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Wonderland Nurserygoods Co., Ltd v. Thorley Industries

March 14, 2012

WONDERLAND NURSERYGOODS CO., LTD., PLAINTIFF/COUNTER DEFENDANT,
v.
THORLEY INDUSTRIES, LLC, D/B/A 4MOMS,
DEFENDANT/COUNTER CLAIMANT.



The opinion of the court was delivered by: Judge Nora Barry Fischer

MEMORANDUM OPINION

I.INTRODUCTION

This is an action brought by Plaintiff/Counter Defendant, Wonderland Nurserygoods Co., Ltd. ("Wonderland"), against Defendant/Counter Claimant, Thorley Industries, LLC ("Thorley"), for infringement of United States Patent No. 8,047,609 ("the '609 Patent"). (See Docket No. 1). Pending before the Court is Thorley's "Motion to Stay Proceedings Pending Reexamination of U.S. Patent No. 8,047,609." (Docket No. 14). The motion is fully briefed. (See Docket Nos. 15, 16, 20, 22). After consideration of the arguments presented by both sides, the Court finds that the motion should be DENIED.

II.BACKGROUND

As stated, this is a patent infringement lawsuit filed by Wonderland against Thorley. The suit was filed on February 16, 2012. (Docket No. 1). The patent in suit, the '609 Patent, relates generally to mechanized infant rocking chair technology. (See Docket No. 1-2).

On January 12, 2012, Thorley filed a Request for Inter Partes Reexamination with the United States Patent and Trademark Office ("PTO"). (See Docket No. 15-1). The Request asserted challenges against claims 1, 2, 3, 12, 13, 19 and 20 of the '609 Patent. (See id.). On February 14, 2012, the PTO issued an Order granting Thorley's request for inter partes reexamination, concluding that there was a reasonable likelihood that Thorley would prevail as to claims 1, 2, 12, 13, 19 and 20. (See Docket No. 15-2 at 2). Conspicuous for its absence on this list is claim 3, the challenge against which the PTO found unlikely to succeed. (Id.).

Also on February 14, the PTO issued an initial Office Action rejecting all of the claims under reexamination -- i.e., claims 1, 2, 12, 13, 19 and 20. (See Docket No. 15-3). That Office Action expressly stated that claims 3-11 and 14-18 were not subject to reexamination. (Id.). On February 24 -- ten days after the Reexamination was granted (in part) and eight days after this case was filed -- Defendant moved this Court to stay pending reexamination. (Docket No. 14). Plaintiff opposes this request. (Docket No. 16). As the motion is fully briefed (Docket Nos. 15, 16, 20, 22), it is ripe for disposition.

III.LEGAL STANDARD

District courts have broad power to stay proceedings. U.S. ex rel. FLFMC, LLC v. William Bounds, LTD., Civ. No. 10-420, 2010 WL 2990725, *1 (W.D. Pa. July 28, 2010) (Lancaster, C.J.) (citing Bechtel Corp. v. Local 215, Laborers' Int'l Union, 544 F.2d 1207, 1215 (3d Cir. 1976). A court's power to stay proceedings "is incidental to the power inherent in every court to control the disposition of causes on its docket with economy of time and effort for itself, for counsel and for litigants." See Bechtel, 544 F.2d at 1215 (quoting Landis v. North American Co., 299 U.S. 248, 254-55 (1936)); see also Gould v. Control Laser Corp., 705 F.2d 1340, 1341 (Fed. Cir. 1983); Gunduz v. U.S. Citizenship and Immigration Services, Civ. No. 07-780, 2007 WL 4343246, *1 (W.D. Pa. December 11, 2007) (Ambrose, C.J.) (citing Landis and Bechtel). A court must exercise its judgment in weighing the competing interests and maintaining an even balance when staying a proceeding. See Landis, 299 U.S. at 254-55; Cheyney State College Faculty v. Hufstedler, 703 F.2d 732, 737-38 (3d Cir. 1983); Soverain Software LLC v. Amazon.com, Inc., 356 F.Supp.2d 660, 662 (E.D. Tex. 2005). In deciding whether to stay litigation pending reexamination at the PTO, courts typically consider: (1) whether a stay will unduly prejudice or present a clear tactical disadvantage to the nonmoving party; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether discovery is complete and whether a trial date has been set. Soverain, 356 F.Supp.2d at 662; Xerox Corp. v. 3Com Corp., 69 F.Supp.2d 404, 406 (W.D.N.Y. 1999).

IV.ANALYSIS

a.Prejudice

Thorley begins by asserting that Wonderland will not be subject to prejudice, because delay alone does not prejudice a party. (Docket No. 15 at 6) (citing Everett Labs, Inc. v. River's Edge Pharmaceuticals, LLC, Civ. No. 09-3458, 2009 WL 4508584, at *3 (D.N.J. Nov. 24, 2009). Thorley points to 35 U.S.C. § 314(c), which requires the PTO to conduct reexaminations with "special dispatch." (Docket No. 15 at 6). Thorley also argues that a stay is unlikely to prejudice Wonderland because damages will continue to accrue during the term of reexamination. (Id. at 7) (citing Patlex Corp. v. Mossinghoff, 758 F.2d 594, 603 (Fed. Cir. 1985)).

In response, Wonderland argues that a stay pending reexamination will likely last five to eight years, which is "a sizable portion of the initial life of its patent, sometimes the only significant portion of a patent's life." (Docket No. 16 at 8). Wonderland also argues that, because it is a direct competitor to Thorley, a stay will cause it undue prejudice because Wonderland will lose substantial profits and goodwill in the market. (Id.).

The gist of Thorley's reply is that Wonderland has overestimated the term of the stay. Thorley contends that the PTO "has made every indication" that it intends to process the reexamination in a speedy manner. (Docket No. 20 at 3-4). Thorley also argues that Wonderland's assertions over the length of a stay are unsupported: the evidence Wonderland cited is old, and they have not taken into account the passage of the America Invents Act ("AIA"), H.R. 1249 (2011), which has overhauled the reexamination process. (Id. at 3). Thorley also challenges Wonderland's assertion that the two companies are direct competitors. (Id. ...


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