Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 1 of 16 PageID #: 731
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`C.A. No. 20-00365-MN
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`EXELA PHARMA SCIENCES, LLC,
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`Plaintiff,
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`v.
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`ETON PHARMACEUTICALS, INC.,
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`Defendant.
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`OPENING BRIEF IN SUPPORT OF DEFENDANT
`ETON PHARMACEUTICALS, INC.’S MOTION TO STAY
`PENDING POST-GRANT PROCEEDINGS
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`
`OF COUNSEL:
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`Ralph J. Gabric
`ralph.gabric@haynesboone.com
`Laura Beth Miller
`laura.miller@haynesboone.com
`Judy K. He
`judy.he@haynesboone.com
`Haynes & Boone LLP
`180 North LaSalle Street
`Suite 2215
`Chicago, IL 60601
`(312) 216-1620
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`Dated: October 2, 2020
`
`Kelly E. Farnan (#4395)
`farnan@rlf.com
`Valerie A. Caras (#6608)
`caras@rlf.com
`Richards, Layton & Finger, P.A.
`920 N. King Street
`Wilmington, DE 19807
`(302) 651-7705
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`Attorneys for Defendant
`Eton Pharmaceuticals, Inc.
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`1
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`EXELA 2021
`Eton Pharmaceuticals v. Exela Pharma Sciences
`PGR2020-00086
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`

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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 2 of 16 PageID #: 732
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`TABLE OF CONTENTS
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`Statement of Nature and Stage of Proceedings ................................................................... 1
`Summary of Argument ....................................................................................................... 2
`Background and Statement of Facts ................................................................................... 3
`A.
`Procedural History of the Instant Litigation ........................................................... 3
`B.
`Status of Eton’s Pending PGR Petitions at the PTAB ............................................ 5
`Argument ............................................................................................................................ 6
`A.
`A Stay Will Neither Unduly Prejudice Nor Present a Clear Tactical Disadvantage
`to Plaintiff ........................................................................................................................... 8
`1. Eton Promptly Filed Its PGRs and Requested A Stay .................................... 8
`2. Stage and Duration of Eton’s PGRs Will Not Prejudice Plaintiff .................. 9
`3. Relationship Between Plaintiff and Eton Favors a Stay ............................... 10
`A Stay Will Simplify Issues and Streamline Trial ................................................ 11
`B.
`Early Stage of Litigation Favors a Stay ................................................................ 12
`C.
`Conclusion ........................................................................................................................ 13
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`
`
`i
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`I.
`II.
`III.
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`IV.
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`V.
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`2
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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 3 of 16 PageID #: 733
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`TABLE OF AUTHORITIES
`
`
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`Page(s)
`
`Cases
`
`AT&T Intellectual Property I, L.P. et al. v. Cox Communications, Inc.,
`No. 14-1106-GMS (D. Del. Sept. 24, 2015) ..................................................................7, 12, 13
`
`Bonutti Skeletal Innovations, L.L.C. v. Zimmer Holdings, Inc.,
`No. 12-cv-1107-GMS, 2014 WL 1369721 (D. Del. Apr. 7, 2014) .........................................11
`
`British Telcoms PLC. V. IAC Interactive Corp.,
`No. 18-366-WCB, 2020 WL 5517283 (D. Del. Sept. 11, 2020) ...........................................7, 9
`
`Canatelo LLC v. Axis Communications AB et al.,
`No. 13-cv-1227-GMS, 2014 WL 12774920 (D. Del. May 14, 2014) ............................. passim
`
`IOENGINE, LLC v. PayPal Holdings, Inc.,
`No. 18-452-WCB, 2019 WL 3943058 (D. Del. Aug. 21, 2019) ...............................................6
`
`Message Notification Techs. LLC v. Microsoft Corp.,
`13-cv-1881-GMS, 2015 WL 13781851 (D. Del. Feb. 24, 2015)...............................................7
`
`Princeton Digital Image Corp. v. Konami Digital Entertainment Inc.,
`No. 12-1461-LPS, 2014 WL 3819458 (D. Del. Jan. 14, 2015) ...........................................9, 12
`
`Santen Pharm. Co. et al. v. Micro Labs Ltd.,
`No. 16-353-GMS (D. Del. March 27, 2018)............................................................................10
`
`Sirona Dental Sys. GmbH v. Dental Wings Inc.,
`No. 14-00460-LPS-CJB, 2016 U.S. Dist. LEXIS 155706 (D. Del. Mar. 22,
`2016) ........................................................................................................................................12
`
`Softview LLC v. Apple Inc.,
`No. 12-989-LPS, 2013 WL 4757831 (D. Del. Sept. 4, 2013) .................................................12
`
`Statutes
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`35 U.S.C. § 103 ................................................................................................................................5
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`35 U.S.C. § 271(e)(2) .......................................................................................................................3
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`35 U.S.C. § 324(c)(1) ...................................................................................................................6, 9
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`35 U.S.C. § 328(a)(11) .................................................................................................................6, 9
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`
`
`ii
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`3
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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 4 of 16 PageID #: 734
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`I.
