One Year In: Analyzing Motions to Stay Pending CBM Review under Section 18 of the AIA

Defendants in patent litigation commonly challenge the validity of an asserted patent. And with the passage of the America Invents Act, it is increasingly common to pursue a parallel challenge of patent validity with the PTAB under the newly instituted Inter Partes, Covered Business Method, or Post-Grant Review procedures. Once a petition for review is filed with the PTAB, defendants commonly seek to stay litigation in district court. The reasoning is usually straightforward – why waste time and money in litigation if the patent may later be invalidated by the PTAB? To many, the America Invents Act was viewed as a critical step towards lowering the high cost of patent litigation. Historically, seeking reexamination of a patent with the PTO did not guarantee a defendant could successfully stay litigation in court. But the Act sought to change this. Under the Covered Business Method Review procedure, which went into effect in September 2012, a district court is now required to consider 4 statutory factors in determining whether to grant or deny a motion to stay:

• Whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;

• Whether discovery is complete and whether a trial date has been set;

• Whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and

• Whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.

In promoting Section 18 of the AIA, Senator Schumer, the bill's author, stated, ‘it is nearly impossible to imagine a scenario in which a district court would not issue a stay’ under the proposed CBM Review procedures. So how then have the courts reacted?

The results are mixed (if not surprising). A recent search of Docket Navigator revealed only 9 orders on motions to stay pending CBM Review. Of the 9 orders, only 5 (55%) granted a stay. Three of the remaining orders (33%) denied the motion to stay without prejudice. One order denied the motion in part and granted it in part. The results for motions to stay pending post-AIA inter partes review are similar. Of 53 orders, only 28 (53%) granted a stay. Eight (15%) denied the motion without prejudice, and 6 (11%) denied the motion outright.

The sample size is admittedly small here. But it does not appear courts are reacting to the new stay provisions under Section 18 of the AIA with the same enthusiasm as Senator Schumer.

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