Case 1:14-cv-01445-LPS Document 334 Filed 01/27/17 Page 1 of 7 PageID #: 18576
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`YODLEE, INC.,
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`Plaintiff,
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`v.
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`PLAID TECHNOLOGIES INC.,
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`Defendant.
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`Civil Action No. 14-1445-LPS-CJB
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`MEMORANDUM ORDER
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`At Wilmington this 27th day of January, 2017: ·
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`Pending before the Court is Defendant Plaid Technologies, Inc.'s ("Plaid") objection (D.I.
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`317) under Federal llule of Civil Procedure ("Rule(s)") 72(a) to United States Magistrate Judge
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`Christopher J. Burke's order (D.I. 312 (the "Order")) on Plaid's motion to stay this matter (D.I.
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`151). For the reasons given helm~', ITIS HEREBY ORDERED that Plaid's objection is
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`OVERRULED, and IT IS FURTHER ORDERED that its renewed motion to stay ~ee D.I.
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`318) is GRANTED.
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`1.
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`This is a patent infringement case. Plaintiff Y odlee, Inc. ("Y odlee") alleges that
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`Plaid infringes U.S. Pat~nt Nos. 6,199,077 (the '"077 patent"), 6,317,783 (the "'783 patent"),
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`· 6,510,451 (the '"451 patent"), 7,263,548 (the '"548 patent"), 7,424,520 (the "'520 patent''),
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`7,752,535 (the '"535 patent"), and 8,266,515 (the '"515 patent").
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`2.
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`Plaid first filed a motion to stay in May 2015, seeking a halt to proceedings
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`·pending resolution of its motion to dismiss. (D.I. 30) Judge Burke denied the motion in July
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`2015. (D.I. 51) Plaid later pursued Inter Partes Review (IPR) and Covered Business Method
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`1
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`Case 1:14-cv-01445-LPS Document 334 Filed 01/27/17 Page 2 of 7 PageID #: 18577
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`(CBM) challenges at the U.S. Patent and Trademark Office (PTO) involving all seven patents· in
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`suit. The Patent Trial & Appeal Board (PTAB) eventually instituted IPR proceedings as to the
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`'783 patent (see D.I. 207-2 at 101-143of143) and CBM review as to the '451, '535, and '515
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`patents (see D.I. 256-1, 318-1, 318-2). The PTAB declined to institute IPR and/or CBM review
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`with respect to the '077, '548, and '520 patents.
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`4.
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`In the meantime, Plaid again moved for a stay of this litigation pending resolution
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`· ofboth its motion to dismiss and the PTO proceedings. (D.I. 151) In his detailed Order,1 Judge
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`Burke granted the motion as to the '451 patent but denied it as to the other six patents in suit.
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`(D.I. 312)
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`5.
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`Under Rule 72, "[w]hen a pretrial matter not dispositive of a party's claim or
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`defense is referred to a magistrate judge to hear and decide," and a party objects to the resulting
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`order, the district judge must "modify or set aside any part of the order that is clearly erroneous
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`or is contrary to law." Fed. R. Civ. P. 72(a). Plaidtimely filed its objection under Rule 72 to
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`Judge Burke's Order. (See D.I. 317)
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`6.
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`By separate order entered on this date, the Court has now resolved all of Plaid's
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`§ 101 patent eligibility challenges in this case. An updated version of the chart appearing in
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`Judge Burke's Order (see D.I. 312 at 4) follows:
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`1 As a preliminary matter, the motion to stay was properly before and resolved by Judge
`Burke under the Court's referral order. (See D.I. 323 at 3 n.1 (Yodlee's correct interpretation of
`the Court's referral order))
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`2
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`Case 1:14-cv-01445-LPS Document 334 Filed 01/27/17 Page 3 of 7 PageID #: 18578
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`Asserted Patent
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`Number of
`Asserted
`Claims
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`PTAB Action
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`Current Status
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`'077
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`'783
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`'451
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`'548
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`'520
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`~1-
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`'535
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`'515
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`8
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`7
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`1
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`2
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`1
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`1
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`1
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`Denied IPR and CBM petitions; All PT AB challenges
`denied request for rehearing.
`exhausted; Court has
`also denied eligibility
`challenges.
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`Instituted IPR as to all claims;
`denied CBM petition.
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`Instituted CBM review.
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`Denied CBM petition.
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`Denied CBM petition.
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`Instituted CBM review.
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`Instituted CBM review.
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`Pending IPR ruling;
`Court has denied
`eligibility challenges.
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`Pending CBM ruling;
`Court has granted
`motion to dismiss.