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`Statement of Nature and Stage of Proceedings
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`This is a recently amended ANDA case, in which Defendant’s accused product is not on
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`the market and whose regulatory approval by the FDA is subject to a 30-month stay that is not
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`due to expire until August 3, 2022. (D.I. 22 at p.13.) Post-grant review (“PGR”) proceedings
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`have been filed, which challenge the validity of all claims of the three asserted patents, U.S.
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`Patent Nos. 10,479,453 (“’453 patent”), 10,583,155 (“’155 patent”), and 10,653,719 (“’719
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`patent”) (collectively, “Patents-in-Suit”). A decision on institution of the first of these PGR
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`petitions is anticipated on or before November 30, 2020, and if instituted, would likely result in a
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`Final Written Decision (“FWD”) on the issue of invalidity by November 30, 2021, long before
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`expiration of the 30-month regulatory stay and well before the currently scheduled trial date of
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`March 7, 2022 in this case. (D.I. 22 at p.13.)
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`In contrast to the status of the PGR proceedings, this action is in its infancy, with a
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`Scheduling Order (D.I. 22) having only recently been entered on August 26, 2020, and the
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`parties having exchanged Rule 26(a)(1) initial disclosures and the disclosures required by
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`Paragraphs 3 and 4(a)-(c) of the Court’s Default Standard for Discovery on September 4, 2020.
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`The parties have not yet exchanged infringement charts (due from Plaintiff) or invalidity
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`contentions (due from Defendant). Other key dates in the Scheduling Order are still many
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`months away, including a Markman hearing set for June 2, 2021 and deadlines of July 30, 2021
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`and November 5, 2021, for the close of fact and expert discovery, respectively. (D.I. 22 at
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`pp.12-13.)
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`Given the early filing of Defendant’s PGR petitions, the early stage of proceedings in this
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`case, and the substantial likelihood that a FWD from any of the PGR proceedings would
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`streamline, if not eliminate, this litigation and the burdens on the parties and this Court that may
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`ultimately prove unnecessary, Defendant respectfully moves this Court to stay this litigation
`1
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`4
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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 5 of 16 PageID #: 735
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`pending resolution of its PGR petitions of the Patents-in-Suit, as a stay would not would unduly
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`prejudice Plaintiff, nor provide Defendant with a clear tactical advantage.
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`II.
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`Summary of Argument
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`Staying this case is warranted for the following reasons:
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`(1) Plaintiff would not suffer any undue prejudice if a stay were granted. Defendant’s
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`product is not currently on the market and is not anticipated to be approved before resolution of
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`the PGR proceedings. Moreover, if the PGR petitions are instituted, the first of the FWDs likely
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`would issue by no later than November 30, 2021, providing the parties and the Court with the
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`benefit of that decision well before the trial date currently scheduled in this case.
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`Nor would Defendant gain a clear tactical advantage if a stay were granted. This is not a
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`situation where Defendant filed a last-minute petition, hoping to avoid a looming trial deadline.
