  United States Court of Appeals
      for the Federal Circuit
                ______________________

               VIRTUALAGILITY INC,
                  Plaintiff-Appellee,

                           v.

    SALESFORCE.COM, INC., DELL, INC., DR.
  PEPPER SNAPPLE GROUP, INC., KIMBERLY-
 CLARK CORPORATION, NBCUNIVERSAL, INC.,
  LIVINGSOCIAL, INC., FEDEX CORPORATION,
   BMC SOFTWARE, INC., BANK OF AMERICA
 CORPORATION, BANK OF AMERICA NATIONAL
  ASSOCIATION, MERRILL LYNCH & CO., INC.,
  MERRILL LYNCH, PIERCE, FENNER & SMITH
   INCORPORATED, AND FEDEX CORPORATE
              SERVICES, INC.,
            Defendants-Appellants.
            ______________________

                      2014-1232
                ______________________

   Appeal from the United States District Court for the
Eastern District of Texas in No. 2:13-cv-00011-JRG,
Judge J. Rodney Gilstrap.
                ______________________

                Decided: July 10, 2014
                ______________________

    CHRISTIAN JOHN HURT, Nix Patterson & Roach LLP,
of Irving, Texas, argued for plaintiff-appellee. With him
on the brief were EDWARD K. CHIN and ANDREW JOSEPH
2               VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



WRIGHT; and DEREK T. GILLILAND, of Daingerfield, Texas.
Of counsel was D. NEIL SMITH, of Irving, Texas.

   JOSE C. VILLARREAL, Wilson, Sonsini, Goodrich &
Rosati, PC, of Austin, Texas, argued for defendants-
appellants. With him on the brief was DARRYL J. ADAMS,
Baker Botts, LLP, of Austin, Texas, for Kimberly–Clark
Corporation. Of counsel were JOEL CHRISTIAN BOEHM and
BRIAN DAVID RANGE, Wilson, Sonsini, Goodrich & Rosati,
PC, of Austin, Texas; and KEVIN J. MEEK, Baker Botts,
LLP, of Austin, Texas.
                 ______________________

    Before NEWMAN, MOORE, and CHEN, Circuit Judges.
    Opinion for the court filed by Circuit Judge MOORE.
    Dissenting opinion filed by Circuit Judge NEWMAN.
MOORE, Circuit Judge.
    Salesforce.com, Inc. and other defendants (collective-
ly, Defendants) 1 appeal from the district court’s order
denying their joint motion to stay VirtualAgility Inc.’s
(VA) patent infringement lawsuit against Defendants
pending post-grant review of the validity of VA’s asserted
claims under the Transitional Program for Covered Busi-
ness Method Patents (CBM program). We reverse.
                      BACKGROUND
     In January 2013, VA sued Defendants alleging in-
fringement of U.S. Patent No. 8,095,413 (’413 patent). On
May 24, 2013, Salesforce filed a petition with the Patent
Trial and Appeal Board (PTAB) for post-grant review of
all claims of the ’413 patent under the CBM program. In


    1  When we refer to “Defendants,” we mean all de-
fendants-appellants.  When we refer to “Salesforce,”
however, we mean only “Salesforce.com, Inc.”
VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.               3



the petition, Salesforce argued that all claims of the ’413
patent were eligible for this form of post-grant review
because they are directed to a “covered business method
patent” within the meaning of § 18(a)(1) of the America
Invents Act (AIA), Pub L. No. 112-29, 125 Stat. 284, 329–
31 (2011), and that Salesforce had standing to bring the
petition because it was sued for patent infringement, AIA
§ 18(a)(1)(B). Salesforce further argued the PTAB should
institute CBM review because all the claims of the ’413
patent were more likely than not patent-ineligible under
35 U.S.C. § 101 and invalid under 35 U.S.C. §§ 102, 103 in
view of several prior art references.
     On May 29, 2013, Defendants filed a motion to stay
district court proceedings pursuant to AIA § 18(b)(1). See
Defendants’ Joint Motion To Stay Proceedings, VirtualA-
gility Inc. v. Salesforce.com, Inc., 13-cv-00111 (E.D. Tex.
May 29, 2013), ECF No. 67. In August 2013, while this
motion was pending, the district court issued a discovery
order and held a scheduling conference, setting an April
2014 date for a claim construction hearing and a Novem-
ber 2014 date for jury selection. Also in August 2013, VA
filed a Preliminary Response in opposition to Salesforce’s
petition at the PTAB pursuant to 37 C.F.R. § 42.207(a).
In November 2013, the PTAB granted-in-part Salesforce’s
petition based on its conclusion that all claims of the ’413
patent are directed to a covered business method, and are
more likely than not patent-ineligible under 35 U.S.C.
§ 101 and invalid under § 102 as anticipated by U.S.
Patent No. 5,761,674 (Ito). The PTAB also issued its own
scheduling order, setting a July 2014 date for a trial on
the validity of the ’413 patent claims.
     In early January 2014, the district court denied De-
fendants’ motion to stay the case pending CBM review.
VirtualAgility Inc. v. Salesforce.com, Inc., 13-cv-00111,
2014 WL 94371 (E.D. Tex. Jan. 9, 2014). Defendants
timely filed an interlocutory appeal to this court, and also
filed motions to stay district court proceedings pending
4               VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



the disposition of this appeal with the district court and
this court. While these motions were pending, VA filed a
Motion to Amend the ’413 patent claims with the PTAB
contingent on the claims’ invalidation.        PTAB No.
CBM2013-00024, Paper 26 (Jan. 28, 2014). In February,
we issued an order staying proceedings in the district
court pending our disposition of Defendants’ motion to
stay pending appeal. VirtualAgility Inc. v. Salesforce.com,
Inc., 14-1232 (Fed. Cir. Feb. 12, 2014), ECF No. 34.
Pursuant to our order, the district court entered the stay
pending appeal.
                       DISCUSSION
    We have jurisdiction over this appeal under AIA
§ 18(b)(2), which provides that “[a] party may take an
immediate interlocutory appeal from a district court’s
decision” granting or denying a motion to stay litigation
pending CBM review. The statute instructs the district
court to consider the following four factors when deciding
whether to grant a stay:
    (A) whether a stay, or the denial thereof, will sim-
    plify the issues in question and streamline the
    trial;
    (B) whether discovery is complete and whether a
    trial date has been set;
    (C) whether a stay, or the denial thereof, would
    unduly prejudice the nonmoving party or present
    a clear tactical advantage for the moving party;
    and
    (D) whether a stay, or the denial thereof, will re-
    duce the burden of litigation on the parties and on
    the court.
AIA § 18(b)(1). The statute further provides that we
“shall review the district court’s decision to ensure con-
VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.              5



sistent application of established precedent, and such
review may be de novo.” Id. § 18(b)(2) (emphasis added).
                  I. Standard of Review
     The parties dispute the standard of review that we
should apply to this case. Defendants contend that the
statute “encourages full de novo review where factual
evidence and conclusions of law are reviewed fully and
independently.” Appellant’s Br. 15. VA responds that we
should review the order denying a stay with deference
because such decisions implicate district courts’ manage-
ment of their own dockets, which is a matter traditionally
left to their discretion. We note that prior to the AIA,
district court decisions on motions to stay pending U.S.
Patent and Trademark Office (PTO) proceedings were
generally not appealable and, when they were, we re-
viewed them under the abuse of discretion standard.
Procter & Gamble Co. v. Kraft Foods Global, Inc., 549
F.3d 842, 845, 848–49 (Fed. Cir. 2008); see also Landis v.
N. Am. Co., 299 U.S. 248, 254–55 (1936); Gould v. Control
Laser Corp., 705 F.2d 1340, 1341 (Fed. Cir. 1983). We
also note that the AIA expressly created an immediate
right of appeal of stay decisions pending CBM review,
gave us jurisdiction over the interlocutory appeals, and
that the only standard mentioned in the statute is de novo
review. Nevertheless, we need not resolve this dispute
because we hold that, even under the abuse of discretion
standard argued for by VA, the district court’s decision to
deny a stay pending the PTAB’s review of the ’413 patent
claims under the CBM program must be reversed. Noth-
ing in this opinion should be read as deciding the stand-
ard of review applicable to the ultimate stay decision or
the individual factors. We leave it to a future case to
resolve what Congress meant when it indicated that our
“review may be de novo.”
6               VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



