Case 1:12-cv-00398-GMS Document 38 Filed 05/16/13 Page 1 of 15 PageID #: 1361
`Case 1:12—cv—OO398—GMS Document 38 Filed 05/16/13 Page 1 of 15 Page|D #: 1361
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`HUMANEYES TECHNOLOGIES LTD.
`
`Plaintzfif
`
`V.
`
`C.A. No. 12-398-GMS
`
`SONY CORPORATION, SONY
`CORPORATION OF AMERICA, SONY
`ELECTRONICS INC., SONY MOBILE
`COMMUNICATIONS AB, AND SONY
`MOBILE COMMUNICATIONS (USA) INC.,
`
`Defendants.
`
`
`REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO STAY LITIGATION
`PENDING THE OUTCOME OF INTER PARTES REVIEW OF THE PATENTS—IN—SUIT
`
`OF COUNSEL:
`
`John Flock
`
`Walter Hanley
`Michelle Carniaux
`Sheila Mortazavi
`Iuliana Tanase
`KENYON & KENYON LLP
`
`One Broadway
`New York, New York 10004-1050
`(212) 425-7200
`
`May 16,2013
`
`Chad M. Shandler (#3796)
`Elizabeth R. He (#5345)
`RICHARDS, LAYTON & FINGER, P.A.
`One Rodney Square
`920 N. King Street
`Wilmington, DE 19801
`(302) 651-7700
`Shand1er@rlf.com
`He@r1f.com
`
`Attorneys for Defendants Sony Corporation,
`Sony Corporation ofAmerica, Sony Electronics
`Inc., Sony Mobile Communications AB, Sony
`Mobile Communications (USA) Inc.
`
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`

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`TABLE OF CONTENTS
`
`TABLE OF AUTHORITIES ........................................................................................................ .. ii
`
`I.
`
`II.
`
`INTRODUCTION ............................................................................................................ .. 1
`
`ARGUMENT .................................................................................................................... .. 2
`
`A.
`
`A Stay Will Simplify the Issues and Conserve Valuable Resources .............................. .. 2
`
`1.
`
`Issues Will Be Simplified For the Claims Asserted in the ITC .................................. .. 2
`
`2.
`
`3.
`
`Issues Will Be Simplified Despite HumanEyes’ Reactive Assertion of Claims That
`Were Not Asserted in the ITC .................................................................................... .. 3
`
`Issues Will Be Simplified Even If IPRs Are Not Instituted For All the Asserted
`Claims ......................................................................................................................... .. 4
`
`B.
`
`A Stay Is Favored Given the Early Stage of Litigation, and the Significant Amount of
`Work That Still Remains to Be Done In This Action ..................................................... .. 5
`
`C.
`
`Staying This Action Will Not Unduly Prejudice HumanEyes ........................................ .. 6
`
`l. HumanEyes Demonstrated Its Willingness to Accept a Stay In This Action and to
`Defer Damages By Filing an ITC Complaint ............................................................. .. 7
`
`2. HumanEyes Has Not Identified Any Tactical Disadvantage Arising From the Timing
`of Sony’s IPR Petitions or Stay Motion ...................................................................... .. 7
`
`3. HumanEyes Has Not Shown That It Cannot Be Adequately Compensated by
`Monetary Damages ..................................................................................................... .. 9
`
`V.
