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We Will Just Have to Wait – Judge Liman Grants Motion to Stay Pending Resolution of Parallel Motion to Dismiss

On October 4, 2022, District Judge Lewis J. Liman (S.D.N.Y.) granted a motion to stay pending the resolution of a motion to dismiss in a parallel proceeding. In April 2022, Plaintiff Diatek Licensing LLC (“Diatek”) asserted that Estrella Media, Inc. (“Estrella”) infringed claims of U.S. Patent No. 7,079,752 and U.S. Patent No. 8,195,828 (collectively, “the patents-in-suit”). Several months prior, Diatek filed a lawsuit in the same Court, asserting the same patents-in-suit against a different defendant, Accuweather (the “Accuweather Matter”). Accuweather filed a motion to dismiss under 35 U.S.C. § 101. Estrella filed a motion to dismiss on identical grounds and requested a stay pending resolution of the motion to dismiss in the Accuweather Matter.

The Court found that “on the peculiar facts of this case, a stay pending resolution of the motion to dismiss” in the Accuweather Matter was justified. Diatek “never describes using the patent in its complaint or opposition to the motion, no discovery has been undertaken, and [Diatek] identifies no evidentiary issues that would arise from delaying discovery.” Moreover, the heavy burden on Estrella to produce highly confidential source code, documents concerning damages, and conducting confidentiality and privilege reviews weighed in favor of a stay. “To begin discovery in this case now would risk wasting time and resources on claims that [Plaintiff] may be collaterally estopped from asserting.”

The Court also found that staying the case pending resolution of the motion to dismiss in the Accuweather Matter “comports with the interests of comity.” “While the defendants are different, the plaintiffs are nonetheless the same, the claims both concern patent infringement, and the issues raised in the motions to dismiss” are almost identical and do not present any issues of fact. The Court also acknowledged that Estrella agreed to adopt the Court’s decision on the motion to dismiss in the Accuweather Matter. The Court noted that this would simplify the issues, as Estrella would be estopped from arguing that the patents-in-suit were directed to patent-ineligible subject matter should the motion to dismiss fail in the Accuweather Matter.

The case is Diatek Licensing LLC v. Estrella Media Inc., Case No. 22-cv-3508-LJL (S.D.N.Y. Oct. 4, 2022)