Ipe Clip Fastener Company, LLC v. Simpson Strong-Tie Company, Inc.

Filing 65

ORDER granting 41 --motion to stay; directing the clerk to ADMINISTRATIVELY CLOSE the case; directing the plaintiff, within fourteen days after conclusion of the re-examination, to file the PTO's determination and to move to re-open the case and to lift the stay. Signed by Judge Steven D. Merryday on 10/20/2017. (BK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
THE IPE CLIP FASTENER
COMPANY, LLC,
Plaintiff,
v.

CASE NO. 8:16-cv-2862-T-23TGW

SIMPSON STRONG-TIE COMPANY,
INC.,
Defendant.
____________________________________/

ORDER
The plaintiff sues (Doc. 1) for a declaratory judgment that two of the plaintiff’s
products, “Extreme4”and “ExtremeKD” fasteners, are “not covered” by United
States Patent Nos. 8,874,113 and 8,161,702 (Doc. 1 at 3),1 and the defendant
counterclaims (Doc. 23) for breach of contract and for patent infringement. Because
the United States Patent and Trademark Office (“PTO”) recently granted
(Docs. 41-3, 41-5) the plaintiff’s request for ex parte re-examination of both patents,
the plaintiff moves (Doc. 41) to stay this action pending the outcome of the reexaminations.
1

“[The plaintiff’s] predecessor-in-interest . . . entered into a license agreement with [the
defendant’s] predecessor-in-interest . . . with regard to the production of certain hidden outdoor deck
fasteners . . . . [The defendant] is now asserting that [the plaintiff’s] Extreme4 and ExtremeKD deck
fasteners are covered by certain patents . . . .” (Doc. 1 at 2 and 3) “[The plaintiff] seeks a declaratory
judgment that certain of [the plaintiff’s] fasteners are not covered by any valid claim of [the patents]
and are therefore not subject to the License Agreement.” (Doc. 1 at 3)

A district court “ha[s] inherent power to manage [its] docket and stay
proceedings, including the authority to order a stay pending conclusion of a PTO reexamination,” and the decision whether to stay rests “with the sound discretion of
the Court.” Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426–27 (Fed. Cir. 1988). Stays are
granted liberally, and re-examination “should be deferred to . . . especially where the
infringement litigation is in the early stages.” Roblor Marketing Group, Inc. v GPS
Industries, Inc., 633 F. Supp. 2d 1341, 1346 (S.D. Fla. 2008) (Torres, J.).
Factors to consider in determining whether to stay an action pending the
outcome of a re-examination include whether a stay (1) simplifies the issues and
streamlines the trial, (2) reduces the burden of litigation on the parties and the court,
and (3) avoids tactical disadvantage or other undue prejudice to the non-moving
party. Baxa Corp. v. Forhealth Techs., Inc., 2006 WL 4756455, *1 (M.D. Fla. May 5,
2006) (Fawsett, J.) (citing Tap Pharm. Prods., Inc. v. Atrix Labs., Inc., 70 U.S.P.Q.2d
1319, 1320 (N.D. Ill. 2004) (Zagel, J.).
Stating that the PTO found a “substantial question of patentability for
all claims” of the two patents, the plaintiff argues that “the outcome of the
reexaminations . . . could determine the outcome of the license agreement claim and
counterclaim” and that “if the PTO cancels all claims of the [defendant’s] patents,
the claims and counterclaims relating the License Agreement and [the] patent

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infringement counterclaim will be resolved.”2 (Doc. 41 at 10–11) The defendant
asserts (1) that a “multi-year delay” fails to “make sense” because re-examination
fails to resolve all the litigated issues (Doc. 47 at 8) and (2) that a stay fails to reduce
the burden of litigation on the parties or the court because “ultimately the court and a
jury” must adjudicate “the issues of validity, infringement, and breach of license.”
(Doc. 47 at 11)
However, other benefits, most notably the usefulness of the PTO’s expert
opinion, weigh in favor of a stay. Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426 (Fed.
Cir. 1988) (“[A]n advantage of the reexamination process is that it allows the validity
of a patent to be tested in the Patent office where the most expert opinions exist and
at a much reduced cost.”) (citation omitted). Whatever the re-examination’s
outcome, the PTO’s expert opinion is likely to narrow the contested issues, prevent
duplication of proceedings, and streamline the proceedings.3
Also, the PTO “expedite[s]” re-examination requests “to the extent possible.”
Section 2286, Manual of Patent Examining Procedure. But during any delay
attributable to re-examination, money damages continue to accrue to compensate for
any infringement.

2

The plaintiff states that “it is overwhelmingly likely that re-examinations will result in the
cancellation or amendment of all claims of the . . . Patents. According to the PTO’s most recent
statistics, the claims of the re-examined patents have been canceled or amended in 78% of the ex parte
re-examinations completed . . . for those . . .requested . . . .” (Doc. 41 at 9)
3

For example, by “reduc[ing] [future] discovery costs . . . and motion practice.”
(Doc. 41 at 12)

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CONCLUSION
In sum, re-examination often simplifies and expedites litigation (and perhaps
eliminates the need for a trial) without undue prejudice to an affected party. The
plaintiff’s motion (Doc. 41) to stay is GRANTED, and this action is STAYED. The
clerk is directed to administratively close the case. Within fourteen days after
conclusion of the re-examination, the plaintiff must file the PTO’s determination and
move to re-open the case and to lift the stay.
ORDERED in Tampa, Florida, on October 20, 2017.

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