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Judge Briccetti Stays Patent Case Against a Customer Pending Resolution of Lawsuit Against Supplier

On June 3, 2016, District Judge Vincent L. Briccetti (S.D.N.Y.) stayed a patent infringement action brought by plaintiff Marine Travelift (“Marine”) against defendant K. Graefe & Sons Corp. (“Graefe”), pending the resolution of patent litigation between Marine and ASCOM in the United States District Court for the Eastern District of Wisconsin. Marine’s infringement allegations against Graefe were based on Graefe’s purchase of equipment from ASCOM, and both cases involved Marine’s allegations of infringement of its U.S. Patent No. 8,215,441 (“the ’441 patent”). By the time Marine filed suit against Graefe, the case against ASCOM had already reached the summary judgment stage.

The Court explained that the following five factors are to be considered in deciding whether a stay is appropriate: (1) the private interests of the plaintiffs in proceeding expeditiously with the civil litigation as balanced against the prejudice to the plaintiffs if delayed; (2) the private interests of and burden on the defendants; (3) the interests of the courts; (4) the interests of persons not parties to the civil litigation; and (5) the public interest.

The Court found that the relevant factual evidence is nearly identical in both cases. Further, the Court explained, if the Wisconsin court were to grant summary judgment of invalidity and/or non-infringement of the ’441 patent to ASCOM, then it would be highly likely that Marine would be collaterally estopped from pursuing its case against Graefe. Thus, to begin discovery in the present case would risk wasting resources on claims that Marine may eventually be estopped from asserting.Judge Briccetti Stays Patent Case Against a Customer Pending Resolution of Lawsuit Against Supplier

The Court further explained that ASCOM, as the manufacturer of the boat hoists, is better suited to defend its case than is Graefe, an end-user customer. The “customer-suit” doctrine provides that a later-filed suit between a patentee and a manufacturer will take precedence over an earlier-filed suit against a customer or end-user. The Court found that, although the doctrine is not directly applicable to the present procedural posture, its guiding principles of efficiency and judicial economy suggest that the Wisconsin case should take precedence over the present case, even if the public interest factor weighs in favor of the present case progressing.

Case: Marine Travelift, Inc. v. K. Graefe & Sons Corp., No. 7:16-cv-02068-VB, 2016 U.S. Dist. LEXIS 73168, 2016 BL 179141 (S.D.N.Y. June 3, 2016). The patent-in-suit is U.S. Patent No. 8,215,441.