This case involves an interlocutory appeal from a patent infringement lawsuit that the patentee filed in Utah District Court. Shortly after the patentee amended its complaint, the alleged infringer petitioned the Patent Trial and Appeal Board (PTAB) for inter partes review (IPR) of the asserted patents and concurrently moved to stay the district court litigation pending the outcome of the IPR proceedings. The district court applied the traditional three-factor test in staying the case: 1) stage of the proceedings; 2) potential for the stay to simplify issues in the case; and 3) undue prejudice to the non-moving party or a clear tactical advantage for the moving party resulting from a stay. In addition, the district court considered a fourth factor: potential for a stay to reduce the burden of litigation on the parties and the court.
The patentee moved to lift the stay and for entry of a preliminary injunction. The district court denied both motions in a single order. The district court held that every factor of the four-factor test weighed in favor of granting the stay and that the patentee untimely filed its motion for preliminary injunction.
The Federal Circuit affirmed the district court’s order pertaining to the stay. The court reviewed the district court’s refusal to lift the stay for an abuse of discretion and held that consideration of the fourth factor was within the district court’s discretion: “The Supreme Court has long recognized that district courts have broad discretion to manage their dockets, including the power to grant a stay of proceedings,” and attendant to that power is the “court’s discretionary prerogative to balance considerations beyond those captured by the three-factor stay test.”
With regard to the preliminary injunction, the court noted that the denial of a preliminary injunction motion is reviewed for an abuse of discretion and that Rule 52(a)(2) of the Federal Rules of Civil Procedure requires that the court state its findings and conclusions supporting the grant or denial of a preliminary injunction. Here, the Federal Circuit found that the district court did not offer any analysis in denying the patentee’s motion and that such a cursory treatment did not satisfy Rule 52(a)(2). The court held that “[w]hen a district court denies a preliminary injunction motion, it must provide an adequate reason for its decision beyond merely noting that the case has been stayed.” Therefore, the Federal Circuit vacated the district court’s denial of the patentee’s motion for a preliminary injunction and remanded for further proceedings.