United States District Court, D. Minnesota
BOWBEER, UNITED STATES MAGISTRATE JUDGE
matter is before the Court on Defendant Seasonal
Specialties' (“Seasonal”) Motion to Stay
Pending Reexamination of Patents [Doc. No. 34]. Seasonal
moves the Court to stay this patent infringement lawsuit
pending the resolution of reexamination and post-grant review
proceedings at the U.S. Patent and Trademark Office
(“Patent Office”) pertaining to U.S. Patent No.
9, 546, 775 (“the '775 patent”) and U.S.
Patent No. 9, 752, 761 (“the '761 patent”).
For the reasons set forth below, the Court grants the motion.
is a Minnesota company that develops, imports, and sells
decorative lighting products to retailers. (Fagerlee Decl.
¶ 2 [Doc. No. 11-2].) Telebrands is a New Jersey company
that also sells, among other things, decorative lighting
products. (Compl. ¶¶ 7-8 [Doc. No. 1].) On May 11,
2017, Telebrands filed a lawsuit in the District of New
Jersey alleging that Seasonal's Laser Motion product-a
device that projects light in decorative holiday patterns-
infringes Telebrands' U.S. Patent No. 9, 546, 775
(“the '775 patent”) and U.S. Design Patent
No. D773, 707 (“the D'707 patent”). (Compl.
¶¶ 23-37.) The '775 patent claims a decorative
laser light apparatus with two laser light sources.
(Pl.'s Ex. B at 30-48 [Doc. No. 1].) The D'707 patent
claims an ornamental design for a laser light with two light
sources. (Pl.'s Ex. A at 21-29 [Doc. No. 1].)
Telebrands' Star Shower line of products incorporates the
technology and designs covered by the patents.
26, 2017, a few weeks after Telebrands filed its patent
infringement suit, Seasonal filed its own suit in the
District of Minnesota seeking a declaratory judgment that its
activities did not infringe the Telebrands patents.
Complaint, Seasonal Specialties v. Telebrands, No.
17-cv-1768 (D. Minn. May 5, 2017), ECF No. 1. Seasonal also
moved to dismiss or transfer Telebrands' patent suit
against it from the District of New Jersey to the District of
Minnesota on the ground that Seasonal neither resided in nor
had a regularly established place of business in New Jersey.
[Doc. No. 11]. The Honorable Jose Linares granted the motion
and transferred the case to this Court. [Doc. No. 16.] The
two cases were subsequently consolidated into the instant
action. [Doc. No. 46.]
13, 2017, shortly after Telebrands filed the instant suit, a
third party filed a request in the United States Patent
Office for an ex parte reexamination of the '775
patent. (Merrill Decl. [Doc. No. 37].) The Patent Office
ordered reexamination on August 1, 2017, finding a
substantial new question of patentability as to all 25 claims
of the '775 patent. (Def.'s Ex. B at 4-5 [Doc. No.
37-2].) Seasonal then moved to stay the litigation in this
Court pending the completion of the reexamination proceedings
regarding the '775 patent [Doc. No. 34]. On October 31,
2017, Telebrands moved for leave to file an amended complaint
to add, inter alia, claims of patent infringement
relating to its recently issued '761 patent [Doc. No.
51]. Subsequently, on November 24, 2017, the Patent Office
ordered reexamination of the '761 patent, which had also
been requested by a third party. (Pl.'s Suppl. Mem.
Opp'n at 1 [Doc. No. 71].)
January 3, 2018, the undersigned heard arguments on
Seasonal's Motion to Stay and Telebrands' Motion to
Amend. (Hr'g Tr. [Doc. No. 66].) The day before the
hearing, Telebrands notified the Court of its intention to
seek leave to further amend its complaint to add claims
relating to its newly issued U.S. Design Patent No. D804, 083
(“the D'083 patent”) and U.S. Design Patent
No. D804, 715 (“the D'715 patent”). (Jan. 2,
2018 Letter [Doc. No. 59].) After providing Seasonal with the
opportunity to respond to Telebrands' oral motion, the
Court granted leave to add claims pertaining to the '761,
D'083, and D'715 patents and ordered Telebrands to
file its amended complaint by January 31, 2018. (Hr'g Tr.
at 44; Jan. 26, 2018 Order [Doc. No. 79].)
respect to the Motion to Stay, Seasonal argued at the hearing
that, in addition to the reasons cited in its briefing, the
Court should also stay the district court litigation while
the Patent Office considered petitions brought by third
parties seeking post-grant review of the '761 and '775
patents. Because Telebrands did not have an opportunity to
fully review and respond to this and certain other arguments
raised by Seasonal at the hearing, the Court permitted
supplemental written argument. [Doc. Nos. 71, 83].
Court has the power to stay proceedings in order to control
its docket, to conserve judicial resources, and to provide
for the just determination of cases that pend before it.
