Extremity Medical LLC v. Fusion Orthopedics LLC

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Extremity Medical LLC, No. CV-22-00723-PHX-GMS 10 Plaintiff, ORDER 11 v. 12 Fusion Orthopedics LLC, 13 Defendant. [15] 16 Pending before the Court is Defendant Fusion Orthopedics, LLC’s Motion to Stay 17 (Doc. 77) and Defendant Fusion Orthopedics, LLC’s Renewed Motion to Stay (Doc. 99). 18 For the reasons below, the Motion to Stay is granted and Defendant’s Renewed Motion to 19 Stay is declared moot. 20 BACKGROUND 21 On April 28, 2022, Extremity Medical, LLC (“Plaintiff”) filed its complaint against 22 Fusion Orthopedics, LLC (“Defendant”) for patent infringement of U.S. Patent No. 23 11,298,166 (“the ‘166 Patent”). (Doc. 1). The ‘166 Patent is for a medical device: a bone 24 fusion assembly used for treating damaged or fractured human bones. (Doc. 1 at 3). On 25 March 17, 2023, the parties filed a Joint Claim Construction and Prehearing Statement. 26 (Doc. 59). A Markman hearing was held on June 22, 2023, and the claims were construed 27 by the Court on July 7, 2023. (Docs. 72, 73). In between the filing of the claim construction 28 statement and the Markman hearing, Defendant filed for an Inter Partes Review (“IPR”) of 1 the ‘166 Patent with the United States Patent and Trademark Office (“USPTO”). 2 On August 3, 2023, Defendants filed a Motion to Stay on the grounds that the 3 USPTO might take up the IPR. (Doc. 77). On November 17, 2023, the USPTO instituted 4 an IPR regarding the ‘166 Patent. (Doc. 99 at 1). On November 29, 2023, Defendant 5 renewed its motion to stay on grounds that the IPR had been instituted. (Doc. 99). On 6 December 6, Plaintiff filed its Response in which it indicated it “does not oppose a 7 stay . . . .” (Doc. 101 at 4). 8 DISCUSSION 9 I. Legal Standard 10 IPR proceedings are governed by the Leahy-Smith America Invests Act, passed by 11 Congress in 2011. See 35 U.S.C. §§ 311–19; Parsons Xtreme Golf LLC v. Taylor Made 12 Golf Co., No. CV-17-03125-PHX-DWL, 2018 WL 6242280 , at *2 (D. Ariz. Nov. 29, 13 2018). In an IPR, a party can “request cancellation of ‘1 or more claims of a patent . . . .’” 14 Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, S. Ct. 1365, 1371 (2018). 15 “A court’s power to stay proceedings is incidental to the power inherent in every court to 16 control the disposition of the causes on its docket with economy of time and effort for itself, 17 for counsel, and for litigants. In deciding how best to exercise this inherent power, the 18 court must weigh competing interests and maintain an even balance.” Parsons Xtreme Golf 19 LLC, 2018 WL 6242280 , at *3 (quoting Drink Tanks Corp. v. GrowlerWerks, Inc., No. 20 3:16-cv-410-SI, 2016 WL 3844209 , at *2 (D. Or. July 15, 2016)). 21 Courts generally consider three factors when granting or denying a stay pending an 22 IPR: “(1) whether discovery is complete and whether a trial date has been set; (2) whether 23 a stay will simplify the issues in question and trial of the case; and (3) whether a stay would 24 unduly prejudice or present a clear tactical disadvantage to the non-moving party.” Id. 25 (quoting Drink Tanks Corp, 2016 WL 3844209 , at *2). This is a totality of the 26 circumstances analysis guided by a “liberal policy” in favor of granting a stay. Id.; see also 27 Medicis Pharm. Corp. v. Upsher-Smith Lab’ys, Inc., 486 F. Supp. 2d 990, 993 (D. Ariz. 28 2007). 1 II. Analysis 2 After considering the following three factors, the Defendant’s Motion to Stay 3 (Doc. 77) is granted. 4 A. Stage of Litigation 5 When considering the stage of litigation, Courts look to whether discovery is 6 complete and trial date has been set. Parsons Xtreme Golf LLC, 2018 WL 6242280 , at *4; 7 Drink Tanks Co., 2016 WL 3844209 , at *2. “Generally, the time of the motion is the 8 relevant time to measure the stage of litigation.” Parsons Xtreme Golf LLC, 2018 WL 9 6242280, at*4 (quoting VirtualAgility Inc. v. Salesforce.com, Inc., 759 F. 3d 1307 , 1317 10 (Fed. Cir. 2014)). 