Case 8:19-cv-02192-GW-AS Document 65 Filed 11/12/20 Page 1 of 7 Page ID #:1653
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`CIVIL MINUTES - GENERAL
`SACV 19-2192-GW-ADSx
`Ancora Technologies, Inc v. TCT Mobile (US), Inc., et al.
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`Case No.
`Title
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`Date November 12, 2020
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`Present: The Honorable GEORGE H. WU, UNITED STATES DISTRICT JUDGE
`Javier Gonzalez
`Terri A. Hourigan
`Tape No.
`Deputy Clerk
`Court Reporter / Recorder
`Attorneys Present for Plaintiffs:
`Attorneys Present for Defendants:
`Marc Lorelli
`Kyle R. Canavera
`John P. Rondini
`John P. Schnurer
`PROCEEDINGS:
`TELEPHONIC HEARING ON TCL'S MOTION TO STAY [59]
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`Court and counsel confer. The Tentative circulated and attached hereto, is adopted as the Court’s Final
`Ruling. The Court would DENY Defendants’ motion to stay this case pending IPR. Defendants may
`renew the motion if the PTAB institutes IPR.
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`CV-90 (06/04)
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`CIVIL MINUTES - GENERAL
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`Page 1 of 1
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`Initials of Preparer
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`Case 8:19-cv-02192-GW-AS Document 65 Filed 11/12/20 Page 2 of 7 Page ID #:1654
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`Ancora Techs., Inc. v. TCT Mobile (US) Inc. et al., Case No. 8:19-cv-02192-GW-(ASx) (Lead Case);
`Ancora Techs., Inc. v. TCT Corp. et al., Case No. 2:20-cv-01252-GW-(ASx) (Consolidated Case)
`Tentative Ruling on Motion to Stay Pending Inter Partes Review
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`I.
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`Background
`Plaintiff Ancora Technologies., Inc. sued TCL Corp., TCL Communication Ltd., TCL
`Communication Holdings Ltd., and TCL Communication Technology Holdings Ltd. on August
`27, 2019, alleging infringement of U.S. Patent No. 6,411,941 (the “‘941 Patent”). Ancora
`Techs., Inc. v. TCL Corp. et al., Case No. 2:20-cv-01252-GW-(ASx) (“Consolidated Case”),
`Docket No. 1; see also Docket No. 12 (Consolidated Case Amended Complaint).
`On November 12, 2019, TCT Mobile (US) Inc. and Huizhou TCL Mobile
`Communication Co., Ltd. separately sued Plaintiff, seeking declaratory judgement of non-
`infringement of the ‘941 Patent. TCT Mobile (US) Inc. et al. v. Ancora Techs., Inc., Case No.
`8:19-cv-02192-GW-(ASx) (“Lead Case”), Docket No. 1. The two actions have been
`consolidated so that Plaintiff now accuses TCT Mobile (US) Inc., Huizhou TCL Mobile
`Communication Co., Ltd., Shenzhen TCL Creative Cloud Technology Co., Ltd., TCL
`Communication Ltd., TCL Communication Technology Holdings Ltd., TCT Mobile (US)
`Holdings Inc., TCT Mobile, Inc., and TCT Mobile International Ltd.1 of infringing the ‘941
`Patent. Docket No. 29; see also Docket No. 23 (Joint Stipulation to realign parties); Docket
`No. 24 (Lead Case First Amended Complaint); Docket No. 44 (Lead Case Second Amended
`Complaint).2
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`The parties completed claim construction briefing on September 21, 2020 and presented a
`claim construction tutorial on October 1, 2020. See Docket Nos. 52-57. The Court held a
`Markman hearing on October 15, 2020 and took the matter under submission. See Docket No.
`60.
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`On September 10, 2020, Defendants filed a petition for inter partes review (“IPR”) of the
`‘941 Patent with the Patent Trial and Appeal Board (“PTAB”). See Docket No. 59-3. The
`PTAB will decide whether to institute review by March 2021. See Docket No. 59-1 at 5; Docket
`No. 63 at 10. Before the Court now is Defendants’ October 14, 2020 motion to stay this case
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`1 TCL Communication Holdings Ltd. and TCL Corp. are no longer parties to this case. See Consolidated
`Case, September 12, 2019 Docket Entry (no docket number); Lead Case, Docket No. 26.
