Case 1:17-cv-00585-JFB-SRF Document 121 Filed 07/27/18 Page 1 of 16 PageID #: 4178
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`Case 1:17-cv-00585—JFB-SRF Document 121 Filed 07/27/18 Page 1 of 16 PageID #: 4178
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`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`CA. No. l7-585-JFB-SRF
`REDACTED
`
`PUBLIC VERSION
`
`) )
`
`) )
`
`)
`)
`
`))
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`)
`
`UNIVERSAL SECURE REGISTRY LLC,
`
`Plaintiff,
`
`V.
`
`APPLE INC, VISA INC, and VISA U.S.A., INC,
`
`Defendants.
`
`DEFENDANT APPLE INC.’S REPLY BRIEF IN SUPPORT OF ITS MOTION TO STAY
`PENDING INTER PAR TES AND COVERED BUSINESS METHOD REVIEWS
`
`OF COUNSEL:
`
`Mark D. Selwyn
`Liv L. Herriot
`WILMER CUTLER PICKERING HALE
`AND DORR LLP
`950 Page Mill Road
`Palo Alto, CA 94304
`
`Frederick L. Cottrell, III (#2555)
`Jason J. Rawnsley (#5379)
`RICHARDS, LAYTON & FINGER, PA.
`920 North King Street
`Wilmington, DE 19801
`(302) 65 {-7700
`cottrell@rlf.com
`rawnsley@rlf.com
`
`(650) 85 8-6000
`
`Attorneys for Defindanr Apple Inc.
`
`Monica Gi‘ewal
`Kate Saxton
`WILMER CUTLER PICKERING HALE
`
`AND DORR LLP
`60 State Street
`
`Boston, MA 02109
`
`(202) 663-6000
`
`Derek A. Gosma
`WILMER CUTLER PICKERING HALE
`AND DORR LLP
`
`350 South Grand Avenue, Suite 2100
`
`Los Angeles, CA 9007]
`(213) 443-5300
`
`DATED: July 20, 2018
`
`

`

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`TABLE OF CONTENTS
`
`TABLE OF AUTHORITIES .......................................................................................................... ii
`
`I.
`
`ll.
`
`Introduction .......................................................................................................................... 1
`
`Argument ............................................................................................................................. 2
`
`A.
`
`B.
`
`C.
`
`A Stay Will Resolve the Case or, at a Minimum, Simplify the Issues. ................... 2
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`The Early Stage ofthe Case Favors a Stay Pending IPR and CBM Review ........... 6
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`USR Will Not Be Unduly Prejudiced by 21 Stay. ..................................................... 8
`
`111.
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`Conclusion ......................................................................................................................... 10
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`TABLE OF AUTHORITIES
`
`Page(s)
`
`Federal Cases
`
`454 Life Scis. Corp. v. [on Torrent Sys., Inc,
`No. 15-595-LPS, 2016 WL 6594083 (D.Del.Nov. 7,2016) ................................................4, 6
`
`Advanced Microscopy Inc. v. Carl Zeiss Microscopy, LLC,
`N0. 15-516-LPS-CJB, 2016 WL 558615 (D. Del. Feb. 11, 2016) ............................................ 3
`
`AIP Acquisition LLC 1). Level 3 Commc ’ns, LLC,
`No. 12-617-GMS, 2014 WL 12642000 (D. Del. Jan. 9, 2014) ................................................. 5
`
`AT&T Intellectual Prop. 1, LP. 12. Cox Comma ’ns, Inc,
`No. 14-1106-GMS (D. Del. Sept. 24,2015) .............................................................................. 4
`
`Disk Nen'vork Corp. v. Customedio Techs., Inc,
`Nos. CBM2017-00019, CBM2017-00032, 2018 WL 2084934 (P.T.A.B. May
`2, 2018) ...................................................................................................................................... 3
`
`[win Indus. Tool Co. 12. Milwaukee Eiec. Toolr Corp,
`No. 15-30005, 2016 WL 1735330 (D. Mass. Apr. 28, 2016) .................................................. 10
`
`Larson Archery Co. v. Mathews, Inc,
`No.11-126, 2013 WL 139472 (D. Utah 12131.10, 2013) ............................................................ 9
`
`Market-Alerts Pty. Ltd. v. Bioomberg Fin. L.P.,
`922 F. Supp. 2d 486 (D. Del. 2013) ........................................................................................... 9
`
`Neste Oil OYJ v. Dynamic Fuels, LLC,