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`Within weeks of answering Plaintiff’s original Complaint, Defendant promptly filed two PGR
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`petitions, challenging the validity of the two patents being asserted in this litigation at the time:
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`the ’453 and ’155 patents. While the ’719 patent was issued on May 19, 2020, Plaintiff delayed
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`listing that patent in the U.S. Food and Drug Administration’s (“FDA”) electronic Orange Book:
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`Approved Drug Products with Therapeutic Equivalence Evaluations (“Orange Book”) in
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`connection with Plaintiff’s product that is at issue, Elcys®, until July 2, 2020. Plaintiff similarly
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`delayed moving to add the ’719 patent to this litigation. (D.I. 14.) Yet, on September 21, 2020,
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`less than two months after Plaintiff filed its Amended Complaint (D.I. 14), Defendant filed a
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`third PGR petition, challenging the validity of the ’719 patent. Defendant’s prompt actions in
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`filing its PGR petitions and the lack of undue prejudice or tactical disadvantage to Plaintiff
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`weigh in favor of a stay.
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`(2) A stay pending the PTAB’s resolution of Defendant’s PGR petitions would benefit
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`both the parties and the Court given the substantial overlap in Defendant’s invalidity positions in
`2
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`5
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`

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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 6 of 16 PageID #: 736
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`these parallel proceedings. The grounds of Defendant’s PGR petitions will form the crux of
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`Defendant’s invalidity defenses in this litigation and adjudicating these issues before the PTAB
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`would greatly assist both the parties and Court in streamlining, and potentially eliminating, not
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`only issues of invalidity, but also issues of claim construction and potentially infringement, and
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`the attendant time and costs associated with adjudicating those issues. Thus, this factor also
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`favors a stay.
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`(3) This litigation is in its early stages. To date, the parties have only engaged in limited
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`written discovery and document production catered towards initial disclosures, technical
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`documents such as Defendant’s ANDA filing and product samples, and Plaintiff’s identification
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`of the accused devices, asserted patents, and file histories. Contention deadlines, discovery
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`cutoffs and other Markman deadlines are many months and, in some instances, more than a year
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`away from the filing of this motion. (See D.I. 22 at pp.12-13.) As such, this factor also weighs
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`in favor of a stay.
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`III. Background and Statement of Facts
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`Procedural History of the Instant Litigation
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`A.
`On March 16, 2020, Plaintiff Exela Pharma Sciences, LLC (“Exela” or “Plaintiff”) filed a
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`Complaint (D.I. 1) against Eton Pharmaceuticals, Inc. (“Eton” or “Defendant”), asserting
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`infringement under 35 U.S.C. § 271(e)(2), based on Eton’s ANDA filing. The Complaint
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`alleged infringement of the two patents that were listed in the FDA’s Orange Book for Plaintiff’s
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`product Elcys® at the time: the ’453 and ’155 patents. (Ex. A, 3/16/2020 Orange Book (“OB”)
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`Listing for Elcys®.)1
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`1 All “Ex. _” references are to the Declaration of Judy K. He submitted herewith.
`3
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`6
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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 7 of 16 PageID #: 737
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`The ’453 and ’155 patents belong to the same patent family (the ’155 patent issued from
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`application no. 16/665,702 (“702 application”), which is a continuation of application no.
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`16/248,460 (“’460 application”), which issued as the ’453 patent), and both patents are generally
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`directed towards stable L-cysteine compositions for injection and “compositions for a total
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`parenteral nutrition regimen and methods for their use.” (D.I. 14-1 at p.16, ’453 patent at
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`Abstract; D.I. 14-1 at p.60, ’155 patent at Abstract.)
