IMS 13-2071

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    IN THE UNITED STATES DISTRICT COURT

    FOR THE DISTRICT OF DELAWARE

    IMS HEAL

    TH

    IN

    CORPORA

    TED, )

    Plaintiff, )

    v. )

    SYMPHONY

    HEAL

    TH SOLUTIONS )

    CORPORATION, SOURCE )

    HEALTHCARE ANALYTICS, LLC, and )

    IMP ACTRX, INC., )

    Defendants. )

    Civil Action No. 13-2071 (GMS)

    OR ER

    WHEREAS, presently before the court is the Motion to Stay Pursuant to § l 8(b) of the

    America Invents Act ( AIA ) (D.I. 151) filed by Symphony Health Solutions Corporation, Source

    Healthcare Analytics LLC, and lmpactrx, Inc. (collectively, the Defendants );

    1

    and

    WHEREAS, the court, having considered the instant motion, the response and replies

    thereto, and the applicable law, concludes that the Defendants have demonstrated that a stay in the

    above captioned matter pending covered business method patent review is appropriate in this case.

    2

    1

    IMS Health Incorporated ( IMS Health ) filed this action on December 20, 2013, alleging infringement of

    U.S. Patents Nos. 6,379,224 (the '224 patent ), 7,577,578 (the ' 578 patent ), and 8,743,452 (the ' 452 patent )

    (collectively, the patents-in-suit ). The Defendants filed a petition on September 16, 2014 to institute a covered

    business method ( CBM ) patent review of all three claims of the '578 patent. See D.I. 152 at 1. The Patent Trial

    and Appeal Board ( PTAB ) instituted review of the first petition on March 27, 2015.

    Id.)

    The Defendants

    subsequently petitioned the PTAB for CBM review

    of

    the '224 Patent on February 1, 2015 and the '452 Patent

    on

    February 20, 2015. Id.)

    2

    t

    is

    well established that the decision to stay an action lies within the sound discretion of the trial court.

    Cost

    Bros Inc v

    Travelers Indemnity Co.,

    760 F.2d 58, 60 (3d Cir. 1985);

    see also First

    Am

    Title

    Ins Co v

    Maclaren, L.L.C., No. 10-363-GMS, 2012 WL 769601, at *4 (D. Del. Mar. 9, 2012). Central to the rationale

    providing for such discretion is that

    of

    the court's inherent power to conserve judicial resources by controlling its

    own docket. Cost Bros. Inc., 760 F.2d at 60-61 (citation omitted).

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    Section

    18

    of the AIA provides for the establishment

    of

    transitional post-grant review proceedings to

    reexamine the validity of covered business method patents. Leahy-Smith America Invents Act, Pub. L. No. 112-29,

    § 18, 125 Stat. 284, 32931 (2011). The AIA also considers the effect of these proceedings on related patent

    infringement actions and authorizes the district courts to stay such parallel litigation under certain circumstances.

    Courts are directed to base their decision as to whether or not to grant such a stay on 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 § 18(b)(l). This statutory test closely resembles

    the stay analysis courts have applied in assessing a motion to stay pending

    inter partes

    or

    ex parte

    reexamination by

    the United States Patent and Trademark Office ( PTO ).

    See Market-Alerts Pty.

    Ltd v.

    Bloomberg Fin., L.P.,

    922 F.

    Supp.

    2d

    486, 489 (D. Del. 2013) (citations omitted).

    As to the first factor, the court must consider whether a stay, or the denial thereof, will simplify the issues

    in question and streamline the trial. AIA § l 8(b )(I )(B). The Defendants assert that a stay will simplify the issues

    for trial because CBM review will simplify, streamline, or completely eliminate the

    578

    patent from this litigation.

    D.1. 152 at 11.) In addition, the Defendants assert that while the PTO has not yet made a decision to institute CBM

    review

    of

    the

    224

    and

    452

    patents, granting the stay will allow the

    PT

    AB to exercise its particular expertise and

    avoid the possibility of inconsistent decision on the merits

    if

    the two proceedings were to proceed in parallel.

    Id.

    at

    11-12.) IMS Health asserts that even an entirely favorable outcome in the

    578 CBM

    review would not meaningfully

    simplify the issues

    or

    streamline the trial.

    D.1.

    158 at 6.) IMS Health argues that the

    224

    and

    452

    patents do not

    meet the requirements for

    CBM

    review and, as a result, the Defendants are unlikely to overcome the high up-front

    showing required for institution ofa CBM review.

    (Id.

    at

    6-8.)

    The court takes no position as to the likelihood of the

    PTAB granting CBM review of the

    224

    and

    452

    patents. The court agrees with the Defendants and finds that first

    factor-particularly

    with regard to the

    578

    patent weighs-in favor of a stay.