`2 Subsequent docket citations are to the Lead Case unless otherwise noted.
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`Case 8:19-cv-02192-GW-AS Document 65 Filed 11/12/20 Page 3 of 7 Page ID #:1655
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`pending IPR proceedings by the PTAB. See Docket No. 59-1 (“Motion”). Plaintiff opposes, see
`Docket No. 63 (“Opp’n”), and Defendants have filed a reply brief. See Docket No. 64
`(“Reply”).
`II.
`Legal Framework
`Courts have discretion to control their dockets and ensure that their cases are managed in
`the interest of justice. See Clinton v. Jones, 520 U.S. 681, 706 (1997) (“[T]he District Court has
`broad discretion to stay proceedings as an incident to its power to control its own docket.”). In
`deciding whether to stay an action pending an IPR, a court’s discretion is typically guided by
`three factors: “(1) whether discovery is complete and whether a trial date has been set; (2)
`whether a stay will simplify the issues in question and trial of the case; and (3) whether a stay
`would unduly prejudice or present a clear tactical disadvantage to the nonmoving party.” Aten
`Int’l Co., Ltd v. Emine Tech. Co., Ltd., No. SACV 09-0843 AG (MLGx), 2010 WL 1462110, at
`*6 (C.D. Cal. Apr. 12, 2010) (quoting Telemac Corp. v. Teledigital, Inc., 450 F. Supp. 2d 1107,
`1111 (N.D. Cal. 2006)); Murata Machinery USA v. Daifuku Co., Ltd., 830 F.3d 1357, 1361 (Fed.
`Cir. 2016); see also Semiconductor Energy Lab. Co., Ltd. v. Chimei Innolux Corp., No. SACV
`12-21-JST (JPRx), 2012 WL 7170593, at *1 & n.1 (C.D. Cal. Dec. 19, 2012) (stating that the
`same three-factor framework for staying the case applies regardless of whether a request for
`reexamination or an IPR is pending); Peter S. Menell et al., Fed. Judicial Ctr., Patent Case
`Management Judicial Guide § 2.2.6.4.2 (3d ed. 2016). The inquiry, however, is not limited to
`these factors and “the totality of the circumstances governs.” Allergan Inc. v. Cayman Chem.
`Co., No. SACV 07-01316-JVS-(RNBx), 2009 WL 8591844, at *2 (C.D. Cal. Apr. 9, 2009)
`(citation omitted).
`III. Discussion
`As Defendants note, it is this Court’s practice to deny motions to stay until after the
`PTAB decides whether it will institute an IPR. See Motion at 12; see also BlackBerry Ltd. v.
`Facebook, Inc., No. 2:18-cv-01844-GW-(KSx), Initial Thoughts Regarding Joint Report, Docket
`No. 166 (“The Court notes, however, that it is this Court’s practice to deny motions to stay until
`after the PTAB has made a decision regarding whether it will actually institute an IPR; and it
`may also deny the stay even if an IPR has been granted if the issues raised in the IPR would not
`strongly impact the litigation or if a party has dallied in filing the IPR request.”); Updated
`Tentative Ruling on Renewed Motion to Stay Case Pending Instituted Inter Partes Review
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`Proceedings, Docket No. 652 at 2 (stating that the defendants in BlackBerry Ltd. “withdrew the
`motion after the Court stated . . . that it is disinclined to grant stays pending IPR proceedings
`until after the [PTAB] has issued a decision indicating that it would actually institute an IPR”
`and only considering the renewed motion to stay after the PTAB instituted IPR for the asserted
`claims).
