PHILADELPHIA (Legal Newsline) -- A federal judge has agreed to stay a patent infringement lawsuit against Target Corp.
Judge Anita B. Brody of the U.S. District Court for the Eastern District of Pennsylvania, in a March 24 memorandum, sided with the popular retailer, saying a stay will "avoid the potential waste of judicial and litigant resources."
Destination Maternity Corp. sued Target, along with Elizabeth Lange LLC, for infringement of U.S. Patent Nos. 43,531 and 43,563 in October 2012.
The patents, which have a common priority date of May 31, 2007 and will naturally expire on Aug. 26, 2027, relate to maternity pants having a flexible belly panel that can be worn during different stages of pregnancy and different stages of postpartum body changes.
In August 2013, Target filed petitions for inter partes review, asking the Patent Trial and Appeal Board, or PTAB, to institute inter partes review proceedings to invalidate all 29 claims that DMC asserts against the defendants.
The board is tasked with reviewing adverse decisions, reviewing appeals of reexaminations, derivation proceedings, inter partes and post-grant reviews, and rendering decisions on interferences.
Right after filing its petition, Target filed a motion to stay the litigation in federal court pending the resolution. At the time the retailer filed its motion to stay, fact discovery was not complete and expert discovery and depositions had not begun.
In February, the PTAB concluded there is a "reasonable likelihood" that Target will prevail with respect to the invalidity of 27 of the 29 claims that Destination Maternity asserts against the defendants.
Thus, the PTAB instituted inter partes review proceedings for those 27 claims.
And although two of the 29 claims at issue in the lawsuit are not currently subject to inter partes review, Target intends to file two new petitions for inter partes review that demonstrate the invalidity of the two remaining claims based on Japanese prior art that Destination Maternity did not disclose to Target until after it filed its original petitions for review.
Target will seek to join these petitions with its existing ones, and believes that all 29 claims will soon be subject to inter partes review proceedings.
In response to Target's motion for a stay, Destination Maternity argued the case was already at an "advanced stage" because the parties had conducted significant discovery, including the company's production of more than 34,000 pages of documents to the defendants.
Destination Maternity also argued a stay will place it at a "tactical disadvantage" and cause it to suffer undue prejudice.
Target responded that although the plaintiff filed its complaint in October 2012, it waited until May 2013 to serve its infringement contentions.
And, Target noted, prior to receiving the contentions, it did not know which of the 50 claims in patents Destination Maternity would assert against it.
Therefore, to prepare inter partes review petitions premised on speculation and conjecture would have been "extremely difficult, wasteful and inefficient" for it or anyone else, the retailer argued.
Brody, in her 12-page memorandum, agreed, saying Target's delay was "not unreasonable" and does not place Destination Maternity at an unfair tactical disadvantage.
As to Destination Maternity's argument that it will be unduly prejudiced by a stay because Target is a direct competitor, the judge didn't buy it.
"There is no dispute that DMC and Target are direct competitors," she said. "However, DMC has several other competitors in the market, including H&M, Babies 'R' Us, Walmart, Old Navy, J.C. Penny and Gap.
"In 2008, DMC threatened Gap and J.C. Penny with its prospective patent rights, and, in 2009, DMC first threatened Target with its prospective patent rights. Despite these threats against Gap and J.C. Penny, DMC has only filed suit against Target, and has never sued any of its other competitors."
The judge continued, "While DMC may experience a loss of market share during a delay in litigation, only a fraction of this loss will be attributable to Target because of the several other competitors that continue to compete for market share with DMC without repercussions."
Brody also quashed Destination Maternity's argument that a stay will cause it to lose a significant portion of its patent term.
"All of [DMC's] legal and equitable remedies will be available when the stay is lifted; a stay does not foreclose [DMC] from any remedy," the judge wrote. "Moreover, DMC's patents do not expire until Aug. 26, 2027. Thus, even after a stay, DMC likely will have over a decade to enforce its patent rights."
A case, Brody noted, also need not be in its infancy to warrant a stay.
"Although the parties have already conducted a significant amount of discovery, fact and expert discovery is nowhere near complete. The parties have not yet filed any dispositive motions and a trial date is not set," she wrote. "The court has conducted only two conferences with the parties and resolved only one disputed motion. Moreover, the court has not had to resolve any discovery disputes."
So far, the court has invested "limited resources" in the case, the judge said.
"If litigation continues without a stay, the parties and the court will have to expend a considerable amount of resources on discovery, motions practice and trial," Brody wrote.
"Given the substantial amount of work that lies ahead, the stage of the litigation weighs in favor of a stay."
Destination Maternity declined to comment on the judge's decision.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.