`
`CONCLUSION ............................................................................................................... .. 10
`
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`Cases
`
`TABLE OF AUTHORITIES
`
`Adair v. Boat Dock Innovations, LLC,
`No. 1:12-CV-1930-SCJ, 2013 WL 1859200 (N.D. Ga. Feb. 27, 2013) ................................... .. 10
`
`Alloc, Inc. v. Unilin Decor N. V.,
`
`N0. 03—253—GMS, 2003 WL 21640372 (D. Del. July 11,2003) .............................................. .. 4
`
`Alps South, LLC v. Ohio Willow Wood Co.,
`No. 8:09-CV-00386-T-EAK-MAP, 2010 U.S. Dist. LEXIS 144260 (M.D. Fla. June 16, 2010) 5
`
`Belden Techs. Inc. v. Superior Essex Comm ’n,
`N0. 08-CV-63-SLR, 2010 U.S. Dist. LEXIS 90960 (D. Del. Sep. 2, 2010) .............................. .. 9
`
`Ever Win Int ’l Corp. v. Radioshack Corp.,
`--— F. Supp. 2d --—, 2012 WL 4801890 (D. Del. Oct. 9, 2012) .............................................. .. 5, 9
`
`Imagevisionnet Inc. v. Internet Payment Exchange Inc. ,
`No. 12-054-GMS—MPT, D.I. 65 (D. Del. Apr. 22, 2013) ......................................................... .. 5
`
`Interwoven, Inc. v. Vertical Cop. Sys.,
`No. 10-04645 RS, 2012 U.S. Dist. LEXIS 30946 (N.D. Cal. Mar. 8, 2012) ............................ .. 5
`
`LG Electronics U'.S./1. v. Whirlpool Corp.,
`No. 09-5142 (GEB—ES), 2011 U.S. Dist. LEXIS 11488 (D.N.J. Feb. 4, 2011) ....................... .. 5
`
`Neste Oil Oyj v. Dynamic Fuels, LLC,
`N0. 12-662-GMS, 2013 WL 424754 (D. Del. Jan. 31, 2013) .............................................. .. 3, 4
`
`In re Princo Corp.,
`486 F.3d 1345 (Fed. Cir. 2007) ................................................................................................ .. 7
`
`Round Rock Research LLC v. HanesBrands Inc. ,
`N0. 11-1241—RGA, 2012 U.S. Dist. LEXIS 49106 (D. Del. Apr. 6, 2012) .............................. .. 9
`
`SenoRx, Inc. v. Hologic, Inc.,
`No. 12-173-LPS-CJB, 2013 U.S. Dist. LEXIS 8044 (D. Del. Jan. 11,2013) ...................... .. 8, 9
`
`Textron Innovations Inc. v. Toro Co.,
`No. 05-486 (GMS), 2007 WL 7772169 (D. Del. Apr. 25, 2007) ......................................... .. 6, 9
`
`Tuitz'onFund, LLC v. Suntrust Banks, Inc,
`No. 3:11-00069, 2012 U.S. Dist. LEXIS 144408 (MD. Tenn. Oct. 5,2012) .......................... .. 5
`
`Ultra Prods., Inc. v. Antec, Inc.,
`No. 09-04255 RS, 2010 U.S. Dist. LEXIS 50096 (N.D. Cal. Apr. 26, 2010) .......................... .. 5
`
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`Regulations
`
`19 C.F.R. § 210.29 ........................................................................................................................ .. 7
`
`37 C.F.R. § 42.104 ........................................................................................................................ .. 7
`
`37 C.F.R. § 42.107(b) ................................................................................................................... .. 8
`
`37 C.F.R. § 42.24(a)(1)(i) ............................................................................................................. .. 7
`
`37 C.F.R. § 42.6(a) ........................................................................................................................ .. 7
`
`Statues
`
`28 U.S.C. § 1659(a) ...................................................................................................................... .. 7
`
`35 U.S.C. § 316(a)(5) .................................................................................................................... .. 4
`
`35 U.S.C. § 316(c) ........................................................................................................................ .. 5
`
`35 U.S.C. § 6 ................................................................................................................................. .. 5
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`I.
`
`INTRODUCTION
`
`HumanEyes fails to show that any of the three factors that the Court considers in deciding
`
`whether to grant a stay disfavors a stay here.
`
`First, HumanEyes’ argument that inter partes review (“IPR”) will not simplify the issues
`
`because IPR will address “only a small handful of patent claims” (Op.1 at 2) is incorrect. The
`
`“small handful” of claims challenged in Sony’s IPR petitions includes every patent claim that
`
`HumanEyes had ever asserted against Sony, including in the International Trade Commission
`
`(“ITC”) Investigation, until HumanEyes responded to Sony’s stay motion. HumanEyes had
`
`every opportunity, with the benefit of what it contends was complete liability fact discovery, to
`
`assert additional claims either by seeking to amend its ITC complaint or by notifying Sony of its
`
`intent to do so in this action. Yet, it did so only in reaction to this motion. Because HumanEyes
`
`has now added claims (Op. at 13-14), Sony intends to submit petitions for IPR of those new
`
`claims and seek joinder with its previously-filed petitions. Therefore, the arguments in Sony’s
`
`opening brief that IPR will simplify the issues still apply with equal force.
