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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`LYFT, INC.,
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`Plaintiff,
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`v.
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`AGIS SOFTWARE DEVELOPMENT LLC,
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`Defendant.
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`Case No. 21-cv-04653-BLF
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`ORDER GRANTING PLAINTIFF
`LYFT, INC.’S MOTION TO STAY
`CASE PENDING PATENT OFFICE
`PROCEEDINGS INVOLVING THE
`PATENTS-IN-SUIT
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`[Re: ECF No. 103]
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`Before the Court is Plaintiff Lyft, Inc.’s (“Lyft’s”) Motion to Stay Pending Patent Office
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`Proceedings Involving the Patents-in-Suit. See Motion, ECF No. 103. This is a patent declaratory
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`judgment action filed by Lyft against Defendant AGIS Software Development LLC
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`(“AGIS Software”), which had previously asserted the five patents-in-suit against Lyft in the
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`Eastern District of Texas.
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`Pursuant to Civil Local Rule 7-1(b), the Court finds that Lyft’s motion is appropriate for
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`determination without oral argument. Based on the below reasoning, the Court GRANTS Lyft’s
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`motion.
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`I. BACKGROUND
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`On January 29, 2021, AGIS Software filed a patent infringement action against Lyft in the
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`Eastern District of Texas regarding the Patents-in-Suit based on “the Lyft and Lyft Driver
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`applications and the related services and/or servers for the applications.” See Complaint, ECF No. 1
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`¶ 4. The case was consolidated with AGIS Software’s cases against T-Mobile US, Inc., T-Mobile
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`USA, Inc. (collectively, “T-Mobile”), Uber Technologies, Inc. (“Uber”), and WhatsApp, Inc.
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`(“WhatsApp”) before Judge Gilstrap under the caption AGIS Software Dev. LLC v. T-Mobile USA,
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`Case 5:21-cv-04653-BLF Document 135 Filed 05/19/22 Page 2 of 10
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`Inc., No. 2:21–cv–00072–JRG–RSP (E.D. Tex.) (“E.D. Texas Action”). On January 19, 2022,
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`Judge Gilstrap dismissed Lyft from the case for improper venue. See E.D. Texas Action, ECF No.
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`334. AGIS Software’s claims against T-Mobile, WhatsApp, and Uber in the Eastern District of
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`Texas have been dismissed as well. See id., ECF Nos. 169, 220, 370.
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`On June 16, 2021, while AGIS Software’s Eastern District of Texas action against Lyft was
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`still pending, Lyft filed the present action for declaratory judgment of noninfringement of the same
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`patents asserted against it in the Texas case. See Complaint, ECF No. 1. Five patents are at issue
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`in this case: U.S. Patent Nos. 7,031,728 (“’728 Patent”); 7,630,724 (“’724 Patent”); 8,213,970
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`(“’970 Patent”); 10,299,100 (“’100 Patent”); and 10,341,838 (“’838 Patent”) (collectively, the
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`“Patents-in-Suit”).
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`On July 27, 2020, the USPTO granted Google LLC’s (“Google”) request for EPR of the
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`’970 Patent challenging all claims at issue in the above-captioned case. In late 2021, reexamination
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`terminated with the issuance of a reexamination indicating amendments to the two challenged
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`independent claims—Claims 2 and 10. See Motion, ECF No. 103, Ex. 1. AGIS has not asserted
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`the new claims in this litigation. See Motion, ECF No. 103 at 2.
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`On October 22, 2021, Uber filed a Request for ex parte reexamination (“EPR”) of the ’728
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`and ’724 Patents, challenging each claim of these patents at issue in the above-captioned case. See
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`Appl. No. 90/014,889; Appl. No. 90/014,890.
