CTP Innovations LLC v. EBSCO Industries Inc

Filing 33

INITIAL PROCEDURAL MEMORANDUM AND ORDER in case 1:14-md-02581-MJG in case 1:14-cv-03894-MJG in case 1:14-cv-03893-MJG in case 1:14-cv-03888-MJG in case 1:14-cv-03887-MJG in case 1:14-cv-03886-MJG in case 1:14-cv-03892-MJG in case 1:14-cv-03890-MJG i n case 1:14-cv-03884-MJG in case 1:14-cv-03889-MJG; granting in part (12) Motion to Stay Pending Re-examination in case 1:14-md-02581-MJG, etc. Signed by Judge Marvin J. Garbis on 1/23/2015 Associated Cases: 1:14-md-02581-MJG et al.(cags, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
IN RE:

*

CTP INNOVATIONS, LLC,
PATENT LITIGATION

*

MDL 14-MD-2581
ALL ACTIONS

*
*

*

*

*

*

*

*

*

*

INITIAL PROCEDURAL MEMORANDUM AND ORDER
I.

INTRODUCTION
Plaintiff, CTP Innovations, LLC (“CTP”), is the owner of

United States Patent Nos. 6,611,349 (“the ‘349 Patent”) and
6,738,155 (“the ‘155 Patent”) (collectively, “the Patents in
Suit”).

The Patents in Suit pertain to systems and methods

relating to the printing industry.

CTP has sued some 49

printing companies, alleging infringement of the ‘359 and ‘149
Patents.

In addition, Taylor Publishing Company (“Taylor”) has

commenced a declaratory judgment action and is a Counterclaim
Defendant.

In the instant document, the Court refers to Taylor,

together with the parties sued by CTP as, collectively, “the
Defendants.”

To date, 41 of these cases have settled, leaving

eight cases pending in 6 districts.
On July 29 and August 2, 2013, Printing Industries of
America filed Inter Partes Review (“IPR”) petitions regarding
the Patents in Suit.

The Patent Trial and Appeal Board (“PTAB”)

declined to accept the petitions.

On May 20, 2013, Eastman Kodak, Co., Agfa Corp., Esko
Software BVBA, and Heidelberg, USA (“the Manufacturers”)1 filed
four petitions for IPR with PTAB regarding the Patents in Suit.
On November 26 and 29, 2014, the PTAB accepted the petitions
with regard to all claims of the ‘155 Patent and most claims of
the ‘349 Patent.

The only claims not at issue in the PTAB

proceeding are method claims 4-9 of the ‘349 Patent.

These

claims shall hereinafter be referred to as “Claims 4-9.”

The

PTAB proceedings are underway with a decision anticipated no
later than a year after the November dates on which the
proceedings commenced, i.e., November 26 and 29, 2015.
On December 12, 2014, the United States Judicial Panel on
Multidistrict Litigation (“the Panel”) issued its Transfer Order
[Document 1] consolidating the pending actions involving the
Patents in Suit and transferring them for pretrial purposes
before this Court.
On January 8, 2015, the Court held a case planning
conference attended, in person and by telephone, by counsel for
all parties in the eight pending cases.

CTP advises that it may

be filing additional (20 to 40) “tag-a-long” cases in various
1

The Manufacturers have supplied to some, but not all
Defendants, products that, CTP asserts, meet various limitations
of claims of the Patents in Suit. Apparently, the Manufacturers
are concerned about their customer-defendants’ potential
assertion of indemnity claims. Hence, they would benefit from a
PTAB decision invalidating the Patents in Suit.

2

districts asserting claims of infringement of the Patents in
Suit.

II.

THE STAY MOTION
The Court has before it Defendants’ Motion to Stay Pending

Inter Partes Review Proceedings Before the Patent Trial and
Appeal Board [Document 12] and the materials submitted relating
thereto.

The Court has held a hearing on the motion and has had

the benefit of the statements of counsel for all parties
relating thereto.
All Defendants seek a stay of the pending cases until the
conclusion of the PTAB proceedings relating to the Patents in
Suit.

