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After Transfer, Case Is Stayed Pending IPR Even Though Only Three of Twenty-Two Claims Were at Issue in the IPR

Plaintiff ACQIS, LLC (“ACQIS”) filed a patent infringement action in the Eastern District of Texas alleging that Defendant EMC Corporation (“EMC”) had infringed claims in 11 patents owned by ACQIS. Specifically, ACQIS alleged that 20 EMC computer storage products infringe 22 claims from these 11 patents, including EMC products for modular computer systems.

After the Eastern District of Texas transferred the case, EMC moved to stay the case pending Inter Partes Review (“IPR”). The United States Patent and Trademark Office (“PTO”) has instituted IPRs for 2 of the 11 patents-in-suit, involving 3 of the 22 claims asserted against EMC.

The district court then analyzed the three factors that are considered in deciding a motion to stay while an IPR is pending: “(1) the stage of the litigation, including whether discovery is complete and a trial date has been set; (2) whether a stay will simplify the issues in question and the trial of the case; and (3) whether a stay will unduly prejudice or present a clear tactical disadvantage to the nonmoving party.” SurfCast, Inc. v. Microsoft Corp., No. 2:12-CV-333, 2014 WL 6388489, at *1 (D. Me. Nov.14, 2014). The analysis considers the totality of the circumstances, and “while prior decisions may prove instructive, the inquiry is largely case specific.” Id. (citation omitted).

In support of the motion to stay, EMC argued that “the requested stay is appropriate because discovery is still in its early stages and a trial date has not been set, a stay would likely simplify the issues in question and trial of the case, and it would not unduly prejudice or present a clear tactical disadvantage to ACQIS.” ACQIS opposed the stay on the grounds “that the parties and the Eastern District of Texas have already made substantial investments in the case, the IPR challenges are limited in scope and thus are unlikely to result in significant simplification of the issues in the case, EMC unreasonably delayed in petitioning for IPR, and a stay would unduly prejudice ACQIS.”

The district court then found that “[n]otwithstanding the fact that substantial document and written discovery has already occurred, and a claim construction opinion has been issued, a significant amount of work still remains to be done by the parties and this Court. Other courts have stayed cases that were further along than this one pending IPR.” See, e.g., SurfCast, 2014 WL 6388489, at *2 (granting stay where “discovery is complete, a Markman order has been issued, and briefing is complete on the pending summary judgment, Daubert, and related motions”); PersonalWeb Techs., 2014 WL 4757816, at *3 (granting stay where “discovery has been completed,” the parties “have taken a dozen depositions,” and a claim construction order has issued as to all of the patents-in-suit).

The district court concluded that this factor weighed moderately in favor of a stay.
Turning to the second factor, the district court stated that “this factor does not favor a stay as strongly as in a case where all of the claims in the litigation are under review in an IPR, and the Court agrees with ACQIS that the IPRs most likely will not eliminate the need for a trial. However, given the significant overlap outlined above, the Court concludes that this factor weighs slightly in favor of a stay.”

Finally, the district court determined that the third factor also favored a stay. “In sum, the IPRs are already underway, and a final decision is expected on or before March 11, 2016. ACQIS, a non-practicing entity that does not compete directly with EMC, has not identified any actual harm that would result from a stay, and EMC was timely in filing its IPR petitions and moving for a stay. Based on all of these considerations, the Court concludes that a stay of approximately nine months (or less) from the date of this Memorandum and Order until a decision is issued in the IPRs is unlikely to cause undue prejudice or present a clear tactical disadvantage to ACQIS. Thus, this factor weighs in favor of a stay.”

Given that all three factors weighed in favor of a stay, the district court granted the motion to stay.

Acqis, LLC v. EMC Corporation, Case No. 14-cv-13560 (D. Mass. June 10, 2015)

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or