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` The USPTO granted the requests on
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`December 6 and 7, 2021, finding substantial new questions of patentability. See Motion,
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`ECF No. 103, Exs. 2 & 3. Despite petitioning for and receiving two-month extensions of time to
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`file its Patent Owner’s Statements in both EPR proceedings, AGIS Software ultimately failed to
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`submit Patent Owner Statements in either. See Motion, ECF No. 103, Exs. 4 & 5. Lyft indicates
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`that a first office action in the EPR proceedings is likely in short order. See Motion, ECF No. 103
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`(citing 37 C.F.R. § 1.550(a); Motion, ECF No. 103, Ex. 6 at 2).
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`On January 29, 2022, Lyft filed IPR petitions challenging all claims of the ’838 and ’100
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`Patents at issue in the above-captioned action.
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` See IPR2022-00513; IPR2022-00514;
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`IPR2022-00515. Lyft’s petitions are substantively identical to IPR petitions filed by Uber on
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`July 23, 2021, which were instituted by the PTAB on January 7, 2022 and subsequently terminated
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`Case 5:21-cv-04653-BLF Document 135 Filed 05/19/22 Page 3 of 10
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`due to settlement on March 17, 2022. See Motion, ECF No. 103, Exs. 7–9. AGIS Software filed
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`Patent Owner’s Preliminary Responses on May 9, 2022, so the PTAB will issue its institution
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`decisions within three months of that date. See 35 U.S.C. § 314(b)(1).
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`Lyft moves to stay the above-captioned case in light of the EPRs pending as to the ’728 and
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`the ’724 Patents and Lyft’s pending IPR petitions as to the ’838 and ’100 Patents. Lyft argues that
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`a stay is justified because (1) the case is at an early stage, since no merits discovery has taken place
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`and the case deadlines are months or years away; (2) 64 of the 68 patent claims at issue in this case
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`are likely to be or currently under EPR or IPR review, so simplification from a stay is almost certain;
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`and (3) a stay would not prejudice non-competitor AGIS Software. See Motion, ECF No. 103;
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`Reply, ECF No. 132. AGIS Software opposes, arguing that (1) the parties have engaged in
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`jurisdictional discovery and exchanged contentions and some claim construction disclosures, so the
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`stage of litigation weighs against a stay; (2) no IPR or EPR proceedings are pending as to the ’970
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`Patent and Lyft’s IPR petitions as to the ’838 and ’100 Patents have not been instituted, so
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`simplification is not assured; and (3) AGIS Software will be prejudiced by a stay, particularly given
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`the advanced age of its CEO and primary witness. See Opposition, ECF No. 120.
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`II. LEGAL STANDARD
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`A district court has inherent power to manage its own docket and stay proceedings,
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`“including the authority to order a stay pending conclusion of a PTO reexamination.” Ethicon, Inc.
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`v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988) (citation omitted). A court is under no obligation
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`to stay proceedings pending parallel litigation in the PTAB. See Aylus Networks, Inc. v. Apple, Inc.,
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`No. C–13–4700 EMC, 2014 WL 5809053, at *1 (N.D. Cal. Nov. 6, 2014) (citations omitted). The
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`factors that courts in this District consider when determining whether to stay litigation are:
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`“(1) whether discovery is complete and whether a trial date has been set; (2) whether a stay will
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`simplify the issues in question and trial of the case; and (3) whether a stay would unduly prejudice
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`or present a clear tactical disadvantage to the nonmoving party.” PersonalWeb Techs., LLC v.
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`Apple, Inc., 69 F.Supp.3d 1022, 1025 (N.D. Cal. 2014) (quoting Telemac Corp. v. Teledigital, Inc.,
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`450 F.Supp.2d 1107, 1111 (N.D.Cal. 2006)). The moving party bears the burden of persuading the
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`court that a stay is appropriate. See Evolutionary Intelligence, LLC v. Millenial Media, Inc.,
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`Case 5:21-cv-04653-BLF Document 135 Filed 05/19/22 Page 4 of 10
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`No. 5:13–CV–04206–EJD, 2014 WL 2738501, at *3 (N.D. Cal. June 11, 2014).
