On July 29, 2015, DermaFocus LLC—a non-practicing entity—filed suit against Ulthera, Inc. in the District of Delaware alleging that the Ulthera infringed U.S. Patent No. 6,113,559 (the “’559 patent”) relating to a method and apparatus for therapeutic treatment of skin with ultrasound. Just shy of one year after DermaFocus’s complaint (on July 19, 2016), Ulthera filed an IPR challenging all claims of the ’559 patent. On November 11, 2016 the parties agreed to stay the district court litigation until the PTAB denied institution or issued a final written decision. Ultimately, the PTAB instituted IPRs on 16 of 18 claims and, on January 19, 2018, issued a final written decision rejecting all of Ulthera’s validity challenges. Consequently, DermaFocus moved to lift the stay.
Courts typically consider three factors when determining whether to stay, or lift a stay, in district court: (1) whether the stay will simplify the issues for trial; (2) the status of the litigation; and (3) whether the nonmoving party will be prejudiced—based on timing, delay, and the relationship of the parties. DermaFocus’s arguments to lift the stay centered on the more than two-year delay in litigation and the fact that the stay’s purpose had been fulfilled following the PTAB’s final written decision finding that all 16 instituted claims were patentable. Ulthera opposed the motion to lift the stay and instead sought a continuation based on its appeal to the Federal Circuit.
Although the aforementioned three factors normally govern motions to stay, Magistrate Judge Fallon determined that the SAS Institute decision mandated a different outcome. In SAS Institute, the Supreme Court ruled against the PTAB’s practice of partial institutions and held that the PTAB must issue final written decisions “with respect to patentability of any patent claim challenged” and that, in this context, “‘any’ means ‘every.’”
In the parallel IPR proceeding, the PTAB had instituted IPR on only 16 of the patent’s 18 claims. Accordingly, following the Supreme Court’s decision, Ulthera had filed a motion with the Federal Circuit requesting remand of the appeal to the PTAB for issuance of a final decision regarding patentability of the two claims not instituted. The Federal Circuit granted Ulthera’s remand motion and stated that the PTAB had “to resolve the patentability of all challenged claims in the pending IPR proceeding.”
As such, Magistrate Judge Fallon ruled that the parties’ stay agreement had not been fulfilled—specifically, the stipulation that the stay would be lifted “pending resolution by the PTAB of the patentability of all challenged claims in the pending IPR.” The motion to lift the stay was, therefore, denied because the conditions for originally implementing the stay still existed: the PTAB had not finished considering all challenged claims in light of the SAS Institute decision.
DermaFocus LLC v. Ulthera, Inc., 1-15-cv-00654 (D. Del. June 7, 2018) (Fallon, MJ) (order denying motion to lift stay)