Geotag, Inc. v. Fred's Inc.
Filing
96
ORDER granting 80 Motion to Stay. Signed by Chief Judge Jon Phipps McCalla on 5/20/13. (McCalla, Jon)
IN THE UNITED STATES DISTRICT COURT FOR
THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
GEOTAG, INC.,
Plaintiff,
v.
FRED’S, INC.,
Defendant.
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Case No: 2:13-2030-JPM-tmp
ORDER GRANTING DEFENDANT’S MOTION TO STAY
Before the Court is Defendant Fred’s, Inc.’s (“Defendant”
or “Fred’s”) Motion to Stay filed February 18, 2013.
80.)
(ECF No.
Plaintiff GeoTag, Inc. (“Plaintiff” or “GeoTag”) filed its
Response in Opposition on March 7, 2013.
(ECF No. 89.)
With
leave of Court, Defendant filed its Reply in Support of the
Motion to Stay on March 25, 2013.
(ECF No. 93.)
For the
following reasons, Defendant’s Motion is GRANTED.
I.
BACKGROUND
This case concerns the alleged infringement of U.S. Patent
No. 5,930,474 (the “‘474 Patent”).
GeoTag filed a Complaint
against sole-defendant Circle K Stores, Inc., in the United
States District Court for the Eastern District of Texas on
September 13, 2011.
(ECF No. 1 at 2; see Comp., ECF No. 1,
GeoTag, Inc. v. Circle K Stores, Inc., 2:11-cv-00405-MHS (E.D.
Tex. Sept. 13, 2011).)
GeoTag then filed an Amended Complaint,
naming over fifty additional defendants, including Fred’s, on
October 25, 2011.
(ECF No. 2; see Am. Comp., ECF No. 10,
GeoTag, Inc., 2:11-cv-00405-MHS (E.D. Tex. Oct. 25, 2011).)
GeoTag claims that Fred’s
has infringed the ‘474 Patent . . . through actions
comprising the making, using, selling and/or offering
for sale in the United States systems and methods
which comprise associating on-line information with
geographic areas and which are covered by one or more
claims of the ‘474 patent. On information and belief,
such systems and methods include the store and/or job
locator at [Fred’s company website and Fred’s careers
website].
(ECF No. 2 ¶ 103.)
The Eastern District of Texas subsequently
severed each defendant into separate cases, pursuant to the
America Invents Act, on August 15, 2012.
(ECF No. 1.)
Thereafter, Fred’s filed a Motion to Dismiss for Lack of
Personal Jurisdiction (ECF No. 9) and a Motion to Sever and
Transfer (ECF No. 10) on August 28, 2012.
Fred’s contended that
the Eastern District of Texas lacked personal jurisdiction to
hear the claims against Fred’s (ECF No. 9), and alternatively,
that the action against Fred’s should be transferred pursuant to
28 U.S.C. § 1404(a) to the United States District Court for the
Western District of Tennessee, Fred’s principal place of
business.
(ECF No. 10.)
On January 14, 2013, the Eastern
District of Texas granted Fred’s Motion for Transfer, and the
2
case was transferred to the Western District of Tennessee.1
(ECF
No. 70.)
On February 18, 2013, Fred’s filed its Answer and
Counterclaim to GeoTag’s Amended Complaint.
(ECF No. 79.)
Fred’s filed the instant Motion to Stay the same day.
(ECF
No. 80.)
Fred’s moves to stay the instant case pending the outcome
of a Declaratory Judgment Action regarding the ‘474 Patent that
is currently pending in the United States District Court for the
District of Delaware (the “Delaware action”).
(ECF No. 80 at
1); see Microsoft Corp. v. GeoTag, Inc., 1:11-cv-00175-RGA (D.
Del. Mar. 1, 2011).
The Delaware action concerns the validity
of the ‘474 Patent.
(ECF No. 80 at 1.)
