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Gentherm Canada, Ltd. v. IGB Automotive Ltd.

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

February 26, 2015

Gentherm Canada, LTD, Plaintiff,
v.
IGB Automotive, LTD, Defendant.

Paul J. Komives, Magistrate Judge.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO STAY [29]

Arthur J. Tarnow, Senior United States District Judge.

Defendant has asked the Court to stay this patent infringement suit pending the Patent Trial and Appeal Board’s review of the validity of some of the patent claims at issue. Plaintiff opposes the stay in its entirety and alternatively argues that if the Court grants a stay, it should allow the parties to proceed with discovery.

For the reasons stated below, Defendant’s Motion to Stay [29] is GRANTED IN PART AND DENIED IN PART. The parties may proceed with discovery, but other proceedings in the case are stayed.

Factual Background

Defendant IGB Automotive manufactures and sells products related to heating and cooling systems for car seats. Plaintiff Gentherm Canada (formerly known in this litigation as W.E.T. Automotive Systems) claims that Defendant’s manufacture and sale of these products has infringed eleven of Plaintiff’s patents. Defendant has raised several defenses, including the alleged invalidity of some of the claims in Plaintiff’s patents.

On April 18, 2014, Defendant filed petitions with the Patent Trial and Appeal Board (PTAB) for inter partes review (IPR) of the validity of certain claims in six of the eleven patents. On May 8, 2014, Defendant filed the instant Motion to Stay [29], arguing that the case should be stayed pending PTAB’s resolution of the IPR petitions. Plaintiff filed a Response [33] and Defendant filed a Reply [36].

In September and October 2014, PTAB instituted IPR review of some or all of the asserted claims in four of the eleven patents. PTAB’s review of those claims is ongoing. On December 5, 2014, Plaintiff filed a Supplemental Brief [43] addressing the relevance of PTAB’s institution decisions to the instant motion. On December 12, 2014, Defendant likewise filed a Supplemental Brief [46].

The Court held a hearing on the motion on December 17, 2014. At the hearing, Plaintiff’s counsel argued that if the Court grants a stay, the Court should at least allow the parties to proceed with discovery. Defendant’s counsel suggested that proceeding with discovery would be difficult in light of the great number of claims asserted by Plaintiff and the uncertainty regarding which claims Plaintiff will attempt to bring to trial. The Court held the motion in abeyance pending the parties’ efforts to streamline the case.

The parties filed a Joint Status Report [50] on January 22, 2015. On January 26, 2015, the Court held a status conference with the parties, during which the parties agreed to attend a settlement conference. The Court held the instant motion in abeyance pending the settlement conference. Plaintiff subsequently requested a status conference, which was held via phone on February 17, 2015. During the conference, Plaintiff expressed doubt that the settlement conference, currently scheduled for April 13, 2015, would be productive. Plaintiff asked the Court to rule on the instant motion in advance of the conference, and the Court agreed.

Analysis

Courts have inherent and discretionary authority to stay litigation pending IPR review. See Everlight Electronics Co., Ltd. v. Nichia Corp., No. 12-11758, 2013 WL 1821512, at *7 (E.D. Mich. April 30, 2013) (citing Ethicon Inc. v. Quigg, 849 F.2d 1422, 1426–27 (Fed. Cir. 1988)). Courts consider three factors in determining whether to grant a stay pending IPR review: (1) whether IPR review is likely to simplify the issues in the case; (2) whether the non-moving party will be prejudiced by a stay; and (3) whether discovery is complete and a trial date has been set. See Id. at *7-*10; Regents of Univ. of Mich. v. St. Jude Medical, Inc., No. 12-12908, 2013 WL 2393340, at *2 (E.D. Mich. May 31, 2013).

I. Simplification of Issues

Defendant argues that the case should be stayed pending PTAB’s final decisions because those decisions will likely simplify the issues in the case. Defendant claims that its IPR petitions challenged “all claims asserted to infringe.” Defendant therefore argues that this case will be greatly simplified if PTAB invalidates the challenged claims. Defendant acknowledges that its IPR petitions do not cover all of Plaintiff’s patent claims, or even all of the patents. However, Defendant argues that PTAB’s resolution of the challenged claims will provide guidance on ...


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