Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 1 of 18 Page ID #:1612
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`
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`William E. Thomson, Jr. (SBN 47195)
`BROOKS KUSHMAN P.C.
`601 S. Figueroa Street, Suite 2080
`Los Angeles, California 90017-5780
`Phone: (213) 622-3003
`wthomson@brookskushman.com
`
`Marc Lorelli (Admitted pro hac vice)
`mlorelli@brookskushman.com
`John P. Rondini (Admitted pro hac vice)
`jrondini@brookskushman.com
`Mark A. Cantor (Admitted pro hac vice)
`mcantor@brookskushman.com
`John S. LeRoy (Admitted pro hac vice)
`jleroy@brookskushman.com
`BROOKS KUSHMAN P.C.
`1000 Town Center, 22nd Floor
`Southfield, MI 48075
`Phone: (248) 358-4400
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`Attorneys for Plaintiff
`Ancora Technologies, Inc.
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`ANCORA TECHNOLOGIES,
`INC.
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`Plaintiff,
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`UNITED STATES DISTRICT COURT
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`CENTRAL DISTRICT OF CALIFORNIA
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`
`Case No. 8:19-cv-02192-GW-ASx
`(LEAD CASE)
`
`Consolidated Case
`No. 2:20-cv-01252-GW-ASx
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`PLAINTIFF’S BRIEF IN
`OPPOSITION TO DEFENDANTS’
`MOTION TO STAY PENDING
`INTER PARTES REVIEW
`
`Hearing Date: November 12, 2020
`Time: 8:30 am
`Before Hon. George H. Wu
`United States Courthouse
`Courtroom: 9D, 9th Floor
`
`v.
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`TCT MOBILE (US) INC.,
`HUIZHOU TCL MOBILE
`COMMUNICATION CO.,
`LTD., and SHENZHEN TCL
`CREATIVE CLOUD
`TECHNOLOGY CO., LTD.,
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`Defendants.
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`Brief in Opposition to Defendants’ Motion to Stay
`Case No. 8:19-cv-02192-GW-ASx
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 2 of 18 Page ID #:1613
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`TABLE OF CONTENTS
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`TABLE OF AUTHORITIES ................................................................................. ii
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`I.
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`INTRODUCTION ....................................................................................... 1
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`II.
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`CONCISE STATEMENT OF FACTS ......................................................... 3
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`III. ARGUMENT .............................................................................................. 4
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`A.
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`Legal Standards ................................................................................. 4
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`B.
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`Defendants have not carried their burden of showing a stay is
`warranted ........................................................................................... 5
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`1.
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`2.
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`3.
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`4.
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`This case is not in infancy ........................................................ 5
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`A stay will not simplify issues ................................................. 7
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`Ancora will be unduly prejudiced if Defendants’ motion is
`granted ................................................................................... 10
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`The USPTO’s “recent changes” are not only irrelevant, but
`also weight against granting a stay ......................................... 12
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`IV. CONCLUSION ..........................................................................................13
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`Brief in Opposition to Defendants’ Motion to Stay
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 3 of 18 Page ID #:1614
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`TABLE OF AUTHORITIES
`
`Cases
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`Ambato Media, LLC v. Clarion Co., Ltd., No. 2:09-cv-242-JRG,
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`2012 U.S. Dist. LEXIS 7558 (E.D. Tex. Jan. 23, 2012) ............................... 11
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`Ancora Techs. v. Apple, Inc.,
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`744 F.3d 732 (Fed. Cir. 2014) ........................................................................ 3
`
`Ancora Techs. v. HTC Am., Inc.,
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`908 F.3d 1343 (Fed. Cir. 2018) ...................................................................... 3
`
`Carl Zeiss A.G. v. Nikon Corp., No. 2:17-cv-03221-RGK-MRW,
`
`2018 U.S. Dist. LEXIS 199080 (C.D. Cal. Feb. 9, 2018) ............................... 9
`
`Comcast Cable Communs. Corp. v. Finisar Corp., No. C 06-04206 WHA,
`
`2007 U.S. Dist. LEXIS (N.D. Cal. Apr. 5, 2007) ........................................... 5
`
`Date, Inc. v. AMP Plus, Inc., No. 2:18-cv-07090-CAS (GJSx),
`