In the Delaware action,
Plaintiffs Microsoft Corporation and Google, Inc., “seek a
declaratory judgment that the ‘474 patent is invalid and is not
infringed by the use of Plaintiffs’ web mapping services.”
(ECF
No. 80 at 1-2 (quoting Compl., ECF No. 1, Microsoft Corp., 1:11cv-00175-RGA (D. Del. Mar. 1, 2011) (internal quotation marks
omitted).)
Fred’s claims that the Delaware action “involves the real
parties in interest concerning GeoTag’s patent infringement
suits,” while the instant case involves “a customer of Google –
1
The Eastern District of Texas transferred the action without deciding Fred’s
then-pending Motion to Dismiss for lack of personal jurisdiction. (ECF No.
70 at 1 n.1.) This Court denied the Motion to Dismiss as moot on March 12,
2013. (ECF No. 88.)
3
a provider of the accused technology.”
(ECF No. 80 at 2.)
Fred’s claims that “the Delaware litigation will dispose of
significant issues in the instant case and may even moot the
litigation before this Court entirely.”
(ECF No. 80-1 at 1-2.)
Fred’s also claims that the “first-to-file” rule applies to stay
the instant litigation because the Delaware action was commenced
on March 1, 2011, while GeoTag did not sue Fred’s until October
25, 2011.
Fred’s finally claims that if the “first-to-file”
rule is inapplicable, the “customer-suit exception” to the
“first-to-file” rule applies, which provides that “litigation
against or brought by the manufacturer of infringing goods takes
precedence over a suit by the patent owner against customers of
the manufacturer.”
(Id. at 2 (quoting Katz v. Lear Siegler,
Inc., 909 F.2d 1459, 1464 (Fed. Cir. 1990) (internal quotation
marks omitted).)
II.
STANDARD OF REVIEW
“The decision whether to grant a stay of a particular
action is within the inherent power of the Court and is
discretionary.”
Ellis v. Merck & Co., Inc., 06-1005-T/AN, 2006
WL 448694 (W.D. Tenn. Feb. 19, 2006).
The court is tasked with
“control[ling] the disposition of the causes on its docket with
economy of time and effort for itself, for counsel, and for
litigants.”
Gray v. Bush, 628 F.3d 779, 786 (6th Cir. 2010)
(quoting Landis v. North Am. Co., 299 U.S. 248, 254 (1936))
4
(internal quotation marks omitted).
In determining whether to
stay patent cases pending the resolution of other matters,
courts generally consider:
“(1) whether a stay would unduly
prejudice or present a clear tactical disadvantage to the nonmoving party; (2) whether a stay will simplify the issues in
question and trial of the case; and (3) whether discovery is
complete and whether a trial date has been set.”
Lectrolarm
Custom Servs., Inc. v. Vicon Indus., Inc., 03-2330 MA/A, 2005 WL
2175436, at *3 (W.D. Tenn. Sept. 1, 2005) (footnote omitted)
(quoting Xerox Corp. v. 3Com Corp., 69 F. Supp. 2d 404, 406
(W.D.N.Y. 1999)) (internal quotation marks omitted).
III. ANALYSIS
In support of its Motion, Fred’s argues that a stay is
appropriate, that the first-to-file rule applies, and that,
alternatively, the customer-suit exception to the first-to-file
rule applies.
The Court will first address whether the first-
to-file rule applies, or whether the customer-suit exception
applies.
The Court will then address whether a stay is
appropriate in this case.
A.
First-to-File Rule
Fred’s claims that the first-to-file rule applies in the
instant case, making a stay of the action appropriate.
The
first-to-file rule is a “well-established doctrine that
encourages comity among federal courts of equal rank.”
5
Odyssey
Med., Inc. v. Augen Opticos, S.A. de C.V., No. 10-2797, 2011 WL
2551191, at *2 (W.D. Tenn. June 27, 2011) (quoting Certified
Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511
F.3d 535, 551 (6th Cir. 2007)) (internal quotation marks
omitted).