`N0. 12-1744-GMS, 2013 WL 3353984 (D. De]. July 2, 2013) ................................................. 4
`
`Nichia Corp. v. VIZIO, Inc,
`No. 16-00545, 2017 WL 3485767 (CD. Cal. Feb. 2, 2017) ..................................................... 9
`
`Nicnia Corp. v. VIZIO, Inc,
`No. 18-00362 (CD. Cal. May 21, 2018) ................................................................................... 3
`
`Nu Vasive, Inc. v. Neurovision Med. Prods., Inc,
`No. 15-286-LPS—CJB, 2015 WL 3918866 (D. Del. June 23, 2015) .......................................... 7
`
`Princeton Digital Image Corp. v. Konami Digital Enim 7 Inc,
`No. 12-1461-LPS-CJB, 2014 WL 3819458 (D. Del. Jan. 15,2014) ..................................... 6, 9
`
`Quest Licensing Corp. v. Biooniberg L.P.,
`No. 14-561-GMS, 2014 US. Dist. LEXIS 196995 (D. Del. Dec. 3,2014) .............................. 6
`
`ii
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`

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`Safe Storage LLC V. Dell Inc,
`No. l2-1624~GMS, 2015 WL 13123362 (D. Del. Jan. 22, 2015) ............................................. 6
`
`SAS Institute, Inc. v. Iancu,
`138 S.Ct. 1348 (2018) ........................................................................................................... 1,3
`
`Toshiba Samszmg Storage Tech. Korea Corp. 12. LG Elecs., Inc,
`No. 15~691-LPS-CJB, 2015 WL 7824098 (D. Del. Dec. 3, 2015) ............................................ 3
`
`Verosea! LLC v. Costco Wholesale Corp,
`No. 17—00713 (ED. Tex. May 17, 2018) ................................................................................... 9
`
`VirtualAgilz'tj/ Inc. v. Salesforceeom, Inc,
`759 F.3d 1307 (Fed. Cir. 2014) ............................................................................................ 9,10
`
`Federal Statutes
`
`35 U.S.C. § 314(1)) ......................................................................................................................... 10
`
`35 U.S.C.§316(a)(11) ................................................................................................................... 10
`
`35 U.S.C. § 324(0) ......................................................................................................................... 10
`
`35 U.S.C. § 326(a)(11) ................................................................................................................... 10
`
`Regulations
`
`37 CPR. § 42.107(b) .................................................................................................................... 10
`
`37 C.F.R. §42.207(b) .................................................................................................................... 10
`
`iii
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`

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`Defendant Apple lnc. (“Apple”) respectfully submits this reply brief in further support of
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`its motion to stay this litigation pending resolution of its petitions for inter partes review (“lPR”)
`
`and covered business method review (“CBM”) filed on April 3, 4, and 12 and May 3, 2018.
`
`I.
`
`Introduction
`
`Apple’s opening brief demonstrated that this case should be stayed pending resolution of
`
`Apple’s petitions for [PR and CBM review. Nothing in Universal Secure Registry’s (“USR”)
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`Opposition (“Opp") calls that conclusion into question.
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`A stay will resolve the ease or, at a minimum, simplify it. First, iprple’s IPR and CBM
`
`petitions are successful, a stay would avoid needless litigation. Second, USR does not dispute
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`that the US. Patent and Trademark Office (“PTO”)’s review of Apple’s petitions will simplify
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`the issues for trial even if claims are neither amended nor canceled. Third, contrary to USR’s
`
`arguments, the case-simplifying benefits ofa stay are not speculative.