`
`Second, HumanEyes’ decision to assert additional claims contradicts its assertion that the
`
`ITC proceedings have moved this case to an advanced stage. Even assuming for the sake of
`
`argument that liability fact discovery is “complete”—it is not——the addition of previously
`
`unasserted claims adds infringement, validity and claim construction issues that were never
`
`litigated in the ITC. HumanEyes admits that fact discovery on damages and willfulness issues
`
`remains, as well as claim construction and expert discovery (Op. at 10-12), not to mention
`
`potential dispositive motions, pre-trial proceedings, and the yet-to-be-scheduled trial itself.
`
`1 “Op.” refers to HumanEyes’ Answering Brief in Opposition to Sony’s Motion to Stay (D.l. 34).
`“Sony Br.” refers to Sony’s Opening Brief in support of its Motion to Stay (D.I. 30).
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`Third, HumanEyes’ assertion that the delay occasioned by a stay will cause it undue
`
`prejudice should be rejected because the only remedy HumanEyes seeks in this action is
`
`damages, the sole (and wholly unsupported) instance of alleged harm to its “licensing and
`
`partnership efforts” occurred before the filing of the complaint, and HumanEyes elected to delay
`
`pursuing any potential damages remedy by filing an ITC complaint. That choice prompted a stay
`
`of this action (automatic upon the request of either party) pending a final ITC determination,
`
`including all appeals. If not for Sony’s decision to discontinue the accused product features in
`
`new models, that stay would have lasted for years. Having itself triggered a stay of this action
`
`despite the supposed harm to its licensing efforts, HumanEyes cannot now legitimately argue
`
`that a similar delay resulting from a stay pending IPR would be unduly prejudicial.
`
`II.
`
`ARGUMENT
`
`A.
`
`A Stay Will Simplify the Issues and Conserve Valuable Resources
`
`HumanEyes identified the fourteen claims it contended Sony was infringing in its March
`
`28, 2012 ITC complaint and had the benefit of discovery about the accused Sony products in the
`
`ITC to decide whether to assert any additional claims. Yet, HumanEyes never notified Sony that
`
`it contended any other claims were infringed until its May 6, 2013 opposition to Sony’s stay
`
`motion. Notwithstanding that reactive identification of additional claims, and contrary to
`
`HumanEyes’ arguments, IPR will simplify issues in this action for both the previously asserted
`
`claims and the newly asserted claims, even if IPR is not instituted on all petitioned claims.
`
`1.
`
`Issues Will Be Simplified For the Claims Asserted In the ITC
`
`Sony’s pending IPR petitions address all claims asserted in the ITC. Op. at 1, 14. If
`
`HumanEyes continues to assert those claims in this action (which it does not deny), the outcome
`
`of IPR, whether favorable or unfavorable, will simplify the issues. See Sony Br. at 8-10.
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`HumanEyes misses the point when it dismisses as “optimistic” and “speculation[]” the
`
`likelihood of the PTO cancelling all of the claims challenged in Sony’s IPR petitions. Op. at 13.
`
`All claims need not be cancelled for the Court to find that lPR will simplify the issues, although
`
`that is certainly one possible outcome (in 42% of PTO proceedings, according to HumanEyes)
`
`favoring a stay. Neste Oil Oyj v. Dynamic Fuels, LLC, No. l2-662-GMS, 2013 WL 424754, at
`
`*4 (D. Del. Jan. 31, 2013) (“[T]here remains the possibility that, rather than ruling in [the
`
`patentee’s] favor, the PTO will cancel all the claims before it.”). HumanEyes has made no
`
`showing that the petitioned claims are unlikely to be cancelled in view of the prior art cited in
`
`Sony’s petitions. See Sony Br. at 4-5; Tanase Decl. (D.I. 31), Ex. B at 16-43, Ex. C at 16-52.