    II. Factors (A) and (D): Simplification of Issues and
                Reduced Burden of Litigation
     The district court concluded that the first factor—
simplification of the issues—was “essentially neutral, if
not slightly against” granting a stay because it was “not
convinced” by the PTAB’s assessment that cancellation of
some or all of the claims during CBM review was “proba-
ble.” VirtualAgility, 2014 WL 94371, at *2, *5. The
district court reviewed the lengthy prosecution history
that the ’413 patent underwent before issuance. The
court was persuaded that “there can be little dispute here
about the thoroughness of the PTO’s prior examination of
the ’413 patent, given the various grounds of invalidity
and the breadth of prior art references considered by the
PTO before issuing this patent.” Id. at 3. The court then
performed its own evaluation of the bases upon which the
PTAB granted the CBM petition. The court stated that,
even though the Ito patent had never been before the
PTO, it was not persuaded that Ito anticipates all of the
claims given the PTO’s extensive review of other prior art
during “a lengthy prosecution process.” Id. The court
also concluded that the value of the PTAB’s consideration
of Ito was “marginal” because Defendants introduced two
other pieces of prior art in the district court proceedings—
which, they represented, were “of particular im-
portance”—that Salesforce did not include in its CBM
petition. Id. With regard to the PTAB’s decision to
review whether the ’413 patent claims are patent-
ineligible, the court observed that the claims were
amended during prosecution to overcome an earlier § 101
rejection. Based on its assessment of the claims and the
law of § 101, the court “was not persuaded that the PTAB
will likely cancel all claims of the ’413 patent” as patent-
ineligible. Id. at 4. In spite of the PTAB’s grant of the
CBM petition, finding that all the claims of the ’413
patent were more likely than not invalid on two different
grounds, the district court concluded that it was not
VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.                 7



convinced that the PTAB would cancel some or all of the
’413 patent claims. The court further concluded that it
was not convinced that the CBM review would simplify
the issues in this case and that, therefore, this factor was
“neutral, if not slightly against, granting a stay.” Id. at 5.
     The court determined that the parties’ arguments re-
garding the fourth factor—burden of litigation—
“substantially overlap” with those presented under the
first factor. It found that “the specific circumstances in
the instant case present only a limited possibility” of a
reduced burden on the court and the parties. Id. at 8.
The court therefore concluded that the fourth factor
“weighs only slightly in favor of a stay.” Id.
     After the court denied the motion for a stay, VA filed
proposed claim amendments in the CBM review. Defend-
ants filed a motion to, at least, stay district court proceed-
ings pending appeal of the denial of the motion to stay.
Defendants argued that the fact that VA has already filed
a motion to amend claims in the CBM proceeding in-
creased the likelihood that the CBM proceeding will
simplify issues. In its decision denying the motion to stay
pending appeal, the court observed that VA’s proposed
amendments to the ’413 patent claims in the CBM pro-
ceeding were not a part of the record at the time of its
decision on the motion now on appeal. See VirtualAgility
Inc. v. Salesforce.com, Inc., 13-cv-00111, 2014 WL 807588
(E.D. Tex. Feb. 27, 2014). On the merits, the court con-
cluded that Defendants “made no attempt at showing how
. . . conditions triggering the amendments would likely
arise” and have not “challenged [its] previous finding that
cancellation of some or all the claims was unlikely.” Id. at
2. The court also noted that, “[t]o the extent any further
statements [by VA] or amendments to claims may affect
[its] claim construction, such is fully remediable with
supplemental claim constructions.” Id. at 3. Thus, the
court concluded that the fact that VA moved to amend the
8               VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



claims in the CBM proceeding did not affect its determi-
nation regarding the first and fourth factors.
    On appeal, Defendants contend that the district court
made “critical errors” in finding the first factor neutral or
slightly against the stay. Defendants argue that CBM
review will simplify and streamline issues for trial be-
cause the district court would not need to address any
claims that are cancelled and because Defendants will be
estopped from challenging the validity of the ’413 patent
in view of § 101 and the Ito patent after the review is
concluded. 2 Defendants further argue that claim amend-
ments during CBM review may eliminate infringement
arguments and give rise to intervening rights. They
contend that the district court should not have second-
guessed the PTAB’s conclusion that all ’413 patent claims
are “more likely than not” anticipated by Ito and invalid
under § 101.
    Defendants also argue that the fourth factor likewise
strongly favors a stay because CBM review may spare
Salesforce’s customers, who have also been sued by VA,
from discovery, while “the true parties in interest” focus
on the validity of the ’413 patent at the PTAB. They
argue that a stay will further reduce discovery burdens on
third parties. Finally, they contend that the district court
erred by conflating the fourth factor with the first factor
and by giving it too little weight.


    2   As the petitioner in the CBM proceeding,
Salesforce is estopped from asserting at the district court
that the ’413 patent claims are “invalid on any ground
that [it] raised during the . . . proceeding.”         AIA
§ 18(a)(1)(D). Although this provision does not apply to
the other, non-petitioner defendants in this case, “all
other defendants will agree to this same scope of statutory
estoppel” if a stay pending CBM review is granted. De-
fendants’ Joint Motion To Stay Proceedings at 8.
VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.                9



     VA counters that a stay will not significantly simplify
this case or reduce the burden on the court and the par-
ties. As an initial matter, VA contends that we should not
take into account its Motion to Amend because it was not
a part of the record below. VA asserts that, while the
motion to stay litigation pending CBM review was pend-
ing, it told Defendants that it might move to amend the
claims. It contends that, because Defendants did not
notify the district court about VA’s possible amendments,
they waived any argument about the Motion to Amend.
On the merits, VA points out that the motion seeks to
amend only seven of the twenty-one asserted claims and
that the amendments may not necessarily be entered for
any of the claims. It contends that the proposed amend-
ments merely clarify the claim language and are not
related to claim construction disputes currently before the
district court, and thus would not significantly impact the
litigation.
    VA also argues that a stay is unlikely to meaningfully
simplify the case because invalidity issues not before the
PTAB, as well as infringement and damages issues, will
remain as long as a single claim survives CBM review. It
contends the PTAB’s § 101 review is also unlikely to
simplify the case because patent-eligibility analysis is
generally not resource-intensive. VA contends that the
district court’s conclusion that the claims would likely
survive the PTAB’s scrutiny was reasonable based on its
assessment of § 101 law. Further, VA argues that there is
a “palpable risk” that we would vacate the PTAB’s deci-
sion to initiate CBM review of the ’413 patent under the
Administrative Procedure Act (APA) because it is not a
“covered business method patent” within the meaning of
§ 18(d)(1) of the AIA. It argues that Defendants’ assertion
that PTAB review would simplify litigation is contrary to
trial court experience, and that the district court therefore
properly rejected Defendants’ “generic” arguments that a
stay pending CBM review would promote efficient adjudi-
10              VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



cation in this case. VA contends that Salesforce’s argu-
ments about its customer defendants and third parties
were not properly preserved for appeal. It argues that, in
any event, the customers are the true parties in interest
because they partner with Salesforce, and that a stay
would not reduce a burden on third parties because most
third-party discovery has already taken place.
    We conclude that it is proper for us to consider the
fact that VA filed a Motion to Amend in our review of the
district court’s decision. Defendants did not waive the
arguments regarding claim amendments. They argued to
the district court that claim amendments during PTAB
review are a distinct possibility and, in doing so, gave VA
an opportunity to respond to this argument below. De-
fendants’ Joint Motion To Stay Proceedings at 7–8.
     We also conclude that we are not improperly expand-
ing the record on appeal if we consider the Motion to
Amend. See Moore U.S.A., Inc. v. Standard Register Co.,
229 F.3d 1091, 1116 (Fed. Cir. 2000) (citing Fed. R. App.
P. 10(a)). We are mindful that “[a]n appellate court may
consider only the record as it was made before the district
court.” Ballard Med. Prods. v. Wright, 821 F.2d 642, 643
(Fed. Cir. 1987); see also Sage Prods., Inc. v. Devon Indus.,
Inc., 126 F.3d 1420, 1426 (Fed. Cir. 1997) (“No matter
how independent an appellate court’s review of an issue
may be, it is still no more than that—a review.”). Never-
theless, pursuant to Rule 201(b)(2) of the Federal Rules of
Evidence, we may take judicial notice of the fact that a
filing was made before the PTAB. See, e.g., Genentech,
Inc. v. Chiron Corp., 112 F.3d 495, 497 n.1 (Fed. Cir.
1997) (noting that, because the “record before the Board is
a public record . . . and thus capable of accurate and ready
determination by resort to unquestionable sources,”
judicial notice was appropriate). Cognizant of the limits
imposed by Rule 201(b)(2), however, we reiterate that we
consider only the fact that a Motion to Amend was filed—
not the impact of the proposed amendments on the par-
VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.               11