`
`In addition to statistics
`
`demonstrating that a significant majority of petitions for post~grant review are granted by the
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`PTO, one of the patents-in—suit is already subject to an instituted IPR filed by Unified Patents,
`
`Inc. (“Unified Patents”), and USR has filed no Patent Owner preliminary response to Apple’s
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`iPR petitions challenging another; it is thus highly likely that at least two of the patents-in-suit
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`will be subject to PTO review proceedings.
`
`In addition, USR has already disciaimed three patent
`
`claims in its Patent Owner preliminary response to Apple’s CBM petition for the ’ i 37 patent.
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`Furthermore, the Supreme Court’s recent decision in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348,
`
`1354 (2018), eliminates any speculation regarding which claims the PTO will review if Apple’s
`
`petitions are instituted—and USR does not dispute that Apple’s petitions challenge all claims
`
`that USR is likely to assert from the four asseited patents.
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`The early stage ofthis case strongly favors a stay. USR concedes that the majority of
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`work for the Court and the parties in this case lies ahead. Opp. at 16. Contrary to USR’S
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`
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`arguments, however, the portion scheduled to occur before the PTO’s institution decisions—
`
`including document production, infringement and invalidity contentions, and preparation for
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`claim construction proceedings—is not insubstantial. And much of that work risks duplication to
`
`the extent that USR’s statements to the PTO and/or amendment of claims—in the Unified
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`Patents IPR proceeding (where USR is currently seeking to amend claims) as wet] as in PTO
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`review of Apple’s petitions—add to the prosccution history of the asserted patents. Moreover, if
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`USR is granted leave to amend its complaint to assert three new patents, the addition of those
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`patents will necessitate delay, such that the relative impact on the case schedule of staying the
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`case now would be minimal in the event that review of Apple’s petitions is not instituted.
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`USR would not be unduly prejudiced by a stay. USR does not attempt to argue that any
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`of the standard factors considered by this Court supports a finding of undue prejudice. Although
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`long delay in filing suit and delays in moving to amend—belie its purported desire to expedite.
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`II.
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`Argument
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`USR’s brief confirms that the facts, and all factors courts consider when evaluating
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`whether to stay pending {PR or CBM review by the PTO weigh in favor of an immediate stay.
`
`A.
`
`A Stay Will Resolve the Case or, at a Minimum, Simplify the Issues.
`
`USR concedes that “[i]fthc [Patent Trial and Appeal] Board institutes review, there will
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`be at least some simplification ofthe issues for trial in many cases, even if claims are not
`
`ultimately canceled or amended.” Opp. at 8. USR also appears to concede (or at least does not
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`dispute) that Apple’s lPR and CBM petitions cover all claims it is likely to assert from the four
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`currently asserted patents. Therefore, in light ofthe Supreme Court’s ruling in SAS that the PTO
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`must address every patent claim challenged by the petitioner in an instituted review proceeding
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`

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`under the America Invents Act, this simplification ofthe issues will likely apply to all asserted
`
`claims. See SAS, 138 S. Ct. at 1354 (the PTO’S final written decision “must address every claim
`
`the petitioner has challenged” in an instituted {PR (emphasis in original»; Dish Network Corp. v.
`
`Customedi'a Techs, Inc, Nos. CBM2017-00019, CBM2017-00032, 2018 WL 2084934, at *I
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`(P.T.A.B. May 2, 20} 8) (Court’s reasoning in SAS applies equally to CBM review); see also Ex.
`
`1 (attached hereto), Nickie Corp. v. VIZIO, Inc, No. 18—00362 (CD. Cal. May 21, 2018) (13.1.
