Mueller Water Products, Inc. et al v. Victaulic Company
Filing
27
ORDER AND OPINION denying without prejudice defendants 6 Motion to Dismiss or Transfer, granting 18 Plaintiffs' Motion to Stay; granting as unopposed defendants 19 Motion to Seal and granting defendants [23,24] Motions for Leave to File Su pplemental Material. This action is STAYED and ADMINISTRATIVELY TERMINATED pending the ongoing USPTO reexaminations concerning patents 131 and 796. Either party may reopen the case by filing a motion so requesting within sixty (60) days of the USPTOs decision on the pending reexaminations or, at any time, for good cause shown. Signed by Judge Julie E. Carnes on 9/25/13. (ddm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
MUELLER WATER PRODUCTS, INC.
and ANVIL INTERNATIONAL, LLC,
Plaintiffs,
CIVIL ACTION NO.
1:12-cv-3446-JEC
v.
VICTAULIC COMPANY,
Defendant.
ORDER & OPINION
This case is before the Court on defendant’s Motion to Dismiss
or Transfer [6], plaintiffs’ Motion to Stay [18], defendant’s Motion
to Seal [19] and defendant’s Motions for Leave to File Supplemental
Material [23] and [24].
arguments
of
the
The Court has reviewed the record and the
parties
and,
for
the
reasons
set
out
below,
concludes that defendant’s Motion to Dismiss or Transfer [6] should
be DENIED without prejudice, plaintiffs’ Motion to Stay [18] should
be GRANTED, defendant’s Motion to Seal [19] should be GRANTED as
unopposed and defendant’s Motions for Leave to File Supplemental
Material [23] and [24] should be GRANTED.
AO 72A
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BACKGROUND
Plaintiffs Mueller Water Products and Anvil International have
filed this declaratory judgment seeking an order that certain patents
owned by defendant are invalid and are not infringed. (Compl. [1] at
¶
1.)
Plaintiffs
and
defendant
are
competitors
in
the
water
infrastructure industry, specifically the market for grooved and
plain-end mechanical pipe joining systems.
(Id. at ¶¶ 8, 13.)
The
patents at issue are U.S. Patent No. 7,086,131 (“the ‘131 patent”)
and No. 7,712,796 (“the ‘796 patent”).
(Id. at ¶¶ 16, 20.)
both
pipe
relate
to
deformable
mechanical
couplings
They
that
are
configured to join together two end portions of pipe elements in a
sealable manner.
(Id. and Pls.’ Br. in Supp. of Mot. to Stay (“Pls.’
Br.”) [18] at 7-9.)
In January 2012, plaintiffs filed an inter partes reexamination
request with the U. S. Patent and Trademark Office (“USPTO”) of the
‘131 patent.
(Compl. [1] at ¶ 32.)
Finding that the request met its
reasonable likelihood of prevailing standard, the USPTO granted the
request for reexamination.
(Id. at ¶¶ 33-34.)
A few weeks later,
plaintiffs filed an inter partes review of the ‘796 patent.
¶ 36.)
(Id. at
The USPTO granted reexamination as to some of the claims in
the ‘796 patent, but denied reexamination as to certain other claims.
(Id.
at
¶
37.)
In
response,
plaintiffs
reexamination request of the denied claims.
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filed
an
ex
(Id. at ¶ 38.)
parte
In
September
2012,
plaintiffs
unveiled
their
new
SlideLOK
coupling product at a Las Vegas trade show known as the MINExpo.
(Compl. [1] at ¶ 10.)
Defendant also attended the MINExpo trade
show.
At some point during the show, several of
(Id. at ¶ 42.)
defendant’s employees viewed the SlideLOK and had some discussions
with plaintiffs’ representatives concerning the product.
Done Decl. [1].)
(Id. and
The substance of those discussions is disputed.
(Sargent Decl. [6] and First Bauer Decl. [6].)
Two days after the conclusion of the MINExpo, defendant’s
counsel wrote a letter to plaintiffs requesting three samples of the
SlideLOK
coupling
portfolio.”
for
“evaluation
vis-a-vis
Victaulic’s
patent
(Victaulic Letter, attached to Compl. [1] as Ex. G.)
The letter sates:
We represent Victaulic Company (“Victaulic”) with
regard to certain intellectual property matters. We write
regarding Anvil’s new coupling, which we understand Anvil
is calling the “SlideLok” coupling and promoting as an
“Installation-Ready” coupling.
Victaulic is the leader in INSTALLATION READY™
coupling technology, with a portfolio of patents and
pending applications covering various aspects of that
technology.
In fact, as I am sure you know, Anvil has
requested that the Patent Office reexamine a couple of
those patents.
We request that three samples of the SlideLok coupling
be sent to us for evaluation vis-a-vis Victaulic’s patent
portfolio.
In addition, if Anvil believes that the
SlideLok coupling and the use of that coupling do not
infringe any Victaulic patent, please provide the basis for
that belief.
