Judge Sleet Denies Motions to Dismiss, Grants Motions to Stay Pending IPR

Judge Sleet recently considered two patent infringement defendants’ motions to dismiss for failure to state a claim and lack of subject matter jurisdiction as well as motions to stay pending inter partes review. His Honor denied the motions to dismiss, explaining that “[Defendants] ask too much of [plaintiff] at this stage, and would require that [plaintiff] identify each claim element that is practiced by the accused products. The burden of pleading is not so high.” Message Notification Technologies LLC v. Microsoft Corp., et al., C.A. Nos. 13-1881-GMS, 13-1883-GMS, Order at 2-3 n.3 (D. Del. Feb. 23, 2015). Furthermore, the operative complaints were filed prior to the Supreme Court’s decision in Limelight Networks, Inc. v. Akamai Technologies, Inc., so although “it appears several of [plaintiff’s] statements rested on the assumption that ‘divided infringement’ was a viable route to liability[, defendants] will have the opportunity to test [plaintiff’s] allegations through summary judgment, but only after [plaintiff] is allowed discovery.” Id. Judge Sleet also rejected the subject matter jurisdiction argument, finding that the plaintiff adequately plead ownership of the patent-in-suit and thus had standing. Id.

However, Judge Sleet granted defendants’ motions to stay due to a lack of undue prejudice, potential simplification of issues, and the stage of the case: “It is true that [defendant] filed its petition seeking IPR review on the eve of its one-year deadline. . . . Although this delay would typically suggest prejudice or tactical advantage, in this case, the court has not yet entered a schedule.” Id. at 3 n.4. Furthermore, because the PTAB institutes review in the majority of IPR petitions, Judge Sleet did “not consider the fact that the [PTAB] has not yet decided to institute review of Microsoft’s petition to be of great moment,” and the plaintiff “is a non-practicing entity, without competing products, thus minimizing the risk of harm.” Id. Finally, the defendant that filed the IPR “is statutorily estopped from re-litigating issues decided by the PTAB, and [the non-IPR defendant] has stipulated to be similarly estopped. Thus, there is no danger of duplicative litigation.” Id.

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