Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 1 of 26 PageID #: 1381
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`C.A. No. 17-585-JFB-SRF
`
`
`
`
`
`
`
`)))))))))
`
`UNIVERSAL SECURE REGISTRY LLC,
`
`
`
`
`
`APPLE INC., VISA INC., and VISA U.S.A., INC.,
`
`
`
`
`
`
`v.
`
`
`
`
`
`
`
`Plaintiff,
`
`Defendants.
`
`DEFENDANT APPLE INC.’S OPENING BRIEF IN SUPPORT OF ITS MOTION TO
`STAY PENDING INTER PARTES AND COVERED BUSINESS METHOD REVIEWS
`
`Frederick L. Cottrell, III (#2555)
`Jason J. Rawnsley (#5379)
`RICHARDS, LAYTON & FINGER, P.A.
`920 North King Street
`Wilmington, DE 19801
`(302) 651-7700
`cottrell@rlf.com
`rawnsley@rlf.com
`
`Attorneys for Defendant Apple Inc.
`
`
`
`
`OF COUNSEL:
`
`Mark D. Selwyn
`Liv L. Herriot
`WILMER CUTLER PICKERING HALE
`AND DORR LLP
`950 Page Mill Road
`Palo Alto, CA 94304
`(650) 858-6000
`
`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 PICKERING HALE
`AND DORR LLP
`350 South Grand Avenue, Suite 2100
`Los Angeles, CA 90071
`(213) 443-5300
`
`DATED: June 15, 2018
`
`
`
`
`
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 2 of 26 PageID #: 1382
`
`
`TABLE OF CONTENTS
`
`Nature and Stage of the Proceedings ...................................................................................1 
`Summary of Argument ........................................................................................................1 
`Statement of Facts ................................................................................................................3 
`A.
`The current litigation is in its infancy ......................................................................3 
`B.
`The parties ................................................................................................................3 
`C.
`Pending IPR and CBM petitions ..............................................................................4 
`Argument .............................................................................................................................5 
`A.
`A stay will resolve the case or, at a minimum, simplify the issues and reduce
`the burden of litigation .............................................................................................6 
`1.
`Apple’s IPRs and CBM petitions are likely to resolve this case .................7 
`2.
`At a minimum, the IPRs and CBM reviews will simplify and streamline
`the case, reducing the burden of litigation on the parties and the Court ......9 
`The early stage of this case favors staying it pending IPR and CBM review ........13 
`USR will not be unduly prejudiced by a stay ........................................................14 
`1.
`The timing of Apple’s IPR and CBM petitions favors a stay ....................14 
`2.
`The timing of this motion favors a stay, and staying would not be
`premature ...................................................................................................15 
`The relationship between Defendants and USR favors a stay ...................17 
`3.
`USR’s actions show it will not be prejudiced by a stay .............................19 
`4.
`Conclusion .........................................................................................................................20 
`
`B.
`C.
`
`
`
`I.
`II.
`III.
`
`IV.
`
`V.
