Judge Thynge Recommends Denial of Stay Pending Reexamination

Magistrate Judge Thynge has issued a report and recommendation considering the defendant’s motion to stay pending inter partes reexamination in ImageVision.Net, Inc. v. Internet Payment Exchange, Inc., C.A. No. 12-054-GMS-MPT (D. Del. Sep. 4, 2012). Considering each of the three factors for issuing a stay, Judge Thynge concluded that the motion should be denied.

Judge Thynge first considered whether the timing and status of the litigation and the reexamination weighs against a stay. She noted the defendant’s argument that “the legally relevant inquiry considers not whether discovery has commenced, but rather whether discovery is complete and a trial date set.” She then found that the status of the litigation favored a stay because “[a]lthough initial discovery has begun and a scheduling order issued, ‘this case is still in its infancy, and the record is relatively sparse.’ No trial date has been set and discovery is not scheduled to be completed until July 19, 2013. [Plaintiff] does not demonstrate how the facts of this case weigh against a stay despite the obvious lack of significant discovery activity. As a result, the status of the litigation favors a stay.” Id. at 5-6.

Judge Thynge next considered whether a stay would simplify the issues in question and trial of the case. She pointed out that “[s]hould the PTO grant defendant’s reexamination request, many issues outside the purview of the reexamination would remain to be tried.” Finding that “the scope of the issues to be resolved during litigation substantially exceeds the scope of the issues that can be resolved during the reexamination proceedings,” Judge Thynge determined that this factor disfavored a stay. Id. at 6-8.

Finally, Judge Thynge considered whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party. In this regard, she first noted that “[a]lthough competition between two parties is not dispositive, ‘the relationship between the parties is ‘[o]f particular importance’ because ‘[c]ourts are generally reluctant to stay proceedings where the parties are direct competitors.’” Accordingly, “[t]he element of direct competition strongly favor[ed] denying [the] motion for a stay.” Id. at 8-10. Judge Thynge next found that a stay “would prejudice [the plaintiff] particularly” because the reexamination had only recently been filed and “this litigation would likely be completed far in advance of a decision on the last appeal in the reexamination proceeding.” Therefore, the “prejudice to plaintiff resulting from the status of the reexamination proceedings disfavors granting a stay.” Id. at 10. Because the parties in the case were direct competitors and the reexamination was in its earliest stages, Judge Thynge found that the prejudice factor favored a stay and concluded: “Weighing all considerations, the interests in proceeding with the litigation outweigh any basis for a stay in this action.” Id. at 12.

ImageVision.Net, Inc. v. Internet Payment Exchange, Inc., C.A. No. 12-054-GMS-MPT (D. Del. Sep. 4, 2012).

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