McCabe v. Floyd Rose Guitars et al

Filing 61

ORDER (1) granting in part and denying in part 37 Defendant's Motion to Stay Proceedings Pending Re-Examination and (2) denying 59 Defendant's Ex Parte Motion for Leave to File Sur-Reply. The Court grants Defendant's Motion to Stay as to the five patent infringement claims. This action is stayed as to claims 1-5 of Plaintiff's first amended complaint. The Court denies Defendant's Motion to Stay as to claims 6-8. Signed by Judge Janis L. Sammartino on 4/12/11. (lmt) Modified text on 4/13/2011 (jcj).

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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GEOFFREY L MCCABE,
Plaintiff,

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CASE NO. 10-CV-0581 JLS (JMA)
ORDER (1) GRANTING IN PART
AND DENYING IN PART
DEFENDANT’S MOTION TO
STAY PROCEEDING PENDING
RE-EXAMINATION AND (2)
DENYING DEFENDANT’S EX
PARTE MOTION FOR LEAVE TO
FILE SUR-REPLY

vs.

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FLOYD ROSE GUITARS, FLOYD ROSE
MARKETING INC.; FLOYD D. ROSE,
DAVITT & HANSER MUSIC CO.; PING
WELL INDUSTRIAL CO.; DOES 1-10,
INCLUSIVE.,

(Doc. Nos. 37 & 59.)

Defendants.

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Plaintiff’s first amended complaint alleges infringement of five patents, patent false

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marking, and common law and statutory unfair competition. (Doc. No. 42 (FAC)). On December

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7, 2010, Defendant Floyd Rose Marketing, Inc. (Floyd Rose), requested the United States Patent

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and Trademark Office (USPTO) to perform ex parte reexamination of all five asserted patents.

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(Doc. No. 37 (Mot. to Stay) at 3.) Three days later, Defendant filed the present motion to stay.

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(Id.) The motion was filed before the USPTO granted reexamination, and the Court ordered

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supplemental briefing on the motion after reexamination was granted. (Doc. No. 54.) After

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considering all relevant documents and admissible evidence, the Court GRANTS IN PART AND

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DENIES IN PART Defendant’s motion to stay.

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The determination of whether to grant a stay pending the resolution of a reexamination of a

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patent at the United States Patent and Trademark Office is within the discretion of the district

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court. Gould v. Control Laser Corp., 705 F.2d 1340, 1341 (Fed. Cir. 1983). When ruling on a

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motion to stay the Court considers several factors: (1) the stage of the litigation, including whether

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discovery is or will be almost completed and whether the matter has been marked for trial; (2)

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whether a stay will unduly prejudice or tactically disadvantage the nonmoving party; and (3)

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whether a stay will simplify the issues in question and streamline the trial, thereby reducing the

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burden the burden of litigation on the parties and on the court. See Alltech, Inc. v. Cenzone Tech,

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Inc., 2007 WL 935516, at *2 (S.D. Cal March 21, 2007).

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The early stage of this litigation favors a stay. This Court has entertained only Defendants’

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motions to dismiss based on procedural matters and the present motion to stay. The parties have

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not yet begun discovery or made any headway on the merits of the claims.

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The second factor concerns issues of prejudice and tactical disadvantage to Plaintiff if a

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stay is granted. Plaintiff claims prejudice based on “the lapse of time during reexamination, which

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could result in loss of evidence and the fading of witness memory.” (Doc. No. 56 at 4.) Plaintiff

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states that the patent infringement claims involve evidence dating back to 2001 and that the false

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marking and unfair competition claims involve evidence dating back more than thirty years. (Id.

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at 4–5.) As a result, Plaintiff argues that evidence “will be (or has been) lost and respective

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memories will continue to fade if resolution of this case is delayed any further.” (Id. at 5.) The

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Court finds that the second factor weighs in favor of denying a stay because the lapse of time

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during reexamination could compound the loss of evidence and the fading of witness memory.

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Alltech, Inc., 2007 WL 935516, at *2.

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The last factor is whether a stay would simplify the issues in question and streamline the

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trial. The answer is no. Defendant requested reexamination of the five asserted patents, but

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Plaintiff does not claim only patent infringement. Plaintiff also alleges causes of action for patent

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false marking and unfair competition. And those causes of action are based on Defendant’s

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patents, not Plaintiff’s. Defendant’s requested reexamination does not affect Plaintiff’s false

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marking and unfair competition claims. On those claims, the third factor favors denying a stay.
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Nonetheless, Plaintiff’s patent infringement claims are affected by reexamination, and

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reexamination would benefit the Court when resolving those claims. “Without a stay, litigation is

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likely to be duplicative, especially considering that any claims that are cancelled by the PTO will

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not have to be litigated at all.” DJO, LLC v. VitalWear, Inc., 2010 WL 4065633, at *2 (S.D. Cal.

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October 15, 2010). Even if no claims are invalidated, the Court would still benefit from the

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USPTO’s expertise in having reviewed whatever prior art is presented during reexamination. See

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id. On the patent claims, the third factor favors granting a stay.

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After balancing the factors, the Court GRANTS DEFENDANT’S MOTION TO STAY
as to the five patent infringement claims. (Doc. No. 37.) This action is STAYED as to claims 1–5

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of Plaintiff’s first amended complaint. Although delay may negatively affect the evidence, the

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Court finds that the benefit of reexamination and the early stage of litigation ultimately favors

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granting a stay on the patent claims. The Court DENIES DEFENDANT’S MOTION TO STAY

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as to claims 6–8. (Id.) Patent reexamination does not affect these claims. And finally, the Court

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DENIES Plaintiff’s ex parte motion for leave to file sur-reply in support of the motion to stay.

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(Doc. No. 59.) This matter has been sufficiently briefed.

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IT IS SO ORDERED.

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DATED: April 12, 2011
Honorable Janis L. Sammartino
United States District Judge

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