Apple, Nike Motion to Stay Denied by Judge Wilken

| May 17, 2011

日本語版

In an increasing number of District Courts, an accused infringer must act quickly if it wants to stay its case pending completion of a reexamination proceeding. For instance, on Friday, Judge Claudia Wilken of the Northern District of California denied defendants’ motion to stay in Affinity Labs v. Nike and Apple, 2011 U.S. Dist. LEXIS 51665, citing defendants’ delays in requesting reexamination and in filing their stay motion.

Affinity sued Nike and Apple in the Eastern District of Texas in February 2010, accusing the companies of infringing two patents related to systems for monitoring athletic performance (e.g., pedometers).  Defendants’ motion to transfer to California was granted November 4, and 11 days later, Apple requested inter partes reexamination of the patents-in-suit.  Reexamination of one patent was granted on January 18, 2011, and a rejection issued the next day; for the second patent, both a grant of reexamination and a rejection issued on January 20, 2011.  On March 22, Apple and Nike moved to stay the District Court case pending completion of the case.

Judge Wilken began her analysis of the motion by reciting the uniformly applied three-part test: the stage of the litigation, whether reexamination would simplify the issues to be tried, and whether the stay would prejudice the non-moving party or was requested by the moving party to obtain a tactical advantage.  First, the Judge acknowledged that the case was in its early stages, favoring a stay.  With respect to simplification, she noted that the result of the inter partes reexamination would be legally binding on the requestor Apple and that Nike had voluntarily agreed to be bound by the result.  Still, she stated that “it is unlikely that the reexamination proceeding will resolve all of the issues,” and in view of “the uncertainty about whether reexamination will actually simplify the issues in this case, this factor is neutral.”

For Judge Wilken, the third factor – possible prejudice to the patentee Affinity – was crucial.  She noted that “Apple [had] waited nine months after Affinity filed the present suit before requesting the reexaminations” and that Apple and Nike had waited two months from the grant of the reexaminations to request a stay.  Because of these delays, Judge Wilken concluded that a “stay may prejudice Affinity’s ability to enforce and license its patents, and could lead to a loss of evidence.”  She therefore denied the stay motion.

It is noteworthy that Judge Wilken relied on prejudice to Affinity, even without a finding that it and the defendants were direct competitors.  Clearly, she believed that Apple and Nike, by not requesting reexamination and filing their motion more quickly, had unnecessarily delayed resolution of the dispute.  Defendants should take note.

Category: Stays/District Courts

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