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Buysafe, Inc. v. Google, Inc.

United States District Court, E.D. Virginia, Richmond Division

June 16, 2014

buySAFE, INC., Plaintiff,
v.
GOOGLE, INC., Defendant.

MEMORANDUM OPINION (GRANTING A PARTIAL LIMITED STAY)

HENRY E. HUDSON, District Judge.

This matter is before the Court on Google, Inc.'s ("Defendant") Motion to Stay (ECF No. 46), filed on May 12, 2014. Specifically, Defendant requests that this case be stayed pending completion of a Covered Business Method ("CBM") Review (the Petition for Review and the Review itself) of U.S. Patent No. 8, 515, 791 ("the '791 Patent"), the asserted patent. The parties have fully briefed the issue, and the Court heard oral argument on June 9, 2014. For the reasons stated herein, the Court grants a partial limited stay.

I. BACKGROUND

This case involves the parties' allegedly competing products. Both provide a type of guarantee or verification to on line shoppers, and consumer behavior information. Plaintiff "sells to Internet retailers a patented service that provides third-party certification and transactional guarantees for online merchants." (Compl. at ¶¶ 2, 9, ECF No. 1.) Plaintiff "has also invented methods for performing systematic analysis of consumer behavior data to predict consumer demand in relation to the offering of a third-party transactional guarantee." ( Id. at ¶ 10.) These methods are covered by the '791 Patent, which issued on August 20, 2013. ( Id. at ¶ 11.)

According to the Complaint, in 2011 Defendant launched Google Trusted Stores ("GTS"), which provides "merchants with a trust seal[, ] guarantee[s] the purchases of online shoppers, " and "collect[s] consumer purchase information." ( Id. at ¶¶ 12, 16.) Defendant contends that GTS does not offer a guarantee - rather, it provides "consumers with information about online merchants, including seller rating and shipping information, and to help consumers feel confident in their purchases by allowing retailers to display the GTS badge on their website." (Def.'s Reply Br. Supp. Mot. to Stay at 3, ECF No. 77.) Plaintiff filed suit against Defendant on November 25, 2013, alleging that Defendant is infringing the '791 Patent. (Compl. at ¶ 23.)

The Leahy-Smith America Invents Act ("AIA"), 112 Pub. L. No. 29 (2011), provides for U.S. Patent and Trademark Office ("PTO" or "the Patent Office") Patent Trial and Appeal Board ("PTAB") review of CBM patents upon petition. 35 U.S.C. § 321. Under the AIA, "a person who is not the owner of a patent may file with the Office a petition to institute a post-grant review of the patent." Id. at § 321(a). Specifically, "[a] petitioner in a post-grant review may request to cancel as unpatentable 1 or more claims of a patent on any ground that could be raised under paragraph (2) or (3) of section 282(b) [35 U.S.C. § 282(b)] (relating to invalidity of the patent or any claim)." Id. at § 321(b).

On May 9, 2014, Defendant filed a Petition for Transitional Post-Grant Review of a patent (CBM Review) with PTAB ("the Petition"), seeking to invalidate all claims of the '791 Patent pursuant to 35 U.S.C. § 321. (Def.'s Mem. Supp. Mot. to Stay, ECF No. 47, Ex. 1 thereto). The AIA allows Plaintiff three months from May 9, 2014 to file its response to the Petition. 37 C.F.R. § 42.207(b). Under 35 U.S.C. § 324(c)(1), PTAB has three months after "receiving a preliminary response to the petition" from Plaintiff to determine whether to conduct a CBM Review. Thus, PTAB will have decided whether to conduct a CBM Review no later than six months after May 9, 2014 (or by November 9, 2014). If the Petition is granted, Plaintiff may make a motion to PTAB to amend claims of the '791 Patent, but amendments "may not enlarge the scope of the claims of the patent or introduce new matter." 35 U.S.C. § 326(d).

II. STANDARD OF REVIEW

"As the movant[] seeking a stay, Defendant[] bear[s] the burden of demonstrating that a stay is warranted." Segin Sys. v. Stewart Title Guar. Co., 2014 U.S. Dist. LEXIS 45595, at *5-6 (E.D. Va. Mar. 31, 2014) (citing Market-Alerts Pty. Ltd. v. Bloomberg Finance L.P., 922 F.Supp.2d 486, 489-90 (D. Del. 2013)).

The AIA provides that "[i]f a party seeks a stay of a civil action alleging infringement of a patent under section 281 of title 35, United States Code, relating to a transitional proceeding for that patent, the court shall decide whether to enter a stay based on" the following four factors:

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

AIA, 112 Pub. L. No. 29 § 18(b)(1) (2011).

Congress could have created an automatic stay of litigation pending CBM Review, but did not. See Segin, 2014 U.S. Dist. LEXIS 45595, at *8. Thus, while a stay may be appropriate in many circumstances, it is only proper where the AIA § 18(b)(1) factors weigh in favor of a stay.[1] "The Supreme Court has long recognized that district courts have broad discretion to manage their dockets, including the power to grant a ...


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