“The rule provides that when actions involving nearly
identical parties and issues have been filed in two different
district courts, the court in which the first suit was filed
should generally proceed to judgment.”
Id. (quoting Certified
Restoration Dry Cleaning, 511 F.3d at 551) (internal quotation
marks omitted).
“Courts have identified three factors to
consider in determining whether to invoke the first-to-file
rule: ‘(1) the chronology of the actions; (2) the similarity of
the parties involved; and (3) the similarity of the issues at
stake.’”
Id. at *3 (quoting Clear!Blue, LLC v. Clear Blue,
Inc., 521 F. Supp. 2d 612, 614–15 (E.D. Mich. 2007)).
1.
Chronology
“In analyzing the [chronology] factor, ‘the date that an
original complaint is filed controls,’ not the date of an
amended complaint even if a party was only added in an amended
complaint after filing suit elsewhere.”
Id. at *3 (citation
omitted) (quoting Zide Sport Shop of Ohio v. Ed Tobergte
Assocs., Inc., 16 F. App’x 433, 437 (6th Cir. 2001)).
GeoTag filed its original Complaint for patent infringement
on September 13, 2011, in the Eastern District of Texas.
6
(ECF
No. 80-1 at 12; see ECF No. 1 at 2; Compl., ECF No. 1, GeoTag,
Inc., 11-cv-00405-MHS (E.D. Tex. Sept. 13, 2011).)
GeoTag filed
an amended Complaint, adding Fred’s and over fifty other
defendants to the action, on October 25, 2011.
(ECF No. 80-1 at
12; see ECF No. 1 at 2; Am. Comp., ECF No. 10, GeoTag, Inc., 11cv-00405-MHS (E.D. Tex. Oct. 25, 2011).)
The Delaware action
involving Microsoft and Google – the purported “real parties in
interest” - was filed on March 1, 2011.
(ECF No. 80-1 at 12;
see Compl., ECF No. 1, Microsoft Corp., 1:11-cv-00175-RGA.)
As a result, the first factor weighs in favor of Fred’s, as
the Delaware action was filed six months before the original
GeoTag patent-infringement action and seven months before Fred’s
was added as a defendant.
2.
Similarity of Parties
Fred’s argues that while it is not a party to the Delaware
action, it is a “peripheral party to GeoTag’s overall patent
infringement suits.”
(ECF No. 80-1 at 12.)
Fred’s claims that
it “does nothing more than use and repackage Mapping Services
that are owned, operated, managed, and controlled by Google.”
(Id.)
Fred’s supports this claim by illustrating that Fred’s
store-locator webpage “states that the Mapping Service is
provided by Google and contains Google’s own ‘Terms of Use’”
which proves that the “Fred’s store locator function acts as a
mere portal in a transaction between Google and the end user.”
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(Id. at 13-14.)
As a result, Fred’s claims that Google is the
party that is relevant to the alleged infringement of the ‘474
Patent, and Fred’s would “ha[ve] little documentation” relating
to GeoTag’s claims.
(Id. at 14.)
Fred’s asserts that “its
similarity to Google as a peripheral party [in the litigation
between Google and GeoTag] satisfies this element of the firstto-file rule.”
(Id. at 15.)
GeoTag disputes that Fred’s and Google are “nearly
identical parties.”
(ECF No. 89 at 16.)
GeoTag argues that
Fred’s admitted that its accused store locator was developed inhouse at Fred’s, not by Google.
89-4, at 8:15-22.)
(Id.; see Deats Dep., ECF No.
GeoTag also argues that its infringement
contentions assert that Fred’s store locator, not Google’s map,
is infringing the ‘474 patent.
(ECF No. 89 at 16.)
Finally,
GeoTag states that Fred’s has “never contended that Google is
indemnifying Fred’s for this litigation or that Google is the
real party in interest,” that Fred’s “never requested a stay in”
the Eastern District of Texas, and that “there are additional
accused instrumentalities [namely, the mobile locator
application and the job-finder locator] that Fred’s does not
allege are provided by Google.”
