Universal Electronics, Inc. v. Universal Remote Control, Inc.

943 F. Supp. 2d 1028, 2013 WL 1876459, 2013 U.S. Dist. LEXIS 64154
CourtDistrict Court, C.D. California
DecidedMay 2, 2013
DocketCase No. SACV 12-00329 AG(JPRx)
StatusPublished
Cited by47 cases

This text of 943 F. Supp. 2d 1028 (Universal Electronics, Inc. v. Universal Remote Control, Inc.) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Universal Electronics, Inc. v. Universal Remote Control, Inc., 943 F. Supp. 2d 1028, 2013 WL 1876459, 2013 U.S. Dist. LEXIS 64154 (C.D. Cal. 2013).

Opinion

ORDER DENYING DEFENDANT’S MOTION TO STAY PENDING INTER PARTES REVIEW

ANDREW J. GUILFORD, District Judge.

Defendant Universal Remote Control, Inc. (“Defendant”) moves to stay this litigation pending inter partes review of U.S. Patent Nos. 5,414,426 (the “'426 Patent”), 5,614,906 (the “'906 Patent”), and 6,587,067 (the “'067 Patent”). Plaintiff Universal Electronics, Inc. (“Plaintiff’) opposes the Motion. The Court DENIES the Motion. BACKGROUND

Plaintiff and Defendant are competitors in the universal remote control business. On March 2, 2012, Plaintiff filed this suit, alleging infringement of the '426 Patent, the '906 Patent, the '067 Patent, and U.S.

Patent No. 5,568,367 (the “'367 Patent”). Both the '426 Patent and the '067 Patent have expired. On January 22, 2013, before the Markman hearing, Defendant filed a Notice of Intent to File Petitions for Inter Partes Review, notifying the Court that it was preparing to file the petitions and that it would seek to stay the case pending the outcome of the PTO proceedings. On February 1, 2013, the Court issued its Claim Construction Order, which invalidated the only relevant claim in the '367 Patent. From February 6, 2013 through February 26, 2013, Defendant filed three petitions for inter partes review, one for each of the '426, '906, and '067 Patents. On March 11, 2013, Defendant filed this Motion.

LEGAL STANDARD

1. INTER PARTES REVIEW

The Leahy-Smith America Invents Act (“AIA”) intended to improve the former inter partes reexamination proceeding with a new inter partes review proceeding. 35 U.S.C. §§ 311-319. Pursuing the AIA’s goal “to establish a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs,” the PTO sought “to create a timely, cost-effective alternative to litigation” in crafting the inter partes review regulations. Changes to Implement Inter Partes Review Proceedings, Postr-Grant Review Proceedings, and Transitional Program for Covered Business Method Patents, 77 Fed.Reg. 48,680 (Aug. 14, 2012) (codified at 37 C.F.R. §§ 42.100 et seq.). The inter partes review procedure is designed (1) to reduce to 12 months the time the PTO spends reviewing validity, from the previous reexamination average of 36.2 months (id. at 48,725); (2) to minimize duplicative efforts by increasing coordination between district court litigation and inter partes review (id. at 48,721); and (3) to allow [1030]*1030limited discovery in the review proceedings (id. at 48,719).

Inter partes review allows a party other than the patentee to bring an adversarial proceeding in the PTO to establish that the patent claims are invalid under 35 U.S.C. §§ 102 or 103. 35 U.S.C. § 311. A significant change from inter partes reexamination to inter partes review is that it “converts inter partes reexamination from an examinational to an adjudicative proceeding.” H.R.Rep. No. 112-98, 46 (2011), reprinted in 2011 U.S.C.C.A.N. 67, 77. While inter partes reexamination was conducted through amendment-and-response practice before a PTO examiner, inter partes review will be conducted before a panel of three technically-trained Administrative Patent Judges of the newly formed Patent Trial and Appeal Board (“PTAB”). 35 U.S.C. § 6. The parties can take discovery and respond to each other’s arguments, and have the right to an oral hearing. 35 U.S.C. § 316(a)(5), (8), (10), and (13). The petitioner need only prove invalidity by a preponderance of the evidence. 35 U.S.C. § 316(e). The parties may also settle. 35 U.S.C. § 317. PTAB decisions will be appealed directly to the Federal Circuit. 35 U.S.C. § 319; 35 U.S.C. § 141(c).

After a party has filed a petition requesting inter partes review, the patent owner has three months to file a preliminary response opposing the request. 35 U.S.C. § 313; 37 C.F.R. § 42.107(b). Within three months of the time set for the patent owner’s response, the PTO will grant the inter partes review request if “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” 35 U.S.C. § 314(a). This standard for granting review is more stringent than the previous “substantial new question of patentability” standard. If the PTO grants review, a final determination must be issued “not later than 1 year” after the petition is granted. 35 U.S.C. § 316(a)(ll). The one-year period may be extended for good cause by not more than 6 months, although “[extensions of the one-year period are anticipated to be rare.” 77 Fed.Reg. at 48,695. The patent owner has an opportunity to add or amend claims during inter partes review. 35 U.S.C. § 318(b). After review concludes, the requester is estopped from asserting that a claim is invalid “on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” 35 U.S.C. § 315(e)(2).

The statute also seeks to limit the abuse of inter partes review as a tool for tactical delay by requiring that a defendant petition for review within one year after being served with the complaint. 35 U.S.C. § 315(b). This one year limit sets a ceiling on the PTO’s ability to commence inter partes review where there is ongoing litigation. The one year ceiling does not change the fact that delay in seeking the PTO’s review of a patent within that year can adversely affect a district court’s view of a request for a stay pending review.

2. MOTION TO STAY PENDING PTO REVIEW

While inter partes review is new, at least one court has already analyzed motions to stay pending inter partes review using the framework applicable to motions to stay pending reexamination, and the Court does so now.

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943 F. Supp. 2d 1028, 2013 WL 1876459, 2013 U.S. Dist. LEXIS 64154, Counsel Stack Legal Research, https://law.counselstack.com/opinion/universal-electronics-inc-v-universal-remote-control-inc-cacd-2013.