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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`FISHER & PAYKEL HEATHCARE
` Case No. 16-cv-2068 DMS (WVG)
`LIMITED, a New Zealand
`
`ORDER DENYING PLAINTIFF’S
`corporation,
`MOTION TO LIFT THE STAY
`
`
`
`
`
`v.
`
`RESMED CORP., a Minnesota
`corporation,
`
`
`
`
`Defendant.
`
`Plaintiff,
`
`
`
`
`
`This case comes before the Court on Plaintiff Fisher & Paykel’s motion to lift
`
`the stay on a portion of the present proceedings. Defendant ResMed filed an
`opposition to the motion, and Plaintiff filed a reply. For the reasons discussed below,
`Plaintiff’s motion is denied.
`
`I.
`BACKGROUND
`The present case was filed on August 16, 2016. In the Complaint, Plaintiff
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`alleges Defendant is infringing nine of its patents. On September 7, 2016, Defendant
`filed an Answer and Counterclaim. In the Counterclaim, Defendant asserts claims
`for declaratory judgment of noninfringement, invalidity of Plaintiff’s patents, and
`infringement of seven of its patents. On October 3, 2016, Plaintiff filed an Answer
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`16-cv-2068 DMS (WVG)
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`Case 3:16-cv-02068-DMS-WVG Document 51 Filed 05/23/17 PageID.2461 Page 2 of 6
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`judgment of
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`for declaratory
`the Counterclaims and Counterclaims
`to
`noninfringement and invalidity of Defendant’s patents.
`
`On September 7, 2016, Defendant filed 15 petitions for inter partes review
`(“IPR”) with the Patent Trial and Appeal Board (“PTAB”), seeking review of the
`validity of Plaintiff’s nine asserted patents. Defendant moved to stay litigation on
`Plaintiff’s patents pending resolution of its requests for IPR, and the Court granted
`that motion.
`
`On October 6, 2016, Plaintiff filed a motion to stay Defendant’s counterclaims
`on two of its patents pending proceedings before the United States International
`Trade Commission (“ITC”) on those patents. Defendant did not oppose that motion,
`and the Court granted the request to stay that portion of this case on November 17,
`2016.
`Thereafter, between October 11, 2016 and January 9, 2017, Plaintiff filed 15
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`petitions for IPR with the PTAB, seeking review of the validity of Defendant’s seven
`asserted patents. In light of those petitions, the parties jointly moved to stay the
`remainder of the case, and the Court granted that motion on January 13, 2017.
`
`To date, the PTAB issued its decisions on Defendant’s petitions. The PTAB
`declined to institute IPR on some or all claims of the ’902, ’641, ’345, ’807, and
`’741 Patents, and instituted IPR on all claims of the remaining patents. A final
`written decision on the IPRs is expected from the PTAB by March 2018. As to
`Plaintiff’s petitions, the PTAB issued its decisions on only six petitions, declining to
`institute IPR on some or all claims of the ’196, ’931, and ’316 Patents. The parties
`expect the PTAB to decide the remaining petitions by July 27, 2017.
`
`On March 24, 2017, Plaintiff filed a motion to lift the stay only as to its claims
`for infringement of the ’902, ’641, ’345, ’807, and ’741 Patents on which IPRs were
`not instituted.
`/ / /
`/ / /
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`Case 3:16-cv-02068-DMS-WVG Document 51 Filed 05/23/17 PageID.2462 Page 3 of 6
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`II.
`DISCUSSION
`When an IPR petition is pending or granted, a court has the discretion to stay
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`the underlying lawsuit. Landis v. N. Am. Co., 299 U.S. 248, 254 (1936); see Ethicon,
`Inc. v. Quigg, 849 F.2d 1422, 1426–27 (Fed. Cir. 1988) (“Courts have inherent
`power to manage their dockets and stay proceedings, including the authority to order
`a stay pending conclusion of a PTO reexamination.”). “The same court that imposes
`a stay of litigation has the inherent power and discretion to lift the stay.” Canady v.
`Erbe Elektromedizin GmbH, 271 F. Supp. 2d 64, 75 (D.D.C. 2002). A court may
`lift the stay when “[p]etitioners no longer satisfy the standard for issuance of a stay.”
`Ala. Survival v. Surface Transp. Bd., 704 F.3d 615, 616 (9th Cir. 2012). District
`courts in the Ninth Circuit consider three factors in determining whether a stay
`pending IPR is appropriate. Those factors are: “‘(1) the stage of litigation; (2)
`whether a stay would cause undue prejudice or present a clear disadvantage to the
`non-moving party; and (3) whether a stay will simplify the issues in question and the
`trial of the case.’” Palomar Techs., Inc. v. Mrsi Sys., LLC, No. 15-CV-1484 JLS
`(KSC), 2016 WL 4496839, at *1 (S.D. Cal. June 14, 2016) (quoting Sorensen v.
`Giant Int’l (USA) Ltd., Nos. 07cv2121 et al., 2009 WL 5184497, at *2 (S.D. Cal.
`Dec. 21, 2009)).