`
`
`
`
`i
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 3 of 26 PageID #: 1383
`
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Federal Cases
`
`454 Life Scis. Corp. v. Ion Torrent Sys., Inc.,
`No. 15-cv-159-LPS, 2016 WL 6594083 (D. Del. Nov. 7, 2016) ...............................5, 8, 13, 15
`
`AIP Acquisition LLC v. Level 3 Commc’ns, LLC,
`No. 12-cv-617-GMS, 2014 WL 12642000 (D. Del. Jan. 9, 2014) ............................................9
`
`AT&T Intellectual Prop. I L.P. v. Cox Commc’ns, Inc.,
`No. 14-cv-1106-GMS (D. Del. Sept. 24, 2015) .................................................................10, 17
`
`Aylus Networks, Inc. v. Apple Inc.,
`856 F.3d 1353 (Fed. Cir. 2017)................................................................................................11
`
`Bonutti Skeletal Innovations, L.L.C. v. Zimmer Holdings, Inc.,
`No. 12-cv-1107-GMS, 2014 WL 1369721 (D. Del. Apr. 7, 2014) ...................................15, 18
`
`Canatello LLC v. AXIS Commc’ns, Inc.,
`No. 13-cv-1227-GMS, 2014 U.S. Dist. LEXIS 161801 (D. Del. May 14,
`2014) ........................................................................................................................................10
`
`Chrimar Sys. Inc. v. Ruckus Wireless, Inc.,
`No. 16-cv-00186-SI, 2016 WL 5403595 (N.D. Cal. Sept. 26, 2016) ........................................9
`
`Dish Network Corp. v. Customedia Techs., Inc.,
`Nos. CBM2017-00019, CBM2017-00032, 2018 WL 2084934 (P.T.A.B. May
`2, 2018) ............................................................................................................................6, 8, 10
`
`GT Nexus, Inc. v. Inttra, Inc.,
`No. 11-cv-02145-SBA, 2014 WL 3373088 (N.D. Cal. July 9, 2014) .......................................9
`
`IMS Health Inc. v. Symphony Health Sols. Corp.,
`No. 13-cv-2071-GMS (D. Del. May 29, 2015)........................................................................14
`
`In-Depth Test, LLC v. Maxim Integrated Prods., Inc.,
`No. 14-cv-887-GMS (D. Del. Sept. 3, 2015) ...........................................................................17
`
`Intellectual Ventures II LLC v. U.S. Bancorp,
`No. 13-2071, 2014 WL 5369386 (D. Minn. Aug. 7, 2014) ...............................................10, 11
`
`Market-Alerts Pty. Ltd. v. Bloomberg Finance L.P.,
`922 F. Supp. 2d 486 (D. Del. 2013) ................................................................................. passim
`
`Message Notification Techs. LLC v. Microsoft Corp.,
`No. 13-cv-1881-GMS, 2015 U.S. Dist. LEXIS 30626 (D. Del. Feb. 23, 2015) ..........12, 17, 18
`
`ii
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 4 of 26 PageID #: 1384
`
`
`Neste Oil OYJ v. Dynamic Fuels, LLC,
`No. 12-cv-1744-GMS, 2013 WL 3353984 (D. Del. July 2, 2013) .................................. passim
`
`Princeton Digital Image Corp. v. Konami Digital Entm’t Inc.,
`No. 12-cv-1461-LPS-CJB, 2014 WL 3819458 (D. Del. Jan. 15, 2014) ................12, 13, 14, 17
`
`Quest Licensing Corp. v. Bloomberg L.P.,
`No. 14-cv-561-GMS, 2014 U.S. Dist. LEXIS 196995 (D. Del. Dec. 3, 2014) .......................17
`
`Safe Storage LLC v. Dell Inc.,
`No. 12-cv-1624-GMS, 2015 WL 13123362 (D. Del. Jan. 22, 2015) ......................................12
`
`SAS Institute, Inc. v. Iancu,
`138 S. Ct. 1348 (2018) ..................................................................................................... passim
`
`Toshiba Samsung Storage Tech. Korea Corp. v. LG Elecs., Inc.,
`193 F. Supp. 3d 345 (D. Del. 2016) ...................................................................................13, 18
`
`Versata Software, Inc. v. Callidus Software, Inc.,
`771 F.3d 1368 (Fed. Cir. 2014), vacated as moot on other grounds, 780 F.3d
`1134 (Fed. Cir. 2015) ...............................................................................................................13
`
`VirtualAgility, Inc. v. Salesforce.com, Inc.,
`759 F.3d 1307 (Fed. Cir. 2014)........................................................................................ passim
`
`Wi-LAN, Inc. v. LG Elecs., Inc.,
`No. 3:17-cv-00358-BEN-MDD, 2018 WL 2392161 (S.D. Cal. May 22, 2018) ...............10, 16
`
`Federal Statutes
`
`35 U.S.C. § 314(b) .....................................................................................................................4, 19
`
`35 U.S.C. § 315(b) ...................................................................................................................14, 15
`
`35 U.S.C. § 315(e)(2) .....................................................................................................................12
`
`35 U.S.C. § 316(a)(11) ...........................................................................................................4, 5, 19
`
`35 U.S.C. § 324(c) .....................................................................................................................4, 19
`
`35 U.S.C. § 326(a)(11) ...............................................................................................................5, 19
`
`Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 18, 125 Stat. 284, 329–
`31 (2011) ..............................................................................................................................6, 12
`
`Regulations
`
`37 C.F.R. § 42.107(b) ....................................................................................................................19
`
`iii
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 5 of 26 PageID #: 1385
`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 5 of 26 PageID #: 1385
`
`
`37 C.F.R. § 42.207(b) ....................................................................................................................19
`37 CPR. § 42.207(b) .................................................................................................................... 19
`
`
`
`
`
`
`
`
`
`iv
`iV
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 6 of 26 PageID #: 1386
`
`
`Defendant Apple Inc. (“Apple”) respectfully moves to stay this litigation pending
`
`resolution of its petitions for inter partes review (“IPR”) and covered business method review
`
`(“CBM”) filed on April 3, 4, and 12 and May 3, 2018.
