IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

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CANATELO LLC, )
)
Plaintiff, )
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v. ) Civil Action No. 13-1227-GMS
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AXIS COMMUNICATIONS AB, )
AXIS COMMUNICATIONS, INC. )
COMMUNICATIONS SUPPLY CORPORATION,)
)
Defendants. )
ORDER
Presently before the court in the above captioned matter is the defendants' Motion to Stay
Pending Inter Partes Review of the Patents-in-Suit.
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(D.I. 46.) A decision to stay litigation lies
within the sound discretion of the court. See Cost Bros., Inc. v. Travelers Indem. Co., 760 F.2d
58,60 (3d Cir. 1985); Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (citations
omitted) ("Courts have inherent power to manage their dockets and stay proceedings, including
the authority to order a stay pending conclusion of a PTO reexamination."). In order to determine
if a stay is appropriate, the court balances the following three factors: "(1) whether a stay would
unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2) whether a
stay will simplify the issues in question and trial of the case; and (3) whether discovery is complete
and whether a trial date has been set." First Am. Title Ins. Co. v. McLaren LLC, No. 1 0-363-GMS,
On July 12, 2013, the plaintiff, Canatelo LLC ("Canatelo"), brought the above-captioned action against the
defendants alleging infringement of U.S. Patent Nos. 7,31 0, Ill (the'" Ill patent") and 6,476,858 (the '"858 patent").
(D.I. 1.) On August 19,2013, Canatelo filed an amended complaint. (D.I. 7.)
2012 WL 769601, at *4 (D. Del. Mar. 9, 2012) (citation omitted).
After considering the parties' positions as set forth in their papers, as well as the applicable
law, the court concludes that a stay is warranted here. The plaintiff is unlikely to suffer undue
prejudice as a result of the stay,
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the issues before the court will be simplified should the Patent
Trial and Appeal Board ("PTAB") grant the defendants inter partes review,
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and the case is at a
very early stage currently.
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Accordingly, the court grants defendants' motion.
IT IS HEREBY ORDERED THAT the defendants' Motion to Stay Litigation Pending
Inter Partes Review (D.I. 46) is GRANTED.
The court weighs a variety of sub factors in determining whether there is undue prejudice: "the timing of the
request for reexamination, the timing of the request for stay, the status of the reexamination proceedings, and the
relationship of the parties." Boston Scientific Corp. v. Cordis Corp., 777 F. Supp. 2d 783, 789 (D. Del. 2011). The
mere potential for delay does not in itself establish undue prejudice. See, e.g., Body Media, Inc. v. Basis Sci., Inc., No.
12-CV-133 (GMS), 2013 U.S. Dist. LEXIS 82830, at *4 (D. Del. Jun. 6, 2013). After considering these three factors,
the court concludes that there is no evidence at all of undue prejudice. Regarding the timing of the request for
reexamination, the defendants filed their IPR petitions on January 30, 2014. (D.I. 47 at 12.) This is well within the
one-year timeframe that the statute provides. See 35 U.S.C. 315(b). The timing of the request for stay suggests no
dilatory motive; the defendants filed the motion to stay less than two weeks after filing their IPR petitions. (D.I. 46.)
The Patent Trial and Appeal Board ("PTAB") has yet to indicate whether it will grant the defendants petitions, but
this is not dispositive. The relationship of the parties favors granting a stay here since Canatelo is a non-practicing
entity and, by its own admission, does not compete with the defendants. (D.I. 47 at 13; D.I. 52 at 10-11.)
The PT AB has not yet granted the defendants' petitions, but statistics indicate that it is very likely the PT AB
will grant the IPR petitions. (D.I. 48, Ex. 1.) In their IPR petitions, the defendants present new prior art that they
allege discloses every element of the patents-in-suits' claims and that was not considered during prosecution of the
patents-in-suit. (D.I. 47 at 6-10.) Should the PTAB deem the patents-in-suit unpatentable or narrow their scope, the
court's resources will be conserved by expending fewer resources on claim construction or avoiding the claim
construction process altogether. See Bear Creek, 2013 WL 3789471 at *3 n.8. Should the claims survive the IPR
process, the court will still benefit from the PTAB's expertise. See Neste Oil OYJv. Dynamic Fuels, LLC, No. 12-
1744-GMS, 2013 U.S. Dist. LEXIS 92416, at *12 (D. Del. Jul. 2, 2013); Gioello Enters. Ltd. v. Matte/, Inc., No. 99-
375--GMS, 2001 WL 125340, at *1 (D. Del. Jan. 29, 2001).
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In considering the stage of litigation, the court asks "whether discovery is complete and whether a trial date
has been set." First Am. Title Ins. Co. v. MacLaren LLC, No. 10-363-GMS, 2012 U.S. Dist. LEXIS 31508, at *13 (D.
Del. Mar. 9, 2012). Staying a case in its early stages advances judicial efficiency and prevents the court and the parties
from expending resources on claims that may be rendered invalid. See SenoRx, Inc. v. Hologic, Inc., No. 12-173-LPS-
CJB, 2013 U.S. Dist. LEXIS 8044, at *15-16 (D. Del. Jan. 11, 2013). Here, the parties have yet to conduct any
discovery and no scheduling order has been entered. (D.I. 47 at 13-14.)
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Dated: May J!1-' 2014
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