Case: 4:22-cv-01387-JAR Doc. #: 79 Filed: 04/05/23 Page: 1 of 5 PageID #: 1704
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MISSOURI
`EASTERN DIVISION
`
`
`OLLNOVA TECHNOLOGIES, LTD.,
`
`
`No. 4:22-CV-1387-JAR
`
`
`
`
`
`
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`Plaintiff,
`
`
` v.
`
`
`EMERSON ELECTRIC CO. and
`VERDANT ENVIRONMENTAL
`TECHNOLOGIES, INC.,
`
`
`Defendants.
`
`
`
`MEMORANDUM AND ORDER
`
`This matter is before the Court on Plaintiff’s motion to amend its complaint and
`
`Defendants’ motion to stay the case pending inter partes review of Plaintiff’s patent claims by the
`
`U.S. Patent and Trademark Office. The Court will grant both motions and stay the case.
`
`BACKGROUND
`
`Plaintiff Ollnova Technologies is an Irish limited liability company and the owner of two
`
`thermostat patents at issue in this patent infringement action. The first, U.S. Patent No. 8,224,282
`
`(the ‘282 patent), claims a method and device to manage power utilization of wireless multi-sensor
`
`devices. The second, U.S. Patent No. 7,746,887 (the ‘887 patent) claims dynamic value reporting
`
`for wireless automated systems. In lay terms, as the Court understands it, these patents claim
`
`certain innovations with respect to “smart” thermostats that can interact with other devices on a
`
`wireless network while conserving power and bandwidth by limiting communications to certain
`
`sensor-identified criteria.
`
`In April 2022, Plaintiff filed a complaint against Defendants Emerson Electric, a Missouri
`
`corporation, and its Canadian subsidiary Verdant Environmental Technologies, asserting that
`
`

`

`Case: 4:22-cv-01387-JAR Doc. #: 79 Filed: 04/05/23 Page: 2 of 5 PageID #: 1705
`
`Defendants’ thermostats infringe several claims of Plaintiff’s ‘282 and ‘887 patents. The case was
`
`originally filed in the Western District of Texas based on Emerson’s business presence there. In
`
`June 2022, Plaintiff agreed to dismiss without prejudice its claims of pre- and post-suit indirect
`
`infringement of claims 20 and 21 of the ‘282 patent.1 Plaintiff served its preliminary infringement
`
`contentions in July 2022. Defendants served their preliminary invalidity contentions in September
`
`2022. Plaintiff amended its infringement contentions in October 2022, and Defendants amended
`
`their invalidity contentions in January 2023.
`
`The case was transferred to this Court in December 2022. A claim construction hearing
`
`was set for April 13, 2023, and the trial is scheduled for September 9, 2024. Fact discovery began
`
`in January 2023. In February 2023, Plaintiff filed a motion to amend its complaint to re-instate its
`
`claims for post-suit indirect infringement as to claims 20 and 21 of the ‘282 patent. In March
`
`2023, Defendants filed petitions for inter partes review (IPR) of Plaintiff’s claims by the U.S.
`
`Patent and Trademark Office (PTO) and concurrently filed a motion asking this Court to stay the
`
`case pending the outcome of IPR.
`
`DISCUSSION
`
`
`
`Congress created IPR proceedings as part of the America Invents Act to convert inter
`
`partes reexamination from an examinational to an adjudicative proceeding. Masa LLC v. Apple
`
`Inc., 4:15-CV-00889-AGF, 2016 WL 2622395, at *2 (E.D. Mo. May 9, 2016) (citing 35 U.S.C.
`
`§§ 311-319). The new process offers a timely, cost-effective alternative to litigation, designed to
`
`produce a more efficient and streamlined patent system that improves patent quality and limits
`
`
`1
`Claim 20 describes the power-saving method involving the scanning of sensor data,
`identification of changed values, and communication between components. Dependent claim 21
`describes the method of claim 20 with a threshold function for identifying changed sensor values.
`(Doc. 36-4 at p. 15).
`
`- 2 -
`
`

`

`Case: 4:22-cv-01387-JAR Doc. #: 79 Filed: 04/05/23 Page: 3 of 5 PageID #: 1706
`
`unnecessary and counterproductive litigation costs. Id. (citing Intellectual Ventures II LLC v. U.S.
`
`Bancorp, CIV. 13-2071 ADM/JSM, 2014 WL 5369386, at *3 (D. Minn. Aug. 7, 2014))
`
`The power to stay proceedings is incidental to the power inherent in every court to control
`
`the disposition of causes on its docket. Procter & Gamble Co. v. Kraft Foods Glob., Inc., 549
`
`F.3d 842, 849 (Fed. Cir. 2008). This includes the court’s discretion to stay a case pending IPR at
`
`the request of the defendant. Id. In determining whether to grant a stay in this context, courts
`
`consider (1) whether discovery is complete and a trial date has been set; (2) whether a stay of
`
`litigation will simplify the issues and facilitate the trial; and (3) whether a stay would unduly
`
`prejudice or present a clear tactical disadvantage for the non-moving party. Masa, 2016 WL
`
`2622395, at *2.
`
`
`
`In support of their motion to stay, Defendants argue that (1) the case is in its early stages,
`
`with depositions and expert discovery yet to occur; (2) the IPR process could narrow or reduce the
`
`issues to simplify and streamline the case for trial; and (3) a stay would not prejudice Plaintiff
`
`insofar as Plaintiff is a non-practicing entity seeking only monetary relief. Plaintiff objects on
`
`several grounds: (1) the parties have already engaged in significant document discovery, and claim
`
`construction in the Western District of Texas was initially anticipated in January 2023; (2)
`
`Defendants are dilatory in seeking IPR eight months after they had notice of Plaintiff’s
`
`contentions; (3) a stay is premature and speculative insofar as the Patent Trial and Appeal Board
`
`(PTAB) has not yet decided whether to institute IPR on the subject patents; (4) Defendants have
`
`not identified any terms for claim construction by the PTAB; (5) IPR is unlikely to simplify the
`
`issues with respect to Defendants’ defenses; and (6) Plaintiff will suffer prejudice due to the
`
`protracted timeline, during which the uncertainty will impact its licensee relationships.
`
`- 3 -
`
`

