In recent weeks, two more courts in the Northern District of Georgia have stayed cases pending the completion of Inter Partes Review proceedings at the USTPO—in one case doing so without a party even requesting a stay.
Airwatch LLC v. Good Tech. Corp et al.
First, in Airwatch LLC v. Good Technology Corp., Judge Steve C. Jones granted the defendants’ motion to stay pending an IPR in a patent infringement case regarding controlling access to data on a network. Less than four months after being sued, Defendants filed an IPR request and moved the Court to stay the case. Notably, the PTAB has yet to decide whether to institute the IPR proceeding.
The Court carefully considered the jurisdiction’s three-factor test governing stay motions:
(1) whether discovery is complete and a trial date has been set;
(2) whether a stay will simplify the issues in the case; and
(3) whether a stay would unduly prejudice or present a tactical disadvantage to the nonmovant.
See Interface, Inc. v. Tandus Flooring U.S., LLC, No. 4:13-cv-46-WSD, 2013 WL 5945177 (N.D. Ga. Nov. 5, 2013).
As to the first two factors, the Court found that the case was in an early stage at the time the stay motion was filed, which the Court held was the relevant timeframe to consider. Next, the Court found that the IPR was likely to result in a simplification of the issues before the Court.
The third factor—possible prejudice to the plaintiff—presented the most challenge. The plaintiff argued that the parties were direct competitors, in a relatively young market, in a which loss of market share could permanently prejudice the plaintiff. However, the Court was unconvinced, noting (a) that the market was not particularly young (existing since at least 2011), (b) there was little evidence supporting the claim of direct competition, and (c) the plaintiff had not sought a preliminary injunction. Thus, the Court concluded that the third factor was, “at best, a wash.”
Consequently, the Court granted the motion and stayed the case through the IPR’s conclusion.
Wingard v. North Georgia Auto Brokers
While the facts in Airwatch resemble those that practitioners frequently see in other cases, Wingard v. North Georgia Auto Brokers presented a more unusual scenario. In Wingard, the Plaintiff was asserting a patent infringement claim against an automobile dealership, alleging infringement by a particular anti-theft feature in certain Kia cars sold at the dealership. However, Kia was notably absent from the suit as a defendant. In fact, Wingard had filed over twenty suits against car dealerships nationwide, at least ten of which were Kia dealers. In response, Kia and American Honda Motors had each filed declaratory judgment suits against Wingard, and Kia recently filed an IPR petition.
Noting this factual and procedural context, newly confirmed Judge Eleanor Ross took the unusual step of staying the case sua sponte—absent any request from either party. The Court noted its inherent authority to manage its docket, including by issuing stays. Given the various stages of the numerous other cases nationwide, Judge Ross concluded that a stay was the most efficient use of judicial resources and the most likely route to avoid inconsistent results. Finally, the Court found that the plaintiff would suffer little prejudice from a stay, noting the plaintiff’s “curious . . . piecemeal litigation strategy” of suing only individual dealers” rather than the automobile manufacturers.
Collectively, Airwatch and Wingard again illustrate the significant impact IPRs can have on district court patent litigation, particularly in the Northern District of Georgia.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of Fish & Richardson P.C., any other of its lawyers, its clients, or any of its or their respective affiliates. This post is for general information purposes and is not intended to be and should not be taken as legal advice.
Noah C. Graubart has an international practice specializing in patent infringement litigation and other areas of intellectual property. Mr. Graubart regularly represents clients in U.S. District Courts across the country, at the U.S. International Trade Commission, as well as arguing or briefing cases in the U.S. Courts of Appeals, including...