United States District Court, E.D. California
MEMORANDUM AND ORDER
MORRISON C. ENGLAND, Jr., District Judge.
There are two motions presently before the Court: Defendant Origen Biomedical, Inc. ("Defendant") has filed both a Motion to Dismiss (ECF No. 28) and a Renewed Motion to Stay (ECF No. 82). The latter seeks a stay of this patent infringement case pending resolution of ex parte reexamination proceedings currently before the United States Patent and Trademark Office ("PTO"). For the reasons that follow, Defendant's Motion to Stay is granted and Defendant's Motion to Dismiss is denied without prejudice.
Plaintiff Thermogenesis Corp. ("Plaintiff") alleges that Defendant infringed two of Plaintiff's patents, specifically U.S. Patent Nos. 6, 491, 678 ("the 678 Patent") and 6, 232, 115 ("the 115 Patent") (collectively, "the patents-in-suit").
On March 11, 2014, Defendant requested that the PTO reexamine Claims 1-4, 6, and 7 of the 678 Patent, based on a combination of prior art references. The PTO granted Defendant's request for reexamination on April 4, 2014. On August 5, 2014, the PTO determined that each of the challenged claims of the 678 Patent were invalid based on the references that Defendant had submitted. Plaintiff challenged that determination. On December 2, 2014, the PTO issued a Final Office Action that concluded each of the challenged claims of the 678 Patent were invalid as obvious over a combination of prior art references and thus void ab initio. Plaintiff has the right to appeal the Final Office Action to the PTO's Patent Trial and Appeals Board and the United States Court of Appeals for the Federal Circuit.
On September 25, 2014, Defendant requested that the PTO reexamine all twenty-three claims of the 115 Patent based on prior art. The PTO granted Defendant's request for reexamination on October 24, 2014. Just as it did with the claims of 678 Patent, the PTO will ultimately rule on whether the claims of the 115 Patent are valid, and Plaintiff will have the right to appeal that determination.
A. MOTION TO STAY
"Courts have inherent power to manage their dockets and stay proceedings, including the authority to order a stay pending conclusion of a PTO examination." Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (citation omitted). While courts are not required to stay judicial proceedings pending re-examination of a patent, a stay for purposes of re-examination is within the district court's discretion. See, e.g., Patlex Corp. v. Mossinghoff, 758 F.2d 594, 603 (Fed. Cir. 1985).... [T]here is "a liberal policy in favor of granting motions to stay proceedings pending the outcome" of re-examination or re-issuance proceedings, especially in cases that are still in the initial stages of litigation and where there has been little or no discovery. ASCII Corp. v. STD Entm't USA, Inc., 844 F.Supp. 1378, 1381 (N.D. Cal. 1994).
In determining whether to stay this case pending re-examination, the Court considers the following 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 disadvantage to the nonmoving party. In re Cygnus [Telecomms. Tech.], 385 F.Supp.2d [1022, ] 1023 [(N.D. Cal. 2005)].
Telemac Corp. v. Teledigital, Inc., 450 F.Supp.2d 1107, 1110-11 (N.D. Cal. 2006). As explained below, the Court finds that each of the three factors weighs in favor of granting the stay.
1. Stage of Proceedings
Plaintiff does not dispute that the Court has neither issued a discovery and scheduling order nor set a date for trial. Nevertheless, Plaintiff argues that the first factor weighs against granting the stay because discovery is "substantially complete." Pl.'s Opp'n, Dec. 4, 2014, ECF No. 88 at 13. Defendant counters that "[a]part from limited, expedited discovery for the preliminary injunction motion, there is much discovery and deposition practice to come." Def.'s Reply, Dec. 12, 2014, ECF No. 90 at 7.
Although some discovery has taken place, it appears to have been limited to resolving Plaintiff's Motion for Preliminary Injunction. Because the parties have not completed discovery and the Court has not set a trial ...