Order Granting Motion to Stay, Security People, Inc. v. Ojmar US, LLC, 14-cv-04968 (Judge Haywood Gilliam Jr.)
A recent opinion analyzes what relief, if any, a patentee is entitled to when its District Court case is stayed pending an inter partes review (IPR) before the Patent Office. In Security People v. Ojmar, the plaintiff-patentee Security People opposed a motion to stay on several routine grounds. In addition, Security People made unorthodox arguments, including that 1) the AIA is unconstitutional, 2) Ojmar should post a bond due to Security People's alleged loss of sales due to patent infringement, or 3) an injunction should issue prohibiting the sale of the accused products during the pendency of the stay. Judge Gilliam disagreed with Security People's preliminary injunction-like requests and simply stayed the litigation.
With respect to the motion to stay arguments, Judge Gilliam found that the case had "just begun" and that Ojmar satisfied the usual requirements to obtain a stay pending IPR proceedings, even though the PTAB had not yet granted Ojmar's IPR petition. The first case management conference occurred on April 1, and the claim construction briefing process was scheduled to begin mid-June. Given that the IPR petition sought cancellation of all the asserted claims, Judge Gilliam found that there was a substantial chance that the IPR, if initiated, would simplify the litigation. He also concluded that Ojmar had not unduly delayed in bringing the IPR petition given that it filed the petition within six months of the filing of the suit. Finally, Judge Gilliam found that Security People could not claim unfair surprise because Ojmar provided notice in March that it was considering filing an IPR petition.
In addition to opposing the stay motion, Security People raised two additional arguments. First, it argued that the AIA's IPR process was unconstitutional. Judge Gilliam found that an opposition to a motion to stay process was the incorrect procedural vehicle through which to raise a constitutional challenge, and that Security People could attempt to raise a constitutional challenge in a separate action. Second, Security People argued that since Ojmar was a competitor, Ojmar should have to post a bond as security for lost sales during the IPR process or otherwise be enjoined from selling products. Security People supported this argument with a fact declaration from an employee that alleged that Security People had lost sales to Ojmar. Judge Gilliam found, however, that Security People had not introduced evidence sufficient to support the requirement of the bond or an injunction. Security People also argued that Ojmar was a "shell company" that would shift its funds to avoid a judgment, but Judge Gilliam found this argument to be unsubstantiated as well.
Judge Gilliam did not rule that a patentee facing a stay pending IPR could never obtain a bond or preliminary injunction. But a patentee seeking a bond or injunction must present a compelling showing—as is the case for any patent preliminary injunction—why the relief it seeks is necessary.
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