Targus International LLC v. Group III International, Inc.

United States District Court

for the

Southern District of Florida

Targus International LLC, Plaintiff, )

)

v. )

Civil Action No. 20-21435-Civ-Scola

)

Group III International, Inc., )

Defendant. )

Order Granting Stay

Plaintiff Targus International LLC complains Defendant Group III

International, Inc., has infringed its patent—U.S. Patent No. 8,567,578 (the

“’578 Patent”)—which protects innovations related to its line of “checkpoint-

friendly” laptop bags and cases. (Compl., ECF No. 1.) Now before the Court is

Group III’s expedited motion to stay these proceedings pending a potential inter

partes review of the alleged infringed patent. (Def.’s Mot. for Stay, ECF No. 65.)

Targus opposes Group III’s motion for a stay, arguing that Group III’s request

is premature and that all of the factors the Court should consider weigh

against a stay. (Pl.’s Resp., ECF No. 67.) Group III has timely replied. (Def.’s

Reply, ECF No. 69.) After careful review, the Court finds the factors, on

balance, tip in favor of the Court’s exercising its broad discretion to grant the

stay. Accordingly, the Court grants Group III’s motion to stay this case (ECF

No. 65).

1. Legal Standard

In 2011, Congress passed the Leahy-Smith America Invents Act and, in

doing so, introduced a process known as “inter partes review” which was

intended to serve as “a quick, inexpensive, and reliable alternative to district

court litigation to resolve questions of patent validity.” S. Rep. No. 110-259, 20

(Jan. 24, 2008). As an alternative to litigation, inter partes review allows a party

to ask the United States Patent Trial and Appeal Board (“PTAB”) “to reexamine

the claims in an already-issued patent and to cancel any claim that the agency

finds to be unpatentable in light of prior art.” Cuozzo Speed Techs., LLC v. Lee,

136 S. Ct. 2131, 2136 (2016).

Courts generally enjoy broad discretion in deciding how best to manage

the cases before it. See Johnson v. Bd. of Regents of Univ. of Georgia, 263 F.3d

1234, 1269 (11th Cir. 2001) (“accord[ing] district courts broad discretion over

the management of pre-trial activities, including discovery and scheduling”). It

no doubt follows, then, that, when inter partes review is sought, “the decision

to stay related civil patent infringement litigation is within the sound discretion

of the district court.” Lighting Sci. Group Corp. v. Nicor, Inc., 6:16-CV-1087-

ORL-37GJK, 2017 WL 3706697, at *2 (M.D. Fla. May 9, 2017). This makes

sense because inter partes review has the potential to “eliminate trial of

invalidity issues when a claim is canceled or, otherwise facilitate trial of

remaining issues following PTO denial of reexamination or reissuance

proceedings.” Roblor Mktg. Grp., Inc. v. GPS Indus., Inc., 633 F. Supp. 2d 1341,

1346 (S.D. Fla. 2008) (Torres, Mag. J.). Stays pending such reviews are granted

routinely “in order to avoid inconsistent results, obtain guidance from the

PTAB, or avoid needless waste of judicial resources.” See Evolutionary

Intelligence, LLC v. Apple, Inc., No. 13cv04201, 2014 WL 93954, at *2 (N.D. Cal.

Jan. 9, 2014).

2. Discussion

As a preliminary matter, while the Court acknowledges courts often deny

stays when they are sought before the PTAB has decided to institute review,

this is not the bright-line rule Targus makes it out to be. (See Pl.’s Resp. at 4

(describing the Southern and Middle Districts of Florida as “routinely den[ying]

stays” before the Patent Board institutes review).) Instead, the Court agrees

with those courts that find whether the PTAB has decided to institute review at

the time the stay is sought is simply part of the Court’s analysis of the relevant

factors. See VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1315–16

(Fed. Cir. 2014) (“While a motion to stay could be granted even before the PTAB

rules on a post-grant review petition, no doubt the case for a stay is stronger

after post-grant review has been instituted.”). That the PTAB has not yet made

a decision on whether to institute review, then, is not dispositive here.

Instead, the Court looks to the three factors courts typically consider in

determining the appropriateness of a stay pending inter partes review: (1)

whether the stay will unduly prejudice or present a clear tactical disadvantage

to the nonmoving party; (2) whether the stay will simplify issues in question

and trial of the case; and (3) whether discovery is complete and whether a trial

date has been set. Roblor, 633 F. Supp. 2d at 1347.