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`III. DISCUSSION
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`As outlined above, the parties dispute whether the (1) stage of the case; (2) simplification;
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`and (3) prejudice factors support a stay. The Court considers each factor in turn.
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`A.
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`Stage of the Case
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`First, the Court considers whether the case has progressed significantly enough for a stay to
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`be disfavored. PersonalWeb, 69 F.Supp.3d at 1025. Lyft argues that this factor favors a stay
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`because there has been no discovery on the merits (only as to jurisdiction); the claim construction
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`hearing is scheduled for September; and trial is not until late 2023. See Motion, ECF No. 103 at 4–5.
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`Lyft also argues that resolution of various gating items lies ahead, including issues related to
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`discovery and AGIS Software’s infringement contentions. See id.; Reply, ECF No. 132 at 3. AGIS
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`Software argues that this factor does not favor a stay because infringement and invalidity
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`contentions have been exchanged, jurisdictional discovery has taken place, and the parties have
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`made claim construction disclosures. See Opposition, ECF No. 120 at 8–9.
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`The Court finds that the stage of the case strongly favors a stay. An operative complaint is
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`not even on file, and all of the most burdensome stages of litigation lie far in the future. The limited
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`jurisdictional discovery the parties have engaged in and the contentions they have exchanged weigh
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`little against a stay, particularly where questions regarding AGIS Software’s infringement
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`contentions have yet to be resolved. See Motion to Amend Infringement Contentions, ECF No. 84;
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`Motion, ECF No. 103 at 5 (“[AGIS Software] has not yet confirmed whether it will attempt to assert
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`the claims of the ’970 Patent that emerged from reexamination.”).
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`Accordingly, the Court finds this factor weighs strongly in favor of a stay.
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`B.
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`Simplification
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`The second factor courts consider is “whether a stay will simplify the issues in question and
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`trial of the case[.]” PersonalWeb, 69 F.Supp.3d at 1025. Lyft argues that a stay would likely
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`simplify the case. Lyft argues that the IPR petitions regarding the ’100 and ’838 Patents and the
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`EPR requests regarding the ’728 and ’724 Patents cover 64 of the 68 claims at issue in this case—
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`leaving the four ’970 Patent claims found invalid in a previous EPR. See Motion, ECF No. 103 at 5.
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`Based on USPTO and PTAB statistics, Lyft argues that there is around a 99.8% chance that at least
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`one of the four challenged patents will be impacted by the currently pending EPR and IPR
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`proceedings. See id. at 6; Reply, ECF No. 132 at 1. Further, Lyft argues that simplification is not
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`speculative here, because the PTAB has previously instituted IPR based on the same invalidity
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`grounds as it presents for the ’100 and ’838 Patents. See Motion, ECF No. 103 at 3; Reply, ECF
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`No. 132 at 1–2. Further, Lyft argues that the USPTO found substantial new questions of
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`patentability in the EPRs of the ’728 and ’724 Patents, and AGIS Software failed to file a patent
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`owner response. See Motion, ECF No. 103 at 2–3; Reply, ECF No. 132 at 2. In response, AGIS
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`Software argues that the ’970 Patent is not subject to USPTO review; the IPRs as to the ’100 and
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`’838 Patents have not been instituted; and it is speculative that the USPTO will change or invalidate
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`the ’728 and ’724 claims through EPR review, which lacks any estoppel effect in any case. See
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`Opposition, ECF No. 120 at 4–6.
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`The Court finds that the simplification factor favors a stay. The vast majority of claims at
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`issue in this case—94%—are likely to be or currently under review in post-grant proceedings.
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`Further, the statistics Lyft presents are compelling. It is overwhelmingly likely based on the current
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`state of the IPRs and EPRs that the claims at issue in this case change or are invalidated based on
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`post-grant proceedings, or else clarification of the Patents-in-Suit results.
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`Courts often disfavor stays pending IPR prior to institution. See, e.g., Skillz Platform Inc. v.
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`AviaGames Inc., No. 21–cv–02436–BLF, 2022 WL 1189882, at **3–4 (N.D. Cal. Apr. 21, 2022).
