Lack of Full Statutory Estoppel Warrants Denial of Stay Pending Third Party IPR​

The court denied defendant's motion to stay pending inter partes review initiated by third parties in one of plaintiff's other actions because the lack of potential simplification of issues and undue prejudice did not favor a stay. "In this case, the [PTO] has not instituted review on all of the asserted claims nor have defendants agreed to be bound by the estoppel provisions of 35 U.S.C. § 315 as would the petitioner. . . . [T]he limited estoppel proposed by Defendants may not actually simplify the issues at all. . . . [U]nder the limited estoppel proposed here, Defendants could raise new obvious combinations using old prior art the PTO considered, provided at least one new (perhaps inane) reference not previously considered by the PTO is used to meet one claim element. This would not simplify the case; rather, it very well might complicate the case, by precipitating a dispute as to whether such a combination fell within the carefully worded limited estoppel, i.e., whether such combination fell within 'a specific ground(s) upon which those IPRs were instituted.'. . . [A] full statutory estoppel would avoid such disputes, but, as some have called it, 'estoppel light' would not. The absence of a full statutory estoppel not only increases the ability of litigants to 'game the system' and devise an unfair second bite at the apple, it also has the potential to increase rather than reduce the complexity of the validity issues that may come before the Court."

Intellectual Ventures II LLC v. Kemper Corporation et al, 6-16-cv-00081 (TXED November 7, 2016, Order) (Gilstrap, USDJ)