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`Case 4:17-cv-03745-PJH Document 49 Filed 10/31/17 Page 1 of 8
`
`Kenneth M. Albridge, III (To be admitted
`Pro Hac Vice)
`kmalbridge@michaelbest.com
`MICHAEL BEST & FRIEDRICH LLP
`One South Pinckney Street, Suite 700
`P.O. Box 1806
`Madison, WI 53701-1806
`Phone: 608.257.3067
`Fax:
`608.283.2275
`
`Rachel N. Bach (Admitted via Pro Hac
`Vice)
`rnbach@michaelbest.com
`MICHAEL BEST & FRIEDRICH LLP
`100 East Wisconsin Avenue, Suite 3300
`Milwaukee, WI 53202-4108
`Phone: 414.271.6560
`Fax:
`414.277.0656
`
`
`
`
`Patricia L. Peden (SBN 2064440)
`Patricia.Peden@leclairryan.com
`LECLAIRRYAN LLP
`44 Montgomery Street, Suite 3100
`San Francisco, California 94104
`Phone: 415.391.7111
`Fax: 415.391.8766
`
`Arthur Gollwitzer III(Admitted via Pro Hac Vice)
`agollwitzer@michaelbest.com
`MICHAEL BEST & FRIEDRICH LLP
`Terrace 7 Building
`2801 Via Fortuna, Suite 300
`Austin, Texas 78746
`Phone: 512.640.3161
`Fax:
`512.640.3170
`
`Larry Saret (Admitted via Pro Hac Vice)
`llsaret@michaelbest.com
`MICHAEL BEST & FRIEDRICH LLP
`River Point
`444 West Lake Street, Suite 3200
`Chicago, Illinois 60606
`Phone: 312.661.2116
`Fax:
`312.222.0818
`
`
`Attorneys for Defendant DYNACRAFT BSC, Inc.
`
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`SAN FRANCISCO DIVISION
`
`FISHER-PRICE, INC. and
`MATTEL, INC.,
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`Plaintiffs,
`
`v.
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`DYNACRAFT BSC, INC.,
`
`Defendant.
`
`DEFENDANT DYNACRAFT’S REPLY IN
`SUPPORT OF MOTION TO STAY
`LITIGATION
`
`
`
`
`Case No. 17-CV-03745-PJH
`
`DEFENDANT DYNACRAFT’S REPLY IN
`SUPPORT OF ITS MOTION TO STAY
`LITIGATION PENDING INTER-PARTES
`REVIEW AND SUPPORTING
`MEMORANDUM OF POINTS AND
`AUTHORITIES
`
`
`Date: November 15, 2017
`Time: 9:00 a.m.
`Courtroom: 3, 3rd Floor
`Judge: Honorable Phyllis J. Hamilton
`
`
`17-CV-03745-PJH
`
`
`
`
`
`

