DISCUSSION

Although the motion before us is one for leave to amend, Dell focuses nearly all
of its attention on the issue of the stay of proceedings. They assert that the stay should
continue primarily because of the tendency in patent cases to stay infringement actions
against customers pending the outcome of suits against manufacturers of the products
sold to those customers. They cite many cases from this jurisdiction and others where
this procedure has been used and urge us to follow suit. However, nearly every case
upon which they rely involved suits that were pending in different fora. Katz v. Lear-
Siegler, Inc., 909 F.2d 1459 (Fed. Cir. 1990) (Massachusetts and New York); Codex
Corp. v. Milgo Elec. Corp., 553 F.2d 735 (1st Cir. 1977) (Massachusetts and Kansas);

William Gluckin & Co, v, Int’! Playtex Corp., 407 F.2d 177 (2nd Cir. 1969) (Georgia

and New York); Whelen Tech., Inc. v. Mill Specialties, Inc., 741 F. Supp. 715 (N.D.

Ill. 1990) (IIlinois and Arizona); Andco Environmental Processes, Inc. v. Niagara

Environmental Assocs., Inc., 211 U.S.P.Q. 544 (W.D.N.Y. 1981) (New York and

Florida); Allway Tools, Inc. v. Am. Safety Razor Co., 206 U.S.P.Q. 475 (S.D. Tex.

1979) (Texas and Virginia); Wehr Corp. v. Commercial Construction Corp., 464

F. Supp. 676 (S.D. Fla. 1979) (Florida and Washington); Kistler Instrumente v. PCB

Piezotronics, Inc., 419 F. Supp. 120 (W.D.N.Y. 1976) (New York and U.S. Court of

Claims); Siemens Aktiengesellschaft v. Sonotone Corp., 370 F. Supp. 970 (N.D. Ill.

-4.


motive on the part of the movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by virtue of allowance of
the amendment, [or] futility of amendment.” Foman, 371 U.S. at 182, 83 S. Ct. at 230.
Accordingly, the motion for leave to file the amended complaint is granted.
CONCLUSION

Based on the foregoing analysis, the stay initiated on August 5, 2003, in this case
is lifted. This case and its companion, IP Innovation v. Lexmark, Case No. 02 C 7611,
are consolidated for discovery purposes only. IP Innovation’s motion for leave to

amend the complaint against Dell is granted.

Charles P. Kocoras
Chief Judge
United States District Court

(APR .~8 2004
Dated:


Shortly after the minute order setting the discovery cut-off date issued, IP
Innovation propounded interrogatories to Dell and filed a motion for leave to amend
their complaint to add claims pertaining to the ‘637 patent. Dell opposes the proposed
amendment, claiming that the stay remains in effect and thus precludes any action with
regard to the Dell suit, including amendment of the complaint.

LEGAL STANDARDS

The power and ability of a district court to stay a proceeding stem from the

court’s inherent power to control disposition of cases before it in an efficient and

orderly manner, See Landis v. North American Corp., 299 U.S. 248, 254-55, 57S. Ct.

163, 166 (1936). Deciding how best to accomplish this goal requires an exercise of
judgment that must take into account and balance competing interests. Id.; see also

Ingersoll Mill. Mach. Co. v. Granger, 833 F.2d 680, 686 (7th Cir. 1987).

Pursuant to Fed. R. Civ. Proc. 15(a), a plaintiff may amend a complaint once as
a matter of course at any time before a responsive pleading is served. Rule 15(a)
provides that leave to amend a complaint “shall be freely given when justice so
requires.” Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 230 (1962). The
decision whether to grant or deny a motion for leave to amend is committed to the
sound discretion of the district court. Perrian v. O’Grady, 958 F.2d 192 (7th Cir.

1992). With these principles in mind, we turn to the matters at hand.

3-


1973) (Illinois and New York); Coyne & Delany Co. v. G.W. Onthank Co., 90 F. Supp.

505 (S.D. Iowa 1955) (New York and Iowa); Wireless Spectrum Technologies, Inc. v.

Motorola Corp., 2001 WL 32852 (N.D. Ill. Jan. 12, 2001) (Illinois and Patent and

Trademark Office); Indianapolis Motor Speedway Corp. v. Polaris Indus., Inc., 2000

WL 777874 (S.D. Ind. June 15, 2000) (Minnesota and Indiana); T.J. Smith v. Ferris
Corp., 1987 WL 7496 (N.D. Ul. March 2, 1987) (New York and Illinois). Although
the fact that two judges are considering suits that are markedly similar is not dispositive
in deciding whether a stay is warranted, clearly it provides a significant basis for
circumspection.

By contrast, the manufacturer suit and the Dell suit are both before us, through
the efforts of Dell to transfer from the Eastern District of Texas. Thus, there is no
danger of inconsistent results or duplicative expenditure of scarce judicial resources

arising from simultaneous consideration by different judges. See Watson Industries

Inc. v. Canon, Inc., 2003 WL 23218401, at *1 (W.D. Wis. Nov. 24, 2003) (denying

motion to stay in patent infringement case against customer because, inter alia,
manufacturer case was before identical judge). Neither does it promote judicial
economy to await for ultimate resolution of the manufacturer case when there is no
agreement from IP Innovation or Dell to be bound by the outcome of the issues in the

manufacturer suit, enabling later disputes over subjects such as collateral estoppel,

5.


