IP Law Daily, PATENT—E.D. Tex.: Stay and severance of claims under customer suit exception denied in airline in-flight connectivity dispute, (Jul 31, 2025)

By Kevin M. Finson, J.D.

The customer-suit exception did not apply to claims against American Airlines for its in-flight internet connectivity services because the infringement allegations at issue related to American Airlines using several different manufacturer’s devices interchangeably, and only one of those manufacturers had a pending patent infringement suit with the patentee.

American Airlines was not entitled to a stay of patent infringement claims against it under the customer-suit exception, the U.S. District Court in Sherman, Texas, has held. The alleged infringement used products from multiple vendors, only one of which was the subject of a subsequently filed action between the manufacturer and patentee (Intellectual Ventures I LLC v. American Airlines, Inc., No. 4:24-cv-00980-ALM (E.D. Tex. July 30, 2025)).

Intellectual Ventures I, LLC and Intellectual Ventures II, LLC (collectively, Intellectual) were the owner of several patents which they asserted against American Airlines, Inc. (AA), including U.S. Patent Nos. 7,324,469 (the ’469 patent) and 8,027,326 (the ’326 patent). The patents covered in-flight connectivity for airline passengers and were allegedly infringed by AA’s use of third-party systems provided by Viasat, Inc. and other companies.

AA moved to sever and stay the claims relating to the Viasat products under the customer-suit exception to the first-to-file rule, arguing that a subsequently filed declaratory judgment suit by Viasat, Inc. should proceed first.

Customer-suit exception. The court found that AA was a mere user of the accused product, which favored a stay, and that AA had agreed to be bound by the outcome of the declaratory judgment action. However, this would have little practical effect because Viasat was just one provider of the in-flight internet connection technology which Intellectual alleged infringed. The Viasat declaratory judgment would have no impact on AA’s alleged infringement of the same patents using products from other vendors. Accordingly, the court declined to apply the customer-suit exception.

Discretionary stay. Applying the traditional stay factors, the court held that a stay would prejudice the non-moving party by delaying its enforcement of its patent rights and would not simplify the issues in the case because of AA’s use of multiple vendors for the same alleged infringement. Although the case was in its early stages, this prejudice was severe enough that the court declined to stay the case.

The court denied the motion to sever and stay.

The Case is No. 4:24-cv-00980-ALM.

Judge: Mazzant, A.

Attorneys: Allen Franklin Gardner (Allen Gardner Law, PLLC) for Intellectual Ventures I, LLC and Intellectual Ventures II, LLC. John Bruce Campbell (McKool Smith, PC) for American Airlines, Inc.

Companies: Intellectual Ventures I, LLC; Intellectual Ventures II, LLC; American Airlines, Inc.

Cases: Patent TexasNews