CTP opposes any stay and contends that if the Court

should grant a stay, it should stay only proceedings regarding
the claims involved in pending PTAB proceedings.

CTP further

contends that, to the extent any stay is granted a Defendant,
that Defendant should, consistent with frequent practice in the
District of Delaware and some other districts, agree to be bound
by the estoppel effect of 35 U.S.C. § 315(e) in regard to the
pending PTAB proceedings.

See, e.g., Softview LLC v. Apple

Inc., Civ. No. 10-389-LPS, 2012 WL 3061027, at *3 (D. Del. July
26, 2012)(declining to stay case, in part, because nonparticipating defendants “would remain free to assert additional

3

prior art references at trial, and/or different combinations of
the same prior art references now being asserted by [a third
party] in the reexamination proceedings.”).

A.

Claims At Issue in Pending PTAB Proceedings

The Court concludes, in view of its high level of
confidence that the PTAB will render its decision no later than
November 29, 2015, that a stay of proceedings regarding the
claims at issue in the pending PTAB proceedings is appropriate.
However, the Court agrees with CTP that a Defendant seeking to
obtain the benefit of the stay should agree to be bound by the
estoppel effect of 35 U.S.C. § 315(e).
The Court finds certain Defendants’ positions that the
Manufacturers may not present their contentions as skillfully as
would that Defendant, unpersuasive.

If a Defendant believes its

counsel can do a better job of advocacy that the Manufacturers,
it should forego the benefit of a stay and have its own counsel
exercise their skills to re-litigate issues that the
Manufacturers may have lost in the PTAB.
Certain Defendants have stated that the Manufacturers may
have a conflict of interest with them and, therefore, proceed
before the PTAB in a manner inconsistent with the Defendant’s
interests.

The Court finds no basis to believe that the

4

Manufacturers would have any different, or lower, interest than
Defendants in a PTAB decision invalidating the Patents in Suit.
Moreover, as to any claim modification issues in the PTAB, the
Court sees no realistic probability that the Manufacturers would
seek a modification favorable to them but not equally favorable
to the Defendants.

Of course, if any Defendant, in reality, has

a conflict of interest concern, that Defendant should forego the
benefit of a stay.

B.

Claims 4-9

At the hearing, CTP stated that it had completed a site
inspection of Taylor.

Therefore, CTP stated that it would

require no more than a single deposition – four hours or less in
duration – to determine whether it would assert infringement of
Claims 4-9 against Taylor.

CTP, however, has discovered that

its statement was erroneous and has promptly so advised the
Court.
Under the circumstances, the Court will stay proceedings
regarding Claims 4-9 in any case in which a stay is issued based
upon the claims at issue in the pending PTAB proceedings.

In a

case in which a Defendant does not agree to be bound by the
estoppel effect of 35 U.S.C. § 315(e), or in which CTP asserts
infringement only as to Claims 4-9, there will be no stay.

5

C.

Anticipated Tag-a-Long Cases

Absent a showing of a need for different treatment in a
particular case, any additional case asserting infringement of
the Patents in Suit filed during the pendency of the PTAB
proceedings shall be treated consistently with the presently
pending cases.

Therefore, there will be a stay of the case

unless: (1) the Defendant does not agree to be bound by the
estoppel effect of 35 U.S.C. § 315(e); or (2) CTP asserts
infringement only as to Claims 4-9.

III.

CONCLUSION
For the foregoing reasons:
1.

Defendants’ Motion to Stay Pending Inter Partes
Review Proceedings Before the Patent Trial and
Appeal Board [Document 12] is GRANTED IN PART.

2.

By January 30, 2015, the parties shall
agreed form of stipulation to be bound
estoppel effect of 35 U.S.C. § 315(e),
parties shall submit separate versions
stipulation.

4.

By separate Order, the Court shall refer these
cases (and any tag-a-long cases that may be
filed) to a Magistrate Judge to conduct
confidential settlement proceedings.

submit an
by the
or the
of such a

SO ORDERED, on Friday, January 23, 2015.

/s/__________
Marvin J. Garbis
United States District Judge

6