Columbia Insurance Company v. Simpson Strong-Tie Company Inc.

Background

Columbia Insurance Company and MiTek Inc. alleged that Simpson Strong-Tie Company Inc. infringed Columbia’s U.S. Patents Nos. 11,021,867 and 11,649,626 under 35 U.S.C. § 271(a). The patents concern hangers used to connect structural components such as beams or joists to fire-separation walls. MiTek is Columbia’s exclusive licensee and developed and commercialized products protected by the patents.

Simpson moved to stay the case while the Federal Circuit considered the validity of the ’867 patent and while the Patent Trial and Appeal Board (PTAB) decided whether to institute post-grant review proceedings concerning the ’626 patent. Columbia separately sought permission to amend its complaint by removing its ’626 patent infringement claims and adding claims that Simpson’s newer DGT/DGHT hangers infringed the ’867 patent.

Motion to Amend

The court denied Columbia’s motion for leave to amend its complaint. A scheduling order set July 28, 2023, as the deadline for amending the pleadings. The court found that Columbia knew about the proposed product changes and the PTAB petitions concerning the ’626 patent before that deadline but did not seek amendment until October 17, 2023. Columbia did not explain its failure to move earlier or show the required good cause for missing the deadline.

The court also stated that the circumstances suggested Columbia might have acted in bad faith or with a delaying motive by waiting until after the October 3 hearing on Simpson’s stay motion. In addition, Simpson had already spent substantial time and money litigating the ’626 patent claims, including preparing lengthy claim-construction and invalidity materials. The court concluded that allowing amendment would unfairly prejudice Simpson and could lead to separate litigation later over the same claims.

The denial of leave to amend was without prejudice to any motion to amend that Columbia might file after the stay is lifted.

Motion to Stay

The court granted Simpson’s motion to stay the current proceedings. Courts consider three factors when deciding whether to stay a patent case pending related patent proceedings: the stage of the litigation, whether a stay will simplify the issues, and whether the stay will unfairly harm the opposing party.

The first factor favored a stay because the case was in the early stages of discovery. Although Simpson had filed an answer and counterclaim, discovery had only recently begun, and no trial date had been set.

The second factor also favored a stay. The ’626 patent has 105 claims, and PTAB review could change the scope of the case by invalidating some or all of those claims. Although the PTAB had already issued a final written decision concerning the ’867 patent, invalidating 18 of its 23 original claims, the court found that considering the related patent proceedings together could simplify the case. Proceeding separately on the two patents could inefficiently divide the litigation.

The court found that the third factor did not outweigh the reasons for a stay. Simpson filed its petitions concerning the ’626 patent before the applicable deadline and requested a stay on the same day. Simpson also appealed the PTAB’s decision concerning the ’867 patent promptly. Columbia and MiTek argued that their direct competition with Simpson meant they would be harmed by ongoing infringement during the stay, but the court found that they had not explained why money damages would be inadequate if they ultimately prevailed.

Disposition

The court denied Columbia’s motion for leave to amend its complaint and granted Simpson’s motion to stay the case pending the PTAB’s decision on whether to institute post-grant review of the ’626 patent and the Federal Circuit’s decision concerning the validity of the ’867 patent. If the PTAB institutes review of the ’626 patent, the stay will continue through those proceedings or until further order of the court. Judge P. Casey Pitts signed the order.