Clinton v. Jones, 520 U.S. 681, 706 (1997). The
party seeking to stay litigation bears the burden of showing
that such a course is appropriate. Landis v. N. Am.
Co., 299 U.S. 248, 255 (1936). District courts may, and
often do, stay patent litigation pending the conclusion of a
Patent Office reexamination or post-grant review, recognizing
that such a stay can serve judicial economy. VData, LLC
v. Aetna, Inc., Civil No. 06-1701 JNE/SRN, 2006 WL
3392889, at *6 (D. Minn. Nov. 21, 2006); VirtualAgility
Inc. v. Salesforce.com, Inc., 759 F.3d 1307 (Fed. Cir.
2014); see also Tinnus Enterprises, LLC v. Telebrands
Corp., No. 6:15-CV-551-RC-JDL, 2017 WL 379471, at *2
(E.D. Tex. Jan. 24, 2017); SZ DJI Tech. Co. v. Yuneec
Int'l Co., No. CV 16-0595-BRO (KKX), 2016 WL
9114148, at *2 (C.D. Cal. Dec. 1, 2016). Indeed, “it is
often prudent for a court to await the PTO's reassessment
of the patents at issue before resuming litigation over the
validity, enforceability or infringement of those
patents.” Card Tech. Corp. v. DataCard Corp.,
No. 05-cv-2546 (MJD/SRN), 2007 WL 2156320, at *4 (D. Minn.
July 23, 2007).
short, “a stay is usually warranted unless other
factors outweigh the potential benefits of awaiting the
outcome of reexamination.” Card Tech., 2007 WL
2156320, at *4. However, the “decision whether to grant
the stay is a matter for the discretion of the district
court.” Regalo Int'l, LLC v. DEX Prod.,
Inc., No. CIV 08-4206 ADM/AJB, 2009 WL 2951107, at *1
(D. Minn. Sept. 9, 2009). When evaluating a request to stay
litigation, district courts consider three factors: (1)
whether a stay would unduly prejudice or present a clear
tactical disadvantage to the non-moving party; (2) whether a
stay will simplify the issues in the litigation and
facilitate trial; and (3) whether discovery is complete and a
trial date is set. 3M Innovative Properties Co. v.
EnvisionWare, Inc., No. 09-1594 (ADM/FLN), 2010 WL
11537508, at *1 (D. Minn. Oct. 13, 2010).
Whether a Stay Would Unduly Prejudice Telebrands
may find a stay unduly prejudicial where the movant appears
to seek it for tactical advantage.” Ecolab, Inc. v.
FMC Corp., No. 05-CV-831(JMR/FLN), 2007 WL 1582677, at
*1 (D. Minn. May 30, 2007). However, delay by itself does not
constitute undue prejudice. Arctic Cat Inc. v. Polaris
Indus. Inc., No. CV 13-3579 (JRT/FLN), 2015 WL 6757533,
at *3 (D. Minn. Nov. 5, 2015); Card Tech., 2007 WL
2156320, at *6. Instead, “the key inquiry is whether 
delay would prejudice or tactically disadvantage the
non-moving party.” Arctic Cat Inc., 2015 WL
6757533, at *3. For instance, a party could be
unduly prejudiced if a lengthy stay results in the erosion of
evidence, such as witness memories of significant facts.
See Am. Med. Sys. v. Laser Peripherals, LLC, No. CV
08-4798 (JNE/FLN), 2010 WL 11537576, at *2 (D. Minn. Feb. 23,
2010). A patentee opposing a motion to stay may also suffer
undue prejudice if the parties are direct competitors and
delay would allow continued sales to erode market share.
Honeywell Int'l, Inc. v. Furuno Elec. Co., No.
CIV. 09-3601, 2010 WL 3023529, at *2 (D. Minn. July 30,
2010). On the other hand, the Court should take into account
that an award of monetary damages “can ameliorate
potential undue prejudice, especially where the non-moving
party has not explained why money damages are not an adequate
remedy.” Intellectual Ventures II LLC v. U.S.
Bancorp, No. CIV. 13-2071 ADM/JSM, 2014 WL 5369386, at
*5 (D. Minn. Aug. 7, 2014).
argues that a stay in this case would cause undue prejudice
that cannot be fully remedied by a monetary award. (Pl.'s
Suppl. Mem. Opp. at 6 [Doc. No. 71].) It points out that a
stay pending Patent Office review could significantly delay
the case. A stay pending reexamination could delay the case
up to five years, the average length of reexamination
proceedings and subsequent appeals. A stay pending post-grant
review could delay the case by at least a year and a half
(not counting appeals), according to statutory timelines.
See 35 U.S.C. §§ 324(c), 326(a)(11).
Moreover, Telebrands points out, the Patent Trial and Appeal
Board (PTAB) has not yet determined whether to institute
post-grant review on either petition. During that time, Telebrands
contends, Seasonal would be able to compete against it using
Telebrands' own technology. Even if it eventually
prevailed in this ...