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Reflecting on All Factors, District Judge Ronnie Abrams Grants Pre-Institution Stay in lululemon Mirror Case

On February 24, United States District Judge Ronnie Abrams (S.D.N.Y.) granted defendants lululemon USA Inc. and Curiouser Products Inc. d/b/a Mirror (collectively “lululemon”)’s motion to stay pending inter partes review.  Judge Abrams ordered the stay even though the IPRs have not yet been instituted.  

Case Background

Plaintiff Nike Inc. (“Nike”) launched the action in 2022 alleging that lululemon—by way of its sale of The Mirror Home Gym and related products—infringed six Nike patents: U.S. Patent Nos. 8,620,413; 9,278,256; 9,259,615; 10,188,930; 10,232,220; and 10,923,225.  lululemon filed petitions for inter partes review for all six patents and, then, sought a stay pending results from the IPR proceedings.

Motion to Stay

In assessing the request, the Court called upon the standard factors: (1) whether the stay will simplify the issues in question and trial of the case; (2) the stage of the proceedings before the court; and (3) whether the stay will prejudice the nonmoving party. 

As to the first  factor, per the Court, the PTAB’s institution of even one of the six petitions would simplify the issues presented in the action.  Added to that, and citing PTAB statistics, Judge Abrams noted that “institution of IPR proceedings on at least some of the challenged claims is not merely possible in this action, but is arguably likely.”  The Court also rejected the proposition that a pre-institution stay was somehow inappropriate, calling upon Judge Caproni’s reasoning in Molo Design, Ltd. v. Chanel, Inc., 2022 WL 2135628 (S.D.N.Y. May 2, 2022).  Therein, Judge Caproni explained that a pre-institution stay would either “result in a minor delay or, if the PTAB grant[ed] [defendant]’s request for review, [would] simplify the issues in [the] case and provide the Court with expert guidance in a complex area of law.”  Id. at *3.  So, too, here.

As to the second  factor, the Court determined that the relatively early stages of the litigation weighed in favor of a stay.  Still on the “to-do” list in this district court case were: all fact depositions; a Markman hearing; and the scheduling of major case deadlines, including the close of fact and expert discovery.  In all ways considered, discovery was “not substantially complete.”

On the third  and final factor—prejudice to the non-moving party—Judge Abrams found that Nike would not be unduly prejudiced by the stay.  Nike did not launch the action until more than three years after it became aware of the allegedly infringing activity.[1] In contrast, the stay at issue would last approximately five months.  “[T]he Court fail[ed] to see how a stay of five months will cause undue prejudice to a party that waited three years to file this action in the first place.”

The case is Nike Inc. v. lululemon USA Inc., et al., No. 22-cv-00082 (S.D.N.Y.).

[1] The Court also found meaningful that Nike does not offer a competing product that practices the six asserted patents.