`
`I.
`
`Nature and Stage of the Proceedings
`
`
`
`Plaintiff Universal Secure Registry, LLC (“USR”) accuses Apple, Visa Inc., and Visa
`
`U.S.A., Inc. (collectively “Visa,” and together with Apple, “Defendants”) of infringing four
`
`patents: U.S. Patent Nos. 8,577,813 (“’813 patent”), 8,856,539 (“’539 patent”), 9,100,826
`
`(“’826 patent”), and 9,530,137 (“’137 patent”) (collectively, “patents-in-suit”). D.I. 1, Exs. A–
`
`D. USR filed its Complaint on May 21, 2017 (D.I. 1) and served the Complaint on Apple on
`
`July 5, 2017 (D.I. 8). Although filed over a year ago, the case is still in its early stages. Apple
`
`and Visa moved to dismiss for failure to state a claim on August 25, 2017 (D.I. 16) and moved to
`
`transfer to the U.S. District Court for the Northern District of California on September 19, 2017
`
`(D.I. 21). Both motions are pending. The Court held a Rule 16 conference on April 3, 2018, and
`
`entered its Scheduling Order on April 11, 2018. D.I. 57. The parties have exchanged initial
`
`disclosures and preliminary discovery requests (D.I. 59–61, 67–71, 74, 78, 85–88), Defendants’
`
`initial document production will occur on June 18 (D.I. 57, Scheduling Order, ¶ 2.b.), and USR
`
`has not yet produced any documents. USR has neither identified the specific claims of the
`
`patents-in-suit that it accuses Apple and/or Visa of infringing nor served infringement
`
`contentions, which are due August 10, 2018 (D.I. 57, ¶ 2.b.). The Court’s claim construction
`
`hearing is over eight months away—March 6, 2019 (D.I. 57, ¶ 9.vii.), and trial is over two years
`
`away—July 20, 2020 (D.I. 57, ¶ 15).
`
`II.
`
`Summary of Argument
`
`The facts weigh strongly in favor of an immediate stay pending inter partes review and
`
`covered business method review because: (1) a stay until completion of the IPR and CBM
`
`1
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 7 of 26 PageID #: 1387
`
`
`proceedings will simplify—and potentially wholly eliminate—the issues for trial and reduce the
`
`burden of litigation on the parties and on the Court; (2) this case is in its early stages; and (3)
`
`USR will suffer no undue prejudice or tactical disadvantage from any delay.
`
`1.
`
`Apple’s IPR and CBM petitions request that the U.S. Patent and Trademark
`
`Office (the “PTO” or “Patent Office”) declare invalid the majority of the claims of the patents-
`
`in-suit (including all claims identified in the Complaint, all independent claims of the four
`
`patents-in-suit, and every claim of the ’539, ’813, and ’137 patents). Apple expects institution
`
`on these petitions in early October and early November 2018. Apple has brought this motion
`
`prior to institution of review based on two recent developments: (1) the Supreme Court’s ruling
`
`in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348, 1354 (2018), that the PTO must address every
`
`patent claim challenged by the petitioner in an instituted review proceeding under the America
`
`Invents Act, and (2) the PTO’s institution of Unified Patents, Inc.’s (“Unified Patents”) IPR
`
`challenging the ’813 patent. The PTO’s consideration of Apple’s and Unified Patents’ petitions,
`
`particularly in light of SAS, could potentially render this litigation entirely unnecessary if the
`
`claims USR asserts are ultimately determined to be invalid and, at a minimum, will simplify the
`
`case by providing guidance on claim scope and reduce the burden of litigation.
