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Adidas America, Inc. v. Skechers USA, Inc.

United States District Court, D. Oregon

June 12, 2017

ADIDAS AMERICA, INC., a Delaware corporation; ADIDAS AG, a foreign entity, Plaintiffs,
v.
SKECHERS USA, INC., a Delaware corporation, Defendant.

          Stephen M. Feldman, Perkins Coie LLP, Mitchell G. Stockwell, Kilpatrick Townsend & Stockton LLP, Matias Ferrario and Michael Morlock, Kilpatrick Townsend & Stockton LLP, Of Attorneys for Plaintiffs.

          Kenneth R. Davis II and Parna A. Mehrbani, Lane Powell pc, Mark A. Samuels, Brian M. Berliner, Andrea LaFountain, and Sina S. Aria, O'Melveny & Myers LLP, Cameron W. Westin, O'Melveny & Myers LLP, Of Attorneys for Defendant.

          OPINION AND ORDER GRANTING STAY

          Michael H. Simon United States District Judge.

         Plaintiffs adidas America, Inc. and adidas AG (collectively, “adidas”) bring this lawsuit against Defendant Skechers USA (“Skechers”) for patent infringement. Plaintiffs allege that Defendant's “Mega Blade 2.0” and “Mega Blade 2.5” shoes (collectively, the “Mega Blade shoes”) infringe Plaintiffs' United States Patent Nos. 9, 339, 079 (the “'079 patent”) and 9, 345, 285 (the “'285 patent”) (collectively, the “patents-in-suit”). Defendant has filed five petitions with the United States Patent and Trial Appeals Board (“PTAB”) requesting that the PTAB conduct an inter partes review (“IPR”) of all patent claims asserted in the patents-in-suit. On April 26, 2017, the PTAB instituted IPR in response to the first two petitions and scheduled trial (i.e., oral argument) before the PTAB on January 8, 2018. On May 30, 2017, the PTAB declined to institute IPR on the third and fourth of the five petitions. A decision from the PTAB on whether to institute IPR on the fifth petition is due August 27, 2017. Defendant moves for an order from this Court staying the litigation pending the PTAB's final resolution of all instituted IPR proceedings related to the patents-in-suits. For the reasons that follow, the Court grants Defendant's motion to stay.

         STANDARDS

         A. Inter Partes Review

         The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125 Stat. 284 (2011) (codified in various sections of Title 35 of the United States Code), was enacted to improve and replace, among other things, the former inter partes reexamination proceeding with a new IPR proceeding and post-grant review. One of the goals of the new IPR proceeding is “to minimize duplicative efforts by increasing coordination between district court litigation and inter partes review.” Wonderland Nursery Goods Co. v. Baby Trend, Inc., 2015 WL 1809309, at *1 (C.D. Cal. Apr. 20, 2015).

         Under the AIA, any “person who is not the owner of a patent may file with the [PTAB] a petition to institute an inter partes review of the patent.” 35 U.S.C. § 311(a). Petitioners “may request to cancel as unpatentable 1 or more claims of a patent only on a ground that could be raised under section 102 or 103 [relating to invalidity of the patent or any claim on the basis of prior art].” Id. § 311(b). Before it may institute IPR, the PTAB must determine that the petition presents “a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” Id. § 314(a). If IPR is instituted, the petitioner has the burden of proving lack of patentability by a preponderance of the evidence. Id. § 316(e).

         The current IPR timeline is more compressed than the timeline under its predecessor inter partes reexamination procedure.[1] After an IPR petition is filed, the patent owner may, within three months, file a preliminary response “setting forth the reasons why no inter partes review should be instituted.” 37 C.F.R. § 42.107(a). Alternatively, the patent owner may expedite the proceeding by waiving the preliminary response. Id. § 42.107(b). The PTAB must decide whether to institute IPR within three months from when the patent owner's preliminary response is due. 35 U.S.C. § 314(b). The PTAB must issue a final decision within one year from granting IPR, with the possibility of one six-month extension on a showing of good cause. Id. § 316(a)(11); Id. § 318(a). A dissatisfied party may appeal the PTAB's decision to the Court of Appeals for the Federal Circuit. Id. § 141(c). If the PTAB issues a final written decision and the time for appeal has expired or any appeal has terminated, the PTAB “shall issue and publish a certificate canceling any claim of the patent finally determined to be unpatentable [and] confirming any claim of the patent determined to be patentable.” Id. § 318(b).

         B. Motion to Stay

         A court's “power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936); Murata Mach. USA v. Daifuku Co., Ltd., 830 F.3d 1357, 1361 (Fed. Cir. 2016) (“The ability to stay cases is an exercise of a court's inherent power to manage its own docket.”). In deciding how best to exercise this inherent power, the court “must weigh competing interests and maintain an even balance.” Landis, 299 U.S. at 254-55. With regard to deciding whether to stay litigation pending IPR, courts generally consider the following three factors:

1. whether discovery is complete and whether a trial date has been set;
2. whether a stay will simplify the issues in question and trial of the case; and
3. whether a stay would unduly prejudice or present a clear tactical disadvantage to ...

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