`

`Case: 4:22-cv-01387-JAR Doc. #: 79 Filed: 04/05/23 Page: 4 of 5 PageID #: 1707
`
`In reply, Defendants cite numerous cases in this district and others where courts have
`
`granted stays for IPR, even before the PTAB decided to institute the process. ZeaVision, LLC v.
`
`Bausch & Lomb Inc., 4:21 CV 739 RWS, 2022 WL 715013, at *2 (E.D. Mo. Mar. 10, 2022);
`
`Lineweight LLC v. Firstspear, LLC, 4:18-CV-00387-JAR, 2019 WL 4015824, at *1 (E.D. Mo.
`
`Aug. 26, 2019); Masa, 2016 WL 2622395, at *1; Scramoge Tech., Ltd. v. Volkswagen Group of
`
`Am., Inc., 22-CV-10730, 2022 WL 17616451, at *3 (E.D. Mich. Dec. 12, 2022); NST Glob., LLC
`
`v. SIG Sauer Inc., 19-CV-792-PB, 2020 WL 1429643, at *4 (D.N.H. Mar. 24, 2020); Baxter Int'l,
`
`Inc. v. Becton, Dickinson & Co., 17 C 7576, 2018 WL 11189348, at *2 (N.D. Ill. Nov. 26, 2018).
`
`Based on this precedent, the Court agrees that the motion is not premature. The Court
`
`further concludes that a stay is appropriate here. The PTAB will decide whether to institute IPR
`
`within six months. Discovery has just begun, and no depositions have been taken. If the PTAB
`
`declines review, no resources will be saved but neither will any have been wasted, and the case
`
`remains the same. Lineweight, 2019 WL 4015824, at *2 (granting a stay after the Markman
`
`hearing but before a ruling).
`
`Plaintiff’s assertions that IPR is unlikely to inform claim construction or narrow the issues
`
`are unpersuasive. If the PTAB institutes review and invalidates some claims, such a partial ruling
`
`could narrow the scope of discovery and limit the issues before the Court. If the PTAB invalidates
`
`all claims, then the case is moot. And if all claims survive, Defendants will be subject to estoppel
`
`on any grounds raised during IPR, and the Court may benefit from the expertise of the PTO in
`
`clarifying the claims before it. Masa, 2016 WL 2622395 at *3.
`
`Further, the delay is insufficient to establish undue prejudice and, in the Court’s estimation,
`
`is outweighed by the potential benefit of streamlining the issues. Id. The Court finds no dilatory
`
`motive in the timing of Defendants’ motion, particularly given the initiation of the case in Texas
`
`- 4 -
`
`

`

`Case: 4:22-cv-01387-JAR Doc. #: 79 Filed: 04/05/23 Page: 5 of 5 PageID #: 1708
`
`and subsequent transfer to this Court necessitating changes to the case management schedule. In
`
`the interests of judicial economy, the Court finds it appropriate to stay the case pending IPR.
`
`Finally, Plaintiff seeks leave to amend its complaint to reinstate its claims with respect to
`
`post-suit indirect infringement of claims 20 and 21 of the ‘282 patent. Defendants object, primarily
`
`on the basis of futility. Given that Defendants’ IPR petitions include these claims, the Court finds
`
`it appropriate to allow Plaintiff to amend its complaint accordingly. Defendants cannot
`
`demonstrate prejudice for the same reasons discussed above as to Plaintiff. The case is in early
`
`stages, and the IPR process may inform or resolve the issues.
`
`CONCLUSION
`
`Accordingly,
`
`IT IS HEREBY ORDERED that Plaintiff’s motion to amend its complaint is
`
`GRANTED. (Doc. 68). The Clerk of the Court is directed to detach the amended complaint (Doc.
`
`68-2).
`
`IT IS FURTHER ORDERED that Defendants’ motion to stay the case is GRANTED.
`
`(Doc. 70). The Markman hearing set for April 13, 2023, and all deadlines in the case are
`
`VACATED, and this case is STAYED pending further order of the Court.
`
`IT IS FURTHER ORDERED that, within ten days following the conclusion of inter
`
`partes review by the U.S. Patent and Trademark Office, the parties shall file, either jointly or
`
`separately, a motion to lift the stay along with a proposed schedule for further proceedings or,
`
`alternatively, a status report or motion for other relief as may be appropriate at that time.
`
`Dated this 5th day of April, 2023.
`
`
`
`
`
`
`
`
`
`
`
`
`________________________________
`JOHN A. ROSS
` UNITED STATES DISTRICT JUDGE
`
`
`
`
`
`
`- 5 -
`
`