Ambato Media v. Clarion Co., et al, 2:09cv242-JRG
Judge: Rodney Gilstrap
Holding: Motion to Stay Proceedings DENIED
Defendant Garmin moved to stay this litigation pending the outcome of pending reexamination proceedings. The Markman hearing in this case was conducted on June 14, 2011, a Markman Order was issued on July 18, 2011 and jury selection is set for July 2, 2012.
Judge Gilstrap noted that courts typically consider three things when deciding whether to stay litigation pending reexamination, and held that in this case all three factors weighed against a stay:
- whether a stay will unduly prejudice or present a clear tactical advantage to the nonmoving party,
- whether a stay will simplify issues in question and trial of the case, and
- whether discovery is complete and whether a trial date has been set.”
(Citing Soverain Software LLC v. Amazon, Inc., 356 F. Supp. 2d 660, 662 (E.D. Tex. 2005)).
First, Judge Gilstrap held that a stay would unduly prejudice the patentee, who has an interest in the timely enforcement of its patent rights.
The ex parte reexamination requested by Garmin has barely entered its merit stage, and there is a strong likelihood that it may not finish until well after the current trial date. Moreover, a patentee can appeal a reexamination result to the Board of Patent Appeals and Interferences and to the Court of Appeals for the Federal Circuit. 35 U.S.C. § 305. A fully contested ex parte reexamination proceeding could therefore take several years to reach resolution. Ambato would be unduly prejudiced if the Court were to grant the stay because a stay would effectively prevent EMG from enforcing its patent rights for several more years.
(Internal citations omitted whenever I feel like it). Granting a stay would also prejudice Ambato because, when a case is stayed, “witnesses may become unavailable, their memories may face, and evidence may be lost while the PTO proceedings take place.” The possibility of witness and evidence loss was heightened in this case, the Court observed, because Garmin admits that it has discontinued at least some of the accused products. "When a product is discontinued, it is likely that some of the responsible engineers and other related employees may leave Garmin, rendering obtaining testimony and evidence from them much more difficult." Accordingly, because Ambato will suffer prejudice if the case is stayed pending reexamination, this factor weighs in favor of denying a stay, the Court found.
The second factor, whether a stay would simplify issues in the case, also weighed in favor of denying a stay, the Court concluded.
Garmin’s argument that the asserted claims may be cancelled or amended during reexamination is merely speculative. Granting a motion to stay on such a provisional ground “would invite parties to unilaterally derail timely patent case resolution by seeking reexamination and not promote the efficient and timely resolution of patent cases.” Even though some of the claims may change in this case, “the interests of justice will be better served by dealing with that contingency when and if it occurs, rather than putting this case indefinitely on hold.”
The Court also determined that the third factor, whether discovery is complete and whether a trial date has been set, also weighed against granting a stay.
The Court issued a Docket Control Order over a year and a half ago on May 24, 2010 and the parties have undertaken an extensive discovery process. Several rounds of interrogatories and document requests have been served and answered, “millions” of pages of documents have been exchanged, Infringement Contentions and Invalidity Contentions have been exchanged, a Markman hearing has come and gone, and the parties have exchanged initial and rebuttal expert reports on infringement, validity and damages. Discovery is set to close by March 15, 2012 and jury selection will commence on July 2, 2012. This factor also weighs in favor of denying a stay.
Accordingly, the Court denied the motion to stay.
