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COVID-19 Justifies Stay of Litigation Pending Inter Partes Review Where Review Had Not Yet Been Initiated by Patent Trial and Appeal Board

Plaintiff DivX, LLC (“DivX”) filed patent infringement actions against Netflix and Hulu asserting that both companies infringed various patents. Both defendants filed motion to stay their cases pending inter partes review (“IPR”) proceedings before the Patent Trial and Appeal Board (“PTAB”).

As explained by the district court, starting in October 2019, Defendants began filing IPRs of certain claims of the asserted patents before the PTAB. Defendants filed the majority of their IPR petitions between February and March 2020. The deadline for Defendants to file their IPR petitions passed in mid-March 2020, before Plaintiff’s deadline to reduce the number of asserted claims in this case.

After the filing of all of the IPRs, but before the PTAB had decided whether or not to issue review, the Defendants moved to stay the proceedings.

In reviewing the motion, the district court first looked at the stage of the proceedings and noted that the proceedings were at an early stage. “There is significantly more work left to be done in this case compared to work that has already been completed, and Plaintiff does not reasonably dispute that fact. Id. 14:15–16; see also Lodge Mfg. Co. v. Gibson Overseas, Inc., CV 18-8085 PSG (GJSx) (slip op.), at *4–5 (C.D. Cal. Sept. 24, 2019) (collecting cases to support that stage of proceedings factor weighs in favor of stay where claim construction proceedings have not yet occurred). Moreover, the entry of a stay pending patent office proceedings would not mean that the parties’ commendable efforts to streamline litigation thus far will have been completely in vain. Those efforts will remain relevant even after any stay is lifted.”

The district court also found that the “coronavirus pandemic is also a relevant consideration under this factor. Defendants, particularly Hulu, has stated that the pandemic has hindered their ability to meet certain case deadlines. See, e.g. Hulu Case, Plaintiff also recognizes that ‘the Court, parties, and counsel face unprecedented challenges from COVID-19 and the corresponding guidance and restrictions that have disrupted everyday life and routines.’ Opp. to Netflix 14:21–23. It is likely that if these cases were to proceed on their current schedule, hearings and trial would be subject to delays, particularly because criminal matters will take priority over these patent infringement actions.”

Therefore, the stage of the proceedings favored stay of the litigation. The district court also found that the potential simplification of the issues, the lack of undue prejudice to the DivX and the totality of the circumstances also justified the stay.

Accordingly, the district court granted the motion to stay pending the PTAB’s preliminary decision on the IPRs or after the conclusion of all of the IPR proceedings.

DivX, LLC v. Netflix, Inc., Case No. 19-1602 PSG (DFMx) (C.D. Cal. May 11, 2020)

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