Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 1 of 17 Page ID #:1618
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`LATHAM & WATKINS LLP
` Bradley A. Hyde (Bar No. 301145)
`bradley.hyde@lw.com
`650 Town Center Drive – 20th Floor
`Costa Mesa, California 92626
`Telephone: (714) 540-1235
`Facsimile: (714) 755-8290
`
`LATHAM & WATKINS LLP
` Charles H. Sanders (pro hac vice)
`charles.sanders@lw.com
` Anant K. Saraswat (pro hac vice)
`anant.saraswat@lw.com
`200 Clarendon Street
`Boston, Massachusetts 02116
`Telephone: (617) 948-6000
`Facsimile: (617) 948-6001
`
`LATHAM & WATKINS LLP
` Lesley Hamming (pro hac vice)
`lesley.hamming@lw.com
`330 N. Wabash Avenue, Suite 2800
`Chicago, Illinois 60611
`Telephone: (312) 876-7700
`Facsimile: (312) 993-9767
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`Attorneys for Defendants SEOUL
`SEMICONDUCTOR CO., LTD and
`SEOUL SEMICONDUCTOR, INC.
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`SOUTHERN DIVISION
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`
`
`
` CASE NO. 8:17-CV-00981-JVS-JCG
`
`DEFENDANTS’ REPLY IN SUPPORT OF
`THEIR MOTION TO STAY PENDING INTER
`PARTES REVIEW
`
`Judge: Honorable James V. Selna
`Date: March 26, 2018
`Time: 1:30 pm
`Courtroom: 10C
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`
`
` DOCUMENT SECURITY SYSTEMS,
`INC.,
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`SEOUL SEMICONDUCTOR CO.,
`LTD. and SEOUL
`SEMICONDUCTOR, INC.,
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`Plaintiff,
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`v.
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`Defendants.
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`A TTORNEYS A T L AW
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
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`

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`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 2 of 17 Page ID #:1619
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`I.
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`II.
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`TABLE OF CONTENTS
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`Page
`INTRODUCTION ....................................................................................... 1
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`ARGUMENT............................................................................................... 1
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`A. DSS Exaggerates the Status of this Case; The Case
`Remains At An Early Stage Of Fact Discovery .................................. 1
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`B.
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`C.
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`DSS Fails To Rebut Seoul’s Arguments That A Stay Is
`Highly Likely To Simplify The Issues ............................................... 4
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`A Stay Will Not Result In Undue Prejudice Or Tactical
`Disadvantage to DSS ......................................................................... 8
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`1.
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`2.
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`3.
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`4.
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`A stay will not result in tactical benefits for Seoul ................... 8
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`A stay will not diminish DSS’s eventual recovery ................... 8
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`DSS’s generalized assertions concerning a right to
`timely enforcement and fading memories do not
`show prejudice ......................................................................... 9
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`DSS will not be prejudiced by having to defend its
`patents before the PTAB ........................................................ 10
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`III. CONCLUSION ......................................................................................... 11
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`A TTORNEYS A T L AW
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
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`

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`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 3 of 17 Page ID #:1620
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`TABLE OF AUTHORITIES
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`CASES
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` Page(s)
`
`Avago Techs. Fiber IP (Sing.) Pte. Ltd. v. IPtronics Inc.,
`No. CV 10-02863 EJD, 2011 WL 3267768 (N.D. Cal. July 28,
`2011) ................................................................................................................. 3
`
`Carl Zeiss A.G. v. Nikon Corp.,
`No. CV 17-03221 RGK (C.D. Cal. Feb. 9, 2018) ............................................... 3
`
`Clouding IP LLC v. SAP AG,
` No. CV 13-01456 LPS (D. Del. 2014) .............................................................. 4
`
`Cooper Notification, Inc. v. Twitter, Inc.,
`No. 09-865 LPS, 2010 U.S. Dist. LEXIS 131385 (D. Del. Dec. 13,
`2010) ................................................................................................................. 4
`
`Document Sec. Sys. v. Nichia Corp.,
`No. CV 17-08849 (Dec. 7, 2017) ....................................................................... 5
`
`DSS Tech. Mgmt., Inc. v. Apple, Inc.,
`No. CV 14-05330 HSG, 2015 WL 1967878 (N.D. Cal. May 1,
`2015) ........................................................................................................... 7, 11
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`Game & Tech. Co. v. Riot Games, Inc.,
`Nos. CV 16-06486 BRO et al., 2016 WL 9114147 (C.D. Cal. Nov.
