Download - IMS 13-2071
-
8/9/2019 IMS 13-2071
1/3
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
IMS HEAL
TH
IN
CORPORA
TED, )
Plaintiff, )
v. )
SYMPHONY
HEAL
TH SOLUTIONS )
CORPORATION, SOURCE )
HEALTHCARE ANALYTICS, LLC, and )
IMP ACTRX, INC., )
Defendants. )
Civil Action No. 13-2071 (GMS)
OR ER
WHEREAS, presently before the court is the Motion to Stay Pursuant to § l 8(b) of the
America Invents Act ( AIA ) (D.I. 151) filed by Symphony Health Solutions Corporation, Source
Healthcare Analytics LLC, and lmpactrx, Inc. (collectively, the Defendants );
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
IMS Health Incorporated ( IMS Health ) filed this action on December 20, 2013, alleging infringement of
U.S. Patents Nos. 6,379,224 (the '224 patent ), 7,577,578 (the ' 578 patent ), and 8,743,452 (the ' 452 patent )
(collectively, the patents-in-suit ). The Defendants filed a petition on September 16, 2014 to institute a covered
business method ( CBM ) patent review of all three claims of the '578 patent. See D.I. 152 at 1. The Patent Trial
and Appeal Board ( PTAB ) instituted review of the first petition on March 27, 2015.
Id.)
The Defendants
subsequently petitioned the PTAB for CBM review
of
the '224 Patent on February 1, 2015 and the '452 Patent
on
February 20, 2015. Id.)
2
t
is
well established that the decision to stay an action lies within the sound discretion of 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
of
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).
-
8/9/2019 IMS 13-2071
2/3
Section
18
of the AIA provides for the establishment
of
transitional post-grant review proceedings to
reexamine the validity of 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 of 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 of litigation 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 United States Patent and Trademark Office ( 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 § l 8(b )(I )(B). The Defendants assert that a stay will simplify the issues
for trial because CBM review will simplify, streamline, or completely eliminate the
578
patent from this litigation.
D.1. 152 at 11.) In addition, the Defendants assert that while the PTO has not yet made a decision to institute CBM
review
of
the
224
and
452
patents, granting the stay will allow the
PT
AB to exercise its particular expertise and
avoid the possibility of inconsistent decision on the merits
if
the two proceedings were to proceed in parallel.
Id.
at
11-12.) IMS Health asserts that even an entirely favorable outcome in the
578 CBM
review would not meaningfully
simplify the issues
or
streamline the trial.
D.1.
158 at 6.) IMS Health argues that the
224
and
452
patents do not
meet the requirements for
CBM
review and, as a result, the Defendants are unlikely to overcome the high up-front
showing required for institution ofa CBM review.
(Id.
at
6-8.)
The court takes no position as to the likelihood of the
PTAB granting CBM review of the
224
and
452
patents. The court agrees with the Defendants and finds that first
factor-particularly
with regard to the
578
patent weighs-in favor of a stay.
The second factor, which has the court consider how far the litigation has progressed, weighs against granting
a stay. AIA § 18(b)( l)(B). This case has progressed beyond the early stages of litigation. Fact discovery was
completed on March 6, 2015. (D.1. 158 at
I.
Expert reports have been served.
Id)
Trial is scheduled for November
2015. The court has already held a
Markman
hearing and issued its Order construing the asserted claims of the '224
and '452 patents.
(See
D.l. 118.) The court did not construe the claims
of
the
578
patent in light
of
the then-pending
CBM petition.
Id
at 1 n.
l)
The court and both parties have already expended significant assets on this matter. While
the costs
of
trial preparation remains, the court finds this factor to weigh against granting a stay.
Under the third factor, the court must consider the potential of a stay to unduly prejudice the plaintiff or place
it at a clear tactical disadvantage. AIA § 18(b
)(I
)(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 of the stay request, the timing
of the administrative review request, the status of the review proceedings, and the relationship between the parties.
Id.
(citations omitted). The court recognizes that IMS Health has an interest in the timely enforcement
of
its patent
rights.
See Smith Int /, Inc.
v.
Hughes Tools Co.,
718 F.2d 1573, 1581 (Fed. Cir. 1983) ( [P]ublic policy favors the
protection
of
he rights secured by valid patents. ). Nonetheless, the court also recognizes the reduced time-frame
allotted by Congress for
CBM
review completion. The Defendants do not dispute that the parties are competitors.
Rather, the Defendants argue that IMS Health should not be able to claim prejudice
now
after it knowingly sat on its
rights and for more than three years,
and
only initiated this action as retaliation for the Defendants having filed an
anti-trust action against IMS [Health] in July 2014. (D.l. 152 at 13.) The court takes note
of
the parties' alleged
history but assigns it no weight as it
is
unsupported by record evidence. More important, the timing
of
the request
weighs against granting the stay. The Defendants provide no reason for its fourteen month delay from the filing of
IMS Health's lawsuit to file
CBM
petitions for the
224
and
452
patents. The court considers the belated filing to be
prejudicial to IMS Health's enforcement
of
its patent rights. As such, this factor weighs against granting the stay.
The fourth factor requires the court to consider whether a stay, or the denial thereof, will reduce the burden
of
litigation on the parties and on the court. AIA
§
18(b)(l)(D).
It
is clear that the parties-not to mention the
2
-
8/9/2019 IMS 13-2071
3/3
IT IS HEREBY ORDERED THAT:
1 Defendants' Motion to Stay (D.I. 151) is GRANTED-in-part;
2
This matter is STAYED as to U.S. Patent No. 7,577,578 pending resolution
of
the
covered business method patent review;
3
This matter is TEMPORARILY STAYED as to U.S. Patent Nos. 8,743,452 and
6,379,224 pending the
PTAB s
decision regarding institution
of
CBM review; and
4
The parties are directed to contact the court with the PTAB s decision as to
instituting CBM review of U.S. Patent Nos. 8,743,452 and 6,379,224.
Dated: M a y ~ 2015
court-have already expended significant resources on the litigation. The Defendants argue that a stay will spare the
parties the burden of litigating the validity of the '578 patent in this court and the PTAB at the same time. (D.I.
152
at 16.) The Defendants point to the strong potential that post grant review may result
in
the cancellation or
amendment
of
claims
in
support
of
its argument that granting a stay now would conserve the resources
of
both
parties, as well as the court. (D.I. 152 at 12.) The court agrees with the Defendants as to the risk of contradictory
outcomes of the '578 patent. The court concludes that a stay will lessen the burden of litigation at issue. As such, 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 § 18(b) of he AIA. The balance
of
the four statutory factors weighs slightly
in
favor of granting a stay pending resolution of the CBM review
proceedings. The court finds it appropriate to stay the case temporarily in its entirety pending the PTAB's decision
as to the '224 and '452 patents. f he PTAB declines to institute CBM review, the court will consider arguments for
lifting the stay as to those patents and proceeding expeditiously to trial.
3