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Corel Software, LLC v. Microsoft Corporation

United States District Court, D. Utah, Central Division

May 14, 2019

COREL SOFTWARE, LLC, Plaintiff,
v.
MICROSOFT CORPORATION, Defendant.

          Jill N. Parrish District Judge

          MEMORANDUM DECISION AND ORDER

          PAUL M. WARNER CHIEF UNITED STATES MAGISTRATE JUDGE.

         District Judge Jill N. Parrish referred this case to Chief Magistrate Judge Paul M. Warner pursuant to 28 U.S.C. § 636(b)(1)(A).[1] Before the court is Defendant Microsoft Corporation's (“Microsoft”) motion to stay this action.[2] The court has carefully reviewed the written memoranda submitted by the parties. Pursuant to Civil Rule 7-1(f) of the Rules of Practice for the United States District Court for the District of Utah, the court has concluded that oral argument is not necessary and will decide the motion on the basis of the written memoranda. See DUCivR 7-1(f).

         RELEVANT BACKGROUND

         On February 20, 2019, Microsoft filed a request for ex parte reexamination (“Reexamination”) with the United States Patent and Trademark Office (“USPTO”), challenging the validity of the two asserted claims (5 and 18) of U.S. Patent No. 8, 700, 996 (“996 Patent”). The 996 Patent is one of the three related patents that are the subject of this infringement action. On April 8, 2019, Microsoft filed a notice with the court indicating that the USPTO has decided to conduct the Reexamination.[3]

         In the motion before the court, Microsoft seeks a stay of this action pending the resolution of the Reexamination. Plaintiff Corel Software, LLC (“Corel”) opposes Microsoft's motion.

         ANALYSIS

         “The Federal Circuit has recognized that a district court may properly stay proceedings in a patent case pending the [USPTO]'s reexamination of a patent by that Office.” Larson Archery Co. v. Mathews, Inc., No. 1:11-CV-126 TS, 2013 WL 139472, at *1 (D. Utah Jan. 10, 2013) (footnote and citation omitted). In general, courts consider the following factors in determining whether to stay litigation proceedings pending USPTO reexamination: “(1) whether a stay will simplify the issues in question and trial of the case; (2) whether discovery is complete and a trial date has been set; and (3) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party.” Pool Cover Specialists Nat'l, Inc. v. Cover-Pools Inc., No. 2:08CV879DAK, 2009 WL 2999036, at *1 (D. Utah Sept. 18, 2009).

         I. Simplification of the Issues

         Microsoft argues that the Reexamination will likely result in cancellation of claims 5 and 18 of the 996 Patent, thereby streamlining this case. Corel contends that Microsoft's argument is speculative, and that the Reexamination likely will not simplify this case.

         Given that the USPTO has decided to conduct the Reexamination, the court concludes that the Reexamination has at least the potential to simplify the issues in this case. The court also concludes that allowing this case to proceed while the Reexamination takes place, particularly if the Reexamination results in cancellation of claims 5 and 18 of the 996 Patent, could complicate the issues before the court, require reconsideration of certain issues, and result in piecemeal litigation. Furthermore, “‘even if the reexamination [does] not lead to claim amendment or cancellation, it could still provide valuable analysis to the district court.'” Id. at *2 (quoting Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1428 (Fed. Cir. 1989)).

         “Courts have recognized that ‘there is a liberal policy in favor of granting motions to stay proceedings pending the outcome of USPTO reexamination proceedings.'” Id. (quoting ASCII Corp. v. STD Entm't USA, Inc., 844 F.Supp. 1378, 1381 (N.D. Cal. 1994)). Under that liberal policy, and considering the interests of judicial economy, the court concludes that this factor weighs in favor of a stay.

         II. Status of the Action

         When this court previously imposed a stay in this case, the court considered this factor and concluded that it weighed in favor of a stay.[4] On June 6, 2018, that stay was lifted.[5] Since the lift of that stay, the parties have moved this case forward to some degree, but there are substantial proceedings yet to be completed. While the parties have recently begun the claim construction process and summary judgment proceedings, as when the prior stay was imposed, no trial date has been set. In short, the court concludes that the status of the case has not changed substantially since the imposition of the prior stay. Accordingly, the court again concludes that this factor weighs in favor of a stay. See, e.g., EMSAT Advanced v. T-Mobile USA, Inc., No. 4:08cv00817, 2011 WL 843205, at *2 (N.D. Ohio Mar. 8, 2011) (“[T]here remain several costly stages of this litigation that ...


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