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`On May 6, 2020, Eton filed its Answer and Affirmative Defenses (D.I. 8) to Plaintiff’s
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`Complaint, and within a few weeks, filed two PGR petitions challenging the validity of all
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`claims of the ’453 and ’155 patents. PGR2020-00064, was filed on May 19, 2020, challenging
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`the validity of all claims of the ’453 patent (Ex. B, PGR2020-00064, Petition), and PGR2020-
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`00068 was filed on June 8, 2020, challenging the validity of all claims of the ’155 patent (Ex. C,
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`PGR2020-00068, Petition).2
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`On May 19, 2020, the USPTO issued the ’719 patent. The ’719 patent issued from an
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`application that also claims priority to the ’460 application and is generally directed to
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`“compositions for parenteral administration comprising L-cysteine that are stable and have
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`desirable safety attributes for extended periods of time.” (D.I. 14-1 at 115, ’719 patent at
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`Technical Field, 1:18-22.)
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`Exela then waited until July 2, 2020, to submit the ’719 patent to the FDA for listing in
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`the Orange Book for Plaintiff’s Elcys® product, (Ex. D, 9/23/2020 OB Listing for Elcys®).
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`Then, after obtaining Eton’s consent and leave of Court to amend the Complaint, Plaintiff filed
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`an Amended Complaint on July 28, 2020, adding the ’719 patent. (D.I. 14.) On August 11,
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`2 Docket sheets reflecting the events that have transpired to date and the status of Eton’s PGR
`petitions are attached as Exhibits F to H to the He Declaration. Exhibits to Eton’s PGR petitions
`are voluminous but can be provided to the Court if needed.
`4
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`7
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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 8 of 16 PageID #: 738
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`2020, Eton filed its Answer and Affirmative Defenses (D.I. 20) to Plaintiff’s Amended
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`Complaint, and on September 21, 2020, Eton filed a third PGR petition, PGR2020-00086,
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`challenging the validity of all claims of the ’719 patent. (Ex. E, PGR2020-00086, Petition.)
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`Together, Eton’s PGR petitions challenge the validity of all the claims in the Patents-in-Suit,
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`which are the only patents listed in in the FDA’s Orange Book for Plaintiff’s product Elcys®.
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`(Ex. B; Ex. C; Ex. E; see also Ex. D.)
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`This case is in the early stages of discovery, with no dispositive issues having been
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`resolved. The parties have served and responded to written discovery and produced documents
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`and information as required by the deadlines for initial disclosures. However, infringement
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`charts and invalidity contentions are not yet due, and discovery cutoffs are nearly a year from
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`now, with the close of fact discovery set for July 30, 2021, and the close of expert discovery set
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`for November 5, 2021. (D.I. 22 at pp.12-13.) Trial is currently scheduled for March 7, 2022.
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`(Id. at p.13.)
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`Status of Eton’s Pending PGR Petitions at the PTAB
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`B.
`Eton’s PGR petitions assert that the claims of the Patents-in-Suit are invalid under 35
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`U.S.C. § 103, based on the same or overlapping primary prior art references and arguments. (See
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`D.I. 20 at pp.27-28, Eton’s Second Affirmative Defense.) These prior art references and
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`arguments also form the basis of an obviousness affirmative defense asserted by Eton in this
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`litigation, citing to both the Sandoz L-cysteine product and the Hospira L-cysteine product,
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`which were relied upon in Eton’s PGR petitions. (See id.) Therefore, a FWD with respect to the
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`first filed PGR proceeding concerning the ’453 parent patent, is likely to affect resolution of the
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`remaining PGR proceedings, as well as impact the affirmative defense asserted by Eton in this
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`litigation.
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`5
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`8
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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 9 of 16 PageID #: 739
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`The following table summarizes significant dates with respect to Eton’s pending PGR
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`petitions involving the Patents-in-Suit:
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`PGR Petition No.
`
`Filing Date
`of PGR
`Petition
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`May 19,
`2020
`
`Filing Date of
`Patent Owner’s
`Preliminary
`Response
`(“POPR”)
`August 28, 2020
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`Expected Date of
`Institution
`Order3
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`Expected
`Date of
`FWD,4 if
`Instituted
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`November 30,
`2020
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`November 30,
`2021
`
`PGR2020-00064
`(challenging the
`validity of the ’453
`patent)
`PGR2020-00068
`(challenging the
`validity of the ’155
`patent)
`PGR2020-00086
`(challenging the
`validity of the ’719
`patent)
`
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`IV. Argument
`“A decision to stay litigation lies within the sound discretion of the court.” Canatelo LLC
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`June 8,
`2020
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`September 18,
`2020
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`December 18,
`2020
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`December 20,
`2021
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`September
`21, 2020
`
`~ December 20205
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`~ March 2021
`
`~ March 2022
`
`v. Axis Communications AB et al., No. 13-cv-1227-GMS, 2014 WL 12774920, at *1 (D. Del.