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We stress that Victaulic is not currently asserting
that the SlideLok coupling or use of that coupling
infringes any Victaulic patent. We simply request samples
of the coupling and the basis of any non-infringement
contention by Anvil to evaluate and determine if there are
any issues that should be addressed by Victaulic and Anvil.
(Id.)
On October 3, 2012, less than a week after receiving the letter
and before responding or sending samples to defendant, plaintiffs
filed this declaratory action.
at ¶ 14.)
(See Compl. [1] and Bucher Dec. [6]
On October 11, 2012, plaintiffs sent the requested
coupling samples to defendant.
Mot. to Dismiss [6] as Ex. 21.)
(Hyland Letter, attached to Def.’s
Defendant subsequently filed suit
against plaintiff Anvil in the Eastern District of Pennsylvania,
alleging that the SlideLOK coupling infringes on the ‘131 and the
‘796 patents.
Victaulic Co. v. Anvil Int’l, LLC, Civ. No. 5:12-CV-
05985-SD, Compl. at Dkt. No. [1] (E.D. Pa. Oct. 19, 2012).
Defendant has now filed a motion urging the Court to dismiss or
transfer this case to Pennsylvania, where its own action is pending.
(Def.’s Mot. to Dismiss or Transfer [6].)
Plaintiff has filed a
motion to stay the case pending the USPTO’s ongoing reexamination
proceedings concerning the ‘131 and ‘796 Patents.
Stay [18].)
(Pl.’s Mot. to
In connection with the motion to stay, defendant has
filed motions to seal certain exhibits and to submit supplemental
material.
(Def.’s Mot. to Seal [19] and Mots. for Leave to File
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Supplemental Materials [23] and [24].)
The Court GRANTS defendant’s
motion to seal [19] as unopposed and also GRANTS defendant’s motions
to
supplement
[23]
and
[24].
The
Court
has
considered
the
supplemental material submitted by defendant in ruling on the motions
to stay [18] and dismiss [6].
DISCUSSION
As discussed above, the ‘131 and ‘796 patents are the subject of
ongoing USPTO reexamination proceedings.
(Compl. [1] at ¶¶ 32-38.)
During those proceedings, the USPTO will reevaluate the validity and
scope of the ‘131 and ‘796 patents.
See 35 U.S.C. §§ 302, 311.
As
a result of the proceedings, certain claims in either patent may be
upheld, amended or invalidated.
35 U.S.C. § 307.
Because of the
potential impact of the USPTO’s decision on any patent claims, courts
frequently stay patent litigation pending the outcome of an ongoing
USPTO reexamination.
1340,
1342
(Fed.
See Gould v. Control Laser Corp., 705 F.2d
Cir.
1983)(“One
purpose
of
the
reexamination
procedure is to eliminate trial of [validity] (when the claim is
canceled) or to facilitate trial of that issue by providing the
district court with the expert view of the PTO (when a claim survives
the reexamination proceeding).”) and Roblor Mktg. Grp., Inc. v. GPS
Indus., Inc., 633 F. Supp. 2d 1341, (S.D. Fla. 2008)(recognizing a
liberal policy in favor of granting stays).
The Court has broad discretion to grant or deny a stay of this
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action pending USPTO reexamination of the patents in suit.
705 F.2d at 1342.
Gould,
See also Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 21 (1983)(noting the district court’s
discretion to stay proceedings incident to the court’s power to
control its own docket).
In exercising that discretion, courts
generally consider the following factors:
unduly
prejudice
or
present
a
clear
(1) whether a stay would
tactical
disadvantage
to
defendant, (2) whether a stay will simplify the issues in question
and trial of the case, and (3) whether discovery is complete and
whether a trial date has been set.
See Cheng v. Sighting Sys.
Instruments, LLC, No. 1:06-cv-2326-WSD, 2007 WL 1341119, at *2 (N.D.
Ga. May 3, 2007)(Duffey, J.)(citing Xerox Corp. v. 3Com Corp., 69 F.
Supp. 2d 404, 406-07 (W.D.N.Y .1999)) and Southwire Co. v. Cerro
Wire, Inc., 750 F. Supp. 2d 775, 778 (E.D. Tex. 2010)(applying the
same factors).
All of the relevant factors favor a stay in this case.
initial matter, this case is in its earliest stages.
As an
Defendant has
not filed an answer and no discovery has been conducted. Courts have
readily granted stays under similar circumstances.
See Emhart
Indus., Inc. v. Sankyo Seiki Mfg. Co., Ltd., 3 U.S.P.Q. 2d 1889, 1890
(N.D. Ill. 1987)(“In cases which have not progressed beyond . . .
initial litigation stages, the reexamination procedure should be
utilized.”) and Snyder Seed Corp. v. Scrypton Sys. Inc., 52 U.S.P.Q.
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2d 1221, 1223 (W.D.N.Y. 1999)(noting that reexamination provides an
“inexpensive, expedient means of determining patent validity” when
the infringement litigation is in the early stages).
It is also likely that the reexamination will simplify the
issues in the case.
In granting the inter partes reexamination
requests, the USPTO found that plaintiffs presented a “reasonable
likelihood of prevailing” on invalidity claims for the ‘131 and ‘796
patents based on prior art not previously considered.
