Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 1 of 20 PageID #: 216
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`C.A. No. 17-1399-RGA
`
`JURY TRIAL DEMANDED
`
`)))))))))
`
`IRONWORKS PATENTS, LLC,
`
`Plaintiff,
`
`v.
`
`APPLE INC.,
`
`Defendant.
`
`DEFENDANT APPLE INC.’S OPENING BRIEF IN SUPPORT OF
`ITS MOTION TO STAY PENDING INTER PARTES REVIEW
`
`OF COUNSEL:
`
`Xin-Yi Zhou
`O’MELVENY & MYERS LLP
`400 South Hope Street, 18th Floor
`Los Angeles, CA 90071
`Tel: (213) 430-6000
`
`Luann L. Simmons
`O’MELVENY & MYERS LLP
`Two Embarcadero Center, 28th Floor
`San Francisco, CA 94111
`Tel: (415) 984-8700
`
`Dated: July 19, 2018
`5872475 / 44530
`
`David E. Moore (#3983)
`Bindu A. Palapura (#5370)
`Stephanie E. O’Byrne (#4446)
`POTTER ANDERSON & CORROON LLP
`Hercules Plaza, 6th Floor
`1313 N. Market Street
`Wilmington, DE 19801
`Tel: (302) 984-6000
`dmoore@potteranderson.com
`bpalapura@potteranderson.com
`sobyrne@potteranderson.com
`
`Attorneys for Defendant Apple Inc.
`
`

`

`Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 2 of 20 PageID #: 217
`
`I.
`
`II.
`
`III.
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`IV.
`
`V.
`
`TABLE OF CONTENTS
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`Page
`NATURE AND STAGE OF PROCEEDING ................................................................... 1
`
`SUMMARY OF ARGUMENTS ....................................................................................... 1
`
`BACKGROUND ............................................................................................................... 3
`
`LEGAL STANDARDS ..................................................................................................... 5
`
`ARGUMENT ..................................................................................................................... 5
`
`A.
`
`B.
`
`C.
`
`D.
`
`First Factor: A Stay Will Resolve The Case Or Simplify The Issues For
`Trial ........................................................................................................................ 5
`
`Second Factor: The Early Stage Of This Case Strongly Favors A Stay ................ 9
`
`Third Factor: A Stay Will Not Unduly Prejudice Or Tactically
`Disadvantage Ironworks ...................................................................................... 10
`
`The Court Should Stay This Case Without Waiting For The PTO’s
`Institution Decisions ............................................................................................ 12
`
`VI.
`
`CONCLUSION ................................................................................................................ 14
`
`i
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`

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`Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 3 of 20 PageID #: 218
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`CASES
`
`454 Life Scis. Corp. v. Ion Torrent Sys., Inc.,
`C.A. No. 15-595-LPS, 2016 WL 6594083 (D. Del. Nov. 7, 2016) ............................... 8, 10-11
`
`AIP Acquisition LLC v. Level 4 Commc’ns, LLC,
`C.A. No. 12-617-GMS, 2014 WL 12642000 (D. Del. Jan. 9, 2014) ...................................... 11
`
`Alerts Pty. Ltd. v. Bloomberg Fin., L.P.,
`922 F. Supp. 2d 486 (D. Del. Feb. 5, 2013) ....................................................................... 11-12
`
`AT&T Intellectual Prop. I LP v. Cox Commc’ns, Inc.,
`C.A. No. 14-1106-GMS (D. Del. Sept. 24, 2015) .............................................................. 7, 14
`
`Aylus Networks, Inc. v. Apple Inc.,
`856 F.3d 1353 (Fed. Cir. 2017)................................................................................................. 7
`
`Bechtel Corp. v. Local 215, Laborers’ Int’l Union of N. Am.,
`544 F.2d 1207 (3d Cir. 1976).................................................................................................... 5
`
`Bonutti Skeletal Innovations, LLC v. Zimmer Holdings, Inc.,
`C.A. No. 12-1107-GMS, 2014 WL 1369721 (D. Del. Apr. 7, 2014) ....................................... 9
`
`Bos. Sci. Corp. v. Cordis Corp.,
`777 F. Supp. 2d 783 (D. Del. 2011) ........................................................................................ 10
`
`Bradium Technologies LLC v. Microsoft Corp.,
`C.A. No. 15-31-RGA (D. Del. Sept. 24, 2015)....................................................................... 14
`
`Canatelo LLC v. Axis Commc’ns AB,
`C.A. No. 13-1227-GMS, 2014 WL 12774920 (D. Del. May 14, 2014) ............................... 6, 7
`
`Chestnut Hill Sound Inc. v. Apple Inc.,
`C.A. No. 15-261-RGA (D. Del. Dec. 3, 2015) ....................................................................... 14
`
`Cost Bros. v. Travelers Indem. Co.,
`760 F.2d 58 (3d Cir. 1985)........................................................................................................ 5
`
`CRFD Research, Inc. v. Dish Network Corp.,
`C.A. Nos. 14-315, 14-314, 14-313, 14-64-GMS (D. Del. June 4, 2015)................................ 14
`
`Ever Win Int’l Corp. v. Radioshack Corp.,
`902 F. Supp. 2d 503 (D. Del. 2012) ................................................................................ 6, 9, 10
`
`Fresenius USA, Inc. v. Baxter Int’l, Inc.,
`721 F.3d 1330 (Fed. Cir. 2013)................................................................................................. 6
`
`ii
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`

