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Service Solutions U.S. LLC v. Autel.US Inc.

United States District Court, Eastern District of Michigan, Southern Division

January 28, 2015

SERVICE SOLUTIONS U.S., L.L.C., Plaintiff,
v.
AUTEL.US INC., and AUTEL INTELLIGENT TECHNOLOGY CO., LTD., Defendants.

ORDER GRANTING DEFENDANTS’ MOTION TO STAY (DKT. 42)

TERRENCE G. BERG, UNITED STATES DISTRICT JUDGE

This matter is before the Court on Defendants’ Autel.US Inc. and Autel Intelligent Technology Co., Ltd. (“Defendants”) motion to stay, (Dkt. 42). The parties fully briefed this matter and the Court took it under advisement without oral argument on December 17, 2014 pursuant to E.D. Mich. L.R. 7.2(f)(2). For the reasons set forth below, the Court GRANTS Defendants’ motion to stay.

I. FACTUAL AND PROCEDURAL BACKGROUND

On February 8, 2013, Plaintiff Service Solutions[1] (“Plaintiff”) sued Defendants for patent infringement alleging that Defendants had infringed on seven of their patents.[2] (Dkt. 1.) Following a denial of Defendants’ motion to dismiss, this Court referred the parties to facilitation on January 17, 2014. (Dkt 36.) The order for facilitation stayed discovery and further motion practice until further order of this Court. (Id.)

On March 18, 2014, the parties met with Mediator Richard Grauer. (Dkt 46.) In his post-mediation report, Mr. Grauer noted that the meiation was “adjourned/incomplete” and also indicated that further alternative dispute resolution proceedings were contemplated. (Id. at Ex. A.) Further, in an email to the parties, Mr. Grauer instructed the parties to contact him once Plaintiff had provided additional information to Defendants. (Id.) It is undisputed that the parties never resumed the mediation.

While litigation proceeded in this Court, Defendants’ filed for inter partes review (or “IPR”) of Plaintiffs 796 patent with the United States Patent and Trademark Office’s Patent Trial and Appeal Board (“the Board”) on November 21, 2013. (Dkt. 42, Ex. 3.) On May 7, 2014, the Board instituted inter partes review of the 796 patent. (Id. at Ex. 2.) The parties have fully briefed the matter and presented oral arguments before the Board on December 9, 2014. (Dkt. 42, p. 5). Pursuant to 35 U.S.C. § 316(a)(11) and 37 C.F.R. § 42.100(c), the Board must complete its review of the patent within one year of instituting the review, on or before May 7, 2015.

From March through September 2014, neither party reported to the Court on the progress of the meiation proceedings, nor did either party notify the Court that an IPR had been ordered by the Patent Board. Consequently, the Court scheduled a telephonic status conference with the parties on October 2, 2014. During the conference, Defendants informed the Court about the inter partes review involving the 796 patent and requested a stay of this case pending the resolution of the review. Since Plaintiff opposed the stay, the Court invited Defendants to submit this motion.

II. ANALYSIS

A. Standard of Review

Courts have “broad discretion to determine whether a stay is appropriate” pending inter partes review. Regents of Univ. of Michigan v. St. Jude Med., Inc., No. 12-12908, 2013 WL 2393340, at *2 (E.D. Mich. May 31, 2013). The party seeking a stay has the “burden of showing that the circumstances justify the exercise of that discretion.” Everlight Electronics Co. Ltd. v. Nichia Corp., No. 12-cv-11758, 2013 WL 1821512 at *6 (E.D. Mich. Apr. 30, 2013). However, there is a “liberal policy in favor of granting motions to stay proceedings pending the outcome of the USPTO reexaminations or reissuance proceedings.” Id. at *7 (internal quotations omitted).

Courts consider three factors in determining whether to grant a stay: “(1) whether discovery is complete and whether a trial date has been set; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party.” Regents of Univ. of Michigan, No. 12-12908, 2013 WL 2393340, at *2.

B. Discussion

The Court will consider each of these factors in turn.

1. Whether Discovery is Complete and a Trial Date ...


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