SAS Weighs in Favor of Stay Pre-Institution

At the time SAS Institute first raised its challenge to the partial institution practices of the Patent Trial & Appeal Board (PTAB), I explained that should this argument ultimately prevail that it would be bad news for Patent Owners. Patent Owners facing a motion to stay pending PTAB review frequently leveraged partial institutions to defeat the stay. Such motions were denied because one of the factors considered in the motion analysis is the potential for “simplification of issues for trial.” And where a trial would eventually be conducted regardless of PTAB outcome — the case when there was a partial institution — this factor weighed strongly in favor of Patent Owners continuing the district court litigation .

Post-SAS, this argument is now gone. The impact of SAS on common stay scenarios is already being felt by Patent Owners.

Last week in Wi-Lan, Inc. et al., v LG Electronics, Inc., et al., the Southern District of California considered a motion for stay where IPR petitions were only recently filed. In granting the stay, the Court explained the impact of SAS on the “simplification of issues for trial” factor (here):

"Certainly, the PTO’s review of the patents-in-suit will clarify and streamline the issues before this Court. LG has filed IPR petitions for reexamination of every asserted claim of the four patents-in-suit. Recently, the Supreme Court issued an opinion concluding that, once the PTAB grants review of an IPR petition, it is statutorily required to address every contested claim. SAS Inst., Inc. v. lancu, 138 S. Ct. 1348, 1354 (2018). As a result, if IPR is instituted, the PTO will either ( 1) invalidate the asserted claims and reduce the number of issues before this Court, or (2) find the claims valid, in which case LG will be estopped from asserting those invalidity contentions here.

The PTO has yet to decide whether it will institute review on any of LG’ s six petitions. . . .

While review is not guaranteed and, therefore, the benefits of review are only speculative at this juncture, in light of the Supreme Court’s mandate to review all contested claims upon grant of IPR and the complexity of this case, the Court finds this factor [simplification of issues] weighs in favor of a limited stay of proceedings until the PTO issues its decisions on whether to institute IPR.

(emphasis added)

Given the “all or nothing” dynamic post-SAS, it is no longer necessary for patent challengers to wait until institution to convince the court as to the potential simplification of issues for trial. As such, it seems very likely that Patent Owners will start seeing motions to stay earlier in cases.

Scott A. McKeown is an author of the Patents Post Grant.