Koninklijke Philips Electronics N.V. et al v. Zoll Medical Corporation

Filing 912

Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER, denying 892 MOTION TO SET DEADLINES FOR PHILIPS TO SEEK LEAVE TO FILE ANY AMENDED OR NEW DAMAGES EXPERT REPORTS filed by Zoll Medical Corporation, and denying 876 MOTION to Stay Trial Pending Reexamination with attached Certificate of Service filed by Zoll Medical Corporation.(Lima, Christine)

United States District Court
District of Massachusetts

KONINKLIJKE PHILIPS N.V. and
PHILIPS ELECTRONICS NORTH
AMERICA CORPORATION,
Plaintiffs,
v.
ZOLL MEDICAL CORPORATION,
Defendant.

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Civil Action Nos.
10-11041-NMG

MEMORANDUM & ORDER
GORTON, J.
In this bifurcated patent infringement case defendant Zoll
Medical Corporation (“Zoll”) moves to postpone the trial on
damages scheduled for July, 2017 because of the prolonged
reexamination of the subject patents in the Patent and Trademark
Office (“PTO”).

Zoll also moves to set deadlines for plaintiffs

Koninklijke Philips, N.V. and Philips Electronics North America
Corporation (collectively, “Philips”) to seek leave to file
amended or new expert damage reports.

For the reasons that

follow, both motions will be denied.
I.

Background
This patent case involves external defibrillators.

In

June, 2010, Phillips filed suit against Zoll for infringement of
its waveform patents (the ‘454, ‘905, ‘212 and ‘978 patents),

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self-test patents (the ‘460 and ‘374 patents) and CPR
instructions patent (the ‘785 patent).

Zoll denied infringement

and counterclaimed for infringement of its electrode patent (the
‘526 patent) and defibrillator patent (the ‘187 patent).

This

Court bifurcated the liability and damages phases of the case.
In December, 2013, after a vigorously contested jury trial,
the Court submitted the validity and infringement issues to the
jury.

With respect to Philips’ patents, the jury did not

address the validity of the ‘212 patent, which was not
contested, but otherwise found that all of the contested claims
in the ‘212, ‘454, ‘905 and ‘460 patents were valid and directly
infringed by Zoll’s products and that all of the disputed claims
in Philips’ ‘374 patent were valid and some were directly
infringed.
With respect to the Zoll patents, the jury found that the
disputed claims of the ‘187 and ‘526 patent were valid, all of
the claims of the ‘187 patent were directly infringed and most
of the disputed claims of the ‘526 patent were directly
infringed.
This Court denied both parties’ motions for judgment as a
matter of law and both parties appealed.
In January, 2015, the Court granted Zoll’s motion to
continue the damages trial pending the appeal even though the
parties had already exchanged damages expert reports.
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In July,

2016, the Federal Circuit Court of Appeals affirmed, in part,
reversed, in part, vacated, in part, and remanded the case for a
new liability trial on the contested claims in Zoll’s ‘526
electrode patent.

This Court lifted the stay and scheduled the

damages trial to commence on July 24, 2017.
Early in 2015, Zoll requested the PTO to reexamine the
validity of the claims based on the Philips’ waveform ‘454, ‘905
and ‘212 patents.

The PTO did so and issued final rejections of

the claims with respect to the ‘454 and ‘212 patents.

Philips

has now appealed those rejections to the Patent Trial and Appeal
Board and, in September, 2016, Zoll again moved to stay the
damages trial pending the completion of the reexamination.

Zoll

also moved to set deadlines for Philips to seek leave to file
any amended or new damages expert reports.

This memorandum

addresses the pending motions.
II.

Motion to Stay
It is well established that
[c]ourts have inherent power to manage their dockets and
stay proceedings including the authority to order a stay
pending conclusion of a PTO reexamination.

Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426–27 (Fed. Cir. 1988)
(citation omitted).

While courts have the power to grant a stay

if there is a pending reexamination, they are not required to do
so. Viskase Corp. v. Am. Nat. Can Co., 261 F.3d 1316, 1328 (Fed.
Cir. 2001).

The decision to grant a stay lies within a court’s
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discretion. Id.

In evaluating whether a stay is appropriate,

courts consider the following factors:
1) whether a stay would unduly prejudice or present a clear
tactical disadvantage to the non-moving party;
2) whether a stay will simplify the issues [] and [the]
trial of the case; and
3) whether discovery is complete and whether a trial date
has been set.
Englishtown, Inc. v. Rosetta Stone Inc., 962 F. Supp. 2d 355,
359 (D. Mass. 2013).
As for the first factor, it is undeniable that a stay would
be to the tactical disadvantage of the non-moving party,
Philips.