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`Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 4 of 20 PageID #: 219
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`Intellectual Ventures II LLC v. U.S. Bancorp,
`No. 13-2071, 2014 WL 5369386 (D. Minn. Aug. 7, 2014) ...................................................... 7
`
`Ironworks Patents LLC v. Apple Inc.,
`C.A. No. 10-258-SLR (D. Del. Mar. 1, 2010) .............................................................. 3, 12, 13
`
`Ironworks Patents LLC v. Apple Inc.,
`No. 17-2291 (Fed. Cir. June 5, 2018) ....................................................................................... 4
`
`Krippelz v. Ford Motor Co.,
`667 F.3d 1261 (Fed. Cir. 2012)................................................................................................. 8
`
`Miics & Partners Am. Inc. v. Toshiba Corp.,
`C.A. No. 14-803-RGA, 2015 WL 9854845 (D. Del. Aug. 11, 2015)..................................... 14
`
`Neste Oil OYJ v. Dynamic Fuels, LLC,
`C.A. No. 12-1744-GMS, 2013 WL 3353984 (D. Del. July 2, 2013)............................ 5, 10, 14
`
`Nexans Inc. v. Belden Inc.,
`C.A. No. 12-1491-SLR-SRF, 2014 WL 651913 (D. Del. Feb. 19, 2014) .............................. 11
`
`Omega Eng’g, Inc. v. Raytek Corp.,
`334 F.3d 1314 (Fed. Cir. 2003)................................................................................................. 7
`
`Princeton Digital Image Corp.,
`C.A. No. 12-1461-LPS-CJB, 2014 WL 3819458 (D. Del. Jan. 15, 2014) ............. 9, 10, 11, 14
`
`SAS Inst. Inc. v. Iancu,
`138 S. Ct. 1348 (2018) .............................................................................................................. 8
`
`Signal IP, Inc. v. Fiat U.S.A., Inc.,
`No. 14-cv-13864, 2016 WL 5027595 (E.D. Mich. Sept. 20, 2016) ......................................... 8
`
`Softview LLC v. Apple Inc.,
`C.A. Nos. 12-989-LPS, 10-389-LPS, 2013 WL 4757831 (D. Del. Sept. 4, 2013) ................... 6
`
`Target Therapeutics, Inc. v. SciMed Life Sys., Inc.,
`No. C-94-20775, 1995 WL 20470 (N.D. Cal. Jan. 13, 1995) ................................................. 13
`
`STATUTES
`
`35 U.S.C. § 314 ............................................................................................................................... 4
`
`35 U.S.C. § 315(e)(2) .................................................................................................................. 2, 8
`
`REGULATIONS
`
`37 C.F.R. § 42.100(c)...................................................................................................................... 4
`
`iii
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`