ties’ claim construction and infringement arguments. The
latter cannot be “accurately and readily determined from
sources whose accuracy cannot reasonably be questioned.”
Fed. R. Evid. 201(b)(2). Moreover, the district court’s
ability to address the Motion to Amend in its ruling
denying a stay of its proceedings pending appeal supports
our consideration of the fact that VA filed proposed claim
amendments because we are not faced with the uncom-
fortable task of doing so for the first time on appeal. Cf.
Singleton v. Wulff, 428 U.S. 106, 121 (1976).
    Another preliminary issue concerns the relationship
between the first and fourth factors. We agree with the
district court that there is a great deal of overlap between
the parties’ arguments with regard to these two factors.
We note, however, that the simplification of the issues
factor and the burden of litigation factor are listed sepa-
rately in the statute. Thus, even when both factors point
in the same direction—in favor of or against the stay—
they continue to be separate, individual factors which
must be weighed in the stay determination. We cannot,
as VA requests, collapse the four-factor test expressly
adopted by Congress into a three-factor test.
     We conclude that the district court clearly erred in
finding that the first factor was neutral or slightly against
a stay, and that the fourth factor weighed only slightly in
favor of a stay. We hold that these factors strongly favor
a stay in this case. The district court erred as a matter of
law to the extent that it decided to “review” the PTAB’s
determination that the claims of the ’413 patent are more
likely than not invalid in the posture of a ruling on a
motion to stay. Under the statutory scheme, district
courts have no role in reviewing the PTAB’s determina-
tions regarding the patentability of claims that are sub-
ject to CBM proceedings.
    Indeed, a challenge to the PTAB’s “more likely than
not” determination at this stage amounts to an improper
12              VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



collateral attack on the PTAB’s decision to institute CBM
review, and allowing it would create serious practical
problems. As a preliminary matter, Congress made post-
grant review more difficult to obtain than reexamination
by raising the standard from “a substantial new question
of patentability,” 35 U.S.C. § 303(a) (2012), to “more likely
than not . . . unpatentable,” id. § 324(a). Congress clearly
did not intend district courts to hold mini-trials reviewing
the PTAB’s decision on the merits of the CBM review. To
do so would overwhelm and dramatically expand the
nature of the stay determination. If the district court
were required to “review” the merits of the PTAB’s deci-
sion to institute a CBM proceeding as part of its stay
determination, it would undermine the purpose of the
stay. When the stay decision is then appealed to this
court, we would be required to likewise review the PTAB’s
decision to institute a CBM proceeding. This is clearly
not how or when Congress intended review of the PTAB’s
CBM determinations to take place. See id. § 141(c) (“A
party to . . . a post-grant review who is dissatisfied with
the final written decision of the [PTAB] . . . may appeal
the Board’s decision only to the United States Court of
Appeals for the Federal Circuit.”). The stay determina-
tion is not the time or the place to review the PTAB’s
decisions to institute a CBM proceeding. 3




     3  It would also be inappropriate for the district
court to evaluate the potential success of an APA chal-
lenge to the PTAB’s determination that the ’413 patent is
a “covered business method patent” when analyzing
whether CBM review will simplify the issues and reduce
the burdens on the parties and the court. Like the district
court’s validity analysis, this inquiry would amount to an
improper collateral attack on the PTAB’s decision to
institute CBM review.
VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.              13



    The district court’s decision regarding the first and
fourth factors was based predominantly on its improper
review of whether the PTAB was correct in its determina-
tion that the claims of the ’413 patent were more likely
than not invalid. After this review is removed from the
calculus, the remaining evidence of record weighs heavily
in favor of a stay. We find it significant that the PTAB
granted CBM review on all asserted claims of the sole
asserted patent. And it determined that all of these
claims were more likely than not unpatentable on two
separate, alternative grounds. The statute allows for
institution of post-grant review if “it is more likely than
not that at least 1 of the claims challenged in the petition
is unpatentable.” 35 U.S.C. § 324(a). In this case, the
PTAB expressly determined that all of the claims are
more likely than not unpatentable. This CBM review
could dispose of the entire litigation: the ultimate simpli-
fication of issues. See Broad. Innovation, L.L.C. v. Char-
ter Commc’ns Inc., No. 03-cv-2233, 2006 WL 1897165, at
*8 (D. Colo. July 11, 2006) (noting that “a stay would
further the interests of judicial economy and the conser-
vation of the parties’ resources, as well as that of the
court” if a reexamination would “dispose of . . . litigation
entirely”); cf. Procter & Gamble Co. v. Team Techs., Inc.,
12-cv-552, 2014 WL 533494, at *4 (S.D. Ohio Feb. 11,
2014) (denying a motion to stay and noting that “in addi-
tion to the 11 claims that Plaintiff has asserted in this
case that are also at issue in the [inter partes review
proceedings], the remaining 16 asserted claims are not at
issue in any [inter partes review]”); Cognex Corp. v. Nat’l
Instruments Corp., No. 00-442, 2001 WL 34368283, at *2
(D. Del. June 29, 2001) (denying a stay pending reexami-
nation in part because the complaint alleged “a variety of
claims which are not linked to the patent infringement
claim, including claims of copyright and trademark in-
fringement and unfair competition, all of which require a
trial”). This weighs heavily in favor of granting the stay.
We reach this conclusion without needing to consider the
14              VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



fact that VA moved in the CBM proceeding to amend
claims of the ’413 patent. This fact, if considered, could
only weigh further in favor of granting the stay so as to
avoid unnecessary claim construction of what could
potentially be a moving target in terms of claim language.
     VA’s position that Salesforce’s decision to save two
pieces of its important prior art for district court proceed-
ings instead of placing it before the PTAB has reduced
efficiencies is not without support. The simplification
argument would be stronger if all of the prior art or
relevant invalidity issues were in the CBM review, as this
would entirely eliminate the trial court’s need to consider
validity in the event that some claims survive CBM
review. In this case, however, where CBM review has
been granted on all claims of the only patent at issue, the
simplification factor weighs heavily in favor of the stay. If
Salesforce is successful, and the PTAB has concluded that
it “more likely than not” will be, then there would be no
need for the district court to consider the other two prior
art references. This would not just reduce the burden of
litigation on the parties and the court—it would entirely
eliminate it. 4
    Failure to include other known prior art in the CBM
petition could, as we will discuss below, create a potential


     4  We note that, while the same pieces of evidence
can often relate to both the first and the fourth factors as
they do here, this may not always be the case. While
simplifying issues would as a general matter always
reduce the burdens of litigation on the parties and the
court, the reduced burden of litigation factor may impli-
cate other considerations, such as the number of plaintiffs
and defendants, the parties’ and witnesses’ places of
residence, issues of convenience, the court’s docket, and in
particular its potential familiarity with the patents at
issue.
VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.               15



tactical advantage for Defendants that would weigh
against a stay under the third factor. Cf. Gladish v. Tyco
Toys, Inc., 29 U.S.P.Q.2d (BNA) 1718, 1720, 1993 WL
625509, at *2 (E.D. Cal. 1993) (observing that the district
court “is the only forum for a complete consideration of
[the defendant’s] evidence of invalidity” and noting that
this fact disfavors a stay pending reexamination); see also
Enprotech Corp. v. Autotech Corp., 15 U.S.P.Q.2d (BNA)
1319, 1320, 1990 WL 37217, at *1 (N.D. Ill. 1990). We
also agree with VA that Defendants’ arguments regarding
customers and third parties were not raised before the
district court and are therefore waived. Nevertheless, on
balance of the evidence in the record, we conclude that the
first and fourth factors heavily favor a stay.
   III. Factor (B): Whether Discovery Is Complete and
           Whether a Trial Date Has Been Set
    The court found that the timing factor favored grant-
ing a stay because the parties had not yet filed their joint
claim construction statement, the deadline to complete
fact discovery was more than six months away, and jury
selection was not until November 2014. VirtualAgility,
2014 WL 94371, at *5; see Docket Control Order, Virtu-
alAgility Inc. v. Salesforce.com, Inc., 13-cv-00111 (E.D.
Tex. Aug. 30, 2013), ECF No. 91. But it concluded that
“the benefits of a stay at this relatively early stage of the
proceedings are outweighed by various other considera-
tions as discussed elsewhere herein.” VirtualAgility, 2014
WL 94371, at *5.
    Defendants argue that the district court correctly con-
cluded that the early stage of the litigation favors a stay.
Defendants contend, however, that the district court did
not weigh this factor heavily enough in favor of the stay
because it erroneously considered the case’s status at the
time it ruled on the motion rather than at the time when
the motion was filed—seven months earlier. They argue
that, when considering a motion to stay, it does not make
16              VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