`2019 U.S. Dist. LEXIS 224636 (C.D. Cal. Dec. 13, 2010) ............................. 5
`
`e.Digital Corp. v. Dropcam, Inc., No. 14-cv-04922-JST,
`
`2016 U.S. Dist. LEXIS 20609 (N.D. Cal. Feb. 18, 2016) ............................. 11
`
`Ellison Educ. Equip., Inc. v. Stephanie Barnard Designs, Inc.,
`
`No. SA CV 18-2043-DOC (ADSx),
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`2020 U.S. Dist. LEXIS 80901 (C.D. Cal. Jan. 13, 2020) ............................. 4, 7
`
`Ethicon, Inc. v. Quigg,
`
`849 F.2d 1422 (Fed. Cir. 1988) ...................................................................... 4
`
`Everlight Elecs. Co. v. Bridgelux, Inc. No. C 17-03363 JSW,
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`2018 U.S. Dist. LEXIS 221485 (N.D. Cal. Sep. 14, 2018) ............................. 8
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`Intellectual Ventures I LLC v. Toshiba Corp., No. 13-453-SLR/SRF,
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`2015 U.S. Dist. LEXIS 63859 (D. Del. May 15, 2015) ................................ 13
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`Interwoven, Inc. v. Vertical Computer Sys., No. C-10-04645 RS,
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`2012 U.S. Dist. LEXIS 30946 (N.D. Cal. Mar. 8, 2012) ................................ 7
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`Invensas Corp. v. Samsung Elecs. Co., No. 17-1363-MN-SRF,
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`2018 U.S. Dis. LEXIS 169999 (D. Del. Oct. 2, 2018) .................................. 13
`
`Kerr Corp. v. Ultradent Prods., No. SACV 14-00236-CJC (ANx),
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`2014 U.S. Dist. LEXIS 182892 (C.D. Cal. Nov. 13, 2014) ............................ 5
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`
`Brief in Opposition to Defendants’ Motion to Stay
`Case No. 8:19-cv-02192-GW-ASx
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 4 of 18 Page ID #:1615
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`Landis v. N. Am. Co.,
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`299 U.S. 248 (1936). ...................................................................................... 5
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`NFC Tech. LLC v. HTC Am., Inc., No. 2:13-CV-1058-WCB,
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`2015 U.S. Dist. LEXIS 29573 (E.D. Tex. Mar. 11, 2015) ............................ 11
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`Otto Bock Health Care LP v. Ossur HF, No. SACV 13-00891-CJC(ANx),
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`2013 U.S. Dist. LEXIS 1884428 (C.D. Cal. Dec. 16, 2013) ..................... 9, 12
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`Polaris Innovations, Ltd v. Kingston Tech. Co., No. SACV 16-00300-CJC(RAOx),
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`2016 U.S. Dist. LEXIS 186795 (C.D. Cal. Nov. 17, 2016) ............................ 9
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`Realtime Data LLC v. Action Corp., No. 6:15-CV-463-RWS-JDL,
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`2016 U.S. Dist. LEXIS 77566 (E.D. Tex. June 14, 2016) ............................ 12
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`Rensselaer Polytechnic Inst. v. Apple Inc., No. 1:13-CV-0633,
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`2014 U.S. Dist. LEXIS 5186 (N.D. N.Y. Jan. 15, 2014) .............................. 10
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`Robert Bosch Healthcare Sys., Inc. v. Cardiocom, LLC, No. C-14-1575 EMC,
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`2014 U.S. Dist. LEXIS 92792 (N.D. Cal. July 3, 2014) ................................. 4
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`Speakware, Inc. v. Microsoft Corp., No. CV 18-1293-DOC,
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`2019 U.S. Dist. LEXIS 74579 (C.D. Cal. Feb. 21, 2019) ............................... 8
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`Telesign Corp. v. Twilio, Inc., No. CV 15-3240,
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`2016 U.S. Dist. LEXIS 185572 (C.D. Cal. Mar. 9, 2016) ............................ 11
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`Tessera Advanced Techs., Inc. v. Samsung Elecs. Co., No. 2:17-CV-00671-JRG,
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`2018 U.S. Dist. LEXIS 120999 (E.D. Tex. July 19, 2018) ........................... 13
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`Ultratec, Inc. & Captel, Inc. v. Sorenson Commc’ns, Inc., No. 13-cv-346-bbc,
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`2013 U.S. Dist. LEXIS 162459 (W.D. Wis. Nov. 14, 2013) ........................ 13
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`Universal Elecs., Inc. v. Universal Remote Control, Inc.,
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`943 F. Supp. 2d 1028 (C.D. Cal. 2013) .................................................5, 7, 11
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`28 U.S.C. § 1498..................................................................................................2, 9
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`Statutes
`
`Rules
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`Fed. R. Civ. P. 1 ..................................................................................................... 12
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`Brief in Opposition to Defendants’ Motion to Stay
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 5 of 18 Page ID #:1616
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`I.
