In VERSATA SOFTWARE, INC. v. CALLIDUS SOFTWARE, INC., Appeal No. 2014-1468, the Federal Circuit reversed the denial of a stay pending CBM (covered business method) review of the patents-in-suit.

Shortly after initiation of suit, Callidus filed CBM petitions with the PTO challenging every asserted independent claim and some of the asserted dependent claims.  The PTO instituted CBM review for each asserted patent.  Callidus moved to stay the case in the district court pending the PTO’s resolution of each CBM review.  The district court granted the motion to stay as to one asserted patent, but denied the motion regarding two patents whose asserted claims were not entirely challenged in the CBM review.  Callidus appealed.

The Federal Circuit reversed the partial denial of the stay.  Analyzing the factors provided in section 18(b) of AIA, the Federal Circuit determined that each favored the stay.  The Federal Circuit rejected a categorical rule that disfavors a stay if any asserted claims are not also challenged in the CBM proceeding, noting that a CBM review can simplify the issues even when only some of the asserted claims are challenged.  Further, that the case was in an early stage favored the stay, as did a finding that neither party would gain an unfair advantage from the stay.  Finally, the Federal Circuit concluded that resolution of the CBM petitions would reduce the prospective burden of litigation on the parties and on the court.