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Judge Sleet grants motion to stay pending reexamination

Chief Judge Gregory M. Sleet recently granted defendant’s motion to stay pending reexamination. Celorio v. On Demand Books LLC, C.A. No. 12-821-GMS (D. Del. Aug. 21, 2013). In doing so, Judge Sleet examined the following 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 a trial date has been set.” Id. at 2 n.1 (quotations omitted). Regarding the first factor, Judge Sleet noted that any stay pending reexamination will delay final resolution of the case. Therefore, that fact alone is insufficient to establish that any prejudice from the delay is “undue.” Id. As such, the court must look at “sub-factors,” such as “the timing of the stay request”; “the relationship between the parties”; “the related question of whether the plaintiff may be compensated through future money damages”: and “the status of the reexamination proceedings.” Id. Judge Sleet determined that any delay will not result in undue prejudice or present a tactical disadvantage to plaintiff. In particular, Judge Sleet found that because the petition for reexamination and the motion to stay were filed early in the case, the Court could not conclude that defendant was attempting to gain an unfair tactical advantage. Id. Further, plaintiff’s five-year delay of filing the case after it became aware of defendant’s alleged infringement demonstrated that plaintiff did not consider “this to be a ‘time of the essence matter’ or that, absent expeditious litigation, he [would] suffer undue prejudice.” Id. In addition, plaintiff could be compensated for any delay through money damages. Id.

Regarding simplification of issues, Judge Sleet determined that this factor favored a stay. “[R]egardless of the PTO’s conclusion, the results of the reexamination proceeding will aid in simplifying or eliminating the overlapping issues before the court. Indeed, even if the PTO were to ultimately confirm all of the claims, the court would likely benefit from the expert analysis the PTO conducts, thus further simplifying issues before the court.” Id. at 3 n.1. Judge Sleet determined that the early stage of the case also favored a stay, as no scheduling order had been entered and no trial date had been set. Id.

Judge Sleet also specifically rejected plaintiff’s argument that defendant was “estopped from seeking a stay because it filed a counterclaim for declaratory relief pursuant to the Declaratory Judgment Act (‘DJA’).” Id. Judge Sleet noted:

Celorio [did] not cite any case law supporting his argument and instead provide[d] citations to cases detailing the parameters of the DJA and rules regarding binding admissions in responsive pleadings. None of the cases Celorio cite[d] suggested that once a party has filed a claim under the DJA, it should be barred from requesting a stay and the court [had] not uncovered such precedent.

Id.

Celorio v. On Demand Books LLC, C.A. No. 12-821-GMS (D. Del. Aug. 21, 2013)

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