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`INTRODUCTION
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`Plaintiff Ancora Technologies, Inc. (“Ancora”) respectfully submits this
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`Response in Opposition to Defendants TCT Mobile (US) Inc., Huizhou TCL Mobile
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`Communication Co., Ltd., and Shenzhen TCL Creative Cloud Technology Co., Ltd.
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`(collectively “TCL”) Motion to Stay Pending Inter Partes Review. Dkt. No. 59
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`(hereinafter, “Defendants’ Motion”). Defendants’ Motion should be denied.
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`Defendants’ Motion is premature. For this reason alone, this Court should deny
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`Defendants’ Motion. As Defendants recognize, courts rarely stay a case pending inter
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`partes review which may or may not be instituted. At the very earliest, the PTAB will
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`not decide whether to institute review until March 10, 2021. If instituted, it will take
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`at least another 12 months for the PTAB to issue its Final Written Decision—which
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`again may or may not simplify some of the issues in question here. Defendants’ mere
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`filing of a petition is simply too speculative to merit a stay.1
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`The stage of proceedings in the present case also does not favor a stay. Earlier
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`this year, the parties exchanged infringement, invalidity, and damages contentions.
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`The parties are also engaged in the discovery process. And earlier this month, the
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`parties completed claim construction with the Court issuing a tentative claim
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`construction ruling (Dkt. No. 60) prior to the Markman hearing. While this Court has
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`not yet issued its post-Markman Scheduling Order, based on this Court’s historical
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`average time-to-trial for patent infringement cases, this case may conclude long before
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`any PTAB Final Written Decision. In contrast, if this Court grants a stay in favor of a
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`1 Currently, the institution rate for IPR petitions filed in 2020 is 56%. (Ex. 1, pg. 7.)
`The current USPTO statistics confirm that IPR institution is not certain and even more
`unlikely for a patent such as the ‘941 patent that has been subjected to multiple
`USPTO reviews and Federal Circuit decisions.
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 6 of 18 Page ID #:1617
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`filing of a petition before PTAB, the case will sit idly on the Court’s docket for likely
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`over three years from the time of the Defendants’ petition to full resolution through
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`the appeal stage. This is highly prejudicial.
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`Nor have the Defendants carried their burden of showing why the institution of
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`an inter partes review has the tendency to simplify the questions before this Court.
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`While a Final Written Decision would foreclose the Defendants from reasserting some
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`of their invalidity arguments here, it would not address any of the Defendants’
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`numerous other affirmative defenses or counterclaims. See Dkt. No. 45 (raising 15
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`defenses including invalidity under Sections 101 and/or 112, non-infringement,
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`prosecution history estoppel, equitable doctrines of waiver, estoppel, acquiescence,
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`laches, and/or unclean hands, license and exhaustion, lack of standing, limitation for
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`sales covered by 28 U.S.C. § 1498(a), extraterritoriality, patent expiration, limitation
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`on damages, no willful and enhanced damages, no attorneys’ fees, failure to state a
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`claim, and ensnarement along with its reservation of rights to assert other applicable
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`defenses).
