The Law of District Court Stays for USPTO Proceedings
| Author | Jonathan Stroud |
| Pages | 26-63 |
Published in Landslide, Volume 14, Number 1, 2021. © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or
any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
26
Federal Article III judges may stay civil litigation. They generally
do so either incident to their inherent power to control their own
dockets1 or via congressional prescription.2 Stays are appropriate
when another court or authority may resolve a part of or the entire
dispute before the rigors of a trial; as it stands, court dockets are
crowded with criminal and civil federal and state matters, and judges
must conserve limited judicial resources where cases are likely to
be resolved or streamlined and doing so accrues no undue prejudice.
Some statutes, as well as some district court case law and appellate
precedent, guide the courts on when to stay. But the interlocutory
nature of such decisions makes precedential decisions scarce.
The Patent Trial and Appeal Board (PTAB), an administrative body
tasked with patent post-grant review, reviews most issues of patent-
ability cheaply compared to district court review, and challenges can
estop later validity arguments. So too does the Central Reexamina-
tion Unit (CRU) launch ex parte reexaminations that often streamline
or resolve disputes between ersatz litigants. Stays for these proceed-
ings are particularly favored.
The Law of
District Court
Stays for USPTO
Proceedings
By Jonathan Stroud
Image: GettyImages
Published in Landslide, Volume 14, Number 1, 2021. © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or
any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
26
27
Jonathan Stroud is chief IP counsel at Unied Patents Inc. He can
be reached at jonathan@uniedpatents.com.
So it is welcome that Federal Circuit Judge Bryson, sit-
ting by designation in various district courts, has provided the
most comprehensive guidance on how to employ the factors,14
for both inter partes reviews (IPRs) and ex parte reexami-
nations, from the beginning of the America Invents Act’s
(AIA’s) application to today. He has collected cases and syn-
thesized rules and notes that, among the many district court
cases in which contested stays have been requested, there
have been upward of 60 decisions applying the factors as the
dominant legal framework for applying the judicial discretion
to decide whether to stay a case.15
In NFC Technology LLC v. HTC America, Inc. in 2015,16
for instance, Judge Bryson exhaustively cataloged the appro-
priateness of stays in light of IPRs.17 He refreshed that
difcult, detailed work in 2019 in Cywee Group Ltd. v. Sam-
sung Electronics Co. Ltd.,18 and capped off those efforts with
an opinion, sitting by designation the District of Delaware,
that collects stays in light of ex parte reexaminations and
applies the same stay analysis in that context, analyzing in
detail the facts particular to that type of proceeding, in British
Telecommunications PLC v. IAC/InterActiveCorp.19 Anyone
applying for, opposing, or writing about district court stay
motions for parallel proceedings should read them carefully.
The synthesized rules of reason laid down by Judge Bryson
in all three are compelling, persuasive, and exhaustively
researched; they are also being ignored by the nation’s busi-
est patent judge.
After extensively researching the landscape of district
court orders deciding stay motions in patent cases, Judge
Bryson laid out appropriate applications of the stay power
and the application of facts to the three factors. Initially, a
stay is particularly justied when “the outcome of a PTO
proceeding is likely to assist the court in determining patent
validity or eliminate the need to try infringement issues.”20 As
to the factors as properly applied, he nds “the most impor-
tant factor bearing on whether to grant a stay in this case
is the prospect that the inter partes review proceeding will
result in simplication of the issues before the Court,”21 that
is, factor one of most judicial opinions on stays. For factor
two, he has found that where petitions are led four to seven
months after the ling of a complaint, they are generally
reasonable, early, and likely to simplify the case.22 For fac-
tor three, the courts have generally recognized that, while a
USPTO action may result in a delay of the case, that “omni-
present potential for delay does not alone sufce to establish
the prejudice needed to deny a stay,” and as “granting inter
partes review probably results in an even higher likelihood
than under the prior standard that the issues in [an] action
will be simplied by the reexamination,” courts are careful to
realize that prejudice cannot be found through the mere act
of ling a challenge.23 These considerations apply with equal
force to ex parte reexaminations.24 The law of stays, and the
written opinions that normally follow, all apply a judge’s dis-
cretion against the backdrop of these reasonable decisions
based on case-specic reasoning.
One senior appellate judge from the U.S. Court of Appeals
for the Federal Circuit, sitting by designation, has for almost
a decade been issuing authoritative orders on stays for U.S.
