Request for Stay Pending Before Institution of Inter Partes Review Denied

CDX Diagnostics, Inc., et al. v. US Endoscopy Group, Inc., et al.

Case Number: 7:13-cv-05669-NSR (Dkt. 23)

US Endoscopy Group requested a stay of proceedings pending resolution of three inter partes review (“IPR”) petitions pending before the U.S. Patent and Trademark Office (“PTO”).  Judge Román recognized the benefits of the new IPR procedure as offering an effective tool to streamline litigation.

Judge Román noted that courts consider three factors when assessing whether to grant a stay pending review by the PTO:  1) whether a stay will simplify the issues and trial; 2) the stage of the proceedings; and 3) whether the stay will prejudice the non-moving party.  First, Judge Román recognized that granting a stay would obviously simplify the issues, because the outcome of the IPR could eliminate a trial if the claims were cancelled, and if they are not, it would facilitate trial by providing the court with the PTO’s expert opinion to clarify the scope of the claims.  But, because the PTO had yet to decide whether Defendant’s petition would even be granted, a stay would essentially leave the parties and the Court “treading water” with no progress being made on the docket.  Accordingly, this factor weighed slightly against granting a stay.

Next, Judge Román turned to the stage of the proceedings, where no discovery had yet to occur, which weighed in favor of a stay.  Finally, considering the potential for prejudice should a stay be granted, Judge Román noted that some courts look to whether the parties are competitors in the marketplace.  If so, any delay in adjudicating a dispute could result in the potential for loss of market share and the erosion of goodwill.  As the parties were competitors, Judge Román found their relationship did not favor granting a stay.  Finding the totality of the circumstances did not warrant issuing a stay, Judge Román denied the request, but said the court would consider a new application should the PTO render a decision on the IPR petition.


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