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` Even if the PTAB institutes this petition and even if it finds one or more of the
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`asserted claims invalid, the parties will still need to litigate the above-mentioned
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`defenses and counterclaims. Accordingly, this alleged hypothetical simplification of
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`issues before the Court, if at all present, is simply too narrow to justify staying this
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 7 of 18 Page ID #:1618
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`II. CONCISE STATEMENT OF FACTS
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`Ancora has asserted claims 1–3, 6–14, and 16 of U.S. Patent No. 6,411,941
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`(“the ’941 Patent”) against TCL. The ’941 Patent is described in detail in both Federal
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`Circuit’s previous opinions, Northern District of California’s 2012 Claim
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`Construction Order, and the U.S. Patent and Trademark Office’s (“USPTO”)
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`decisions in the reexamination and post-grant proceedings. In short, the ’941 Patent
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`discloses and claims “a method of preventing unauthorized software use by checking
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`whether a software program is operating within a license and stopping the program or
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`taking other remedial action it is not.” Ancora Techs. v. Apple, Inc., 744 F.3d 732, 733
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`(Fed. Cir. 2014). “More specifically: The method calls for storage of a license record
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`in a ‘verification structure’ created in a portion of BIOS [Basic Input Output System]
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`memory that, unlike the ROM of the BIOS, ‘may be erased or modified.’ The role of
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`the verification structure is to ‘indicate that the specified program is licensed to run
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`on the specified computer.’” Ancora Techs. v. HTC Am., Inc., 908 F.3d 1343, 1345
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`(Fed. Cir. 2018) (citations omitted).
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`As recognized by the Defendants, the ’941 Patent has been subject to close-
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`scrutiny by the USPTO and the courts including the Federal Circuit—twice. The
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`validity of the ’941 Patent has been re-affirmed time after time. Relying on these
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`courts’ guidance and interpretation, Ancora brought the present action in August 2019.
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`Dkt. No. 1. Defendants filed a dispositive motion in March 2020 based on an alleged
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`pleading issue. Dkt. No. 37. In April through July of 2020, while engaged in
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`discovery, the parties exchanged infringement, invalidity, and damages contentions.
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`Claim Construction briefs were filed, and Markman Tutorial conducted in
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`September and October of 2020, respectively. Dkt. Nos. 52-53. The Court circulated
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 8 of 18 Page ID #:1619
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`its tentative Claim Construction Ruling on October 15, 2020 – prior to the Markman
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`hearing. Dkt. No. 60. Per the scheduling order, the Court will be providing “further
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`court dates” for completing this case now that the Markman hearing is complete.
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`Despite significant progress in litigation, the Defendants filed a petition for
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`Inter Partes Review on September 11, 2020—one day before the statutory cut-off date
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`and just days before the Markman hearing in this case. Then, Defendants filed their
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`motion to stay the evening before the Markman hearing. Dkt. No. 59.
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`III. ARGUMENT
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`A. Legal Standards
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`“Courts have inherent power to manage their dockets and stay proceedings,
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`including the authority to order a stay pending conclusion of a PTO reexamination.”
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`Ellison Educ. Equip., Inc. v. Stephanie Barnard Designs, Inc., No. SA CV 18-2043-
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`DOC (ADSx), 2020 U.S. Dist. LEXIS 80901, at *2 (C.D. Cal. Jan. 13, 2020) (quoting
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`Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988)). “To be sure, a court
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`is under no obligation to delay its own proceedings by yielding to ongoing PTAB
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`patent reexaminations—even if the reexaminations are relevant to the infringement
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`claims before the Court.” Id. (quoting Robert Bosch Healthcare Sys., Inc. v.
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`Cardiocom, LLC, No. C-14-1575 EMC, 2014 U.S. Dist. LEXIS 92792, at *9 (N.D.
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`Cal. July 3, 2014)). In fact, “[i]f litigation were stayed every time a claim in suit
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`undergoes reexamination, federal infringement actions would be dogged by fits and
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`starts. Federal court calendars should not be hijacked in this manner.” Date, Inc. v.
