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Magistrate Judge Pollak Recommends Granting Motion to Stay Pending Inter Partes Review

On September 12, 2018, Magistrate Judge Cheryl Pollak issued a report recommending that defendants Quest USA Corp.'s and Isaac Srour's (collectively, "Defendants") motion for a stay pending inter partes review ("IPR") be granted.

Plaintiff PopSockets LLC ("PopSockets") accused Defendants of infringing PopSockets' patent, U.S. Patent No. 8,560,031 ("the '031 patent"), directed to cases for portable, personal electronic devices, as well infringing its copyrights and trademarks.  A brief summary of the procedural history is as follows:

  • On December 8, 2017, PopSockets served its initial Infringement Contentions, asserting claims 9-11, 16, and 17 of the '031 patent.
  • On January 15, 2018, Defendants filed a petition with the Patent Trial and Appeal Board ("PTAB") seeking IPR of all of PopSockets' originally asserted patent claims.
  • On January 31, 2018, PopSockets served its Supplemental Infringement Contentions in which it asserted new patent claims.
  • On May 15, 2018, Defendants filed a motion to stay the litigation pending a decision from the PTAB on the first IPR petition.
  • On June 21, 2018, Defendants filed a second IPR petition, seeking to cancel claims 1-3 and 6 of the '031 patent in view of other, non-cumulative prior art.
  • On August 13, 2018, the PTAB instituted IPR of the patent claims challenged in the first IPR petition.

Judge Pollak evaluated the stay motion under the three-factor test commonly employed by Courts to determine whether a stay is appropriate. First, the Judge found that the issues would likely be simplified by the IPR proceedings, agreeing with Defendants that a stay would be of "invaluable assistance" to the Court. Over PopSockets' argument that its copyright and trademark infringement claims would not be resolved by the PTAB, the Judge agreed with Defendants that the core patent infringement claims were likely to require the most investment of time in discovery and in ultimately trying the matter. Second, the Judge found that the case is in its early stages: the parties had engaged in limited discovery; claim construction proceedings had not been scheduled; and no trial date was in sight. Third, regarding prejudice, PopSockets argued that Defendants' actions have led to a loss of PopSockets' market share and goodwill, as well as customer confusion, but the Judge did not find such arguments to outweigh "the efficiencies to be achieved if the parties first obtain a ruling [from the PTAB]." Accordingly, Judge Pollak recommended entry of a stay of all proceedings pending the outcome of the two IPR petitions.

Case: PopSockets LLC v. Quest USA Corp. and Isaac Srour, No. 17-03652, Dkt. No. 83 (E.D.N.Y. Sept. 12, 2018).