As to the first factor, the Court recognizes that Group III is a direct

competitor of Targus. Accordingly, as courts often recognize and as Targus

points out, there will undoubtedly be some unavoidable prejudice to Targus if

the case is stayed. See Gatearm Techs., Inc. v. Access Masters, LLC, 14-62697-

CIV, 2015 WL 13752667, at *1 (S.D. Fla. July 13, 2015) (Scola, J.). But, here,

Targus has not sought a preliminary injunction and, thus, any further harm

occasioned by the stay may be ameliorated money damages. See id.; see also

Andersons, Inc. v. Enviro Granulation, LLC, 8:13-CV-3004-T-33MAP, 2014 WL

4059886, at *3 (M.D. Fla. Aug. 14, 2014) (noting, in addressing a similar

argument, that the plaintiff had “not sought a preliminary injunction and that

any damages it incurs may be remediated with money damages”).

Further, contrary to Targus’s position, “standing alone, the potential for

litigation delay does not establish undue prejudice.” Patent Asset Licensing,

LLC v. Bright House Networks, LLC, 3:15-CV-742-J-32MCR, 2016 WL 4431574,

at *2 (M.D. Fla. Aug. 22, 2016) (emphasis in original). The Court finds, in this

case, such a delay is outweighed by the many recognized potential advantages

of inter partes review: “(1) furthering judicial economy; (2) determining validity;

(3) focusing the issues, defenses, and evidence; (4) developing the prior art and

prosecution history; (5) obtaining the PTO’s particular expertise; (6)

encouraging settlement; and (7) reducing costs to the parties.” Patent Asset,

2016 WL 4431574, at *3. This is especially so where, as here, Targus

acknowledges waiting seven years after its patent issued before pursuing

litigation against Group III.

On the whole then, the Court finds Targus has not rebutted Group III’s

showing that a stay will not unduly burden Targus and, therefore, the first

factor tips in favor of a stay.

As to the second factor, the Court again agrees with Group III. Even if

only some of the claims are canceled, those claims will not need to be litigated

in this action, which will save the parties from spending more time conducting

discovery, researching, and briefing the issues. And any streamlining of the

issues or invalidated issues will save judicial resources. This factor, then, also

leans in favor of a stay.

Finally, as to the third factor, this case is not so far along that a stay

would be senseless. Although the parties have engaged in written discovery and

exchanged infringement, noninfringement, invalidity, and unenforceability

contentions, no depositions—fact or expert—have been taken, and the claim

construction briefing is in its infancy. No hearing has been scheduled for claim

construction and nearly four months of fact discovery remain. If anything, this

factor may weigh marginally in Targus’s favor or is perhaps only neutral.

In sum, the Court finds that a stay may prevent unnecessary

expenditure of substantial resources and that, should the PTAB render a final

decision on the inter partes review, it will help streamline this case and, at a

minimum, allow the parties to more effectively focus their claims. See

Intellectual Ventures I, LLC v. Motorola Mobility LLC, 13-61358-CIV, 2014 WL

12584301, at *2 (S.D. Fla. July 17, 2014) (Middlebrooks).

3. Conclusion

Accordingly, the Court grants Group III’s expedited motion for a stay

(ECF No. 65) and stays this case pending resolution of the inter partes review.

The Clerk is directed to administratively close this case. The parties must

jointly submit a motion to reopen this case, along with a proposed amended

scheduling order, within ten days after completion of the inter partes review.

Any other pending motions are denied as moot! and may be renewed when the

case is reopened. Once the PTAB decides whether to institute inter partes

review of the 578 Patent, Group III must promptly notify the Court.

Done and ordered, at Miami, Florida, on January 7, 2021.

dobert N. Scola, Jr.

United States District Judge

! As an aside, the Court notes the parties’ request for clarification as to the opening claim-

construction brief. (Pl.’s Mot., ECF No. 64; Def.’s Resp., ECF No. 68.) While simultaneous

briefing of opening claims-construction may have been permitted in other cases, the Court’s

general practice is that only the party claiming infringement may (and must) file an opening

claim-construction brief. When or if this case proceeds before the Court, this will be clarified in

an amended scheduling order. Briefing will proceed under the standard timing allowed for

motions generally under the Local Rules.