`

`Case 4:17-cv-03745-PJH Document 49 Filed 10/31/17 Page 2 of 8
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`Plaintiff Fisher-Price opposes a stay in this case, arguing that the benefits of a stay are
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`speculative, it is untimely, and that Fisher-Price will be prejudiced. None of those arguments
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`stands up to scrutiny.
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`First, numerous courts in this district have recognized the benefits of a stay pending IPR.
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`See, e.g., Finjan, Inc. v. Palo Alto Networks, Inc., No. 14-cv-04908, 2016 U.S. Dist. LEXIS
`
`69363, at *2 (N.D. Cal. May 26, 2016 (Hamilton, J.); Sec. People, Inc. v. Ojmar US, LLC, No.
`
`14-cv-04968, 2015 U.S. Dist. LEXIS 70011, at *3-4 (N.D. Cal. May 29, 2015); Advanced Micro
`
`Devices, Inc. v. LG Elecs., Inc., No. 14-cv-01012-SI, 2015 U.S. Dist. LEXIS 15496, at *9-11
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`(N.D. Cal. Feb. 9, 2015); Evolutionary Intelligence, LLC v. Facebook, Inc., No. 13-cv-04202-SI,
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`2014 U.S. Dist. LEXIS 9149, at *2 (N.D. Cal. Jan. 23, 2014); Brisham Solutions Ltd. v. Juniper
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`Networks, Inc., No. 13-cv-00616-JCS, 2014 U.S. Dist. LEXIS 58770, at *3-4 (N.D. Cal. Apr. 28,
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`2014); Software Rights Archive, LLC v. Facebook, Inc., No. C-12-3970, 2013 U.S. Dist. LEXIS
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`13
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`133707, at *4 (N.D. Cal. Sept. 17, 2013). For example, this Court has recognized that a stay
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`pending IPR is beneficial even if the PTAB does not institute all of the requested IPR trials
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`because “proceeding in such a piecemeal fashion could lead to duplicative efforts.” Finjan, 2016
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`U.S. Dist. LEXIS 69363, at *2.
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`There is nothing unique to this case that differentiates it from the many cases in this
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`district that have been stayed pending IPRs. In fact, in this case, which is at a very early stage, a
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`stay offers a wide range of benefits, including avoiding inconsistent parallel proceedings, review
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`of the prior art by the PTAB and the resulting estoppel that prevents re-litigation of those issues in
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`this Court, and potentially resolving this entire matter or encouraging settlement.
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`Fisher-Price relies heavily on a few cases from the Eastern District of Texas and
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`elsewhere for the proposition that motions to stay should not be granted prior to the PTAB
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`instituting the IPRs. (Dkt. 44 at 4-5.) That approach, however, has been rejected by this Court
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`and others in this District. Polaris Innovations Limited v. Dell Inc., No. 16-cv-07005, 2017 U.S.
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`Dist. LEXIS 92549, at *3 (N.D. Cal. June 15, 2017) (Hamilton, J.) (granting stay pending PTAB
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`decision to institute IPR on four petitions where motion to stay was filed two months after initial
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`28
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`case management conference and initial discovery had been served and answered); Advanced
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`
`DEFENDANT DYNACRAFT’S REPLY IN
`SUPPORT OF MOTION TO STAY
`LITIGATION
`
`
`
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`- 1 -
`
`17-CV-03745-PJH
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`Case 4:17-cv-03745-PJH Document 49 Filed 10/31/17 Page 3 of 8
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`Connection Tech., Inc. v. Toshiba Am. Info. Sys., Inc., No. C 12-6489 PJH, 2013 U.S. Dist.
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`LEXIS 172989, at *2-3 (N.D. Cal. Nov. 27, 2013) (Hamilton, J.) (granting stay pending PTAB
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`decision to institute IPR due to the “potential for this case becoming moot” and “given the fact
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`that [the] case is still in its early stages”); Advanced Micro Devices, 2015 U.S. Dist. LEXIS
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`15496, at *14, 19 (granting pre-institution motion to stay reasoning in part that “[s]hould the PTO
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`use the full statutory six months to deny [institution], the delay caused by the stay will have been
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`relatively short”); Finjan, Inc. v. Symantec Corp., 139 F. Supp. 3d 1032, 1037 (N.D. Cal. 2015)
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`(granting pre-institution stay and noting that “any concern that the motion[ ][is] premature is
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`alleviated by the short time frame of the initial stay and the Court’s willingness to reevaluate the
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`stay if inter partes review is not instituted for all of the asserted claims”); DSS Tech. Mgmt., Inc.
`
`v. Apple, Inc., No. 14-cv-05330- HSG, 2015 U.S. Dist. LEXIS 57704, at *10 (N.D. Cal. May 1,
`
`2015) (“The Court finds that staying the case for two months pending the PTO’s decision whether
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`to institute IPR is the most efficient use of resources at this juncture.”); PersonalWeb Techs., LLC
`
`v. Facebook, Inc., No. 5:13-cv-01356-EJD, 2014 U.S. Dist. LEXIS 4095, at *17 (N.D. Cal. Jan.
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`13, 2014) (finding that four-month delay before PTAB’s institution decision would issue was
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`“relatively short” and did not outweigh anticipated simplification of issues); Delphix Corp. v.
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`Actifio, Inc., No. 13-cv-04613-BLF, 2014 U.S. Dist. LEXIS 160372, at *8 (N.D. Cal. Nov. 13,
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`2014) (“At a minimum, instituting a brief, limited stay of approximately five months to see
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`whether and how the PTAB will act on Defendant’s IPR petitions will conserve judicial resources
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`and avoid inconsistent results.”); Coho Licensing LLC v. Glam Media, No. C 14-01576 JSW,
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`21
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`2014 U.S. Dist. LEXIS 131284, at *11 (N.D. Cal. Sept. 17, 2014) (granting pre-institution motion
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`to stay); Pragmatus AV, LLC v. Facebook, Inc., No 11-cv-02168-EJD, 2011 U.S. Dist. LEXIS
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`23
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`117147, at *11 (N.D. Cal. Oct. 11, 2011) (same).
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`Moreover, Fisher-Price attempts to discount the Patent Office statistics showing how often
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`IPRs are instituted and result in invalidation by arguing that each case is unique. But Fisher-Price
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`does not describe how this case in unique, and the overall IPR success rate undeniably
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`demonstrates the likelihood that one or more of the four IPRs will resolve this matter, making a
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`stay appropriate to conserve judicial and the parties’ resources. Moreover, if the PTAB declines
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`DEFENDANT DYNACRAFT’S REPLY IN
`SUPPORT OF MOTION TO STAY
`
`LITIGATION
`
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`- 2 -
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`17-CV-03745-PJH
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`Case 4:17-cv-03745-PJH Document 49 Filed 10/31/17 Page 4 of 8
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`to institute the IPRs in this case, the parties and the Court will know that outcome in five months
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`or less, and a stay can be promptly lifted at that time, resulting in very little disruption of this case
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`at its early stage.
`
`In the end, Fisher-Price’s contention that this factor “cuts strongly against a stay” (Dkt. 48
`
`at 6) is unsupported.
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`Second, Fisher-Price complains that it first filed this case ten months ago in January 2017.
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`There has been no improper delay in this case. Dynacraft promptly moved to stay this litigation,
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`this case is still in its infancy and any so-called delay is a product of Fisher-Price’s own choices.
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`
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`Fisher-Price filed this suit in the District of Delaware knowing two key facts: (i)
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`Dynacraft is not incorporated in Delaware and has no physical presence in Delaware, and (ii) the
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`Supreme Court had granted certiorari in the TC Heartland case, signaling that it would re-affirm
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`its 1952 ruling in Fourco that 28 U.S.C. § 1400(b) is the sole and exclusive venue rule in patent
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`cases. Indeed, the majority of courts addressing the issue since the TC Heartland decision have
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`held that the Supreme Court’s holding was not a change in the law, but merely a re-affirmation of
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`its prior holding (contrary to Fisher-Price’s argument at p. 6). See, e.g., Fox Factory, Inc. v.
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`16
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`SRAM, LLC, No. 3:16-cv-00506-WHO, 2017 U.S. Dist. LEXIS 126799, at *10 (N.D. Cal. July
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`18, 2017) (“TC Heartland did not actually change the law”) (collecting cases). Moreover, Fisher-
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`Price could have dismissed its original suit without prejudice at any time and re-filed in this Court
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`without waiting for the Supreme Court’s decision or Dynacraft’s motion to dismiss for lack of
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`venue. In short, Fisher-Price’s claim that the case has “already been forestalled by no fault” of its
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`own (Dkt. 44 at 6) is wrong.
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`Fisher-Price also engaged in settlement discussions with Dynacraft for over five months
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`after filing suit. Dynacraft believed the parties were working in good faith to resolve this matter
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`until settlement discussions broke down on July 19, 2017. Given that filing four IPR petitions
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`costs over $92,000 in filing fees alone, without taking into account legal fees, Dynacraft can
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`hardly be faulted for waiting to prepare and file its IPR petitions until after it had exhausted
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`efforts to settle this case. After July 19, 2017, Dynacraft worked diligently to prepare and file
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`four IPR petitions by October 9, 2017 – less than three months.
`
`DEFENDANT DYNACRAFT’S REPLY IN
`SUPPORT OF MOTION TO STAY
`
`LITIGATION
`
`
`- 3 -
`
`17-CV-03745-PJH
`
`