`
`The issues will be simplified by IPR even if only some of the petitioned claims are
`
`cancelled or amended, and even if all claims survive intact. If any claims are cancelled, there
`
`will be fewer claims to try. If any claims are amended, there will be fewer claims to try because
`
`the doctrine of intervening rights will preclude assertion of amended claims against past activity
`
`and, as HumanEyes notes, Sony has decided to discontinue the accused product features. Op. at
`
`5, 11. If any claims survive intact, Sony will be precluded from raising certain prior art defenses,
`
`streamlining validity issues for trial. Sony Br. at 8-10. HumanEyes fails to address these points,
`
`and its assertion that certain invalidity defenses not addressed in IPR will remain does not justify
`
`denial of a stay. See Neste, 2013 WL 424754, at *4, 6 (finding that a stay was favored because
`
`of “the potential exists for reexamination to significantly narrow the issues before the court,”
`
`despite the plaintiffs arguments that reexamination would not “fully resolve the dispute”).
`
`2.
`
`Issues Will Be Simplified Despite HumanEyes’ Reactive Assertion of
`Claims That Were Not Asserted in the ITC
`
`All of the additional claims that HumanEyes now states that it may assert were never
`
`previously identified to Sony — not when the ITC and district court complaints were filed, not
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`during ITC fact discovery (which lasted 4.5 months, not 7 months as HumanEyes contends (Op.
`
`at 1)), not when proposed constructions were exchanged in the ITC, and not when the stay in this
`
`action was lifted and HumanEyes amended its complaint in February. D.l. 27. Sony had no
`
`obligation or reason to include in its IPR petitions claims that HumanEyes had never before
`
`asserted. HumanEyes cannot accuse Sony of dilatory tactics — or credibly argue that fact
`
`discovery is “complete” (Op. at 1, 12) and the case ready to “proceed to expert discovery and
`
`trial” (Op. at 12) — when thirteen months after filing its complaint it is adding claims. Sony
`
`intends to submit IPR petitions for these newly asserted claims, and to seek joinder with its
`
`previously-filed IPR petitions. Thus, IPR will simplify the issues notwithstanding HumanEyes’
`
`assertion of additional claims.
`
`3.
`
`Issues Will Be Simplified Even If IPRS Are
`Not Instituted For All the Asserted Claims
`
`Even if Sony’s IPR petitions are granted for fewer than all asserted claims, a stay would
`
`still simplify the issues. A stay pending review of related claims allows the parties and the Court
`
`to “benefit from a narrowing of the numerous complex issues relating to claims, which, if clearly
`
`defined would streamline discovery and subsequent litigation.” Alloc, Inc. v. Unilin Decor N V.,
`
`No. 03-253-GMS, 2003 WL 21640372, at *2 (D. Del. July 11, 2003) (staying case even though
`
`only the parent of the patent-in-suit was under reexamination).
`
`The benefits cited in Alloc are even more likely to accrue here in view of the rights
`
`afforded in IPR. The parties will be able to conduct discovery, within limits, making it more
`
`likely that “discovery issues relating to prior art may be alleviated.” Id.; see also 35 U.S.C. §
`
`3l6(a)(5) (addressing the scope of discovery, including depositions, during IPR). The Patent
`
`Trial and Appeal Board (“PTAB”) will issue a decision even faster than in reexamination
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`proceedings, thereby encouraging “settlement without further involvement of the court.” Alloc,
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`2003 WL 21640372, at *2; Sony Br. 2. HumanEyes fails to address these benefits. Sony Br. at 8.
`
`A stay pending IPR will also ensure that this Court has the benefit during claim
`
`construction of the scrutiny afforded to the patents and the prior art by three Administrative
`
`Patent Judges specializing in such matters. 35 USC. §§ 6, 316(c). Even HumanEyes cannot
`
`deny that IPR will generate additional intrinsic evidence that will need to be considered during
`
`claim construction. See Sony Br. at 9-10.