`
`49, 5) (granting stay where three of five pending lPR petitions had yet to be instituted, noting
`
`with the “new all-or-nothing approach to institution decisions, there’s no concern about the
`
`PTAB picking and choosing certain claims or certain invalidity grounds from each petition”).l
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`Contrary to USR’s arguments, it is not mere speculation that Apple’s pending IPR and
`
`CBM petitions will simplify the issues for trial. Indeed, USR already disclaimed three claims of
`
`the ’137 patent in its Patent Owner preliminary response. Declaration of Mark D. Selwyn
`
`(“Selwyn Reply Dec1.”), Exs. AHB. Furthermore, as explained in Apple’s Opening Brief, the
`
`PTO has instituted approximately 67.4% of post-AIA IPR, CBM, and post—grant review
`
`petitions.2 And at least some claims were canceled in approximately 81% of the instituted
`
`' After SAS, the PTO’s institution decision is not necessary to ascertain which claims will be
`subject to review and evaluate the potential case simplifying benefits. Cf Advanced Microscopy
`Inc. v. Carl Zeiss Microscopy, LLC, No. lS-Sl6-LPS-CJB, 2016 WL 558615, at *2 (D. Del. Feb.
`1 1, 2016) (explaining if PTO institutes review, “the Court can examine the grounds upon which
`review has been granted (including which ofthe claims ofthe patent-in-suit would be the subject
`ofthat review)” and determine the effect the “decision could have on simplifying this case”);
`Toshiba Samsurrg Storage Tech. Korea Corp. 12. LG Elena, Inc, No. 15—691—LPS-CJB, 2015 WL
`7824098, at *2 (D. De]. Dec. 3, 2015) (same). However, to the extent the Court agrees with
`USR that knowing what patent claims will be in dispute would facilitate the Court‘s ruling on the
`motion to stay, there is a simpler and less costly solution—USR could identify the claims it
`intends to assert without providing the accompanying claim charts or requiring Defendants to
`expend costly efforts on invalidity contentions.
`2 See Declaration ofMark D. Selwyn (“Selwyn Dec1.”) (D1. 92), Ex. Q at 7 (as of April 2018,
`4,465 petitions instituted out of 6,625 decisions, excluding rehearing requests); id. at 8 (68% of
`electrical/computer patent and 69% of mechanical/business method patent petitions instituted).
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`petitions reaching a final written decision.3 USR fails to explain why it characterizes these PTO-
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`reported statistics as “cherry-picked” (Opp. at l l)-«—the statistics plainly demonstrate that the
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`PTO is significantly more likely than not to institute petitions for post-«grant proceedings, and
`
`that instituted petitions overwhelmingly result in claim cancellations.
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`Furthermore, USR did not file any Patent Owner preliminary responses for the ’826 lPRs.
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`Selwyn Reply Decl., 1i 3. Accordingly, those IPRs are likely to be instituted on all challenged
`
`claims. Given that the PTO has already instituted the Unified Patents ’81 3 IPR, this means at a
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`minimum half of USR’s asserted patents will likely be the subject of instituted IPR proceedings.
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`And the PTO is likely to cancel at least some—if not all—of the claims chailenged therein. See,
`
`e.g., Neste Oil OYJ v. Dynamic Fuels, LLC, No. 12-1744-GMS, 2013 WL 3353984, at *4, 4 n.5
`
`(D. De]. July 2, 2013) (institution implies “reasonable likelihood that the petitioner [will] prevail
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`with respect to at least [one] of the claims challenged in the petition” (alterations in original».
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`That the PTO’s institution decisions identify “which claims the Board believed did not
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`meet the standard for review” (Opp. at 13) does not change this analysis because, as USR
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`concedes elsewhere in its brief, even if claims are not ultimately canceled or amended, the issues
`
`for trial are likely to be simplified.4 Opp. at 8. See also, e.g., 454' Life Scis. Corp. v. [on Torrent
`
`Sys.,1nc,, No. 15-595-LPS, 2016 WL 6594083, at *3 (D. Del. Nov. 7, 2016) (“[T]he fact that
`
`Defendants will be estopped .
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`.
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`. and the creation of additional prosecution history .
`
`.
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`. will
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`simplify the issues left to be litigated in this case.” (citations omitted»; D.l. 91, Ex. i,AT&T
`
`Intellectual Prop. 1, LP. 12. Cox Comme’ns, Inc, No. 14-1 lO6-GMS (D. Del. Sept. 24, 20l5)
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`(DJ. 161, 3 n4) (IPR “may affect not only validity ofthe asserted claims, but also their scope”).
`
`3See id. at 11.
