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Judge Fallon recommends denial of plaintiffs’ motion to stay pending inter partes review

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In Nexans Inc. et al. v. Belden Inc. et al., C.A. No. 12-1491-SLR-SRF (D. Del. Feb. 19, 2014), Magistrate Judge Sherry R. Fallon issued a report recommending the denial of plaintiffs’ motion to stay pending the PTO’s inter partes review (“IPR”) determination regarding the validity of United States Patent Nos. 6,074,503; 7,135,641; 7,977,575; and 7,663,061. Id. at 1. In the instant action (“the Delaware action”), plaintiffs have requested a declaratory judgment of invalidity and noninfringement of the patents under IPR, and are asserting an additional patent. Id. at 2. Shortly after the Delaware action was originally filed, the defendants initiated an additional, parallel action in the Southern District of Indiana for patent infringement against plaintiffs. Id. at 3. Each of plaintiffs IPR petitions were granted and are anticipated to be completed by May 2014. Id. at 3, 1 n.1.

Judge Fallon explained that “Plaintiffs did not wait for the litigation to move forward or for expenses to accrue before petitioning for IPR,” which weighed slightly in favor of stay. Id. at 5. Further, “[n]o substantive litigation took place while the parties awaited the court’s decision on the motions to dismiss,” and “fact discovery remains open and the trial is scheduled for December 2015.” Id.

Judge Fallon, however, was persuaded by defendants’ argument that plaintiffs may be “attempting to gain an improper tactical advantage by filing first to secure a Delaware forum, opposing litigation in Indiana and then seeking a stay of the litigation altogether in favor of IPRs.” Id. at 5. Further, Judge Fallon found the status of the IPR proceedings to disfavor stay, given the “substantial amount of time before the close of discovery and the short window of time before the PTO issues its decision in the IPRs.” Id. at 6. Judge Fallon similarly explained that while the IPR could simplify the issues for trial, “[r]eceiving a determination from the PTO early in the discovery phase of the pending case weighs against a stay. The parties will have nearly a year remaining to tailor further proceedings based on the outcome of the IPRs, without disruption to the present scheduling order.” Id. at 7. Judge Fallon additionally noted that the IPR proceedings are scheduled to conclude by May 2014, and the fact discovery deadline is not until December 2015, which weighed against stay. Id. at 8. On balance, Judge Fallon concluded that stay was not warranted and denied plaintiffs’ motion.

Nexans Inc. et al. v. Belden Inc. et al., C.A. No. 12-1491-SLR-SRF (D. Del. Feb. 19, 2014)

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