`
`B.
`
`A Stay Is Favored Given the Early Stage of Litigation, and the Significant
`Amount of Work That Still Remains to Be Done In This Action
`
`HumanEyes distorts the stage of this litigation and fails to show why a stay should be
`
`denied Where, as here, the court has expended little or no resources addressing potentially invalid
`
`claims. Ever Win Int ’l Corp. v. Radioshack Corp., -- F. Supp. 2d --, 2012 WL 4801890, at *5
`
`(D. Del. Oct. 9, 2012). The precedent cited by HumanEyes does not contradict this, and merely
`
`states the inverse—namely, that a stay may be denied where a court has expended resources
`
`addressing the claims. See Op. at 10 (citing Imagevision. net Inc. v. Internet Payment Exchange
`
`Inc., No. 12-054-GMS-MPT, D.l. 65 at 10, n. 8 (D. Del. Apr. 22, 2013) (evaluating stay after
`
`scheduling order and court conference addressing significant discovery issues)).2
`
`HumanEyes does not address the lack of expended judicial resources. Instead, it
`
`incorrectly argues that this action is not in the early stages because the parties completed “all
`
`2 The decisions from other districts cited by HumanEyes likewise merely confirm that stays may
`be denied in cases where, unlike here, a court has expended resources by entering scheduling
`orders, overseeing discovery disputes, or conducting Markman hearings. Op. at 9, n. 5 (citing
`Tuiti0nFund, LLC v. Suntrust Banks, Inc., No. 3:11-00069, 2012 U.S. Dist. LEXIS 144408
`(M.D. Tenn. Oct. 5, 2012); Interwoven, Inc. v. Vertical Cop. Sys., No. 10-04645 RS, 2012 U.S.
`Dist. LEXIS 30946 (N.D. Cal. Mar. 8, 2012); LG Electronics U.S.A. v. Whirlpool Corp, No. 09-
`5142 (GEB-ES), 2011 U.S. Dist. LEXIS 11488 (D.N.J. Feb. 4, 201 1); Alps South, LLC v. Ohio
`Willow Wood Co., No. 8:09—cv-00386-T-EAK—MAP, 2010 U.S. Dist. LEXIS 144260 (M.D. Fla.
`June 16, 2010); Ultra Prods, Inc. v. Antec, Inc., No. 09-04255 RS, 2010 U.S. Dist. LEXIS
`50096 (N.D. Cal. Apr. 26, 2010)).
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`necessary liability fact discovery” and “most of the preliminary Markman tasks” based on
`
`activity in the ITC. Op. at 10-13. HumanEyes is wrong on all counts.
`
`HumanEyes ignores the fact that additional activity will be required as a result of its
`
`assertion of additional claims (e.g., further contentions, claim construction, and possibly
`
`additional discovery). Separate and apart from the new claims, substantial fact discovery must
`
`still occur in this action beyond that taken in the ITC, as well as expert discovery, and briefing
`
`claim construction and summary judgment motions. Moreover, liability fact discovery was not
`
`completed in the ITC as HumanEyes contends.3 See Op. at 10-12. When HumanEyes decided to
`
`terminate the ITC action, both parties cancelled depositions of Sony and third-party witnesses.
`
`Several discovery issues had yet to be resolved, including HumanEyes’ deficient responses to
`
`Sony’s requests for email production.
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`Thus, despite the ITC activity, HumanEyes cannot credibly dispute that a “significant
`
`amount of work remains to be done,” which militates in favor of a stay. Textron Innovations Inc.
`
`v. Tom Co., No. 05-486 (GMS), 2007 WL 7772169, at *2 (D. Del. Apr. 25, 2007). This work
`
`includes completing liability fact discovery and resolving discovery disputes, conducting
`
`damages discovery, updating contentions, preparing expert reports, conducting expert discovery,
`
`and briefing claim construction positions and summary judgment motions. Therefore, this case
`
`is not yet ready for trial as HumanEyes contends. Op. at 12.
`
`C.