sense for a district court to take into account its added
familiarity with the case developed during the pendency
of the motion. Defendants note that, at the time of the
filing, there was no date for jury selection and no discov-
ery had taken place.
    VA counters that the district court correctly evaluated
the status of the case on the date when it ruled on the
motion rather than when the motion was filed because
there was no indication that the PTAB would initiate
CBM review when Defendants moved for a stay. VA
notes that, at the time the district court ruled on the
motion to stay, the parties were involved in fact discovery
and were preparing for a claim construction hearing,
which, it contends, indicates that the case was at an
advanced stage. VA thus argues that the timing factor is
neutral.
    We hold that the timing factor heavily favors a stay.
We note at the outset that it was not error for the district
court to wait until the PTAB made its decision to institute
CBM review before it ruled on the motion. Indeed, while
some district courts ruled on motions to stay before the
PTAB granted the petition for post-grant review, see, e.g.,
Intertainer, Inc. v. Hulu, LLC, No. 13-cv-5499, 2014 WL
466034, at *1 (C.D. Cal. Jan. 24, 2014), others have wait-
ed until post-grant review was instituted, and still others
denied as premature the motion to stay without prejudice
to refiling after institution of post-grant review, see, e.g.,
Checkfree Corp. v. Metavante Corp., No. 12-cv-15, 2014
WL 466023, at *1 (M.D. Fla. Jan. 17, 2014). We express
no opinion on which is the better practice. While a motion
to stay could be granted even before the PTAB rules on a
post-grant review petition, no doubt the case for a stay is
stronger after post-grant review has been instituted.
    In this case, the stay motion was filed in May 2013,
almost immediately after Salesforce had filed its CBM
petition with the PTAB. The PTAB granted the petition
VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.              17



in November 2013. The district court denied the motion
to stay in January 2014. As noted above, we see no error
in the district court’s decision to rule on the stay motion
after the PTAB rendered its decision on the CBM petition.
Furthermore, a district court is not obligated to “freeze”
its proceedings between the date that the motion to stay
is filed and the date that the PTAB decides on the CBM
petition. Of course, the court should make every effort to
expeditiously resolve the stay motion after the PTAB has
made its CBM review determination. To do otherwise
would undermine the intent of Congress to allow for stays
to prevent unnecessary duplication of proceedings.
     As for the proper time to measure the stage of litiga-
tion, district courts have adopted the date of the filing of
the motion to stay. See, e.g., Norred v. Medtronic, Inc.,
No. 13-2061, 2014 WL 554685, at *2 (D. Kan. Feb. 12,
2014) (“The Court finds that this case is still in its early
stages, with the Scheduling Order entered only a few
months before this motion was filed.”); Cynosure, Inc. v.
Cooltouch Inc., No. 08-10026, 2009 WL 2462565, at *2 (D.
Mass. Aug. 10, 2009) (“The most compelling justification
for denying defendant’s motion to stay is the stage of the
litigation at which it was filed.”) (emphasis added); Agar
Corp Inc. v. Multi-Fluid, Inc., 983 F. Supp. 1126, 1127
(S.D. Tex. 1997) (articulating the timing factor as “the
stage of the litigation at which the motion was filed”).
The cases cited by the dissent are not to the contrary and
do not hold that the stage of litigation is measured as of
any date other than the date of the motion. 5 In two of the



   5     The dissent is correct that some cases discuss the
time of the motion in conjunction with the prejudice factor
because those cases were considering whether defendants’
delays in seeking a stay would unduly prejudice the
plaintiff—an entirely different issue. None of those cases
suggests, however, that the stage of the litigation should
18              VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



cases cited by the dissent, the motion was decided within
weeks of its filing, and thus the stage of litigation dis-
cussed was effectively the stage of the filing of the motion.
Rensselaer Polytech. Inst. v. Apple Inc., No. 13-cv-0633,
2014 WL 201965, at *5 (N.D.N.Y. Jan. 15, 2014) (motion
to stay filed in December 2013); TPK Touch Solutions,
Inc. v. Witek Electro-Optics Corp., No. 13-cv-2218, 2013
WL 6021324, at *4–5 (N.D. Cal. Nov. 13, 2013) (motion to
stay filed in late September 2013). In the third case, it is
clear that the district court used the time of the filing of
the motion for a stay to evaluate the stage of litigation.
Boston Scientific Corp. v. Cordis Corp., 777 F. Supp. 2d
783 (D. Del. 2011). The court explained that the stage of
litigation cuts against a stay because discovery is com-
plete and the trial is scheduled to commence in May 2011.
Id. at 788. Although it is not apparent from this portion
of the opinion at what time the stage of litigation was
measured, the district court later made clear that it
looked at the time of the filing of the motion: “Cordis’
motion for stay was filed on September 23, 2010, nearly
one year after the untimely request for reexamination
was made. As noted above [in the ‘Status of litigation’
section], a trial date had been set and fact discovery was
complete at the time Cordis filed its motion for stay.” Id.
at 789.
    Generally, the time of the motion is the relevant time
to measure the stage of litigation. 6 In this case, we see no



be anything other than the time of the filing of the mo-
tion.
    6   While district courts should generally consider
“whether discovery is complete and whether a trial date
has been set” as of the date of the stay motion, there was
no error in also taking into account the stage of litigation
as of the date that CBM review was granted. Similarly,
the district court may consider evidence that develops
VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.              19



error in the district court’s having waited until the PTAB
granted the CBM review to rule upon the motion. Wheth-
er we consider the May 2013 date, when the motion to
stay was filed, or the November 2013 date, when the
PTAB granted CBM review, this factor heavily favors
Defendants. At the time Defendants filed their motion in
May 2013, the case was less than four months old. Dis-
covery had not yet begun and no trial date had been set.
As of the date the PTAB granted CBM review, there
remained eight months of fact discovery, the joint claim
construction statements had yet to be filed, and jury
selection was a year away. The litigation at either time
was still at its infancy, which favors granting the stay.
  IV. Factor (C): Undue Prejudice or Tactical Advantage
    The district court concluded that the undue prejudice
factor weighed heavily against a stay. It found that, given
“credible evidence” that VA and Salesforce were direct
competitors, VA would suffer irreparable harm in the
form of lost market share and consumer goodwill stem-
ming from the delay in enforcing its patent rights. Virtu-
alAgility, 2014 WL 94371, at *6. The court noted that, for
example, VA and Salesforce “took part in the same gov-
ernment bid process at least once.” Id. It determined
that, even though CBM review must conclude by Novem-
ber 2014 (i.e., one year from institution of the proceeding,
see 35 U.S.C. § 326(a)(11)), 7 VA would still suffer undue
prejudice because it is a small company with limited


after the date of the stay motion—for example, the fact
that the PTAB granted the CBM petition, any claim
amendments proposed or entered in the post-grant pro-
ceeding, further evidence of competition, and so on—as it
pertains to the other three factors.
    7   This period may be extended by no more than six
months “for good cause shown.” 35 U.S.C. § 326(a)(11)
(2012).
20              VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



resources and because a likely appeal would impose
further delay. The court also found that VA would be
unduly prejudiced “because certain identified witnesses
are of an advanced age.” Id. at 7. Finally, the court
refused to weigh the fact that VA did not move for a
preliminary injunction against VA, stating that it was not
“in a role to judge the parties’ litigation strategy.” Id.
    Defendants argue that the district court erred in con-
cluding that a stay would unduly prejudice VA. They
contend that VA will not suffer undue prejudice because
the timeframe for CBM review is short. They argue that,
in any event, mere delay in having one’s claim adjudicat-
ed does not constitute undue prejudice. Defendants argue
that VA has not identified any actual risk of fading mem-
ories or potentially unavailable evidence. Defendants
further contend that VA could be adequately compensated
by money damages. They argue that the district court
clearly erred in finding that VA and Salesforce competed
for the same bid, and that VA has not proven that it
would lose market share or goodwill due to a delay in the
resolution of its infringement case. Defendants contend
that the fact that VA did not move for a preliminary
injunction suggests that VA is not truly concerned about a
delay.
    VA counters that a delay will subject it to undue prej-
udice by significantly harming its business. It argues
that the fate of the ’413 patent claims would almost
certainly not be known until after the statutory November
2014 deadline because of the likely appeal of the PTAB’s
decision and due to other potential delays. It contends
that Defendants’ argument that VA and Salesforce are
not true competitors is meritless in view of record evi-
dence that the two companies compete in the same mar-
ket. VA argues that expeditious enforcement of its patent
rights against larger competitors like Salesforce is critical
to protecting its market share, and that a permanent
injunction would thus be “very likely” if it succeeded in
VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.              21