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`May 14, 2014); see also IOENGINE, LLC v. PayPal Holdings, Inc., No. 18-452-WCB, 2019 WL
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`3943058, at *2 (D. Del. Aug. 21, 2019) (“A district court has inherent power to control its own
`
`
`3 Under 35 U.S.C. § 324(c)(1), “[t]he Director shall determine whether to institute a post-grant
`review . . . within 3 months after . . . receiving a preliminary response to the petition,” i.e., the
`POPR. Accordingly, because Exela filed its POPR in PGR2020-00064 on August 28, 2020, the
`PTAB should issue an Institution Decision no later than November 30, 2020, i.e., 3 months from
`the POPR’s filing date. The same 3-month timeframe for an Institution Decision also applies to
`PGR2020-00068 and PGR2020-00086 (challenging the ’155 and ’719 patents, respectively).
`4 Under 35 U.S.C. § 328(a)(11), “[t]he Director shall prescribe regulations—(11) requiring that
`the final determination in any post-grant review be issued not later than 1 year after the date on
`which the Director notices the institution of a proceeding . . . .”
`5 As of the date of this filing, the PTAB has not yet issued a Notice of Filing Date Accorded
`(“Notice”) in PGR2020-00086, which confirms the deadline for Exela to file its POPR. Eton
`expects the Notice to be issued shortly and will provide a copy to the Court once it is available.
`6
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`9
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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 10 of 16 PageID #: 740
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`docket, including the power to stay the proceedings before it.”). A stay is particularly
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`appropriate where, as is the case here, “the outcome of a PTO proceeding is likely to assist the
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`court in determining patent validity or eliminate the need to try infringement issues.” British
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`Telcoms PLC. V. IAC Interactive Corp., No. 18-366-WCB, 2020 WL 5517283, *2 (D. Del. Sept.
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`11, 2020) (citation omitted).
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`In determining whether stay is appropriate, the courts consider: (1) “whether a stay would
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`unduly prejudice or present a clear tactical disadvantage to the non-moving party”; (2) “whether
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`a stay will simplify the issues in question and trial of the case” and relatedly whether it will
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`reduce the burden of litigation on the parties and the Court; and (3) the stage of the litigation
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`proceedings. See Ex. K, AT&T Intellectual Property I, L.P. et al. v. Cox Communications, Inc.,
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`No. 14-1106-GMS (D.I. 161 at 2-3) (D. Del. Sept. 24, 2015); see also Canatelo LLC, 2014 WL
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`12774920, at *1 (citing First Am. Title Ins. Co. v. MacLaren LLC, No. 10-363-GMS, 2012 WL
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`769601, at *4 (D. Del. Mar. 9, 2012)). Each of these factors favors granting a stay of this
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`litigation pending resolution of Eton’s PGR petitions.
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`Moreover, the fact that the PTAB “has yet to indicate whether it will grant the . . .
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`petitions . . . is not dispositive” of whether a stay is warranted. Canatelo LLC, 2014 WL
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`12774920, at *1 n.2; see also Message Notification Techs. LLC v. Microsoft Corp., 13-cv-1881-
`
`GMS, 2015 WL 13781851, at *1 n.4 (D. Del. Feb. 24, 2015) (“[T]he court does not consider the
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`fact that the [PTAB] has not yet decided to institute review . . . to be of great moment. . . .
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`Regardless of whether the PTAB has instituted review, courts will often impose a stay where the
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`facts of the case suggest it is warranted.”).
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`7
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`10
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`A.
`
`A Stay Will Neither Unduly Prejudice Nor Present a Clear Tactical
`Disadvantage to Plaintiff
`
`1.