`
`Staying This Action Will Not Unduly Prejudice HumanEyes
`
`As set forth in Sony’s Opening Brief, HumanEyes’ contention that it will be unduly
`
`prejudiced by a stay should be rejected because HumanEyes seeks only a damages award and
`
`3 HumanEyes’ references to the amount of discovery in the ITC action (e.g., “the parties have
`produced over 550,000 pages of documents,” “propounded and responded to over 700 written
`discovery requests” and “deposed 22 witnesses”) includes substantial discovery related to ITC-
`specific issues such as domestic industry that are not at issue in this action. See Op. at 4, 10.
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`any delay in collecting damages can be redressed by prejudgment interest. Sony Br. at 13.
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`HumanEyes has not provided any reason for this Court to find otherwise.4
`
`1.
`
`HumanEyes Demonstrated Its Willingness to Accept a Stay In This
`Action and to Defer Damages By Filing an ITC Complaint
`
`HumanEyes voluntarily delayed pursuing a damages award in this action when it filed its
`
`ITC complaint, thereby triggering an automatic stay of this action (which would have continued
`
`until the conclusion of all appeals). See 28 U.S.C. § l659(a); In re Princo Corp, 486 F.3d 1345,
`
`1369 (Fed. Cir. 2007). The target date for HumanEyes’ ITC Investigation was September 3,
`
`2013, and given the virtual certainty of an appeal to the Federal Circuit, that stay would have
`
`continued until late 2014 or early 2015. If not for Sony’s decision to discontinue the accused
`
`features, this action would still be stayed today.5 Therefore, HumanEyes cannot legitimately
`
`claim that it is unduly prejudiced by any delay resulting from a stay given its demonstrated
`
`willingness to put its pursuit of damages on hold for years by filing its ITC complaint.
`
`2.
`
`HumanEyes Has Not Identified Any Tactical Disadvantage Arising
`From the Timing of Sony’s IPR Petitions or Stay Motion
`
`HumanEyes argues that Sony should have filed its IPR petitions before March 29, 2013,
`
`and closer to the August 29, 2012 date that Sony served preliminary invalidity contentions in the
`
`ITC. Op. at 5, 16, and 17. The IPR procedure, however, was not even available until September
`
`16, 2012. Once IPR became an option, Sony diligently prepared its petitions in accordance with
`
`the IPR requirements, which differ from the lTC’s invalidity contention requirements. See 37
`
`C.F.R. §§ 42.24(a)(1)(i), 42.6(a), 42.104; 19 C.F.R. § 210.29. This activity—including
`
`4 The cases that HumanEyes cites in a footnote, without any discussion, with respect to this
`factor do not address IPR (or its short duration) and include distinguishable facts such as parties
`that were competitors or a stay motion that was filed after an intervening negative case event.
`Op. at 9, n.5 (collecting cases).
`5 HumanEyes itself waited three month after receiving Sony’s notice of intent to discontinue the
`accused features to terminate the ITC investigation, and another month after termination of the
`ITC investigation to move lift the stay in this action. D.I. 12.
`7
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`analyzing prior art and supporting documents, interviewing witnesses (including non-party
`
`foreign witnesses not deposed during the ITC action), and preparing and filing the petitions
`
`(which addressed additional prior art, declarations from foreign witnesses and documents not
`
`included in the ITC contentions (Tanase Decl. (D.I. 31), Ex. B at 43-46; D.I. 31, EX. C at 52-
`
`55))—occurred at a time when this action was stayed (through January 8, 2013) or had not
`
`progressed beyond the early pleading stage. See D.I. 16.6
`
`HumanEyes nevertheless asks this Court to infer that Sony is seeking an “inappropriate
`
`tactical advantage” because Sony’s IPR petitions allegedly were “made well after the onset of
`
`litigation.” Op. at 15 (emphasis in the original) (quoting .S'en0Rx, Inc. v. Hologic, Inc, No. 12-
`
`173-LPS—CJB, 2013 U.S. Dist. LEXIS 8044, at *23 (D. Del. Jan. 11, 2013)). Nowhere does
`
`HumanEyes describe what supposed “inappropriate tactical advantage” Sony has allegedly
`
`gained by the timing of its IPR petitions and stay motion, or, in View of the lack of activity in this
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`action, how the parties’ positions would be any different now if Sony had filed them earlier. Op.
