Order Lifting Stay, MLC Intellectual Property, LLC v. Micron Technology, Inc., Case No. 14-cv-03657-SI (Judge Susan Illston)

As we have reported in the past, judges in the Northern District are generally willing to stay a case pending IPR, and sometimes even before the PTAB decides whether to institute review. But Judge Illston’s order in MLC v. Micron confirms there are limits. At least when an IPR petition is initially denied, and a decision on rehearing is nowhere in sight, the scales may tip in favor of lifting an existing stay and letting the district court action proceed, notwithstanding unfinished business before the PTAB.

In MLC, defendant Micron filed an IPR petition in December 2014, and the court stayed the case pending the outcome of those proceedings in February 2015. The PTAB denied the IPR petition in July 2015, and Micron filed a request for rehearing the following month. Thereafter, the court granted two requests to extend the stay that was already in place. In the meantime, nothing seemed to be happening before the PTAB. The silence is unusual, since the PTAB’s Office Patent Trial Practice Guide states, “The Board envisions that, absent a need for additional briefing by an opponent, requests for rehearing will be decided approximately one month after receipt of the request.” 77 Fed. Reg. 48,756, 48,768 (Aug. 14, 2012).

Finally, about a year after the case was stayed, MLC ran out of patience and moved to lift the stay. Both sides tried to spin the PTAB’s delay in their favor: MLC argued that the Board’s delay was inconsistent with its own guidelines, so it was unclear when the Board would ever act on the rehearing request. Micron, on the other hand, argued that the Board might take longer than a month particularly in cases where the Board intends to reverse its prior denial.

Judge Illston was unpersuaded by Micron’s speculation, or the fact that the patent-in-suit has expired. The court also discounted Micron’s argument that MLC, as a non-practicing entity, would not be prejudiced by a continued stay. Judge Illston stated, “The Court does not wish to further delay this action and is concerned that there has not been substantive activity on this case since November 2014. In the event the Board grants rehearing, the Court can adjust the pretrial schedule in this case if necessary.” As a result, Judge Illston lifted the stay, reflecting that in unusual circumstances like that presented by Micron’s petition, ongoing proceedings before the PTAB will not preclude the resumption of parallel patent infringement litigation.