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Canatelo LLC v. Axis Comms. AB, et al., C.A. No. 13-1227-GMS, Order (D. Del. May 14, 2014).

Canatelo LLC v. Axis Comms. AB, et al., C.A. No. 13-1227-GMS, Order (D. Del. May 14, 2014).

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Canatelo LLC v. Axis Comms. AB, et al., C.A. No. 13-1227-GMS, Order (D. Del. May 14, 2014).
Canatelo LLC v. Axis Comms. AB, et al., C.A. No. 13-1227-GMS, Order (D. Del. May 14, 2014).

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10/16/2014

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE CANATELO LLC, ) Plaintiff, )
v.
)
Civil Action No. 13-1227-GMS AXIS COMMUNICATIONS AB, ) AXIS COMMUNICATIONS, INC. ) COMMUNICATIONS SUPPLY CORPORATION,) Defendants. )
OR ER
Presently before the court in the above captioned matter is the defendants' Motion to Stay Pending
Inter Partes
Review
of
the Patents-in-Suit.
1
(D.I. 46.) A decision to stay litigation lies within the sound discretion
of
the court.
See Cost Bros.
Inc
v
Travelers Indem. Co.
760 F.2d
58,60
(3d Cir. 1985);
Ethicon
Inc
v
Quigg
849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (citations omitted) ( Courts have inherent power to manage their dockets and stay proceedings, including the authority to order a stay pending conclusion
of
a PTO reexamination. ). In order to determine
if
a stay is appropriate, the court balances the following three factors:
(1)
whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2) whether a stay will simplify the issues in question and trial
of
the case; and (3) whether discovery is complete and whether a trial date has been set.
First Am. Title
Ins Co
v
McLaren LLC
No. 1 0-363-GMS,
On
July
12
2013, the plaintiff, Canatelo LLC ( Canatelo ), brought the above-captioned action against the defendants alleging infringement
of
U.S. Patent Nos.
7 31 0
ll
(the'
ll
patent ) and 6,476,858 (the ' 858 patent ). (D.I.
1.)
On
August 19,2013, Canatelo filed an amended complaint. (D.I. 7.)
 
2012
WL
769601, at *4 (D. Del. Mar. 9, 2012) (citation omitted). After considering the parties' positions as set forth in their papers, as well as the applicable law, the court concludes that a stay is warranted here. The plaintiff
is
unlikely to suffer undue prejudice as a result
of
the stay,
 
the issues before the court will be simplified should the Patent Trial and Appeal Board ( PTAB ) grant the defendants
inter partes
review,
3
and the case is at a very early stage currently.
4
Accordingly, the court grants defendants' motion. IT
IS
HEREBY ORDERED THAT the defendants' Motion to Stay Litigation Pending
Inter Partes
Review (D.I. 46) is GRANTED.
The court weighs a variety
of
sub factors
in
determining whether there
is
undue prejudice: the timing
of
the request for reexamination, the timing
of
the request for stay, the status
of
the reexamination proceedings, and the relationship
of
the parties.
Boston Scientific Corp.
v
Cordis Corp.
777
F.
Supp. 2d 783, 789 (D. Del. 2011). The mere potential for delay does not in itself establish undue prejudice.
See e.g. Body Media Inc.
v
Basis Sci. Inc.
No. 12-CV-133 (GMS), 2013 U.S. Dist. LEXIS 82830, at
4
(D. Del. Jun. 6, 2013). After considering these three factors, the court concludes that there is no evidence at all
of
undue prejudice. Regarding the timing
of
the request for reexamination, the defendants filed their IPR petitions on January 30, 2014. (D.I. 47 at 12.) This
is
well within the one-year timeframe that the statute provides.
See
35
U.S.C.
§
315(b). The timing
of
the request for stay suggests no dilatory motive; the defendants filed the motion to stay less than two weeks after filing their IPR petitions. (D.I. 46.) The Patent Trial and Appeal Board ( PTAB ) has yet to indicate whether it will grant the defendants petitions, but this
is
not dispositive. The relationship
of
the parties favors granting a stay here since Canatelo is a non-practicing entity and, by its own admission, does not compete with the defendants. (D.I. 47 at 13; D.I. 52 at 10-11.) The PT
AB
has not yet granted the defendants' petitions, but statistics indicate that it is very likely the PT
AB
will grant the IPR petitions. (D.I. 48, Ex.
1.)
In their IPR petitions, the defendants present new prior art that they allege discloses every element
of
the patents-in-suits' claims and that was not considered during prosecution
of
the patents-in-suit. (D.I. 47 at 6-10.) Should the PTAB deem the patents-in-suit unpatentable or narrow their scope, the court's resources will be conserved by expending fewer resources on claim construction or avoiding the claim construction process altogether.
See Bear Creek
2013 WL 3789471 at
3
n.8. Should the claims survive the IPR process, the court will still benefit from the PTAB's expertise.
See Neste Oil
OYJv
Dynamic Fuels LLC
No.
12-
1744-GMS, 2013 U.S. Dist. LEXIS 92416, at *12 (D. Del. Jul. 2, 2013);
Gioello Enters. Ltd.
v
Matte/ Inc.
No.
99
375--GMS, 2001 WL 125340, at
1
(D. Del. Jan. 29, 2001).
4
In
considering the stage
of
litigation, the court asks whether discovery
is
complete and whether a trial date has been set.
First Am. Title
Ins Co
v
MacLaren LLC
No. 10-363-GMS, 2012 U.S. Dist. LEXIS 31508, at
13
(D. Del. Mar. 9, 2012). Staying a case
in
its early stages advances judicial efficiency and prevents the court and the parties from expending resources on claims that may be rendered invalid.
See SenoRx Inc.
v
Hologic Inc.
No. 12-173-LPSCJB, 2013 U.S. Dist. LEXIS 8044, at *15-16 (D. Del. Jan.
11,
2013). Here, the parties have yet to conduct any discovery and no scheduling order has been entered. (D.I. 47 at 13-14.)

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