in order to reduce and streamline litigation. See Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir. 1983) ("One purpose of the reexamination procedure is to eliminate trial (when the claim is canceled) or facilitate trial of that issue by providing the district court with the expert view of the PTO (when a claim survives the reexamination proceeding)."). Particularly when cases are still in the initial stages of litigation, courts have noted a "liberal policy in favor of granting motions to stay proceedings." ASCII Corp. v. STD Entm't USA, Inc., 844 F. Supp. 1378, 1381 (N.D. Cal. 1994).
No court is obligated, however, to stay its proceedings while there is a pending patent reexamination, regardless of whether the court is analyzing the same issues as the PTO. Fresenius Medical Care Holdings, Inc. v. Baxter Int'l, Inc., No. C 03-1431 SBA, 2007 WL 1655625, at *3 (N.D. Cal. 2007). Generally, if a stay would "more likely than not delay the district court proceedings without any countervailing benefit, the court should proceed with the merits of the case without the benefit of the Patent Office reexamination." Agar Corp. v. Multi-Fluid Inc., 983 F. Supp. 1126, 1127 (S.D. Tex. 1997).
Courts have considered the following three factors when evaluating requests for a stay: (1) whether a stay would simplify the claims and issues; (2) whether discovery is completed and whether a trial date is set; and (3) whether a stay would unduly prejudice or create a tactical disadvantage for the non-moving party. IMAX Corp. v. In-Three, Inc., 385 F. Supp. 2d 1030, 1032 (C.D. Cal. 2005) (citing Guthy-Renker Fitness L.L.C. v. Icon Health and Fitness, Inc., No. CV 97-7681 LGB (EX), 1998 WL 670240, at *2 (C.D. Cal. Jul. 17, 1998)).
An analysis of the above-mentioned three factors leads to the conclusion that a stay is not appropriate in this case. Although the PTO reexamination has the potential to simplify issues in this case, that possibility does not outweigh the likely resulting prejudice to Plaintiffs. Each of the three factors will be discussed in turn.
Courts are significantly more likely to grant motions to stay while litigation is in its early stages. "The later in the litigation that the reexamination request is made, the more likely it is to represent a tactical move for delay." Avago Technologies Fiber IP (Singapore) PTE Ltd. v. IPtronics Inc., No. 10-CV-02836-EJD, 2011 WL 3267768, at *4 (N.D. Cal. July 28, 2011). Here, Defendants' argument that the case is still in its early stages is significantly diminished by the fact that Defendants themselves have caused substantial delays in the progress of this case. Further, discovery is set to close in eight months and a trial date has already been set. These considerations are, however, counterbalanced by the ...