Pakage Apparel, Inc. v. Tommy John, Inc.

Background

Pakage Apparel, Inc., doing business as BN3TH, is the owner of U.S. Patent No. 10,834,974, which concerns an underwear pouch designed to provide support. Tommy John, Inc. markets and sells men’s underwear, including products using what it calls the “Hammock Pouch.” Pakage alleged that several of those products infringe the patent and sought damages and a permanent injunction.

Pakage notified Tommy John of its infringement claim in November 2020. Tommy John responded that the claim was frivolous and that the patent was likely invalid, and it declined to stop the challenged activities. Pakage filed the infringement lawsuit in the Southern District of Texas in November 2023. The case was later transferred to the Southern District of New York.

Tommy John filed a petition with the Patent Trial and Appeal Board for inter partes review, a proceeding in which the Board considers whether previously issued patent claims should be canceled as unpatentable based on prior art. The petition challenged independent claim 1 and dependent claims 2–13 and 15–16 of the patent, asserting that the claims were obvious over prior art. Tommy John moved to stay, or pause, the lawsuit while the Board considered the petition. The Board had not yet decided whether to begin the review when Judge Liman ruled.

The Court’s Analysis

Courts in the district generally consider three factors when deciding whether to stay a patent case pending inter partes review: whether the review will simplify the issues, how far the court case has progressed, and whether the stay will unfairly harm the party opposing it. The moving party bears the burden of showing that a stay is justified.

The court concluded that the first factor favored a stay. If the Board canceled the challenged claims, the infringement lawsuit would have no claims on which to proceed and would be dismissed. If the Board upheld the claims, Tommy John would be barred from later challenging their validity on grounds that it raised or reasonably could have raised during the review. The court also stated that the Board’s analysis could assist with claim construction and patent validity.

The court recognized that the prior-art references in Tommy John’s petition had been listed in an information-disclosure statement during the patent’s examination. It found that this fact weighed slightly against a stay but was not decisive. The court also determined that the Board’s expected decision on whether to begin review, anticipated in approximately mid-January 2025, was close enough that denying a stay solely because review had not yet begun was unwarranted.

The second factor also favored a stay. Although the parties had exchanged preliminary infringement, invalidity, and claim-construction materials, they had not exchanged written discovery, briefed claim construction, attended a claim-construction hearing, or received a claim-construction ruling. The court therefore considered the case to remain at an early stage.

The third factor favored a stay as well. The court acknowledged that the parties were direct competitors but found that Pakage had not identified specific financial harm, market-share loss, or goodwill injury. Pakage had also waited nearly three years after its 2020 communications with Tommy John before filing suit and had not sought preliminary injunctive relief. The court further found that Tommy John filed its review petition and stay motion promptly and found no evidence that the timing was strategic or intended to cause delay.

Ruling

Judge Lewis J. Liman granted Tommy John’s motion to stay. The parties must file a joint status letter within seven days after the Board decides whether to institute inter partes review and, if review is instituted, every three months afterward. The stay expires upon the earlier of the Board’s decision not to institute review or its final written decision. All dates in the existing scheduling order were adjourned pending the Board’s decision on the review. The order did not decide whether Tommy John infringed the patent or whether the patent claims are valid.