`

`Case 4:17-cv-03745-PJH Document 49 Filed 10/31/17 Page 5 of 8
`
` After complaining about Dynacraft’s “delay” in filing its motion for stay, Fisher-Price
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`switches to the inconsistent complaint that Dynacraft’s motion is premature because the four IPRs
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`have not yet been instituted. Using Fisher-Price’s logic, there is no appropriate time to seek a
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`stay: if Dynacraft waited the six months until the IPR institution decisions were made by the
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`PTAB, Fisher-Price would likely complain of a greater “delay” than has occurred to date; by
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`filing a motion to stay now, Fisher-Price alleges Dynacraft is “premature.” The law does not
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`support such “heads-we-win, tails-we-win” logic.
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`
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`Fisher-Price’s inconsistent arguments and indecision about timing illustrate that there are
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`multiple appropriate times for a stay, and one of those times is now. As all parties agree,
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`discovery has not yet begun, the Court has not yet held a case management conference, and no
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`case schedule yet exists. So notwithstanding the January 2017 filing date, this case is in its early
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`stages – especially when compared to cases that have been stayed despite much greater progress.
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`See, e.g., Polaris Innovations, 2017 U.S. Dist. LEXIS 92549, at *3 (granting stay in June 2017
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`even though case was filed in May 2016, transferred in December 2016, initial case management
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`conference was held and discovery was served and responded to); Finjan, 2016 U.S. Dist. LEXIS
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`69363, at *3-4 (granting stay even though the parties had exchanged infringement contentions);
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`see also Advanced Micro Devices, 2015 U.S. Dist. LEXIS 15496, at *9-11 (granting stay after the
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`parties exchanged some discovery, including infringement contentions); Sec. People, 2015 U.S.
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`Dist. LEXIS 70011, at *5-6 (granting stay and citing cases where stays were granted after claim
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`construction briefing and even after issuance of a claim construction order).
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`Third, Fisher-Price concludes by asserting without evidence that it will be irreparably
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`harmed by any further delay. For example, Fisher-Price argues that it is losing market share (Dkt.
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`48 at 8), but it provides no evidence to substantiate its claim. Moreover, Fisher-Price does not
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`explain why its alleged lost market share cannot be valued in dollars and included in its damages
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`calculations if this case moves forward. Likewise, Fisher-Price makes only speculative
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`arguments about Dynacraft’s ability to pay some future judgment. (Id.)
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`In fact, these arguments are undermined by the evidence we do have. That is, Fisher-Price
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`filed this case ten months ago but has not moved for a preliminary injunction, belying the
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`DEFENDANT DYNACRAFT’S REPLY IN
`SUPPORT OF MOTION TO STAY
`
`LITIGATION
`
`
`- 4 -
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`17-CV-03745-PJH
`
`

