Defendant Omron Oilfield & Marine, Inc. (“Omron”) filed a motion to stay pending an Inter Partes Review that it initiated against Plaintiff’s National Oilwell Varco, L.P.’s (“NOV”) patent-in-suit. The patent-in-suit, U.S. Patent No. 5,474,142 (the ‘142 patent), is directed to automatic drilling.
As the district court explained, “[o]n May 3, 2013, Omron opened up a second front in its legal battle with NOV, by filing a petition for inter partes review with the United States Patent Office. This review process, a relative novelty, is before a panel of three administrative patent judges, as part of the Patent Trial and Appeal Board (PTAB). 35 U.S. C §§6, 316(c). NOV has three months, from the date of Omron’s PTAB petition, to file a response, 37 C.F.R. § 42.107(b), and the PTAB in turn has three months after that to determine whether an inter partes review will proceed, 35 U.S.C. § 314(b). In other words, it will likely be five months before the Court or the parties even know if an inter partes review will actually occur here. If the PTAB grants review, by statute it must render a final determination within one year. Id. § 316(a)(11). The one-year period can be extended for a further sixth months upon a showing of good cause. Id. As such, there is a possibility the entire inter partes review process would take nearly two years. Even assuming the parties and the PTAB move expeditiously, the stay Omron seeks could easily last many months or a year, at least.”
The district court then noted that the case had already proceeded through a Markman hearing. “The case is proceeding under a pre-Markman scheduling order, entered on February 22, 2013. Pre-Markman opening briefs and reply briefs have already been filed. The Special Master presided over a technical tutorial and Markman hearing on April 16, 2013. Both parties recently filed Post-Markman hearing briefs, and their reply briefs are due on June 13. Once the reply briefs are filed, the case will be fully briefed for the Special Master’s Markman report and recommendation.”
Based on these facts, the district court declined to issue a stay because it would be a waste of judicial resources given that Markman proceedings were underway and nearing completion. “The Court declines to issues a stay at this time. It would be a waste of judicial resources to stay the case now, when the matter is so close to issuance of a Markman order. Cf. Landis v. N. Am. Co., 299 U.S. 248, 254 (1936) (“The Power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.”). Other district courts have declined to grant stays premised on an inter partes review petition filed while the Markman process was ongoing. Universal Elecs., Inc. v. Universal Remote Control, Inc., No. SACV 12-00329 AG, 2013, WL 1876459, at *1 (C.D. Cal. May 2, 2013). ”
The district court also concluded that there was a real risk that the PTAB would decline to grant the Inter Partes Review and that there was a danger of prejudice to NOV. “Furthermore, there is a real risk at this point the PTAB will decline to grant inter partes review, which would make a stay at this point a complete waste of time. Finally, the court finds there is a danger of prejudice to NOV, because of the possibility no review will even occur. See id. at *2 (“Three significant factors in deciding whether to stay an action are (1) whether discovery is complete and whether a trial date has been set; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether a stay would unduly prejudice or present a clear tactical disadvantage to the nonmoving party.”).”
Finally, the district court did agree to revisit the issue after the final Markman ruling and if the PTAB agreed to institute the Inter Partes Review.
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The district court’s decision once again highlights the importance of promptly instituting an Inter Partes Review and moving quickly for a stay. Failure to do so, can result in the denial of the motion to stay and the consequence of simultaneous litigation in two different forums.
National Oilwell Varco, L.P. v. Omron Oilfield & Marine, Inc., Case No. A-12-CA-773-SS (W.D. Tex. June 10, 2013)
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