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Steuben Foods, Inc. v. Gea Process Engineering, Inc.

United States District Court, W.D. New York

March 9, 2015

STEUBEN FOODS, INC., Plaintiff,
v.
GEA PROCESS ENGINEERING, INC., d/b/a GEA PROCOMAC and GEA PROCOMAC S.p.A., Defendants.

DECISION AND ORDER

JEREMIAH J. McCARTHY, Magistrate Judge.

This patent infringement action has been referred to me for supervision of pretrial proceedings [89].[1] Before me is the motion of defendants GEA Process Engineering, Inc. ("GPNA") and GEA Procomac S.p.A. ("GEA") to stay this action pending completion of inter partes review ("IPR") proceedings in the United States Patent and Trademark Office ("PTO") [104], coupled with a request for an extension of the stay [167], in which defendants in related actions have joined.

For the following reasons, the original motion for a stay [104] is granted, but the request for an extension of the stay is denied. However, the effective date of this Decision and Order will be deferred to March 16, 2015, in order to give defendants the opportunity to argue to Judge Wolford that my reasoning is "clearly erroneous or contrary to law".[2]

BACKGROUND

Plaintiff Steuben Foods, Inc. ("Steuben") commenced this action on September 24, 2012, alleging infringement of five U.S. patents (6, 945, 013; 6, 536, 188; 6, 481, 468; 6, 475, 435; and 6, 209, 591, collectively the "Steuben patents") relating to apparatuses and methods for filling aseptic containers. Complaint [1]. Steuben has also commenced five other actions against different defendants, alleging infringement of most or all of the same patents.[3] Although the actions have not been formally consolidated, pretrial proceedings in all cases are being coordinated to the extent possible.

The Prior Stay Motions

Several of the defendants in this and other actions have previously moved to stay the actions pending PTO review of the patents' validity. Those motions were denied. See, e.g., Steuben Foods, Inc. v. Shibuya Hoppmann Corp., 2011 WL 3608064, *8 (W.D.N.Y. 2011) (Arcara, J.) ("The Court wants to avoid a situation in which intentionally or coincidentally staggered requests for re-examination hamper this litigation indefinitely. If later patent revocations or additional re-examination requests cast serious doubt on the substance of plaintiff's theories of liability then the parties may advise the Court at that time. Until then, the most prudent course of action is to allow the case to proceed"); Steuben Foods, Inc. v. GEA Process Engineering, Inc., 2013 WL 5567499 (W.D.N.Y. 2013) (Schroeder, M.J.) (denying defendants' motion for a stay in this action); and my Text Orders in Steuben Foods, Inc. v. Shibuya etc. et al., 10-cv-00781-EAW-JJM [130] and Steuben Foods, Inc. v. HP Hood LLC, 12-cv-00211-EAW-JJM [96].

The IPR Stay Motion

On March 31, 2014, defendants renewed their motion for a stay of proceedings in this action [104], arguing that "[o]n March 10, 2014 the... PTO instituted... IPR invalidity proceedings against all five of Steuben's patents-in-suit.... [T]he grant of these IPRs has radically and forever changed the landscape of this case, and presents a more compelling case for a stay than the reexaminations did for [defendants'] earlier motion for stay.... Based on the history of instituted IPR proceedings to date, there is now a near statistical certainty that most, if not all, of the claims in these IPRs will be held invalid. By statute, the PTO is due to issue decisions in each IPR proceeding by March 10, 2015. [Defendants] respectfully move[ ] this Court for a stay until then". Defendants' Memorandum of Law [105], p. 6 of 27.

During oral argument of that motion on May 20, 2014, I stated that "this strikes me as a different animal than the grounds raised previously for the other stays.... [H]ere we have the patent appeal board itself saying that it's likely that the claims will be invalidated. That's by no means a guarantee, but seems to cast it in a different light." [135], p. 3. However, I cautioned that "[i]f I am going to grant a stay, it's only going to be [until] next March." Id., p. 26. By Text Order dated June 10, 2014 [139], I stayed all further proceedings in this and the related infringement actions "pending the earlier of the conclusion of the IPR proceedings or March 10, 2015".

Thereafter, Nestle USA, Inc. ("Nestle"), the defendant in action 13-cv-892, filed its own IPR petitions "between August and early November 2014". Nestle's Submission (13-cv-892 [55], p. 9 of 20). During proceedings on November 6, 2014, I cautioned the parties that I did not anticipate extending the stay which I had previously granted: "[A]s you all know, I did stay proceedings pending the outcome of the then filed IPR review proceedings up until either the earlier of the conclusion of those proceedings or, I believe, March 15th of next year. So, we're now about halfway through that time period. And just for people's benefit, I don't think at this point that I would look kindly on a further application for stay made by anyone based on subsequently filed by IPR proceedings because I'm trying to strike a balance here. The case does need to move forward." [154], p. 4.

On December 23, 2014 the United States Patent and Trademark Appeals Board ("PTAB") terminated GPNA's IPR proceedings without determining the validity of the patent claims, finding that GEA "was an RPI (real party-in-interest) of the instant proceedings that was not identified in the Petitions" (Termination Order, p. 21), [4] that because GPNA did not identify GEA as an RPI, "it has not met the statutory requirement of [35 U.S.C.] ยง312(a)(2), and we cannot consider the petitions" (id., p. 23), and that "equity does not dictate allowing [GPNA] to make the RPI correction", because its failure to list GEA as an RPI was not a "good-faith mistake" (id., p. 25).[5]

Although the PTAB has terminated the IPR proceedings initiated by GPNA, Nestle's IPR proceedings, seeking to invalidate the same Steuben patents, are still pending. By Text Order dated January 7, 2015 [157], I gave the parties in this and the other actions the opportunity to address whether ...


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