Biomet Biologics LLC v. Bio Rich Medical Inc

Filing 63

ORDER by Judge David O. Carter: denying 47 Motion to Stay Case. (twdb)

UNITED STATES DISTRICT COURT

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FOR THE CENTRAL DISTRICT OF CALIFORNIA

BIOMET BIOLOGICS, LLC et al.,

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Plaintiff(s),
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v.
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BIO RICH MEDICAL, INC. et al.,
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Defendant(s).
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_________________________________ )

CASE NO. SACV 10-1582 DOC
(PJWx)

O R D E R 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 abovecaptioned 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.
I. Background
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.

II. Legal Standard
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)).

III. Discussion
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.

Progress of Case
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 fact that there has not yet been a significant amount of discovery
and the trial date is not until next summer. Consequently, this factor does not weigh
strongly in either direction.
Prejudice
If a stay would result in prejudice or a clear tactical disadvantage to the nonmoving party, courts have generally denied the motion to stay. Here, because Defendants
allegedly continue to infringe upon Plaintiffs’ patent in direct competition with Plaintiff,
a delay has the potential to cause severe prejudice. Defendants suggest that Plaintiffs are
immune from irreparable injury because they did not seek a preliminary injunction. But,
as other courts have pointed out, “[t]his contention is flawed” because Plaintiffs “might
have other reasons for deciding not to pursue injunctive relief at this stage – for example,
the difficulty of showing a likelihood of success on the merits while its patents are in
reexamination.” Avago, 2011 WL 3267768, at *6. Like the Avago court, this Court will
not hold against Plaintiffs their decision not to pursue a preliminary injunction.

Second, Plaintiffs are rightfully concerned about the remaining life of the ‘007
patent after the completion of the reexamination. The PTO’s own statistics show that
reexamination proceedings, on average, take over two years to complete. Declaration of
Robert J. Theuerkauf ¶ 12, Ex. K. Because the PTO has not yet even decided to accept
Defendants’ reexamination request, it is likely that the reexamination, if the request is
ultimately granted, would not be completed until the end of 2013 or beginning of 2014.
The ‘007 patent expires in December 2014. Plaintiffs’ Opposition, 8. Placing the ‘007
patent in limbo for the majority of its remaining life would create a clear tactical
disadvantage for Plaintiffs. Thus, the prejudice factor weighs strongly against granting
Defendants’ Motion to Stay.
Simplification
Defendants’ reliance on PTO reexamination statistics is not sufficient support to
warrant a stay in the present case. Although there is a statistically significant chance that
a reexamined patent may be amended, Defendants reach too far in asserting that it “is
highly likely in the present case that at least some of the claims will be cancelled.”
Defendants’ Motion to Stay, 15. Additionally, Defendants seek declarations of noninfringement and invalidity with respect to two unrelated patents that are not subject to
reexamination, as well as counterclaims for sham litigation and an antitrust violation.
Defendants’ Answer to Plaintiffs’ First Amended Complaint, ¶ 56, 74-80. The Court will
still litigate these issues regardless of the PTO’s reexamination of the ‘007 patent.
Consequently, although the PTO’s reexamination of the ‘007 patent has the potential to
simplify the issues at trial, that mere possibility is not sufficient to outweigh the likely
prejudice against Plaintiffs if the stay was granted. As other courts have held, permitting

a stay because some relevant claims may be affected “would invite parties to unilaterally
derail timely patent case resolution by seeking reexamination.” Largan Precision Co. Ltd.
v. Fujifilm Corp., No. C 10-1318 SBA, 2011 WL 794983, at *2 (N.D. Cal. Mar. 1, 2011)
(citing Soverain Software LLC v. Amazon.com, Inc., 356 F. Supp. 2d 660, 662-63 (E.D.
Tex. 2005)).
IV. Disposition
For the foregoing reasons, Defendants’ Motion to Stay is hereby DENIED.

IT IS SO ORDERED.
DATED: September 26, 2011

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DAVID O. CARTER
United States District Judge