Targus International LLC v. Group III International, Inc.
ORDER granting 65 Expedited Motion to Stay. Staying Case; Administratively Closing Case. Signed by Judge Robert N. Scola, Jr. on 1/7/2021. See attached document for full details. (ls)
Case 1:20-cv-21435-RNS Document 71 Entered on FLSD Docket 01/08/2021 Page 1 of 4
United States District Court
Southern District of Florida
Targus International LLC, Plaintiff,
Group III International, Inc.,
Civil Action No. 20-21435-Civ-Scola
Order Granting Stay
Plaintiff Targus International LLC complains Defendant Group III
International, Inc., has infringed its patent—U.S. Patent No. 8,567,578 (the
“’578 Patent”)—which protects innovations related to its line of “checkpointfriendly” laptop bags and cases. (Compl., ECF No. 1.) Now before the Court is
Group III’s expedited motion to stay these proceedings pending a potential inter
partes review of the alleged infringed patent. (Def.’s Mot. for Stay, ECF No. 65.)
Targus opposes Group III’s motion for a stay, arguing that Group III’s request
is premature and that all of the factors the Court should consider weigh
against a stay. (Pl.’s Resp., ECF No. 67.) Group III has timely replied. (Def.’s
Reply, ECF No. 69.) After careful review, the Court finds the factors, on
balance, tip in favor of the Court’s exercising its broad discretion to grant the
stay. Accordingly, the Court grants Group III’s motion to stay this case (ECF
1. Legal Standard
In 2011, Congress passed the Leahy-Smith America Invents Act and, in
doing so, introduced a process known as “inter partes review” which was
intended to serve as “a quick, inexpensive, and reliable alternative to district
court litigation to resolve questions of patent validity.” S. Rep. No. 110-259, 20
(Jan. 24, 2008). As an alternative to litigation, inter partes review allows a party
to ask the United States Patent Trial and Appeal Board (“PTAB”) “to reexamine
the claims in an already-issued patent and to cancel any claim that the agency
finds to be unpatentable in light of prior art.” Cuozzo Speed Techs., LLC v. Lee,
136 S. Ct. 2131, 2136 (2016).
Courts generally enjoy broad discretion in deciding how best to manage
the cases before it. See Johnson v. Bd. of Regents of Univ. of Georgia, 263 F.3d
1234, 1269 (11th Cir. 2001) (“accord[ing] district courts broad discretion over
the management of pre-trial activities, including discovery and scheduling”). It
no doubt follows, then, that, when inter partes review is sought, “the decision
to stay related civil patent infringement litigation is within the sound discretion
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of the district court.” Lighting Sci. Group Corp. v. Nicor, Inc., 6:16-CV-1087ORL-37GJK, 2017 WL 3706697, at *2 (M.D. Fla. May 9, 2017). This makes
sense because inter partes review has the potential to “eliminate trial of
invalidity issues when a claim is canceled or, otherwise facilitate trial of
remaining issues following PTO denial of reexamination or reissuance
proceedings.” Roblor Mktg. Grp., Inc. v. GPS Indus., Inc., 633 F. Supp. 2d 1341,
1346 (S.D. Fla. 2008) (Torres, Mag. J.). Stays pending such reviews are granted
routinely “in order to avoid inconsistent results, obtain guidance from the
PTAB, or avoid needless waste of judicial resources.” See Evolutionary
Intelligence, LLC v. Apple, Inc., No. 13cv04201, 2014 WL 93954, at *2 (N.D. Cal.
Jan. 9, 2014).
As a preliminary matter, while the Court acknowledges courts often deny
stays when they are sought before the PTAB has decided to institute review,
this is not the bright-line rule Targus makes it out to be. (See Pl.’s Resp. at 4
(describing the Southern and Middle Districts of Florida as “routinely den[ying]
stays” before the Patent Board institutes review).) Instead, the Court agrees
with those courts that find whether the PTAB has decided to institute review at
the time the stay is sought is simply part of the Court’s analysis of the relevant
factors. See VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1315–16
(Fed. Cir. 2014) (“While a motion to stay could be granted even before the PTAB
rules on a post-grant review petition, no doubt the case for a stay is stronger
after post-grant review has been instituted.”). That the PTAB has not yet made
a decision on whether to institute review, then, is not dispositive here.
Instead, the Court looks to the three factors courts typically consider in
determining the appropriateness of a stay pending inter partes review: (1)
whether the stay will unduly prejudice or present a clear tactical disadvantage
to the nonmoving party; (2) whether the stay will simplify issues in question
and trial of the case; and (3) whether discovery is complete and whether a trial
date has been set. Roblor, 633 F. Supp. 2d at 1347.