(Id. at 15-16.)
The Court finds that this factor weighs slightly in favor
of Fred’s.
First, while the deposition testimony of Jim Deats,
Fred’s Senior Vice President and Chief Information Officer,
8
states that the store locator was developed in-house and “put in
place in the 2003-2004 timeframe” (Deats Dep., ECF No. 89-4, at
8:15-16, 22), in its Answer to GeoTag’s Interrogatory regarding
the “Accused Instrumentality,” namely the store locator, Fred’s
stated,
It is believed that Fred’s first employed a basic
store listing, with no map or geo-location function,
in the 2003-04 timeframe; it is believed that this
consisted of dropdown menu for states, which would
then list stores for each state. In the first quarter
of 2009, a store locator provided by Google was
employed on the Fred’s website. In July 2012, Fred’s
entered into a Google Maps API agreement with Google
for a store locator.
(ECF No. 93-3 at PageID 4933.)
While GeoTag may assert that
Fred’s original store locator infringed its patent, there is a
substantial similarity between the issue of the Google-provided
store locator after 2009 and the issues in the Delaware action.
Second, contrary to GeoTag’s assertion that Fred’s has not
previously identified Google as a real party in interest, Fred’s
has previously identified Google as “having knowledge concerning
the ‘store locator’ function of Fred’s website” in its Rule
26(a)(1) Disclosures.
PageID 4911.)
(ECF No. 93 at 2; see ECF No. 93-2 at
Further, in the same disclosures Fred’s
identified “documents related to third party providers of
locators” as potential documents on which Fred’s may rely in its
defense.
(ECF No. 93 at 2 (internal quotation marks omitted);
see ECF No. 93-2 at PageID 4912-13.)
9
Third, GeoTag’s claim that Fred’s never filed for a stay of
this case pending the outcome of the Delaware action is
incorrect.
Fred’s, along with forty-six other defendants, filed
a Motion to Stay in the Eastern District of Texas on June 1,
2012.
(ECF No. 93-1; id. at PageID 4904); see Defs.’ Mot. Stay,
ECF No. 355, GeoTag, Inc., 11-cv-00405-MHS (E.D. Tex. June 1,
2012).)
As a result, Fred’s has taken a consistent position
that the action against it and the various other defendants
should be stayed “in favor of [the] Microsoft and Google
declaratory judgment action in Delaware.”
(ECF No. 93-1 at 1.)
Finally, the Court recognizes that GeoTag’s argument that
the other instrumentalities accused of infringing the ‘474
patent - namely the job locator and the mobile application – is
a genuine issue relating to parties distinct from the Delaware
action.
Fred’s states that the “mapping function of the mobile
application is powered by Google, and the application interfaces
with Google’s databases to display location information.”
No. 93 at 8 n.4.)
(ECF
While the mobile locator is potentially a
mobile version of the Fred’s webpage’s store locator, and
therefore subject to the same arguments regarding Google’s
mapping feature, there is a genuine issue as to which company
provided the job locator.
GeoTag relies on the deposition of
Jim Deats, who testified that Sullivan Branding and
CareerBuilders, LLC, provided Fred’s the job-locator
10
functionality (Deats Dep., ECF No. 89-4, at 23:13-24:25), while
Fred’s states that the issue has been resolved by a settlement
GeoTag reached with CareerBuilder releasing it from liability
(ECF No. 93 at 7-8).
Reviewing the record, it appears that Deats asserted that
Sullivan Branding was also a provider of the job locator.
As a
result, it is unclear whether the issue of liability as it
regards the job locator will be completely resolved in the
Delaware case.
The Court agrees that resolution of the Delaware
action will potentially address the store-locator function only
and not the job-locator infringement contention specific to
GeoTag’s claim against Fred’s.