`4, 2016) .............................................................................................................. 8
`
`Limestone v. Micron Tech.,
`Nos. SA CV 15-0278 DOC et al., 2016 WL 3598109 (C.D. Cal.
`Jan. 12, 2016)............................................................................................... 7, 11
`
`Locata LBS, LLC v. Yellowpages.com, LLC,
`Nos. LA CV 13-07664 JAK et al., 2014 WL 8103949 (C.D. Cal.
`Jul. 11, 2014) ..................................................................................................... 5
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`NFC Tech. LLC v. HTC Am., Inc.,
`No. CV 13-1058 WCB, 2015 WL 1069111 (E.D. Tex. Mar. 11,
`2015) ....................................................................................................... 6, 9, 10
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
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`

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`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 4 of 17 Page ID #:1621
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`Otto Bock HealthCare LP v. Össur HF,
`SACV 13-00891 CJC, 2013 U.S. Dist. LEXIS 188428 (C.D. Cal.
`Dec. 16, 2013) ................................................................................................... 6
`
`PersonalWeb Techs., LLC v. Facebook, Inc.,
`Nos. CV 13-01356 EJD et al., 2014 WL 116340 (N.D. Cal. Jan.
`13, 2014) ...................................................................................................... 5, 11
`
`Pi-Net Int’l, Inc. v. Hertz Corp.,
`Nos. CV 12-10012 PSG et at., 2013 WL 7158011 (C.D. Cal. June
`5, 2013) .......................................................................................................... 2, 5
`
`Polaris Innovations Ltd. v. Kingston Tech. Co., Inc.,
`No. CV 16-00300 CJC, 2016 WL 7496740 (C.D. Cal. Nov. 17,
`2016) ................................................................................................................. 4
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`Realtime Data LLC v. Teradata Ops., Inc.,
`No. SA CV 16-02743 AG, 2017 WL 3453295 (C.D. Cal. Feb. 27,
`2017) ........................................................................................................... 6, 10
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`SoftView LLC v. Apple Inc.,
`No. CV 10-00389 LPS (D. Del. Dec. 9, 2011) ................................................... 3
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`TeleSign Corp. v. Twilio, Inc.,
`No. CV 15-3240 PSG, 2016 WL 6821111 (C.D. Cal. Mar. 9, 2016) ........ 3, 6, 10
`
`Universal Elecs., Inc. v. Universal Remote Control, Inc.,
` 943 F. Supp. 2d 1028 (C.D. Cal. 2013) ............................................................. 4
`
`VirtualAgility Inc. v. Salesforce.com, Inc.,
`759 F.3d 1307 (Fed. Cir. 2014) .......................................................................... 9
`
`Wonderland Nursery Goods Co. v. Baby Trend, Inc.,
`No. ED CV 14-01153 VAP, 2015 WL 1809309 (C.D. Cal. Apr. 20,
`2015) ................................................................................................................. 3
`
`STATUTES
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`35 U.S.C. § 101 ...................................................................................................... 4
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`35 U.S.C. § 314(b) .................................................................................................. 6
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
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`

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`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 5 of 17 Page ID #:1622
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`REGULATIONS
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`77 Fed. Reg. 48680-01 (Aug. 12, 2012) (codified at 37 C.F.R. §§
`42.100 et seq.) .................................................................................................. 11
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`iv
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
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`

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`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 6 of 17 Page ID #:1623
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`I.
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`INTRODUCTION
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`Seoul’s motion to stay pending inter partes review should be granted at this
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`stage because all three factors heavily favor a stay.
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`First, DSS does not dispute that it has not produced a single document other
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`than the patents and file histories publicly available at the Patent Office and has not
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`proposed a protective order to protect confidential document production, or that no
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`depositions have been scheduled and the Markman process has not yet begun.
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`There can be no genuine dispute that this case remains at an early stage of fact
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`discovery.
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`Second, DSS does not contest that this Court will need to consider the IPR
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`record in claim construction or that claims held invalid in IPR will not require
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`construction. DSS’s argument against simplification of the issues relies on the
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`cases pending against other defendants. However, all defendants from the other
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`three coordinated cases have already joined in Seoul’s motion.