As to the first factor, the Court recognizes that Group III is a direct
competitor of Targus. Accordingly, as courts often recognize and as Targus
points out, there will undoubtedly be some unavoidable prejudice to Targus if
the case is stayed. See Gatearm Techs., Inc. v. Access Masters, LLC, 14-62697CIV, 2015 WL 13752667, at *1 (S.D. Fla. July 13, 2015) (Scola, J.). But, here,
Targus has not sought a preliminary injunction and, thus, any further harm
occasioned by the stay may be ameliorated money damages. See id.; see also
Andersons, Inc. v. Enviro Granulation, LLC, 8:13-CV-3004-T-33MAP, 2014 WL
4059886, at *3 (M.D. Fla. Aug. 14, 2014) (noting, in addressing a similar
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argument, that the plaintiff had “not sought a preliminary injunction and that
any damages it incurs may be remediated with money damages”).
Further, contrary to Targus’s position, “standing alone, the potential for
litigation delay does not establish undue prejudice.” Patent Asset Licensing,
LLC v. Bright House Networks, LLC, 3:15-CV-742-J-32MCR, 2016 WL 4431574,
at *2 (M.D. Fla. Aug. 22, 2016) (emphasis in original). The Court finds, in this
case, such a delay is outweighed by the many recognized potential advantages
of inter partes review: “(1) furthering judicial economy; (2) determining validity;
(3) focusing the issues, defenses, and evidence; (4) developing the prior art and
prosecution history; (5) obtaining the PTO’s particular expertise; (6)
encouraging settlement; and (7) reducing costs to the parties.” Patent Asset,
2016 WL 4431574, at *3. This is especially so where, as here, Targus
acknowledges waiting seven years after its patent issued before pursuing
litigation against Group III.
On the whole then, the Court finds Targus has not rebutted Group III’s
showing that a stay will not unduly burden Targus and, therefore, the first
factor tips in favor of a stay.
As to the second factor, the Court again agrees with Group III. Even if
only some of the claims are canceled, those claims will not need to be litigated
in this action, which will save the parties from spending more time conducting
discovery, researching, and briefing the issues. And any streamlining of the
issues or invalidated issues will save judicial resources. This factor, then, also
leans in favor of a stay.
Finally, as to the third factor, this case is not so far along that a stay
would be senseless. Although the parties have engaged in written discovery and
exchanged infringement, noninfringement, invalidity, and unenforceability
contentions, no depositions—fact or expert—have been taken, and the claim
construction briefing is in its infancy. No hearing has been scheduled for claim
construction and nearly four months of fact discovery remain. If anything, this
factor may weigh marginally in Targus’s favor or is perhaps only neutral.
In sum, the Court finds that a stay may prevent unnecessary
expenditure of substantial resources and that, should the PTAB render a final
decision on the inter partes review, it will help streamline this case and, at a
minimum, allow the parties to more effectively focus their claims. See
Intellectual Ventures I, LLC v. Motorola Mobility LLC, 13-61358-CIV, 2014 WL
12584301, at *2 (S.D. Fla. July 17, 2014) (Middlebrooks).
Accordingly, the Court grants Group III’s expedited motion for a stay
(ECF No. 65) and stays this case pending resolution of the inter partes review.
Case 1:20-cv-21435-RNS Document 71 Entered on FLSD Docket 01/08/2021 Page 4 of 4
The Clerk is directed to administratively close this case. The parties must
jointly submit a motion to reopen this case, along with a proposed amended
scheduling order, within ten days after completion of the inter partes review.
Any other pending motions are denied as moot 1 and may be renewed when the
case is reopened. Once the PTAB decides whether to institute inter partes
review of the ’578 Patent, Group III must promptly notify the Court.
Done and ordered, at Miami, Florida, on January 7, 2021.
Robert N. Scola, Jr.
United States District Judge
As an aside, the Court notes the parties’ request for clarification as to the opening claimconstruction brief. (Pl.’s Mot., ECF No. 64; Def.’s Resp., ECF No. 68.) While simultaneous
briefing of opening claims-construction may have been permitted in other cases, the Court’s
general practice is that only the party claiming infringement may (and must) file an opening
claim-construction brief. When or if this case proceeds before the Court, this will be clarified in
an amended scheduling order. Briefing will proceed under the standard timing allowed for
motions generally under the Local Rules.
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