J. MICHELLE CHILDS, District Judge.
Plaintiff Zipit Wireless ("Plaintiff") brought this action, (ECF No. 1), on October 30, 2013, for patent infringement against Defendants Blackberry Limited and Blackberry Corporation (collectively "Defendants"). This matter is before the court on Defendants' Motion to Stay Litigation (ECF No. 83). For the reasons set forth below, the court
This court has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1338 (2012) because this is a civil action for patent infringement under the Patent Act, 35 U.S.C. § 101 et seq. (2012). This court has personal jurisdiction over Defendants because they conduct regular and systematic business in the State of South Carolina and maintain a registered agent for service of process in the State of South Carolina. Venue is proper under 28 U.S.C. §§ 1331, 1338, 1391(a), 1391(b), 1391(c), and 1400(b).
On October 30, 2013, Plaintiff brought this suit for patent infringement of four different patents: (1) No. 7,894,837 ("Patent 837"), (2) No. 8,190,694 ("Patent 694"), (3) No. 7,292,870 ("Patent 870"), and (4) No. 8,086,678 ("Patent 678"). (ECF No. 28.) Trial was originally set for December 7, 2015. (ECF Nos. 31, 77.) In preparation for trial, the parties exchanged infringement contentions, invalidity contentions, claim constructions for the disputed claim terms, and filed the Joint Claim Construction and Pre-Hearing Statement. (ECF No. 77 at 2.) Further, the parties produced documents and participated in written discovery, but did not take depositions. (Id.) However, the parties agreed to stay litigation until two weeks after the final decision by the United States Patent and Trademark Office's ("USPTO") Patent Trial and Appeal Board ("PTAB") for the Inter Partes Review
Defendants appealed the PTAB's decision to the United States Court of Appeals for the Federal Circuit ("Federal Circuit").
Although a motion to stay is not expressly addressed in the Federal Rules of Civil Procedure, it is a power inherent to the courts "under their general equity powers and in the efficient management of their dockets." Williford v. Armstrong World Industries, Inc., 715 F.2d 124, 127 (4th Cir. 1983). The moving party seeking the motion to stay has the burden of proof to "justify [its motion] by clear and convincing circumstances outweighing potential harm to the party against whom it is operative." Williford, 715 F.2d at 127.
Under the Leahy-Smith America Invents Act ("America Invents Act"):
Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 325, 125 Stat. 284, 307 (2011); see VirtualAgility Inc. v. Salesforce.com, 759 F.3d 1307, 1313 (Fed. Cir. 2014).
When addressing a motion to stay for an IPR, this court has considered "(1) reduction of the burden on the parties and the court; (2) the stage of the litigation; and (3) any undue prejudice caused by the stay to the non-moving party." Pleasurecraft Marine Engine Co. v. Indmar Prods. Co., No. 8:14-cv-04507-MGL, 2015 U.S. Dist. LEXIS 122431, at *2-3 (D.S.C. Sep. 15, 2015); see Graham-White Mfg. Co. v. Ell-Con Nat'l, Inc., No. 6:05-0396-HFF-WMC, 2006 U.S. Dist. LEXIS 68754, at *4-5 (D.S.C. Sep. 22, 2006).
Regarding a motion to stay pending appellate review of an IPR, neither this court nor the Federal Circuit has specifically addressed the factors that courts should analyze. Therefore, the court will consider the factors set out in both the America Invents Act and Pleasurecraft, as well as exercise the court's discretion to analyze the totality of the circumstances. Universal Elecs., Inc. v. Universal Remote Control, Inc., 943 F.Supp.2d 1028, 1031 (C.D. Cal. 2013). In exercising its discretion, the court must weigh the competing interests of itself, counsel, and litigants and maintain an even balance between all parties. See Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936). Therefore, although courts tend to rule in favor of a stay for IPRs, this court is not required to do so.
First, the court addresses whether granting the stay will simplify the issues in question, streamline the trial, and reduce the burden of litigation on the parties and the court. When a court is considering a motion to stay pending the IPR by the PTAB, these factors generally weigh in favor of granting a stay because (1) the claims may be invalidated, rendering the claims moot and further litigation unnecessary, and (2) the analysis may provide insight to the court for claim construction issues. See Canvs Corp. v. United States, 118 Fed. Cl. 587, 592-93 (2014). However, this court is considering a Motion to Stay pending appellate review of the IPR. The court has previously granted two Motions to Stay
Second, the court addresses whether the stage of the litigation, specifically the stage of discovery and the trial date, weighs in favor of granting a stay. Although discovery is not complete, this case is far from being in the "early stages." See Pleasurecraft Marine Engine Co., No. 8:14-cv-04507-MGL, 2015 U.S. Dist. LEXIS 122431, at *3. According to the most recent status update, the parties exchanged infringement contentions, invalidity contentions, claim constructions for the disputed claim terms, and filed the Joint Claim Construction and Pre-Hearing Statement. (ECF No. 77 at 2.) The parties produced documents and participated in written discovery, but did not take depositions.
Finally, the court considers whether the Motion to Stay should be denied based on a clear tactical advantage for the moving party or undue prejudice to the nonmoving party. When addressing tactical advantage, courts will look at the timing of the request for a stay. See Belden Techs. Inc., No. 08-63-SLR, 2010 U.S. Dist. LEXIS 90960, 8-9. Since the Defendants filed their request for review by the Federal Circuit and their Motion to Stay within a valid timeframe, the court does not find that Defendants filed their Motion for an inappropriate tactical advantage. When determining undue prejudice, courts typically look at (1) the status of the review proceedings (2) the relationship of the parties and (3) other issues. See Belden Techs. Inc. v. Superior Essex Communs. LP, No. 08-63-SLR, 2010 U.S. Dist. LEXIS 90960, at *8-12 (D. Del. Sep. 2, 2010); LG Elecs., Inc. v. Toshiba Samsung Storage Tech. Korea Corp., No. 12-1063-LPS-CJB, 2015 U.S. Dist. LEXIS 167153, at *16-21 (D. Del. Dec. 11, 2015). This case has already undergone review by the USPTO's PTAB, and is now awaiting review by the Federal Circuit, which is not expected for several months. Therefore, Plaintiff would be prejudiced by the delay. When looking at the relationship between the parties, courts generally are "reluctant to stay proceedings where the parties are direct competitors." Belden Techs. Inc., No. 08-63-SLR, 2010 U.S. Dist. LEXIS 90960, at *11; Nidec Corp. v. LG Innotek, Co., No. 6:07cv108, 2009 U.S. Dist. LEXIS 46123, 2009 WL 3673433, at *4 (E.D. Tex. Apr. 3, 2009). The parties dispute whether they are direct competitors, and therefore provide no guidance for the court on this issue. In the "other" category, courts have looked at whether there is a significant chance that Defendants may file for bankruptcy. Defendants allege that there is a 34% probability that they would declare bankruptcy within two years, (ECF No. 10 at 12), whereas Plaintiff alleges that there is a 43% chance that Defendants will enter bankruptcy. (ECF No. 90.) Without making a factual finding, even if the probability is 34%, the court finds that this probability is still significant. The court finds that balancing the factors for tactical advantage and undue prejudice weighs in favor of denying the stay.
After a careful consideration of the record, the court