Texas Patent Litigation Monthly Wrap-Up: October 2024

This post summarizes two federal patent cases from the Eastern District and Western District of Texas issued in October 2024. The decisions considered the defendants’ motions to stay the cases pending the resolution of inter partes reviews (IPRs) or related appeals. The courts granted one stay and denied the other. This summary focuses on the procedural backdrop and analysis in reaching these holdings.

Viasat, Inc. v. Kioxia Corporation, Kioxia America, Inc., No. 6:21-cv-01231, Dkt. 242 (October 17, 2024)

In this sua sponte decision, Judge Albright granted a stay of the case until the final decision of an appeal of an IPR decision for the sole asserted claim.

Following a claim construction order, plaintiff Viasat dropped all asserted claims except for a single dependent claim. Dkt. 244 at 1-2. This single claim had been upheld as valid in an IPR before the Patent Trial and Appeal Board (PTAB). The defendant, Kioxia, appealed this decision to the Federal Circuit and filed the present stay while the appeal was pending.

Under these circumstances, the court considered a stay of the case sua sponte. This analysis centered on consideration of three factors: “(1) whether the stay will unduly prejudice the nonmoving party, (2) whether the proceedings before the court have reached an advanced stage, including whether discovery is complete and a trial date has been set, and (3) whether the stay will likely result in simplifying the case before the court.” Dkt. 242 at 1 (quoting NFC Tech. LLC v. HTC Am., Inc., No. 2:13- cv-1058, 2015 WL 1069111, at *2 (E.D. Tex. Mar. 11, 2015)).

The first and second factors favored denying the stay. The court explained that Viasat would suffer undue prejudice from a stay due to the risk of loss of valuable evidence and because Viasat had an interest in the timely enforcement of its patent rights. Id. at 2. The second factor favored denying the stay because “[t]rial was set to begin with[in] weeks of this motion.” Id.

However, the court granted the stay because the simplification of the issues was the “most important factor” and could fully resolve the case. If the Federal Circuit found the patent invalid on appeal, Viasat would be precluded from asserting the only asserted claim in the case. Id. at 4. The court also found that “the invalidation of the other asserted claims and the fact that only one remaining claim sits on appeal is guiding,” and supported a reasonable likelihood the final claim would also be found invalid. Id. at 5. As such, the third factor alone was sufficient to grant a stay, whereas the first two factors favored denial.

Portsmouth Network Corporation v. Cisco Systems, Inc., No. 2:23-cv-00441, Dkt. 77 (October 21, 2024)

This motion to stay was brought when three out of four IPR petitions had been instituted, but the court ultimately denied it as premature due to the one pre-institution petition.

The plaintiff in this case asserted four patents, and defendant filed IPR petitions challenging each asserted patent. At the time of the decision, the PTAB had instituted three of the petitions and was expected to provide an institution decision on the final petition by December 2024.

The court enumerated the same factors addressed above. However, unlike in the first case, Judge Gilstrap expressed “a consistent practice of denying motions to stay when the PTAB has yet to institute post-grant proceedings.” Dkt. 77 at 2. He was not swayed by the fact that three of the petitions had already been instituted.