This Case Can Wait – Judge Rochon Finds Stay Warranted After Institution of IPR | Patterson Belknap Webb & Tyler LLP
On August 4, 2023, United States District Judge Jennifer L. Rochon (S.D.N.Y.) granted Plaintiff Nanobebe US Inc.’s (“Nanobebe”) motion to stay the case pending the resolution of an instituted inter partes review (“IPR”) proceeding seeking to invalidate Mayborn (UK) Ltd.’s (“Mayborn”) two asserted patents.
While the lawsuit was pending, Nanobebe filed IPR petitions, “seeking to invalidate the asserted claims” of the asserted patents. The Patent Trial and Appeals Board (“PTAB”) instituted review on June 16, 2023. Shortly thereafter, Nanobebe moved to stay the district court litigation. In granting the motion to stay, the Court considered the traditional factors, such as: 1) whether the stay will simplify the issues in the case, 2) the stage of proceedings in the litigation, and 3) whether the stay will prejudice the nonmoving party. The Court found that, on balance, the factors favored a stay.
First, the Court noted that the outcome of the IPR proceedings could completely eliminate the need for trial. And, even if some claims remained, the stay “is highly likely to simplify the issues in this case.” The Court noted that the parties had already engaged in discovery and received a Markman order, which weighed against a stay. However, the Court found that this factor did not weigh heavily against a stay because discovery was still ongoing, depositions were not completed, and expert discovery “is yet to be done.”
While the Court found it “concerning that Nanobebe” waited until the “last moment” to file its IPR petitions, the Court noted that the IPRs were, in fact, timely filed. The Court also noted that Nanobebe quickly filed its request for a stay once the PTAB instituted review and that the institution of the IPRs favored a stay. Finally, the Court noted that although the parties are competitors, which weighs against a stay, Mayborn did not provide any “specifics regarding any market share or goodwill impact.” The Court summarized that “while Mayborn’s competitive relationship with Nanobebe is a significant consideration, the remainder of the factors used to evaluate prejudice weigh in favor of a stay.”
In sum, the Court found that “this is a close call” but the factors “weight in favor of a stay, most notably because the IPR proceeding that has already been initiated will simplify the issues” in the litigation. “It would waste the resources of both the Court and the parties to move forward with the substantial remaining litigation efforts here” while the IPR proceeding may resolve many of the issues in the litigation.
The case is Nanobebe US Inc. v. Mayborn (UK) Ltd., No. 21-cv-08444 (JLR) (S.D.N.Y. Aug. 4, 2023).
