The opinion of the court was delivered by: ROBERT KUGLER, Magistrate Judge
This matter comes before the court upon motion by Defendant
Franklin Covey Co. to stay proceedings in the above-captioned
case pending reexamination of the patent-in-suit by the Patent
and Trademark Office ("PTO"). For the reasons set forth below,
the Court will grant Defendant's motion.
A trial court may exercise its discretion in deciding whether
to stay proceedings in a matter pending before it. Landis v.
North Am. Co., 299 U.S. 248, 254-55 (1936). The authority to
enter a stay applies equally to patent cases where reexamination
by the PTO has been requested and granted. Ethicon, Inc. v.
Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (noting that
courts have the authority to order a stay pending the conclusion
of a PTO examination).
In deciding whether to grant a stay, the court must weigh the benefits of the stay against the costs. Middleton,
Inc. v. Minnesota Mining & Mfg. Co., No. 03-CV-40493, 2004 WL
1968669, at *3 (S.D. Iowa Aug. 24, 2004). In particular, the
court must consider (1) whether a stay would unduly prejudice or
present a clear tactical disadvantage to the non-moving party;
(2) whether a stay will simplify the issues and the trial of the
case; and (3) whether discovery is complete and a trial date has
been set. Id. (citations omitted).
It is not clear that entry of a stay in this matter would
unduly prejudice or present a clear tactical disadvantage to the
plaintiff. In his opposition papers, Motson does not point to any
undue prejudice he would suffer if the stay was granted.*fn1
Although the stay may delay the Court's determination as to the
defendant's counterclaim of invalidity under 35 U.S.C. 112, it
would not be for such a protracted or indefinite period to
constitute an abuse of discretion. See Gould v. Control Laser
Corp., 705 F.2d 1340, 1341-42 (Fed. Cir. 1983) (noting that
entry of a stay pending reexamination does not last so long as to
constitute an abuse of discretion because (1) by statute the PTO
reexamination must proceed with special dispatch and (2) stays to
enable reexamination do not foreclose review on the merits by federal courts). Moreover, the reexamination has the potential to
eliminate trial on the issue altogether or at least reduce the
costs associated with litigating it. See Gould,
705 F.2d at 1342; Middleton, 2004 WL 1968669, at *3. And, if the PTO
upholds the validity of plaintiff's patent, "the plaintiff's
rights will only be strengthened, as the challenger's burden of
proof becomes more difficult to sustain." Pegasus Dev. Corp. v.
Directv, Inc., No. 00-1020-GMS, 2003 WL 21105073, at *2 (D. Del.
May 14, 2003) (citing Custom Accessories, Inc. v. Jeffrey-Allan
Indus., Inc., 807 F.2d 955, 961 (Fed. Cir. 1986)).
As mentioned above, the second factor weighs in favor of
granting the defendant's motion because entry of a stay, pending
reexamination by the PTO, may simplify or even eliminate the need
for trial on the remaining validity challenge in this matter.
See Gould, 705 F.2d at 1342. The reexamination procedure has
the potential to either uphold or narrow the claims in the
plaintiff's patent. Loffland Bros. Co. v. Mid-Western Energy
Corp., No. 83-CV-2255, 1985 WL 1483, at *2 (W.D. Okla. Jan. 3,
1985). In any event, the technical expertise of the PTO examiner
may be helpful to the Court should further consideration of the
matter be necessary after reexamination. See id.
Finally, although discovery is complete and summary judgment
has been decided, the court has not set a trial date nor has it
issued a pre-trial order. Courts have previously entered stays in
situations which are similar, if not more advanced, than the present case. See e.g., Loffland Brothers, 1985 WL 1483,
at *2 (stay granted after significant discovery, pretrial
conference and trial date set); Gould, 705 F.2d 1340 (stay
upheld even where it was entered five years after commencement of
litigation and only 20 days before scheduled start of trial).
Although discovery and briefing expenses have already been
incurred, a trial at this point on the sole remaining issue in
the case may compound those costs unnecessarily if the PTO
reexamination eliminates the need for a trial or creates a need
to relitigate other issues. See Middleton, 2004 WL 1968669,
Therefore, the balance of relevant factors weighs in favor of
granting the defendant's motion. For the foregoing reasons, the
Court will enter a stay of all proceedings in this matter pending
reexamination of the patent-in-suit by the PTO.
The accompanying Order will issue today.
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