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District Court Denies Defendants’ Motion to Stay Pending Inter Partes Review (“IPR”) Where Third Parties Filed IPRs and Defendants Would Not Be Subject to Estoppel Provisions

In this patent infringement case, Plaintiff Signal IP, Inc. (“Signal”) alleged that Defendants Ford Motor Company (“Ford”) and Fiat Chrysler US LLC (“FCA”) (collectively “Defendants”) infringed upon six of patents. The Defendants filed a joint motion to stay all proceedings pending an inter parties review of the patents-in-suit.

Defendants Ford and FCA argued that there were eleven inter partes review proceedings and three reexamination proceedings challenging the validity of all the claims asserted in the patents-in-suit. Ford and FCA argued that it would be more efficient for the USPTO to decide the validity of the asserted claims in the patents before the district court proceeded with the case.

The district court then recited the common test for determining whether to stay a case: In considering whether or not to stay a case, courts routinely consider at least the following three factors: (1) whether a stay will simplify the issues in the case or conserve judicial resources; (2) whether a stay will unduly prejudice or present a clear tactical disadvantage to the non-moving party; and (3) whether discovery is complete and when (or whether) a trial date has been set. Dura Global Techs., LLC v. Magna Int’l Inc., No. 11-cv-10551, 2011 WL 5039883, at *6 (E.D. Mich. Oct. 24, 2011); Regents of Univ. of Mich., 2013 WL 2393340, *2 (“To determine whether a stay pending inter partes review is appropriate, courts apply the same factors as determining whether to stay a case pending reexamination.”).

Turning to the first factor, the district court found it weighed in favor of not staying this case for three reasons. First, the district court noted that the plaintiff has agreed to dismiss the asserted claims of two of the patents and would add different claims not subject to the inter partes review. Second, the district court found it could “minimize any negative effects on efficiency and judicial economy by working with the parties to carefully draft an appropriate scheduling order.” Third, the district court noted that the estoppel provision under 35 U.S.C. ยง 315(e)(2) would not prevent the Defendants “from making the same or similar arguments in this case as being made by other automobile manufacturers in the inter partes review proceedings” because the inter partes review proceedings were filed by third parties.

With respect to the second factor, the district court found that it weighed only slightly in favor of a stay. “Although this case has been pending well over a year, this case is in its infancy and a stay would generally save the parties time and money, if a decision in an inter partes review completely invalidates all the claims being asserted in a patent. However, as discussed above, the Court finds that a carefully drafted scheduling order will allow decisions in the inter partes review proceedings to occur before dispositive motions are filed in this case. Thus, the parties and the Court will conserve resources in preparing and deciding dispositive motions and having a trial for any patent claims that are invalidated in the inter partes review proceedings.”

Turning to the third factor, the district court determined that this factor weighed slightly in favor of denying a stay. “The Plaintiff will be prejudiced by a stay, because a plaintiff has a legitimate interest in having its case timely resolved. Significant delay is a consideration here, because many of the inter partes review proceedings were not filed until almost a full year after Plaintiff filed its complaint in this case.”

Accordingly, the district court denied the motion to stay.

Signal IP, Inc. v. Ford Motor Company, Case No. 14-cv-13729 (E.D. Mich. Sept. 30, 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