Plaintiff e-Watch, Inc. filed a patent infringement action against several defendants, including Defendant FLIR Systems, Inc. ("FLIR"). FLIR filed a motion to stay pending an inter partesreview of the patent-in-suit by the Patent Office.

In deciding to grant the stay, the district court noted that the action was at an early stage and that the inter partes review could simplify the issues in the case. "This action is at a very early stage, and a stay could materially simplify the issues in the case if the United States Patent and Trademark Office ("USPTO") decides to institute an inter partes review with respect to either of the patents at issue."

e-Watch asserted that FLIR was "not entitled to a stay based upon inter partes review because defendant did not file the petitions for inter partes review and is therefore not subject to the estoppel effect of a decision of the USPTO." To avoid this argument FLIR represented that it would be "willing to be estopped in this action from challenging the validity of any claim of e-Watch's '913 or '183 patent[s] on the same grounds and based upon the same combinations of prior art asserted by Mobotix and used by the USPTO in its findings in the Inter Partes Reviews."

The district court went a step further and added conditions to the estoppel to make it in line with the statutory estoppel provisions. "The court concludes, however, that as a condition for a stay if either of the petitions results in a final written decision under 35 U.S.C. § 318(a), FLIR should be estopped from arguing that the patents alleged in this action, or any claim in the patents, is invalid on "any ground" that Mobotix -- the petitioner in the pending petitions for inter partes review -¬"raised or reasonably could have raised during that inter partes review." See 35 U.S.C. § 315(e) (2).

As a result, the district court then determined that there would be no undue prejudice to e-Watch and granted the stay. "Since the court's stay is conditioned upon FLIR being so estopped, the court concludes that a stay will not unduly prejudice plaintiff or present a clear tactical disadvantage to plaintiff." e-Watch, Inc. v. FLIR Systems, Inc., Case No. H-13-0638 (S.D. Tex. Aug. 8, 2013)

e-Watch, Inc. v. FLIR Systems, Inc., Case No. H-13-0638 (S.D. Tex. Aug. 8, 2013)