`

`Case 4:17-cv-03745-PJH Document 49 Filed 10/31/17 Page 6 of 8
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`irreparable harm argument.
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`Put simply, Fisher-Price has not and cannot point to any evidence that it is being harmed
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`in any manner that cannot be addressed with money damages.
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`Conclusion
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`For the foregoing reasons, this Court should enter an order staying this case pending
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`resolution of the pending inter-partes review petitions.
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`DEFENDANT DYNACRAFT’S REPLY IN
`SUPPORT OF MOTION TO STAY
`
`LITIGATION
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`- 5 -
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`17-CV-03745-PJH
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`

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`Case 4:17-cv-03745-PJH Document 49 Filed 10/31/17 Page 7 of 8
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`Dated: October 31, 2017
`
`
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`
`
`By: /s/ Patricia L. Peden
`Patricia L. Peden (SBN 2064440)
`LECLAIRRYAN LLP
`44 Montgomery Street, Thirty First Floor
`San Francisco, California 94104
`Phone:
`415.391.7111
`Fax:
`415.391.8766
`Email: Patricia.Peden@leclairryan.com
`
`
`Arthur Gollwitzer III
`(Admitted via Pro Hac Vice)
`MICHAEL BEST & FRIEDRICH LLP
`Terrace 7 Building
`2801 Via Fortuna, Suite 300
`Austin, Texas 78746
`Phone:
`512.640.3161
`Fax: 512.640.3170
`Email: agollwitzer@michaelbest.com
`
`Larry Saret (Admitted via Pro Hac Vice)
`MICHAEL BEST & FRIEDRICH LLP
`River Point
`444 West Lake Street, Suite 3200
`Chicago, Illinois 60606
`Phone:
`312.661.2116
`
`Fax: 312.222.0818
`Email: llsaret@michaelbest.com
`
`Rachel N. Bach (Admitted via Pro Hac Vice)
`MICHAEL BEST & FRIEDRICH LLP
`100 East Wisconsin Avenue, Suite 3300
`Milwaukee, WI 53202-4108
`Phone:
`414.271.6560
`Fax:
`414.277.0656
`Email: rnbach@michaelbest.com
`
`Kenneth M. Albridge, III
`(To be admitted Pro Hac Vice)
`MICHAEL BEST & FRIEDRICH LLP
`One South Pinckney Street, Suite 700
`P.O. Box 1806
`Madison, WI 53701-1806
`Phone:
`608.257.3067
`Fax: 608.283.2275
`Email: kmalbridge@michaelbest.com
`
`Attorneys for Defendant Dynacraft BSC, Inc.
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`DEFENDANT DYNACRAFT’S REPLY IN
`SUPPORT OF MOTION TO STAY
`
`LITIGATION
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`17-CV-03745-PJH
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`Case 4:17-cv-03745-PJH Document 49 Filed 10/31/17 Page 8 of 8
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`
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`CERTIFICATE OF SERVICE
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`I hereby certify that on October 31, 2017, the foregoing DEFENDANT DYNACRAFT’S
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`REPLY IN SUPPORT OF ITS MOTION TO STAY LITIGATION PENDING INTER-
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`PARTES REVIEW AND SUPPORTING MEMORANDUM OF POINTS AND
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`AUTHORITIES was electronically filed using the Court’s ECF system and thus will be
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`electronically served upon all counsel of record.
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`/s/ Adriana L. Lawrence
` Adriana L. Lawrence
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