`
`2.
`
`This case is still in its early stages, with minimal discovery exchanged,
`
`infringement and invalidity contentions not yet exchanged, and trial scheduled for July 2020.
`
`The Court entered its Scheduling Order only two months ago. D.I. 57. Accordingly, staying the
`
`case will ensure that the parties and the Court do not expend valuable time and resources on
`
`patent claims that are likely to be ruled invalid. In particular, a stay would allow the Court and
`
`the parties to avoid spending resources on discovery, contentions, a Markman hearing, and trial
`
`to address claims that have at least a reasonable likelihood of being amended or canceled and
`
`2
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 8 of 26 PageID #: 1388
`
`
`obviate the need for the Court to decide at this time Defendants’ pending motion to dismiss and
`
`motion to transfer.
`
`3.
`
`USR will not suffer undue prejudice from any delay resulting from a stay. USR
`
`delayed years in bringing suit and has not sought a preliminary injunction—unsurprisingly, given
`
`that USR and Apple are not competitors.
`
`Accordingly, Apple respectfully requests that the Court stay this litigation pending
`
`resolution of Apple’s petitions for IPR and CBM review.
`
`III.
`
`Statement of Facts
`A.
`
`The current litigation is in its infancy
`
`USR filed its Complaint on May 21, 2017, more than four and a half years after the first
`
`of the patents-in-suit issued and, as alleged in the Complaint, more than three and a half years
`
`after Apple’s public announcement of its accused Apple Pay service. See D.I. 1, ¶¶ 25–28, 36.
`
`Although USR has not yet specified the claims of the patents-in-suit that it accuses Apple or Visa
`
`of infringing, its Complaint alleges infringement by Apple and Visa of four exemplary claims:
`
`claim 1 of the ’813 patent, claim 22 of the ’539 patent, claim 10 of the ’826 patent, and claim 12
`
`of the ’137 patent. D.I. 1, ¶¶ 43, 65, 84, 106. The exemplary claims are all included in Apple’s
`
`IPRs and CBMs. See Declaration of Mark D. Selwyn (“Selwyn Decl.”), Exs. B–L. USR has not
`
`moved for a preliminary injunction.
`
`Apple and Visa moved to dismiss USR’s Complaint on August 25, 2017, on the grounds
`
`that each patent-in-suit claims unpatentable subject matter under 35 U.S.C. § 101. D.I. 16.
`
`Apple and Visa moved to transfer on September 19, 2017. D.I. 21. Oral argument on both
`
`motions occurred on December 13, 2017. Both motions are pending.
`
`B.
`
`The parties
`
`USR and Apple are not competitors. USR licenses its technology to USR ID but does not
`
`3
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 9 of 26 PageID #: 1389
`
`
`appear to have its own products. See, e.g., Selwyn Decl., Ex. O (https://usrid.net/about/) (“USR
`
`ID creates identity authentication solutions based on mobile software technology developed by
`
`Universal Secure Registry LLC”)), Ex. P (https://universalsecureregistry.net/technology-2/)
`
`(describing USR’s technology); D.I. 1, ¶ 24 (describing “USR’s licensed ‘USR ID’
`
`application”). USR ID’s licensed product—which allows a user to “lock and unlock [a]
`
`computer based on the [mobile] phone’s proximity” (Selwyn Decl., Ex. O)—is also not in
`
`competition with Apple.
`
`C.
`
`Pending IPR and CBM petitions
`
`On May 2, 2018, the PTO instituted Unified Patents’ IPR on claim 1, which was
`
`identified as an exemplary claim in USR’s Complaint (D.I. 1, ¶ 43), and on claims 2–3 and 5–26
`
`of the ’813 patent. D.I. 77, Ex. A (decision on institution). A final decision on the merits of
`
`Unified Patents’ ’813 patent IPR is expected by May 2019. See 35 U.S.C. § 316(a)(11).
