Baxter Healthcare Corporation et al v. Becton, Dickinson, and Company
Filing
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ORDER Denying 72 Motion to Lift Stay as to U.S. Patent No. 8,554,579. Signed by Judge Janis L. Sammartino on 1/4/2021. (tcf)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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BAXTER HEALTHCARE
CORPORATION and BAXTER
CORPORATION ENGLEWOOD,
Case No.: 3:17-cv-2186 JLS-RBB
ORDER DENYING MOTION TO
LIFT STAY AS TO U.S. PATENT
NO. 8,554,579
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Plaintiffs,
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v.
(ECF No. 72)
BECTON, DICKINSON AND
COMPANY
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Defendant.
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Presently before the Court is Plaintiffs Baxter Healthcare Corporation and Baxter
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Healthcare Englewood’s Motion to Lift Stay Regarding U.S. Patent No. 8,554,579.
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(“Mot.,” ECF No. 72). Also before the Court is Defendant Becton, Dickinson and
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Company’s Opposition to the Motion (“Opp’n,” ECF No. 73) and Plaintiffs’ Reply in
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Support of the Motion, (“Reply,” ECF No. 76). The Court took this matter under
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submission without oral argument.
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considered the Parties’ arguments and the relevant law, the Court DENIES Plaintiffs’
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Motion to Lift Stay.
See generally ECF No. 77.
Having carefully
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BACKGROUND
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Plaintiffs develop and manufacture renal and medical products, including pharmacy
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automation, software and services, acute renal care, home and in-center dialysis, sterile IV
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solutions, infusion systems and devices, parenteral nutrition, biosurgery products and
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anesthetics, and perioperative care. Complaint (“Compl.,” ECF No. 1) ¶ 26. Defendant is
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“a global medical technology company that manufactures and sells medical supplies, drug
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delivery systems, laboratory equipment, software solutions, and diagnostic systems.” Id.
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¶ 32. Plaintiffs are both the assignee and owner of three United States patents: No.
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8,554,579 (the ’579 patent), issued October 8, 2013, id. ¶ 17; Ex. A, ECF No. 1-3; No.
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9,474,693 (the ’693 patent), issued October 25, 2016, Compl. ¶ 18; Ex. B, ECF No. 1-4;
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and No. 9,662,273 (the ’273 patent), issued May 30, 2017, Compl. ¶ 19; Ex. C, ECF No.
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1-5.
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The ’579 patent generally claims a “management of medication dose orders and
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medication dose preparation,” and, more specifically, “remote dose inspection for
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facilitating the practice of telepharmacy.” Ex. A at 1:14–20. The ’579 specification
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explains that “a pharmacist by law has to approve each drug order before it can be released
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and delivered to a patient,” id. at 3:6–7, and States impose a variety of regulations for “the
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level of supervision required by a pharmacist in monitoring and approving drugs prepared
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by others,” id. at 3:8–12. Generally, pharmacists “may be able to approve a drug order and
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release it even if the pharmacist is in a different room of the same building,” id. at 3:12–
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14, but an issue arises when a “pharmacist is temporarily unavailable,” id. at 3:20. The
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’579 patent addresses this issue by “provid[ing] a portal for remote inspection of prepared
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doses and thus facilitat[ing] the practice of telepharmacy, by which a pharmacist can
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inspect the dose preparation from any location inside the hospital or elsewhere so that doses
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are released more quickly and efficiently.” Id. at 20:58–63.
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The ’693 patent shares the same specification with its continuation, the ’273 patent.
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Similar to the ’579 patent, the ’693 and ’273 patents generally cover “[e]mbodiments of
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medical dose preparation management systems that may assist in management of medical
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doses.” Ex. C at 2:38–39. The common specification explains that “medical doses may
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be required to be verified by a pharmacist prior to being dispensed from the pharmacy for
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administration to a patient.” Id. at 1:39–41. A problem arises when a pharmacist must
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“physically observe the materials associated with the dose order” because the pharmacist
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may need to enter a “clean room” to verify the dose preparation. Id. at 1:54–56.
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PROCEDURAL BACKGROUND
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On October 26, 2017, Plaintiffs filed a Complaint alleging infringement of the ’579,
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’693, and ’273 patents. See generally ECF No. 1. On November 12, 2018, Defendant filed
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a Motion to Stay pending the Patent Trial and Appeal Board’s (“PTAB”) resolution of inter
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partes review (“IPR”) petitions filed by Defendant on the three patents. See generally ECF
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No. 45. Plaintiffs initially filed an Opposition, see generally ECF No. 54, and Defendant
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filed a Reply, see generally ECF No. 57. However, on May 3, 2019, the PTAB issued
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decisions instituting trial on all claims challenged in the three IPR petitions. See ECF No.
