07/13/16

Stays Pending Inter Parties Review: Not in the Eastern District of Texas


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Stays Pending Inter Parties Review: Not in the Eastern District of Texas

Douglas B. Wentzel

Grant rates for stays of patent litigation pending the outcome of IPRs are now falling despite initially being very high. Use of IPRs is increasing, as is the likelihood that defendants will seek to stay litigation pending the resolution of these proceedings. Defendants should recognize that obtaining a stay pending IPR outcome is particularly challenging in the most popular patent litigation venue, the Eastern District of Texas.

Recent scholarship analyzes the general success rates of motions to stay pending IPR, but has yet to consider in depth the differential treatment of motions to stay pending IPR nationwide versus solely in the Eastern District of Texas, or treatment of these motions to stay in NPE-filed patent litigation. Treatment of stays pending IPR in exclusively NPE-filed cases in the Eastern District of Texas is significant because NPE-filed cases constitute more than two-thirds of all infringement cases filed in 2015 and NPEs filed almost half of all 2015 patent cases in the Eastern District of Texas.

This Article comprises an original study of the differential treatment of motions to stay pending IPR in exclusively NPE-filed cases, both nationwide and solely in the Eastern District of Texas. Through August 2015, the Eastern District of Texas had the lowest grant rate of stays pending IPR outcome in the nation. How the Eastern District of Texas decides stays represents a stark difference from stay decisions made in other U.S. district courts. Also, IPRs are now instituted less frequently than in years prior, and this lower grant rate has significantly impacted the likelihood of stays in the Eastern District of Texas.

A lower stay grant rate in the Eastern District of Texas than in other districts is surprising, given that more than 96% of patent infringement suits in the district are brought by NPEs. Interestingly, district courts nationwide consistently find that NPEs are not prejudiced by a stay of co-pending patent litigation. The present study identifies and analyzes specific reasons for the unique treatment of motions to stay pending IPR in the Eastern District of Texas. This Article also considers how IPR institution impacts stay decisions in the Eastern District of Texas. Due to its unique approach to stay analysis, the Eastern District of Texas is the least likely district to grant a stay pending IPR.

98 J. PAT. & TRADEMARK OFF. SOC’Y 120 (2016)

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