Days after the PTAB instituted Inter Partes Review (IPR), Judge Alvin Thompson in the District of Connecticut has stayed a case between Conair and Tre Milano.
Conair sued Tre Milano in October 2014, for infringing U.S. Patent No. 8,651,118, which relates to a hair styling device. On February 2, 2015, Tre Milano filed a petition for IPR of the ’118 patent. Tre Milano also filed a motion to stay the case pending the IPR a day later. The PTAB instituted the IPR on June 22, 2015, and the Court granted the motion to stay about a week and a half later.
In determining to grant the stay, Judge Thompson applied the common three-factor test in which the Court considers: (1) the stage of the proceedings; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether a stay will prejudice the nonmoving party. With respect to the first factor, the Court found the case was in an early stage. The Court noted the parties had not yet conducted significant discovery, the parties’ report on their case planning conference had not been approved, and claim construction proceedings had not started.
For the second factor, the Court concluded the stay would simplify the issues in question and trial. Conair argued that many issues would not be simplified or eliminated by the conclusion of the IPR, including many of Tre Milano’s asserted defenses and counterclaims that could not be addressed by the IPR. The Court found this argument unpersuasive, observing that since all of the asserted claims were subject to the IPR, “whatever the outcome of the inter partes review, it will simplify the issues in this action and provide the PTO’s expertise as to any remaining claims.”
Turning to the final factor, the Court found the stay would prejudice Conair. Rejecting Tre Milano’s argument that it and Conair were not competitors, the Court determined that Tre Milano and Conair both sold hand-held hair styling and curling products, and that the companies competed in the automatic hair styling market. Accordingly, the Court found that Conair would be prejudiced by a stay because it could lose sales and market share to Tre Milano, and Tre Milano’s products in the market could pressure Conair to lower its price. While the Court found the prejudice was lessened by the presence of other manufacturers in the automatic hair styling market, the Court concluded this factor weighed “somewhat” against the stay.
Finally, the Court considered the totality of the circumstances and found an additional consideration supported a stay—a continuation of the ’118 patent. The Court stated:
“Depending on the outcome of Conair’s Continuation Application, Conair’s claims could change after the parties have already invested substantial time and resources in litigating this matter and could result in repetition of steps that have already been taken. This would be a waste of the parties’ and the court’s resources.”
The Court concluded this consideration weighed in favor of granting a stay. Concluding two of the three factors and the totality of the circumstances weighed in favor, the Court granted the stay.
This case provides another example of courts’ willingness to stay cases pending resolution of an IPR, especially where the PTAB issues a decision to institute the IPR before the case has progressed beyond its early stages.
The case is Conair Corporation v. Tre Milano, LLC, Case No. 3:14-cv-1554-AWT (D.Conn), before Judge Alvin W. Thompson. A copy of the order can be found here.