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`Case 1:17-cv-01399—RGA Document 23 Filed 07/19/18 Page 5 of 20 PageID #: 220
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`37 C.F.R. § 42.107 .......................................................................................................................... 4
`37 C.F.R. § 42.107 .......................................................................................................................... 4
`
`83 Fed. Reg. 21221 ......................................................................................................................... 7
`83 Fed. Reg. 21221 ......................................................................................................................... 7
`
`iv
`iv
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`

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`Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 6 of 20 PageID #: 221
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`Defendant Apple Inc. (“Apple”) respectfully moves to stay this litigation pending
`
`resolution of its petitions for inter partes review (“IPR”) filed on July 10 and 18, 2018.
`
`I.
`
`NATURE AND STAGE OF PROCEEDING
`
`1.
`
`Ironworks Patents, LLC (“Ironworks”) filed its Complaint on October 6, 2017 and
`
`served it on January 2, 2018. D.I. 1 and 5. The Complaint alleges infringement of Claims 12
`
`and 2 of U.S. Patent No. RE39,231 (the “’231 Patent”) (Counts I and II), Claim 1 of U.S. Patent
`
`No. 6,850,150 (the “’150 Patent”) (Count III), and Claim 1 of U.S. Patent No. 8,847,734 (the
`
`“’734 Patent”) (Count IV). D.I. 1.
`
`2.
`
`Pursuant to the parties’ stipulation, the Court stayed all proceedings relating to the
`
`’231 Patent (Counts I and II of the Complaint) on February 28, 2018. D.I. 8-9.
`
`3.
`
`Apple filed a Partial Motion to Dismiss for Failure to State a Claim on March 1,
`
`2018. D.I. 10. The Court denied Apple’s motion on June 12, 2018. D.I. 18.
`
`4.
`
`5.
`
`Apple answered the Complaint on June 26, 2018. D.I. 19.
`
`Because all proceedings relating to the ’231 Patent are already stayed, the present
`
`motion seeks to stay the entire case pending resolution of IPRs for the two remaining patents.
`
`II.
`
`SUMMARY OF ARGUMENTS
`
`The facts of this case weigh strongly in favor of an immediate stay of the entire case
`
`because: (1) a stay until completion of the IPRs will simplify—if not wholly eliminate—the
`
`issues for trial and promote judicial economy; (2) the case is in its infancy; and (3) Ironworks
`
`will suffer no undue prejudice or tactical disadvantage from any delay.
`
`1.
`
`A stay will resolve or simplify the issues in this litigation. If the U.S. Patent and
`
`Trademark Office (“PTO”) invalidates the asserted claims of the ’150 and ’734 Patents through
`
`

`

`Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 7 of 20 PageID #: 222
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`IPR, this entire case may become moot.1 Even if some claims survive review, the Court will
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`have the benefit of the PTO’s findings and Apple may be estopped from raising certain invalidity
`
`defenses in the district court litigation. See 35 U.S.C. § 315(e)(2). And because the ’150 and
`
`’734 Patent are related, any ruling by the PTO on either patent may be instructive on the validity
`
`and scope of the claims from both patents. Thus, under any outcome, a stay pending completion
`
`of the IPRs will simplify the issues remaining for trial.
`
`2.
`
`The stage of this case strongly favors a stay. The case is still in its infancy, as the
`
`Court has set the initial case management conference for August 3, 2018, fact and expert
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`discovery has not begun, no claim construction hearing has been held, and no trial date has been
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`set. Thus, staying this case at the current stage will avoid needless discovery and conserve
`
`judicial resources.
`
`3.
`
`Ironworks will not suffer any undue prejudice or tactical disadvantage from a
`
`stay. Because Ironworks is a non-practicing entity, there is no potential for irreparable harm that
`
`may result from a stay. Moreover, Ironworks, along with its predecessors-in-interest, waited
`
`years before asserting the ’150 and ’734 Patents—over six years after the earliest accused
`
`product was released. These patents are also of little priority to Ironworks and its predecessors-
`
`in-interest, as they represent the seventeenth and eighteenth patents from the portfolio chosen
`
`to assert against Apple. These facts demonstrate the lack of any undue prejudice from a stay.
`
`4.
`
`The unique facts of this case justify an immediate stay of the entire case before
`
`the PTO issues its IPR institution decisions. The parties already stipulated to a stay of all
`
`proceedings relating to the ’231 Patent pending an appeal before the Federal Circuit. That appeal
`
`1 As noted below, the validity of the remaining patent, the ’231 Patent, is being considered by the
`Federal Circuit in Appeal Case No. 17-2291.
`
`2
`
`