`
`Eton Promptly Filed Its PGRs and Requested A Stay
`
`Eton promptly filed its PGR petitions and this stay request. Within a matter of weeks of
`
`filing its Answer and Affirmative Defenses (D.I. 8) to Plaintiff’s Complaint on May 6, 2020,
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`Eton filed two PGR petitions challenging the validity of the claims in the only two asserted
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`patents: the ’453 and ’155 patents. (Ex. B (PGR2020-00064, Petition, filed May 19, 2020); Ex.
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`C, (PGR2020-00068, Petition, filed June 8, 2020).)
`
`Following Plaintiff’s subsequent submission of the ’719 patent to the FDA for listing in
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`the Orange Book for Plaintiff’s Elcys® product, and its amendment of the Complaint to assert
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`infringement of the ’719 patent, Eton filed a third PGR petition challenging the validity of the
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`’719 patent claims. (Ex. E (PGR2020-00086, Petition, filed September 21, 2020).)
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`Thus, each of these PGR petitions were timely filed upon notice of Plaintiff’s
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`infringement claims. In addition, the filing of this motion is timely as it comes shortly after the
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`final of these PGR petitions was filed and at the outset of this case. Similar timing has been
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`found by this court to “suggest[] no dilatory motive” and to be evidence of no undue prejudice.
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`Canatelo LLC, 2014 WL 12774920, at *1 n.2 (“the defendants filed the motion to stay less than
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`two weeks after filing their IPR petitions”).
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`Even more importantly, these petitions and this stay were not filed on the eve of trial or
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`after dispositive rulings in this case. Thus, it cannot be persuasively argued that the timing of
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`these filings creates undue prejudice or a tactical disadvantage to Plaintiff, who presumably is
`
`interested in a prompt resolution of this dispute. To the contrary, as explained below, resolution
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`of the invalidity cloud hanging over the Patents-in-Suit is likely to be resolved more quickly
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`8
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`11
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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 12 of 16 PageID #: 742
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`through the PTAB proceedings than through this district court proceeding, and resolution of that
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`issue, will eliminate, or at least streamline, any remaining issues for trial.
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`2.
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`Stage and Duration of Eton’s PGRs Will Not Prejudice Plaintiff
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`The PTAB is expected to issue an Institution Decision on the first of Eton’s three PGR
`
`petitions (PGR2020-00064) no later than November 30, 2020. See 35 U.S.C. § 324(c)(1).
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`Assuming institution, a FWD should issue by November 30, 2021. See 35 U.S.C. § 328(a)(11)
`
`(“The Director shall prescribe regulations—(11) requiring that the final determination in any
`
`post-grant review be issued not later than 1 year after the date on which the Director notices the
`
`institution of a proceeding under this chapter . . . .”). That decision likely would streamline not
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`only the invalidity issues in this case, but also issues of claim construction and potentially
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`infringement. Of course, if the PTAB were to deny institution, “any granted stay would be
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`relatively short.”6 Princeton Digital Image Corp. v. Konami Digital Entertainment Inc., No. 12-
`
`1461-LPS, 2014 WL 3819458, at *5 n.8 (D. Del. Jan. 14, 2015).
`
`The expected PTAB timeline is significant for additional reasons. A FWD is likely to
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`come, at least with respect to the ’453 patent—which is the parent of the remaining ’155 and
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`’719 patents — well before the expiration of the 30-month regulatory approval stay for Eton’s
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`accused product and well before the start of the “most burdensome parts of the case for the
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`parties and the court,” e.g., “preparation for trial, going through the trial process, and engaging in
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`post-trial motions practice.” British Telcoms PLC, 2020 WL 5517283, at *6. Indeed, this timing
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`provides both parties and the Court with the advantage of resolving important substantive issues
`
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`6 The first Institution Decision is due by November 30, 2020, while the last Institution Decision
`on the third petition is anticipated by March 2021. However, given the substantial overlap of
`references and arguments, Eton anticipates that the Institution Decisions to be substantially the
`same for all three proceedings.
