United States District Court, E.D. Texas, Marshall Division
PAYNE UNITED STATES MAGISTRATE JUDGE.
the Court is Defendant Flywheel Sports, Inc.'s
(“Flywheel”) Motion to Stay Pending Inter
Partes Review Proceedings (“Motion to Stay”)
(Dkt. No. 62). The Court concludes that Flywheel has not
sufficiently shown that a stay would simplify the issues
within the case, and the Court concludes that a stay would
result in significant prejudice for Plaintiff Peloton
Interactive, Inc. (“Peloton”) based on the facts
in this case. Accordingly, the Court DENIES
Flywheel's Motion to Stay.
asserts claims of patent infringement against Flywheel,
asserting U.S. Patent Nos. 9, 174, 085 (“'085
Patent”), 9, 233, 276 (“'276 Patent”),
9, 861, 855 (“'855 Patent”), and 10, 322, 315
(“'315 Patent”). The Patent Trial and Appeal
Board (“PTAB”) instituted Inter Partes
Review (“IPR”) proceedings for the '085,
'276, and '855 Patents. (Dkt. Nos. 62-3, 62-4, 62-5).
The '315 Patent issued on June 18, 2019. '315 Patent
at . Peloton represents that the '315 Patent is part
of the same patent family as the '085, '276, and
'855 Patents and that the '315 Patent is a direct
continuation of those patents. (Dkt. No. 64 at ¶ 108.)
Additionally, Flywheel represented at the August 12, 2019
hearing that it filed an IPR petition for the '315 Patent
on Friday, August 9, 2019.
party seeking a stay bears the burden of showing that such a
course is appropriate.” Realtime Data, LLC v.
Hewlett Packard Enter. Co., No. 6:16-cv-00086-RWS-JDL,
2017 WL 3712916, at *3 (E.D. Tex. Feb. 3, 2017). “The
decision of whether to extend a stay falls solely within the
court's inherent power to control its docket.”
Pers. Audio LLC v. Google, Inc., No.
1:15-cv-350-RHC, 230 F.Supp.3d 623, 626 (E.D. Tex. 2017)
(citing ThinkOptics, Inc. v. Nintendo, No.
6:11-cv-455-LED, 2014 WL 4477400, at *1 (E.D. Tex. Feb. 27,
2014)); accord Ethicon, Inc. v. Quigg, 849 F.2d
1422, 1426-27 (Fed. Cir. 1988) (“Courts have inherent
power to manage their dockets and stay proceedings including
the authority to order a stay pending conclusion of a PTO
reexamination.”); Landis v. N. Am. Co., 299
U.S. 248, 254-55 (1936). In determining whether to stay
litigation pending IPR, courts within this district have
considered three factors: (1) “whether the stay will
simplify issues in question in the litigation, ” (2)
“whether the stay will unduly prejudice the nonmoving
party or present a clear tactical disadvantage to the
nonmoving party, ” and (3) “whether the
proceedings before the court have reached an advanced stage,
including whether discovery is complete and a trial date has
been set. . . .” Id. (citing Trover Grp.,
Inc. v. Dedicated Micros USA, No. 2:13-CV-1047-WCB, 2015
WL 1069179, at *2 (E.D. Tex. Mar. 11, 2015)). Whether a stay
“will result in simplification of the issues before a
court is viewed as the most important factor when evaluating
a motion to stay.” Uniloc USA, Inc. v. Acronis,
Inc., No. 6:15-CV-01001-RWS-KNM, 2017 WL 2899690, at *3
(E.D. Tex. Feb. 9, 2017) (citing Intellectual Ventures II
LLC v. Kemper Corp., No. 6:16-cv-0081-JRG, 2016 WL
7634422, at *2 (E.D. Tex. Nov. 7, 2016) (citing NFC Tech.
LLC v. HTC Am., Inc., No. 2:13-CV-1058-WCB, 2015 WL
1069111, at *4 (E.D. Tex. Mar. 11, 2015))).
on the facts of this case, the Court concludes that a stay
would not be appropriate. The Court will address each of the
three stay factors-simplification, prejudice, and the stage
of the case-below.
A stay would not significantly simplify the issues of the
present litigation, suggesting that a stay is not
factor weighs against a stay in the present case for several
reasons. First, no institution decision has been made for the
'315 Patent. Second, SAS Inst., Inc. v. Iancu,
138 S.Ct. 1348 (2018) (hereinafter
“SAS”) precluded the PTAB from
instituting IPRs for only a portion of the patent claims, so
any institution decision occurring after SAS
provides a weaker inference that the PTAB will determine that
all challenged claims are unpatentable. Thus, institution
decisions for the '085, '276, and '855 Patents
are less helpful in indicating that IPRs will result in a
simplification of issues than they would have been before
SAS. Third, Flywheel indicated at the August 12,
2019 hearing that it intended to present several additional
invalidity theories if the instituted IPR proceedings are not
fully successful, so the scope of the invalidity contentions
is significantly broader than the invalidity theories
presented for IPR proceedings. Each of these reasons suggest
that this factor weighs against a stay.
the PTAB has not yet instituted review for the '315
Patent. Courts in this district have often concluded that the
simplification factor weighed against a stay where the PTAB
had not instituted IPR proceedings for all asserted patents.
See, e.g., Cellular Commc'ns Equip. LLC v.
HTC Corp., No. 6:16-CV-475-KNM, 2018 WL 4261194, at *3
(E.D. Tex. May 8, 2018) (concluding that simplification
factor weighed against a stay where IPR had been instituted
for only two of the three patents-in-suit). The PTAB has not
instituted IPR proceedings for all asserted patents, this
suggests that a stay is not appropriate.
second reason provided above, the Court concludes that the
Supreme Court's decision in SAS alters the
Motion to Stay analysis and makes institution decisions less
indicative that all claims will be found unpatentable.
“If an inter partes review is instituted and
not dismissed under this chapter, the Patent Trial and Appeal
Board shall issue a final written decision with respect to
the patentability of any patent claim challenged by the
petitioner. . . .” 35 U.S.C. § 318. In
SAS, the Supreme Court interpreted this language to
mean that the PTAB “must address every claim
the petitioner has challenged.” 138 S.Ct. at 1354.
Before SAS, the PTAB could partially institute IPR
proceedings, instituting review of some challenged claims but
not others. After SAS, the PTAB cannot partially
institute IPR proceedings-the PTAB must now institute IPR
proceedings as to all challenged claims.
the PTAB can no longer partially institute IPR proceedings,
institution decisions are not as useful as they were in the
past for providing an indication of whether all claims would
be found unpatentable. Because the PTAB could partially
institute review before SAS, their institution
decisions provided a much stronger indication that all claims
for which review was instituted would be found unpatentable.
This is because the PTAB could decline institution for
certain challenged claims if the PTAB concluded that the
petitioner had not shown a reasonable likelihood of
prevailing for those claims. When the PTAB decides to
institute review after SAS, it must institute review
for all challenged claims even if the PTAB concludes at the
petition stage that the petitioner did not show a reasonable
likelihood that it would prevail for some challenged claims.
Flywheel argues that the PTAB may still decline institution
of IPR proceedings even if it concludes that the petition has
shown a reasonable likelihood that the petitioner would
prevail with respect to at least 1 of the claims challenged
in the petition. However, the Court still concludes that an
institution decision is less effective as a barometer for the
issue of whether the PTAB will eventually determine that the
challenged claims are unpatentable after SAS.
respect to this case, the fact that the PTAB has instituted
IPR proceedings for three of the four asserted patents still
permits an inference that a stay would simplify the case to