Pacific Coast Building Products, Inc. v. Certainteed Gypsum Manufacturing, Inc.

          ORDER

          Susan O. Hickey, Chief United States District Judge

         Before the Court is Defendant's Motion to Stay Proceedings. (ECF No. 38). Plaintiffs have filed a response. (ECF No. 43). Defendant has filed a reply. (ECF No. 46). Plaintiffs have filed a sur-reply. (ECF No. 50). The Court finds this matter fully briefed and ripe for consideration.

         BACKGROUND

         This is a patent infringement action. In addition to the highly technical nature of patent litigation, this case presents a particularly complex factual and procedural background involving several different litigations, concerning several different patents, fought amongst several different parties. Therefore, for the sake of clarity, the Court endeavors to set out the relevant facts as follows.

         I. The Parties and Products at Issue

         Plaintiff Pabco Building Products, LLC (“Pabco”) is in the business of manufacturing building materials, including gypsum wallboard and other types of drywall. Plaintiff Pacific Coast Building Products, Inc. (“Pacific Coast”) is a holding company that has no employees. Pabco is a subsidiary of Pacific Coast. Both entities are based primarily in the western United States and have principal places of business in Rancho Cordova, California.

         Defendant CertainTeed Gypsum Manufacturing, Inc. is a subsidiary of the CertainTeed Corporation, which is headquartered in Malvern, Pennsylvania. Like Pabco, Defendant is in the business of manufacturing various drywall products. Defendant maintains a manufacturing facility in Nashville, Arkansas.

         This case centers around sound dampening drywall panels which can be cut and installed like standard drywall. Standard drywall is cut and installed using the “score and snap” method, which involves making a shallow cut on the surface of the drywall-the score-then breaking the drywall along the scored line-the snap. Standard drywall can be cut in this fashion because it only has paper backing on the outer surfaces. Sound dampening drywall was traditionally manufactured by gluing two pieces of standard drywall together, with paper on both the inner and outer surfaces. However, the resulting laminated structure does not score and snap like standard drywall because of these inner layers of paper.

         Pabco produces a sound dampening drywall panel called QuietRock EZ-SNAP. EZ-SNAP can be scored and snapped like regular drywall because the paper from the inner, glued surfaces has been removed for this specific purpose. Defendant produces a line of sound dampening drywall products under the brand name SilentFX. One of Defendant's products, SilentFX QuickCut, consists of a laminated panel featuring a viscoelastic polymer between two gypsum panels that also cuts like standard gypsum wallboard due to the lack of paper on the inner surfaces of the panels. Plaintiffs claim that QuickCut infringes on certain patents which Pacific Coast owns and Pabco holds exclusive license to.

         II. The Patents at Issue

         This case involves two patents: (1) U.S. Patent No. 10, 125, 492 (“the ‘492 patent”) entitled “Acoustical Sound Proofing Material with Improved Fracture Characteristics and Methods for Manufacturing Same”; and (2) U.S. Patent No. 10, 132, 076 (“the ‘076 patent”) entitled “Acoustical Sound Proofing Material with Improved Fracture Characteristics and Methods for Manufacturing Same.” Both of the asserted patents claim priority from U.S. Patent No. 9, 388, 568 (“the ‘568 patent”). As will become relevant below, all three patents also include claims reciting the term “scored flexural strength.” The asserted patents and the ‘568 patent all relate to drywall used for soundproofing. As mentioned above, typical drywall is a composition of gypsum and other materials encased in paper. These three patents claim a laminated panel that is made by gluing together two gypsum boards with a sound-dissipating adhesive. The two gypsum boards, however, do not have any paper on the inner surfaces that are glued, and thus, can be cut like conventional drywall.

         III. The Four Litigations

         A. The 2017 Northern District of California Action

         Pacific Coast initially brought a patent infringement action against CertainTeed Gypsum, Inc. (“CertainTeed Gypsum”), a sister company of Defendant, in the Northern District of California, alleging infringement of the ‘568 patent and U.S. Patent No. 8, 181, 738 (“the ‘738 patent”)^[1] on March 3, 2017 (“the 2017 action”).^[2] On September 18, 2017, counsel for CertainTeed Gypsum proposed a sixty-day standstill agreement, wherein Pacific Coast would dismiss the case without prejudice as the parties attempted to settle. According to the terms of the standstill agreement, absent settlement, Pacific Coast would re-file the lawsuit. On October 3, 2017, Pacific Coast dismissed its case without prejudice so that the parties could engage in settlement negotiations.

         Before the 2017 action was dismissed, the court conducted an initial case management conference and issued a case management order. However, the court did not issue any substantive orders or analyze the patents-in-suit or underlying factual allegations.

         B. The 2018 Northern District ...