Four Mile Bay LLC v. Zimmer Holdings Inc et al
Filing
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OPINION AND ORDER re 36 MOTION to Stay Pending Inter Partes Review by Defendants Zimmer Dental Inc, Zimmer Holdings Inc. The Court ORDERS that all proceedings in this matter are STAYED until the PTAB rules on Defendant's pending IPR petitio ns. The Court ORDERS the parties to file a join status report within fourteen days of the PTAB decision, or by 10/30/2015, which ever date is earlier, informing the Court of the PTAB's decision and the status of the case. Signed by Magistrate Judge John E Martin on 8/3/2015. (lhc)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
FOUR MILE BAY LLC,
Plaintiff,
v.
ZIMMER HOLDINGS, INC., and
ZIMMER DENTAL, INC.,
Defendants.
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CAUSE NO. 3:14-CV-1300-JVB-JEM
OPINION AND ORDER
This matter is before the Court on Defendants’ Motion for a Limited Stay Pending Inter
Partes Review [DE 36], filed by Defendants on April 22, 2015. Defendants request that the Court
stay this case until the Patent Trial and Appeal Board issues its institution decisions in Defendants’
inter partes review proceedings. Plaintiff filed a response on April 29, 2015, and on April 30, 2015,
Defendants filed a reply.
I.
Background
Plaintiff filed this patent infringement action on April 15, 2014, alleging that Defendant
infringed its U.S. Patent No. 8,684,734. On October 17, 2014, Plaintiff served its preliminary
infringement contentions, and on December 5, 2014, Defendants served their preliminary invalidity
contentions. On February 27, 2015, the parties served their joint claim construction statement. No
substantive motions have been filed and there have been no dates set for either a Markman hearing
or a trial date.
On April 16, 2015, Defendants filed two petitions for inter partes review (“IPR”) with the
Patent Trial and Appeal Board (“PTAB”), asking it to review the validity of all 22 asserted claims
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of the patent. On May 1, 2015, the Court stayed the filing of the parties’ claim construction briefs
pending ruling on the instant Motion.
II.
Analysis
“[T]he power to stay proceedings is incidental to the power inherent in every court to control
the disposition of the causes on its docket with economy of time and effort for itself, for counsel,
and for litigants,” and a court considering whether to stay a case “must weigh competing interests
and maintain an even balance.” Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936) (citations
omitted); see also Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 849 (Fed. Cir.
2008) (“this court [Federal Circuit Court of Appeals] ha[s] consistently recognized the inherent
power of the district courts to grant a stay pending reexamination of a patent”). Accordingly, when
considering whether a stay is appropriate, “courts consider the following factors: (i) whether a stay
will unduly prejudice or tactically disadvantage the non-moving party, (ii) whether a stay will
simplify the issues in question and streamline the trial, and (iii) whether a stay will reduce the
burden of litigation on the parties and on the court.” Tap Pharm. Prods., Inc. v. Atrix Lab., Inc., No.
03 C 7822, 2004 WL 422697, at *1 (N.D.Ill. Mar. 3, 2004). “The party requesting a stay bears the
burden of showing that the circumstances justify an exercise of that discretion.” Nken v. Holder,
556 U.S. 418, 433-34 (2009). The Court will consider each factor in turn.
A.
Undue Prejudice or Tactical Disadvantage
Plaintiff argues that it will be unduly prejudiced and tactically disadvantaged by a stay.
Plaintiff argues that the PTAB is unlikely to grant Defendants’ IPR petitions, and that Defendants
waited as long as it could to file the IPR petitions. Defendants argue that the timing of their filing
was not prejudicial, since it was within the statutory deadline, and its decision to wait to file until
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after it received Plaintiff’s infringement petitions was to streamline the IPR petitions, not to
tactically disadvantage Plaintiff.
Plaintiff relies on Unwired Planet, LLC v. Square, Inc. a case from Nevada, for its argument
that Defendants’ timing and tactics are reason to deny the request. No. 3:13-CV-00579-RCJ, 2014
WL 4966033 (D. Nev. Oct. 3, 2014) (denying motion to stay). In that case, like this one, Defendants
filed the PTAB petitions after the infringement contentions had been filed, but unlike in Unwired,
there has not been substantial discovery and no Markman briefs have been filed in this case.
