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T-Rex Property AB v. Adaptive Micro Systems, LLC

United States District Court, N.D. Illinois, Eastern Division

January 26, 2017

T-REX PROPERTY AB, Plaintiff,
v.
ADAPTIVE MICRO SYSTEMS, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          Virginia M. Kendall United States District Court Judge

         Plaintiff T-Rex Property AB (“T-Rex”) sued Defendant Adaptive Micro Systems, LLC (“Adaptive”) alleging infringement of three patents related to controlling and coordinating digital information systems to multiple displays and devices. Following minimal discovery, Adaptive filed the instant motion seeking a stay of this case pursuant to Section 18(b) of the America Invents Act (“AIA”) pending United States Patent Trial and Appeal Board's (“PTAB”) review of the three patents. For the following reasons, Adaptive's Motion to Stay [28] is granted. The parties are ordered to file a status report with the Court within 24 hours of receipt of each of the PTAB's institution decisions.

         BACKGROUND

         T-Rex, a non-practicing entity, has filed at least 58 lawsuits, including this one, against various defendants alleging infringement of U.S. Patent Nos. RE39, 470 (the “'470 Patent”); 7, 382, 334 (the “'334 Patent”); and 6, 430, 603 (the “'603 Patent”) (collectively, the “Asserted Patents”). (See Dkt. No. 30 at 1-2.) BroadSign International, LLC (“Broadsign”), a defendant in a separate case, filed two petitions for inter partes review (“IPR”) and one petition for covered business method review (“CBM”) before the PTAB challenging the validity of the Asserted Patents. (See Dkt. No. 31-1 (IPR petition challenging '470 Patent); Dkt. No. 31-2 (IPR petition challenging '334 Patent); Dkt. No. 31-3 (CBM petition challenging '603 Patent).) The PTAB has not yet issued decisions regarding any of the petitions, but the decisions are due as follows:

Petition

Date Filed

Latest Date for Institution Decision

IPR for '470 Patent

Sept. 24, 2016

March 24, 2017

IPR for '334 Patent

Oct. 6, 2016

April 6, 2017

CBM for '603 Patent

Oct. 28, 2016

April 28, 2017

         Following a hearing on November 21, 2016, the Court stayed discovery pending its ruling on the present motion. (See Dkt. No. 35.)

         LEGAL STANDARD

         Section 18 of the AIA provides for the establishment of transitional post-grant review proceedings to reexamine the validity of covered business method patents. Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 18, 125 Stat. 284 (Sept. 16, 2011). The AIA also establishes protocol with respect to related patent infringement actions and authorizes the district courts to stay such parallel litigation under certain circumstances. Specifically, Section 18(b)(1) states:

If a party seeks a stay of a civil action alleging infringement of a patent under section 281 of title 35, United States Code, relating to a transitional proceeding for that patent, the court shall decide whether to enter a stay based on--
(A) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;
(B) whether discovery is complete and whether a trial date has been set;
(C) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and
(D) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.

Id. The statutory test closely resembles the stay analysis courts have applied in assessing a motion to stay pending inter partes or ex parte reexamination by the PTAB. See, e.g., Genzyme Corp. v. Cobrek Pharm., Inc., No. 10 CV 00112, 2011 WL 686807, at *1 (N.D. Ill. Feb. 17, 2011) (applying three-factor stay test that considers “whether a stay will (1) unduly prejudice or tactically disadvantage the non-moving party, (2) simplify the issues in questions and streamline the trial, and (3) reduce the burden of litigation on the parties and ...


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