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International Test Solutions, Inc. v. Mipox International Corp.

United States District Court, N.D. California

April 10, 2017

INTERNATIONAL TEST SOLUTIONS, INC, Plaintiff,
v.
MIPOX INTERNATIONAL CORPORATION, et al., Defendants.

          ORDER DENYING MOTION TO STAY

          RICHARD SEEBORG United States District Judge

         I. INTRODUCTION

         Defendants Mipox Corporation, Mipox International Corporation, and MGN International, Inc. (“Mipox”) move to stay this patent infringement litigation pending an inter partes review (“IPR”) by the Patent Trial & Appeal Board (“PTAB”). The United States Patent & Trademark Office (“PTO”) has not yet acted on Mipox's recently-filed petitions for IPR of the three patents at issue in this case. Nonetheless, Mipox argues that, if IPR is granted, that process would likely narrow or eliminate claims for relief asserted by plaintiff International Test Solutions, Inc. (“ITS”). For the reasons discussed below, the motion is denied without prejudice.

         II. BACKGROUND

         ITS filed suit against Mipox International and MGN International on February 17, 2016 alleging infringement of U.S. Patent Nos. 8, 371, 316 (‘316 Pat.) and 8, 801, 869 (‘869 Pat.). On March 14, 2016, ITS amended the complaint; it dropped allegations regarding the ‘316 patent and added allegations of infringement of U.S. Patent Nos. 6, 777, 966 (‘966 Pat.) and 7, 202, 683 (‘683 Pat.). The parties exchanged infringement and invalidity contentions in June and July 2016. In December 2016, ITS sought leave to add Mipox Corporation (“Mipox Japan”) as a defendant. The Markman hearing, initially scheduled for January 30, 2017 was continued to allow for Mipox Japan's participation. ITS filed its claim construction brief on December 5, 2016 and its amended complaint on January 5, 2017. On February 3, 2017, Mipox filed its response to the claim construction brief and, on February 10, 2017, ITS filed its reply. Between February 10 and 16, 2017, Mipox filed a petition for IPR of each of the patents at issue. On February 17, 2017, Mipox filed the current motion to stay judicial proceedings pending disposition of the IPR. The Markman hearing was held on February 27, 2017, and a claims construction determination is being issued contemporaneously with this order.

         III. LEGAL STANDARD

         The decision to stay a patent case pending IPR rests entirely within a court's discretion. See Viskase Corp. v. Am. Nat'l Can Co., 261 F.3d 1316, 1328 (Fed. Cir. 2001). A court may grant a stay “in order to avoid inconsistent results, narrow the issues, obtain guidance from the PTO, or simply to avoid the needless waste of judicial resources, especially if the evidence suggests that the patents-in-suit will not survive reexamination.” Robert Bosch Healthcare Systems, Inc. v. Cardiocom, LLC, 2014 WL 3107447, at *3 (N.D. Cal. July 3, 2014) (citing MercExchange, LLC v. eBay, Inc., 500 F.Supp.2d 556, 563 (E.D. Va. 2007)).[1] A court, however, “is under no obligation to delay its own proceedings by yielding to ongoing PTAB patent reexaminations.” Id.; see also Karl Storz Endoscopy-America, Inc. v. Stryker Corp., No. 14-cv-00876-RS, slip op. at *3 (N.D. Cal. Mar. 30, 2015) (“A court is not required to stay patent litigation simply because parallel PTO proceedings have been instituted.”) (citing Viskase, 261 F.3d at 1328). The party requesting the stay must show a stay is appropriate. Nken v. Holder, 556 U.S. 418, 433-34 (2009).

         Courts traditionally consider three factors in determining whether to stay a case pending IPR: “(1) the stage of the case; (2) whether a stay will simplify the court proceedings; and (3) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party.” Stryker, No. 14-cv-00876-RS, slip op. at *3 (citing Evolutionary Intelligence, LLC v. Facebook, Inc., No. C 13-4202-SI, 2014 WL 261837, at *1 (N.D. Cal. Jan. 23, 2014)).

         IV. DISCUSSION

         A. Stage of the Case

         Courts in this district favor granting stays pending reexamination where there has been “no material progress in the litigation.” Pragmatus, LLC v. Facebook, Inc., C-11-2168 EJD, 2011 WL 4802958, at *6-7 (N.D. Cal. Oct. 11, 2011). Where discovery has not yet been completed and a trial date has not been set, courts are more likely to issue stays to save the parties and the court the unnecessary expenditure of judicial resources. Robert Bosch, 2014 WL 3107447 at *4. Where, as here, defendants have been less than expedient in requesting a stay, courts have focused their inquiry on whether there has been dispositive motion practice. See, e.g., Stryker, slip op. at *1-*2 (granting stay where IPR petition was filed nearly one year after the initial complaint was filed and after the parties filed claim construction briefing because “no dispositive motions ha[d] been filed”); Cypress Semiconductor Corp. v. LG Elects., Inc., No. 13-4034, 2014 WL 5477795, at *1-*2 (N.D. Cal. Oct. 29, 2014) (same).

         Here, the stage of the case weighs against a stay. Although the pleadings have yet to settle and significant electronic discovery looms on the horizon, the parties have now argued and briefed a dispositive issue. At the claims construction hearing, Mipox challenged the definiteness of every asserted claim. The parties fully briefed (even with supplemental briefing) the dispositive issue of indefiniteness and that issue has now been decided. Accordingly, dispositive motion practice is well under way. See Nautilus v. Biosig Instruments, Inc., 134 S.Ct. 2120, 2124 (2014) (holding that claim construction is dispositive when a defendant challenges claim definiteness as “a patent [claim] is invalid for indefiniteness”). Unlike in Stryker, Mipox did not move to continue the Markman hearing or make any effort to ensure that the stay motion could be heard before the parties and court expended time and resources in resolving the claim construction issues. Nor was Mipox ever “transparent about its intention to move for a stay.” Security People Inc. v. Ojmar US, LLC, 2015 WL 3453780, at *3 (N.D. Cal. May 29, 2015). This case is thus distinguishable from the cases granting stays at later stages, including those granting last-minute Order re: Motion to Stay Case No. 16-cv-00791-RS stays on the eve of claim construction.

         B. Narrowing of Issues

         If granted, an IPR will, likely, simplify this case. See id., at *3 (“the outcome of IPR could simplify the case by . . . estopping [defendant] from asserting any arguments it raised or reasonably could have raised in the IPR”). Yet, several courts in this district have recently declined to grant a stay, where, as here, “the PTAB has not yet acted on the petitions.” Hewlett-Packard Co. v. ServiceNow, Inc., 2015 WL 1737920, at *2 (N.D. Cal. April 9, 2015); see also SAGE Electrochromics, Inc. v. View, Inc., 2015 WL 66415, at *3 (N.D. Cal. Jan. 5, 2015) (“the ...


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