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Se-Kure Controls, Inc. v. Vanguard Products Group

December 18, 2009

SE-KURE CONTROLS, INC., PLAINTIFF,
v.
VANGUARD PRODUCTS GROUP, INC., AND TELEFONIX, INC., DEFENDANTS.



The opinion of the court was delivered by: Wayne R. Andersen District Judge

MEMORANDUM OPINION AND ORDER

This case is before the court on Plaintiff Se-Kure's Motion to Stay Litigation [426]. For the reasons set forth below, the motion is granted in part and denied in part. All proceedings in this case are stayed pending an appeal to the Federal Circuit in a related case, with the exception of proceedings related to Defendants' counterclaim of inequitable conduct.

BACKGROUND

The Court largely adopts the background summary provided by Se-Kure in its Motion to Stay Litigation and Memorandum in Support Thereof. This case involves a patent for an anti-theft device. Only Defendants Vanguard Products Group and Telefonix, Inc. remain in the case. Se-Kure asserts that each of them has willfully infringed -- and continues to willfully infringe --

U.S. Patent No. RE37,590 ("the '590 patent"), by manufacturing, having made, using, selling or offering for sale retail merchandise security systems employing retractable sensors, and/or by selling components of those systems. Defendants' Second Amended Counterclaim alleges non-infringement, invalidity, inequitable conduct, and an antitrust violation. Se-Kure has asserted the '590 patent against other Defendants in other cases, namely Civil Action No. 06 C 4857 entitled Se-Kure Controls, Inc. v. Diam USA, Inc., et al. ("the Diam case") and Civil Action No. 08 C 6075 entitled Se-Kure Controls, Inc. v. Sennco Solutions Inc., et al. ("the Sennco case"). Telefonix is a defendant in both this case and the Diam case.

Just recently, in the Diam case, Judge Guzman entered a Memorandum Opinion and Order holding the '590 patent invalid as obvious in view of certain prior art. In the Sennco case, Judge Holderman has stayed proceedings relating to the '590 patent, with two other patents proceeding to trial in that case.

Se-Kure has appealed Judge Guzman's decision in the Diam case to the United States Court of Appeals for the Federal Circuit, and is now moving this Court to stay all further proceedings in this case pending the appeal in the Federal Circuit, arguing that nearly all remaining issues in this case will be affected by the Federal Circuit's ruling. Defendants oppose Se-Kure's motion insofar as they wish to proceed solely on their inequitable conduct counterclaim, which they believe would be completely unaffected by the outcome of the appeal in the Federal Circuit.

We note that Defendants filed a motion for summary judgment on the issue of inequitable conduct on January 29, 2007, and that we declined to grant summary judgment because there existed genuine issues of material fact. (Dkt. No. 372) Se-Kure requests that, if the Court denies the motion for a complete stay, then, in lieu of a hearing, the Court grant Se-Kure leave to file its own motion for summary judgment on inequitable conduct - that the patent is not unenforceable for inequitable conduct.

LEGAL STANDARD

"[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. North American Co., 299 U.S. 248, 254 (1936). "[I]f there is even a fair possibility that the stay . . . will work damage to some one else," the party seeking the stay "must make out a clear case of hardship or inequity in being required to go forward." Id.

In deciding whether a stay is appropriate, courts consider the following factors: (1) whether a stay will unduly prejudice or tactically disadvantage the non-moving party, (2) whether a stay will simplify the issues in question and streamline the trial, and (3) whether a stay will reduce the burden of litigation on the parties and on the court. Pfizer, Inc. v. Apotex, Inc., 640 F. Supp. 2d 1006, 1007(N.D. Ill. 2009).

DISCUSSION

I. Undue Prejudice and Tactical Disadvantage

Defendants argue that they would be enormously prejudiced if the case were stayed with respect to the inequitable conduct counterclaim. First, Defendants point to the failing health and memory of the sole relevant witness to this counterclaim, patent inventor Roger Leyden, who just turned 76 years old. The second patent inventor, Terry Surma, unexpectedly died on November 22, 2009, which Defendants argue makes any stay of the litigation even ...


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