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Judge Sleet grants defendants’ motion to consolidate and stay multiple-related actions

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In a recent Order, Judge Gregory M. Sleet granted defendants’ (the “Broadcaster Defendants”) motion to consolidate and stay fourteen related lawsuits. Delaware Radio Technologies, LLC et al. v. Beasley Broadcast Group, Inc., C.A. No. 13-1813-GMS, et al. (D. Del. Jan. 4, 2015). Plaintiffs allege that the Broadcaster Defendants infringe at least one or all of U.S. Patent Nos. 5,506,866, 5,642,379, and 5,475,691 (the “patents-in-suit”), which “relate to the transmission of both digital and analog radio signals using the in-band, on-channel (‘IBOC’) technique, often referred to as HD Radio technology.” Id. at 1. After plaintiffs filed suit against the Broadcaster Defendants, a third party, iBiquity Digital Corporation (“iBiquity”), filed a separate action against plaintiffs seeking a declaratory judgment of invalidity and noninfringement of the patents-in-suit. Id. iBiquity “licenses its software to the Broadcasting Defendants, which, when implemented into broadcasting equipment and systems, allegedly causes infringement of the method claims of the patents-in-suit.” Id.

The Broadcasting Defendants each filed a motion to consolidate and stay the cases pending the resolution of iBiquity’s declaratory judgment action. Judge Sleet ultimately granted that motion, finding all four traditional factors to weigh in favor of stay. Id. at 2 n.2. Judge Sleet first explained that “[a]lthough iBiquity is not itself an alleged direct infringer of the patents-in-suit, its technology is at the core of the Plaintiffs’ infringement contentions,” and the “[a]djudication of iBiquity’s declaratory judgment lawsuit will therefore either eliminate or crystalize the remaining issues for the Broadcast Defendants litigation.” Id. Judge Sleet further explained that “[t]he court can discern no meaningful prejudice to the Plaintiffs, as the information obtained during the course of the iBiquity lawsuit is not wasted; it can be applied-indeed, it is necessary-to the instant consolidated suit.” Id. Judge Sleet also noted that the case “is still in its infancy: no Rule 16 schedule is in place, and no discovery has been taken.” Id.

Judge Sleet explained that while “[b]oth parties extensively discusse[d] the ‘customer suit exception’ in their briefing . . . . the facts at bar do not fit squarely within the exception.” Id. That is, “iBiquity’s software is not itself infringing; it is the implementation of the software into the Broadcast Defendants’ systems that triggers the alleged infringement.” Id. Judge Sleet nevertheless found that the “underlying principles of the customer suit exception” – efficiency and judicial economy – to support the imposition of stay.

 

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