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68 at 1. Based on these developments, Plaintiffs did not oppose a renewed Motion to Stay
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this action. Id. On May 20, 2019, Defendant filed a renewed unopposed Motion to Stay
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pending IPR “through final exhaustion of the IPR proceeding, including any appeal.” Id.
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The Court granted Defendant’s Unopposed Motion to Stay conditioned on the exhaustion
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of any appeals. See generally ECF No. 69.
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The PTAB issued its Final Written Decision on May 3, 2019, concluding that all
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claims of the ‘579 Patent were patentable and that the ‘693 and ‘273 patents were
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unpatentable. Mot. at 2–3. The Parties have now appealed all three of the PTAB’s
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decisions. See Opp’n at 7 (citing Becton, Dickinson & Co. v. Baxter Corp. Englewood,
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No. IPR2019-00121, Paper 64 (P.T.A.B. May 11, 2020); Becton, Dickinson & Co. v.
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Baxter Corp. Englewood, No. IPR2019-00120, Paper 64 (PTAB May 11, 2020); Becton,
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Dickinson & Co. v. Baxter Corp. Englewood, No. IPR2019-00119, Paper 52 (P.T.A.B.
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June 18, 2020)). Plaintiffs now file this instant Motion seeking to lift the stay as to the
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‘579 patent only. See generally Mot.
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LEGAL STANDARD
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“[A] court that imposes a stay of litigation has the inherent power and discretion to
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lift the stay.” Ho Keung Tse v. Apple, Inc., No. C 06-06573 SBA, 2013 WL 5302587, at
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*2 (N.D. Cal. Sept. 19, 2013) (quoting Canady v. Erbe Elektromedizin GMBH, 271 F.
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Supp. 2d 64, 74 (D.D.C. 2002)). “A court may lift a stay if the circumstances supporting
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the stay have changed such that the stay is no longer appropriate.” Murata Mach. USA v.
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Daifuku Co., 830 F.3d 1357, 1361 (Fed. Cir. 2016) (citing Canady, 271 F. Supp. 2d at 74).
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When determining whether to lift a stay, the court analyzes the same three-factor test which
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informed whether the stay was appropriate in the first place: “(1) whether discovery is
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complete and whether a trial has been set; (2) whether a stay will simplify the issues in
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question and trial of a case; and (3) whether the stay would unduly prejudice or present a
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clear tactical disadvantage to the nonmoving party.” Pi-Net Int’l, Inc. v. Focus Bus. Bank,
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No. 5:12-CV-04958-PSG, 2015 WL 1538259, at *3 (N.D. Cal. Apr. 6, 2015). In addition
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to these factors, a court should consider the “totality of the circumstances.” Universal
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Elecs., Inc. v. Universal Remote Control, Inc., 943 F. Supp. 2d 1028, 1031 (C.D. Cal. 2013)
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(citing Allergan Inc. v. Cayman Chem. Co., No. SACV 07–01316 JVS (RNBx), 2009 WL
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8591844, at *2 (C.D. Cal. Apr. 9, 2009).
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ANALYSIS
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Stage of the Proceedings
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The Court finds the early stage in the proceedings weighs against lifting the stay. If
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discovery has not been completed and a trial date has not been set, the first factor typically
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weighs against lifting the stay.
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212CV02319TLNEFB, 2016 WL 5159524, at *2 (E.D. Cal. Sept. 21, 2016); Target
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Therapeutics, Inc. v. SciMed Life Sys., Inc., 33 U.S.P.Q.2d 2022, 2023 (N.D. Cal. 1995)
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(holding that the absence of “significant discovery” or “substantial expense and time . . .
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invested” in the litigation weighed in favor of staying the litigation).
Smart Modular Techs., Inc. v. Netlist, Inc., No.
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When the Court granted the stay in this case on May 21, 2019, the litigation had not
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progressed past the early stages. See generally ECF No. 69. This has not changed during
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the duration of the stay. Little discovery has been completed in this case, the Court has not
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yet issued a scheduling order, and the Court has not held an Early Neutral Evaluation
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Conference. Opp’n at 13 (citing ECF No. 57 at 2); see Robert Bosch Healthcare Sys., Inc.