proving infringement. Appellee’s Br. 48. It further ar-
gues that the district court’s fast schedule made it unnec-
essary to move for a preliminary injunction. Finally, VA
contends that the district court did not err in concluding
that loss of evidence during the pendency of CBM review
is likely and that, regardless, Defendants waived the
argument that loss of evidence was not a concern.
     We conclude that the district court clearly erred in
finding that the undue prejudice factor weighed heavily
against a stay. At best, this factor weighs slightly against
a stay. We agree with the district court that competition
between parties can weigh in favor of finding undue
prejudice. See, e.g., Market-Alerts Pty. Ltd. v. Bloomberg
Fin. L.P., 922 F. Supp. 2d 486, 494–95 (D. Del. 2013).
There is evidence in this record that Salesforce and VA
are in the same business space. The record indicates that
Salesforce provides cloud-based enterprise-level infor-
mation technology solutions, J.A. 339, 344, and so does
VA, J.A. 315–16. In addition, both companies target
public-sector customers. J.A. 316–17, 323–27. But as to
evidence of direct competition, the record establishes only
that Salesforce was mentioned in a Government Services
Administration (GSA) bid, which VA received, identifying
Salesforce’s products as the brand name reference prod-
ucts. J.A. 316, 322–37. VA admitted during oral argu-
ment, however, that this GSA bid was a small business
set-aside, for which Salesforce, a large business, could not
compete. J.A. 322; Oral Argument at 24:19–25:32, avail-
able at http://oralarguments.cafc.uscourts.gov/default.
aspx?fl=2014-1232.mp3. Thus, there is no evidence in
this record that the two companies ever competed for the
same customer or contract. We acknowledge, however,
that direct evidence of such competition is not required to
establish that VA and Salesforce are competitors, espe-
cially at such an early stage of the proceedings. See
Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261,
1271 (Fed. Cir. 1986), abrogated on other grounds by
22              VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed.
Cir. 2008) (en banc) (“[D]irect evidence of a fact is not
necessary.”). We do credit the district court’s finding that
loss of market share and consumer goodwill is high in the
growing market of cloud-computing. See VirtualAgility,
2014 WL 94371, at *6.
    Of course, whether the patentee will be unduly preju-
diced by a stay in the district court proceedings during
the CBM review, like the irreparable harm-type inquiry,
focuses on the patentee’s need for an expeditious resolu-
tion of its claim. A stay will not diminish the monetary
damages to which VA will be entitled if it succeeds in its
infringement suit—it only delays realization of those
damages and delays any potential injunctive remedy. VA
argues that it needs injunctive relief as soon as possible to
prevent irreparable harm to its business, indicating that
even a one- to two-year delay in the adjudication of its
infringement claims would subject it to undue prejudice
because VA and Salesforce compete in the same market.
See Appellee’s Br. 49–50; VA’s Response in Opposition to
Defendants’ Joint Motion To Stay Proceedings Pursuant
to Section 18(b) of the America Invents Act at 10–11,
VirtualAgility Inc. v. Salesforce.com, Inc., 13-cv-00111
(E.D. Tex. June 20, 2013), ECF No. 72. Although this is
not dispositive, we note that VA did not move for a pre-
liminary     injunction    against    Defendants.        We
acknowledge, as the district court did, that there could be
a variety of reasons that a patentee does not move for a
preliminary injunction. See, e.g., Nippon Steel & Sumito
Metal Corp. v. POSCO, No. 12-2429, 2013 WL 1867042, at
*6 n.6 (D.N.J. May 2, 2013); Nat’l Prods., Inc. v. Gamber-
Johnson LLC, 12-cv-00840, 2012 WL 3527938, at *3 n.5
(W.D. Wash. Aug. 14, 2012); Cooper Notification, Inc. v.
Twitter, Inc., No. 09-865, 2010 WL 5149351, at *4 (D. Del.
Dec. 13, 2010); see also U.S. Magistrate Judge Morton
Denlow, The Motion for a Preliminary Injunction: Time
for a Uniform Federal Standard, 22 Rev. Lit. 495, 534
VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.               23



(2003). In this case, VA argues that it did not move for a
preliminary injunction because it is a small company with
limited resources and that the litigation process would
move fast enough to make this unnecessary.
     VA’s arguments are rational reasons for not pursuing
a preliminary injunction, but the fact that it was not
worth the expense to ask for this remedy contradicts VA’s
assertion that it needs injunctive relief as soon as possi-
ble. We also note that VA, for some unexplained reason,
waited nearly a year after the ’413 patent issued before it
filed suit against Defendants. These facts weigh against
VA’s claims that it will be unduly prejudiced by a stay.
      To the extent that the district court found that “the
added risk of witness loss” could unduly prejudice plain-
tiff, we do not agree that this record supports a conclusion
of undue prejudice. VA asserts that one potentially
relevant witness is “over 60” and three others are “over
70.” Since when did 60 become so old? It is undoubtedly
true, as many courts have observed, that with age and the
passage of time, memories may fade and witnesses may
become unavailable.       Without more, however, these
assertions here are not sufficient to justify a conclusion of
undue prejudice. There is no evidence that any of these
individuals are in ill health, and at least one of the older
witnesses has already been deposed. In addition, Rule 27
of the Federal Rules of Civil Procedure allows for the
perpetuation of testimony when facts suggest that such
action may be necessary. This rule gives district courts
the authority to grant a petition authorizing a deposition
to perpetuate testimony even before a lawsuit has been
brought, and also applies when a case is otherwise stayed.
See Texaco, Inc. v. Borda, 383 F.2d 607, 609 (3d Cir. 1967)
(concerns over advanced age of a witness could be allevi-
ated by permitting a deposition to preserve testimony,
and did not prevent a stay). The advanced age of wit-
nesses is a factor relevant to potential prejudice, but the
prejudice can be reduced, when necessary, by preserving
24              VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



the testimony. We conclude that this record does not
support the conclusion that VA would be unduly preju-
diced by the stay.
     Finally, the district court did not find that a stay
would give Defendants a clear tactical advantage, and we
agree. There is no evidence that Defendants possessed a
“dilatory motive,” which would have pointed against a
stay. See, e.g., Market-Alerts, 922 F. Supp. 2d at 495–96.
In fact, Salesforce filed its CBM petition less than four
months after VA instituted this infringement action and
moved to stay the district court proceedings almost im-
mediately after filing the petition. To the district court,
VA argued that Salesforce “could have used but deliber-
ately and tactically withheld from the post-grant proceed-
ing” the so-called “Oracle Projects” prior art.         VA’s
Response in Opposition to Defendants’ Joint Motion To
Stay Proceedings at 1.        Defendants responded that
Salesforce did not include Oracle Projects in the CBM
petition because it is “a proprietary software system, not
strictly a printed publication of the type typically consid-
ered by the PTO,” and would require testimony from “live
third party witnesses at trial.” Defendants’ Reply In
Support of Motion To Stay at 4, VirtualAgility Inc. v.
Salesforce.com, Inc., 13-cv-00111 (E.D. Tex. July 1, 2013),
ECF No. 74. Defendants also indicated that they had
difficulties in obtaining evidence in connection with
another piece of prior art “of particular importance” not
used in CBM review, “Tecskor product,” necessitating a
letter of request for international judicial assistance from
Canada from the district court. Oral Argument at 42:13–
45:26, available at http://oralarguments.cafc.uscourts.gov/
default.aspx?fl=2014-1232.mp3; VirtualAgility Inc. v.
Salesforce.com, Inc., 13-cv-00111 (E.D. Tex. Nov. 7, 2013),
ECF No. 104; see VirtualAgility, 2014 WL 94371, at *3. In
some circumstances, a defendant’s decision to save key
pieces of prior art for district court litigation in case its
CBM challenge fails would weigh against a stay. Even
VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.                25