Tactical decisions, such as the decision to wait until after the infringement contentions have been
made to file the PTAB petitions, are not necessarily prejudicial, particularly where, as here,
Defendants filed the petition within its statutory deadline. See Cypress Semiconductor Corp. v. GSI
Tech., Inc., No. 13-CV-02013-JST, 2014 WL 5021100, at *4 (N.D. Cal. Oct. 7, 2014) (“Other courts
have found that waiting until after receiving infringement contentions to analyze the claims alleged
and then filing petitions for review does not cause undue prejudice.”) (citing cases).
The Court need not make a determination as to the likelihood that the IPRs will be instituted.
See, e.g., Rensselaer Polytechnic Inst. v. Apple Inc., No. 1:13-CV-0633 DEP, 2014 WL 201965, at
*8 (N.D.N.Y. Jan. 15, 2014) (“I have found no authority, however, to suggest that a court, lacking
the expertise of the PTO, should examine the strength of a petitioner’s claims of invalidity asserted
in an IPR petition when addressing a motion to stay.”). The Court also notes that Plaintiff and
Defendants are also not direct competitors, so Plaintiff does not face market loss as a result of a stay.
C.f. Lippert Components Mfg., Inc. v. AL-KO Kober, LLC, No. 3:13-CV-697-JVB-CAN, 2014 WL
8807329, at *2 (N.D. Ind. Jan. 16, 2014).
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Although any delay can cause some prejudice, the delay in this case is limited to the amount
of time it will take for PTAB to decide whether to institute IPR proceedings, a delay of only until
approximately October 15, 2015. Plaintiff will not be unduly prejudiced or tactically disadvantaged
by this relatively brief stay.
B.
Simplification of Issues and Streamline Trial
Defendants argue that a stay will simplify the issues in question and streamline the litigation.
Plaintiff argues that the Court may be capable of granting case-dispositive relief more quickly than
the PTAB and the PTAB cannot grant all the relief requested. In particular, Plaintiff argues that
there are certain arguments that cannot be raised in the IPR petitions but can be raised in claimconstruction proceedings. In addition, Plaintiff argues that the fact that the IPR may not be instituted
also means that the stay may delay rather than streamline the proceedings.
Defendants argue that the PTAB will issue its institution decisions in October 2015, and that
those decisions, even if they deny institution, will address claim construction, priority-date, and
invalidity. Defendants agree that these are not final decisions, but argue that they will provide
analysis and expert guidance on important issues in the case. Defendants also argue that the final
decisions of the PTAB could potentially invalidate all of the asserted claims in this litigation as early
as October 2016, only a few months after the earliest date by which dispositive motions could
possibly be briefed and ruled on.
The stay requested by Defendants will not at this point extend through the date of the final
PTAB decision, and the Court recognizes that there may not be complete overlap between the IPR
and the questions before the Court. However, resolution or guidance on some of the issues, and
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even knowing whether or not the PTAB will institute IPR proceedings regarding patent validity, will
simplify this case and are likely to streamline the litigation.
C.
Burden of Litigation
Defendants argue that a stay will reduce the burden on the Court by providing a potential
roadmap of major issues in this case. In particular, Defendants argue that the stay will prevent
unnecessary fact and expert discovery, motion practice, and claim construction briefing by clarifying
the issues in this case, particularly since the claim construction briefs have not been filed and only
minimal discovery has occurred. If the claims are simplified or canceled through the IPR
proceedings, discovery and briefing may be further limited.
Plaintiff argues that the PTAB
might not institute the IPRs, so that there may be no reduction in burden at all, and that some of the
issues in this case cannot be addressed by the PTAB.
As described above, IPR proceedings, including the PTAB’s decision on whether to institute
them, could narrow the scope of this litigation or provide the Court with additional insight about the
claims in this action. The requested stay is brief, only until the PTAB determines whether to
institute IPR proceedings, at which point the Court can consider how best to proceed to limit the
burden of litigation going forward.
III.
Conclusion
For the foregoing reasons, the Court hereby GRANTS on Defendants’ Motion for a Limited
Stay Pending Inter Partes Review [DE 36]. The Court ORDERS that all proceedings in this matter
are STAYED until the PTAB rules on Defendant’s pending IPR petitions. The Court ORDERS the
parties to file a join status report within fourteen days of the PTAB decision, or by October 30,
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2015, which ever date is earlier, informing the Court of the PTAB’s decision and the status of the
case.
So ORDERED this 3rd day of August, 2015.
s/ John E. Martin
MAGISTRATE JUDGE JOHN E. MARTIN
UNITED STATES DISTRICT COURT
cc: All counsel of record
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