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Puget BioVentures, LLC v. Biomet Orthopedics LLC

United States District Court, N.D. Indiana, South Bend Division

August 14, 2017

PUGET BIOVENTURES, LLC, Plaintiff,
v.
BIOMET ORTHOPEDICS, LLC Defendant.

          OPINION AND ORDER

          Michael G. Gotsch, Sr. United States Magistrate Judge

         On March 16, 2017, Plaintiff Puget BioVentures filed its Motion to Lift Stay, entered in this case in December of 2010. Defendant Biomet Orthopedics, LLC (“Biomet”) timely filed its response on March 30, 2017. This motion became ripe for ruling when Plaintiff filed its reply brief on April 11, 2017.

         I. Relevant Background

         Through its complaint, filed in the Northern District of Illinois on July 19, 2010, Plaintiff alleges that Biomet infringed its patent, U.S. Patent No. 7, 344, 541 (“'541 patent”).[1] On November 4, 2010, this case was transferred to this Court. In October of 2010, before the November transfer, Biomet filed a petition for inter partes reexamination (“IPR”) of the '541 patent with the Patent and Trademark Office (“PTO”).[2] On December 8, 2010, by agreement of the parties, this Court stayed this case pending the completion of the IPR. Since then, the stay has been extended by agreement on multiple occasions throughout a protracted IPR process that has yet to conclude. Until now, the parties had agreed that the case should be stayed until the conclusion of the IPR process. However, the IPR process has been lengthier than either party anticipated at the time the stay was imposed.

         After Biomet filed its IPR petition, the PTO Examiner rejected all of the claims in the '541 patent in the first Office Action in the IPR process. In response to the rejections, Plaintiff filed amendments to claims 1, 5, 6, 9, 10, 21-26, 35-38, and 49-52, rather than filing an immediate appeal.[3] Furthermore, Plaintiff rewrote the remaining claims from dependent claims into independent claims. Despite Plaintiff's amendments and rewrites, the Examiner again rejected all of the claims. The Examiner then closed prosecution of the patent, to which Plaintiff responded with further amendments of the '541 patent's claims on September 29, 2011. The Examiner filed a Right of Appeal Notice indicating the amendments made after the close of prosecution were not entered on the patent.

         Plaintiff then appealed to the Patent Trial and Appeal Board (“the Board”), which reversed the Examiner's findings in part. Specifically, the Board reversed the Examiner's decision to reject each of the unamended claims. However, the Board affirmed the Examiner's decision to reject each of the amended claims. Plaintiff then filed a request for rehearing, which the Board granted. Upon rehearing, the Board maintained its decision to reverse the Examiner's rejection of the unamended claims, but also decided to reverse the Examiner's rejection of the amended claims. Of particular note, the Board reversed the Examiner's decision to reject amended claims 31, 33, 45, and 47, which remain at issue in this litigation.

         Biomet then appealed to the Court of Appeals for the Federal Circuit and sought to have the Board's decision regarding both the amended and unamended claims reversed. However, Plaintiff's '541 patent expired on December 24, 2015, before the Court of Appeals came to its decision. Consequently, the Court of Appeals vacated the Board's decision regarding the amended claims because “the PTO does not enter amendments made in IPR after the expiration of the patent.” Biomet Orthopaedics, LLC v. Puget Bioventures, LLC, 640 F. App'x 868, 870 (Fed. Cir. 2016). The Court further held that the expiration of the patent prevented the amendments from issuing, as amendments cannot issue until the certificate issues, which cannot happen after a patent expires. Id. The Court declined to consider the original form of the amended claims because the Board had not considered the original forms. Lastly, the Court of Appeals upheld the Board's confirmation of the unamended claims, and remanded the case to the Board for further consideration of what the appropriate action was in this unusual set of facts. Id.

