Versata Software, Inc. et al. v. Callidus Software, Inc.

Docket Nos. 2014-1468

November 20, 2014

Brief Summary: DC decision denying a stay for certain claims being reviewed by the PTO under the Transitional Program for Covered Business Method (CBM) Patents program was reversed and remanded.

Summary: Callidus appealed DC denial of a stay in litigation pending the USPTO covered business method review of the patents-in-suit. Veritas brought suit against Callidus, alleging infringement of three patents relating to management and tracking of sales information by a financial services company. After Veritas’ complaint was filed, Callidus filed a motion to transfer the case and a motion to dismiss for failure to state a claim which were both denied. It then answered and counterclaimed, asserting three of its own patents, and informed Versata that it would file petitions for post-grant review of the asserted patents under the Transitional Program for Covered Business Method (CBM) Patents. Versata had not yet identified its asserted claims when the petitions were filed. Once those claims were identified, Callidus filed a second set of CBM petitions regarding the claims it had not originally included. The DC then granted Callidus a stay regarding the first set of petitions but not the second. Section 18(b) of the AIA identifies four factors to be considered in deciding whether to grant a stay: 1) will it simplify the issues? 2) is discovery complete and a trial date set? 3) would a stay, or denial, unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party? And, 4) would it reduce the burden of litigation on the parties and court? Here, the FC reversed the denial because “the balance of the factors did not favor a stay” (e.g., “a stay will simplify the issues and streamline trial”, noting this is possible even “when only some, but not all, of the claims asserted in litigation are challenged in a CBM review” although it took “judicial notice of the fact that the PTAB had recently instituted CBM review on the remaining claims” (“By granting CBM review, the PTAB has determined that every claim is more likely than not unpatentable under § 101.”)) The FC also found “the timing factor strongly favors a stay” (question 2). It also found no tactical advantage for Callidus as “it was seeking to stay the entire case” not just Veritas’ claims against Callidus. And it concluded a stay would reduce the litigation burden. The DC decision was therefore reversed and remanded.

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