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`But the facts of this case regarding the ’100 and ’838 Patents are more compelling than in a typical
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`stay motion filed prior to institution of pending IPR petitions. It is undisputed here that Lyft’s IPR
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`petitions as to the ’100 and ’838 Patents are “substantively identical” to Uber’s IPR petitions on
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`which the PTAB previously instituted review (but subsequently terminated due to settlement). See
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`Motion, ECF No. 103 at 3. Accordingly, as to the ’100 and ’838 Patents, the simplification factor
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`weighs in favor of a stay—much as it would in a situation in which IPR review had already been
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`instituted as to these patents. See Lighting Sci. Grp. Corp. v. Shenzhen Jiawei Photovoltaic Lighting
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`Co., Ltd., No. 16–cv–03886–BLF, 2017 WL 2633131, at *3 (N.D. Cal. June 19, 2017)
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`(simplification favors a stay where it is “highly likely” that “the PTAB repeats its previous
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`Case 5:21-cv-04653-BLF Document 135 Filed 05/19/22 Page 6 of 10
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`institution decisions”).
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`AGIS Software further argues that simplification from the EPRs as to the ’728 and the ’724
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`Patents is speculative. See Opposition, ECF No. 120 at 5–6. But the Court disagrees given that the
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`USPTO has already granted the EPR requests as to these patents and AGIS Software has failed to
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`submit Patent Owner Statements in the EPR proceedings. See Motion, ECF No. 103 at 2.
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`Accordingly, the Court finds that simplification based on the EPRs is likely. AGIS Software further
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`argues that EPR review does not have an estoppel effect. See Opposition, ECF No. 120 at 5.
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`Regardless, the EPR proceedings are still likely to simplify, clarify, or otherwise impact the present
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`proceedings.
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` See, e.g., Universal Elecs.,
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`Inc. v. Universal Remote Control,
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`Inc.,
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`943 F.Supp.2d 1028, 1032 (C.D. Cal. 2013).
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`Additionally, AGIS Software argues that the lack of post-grant proceedings pending as to
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`the ’970 Patent indicates that the simplification factor does not support a stay. See Opposition, ECF
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`No. 120 at 4–5. But post-grant proceedings are likely or currently underway as to 64 of the
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`68 claims at issue in this case. Courts commonly find that the simplification factor favors a stay
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`when the vast majority—but not all—asserted claims are under USPTO review. See, e.g., Netlist,
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`Inc. v. Smart Storage Sys., Inc., No. 13–cv–5889–YGR, 2015 WL 1738192, at *1 (N.D. Cal. Apr.
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`9, 2015) (“[T]he PTAB’s determination to proceed with review on the majority of claims . . .
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`strongly indicates that a stay would simplify the case and avoid duplicative litigation.”).
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`AGIS Software also argues that the prior stipulated schedule and the fact that Lyft has failed
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`to move for a continuance of any dates weighs against a stay. See Opposition, ECF No. 120 at 5.
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`The Court disagrees. AGIS Software can point to no authority indicating that a party must first seek
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`modification of the case schedule before it can move for a stay.
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`Accordingly, the Court finds that the simplification factor weighs in favor of a stay.
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`C. Prejudice
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`The third factor courts consider in assessing whether a stay is appropriate is “whether a stay
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`would unduly prejudice or present a clear tactical disadvantage to the nonmoving party.”
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`PersonalWeb, 69 F.Supp.3d at 1025. Courts typically consider four subfactors: “(1) the timing of
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`the petition for review; (2) the timing of the request for the stay; (3) the status of review proceedings;
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`and (4) the relationship of the parties.” Uniloc, 2019 WL 1905161, at *5.
