Plaintiff's Initiation of ITC Investigation Leads to Stay of District Court Case, including Stay of Patent not Involved in ITC Investigation

March 4, 2013

Avago Technologies ("Avago") filed a patent infringement action against IPtronics, Inc. ("IPtronics") asserting infringement of two U.S. Patents, patent nos. 5,359,447 (the '447 patent) and the 6,947,456 (the '456 patent) in the United States District Court for the Northern District of California. After a second amended complaint was filed, Avago filed a complaint at the International Trade Commission ("ITC") alleging infringement of the '456 patent, but did not allege infringement of the '447 patent. The ITC instituted an investigation naming IPtronics as a respondent.

As noted by the district court, "[w]hen parallel actions are proceeding before a district court and the International Trade Commission, 28 U.S.C. ยง 1659 requires the district court to stay 'Any claim that involves the same issues involved in the proceeding before the Commission' until the 'Determination of the Commission becomes final" upon request by 'a party to a civil action that is also a respondent in the proceedings before the [ITC].'"

Here, Avago asserted that the patent it did not pursue, the '447 patent, should not be stayed pending the ITC investigation. The district court disagreed. "Though this litigation is already well underway, the harm imposed by a stay to Plaintiffs is minimal and largely of their own making. Plaintiffs chose to file an ITC investigation fairly late in this litigation knowing that in so doing, they would spread Defendants' financial resources even thinner and afford Defendants an opportunity to request both a mandatory and a discretionary stay from the court. That Defendants pursued this option does not constitute harm to Plaintiffs. Defendants have demonstrated that the '447 claims and the business tort claims are at least somewhat related to the claims at issue in the ITC investigation. Plaintiffs have failed to identify any specific continuing severe harm it may suffer should a stay issue that could not ultimately be rectified by a damage award. Even if such harm did exist, Defendants have attempted to minimize it by requesting a discretionary stay only until the ITC issues its initial determination, rather than demanding a stay until the final resolution of that investigation. Therefore, the curt finds that this factor weighs slightly in favor of a stay."

The district court also found that there was the possibility of harm to IPtronics if there was no stay. "The court notes the aggressive pace and demands of an ITC investigation, and finds that under the circumstances presented here, Defendants would face a hardship without a stay."

The district court also found that judicial economy favored a stay. "Because the '456 patent claims are stayed as of right, the court faces the decision of allowing this litigation to proceed on two tracks, or waiting twelve months to enable this litigation to go forward on one. In the event, the court does not issues a stay, the present case will proceed to trial on the '447 patent and the business tort claims. Later, after the ITC investigation concludes, litigation in this court may be renewed as to the '456 patent. A dual schedule such as the one presented here may require duplicative discovery, two rounds of dispositive motions, and ultimately, two trials. Because the ITC investigation relates to the present case, several issues of proof may stand to be clarified by the ITC's determination. Given this relationship and the court's already impacted schedule, the court finds that judicial economy will be served by having this case go forward in its entirety. Therefore, this factor weighs in favor of a stay."

Accordingly, the district court granted the stay of the entire litigation.

Avago Technologies U.S. Inc., et al. v. IPtronics, Inc., et al., Case No. 5:10-CV-02863-EJD (N.D. Cal. Feb. 15, 2013)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.