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`4 Moreover, in its institution decision for the Unified Patents ’8 l 3 IPR, the PTO identified only 2
`ofthe 25 claims as claims that did not meet the standard for review. Selwyn Reply Decl., Ex. E.
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`In the event that Apple is incorrect and despite (l) the institution statistics, (2) the PTO’s
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`institution ofthe Unified Patents ’813 lPR, and (3) USR’s failure to file a preliminary response
`
`for the ’826 lPRs, the PTO does not institute review on Apple’s {PR and CBM petitions, little
`
`time will have been lost in discovery.
`
`In under four months the parties wili know whether all
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`patentsin—suit will be subject to review: the institution decision on two patents will issue by early
`
`October, and on a third patent by mid-November.
`
`In its focus on December 12, USR neglects to
`
`inform the Court that the only institution decisions that may issue in December are for the ’813
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`patent, for which the PT0 has already instituted review of Unified Patents’ petition.
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`USR’s conduct before the PTO on the Unified Patents ”813 lPR confirms that a stay
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`would simplify the case. On June 20, the PTO issued an order permitting USR to submit a
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`motion on August lO—the same day USR’s infringement contentions are currently due in this
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`litigation—to amend the claims ofthe ’813 patent. Selwyn Reply Decl., Ex. F; D.i. 57,1l 2b. if
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`the PTO grants USR’s motion to amend, USR will need to redo its infringement contentions,
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`Apple and Visa will need to redo their invalidity contentions, and the Court may need to redecide
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`claim construction issues.5 A stay would prevent this needless waste ofjudicial resources and
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`unnecessary expenditure of funds by the parties. See, e.g., ALP Acquisition LLC 12. Level 3
`
`Commc’ns, LLC, N0. l2~6l7-GMS, 2014 WL 12642000, at *2 n.5 (D. Del. Jan. 9, 2014)
`
`(granting stay and noting that without a stay “the PTO’s final decision will likely issue after the
`
`scheduled Markman hearing .
`
`.
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`. but before trial .
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`.
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`. thereby nuiiifying the court’s Markman
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`efforts in the ‘reasonably likeiy’ event the claims are amended or canceled”).
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`5 USR’s final submissions in the Unified Patents lPR proceeding with respect to Unified Patents”
`[PR and USR’s motion to amend are due on November 27, 20i 8, over a month after Defendants”
`invalidity contentions are due and several weeks after the parties are to exchange proposed
`constructions in this case. Selwyn Reply Deci, Ex. F; D]. 57, il‘li 2.b., 9. The PTO’s decision on
`the Unified Patents ”813 lPR is expected by May 2019, two months after the Markman hearing.
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`

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`Contrary to USR’s arguments, even if estoppel appiies only to Apple, the invalidity
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`issues left for this Court to decide will be reduced, the overali case simplified, and the burden on
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`the Court and the parties reduced. See, cg, Safe Storage LLC 12. Dell Inc, No. [2-1624~GMS,
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`2015 WL 13123362, at *1 n.4 (D. De]. Jan. 22, 2015) (granting stay and finding estoppel effect
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`ofIPR would simplify litigation even though it would not apply to all defendants); Princeton
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`DigitalY Image Corp. v. Konami Digital.r Entm ’2‘ Inc, No. 12—1461—LPS—CJB, 2014 WL 3819458,
`
`at *2 (D. Del. Jan. 15, 2014) (same); Quest Licensing Corp. v. Bloomberg LR, No. 14-561-
`
`GMS, 2014 U.S. Dist. LEXIS 196995, at *4 n.2 (D. Dei. Dec. 3, 2014) (granting stay pending
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`CBM review because it wili lessen the burden of litigation and there is no requirement the court
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`impose estoppel on the nonmoving defendants or consider the lack of stipulated estoppel).
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`Finally, if Apple’s petitions result in canceilation of all OfUSR’s asserted claims-eonce
`
`identified—a stay will obviate the need to proceed with this iitigation (including the need to
`
`address the pending motion to dismiss and motion to transfer). See, e.g., 454 L19??? Scis, 2016
`
`WL 6594083, at >“3 (ifthe PTAB invalidates ail challenged claims, “the litigation would be
`
`‘simplified’ because it wouid be concluded” (internal quotation marks omitted)).
