quest licensing corp. v. bloomberg l.p., et al., c.a. no. 14-561-gms (d. del. dec. 3, 2014)

8/10/2019 Quest Licensing Corp. v. Bloomberg L.P., et al., C.A. No. 14-561-GMS (D. Del. Dec. 3, 2014).

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

QUEST LICENSING CORP.,

Plaintiff,

V.

BLOOMBERG L.P., et al.,

Defendants.

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OR ER

Civil Action No. 14-561 (GMS)

CONSOLIDATED

WHEREAS, presently before the court is the Motion to Stay Pursuant to 18(b) of the

America Invents Act (D.I. 15) filed by Bloomberg L.P., Bloomberg Finance L.P., The Charles

Schwab Corporation, and Charles Schwab Co., Inc., (respectively, Bloomberg and

Schwab );

1

and

WHEREAS, the court, having considered the instant motion, the response and replies

thereto, and the applicable law, concludes that the defendants have demonstrated that a stay in the

above captioned matter pending covered business method patent review is appropriate in this case.

2

1

Quest Licensing Corp. ( Quest ) filed this action on April 29, 2014 against Bloomberg.

D.1.

1.) A related

action was filed against Schwab on June 11, 2014. (D.l.

16

at 6.) On October 9, 2014 this case was consolidated with

Civil Action Numbers 14-562 (GMS); 14-563 (GMS); 14-564 (GMS); and 14-727 (GMS). The remaining defendants

FactSet Research Systems Inc. ( FactSet ), SunGard Data Systems Inc. ( SunGard ), and Interactive Data

Corporation ( IDC ) each filedjoinder motions in support

of

the Motion to Stay on October 10, 2014.

See

D.l. 18,

19,

and 20.) As all defendants have joined the instant motion the court will refer to the parties as the defendants for

purposes

of

this Order. The court also reviewed the defendants ' submission

of

subsequent authority. (D.l. 29.)

2

On September 30, 2014 Bloomberg and Schwab filed a petition for covered business method review ( CBM

review ) challenging the validity

of

every claim

of

U.S. Patent No. 7, 194,468 ( the '468 Patent ), the sole patent-in

suit. (D.l.

16

at 6.) For clarity, the court addresses those defendants that did not join the CBM review petition as the

nonmoving defendants. On the same day as the CBM review petition was filed, the court held a scheduling

conference

in

this action and the related consolidated cases.

D.1.

13.) The court set a trial date of June 20, 2016

more than twenty months from the filing

of

the instant motion.

Id.)

At the same conference, the court stayed

discovery until December

8,

2014, so that the instant motion could first be addressed by the court. Id.) The court


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also scheduled a status conference for December 5, 2014, in the event that the court needed to revisit the issue o

discovery while the motion was pending.

Id.)

No discovery has occurred, the parties have not filed substantive

motions, and the court has not made any substantive rulings.

t is well established that the decision to stay an action lies within the sound discretion o the trial court. Cost

Bros. Inc. v. Travelers Indemnity Co.,

760 F.2d 58, 60 (3d Cir. 1985);

see also First Am. Title Ins. Co. v. Maclaren,

L.L.C.,

No. 10-363-GMS, 2012 WL 769601, at *4 (D. Del. Mar.

9,

2012). Central to the rationale providing for such

discretion is that

o

the court's inherent power to conserve judicial resources by controlling its own docket.

Cost

Bros. Inc., 760 F.2d at 60-61 (citation omitted).

Section 18 o

the AIA provides for the establishment

o

transitional post-grant review proceedings to

reexamine the validity o covered business method patents. Leahy-Smith America Invents Act, Pub. L No. 112-29,

18,

125

Stat. 284, 32931 (2011 ). The AIA also considers the effect o these proceedings on related patent

infringement actions and authorizes the district courts to stay such parallel litigation under certain circumstances.

Courts are directed to base their decision as to whether or not to grant such a stay on four factors: (A) whether a stay,

or the denial thereof, will simplify the issues in question and streamline the trial; (B) whether discovery is complete

and whether a trial date has been set; (C) whether a stay, or the denial thereof, would unduly prejudice the nonmoving

party or present a clear tactical advantage for the moving party; and (D) whether a stay, or the denial thereof, will

reduce the burden oflitigation on the parties and on the court. AIA 18(b)(l). This statutory test closely resembles

the stay analysis courts have applied in assessing a motion to stay pending

inter partes

or

ex parte

reexamination by

the Patent and Trademark Office (the PTO ).

See Market-Alerts Pty. Ltd. v. Bloomberg Fin., L.P.,

922 F. Supp. 2d

486, 489 (D. Del. 2013) (citations omitted).

As to the first factor, the court must consider whether a stay, or the denial thereof, will simplify the issues

in question and streamline the trial. AIA 18(b)(l)(B). The defendants assert that a stay will simplify the issues for

trial for at least three reasons.

D.1. 16

at 14.) First, that the CBM review process will address and streamline claim

construction. Id.) Second, that CBM review is very likely to result in cancellation o some or all o the '468 patent's

claims.

Id.)

Third, the defendants assert that even i the claims are not amended, the CBM review will affect the

substantive meaning o the claims by prosecution history or otherwise. Id.) Quest argues that because the Patent

Trial and Appeal Board's ( PTAB ) claim construction is not binding on this Court, and the claim construction

standards applicable before this Court and before the PTAB are fundamentally different that CBM review would do

nothing to streamline the case. (D.I.

23

at 16.) The court does not dispute Quest 's position regarding the various

claim construction standards. In spite

o

this fact, the court finds that simplification

o

the issues is still likely

i

the

underlying Petition is granted. Further, the differing standards do not limit the court's consideration o the PTAB's

determination and relevant intrinsic evidence. The court agrees with the defendants and finds that first factor weighs

in

favor

o

a stay.

