United States District Court, D. Delaware
HONORABLE MARYELLEN NOREIKA, UNITED STATES DISTRICT JUDGE
before the Court is the motion (D.I. 435) of Defendants,
Decco U.S. Post-Harvest Inc. (“Decco”),
Cerexagri, Inc., Essentiv LLC, 1 and UPL Ltd. (collectively,
“Defendants”) seeking to stay the proceedings on
U.S. Patent No. 9, 394, 216 (Count III of AgroFresh's
Second Amended Complaint, D.I. 412) pending Plaintiff
AgroFresh Inc.'s (“Plaintiff” or
“AgroFresh”) expected appeal to the Federal
Circuit of the Patent Trial and Appeal Board's
(“PTAB”) Final Written Decision in the inter
partes review (“IPR”) of U.S. Patent No. 9,
394, 216 (“the '216 patent”).(D.I. 436 at 1).
AgroFresh opposes the motion. (D.I. 442). For the reasons
discussed below, the Court will GRANT the motion.
case has a long history. Currently, the Second Amended
Complaint (“Amended Complaint”) (D.I. 412) is the
operative pleading. The Amended Complaint asserts
infringement of three patents (including the '216
patent), unfair competition, unjust enrichment, trade secrets
violations, intentional interference with business
relationships and contracts, conversion and civil conspiracy.
(Id.). The Court entered a Scheduling Order on
September 29, 2017, setting trial for October 7, 2019. (D.I.
122). Fact discovery closed on December 19, 2018.
(Id.). Although the parties had already served
expert reports when this motion was filed, expert discovery
was ongoing. Expert discovery, however, is apparently now
completed and summary judgment motions have been filed.
(See D.I. 450, 452). The two summary judgment
motions Plaintiff filed address validity defenses for the
'216 patent. And at least two of the eight grounds for
summary judgment set forth by Defendants address infringement
or validity of the '216 patent. (See D.I. 451,
SJ 5 and SJ 8).
petitioned for IPR proceedings against the '216 patent on
August 8, 2019. (D.I. 227 at Ex. 3). Thereafter, on March 7,
2018, the PTAB instituted IPR proceedings on all claims of
that patent. (D.I. 424 at Ex. 1). On March 6, 2019, the PTAB
issued a final written decision finding that all claims of
the '216 patent are unpatentable. (Id.). On
April 12, 2019, Defendants filed the instant motion to stay.
or not to stay litigation is a matter left to the Court's
discretion.” Ethicon LLC v. Intuitive Surgical,
Inc., No. 17-871 (LPS), 2019 WL 1276029, at *1 (D. Del.
Mar. 20, 2019) (citing Dentsply Int'l Inc. v. Kerr
Mfg. Co., 734 F.Supp. 656, 658 (D. Del. 1990)). Courts
typically review three factors in determining whether a stay
is appropriate: “(1) whether a stay will simplify the
issues for trial, (2) whether discovery is complete and a
trial date has been set, and (3) whether a stay would unduly
prejudice or present a clear tactical disadvantage to the
non-moving party. Sometimes courts also consider whether the
moving party would face hardship or inequity in going forward
with the litigation.” Ethicon, 2019 WL
1276029, at *1 (citation omitted) (citing Enhanced
Sec. Research, LLC v. Cisco Sys., Inc., No. 09-571
(JJF), 2010 WL 2573925, at *3 (D. Del. June 25, 2010)).
the potential for simplification of the issues in this case
is substantial. All of the claims of the '216 patent have
been found unpatentable. A stay will simplify the case
because the Federal Circuit's review of the PTAB decision
will reduce or at least clarify issues the Court would
otherwise address, including in connection with dispositive
motions and trial. See UCB, Inc. v. Hetero USA Inc.,
277 F.Supp.3d 687, 690 (D. Del. 2017); Princeton Digital
Image Corp. v. Konami Digital Entm't Inc., No.
12-1461-LPS-CJB, 2014 WL 3819458, at *2 (D. Del. Jan. 15,
2014). If the Federal Circuit upholds the PTAB decision,
there will be no valid claims of the '216 patent and the
Court will not have to address that patent in connection with
summary judgment or at trial. Thus, it would be potentially
wasteful to litigate the '216 patent while the Federal
Circuit also is addressing it. Moreover, if the Federal
Circuit reverses all or part of the PTAB decision,
“there will be estoppel of defenses that could
otherwise be litigated in this court.” Transcript of
Oral Argument (D.I. 64) at 23, Thermo Fisher Sci. Inc. v.