In applying the first-to-file rule, “the parties and issues
need not be identical[, r]ather, the crucial inquiry is whether
the parties and issues substantially overlap.”
Fuller v.
Abercrombie & Fitch Stores, Inc., 370 F. Supp. 2d 686, 688 (E.D.
Tenn. 2005) (citations omitted).
GeoTag asserts that Fred’s
job-locator function infringes the ‘474 Patent.
The Court
finds, therefore, that the validity of the ‘474 Patent is a
substantial issue in the instant case, which overlaps the same
issue in the Delaware action.
in favor of Fred’s.
As a result, this factor weighs
While there is an issue of the source of
the job-locator and the effect of the settlement between
CareerBuilder and GeoTag, the more substantial issue of the
11
validity of the ‘474 Patent overlaps in the Delaware case and
the instant case.
3.
Similarity of the Issues
Fred’s argues that the similarity of the issues in the
instant action and the Delaware action make a stay in the
instant case appropriate.
Fred’s argues that the same patent is
at issue in both cases; that Google is the “manufacturer,
supplier, and host of the Mapping Services” used by Fred’s
allegedly infringing products, thereby making Google the real
party in interest; and that as “Google controls the design and
production of the Mapping Services at issue,” it has an interest
in defending its products against patent-infringement claims.
(ECF No. 80-1 at 15-16.)
GeoTag argues that it “is not asserting that the Google
mapping feature infringes the ‘474 patent in the Delaware
litigation,” therefore the issues are distinct.
4.)
(ECF No. 89 at
In the Delaware action, GeoTag’s counterclaim states,
GeoTag’s claim of infringement of the ‘474 Patent
against Google relating to the provision store locator
services to any of its customers is based only upon
Google’s internal use of the inventions claimed by the
‘474 patent and is not based upon Google’s sale or
distribution of any store locator services to any
third party, including any other person who has been
sued by GeoTag for infringement of the ‘474 patent.
(GeoTag’s Ans. & Countercl., ECF No. 36 ¶ 18, Microsoft Corp.,
1:11-cv-00175-RGA (D. Del. Feb. 13, 2012).)
12
As previously stated, in determining whether the first-tofile rule applies, the “issues need not be identical[, r]ather,
the crucial inquiry is whether the . . . issues substantially
overlap.”
Fuller, 370 F. Supp. 2d at 688 (citations omitted).
In the instant motion, it appears to the Court that
although GeoTag is only claiming Google infringed the ‘474
patent through its “internal use” of the patent, the
determination of the validity of the patent concerns a similar
use of the patent by Fred’s.
In effect, a determination of
validity or invalidity of Google’s independent use of the ‘474
patent will likely have an effect on Fred’s use of the patent.
See Blonder-Tongue Labs., Inc. v. Univ. of Illinois Found., 402
U.S. 313 (1971); Abbott Labs. v. Andrx Pharms., Inc., 473 F.3d
1196, 1203 (Fed. Cir. 2007) (characterizing Blonder-Tongue as
stating that “a defendant could plead estoppel if it ‘identifies
the issue in suit as the identical question finally decided
against the patentee in previous litigation’” (quoting BlonderTongue, 402 U.S. at 333)).
Fred’s has also agreed to be bound
by a finding of validity or invalidity for the ‘474 patent in
the Delaware action should a stay be granted in the instant
case.
(ECF No. 80-1 at 8.)
As a result, the Court finds that
while there are other issues at stake in the instant case –
namely the source of Fred’s job locator and the store locator in
use before the 2009 agreement with Google – the validity of the
13
‘474 patent is of substantial importance to the instant case,
such that a stay is appropriate under these circumstances.
Because the first-to-file factors weigh in favor of Fred’s,
the Court finds the rule applicable to the instant Motion.
The
Court, therefore, need not address the applicability of the
customer-suit exception.
B.
