Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-03715/USCOURTS-cand-3_04-cv-03715-8/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:101 Copyright Infringement

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

PHOTOFLEX PRODUCTS, INC.,

Plaintiff,

 v.

CIRCA 3 LLC dba AMVONA.COM,

Defendant.

 /

No. C 04-03715 JSW

ORDER GRANTING IN PART

AND DENYING IN PART

AMENDED MOTION TO STAY

LITIGATION

Now before the Court is Defendant Circa 3 LLC dba Amvona.com’s (“Amvona”)

motion to stay litigation during the pendency of reexamination of United States Patent 6,076,

935 (the “’935 Patent”). The Court finds that this matter is appropriate for disposition without

oral argument. See N.D. Civ. L.R. 7-1(b). Accordingly, the hearing set for May 26, 2006 is

HEREBY VACATED. Having considered the parties’ pleadings and the relevant legal

authority, the Court HEREBY GRANTS IN PART AND DENIES IN PART Defendant’s

motion to stay litigation. In this action, Plaintiff brings claims for copyright and patent

infringement, as well we claims of unfair competition and false designation of origin, related to

the manufacture and marketing of high quality photographic equipment. Count two of the

second amended complaint for patent infringement is STAYED, but Counts one, three and four

for copyright infringement, false designation of origin and unfair competition are NOT

STAYED.

Case 3:04-cv-03715-JSW Document 95 Filed 05/24/06 Page 1 of 5
United States District Court

For the Northern District of California

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ANALYSIS

A. Legal Standards Applicable to a Motion to Stay Proceedings Pending

Reexamination.

The patent reexamination statute provides in pertinent part that “[a]ny person at any time

may file a request for reexamination by the [PTO] of any claim of a patent on the basis of any

prior art cited under the provisions of section 301.” 35 U.S.C. § 302. The PTO must

“determine whether a substantial new question of patentability affecting any claim of the patent

concerned is raised by the request . . . .” 35 U.S.C. § 303(a). The reexamination statute further

provides that “[a]ll reexamination proceedings . . . including any appeal to the Board of Patent

Appeals and Interferences, will be conducted with special dispatch.” 35 U.S.C. § 305.

The determination of whether to grant a stay pending the outcome of the PTO’s

reexamination is soundly within the Court’s discretion. See Tap Pharm. Prods. Inc. v. Atrix

Labs. Inc., 70 U.S.P.Q. 2d 1319, 1320 (N.D. Ill. 2004) (citing Gould v. Control Laser Corp.,

705 F.2d 1340, 1341 (Fed. Cir. 1983)). When ruling on such a stay, courts consider several

factors: (1) the stage of the litigation, including whether discovery is or will be almost

completed and whether the matter has been marked for trial; (2) whether a stay will unduly

prejudice or tactically disadvantage the nonmoving party; and (3) whether a stay will simplify

the issues in question and streamline the trial, thereby reducing the burden of litigation on the

parties and on the court. Id.; Methode Elecs., Inc. v. Infineon Techs. Corp., No. 99-21142, 2000

U.S. Dist. LEXIS 20689, at *5-6 (N.D. Cal. Aug. 7, 2000). There is a “liberal policy in favor of

granting motions to stay proceedings pending the outcome of USPTO reexamination or

reissuance proceedings.” ASCII Corp. v. STD Entertainment, 844 F. Supp. 1378, 1381 (N.D.

Cal. 1994).

B. Early Stage of Litigation Favors a Stay of the Patent Claim.

Here, the early stage of this litigation weighs in favor of granting a stay of the patent

infringement portion of the case. See Target Therapeutics, Inc. v. SciMed Life Sys., Inc., 33

U.S.P.Q. 2d 2022, 2023 (N.D. Cal. 1995) (holding that the absence of “significant discovery” or

“substantial expense and time . . . invested” in the litigation weighed in favor of staying the

litigation); see also ASCII Corp., 844 F. Supp. at 1381 (granting stay where parties had

Case 3:04-cv-03715-JSW Document 95 Filed 05/24/06 Page 2 of 5
United States District Court

For the Northern District of California

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undertaken little or no discovery and the case had not yet been set for trial). Here, discovery

has just begun. Amvona has served 14 interrogatories and 29 requests for production of

documents and Photoflex has served 16 interrogatories and 5 requests for production of

documents. No depositions have been taken or scheduled. (See Declaration of James Yuanxin

Li (“Li Decl.”), ¶ 2.) Therefore, the fact that this case is still in the early stages and the parties

have not yet conducted “significant discovery” or invested “substantial expense” into the

litigation weighs in favor of granting a stay. See Target Therapeutics, 33 U.S.P.Q. 2d at 2023.

