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Princeton Digital Image Corporation v. Konami Digital Entertainment Inc.

United States District Court, D. Delaware

January 14, 2015

PRINCETON DIGITAL IMAGE CORPORATION, Plaintiff,
v.
KONAMI DIGITAL ENTERTAINMENT INC., HARMONIX MUSIC SYSTEMS, INC. and ELECTRONIC ARTS, INC., Defendants. PRINCETON DIGITAL IMAGE CORPORATION, Plaintiff,
v.
UBISOFT ENTERTAINMENT SA, Defendant.

MEMORANDUM ORDER

CHRISTOPHER J. BURKE, Magistrate Judge.

In both of these two patent infringement actions (referred to herein as the " Harmonix Action" and the " Ubisoft Action, " respectively), presently pending before the Court are Plaintiff Princeton Digital Image Corporation's ("Plaintiff") motions to lift a stay that has been in effect in the cases. (D.I. 75; Ubisoft Action D.I. 56)[1] The stay had been imposed in light of a request made for inter partes review ("IPR") of the patent-in-suit, United States Patent No. 5, 513, 129 ("the 129 Patent"). For the reasons stated below, the Court DENIES Plaintiffs motions to lift the stay.

I. BACKGROUND

Plaintiff filed the Harmonix Action on November 13, 2012. (D.I. 1) It filed the Ubisoft Action on February 27, 2013. ( Ubisoft Action, D.I. 1) On July 17, 2013, Chief Judge Leonard P. Stark referred both cases to the Court to hear and resolve all pretrial matters, up to and including the resolution of case-dispositive motions. (D.I. 30; Ubisoft Action, D.I. 10)

On November 15, 2013, Defendant Harmonix Music Systems, Inc. ("Harmonix") filed a petition with the United States Patent and Trademark Office (the "PTO") for IPR of claims 1, 5-6, 8-13, 15-19 and 21-23 of the 129 Patent. (D.I. 67 at 4 & ex. 1) On December 3, 2013, Harmonix filed a motion to stay the Harmonix Action pending resolution of the IPR proceeding. (D.I. 66) On December 20, 2013, in the Ubisoft Action, Defendant Ubisoft Entertainment SA ("Ubisoft") filed a similar motion to stay pending resolution of the Harmonix IPR proceeding. ( Ubisoft Action, D.I. 42) On January 15, 2014, the Court issued a Memorandum Order granting Harmonix's and Ubisoft's (collectively, "Defendants") motions to stay. See Princeton Digital Image Corp. v. Konami Digital Entm't Inc., Civil Action No. 12-1461-LPS-CJB, Civil Action No. 13-335-LPS-CJB, 2014 WL 3819458 (D. Del. Jan. 15, 2014). Following the Court's Order granting a stay, the Patent Trial and Appeal Board ("PTAB") issued a decision on the Harmonix IPR petition on May 9, 2014, instituting review on claims 10, 11, 22, and 23 of the 129 Patent. (D.I. 75, ex. A at 22)

Meanwhile, on April 15, 2014, Ubisoft had filed a second petition for IPR of all claims of the 129 Patent. (D.I. 75 at 2) The PTAB issued a decision on that petition on October 17, 2014, instituting review of claims 1-13, 15-18, and 21-23. ( Id., ex. Bat 2, 24) Thus, only three of the 129 Patent's 23 claims are not currently under review in these two IPR proceedings: claims 14, 19, and 20.[2] Each of these three claims are dependent claims; the independent claims from which they depend (claims 12 and 16) are currently under review by the PTAB. (129 Patent, col. 30:16-18, 30:42-47)

II. STANDARD OF REVIEW

A court has discretionary authority to grant a motion to stay. See Cost Bros., Inc. v. Travelers Indem. Co., 760 F.2d 58, 60-61 (3d Cir. 1985); see also Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) ("Courts have inherent power to manage their dockets and stay proceedings, ... including the authority to order a stay pending conclusion of a PTO reexamination.") (citations omitted). In determining whether a stay is appropriate in the first instance, our Court typically considers three factors: (1) whether granting the stay will simplify the issues for trial; (2) the status of the litigation, particularly whether discovery is complete and a trial date has been set; and (3) whether a stay would cause the non-movant to suffer undue prejudice from any delay, or allow the movant to gain a clear tactical advantage. See, e.g., Cooper Notification, Inc. v. Twitter, Inc., Civ. No. 09-865-LPS, 2010 WL 5149351, at *1 (D. Del. Dec. 13, 2010).

When a court has imposed a stay, but "circumstances have changed such that the court's reasons for imposing [that] stay no longer exist or are inappropriate, " the court also has the inherent power and discretion to lift the stay. Auto. Techs. Int'l., Inc. v. Am. Honda Motor Co., C.A. Nos. 06-187-GMS, 06-391 GMS, 2009 WL 2969566, at *2 (D. Del. Sept. 15, 2009) (internal quotation marks and citation omitted). On the other hand, "where there are no new circumstances that impose hardship on the plaintiff or that change the court's earlier disposition imposing the stay, the plaintiff's motion to lift the stay should be denied." Id. (citation omitted).

III. DISCUSSION

Plaintiff makes two arguments in support of lifting the stay here: (1) continuing the stay will not simplify the issues for trial, (D.I. 75 at 5-6), and (2) continuing the stay will cause undue delay, prejudice, and tactical disadvantage, (id. at 4-5). The Court will address these arguments in turn.

A. Simplification of Issues for Trial

Plaintiff seeks to lift the stay "at least with respect to claims 14, 19, and 20[, ]" arguing that continuing the stay at this stage will not result in a simplification of issues for trial. (D.I. 75 at 1, 5-6) Plaintiff points out that dependent claims 14, 19, and 20 are excluded from the pending IPR proceedings and that, regardless of the outcome of those proceedings, the Court will eventually have to address those three claims (as well as the two independent claims from which they depend). (Id. at 6)

However, were Plaintiff's request to lift the stay granted-either as to claims 14, 19 and 20, or as to all claims-that could significantly complicate the issues in these actions and lead to inefficiency. For example, the IPR proceedings still involve 20 other claims that the PTO may ultimately hold to be valid, and Plaintiff has given no indication that it intends to surrender its right to later assert any of the claims that survive. Thus, even if the Court were to allow the parties to proceed to trial solely on claims 14, 19, and 20, the Court and the parties may then be forced to revisit the remaining claims following resolution of the IPR. At that point, depending on the outcome at the PTO, the remaining claims could include as many as three independent claims (claims 1, 5, and 10) and fifteen dependent claims (claims 2-4, 6-9, 11, 13, 15, 17, 18, and 21-23) that would not have been litigated to any real extent by either party in this Court. Alternatively, if the Court ...


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