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Perdiemco LLC v. Telular Corp.

United States District Court, E.D. Texas, Marshall Division

June 6, 2017

PERDIEMCO LLC Plaintiffs,
v.
TELULAR CORP. et al., Defendants.

          MEMORANDUM AND ORDER

          ROY S. PAYNE UNITED STATES MAGISTRATE JUDGE.

         In this patent case, Defendants move the Court to stay this action pending inter partes review (IPR) of each of the seven asserted patents. Defs.' Motion [Dkt. # 36]. The Court DENIES the motion.

         I. BACKGROUND

         This dispute dates back to 2015, when PerdiemCo sued TV Management for infringement of U.S. Patents 8, 223, 012, 9, 003, 499, and 9, 071, 931. See PerdiemCo LLC v. TV Management, Inc., Nos. 2:15-cv-1217-JRG-RSP, 2:15-cv-1216-JRG-RSP (Lead Case). TV Management responded by filing petitions for IPR requesting review of each asserted claim. Eventually the parties settled that litigation, and the Court dismissed the case with prejudice last November.

         Not long after the settlement, the Patent Trial and Appeal Board (PTA B) instituted review of each challenged claim. In March 2017, PerdiemCo filed responses on the merits in the IPR proceedings for the '012, '499, and '931 patents.

         With that background in mind, in December 2016, PerdiemCo filed this lawsuit asserting 115 claims. Compl. [Dkt. # 1]. PerdiemCo claims almost all Defendants infringe the '012, '499, and '931 patents, and that all Defendants infringe four newly asserted patents: U.S. Patents 9, 485, 314, 8, 149, 113, 9, 319, 471, and 9, 119, 033. Id.

         In response, Telular filed eight IPR petitions. Between January and March 2017, Telular filed seven IPR petitions challenging the currently asserted claims. Defs.' Motion [Dkt. # 36] at 3-4. In April 2017, Telular filed another IPR petition directed to all claims of U.S. Patent 9, 621, 661, which PerdiemCo has yet to assert. Notice of Suppl. Facts [Dkt. # 49]; see also PerdiemCo's Response [Dkt. # 40] at 5 n.3 (noting PerdiemCo's intention to add two more patents to this litigation).

         Defendants claim these facts warrant a stay because it's highly likely the PTAB will institute review of all asserted claims given that (1) the PTAB already instituted review of the '012, '499, and '931 patents, and (2) the other four asserted patents are closely related. Defs.' Motion [Dkt. # 36] at 1-2. Telular notes all seven patents share the same specification and claim priority to the same original application. Id.

         II. APPLICABLE LAW

         The question of whether to stay proceedings pending inter partes review of a patent is a matter committed to the district court's discretion. See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (request for stay pending inter partes reexamination). A stay is particularly justified when “the outcome of a PTO proceeding is likely to assist the court in determining patent validity or eliminate the need to try infringement issues.” Evolutionary Intelligence, LLC v. Millennial Media, Inc., No. 5:13-cv-04206, 2014 WL 2738501, at *2 (N.D. Cal. June 11, 2014); see also 3rd Eye Surveillance, LLC v. Stealth Monitoring, Inc., No. 6:14-cv-162, 2015 WL 179000, at *1 (E.D. Tex. Jan. 14, 2015); Norman IP Holdings, LLC v. TP-Link Techs., Co., No. 6:13-cv-384, 2014 WL 5035718, at *2 (E.D. Tex. Oct. 8, 2014); see also Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir. 1983).

         District courts typically consider three factors when determining whether to grant a stay pending inter partes review: (1) whether the stay will unduly prejudice the non-moving party, (2) whether the proceedings before the court have reached an advanced stage, including whether discovery is complete and a trial date has been set, and (3) whether the stay will simplify issues in the litigation. See Lennon Image Techs., LLC v. Macy's Retail Holdings, Inc., Nos. 2:13-cv-235, 2014 WL 4652117, at *2 (E.D. Tex. Sept. 17, 2014); Soverain Software LLC v. Amazon.com, Inc., 356 F.Supp.2d 660, 662 (E.D. Te x . 2005). Based on those factors, courts determine whether the benefits of a stay outweigh the inherent costs of postponing the litigation. See EchoStar Techs. Corp. v. TiVo, Inc., No. 5:05-cv-81, 2006 WL 2501494 (E.D. Tex. July 14, 2006).

         Some courts have also considered whether a stay will reduce the burden of litigation on the parties and on the court. See, e.g., Market-Alerts Pty. Ltd. v. Bloomberg Finance L.P., 922 F.Supp.2d 486, 489 (D. Del. 2013); Ultratec, Inc. v. Sorenson Commc'ns, Inc., No. 13-cv-346, 2013 WL 6044407 (W.D. Wis. Nov. 13, 2013). In this district, courts usually deny motions for stay when the PTAB has not acted on a petition for inter partes review. See Trover Group, Inc. v. Dedicated Micros USA, No. 1:13-CV-1047-WCB, 2015 WL 1069179, at *6 (E.D. Tex. Mar. 11 2015) (“In this district, that is not just the majority rule; it is the universal practice.”).

         III. DISCUSSION

         A. ...


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