DiversiTech Corporation v. RectorSeal, LLC et al
Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER: "For the foregoing reasons, the motion of RectorSeal, LLC, The RectorSeal Corporation and CSW Industrials, Inc. to stay the action pending inter partes review of the subject patent (Docket No. 36) is ALLOWED. The parties are directed to file a joint status report on or before October 31, 2021." (Lima, Christine)
Case 1:20-cv-11896-NMG Document 52 Filed 07/14/21 Page 1 of 10
United States District Court
District of Massachusetts
RectorSeal, LLC, et al.,
Civil Action No.
MEMORANDUM & ORDER
This case arises out of a dispute between DiversiTech
Corporation (“DiversiTech” or “plaintiff”) and RectorSeal, LLC,
The RectorSeal Corporation and CSW Industrials, Inc.
(collectively, “RectorSeal” or “defendants”) regarding
RectorSeal’s alleged infringement of a patent held by
Pending before the Court is defendants’ motion to
stay the instant action in its entirety pending review by the
United States Patent and Trademark Office (“PTO”) of a petition
for inter partes review (“IPR”) of the subject patent.
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A. Factual Background
DiversiTech is a manufacturer and supplier of tools and
hardware in the heating, ventilation, air conditioning and
refrigeration (HVACR) industry and other related industries.
RectorSeal likewise produces tools and hardware in the HVACR and
DiversiTech is presently assigned United States Patent No.
9,550,223 (“the ‘223 Patent”) which was issued in January, 2017.
The ‘223 Patent covers certain designs of flaring and swaging
bits, which are used to connect metal tubes, and methods of
using those bits.
DiversiTech alleges that RectorSeal has sold
and continues to sell flaring and swaging products which
infringe on the ‘223 Patent.
To recover damages for such
purported infringement, plaintiff filed the instant action
against Rectorseal in October, 2020.
B. Inter Partes Review
Congress created the IPR process by enactment of the
American Invents Act of 2011. 35 U.S.C. §§ 311-319.
an expedited procedure for challenging the validity of a
patent before the PTO and its Patent Trial and Appeal Board
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ACQIS, LLC v. EMC Corp., 109 F. Supp. 3d 352, 355 (D. Mass.
A person who is not the owner of a patent may file a
petition with the PTO to institute the IPR process, 35 U.S.C.
§ 311(a), and such review will be granted only if
there is a reasonable likelihood that the petitioner would
prevail with respect to at least 1 of the claims challenged
in the petition.
35 U.S.C. § 314(a).
Once review is granted, the PTO generally
must reach a decision within one year. 35 U.S.C. § 316(a)(11).
In February, 2021, defendants filed an IPR petition
challenging every asserted claim of the ‘223 Patent.
must determine whether to institute the IPR on or before
September 9, 2021. See 35 U.S.C. § 314(b).
Defendants filed their motion to stay this action pending
IPR in late March, 2021, which plaintiff timely opposed.
then, the parties have exchanged opening claim construction
briefs but have not yet filed responsive briefs.
construction hearing before this Court is scheduled to take
place in August, 2021 and the Court intends to construe those
claims promptly thereafter.
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Motion to Stay
Courts are authorized to manage their dockets and stay
proceedings where appropriate, including during the pendency of
an IPR before the PTO. See Irwin Indus. Tool Co. v. Milwaukee
Elec. Tool Corp., No. 15-cv-30005, 2016 U.S. Dist. LEXIS 56885,
at *5 (D. Mass. Apr. 28, 2016) (internal citation omitted).
determine whether to stay a case pending IPR, courts consider
(1) the stage of the litigation, including whether
discovery is complete and a trial date has been set; (2)
whether a stay will simplify the issues in question and the
trial of the case; and (3) whether a stay will unduly
prejudice or present a clear tactical disadvantage to the
ACQIS, LLC, 109 F. Supp. 3d at 356 (internal citation omitted).
Courts are to consider the totality of the circumstances and,
although prior decisions may help guide the inquiry, such a
determination is largely case specific. See id.
Stage of the Litigation
First, the Court considers the stage of the litigation
comprising the instant action and, specifically, whether
discovery is complete and a trial date has been set. See Irwin
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Indus. Tool Co., 2016 U.S. Dist. LEXIS 56885, at *6.
is to determine “whether litigation has progressed significantly
enough for a stay to be disfavored.” PersonalWeb Techs., LLC v.
Apple Inc., 69 F. Supp. 3d 1022, 1025 (N.D. Cal. 2014).
earlier the stage of proceedings, the greater the reason” for a
court to grant a stay. SurfCast, Inc. v. Microsoft Corp., No.
12-cv-333, 2014 U.S. Dist. LEXIS 160062, at *6 (D. Me. Nov. 14,
The Court recognizes that the parties have expended time,
effort and expense with respect to the claim construction
briefing that has occurred to date.
The fact remains, however,
that no claim construction hearing has yet occurred, six months
remain until the fact discovery deadline and expert discovery is
not scheduled to be complete until three months thereafter.
Furthermore, dispositive motions are not due until May, 2022,
and, although a trial date has been set, it is more than one
the most burdensome stages of the case — completing
discovery, preparing expert reports, filing and responding
to pretrial motions, preparing for trial, going through the
trial process, and engaging in post-trial motions practice
— all lie in the future.