`
`The first factorwsimplification of the case—and the fourth statutory factor of AIA
`
`§ 18(b)(1)—reducing the burden oflitigation—weigh heavily in favor ofa stay.
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`B.
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`The Early Stage of the Case Favors 3 Stay Pending IPR and CBM Review.
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`Contrary to USR’s arguments, the early stage ofthe case clearly favors a stay. Although
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`USR flied this case on May 21, 2017, and encouraged this Court to hold a Scheduling
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`Conference in April 2018 notwithstanding the pendency ofDefendants’ motions to dismiss and
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`transfer, USR has still not produced a single document.
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`In response to Defendants” document
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`requests, USR failed to indicate when it would produce any documents (even though Rule 34
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`requires the responding party specify a “reasonable time” by which it wili complete production).
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`Furthermore, no depositions have been noticed, and no contentions have been exchanged.
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`Unlike in NuVasive, Inc. v. Neurovz'sz’on Medical Products, Inc, No. 15-286-LPS-CJB,
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`2015 WL 3918866 (D. Del. June 23, 2015), where the institution decision was expected to
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`“come well before the parties will have engaged in time~consuming and costly discovery and
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`claim construction-related activity in this case,” id. at *2, substantial work will occur in this case
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`before the institution decisions. USR has not yet served its infringement contentions or—more
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`than a year into this litigation—even identified the claims it will assert. Defendants will incur
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`substantial costs preparing and serving invalidity contentions in October. Moreover, Defendants
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`will likely have to incur these costs a second time for the ’813 patentmwhich USR has already
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`notified the PTO it intends to amend—wand any other patents USR may seek to amend.
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`With respect to claim construction, the parties will spend substantial effort identifying the
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`key claim terms, the proposed constructions, and all evidence in support of those constructions.
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`This work will also likely need to be reconsidered and revised in light ofUSR’s statements to the
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`PTO during the {PR and CBM proceedings, especially USR’s statements in connection with its
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`proposed claim amendments for the 1813 patent or any of the other asserted patents.
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`Furthermore, USR has stated that it will not move to amend its complaint until US.
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`Patent Application No. 14/814,740 issues. Selwyn Reply Dec1., Ex. G. Any delay in the
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`issuance ofthis patent is due to USR’s own actions—the PTO mailed the Notice ofAllowance
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`on April 5, 2018, but USR failed to pay the issue fee until June 26, almost three months after the
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`Notice of Aliowance was mailed and 11 days after Apple moved to stay. 1621, Exs. Hwi. Due to
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`USR’s delay in paying the issue fee, this patent will likely not issue until late August or
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`September 2018. 101,11 8.
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`USR’S delay in seeking to amend confirms the early stage ofthe case. Because these
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`patents are not yet in the case, no discovery has occurred with respect to these patents. Indeed,
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`USR initiaily took the position in its responses to Apple’s requests for production of documents
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`that it would not produce any documents relating to these patents. Selwyn Reply Deci, Ex. I.
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`ifthe Court allows USR to add three new patents, USR will need to prepare and serve
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`additional infringement contentions and Defendants will need to prepare and serve additional
`
`invalidity contentions. Only after that work occurs will the parties be able to identify and
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`exchange claim terms and proposed constructions from these new patents. See Opp. at 17
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`(conceding this in the context of the asserted patents). Furthermore, because the new patents are
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`related to the ’539 and ’826 patents, there will iikely be overlapping claim construction issues
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`such that it would be most efficient for the Court to construe terms from all seven patents at the
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`same time. Accordingly, USR’s motion to amend, if allowed, is likely to require pushing out
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`dates in the scheduling order. Therefore, granting Apple’s Motion to Stay will likely have a
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`minimal effect on the schedule if in fact review is not instituted on all of Apple’s petitions.6
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`Finally, contrary to USR’s statements, the Asserted Patents are not all asserted against the
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`same products. For example, Mac and iTunes/iBooks/App Store products are only accused for
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`two ofthe four asserted patents. See Selwyn Decl., DJ. 92, Ex. S. Accordingly, in addition to
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`the significant economies associated with invalidity contentions and claim construction, a stay is
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`likely to yield significant discovery economies even if some claims survive review by the PTO.
