VirtualAgility Inc v. Salesforce.com et al.


Docket Nos. 2014-1232

NEWMAN (d), MOORE, CHEN
July 10, 2014

Brief Summary: DC decision denying a motion to stay litigation until post-grant review is complete is reversed.

Summary: Salesforce.com et al. appealed from DC order denying their motion to stay VA’s infringement suit pending post-grant review of the validity of the asserted claims of US 8,095,413 under the Transitional Program for Covered Business Method Patents (CMB program). AIA § 18(b)(2) provides that a party may appeal a DC decision granting or denying a motion to stay. It also instructs the DC to consider four factors in making that decision: A) whether the issues in question will be simplified and the trial streamlined; B) whether discovey is complete and a trial date set; C) whether the nonmoving party would be unduly prejuidiced or the moving party advantaged; and D) whether a stay or denial would reduced the litigation burden. The FC panel concluded that factors A and D “heavily favor[ed] a stay” in part because Salesforce did not present two pieces of “important prior art” to the PTAB but saved those for the DC (“simplification argument would be stronger if all the prior art or relevant invalidity issues were in the CBM review”). Factor B was also found to “heavily favor[] a stay” (“[d]iscovery had not yet begun and no trial date had been set”). The DC found “that the undue prejudice factor weighed heavily against a stay” because “VA would suffer irreparably harm in the form of lost market share and consumer goodwill stemming from the delay in enforcing its patent rights.” But the FC disagreed, finding “[a]t best, this factor weighs slightly against a stay” because, in part, VA’s damages will not be diminished if it succeeds and did not move for a preliminary injunction (“the fact that it was not worth the expense to ask for this remedy contradicts VA’s assertion that it needs injunctive relief as soon as possible”). The FC panel agreed with the DC “that a stay would [not] give Defendants a clear tactical advantage”. As it concluded “[t]hree of the four factors weigh heavily in favor of a stay” and “[t]he undue prejudice factor, at best, weighs slightly in favor of” denial, the DC decision denying the motion to stay was reversed. Judge Newman’s dissent argues that this decision contradicts the AIA and its purpose, and the decision of whether to grant a stay “is consigned to the discretion of the judge.”

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