Customer Suit Stayed Provided Customers Agree to Invalidity Estoppel

The court granted defendants' motion to stay plaintiff's infringement actions pending a nonparty manufacturer's declaratory relief action against plaintiff, but only as to the defendants who agreed to be bound by any invalidity decision in the manufacturer case. "I would have to be willfully blind not to understand that it is a significant tactical advantage for Plaintiff to be herding twenty-one defendant cats, and that it would significantly alter the tactical landscape if the defendants are able to sit on the sidelines and let their champion, [the manufacturer], do battle. . . . The theoretical reason for staying 'customer cases' is that the manufacturer is in a better position, and has a greater interest, in defending its product. The concept is a little more complicated here, because [the manufacturer] does not sell a product that the customers resell. Rather the claim is that the customers use the product, and perhaps modify it in doing so, and then make profits from its use in their diverse business operations. . . . [I]t seems to me that if I am going to force [plaintiff] to forego chasing its preferred targets, [plaintiff] ought to get something concrete out of it, which would also offer a better chance of locking in the simplification that could result from [the manufacturer] going first. In that regard, I think the defendants ought to get one shot at invalidity, and, if they are willing to have [the manufacturer] take that shot, then I believe that the balance tips in favor of granting a stay."

Infinite Data LLC v. Amazon.com Inc., 1-12-cv-01616 (DED January 24, 2014, Order) (Andrews, J.)