Patent and Trademark Ofce (USPTO) proceedings, at least
twice in the Eastern District of Texas and recently in Del-
aware, where he has exhaustively compiled district court
stay cases and offered a guide for other judges faced with
determining whether to stay.3 Those cases outline the clear
contours controlling the judicial exercise of discretion sur-
rounding motions to stay and are applicable in all of the U.S.,
as dictated by the Federal Circuit and as applied by the vari-
ous district courts. Judges who ignore those cases or fail to
weigh those factors in written opinion risk running afoul of
reviewing courts and their brethren below.
The Law of Stays
A federal court has the power to stay litigation in a patent
infringement case pending the USPTO’s review of the patent,
as noted both above and elsewhere,4 under its inherent docket
control authority.5 The courts have concluded there are three
factors judges look to in determining whether to grant a stay
in light of a USPTO proceeding:
1. whether the stay will simplify issues at trial,
2. whether discovery is complete and a trial date is set,
and
3. whether a stay will unduly prejudice the nonmoving
party.6
The formulation of the as-applied test can vary slightly, the
substance should not, and it has been endorsed by the Federal
Circuit and by nearly every other district court judge who has
ruled on a contested motion.
In VirtualAgility Inc. v. Salesforce.com, Inc.,7 the Federal
Circuit applied these factors in reviewing a denial of a stay
for a USPTO review. The court was careful to apply the abuse
of discretion standard and found such an abuse there.8 As the
U.S. Supreme Court notes, there is “good authority that ‘a
motion to [a court’s] discretion is a motion, not to its incli-
nation, but to its judgment; and its judgment is to be guided
by sound legal principles.’”9 The same goes for a court’s
“belief.”10 The application of the court’s discretion includes
adherence to the sound legal principles and judgments out-
lined by the hundreds of district court orders that have issued
before them, as guided by their appellate and sister courts.
Discretion cuts a channel.
Even so, given the interlocutory nature of stay orders, the
practical opportunities for an appellate court to review lower
courts on the issue are vanishingly small.11 True, the writ of
mandamus is available, but the court has admonished that it
“is not to be used as a substitute for appeal.”12 But it is of use
“when there is ‘usurpation of judicial power’ or a clear abuse
of discretion.”13 And it is also appropriate where there can be
no appellate review absent certication—such as interlocu-
tory issues of docket control like the granting of stay motions,
which have serious and wide-ranging consequences in heav-
ily traveled districts. Nonetheless, mandamus review is an
extraordinary remedy, and the Federal Circuit has had and
will have little chance to comment on the actions (or inac-
tions) of district court judges.
Published in Landslide, Volume 14, Number 1, 2021. © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or
any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
Published in Landslide, Volume 14, Number 1, 2021. © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or
any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
28
The Nation’s Busiest Patent Docket
The Western District of Texas has quickly become the lead-
ing patent litigation venue in the U.S., receiving a deluge of
almost a thousand patent cases in 2020, a year district court
lings were down nationally.25 It is still rising. Plaintiffs now
le one-quarter of all U.S. patent cases in the Western District
of Texas.26 To be precise, 233 of the 937 new U.S. district
court patent cases were assigned to a judge in the Western
District during the rst quarter of 2021;27 in comparison, in
all of 2016 and 2017 combined, 120 patent cases were led in
the Western District.28
That volume is due to one judge—Alan Albright of the
Waco Division, a single-judge division in Western Texas. As
the sole judge sitting in the Waco Division, Judge Albright
has transformed the dockets overnight from minuscule
to seemingly unmanageable. Indeed, according to Judge
Albright himself, he has upward of 1,200 cases on his docket
as recently as May 2021,29 far up in a pandemic year when
judicial caseloads dropped substantially.30 This is far in excess
of the Judicial Conference’s recommended 400 weighted
cases31 and means he has brought one of the nation’s heaviest
dockets to Waco.
