Trading Techs. Int’l, Inc. v. BCG Partners, Inc., Nos. 10 C 715, 716, 718, 720, 721, 726, 882-885, 929 & 931, Slip Op. (N.D. Ill. Mar. 25, 2015) (Kendall, J.).
Judge Kendall granted defendants’ motion to stay this patent litigation pending the Patent Office’s (“PTO”) Covered Business Method Review (“CBM”) of at least four of plaintiff Trading Technologies’ (“TT”) fifteen patents-in-suit involving futures trading software. For more on this series of cases and the other related cases, click here for the Blog’s archives.
The PTO granted certain defendants’ petition for CBMs as to four of the fifteen patents in suit, agreeing to consider whehter each claim of each patent (118 total claims) was patentable pursuant to 35 U.S.C. § 101, as well as an obviousness determination for one of the four patents. The PTO refused to institute CBM for a fifth patent and two further petitions were still under consideration. The Court considered each of the four statutory factors:
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.
The Court reasoned as follows:
- Simplification of the Issues
While there were at least nine patents not under CBM, the CBMs encompassed 118 of the 400 potential claims in suit. The Court also cited several courts across the country granting stays when fewer than all patents or claims in suit were subject to CBM. The fact that between nine and eleven patents would not be reviewed by the PTO lessened the simplification, but did not negate it. The CBMs would “undoubtedly shape future claim construction and litigation with respect to the other asserted patents.”
Furthermore, the fact that non-petitioning defendants refused to be estopped by the CBMs did not eliminate the simplification. Congress specifically chose to limit the estoppel to petitioners and the Court’s review of the Senate’s AIA hearing transcripts suggested that Congress found whether estoppel applied to non-petitioners in suit was “irrelevant to the stay analysis.”
- Stage of the Litigation
While the cases were over four years old, their early stages – no case was past initial disclosures – weighed heavily in favor of staying the cases. The Court had ruled upon several summary judgment motions, which were subsequently appealed, but each of those motions was briefed and decided without substantial discovery.
- Undue Prejudice or Tactical Advantage
This factor was nuetral. While the parties were competitors in the futures industry, there was no evidence that the petitioners sought CBM only to delay and, further, TT had never sought preliminary injunctive relief.
- Burden of Litigation
The Court held that the burden of parallel litigation and the potential that the CBM would cancel or limit claims weighed in favor of staying the litigation.