In Re: Corel Software LLC

Case: 19-124 Document: 15 Page: 1 Filed: 08/01/2019
NOTE: This order is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
In re: COREL SOFTWARE LLC,
Petitioner
______________________
2019-124
______________________
On Petition for Writ of Mandamus to the United States
District Court for the District of Utah in No. 2:15-cv-00528-
JNP-PMW, Judge Jill N. Parrish.
______________________
ON PETITION
______________________
Before LOURIE, BRYSON, and TARANTO, Circuit Judges.
PER CURIAM.
ORDER
Corel Software, LLC, petitions for a writ of mandamus
directing the United States District Court for the District
of Utah to vacate its order staying this patent infringement
litigation. Microsoft Corporation opposes.
In July 2015, Corel brought this action against Mi-
crosoft alleging infringement of certain claims of U.S. Pa-
tent Nos. 6,731,309 (“the ’309 patent”); 7,827,483 (“the ’483
patent”); and 8,700,996 (“the ’996 patent”). In May 2016,
Microsoft filed several petitions in the United States Pa-
tent and Trademark Office (“PTO”) seeking inter partes
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2 IN RE: COREL SOFTWARE LLC
review of the asserted claims of the ’483 and ’996 patents,
and in June 2016, Microsoft filed a petition for inter partes
review of the asserted claims of the ’309 patent. Microsoft
asked the court to stay the district court litigation, and in
August 2016, the court stayed the court proceedings pend-
ing the resolution of Microsoft’s petitions for inter partes
review.
The PTO instituted inter partes review of the ’996 pa-
tent, after which Corel cancelled all of the then-asserted
claims of that patent. The PTO, however, declined to insti-
tute inter partes review on the other two patents. With re-
spect to the ’309 patent, the PTO declined to institute inter
partes review after concluding that Microsoft had failed to
show that a certain reference qualified as prior art. Subse-
quently, Microsoft sought and obtained ex parte reexami-
nation of the ’309 patent, and the examiner cancelled the
only asserted independent claim of that patent based on
additional evidence of the public availability of the prior art
reference in question. The patentability of the other two
asserted claims of the ’309 patent was confirmed. *
After the completion of those post-grant review pro-
ceedings, the district court in June 2018 lifted the stay of
the district court litigation. In November 2018, the district
court granted Corel’s motion to amend its infringement
contentions to add two additional claims from the ’996 pa-
tent that were not initially asserted in the litigation and
were not challenged in the PTO’s post-grant review pro-
ceedings. In February 2019, Microsoft sought ex parte
* Corel initially moved to lift the stay and to amend its
infringement contentions in February 2017 after all of the
inter partes review proceedings had been completed but be-
fore institution of the ex parte reexamination of the ’309
patent. In May 2017, the district court declined to lift the
stay until after the PTO completed its review of the ’309
patent.
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IN RE: COREL SOFTWARE LLC 3
reexamination of those two newly asserted claims and
moved the district court for a second stay of the litigation.
In April 2019, the PTO initiated reexamination proceed-
ings with regard to the newly asserted claims of the ’996
patent.
On May 14, 2019, a magistrate judge who was assigned
to the case entered an order granting Microsoft’s motion to
stay the litigation. The magistrate judge considered the
traditional factors used to analyze stay motions. See Mu-
rata Mach. USA v. Daifuku Co., 830 F.3d 1357, 1361 (Fed.
Cir. 2016). First, the magistrate judge concluded that the
reexamination proceeding “has at least the potential to
simplify the issues in this case” and that not granting a
stay could ultimately “require reconsideration of certain is-
sues[] and result in piecemeal litigation.”
Next, the magistrate judge considered the status of the
litigation. He acknowledged that after the stay was lifted
in June 2018 “the parties have moved this case forward to
some degree.” He noted, however, that “substantial pro-
ceedings” in the case had yet to be completed and that no
trial date had yet been set. He therefore found that the
posture of the case weighed in favor of a stay.
Finally, the magistrate judge concluded that Corel had
not shown that it would be unduly prejudiced by a stay, a
conclusion that was supported by the fact that Corel had
not sought injunctive relief in the case. The magistrate
judge also rejected Corel’s assertion that Microsoft was at-
tempting to gain a tactical advantage by seeking a stay; he
noted that “Microsoft filed its reexamination request soon
after receiving Corel’s amended final infringement conten-
tions and before serving its final invalidity contentions,”
and that “it does not appear that Microsoft had any reason
to [challenge the two claims of the ’996 patent] until No-
vember 2018, when the court granted Corel’s request for
leave to amend its infringement contentions to assert those
claims.”
