Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_18-cv-00189/USCOURTS-casd-3_18-cv-00189-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:0271 Patent Infringement

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

STRATEGIC OPERATIONS, INC.,

Plaintiff,

v.

CAROLE GIANNINI, and individual; 

GLACIER TECHNOLOGY 

SOLUTIONS, LLC, an Alaska limited 

liability company; and DOES 1–10, 

inclusive,

Defendants.

Case No.: 18-CV-189 JLS (WVG)

ORDER GRANTING DEFENDANTS’ 

MOTION TO STAY

(ECF No. 15)

Presently before the Court is Defendants Carol Giannini and Glacier Technical 

Solutions, LLC’s (“GTS”) Motion to Stay (“Mot.,” ECF No. 15). Also before the Court is 

Plaintiff Strategic Operations, Inc.’s (“StOps”) Response in Opposition to (“Opp’n,” ECF 

No. 16) and Defendants’ Reply in Support of (“Reply,” ECF No. 18) the Motion. The 

Court took the Motion under submission without oral argument pursuant to Civil Local 

Rule 7.1(d)(1). See ECF No. 17. Having considered the Parties’ arguments, the evidence, 

and the law, the Court GRANTS Defendants’ Motion.

/ / /

/ / /

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BACKGROUND

StOps is a tactical trauma training company that provides realistic training 

environments, training scenarios, and proprietary training products and services for 

military, law enforcement, and other organizations. ECF No. 1 (“Compl.”) ¶ 3. StOps is 

the exclusive licensee of United States Patent Nos. 8,840,403 (the “’403 Patent) and 

9,336,693 (the “’693 Patent”) (together, the “Patents-in-Suit”). Id. ¶ 14. The Patents-inSuit “pertain to devices and methods for simulating realistic-looking, dynamic injuries that 

a person may receive during a traumatic event.” Id. ¶ 15. “The devices claimed in the . . . 

Patent[s-in-Suit] are especially useful for medical and combat training purposes as they 

can be worn by ‘role players’ during a simulated traumatic event to mimic a plurality of 

different combat-related bleeding wounds and internal injuries and allow first responders 

to perform medical treatment on the same.” Id. “StOps sells a trauma training and surgical 

simulator product which embodies one or more of the claims of the . . . Patent[s-in-Suit] 

under the trade name ‘Cut Suit.’” Id. ¶ 16.

Ms. Giannini is a resident of San Diego County, see id. ¶ 4, who is associated with 

GTS, see id. ¶ 18, an Alaskan limited liability company with principal places of business 

in El Paso, Texas, and Oceanside, California. See id. ¶ 5. Ms. Giannini “has become 

familiar with StOps’ Cut Suit,” id. ¶ 19, including by “rent[ing] Cuts Suits from StOps for 

use in military training exercises.” Id. ¶ 20. “[T]hrough this rental, [Ms. Giannini] has 

become keenly familiar with the Cut Suit, its capabilities and benefits[,] and demand for 

the Cut Suit in the marketplace.” Id.

“In recent years, [Defendants have] ceased rentals of the Cut Suits from StOps, and 

instead [have] provided a similar Trauma Training Kit (“TTK”) in conjunction with 

military training exercises.” Id. ¶ 21. StOps believes that the TTK “embodies and uses 

inventions claimed in the . . . Patent[s-in-Suit].” Id. ¶ 30. Consequently, “Defendants have 

directly infringed, and continue to directly infringe, the . . . Patent[s-in-Suit] by making, 

using, offering to sell, and/or selling the TTK in conjunction with their trauma training 

exercises.” Id. ¶ 31.

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On January 27, 2018, StOps filed a Complaint against Defendants alleging a single 

cause of action for infringement of the Patents-in-Suit. See generally ECF No. 1. The 

action was transferred to this Court pursuant to the low number rule because of its relation 

to Strategic Operations, Inc. v. Joseph, No. 17-CV-1539 JLS (WVG) (S.D. Cal. filed July 

28, 2017) (the “Joseph Action”). See ECF No. 4. Following several extensions of time 

within which to respond to the Complaint, see ECF Nos. 10, 12, 14, Defendants filed the 

instant Motion.

LEGAL STANDARD

“[T]he power to stay proceedings is incidental to the power inherent in every court 

to control the disposition of the causes on its docket with economy of time and effort for 

itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). This 

power to stay proceedings includes the discretion to grant stays “pending resolution of 

independent proceedings which bear upon the case.” Leyva v. Certified Grocers of Cal., 

Ltd., 595 F.2d 857, 863 (9th Cir. 1979). Moreover, “[t]his rule applies whether the separate 

proceedings are judicial, administrative, or arbitral in character, and does not require that 

the issues in such proceedings are necessarily controlling of the action before the court.” 

Id. at 863–64 (citations omitted).