though the “splitting” of prior art is allowed by statute in
the sense that litigation estoppel does not attach to art
that could have been, but was not, raised in CBM review,
such behavior can still give the movant a clear tactical
advantage within the meaning of § 18. 8 This record does
not establish such a clear tactical advantage given the
uncontradicted evidence that, at the time Salesforce filed
its CBM petition, it did not have the evidence necessary to
include the Oracle Projects and Tecskor prior art. Given
these unusual circumstances, we conclude that there is no
clear tactical advantage to Defendants of granting the
stay.
    On this record, the evidence of competition is weak
and the patentee’s delays in pursuing suit and seeking
preliminary injunctive relief belie its claims that it will be
unduly prejudiced by a stay. We conclude that the district
court clearly erred in concluding that undue prejudice
here weighs heavily against granting the stay. At best,
under the clear error standard, this factor weighs slightly
against a stay on this record.
                         * * * * *
     Three of the four factors weigh heavily in favor of a
stay in this case: simplification of the issues and stream-
lining of the trial, whether discovery is complete and a
trial date has been set, and reduction of the burden of
litigation on the parties and the court. The undue preju-
dice factor, at best, weighs slightly in favor of denying a




    8  We note, however, that it may not be necessary, or
even prudent, in some situations for the petitioner to
provide all known prior art, no matter how irrelevant or
redundant, to the PTAB during CBM review. Failure to
advance irrelevant or redundant prior art would not
demonstrate a clear tactical advantage.
26               VIRTUALAGILITY INC. v. SALESFORCE.COM, INC.



stay. On this record, we conclude that the district court
abused its discretion when it denied the stay.
                        CONCLUSION
    We reverse the district court’s order denying Defend-
ants’ motion for a stay of the district court proceedings
pending CBM review and remand with instructions to
grant the motion. This decision moots Defendants’ motion
to stay district court proceedings pending appeal.
                       REVERSED
                           COSTS
     No costs.
  United States Court of Appeals
      for the Federal Circuit
                 ______________________

               VIRTUALAGILITY INC,
                  Plaintiff-Appellee,

                            v.

    SALESFORCE.COM, INC., DELL, INC., DR.
  PEPPER SNAPPLE GROUP, INC., KIMBERLY-
 CLARK CORPORATION, NBCUNIVERSAL, INC.,
  LIVINGSOCIAL, INC., FEDEX CORPORATION,
   BMC SOFTWARE, INC., BANK OF AMERICA
 CORPORATION, BANK OF AMERICA NATIONAL
  ASSOCIATION, MERRILL LYNCH & CO., INC.,
  MERRILL LYNCH, PIERCE, FENNER & SMITH
   INCORPORATED, AND FEDEX CORPORATE
              SERVICES, INC.,
            Defendants-Appellants.
            ______________________

                       2014-1232
                 ______________________

   Appeal from the United States District Court for the
Eastern District of Texas in No. 2:13-cv-00011-JRG,
Judge J. Rodney Gilstrap.
                ______________________


NEWMAN, Circuit Judge, dissenting.
    The America Invents Act permits but does not require
the district court to stay earlier-filed litigation during
later-requested post-grant PTO proceedings. Such a stay
2                VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.



is not obligatory, but is consigned to the district court’s
discretion. During consideration of the proposed post-
grant review legislation, there was extensive debate about
the relation between concurrent infringement actions in
the courts and post-grant patentability redeterminations
in the PTO. After eight years of discussion, the America
Invents Act adopted rules for concurrent proceedings in
various circumstances. No statute or rule requires the
district court to stay ongoing court proceedings after a
petition for post-grant review is filed in the PTO. My
colleagues’ contrary ruling today is also contrary to the
legislation and its purpose.
    The decision of a trial judge not to stay an infringe-
ment action in litigation, when the defendant requests a
stay but the plaintiff wishes to proceed, is consigned to
the discretion of the judge. Here the plaintiff objected to
the stay and the district court exercised its discretion and
denied the stay. Nonetheless my colleagues reverse the
district court and grant the stay, although it is not shown
that the district court abused its discretion.
    The district court may choose to stay its proceedings
when the interest of justice warrants, and the AIA lists
several factors for the court to consider in deciding how to
exercise its discretion in a particular case. However, a
stay of litigation is not available as a matter of right when
a petition for post-grant review is filed in the PTO. 1 See
Commodity Futures Trading Comm’n v. Schor, 478 U.S.
833, 850 (1986) (“Article III, §1 preserves to litigants their
interest in an impartial and independent federal adjudi-


    1    Compare 28 U.S.C. § 1669(a), giving a party in
district court the absolute right to a stay when there is a
concurrent action in the International Trade Commission,
provided only that the stay request is made 30 days after
the party is named as a respondent, or 30 days after the
district court action is filed, whichever is later.
VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.              3



cation of claims within the judicial power of the United
States. . . .”).
    In this case, the district court applied the traditional
stay factors as recorded in AIA Section 18(b), and ruled
that stay of the ongoing judicial proceeding was inappro-
priate. The district court exercised its discretion to con-
tinue with the trial, which was on a fast track to
completion. This ruling is well within the district court’s
statutory and discretionary authority.
    Although the Covered Business Method (CBM) stat-
ute provides that appellate review of a district court’s
decision to grant or deny a stay “may be de novo,” when
the district court’s decision is within its range of discre-
tion, it warrants appellate respect. My colleagues on this
panel do not identify any abuse of the district court’s
discretion; nor do they acknowledge the deference owed to
a trial judge in rulings on matters of equity and the
balance of interests.
    I respectfully dissent.
                         DISCUSSION
    A stay is an “intrusion into the ordinary processes of
administration and judicial review, and accordingly is not
a matter of right, even if irreparable injury might other-
wise result to the appellant.” Nken v. Holder, 556 U.S.
418, 427 (2009). Section 18(b)(1) of the America Invents
Act authorizes the district court to stay the litigation of a
patent for which CBM review in the PTO has been re-
quested. Such a stay is not automatic; the statute author-
izes the district court in its discretion to stay its
proceedings, on taking into account certain equitable
factors as may exist in the particular case.
     In today’s ruling the panel majority overrides the dis-
trict court’s discretion, and effectively creates a rule that
stays of district court litigation pending CBM review must
always be granted. Here the district court carefully
4               VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.



considered the four factors set out in the statute, and
concluded that VirtualAgility is likely to be harmed
disproportionately in both the litigation and the market-
place if the defendants are allowed to draw out this case
for an extended period, all the while continuing to in-
fringe a presumptively valid patent. The district court
considered the phase of the litigation, the completion of
document production and much of discovery, and the
early trial date, and exercised its discretion to proceed
with the trial proceedings. Whether or not my colleagues’
prolongation of the dispute by way of a potential multi-
plicity of administrative trials and appeals can be defend-
ed, the district court’s evaluation of the equities is
reasonable, is consistent with the analyses by other
district courts, and warrants deference.
    The near automatic grant of litigation stays today en-
grafted onto the statute tilts the legislated balance, for
the statute recognized that a stay pending CBM review
may, depending on the circumstances, lead to inequity
and tactical abuse. See Tuitionfund, LLC v. SunTrust
Banks, Inc., 2012 WL 4758382, at *1 (M.D. Tenn. Oct. 5,
2012) (“Further, there may be tactical advantages to the
Vesdia Defendants in seeking a stay, the most apparent
being delay.”); Bausch & Lomb Inc. v. Rexall Sundown,
Inc., 554 F. Supp. 2d 386, 389 (W.D.N.Y. 2008) (“Resort to
the reexamination procedure should not be sanctioned
through the issuance of a stay, however, where it is
pursued for tactical advantage after substantial and
costly discovery has been conducted or where trial is
imminent.”).
    Successive proceedings can add extensive delay to fi-
nal resolution, while the patent life continues to expira-
tion. The district court emphasized the heavy impact of
delay on this patentee. Deference is owed to the district
court’s assessment, for the trial court is in a better posi-
tion than either the PTO, or this court, to attune a re-
quest for stay to the particular situation.
VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.             5