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4 IN RE: COREL SOFTWARE LLC
Corel filed an objection to the magistrate judge’s order.
On June 3, 2019, the district court overruled Corel’s objec-
tion, finding that the magistrate judge’s order was neither
clearly erroneous nor contrary to law. On June 28, 2019,
the PTO examiner issued a first office action rejecting the
two claims of the ’996 patent that were in reexamination.
A week later, Corel filed this petition for mandamus to
compel the district court to lift the stay of the district court
litigation.
In seeking mandamus relief, Corel argues that the dis-
trict court failed to “account[] for the prejudice imposed by
the serial nature of Microsoft’s challenges and the resulting
serial delays.” As a result, Corel argues, the district court
effectively imposed “an indefinite stay of litigation, subject
to the discretion of the accused infringer to file serial chal-
lenges to the patents-in-suit in the USPTO.”
A decision to stay litigation is committed to the sound
discretion of the trial court. See Gould v. Control Laser
Corp., 705 F.2d 1340, 1341 (Fed. Cir. 1983); see also Landis
v. N. Am. Co., 299 U.S. 248, 254 (1936). “Importantly, on
mandamus review our role is not to second-guess the trial
court’s decision to stay[.]” In re Med. Components, Inc., 535
F. App’x 916, 918 (Fed. Cir. 2013). Instead, we look only to
see whether the decision amounted to a “clear abuse of dis-
cretion.” Bankers Life & Cas. Co. v. Holland, 346 U.S. 379,
383 (1953). Corel has not shown such an abuse here.
The district court’s ruling cannot be characterized as
amounting to “a failure to meaningfully consider” the tra-
ditional stay factors. See In re Link_A_Media Devices
Corp., 662 F.3d 1221, 1223 (Fed. Cir. 2011). Nor is this a
situation in which Microsoft has “abuse[d] the reexamina-
tion process.” See Harris Corp. v. Ruckus Wireless, Inc.,
No. 11-cv-618, slip op. at 4 (M.D. Fla. Oct. 2, 2014). The
first stay resulted in the cancellation of all of the pending
claims of the ’996 patent and, subsequently, the sole as-
serted independent claim of the ’309 patent. After the stay
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IN RE: COREL SOFTWARE LLC 5
was lifted, the district court permitted Corel to add two
new claims from the ’996 patent, and Microsoft promptly
sought reexamination of those claims and a further stay of
the litigation. Although Corel contends that Microsoft
should have challenged the two new claims when it an-
nounced its intention to add them to the litigation, rather
than waiting until the district court granted Corel’s motion
to add those claims to the case, the magistrate judge found
that Microsoft had no reason to challenge those claims un-
til the court granted Corel’s request for leave to amend its
infringement contentions in November 2018. The court’s
conclusion in that regard was not unreasonable.
Nor does Microsoft’s conduct, taken as a whole, amount
to a request for an indefinite stay, as Corel contends. The
initial stay pending the inter partes review proceedings was
reasonable in light of the prospect of simplifying the dis-
trict court litigation. The court also acted reasonably in
denying Corel’s request to lift the stay during the period
that the reexamination of the ’309 patent was pending.
The district court lifted the initial stay in this case after the
completion of the PTO’s proceedings regarding the three
asserted patents, and reinstated the stay only after Corel
sought to add the two new claims from the ’996 patent to
the case. Corel presumably could have asserted those
claims at the outset of the litigation, but did not. Moreover,
the reinstated stay has been in place for only a few months.
The PTO examiner conducting the reexamination stated
that the examination would be expedited, and in fact the
examiner has already entered an office action rejecting the
two challenged claims. Under these circumstances, Corel’s
contention that the district court’s stay order is an invita-
tion for Microsoft to postpone the litigation indefinitely is
not persuasive. The district court committed no clear
abuse of discretion in granting the stay.
Accordingly,
IT IS ORDERED THAT:
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6 IN RE: COREL SOFTWARE LLC
The petition is denied.
FOR THE COURT
August 1, 2019 /s/ Peter R. Marksteiner
Date Peter R. Marksteiner
Clerk of Court
s32