Judge Burke addressed a situation yesterday in BT Americas, Inc. v. Palo Alto Networks, Inc., C.A. No. 22-01538-CJB (D. Del.) where a defendant moved to stay pending IPR, but the patent-in-suit wasn't actually part of the IPR.
You may be thinking—huh? How did that situation come up?
The plaintiff apparently brought suit on two patents, and the defendant moved for IPRs on both. The PTAB instituted on the first one, and declined to institute on the second. When the defendant notified plaintiff of their intent to request a stay, the plaintiff immediately dismissed the first patent with prejudice—leaving only the second patent, which was not the subject of any IPR.
The defendant nonetheless charged ahead with its motion to stay, arguing that it should get a stay anyway:
A stay of the suit pending resolution of PAN’s instituted IPR petition on the ’641 patent will streamline the issues in this case, even if the ’641 patent is dismissed. . . . Regarding the ’237 patent [which is not subject to an IPR], a stay is appropriate regardless of whether the ’641 patent is dismissed because there is substantial overlap between the two Asserted Patents. Both patents share an identical specification and the claims of the ’237 patent substantially overlap with the claims of the ’641 patent. . . . Indeed, during motion to dismiss briefing, the parties and the Court treated claims 14 and 18 of the ’237 patent as representative of all asserted claims of both patents. . . . Even BT’s infringement contentions are replete with internal cross-references, repeatedly relying on the “mapping” of representative ’237 patent claims to argue infringement of the ’641 patent. . . . The PTAB’s institution decision on the ’641 patent relies on the same evidence to demonstrate a reasonable likelihood of success as the PTAB’s decision on the ’237 patent for corresponding claim limitations.
. . .
Because of this significant overlap, the PTAB’s final written decision as to the ’641 patent could dramatically simplify the case or, at the very least, would be highly instructive as to the ’237 patent. The reasoning and written record from the PTAB on the instituted IPR will be relevant to at least claim construction and invalidity of both Asserted Patents. Accordingly, a stay will remove the possibility of onerous, redundant, and potentially inconsistent rulings, and narrow the issues in this case. . . . A stay will thus conserve judicial and party resources as to validity of the Asserted Patents.
Id., D.I. 101 at 1-2. The Court did not buy that argument at all:
ORAL ORDER: The Court, having reviewed Defendant's motion to stay pending IPR ("Motion"), (D.I. 100), and the briefing related thereto, (D.I. 101; D.I. 106; D.I. 108), hereby ORDERS that the Motion is DENIED . . . . For reasons expressed by Plaintiff, (D.I. 106 at 1-3), in all but very unusual circumstances not present here, the Court is not going to be staying a patent case in favor of an IPR proceeding where the only patent-in-suit in the case is not at issue in the IPR. In such a circumstance, there will simply not be enough potential simplification from a stay to warrant pausing a district court case that would, in 100% of the possible IPR outcomes, eventually need to re-start with regard to all asserted claims of the sole patent-in-suit.
Id., D.I. 117.
The Court did offer one the defendant one small bone, suggesting that the parties can later ask the Court to delay a decision in favor of letting the PTAB rule:
If later in this case the Court is about to issue a decision, and it looks like we might hear something from the PTAB very soon that relates to that decision, then one or both parties can ask the Court to delay its decision until the PTAB has weighed in.
Id.
I have to think Defendant knew this one was a long shot. Still, getting one of two patents dismissed with prejudice is a very worthwhile result for an IPR.
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