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`Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 8 of 20 PageID #: 223
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`is expected to complete around the same time as the institution decisions for Apple’s IPRs.
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`Rather than litigating this case piecemeal, it makes more sense to stay the entire case
`
`immediately. An immediate stay would avoid wasting the Court’s and parties’ resources on
`
`patents that may be invalidated by the PTO, or on discovery that may need to be revisited after
`
`completion of the Federal Circuit appeal.
`
`III.
`
`BACKGROUND
`
`This case is part of a long-running dispute between Apple and the owners of the patents-
`
`in-suit—Ironworks and its predecessor-in-interest, MobileMedia Ideas, LLC (“MMI”)—that
`
`started more than eight years ago. See D.I. 1 ¶ 23-27.
`
`On March 31, 2010, MMI filed a Complaint against Apple in this District asserting
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`infringement of fourteen patents, including the ’231 Patent at issue in this case. See Ironworks
`
`Patents LLC v. Apple Inc., C.A. No. 10-258-SLR, D.I. 1 (D. Del. Mar. 1, 2010) (hereafter,
`
`“Ironworks I”). In August 2010, MMI amended its Complaint to add two new patents, bringing
`
`the total number of asserted patents to sixteen. Ironworks I, D.I. 8.2 Ironworks later acquired
`
`MMI’s entire patent portfolio and substituted for MMI as the plaintiff in Ironworks I. See D.I. 1
`
`¶ 27; Ironworks I, D.I. 734.
`
`After more than eight years of litigation and two jury trials in this District, fifteen of the
`
`sixteen patents asserted in Ironworks I have now been found to be invalid and/or not infringed.
`
`See Ironworks I, D.I. 677 ¶¶ 1-16; D.I. 690. On September 9, 2016, the jury in the second
`
`Ironworks I trial found Claims 12 and 2 of the ’231 Patent to be valid and infringed, and awarded
`
`2 The two other patents asserted in the present case issued before or during the pendency of
`Ironworks I, but Ironworks/MMI waited until October 2017 to assert them against Apple. D.I. 1-
`1 at Cover (’150 Patent issued in February 2005); D.I. 1-2 at Cover (’734 Patent issued in
`September 2014).
`
`3
`
`

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`damages of $3 million. D.I. 1 ¶ 26. On June 15, 2017, the Court entered a Final Judgment with
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`an increased award of $10,723,926. Id. ¶ 29. The parties then filed cross-appeals to the Court of
`
`Appeals for the Federal Circuit. Id. ¶ 4. Appeal briefing has completed and the parties are
`
`awaiting oral arguments. See Ironworks Patents LLC v. Apple Inc., C.A. No. 17-2291, D.I. 71,
`
`73, 74 (Fed. Cir. June 5, 2018).
`
`On October 6, 2017, Ironworks filed this case against Apple asserting infringement of the
`
`’231 Patent by new products not accused in Ironworks I, and the ’150 and ’734 Patents for the
`
`first time. See D.I. 1 ¶ 12. The ’150 and ’734 Patents are related and share substantially the
`
`same specification. Id. ¶ 17. Ironworks served the Complaint on January 2, 2018, nearly three
`
`months after its filing. D.I. 5. The parties then stipulated to stay all proceedings relating to the
`
`’231 Patent until at least resolution of the Federal Circuit appeal. D.I. 9.
`
`On July 10 and 18, 2018, Apple filed petitions for IPR requesting review of all claims of
`
`the ’150 and ’734 Patents. Exs. A and B.3 The PTO is expected to issue its decisions regarding
`
`whether it will institute reviews around January or February 2019. See 35 U.S.C. § 314; 37
`
`C.F.R. § 42.107.4 If the IPRs are instituted as anticipated, the PTO should issue its final
`
`decisions regarding the validity of the challenged claims within one year after institution, or by
`
`approximately January or February 2020. See 37 C.F.R. § 42.100(c). The present motion seeks
`
`a stay of this case pending resolution of both IPR petitions.
`
`3 All exhibits are attached the Declaration of Xin-Yi Zhou in support of Apple’s Motion to Stay
`Pending Inter Partes Review, filed concurrently herewith.
`4 The PTO is required to issue its institution decision no later than six months after it issues a
`“Notice of Filing Date Accorded to Petition,” which typically occurs one to three weeks after a
`petition is filed.
`
`4
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`

