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Drone Technologies, Inc. v. Parrot S.A., Parrot, Inc.

United States District Court, W.D. Pennsylvania

November 19, 2014

DRONE TECHNOLOGIES, INC., Plaintiff,
v.
PARROT S.A., PARROT, INC., Defendants.

MEMORANDUM ORDER DEFENDANTS' MOTION TO STAY PENDING APPEAL OR IN THE ALTERNATIVE TO STAY PENDING INTER PARTES REVIEW (DOC. NO. 112)[1]

ARTHUR J. SCHWAB, District Judge.

I. Introduction

The Court has written extensively on this patent infringement case and therefore, will not recount the full procedural posture of this case. See Doc. No. 106 for a complete discussion of the procedural posture to date, summarizing Defendants' relentless efforts to thwart the "just, speedy, and inexpensive determination" of this action. However, it is necessary to note the following:

Plaintiff filed a Complaint against Defendants in January 2014. Doc. No. 1. On May 6, 2014, Defendants filed two petitions in the United States Patent and Trademark Office seeking Inter Partes review of the patents that Defendants allegedly infringed. Defendants filed a Motion to Stay Pending Inter Partes Review (or to alternatively transfer venue to the United States District Court for the Eastern District of Michigan) contemporaneously with its Answer. Doc. Nos. 16-17. The Court denied Defendants' Motion to Stay Pending Inter Partes Review and to Transfer. Doc. No. 29.

The Parties have been at loggerheads over Defendants' Court-Ordered discovery obligations since June 2014. Doc. No. 41. Defendants have repeatedly refused to comply with the Court's Orders to provide complete initial disclosures. Doc. Nos. 51, 61, 74. Plaintiff filed a Motion for Order to Show Cause Why Defendants Should Not be Held in Contempt on August 18, 2014. Doc. No. 78. On September 24, 2014, Defendants filed two petitions for writ of mandamus in the United States Court of Appeals for the Federal Circuit. In re: Parrot S.A., 14-156, 14-157. Defendants contend that Writs of Mandamus should issue because: (1) this Court exceeded its authority by compelling Defendants to produce confidential source code without a showing of relevance and without adequate protections; and (2) this Court abused its discretion by refusing to grant Defendants' Motion to Transfer this case to the United States District Court for the Eastern District of Michigan. Id . This appeal remains pending.

The Court held an evidentiary hearing on Plaintiff's Motion to Show Cause Why Defendants Should Not be Held in Contempt on October 23, 2014. Doc. No. 99.

On October 28, 2014, the United States Patent and Trademark Office Patent Trials and Appeals Board issued institutional decisions in both Inter Partes review proceedings. The Board ordered the institution of Inter Partes review as to all claims in both patents based on obviousness or anticipation over prior art. IPR2014-00730, Paper No. 8, 2; IPR2014-0732, Paper No. 8, 2.

On November 3, 2014, the Court issued a Memorandum Opinion and Order in which the Court set forth that it was compelled to strike Defendants' counterclaims and enter default judgment against Defendants for infringement of the relevant patents based upon review of the six (6) factors set forth in Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863 (3d Cir. 1984). Doc. Nos. 106-107. Defendants filed an appeal of this Order and seven (7) other underlying Orders to the United States Court of Appeals for the Federal Circuit. Drone Technologies, Inc. v. Parrot S.A., 15-1138.[2] This appeal remains pending.

Following the entry of default judgment as to liability, the Court ordered the Parties to meet and confer and to file a Proposed Case Management Order as to any remaining issues. 11/03/2014 Text Order. The Parties were unable to reach agreement and have filed separate Proposed Case Management Orders. Doc. Nos. 111, 114.[3]

Presently before this Court is Defendants' Motion to Stay Pending Appeal or, in the Alternative, to Stay Pending Inter Partes Review. Doc. No. 112. Defendants move this Court to stay this matter pending the outcome of their appeal to the United States Court of Appeals for the Federal Circuit. Id . Defendants alternatively move this Court to stay the case pending the outcome of the Inter Partes Review of the patents at issue at the United States Patent and Trademark Office. Id . Plaintiff opposes this Motion in its entirety. Doc. No. 123.

II. Standard of Review

The Parties agree that this Court has the power to stay this proceeding pending appeal. The following four factors guide a Court's determination of whether a stay is appropriate:

(1) Whether the stay applicant has made a strong showing that he is likely to ...

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