`
`Apple filed IPR and CBM petitions on all asserted patents on April 3, 4, and 12 and May
`
`3, 2018. Apple’s pending petitions request that the PTO invalidate every claim of the ’539, ’813,
`
`and ’137 patents on § 101 grounds and each exemplary claim of the patents-in-suit identified in
`
`USR’s Complaint and the majority of the other claims of the patents-in-suit on anticipation
`
`and/or obviousness grounds. Selwyn Decl., Exs. B–L (IPR and CBM petitions); see also id., Ex.
`
`A (chart setting forth claims included in each petition).1
`
`The PTO is expected to issue institution decisions for Apple’s IPR and CBM petitions in
`
`October and November 2018. See 35 U.S.C. §§ 314(b), 324(c). If the PTAB institutes, then a
`
`1 In total, Apple’s petitions challenge the majority of claims of the four patents-in-suit—
`including all independent claims, every claim of the ’539, ’813, and ’137 patents, and every
`claim of the ’826 patent that USR could conceivably assert. There is no conceivable argument
`that Apple’s products or services infringe the remaining claims of the ’826 patent. For example,
`claims 4 and 5 involve controlling access to a facility (D.I. 1, Ex. C), and USR could not fairly
`point to any aspect of the Apple products or services it has accused that meets this limitation.
`See Selwyn Decl., Ex. S (USR’s initial identification of accused products).
`
`4
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 10 of 26 PageID #: 1390
`
`
`final determination on the merits is expected by November 2019. See id. §§ 316(a)(11),
`
`326(a)(11).
`
`As the petitions demonstrate, multiple prior art references invalidate each of the claims
`
`identified in USR’s Complaint and the majority of the claims of the patents-in-suit. For
`
`example, European Patent Application Publication No. EP 1028401 to Schutzer, asserted against
`
`the ’539 and ’137 patents, discloses a method for performing a credit or bank card transaction
`
`using an anonymous card number that can only be associated with a user’s account by a third-
`
`party database. Selwyn Decl., Ex. M. Similarly, International Patent Application Publication
`
`No. WO 2004/051585 to Jakobsson, asserted against the ’826, ’813, and ’137 patents, discloses a
`
`portable authentication device configured to authenticate a user based on biometric information
`
`and capable of interfacing with a secure database to verify a user’s identity. Selwyn Decl., Ex.
`
`N. The other prior art references asserted in Apple’s petitions disclose similar systems that
`
`anticipate and/or render obvious the claims of USR’s asserted patents.
`
`IV. Argument
`
`This Court weighs three factors in deciding whether to stay litigation pending Patent
`
`Office IPR proceedings: “(1) whether a stay will simplify the issues for trial; (2) the status of the
`
`litigation, particularly whether discovery is complete and a trial date has been set; and (3)
`
`whether a stay would cause the non-movant to suffer undue prejudice from any delay or allow
`
`the movant to gain a clear tactical advantage.” 454 Life Scis. Corp. v. Ion Torrent Sys., Inc., No.
`
`15-cv-159-LPS, 2016 WL 6594083, at *2 (D. Del. Nov. 7, 2016).
`
`Courts generally weigh the same three factors plus an additional factor, “whether a stay,
`
`or the denial thereof, will reduce the burden of litigation on the parties and on the court,” when
`
`deciding whether to stay litigation pending Patent Office CBM review. Market-Alerts Pty. Ltd.
`
`v. Bloomberg Finance L.P., 922 F. Supp. 2d 486, 489 (D. Del. 2013) (internal quotation marks
`
`5
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 11 of 26 PageID #: 1391
`
`
`omitted); see also Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, § 18, 125
`
`Stat. 284, 329–31 (2011) (setting forth four-factor test that courts shall apply in deciding whether
`
`to grant a motion to stay parallel litigation pending CBM review by the PTO). This fourth factor
`
`“was included, in part, to ease the movant’s task of demonstrating the need for a stay.” Market-
`
`Alerts, 922 F. Supp. 2d at 489–90; see also id. at 490 n.4 (noting Congress has “made clear that
`
`the intent of the fourth stay factor was to ‘place[]a very heavy thumb on the scale in favor of a
`
`stay being granted’” (quoting 157 Cong. Rec. S1363–65, at S1363 (daily ed. Mar. 8, 2011)
`
`(statement of Sen. Charles Schumer)).