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`IV.
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`LEGAL STANDARDS
`
`A decision to stay litigation lies within the sound discretion of the Court and represents
`
`an exercise of the Court’s “inherent power to conserve judicial resources by controlling its own
`
`docket.” Cost Bros. v. Travelers Indem. Co., 760 F.2d 58, 60 (3d Cir. 1985). A stay is
`
`particularly appropriate where the outcome of another proceeding may “substantially affect” the
`
`issues in a case. Bechtel Corp. v. Local 215, Laborers’ Int’l Union of N. Am., 544 F.2d 1207,
`
`1215 (3d Cir. 1976).
`
`This Court generally weighs three factors in determining whether to stay a case pending
`
`IPR proceedings: (1) “whether a stay will simplify the issues in question and trial of the case;”
`
`(2) “whether discovery is complete and whether a trial date has been set[;]” and (3) “whether a
`
`stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party.”
`
`Neste Oil OYJ v. Dynamic Fuels, LLC, C.A. No. 12-1744- GMS, 2013 WL 3353984, at *1 (D.
`
`Del. July 2, 2013). All three factors weigh strongly in favor of an immediate stay in this case.
`
`V.
`
`ARGUMENT
`
`A.
`
`First Factor: A Stay Will Resolve The Case Or Simplify The Issues For Trial
`
`Apple’s IPRs are likely to greatly simplify this case or, together with the Federal Circuit
`
`appeal, resolve this case entirely. As noted above, Apple has now petitioned for review of all
`
`claims of the ’150 and ’734 Patents. Exs. A and B. The PTO’s rulings on these petitions could
`
`resolve or significantly simply the issues for trial.
`
`First, Apple’s IPRs have a high likelihood of resulting in the cancellation of the asserted
`
`claims, which would render moot Counts III and IV of the Complaint. Since the inception of the
`
`IPR procedure in 2012, the PTO has instituted over 68% of petitions filed against
`
`5
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`

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`Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 11 of 20 PageID #: 226
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`“Electrical/Computer” patents.5 Once instituted, there is a high probability that the PTO would
`
`cancel some or all claims during review. Among all final written decisions issued from
`
`completed IPRs to date, 81% of the cases resulted in the cancellation of at least some claims, and
`
`65% resulted in the cancellation of all claims.6 These statistics support a “fair inference that the
`
`issues in this case are apt to be simplified and streamlined to some degree as a result of the [IPR]
`
`proceedings.” Ever Win Int’l Corp. v. Radioshack Corp., 902 F. Supp. 2d 503, 506 (D. Del.
`
`2012). Since Counts III and IV of the Complaint allege infringement by only the broadest
`
`independent claims of the ’150 and ’734 Patents (see D.I. 1 ¶¶ 55-77), those claims are most
`
`likely to be cancelled during PTO review.
`
`Any patent claim cancelled by the PTO during an IPR is rendered void ab initio. See
`
`Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1346 (Fed. Cir. 2013). Thus,
`
`cancellation of the two asserted claims of the ’150 and ’734 Patents could result in a complete
`
`resolution of Counts III and IV of the Complaint. See Softview LLC v. Apple Inc., C.A. Nos. 12-
`
`989-LPS, 10-389-LPS, 2013 WL 4757831, at *1 (D. Del. Sept. 4, 2013) (If “all of the asserted
`
`claims [are] found invalid, this litigation would be ‘simplified’ because it would be concluded.”).
`
`Even if only one of the two asserted claims is cancelled, the issues remaining for trial would still
`
`be narrowed. See, e.g., Canatelo LLC v. Axis Commc’ns AB, C.A. No. 13-1227-GMS, 2014 WL
`
`12774920, at *2 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.”).
`
`5 See Ex. C, Trial Statistics, IPR, PGR, CBM, June 2018, available online at:
`https://www.uspto.gov/sites/default/files/documents/trial_statistics_20180630.pdf, at 8 (2,673 of
`3,919 petitions filed against “Electrical/Computer” patents have been instituted).
`6 Id. at 11.
`
`6
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`