The second factor, which has the court consider how far the litigation has progressed, likewise favors a stay.

AIA 18(b)(l)(B). As discussed above, no discovery has occurred, the parties have not filed substantive motions,

and the court has not made any substantive rulings. Quest argues that the current lack o discovery is the result o

delay tactics perpetrated by the defendants. (D.I. 23 at 14-15.) The court finds that the conflicting evidence ofattempts

by the parties to start discovery prior to the court's Rule 26(f) conference does not constitute dilatory tactics.

Additionally, the court's decision to stay discovery for three months pending the resolution o this motion does not

overcome the fact that this litigation is at an early stage.

Under the third factor, the court must consider the potential o a stay to unduly prejudice the plaintiff or place

it at a clear tactical disadvantage. AIA 18(b )( 1

(C).

Potential for delay does not, by itself, establish undue prejudice.

See Market-Alerts,

922

F.

Supp. 2d at 494 (citations omitted). In assessing whether a plaintiff might be unacceptably

prejudiced by a stay, the court turns to additional considerations including the timing o the stay request, the timing

o the administrative review request, the status o the review proceedings, and the relationship between the parties.

Id. (citations omitted). The defendants assert that a stay will not unduly prejudice Quest because the Petition and the

instant motion was filed at the litigation's outset.

D.1. 16

at 17.) Further, the defendants argue that there can be

no

undue prejudice because Quest is a non-practicing entity that does not compete with the defendants and therefore

cannot obtain injunctive relief. Id. at 18.) The defendants also point to a seven-year delay between issuance o the

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IT IS HEREBY ORDERED THAT:

1. Defendants' Motion to Stay (D.I. 15) is GRANTED; and

2. This matter is STAYED pending resolution

of

the covered business method patent

review

of

U.S. Patent No. 7,194,468.

Dated: December

_l_

2014

'468 patent and Quest's filing suit against the defendants. Id) In opposition, Quest argues that it's business the

licensing

of

intellectual

property would

be severely harmed by a stay. D.1. 23 at 12.) Should the defendants

eventually be found to have infringed, Quest can be adequately compensated by money damages for any harm suffered

during the PTO proceedings. (D.I. 16 at 18.) Further, the CBM review process initiated by Congress is required by

law to conclude one year after initiation and only extendable by six months with a showing

of

good cause. 37 C.F.R.

42.301, 42.200(c). The court recognizes that Quest has an interest in the timely enforcement of its patent rights.

See Smith Int

l,

Inc. v. Hughes Tools Co.,

718 F 2d 1573, 1581 (Fed. Cir. 1983) ( [P]ublic policy favors the protection

of the rights secured by valid patents. ). Nonetheless, the court also recognizes the reduced time-frame allotted

by Congress for CBM review completion. Moreover, Bloomberg and Schwab's filing

of

the motion to stay

approximately six months after the filing of he first complaint is not considered by the court to be intentionally delayed

or dilatory. Since the parties and the court will have a definitive answer from the PTO whether it will grant CBM

review five months prior to the scheduled Markman hearing, the court finds this factor neutral. While a delay in

proceeding with its case may be somewhat prejudicial to Quest, it is not unduly prejudicial.

The fourth factor requires the court to consider whether a stay, or the denial thereof, will reduce the burden

on litigation on the parties and on the court. AIA l 8(b

1

)(D). Quest alleges that the defendants have orchestrated

this CBM review and stay request to give them two chances to delay this case.

D.1.

23 at 13.) Because of the

consolidated nature of this case, Quest is concerned that the remaining defendants that did not join Bloomberg and

Schwab's CBM petition will be in a position to trigger separate CBM challenges at any time during the pendency of

this litigation or to re-litigate the claims determined by the PTO as a result

of

the CBM petition. Id.) At this time,

the PTO has not yet granted the CBM review petition. The court recognizes that as the petitioners in CBM review,

Bloomberg and Schwab may not later assert that a claim is invalid on any ground raised in CBM review. While the

court recognizes the potential for delay as a result of separate CBM challenges, the court finds credible the nonmoving

defendants' assertions that they were uninformed of the Petition prior to the eve

of

filing by Schwab and Bloomberg

and in no way were attempting to game the system. See D.l. 27 at 1-2; D.I. 25 at 11.) Additionally, the defendants

note, and the court agrees, that this is an unlikely proposition.

D.1.

25 at 7.) Further, 18(b) does not require the

court impose estoppel effect on the nonmoving defendants or consider the lack of stipulated estoppel effect in assessing

the four factors. Rather, the court is asked to balance the factors with a thumb on the scale

in

favor

of

a stay being

granted. 157 Cong. Rec.

Sl363 64

(daily ed. Mar. 8, 2011) (statement

of

Sen. Charles Schumer). Likewise

unsupported by the AIA is Quest's request that any stay granted by the court apply only to PTAB proceedings filed

by defendants on or before December

1,

2014. As such, the court declines to impose such conditions on defendants

FactSet, SunGard, and IDC at this time.

The court concludes that a stay will lessen the burden of litigation at issue. As such, and in light of the fact

that each

of

the defendants have joined the Motion to Stay, the court finds that the fourth factor favors a stay pending

CBM review. See Market-Alerts, 922 F. Supp. 2d at 496.

For the foregoing reasons, the court will grant the motion to stay pursuant to l 8(b) of he AIA. The balance

of the four statutory factors weighs in favor

of

granting a stay pending resolution of the CBM review proceedings.

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quest licensing corp. v. bloomberg l.p., et al., c.a. no. 14-561-gms (d. del. dec. 3, 2014)

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