`
`All factors favor an immediate stay of this litigation.
`
`A.
`
`A stay will resolve the case or, at a minimum, simplify the issues and reduce
`the burden of litigation
`
`Apple’s IPRs and CBMs are likely to resolve the case or, at a minimum, substantially
`
`simplify the case and reduce the burden of litigation on the Court and on the parties. For claims
`
`canceled by the PTO, no infringement contentions, invalidity contentions, claim construction or
`
`discovery will be needed. Given the technical scope of this case—USR has accused Apple’s
`
`Apple Pay service, iTunes Store, iBooks Store, App Store, various Mac and MacBook Pro
`
`models, and numerous versions of the iPhone and iPad devices, see Selwyn Decl., Ex. S (USR’s
`
`initial identification of accused products)—and the near identity between the prior art raised in
`
`Apple’s petitions and the asserted patents, staying this case now is the most efficient course.
`
`Moreover, in light of the Supreme Court’s recent decision in SAS, if the PTO grants review of
`
`any of Apple’s petitions, it is statutorily required to address every claim challenged by Apple in
`
`that petition. SAS, 138 S. Ct. at 1354; Dish Network Corp. v. Customedia Techs., Inc., Nos.
`
`CBM2017-00019, CBM2017-00032, 2018 WL 2084934, at *1 (P.T.A.B. May 2, 2018).
`
`Accordingly, the likely institution of Apple’s IPR and CBM petitions will ensure the Court the
`
`6
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 12 of 26 PageID #: 1392
`
`
`benefit of the PTO’s guidance on a broad range of claims of the patents-in-suit. The IPRs and
`
`CBMs are likely to reduce substantially the claim construction and discovery burdens on the
`
`Court and the parties. Further, even if not all claims are canceled, the IPRs and CBMs will
`
`simplify the issues in the case.
`
`1.
`
`Apple’s IPRs and CBM petitions are likely to resolve this case
`
`The PTO is likely to grant review of Apple’s IPR and CBM petitions. Since the AIA
`
`provisions creating these post-grant proceedings took effect in 2012, approximately 67.4% of
`
`IPR, CBM, and post-grant review petitions have been instituted,2 and those that have been
`
`instituted overwhelmingly lead to claim cancellations. Of instituted petitions reaching a final
`
`written decision, at least some claims were canceled in approximately 81% of the cases, with all
`
`instituted claims canceled in 65% of the cases.3
`
`Notably, the PTO has already instituted an IPR petition for the ’813 patent, filed by
`
`Unified Patents, providing further evidence that the PTO will likely institute Apple’s IPR
`
`petition challenging that patent. See D.I. 77, Ex. A (decision on institution). And if review is
`
`granted on any of Apple’s petitions, the PTO is likely to cancel at least some—if not all—of the
`
`claims challenged therein. See, e.g., VirtualAgility, Inc. v. Salesforce.com, Inc., 759 F.3d 1307,
`
`1314 (Fed. Cir. 2014) (noting CBM institution implies that “it is more likely than not that at least
`
`1 of the claims challenged in the petition is unpatentable” (quoting 35 U.S.C. § 324(a))); Neste
`
`Oil OYJ v. Dynamic Fuels, LLC, No. 12-cv-1744-GMS, 2013 WL 3353984, at *4, 4 n.5 (D. Del.
`
`July 2, 2013) (IPR institution implies “a reasonable likelihood that the petitioner [will] prevail
`
`
`2 See Selwyn Decl., Ex. Q (U.S. Patent & Trademark Office, Patent Trial & Appeal Bd., Trial
`Statistics, IPR, PGR, CBM, May 2018), at 7 (4,465 petitions instituted out of 6,625 decisions on
`institution as of April 30, 2018, excluding decisions responsive to requests for rehearing); see
`also id. at 8 (indicating institution rates of 68% for electrical/computer patents and 69% for
`mechanical and business method patents).
