Cortex MCP, Inc. v. Visa, Inc.
- Edward Davila
- 5:23-cv-05720
- U.S. District Court · Northern District of California
- 6
In Cortex MCP v. Visa, Judge Davila granted Visa’s stay motion pending patent reviews, terminated its dismissal motion, and vacated the claim-construction hearing.
Cortex MCP, Inc. and Visa, Inc.; the patent case is paused, Visa’s motion to dismiss is terminated pending the stay, and the claim-construction hearing is vacated.
What happened
Cortex MCP, Inc. sued Visa, Inc., alleging infringement of four patents. Visa asked the court to pause the case while the Patent Trial and Appeal Board considered five petitions challenging all claims of those patents.
The court found that the case was still at an early stage, and that the reviews could simplify the issues. Although Visa waited to seek a stay and that factor weighed against it, the court found no undue prejudice to Cortex because the parties were not direct competitors, Cortex was not seeking an injunction, and the expected review decisions were relatively near.
Judge Davila granted Visa’s motion to stay and stayed the case until the Board issued decisions on whether to institute review. The court terminated Visa’s pending motion to dismiss and vacated the scheduled claim-construction hearing, with both to be addressed after the stay is lifted.
The detailed version
- Cortex MCP, Inc. v. Visa, Inc. · No. 5:23-cv-05720
- Edward Davila
- July 22, 2024
Background
Cortex sued Visa for allegedly infringing U.S. Patent Nos. 9,251,531, 9,954,854, 10,749,859, and 11,329,973. The case was originally filed in the Western District of Texas and later transferred to the Northern District of California. Visa had a renewed motion to dismiss pending when it asked the court to stay the case.
Visa filed five petitions for inter partes review, an administrative patent-review process, challenging all claims of the patents at issue. Visa represented that the Patent Trial and Appeal Board expected to issue decisions on whether to institute those reviews by August 6, 2024. The court had scheduled a claim-construction hearing for September 5, 2024, but had not set dates for the close of fact or expert discovery, dispositive-motion briefing, or trial.
Legal Standard
The court considered three factors used to decide whether to stay a patent-infringement case pending patent review: the stage of the litigation, whether a stay would simplify the issues, and whether the stay would unfairly harm or tactically disadvantage the party opposing the stay.
Court’s Analysis
The court found that the case remained in its early stages. Although the parties had engaged in discovery and claim-construction briefing, the motion to dismiss remained pending, the claim-construction hearing had not yet occurred, and substantial work remained before trial.
The court concluded that a stay could simplify the case. If the Board instituted review, the proceedings could invalidate claims or provide guidance about claims that survived. Because the patents were in the same family and used many of the same terms, the court found that even one instituted review could inform the treatment of all four patents.
On prejudice, the court found one factor neutral, one factor weighing against a stay, and two factors weighing in favor. Visa filed its petitions within the statutory one-year deadline, making the timing of the petitions neutral. The court found Visa’s nearly six-month delay in filing the stay motion unreasonable, so that factor weighed against a stay. The expected timing of the Board’s institution decisions did not prejudice Cortex. The court also found that the parties were not direct competitors, that Visa represented Cortex was a non-practicing entity without products or market share related to the patents, and that Cortex was not seeking injunctive relief. The opinion states that Cortex did not deny Visa’s representation about its status.
Ruling
The court GRANTED Visa’s motion for a stay. The case was STAYED until the Patent Trial and Appeal Board issued institution decisions on Visa’s petitions. The parties were ORDERED to file a joint status report within one week after those decisions, and either party could move to extend the stay.
Pending the stay, the court TERMINATED Visa’s motion to dismiss and directed Visa to re-notice the court to proceed when the stay was lifted. Either party could seek leave to file supplemental briefs on that motion after the stay was lifted. The court also VACATED the September 5, 2024 claim-construction hearing, to be reset after the stay was lifted.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.