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`All PT AB challenges
`exhausted; Court has
`denied eligibility
`challenge with
`respect to one
`asserted claim and_
`granted m:otion to
`dismiss as to the
`other.
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`All PT AB challenges
`exhausted; Court has
`also denied eligibility
`challenges.
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`Pending CBM ruling;
`Court has denied
`eligibility challenges.
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`Pending CBM ruling;
`Court has denied
`eligibility challenges.
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`7.
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`Whether to stay litigation (including whether to stay pending resolution of PTO
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`proceedings) is a matter left to the Court's discretion. See Ethicon, Inc. v. Quigg, 849 F .2d 1422,
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`1426-27 (Fed. Cir.1998). "This Court has typically considered three factors when deciding a
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`3
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`Case 1:14-cv-01445-LPS Document 334 Filed 01/27/17 Page 4 of 7 PageID #: 18579
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`motion to stay: (1) whether granting the stay will simplify the issues for trial; (2) the status of the
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`litigation, particularly whether discovery is complete and a trial date has been set; and (3)
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`whether a stay would cause the non-movant to suffer undue prejudice from any delay, or allow
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`the movant to gain a clear tactical advantage." FMC Corp. v. Summit Agro USA, LLC, 2014 WL
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`3703629, at *2 (D. Del. July 21, 2014); see also Walker Digital, LLC v. Google, Inc., 2014 WL
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`2880474, at *1 (D. Del. June 24, 2014) (applying similar test for whether to stay litigation
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`pending CBM review). A movant' s failure to articulate a clear hardship or inequity that it would
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`suffer in the absence of a stay also weighs against such relief. See Cooper Notification, Inc. v.
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`Twitter, Inc., 2010 WL 5149351, at *2 (D. Del. Dec. 13, 2010). As in Judge Burke's Order, the
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`Court will analyze Plaid's motion on a patent-by-patent basis.
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`8.
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`'077 patent. Judge Burke declined to order a stay as to this patent based on the
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`PTAB's denial of Plaid's petitions and because his Report and Recommendation on Plaid's
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`motion to dismiss (D.I. 185 ("R&_R")) did not find any of the '077 patent's asserted claims to be
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`unpatentable. Plaid contends that Judge Burke erred in referring to recommendations in the
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`R&R, because the R&R had not issued when Plaid filed its motion to stay. (See D.l. 317 at 3)
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`Judge Burke's Order is not "clearly erroneous." Fed. R. Civ. P. 72(a). See also VirtualAgility
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`Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1317 (Fed. Cir. 2014) ("Generally, the time of the
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`motion is the relevant time to measure the stage of litigation." (emphasis added)); id. at 1317 n. 6
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`("[T]he district court may consider evidence that develops after the date of the stay motion.");
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`Murata Mach. USA v. Daifuku Co., 830 F.3d 1357, 1361 (Fed. Cir. 2016) ("The ability to stay
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`cases is an exercise of a court's inherent power to manage its own docket."). The Court agrees
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`with Y odlee' s view that the Court need not "treat the record as frozen in time at the second the
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`4
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`Case 1:14-cv-01445-LPS Document 334 Filed 01/27/17 Page 5 of 7 PageID #: 18580
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`opening brief in the motion to stay is filed," nor is the Court "prohibited from considering
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`anything that occurred in the litigation afterwards." (D.I. 323 at 4) Moreover, the Court has now
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`denied Plaid's Rule 12 and Rule 56 patentability motions as to the '077 patent. The Court
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`therefore OVERRULES Plaid's objedions as to the '077 patent, and upholds the Order's denial
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`of Plaid's motion to stay with respect to that patent.
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`9.
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`'548 and '520 patents. For similar reasons, the Court OVERRULES Plaid's
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`objections as to the '548 and '520 patents, and upholds the Order's denial of Plaid's. motion to
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`stay with respect to those patents. The Court has denied Plaintiffs Rule 12(b)(6) and Rule 56
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`motions with respect to the patentability of one asserted claim of the '548 patent and the sole
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`asserted claim of the '520 patent.
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`10.
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`'451 patent. Judge Burke granted Plaid's motion to stay with regard to the '451
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`patent, based on the PT AB' s institution decision and his recommendation that the lone asserted
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`claim be dismissed as unpatentable. (See R&R at 33-44) Because the Court has now adopted the
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`R&R' s recommendation and granted Plaid's motion to dismiss as to the '451 patent, the Court
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`\
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`now VACATES Judge Burke's Order (D.L 312) with respect to the '451 patent and DENIES
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`AS MOOT Plaid's motion to stay as to that patent.
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`11.