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`1. Timing of Requests for Post-Grant Proceedings
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`Under the first subfactor, the Court considers whether the timing of the post-grant requests
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`at issue in this case indicates that a stay would prejudice AGIS Software. PersonalWeb,
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`69 F.Supp.3d at 1029. Lyft points out that the EPR requests for the ’970 Patent was filed in May
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`2020, and the EPR requests for the ’728 and ’724 Patents were filed October 2021. See Motion,
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`ECF No. 103 at 8. Additionally, Lyft argues that it filed its IPR petitions only around a month after
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`the PTAB instituted Uber’s petitions as to the ’100 and ’838 Patents. See Motion, ECF No. 103
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`at 8–9. Further, Lyft argues that if AGIS Software had not moved for dismissal of Uber’s IPRs,
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`Lyft’s IPRs may have been joined with Uber’s IPRs and resolved seven months earlier than they
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`likely will now. See id. at 8–9. In response, AGIS Software argues that Lyft filed its IPR petitions
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`one year from the date of the filing of the complaint against Lyft in the E.D. Texas Action—just
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`within the one-year statutory deadline. See Opposition, ECF No. 120 at 6–7; 35 U.S.C. § 315(b).
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`AGIS Software also argues that Lyft filed its IPR petitions months after Uber filed its IPR petitions
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`in July 2021. See Opposition, ECF No. 120 at 7.
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`The Court finds that the timing of Lyft’s IPR petitions weighs against a stay here. Courts
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`commonly find this factor weighs against a stay where a party filed IPR petitions shortly before the
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`statutory deadline. See, e.g., Int’l Test Sols., Inc. v. Mipox Int’l Corp., No. 16–cv–00791–RS,
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`2017 WL 1316549, at *3 (N.D. Cal. April 10, 2017).
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`Accordingly, this subfactor weighs against a stay.
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`2. Timing of Stay Request
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`Under the second subfactor, the Court considers whether the timing of Lyft’s stay motion
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`indicates prejudice to AGIS Software. Uniloc, 2019 WL 1905161, at *5. Lyft argues that it raised
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`the possibility of a stay motion at the January 27, 2022 case management conference. See Motion,
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`ECF No. 103 at 7. Further, Lyft argues that it filed the present motion shortly after filing its IPRs
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`on January 29, 2022, and any minor delay was not dilatory given that Lyft was seeking discovery
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`and moving to amend its complaint. See Motion, ECF No. 103 at 7; Reply, ECF No. 132 at 4. In
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`response, AGIS Software argues that Lyft’s delay of nearly three months after (1) filing its IPR
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`petitions and (2) flagging the issue at the case management conference weighs against a stay. See
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`Opposition, ECF No. 120 at 7.
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`The Court agrees with AGIS Software. Lyft’s three-month delay in bringing its stay motion
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`after filing its IPR petitions weighs against a stay here. Further, the fact that Lyft flagged a potential
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`stay request at the January 27, 2022 case management conference does not change the Court’s
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`analysis. Lyft waited nearly 3 months after the case management conference to bring its stay motion.
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`Accordingly, this subfactor weighs against a stay.
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`3. Status of Review Proceedings
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`Under the third subfactor, the Court considers whether the status of the IPR and EPR
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`proceedings indicates that a stay would prejudice AGIS Software. Uniloc, 2019 WL 1905161,
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`at *5. Lyft argues that that the stage of the EPR proceedings regarding the ’728 and ’724 Patents
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`favors a stay, because the USPTO is likely to issue first office actions imminently given that AGIS
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`Software failed to file Patent Owner Responses in those proceedings. See Motion, ECF No. 103
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`at 7–8. Further, Lyft argues that the status of the IPR proceedings as to the ’100 and ’838 Patents
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`favors a stay, because they are likely to be instituted by August 8, 2022 given the PTAB’s prior
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`institution as to Uber’s substantively identical petitions. See id. at 8. AGIS Software argues that
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`the status of the EPR proceedings disfavors a stay, because reexamination may take as long as three
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`years. See Opposition, ECF No. 120 at 7. Further, AGIS software argues that the status of the IPR
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`proceedings disfavors a stay, because review has not been instituted. See id.