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`AMP Plus, Inc., No. 2:18-cv-07090-CAS (GJSx), 2019 U.S. Dist. LEXIS 224636, at
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`*34 (C.D. Cal. Dec. 13, 2010) (quoting Comcast Cable Communs. Corp. v. Finisar
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 9 of 18 Page ID #:1620
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`Corp., No. C 06-04206 WHA, 2007 U.S. Dist. LEXIS at *4-5 (N.D. Cal. Apr. 5,
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`2007)).
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`Accordingly, “[i]n deciding a motion to stay pending inter partes review, courts
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`typically consider three factors: (1) the stage of the proceedings; (2) simplification of
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`the issues in question; and (3) undue prejudice or clear tactical disadvantage to the
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`non-moving party.” Kerr Corp. v. Ultradent Prods., No. SACV 14-00236-CJC (ANx),
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`2014 U.S. Dist. LEXIS 182892, at *3-4 (C.D. Cal. Nov. 13, 2014) (citing Universal
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`Elecs., Inc. v. Universal Remote Control, Inc., 943 F. Supp. 2d 1028, 1030-31 (C.D.
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`Cal. 2013)). These factors, however, are not exhaustive. Courts also examine “the
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`totality of circumstances when determining whether to grant a stay.” Date, Inc., 2019
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`U.S. Dist. LEXIS 224636, at *34 (citation omitted). In this instance, TCL “bears the
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`burden of showing that a stay is warranted.” Kerr Corp., 2014 U.S. Dist. LEXIS
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`182892, at *3 (citing Landis v. N. Am. Co., 299 U.S. 248 (1936)).
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`B. Defendants have not carried their burden of showing a stay is
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`warranted
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`None of the above-mentioned factors favor a stay considering a filing of an Inter
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`Partes Review (“IPR”) petition. Defendants have failed to demonstrate why the Court
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`should exercise its discretion and deviate from its routine practice of denying motions
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`to stay litigation due to filed but not yet instituted IPR petition.
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`1.
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`This case is not in infancy
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`Contrary to the Defendants’ assertion, this case is not in its infancy. As
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`expressly noted by the Defendants, parties have already exchanged Infringement,
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`Invalidity, and Damages Contentions. Ancora served its Disclosure of Asserted
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`Claims and Infringement Contentions on April 1, 2020. See Defendants’ Motion,
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 10 of 18 Page ID #:1621
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`pp.7-8 (Dkt. No. 59). Defendants served their Invalidity Contentions on May 13, 2020.
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`Id. Ancora served its Damages Contentions on July 1, 2020. Id. On July 31, 2020,
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`Defendants served their Responsive Damages Contentions. Id. Discovery is ongoing.
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`Both parties have submitted Requests for Document Production. Ancora has served
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`its First Set of Interrogatories and parties are in the midst of collecting and producing
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`responsive documents. Claim Construction briefings already concluded. Dkt. No. 52–
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`55. Markman Tutorial and Markman hearing were held on October 1, 2020 and
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`October 15, 2020, respectively. Dkt. Nos. 57 & 60. And the Court has already
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`provided its Tentative Claim Construction Ruling just hours before the Markman
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`hearing. Dkt. No. 60.
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`In fact, TCL’s May 13th invalidity contentions included three references2 used
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`within its IPR petition. TCL therefore knew of these references at least four months
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`before filing the IPR petition on September 10th. TCL does not explain why its IPR
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`petition could not have been filed before—or shortly after—invalidity contentions
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`were served. TCL’s own delay in filing an IPR using references it was aware of at
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`least as early as May 13th demonstrates any delay is its own doing. Had TCL been
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`more diligent, it could have filed the IPR petition before both parties expended
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`resources on completing the claim construction proceedings. Universal Elecs., Inc.,
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`943 F. Supp. 2d at 1032 (“while prior art searching and preparing PTO petitions takes
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`time . . . Defendants could have filed its petitions and this motion before claim
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`construction. This factor weighs against a stay.”).
