Willis Electric Co., Ltd. v. Polygroup Limited et al

Filing 103

ORDER denying 77 Motion to Lift Stay(Written Opinion) Signed by Magistrate Judge Katherine M. Menendez on 4/24/2018. (BJP)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Willis Electric Co., Ltd.,

Case No. 15-cv-3443- WMW-KMM

Plaintiff,

ORDER ON PLAINTIFF’S
MOTION TO LIFT STAY

v.
Polygroup Limited, et al.,
Defendants.

This patent-infringement case has been stayed since November 3, 2016, when
the Court entered an Order adopting the parties’ Joint Stipulation to Stay Proceedings
Pending Inter Partes Review (also known as “IPR”). [Stay Order (Nov. 3, 2016), ECF
No. 61; Stipulation, ECF No. 57.] The Stay Order provided that any party could move
to lift the stay or for reconsideration of the Stay Order during the pendency of the
IPR. [Stay Order (“This order does not foreclose any party from filing motions to lift
the stay or to reconsider this order during the pendency of inter partes review.”).] The
plaintiff, Willis Electric Group Co., Ltd. (“Willis”), has now filed a Motion to Lift the
Stay. [Pl.’s Mot., ECF No. 77.] The defendants, Polygroup Limited (Macao
Commerical Offshore), Polygroup Macau Limited (BVI), and Polytree (H.K) Co. Ltd.
(collectively “Polygroup”) oppose Willis’ motion to lift the stay. The court held a
hearing on the motion on April 5, 2018.
Since the case was initially stayed, the IPR proceedings for the patents in suit
have concluded. The Patent Trial and Appeal Board (“PTAB”) has resolved the issues
that were raised during IPR in Willis’ favor. However, Polygroup notes the PTAB’s
decisions were accompanied by a written dissent, and Polygroup has appealed those
decisions to the Federal Circuit. The parties are now in the midst of briefing
Polygroup’s appeals, which challenge the PTAB’s construction of certain claim terms

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in the patents, findings regarding various prior art references, and findings about nonobviousness.
The Court finds that the stay should not be lifted at this time for several
reasons. First, at the time the parties stipulated to the stay, they agreed as follows: “the
potential that the outcome of the IPR proceedings will eliminate, reduce, and/or
simplify the issues before the Court, thus saving the resources of the Court and the
parties, the parties hereby stipulate to a stay of this matter.” [Stipulation at 2.] Though
Willis largely prevailed in the IPR, the record does not demonstrate that this factor—
likely simplification of the issues—has changed significantly as a result. Waiting to
begin this litigation until the Federal Circuit resolves the appeal will be useful in
simplifying and narrowing the issues. See Novartis AG v. HEC Pharm Co. Ltd., 183 F.
Supp. 3d 560, 562 (D. Del. 2016) (concluding that the Federal Circuit’s decision in
appeal from PTAB ruling that the patent in suit was invalid would likely simplify the
issues whether upheld or modified); Straight Path IP Gr., Inc. v. Verizon Comm’ns Inc.,
No. 16-cv-4236 (AJN), 2016 WL 6094114, at *2 (S.D.N.Y. Oct. 18, 2016) (concluding
that simplification of the issues favored a stay pending resolution of appeal to the
Federal Circuit where the appeal involved issues of claims construction and validity).
Maintaining the stay through the pendency of the appeal will also help diminish the
risk that the Court and the parties might waste resources litigating issues in this case
that are also being resolved by the Federal Circuit. If the litigation moves forward
with an understanding of the relevant issues based on today’s status quo and the
Federal Circuit alters that landscape significantly, the parties will have engaged in
discovery and pretrial motion practice that then must be repeated or that did not need
to take place at all
Second, though Willis asserts that the landscape of the market in which it and
Polygroup compete has changed to its detriment during the period that the stay has
been in effect, the Court is not persuaded that the undue prejudice factor has
suddenly shifted in favor of moving forward with the litigation because the PTAB has
issued a ruling. The record does not show that maintaining the stay for the pendency
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of the appeal to the Federal Circuit will affect Willis’ position in the market in ways
that cannot be addressed by money damages. See, e.g., Oticon A/S v. GN Resound,
No. 15-cv-2066 (PJS/HB), 2015 WL 5752429, at *2 (D. Minn. Aug. 5, 2015) (“Money
damages and, in appropriate cases, a permanent injunction, are ordinarily adequate to
remedy the harm caused by infringement, including loss of sales and market share.”).
Finally, the Court is not persuaded by Willis’ argument that the Court’s time
won’t be inefficiently expended if the stay is lifted now because the Federal Circuit
would likely reach a decision regarding Polygroup’s appeal before the Court is
required to decide any issue of claim construction, rule on summary judgment, or hold
a trial. However, as noted, litigating this case before the Federal Circuit rules on the
appeal still creates a risk that the parties and the Court will expend significant
resources litigating issues unnecessarily. Moreover, if Willis is correct that the Federal
Circuit will complete its consideration of Polygroup’s appeal as expeditiously as
hoped, this comparatively modest additional delay attributable to the appeal will not
itself result in undue prejudice. But if Willis’ prediction about the speed with which
the Federal Circuit will act is incorrect, then the litigation might reach a stage where
the District Court is confronted with issues that the appellate court may be addressing
at the same time. The most efficient present course is to maintain the stay until the
Federal Circuit rules on the already-pending appeal and fully concludes the PTAB
process.
For these reasons, IT IS HEREBY ORDERED THAT Plaintiff’s Motion to
Lift the Stay [ECF No. 77] is DENIED at this time.
s/ Katherine Menendez
Katherine Menendez
United States Magistrate Judge

Date: April 24, 2018

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