Copy Protection LLC v. Netflix Inc.

Filing 73

MEMORANDUM ORDER re 46 MOTION to Stay Litigation Pending Inter Partes Review of the Patent in-Suit filed by Netflix Inc. is DENIED WITHOUT PREJUDICE. Signed by Judge Leonard P. Stark on 6/17/15. (ntl)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
COPY PROTECTION LLC,
Plaintiff,
v.

C.A. No. 14-365-LPS

NETFLIX, INC.,
Defendant.

MEMORANDUM ORDER
At Wilmington this 17th day of June, 2015:
Having reviewed the parties' filings related to Defendant Netflix, Inc.'s motion to stay
litigation (D.1. 46) pending inter partes review ("IPR") ("Motion") of U.S. Patent No. 7,079,649
(the '"649 patent") by the Patent Trial and Appeal Board ("PTAB") and the corresponding filings
(D.I. 47, 51, 52),
IT IS HEREBY ORDERED that, for the reasons stated below, Defendant's Motion is
DENIED WITHOUT PREJUDICE.
1.

Defendant seeks a stay of proceedings pending IPR of the '649 patent by the

PTAB. (D.1. 46) The PTAB has not instituted the IPR petition. (See D.I. 51at1) Given the
filing date, the PTAB is statutorily required to decide whether to institute the IPR petition by
October 3, 2015. (See D.I. 51at8)
2.

The Court typically considers three factors when deciding whether to stay

litigation pending IPR: "(1) whether a stay would unduly prejudice or present a clear tactical
disadvantage to the non-moving party; (2) whether a stay will simplify the issues in question and

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trial of the case; and (3) whether discovery is complete and whether a trial date has been set."
Neste Oil OYJv. Dynamic Fuels, LLC, 2013 WL 3353984, at *1 (D. Del. July 2, 2013).
3.

As to the first factor, the Court finds that Defendant's delay in petitioning for IPR

could create at least some tactical disadvantage for Plaintiff Copy Protection LLC ("Plaintiff')
and a stay may unduly prejudice Plaintiff. While Plaintiffs status as a non-practicing entity
reduces the prejudice it would suffer from a stay (see D.I. 47 at 9-10), there remains a potential
for undue prejudice. (See D.I. 51 at 3) "[S]taying a case pending PTO review risks prolonging
the final resolution of the dispute and thereby may result in some inherent prejudice to the
plaintiff." Neste Oil OYJ v. Dynamic Fuels, LLC, 2013 WL 3353984, at *2 (D. Del. July 2,
2013).
4.

The second factor, whether a stay will simplify the issues, disfavors a stay at this

time. As noted, the IPR petition has not been instituted. Generally, "the 'simplification' issue
does not cut in favor of granting a stay prior to the time the PTAB decides whether to grant the
petition for inter partes review." Freeny v. Apple Inc., 2014 WL 3611948, at *2 (E.D. Tex. July
22, 2014 ). Defendant may renew its Motion if and when its petition is instituted, and the

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simplification factor may be evaluated differently at that time.
5.

Finally, considering the status of discovery and whether a trial date has been set,

the Court observes that a trial date has been set for October 11, 2016 (around the same time as
the IPR petition may be finally decided) and the parties have engaged in a substantial amount of
discovery and are set to complete claim construction briefing shortly. (See D.I. 51 at 2-3) At this
time, the Court finds that this third factor weighs against granting a stay.
6.

Weighing the pertinent factors, the Court concludes that they do not favor

granting the requested stay. Accordingly, Defendant's motion to stay litigation (D.I. 46) is
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DENIED WITHOUT PREJUDICE.

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HON. LEONARD P. STARK
UNITED STATES DISTRICT JUDGE