District courts commonly stay patent litigation cases pending inter parties review (IPR) that assesses the validity of the patents-in-suit before the Patent Trial and Appeal Board (PTAB). Such stay may be lifted or extended at district courts’ discretion depending on the circumstances of the IPR.
On December 4, 2020, United States District Judge Stephanie M. Rose denied the plaintiff’s motion to lift the stay in G.W. Lisk Co., Inc. v. Gits Mfg. Co., No. 4:17-cv-273-SMR-CFB (S.D. Iowa) and, accordingly, granted Defendant Gits’ motion to continue the stay until the Federal Circuit issues decisions in the parties’ cross-appeals from the inter parties review.
The case was originally stayed in March 2018 upon the institution of the IPR petitions filed by Gits. On March 19, 2019, the PTAB issued its final written decision finding thirteen claims of U.S. Patent No. 6,601,821 unpatentable, but nine other claims were patentable. Both parties were not satisfied with the PTAB’s decision and sought appeal. Gits appeal and Lisk’s cross-appeal are now pending before the Federal Circuit.
In October 2020, Lisk sought to lift the stay and proceed in litigation with the claims the PTAB found patentable. Gits moved on the other hand to extend it pending the Federal Circuit’s decision.
Judge Rose used a four-factor test and decided that case should remain stayed:
- First, Judge Rose observed that while it had been four and a half years since the inception of the case, there had been little discovery, and a trial date had not been set. This weighed in favor of extending the stay.
- Second, Judge Rose noted that the parties’ appeal and cross-appeal affected every single claim of the asserted patent. Thus even the nine confirmed claims were not ripe for adjudication, as Lisk contended. Extending stay would therefore simply the issues and facilitate trial.
- The third factor was undue prejudice. Here Judge Rose opined that the factor weighed against extending the stay, since the parties are competitors in business and the patent-in-suit will soon expire in November 2021. But in any case, she found that extend the stay was not a dilatory tactic by Gits, considering Lisk itself had filed the cross-appeal.
- The fourth “informal” factor was the burden on the judiciary. Here Judge Rose reasoned that the factor weighed in favor of extending the stay, since “the great extent of work anticipated before trial can begin may be obviated, or at least re-focused, by the decision of the Federal Circuit.”
In conclusion, Judge Rose held that the totality of the circumstances counseled in favor of maintaining the stay of this litigation.
Plaintiffs should keep in mind that a patent has a fixed term but patent litigation may be a prolonged process, and engage in alternative dispute resolutions, settlement discussions, and appeals with judiciousness and strategy. For defendants, the case once again highlights the important and integral role of inter partes review in defending against patent infringement lawsuits.
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