DONETTA W. AMBROSE, Senior District Judge.
Before the Court is Defendant's Motion to Stay these proceedings pending the outcome of a covered business method patent review of two of the patents-at-suit, which cover all seven of the remaining claims in this litigation.
The Motion is filed pursuant to Section 18 of the Leahy-Smith America Invents Act ("AIA"), 35 U.S.C. §§ 311-319, which permits persons defending suit on a covered business method ("CBM") patent to seek Patent Trial and Appeal Board ("PTAB") review of the patent's validity. The AIA sets forth four factors to determine whether a stay is appropriate: 1) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial; 2) whether discovery is complete and whether a trial date has been set; 3) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and 4) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court. AIA § 18(b)(1), P.L. 112-29, 125 Stat. 284, 331 (2011). "This statutory test resembles the stay analysis courts have applied in assessing a motion to stay pending inter partes or ex parte reexamination by the [PTO]."
Section 18 "places a very heavy thumb on the scale in favor of a stay being granted." 157 Cong. Rec. S1053. "Since the entire purpose of the transitional program at the PTO is to reduce the burden of litigation, it is nearly impossible to imagine a scenario in which a district court would not issue a stay."
As to the first factor, the parties disagree as to whether a stay will simplify the issues in question or streamline the trial. Plaintiff argues, in particular, that the prior art at issue in this case differs from the prior art that Defendant has used in the review petitions. The PTAB review, however, may result in a pronouncement on the validity of a patent at issue, whether or not prior art at issue in this case remains at issue in this case. Plaintiff also contends that Defendant has not produced evidence that it is more likely than not that the claims will be invalidated, as required to initiate CBM review. I am not, however, asked to pass on the propriety of CBM review; that is an issue for the PTAB.
As one court has observed, a stay may simplify and streamline a trial in the following particulars:
I take note, too, of the observation that "[t]oo many district courts have been content to allow litigation to grind on while a reexamination is being conducted, forcing the parties to fight in two fora at the same time."
As to the second factor, although this litigation has reached a relatively late stage, expert discovery is not complete. No trial date has been set. We are still at a point, under the present circumstances, where a stay can "maximize the likelihood that neither the Court...nor the parties expend their assets addressing invalid claims."
Third, I address how a stay, or denial thereof, will create prejudice for Plaintiff or a tactical advantage for Defendant. "[I]n determining whether a plaintiff might be unacceptably prejudiced by a stay, the court turns to additional considerations including the timing of the stay request, the timing of the administrative review request, the status of the review proceedings, and the relationship between the parties."
Finally, I look to the fourth factor, which is whether the stay, or the denial thereof, will reduce the burden of litigation on the parties and the Court. I consider this factor in light of the suggestion that it was enacted in order to increase the likelihood that a stay would be granted.
I take separate note of Plaintiff's contentions that that Defendant does not have standing to seek CBM review, and that the motion to stay is premature.
In sum, three of the four applicable factors favor a stay, and one does not; overall, the totality of the circumstances weigh in favor of a stay. I am also cognizant, however, of the potential for undue prejudice to the Plaintiff should the stay be prolonged, and the broader interests in precluding litigation from languishing overlong. The review process underlying Defendant's Motion is subject to very specific timelines. Within three months of notification of a filing date, the patent owner may file a preliminary response to the petition; within three months thereafter, the PTAB determines whether to institute trial. Concurrent with that decision, the PTAB will issue a scheduling order if review is granted. Office Patent Trial Practice Guide, 77 Fed. Reg. 157, 48757 (Aug. 14, 2012). Defendant's petitions were filed on May 6, 2013. At this point, therefore, a stay pending the PTAB's determination regarding trial will not result in excessive delay. The PTAB may decide not to proceed on the petitions, and the stay will become unnecessary. Or, if the Board decides to proceed on one or more of the petitions, I will entertain the parties' positions regarding continuation of the stay at that time. Accordingly, I will stay this matter pending that determination.
In sum, a stay is justified in this case under applicable factors. Defendant shall be directed to notify the Court immediately when PTAB determines whether to institute trial on the CBM review petition, and, if trial shall commence, Defendant will apprise the Court of the schedule thereof. At that time, if necessary, the parties will be provided an opportunity to address the duration of the stay. An appropriate Order follows.
AND NOW, this 6th day of June, 2013, it is hereby ORDERED, ADJUDGED, and DECREED that Defendant's Motion for Stay is GRANTED. This matter is stayed until further Order of Court. Defendant shall be directed to notify the Court immediately when PTAB determines whether to institute trial on the CBM review petition, and, if so, Defendant will apprise the Court of the schedule thereof.