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`2 Hellman (U.S. Pat. No. 4,658,093), Chou (U.S. Pat. Nos. 5,892,906), and Schneck
`(U.S. Pat. No. 5,933,498).
`Brief in Opposition to Defendants’ Motion to Stay
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 11 of 18 Page ID #:1622
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`Courts routinely deny premature Motions to Stay in cases at a similar stage of
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`their proceedings as the case at hand. See e.g., Universal Elecs., Inc., 943 F. Supp. 2d
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`1032 (Denying stay and stating that “Defendants could have filed its petitions and this
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`motion before claim construction.”); Date, Inc., 2019 U.S. Dist. LEXIS 224636, at
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`*34 (Denying a Motion to Stay and concluding that litigation is in an advanced stage
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`where “the parties [had] fully briefed the issue of claim construction, attended a
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`Markman hearing, and received a claim construction order[,]” and the date of trial was
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`“fast approaching.”); Interwoven, Inc. v. Vertical Computer Sys., No. C-10-04645 RS,
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`2012 U.S. Dist. LEXIS 30946, at *12 (N.D. Cal. Mar. 8, 2012) (Denying Defendants’
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`Motion to Stay and stating that the case is not in its infancy as “[d]iscovery is well
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`underway” but “[m]ore importantly, the parties have fully briefed the issue of claim
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`construction, attended a Markman hearing, and received a claim construction order.”).
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`This factor weighs against a stay.
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`2.
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`A stay will not simplify issues
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`Defendants have not carried their burden of establishing that the IPR—if
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`instituted—would simplify the issues before this Court. This motion is premature.
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`There is no guarantee that the IPR petition would be instituted or that USPTO would
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`find an of the asserted claims invalid. Ellison Educ. Equip., Inc., 2020 U.S. Dist.
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`LEXIS 80901, at *4-5 (“[W]hile the IPR might simplify this proceeding if it were
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`instituted, there is also a significant chance that the PTAB will decide not to institute
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`IPR, and this Court will have thrown off the entire scheduling of this case for no
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`benefit. This factor also weighs against granting a stay.”) (emphasis in original);
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`Everlight Elecs. Co. v. Bridgelux, Inc. No. C 17-03363 JSW, 2018 U.S. Dist. LEXIS
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`221485, at *13 (N.D. Cal. Sep. 14, 2018) (“[T]he Court finds that because the state of
`
`Brief in Opposition to Defendants’ Motion to Stay
`Case No. 8:19-cv-02192-GW-ASx
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 12 of 18 Page ID #:1623
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`the pleadings is in flux and the PTAB has not granted the petitions on the counterclaim
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`patents, granting a stay would be premature at this juncture.”) (emphasis added).
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`Defendants only argument regarding the simplification of issues before this
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`Court is that both Samsung and their IPR petitions challenges “all claims asserted
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`against TCL in this case.” See Defendants’ Motion, pp. 8-11 (Dkt. No. 59). In arguing
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`so, Defendants cite a handful of cases that have found challenging all claims weighs
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`in favor of simplification of issues. Id. Yet, Defendants fail to acknowledge that unlike
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`the patents asserted in those cases, the ’941 Patent has already withstood significant
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`scrutiny before both the USPTO and courts including twice before the Federal Circuit.
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`This scrutiny adds to the already speculative nature of Defendants’ argument.
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`In essence, Defendants argue that this Court should stay a case, in which claim
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`construction is already complete, in favor of a filing of an IPR petition, which may or
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`may not be instituted and which may or may not invalidate one or more of the asserted
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`claims. No less, claims that have already prevailed against close-scrutiny. This does
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`not justify a stay. Speakware, Inc. v. Microsoft Corp., No. CV 18-1293-DOC, 2019
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`U.S. Dist. LEXIS 74579, at *8 (C.D. Cal. Feb. 21, 2019) (“[A]ny simplification [of
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`the action] as a result of PTAB proceedings is inherently speculative. Accordingly,
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`stay of the instant action is not warranted because it appears ‘based on nothing more
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`than the fact that a petition for inter partes review was filed.’”) (quoting Polaris
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`Innovations, Ltd v. Kingston Tech. Co., No. SACV 16-00300-CJC(RAOx), 2016 U.S.
