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Inc. v. Amazon.Com, Inc.

United States District Court, D. Colorado

July 13, 2018

LET'S GO AERO, INC, a Colorado corporation, Plaintiff,
AMAZON.COM, INC., a Delaware corporation, Defendant.


          Christine M. Arguello Judge.

         Before the Court is Defendant, Inc.'s Motion to Stay or Administratively Close this case pending the resolution of related proceedings. (Doc. # 18.) Plaintiff Let's Go Aero, Inc. objects to the motion. (Doc. # 22.) For the following reasons, the Court overrules that objection, grants the motion, and stays this case.

         I. BACKGROUND

         Plaintiff asserts four claims for relief against Defendant: (1) direct patent infringement; (2) inducement and contributory infringement; (3) trademark infringement and unfair competition; and (4) illegally passing off infringed products. (Doc. # 1.) All of those claims stem from Plaintiff's foundational allegation that Defendant sold or offered to sell products-manufactured, imported, and supplied by non-party Cequent Performance Products, Inc. (Cequent) and non-party Wyers Products Group, Inc. (Wyers)-which Plaintiff claims infringe on its patents, copyrighted materials, and trademarks related to its “Silent Hitch Pin” and “GearCage” products (the “Accused Products”). (Doc. # 1 at 1-2.)

         Plaintiff has also initiated other earlier lawsuits related to the alleged infringement of the Accused Products. As pertinent here, Plaintiff commenced an infringement action against Cequent in this District in June 2014. Let's Go Aero, Inc. v. Cequent Performance Products, Inc., No. 1:14-cv-1600-RM-MEH. That case has been administratively closed pending the outcome of arbitration between the parties (the Cequent Arbitration). 1:14-cv-1600-RM-MEH, Doc. # 64. Plaintiff also commenced an infringement action against Wyers and U-Haul International, Inc. (U-Haul) in February 2016. Let's Go Aero, Inc. v. U-Haul International, Inc. et al, 1: 16-cv-00410-REB-NYW. (the “Wyers and U-Haul Litigation”). Because the claims in that case implicated some of the Cequent Products at issue in the Cequent Arbitration, Magistrate Nina Wang recommended that the case be administratively closed pending the outcome of arbitration. 1: 16-cv-00410-REB-NYW, Doc. # 67. Of note, the Cequent Arbitration and the Wyers and U-Haul Litigation involve the same products implicated in this litigation and allegedly sold or offered to be sold by Defendant.


         The Cequent Arbitration has not been resolved. A hearing took place on June 7, 2018 and post-hearing briefing is due by October 5, 2018. (Doc. # 23 at 1.) The parties expect a final decision by the Arbitrator in November 2018. (Id.) Because, Defendant argues, “the same products, same IP rights, and same causes of action asserted in the Cequent Arbitration . . . are asserted here, ” this Court should stay and administratively close this case until the Cequent Arbitration concludes. (Doc. # 18 at 4-5.) Plaintiff objects to a stay of this case on grounds that (1) the Cequent Arbitration has nearly concluded so a stay is unnecessary; (2) the Cequent Arbitration will not resolve all the claims in this case; and (3) Plaintiff has the right to bring suit against the manufacturer (Cequent) and the seller (Defendant) simultaneously, particularly if the manufacturer cannot fully compensate Plaintiff.

         A. LAW

         The district court has “broad discretion to stay proceedings as an incident to its power to control its own docket.” Clinton v. Jones, 520 U.S. 681, 708 (1997). A federal court may dismiss or stay federal proceedings when a parallel or duplicative proceeding is pending in another forum. Rienhardt v. Kelly, 164 F.3d 1296, 1302 (10th Cir. 1999). The doctrine likewise applies to parallel or duplicative proceedings pending in arbitration. THI of New Mexico at Las Cruces, LLC v. Fox, 727 F.Supp.2d 1195, 1208 (D.N.M. 2010).

         The general rule favors the forum of the first-filed action, i.e. staying the latter-filed action. O'Hare Int'l Bank v. Lambert, 459 F.2d 328, 331 (10th Cir. 1972). There also exists a “customer-suit exception” which provides that litigation against the manufacturer of infringing goods takes precedence over a suit by the patent owner against customers of the manufacturer. Katz v. Lear Siegler, Inc., 909 F.2d 1459, 1464 (Fed. Cir. 1990).

         B. ANALYSIS

         Having thoroughly considered the briefing, record, and applicable law, the Court finds that a stay and administrative closure pending the outcome of the Cequent Arbitration is warranted in this case.

         To begin, this lawsuit and the Cequent Arbitration are duplicative. Plaintiff in this lawsuit and the arbitration are identical (Let's Go Aero, Inc.). Although the defendants are not identical, for the purpose of determining whether a stay is appropriate in this case, the Court finds that they are “substantially the same.” See, e.g., U.S. v. City of Las Cruces, 289 F.3d 1170, 1182 (10th Cir. 2002). The Defendant in this case is alleged to be the seller of infringing products; the defendant in the Cequent Arbitration is alleged to be the manufacturer of some of those same products. Indeed, whether an infringement has occurred is the subject of the Cequent Arbitration. Thus, the Defendant in this case and the arbitration defendant's interests are entirely congruent. See, e.g., Lumen Constr., Inc. v. Brant Constr. Co., Inc., 780 F.2d 691, 695 (7th Cir. 1985) (where interests of parties in both suits are congruent, abstention may be appropriate notwithstanding fact that parties are not identical.). Moreover, the causes of action asserted against the Defendant in this case are nearly identical to the claims asserted against Cequent in the Cequent Arbitration and are inseparable from the primary issue being arbitrated-whether the Cequent products infringe upon Plaintiff's patents, copyrights, or trademarks. Thus, resolution of that issue could either render this action unnecessary or, at the very least, narrow the issues before this Court.

         The Court rejects Plaintiff's arguments that the existence of different defendants and claims render the actions not duplicative and a stay unwarranted. That is simply incorrect, and numerous courts have held otherwise. See, e.g., Int'l Asset Mgmt., Inc. v. Holt, 487 F.Supp.2d 1274, 1284 (N.D. Okla. 2007) (finding cases parallel because the sole issue presented in first case was also at ...

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