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`'783 patent. Judge Burke conducted a detailed analysis under the familiar three-
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`factor test outlined above with respect to Plaid's motion as to the '783 patent. The Court will
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`now address these factors in tum:
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`(a)
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`Simplification of Issues. Judge Burke reasoned that "the total overlap
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`between the claims at issue in this case and those at issue in the IPR ... surely favors a stay."
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`(D.I. 312 at 9) .The Court agrees with Judge Burke and disagrees with Plaid's contention that
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`5
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`Case 1:14-cv-01445-LPS Document 334 Filed 01/27/17 Page 6 of 7 PageID #: 18581
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`Judge Burke's qualifications in his analysis were legally erroneous. (See D.I. 317 at 5)
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`(b)
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`Status of the Litigation. Judge Burke found that this factor disfavors a
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`stay, based on his assessment that, "[t]hough some significant work on the case was yet to occur,
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`by the time the Motion was filed, the Court and the parties had already put a significant amount
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`of time and effort into the matter." (D.I. 312 at 10) As explained above, the Court is
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`unpersuaded by Plaid's assertion that it is impermissible for the Court to consider events
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`occurring after the filing of a motion to stay. While not dispositive, it is also not irrelevant that
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`the litigation has advanced substantially since Plaid filed its motion and the parties are preparing
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`for a pretrial conference currently set for February 10, 2017.
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`(c)
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`Undue Prejudice. The Court does not find any of Judge Burke's analysis
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`with regard to the uridue prejudice subfactors to be clearly erroneous or contrary to law. Judge
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`Burke's conclusions that the timing of request and status of review subfactors weigh slightly
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`against a stay (see D.I. 312 at 11-15) are well-articulated and supported by the record. The same
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`is true of his conclusion that the "relationship of the parties" subfactor weighs against a stay.
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`(See D.I. 312 at 15-18)
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`In sum, the Court OVERRULES Plaid's objections as to the '783 patent and upholds the
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`Order's denial of Plaid's motion to stay as it relates to that patent.
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`12.
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`'535 and '515 patents. At the time Judge Burke issued his Order, the PTAB had
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`not yet rendered an institution decision with respect to Plaid's CBM petitions as to the '535 and
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`'515 patents. Judge Burke properly denied without prejudice Plaid's motion to stay with respect
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`to these two patents. (See D.I. 312 at 6-7) When the PTAB instituted CBM review last month,
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`Plaid renewed its motion to stay (see D.I. 318), and the Court now assesses this renewed request.
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`6
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`Case 1:14-cv-01445-LPS Document 334 Filed 01/27/17 Page 7 of 7 PageID #: 18582
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`As with the '783 patent, proceedings with respect to which the C~urt has decided not to stay, the
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`'535 and '515 patents are the subject of an instituted PTAB proceeding, and the Court has denied
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`Plaid's Rule 12 and Rule 56 subject matter eligibility challenges with respect to all three of these
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`patents. Plaid waited even longer to file the '535 and '515 CBM petitions than it did to file the
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`'783 IPR petition, and the '535 and '515 patents account for only two asserted claims, as
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`compared to the '783 patent's seven. But unlike with respect to the '783 patent, the Court's
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`analysis here is governed by § 18(b) of the Leahy-Smith America Invents Act ("AIA"), which
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`adds a fourth factor to the test used above: "whether a stay, or the denial thereof, will reduce the
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`burden oflitigation oti the parties and on the court." AIA § 18(b)(l)(D). As Judge Burke noted
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`in his order, a number of courts have concluded that this fourth factor was adopted "in order 'to
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`place a thumb on the scale in favor of granting stays."' (D.I. 312 at 5 (quoting Hewlett-Packard
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`Co. v. ServiceNow, Inc., 2015 WL 1737920, at *2 (N.D. Cal. Apr. 9, 2015)) See also Trading
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`Techs. Int'!, Inc. v. BCG Partners, Inc., 186 F. Supp. 3d 870, 873 (N.D. Ill. 2016), affd sub nom.
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`Trading Techs. Int'!, Inc. v. Rosenthal Collins Grp., LLC, _ F. App'x _, 2016 WL 5899197
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`(Fed. Cir. Oct. 11, 2016); Mkt.-Alerts Pty. Ltd. v. Bloomberg Fin. L.P., 922 F. Supp. 2d 486, 496
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`(D. Del. 2013) ('~It appears the intent of this provision was to ensure that district courts would
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`grant stays pending CBM review proceedings at a higher rate than they have allowed stays
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`pending ex parte reexaminations."). "Placing a thumb on the scale" in favor of granting a stay
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`alters the balance, and the Court therefore GRANTS Yodlee's motion to stay as to the '535 and
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`'515 patents.
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`HON. L ONARD P. ST
`UNITED STATES DIST
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`7
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