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`The Court agrees with Lyft. As the Court outlined above, even though the IPR petitions as
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`to the ’100 and ’838 Patents have not been instituted, the status of the IPR proceedings still favors
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`a stay given that IPR review was previously instituted on substantively identical Uber petitions.
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`Further, while reexamination can take time, the Court is not sympathetic to AGIS Software’s
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`position given that it delayed the EPR process by seeking an extension for its Patent Owner
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`Responses and then failed to file any such responses.
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`Accordingly, the Court finds that this subfactor favors a stay.
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`Case 5:21-cv-04653-BLF Document 135 Filed 05/19/22 Page 9 of 10
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`4. Relationship of the Parties
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`Under the fourth subfactor, the Court considers whether the relationship between the parties
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`indicates that a stay would prejudice AGIS Software. Uniloc, 2019 WL 1905161, at *5. Lyft argues
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`that this subfactor favors a stay because the ’728 Patent was issued in 2006 but AGIS Software did
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`not assert it against Lyft until 2021; AGIS Software is a patent assertion entity that does not compete
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`with Lyft; and AGIS Software has not acted with urgency by, e.g., moving for a preliminary
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`injunction in the E.D. Texas Action or waiving its jurisdictional challenge in this case. See Motion,
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`ECF No. 103 at 9–10; Reply, ECF No. 132 at 5. Further, Lyft argues that it would be prejudiced
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`without a stay, since it would continue to incur expense defending against infringement allegations
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`regarding patent claims that may be invalidated or amended. See Motion, ECF No. 103 at 10. In
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`response, AGIS Software argues that its CEO and primary witness is of advanced age, so a lengthy
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`stay would result in undue prejudice. See Opposition, ECF No. 120 at 8. Further, AGIS Software
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`argues that a stay would lead to a prejudicial compression of the remaining stages of litigation. See
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`id. at 8.
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`The Court agrees with Lyft. The parties are not competitors and AGIS Software has
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`repeatedly demonstrated that it has little urgency in pursuing its infringement claims against Lyft—
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`in this Court, in the Eastern District of Texas, and in post-grant proceedings. The Court is
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`sympathetic to AGIS Software given the advanced age of its CEO and primary witness, but AGIS
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`Software has not articulated with sufficient specificity the associated prejudice that would result if
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`the case is stayed. Further, AGIS Software’s concerns about compression of the case schedule can
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`be easily remedied by a modification of the case schedule further down the road if the case is stayed.
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`Accordingly, the Court finds that this subfactor weighs in favor of a stay.
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`With two subfactors weighing in favor of a stay and two subfactors weighing against a stay,
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`* * *
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`the Court finds that the prejudice factor is neutral.
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`D. Balancing the Factors
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`Since two factors—stage of the case and simplification—favor a stay, and the remaining
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`prejudice factor is neutral, the Court finds that a stay is appropriate.
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`Case 5:21-cv-04653-BLF Document 135 Filed 05/19/22 Page 10 of 10
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`IV. ORDER
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`For the foregoing reasons, IT IS HEREBY ORDERED that:
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`1.
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`2.
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`Lyft’s motion to stay is GRANTED;
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`the parties SHALL file a status update based on the earlier of the following: (1) 180
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`days after the filing of this Order or (2) resolution of the pending EPR proceedings
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`regarding the ’728 or ’724 Patents and any IPR proceedings resulting from Lyft’s
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`pending IPR petitions as to the ’838 and ’100 Patents;
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`3.
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`all pending motions, including discovery motions, are hereby TERMINATED
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`WITHOUT PREJUDICE to refiling after the stay ends; and
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`4.
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`excluded from this stay order are Lyft’s filing its First Amended Complaint as
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`ordered at ECF No. 133 and the parties filing a stipulated proposed redacted version
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`of the Court’s sealed order at ECF No. 133 before May 25, 2022.
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`Dated: May 19, 2022
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`______________________________________
`BETH LABSON FREEMAN
`United States District Judge
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