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`Dist. LEXIS 186795 at *5 (C.D. Cal. Nov. 17, 2016); Otto Bock Health Care LP v.
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`Ossur HF, No. SACV 13-00891-CJC(ANx), 2013 U.S. Dist. LEXIS 1884428, at *6
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`(C.D. Cal. Dec. 16, 2013) (same); Carl Zeiss A.G. v. Nikon Corp., No. 2:17-cv-03221-
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`RGK-MRW, 2018 U.S. Dist. LEXIS 199080, at *8-9 (C.D. Cal. Feb. 9, 2018) (Stating
`
`Brief in Opposition to Defendants’ Motion to Stay
`Case No. 8:19-cv-02192-GW-ASx
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 13 of 18 Page ID #:1624
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`absent an institution decision “whether a stay would simplify the issues in this case or
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`conserve judicial resources is an open question.”).
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`Assuming the IPR petition is instituted, the current USPTO statistics indicate
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`4
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`only 60% of the time are all asserted claims found invalid. (Ex. 1, pg. 12). There is
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`therefore a good likelihood that one or more of the claims being asserted in this case
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`would survive the IPR process.
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`While a Final Written Decision would also foreclose the Defendants from
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`reasserting some of their invalidity arguments here, it would not address any of the
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`Defendants’ numerous other affirmative defenses or counterclaims. See Dkt. No. 45
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`(raising 15 defenses including invalidity under Sections 101 and/or 112, non-
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`infringement, prosecution history estoppel, equitable doctrines of waiver, estoppel,
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`acquiescence, laches, and/or unclean hands, license and exhaustion, lack of standing,
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`limitation for sales covered by 28 U.S.C. § 1498(a), extraterritoriality, patent
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`expiration, limitation on damages, no willful and enhanced damages, no attorneys’
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`fees, failure to state a claim, and ensnarement along with its reservation of rights to
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`assert other applicable defenses).
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`These issues would remain for this Court to resolve—only much later severely
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`prejudicing the Plaintiff. Rensselaer Polytechnic Inst. v. Apple Inc., No. 1:13-CV-
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`0633, 2014 U.S. Dist. LEXIS 5186, at *24 (N.D. N.Y. Jan. 15, 2014) (“Even assuming
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`that the PTO institutes IPR on some or all of the ‘798 Patent claims, the review is
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`limited to invalidity arguments based on anticipation and obviousness, and then only
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`based on prior art consisting of patents or printed publications. Thus, barring a
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`cancellation of all of the claims challenged by Apple, the PTAB's IPR decision will
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`serve to enlighten the parties and the court on a limited number of matters, and
`
`Brief in Opposition to Defendants’ Motion to Stay
`Case No. 8:19-cv-02192-GW-ASx
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 14 of 18 Page ID #:1625
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`estoppel will attach only to the claims Apple asserted or could have reasonably
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`asserted before the PTO.”) (citations omitted).
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`This factor, too, weighs against granting a stay.
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`3.
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`Ancora will be unduly prejudiced if Defendants’ motion is
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`granted
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`Granting a stay due to a pending IPR petition is highly prejudicial to the
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`Plaintiff at this juncture of the proceedings. While the Court has not yet provided the
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`parties with its post-Markman Scheduling Order, a trial date is likely much earlier
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`than USPTO’s speculative Final Written Decision. The PTAB will not even decide
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`whether to institute review until the March 2021. From there it takes one year to the
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`Final Written Decision. Regardless of the outcome of the IPR, there will be an appeal.
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`This case is much more likely to have come to a conclusion if it proceeds at its current
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`pace than if it is stayed pending speculative institution of an IPR which would only
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`resolve a narrow set of issues in need of resolution.