`
`at 15.7 Moreover, the cases HumanEyes cites do not support its position. Rather, they hold that
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`a case should be stayed because there is no inappropriate tactical advantage when, as here, stay
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`requests do “not come on the heels of any negative case event.” SenoRx, 2013 U.S. Dist. LEXIS
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`8044, at *23; Round Rock Research LLC v. HanesBrands Inc. , No. l 1-1241 —RGA, 2012 U.S.
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`Dist. LEXIS 49106, at *6 (D. Del. Apr. 6, 2012) (staying action and finding “little tactical
`
`6 With respect to timing, HumanEyes inaccurately states that a decision on institution of IPR
`will not be made until October 3, 2013. Op. at 12. A patentee can accelerate that process by up
`to three months if it either waives its preliminary response or files early, but that has not been
`done yet in the 1.5-month period that has elapsed since Sony filed its IPR petitions. 37 C.F.R. §
`42. 1 07(b) . Moreover, the PTAB often takes less time than the allotted three months after receipt
`of a patent owner’s response to institute IPR. See, e. g., IPR2013—00010, IPR20l3—00036
`IPR2013—000l4, IPR20l 3—O0065 (instituting review one to two months before deadline).
`7 HumanEyes’ argument about the financial burden of litigation (Op. at 18-19; Levy-Ron Decl. ll
`10) makes no sense. If anything, a stay here will ease the burden on both parties (and the
`administrative burden on the Court) by ensuring that resources are not unnecessarily expended in
`parallel with IPR proceedings that could moot much or all of this action.
`8
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`RLFI 8624126v.1
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`

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`Case 1:12-cv-00398-GMS Document 38 Filed 05/16/13 Page 13 of 15 PageID #: 1373
`Case 1:12—cv—OO398—GMS Document 38 Filed 05/16/13 Page 13 of 15 Page|D #: 1373
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`disadvantage to [plaintiff] since [the action] is in its earliest stages”); cf Belden Techs. Inc. v.
`
`Superior Essex Comm ’n LP, No. 08—cv-63-SLR, 2010 U.S. Dist. LEXIS 90960, at *8 (D. Del.
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`Sep. 2, 2010) (denying stay request after an unfavorable summary judgment ruling).
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`3.
`
`HumanEyes Has Not Shown That It Cannot Be
`Adequately Compensated by Monetary Damages
`
`HumanEyes admits that the parties here are “not direct competitors,” and cannot deny
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`that it seeks only monetary relief in this action. Op. at 19. In a suit for money damages, like this
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`one, “a stay does not unduly prejudice [a patentee] in that it does not compete with [the accused
`
`infringer] for sales.” Textron, 2007 WL 7772169, at *3; see also Ever Win, 2012 WL 4801890,
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`at *7 (holding that this factor favors a stay where “there is no real evidence that the parties
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`compete in the same market”). The only Delaware authority cited by HumanEyes for this factor
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`confirms that lack of direct competition favors a stay. See Op. 17-18 (citing Belden, 2010 U.S.
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`Dist. LEXIS 90960, at * 12).
`
`HumanEyes argues that a stay should be denied here because alleged “prolonged
`
`uncertainty” and “ongoing infringement” has affected its licensing opportunities, citing only
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`unsupported attorney argument, speculation by its CEO, and hearsay as to why third parties (who
`
`were never deposed) allegedly decided not to do business with HumanEyes. Op. at 17-19. Even
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`if there were evidence to support these assertions (there is not), denial of a stay would not be
`
`warranted because any alleged interference with HumanEyes’ licensing opportunities can be
`
`adequately compensated by monetary damages. See Adair V. Boat Dock Innovations, LLC, No.
