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Judge Burke denies defendant’s motion to stay pending resolution of its motion to dismiss the patents-in-suit as invalid under 35 U.S.C. § 101

Magistrate Judge Christopher J. Burke recently considered defendant Plaid Technologies Inc.’s motion to stay this action pending the Court’s resolution of defendant’s motion to dismiss all claims of the seven asserted patents-in-suit as patent-ineligible under 35 U.S.C. § 101.  Yodlee, Inc. v. Plaid Technologies Inc., C.A. No. 14-1445-LPS-CJB (D. Del. Jul. 20, 2015).  In denying defendant’s motion, Judge Burke noted that if the motion to dismiss is denied, little efficiency would have been gained.  Id. at 4-5.  Moreover, due to the large number of patents and claims at issue (7 and 162, respectively), “it is reasonable to infer that . . . there is a greater likelihood that a portion of the case will survive the motion to dismiss.”  Id. at 5.  Ultimately, Judge Burke noted that this “simplification of the issues” factor was neutral.  Regarding stage of the litigation factor, Judge Burke noted that although some discovery had progressed, the early stage of the litigation favored a stay.  Id.  at 7.  Finally, regarding undue prejudice, Judge Burke found this factor favored a stay noting that the parties are competitors and that there was evidence that competition from defendant had “financially harmed” plaintiff in the past and  likely would in the future.  Id. at 13.

Ultimately, Judge Burke decided a stay was not warranted:

On balance, the possibility of simplification of the issues is neutral, the status of the litigation weighs squarely in favor of a stay, and the prospect of undue prejudice weighs squarely against a stay. While reasonable minds could disagree as to the right outcome, the Court is ultimately persuaded that the prospect for harm to Plaintiff were a stay granted is the most compelling factor here. Therefore, the motion to stay is DENIED.

Id. at 15.

UPDATE: On January 27, 2017, Chief Judge Stark issued a memorandum order addressing objections to Judge Burke’s stay decisions. Judge Stark largely affirmed Judge Burke’s decisions, but denied as moot as to one patent-in-suit that had been dismissed on § 101 grounds and granted a stay as to two other patents-in-suit for which the PTAB had instituted CBM review in the time between Judge Burke’s decision and Judge Stark’s decision.

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