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`Third, DSS does not argue that it manufactures or sells any LED products or
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`otherwise competes with Seoul in the marketplace. DSS concedes that this case is
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`about its pursuit of “a money judgment.” Dkt. No. 60 at 2. Therefore, DSS will
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`not be unduly prejudiced by any stay. A stay would merely permit the alleged
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`ongoing infringement to continue and thus increase the “money judgment” DSS
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`can seek to obtain. Id.
`II. ARGUMENT
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`A. DSS Exaggerates the Status of this Case; The Case Remains At
`An Early Stage Of Fact Discovery
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`DSS does not dispute any of the key facts set forth in Seoul’s motion which
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`establish that this case remains at an early stage of fact discovery. See Dkt. No. 57
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`at 6-7. Each party has served, and now initially responded to, only one set of
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`discovery requests. DSS has produced only copies of the asserted patents and their
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`file histories, which are publically available on the PTO’s website. The parties
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
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`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 7 of 17 Page ID #:1624
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`have not negotiated a protective order; Seoul is still awaiting the draft DSS
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`promised in early December. Neither party has noticed or taken any depositions.
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`The Markman process has not begun. No expert discovery has taken place. The
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`close of fact discovery is eight and half months away. Trial is set for about a year
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`and a half from now.
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`Unable to controvert these facts, DSS asserts without support that
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`“[d]iscovery is well under way,” pointing only to the fact that the parties have
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`produced “at least some” documents—apparently a reference to the few documents
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`DSS produced by downloading them from the PTO’s website. Dkt. No. 60 at 4.
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`DSS ignores that almost all of the work in this case for both the parties and the
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`Court lies ahead, and that it may be mooted by the IPRs. Where, as here, “there is
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`more work ahead of the parties and the Court than behind the parties and the
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`Court,” a stay is appropriate. Pi-Net Int’l, Inc. v. Hertz Corp., Nos. CV 12-10012
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`PSG et at., 2013 WL 7158011, at *2 (C.D. Cal. June 5, 2013) (citation omitted).
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`Furthermore, as Seoul explained in its motion, numerous courts have granted stays
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`pending IPRs in cases that were far more advanced than this one. See Dkt. No. 57
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`at 7-8.
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`DSS instead argues that the time of Seoul’s IPR filings should be calculated
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`from an earlier date based on DSS’s filing a prior suit in the Eastern District of
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`Texas, which DSS dismissed before Seoul answered after realizing it filed in an
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`improper venue. See Dkt. No. 60 at 4. DSS thus seeks credit for filing suit in the
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`wrong venue, which DSS had to dismiss, because DSS has no argument based on
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`the timing of the IPR petitions relative to the filing of the present case. Seoul’s
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`IPR petitions were filed early in this case, in December 2017 and January 2018—
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`all within ten weeks of the date DSS served infringement contentions identifying
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`asserted claims and within seven months of the filing of the complaint. These IPR
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`filings were sufficiently early. See, e.g., Wonderland Nursery Goods Co. v. Baby
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`Trend, Inc., No. ED CV 14-01153 VAP, 2015 WL 1809309, at *3 (C.D. Cal. Apr.
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
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`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 8 of 17 Page ID #:1625
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`20, 2015) (granting stay where case had been pending for ten months before
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`motion was filed); Avago Techs. Fiber IP (Sing.) Pte. Ltd. v. IPtronics Inc., No.
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`CV 10-02863 EJD, 2011 WL 3267768, at *5 (N.D. Cal. July 28, 2011) (granting
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`stay where motion was filed eight months after complaint).
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`DSS also claims that a stay is inappropriate because the Court expended
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`“significant resources” adjudicating two motions to dismiss. Dkt. No. 60 at 4-5.
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`But the Court did not delve into the meaning of the asserted patent claims or the
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`merits of the parties’ positions, which is the substantial work that remains to be
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`done in this case. See Dkt. No. 36-1 at 5-6 (“[A]t this time, the Court must accept
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`DSS’ factual allegations as true.”); Id. at 6 (“The Court declines to engage in claim
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`construction at this stage.”). The Court dismissed DSS’s willful infringement
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`claims twice because they were insufficiently pleaded. See id.; Dkt. No. 55.