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`Second, even if some asserted claims survive review, a stay pending completion of both
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`IPR proceedings is still likely to simplify and streamline this case. For example, in the unlikely
`
`event that the PTO denies institution or confirms all claims, its written opinions will provide
`
`guidance on claim scope and validity. See, e.g., Canatelo LLC, 2014 WL 12774920, at *2 n.3
`
`(“Should the claims survive the IPR process, the court will still benefit from the PTAB’s
`
`expertise.”); AT&T Intellectual Prop. I LP v. Cox Commc’ns, Inc., C.A. No. 14-1106-GMS, D.I.
`
`161, at *3 n.4 (D. Del. Sept. 24, 2015) (“The results of the IPR may affect not only validity of
`
`the asserted claims, but also their scope.”); Intellectual Ventures II LLC v. U.S. Bancorp, No. 13-
`
`2071, 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
`
`guidance on the issues of invalidity.”).7
`
`Furthermore, any argument Ironworks makes in opposition to the IPR petitions will add
`
`to the patents’ file histories, affect claim construction, and limit claim scope. Because the ’150
`
`and ’734 Patents are related, Ironworks’ statements in either IPR proceeding affect the file
`
`histories of both patents. See Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1333 (Fed. Cir.
`
`2003) (“[P]rosecution disclaimer may arise from disavowals made during the prosecution of
`
`ancestor patent applications.”). As part of the patents’ file histories, Ironworks’ submissions to
`
`the PTO can be considered during this Court’s claim construction process. See, e.g., Aylus
`
`Networks, Inc. v. Apple Inc., 856 F.3d 1353, 1362 (Fed. Cir. 2017) (“[S]tatements 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
`
`7 Recently, the PTO proposed a rule change to replace its “broadest reasonable interpretation”
`claim construction standard with “a standard that is the same as the standard applied in federal
`district courts.” 83 Fed. Reg. 21221.
`
`7
`
`