The Federal Circuit Court of Appeals has determined

that, if there are concurrent litigation and reexaminations with
respect to the same patents and the patents are found invalid in
the final reexamination proceeding, the invalidity decision
controls the outcome in the ongoing litigation. Fresenius USA,
Inc. v. Baxter Int'l, Inc., 721 F.3d 1330, 1339–41 (Fed. Cir.
2013).

Moreover, even if the litigation proceedings have

resulted in a judgment of liability, the final reexamination
decision controls the outcome of undecided damages or remanded
issues. Id. at 1341–42.

Consequently, if the damages trial is

stayed while the reexamination proceedings continue to
completion, Philips may be unable to recover damages for claims
on which a jury has found Zoll liable and as to which the
Federal Circuit Court of Appeals has affirmed.

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Second, although it is true that stays during pending
reexaminations often have the potential to simplify a trial,
Zoll’s delay in seeking reexamination until after the completion
of the liability trial has significantly diminished the
possibility of simplifying this case. Cynosure, Inc. v.
Cooltouch Inc., No. 08-cv-10026-NMG, 2009 WL 2462565, at *2 (D.
Mass. Aug. 10, 2009).

The sole remanded liability issue, Zoll’s

counterclaim based on its ‘526 electrode patent, would not be
simplified by a stay because that patent is not being
reexamined.
While a stay might result in some simplification of damages
issues, it would have no impact on damages with respect to
Philips’ claims based on the ‘374 patent or Zoll’s counterclaims
based on the ‘187 patent because those patents are not currently
being reexamined.

Furthermore, damages can be decided on a

patent-by-patent basis and, if a particular patent is later
invalidated, damages can be reduced accordingly.

In sum, Zoll’s

delay in requesting reexamination until after the liability
trial has seriously limited any benefit that would result from a
stay.
Third, the completion of 1) the liability trial, 2) the
appeal of relevant issues and 3) some discovery with respect to
the damages trial as well as the fact that a damages trial date
has been set weigh against the request for a stay.
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Indeed,

requests for a stay at this stage of litigation are “routinely
denied.” Cynosure, Inc., 2009 WL 2462565, at *2 (citing Ariad
Pharm., Inc. v. Eli Lilly Co., No. 02–cv–11280-RWZ, 2005 WL
1342721, at *1 (D. Mass. June 6, 2005); Softview Computer Prods.
Corp. v. Haworth, Inc., 56 U.S.P.Q.2d 1633, 1635-37 (S.D.N.Y.
2000)).

For all of these reasons, the Court will deny Zoll’s

request for a stay.
III.

Motion to Set Deadlines for Plaintiff to Seek Leave to File
New Or Amended Damages Expert Reports
Zoll moves to set deadlines for Philips to seek leave to

file new or amended damages expert reports on the grounds that
the 2014 deadlines for damages expert discovery have long since
passed.

Courts have broad discretion to oversee the discovery

process. MAZ Partners LP v. Shear, No. CV 11-cv-11049-PBS, 2016
WL 4925781, at *2 (D. Mass. Sept. 15, 2016) (citing Vineberg v.
Bissonnette, 548 F.3d 50, 54 (1st Cir.2008)).

A scheduling

order may be amended if there is good cause and the court
consents. Fed. R. Civ. P. 16(b)(4).
Here, Philips has satisfied the good cause prerequisite.
Its damages theory may be modified to reflect the ruling of the
Federal Circuit in this case and new case law that has evolved
during the pendency of the appeal.

The fact that Zoll’s counsel

worked extensively with Philips’ damages expert on another case
during the stay further buttresses Philips’ showing of good

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cause.

Finally, and perhaps most importantly, the reason that

Philips’ damages case is stale and updates are warranted is that
Zoll’s first request for a stay was granted.

Thus, Zoll’s

request that the Court set deadlines for plaintiffs to seek
leave to file new or amended damages expert reports will be
denied.

Plaintiffs will be permitted to supplement their

damages claims and submit revised expert reports and defendant
will, of course, be permitted to revise its defense accordingly.
IV.

Updated Deadlines
The deadlines set at the status conference on August 18,

2016 are modified as follows:

12/15/2016

Expert reports on issues for which party
bears burden of proof due

01/31/2017

Expert reports on issues for which party
does not bear burden of proof due

02/28/2017

Expert discovery completed

03/15/2017

Daubert motions and motions for summary
judgment due

03/31/2017

Oppositions to Daubert motions and motions
for summary judgment due (replies only with
leave of the Court)

06/08/2017

Motions in limine due

07/24/2017

Jury trial

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ORDER
In accordance with the foregoing, defendant’s motions to
stay (Docket No. 876) and to set deadlines (Docket No. 892) are
DENIED.

So ordered.

/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated November 8, 2016

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