NST Global, LLC v. SIG Sauer Inc., No. 19-cv-792, 2020 U.S.
Dist. LEXIS 50708, at *6 (D.N.H. Mar. 24, 2020) (internal
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Measuring the stage of the litigation at the time
defendants’ motion to stay was filed, as many district courts
find appropriate, see VirtualAgility Inc. v. Salesforce.com,
Inc., 759 F.3d 1307, 1317 (Fed. Cir. 2014) (collecting cases),
increases the weight of this factor in support of staying the
When defendants filed their motion to stay, fact
discovery had barely begun and there had been no exchange of
claim construction briefs.
Finally, other courts have stayed cases in which the
litigation had advanced further than in the instant action. See
ACQIS, LLC, 109 F. Supp. 3d at 357 (collecting cases where stays
were imposed despite the completion of discovery and the
issuance of claim construction orders).
Because a stay could
conserve the resources of the parties and the Court, the first
factor weighs in favor of a stay.
Simplification of the Issues
Next, the Court considers whether a stay would simplify the
issues and the trial of the case.
The IPR process was designed
to simplify proceedings before the courts and to give the
courts the benefit of the expert agency’s full and focused
consideration of the effect of prior art on patents being
asserted in litigation.
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IOENGINE, LLC v. PayPal Holdings, Inc., No. 18-452-WCB, 2019
U.S. Dist. LEXIS 141545, at *27-28 (D. Del. Aug. 21, 2019).
There are several ways in which an IPR could simplify a patent
infringement case. See In re Body Sci. LLC, No. 12-10536-FDS,
2012 U.S. Dist. LEXIS 158835, at *11 (D. Mass. Nov. 2, 2012)
(listing seven advantages of IPR).
A stay is favored where the
outcome of the IPR
would be likely to assist the court in determining patent
validity and, if the claims were canceled . . . would
eliminate the need to try the infringement issue.
ACQIS, LLC, 109 F. Supp. 3d at 357 (internal citation omitted).
That is particularly true if all patent claims before this Court
have been or will be presented to the PTO. See SurfCast, Inc.,
2014 U.S. Dist. LEXIS 160062, at *7.
This Court is convinced that a brief stay will simplify the
resolution of this case.
In its IPR petition, RectorSeal sought
review of all asserted patent claims, thereby presenting the
“maximum potential for simplification of issues.” Uniloc USA
Inc. v. LG Electronics U.S.A. Inc., Nos. 18-cv-06737-JST, 18-cv06739-JST, 18-cv-06740-JST, 2019 U.S. Dist. LEXIS 72002, at *12
(N.D. Ca. Apr. 29, 2019).
Any claims ultimately invalidated by
the PTO would no longer be relevant in this action and
RectorSeal will be further estopped in its defense from
presenting to the Court “any ground that [it] raised or
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reasonably could have raised during [the IPR].” 35 U.S.C.
That the PTO has not yet made a decision regarding whether
to institute IPR does not significantly alter the analysis.
While some courts typically deny requests for stays when such
requests are filed before the IPR is instituted, that rule is
“hardly universal” and many other courts have stayed cases
before the institution of IPR. See NST Global, LLC, 2020 U.S.
Dist. LEXIS 50708, at *9 (collecting cases).
As in other cases
involving pre-institution stays, the stay here will be brief if
the PTO rejects the IPR petition.
A stay will also save
resources should the PTO institute IPR between the time of the
upcoming Markman hearing and this Court’s subsequent claim
Accordingly, the second factor weighs in favor of a stay.
Undue Prejudice or Clear Tactical Disadvantage
Finally, the Court considers whether a stay would unduly
prejudice or present a clear tactical disadvantage to
Undue prejudice requires a showing of something
more than mere delay such as
a dilatory motive on the part of the party seeking a stay,
unavailability of legal remedies once the stay is lifted,
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or the parties’ relationship as direct competitors in the
Teva Pharms. Int’l GMBH v. Eli Lilly & Co., No. 18-cv-12029-ADB,
2019 U.S. Dist. LEXIS 67575, at *18-19 (D. Mass. Apr. 22, 2019).
Even where the parties are direct competitors, the presence of
other active firms in the relevant market decreases the
likelihood of prejudice to the nonmoving party. See id. at *21.
Although RectorSeal observes that no evidence has been
presented to suggest that the parties compete for the same
customers or contracts, it is clear from the allegations in the
complaint that the parties sell similar products in the same
As direct competitors, the Court presumes that
DiversiTech will suffer some amount of prejudice from a stay.
Any potential harm to DiversiTech is mitigated, however, by
the presence of other companies selling similar products in the
same market as the parties in the instant action.
nature of the stay would also lessen any harm resulting from the
ongoing competition and the delay in the enforcement of
DiversiTech’s purported patent rights.
Furthermore, there is no
evidence that RectorSeal has a dilatory motive or that
DiversiTech will lose any legal remedies as a result of a stay.
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The third factor is, therefore, neutral or weighs slightly
against a stay.
Balancing the three factors, the Court
concludes that the issuance of a stay is warranted.
For the foregoing reasons, the motion of RectorSeal, LLC,
The RectorSeal Corporation and CSW Industrials, Inc. to stay the
action pending inter partes review of the subject patent (Docket
No. 36) is ALLOWED.
The parties are directed to file a joint
status report on or before October 31, 2021.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated July 14, 2021
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