‘Minute Order Form (0697)

United States District Court, Northern District of Illinois

Name of Assigned Judge Charles P. Kocoras Sitting Judge if Other
or Magistrate Judge . than Assigned Judge
CASE NUMBER 03 C 3245 DATE 4/8/2004
CASE IP Innovation vs. Dell Computer Corp.
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.]
—

DOCKET ENTRY:

(1) Oo Filed motion of [ use listing in “Motion” box above.]

(2) i) Brief in support of motion due

(3) iz] Answer brief to motion due. Reply to answer brief due__

(4) o Ruling/Hearing on set for at

(5) Oo Status hearing[held/continued to] [set for/re-set for] on set for at

(6) im) Pretrial conference[held/continued to] [set for/re-set for] on set for at .

(7) Oo Trial{set for/re-set for] on at _

(8) a [Bench/Jury trial] [Hearing] held/continued to at

(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OFRCP4¢m) Local Rule 41.1 OFRCP41(a\1) Cl) FRCP41(a)(2).

(10) MW [Otherdocketentry] ENTER MEMORANDUM OPINION: The stay initiated on August 5, 2003,
in this case is lifted. This case and its companion, IP Innovation v. Lexmark, Case No. 02 C 7611, are
consolidated for discovery purposes only. IP Innovations’s motion (Doc 39-1) for leave to amend the
complaint against Dell is granted.

dl) [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required. umber of notices

Notices mailed by judge’s staff.

APR 0 9 2004

Notified counsel by telephone. dard docketed

vo | Docketing to mail notices.

Mail AO 4§0 form.
Copy a magistrate judge. =
APRS 9 2006
courtroom 7 i an date mailed notice
SCT deputy's
initials :
v= Dateltiie received in ;
a central Clerk’s Office ‘mailing depuly initials



patent validity, and the party responsible for the manufacture of the products at issue.
See id. To put off determination of these questions with respect to Dell runs the risk
of the very duplication that Dell says a stay will avoid. At this time, the most sensible
course of action is to put the parties on a common track.

In addition, as the August 5, 2003, transcript makes clear, the stay was granted
for a limited time and with a limited purpose. It was not intended to extend until the
manufacturer suit was completely resolved. The purpose of the stay, to allow time to
determine whether and against whom the manufacturer case would proceed, has been
accomplished. Thus, there is no reason for it to continue, and we formally
acknowledge what was implied in the February 9 minute order: the stay entered on
August 5, 2003 is lifted.

We thus turn to the issue of the amendment of the complaint. As stated above,
leave to amend is freely given when justice requires. Aside from the stay, Dell has not
offered any objection of substance to the proposed amendment. Our review of its
contents reveals that the addition of the claims pertaining to the ‘637 patent will makes
the complaint in the Dell suit track the one in the manufacturer suit. Thus, allowing
the amendment streamlines the contemporaneous consideration of the two suits and
will improve our ability to resolve them in tandem. Neither can we detect any of the

usual reasons to disallow an amendment, such as “undue delay, bad faith or dilatory

-6-


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

IP INNOVATION L.L.C. AND TECHNOLOGY
LICENSING CORPORATION,

Plaintiff,
03 C 3245

vs.

DELL COMPUTER CORPORATION,

we ONES ES SS

Defendant.

en ak
g®

MEMORANDUM OPINION 08
ye

CHARLES P. KOCORAS, Chief District Judge:

This matter comes before the court on the motion of Plaintiffs IP Innovation
LLC and Technology Licensing Corporation (collectively referred to herein as “IP
Innovation”) to amend their complaint against Defendant Dell Computer Corporation
(“Dell”). For the reasons set forth below, the motion is granted.
BACKGROUND
IP Innovation holds two patents relevant to this case: U.S. Patent No. 5,424,780
(“the ‘780 patent”) and U.S. Patent No. 6,529,637 (“the ‘637 patent”). The patents

involve computer imaging technology that can be used in printing and faxing, among

other applications. In October 2002, IP Innovation filed a complaint alleging

Lf.


infringement of the ‘780 patent by Minolta Corporation (“the manufacturer suit”). This
complaint initiated the companion suit to the instant case (“the Dell suit”), which was
originally filed in December 2002 in the Eastern District of Texas. As time went on,
several other defendants were added to the companion suit, and the complaint was
amended in March 2003 to add a claim for infringement of the ‘637 patent.

In April 2003, Judge Ward of the Eastern District of Texas transferred this suit
to our court at Dell’s request. Originally, it was assigned to Judge Guzman but was
reassigned to our calendar because of its relation to the manufacturer suit. At a hearing
in August, the parties to the manufacturer suit reported on their progress in achieving
settlement agreements. The subject of consolidation of the Dell suit and the
manufacturer suit arose, prompting counsel for Dell to resurrect the motion to stay that
had been before Judge Guzman before reassignment. At that time, we granted Dell’s
oral motion until the cast of characters in the manufacturer suit could be finalized. See
August 5, 2003 Tr. at 10. Since then, all but one of the defendants in the manufacturer
suit have reached settlements with IP Innovation. The remaining defendant, Lexmark,
filed a motion to transfer the manufacturer suit to Kentucky as well as a motion for
summary judgment of the infringement claims against it. Both motions were denied.
Because no further impediments remained to commencement of discovery, we set

June 9 as a cut-off date for fact discovery.

-2-