`
`1:12-cv-1930-SCJ, 2013 WL 1859200, at *3 (ND. Ga. Feb. 27, 2013) (finding no undue
`
`prejudice because plaintiff can “recoup the full extent of any monetary damages suffered,
`
`including any damages resulting from Defendants’ actions during the pendency of the stay”).
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`RLF1 8624l26v.l
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`

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`In addition, HumanEyes cannot credibly complain about any “uncertainty” surrounding
`
`its patents and Sony’s alleged “ongoing infringement” in view of HumanEyes’ decision last fall
`
`to terminate the ITC investigation instead of pressing forward with the January 28, 2013 ITC
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`hearing, which would have resulted in an Initial Determination by May 3, 2013.
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`Moreover, undue prejudice cannot be predicated on the alleged harm to HumanEyes’
`
`licensing efforts because that very same alleged harm existed back when HumanEyes filed its
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`ITC complaint. Both HumanEyes’ opposition and the ITC complaint include verbatim the
`
`allegation that “Sony’s infringement was the explicit reason given by at least one potential
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`licensee for ending promising negotiations with HumanEyes and is believed to have negatively
`
`affected negotiations with other potential licensees as well.” Compare Op. at 18 with Tanase
`
`Decl. (D.I. 31), Exhibit E, ll 62. Having elected to file an ITC complaint (thereby deferring
`
`damages) despite that alleged harm, HumanEyes cannot now claim undue prejudice resulting
`
`from a stay pending IPR, or credibly argue that it cannot be adequately compensated by future
`
`money damages if any of its claims survive IPR.
`
`V.
`
`CONCLUSION
`
`For the foregoing reasons, Sony respectfully requests that the Court grant its motion and
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`stay this action pending the outcome of Sony’s IPR petitions.
`
`OF COUNSEL:
`John Flock
`Walter Hanley
`Michelle Carniaux
`Sheila Mortazavi
`Iuliana Tanase
`KENYON & KENYON LLP
`One Broadway
`New York, New York 10004-1050
`(212) 425-7200
`
`Dated: May 16, 2013
`
`/s/ Elizabeth R. He
`Chad M. Shandler (#3796)
`Elizabeth R. He (#5345)
`RICHARDS, LAYTON & FINGER, P.A.
`One Rodney Square
`920 N. King Street
`Wilmington, DE 19801
`(302) 651-7700
`Shandler@rlf.com
`
`Attorneysfor Defendants
`
`RLF1 8624126v.1
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`10
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`

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`Case 1:12-cv-00398-GMS Document 38 Filed 05/16/13 Page 15 of 15 PageID #: 1375
`Case 1:12—cv—OO398—GMS Document 38 Filed 05/16/13 Page 15 of 15 Page|D #: 1375
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`CERTIFICATE OF SERVICE
`
`I hereby certify that on May 16, 2013, I caused to be filed the foregoing document with
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`the Clerk of Court using CM/ECF, which will send notification of such filing to counsel of
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`record, and served true and correct copies of the foregoing on the following counsel as indicated:
`
`BY ELECTRONIC MAIL
`
`Steven J. Balick
`
`Andrew Colin Mayo
`Tiffany Geyer Lydon
`Ashby & Geddes
`500 Delaware Avenue, 8th Floor
`P.O. Box 1 150
`
`Wilmington, DE 19899
`sbalick@ashby—geddes.corn
`amayo@ashby-geddescom
`tlydon@ashby—geddes.com
`
`Matthew D. Powers
`
`Steven S. Cherensky
`Paul T. Ehrlich
`
`Stefani C. Smith
`
`Robert L. Gerrity
`TENSEGRITY LAW GROUP LLP
`
`555 Twin Dolphin Drive, Suite 360
`Redwood Shores, CA 94065
`matthewpowers@tensegritylawgroup.com
`Steven.cherensky@tensegritylawgroup.corn
`paul.ehrlich@tensegrity1awgroup.com
`stefani.smith@tensegritylawgroup.corn
`robert.gerrity@tensegritylawgroup.com
`
`/s/ Elizabeth R. He
`
`Elizabeth R. He (#5345)
`he@rlf.com
`
`RLFI 8624126v.1
`
`11