In a recent decision on a motion to stay litigation pending a Covered Business Method review filed by defendant Carecloud Corporation, District Judge Indira Talwani gave defendants good reason not to delay any petitions for patent office review. Established by the America Invents Act, Covered Business Method reviews may be filed by parties who have been sued for or are charged with infringement of a patent that involves a financial product or service. The case involves U.S. Patent No. 7,617,116 that covers claims generally directed to a medical practice management and billing automation system designed to help medical offices manage insurance billing.
The plaintiff filed its complaint on April 5, 2013. Carecloud waited until June 2, 2014 to file its petition for a Covered Business Method review, and filed its motion to stay shortly thereafter, on June 5, 2014. So when Judge Talwani’s opinion issued, athenahealth still had over a month remaining before its preliminary response to the petition was due, and the Patent Trial and Appeals Board’s decision on the petition remained many months away.
The America Invents Act provides a four-factor test to determine whether a case should be stayed pending the resolution of a Covered Business Method review: (1) whether the stay will simplify the issues; (2) whether discovery is complete and whether a trial date is set; (3) whether a stay would unduly prejudice the nonmoving party; and (4) whether the stay would reduce the burden of litigation on the parties and the Court. In applying the test, Judge Talwani “[took] into account that the Patent Board has not yet granted or denied Covered Business Method review.”
The consequence? The Court couldn’t assess whether factors one and four weighed in favor of or against a stay. Since factors two and three weighed in opposite directions, Judge Talwani split the baby: she stayed much of the case because it would be too burdensome to litigate while awaiting the PTAB’s decision, but she required the parties to move forward on claim construction, which posed a lesser burden to the court and the parties.