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Judge Nathan Grants Stay Pending Appeal of PTAB’s Inter Partes Review Decisions

On October 18, District Judge Alison J. Nathan (S.D.N.Y.) granted defendants Verizon Communications Inc.’s, Verizon Services Corp.’s, Verizon Business Network Services Inc.’s, and Cellco Partnership’s (collectively, “Verizon”) motion to stay the litigation until resolution of a consolidated appeal, pending before the United States Court of Appeals for the Federal Circuit, from two decisions of the United States Patent and Trademark Office’s Patent Trial and Appeal Board (“PTAB”) following inter partes review of claims in two of the patents-in-suit.

Judge Nathan noted that courts in this district consider three factors in determining whether a stay is appropriate: (1) whether a stay will simplify the issues in question and trial of the case; (2) the stage of the proceedings; and (3) whether a stay will prejudice the nonmoving party.

Regarding the first stay factor, the court concluded that a decision by the Federal Circuit, regardless of which side such decision favors, is likely to carry at least some streamlining benefits, whether because causes of action are reduced in their scope or foreclosed entirely or because the contours of the infringement inquiry are sharpened by the Federal Circuit’s application of its claim constructions to the prior art.

Regarding the second stay factor, the court noted that the case is in its infancy. No discovery has been taken and neither a claim construction hearing nor a trial has been scheduled.

Regarding the third stay factor, the court concluded that a stay will not be prejudicial. While plaintiff Straight Path IP asserted that a delay of trial would work harm to its business, the court noted that it did not explain or support such assertion. Straight Path IP is a patent licensing and enforcement firm, and thus, not a direct competitor of Verizon. Additionally, several of the patents-in-suit had already expired. Accordingly, the court concluded, monetary damages would be sufficient to compensate Straight Path IP for any ongoing infringement by Verizon.

Case: Straight Path IP Group, Inc. v. Verizon Comms. Inc. et al., No. 1:16-cv-04236-AJN (S.D.N.Y. Oct. 18, 2016).