Sunpower Corporation v. Panelclaw, Inc., C.A. No. 12-1633-GMS (D. Del. May 16, 2014)

8/12/2019 Sunpower Corporation v. Panelclaw, Inc., C.A. No. 12-1633-GMS (D. Del. May 16, 2014)

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IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF DELAWARE

SUNPOWER CORPORATION,Plaintiff,

v

PANELCLAW, INC.,Defendant.

OR ER

Civil Action No. 12-1633-GMS

Presently before the court in the above captioned matter is PanelClaw's Motion to StayPending Inter Partes Review Proceedings Before the United States Patent and Trademark Office.1(D I 31.) t is well established that a stay of litigation is within the court's discretion as part of itsauthority to manage its docket. See Cost Bros. Inc v Travelers Indem. Co. 760 F.2d 58, 60 (3dCir. 1985); Ethicon Inc v Quigg 849 F 2d 1422, 1426-27 (Fed. Cir. 1988) (citations omitted).The court weighs three factors in determining whether a stay is appropriate: (1) whether a staywould unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2)whether a stay will simplify the issues in question and trial of the case; and (3) whether discoveryis complete and whether a trial date has been set. First Am Title Ins Co v McLaren LLC No.10-363-GMS, 2012 WL 769601, at *4 (D. Del. Mar. 9, 2012) (citation omitted). After consideringthe applicable law and the arguments set forth in the parties' papers regarding these factors, the

On December 3, 2012, the plaintiff, SunPower Corporation ( SunPower ), brought the above-captionedaction against the defendant, PanelClaw, Inc. ( PanelClaw ), alleging infringement ofU.S. Patent Nos. 5,505,788 (the'788 patent ) and RE38,988 (the ' 988 patent ). (D.I. 1.) On January 24, 2013, SunPower filed a first amendedcomplaint, (D.I. 5), and on April 15,2013, SunPower filed a second amended complaint, (D.I. 16).


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court concludes that a stay is warranted here.1 SunPower s Unlikely to Suffer Undue Prejudice

The court weighs a variety o subfactors in determining whether there is undue prejudice:the timing o the request for reexamination, the timing o the request for stay, the status o the

reexamination proceedings, and the relationship o the parties. Boston Scientific Corp. v CordisCorp., 777 F. Supp. 2d 783, 789 (D. Del. 2011). The mere potential for delay does not in itselfestablish undue prejudice. See, e.g., BodyMedia, Inc v Basis Sci., Inc., No. 12-CV-133 (GMS),2013 U.S. Dist. LEXIS 82830, at *4 (D. Del. Jun. 6, 2013).

Regarding the timing o the request for reexamination, PanelClaw filed its IPR petitions onJanuary 28, 2014. (D.I. 32 at 2.) This is within the one-year timeframe that the statute provides,see 35 U.S.C. 315(b), because Panel Claw was first served with a complaint from SunPower onJanuary 29,2014. (D.I. 6 (indicating that summons for first amended complaint served on January29, 2013).) SunPower argues that the fact that PanelClaw filed its IPR patents only on the eve othe statutory deadline is evidence o dilatory intent on Panel Claw's part. (D .I. 3 6 at 10-11.) Theevidence suggests otherwise, however. Thee-mai ls that PanelClaw submitted show that, as earlyas May 2, 2013, PanelClaw requested that SunPower identify which o the patents' numerousclaims SunPower would be asserting. (D.I. 33-1, Ex. 4-5.) PanelClaw expressly stated that itneeded the information in order to possibly file IPR petitions. /d. at Ex. 4.) SunPower refused todisclose the exact claims it intended to assert, however. /d. at Ex. 5.) SunPower does not denythe truth o the e-mails ' content. (D.I. 36 at 10-12.) t was not until October 18, 2013 thatSunPower provided PanelClaw its infringement claim charts, (D.I. 24), after the court ordered itto do so, (D.I. 26 (transcript o eleconference held on October 2, 20 13) . Once SunPower provided

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PanelClaw its infringement contentions, the parties continued settlement discussions until aroundthe time when PanelClaw filed its IPR petitions. (D.I. 36 at 11; D.I. 39 at 6-7.) Thus, the evidencesuggests that PanelClaw s delay in filing the IPR petitions was due not to dilatory intent, but ratherto SunPower's own delay and settlement discussions.

The other subfactors to be considered in weighing undue prejudice do not indicate thatSunPower would be unduly prejudiced if a stay was granted. The timing of the request for staylikewise suggests no dilatory motive; PanelClaw filed the motion to stay on February 14, 2014,which was about two weeks after it filed its IPR petitions. (D.I. 31.) The reexaminationproceedings are still in their infancy, since the Patent Trial and Appeal Board ( PTAB ) has yet togrant PanelClaw's IPR petitions. This does not necessarily counsel against granting a stay,however, since any stay would be lifted by August 2014 if PanelClaw's IPR petitions are notgranted. (D.I. 32 at 13.) Regarding the relationship between the parties, the court concludes thatthe parties are not direct competitors.2 Thus, the case law that SunPower has cited, which counselsagainst granting a stay where the parties are direct competitors, is inapposite. (D.I. 36 at 13-14.)