    The district court has discretionary authority to man-
age its cases, as well as to consider equitable factors. The
Supreme Court has recognized this authority, see Landis
v. North America Co., 299 U.S. 248, 254–55 (1936) (dis-
cussing power and circumstances of stay of proceedings,
stating that: “Only in rare circumstances will a litigant in
one cause be compelled to stand aside while a litigant in
another settles the rule of law that will define the rights
of both.”), as has the Federal Circuit, see Viskase Corp. v.
American National Can Co., 261 F.3d 1316, 1328 (Fed.
Cir. 2001) (“The court is not required to stay judicial
resolution in view of the reexaminations.”). Indeed, the
party appealing denial of a stay historically faced a steep-
er burden because the appeal seeks “interference by an
appellate court with management of proceedings entrust-
ed to the district court.” Gould v. Control Laser Corp.,
705 F.2d 1340, 1341 (Fed. Cir. 1983).
    Congress did not change this precedent in the Ameri-
ca Invents Act, when it directed the courts to apply the
established precedent of litigation stays to the vast varie-
ty of possible situations in overlapping district court and
PTO post-grant proceedings.
    In Highmark Inc. v. Allcare Health Mgmt. Sys., Inc.,
134 S. Ct. 1744 (2014), the Supreme Court discussed the
rationale for abuse of discretion review in the context of
the Patent Act’s fee-shifting provisions. The Court stated
that as a matter of the sound administration of justice,
the district court is better positioned to decide whether a
case is exceptional because it has lived with the case over
a prolonged period. The Court observed that the fee
shifting question is “multifarious and novel,” and not
susceptible to “useful generalization” of the sort that de
novo review provides, but is more “likely to profit from the
experience that an abuse-of-discretion rule will permit to
develop.” Id. at 1748–49.
6               VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.



    The Court’s reasoning in Highmark applies forcefully
to a district court’s exercise of discretion in deciding
whether to stay pending litigation despite the patentee’s
objection. The inquiry created by the AIA’s four factor
test is highly fact specific, not susceptible to “useful
generalization;” the district court is better positioned to
decide whether a stay serves the best balance of interests
of the parties and the court. My colleagues on this panel
ignore this reality.
     Depending on the stage of the litigation, as the AIA
provides, a court may conclude, within its discretion, that
“the principle of maximizing the use of judicial and liti-
gant resources is best served by seeing the case through
to its conclusion.” Mkt.-Alerts Pty. Ltd. v. Bloomberg Fin.
L.P., 922 F. Supp. 2d 486, 494 (D. Del. 2013). Several
courts have expressed concern that a stay will interfere
with their ability to manage their dockets and fulfill their
judicial responsibilities. For example, in response to a
requested stay pending reexamination, a district court
recently stated:
    The Court is concerned that allowing the progress
    of its docket to depend on the status of proceed-
    ings elsewhere can interfere with its obligation “to
    secure the just, speedy, and inexpensive determi-
    nation of every action.” Fed.R.Civ.P. 1. “If litiga-
    tion were stayed every time a claim in suit
    undergoes reexamination, federal infringement
    actions would be dogged by fits and starts. Feder-
    al court calendars should not be hijacked in this
    manner.” Comcast Cable Commc’ns Corp., LLC v.
    Finisar Corp., No. C 06–04206 WHA, 2007 WL
    1052883, at *1 (N.D.Cal. Apr. 5, 2007). This con-
    sideration weighs against a stay.
Universal Elecs., Inc. v. Universal Remote Control, Inc.,
943 F. Supp. 2d 1028, 1035 (C.D. Cal. 2013). The panel
majority does not acknowledge these concerns.
VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.               7



    AIA Section 18(b) lists four factors relevant to evalua-
tion of a stay request. In this case the district court
conscientiously applied this framework, and on considera-
tion of the nature of the patent, this case’s trial schedule,
and the competitive relationship between the parties, the
court concluded that the potential benefits of a stay are
outweighed by the harm that VirtualAgility is likely to
experience, in both the litigation and the marketplace, if a
stay were granted.
    The district court’s analysis of the four factors repre-
sents a consistent application of precedent, and neither
the appellants nor the panel majority have shown that
the balance reached by the court is an abuse of discretion.
I briefly review the four statutory factors set forth in AIA
section 18(b)(1):
    “(A) whether a stay, or the denial thereof,
    will simplify the issues in question and
    streamline the trial”
    The district court found that “[t]his factor is essential-
ly neutral, if not slightly against, granting a stay.” Virtu-
alAgility, Inc. v. Salesforce.com, Inc., 2014 WL 94371, at
*5 (E.D. Tex. Jan. 9, 2014) (“DCt. Op.”). The court em-
phasized “the thoroughness of the PTO’s prior examina-
tion of the ’413 patent, during which time more than sixty
prior art references were considered,” contrasting it to
“more common business method patents” which Congress
explained “have not been thoroughly reviewed at the PTO
due to a lack of the best prior art.” Id. at *3. The court
stated that it was not persuaded that the single prior art
reference at issue in this CBM review would invalidate all
or a substantial number of the asserted claims, and as a
result the court would almost certainly need to consider
other prior art references, including two which appellants
have alleged are “of particular importance.” Id.
   The district court was also not persuaded that the
PTAB would be likely to cancel all claims of the ’413
8                VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.



patent under § 101, citing “even greater uncertainty with
respect to the PTAB’s § 101 determination.” Id. at *4.
The court concluded that it was “not convinced that
granting a stay will simplify the issues in this case.” Id.
at *5.
     The district court correctly recognized that if one
claim were to survive CBM review, a stay would not
simplify the litigation issues in this case. There would
still be full litigation of invalidity issues; the elimination
of one reference of the almost fifty references that the
defendants placed at issue in the district court would not
simplify this case. In addition, the defendants in the
district court litigation raised invalidity defenses under
sections 103, 112, and 256, whereas the CBM proceeding
involves only sections 101 and 102. Unless each and
every claim is invalidated in the CBM review, the district
court was correct that a stay will simply increase the
burden on the parties.
    The majority states that it reached its decision on this
factor without considering possible amendment to the
claims. The PTO record states that VirtualAgility’s
proposed amendments “are strictly contingent on the
Board finding each respective original independent claim
unpatentable.” Patent Owner’s Contingent Motion to
Amend, Dkt. No. 137-1. The district court undertook a
detailed review of the proposed amendments, and con-
cluded that in the unlikely event the amendments would
affect the court’s claim construction, supplemental claim
construction could be considered. The court stated:
    Inconsistency would only arise under the narrow
    contingency that this Court sides with Defendants
    in construing ‘processor’ and ‘storage device,’ and
    the PTAB adopts Plaintiff’s proposed substitute
    claim 28 after finding that the original claim 7 is
    unpatentable. If this does occur, the Court will
    consider holding a supplemental claim construc-
VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.               9



    tion on these two terms to resolve the conflict. In
    any event, the proposed amendments would not
    alter the construction of the remaining seven dis-
    puted claim terms.
VirtualAgility, Inc. v. Salesforce.com, Inc., 2014 WL
807588, at *6 n.1 (E.D. Tex. Feb. 27, 2014).
    In sum, the district court fully and fairly considered
whether the stay would simplify the issues and stream-
line the trial, and concluded that it was not likely to do so.
    “(B) whether discovery is complete and
    whether a trial date has been set”
    The district court discussed the stage of document
production and depositions, which were proceeding to-
ward a trial date of November 2014, but were not yet
complete. Precedent illustrates the reluctance of district
courts to stay litigation that is well advanced. See Verina-
ta Health, Inc. v. Ariosa Diagnostics, Inc., 2014 WL
121640, at *2 (N.D. Cal. Jan. 13, 2014) (timing factor
weighs against stay when trial date is thirteen months
away and “discovery is well underway with the parties
having exchanged initial disclosures, infringement and
invalidity contentions, and some document productions”);
ImageVision.Net, Inc. v. Internet Payment Exch., Inc.,
2013 WL 663535, at *3–4 (D. Del. Feb. 25, 2013) (timing
factor weighs against stay when claim construction hear-
ing and close of fact discovery are four and five months
away respectively, even though no trial date set); Univer-
sal Elecs., Inc., 943 F. Supp. 2d at 1031 (timing factor
weighs against stay when, although little discovery had
occurred, trial date was twelve months away and court
had expended substantial effort construing the claims).
     The panel majority states that generally the time of
filing the motion to stay is the relevant time to measure
the stage of litigation. Maj. op. at 21. The majority cites
three district court cases in which the timing of filing the
10              VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.