The inherent power of district courts to grant stays “calls for the exercise of sound 

discretion,” by which a court must weigh the competing interests of the parties that would 

be affected by a grant or denial of a stay. CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 

1962). The Ninth Circuit has identified three competing interests that warrant the closest 

examination in this analysis: (1) the hardship or inequity upon the non-moving party that 

would result from granting the stay, (2) the hardship or inequity upon the moving party in 

being required to go forward after denial of the stay, and (3) the orderly course of justice 

measured in terms of the simplifying or complicating of issues, proof, and questions of law 

that could be expected to result from a stay. Id.; see also Lockyer v. Mirant Corp., 398 

F.3d 1098, 1110 (9th Cir. 2005). Finally, “[t]he party requesting a stay bears the burden 

of showing that the circumstances justify an exercise of that discretion.” Nken v. Holder, 

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556 U.S. 418, 433–34 (2009) (citing Clinton v. Jones, 520 U.S. 681, 708 (1997); Landis v. 

N. Am. Co., 299 U.S. 248, 255 (1936)).

ANALYSIS

Defendants request that the Court stay this action in favor of the Joseph Action under 

both the “customer-suit” doctrine and the traditional Lockyer factors. See, e.g., Mot. at 1. 

I. The Customer-Suit Doctrine

Defendants urge that, “where, as here, a patentee sues a manufacturer’s customers 

based on the manufacturer’s products, the action against the manufacturer takes 

precedence.” Mot. at 5 (citing In re Nintendo of Am., Inc., 756 F.3d 1363, 1365 (Fed. Cir. 

2014)). This is because “the manufacturer is often considered ‘the true defendant.’” Id.

(quoting Katz v. Lear Siegler, Inc., 909 F.2d 1459, 1464 (Fed. Cir. 1990)). Defendants 

claim that a stay is warranted here because if the Patents-in-Suit “are found to be invalid 

or not infringed in the [Joseph A]ction, those determinations would resolve major issues 

of this case” because “the issues of infringement are entirely common as to the 

manufacturer (KBZ defendants [in the Joseph Action]) and the customer (GTS 

defendants)” and StOps “has sued defendants for infringement of the same two patents.” 

Id. at 7. Defendants additionally contend that “[g]ranting this motion would resolve the[] 

claims more efficiently and conveniently because the issues of non-infringement and 

invalidity are common to the defendants and it plaintiff were to collect royalties from the 

KBZ defendants, plaintiff would be precluded from recovering again from the GTS 

defendants.” Id. 

StOps counters that “[t]his is not simply a ‘customer-suit’ case as proposed by 

Defendants.” Opp’n at 7. Although “[t]his case and the [Joseph Action] are both related 

to infringement of some of the StOps Patents[, t]hat is where the similarities stop.” Id. at 

4. For example, “[d]ifferent infringing conduct is alleged against” Defendants here, such 

as contributory infringement. Id. “Further, the analysis related to damages varies greatly 

between the cases[] and[,] in this case, would extend far outside any involvement by [the 

defendants in the Joseph Action].” Id. at 5. 

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The Court concludes that application of the customer-suit doctrine makes sense 

under these circumstances. The Patents-in-Suit are identical to two of the three patents-insuit in the Joseph Action. Further, both this action and the Joseph Action allege theories 

of patent infringement based on the TTK that is made by the defendants in the Joseph 

Action.1

 Not only would a stay best conserve judicial resources, but the defendants in the 

Joseph Action—as the manufacturer and/or seller of the TTK—are therefore the true 

defendant in this case. Consequently, a stay as to Defendants would be appropriate to spare 

them the burdens of trial while the defendants in the Joseph Action litigate StOps’ 

infringement claims with respect to their manufacture or sale of the TTK. See, e.g., 

Xiaohua Huang v. Open-Silicon, Inc., No. 18-CV-00707-JSW (LB), 2018 WL 5099275, at 

*4 (N.D. Cal. Aug. 27, 2018); Upaid Sys., Ltd. v. CleanDan, No. SACV1800619ABSSX, 

2018 WL 5279567, at *4 (C.D. Cal. July 25, 2018); WP Banquet, LLC v. Lowe’s Cos., No. 

216CV02137CASGJSX, 2016 WL 4472933, at *4 (C.D. Cal. Aug. 24, 2016).

II. Traditional Stay Factors

Defendants also argue that the traditional factors to be considered in granting a stay 

favor granting the Motion because Defendants “will suffer a hardship of the cost and 

expense of defending a parallel tracked litigation for alleged infringement for which they 

no longer have the government contract,” while the Joseph “[A]ction will simplify the 

issues, proof, and questions of law if the stay was later lifted and the [instant] litigation re-

 

1 To the extent StOps now argues that this action alleges that Defendants have induced infringement in 

others who have manufactured other trauma training products, see Opp’n at 4–5, that allegation is thin, at 

best, and hinges upon a single word in the Complaint: “In doing so, Defendants have purposefully 

intended it, and others, to infringe the . . . Patent[s-in-Suit].” Compl. ¶ 36 (emphasis added). Not only is 

the antecedent for “it”—and therefore “others”—unclear, but the rest of the Complaint is focused on 

Defendants’ infringement with respect to the TTK in particular. See generally id. ¶¶ 21–25, 28–38; see 

also id. Exs. 3–4.