`3 See id. at 11.
`
`7
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 13 of 26 PageID #: 1393
`
`
`with respect to at least [one] of the claims challenged in the petition” (quoting 35 U.S.C.
`
`§ 314(a)) (alterations in original)).
`
`Moreover, if Apple’s IPR and CBM petitions are granted, the PTO will institute review
`
`of all challenged claims. See, e.g., SAS, 138 S. Ct. at 1354 (holding that the PTO’s final written
`
`decision “must address every claim the petitioner has challenged” in an instituted IPR (emphasis
`
`in original)); Dish Network, 2018 WL 2084934, at *1 (modifying Decisions on Institution to
`
`institute on all challenged claims and noting, “[a]lthough SAS addressed the statutory section for
`
`final written decisions in inter partes reviews, the corresponding section for post-grant reviews,
`
`35 U.S.C. § 328(a), uses essentially identical language, so we interpret it the same way.
`
`Accordingly, we determine that the Court’s reasoning and the [Patent] Office’s resulting
`
`guidance applies equally to post-grant reviews.” (citation omitted)); see also Selwyn Decl., Ex.
`
`R, U.S. Patent & Trademark Office, Guidance on the Impact of SAS on AIA Trial Proceedings
`
`(Apr. 26, 2018) (addressing “AIA trial proceedings” generally and explaining “[a]s required by
`
`[SAS], the PTAB will institute as to all claims or none”).
`
`If Apple’s IPR and CBM petitions result in all of USR’s asserted claims—once
`
`identified—being canceled, a stay will obviate the need to proceed with this litigation entirely.
`
`See VirtualAgility, 759 F.3d at 1314 (“This CBM review could dispose of the entire litigation:
`
`the ultimate simplification of issues.”); 454 Life Scis., 2016 WL 6594083, at *3 (“[W]ere the
`
`PTAB to find all of the challenged claims to be invalid, the litigation would be ‘simplified’
`
`because it would be concluded.” (internal quotation marks omitted)). A stay would also obviate
`
`the need for the Court to decide at this time Defendants’ pending motion to dismiss and motion
`
`to transfer.
`
`8
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 14 of 26 PageID #: 1394
`
`
`2.
`
`At a minimum, the IPRs and CBM reviews will simplify and streamline the
`case, reducing the burden of litigation on the parties and the Court
`
`Even in the unlikely event that Apple’s IPR and CBM petitions do not completely resolve
`
`this litigation, the PTO’s review process is still highly likely to simplify and streamline the case.
`
`First, the PTO has already instituted Unified Patents’ IPR on the ’813 patent.
`
`Accordingly, there is a high likelihood that any further proceedings in this litigation on that
`
`patent will result in the Court “wast[ing] judicial resources and the parties . . . unnecessarily
`
`expend[ing] funds.” GT Nexus, Inc. v. Inttra, Inc., No. 11-cv-02145-SBA, 2014 WL 3373088, at
`
`*3 (N.D. Cal. July 9, 2014). USR’s statements in that proceeding will become part of the file
`
`histories of the patents-in-suit, and potentially affect claim construction and claim scope. See
`
`Chrimar Sys. Inc. v. Ruckus Wireless, Inc., No. 16-cv-00186-SI, 2016 WL 5403595, at *4 (N.D.
`
`Cal. Sept. 26, 2016) (granting stay prior to institution of defendant’s IPR petitions and noting
`
`that resolution of already instituted IPRs and an ex parte reexamination—brought by unrelated
`
`third parties—“may help simplify and streamline the issues in this case”). Moreover, the PTO’s
`
`institution of Unified Patents’ ’813 patent IPR provides a further indication that the PTO is likely
`
`to grant review of Apple’s own IPR and CBM petitions for that patent.
`
`Second, if the PTO grants “review and finds that one or more of the asserted claims of
`
`the patents-in-suit are invalid or subject to modification, the Court will have wasted judicial
`
`resources and the parties will have unnecessarily expended funds.” GT Nexus, 2014 WL
`
`3373088, at *3 (citing Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1340 (Fed. Cir.
