A decision to stay patent infringement litigation falls within a federal court's power to control its docket. But in determining whether to stay litigation pending the Patent Office's inter partes review (IPR) of the patent, courts still are guided by three factors: (1) whether the stay will simplify the litigation, (2) whether a stay would unduly prejudice (or present a clear tactical disadvantage to) the patent owner, and (3) whether the litigation has progressed to some advanced stage (e.g., discovery is complete, a trial date is set, etc.). Yet since the Supreme Court's 2018 decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018) (discussed here), courts in the Eastern District of Texas have erected an unnecessarily high bar for stay-movants to leap.
Simplification: Most IPRs are petitioned to persuade the Patent Trial and Appeal Board to cancel a patent asserted in litigation. After all, without a patent, there is no basis for the infringement litigation. Logically, the IPR may well simplify the litigation'often obviating it altogether, if not construing and cancelling some claims or estopping the petitioner from later raising the same challenges in litigation. Virtual Agility, Inc. v. SalesForce.com, Inc., 759 F.3d 1307, 1314 (Fed. Cir. 2014), This is the "most important factor bearing on whether to grant a stay." British Telecomms. PLC v. IAC/InterActiveCorp,, Case 18-366-WCB, Slip Op. at 10 (D. Del. Sept. 11, 2020) (Bryson, C.J., sitting by designation).
Progress: An IPR petition must be filed within the year following service of a federal court complaint alleging infringement. That's not an arbitrary window, rather it's one that Congress purposely wrote into the statute to offer accused infringers a "reasonable opportunity to identify and understand the patent claims relevant to the litigation." 157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011) (statement of Sen. Kyl). If discovery were typically completed within that year, maybe Congress would have offered a shorter window. No matter, Congress expressly rejected a shorter, six-month window. Id. Suffice it to say, typically discovery is not complete within that year. Even if a court has ambitiously set a future trial date, that date is always subject to change, especially these days, during the COVID-19 pandemic. British Telecomms., Slip Op. at 10 (Bryson, C.J.) (granting stay motion due to ex parte reexamination, despite conclusion of fact discovery and setting of trial date because, "in light of the COVID-19 pandemic, it seems highly unlikely that the present schedule will hold"). And as patent lawyers know well enough, a federal court trial on a patent not concerning a bio/pharma invention is exceptionally rare, as an overwhelming majority of such cases settle before trial. In short, by the time an IPR petition has been filed, litigation has not progressed to any advanced stage.
Prejudice: Like the stay itself, an IPR is petitioned to prejudice (tactically disadvantage) the patent owner because it's ostensibly easier to convince the Board the claimed invention is not patentable than it is to convince a jury the patent is not valid. But there is nothing unduly prejudicial in having the Patent Office review whether claims in the patent were improperly issued in the first instance, especially because Congress, in authorizing administrative review, sought to limit unnecessary and counterproductive judicial review. See Changes to Implement Inter Partes Review Proceedings, Post-Grant Review Proceedings, and Transitional Program for Covered Business Method Patents; Final Rule, 77 Fed. Reg. 48679, 48680 (Aug. 14, 2012) (link) (noting Congress and the Patent Office designed IPRs "to...
