Asetek Holdings, Inc et al v. Coolit Systems Inc

Filing 59

ORDER by Judge Edward M. Chen granting 52 Plaintiff's Motion for Leave to File Sur-Reply; denying 20 Defendant's Motion to Stay (emclc1, COURT STAFF) (Filed on 1/23/2013)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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ASETEK HOLDINGS, INC., et al.,

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Plaintiffs,
ORDER DENYING DEFENDANT’S
MOTION TO STAY

v.

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For the Northern District of California

United States District Court

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No. C-12-4998 EMC

COOLIT SYSTEMS, INC.,

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Defendant.
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(Docket No. 20)

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Currently pending before the Court is CoolIT’s motion to stay proceedings pending

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reexamination of the ‘764 patent. Having considered the parties’ briefs and accompanying

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submissions,1 as well as the oral argument of counsel, the Court DENIES the motion without

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prejudice for the reasons stated on the record and as supplemented herein.

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A district court has the discretion to stay judicial proceedings pending reexamination of a

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patent. See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed.Cir.1988). In determining whether

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to grant a stay pending reexamination, courts generally consider: “(1) whether discovery is complete

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and whether a trial date has been set; (2) whether a stay will simplify the issues in question and trial

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of the case; and (3) whether a stay would unduly prejudice or present a clear tactical disadvantage to

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the non-moving party.” Telemac Corp. v. Teledigital, Inc., 450 F.Supp.2d 1107, 1110 (N.D. Cal.

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2006) (Wilken, J.).

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This includes Asetek’s sur-reply. Asetek’s motion for leave to file a sur-reply is granted.

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Taking into account the above factors, the Court denies CoolIT’s motion to stay. Although

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this case is in the early stages of litigation, which would generally weigh in favor of a stay, other

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considerations weigh against a stay. For example, arguably, a stay is not likely to substantially

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simplify the issues in the lawsuit, particularly because, even though the PTO has granted

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reexamination with respect to the ‘764 patent, it has denied reexamination with respect to the ‘362

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patent. There is sufficient potential overlap in the litigation of these two patents that counsels in

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favor of keeping them both on the same litigation track. As for prejudice, Asetek and CoolIT are

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direct competitors, and Asetek has provided evidence to support its claim that a stay could have

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“‘effects that would be difficult to reverse after the fact.’” Interwoven, Inc. v. Vertical Computer

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For the Northern District of California

United States District Court

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Sys., No. C 10-04645 RS, 2012 U.S. Dist. LEXIS 30946, at *8 (N.D. Cal. Mar. 8, 2012).
In any event, proceeding with exchange of contentions and discovery at least until claim

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construction briefing will not substantially prejudice either party. Thus, although the Court denies

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Asetek’s motion, the denial is without prejudice. Exchange of contentions and discovery shall

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proceed. The Court shall hold a case management conference in this case on May 23, 2013, at 10:30

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a.m., at which point the parties will be able to provide a further update as to the status of the

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reexamination proceeding before the PTO.

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This order disposes of Docket Nos. 20 and 52.

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IT IS SO ORDERED.

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Dated: January 23, 2013

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_________________________
EDWARD M. CHEN
United States District Judge

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