`The Court would follow its usual practice here and deny Defendants’ motion to stay the
`case, as the PTAB has not decided whether to institute IPR. “A court is under no obligation to
`stay proceedings pending parallel litigation in the PTAB.” DiCon Fiberoptics, Inc. v. Preciseley
`Microtechnology Corp., No. 15-CV-01362-BLF, 2015 WL 12859346, at *1 (N.D. Cal. Oct. 13,
`2015). Because the Court can only speculate as to whether the PTAB will grant review and to
`what extent, the Court would not find a stay warranted until the PTAB institutes IPR. See
`Polaris Innovations Limited v. Kingston Technology Company, Inc., No. SACV 16-00300-CJC-
`(RAOx), 2016 WL 7496740, at *2 (C.D. Cal. November 17, 2016) (holding that a stay of a
`patent infringement action is not warranted when based on nothing more than the fact that an IPR
`petition was filed, as any simplification as a result of PTAB proceedings is inherently speculative
`at this point); DiCon Fiberoptics, Inc., 2015 WL 12859346, at *2 (denying motion to stay and
`finding that “the question of whether a stay will simplify and streamline the issues depends
`entirely on whether the PTAB decides to grant the IPR petition”). The Court has considered the
`parties’ arguments regarding each factor and would find that the circumstances weigh against
`granting a stay pending the PTAB’s decision on whether to institute IPR.
`Defendants nevertheless argue “that the facts of this case, in combination with the change
`in policy at the Patent Office in the past nine months warrant a departure from the Court’s usual
`inclination on this issue.” See Motion at 12-13. First, Defendants contend that the facts of this
`case “show that [Plaintiff] will be uniquely unharmed by a stay in this case.” Id. at 13.
`Defendants argue that the ‘941 Patent expired before Plaintiff brought this suit against
`Defendants, and thus Plaintiff’s “own actions demonstrate its lack of urgency and the lack of
`harm that it would suffer if this case were stayed for a maximum six months while the institution
`decision on [Defendants’] inter partes review petition is pending.” Id. Plaintiff can only seek
`damages for Defendants’ activities performed before this lawsuit began, because it was legally
`impossible for Defendants to infringe the patent by the date that Plaintiff filed this case. See
`Reply at 5. Further, Plaintiff is a non-practicing entity. Plaintiff does not practice the ‘941
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`Patent, make or sell products, or compete in the marketplace with Defendants. See Motion at 11,
`Reply at 7. Plaintiff acknowledges it is not a competitor, but argues it would be unduly
`prejudiced by a stay because (1) Defendants waited until the last day to file the IPR petition; (2)
`Defendants thus caused Plaintiff to expend significant resources construing disputed claim terms;
`(3) the PTAB will not decide whether to institute review until March 2021; and (4) while
`Plaintiff is not currently Defendants’ competitor, it still has an interest in enforcing its patent.
`See Opp’n at 11-12.
`While the Court would find Defendants’ arguments regarding lack of prejudice
`persuasive, the Court still is inclined to deny Defendants’ motion to stay this case for reasons the
`Court has already explained. At this point, the Court can only speculate as to whether the PTAB
`will institute IPR and would not find a stay warranted until the PTAB does so.
`Defendants next argue that the Court should depart from its usual practice and grant a
`stay at this stage because the PTAB has changed its policy regarding how it approaches
`institution decisions for IPR. See Motion at 13. Citing NHK Spring Co. v. Intri-Plex
`Technologies, Inc., IPR2018-00752, Paper 8 (P.T.A.B. Sept. 12, 2018) and Apple Inc. v. Fintiv
`Inc., IPR2020-00019, Paper 11 at 5 (P.T.A.B. Mar. 20, 2020), Defendants note that the PTAB
`“has greatly increased the frequency of its ‘NHK / Fintiv denials’” using “six non-exclusive
`factors for determining ‘whether efficiency, fairness, and the merits support the exercise of
`authority to deny institution in view of an earlier trial date in the parallel proceeding’” set forth
`in Fintiv. See Motion at 13-14 (quoting Fintiv, 2020 WL 2126495, at *3). The PTAB considers
`the following factors:
`1. whether the court granted a stay or evidence exists that one may be granted if a
`proceeding is instituted;
`2. proximity of the court’s trial date to the Board’s projected statutory deadline for a final
`written decision;
`3. investment in the parallel proceeding by the court and the parties;
`4. overlap between issues raised in the petition and in the parallel proceeding;
`5. whether the petitioner and the defendant in the parallel proceeding are the same party;
`and
`6. other circumstances that impact the Board’s exercise of discretion, including the merits.