[18] at 5, 14.)
(Pls.’ Br.
The USPTO further recognized that plaintiffs’
request for ex parte reexamination of the ‘796 patent presented a
substantial new question of patentability. The validity and scope of
the ‘131 and ‘796 patents are central issues in this case.
[1] at ¶¶ 57-105.)
(Compl.
The USPTO’s resolution of these issues prior to
discovery will potentially save substantial time and effort and might
lead to settlement or dismissal of the case.
See MercExchange,
L.L.C. v. eBay, Inc., 500 F. Supp. 2d 556, 563 (E.D. Va. 2007)(a
court may opt to stay a patent case “in order to avoid inconsistent
results, narrow the issues, obtain guidance from the PTO, or simply
to avoid the needless waste of judicial resources”).
Finally, it is noteworthy that it is the plaintiff in this
action that is seeking the stay.
As defendant points out, it would
seem to be an inconsistent litigation strategy for a plaintiff to
file suit and then soon thereafter ask that the court not proceed
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with the action that the party had just filed.
9.)
(Def.’s Resp. [20] at
Defendant argues that plaintiff has only filed suit, and then
sought a stay, in order to gain a tactical advantage.
Defendant
notes that a stay will result in the prolonged sale of the SlideLOK
couplings in the marketplace, and that is undoubtedly true.
Resp. [20] at 7-12.)
(Def.’s
But any lost sales to defendant that are
ultimately determined to be the result of infringement can be
compensated by money damages.
See Tomco Equip. Co. v. S.E. Agri-
Sys., Inc., 542 F. Supp. 2d 1303, 1308 (N.D. Ga. 2008)(finding no
prejudice where damages could be remedied by money).
Defendant’s
suggestion that the SlideLOK is somehow defective and will cause
irremediable marketplace injury is rebutted by plaintiffs’ evidence
that there has never been a single corroborating report to indicate
any problems with the product.
(Radzik Decl. [22] at Ex. B.)
Defendant also argues that it will be tactically disadvantaged
by a stay because the resulting delay will effectively preempt the
Pennsylvania action, which was brought by defendant against plaintiff
Anvil, after plaintiffs Anvil and Mueller filed suit in this district
against the defendant.
(Def.’s Resp. [20] at 21 (“If this [NDGa]
case is stayed, and the Eastern District of Pennsylvania Court
strictly follows the first filed rule, plaintiff Anvil will have
achieved
the
unfair
tactical
advantage
[Pennsylvania] infringement case....“).)
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of
preempting
the
Yet, it is not clear that our sister court in Pennsylvania will
“strictly”
follow
the
first-filed
rule,
under
these
peculiar
circumstances, particularly given how transparent defendant argues
plaintiffs’ ploy to have been.
At any rate, defendant can make its
arguments against a stay of the Pennsylvania action before that
court.
If
the
latter
finds
those
arguments
meritorious,
the
Pennsylvania action can proceed.
In sum, the Court finds that the relevant factors weigh in favor
of staying this litigation pending the ongoing USPTO reexaminations
of
the
‘131
and
‘796
patents.
Accordingly,
the
Court
GRANTS
plaintiffs’ motion for a stay [18]. Pursuant to defendant’s request,
the case will be ADMINISTRATIVELY TERMINATED during the stay. Either
party may reopen the action within sixty (60) days of the USPTO’s
decision on the pending reexaminations or, at any time, for good
cause shown.1
In conjunction with this order, the Court DENIES
without prejudice defendant’s motion to dismiss or transfer [6].
1
If
An example of good cause might occur if our sister court in
Pennsylvania determines that a stay was not warranted based on the
pending patent reexamination, but instead was necessary because, as
the first-filed action, the case in this district must proceed first.
In that event, the Pennsylvania action would effectively become a
hostage to the case in this district. If, on the other hand, our
sister court likewise decides that it too would stay the litigation
pending the patent reexamination, nothing would be gained by the
undersigned tackling what could be a thorny jurisdictional question
in a case that might be eventually mooted by the patent reexamination
decision.
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the case is reopened, defendant should advise the Court within twenty
(20) days whether it wishes to reactivate its motion to dismiss [6].
CONCLUSION
For the foregoing reasons, the Court DENIES without prejudice
defendant’s Motion to Dismiss or Transfer [6], GRANTS plaintiffs’
Motion to Stay [18], GRANTS as unopposed defendant’s Motion to Seal
[19] and GRANTS defendant’s Motions for Leave to File Supplemental
Material [23] and [24].
TERMINATED
pending
This action is STAYED and ADMINISTRATIVELY
the
patents ‘131 and ‘796.
ongoing
USPTO
reexaminations
concerning
Either party may reopen the case by filing a
motion so requesting within sixty (60) days of the USPTO’s decision
on the pending reexaminations or, at any time, for good cause shown.
SO ORDERED, this 25th day of September, 2013.
/s/ Julie E. Carnes
JULIE E. CARNES
CHIEF UNITED STATES DISTRICT JUDGE
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