Factors for a Motion to Stay
Recognizing that the first-to-file rule is not a “strict
rule” and that this Court has the discretion to “dispense with
[it] where equity so demands,” Certified Restoration Dry
Cleaning, 511 F.3d at 551 (quoting Zide Sport Shop, 16 F. App’x
at 437) (internal quotation marks omitted)), the Court will also
analyze Fred’s Motion to Stay under the traditional factors.
See supra Pt. II.
1.
Unduly Prejudicial to the Non-Moving Party
Fred’s argues that staying the instant case will not unduly
prejudice GeoTag as this case is at an early stage, a stay will
resolve “major issues of validity, enforceability, and
construction of the ‘474 patent,” and will likely “simplify
matters in this case.”
(ECF No. 80-1 at 7.)
Fred’s asserts
that much of the relevant discovery in the instant case “will be
in the possession of Google.”
(Id.)
Staying the instant case,
therefore, will allow GeoTag to “devote resources to the
Delaware and Texas cases that would otherwise be strained by
14
litigating [the instant] case,” and to pursue discovery in
Delaware instead of third-party discovery in Tennessee.
(Id.)
Fred’s also asserts that the stay will be “limited in duration,”
lasting only until a verdict is reached in the Delaware action,
which is scheduled for trial in December 2013, with the
potential for lifting the stay prior to a verdict, “depending on
the Delaware Court’s forthcoming ruling on claim construction.”
(Id. at 7-8.)
GeoTag argues that a stay will result in prejudice
resulting in a clear tactical disadvantage to GeoTag.
GeoTag
argues that Fred’s “never requested a stay in Texas and never
mentioned the relevance of Google,” and is manipulating the
litigation process by transferring the case to this Court and
requesting a stay to delay the proceedings.
15.)
(ECF No. 89 at 14-
GeoTag contends that Fred’s is taking inconsistent
positions by stating that “relevant discovery in this case will
be in the possession of Google,” where it previously stated in
its Motion to Transfer that the accused instrumentality was
developed in-house and that the “prima facie sources of proof .
. . would be found at Fred’s principal place of business in
Memphis, Tennessee.”
6).)
(Id. at 6, 15-16 (citing ECF No. 10 at
GeoTag asserts that Fred’s actions illustrate that it is
attempting to gain a tactical advantage by delaying the
15
litigation and thereby unduly prejudicing GeoTag.
(Id. at 15-
16.)
The Court finds that this factor weighs in favor of Fred’s.
First, the Court agrees that the stay sought in the instant
action will likely be of limited duration, as trial in the
Delaware action is set for December.
Additionally, the Delaware
court will issue a claim-construction ruling prior to the trial,
which could also impact the instant case.
While another
district court’s claim construction is not binding on this
Court, and while there is no indication that the same terms
construed by the Delaware court will be construed by this Court,
it may be appropriate to give deference to the previous court’s
construction if the same terms are relitigated.
See Parker-
Hannifin Corp. v. Baldwin Filters, Inc., 724 F. Supp. 2d 810,
815-16 (N.D. Ohio 2010) (allowing a plaintiff to relitigate
claims that were construed in a previous litigation, but giving
the prior claim construction considerable deference).
Second, for the reasons stated supra, Part III.A.2., the
Court finds GeoTag’s assertion that Fred’s “never requested a
stay” is not correct.
(See ECF No. 93-1; id. at PageID 4904);
see also Defs.’ Mot. Stay, ECF No. 355, GeoTag, Inc., 2:11-cv405-MHS (E.D. Tex. June 1, 2012).)
Third, the record indicates that Fred’s is not taking an
inconsistent position regarding the involvement of Google in the
16
store-locator instrumentality.
As noted supra, Part III.A.2.,
the deposition testimony of Jim Deats stating that the store
locator was developed in-house and “put in place in the 20032004 timeframe” (Deats Dep., ECF No. 89-4, at 8:15-16, 22), is
countered by Fred’s Answers to GeoTag’s Interrogatories stating
that after that in-house store locator was developed, Google
provided a store locator to Fred’s in 2009.
