Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Telebrands Corp. v. Seasonal Specialties, LLC

United States District Court, D. Minnesota

February 23, 2018

Telebrands Corp., Plaintiff,
Seasonal Specialties, LLC, Defendant.



         This 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.

         I. BACKGROUND

         Seasonal 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.

         On May 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.]

         On July 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].)

         On 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].)

         With 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[1] 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].


         The 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., 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).

         In 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).

         A. Whether a Stay Would Unduly Prejudice Telebrands

         “Courts 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).

         Telebrands 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.[2] During that time, Telebrands contends, Seasonal would be able to compete against it using Telebrands' own technology. Even if it eventually prevailed in this ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.