Samsung Patent Case Stayed Pending PTO Proceedings

The Colorado District Court granted defendant Samsung’s motion to stay pending inter partes review and ex parte reexamination Tuesday, claiming that the factors heavily weigh in favor of granting the motion. Technology development company Cellect, asserted 11 patents and 56 claims against Samsung relating to “complementary metal-oxide semiconductor (‘CMOS’) image sensor technology” which is used in smartphones.

In February, Samsung filed “5 ex parte reexamination (‘EPR’) requests and 20 petitions for inter partes review (‘IPR’) with the” USPTO to look at the validity and patentability of the claims. Afterward, Samsung filed the motion to stay. The PTO granted all of Samsung’s EPR requests, covering 29 out of the 56 claims.

The court noted that the EPR and IPR process “will permit efficient resolution of requests about the validity of issued patents without recourse to expensive and lengthy infringement litigation.” A court must consider several factors, such as “(1) whether a stay will simplify the issues in question and streamline the trial; (2) whether discovery is complete and whether a trial date has been set; (3) whether a stay would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and (4) whether a stay will reduce the burden of litigation on the parties and on the court.”

Looking at the first factor of simplifying and streamlining trial, the court stated that “[b]ased on

Samsung’s EPR and IPR filings with the PTO, Cellect’s Asserted Claims face one or more of the following fates: they (1) survive intact because they are not examined or reviewed because Samsung’s requests for EPR and IPR are denied; (2) survive intact on their merits following reexamination or review; (3) are cancelled; or (4) are narrowed by amendment.” Since the PTO has granted all of Samsung’s EPR requests, the PTO will review at least 29 out of the 56 claims. The court added that as a result, “it is inevitable that, in some way any trial will be simplified by a stay of proceedings.” Further, as a result of this examination, the court will “gain valuable expert insight as to the issues underlying claim validity.” Any of the possible outcomes from the PTO will help streamline the trail, the court said.

The court considered the status of discovery and date for trial; looking at if discovery has been completed, a trial date has been set, and other aspects such as summary judgment arguments and final pretrial order status. In this case, the parties “have served requests for production and interrogatories, with each fulfilling such requests.” They have also “filed a Joint Disputed Claims Terms Chart” and Samsung filed “its opening Claim Construction Brief.” The court added that “[l]ittle else of substance has happened,” noting that the proceedings “have been delayed by several motions.” As a result, the court states that it is unlikely that fact discovery will be finished until the end of 2020 and expert discovery to finish in early 2021. Additionally, no trial date has been set.

The court also looks at if a stay would unduly prejudice the nonmoving party. For this the court must consider “(1) whether a delay caused by a stay of proceedings unduly prejudices the remedy to which the nonmoving party is entitled, and (2) whether the movant unfairly gains a tactical advantage from any stay granted.” The court found that it does not believe that Cellect will be unduly prejudiced by this motion to stay or that the motion “would create a strategic advantage for Samsung.”

Specifically, the court adds that courts “frequently find that mere delay caused by IPR is not prejudicial.” In this instance, the asserted patents are now expired, thus “Cellect’s requested remedy of damages is, therefore, capped at amounts determined b any pre-expiration infringements of any claims that survive IPR, EPR, or review in court.” Consequently, the requested relief is not unduly prejudiced by a delay from a stay of the proceedings. The court states that IPR actually “provides a more efficient and timely resolution to disputes of patent validity than can be achieved by litigation.” Cellect claims that “a stay is prejudicial because it wishes to pursue claims for infringement against other alleged infringers, but that it can proceed in only one case at a time due to its limited resources.” However, the court again notes that this PTO review might not take longer than the court proceedings, and in fact may be quicker on top of the court potentially gaining the PTO’s expert findings. Additionally, since Cellect and Samsung do not directly compete, this eliminates an argument that Cellect could be prejudiced in a way difficult to quantify or render monetary damages.

 In determining if Samsung gains a “tactical advantage” from a stay, the court examined the timings of Samsung’s filings to the PTO, which was towards the end of the one-year statutory period; noting that some courts permit this timing and others view it as an attempt to gain a tactical advantage. The court stated that while the suit was fined in February, Samsung did not receive a finalized list of Asserted Claims until December, therefore it only had approximately three months to file the 22 IPRs to the PTO, thus any tactical advantage cannot be attributed to Samsung because of this delay. The court concluded that these two factors do not weigh against granting the motion.

The court grants Samsung’s motion to stay because the four factors the court must consider heavily weigh in favor of granting the motion to stay.

Samsung is represented by Arnold & Porter Kayer Scholer, as well as Ropes & Gray LLP. Cellect is represented by Kramer Levin Naftalis & Frankel, LLP and The Eichner Law Firm.