And it is widely known that Judge Albright appeals to
patent plaintiffs through his professed reluctance to stay liti-
gation.32 He has “publicly stated that he will not stay cases
pending the outcome of [IPRs] absent special circumstances,
as he believes that patent owners deserve jury trials in fed-
eral court.”33 In just one of many examples, a law rm posted
a recorded video of Judge Albright explaining his “general
approach on rulings on motions to stay”: “If the case is led,
and after the case is led there is an effort to institute the IPR
. . . in those situations, I almost will never stay my case because
my trial will happen before the resolution of the IPR.”34
According to the Docket Navigator database, there appear
to be no grants of contested stay motions by Judge Albright—
though there do appear to be grants of contested stay motions
by some of his colleagues in the Western District of Texas
during the same time frame, all under similar rules and con-
straints. In the span from 2019 through 2021, it appears that
Judge Albright has denied every contested motion to stay
in view of PTAB proceedings. The only grants uncovered
resulted from joint or unopposed motions to stay.
Including consolidated cases, Judge Albright has denied
at least six contested motions for stay in view of PTAB pro-
ceedings and granted at least 10 joint/uncontested motions.
The orders denying contested motions are generally short and
rely on Judge Albright’s strong belief in the Seventh Amend-
ment35 rather than any of the guiding case law or the legal test
outlined above. More often, though, they are mere text orders
denying the motions for reasons stated at the hearing36—
or there is no order and no ruling at all in cases where one
would make sense, because either the parties were told not to
le orally or were apparently discouraged from doing so. And
this is just in the six the parties had the temerity to le.
Judge Albright’s zero-for-six record contrasts with a
nationwide average of roughly 60 percent of contested
motions for both IPRs and the slower ex parte reexamina-
tions, and almost 80 percent for motions in general, a number
that is on the rise since SAS Institute streamlined IPR institu-
tion decisions.37
It also contrasts with other judges in the Western District
of Texas. Despite having a tiny fraction of Judge Albright’s
patent docket, these judges have granted contested stay
motions in multiple cases in that same time frame.38 And his
professed reason—the fast time to trial—sits at around 24
months for the seven trials he has had to date—six months
longer than his aggressive scheduling orders, and promising
to grow longer, as many more of his patent matters look as if
they will go to trial this year.
Prejudgment and Discretion
Judge Albright has commented on this issue of stays in state-
ments to the press, to members of the bar practicing before
him, and in court. He has made clear that he relies on his
extant beliefs and feelings when doing so.39 And while no
judge is a tabula rasa—nor should be—prejudgment before
considering the parties’ circumstances before the court is
unusual and could affect a fourth of all patent cases led in
the U.S. annually.
To be sure, judges have broad discretion to manage their
own dockets and have freedom to exercise that discretion,
albeit soundly, on record, and within the connes of the law.
It is the power inherent in Article III courts and in the impor-
tance of their roles in the federal judiciary. And we should
be careful before we cast stones and give them wide latitude
to fulll their constitutional duties. Sensing this, reviewing
courts have always sought to avoid internecine battles among
the judges where possible, and should, as lifetime appoint-
ments have long memories, and a conservative approach is
generally best. But there are extreme cases, and this seems
one of them. At least in the court of public opinion, it is clear
where this particular court—with well over a quarter of all
U.S. patent cases—will rule. n
Endnotes
1. See Landis v. N. Am. Co., 299 U.S. 248, 254 (1936) (nding
that this docket control power necessarily implies that district courts
also have the ability to modify or lift a stay if it is no longer deemed
efcient or equitable); see also Clinton v. Jones, 520 U.S. 681, 706
(1997) (“The [d]istrict [c]ourt has broad discretion to stay proceed-
ings as an incident to its power to control its own docket.” (citing
Landis, 299 U.S. at 254)).
2. See, e.g., 28 U.S.C. § 1659 (“Stay of certain actions pending
disposition of related proceedings before the United States Inter-
national Trade Commission”); 9 U.S.C. § 3 (“Stay of proceedings
where issue therein referable to arbitration”); 35 U.S.C. § 315(a)
(automatic stays of declaratory judgment actions in light of IPRs).
3. NFC Tech. LLC v. HTC Am., Inc., No. 2:13-CV-1058-WCB,
2015 WL 1069111, at *2 (E.D. Tex. Mar. 11, 2015); British Telecomms.
PLC v. IAC/InterActiveCorp, No. 18-366-WCB, slip op. at 10–20 (D.
Del. Sept. 11, 2020); Cywee Grp. Ltd. v. Samsung Elecs. Co. Ltd., No.
2:17-cv-00140, slip op. at 7–20 (E.D. Tex. Feb. 14, 2019).
Published in Landslide, Volume 14, Number 1, 2021. © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or
any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
28
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