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`This factor strongly favors a stay—the majority of the work lies ahead (as USR
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`acknowledges), and a not insubstantial portion ofthat will occur prior to the institution decisions.
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`C.
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`USR Will Not Be Unduly Prejudiced by 21 Stay.
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`USR appears to concede that the principal factors courts consider when evaluating undue
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`5 As noted abOVe, the PTO has aiready instituted review of the Unified Patents ”813 IPR, and
`institution decisions on the other three patents are expected prior to USR’s deadline to amend.
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`Case 1:17-cv-00585-JFB-SRF Document 121 Filed 07/27/18 Page 13 of 16 PageID #: 4190
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`Case 1:17-cv-00585—JFB-SRF Document 121 Filed 07/27/18 Page 13 of 16 PageID #: 4190
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`prejudice—~“(1) the timing ofthe request for review; (2) the timing ofthe request for stay; (3) the
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`status of the review proceeding; and (4) the reiationship of the parties”—favor a stay because
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`USR does not address them. Princeton Digital, 2014 WL 3819458, at *4; Market-Alerts Pry.
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`Ltd. v. Bloomberg Fin. LP, 922 F. Supp. 2d 486, 494 (D. Del. 2013); Opp. at 18—20.
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`Instead, USR’S sole prejudice argument is that—
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`_, .1... does
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`undue prejudice. See, e.g., Nichia Corp. v. VIZIO, Inc, No. 16410545, 2017 WL 3485767, at *7
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`(CD. Cal. Feb. 2, 2017) (finding undue prejudice factor to weigh in favor of stay and granting
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`0......—
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`—1;Lm
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`Archery Co. v. Mathews, Inc, No. 11-126, 2013 WL 139472, at *2 (D. Utah Ian. 10, 2013)-
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`— VirtualAgiliw Inc. v. Salesforcecom, 1776., 759 F.3d
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`1307, 1319 (Fed. Cir. 2014);7 see also EX. 2 (attached hereto), Veraseal LLC v. Costco
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`Wholesale Corp, No. 17-00713 (13.15. Tex. May 17, 2018) (D1. 41, 2)—
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`7 While USR is correct that VirtualA 171‘! arose
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`Case 1:17-cv-00585—JFB-SRF Document 121 Filed 07/27/18 Page 14 of 16 PageID #: 4191
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`
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`—, USR waited more than three years to file suit.8 USR
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`then waited over six weeks after filing its Complaint to serve Defendants. Di. l, 645. See Irwin
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`Indus. Tool Co. v. Milwaukee Elec. Tool Corp, No. 15-30005, 2016 WL 1735330, at *5 (D.
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`Mass. Apr. 28, 2016) (“[Plaintiff] waited more than three months from filing its complaint .
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`.
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`.
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`before serving Defendant. This delay demonstrates some lack ofurgency in the prosecution of
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`this case and tends to undermine [Plaintiff s] claim ofundue prejudice”). USR chose to file in a
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`busy/jurisdiction and opposed transfer to a faster jurisdiction, the Northern District of California.
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`USR also refuses to move to amend until all three patents issue, inexplicably delayed nearly
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`three months paying the issuance fee for the third patent, and initially refused to agree to produce
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`documents related to the patents it seeks to add to the case. As a result, if USR is successful in
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`adding patents to the case, thenwunless the case is stayed or the case schedule amended—the
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`parties will likely be engaging in claim construction on the current asserted patents while they
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`are preparing and exchanging contentions for the newly asserted related patents. USR’S actions
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`are not the actions of a party concerned about case speed. This factor favors a stay.
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`III.
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`Conclusion
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`For the reasons set forth above and in Apple’s Opening Brief, Apple respectfully requests
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`that the Court stay this action pending final resolution oprple’s lPR and CBM petitions.