`

`Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 13 of 20 PageID #: 228
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`disclaimer.”); Krippelz v. Ford Motor Co., 667 F.3d 1261, 1266 (Fed. Cir. 2012) (“patentee’s
`
`statements during reexamination can be considered during claim construction, in keeping with
`
`the doctrine of prosecution disclaimer”); Signal IP, Inc. v. Fiat U.S.A., Inc., No. 14-cv-13864,
`
`2016 WL 5027595, at *14 (E.D. Mich. Sept. 20, 2016) (finding “statements in the prosecution
`
`history, particularly during the recent IPR proceeding are unmistakable statements disavowing
`
`the plain and ordinary meaning of” a claim term). Therefore, even if the PTO institutes only one
`
`of the two IPR petitions, the file histories of both patents—and the scope of their claims—will be
`
`in flux until completion of the IPR. If this case proceeds without a stay, the Court may be
`
`required to conduct multiple claim construction proceedings to account for representations about
`
`claim scope made by Ironworks before the PTO. Thus, it makes sense to stay this case in its
`
`entirety until completion of all IPR proceedings so that this Court will have available the
`
`complete intrinsic record of both patents before taking up claim construction.
`
`In addition, if the PTO issues a final written decision affirming the patentability of certain
`
`claims, Apple will be estopped from arguing to this Court that claims confirmed in the IPR (if
`
`any) are invalid on any ground that Apple “raised or reasonably could have raised” during the
`
`IPR. See 35 U.S.C. § 315(e)(2). The Supreme Court recently issued an opinion concluding that,
`
`once the PTO institutes review on an IPR petition, it is statutorily required to address the validity
`
`of every challenged claim. See SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1360 (2018). This
`
`holding guarantees that the invalidity issues in this case will be narrowed if the PTO institutes
`
`review on either petition. See 454 Life Scis. Corp. v. Ion Torrent Sys., Inc., C.A. No. 15-595-
`
`LPS, 2016 WL 6594083, at *3 (D. Del. Nov. 7, 2016) (“Even if the IPR proceedings result in all
`
`of the Asserted Claims remaining valid, the fact that Defendants will be estopped—from
`
`asserting in this litigation any ground for invalidity that they ‘raised or reasonably could have
`
`8
`
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`Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 14 of 20 PageID #: 229
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`raised’ during the IPR proceedings[]—and the creation of additional prosecution history … will
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`simplify the issues left to be litigated in this case.”). Thus, the statutory estoppel, combined with
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`the PTO’s guidance on claim scope, will narrow and streamline this litigation even in the highly
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`unlikely event that all claims survive review.
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`Therefore, the factor of “whether a stay will simplify the issues in question and trial of
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`the case” weighs heavily in favor of a stay.
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`B.
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`Second Factor: The Early Stage Of This Case Strongly Favors A Stay
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`“Motions to stay [pending IPRs] are most often granted when the case is in the early
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`stages of litigation.” Princeton Digital Image Corp., C.A. No. 12-1461-LPS-CJB, 2014 WL
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`3819458, at *3 (D. Del. Jan. 15, 2014). “Granting such a stay early in a case can be said to
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`advance judicial efficiency and ‘maximize the likelihood that neither the Court nor the Parties
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`expend their assets addressing invalid claims.’” Id. (internal citations omitted). There can be no
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`dispute that this case is at its infancy—the Court has yet to issue a scheduling order, the parties
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`have yet to exchange infringement and invalidity contentions, no substantive discovery has taken
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`place, the Court has not conducted a Claim Construction hearing, and a trial has not been
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`scheduled.
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`At this early stage of the case, Courts in this District have found that the second factor
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`weighs heavily in favor of stay. See Ever Win, 902 F. Supp. 2d at 507-08 (finding that since no
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`disclosures had been exchanged, no scheduling order had been entered, and no discovery had
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`occurred, the status of the litigation factor “weighs strongly in favor of a stay”); Bonutti Skeletal
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`Innovations, LLC v. Zimmer Holdings, Inc., C.A. No. 12-1107-GMS, 2014 WL 1369721, at *6
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`(D. Del. Apr. 7, 2014) (finding that “this factor strongly favors granting a stay” where no case
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`scheduling order was in place yet, nor had discovery begun or a trial date been set). Indeed,
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`courts have found this factor to favor a stay even in cases much further advanced compared to
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`Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 15 of 20 PageID #: 230
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`the present one. In Princeton Digital, the defendants sought a stay after discovery had begun,
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`certain initial disclosures had been exchanged, plaintiff’s preliminary infringement contentions
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`had been served, and an early Markman proceeding had been held. 2014 WL 3819458, at *3-4.
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`Yet, the Court still found that this factor “favors a stay” because “most of the significant case
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`events are well in the future.” Id. at *4.
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`In the present case, where nearly all the work lies ahead, the second factor strongly favors
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`granting an immediate stay of the litigation.