As support for its argument that the parties are direct competitors, SunPower cites the declaration of MatthewCulligan. (D.l. 36 at 13.) Mr. Culligan's declaration identifies him as SunPower's Senior Product Manager in theCommercial Rooftops division. (D.l. 38 at 1.) Rather than supporting SunPower's assertions, Mr. Culligan'sexplanations of why PaneiCiaw should be deemed as SunPower's direct competitor suggest that the oppositeconclusion is appropriate. For instance, he states that (u]se ofPaneiCiaw infringing mounting systems has enabledcompeting PV system installers to compete directly with SunPower as well as compete with SunPower authorizeddealers and, indeed, has resulted in competition at those dealers themselves[.] Jd 10.) This description indicatesthat PaneiCiaw does not directly compete against SunPower and instead supplies products that SunPower's actualdirect competitors are able to use. Mr. Culligan also states that [t]he loss in sales and market share has resulted, inpart, from the use of Panel Claw mounting systems to allow competitor installers to under bid SunPower on price ... .IfPanelCiaw had not provided the accused flat roof mounting system, a SunPower commercial dealer would have beenmore likely to win this project due to a more unique and compelling system designed and offered to the city. Jd at14-15.) This further confirms that PaneiClaw merely offers for sale products that SunPower's direct competitorsuse. SunPower has cited no support for the proposition that direct competitors' use of an entity's products is sufficientto establish that the entity is itself a direct competitor.

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2. The IPR Process Will Likely Simplify the Issues Before the CourtThe court concludes that the issues before the court would be simplified should the Patent

Trial and Appeal Board ( PTAB ) grant PanelClaw's IPR petitions and review the claims. AsPanel Claw points out: If the claims are canceled, the case is much simplified or ended altogether.If the claims are amended (albeit an unlikely result), it would be preferable to know what thoseamendments are prior to devoting substantial time and effort to claim construction, summaryjudgment motions, expert reports, and trial in this case. (D.I. 32 at 11.) Even if the claims wereto survive the IPR process entirely intact, the court would still benefit from the PTAB' s expertise.See Neste Oil OY v Dynamic Fuels, LLC, No. 12-1744-GMS, 2013 U.S. Dist. LEXIS 92416, at*12 D. Del. Jul. 2, 2013); Gioello Enters. Ltd v Matte , Inc., No. 99-375-GMS, 2001 WL125340, at *1 (D. Del. Jan. 29, 2001). In addition, the estoppel that would attach to issues thatPanel Claw raised or could have raised would also further simplify the court's proceedings afterthe PTAB's review. See 35 U.S.C. 315(e)(2).

SunPower' s argument that a stay is disfavored here because the scope of the issues inlitigation substantially exceed the scope of the USPTO review is unavailing. Contrary toSunPower's suggestion, the issues raised by the IPR petitions need not be identical to those in thelitigation in order for a stay to be granted. See, e.g., Nexans, Inc v Belden, Inc., No. 12-1491-SLR-SRF, 2014 U.S. Dist. LEXIS 20116, at *11 (D. Del. Feb. 19, 2014) ( [A] complete overlapof the issues in the litigation and the IPR is not required to establish simplification of the case. ),adopted by 2014 U.S. Dist. LEXIS 32322 (D. Del., Mar. 12, 2014); Neste Oil OYJ, 2013 U.S. Dist.LEXIS at *15 ( Finally, while the court recognizes that this case likely presents certain questionsthat simply cannot be addressed through inter partes review, it notes that the 'issue simplification'


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factor does not require complete overlap. )3 The Proceedings re at an Early Stage

There can be no doubt that the very early stage of this litigation favors granting a stay. Inconsidering the stage of litigation, the court asks, among other things, whether discovery iscomplete and whether a trial date has been set. First Am Title Ins Co v MacLaren LLC No.10-363-GMS, 2012 U.S. Dist. LEXIS 31508, at 13 (D. Del. Mar. 9, 2012). The benefits of stayinga case in its early stages are considerable in that doing so advances judicial efficiency andpotentially avoids expending both the parties' and court's resources on invalid claims. See SenoRxInc v Hologic Inc. No. 12-173-LPS-CJB, 2013 U.S. Dist. LEXIS 8044, at *15-16 (D. Del. Jan.11 2013). In the instant matter, as PanelClaw observes, (D.I. 32 at 15), and SunPower does notdeny, (D.I. 36 at 18-19), there is no case scheduling order, document production has yet to occur,and no trial date has been set. The stage cannot be deemed anything except early.4 Conclusion

For the foregoing reasons, the court grants PanelClaw's motion.IT IS HEREBY ORDERED THAT PanelClaw's Motion to Stay Pending Inter Partes

Review Proceedings Before the United States Patent and Trademark Office (D.I. 31) isGRANTED.

Dated: May J. e., 2014 c

Documents

Sunpower Corporation v. Panelclaw, Inc., C.A. No. 12-1633-GMS (D. Del. May 16, 2014)