`See Fintiv, 2020 WL 2126495, at *3.
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`Defendants contend that the Court’s decision on its motion to stay the case “directly
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`implicates Fintiv factors 1 and 2” and that the second factor “has the greatest potential to unfairly
`prevent institution of [Defendants’] petition.” See Motion at 14. Defendants cite another case
`before the Court, Uniloc 2017 LLC v. Netflix, Inc., No. 8:18-cv-02055-GW-(DFMx), as an
`example. Id. at 14-15. In February 2020, the Court set a trial date in Uniloc for February 2021.
`See Uniloc 2017 LLC v. Netflix, Inc., No. 8:18-cv-02055-GW-DFMx, Scheduling Conference
`Minutes, Docket No. 137. In April 2020, the PTAB denied Netflix, Inc.’s petition for IPR
`because the February 2021 scheduled trial date was several months before the April 2021
`deadline for the PTAB’s final decision in the IPR. See Motion at 14-15; Netflix, Inc. v. Uniloc
`2017 LLC, IPR2020-00008, Paper 13 (P.T.A.B. April 13, 2020). The PTAB cited NHK Spring
`Co. and did not consider the merits of the petition. Id. In July 2020, the Court stayed the Uniloc
`matter as the parties attempted the settle the case. See Uniloc 2017 LLC v. Netflix, Inc., No.
`8:18-cv-02055-GW-DFMx, Order on Joint Stipulation Requesting Stay, Docket No. 164.
`Because the Uniloc matter has not settled, Defendants in this case argue that if the Uniloc matter
`“were to be unstayed, it is unlikely the February 2021 trial date could remain in place,” and thus,
`the IPR “could in fact have proceeded and completed.” See Motion at 15. Defendants contend
`that the PTAB’s NHK / Fintiv denial of IPR was based on the incorrect assumption that the
`district court case schedule was set in stone. Id.
`Defendants therefore argue that in this case, if the Court “enters a post-Markman
`schedule setting a trial date for, for example, late-2021, then there is a high risk that the Board
`will issue a Fintiv denial in March 2021 when it issues the institution decision on [Defendants’]
`petition.” Id. at 15-16. According to Defendants, “by refusing to decide a motion to stay prior to
`institution, the Court is essentially already deciding the institution decision in favor of denial,
`and that thereby decides the post-institution motion to stay in favor of a denial as well.” Id. at
`17. Plaintiff does not address Defendants’ arguments regarding NHK / Fintiv denials, except to
`state that the “PTAB’s practice of denying institution when trials precede Final Written
`decisions” are not relevant to the Court’s decision regarding the motion to stay, and that “the
`PTAB proceedings may have likely been concluded before trial in this case” if Defendants were
`“diligent in filing their IPR petitions.” See Opp’n at 13.
`The Court is not inclined to grant a stay based on Defendants’ arguments regarding NHK
`/ Fintiv denials. While trial dates generally are not set in stone, this case differs from the Uniloc
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`matter, as the Court has not set a trial date in this case. As far as the Court understands, the
`parties are not engaging in settlement discussions, so a stay pending such negotiations is not at
`issue here. Further, the Court has indicated that it would find Defendants’ arguments persuasive
`as to whether a stay should be granted should the PTAB institute IPR – particularly regarding the
`lack of prejudice to Plaintiff – which goes directly to the first NHK / Fintiv factor: “whether the
`court granted a stay or evidence exists that one may be granted if a proceeding is instituted.” See
`Fintiv, 2020 WL 2126495, at *3. As such, the Court would not depart from its practice of
`denying a motion to stay until the PTAB institutes IPR.
`IV. Conclusion
`Based on the foregoing discussion, the Court would DENY Defendants’ motion to stay
`this case pending IPR. Defendants may renew the motion if the PTAB institutes IPR.
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