(ECF No. 93-3 at
PageID 4933.)
Finally, while Fred’s did state in its Motion to Transfer
Venue that relevant discovery would be located in Memphis,
Tennessee, Fred’s has previously identified Google as “having
knowledge concerning the ‘store locator’ function of Fred’s
website” in its initial disclosures.
No. 93-2 at PageID 4911.)
(ECF No. 93 at 2; see ECF
In the same disclosure, Fred’s also
identified “documents related to third party providers of
locators” as potential documents on which Fred’s may rely in its
defense.
(ECF No. 93 at 2; see ECF No. 93-2 at PageID 4912-13.)
GeoTag relies on the Court’s decision in Lectrolarm Custom
Services, Inc. v. Vicon Industries, Inc., No. 03-2330-MA/A, 2005
WL 2175436 (W.D. Tenn. Sept. 1, 2005), to support its argument
that Fred’s motion should be denied as “the requested stay would
result in this case not proceeding until two years after this
case was filed by GeoTag in October 2011.”
(ECF No. 89 at 16.)
GeoTag also argues Lectrolarm is applicable because both Fred’s
17
and the defendant in Lectrolarm delayed filing their Motions to
Stay.
(Id.)
The Court finds that GeoTag’s reliance on Lectrolarm is
misplaced.
The instant case is distinguishable from Lectrolarm
because Fred’s did not delay in seeking a stay pending the
outcome of the Delaware action.
of 2012.
Fred’s filed for a stay in June
The issue of delay was central to the Lectrolarm
Court’s decision.
The Lectrolarm Court stated,
Finally, and most significantly, granting Vicon’s
motion to stay would impermissibly permit Vicon to
abuse the reexamination process.
The Defendants were
aware of the allegedly invalidating prior art that is
central to their request for reexamination long before
they actually submitted the request to the PTO. . . .
There is no reason that Vicon could not have requested
a reexamination months or years earlier. . . . The
easier course for the court would be to stay the
action.
That, however, would reward the Defendants’
unexplained, and seemingly unexplainable, delay in
filing the reexamination request.
Lectrolarm, 2005 WL 2175436, at *5.
Accordingly, the Court
finds that this factor weighs in favor of Fred’s.
2.
Simplifying the Issues
Fred’s argues that a stay is appropriate because the issues
in the instant case will be simplified by the resolution of the
Delaware action.
Fred’s asserts that resolution of the Delaware
action, because it concerns the validity of the same patent at
issue in the instant case, may even render the entire case moot.
(ECF No. 80-1 at 9.)
Fred’s also states that it agrees to be
18
bound by the Delaware court’s finding of validity or invalidity
of the ‘474 patent, which could thereby resolve the major claims
against Fred’s in the instant case.
(Id.)
GeoTag argues that the issues facing the Court will not be
simplified by staying the instant action.
GeoTag argues that
Fred’s Motion to Stay is “predicated on Google providing Fred’s
store locator,” yet GeoTag’s infringement contentions “do not
identify or rely on Google’s mapping feature.”
11.)
(ECF No. 89 at
GeoTag also argues that Fred’s Motion to Stay does not
address the other two locator-services GeoTag alleges infringe
the ‘474 patent:
Fred’s job locator and Fred’s mobile locator.
(Id. at 13.)
As stated, supra Parts III.A.2 and 3, while there is an
issue as to which company provided the job locator, the validity
of the ‘474 Patent is a substantial issue in both the Delaware
action and the instant case.
Resolution of that issue will
greatly simplify the issues before this Court, though it will
not address every issue before the Court.
Considering judicial
efficiency and economy, staying the instant case pending
resolution of the Delaware action is likely to simplify a
substantial issue before this Court.
Accordingly, the Court finds that this factor weighs in
favor of Fred’s.
19
3.
