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Drink Tanks Corp. v. Growlerwerks, Inc.

United States District Court, D. Oregon

June 19, 2017

DRINK TANKS CORPORATION, Plaintiff,
v.
GROWLERWERKS, INC., Defendant.

          Timothy S. DeJong and Jacob S. Gill, Stoll Berne Lokting & Shlachter PC, 209 SW Oak Street, Fifth Floor, Portland, OR 97204; Craig R. Smith, Eric P. Carnevale, and William J. Seymour, Lando & Anastasi LLP, Riverfront Office Park, One Main Street, 11th Floor, Cambridge, MA 02142. Of Attorneys for Plaintiff.

          Sean D. O'Brien, Kevin S. Ross, and Alex C. Johnson, Marger Johnson, 888 SW Fifth Avenue, Suite 1050, Portland, OR 97204. Of Attorneys for Defendant.

          OPINION AND ORDER

          MICHAEL H. SIMON UNITED STATES DISTRICT JUDGE.

         Plaintiff Drink Tanks Corporation (“Drink Tanks”) brings this lawsuit against Defendant GrowlerWerks, Inc. (“GrowlerWerks”) for patent infringement. Drink Tanks alleges that GrowlerWerks manufacturers, uses, sells, offers to sell, or imports beverage containers that infringe Drink Tanks's United States Patent No. 9, 156, 670 (“the '670 patent”). Before the Court is GrowlerWerks' Renewed Motion to Stay Litigation Pending Completion of Inter Partes Review (“IPR”) of sixteen out of the nineteen claims of the '670 patent, instituted on February 22, 2017 by the United States Patent and Trials Appeal Board (“PTAB”). For the following reasons, the Court grants GrowlerWerks's motion.

         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 following 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).

         Although IPR “may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent[, ]” a petitioner's “counterclaim challenging the validity of a claim of a patent does not constitute [such an action].” Id. § 315(a)(1), (3). After IPR concludes with a final written decision, the petitioner is estopped from asserting that a patent claim is invalid “on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” Id. § 315(e).

         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). In deciding how best to exercise this inherent power, the court “must weigh competing interests and maintain an even balance.” Id. at 254-55. In deciding whether to stay litigation pending IPR, district courts typically consider the following three factors: “(i) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (ii) whether a stay will simplify the issues in question and trial of the case; and (iii) whether discovery is complete and whether a trial date has been set.” Murata Mach. USA v. Daifuku Co., Ltd., 830 F.3d 1357, 1361 (Fed. Cir. 2016) (citation and quotation marks omitted). Courts also look to whether “the outcome of the reexamination [or IPR] would be likely to assist the court in determining patent validity and, if the claims were cancelled in the reexamination [or IPR], would eliminate the need to try the infringement issue.” Wonderland Nursery Goods, 2015 WL 1809309, at *2 (quoting In re Cygnus Telecomms. Tech., LLC, Patent Litig., 385 F.Supp.2d 1022, 1023 (N.D. Cal. 2005)).

         Courts apply a “liberal policy in favor of granting motions to stay proceedings pending the outcome of . . . IPR proceedings.” Semiconductor Energy Lab. Co. v. Chimei Innolux Corp., 2012 WL 7170593, at *4 (C.D. Cal. Dec. 19, 2012). Nonetheless, “the totality of the circumstances governs, ” Wonderland Nursery Goods, 2015 WL 1809309, at *2 (quoting Universal Elecs., Inc. v. Universal Remote Control, Inc., 943 F.Supp.2d 1028, 1031 (C.D. Cal. May 2, 2013)), and “a stay is never required.” Wonderland Nursery Goods, 2015 WL 1809309, at *2. Whether “to grant a stay falls within the court's sound discretion.” CANVS Corp. v. United States, 118 Fed.Cl. ...


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