“In the event that the Court determines that the original Complaint has failed to point out sufficient details 

regarding the factors which supports denying the Motion to Stay, StOps requests this [M]otion be denied 

pending the filing of an Amended Complaint in which the factors can be more completely ple[]d.” Opp’n 

at 10. The Court DENIES StOps’ request, which is not properly before the Court. See Fed. R. Civ. P. 

7(b)(1) (“A request for a court order must be made by motion.”).

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started.” Mot. at 8. StOps counters that, “[i]f this case is stayed, and StOps cannot pursue 

this case to actively identify and address the various other infringers, the value of StOps[’] 

patented Cut Suit is greatly diminished.” Opp’n at 8. On the other hand, the “Moving 

Defendants have not identified any meaningful hardship that would result from the denial 

of a stay beyond having to defend against [StOps’] claims in this action, which is 

insufficient by itself to justify a stay.” Id. (quoting Carucel Invs., L.P. v. Novatel Wireless, 

Inc., No. 16-cv-118-H-KSC, 2016 WL 8738221, at *3 (S.D. Cal. May 13, 2016)). StOps 

also argues that another case pending before this Court, Abikar v. Bristol Bay Native 

Corporation, No. 17-CV-1036 GPC (AGS) (S.D. Cal. filed May 18, 2017) (the “Abikar 

Action”), “could result in the demise of GTS as a company, and the personnel, evidence 

and records required by StOps and related to GTS’s infringing conduct and the conduct of 

others would likely be lost,” id., thereby “creat[ing] an exigency in having this case heard.” 

Id. at 9.

Ultimately, the Court concludes upon consideration of the traditional Lockyer stay 

factors that Defendants have carried their burden of demonstrating that the Court should 

exercise its discretion to grant a stay under these circumstances. First, the Court must agree 

with Defendants that StOps’ arguments of potential inequity and hardship are primarily 

based on “hyperbolic speculation.” See Reply at 3. It is not clear to the Court—particularly 

based on the current Complaint, see supra note 1—that Defendants have obtained other 

allegedly infringing products manufactured by defendants other than those to the Joseph 

Action. Further, the Abikar Action conditionally settled while this Motion was pending, 

undercutting StOps’ arguments predicated on the potential prejudice it might face if the 

Abikar Action were to reach resolution while this action is stayed.

Second, although StOps is correct that Defendants usually cannot show that they 

will suffer any inequity or hardship sufficient to merit a stay in being forced to proceed 

with litigation, see Opp’n at 8, this general rule is not applicable in the customer-suit 

context. Rather, the customer-suit “rule exists to avoid, if possible, imposing the burdens 

of trial on the customer, for it is the manufacturer who is generally the ‘true defendant’ in 

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the dispute.” In re Nintendo of Am., Inc., 756 F.3d at 1365. Consequently, Defendants 

have adequately demonstrated that they “may suffer hardship or inequity in the absence of 

a stay from duplicative litigation with issues that largely overlap” with the Joseph Action. 

See Xiaohua Huang, 2018 WL 5099275, at *5 (emphasis added); see also Upaid Sys., Ltd. 

v. CleanDan, No. SACV1800619ABSSX, 2018 WL 5279567, at *4 (C.D. Cal. July 25, 

2018) (“[F]orcing Defendant to litigate issues that will be litigated in the Related Action 

would be an unnecessary strain on Defendant.”).

Third and finally, staying this case pending resolution of the Joseph Action is likely 

to simplify the issues, proof, and/or questions of law in the instant action. As discussed 

above, the Patents-in-Suit are identical to two of the three patents-in-suit in the Joseph 

Action and both suits allege theories of patent infringement based on the TTK

manufactured and/or sold by the defendants in the Joseph Action. Consequently, “the 

orderly course of justice is served best by litigating [StOps’] patent claims first against the 

upstream manufacturer, [the defendants in the Joseph Action], before the claims against 

the downstream customer.” See Xiaohua Huang, 2018 WL 5099275, at *5; see also Upaid 

Sys., Ltd., 2018 WL 5279567, at *4 (“[T]he [Joseph Action] will address, among other 

things, whether the [TTK] infringed the . . . patent[s-in-suit], and will resolve all the major 

issues of law and fact presented here.”). 

CONCLUSION

In light of the foregoing, the Court GRANTS Defendants’ Motion (ECF No. 15) and 

STAYS this action pending resolution of Strategic Operations, Inc. v. Joseph, No. 17-cv1539 JLS (WVG) (S.D. Cal. filed July 28, 2017). The Parties SHALL FILE a notice with 

the Court within seven (7) days of the resolution of the Joseph Action.

IT IS SO ORDERED.

Dated: May 7, 2019

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