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`Furthermore, courts grant stays after adjudicating early motions. E.g., TeleSign
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`Corp. v. Twilio, Inc., No. CV 15-3240 PSG, 2016 WL 6821111, at *2 (C.D. Cal.
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`Mar. 9, 2016) (granting stay after ruling on motions to dismiss and a motion for
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`preliminary injunction).
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`Moreover, DSS’s cases do not support its contention that this matter has
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`proceeded beyond the point at which a stay is appropriate because those cases had
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`advanced much farther than the present case or otherwise involved quite different
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`circumstances. In Carl Zeiss A.G. v. Nikon Corp., the close of discovery was two
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`months away, trial was less than six months out, the parties had taken some
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`depositions and scheduled others, and had produced over 750,000 pages of
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`documents. See No. CV 17-03221 RGK, (C.D. Cal. Feb. 9, 2018), Dkt. No. 109.
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`In SoftView LLC v. Apple Inc., motions to stay were filed over a year after the
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`case started, discovery had been open for a year, and the parties “ha[d] exchanged
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`a combined total of more than half a million pages of documents.” See No. CV
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`10-00389 LPS (SoftView Opposition) (D. Del. Dec. 9, 2011), Dkt. No. 174 at 1, 7.
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`The Court had held a Markman hearing and issued a claim construction ruling in
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
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`

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`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 9 of 17 Page ID #:1626
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`Universal Electronics, Inc. v. Universal Remote Control, Inc. See 943 F. Supp. 2d
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`1028, 1031 (C.D. Cal. 2013). In Polaris Innovations Ltd. v. Kingston Technology
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`Co., the parties had exchanged proposed claim constructions, and the Court had
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`ruled on a 35 U.S.C. § 101 motion, which required a substantive assessment of the
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`asserted claims. See No. CV 16-00300 CJC, 2016 WL 7496740, at *2 (C.D. Cal.
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`Nov. 17, 2016). Cooper Notification, Inc. v. Twitter, Inc., is inapposite because it
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`involved a reexamination, not an IPR, and turned on the fact that reexaminations
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`had “an average pendency of thirty-six months.” No. 09-865 LPS, 2010 U.S. Dist.
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`LEXIS 131385, at *11 (D. Del. Dec. 13, 2010). Clouding IP LLC v. SAP AG
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`involved unique coordination issues due to the large number of cases; the Court
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`denied a stay after stating that it had just “devoted substantial resources to working
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`out a coordinated schedule (which has been entered today) of the 13 related cases.”
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`See No. CV 13-01456 LPS (D. Del. 2014), Dkt. No. 35.
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`DSS does not address any of the cases Seoul cited, which are more pertinent
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`to the circumstances here. See Dkt. No. 57 at 6-8.
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`B. DSS Fails To Rebut Seoul’s Arguments That A Stay Is Highly
`Likely To Simplify The Issues
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`DSS’s primary argument that a stay is not highly likely to simplify the issues
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`is based on the premise that “[n]o other defendants have joined” Seoul’s motion to
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`stay. Dkt. No. 60 at 5. This premise is incorrect. All defendants from the other
`three cases coordinated with this one have now joined Seoul’s motion.1 The Court
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`thus can avoid the issues DSS identifies by implementing a stay across the
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`coordinated cases.
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`Furthermore, DSS’s assertion that “only denial of a stay would allow DSS
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`and this Court to spend scarce resources in a single proceeding, rather than two, in
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`1 See Document Sec. Sys. v. Cree, Inc., No. CV 17-04263 JVS (C.D. Cal. Mar. 9,
`2018), Dkt. No. 56; Document Sec. Sys. v. Lite-On, Inc., No. CV 17-06050 JVS
`(C.D. Cal. Mar. 9, 2018), Dkt. No. 54; Document Sec. Sys. v. Everlight Electronics
`Co., No. CV 17-04273 JVS (C.D. Cal. Mar. 12, 2018), Dkt. No. 65.