    The second factor, which has the court consider how far the litigation has progressed, weighs against granting

    a stay. AIA § 18(b)( l)(B). This case has progressed beyond the early stages of litigation. Fact discovery was

    completed on March 6, 2015. (D.1. 158 at

    I.

    Expert reports have been served.

    Id)

    Trial is scheduled for November

    2015. The court has already held a

    Markman

    hearing and issued its Order construing the asserted claims of the '224

    and '452 patents.

    (See

    D.l. 118.) The court did not construe the claims

    of

    the

    578

    patent in light

    of

    the then-pending

    CBM petition.

    Id

    at 1 n.

    l)

    The court and both parties have already expended significant assets on this matter. While

    the costs

    of

    trial preparation remains, the court finds this factor to weigh against granting a stay.

    Under the third factor, the court must consider the potential of a stay to unduly prejudice the plaintiff or place

    it at a clear tactical disadvantage. AIA § 18(b

    )(I

    )(C). Potential for delay does not, by itself, establish undue prejudice.

    See Market-Alerts,

    922 F. Supp.

    2d

    at 494 (citations omitted). In assessing whether a plaintiff might be unacceptably

    prejudiced by a stay, the court turns to additional considerations including the timing of the stay request, the timing

    of the administrative review request, the status of the review proceedings, and the relationship between the parties.

    Id.

    (citations omitted). The court recognizes that IMS Health has an interest in the timely enforcement

    of

    its patent

    rights.

    See Smith Int /, Inc.

    v.

    Hughes Tools Co.,

    718 F.2d 1573, 1581 (Fed. Cir. 1983) ( [P]ublic policy favors the

    protection

    of

    he rights secured by valid patents. ). Nonetheless, the court also recognizes the reduced time-frame

    allotted by Congress for

    CBM

    review completion. The Defendants do not dispute that the parties are competitors.

    Rather, the Defendants argue that IMS Health should not be able to claim prejudice

    now

    after it knowingly sat on its

    rights and for more than three years,

    and

    only initiated this action as retaliation for the Defendants having filed an

    anti-trust action against IMS [Health] in July 2014. (D.l. 152 at 13.) The court takes note

    of

    the parties' alleged

    history but assigns it no weight as it

    is

    unsupported by record evidence. More important, the timing

    of

    the request

    weighs against granting the stay. The Defendants provide no reason for its fourteen month delay from the filing of

    IMS Health's lawsuit to file

    CBM

    petitions for the

    224

    and

    452

    patents. The court considers the belated filing to be

    prejudicial to IMS Health's enforcement

    of

    its patent rights. As such, this factor weighs against granting the stay.

    The fourth factor requires the court to consider whether a stay, or the denial thereof, will reduce the burden

    of

    litigation on the parties and on the court. AIA

    §

    18(b)(l)(D).

    It

    is clear that the parties-not to mention the

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    IT IS HEREBY ORDERED THAT:

    1 Defendants' Motion to Stay (D.I. 151) is GRANTED-in-part;

    2

    This matter is STAYED as to U.S. Patent No. 7,577,578 pending resolution

    of

    the

    covered business method patent review;

    3

    This matter is TEMPORARILY STAYED as to U.S. Patent Nos. 8,743,452 and

    6,379,224 pending the

    PTAB s

    decision regarding institution

    of

    CBM review; and

    4

    The parties are directed to contact the court with the PTAB s decision as to

    instituting CBM review of U.S. Patent Nos. 8,743,452 and 6,379,224.

    Dated: M a y ~ 2015

    court-have already expended significant resources on the litigation. The Defendants argue that a stay will spare the

    parties the burden of litigating the validity of the '578 patent in this court and the PTAB at the same time. (D.I.

    152

    at 16.) The Defendants point to the strong potential that post grant review may result

    in

    the cancellation or

    amendment

    of

    claims

    in

    support

    of

    its argument that granting a stay now would conserve the resources

    of

    both

    parties, as well as the court. (D.I. 152 at 12.) The court agrees with the Defendants as to the risk of contradictory

    outcomes of the '578 patent. The court concludes that a stay will lessen the burden of litigation at issue. As such, the

    court finds that the fourth factor favors a stay pending CBM review.

    See Market-Alerts

    922

    F

    Supp. 2d at 496.

    For the foregoing reasons, the court will grant the motion to stay pursuant to § 18(b) of he AIA. The balance

    of

    the four statutory factors weighs slightly

    in

    favor of granting a stay pending resolution of the CBM review

    proceedings. The court finds it appropriate to stay the case temporarily in its entirety pending the PTAB's decision

    as to the '224 and '452 patents. f he PTAB declines to institute CBM review, the court will consider arguments for

    lifting the stay as to those patents and proceeding expeditiously to trial.

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