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v. Cardiocom LLC, No. 14-CV-01575-EMC, 2017 WL 6939167, at *1 (N.D. Cal. Mar. 16,
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2017) (finding the first factor “necessarily favors maintaining the stay, as the case has been
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frozen at the same early stage it was at when the Court first entered the stay”); Evolutionary
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Intelligence, LLC v. Livingsocial, Inc., No. 13-CV-04205-WHO, 2014 WL 2735185, at *2
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(N.D. Cal. June 16, 2014) (finding the first factor favored the stay because only limited
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discovery had occurred, no pretrial dates had been scheduled, and no claim construction or
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other substantive briefs had been filed or scheduled).
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Accordingly, the first factor disfavors lifting the stay as this case is still in the early
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stages.
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II.
Simplification of Issues
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The Court finds lifting the stay at this juncture could introduce complications into
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the case, and therefore this factor weighs against lifting the stay. “One purpose of the
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reexamination procedure is to eliminate trial of that issue (when the claim is canceled) or
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facilitate trial of that issue by providing the district court with the expert view of the PTO
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(when a claim survives the reexamination proceeding).” Gould v. Control Laser Corp.,
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705 F.2d 1340, 1342 (Fed. Cir. 1983).
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The Federal Circuit’s decision of the appeal as to all three patents will simplify the
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issues at trial. The Federal Circuit’s review could render the entirety of the Plaintiffs’ case
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moot if the court finds that the PTAB erred in its findings on the ‘573 patent while affirming
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the PTAB’s findings of invalidity on the other two patents. Alternatively, if the Federal
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Circuit finds one or both of the other patents to be valid and enforceable, the potential for
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separate infringement suits of related technology in this Court will duplicate the discovery
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process and expend unnecessary resources. See, e.g., Evolutionary Intelligence, 2014 WL
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2735185, at *3 (concluding that, where the patents are related, “[l]itigating the . . . ’682
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patent now and the ’536 patent following resolution of the IPR would be inefficient and
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may result in duplication of effort”); Sonics, Inc. v. Arter is, Inc., 2013 WL 503091, at *3
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(N.D. Cal. Feb. 8, 2013) (“When there are overlapping issues between the reexamined
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patents and other non-reexamined patents-in-suit, courts have found that staying the entire
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case is warranted.”); Methode Elec., Inc. v. Infineon Technologies Corp., 2000 WL
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35357130, at *3 (N.D. Cal. Aug. 7, 2000) (“Duplicative discovery may result if only the
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‘408 patent is stayed since there are likely to be common documents and witnesses
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regarding the infringement litigation of the ‘408 and ‘468 patents.”); Pragmatus Telecom,
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LLC v. NETGEAR, Inc., 2013 WL 2051636, at *2 (N.D. Cal. May 14, 2013) (“[A] stay
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request is not contingent upon the reexamination proceeding being coterminous and
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resolving every claim and issue in this action. Rather, the salient question is whether the
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reexamination will aid the Court or otherwise streamline the litigation.”).
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Plaintiffs argue that the Federal Circuit has a high affirmance rate of PTAB
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decisions, and therefore the potential outcome of the appeal is too speculative to justify a
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stay. Mot. at 7. Some courts have found this argument to be persuasive. See Elm 3DS
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Innovations, LLC v. Samsung Elecs. Co., No. CV 14-1430-LPS-CJB, 2018 WL 1061370,
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at *2 (D. Del. Feb. 26, 2018) (“[W]hile it is of course possible that the Federal Circuit will
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come to a different conclusion than did the PTAB, the ‘mere possibility (as opposed to
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“reasonable likelihood”) that the asserted claims could be invalidated [after an] appeal and
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[that this would] result in simplification is too speculative to be given much weight.’”
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(quoting Network–1 Sec. Sols., Inc. v. Alcatel–Lucent USA Inc., CASE NO. 6:11CV492,
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2015 WL 11439060, at *3 (E.D. Tex. Jan. 5, 2015) (emphasis and alterations in original))).