         Upon remand, the Board remanded the case to the Examiner for further consideration in light of the Court of Appeals decision. Plaintiff then filed an amendment that cancelled all of the prior amendments to the claims, including amendments to claims 31, 33, 45, and 47. This new amendment reverted each of the prior amended claims to their original forms that had all been previously denied by the Examiner. Biomet opposed this amendment, but the Examiner entered it and the amended claims reverted back to their unamended forms. The Examiner then confirmed the patentability of each of the now-unamended claims on March 3, 2017. The Examiner closed prosecution and the next Office Action will be a Right of Appeal Notice, which will give Biomet an opportunity to further appeal the case to the Board and possibly to the Federal Circuit. The parties agree that appeals may not be exhausted for as long as three more years.

         Based on the original Plaintiff's assignment of the '541 patent, the Court substituted Puget BioVentures, LLC as the plaintiff through its Order dated February 1, 2017. [DE 104]. Upon the party substitution, new counsel began prosecuting this action on behalf of Plaintiff. On March 16, 2017, Plaintiff filed both a unilateral status report stating its intention to file a motion to lift the six-and-one-half-year stay in this case and the instant Motion to Lift Stay. The next day, Biomet filed a response in opposition to Plaintiff's status report and Motion to Lift Stay. Biomet opposes Plaintiff's instant motion because it intends to pursue further appeals in the IPR process, which the parties acknowledge may not be fully resolved for another three years.

         II. Legal Standard

         This Court has “the inherent power to manage its own docket and may use its authority to stay proceedings pending conclusion of a PTO re-examination of a patent.” Lippert Components Mfg. v. Al-Ko Kober, LLC, No. 3:13-cv-697-JVB-CAN, 2014 WL 8807329, at *2 (N.D. Ind. Jan. 16, 2014). However, a stay should not “be indefinite or otherwise excessive.” Lincoln Int'l Life Ins. Co. v. Transamerica Fin. Life. Ins. Co., No. 1:08-cv-135-JVB-RBC, 2009 WL 1108822, at *2 (N.D. Ind. Apr. 24, 2009). Indeed, Fed. R. Civ. P. 1 requires the parties and the Court “to secure the just, speedy, and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1.

         Courts typically consider four factors when deciding whether to maintain a stay pending an IPR. Lippert, 2014 WL 8807329, at *2; Universal Elecs., Inc. v. Universal Remote Control, Inc., 943 F.Supp.2d 1028, 1035 (N.D. Cal. 2013). The party seeking to maintain the stay has the burden of proof to show whether the stay will: (1) unduly prejudice or tactically disadvantage the party opposing the stay; (2) simplify the issues in the litigation and streamline trial; and (3) “reduce the burden of litigation on parties and the court;” and (4) whether the totality of the circumstances and the “interests of justice” favor a stay. Lippert, 2014 WL 8807329, at *2; Universal Elecs., 943 F.Supp.2d at 1035. The factor that holds the most weight in this analysis is the first factor of undue prejudice on the party opposing the stay. Lippert, 2014 WL 8807329, at *2.

         III. Analysis

         As stated above, a decision on whether to lift the stay and allow this case to proceed or to continue the stay until the IPR is finalized requires an analysis of the four aforementioned factors. The Court will examine each of the factors in turn.

         A. Undue Prejudice to Plaintiff

         The first and most important factor addressed in deciding whether to continue or lift a stay is whether the plaintiff will face undue prejudice if the stay is maintained. Here, Plaintiff argues that the length of time the IPR process has lasted combined with the three years that Biomet's appeal of the Examiner's decision is likely to take constitutes undue prejudice. It contends that, as the patent owner, it has a great interest in the timely enforcement of its patent rights, and this delay in enforcing those rights will unduly prejudice it. Plaintiff also asserts that the IPR process and this litigation have further prejudiced it by preventing it from further licensing the '541 patent as well as its broader portfolio of patents. Plaintiff supports this argument with the assertion that its status as a non-practicing entity does not affect the prejudice factor. Plaintiff also argues that the age of this case, along with any further delay, creates an evidentiary prejudice. It states that the device in question was ...


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