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
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`

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`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 10 of 17 Page ID #:1627
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`addressing overlapping issues,” Dkt. No. 60 at 6, is wrong because it fails to
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`account for a fourth related case where DSS asserts (among other patents) the three
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`patents on which Seoul filed IPRs. See Document Sec. Sys., Inc. v. Nichia Corp.,
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`No. CV 17-08849 (Dec. 7, 2017), Dkt. No. 1, (hereinafter the “DSS-Nichia case”).
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`DSS filed the DSS-Nichia case six months after DSS filed its complaint against
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`Seoul. See id. Nichia has not answered, no schedule has been set, and the parties
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`are currently briefing a motion to dismiss. See id., Dkt. Nos. 39-42 (filed Mar. 5,
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`2018).
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`Thus, absent a stay of the coordinated cases or other delay of the coordinated
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`schedule to permit coordination with the DSS-Nichia case, the Court will be
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`required to conduct a second Markman proceeding in the DSS-Nichia case anyway
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`because DSS filed it significantly later than the other cases. Staying the
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`coordinated cases would permit the DSS-Nichia case to catch up, so that the Court
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`can avoid wasting valuable resources. Alternatively, the Court can stay the DSS-
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`Nichia case as well. See Pi-Net Int’l, 2013 WL 7158011, at *3 (“[plaintiff] fails to
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`account for the possibility that all litigation involving the [patents] could be stayed
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`[because] [c]ourts have inherent power to manage their dockets and stay
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`proceedings” (citations omitted)).
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`In any event, this District has rejected DSS’s argument that a stay as to one
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`defendant in coordinated cases will not simplify the issues. In Locata LBS, LLC v.
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`Yellowpages.com, LLC, the Court granted a stay, rejecting Plaintiff’s argument
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`that “[s]taying the case against YP but not the other Consolidated Defendants will
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`disrupt the coordinated discovery planned for the pending cases, resulting in the
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`likelihood of duplicative discovery and/or pretrial efforts by the parties and the
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`Court.” See Nos. LA CV 13-07664 JAK et al., 2014 WL 8103949, at *4 (C.D.
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`Cal. Jul. 11, 2014) (citation omitted); cf. PersonalWeb Techs., LLC v. Facebook,
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`Inc., Nos. CV 13-01356 EJD et al., 2014 WL 116340, *1, *4-5 (N.D. Cal. Jan. 13,
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
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`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 11 of 17 Page ID #:1628
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`2014) (granting a stay after finding “potential for streamlining” in “three of a suite
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`of twelve patent infringement lawsuits”).
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`In addition, DSS does not respond to Seoul’s point that records developed in
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`IPR need to be considered in claim construction, and therefore a stay to permit this
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`development prior to a Markman hearing would be beneficial. See Dkt. No. 57 at
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`9-10; see also Realtime Data LLC v. Teradata Operations, Inc., No. SA CV 16-
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`02743 AG, 2017 WL 3453295, at *2 (C.D. Cal. Feb. 27, 2017) (granting a stay,
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`explaining, “At a bare minimum, this Court will gain a richer prosecution history
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`upon which to base necessary claim construction determinations.”); TeleSign, 2016
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`WL 6821111, at *3 (granting a stay, noting that IPRs can streamline litigation by
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`giving the court a full record for claim construction). By contrast, it would be
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`inefficient for the Court to hold to its present schedule with the Markman hearing
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`on July 30, 2108, the day after the deadline for the PTAB’s institution decision on
`the last-filed IPR petition.2 See Dkt. No. 10.
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`DSS argues that a stay is not warranted at this stage because the IPRs have
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`not yet been instituted, but fails to address any of the cases Seoul cited where stays
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`were granted in this posture. See Dkt. No. 57 at 12-13 (collecting cases). Neither
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`of the cases cited by DSS in the text of its brief counsel against granting a stay
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`here. In Otto Bock HealthCare LP v. Össur HF, the Court emphasized that Össur’s
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`IPR did not challenge all asserted claims. SACV 13-00891 CJC, 2013 U.S. Dist.
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`LEXIS 188428, *5-6 (C.D. Cal. Dec. 16, 2013). DSS does not dispute that Seoul
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`challenged all asserted claims here. In NFC Technology LLC v. HTC America,
`Inc., the court granted a motion to stay pending IPR where two petitions had
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`resulted in IPRs directed to some, but not all, asserted claims, and a third petition
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`2 DSS incorrectly states that the “claim construction hearing is also likely to take
`place before the PTAB decides whether or not to even grant Seoul’s petitions.”
