COVID-19 Changes How Some Courts Consider Motions to Stay Pending IPR
A stay is an important mechanism for many defendants to consider when filing an IPR. Due to the ongoing pandemic, courts have had to shift resources to address COVID-19-related concerns. In some instances, that is changing how courts evaluate motions to stay pending IPR.
Courts often consider three factors when determining whether to grant a stay pending IPR of a patent. These factors include:
- The stage of the proceedings
- Whether the stay will simplify the case before the court
- Whether a stay would result in undue prejudice to the nonmoving party
A review of recent decisions suggests that courts are considering COVID-19-related concerns primarily under the stage of the proceedings factor, though in at least one instance a court has considered COVID-19 restrictions under the undue prejudice factor.
Some courts have found COVID-19-related delays weigh in favor of stays. For example, in DivX, LLC v. Netflix, Inc., the district court judge considered COVID-19-related restrictions under the stage of the proceedings analysis. No. 2:19-cv-01602 (C.D. Cal. May 11, 2020). The Court found 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” due to challenges arising from COVID-19. This, in conjunction with the significant remaining discovery in the case, weighed in favor of a stay of the litigation. Ultimately, weighing all relevant factors, the Court granted the motion to stay.
In Sherwood Sending Solutions LLC v. Henny Penny Corp., the district court considered COVID-19-related restrictions under the undue prejudice analysis. No. 3:19-cv-00366 (S.D. Ohio Apr. 28, 2020). The plaintiff opposed the stay arguing that COVID-19 undoubtedly would delay proceedings at the PTO. However, the Court found that there was “no reason to think this Court will be affected any less than the PTO.” The Court, thus, found that the plaintiff would not be unduly prejudiced nor would any clear tactical disadvantage be conferred to plaintiff if a stay was enacted. Again, weighing all relevant factors, the Court granted the motion to stay.
For cases where an IPR petition has been filed but an institution decision has yet to issue, however, some courts remain reluctant to grant a request for stay pending IPR despite COVID-19-related impediments. For example, in Maxell, Ltd. v. Apple Inc., the Court noted that an institution decision was anticipated by September 2020. When assessing the stage of the proceedings factor, the Court noted that the near completion of fact discovery except for depositions that were impeded due to COVID-19 restrictions favored denial of a stay. No. 5:19-cv-0003 (E.D. Tex. Apr. 27, 2020).
In Dataquill Limited v. Blu Products, Inc., the Court noted that an institution decision was not anticipated until late September or early October 2020. No. 1:20-cv-20760 (S.D. Fla. Apr. 10, 2020). Despite noting that the stage of the litigation was in its infancy, the Court nevertheless found that any trial date in district court would be “well before the conclusion of the IPR proceedings . . ., even with the present COVID-19 restrictions.” Further, the Court expressed concern that the defendant was using the stay a delay tactic. Ultimately the district courts in both cases denied the motions to stay.
These cases illustrate that in some instances COVID-19 is changing courts’ analysis of motions to stay pending IPRs. However, a motion to stay remains a case-specific inquiry, and COVID-19 will not necessarily tip the scales in favor of a stay in every instance.