Agilent Techs., Inc., No. 17-600-LPS-(CJB) (D. Del. June
29, 2018). And although the Court understands that the
simplification applies only to one part of the case, it is
not an insubstantial part and substantial simplification is
the second factor, AgroFresh argues that the case is at an
advanced stage and should not be stayed. In particular,
AgroFresh points out that the Court has addressed claim
construction, and that fact and expert discovery are complete
and summary judgment motions have been filed. Defendants
counter that the status of the case should not weigh heavily
against a stay because “of the burden on the parties
and the court in completing expert discovery, resolving
summary judgment motions, and preparing for trial” -
particularly because the PTAB has found all of the claims of
the '216 patent to be unpatentable. (D.I. 436 at 7;
see also D.I. 446 at 9). The Court agrees with
Defendants that, although this case is further along than is
typical for a motion to stay, any weight given to this factor
is outweighed by the likelihood that the issues involved in
summary judgment and for trial will be simplified by a stay.
AgroFresh argues that it will be prejudiced by a stay,
particularly considering Defendants' prior arguments
against a stay. (D.I. 442 at 7-9). In considering whether a
stay will be prejudicial to AgroFresh or give Defendants a
clear tactical advantage, the Court considers four factors:
(1) the timing of the request for review; (2) the timing of
the request for a stay; (3) the status of the review
proceedings; and (4) the relationship of the parties. See
Contour IP Holding, LLC v. GoPro, Inc., No.
15-1108-LPS-CJB, 2016 WL 4474340, at *4 (D. Del. July 14,
neither the timing of Defendants' request for the IPR nor
the timing of their request for a stay supports the
conclusion that Defendants are pursuing an inappropriate
tactical advantage. As to the request for review, UPL filed
its petition for IPR on August 8, 2017 (see D.I. 227
at Ex. 3), just over a month after the Court's June 30,
2017 opinion holding that AgroFresh - not MirTech - owned the
'216 patent (see D.I. 97). See,
e.g., Ethicon, 2019 WL 1276029, at *4
(petitions filed approximately 11 months after notice of
claims being asserted). Similarly, Defendants acted with
reasonable dispatch in connection with filing their motion to
stay. The PTAB issued its final written decision
on March 6, 2019. (See D.I. 437 at Ex. 5). A few
weeks later, Defendants submitted the PTAB decision to the
Court (D.I. 424) and then filed the motion to stay a few
weeks after that (D.I. 435).
status of the IPR proceedings also favors a stay. As noted
above, the PTAB has issued a final written decision finding
that all claims of the '216 patent are unpatentable over
the prior art.
final factor to consider in assessing the potential prejudice
to the non-movant is the relationship of the parties, which
typically involves considering whether the parties are direct
competitors.” Princeton Digital, 2014 WL
3819458, at *6 (citing Cooper Notification, Inc. v.
Twitter, Inc., No. 09-865-LPS, 2010 WL 5149351, at *5
(D. Del. Dec. 13, 2010) and Belden Techs. Inc. v.
Superior Essex Commc'ns LP, No. 08-63-SLR, 2010 WL
3522327, at *3 (D. Del. Sept. 2, 2010)). “Courts have
recognized that when the parties are direct competitors,
there is a reasonable chance that delay in adjudicating the
alleged infringement will have outsized consequences to the
party asserting infringement has occurred, including the
potential for loss of market share and an erosion of
goodwill.” Id. (citing Nat'l Prods.,
Inc. v. Gamber-Johnson LLC, No. 2:12-00840, 2012 WL
3527938, at *2-3 (W.D. Wash. Aug. 14, 2012)).
there is no dispute that the parties are not currently
competing. Defendants are not on the market and have not been
on the market since some time in 2017. Thus, AgroFresh's
damages, if any, are monetary and can be accommodated by the
award of interest if it ultimately prevails. See
Princeton Digital, 2014 WL 3819458, at *6.
case presents a difficult question of how the Court should
exercise its discretion. The Court, however, is convinced
that the substantial likelihood of simplification of issues,
combined with Defendants' general diligence and the lack
of emergent, nonquantifiable, or noncompensable prejudice to
Plaintiff, outweigh the fact that this case has now reached a
fairly-advanced stage and will be ready for trial several
months from now. Accordingly, the Court will stay these
proceedings as related to the '216 patent until after the
issuance of a decision on any appeal from the IPR.
HEREBY ORDERED this 31st day of May 2019, that
Defendants' Motion (D.I. 435) is GRANTED and the
proceedings on the '216 patent (Count III) are STAYED
until the resolution of AgroFresh's appeal. The parties
SHALL SUBMIT a joint status report no later than the earlier
of April 1, 2020 or within seven (7) ...