Motions to Stay Litigation Pending Post Grant Proceeding
Post grant proceedings, including Inter Partes review ("IPR"), Covered Business Method ("CBM") review, and Post Grant review ("PGR") proceedings, were established by the American Invents Act ("AIA") with an understanding that these proceedings may obviate the need for litigation. In particular, Congress understood that defendants in patent infringement suits routinely petition the PTO for review or reexamination and then move to stay concurrent litigation pending completion of the post grant proceedings involving the patent(s)-in-suit.
Staying litigation pending post grant proceedings can save the parties and the court significant amounts of time and money. Federal Courts have the inherent power to conserve judicial resources by controlling their own dockets, which has long been held to include the authority to order a stay of litigation. Motions to stay, which are granted approximately 60% of the time, are a powerful tool in a defendant's arsenal. A general summary of the analysis used to determine whether to stay a case is provided below.
For CBM reviews, Congress promulgated four factors that a district court must consider and balance when a stay is requested. That is, courts must consider and balance: (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).
Requests to stay in view of an IPR, PGR, or ex parte reexamination are decided according to common law tests which, while varying slightly among the district courts, almost universally tracks the first three factors above. The weight of each factor may, however, be considered differently from district court to district court.
The first factor is whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial. Courts recognize that PTO review and reexamination proceedings have the potential to simplify issues by eliminating or clarifying some or all claims at issue before a trial takes place.
The second factor, whether discovery is complete and whether a trial date has been set, may weigh in favor of a stay where a petition for review and subsequent request to stay litigation is made relatively early in the litigation.
The third factor, whether the plaintiff will suffer undue prejudice as a result of a stay, considers a variety of issues. Whether a plaintiff would suffer undue prejudice as a result of a stay may be determined by considering: (a) the timing of the request for reexamination or review; (b) the timing of the motion to stay; (c) the status of the reexamination or review proceedings; and (d) the relationship of the parties.
The fourth and final factor, considered only when the motion to stay concerns a CBM review, is whether a stay will conserve judicial resources. If the motion to stay is made in early stages of litigation, preferably before discovery and before a trial date has been set, the court may conclude this factor weighs in favor of a stay.