C. A Stay Will Not Unduly Prejudice Plaintiff.

In determining whether to grant a stay, courts also consider any resulting undue

prejudice on the nonmoving party. See Methode Elecs., 2000 U.S. Dist. LEXIS 20689, at *7. 

Granting a stay does not cause the nonmoving party undue prejudice when that party has not

invested substantial expense and time in the litigation. Id. The delay inherent to the

reexamination process does not constitute, by itself, undue prejudice. Pegasus Dev. Corp. v.

DirecTV, Inc., 2003 WL 21105073, at *2 (D. Del. May 14, 2003). 

Courts also consider evidence of dilatory motives or tactics, such as when a party unduly

delays in seeking reexamination of a patent. Methode Elecs., 2000 U.S. Dist. LEXIS 20689, at

*7. This is not a case where reexamination is sought on the eve of trial or after protracted

discovery. Cf. Agar Corp., Inc. v. Multi-Fluid, Inc., 983 F. Supp. 1126, 1128 (S.D. Tex. 1997)

(finding that “courts are inclined to deny a stay when the case is set for trial and the discovery

phase has almost been completed”). There has been no showing of dilatory motive or tactics. 

Accordingly, te Court finds that a stay of the patent claim will not unduly prejudice

Plaintiff, and thus this factor also weighs in favor of granting a stay.

D. A Stay Will Simplify the Issues, Streamline the Trial, and Reduce the

Burden of Litigation on Both the Parties and the Court.

Because the patent-in-suit is currently being reexamined, the Court finds that the patent

infringement case should be stayed during the pendency of the reexamination. The Court finds

that such a stay will simplify the issues and streamline the trial, thereby reducing the burden on,

and preserving the resources of both the parties and the Court.

Case 3:04-cv-03715-JSW Document 95 Filed 05/24/06 Page 3 of 5
United States District Court

For the Northern District of California

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However, in determining whether to grant a stay of an entire case, courts consider

whether there would remain, after the PTO reexamination, issues “completely unrelated to

patent infringement” for which a stay would not reduce the burden of litigation on both the

parties and the court. Imax Corp. v. In-Three, Inc., 385 F. Supp. 2d 1030, 1033 (C.D. Cal.

2005). If such matters “would continue to be an issue . . . a stay would not preserve many

resources.” Id.

Here, in addition to the patent infringement claim, Plaintiff brings claims for copyright

infringement, false designation of origin and unfair competition. Simply arguing these claims

have no merit, Defendant has failed to address whether there are significant overlapping issues

between the patent claim and these other claims whereby a stay of the other claims would

reduce the burden of litigation on both the parties and the Court. Thus, the Court finds that

Defendant has made no showing upon which the Court could find a stay of those separate

causes of action would be justified.

Therefore, having considered the factors relevant in determining whether to grant a stay

pending reexamination, the Court hereby GRANTS Amvona’s motion to stay the patent

infringement portion of this case but DENIES the motion as to the remaining claims. 

CONCLUSION

For the foregoing reasons, the Court GRANTS IN PART AND DENIES IN PART

Amvona’s motion to stay. Count two for patent infringement is stayed from the date of this

Order until further notice with the exception of activities relating to or arising out of the judicial

settlement conference currently schedule before Magistrate Judge Wayne D. Brazil on May 25,

2006. The Court HEREBY ORDERS the parties to submit a joint status report regarding the

status of the reexamination proceedings every 120 days, or sooner if the PTO issues a final

decision with respect to any of the ’935 Patent, until the stay of the patent infringement claim is

lifted. 

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Case 3:04-cv-03715-JSW Document 95 Filed 05/24/06 Page 4 of 5
United States District Court

For the Northern District of California

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The Court DENIES the request for a stay as to counts one, three and four. 

IT IS SO ORDERED.

Dated: May 24, 2006 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

Case 3:04-cv-03715-JSW Document 95 Filed 05/24/06 Page 5 of 5