Order Denying Motion to Lift Stay, Evolutionary Intelligence, LLC v. LivingSocial, Inc., Case No. C 13-04205 (Judge William Orrick)
In the past year we've gotten a wealth of data points about the Northern District's willingness to stay cases pending inter partes review of asserted patents. With yet another recent order from Judge Orrick, we start to see how the story plays out as the PTO issues decisions in those IPRs. For Judge Orrick at least, when he stays a case, he means it: the fact that the PTO declined to review many of the asserted claims did not justify lifting the stay, nor did it justify severing and proceeding on only the claims not subject to review.
In order to lift the stay, Judge Orrick required that "the circumstances that persuaded the court to impose the stay in the first place have changed significantly," citing a District of Columbia district court case. But he found that all of the relevant considerations – (1) the early stage of the action, (2) that a stay would simplify the issues in question, and (3) that a stay would not unduly prejudice the plaintiff – still favored a stay.
The second factor was the real point of contention. The PTO had declined to institute review on three of the asserted claims from one patent, and denied inter partes review entirely as to the second patent. Judge Orrick, however, cited his earlier reasoning that the case would be simplified if the PTO narrowed or canceled any of the asserted claims, even if others remained in their original form. Thus, it was of no moment that not all of the asserted claims of the first patent were subject to the IPR. As to the patent not under review at all, Judge Orrick noted that it was a continuation of the first patent, with common claim terms that may be clarified during the IPR. Thus, because it would be inefficient to litigate one patent now and the other after the IPR concluded, staying the entire case was appropriate.
Judge Orrick spent less time disposing of the first and third factors. On the first factor, the case naturally remained in its early stages – since it had been stayed. And on the third factor, he found that plaintiff simply repeated arguments about delay and loss of evidence that he had already rejected.
In short, once the case was stayed, Judge Orrick was committed to letting the IPR run its course, and he would not let the issues trickle back to the district court piecemeal as the PTO decided them. If this view spreads to the other Judges in the District, then plaintiffs with patents in IPR may be in for a wait.
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