`Dkt. No. 60 at 4-5. The institution decisions are due within six months of the
`Notice of Filing Date, and the last Notice issued on January 29, 2018. 35 U.S.C. §
`314(b); IPR2018-00522 (Paper 3).
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
`
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 12 of 17 Page ID #:1629
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`challenging the remaining asserted claims had not yet been instituted. No. CV 13-
`1058 WCB, 2015 WL 1069111 (E.D. Tex. Mar. 11, 2015).3
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`DSS also applies the wrong standard for assessing simplification when it
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`contends that a stay is improper because it may not resolve “all of the issues.” Dkt.
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`No. 60 at 7. DSS’s position “conflates simplification of the issues with total
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`resolution of the case, which is not a factor considered by the court when
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`addressing a motion to stay.” Limestone v. Micron Tech., Nos. SA CV 15-0278
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`DOC et al., 2016 WL 3598109, at *4 (C.D. Cal. Jan. 12, 2016) (citation omitted).
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`Moreover, it is “speculative at best,” Dkt. No. 60 at 5, that any asserted patent
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`claim will survive the IPR process in view of DSS’s IPR history across multiple
`cases where no challenged claims have survived.4 See Dkt. No. 57 at 9.
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`Furthermore, as another court recognized in granting a stay against DSS before
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`IPR institution, the IPR records will still simplify issues for trial if one or more
`claims survive.5 See DSS Tech. Mgmt., Inc. v. Apple, Inc., No. CV 14-05330
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`HSG, 2015 WL 1967878, at *3 (N.D. Cal. May 1, 2015) (“[E]ven if the PTAB
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`decides to institute review and affirms the validity of every asserted claim, the case
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`would still be simplified because such a strong showing would assist in
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`streamlining the presentation of evidence and benefit the trier of fact by providing
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`the expert opinion of the PTO.” (citation omitted)). On the other hand, if all claims
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`3 DSS cites several cases in a footnote for the proposition that other courts have
`denied motions to stay as premature prior to institution. To be sure, various courts
`have decided to await institution before granting motions to stay on the facts
`presented in other cases, but this is subject to the Court’s discretion and Seoul has
`explained why it would be appropriate to grant a stay at this stage in this case.
`4 DSS tries to distinguish its IPR history, in part, by arguing that it involved “a
`plaintiff not named in this case.” Dkt. No. 60 at 7 (original emphasis). The IPRs
`Seoul identified involved DSS’s subsidiary. See Ex. A (Certificate of Interest filed
`with the Federal Circuit identifying DSS as parent corporation) (attached to the
`Declaration of Anant K. Saraswat filed herewith).
`5 DSS also miscalculated in contending that some or all claims have been found
`unpatentable “in only 19.6% of all petitions filed.” Dkt. No. 60 at 7. The actual
`figure is at least 50% higher. DSS failed to account for the 770 proceedings which
`are pending and have not reached a final decision.
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`7
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
`
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 13 of 17 Page ID #:1630
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`are invalidated in the IPRs (as occurred in DSS’s prior cases), this case will be
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`dismissed.
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`C. A Stay Will Not Result In Undue Prejudice Or Tactical
`Disadvantage to DSS
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`DSS will not suffer any prejudice if this case is stayed, for the reasons Seoul
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`set out in its motion. See Dkt. No. 57 at 12-16. DSS’s four arguments to the
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`contrary (Dkt. No. 57 at 8-12) are unavailing for the reasons discussed below.
`1.
`A stay will not result in tactical benefits for Seoul
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`DSS asserts that Seoul would gain a tactical advantage if the “claim
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`construction proceedings in related coordinated cases . . . go forward.” Dkt. No.
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`60 at 9. Per above, DSS’s concern can be resolved by staying those cases as well.
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`Regardless, it would be a tactical disadvantage to Seoul if claim construction
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`proceedings were conducted in the other coordinated cases without Seoul’s being
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`able to offer its arguments to the Court. Furthermore, if the coordinated cases are
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`not stayed, then the Court will have to schedule a second Markman hearing in the
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`DSS-Nichia case—permitting Nichia to take the very “wait and see” approach that
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`DSS claims would inflict unfair prejudice. Dkt. No. 60 at 9. If DSS truly believed
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`that multiple Markman proceedings would result in prejudice, then it would not
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`have filed the DSS-Nichia case or would be advocating to stay or otherwise delay
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`the currently coordinated cases to permit the DSS-Nichia case to become part of
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`the coordinated set of cases.