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`9
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`12
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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 13 of 16 PageID #: 743
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`related to the Patents-in-Suit without having to incur the duplicative costs of litigating parallel
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`suits involving substantially the same issues.
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`Moreover, this court has previously granted a motion to stay pending post-grant
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`proceedings in the Hatch-Waxman context where the PTAB is statutorily required to issue a
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`determination on the asserted patent before the 30-month stay expires. See Ex. I, Santen Pharm.
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`Co. et al. v. Micro Labs Ltd., No. 16-353-GMS, D.I. 64 at 1 (filed Dec. 5, 2017) (where the 30-
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`month stay expires on August 10, 2019, and the PTAB must issue a determination no later than
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`November 29, 2018) and Ex. J, D.I. 85 at 1 (D. Del. March 27, 2018) (granting defendants’
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`motion to stay). In this case, the 30-month stay does not expire until August 3, 2022 (see D.I. 22
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`at p.13), and, if review is instituted, the PTAB is expected to issue a determination in Eton’s
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`first-filed PGR by November 30, 2021, i.e., approximately 8 months in advance of the 30-month
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`stay, which is akin to the timeframe in Santen. Whether the PTAB has or has not instituted
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`review “is not dispositive” on a motion to stay. Canatelo LLC, 2014 WL 12774920, at *1 n.2.
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`3.
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`Relationship Between Plaintiff and Eton Favors a Stay
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`While Plaintiff and Eton are competitors, Eton’s accused product is not currently on the
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`market and is not anticipated to be approved until at earliest after expiration of the regulatory
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`stay (August 3, 2022). (D.I. 22 at p.13.) Thus, even with a stay of the proceedings, Plaintiff need
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`not be concerned that Eton will obtain some market or regulatory advantage during the pendency
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`of the stay. Moreover, the likely streamlining of issues, if discovery or a trial were required after
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`resolution of the PGR proceedings, would result in time and cost savings for the parties and the
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`Court in addressing any remaining disputed issues.
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`As a result, Plaintiff will suffer no undue prejudice or tactical disadvantage if the
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`requested stay is granted.
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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 14 of 16 PageID #: 744
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`A Stay Will Simplify Issues and Streamline Trial
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`B.
`There are several important advantages to granting a stay pending post-grant proceedings
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`including:
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`(1) all prior art presented to the court at trial will have been first considered by the PTO
`with its particular expertise, (2) many discovery problems relating to the prior art can be
`alleviated, (3) if patent is declared invalid, the suit will likely be dismissed, (4) the
`outcome of the reexamination may encourage a settlement without further involvement of
`the court, (5) the record of the reexamination would probably be entered at trial, reducing
`the complexity and the length of the litigation, (6) issues, defenses, and evidence will be
`more easily limited in pre-trial conferences and (7) the cost will likely be reduced both
`for the parties and the court.
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`Bonutti Skeletal Innovations, L.L.C. v. Zimmer Holdings, Inc., No. 12-cv-1107-GMS, 2014 WL
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`1369721, at *5 (D. Del. Apr. 7, 2014) (citing Neste Oil OYJ v. Dynamic Fuels, LLC, No. 12-
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`1744-GMS, 2013 U.S. Dist. LEXIS 92416, at *12 (D. Del. July 2, 2013)).
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`Here, these advantages are very much at play and weigh in favor of a stay. As explained
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`above, Eton’s PGR petitions challenge the validity of all the claims in the Patents-in-Suit. The
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`grounds in Eton’s PGR petitions also form the crux of its obviousness defense in this case (see
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`D.I. 20 at pp.27-28, Eton’s Second Affirmative Defense). As a result, there is substantial overlap
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`between the prior art relied upon by Eton in the PGRs and a primary obviousness affirmative
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`defense asserted in this proceeding.7 A PGR proceeding also involves discovery, including the
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`direct- and cross-examination of experts (37 C.F.R. § 42.224). As a result, discovery disputes
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`may be resolved or narrowed through the PTAB proceeding, without having to litigate them in
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`this Court, saving both parties and the Court significant resources.