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Although the Federal Circuit’s affirmance of the PTAB decisions may be statistically more
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likely, this outcome is far from a foregone conclusion. In addition to the possibility that
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any one or more of the PTAB decisions may be overturned, there are other benefits to
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continuing the stay through the pendency of the appeal. For example, the Federal Circuit’s
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de novo review of the PTAB’s claim constructions of the patents-in-suit may also provide
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guidance that will further simplify the issues before this Court. See In re Ameranth Patent
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Litig. Cases, No. 11CV1810 DMS (WVG), 2015 WL 12868116, at *2 (S.D. Cal. June 4,
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2015) (“[I]t makes little sense to have the parties engage in claim construction discovery
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and briefing, and for the Court to construe claims, when the Federal Circuit may undertake
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that same task in considering the parties’ appeals.”).
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The Court finds lifting the stay has the potential to create duplicative discovery and
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introduce inefficiencies into the case. Therefore, this factor weighs against lifting the stay.
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III.
Undue Prejudice
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Finally, the Court finds that maintaining the stay will not present a clear
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disadvantage to either party, so this factor remains neutral. “[D]elay by itself does not
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necessarily constitute undue prejudice, as nearly every judicial stay involves delay.
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However, even if such already-occurred delay is not given any weight in this analysis, the
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additional delay that would be incurred by continuing the stay pending exhaustion of
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appeals is significant.” Smart Modular Techs., Inc., 2016 WL 5159524, at *3.
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Although Plaintiffs argue that their damages from loss of market share and
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opportunities are not readily calculable monetary damages, Mot. at 8, Plaintiffs never
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sought a preliminary injunction in this case. See Palomar Techs., Inc. v. Mrsi Sys., LLC,
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No. 15-CV-1484 JLS (KSC), 2016 WL 4496839, at *2 (S.D. Cal. June 14, 2016)
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(“Plaintiff’s failure to pursue a preliminary injunction undermines its position that
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monetary damages are insufficient.”). It is true that delaying the suit could limit Plaintiffs’
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time to recoup their investment in the ‘579 patent if the Federal Circuit affirms its validity
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and this Court finds infringement, but the Court finds that Plaintiffs can be adequately
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compensated by monetary damages for any harm suffered from a continued stay. Compare
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Smart Modular Techs., Inc., 2016 WL 5159524, at *4 (“[T]he Court agrees that ‘any undue
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delay in enjoining infringing conduct could cause [the plaintiff] to miss its window for
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financially capitalizing on its own patented technology.’” (citations omitted)) with Teva
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Pharm. Int’l GmbH v. Eli Lilly & Co., No. 18-CV12029-ADB, 2019 WL 1767394, at *8
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(D. Mass. Apr. 22, 2019) (concluding a stay was warranted, even where the parties were
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competitors, because there was “no indication” that a stay would cause plaintiff “to lose
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any presently available legal remedies”).
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While continuing the stay during the pendency of appeal to the Federal Circuit will
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increase the duration of the stay, see Mot. at 10, the possibility of appeals from the IPR
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decisions was expressly contemplated by the parties, Opp’n at 5–6. Significantly, the
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unopposed motion to stay and the Court’s order granting the motion conditioned the stay
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on the resolution of any appeal. See ECF No. 69 at 1 (“The stay will automatically extend
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through final exhaustion of the IPR proceeding, including any appeal.”); but cf. Smart
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Modular Techs., Inc., 2016 WL 5159524, at *3 (lifting stay when the order granting the
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initial stay was not conditioned on any exhaustion of appeals). The Court is not persuaded
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by Plaintiffs’ present argument when Plaintiffs had the opportunity to file an opposition to
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Defendant’s motion for a stay pending IPR including appeals and chose not to do so.
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Compare ECF No. 45, with ECF No. 72. The circumstances under which the Court granted
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the stay have not changed significantly. Akeena Solar Inc. v. Zep Solar Inc., No. C 09-
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05040 JSW, 2011 WL 2669453, at *2 (N.D. Cal. July 7, 2011) (“Here, litigation is still in
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its early stages, and the pending reexamination request may eliminate the need for trial
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completely. Thus lifting the stay would be premature, because the circumstances that led
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this Court to grant the stay have not changed significantly.”). Therefore, the Court finds
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this factor is neutral.
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Considering the totality of the circumstances, the Court finds that the three factors
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weigh in favor of continuing the stay as to the ‘579 Patent through completion of the IPR
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proceedings, including the pendency of any appeal.
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CONCLUSION
For the foregoing reasons, the Court DENIES Plaintiffs’ Motion to Lift the Stay as
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to the ‘579 Patent.
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IT IS SO ORDERED.
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Dated: January 4, 2021
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