11 This factor weighs in favor of a stay. There are aspects on this case’s posture that 12 discourage a stay: a Markman hearing has been completed (Docs. 72, 73) and Defendant 13 did not file its petition for an IPR until the final day of its statutory right to file (Doc. 79 at 14 17). On the other hand, pursuant to requests from both parties, the discovery deadline in 15 this matter has been extended multiple times and currently does not expire until December 16 22, 2023. (Docs. 75, 84). Furthermore, no trial date has been set. Defendant filed its 17 Motion to Stay on August 3, 2023, meaning discovery will not be complete until at least 18 four months after it first requested a stay. Indeed, the matter is still in the expert report 19 stage and no dispositive motions have been filed. (Doc. 99 at 2). Considering the liberal 20 policy in favor of granting a stay, this factor weighs in favor of a stay. Should this case 21 resume, the Court can reopen discovery for only a limited period to reflect the advanced 22 stage of discovery at which this case was stayed. 23 B. Simplification of Issues 24 This factor weighs heavily in favor of a stay. The issue in this matter is a single 25 patent: the ‘166 Patent. The IPR is reviewing the validity of the patent at the center of all 26 the claims in this matter. Thus, the resolution of the IPR has a high chance of simplifying 27 some, if not all, of the issues currently before this Court. See Parsons Xtreme Golf LLC, [28] 2018 WL 6242280 , at *5 (“[S]taying the case pending the outcome of IPR proceedings 1 ‘could eliminate the need for trial if the claims are cancelled or, if the claims survive, 2 facilitate trial by providing the court with expert opinion of the PTO and clarifying the 3 scope of the claims.’”) (quoting Advanced Micro Devices, Inc. v. LG Elecs., Inc., No. 4 14-cv-01012-SI, 2015 WL 545534 , at *3 (N.D. Cal. Feb. 9, 2015). As such, the 5 simplification of issues factor weighs heavily in favor of a stay. 6 C. Undue Prejudice to Extremity 7 The final factor is whether a stay would be unduly prejudicial or “present a clear 8 tactical disadvantage” to the non-movant. Drink Tanks Co., 2016 WL 3844209 , at *5. 9 While delay alone does not create undue prejudice, courts should be skeptical of tactics 10 designed to slow a pending matter. See Parsons Xtreme Golf LLC, 2018 WL 6242280 , at 11 *6 (listing certain sub-factors for the prejudice factor as “(1) the timing of the [IPR] request; 12 (2) the timing of the request for stay; (3) the status of [IPR] proceedings; and (4) the 13 relationship of the parties”) (quoting GoPro, Inc. v. C&A Mktg., Inc., 20174 WL 2591268 , 14 at *4 (N.D. Cal. 2017)). Where parties are competitors, undue prejudice resulting from a 15 stay can be shown where money damages and later injunctive relief would be insufficient 16 to make the non-movant whole. See id. 17 Extremity would not experience undue prejudice from a stay. While Defendant 18 made IPR request on the last day it could, it made its first request for a stay months before 19 the USPTO accepted an IPR proceeding. (Docs. 77, 99). Additionally, Defendant renewed 20 its motion for stay—and in so doing updated this Court as to the status of the IPR 21 proceedings—only 12 days after the USPTO accepted Defendant’s request for a 22 proceeding. (Doc. 99); see Parsons Xtreme Golf LLC, 2018 WL 6242280 , at *6 (finding 23 this factor favored a stay where the movant requested a stay within two months of the 24 USPTO’s institution of IPR proceedings). Finally, there is no indication that money 25 damages would be insufficient should Extremity ultimately prove successful. Accordingly, 26 this factor also weighs in favor of a stay. 27 CONCLUSION 28 Based on the foregoing factors, a stay is appropriate in this case. 1 Accordingly, 2 IT IS THEREFORE ORDERED that Defendant Fusion Orthopedics, LLC’s || Motion to Stay (Doc. 77) is GRANTED. 4 IT IS FURTHER ORDERED directing the Clerk of Court to term the Defendant’s 5 || Renewed Motion to Stay (Doc. 99) as moot. 6 Dated this 12th day of December, 2023. Wars ) A Whacrsay Sooo) 9 Chief United states District Judge [28] _5-