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`If the challenged claims are found unpatentable, the Patents-in-Suit would be declared
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`invalid, and the suit would almost certainly be dismissed. See Canatelo LLC, 2014 WL
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`7 Eton’s initial invalidity contentions are not due until January 8, 2021. (D.I. 22 at p.12)
`However, at this time, Eton anticipates that the prior art relied upon in the PGR petitions will be
`the primary references identified in its initial invalidity contentions when due in this case.
`11
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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 15 of 16 PageID #: 745
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`12774920, at *1 n.3 (“Should the PTAB deem the patents-in-suit unpatentable or narrow their
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`scope, the court’s resources will be conserved by expending fewer resources on claim
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`construction or avoiding the claim construction process altogether.”). Even if some or all the
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`claims were to survive a PTAB proceeding, “the court [and the Parties] will still benefit from the
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`PTAB’s expertise” as the invalidity issues, as well as the claim construction and potentially the
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`infringement issues, likely would be streamlined. Id. As such, the overwhelming potential for
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`issue simplification, as well as reduction of the attendant litigation burdens, in this case favors a
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`stay.
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`Early Stage of Litigation Favors a Stay
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`C.
`“Staying a case in its early stages advances judicial efficiency and prevents the court and
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`the parties from expending resources on claims that may be rendered invalid.” Id. at 1 n.4.
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`Where, as is the case here, “significant case events are well in the future,” e.g., “Markman
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`hearings, the completion of expert discovery and the filing of case dispositive motions,” a stay is
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`strongly favored. See Princeton Digital Image Corp., 2014 WL 3819458, at *4; see also Sirona
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`Dental Sys. GmbH v. Dental Wings Inc., No. 14-00460-LPS-CJB, 2016 U.S. Dist. LEXIS
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`155706, at *23-24, 23 n.8 (D. Del. Mar. 22, 2016) (granting a stay after “the parties have begun
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`making initial patent disclosures” and plaintiff “has propounded some discovery requests” that
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`defendants “have partially responded” to); Ex. K, AT&T Intellectual Property I, L.P. et al., No.
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`14-1106-GMS (D.I. 161 at 2 n.4) (“[T]he court concludes that the case is at an early enough
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`stage as to not weigh against granting a stay. Although the parties have begun discovery, the
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`close of fact discovery is not until January 29, 2016 for a trial scheduled for October 31, 2016.”);
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`Softview LLC v. Apple Inc., No. 12-989-LPS, 2013 WL 4757831, at *2 (D. Del. Sept. 4, 2013)
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`(granting a stay where “by the time case-dispositive motions are filed, the [IPR] is likely to be
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`Case 1:20-cv-00365-MN Document 33 Filed 10/02/20 Page 16 of 16 PageID #: 746
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`over” and “under the circumstances, it is appropriate to allow the [IPR] a reasonable period to
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`conclude before launching the parties into the expense of expert discovery”).
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`Here, discovery has not yet begun in earnest, with Plaintiff’s initial infringement claim
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`chart not due until November 20, 2020, Defendant’s initial invalidity contentions due on January
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`8, 2021, and the close of fact discovery is not until July 30, 2021. (D.I. 22 at pp.12-13.) These
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`deadlines weigh in favor of a stay. See Ex. K, AT&T Intellectual Property I, L.P. et al., 14-1106-
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`GMS (D.I. 161 at 2 n.4) (granting stay when fact discovery cutoff was 4-5 months away from the
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`filing of defendant’s motion to stay). And significantly, expert discovery and pretrial activities
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`are months further away, with a trial is not scheduled until March 7, 2022. (D.I. 22 at pp.12-13.)
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`Each of these facts also weigh in favor of a stay.
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`V.
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`Conclusion
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`For the foregoing reasons, Eton requests that the Court stay this case pending final
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`resolution, including any appeals, of Eton’s pending PGR petitions that challenges the validity of
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`all the claims of the Patents-in-Suit.
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`OF COUNSEL:
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`Ralph J. Gabric
`ralph.gabric@h