District Judge Katherine Forrest granted defendant Cambridge’s motion to stay the litigation pending a Covered Business Method (“CBM”) review of U.S. Patent 7,698,196 (“the ’196 patent”), titled “Method and system for modeling and benchmarking private equity and applications of same,” by the U.S. Patent and Trademark Office (“PTO”) Patent Trial and Appeal Board (“PTAB”). Section 18 of the Leahy-Smith America Invents Act (“AIA”) sets out four factors to consider whether to stay litigation pending CBM review:

  1. whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;
  2. whether discovery is complete and whether a trial date has been set;
  3. whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and
  4. whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.

Considering that the PTAB instituted trial in more than 83% of CBM petitions and that the PTO “either canceled or amended at least one claim 92% of the time in inter partes proceedings,” the court found that there was a high likelihood that the PTAB would grant the CBM review and that one or more claims of the ’196 patent would be cancelled or amended. The court also noted that since the litigation was less than six months old and claim construction had not commenced, the “early stage of the instance action” favored granting a stay. Thus, the court stayed the litigation until the PTAB denied Cambridge’s CBM petition, the PTAB made a final decision in the CBM review, or a further order of the court.

Case: Capital Dynamics AG v. Cambridge Assocs., LLC, No. 13 Civ. 7766 (KBF) (S.D.N.Y. Apr. 1, 2014)