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Trueposition, Inc. v. Polaris Wireless, Inc.

United States District Court, Third Circuit

October 21, 2013

TRUEPOSITION, INC., Plaintiff,
v.
POLARIS WIRELESS, INC., Defendant.

REPORT AND RECOMMENDATION

Mary Pat Thynge, Judge.

I. INTRODUCTION

A. Procedural Background

On May 23, 2012, True Position, Inc. (“plaintiff”) filed suit against Polaris Wireless, Inc. (“defendant”) for infringement of U.S. Patent No. 7, 783, 299 (“the ‘299 patent”).[1]Defendant was served on June 6, 2012, [2] and answered on July 27, 2012, denying infringement of the ‘299 patent and asserting various affirmative defenses, including failure to state a claim upon which relief can be granted, non-infringement, and estoppel.[3] A Rule 16 Scheduling Conference occurred on August 22, 2012.[4] Under that scheduling order fact discovery is due by December 1, 2013.[5] Claim construction briefing was completed as of September 20, 2013, [6] and a Markman hearing occurred on October 18, 2013.[7]

Nearly a year after notice of this lawsuit, defendant filed a petition for inter parties review (“IPR”) on June 4, 2013, [8] seeking review of claims 113-114 of the ‘299 patent.[9]A month thereafter on July 12, 2013 after filing its request with the Patent & Trademark Office (“PTO”), defendant filed a motion to stay this action pending the outcome of IPR, [10] along with its brief in support.[11] Plaintiff answered in opposition on August 2, 2013.[12] On August 8, 2013, defendant filed its reply brief.[13] As of the date of this Report and Recommendation, the PTO has neither granted nor denied defendant’s request for review. This Report and Recommendation addresses defendant’s motion to stay.

B. Factual Background

Plaintiff is the assignee of the ‘299 patent describing methods and systems used in a “wireless location system” (“WLS”), [14] to enable geolocation of a wireless device, such as a cell phone (referenced in the patent as a mobile station or MS), using the wireless network in the area.[15] Defendant likewise deploys its own WLS, competing in the same market as plaintiff.[16] Plaintiff asserts defendant infringes claims 98 and 113-114.[17] Claim 98 covers a WLS utilizing various components including hardware.[18]Claims 113-114 cover systems directed at locating a wireless device using different triggers.[19]

C. Legal Standard

The court’s “inherent power to conserve judicial resources by controlling its own docket” includes the discretion to stay a litigation, [20] which has been found to extend to patent cases where a review by the PTO has been requested.[21]

“The court considers the following three factors when deciding whether to stay a case: ‘(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 in question and trial of the case; and (3) whether discovery is complete and whether a trial date has been set.’”[22] In determining whether a stay would unduly prejudice the non-moving party, courts analyze the following factors: (1) the relationship between the parties; (2) the status of the IPR request; and (3) the timing of the IPR request and motion to stay.[23] A final decision is made with an eye toward maintaining an even balance between the competing interests of the parties at issue.[24]

The defendant in an infringement suit has one year from the date of service of the complaint to file a request for IPR relating to any underlying patent.[25] The patent owner then has three months from the date of notice to file a preliminary response.[26]Thereafter, the PTO has three months from the date of the patent owner’s preliminary response to decide whether to grant the petition for IPR.[27] IPR is limited to challenges only under 35 U.S.C. §§ 102 and 103 based on prior patents and printed publications.[28]After a decision by the PTO to grant or deny the IPR petition, the PTO has one year, subject to a 6-month extension, to issue its findings[29] which are subject to appeal to the United States Court of Appeals for the Federal Circuit.[30]

D. Positions of the Parties

Defendant argues the motion to stay should be granted because there are “several overlapping issues” between this litigation and IPR, such that the findings of the PTO will aid in simplifying the triable issues in this action.[31] Specifically, defendant cites numerous cases in this district that have generally enumerated the potential ways in which IPR may simplify litigation.[32] Defendant further argues that claim 98, not included in the IPR petition, may be disposed of upon summary judgment, thereby eliminating all claims from trial assuming a finding of invalidity by the PTO on claims 113-114.[33]Defendant also argues a stay would not prejudice plaintiff given that defendant is presently not supplying its software within the United States, and cannot directly infringe plaintiff’s patent.[34] Defendant also asserts plaintiff is a subsidiary of a billion-dollar corporation, and a delay in any potential damage award is not prejudicial.[35] In addition, defendant claims its failure to file a petition for IPR until shortly before the deadline is timely under the statute, and thus, not dilatory.[36] Because the matter is purportedly at an early stage, defendant maintains this favors a stay pending IPR, since the result of IPR would likely occur prior to trial.[37]

In opposition, plaintiff argues defendant’s petition for IPR has not been granted, and is merely pending, and it intends to oppose it.[38] Plaintiff also contends IPR will not simplify the issues in the case due to the omission of claim 98, and the inability of IPR to address issues raised under § 112.[39] Plaintiff cites ImageVision.net for the proposition that where the scope of issues in litigation exceeds that which can be solved under IPR, such as when § 112 issues are raised, a stay is disfavored.[40] Plaintiff further notes it would be unduly prejudiced by a stay due to the direct competition between the parties in an “all-or-nothing” market for customer contracts.[41] Plaintiff submits defendant’s argument that its software is supplied outside the United States is fallacious, as evidenced by defendant’s refusal to accept an injunction.[42] Plaintiff points out that defendant delayed until the second to the last day to file its IPR petition which demonstrates strategic dilatory conduct, [43] when it clearly could have been filed earlier, and not in the middle of fact discovery.[44] Similarly, plaintiff maintains delay of the present matter would provide an unfair tactical ...


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