motion was mentioned, but in those cases there is no
apparent difference in the state of discovery etc. between
when the motion was filed and when it was decided. See,
e.g., Norred v. Medtronic, Inc., No. 13-2061, 2014 WL
554685, at *2 (D. Kan. Feb. 12, 2014) (granting stay when
“[l]ittle discovery other than initial disclosures and some
preliminary document discovery has been exchanged. No
depositions have been taken, no interrogatories have been
served, and no expert reports have been exchanged”). In
Boston Scientific Corp. v. Cordis Corp., 777 F. Supp. 2d
783, 789 (D. Del. 2011), the timing of the motion was
discussed only with respect to the prejudice factor.
     In general, district courts consider the current stage
of litigation in analyzing this factor. See, e.g., Hansen
Mfg. Corp. v. Enduro Sys., Inc., 2012 WL 381238, at *1
(D.S.D. Feb. 6, 2012) (“The parties are currently in the
discovery phase of litigation. They have provided their
infringement contentions and invalidity contentions to
one another.”); Forgent Networks, Inc. v. Echostar Techs.
Corp., 2006 WL 6922224, at *2 (E.D. Tex. Nov. 20, 2006)
(“The parties have already produced over five million
pages of documents in this case and the discovery dead-
line is less than four months away. In addition, the par-
ties have also fully briefed and argued the claim
construction issues, and the Court is currently working on
its claim construction order.”); Soverain Software LLC v.
Amazon.com, Inc., 356 F. Supp. 2d 660, 663 (E.D. Tex.
2005) (“The parties have already produced hundreds of
thousands of pages of documents and millions of lines of
source code and should complete discovery next month. As
previously mentioned, the parties have also fully briefed
and argued the claim construction issues, and the Court is
currently working on its order construing the claims at
issue.”).
    The panel majority has acknowledged that the district
court need not rule on a stay motion before the PTAB has
actually instituted the CBM proceedings, and that the
VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.             11



district court is not obligated to “freeze” the litigation
proceedings while the PTAB is considering whether to
proceed. Maj. op. at 19. It cannot be correct to hold that
all interim activity must be ignored, and the stay decided
as if nothing had occurred. 2 Such a rule contravenes the
principle that when “the Court and the parties have
already expended significant resources on the litigation,
the principle of maximizing the use of judicial and litigant
resources is best served by seeing the case through to its
conclusion.” Mkt.-Alerts Pty. Ltd., 922 F. Supp. 2d at 494;
see also Rensselaer Polytech. Inst. v. Apple Inc., No. 13-cv-
0633, 2014 WL 201965, at *5, 8 (N.D.N.Y. Jan. 15, 2014)
(denying stay, without prejudice to renewal of request
after PTO action on petition for inter partes review); TPK
Touch Solutions, Inc. v. Witek Electro-Optics Corp., No.
13-cv-2218, 2013 WL 6021324, at *4–5 (N.D. Cal. Nov. 13,
2013) (denying stay pending inter partes review, observ-
ing that stay is never obligatory, but may be justified
“where the outcome of the reexamination would be likely
to assist the court”); Boston Scientific, 777 F. Supp. 2d at
789 (denying stay, explaining that the stage of litigation
clearly cuts against a stay because discovery was com-
plete, and stating that the reexamination is “fraught with
the potential for multiple appeals”).
    “(C) whether a stay, or the denial thereof,
    would unduly prejudice the nonmoving par-



    2   In some jurisdictions, the district court case may
have received major effort in the interim. It is reported
that for patent litigation cases filed in the fast track
Eastern District of Virginia between 2000 and 2010 the
average trial was completed less than a year after the
case was filed. Mark Lemley, Where to File Your Patent
Case, 38 AIPLA Q.J. No. 4, at 1 (Fall 2010). Compare this
to the six months allocated for the PTO’s initial decision
of whether to institute CBM proceedings at all.
12              VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.



     ty or present a clear tactical advantage for
     the moving party”
    The district court held that the prejudice factor
“weighs heavily against granting a stay.” DCt. op. at *7.
The district court explained that courts are reluctant to
stay proceedings where the parties are direct competitors,
and observed that the “loss of market share and consumer
goodwill is particularly high in the growing market of
enterprise cloud-computing, where contractors and gov-
ernmental agencies are developing lists of preferred
vendors.” Id. at *6 (citing Polymer Techs., Inc. v. Brid-
well, 103 F.3d 970, 975–76 (Fed. Cir. 1996) (“Years after
infringement has begun, it may be impossible to restore a
patentee’s . . . exclusive position by an award of damages
and a permanent injunction. Customers may have estab-
lished relationships with infringers.”)).
     The district court found that Salesforce and VirtualA-
gility compete in the same market and the same customer
base, and stated that VirtualAgility, a small company
with limited resources, “will be ‘forced to compete against
products that incorporate and infringe’ its own invention.”
DCt. op. at *6 (quoting Douglas Dynamics, LLC v. Buyers
Prods. Co., 717 F.3d 1336, 1344 (Fed. Cir. 2013)). The
court concluded that granting a stay would unduly preju-
dice VirtualAgility both in the marketplace and in this
litigation.
     The district court found that Salesforce and VirtualA-
gility “directly compete in at least the enterprise cloud
computing market targeting public sector entities.” DCt.
op. at *6. The panel majority states that there was no
evidence of direct competition. That is contrary to the
record.
    VirtualAgility’s President and Chief Executive Officer
stated that he has “personally had conversations with
VirtualAgility customers and potential customers in
which the customer or potential customer compares the
VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.               13



functionality of VirtualAgility’s products with that of
Salesforce’s products.” Declaration of Stuart E. Rudolph
(June 19, 2013) at J.A. 317. He stated that those custom-
ers include federal and state agencies, which he identi-
fied. Id. The district court did not clearly err in finding
that the parties directly compete in the enterprise cloud
computing market targeting public sector entities.
    The panel majority acknowledges the district court’s
undue prejudice findings, but gives them scant weight.
Instead, my colleagues fault VirtualAgility for not moving
for a preliminary injunction. Maj. op. at 25. The district
court presented a perceptive analysis of this position:
         A party’s decision to seek or not seek a prelim-
    inary injunction often rests upon a variety of fac-
    tors, including that party’s resources, the
    uncertainty of the outcome, or as part of an over-
    all strategy to streamline the process and focus on
    other procedural steps in the litigation. Not being
    in a role to judge the parties’ litigation strategy,
    the Court deems it unfair to hold VirtualAgility to
    a position based upon what is no more than a du-
    bious implication.
DCt. op. at *7.
     A preliminary injunction proceeding often delays the
litigation, and it is a truism that interim relief is not easy
to obtain. The district court did not abuse its discretion in
declining to hold VirtualAgility’s reasonable choice
against it. See Zillow, Inc. v. Trulia, Inc., 2013 WL
5530573, at *6–7 (W.D. Wash. Oct. 7, 2013) (collecting
cases on the significance of failure to seek a preliminary
injunction).
    The district court here gave weight to VirtualAgility’s
small size and limited resources, the competitive relation-
ship between the parties, and the high potential for loss of
market share and consumer goodwill in the market in
14               VIRTUALAGILITY INC.   v. SALESFORCE.COM, INC.



which they compete. The court concluded that a stay may
cause “outsized consequences” to VirtualAgility. DCt. op.
at *5. The district court reasonably weighed the undue
prejudice factor heavily against granting a stay.
     “(D) whether a stay, or the denial thereof,
     will reduce the burden of litigation on the
     parties and on the court”
    With the stay now imposed by my colleagues, Virtu-
alAgility will undergo an inter partes trial in the PTAB on
some, but not all, of the invalidity issues that the defend-
ants raised in the district court. Whichever side loses in
the PTO then has the right first to request reconsidera-
tion by the PTAB, and then the right of judicial review of
the PTO decision. Unless all of VirtualAgility’s patent
claims are finally eliminated in the PTO and that ruling
sustained on appeal, the procedure could be repeated in
the district court. The district court has discretion to
consider this tactical reality, in exercising its discretion to
weigh the burden of litigation on the parties and the
court.
    It is apparent that the district court did not abuse its
discretion in weighing and balancing the statutory factors
and declining to stay its proceedings.
                        Conclusion
    The panel majority has imposed greater rigor on
“stay” considerations than the statute warrants. Post-
grant review in the PTO is a useful tool, but the principle
of post-grant review does not require elimination of judi-
cial discretion to proceed with pending litigation. Indeed,
the America Invents Act contemplates such discretion. I
must, respectfully, dissent from my colleagues’ distortion
of the statutory plan.