`2.
`A stay will not diminish DSS’s eventual recovery
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`DSS does not dispute that DSS and Seoul do not compete and that a “money
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`judgment” “in the form of a reasonable royalty” is therefore sufficient to
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`compensate DSS for any infringement. Dkt. No. 60 at 2, 9. As Seoul explained in
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`its motion, courts routinely reject claims of prejudice where, as in this case, only
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`money is at stake. See Dkt. No. 57 at 13-15; see also, e.g., Game & Tech. Co. v.
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`Riot Games, Inc., Nos. CV 16-06486 BRO et al., 2016 WL 9114147, at *4 (C.D.
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`8
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
`
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 14 of 17 Page ID #:1631
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`Cal. Nov. 4, 2016) (“Monetary damages would adequately compensate Plaintiff
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`and a stay would merely delay collection of the monetary damage.”). DSS
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`incorrectly argues that a stay will “diminish [its] eventual recovery.” Dkt. No. 60
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`at 9. To the contrary, per DSS’s allegations of ongoing infringement, see Dkt. No.
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`40, ¶¶ 18, 25, 37, any award to which DSS is entitled would be expected to
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`increase as a result of a stay because the additional time would permit more
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`allegedly infringing sales to be made prior to trial.
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`DSS complains that Seoul has not stipulated that DSS can obtain
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`prejudgment interest on any eventual judgment. See Dkt. No. 60 at 2, 9. That is
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`not a prerequisite for a stay. DSS fails to cite a single case even considering such a
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`stipulation in the context of a motion to stay. Either DSS will establish that it is
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`entitled to pre-judgment interest or it will not, and the amount of such pre-
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`judgment interest will increase due to the passage of time if the case is stayed.
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`There is no unfair prejudice to DSS here because “[a] stay will not diminish the
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`monetary damages to which [DSS] will be entitled if it succeeds in its infringement
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`suit—it only delays realization of those damages.” VirtualAgility Inc. v.
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`Salesforce.com, Inc., 759 F.3d 1307, 1318 (Fed. Cir. 2014).
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`3.
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`DSS’s generalized assertions concerning a right to timely
`enforcement and fading memories do not show prejudice
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`DSS argues that “[a] stay will unduly prejudice DSS because DSS has a
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`recognized interest in the timely enforcement of its patent rights.” Dkt. No. 60 at
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`9. In every case in which a patentee resists a stay, the patentee can make the same
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`claim. Thus, courts recognize that conclusory assertions of such injury are
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`insufficient, as explained in a case cited by DSS. In NFC Tech., the court
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`explained: “[Plaintiff] makes no specific allegations of prejudice other than to
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`claim that any delay in the vindication of patent rights is prejudicial to a patent
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`owner . . . . [T]hat factor is present in every case in which a patentee resists a stay,
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`and it is therefore not sufficient, standing alone, to defeat a stay motion.” 2015
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`9
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`CASE NO. 8:17-cv-00981-JVS-JCG
`SEOUL’S REPLY IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES REVIEW
`
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 61 Filed 03/12/18 Page 15 of 17 Page ID #:1632
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`WL 1069111, at *2 (granting a stay) (cited in Dkt. No. 60 at 6). DSS has not made
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`the requisite, specific showing of prejudice.
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`Similarly, DSS alleges that it may be prejudiced by fading memories or loss
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`of evidence. Dkt. No. 60 at 10-11. DSS merely quotes from Seoul’s initial
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`disclosures and claims that witnesses identified therein “may become unavailable.”
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`Id. at 11. NFC Tech. directly undercuts this argument as well. In NFC Tech., the
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`court recognized that generalized claims of prejudice based on fading memories
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`and the potential for loss of evidence are “entitled to little weight” where, as here,
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`the party claiming such prejudice fails to “ma[k]e any showing as to particular
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`evidence or discovery that is at risk.” 2015 WL 1069111, at *2. Here DSS does
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`not attempt to make any particular showing that a stay would place the availability
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`of evidence at risk.