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Court Declines to Stay Discovery Pending Motion to Dismiss Under Section 101 Because Court Does Not Believe That There Is an Immediate and Clear Possibility that Motion to Dismiss Will be Granted

The defendants filed a motion to stay discovery until the district court ruled upon its motion to dismiss pursuant to 35 U.S.C. § 101. In their motion to stay, Defendants asserted that its motion to stay discovery should be granted because it is a dispositive motion to dismiss that is likely to be granted, which would render any discovery conducted unnecessary and wasteful.

Plaintiff argued in opposition to the motion to stay that the Defendant’s motion to dismiss is not likely to be granted and also that the parties previously agreed that no Rule 12 motion concerning the pleadings would delay the commencement or conducting of discovery. Plaintiff also argued that it has incurred significant expenses in the litigation and that a stay of discovery would be prejudicial and harmful.

The district court explained that courts have broad power to stay discovery, but such stays are generally disfavored “because when discovery is delayed or prolonged it can create case management problems which impede the Court’s responsibility to expedite discovery and cause unnecessary litigation expenses and problems.” Feldman v. Flood, 176 F.R.D. 651, 652 (M.D. Fla. 1997) (citations and internal quotation marks omitted). As such, “the moving party bears the burden of showing good cause and reasonableness.” Id. A movant may show good cause and reasonableness when a preliminary issue that may be dispositive of the case is presently before the Court. See id. In this situation, the Court “must balance the harm produced by a delay in discovery against the possibility that the motion will be granted and entirely eliminate the need for such discovery.” Id. The Court should “take a preliminary peek at the merits of the allegedly dispositive motion to see if on its face there appears to be an immediate and clear possibility that it will be granted.” Id

Based on this standard, the district court denied the motion. “While it is unprofessional for Defendant’s counsel to breach an agreement regarding the commencement or conducting of discovery in this case, the Court will not deny Defendant’s motion on this basis alone. Rather, it will also deny Defendant’s motion because, having taken a peek at the merits of Defendant’s motion to dismiss, the Court does not believe that there is an immediate and clear possibility that it will be granted. Further, Plaintiff has described how a stay of discovery, even briefly, would cause it prejudice and harm. Defendant has not met its burden of demonstrating good cause in order to stay discovery in this case.”

Aatrix Software, Inc. v. Green Shades Software, Inc., Case No. 3:15-cv-164-HES-MCR (M.D. Fla. Sept. 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