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`Defendants’ argument that Ancora is not a competitor and would not be
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`prejudiced ignores that a patentee “has an interest in the timely enforcement of its
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`patent rights.” Ambato Media, LLC v. Clarion Co., Ltd., No. 2:09-cv-242-JRG, 2012
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`U.S. Dist. LEXIS 7558, at *4 (E.D. Tex. Jan. 23, 2012). This “interest is entitled to
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`weight.” NFC Tech. LLC v. HTC Am., Inc., No. 2:13-CV-1058-WCB, 2015 U.S. Dist.
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`LEXIS 29573, at *7 (E.D. Tex. Mar. 11, 2015). Nor is this alleged delay in bringing
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`an action ground to prejudice Ancora. Defendants themselves waited until the very
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`last day to file their IPR petition. There is no reason why they could not have filed
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`their petition earlier. None of the prior art that the Defendants rely on to make their
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`invalidity arguments is new. Hellman (U.S. Pat. No. 4,658,093) was published in 1987
`
`Brief in Opposition to Defendants’ Motion to Stay
`Case No. 8:19-cv-02192-GW-ASx
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 15 of 18 Page ID #:1626
`
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`and Chou and Schneck (U.S. Pat. Nos. 5,892,906 and 5,933,498, respectively) were
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`2
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`published in 1999. Universal Elecs., Inc., 943 F. Supp. 2d at 1032 (“while prior art
`
`3
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`searching and preparing PTO petitions takes time . . . Defendants could have filed its
`
`4
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`petitions and this motion before claim construction. This factor weighs against a
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`5
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`stay.”).
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`6
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`
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`Indeed, “[i]n weighing the prejudice to the non-moving party, courts consider
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`7
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`four sub-factors: ‘(1) the timing of the petition for review; (2) the timing of the request
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`for the stay; (3) the status of review proceedings; and (4) the relationship of the
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`parties.’” Telesign Corp. v. Twilio, Inc., No. CV 15-3240, 2016 U.S. Dist. LEXIS
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`10
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`185572, at *8-9 (C.D. Cal. Mar. 9, 2016) (quoting e.Digital Corp. v. Dropcam, Inc.,
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`No. 14-cv-04922-JST, 2016 U.S. Dist. LEXIS 20609, at *10 (N.D. Cal. Feb. 18,
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`2016)). A cursory review of these sub-factors demonstrates why Ancora would be
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`prejudiced if this Defendants’ Motion is granted.
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`14
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`Regarding the first factor, Defendants waited until the very last day of their
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`15
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`statutory cut-off day to file their IPR petition. As to the second factor and closely tied
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`to the first factor, in delaying the filing of their petition, Defendants caused both
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`17
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`Ancora and the Court to expend significant resources construing disputed claim terms.
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`Regarding the third factor—the status of review proceedings—the PTAB will not even
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`decide whether to institute review until the March 10, 2021. Finally, as to the
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`relationship between the parties, while Ancora’s is not currently a competitor of the
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`Defendants because its business was stymied based on infringers activities, it still has
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`22
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`an interest in enforcing its patent. See Realtime Data LLC v. Action Corp., No. 6:15-
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`23
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`CV-463-RWS-JDL, 2016 U.S. Dist. LEXIS 77566, at *12 (E.D. Tex. June 14, 2016)
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`24
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`(“The fact that [Plaintiff] is a non-practicing entity and is merely pursuing monetary
`
`Brief in Opposition to Defendants’ Motion to Stay
`Case No. 8:19-cv-02192-GW-ASx
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`Case 8:19-cv-02192-GW-AS Document 63 Filed 10/23/20 Page 16 of 18 Page ID #:1627
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`damages would not preclude [Plaintiff] from experiencing prejudice if the Court
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`2
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`granted Defendants’ motion to stay.”); see also Fed. R. Civ. P. 1 (Rules “should be
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`3
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`construed, administered, and employed by the court and the parties to secure the just,
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`4
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`speedy, and inexpensive determination of every action and proceeding.”). If not in
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`5
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`Ancora’s favor, this factor is at most neutral.
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`6
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`Defendants do not even address the aforementioned factors. As such, they fail
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`to overcome their burden of showing why the stay will not prejudice the plaintiffs.
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`8
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`Instead, it appears that Defendants are tacitly