Whether Discovery is Complete and a Trial Date
Has Been Set
Fred’s argues that the instant case is at an early stage in
the litigation as no scheduling order has been entered.
No. 80-1 at 11.)
(ECF
Fred’s also contends that the Delaware action
is at a much more advanced stage than the instant case, as a
claim-construction ruling is forthcoming, the discovery period
ended in April 2013, and the trial is scheduled for December
2013.
(Id.)
Fred’s also asserts that the stay it seeks will be
of “limited duration and could end as early as the Delaware
Court’s ruling” on the November 2012 claim-construction hearing.
(Id.)
GeoTag argues that when viewed from the filing of the
Amended Complaint and the proceedings in the Eastern District of
Texas, the instant case is “not in its incipient stages as
Fred’s implies.”
(ECF No. 89 at 4.)
Fred’s notes that the
action against Fred’s was filed on October 25, 2011, and
contends that prior to the transfer of the instant case to this
Court, GeoTag had already filed infringement contentions,
initial disclosures, interrogatories, requests for admission,
produced documents, and prepared claim-construction briefing.
(Id.)
GeoTag notes that at the time of the preparation for the
claim construction, Fred’s was still a defendant in that action,
20
and while it was not the lead defendant, it had the opportunity
“to request to submit additional briefing on claim construction
issues” by December 18, 2012, which it did not do, nor did it
claim that Google was the real party in interest.
(Id. at 4-5.)
GeoTag asserts that, “but for the transfer, GeoTag’s case
against Fred’s would be more advanced than the Delaware
litigation.”
(ECF No. 89 at 5.)
GeoTag also notes that a
claim-construction ruling has since been issued in the Eastern
District of Texas case.
(ECF No. 89 at 14.)
The Court finds this factor weighs slightly in favor of
Fred’s.
While some discovery related to Fred’s has commenced
and the Eastern District of Texas has issued a claimconstruction ruling, no scheduling order has been entered in
this Court.
Further, the Eastern District Court case concerned
many more defendants than Fred’s, therefore the issues before
this Court are significantly narrower than the issues existent
in the initial Eastern District of Texas case.
As a result, the
impending discovery will be tailored to more specifically
address the issues presented by the severed case.
Finally,
although the Eastern District of Texas has issued its claimconstruction ruling, a district court’s claim-construction
ruling is not binding on another district court.
Hannifin Corp., 724 F. Supp. 2d at 815-16.
See Parker-
Further, there is no
indication yet that the same claims that were construed by the
21
Eastern District of Texas will be construed in the instant case.
As a result, the instant litigation is not at an advanced stage.
Additionally, the Delaware action is at an advanced stage.
The Delaware court held its claim construction on November 12,
2012; fact discovery closed on April 1, 2013; and a trial is
scheduled to start on December 9, 2013.
(ECF No. 80 at 2; see
Scheduling Order, ECF No. 42, Microsoft Corp., 1:11-cv-00175-RGA
(D. Del. Feb. 27, 2012); Order on Stipulation to Extend Time for
Discovery, ECF No. 173, Microsoft Corp., 1:11-cv-00175-RGA
(D.
Del. Nov. 5, 2012).)
The Court finds that the advanced status of the Delaware
action weighs in favor of staying the instant case, as the
Delaware court’s determination of the validity or invalidity of
the ‘474 Patent will have a substantial effect on the instant
case.
IV.
CONCLUSION
For the foregoing reasons, the Court finds that a stay of
the instant case is appropriate in light of the Declaratory
Judgment action involving the validity of the ‘474 Patent
proceeding in the District of Delaware.
The Court therefore
orders that all proceedings — including Local Patent Rule
disclosures and fact discovery — are hereby STAYED pending the
outcome of the Delaware action.
Either party may move to lift
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the stay prior to a decision in the Delaware action for good
cause.
IT IS SO ORDERED this 20th day of May, 2013.
/s/ Jon P. McCalla
CHIEF U.S. DISTRICT JUDGE
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