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Solutran, Inc. v. U.S. Bancorp

United States District Court, D. Minnesota

December 19, 2018

Solutran, Inc., Plaintiff,
v.
U.S. Bancorp and Elavon, Inc., Defendants. U.S. Bancorp and Elavon, Inc., Counter-Claimants,
v.
Solutran, Inc., Counter-Defendant.

          Robert J. Gilbertson, David J. Wallace-Jackson, and Sybil Dunlop, Greene Espel PLLP, for Plaintiff and Counter-Defendant.

          Peter M. Lancaster, Ben D. Kappelman, and Kenneth E. Levitt, Dorsey & Whitney LLP, and J. Thomas Vitt, Jones Day, for Defendants and Counter-Claimants.

          MEMORANDUM OPINION AND ORDER

          SUSAN RICHARD NELSON, UNITED STATES DISTRICT JUDGE

         For the following reasons, the Court grants in part U.S. Bank's request for a stay of permanent injunction pending appeal. As detailed below, the injunction will not take effect until March 31, 2019.

         I. BACKGROUND

         On December 11, 2018, the Court issued an order ruling on the parties' various post-trial motions. (See Doc. No. 447 (“Order”).) Of note, after finding that the four considerations detailed in eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006), weighed in Solutran's favor, the Court granted Solutran a permanent injunction. (See id. at 61-68.) Specifically, the injunction bars U.S. Bank from continuing to use or sell electronic check processing services through its infringing “ECS-OSI” service, as of January 10, 2019, including to its ten current ECS-OSI merchant-clients. (Id. at 90.)

         On December 13, 2018, U.S. Bank filed an expedited motion for partial stay of permanent injunction pending appeal. (See Doc. No. 449.) Specifically, U.S. Bank requests that, during its appeal of this case to the Federal Circuit, the Court “permit[] U.S. Bank to continue servicing its existing, though not any additional, ECS-OSI customers.” (See U.S. Bank's Mot. in Support of Stay [Doc. No. 450] at 10 (“U.S. Bank Br.”).) In its brief accompanying the motion, U.S. Bank argues that (1) “there is a likelihood that [it] will succeed on appeal, because the case involves close questions that the Federal Circuit reviews de novo, ” (2) “numerous innocent third parties will be irreparably injured by an immediate injunction, ” i.e., U.S. Bank's current ECS-OSI merchant-clients, and their check-carrying customers, (3) “a stay [will not] injure Solutran” because Solutran “never sought preliminary injunctive relief in the six years since its patent issued and will be compensated for continued infringement, ” and (4) “the public interest favors a stay of an injunction” because the injunction will “affect tens of thousands of daily check transactions at merchants across the country.” (See generally id.) In an accompanying affidavit, U.S. Bank also notes that it would be particularly challenging for its clients to conform to this injunction in the next 30 days because Christmas and New Year's are “the busiest period of the year for many stores.” (See Cichoski Dec. [Doc. No. 451] ¶ 7.) Indeed, U.S. Bank adds, its “retail customers will not even entertain working on a project to change their check processing system at this time.” (Id. ¶ 12.)

         Solutran disagrees. In a brief filed on December 19, 2018, Solutran argues that (1) “U.S. Bank does not make a ‘strong showing' that it will ‘likely succeed' on appeal, ” in large part because the at-issue patent “survived § 101 scrutiny at both the PTAB and in this Court, ” (2) “the Court already weighed the relative harms of an injunction and found in Solutran's favor and U.S. Bank's invocation of the holiday rush does not change the outcome, ” and (3) “the public-interest considerations do not turn on whether or not a stay issues, ” because “U.S. Bank has not shown that the transitional pains [for its clients moving away from ECS-OSI], ” which this Court deemed surmountable in its Order, “would be any different whether the injunction takes effect in January, a month or two later, or after the potentially lengthy appeals process has come to an end.” (See generally Solutran's Br. in Opp. to U.S. Bank's Mot. for Stay [Doc. No. 455] (“Solutran's Br.”).)

         II. DISCUSSION

         1. The Law

          The Federal Rules provide that, “[w]hile an appeal is pending from a . . . final judgment that grants . . . an injunction, [a] court may suspend . . . [the] injunction.” Fed.R.Civ.P. 62(d).

         In considering whether to stay a permanent injunction pending appeal in a patent case, a court must consider four factors: (1) whether the applicant has made a strong showing he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether a stay will substantially injure the other party; and (4) the public interest. Hilton v. Braunskill, 481 U.S. 770, 776 (1987); Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511, 513 (Fed. Cir. 1990).[1] “Each factor . . . need not be given equal weight.” Standard Havens, 897 F.2d at 512. Instead, the court “assesses [the] movant's chances for success on appeal and weighs the equities as they affect the parties and the public.” Id. at 513 (quoting E.I. Dupont de Nemours & Co. v. Phillips Petroleum, 835 F.2d 277, 278 (Fed. Cir. 1987)). District courts are afforded “wide discretion” when addressing requests for stays pending appeal. See Amado v. Microsoft Corp., 517 F.3d 1353, 1358 (Fed. Cir. 2008).

         2. Analysis

         The Court finds that delaying the onset of the permanent injunction by approximately 90 days, until March 31, 2019, best protects the parties' competing interests. This is so for three reasons. First, although the Court acknowledges that its validity and non-infringement summary judgment decisions will be subject to de novo review, and that the Federal Circuit may disagree with this Court's rulings, U.S. Bank has not made the requisite “strong showing” that it will succeed on the merits of its appeal. Standard Havens Prods., 897 F.2d at 513. This is especially so given the prior PTAB and Federal Circuit rulings upholding the validity of the at-issue patent. (See Order at 5-6; compare with E.I. DuPont de Nemours & Co., 835 F.2d at 278 (finding that an appellant showed it was sufficiently likely to succeed on the merits of its appeal where “there [was] a conflict between the PTO Examiner's rejection of DuPont's claims as invalid in view of prior art and the district court's ruling of validity”).) Further, despite U.S. Bank's argument to the contrary, “de novo ...


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