`A. Stage of Litigation
`
`Plaintiff does not dispute the first factor, stage of litigation, weighs in favor
`of maintaining the stay. In previously granting a stay, the Court noted it has not
`scheduled an Early Neutral Evaluation Conference, and the parties have yet to
`conduct any discovery. As the stage of the litigation has not advanced since the stay
`was issued, this factor weighs in favor of maintaining the stay.
`B. Undue Prejudice to Plaintiff
`
`The next factor is whether the continued imposition of the stay would unduly
`prejudice or present a clear disadvantage to Plaintiff. Plaintiff contends it will suffer
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`undue prejudice if the Court does not lift the stay. In support, Plaintiff relies on the
`parties’ relationship as direct business competitors. The Court, however, previously
`considered this argument when it originally granted the stay, finding that Plaintiff
`will not suffer irreparable harm from a stay: “[T]here is no dispute the parties are
`direct business competitors. However, Fisher & Paykel fails to present any evidence
`or argument as to why that relationship would cause it to suffer harm that would not
`be compensable by money damages. In the absence of such a showing, the prejudice
`factor does not weigh against the imposition of a stay.” (ECF No. 27, at 6.) The
`Court’s ruling remains applicable to the present context.
`
`Plaintiff also contends continuing the stay as to the non-instituted claims
`related to its patents may delay the final resolution of those claims. However,
`“[m]ere delay, without more though, does not demonstrate undue prejudice.”
`Nanometrics, Inc. v. Nova Measuring Instruments, Ltd., No. C 06-2252SBA, 2007
`WL 627920, at *3 (N.D. Cal. Feb. 26, 2007); Telemac Corp. v. Teledigital, Inc., 450
`F. Supp. 2d 1107, 1111 (N.D. Cal. 2006) (“[T]he likely length of reexamination is
`not, in itself, evidence of undue prejudice.”). Because Plaintiff has not presented
`any evidence demonstrating undue prejudice, this factor also weighs in favor of
`continuing the stay.
`C.
`Simplification of Issues and Trial
`The final factor for consideration is whether continuance of the stay will
`simplify the issues and streamline the litigation. Plaintiff seeks to lift the stay as to
`only the non-instituted claims related to its patents, arguing that continuing the stay
`will not result in simplification of issues for trial. The Court, however, is
`unpersuaded by Plaintiff’s argument. It makes little sense to proceed on only the
`non-instituted claims as to Plaintiff’s asserted patents pending the outcome of the
`PTAB’s proceedings as to the instituted claims. Should the PTAB cancel or modify
`any of the asserted claims as to Plaintiff’s patents, this will likely narrow and
`simplify the present case. Even if the PTAB affirms the validity of every asserted
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`Case 3:16-cv-02068-DMS-WVG Document 51 Filed 05/23/17 PageID.2464 Page 5 of 6
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`claim, the case would be simplified because “such a strong showing would assist in
`streamlining the presentation of evidence and benefit the trier of fact by providing
`the expert opinion of the PTO.” PersonalWeb Techs., LLC v. Facebook, Inc., No.
`5:13-CV-01356-EJD, 2014 WL 116340, at *4 (N.D. Cal. Jan. 13, 2014). Indeed, as
`Defendant contends, “the PTAB’s determinations in the instituted IPRs [as to
`Plaintiff’s patents] may aid this Court in addressing prior art and claim construction
`issues associated with asserted patents even where IPR was not instituted.”1 (Mem.
`of P. & A. in Opp’n to Mot. at 7.)
`Moreover, judicial economy does not warrant allowing the parties to resume
`litigation only on some of Plaintiff’s patents now, and then later, resume litigation
`on its remaining patents and Defendant’s patents. Staying the case pending the
`outcome of the IPR proceedings involving the instituted claims as to both Plaintiff’s
`and Defendant’s patents could simplify the case by rendering some of the
`infringement claims or counterclaims moot, estopping parties from asserting any
`arguments they raised or reasonably could have raised in the IPR, and providing the
`Court with the PTAB’s expert opinion on claims at issue. See Target Therapeutics,
`Inc. v. SciMed Life Sys., Inc., No. C–94–20775, 1995 WL 20470, at *2 (N.D. Cal.
`Jan. 13, 1995) (“waiting for the outcome of the [IPR] could eliminate the need for
`trial if the claims are cancelled or, if the claims survive, facilitate trial by providing
`the court with expert opinion of the PTO and clarifying the scope of the claims.”).
`Because lifting the stay as to a portion of the case would instead significantly
`complicate the issues in this action and lead to inefficiency for both parties and the
`Court, this factor weighs in favor of continuing the stay.
`/ / /
`/ / /
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`1 For example, Defendant contends the technology of the ’902 patent, as to which
`IPR was instituted, is similar to the technology of the ’345 patent, as to which IPR
`was not instituted.
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`Case 3:16-cv-02068-DMS-WVG Document 51 Filed 05/23/17 PageID.2465 Page 6 of 6
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`III.
`CONCLUSION
`Because all three factors support maintaining the stay, the Court denies
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`Plaintiff’s motion to lift stay of these proceedings.
`Dated: May 22, 2017
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`16-cv-2068 DMS (WVG)
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