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`8 USR alleges that Apple’s allegedly infringing Apple Pay service was “publicly launched” on
`September 9, 2014 (D1. 1,11 36), more than ten months after the grant ofthe ”813 patent (D1. 1,
`Ex. A) and less than one month prior to the grant ofthe ’539 patent (D1. 1, EX. B). (The other
`two asserted patents issued in August 2015 and December 2016. Di. 1, Exs. C, D. Accordingly,
`USR could have asserted three ofthe four patents-in-suit almost two years earlier than it did.)
`Despite that, USR waited more than three and a halfyears tofile suit against Apple. Any
`delay resulting from a stay will be outweighed by USR’s own delay in bringing this suit as the
`PTO is expected to complete its review of Apple’s petitions within the next 16 months. See 35
`U.S.C. §§ 314(b), 316(a)(1 l), 324(c), 326(a)(1l); 37 C.F.R. §§ 42.107(b), 42.20703); see also
`VirruaIAgI‘lity, 759 F.3d at 1319 (plaintiff‘s waiting nearly a year after the asserted patent issued
`to file suit “weigh[s] against [Plaintiff’s] claims that it will be unduly prejudiced by a stay”).
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`Case 1:17-cv-00585-JFB-SRF Document 121 Filed 07/27/18 Page 15 of 16 PageID #: 4192
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`Case 1:17-cv-00585-JFB-SRF Document 121 Filed 07/27/18 Page 15 of 16 PageID #: 4192
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`/3/ Jason J. Rawnsiey
`Frederick L. Cottreli, III (#2555)
`Jason J. Rawnsley (#5379)
`RICHARDS, LAYTON & FINGER, P.A.
`920 North King Street
`Wilmington, DE 19801
`(302) 6514700
`oottrell@rlf.com
`rawnsley@rif.com
`
`Attorneys for Defendant Apple Inc.
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`OF COUNSEL:
`
`Mark D. Seiwyn
`Liv L. Herriot
`WILMER CUTLER PICKERING HALE
`AND DORR LLP
`950 Page Mill Road
`Palo Alto, CA 94304
`(650) 85845000
`
`Monica Grewal
`Kate Saxton
`WILMER CUTLER PICKERING HALE
`AND DORR LLP
`60 State Street
`
`Boston, MA 02109
`(202) 663-6000
`
`Derek A. Gosma
`WILMER CUTLER PECKERING HALE
`AND DORR LLP
`
`350 South Grand Avenue, Suite 2100
`
`Los Angeles, CA 90071
`(213) 443-5300
`
`DATED: July 20, 2018
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`
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`

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`Case 1:17-cv-00585-JFB-SRF Document 121 Filed 07/27/18 Page 16 of 16 PageID #: 4193
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`Case 1:17-cv-00585—JFB-SRF Document 121 Filed 07/27/18 Page 16 of 16 PageID #: 4193
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`CERTIFICATE OF SERVICE
`
`I HEREBY CERTIFY that on July 20, 2018,
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`I caused true and correct copies of the
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`foregoing to be served upon the following counsel via electronic mail:
`
`Jack B. Blumenfeld
`
`Sean Pak
`
`Jeremy A. Tigan
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`1201 North Market Street
`PO. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@mnat.com
`jtigan@mnat.com
`
`Brian E. Mack
`QUINN EMANUEL URQUHART &
`SULLIVAN, LLP
`50 California Street, 22nd Floor
`San Francisco, CA 94111
`(415) 875-6600
`qe-usr-team@quinnernanuelcom
`
`Harold Barza
`
`Tigran Guledjian
`Valerie Roddy
`Richard H. Doss
`Jordan Kaericher
`Nima Hefazi
`
`QUINN EMANUEL URQUHART & SULLEVAN, LLP
`865 South Figueroa Street, 10th Floor
`Los Angeies, CA 90017
`(213) 443-3000
`qe-usr-team@quinnemanuel.com
`
`
`
`
`
`
`
`
`/s/Jason J. Rawnsley
`
`Jason J. Rawnsley (#5379)
`rawnsley@rlf.com
`
`