`
`2013)); see also AIP Acquisition LLC v. Level 3 Commc’ns, LLC, No. 12-cv-617-GMS, 2014
`
`WL 12642000, at *3 n.5 (D. Del. Jan. 9, 2014) (granting stay and noting that “if the court does
`
`not stay the action, the PTO’s final decision will likely issue after the scheduled Markman
`
`hearing . . . but before trial . . . thereby nullifying the court’s Markman efforts in the ‘reasonably
`
`9
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 15 of 26 PageID #: 1395
`
`
`likely’ event the claims are amended or canceled during the IPR proceeding”). A stay will allow
`
`the Court and the parties to avoid spending resources on discovery, a Markman hearing, and at
`
`trial to address claims that have a reasonable likelihood of amendment or cancellation.
`
`Third, in light of the Supreme Court’s recent decision in SAS, if the PTO grants review of
`
`any of Apple’s IPR and CBM petitions, it is statutorily required to address every patent claim
`
`challenged by Apple in that petition. SAS, 138 S. Ct. at 1354; Dish Network, 2018 WL 2084934,
`
`at *1. Accordingly, it is likely that every claim that USR could conceivably assert will be
`
`subject to IPR and/or CBM proceedings. See Wi-LAN, Inc. v. LG Elecs., Inc., No. 3:17-cv-
`
`00358-BEN-MDD, 2018 WL 2392161, at *2 (S.D. Cal. May 22, 2018) (granting stay prior to
`
`institution of IPR proceedings in light of SAS even though “review is not guaranteed and,
`
`therefore, the benefits of review are only speculative at this juncture”).
`
`Fourth, the PTO’s written opinions, even if they deny institution of review or uphold
`
`challenged claims, will provide useful guidance on claim scope and validity. See, e.g., Ex. 1
`
`(attached hereto), AT&T Intellectual Prop. I L.P. v. Cox Commc’ns, Inc., No. 14-cv-1106-GMS
`
`(D. Del. Sept. 24, 2015) (D.I. 161, 3 n.4) (“The results of the IPR may affect not only validity of
`
`the asserted claims, but also their scope.”); Canatello LLC v. AXIS Commc’ns, Inc., No. 13-cv-
`
`1227-GMS, 2014 U.S. Dist. LEXIS 161801, at *3 n.3 (D. Del. May 14, 2014) (“Should the
`
`PTAB deem the patents-in-suit unpatentable or narrow their scope, the court’s resources will be
`
`conserved by expending fewer resources on claim construction or avoiding the claim
`
`construction process altogether. . . . Should the claims survive the IPR process, the court will still
`
`benefit from the PTAB’s expertise.”); Intellectual Ventures II LLC v. U.S. Bancorp, No. 13-2071
`
`(ADM/JSM), 2014 WL 5369386, at *6 (D. Minn. Aug. 7, 2014) (“Even if the Asserted Patents
`
`all survive the IPR proceedings entirely intact, this Court will still have the benefit of the PTO’s
`
`10
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 91 Filed 06/15/18 Page 16 of 26 PageID #: 1396
`
`
`guidance on the issue of invalidity.”). In light of SAS, the likely institution of Apple’s IPR and
`
`CBM petitions will ensure the Court the benefit of the PTO’s guidance on every conceivable
`
`asserted claim.
`
`Fifth, any positions taken by USR in opposition to Apple’s petitions will become part of
`
`the file histories of the patents-in-suit, affect claim construction, and limit claim scope—even
`
`with respect to patent claims, if any, confirmed by the PTO. Indeed, “statements made by a
`
`patent owner during an IPR proceeding, whether before or after an institution decision, can be
`
`considered for claim construction and relied upon to support a finding of prosecution
`
`disclaimer.” Aylus Networks, Inc. v. Apple Inc., 856 F.3d 1353, 1362 (Fed. Cir. 2017). If this
`
`case is not stayed, the Court may need to conduct claim construction proceedings in two stages—
`
`once in the normal course of the litigation, and yet again after any relevant representatio