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`C.
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`Third Factor: A Stay Will Not Unduly Prejudice Or Tactically Disadvantage
`Ironworks
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`In evaluating the third factor, courts in this District consider “the timing of the request for
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`reexamination, the timing of the request for stay, the status of the reexamination proceedings and
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`the relationship of the parties.” Neste Oil, 2013 WL 3353984, at *2 (citing Bos. Sci. Corp. v.
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`Cordis Corp., 777 F. Supp. 2d 783, 789 (D. Del. 2011)). “The mere potential for delay … is
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`insufficient to establish undue prejudice.” Id. In view of these considerations, the third factor
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`also favors a stay.
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`First, Apple diligently filed petitions for IPR early in the case, before any substantive
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`exchange or disclosure had taken place. Indeed, Apple filed its petitions well in advance of the
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`one-year statutory deadline for IPR petitions, and Apple did not wait until Ironworks disclosed
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`its infringement contentions or identified its terms for claim construction. In contrast, Ironworks
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`waited more than six years after the release of the earliest accused product, the iPhone 4S, before
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`asserting the ’150 and ’734 Patents. See D.I. 1 at ¶¶ 3, 57; D.I. 1-1 at Cover; D.I. 1-2 at Cover.
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`In Ever Win, the Court found that defendant’s filing of petitions with the PTO “at a time when
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`little substantive activity had yet occurred in [the] case” demonstrated that the defendant was not
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`“motivated by inappropriate litigation tactics.” 902 F. Supp. 2d at 508-09; see also 454 Life
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`Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 16 of 20 PageID #: 231
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`Scis., 2016 WL 6594083, at *4 (finding the filing of “petitions less than six months into litigation
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`and well within the one-year statutory window” to support the third factor). And in Princeton
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`Digital, the Court found the third factor to favor a stay even though the IPR petitions were filed
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`“almost a year to the day after Plaintiff filed the initial Complaint against it, and less than three
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`months after the Scheduling Order issued.” 2014 WL 3819458, at *4. In this case, Apple filed
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`its petitions for IPR within about a month of the Court ruling on its motion to dismiss, and before
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`the initial case management conference. Thus, there can be no question that the timing of the
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`IPR petitions favors a stay.
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`Second, the timing of Apple’s motion also favors a stay. This case is at its early stages,
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`and thus an immediate stay can avoid any unnecessary waste of the Court’s and the parties’ time
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`and resources. See, e.g., Nexans Inc. v. Belden Inc., C.A. No. 12-1491-SLR-SRF, 2014 WL
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`651913, at *3 (D. Del. Feb. 19, 2014) (finding that this factor favored stay where defendant filed
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`motion to stay “soon after the court issued its decision on the motions to dismiss,” fact discovery
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`remained open, and nearly two years remained until the scheduled trial date).
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`Third, the relationship between the parties also favors a stay. Ironworks is a non-
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`practicing, patent-licensing entity that seeks only monetary damages. See D.I. 1 at Prayer for
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`Relief. Ironworks does not compete with Apple in the marketplace, and it does not make or sell
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`any product that even resembles the iPhones accused in this case. See id. ¶ 3. Because
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`Ironworks is “not a director competitor,” Ironworks would not suffer any undue prejudice
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`because it “can be adequately remedied for any delay by money damages, including any
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`appropriate interest accrued during the stay.” AIP Acquisition LLC v. Level 4 Commc’ns, LLC,
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`C.A. No. 12-617-GMS, 2014 WL 12642000, at *3 (D. Del. Jan. 9, 2014) (internal citations
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`omitted); see also Alerts Pty. Ltd. v. Bloomberg Fin., L.P., 922 F. Supp. 2d 486, 494-95 (D. Del.
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`Case 1:17-cv-01399-RGA Document 23 Filed 07/19/18 Page 17 of 20 PageID #: 232
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`Feb. 5, 2013) (finding the relationship between the parties favored a stay where the parties are
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`not direct competitors).
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`Fourth, Ironworks’ own litigation actions demonstrate that it would not be unduly
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`prejudiced by a stay. Ironworks did not assert the ’150 and ’734 Patents until more than seven
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`years after Ironworks I started, and more than twelve years after the ’150 Patent issued. See D.I.
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`1; Ironworks I at D.I. 1. And even after the filing of this case, Ironworks waited nearly three
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`months before serving the Complaint, and then immediately agreed to stay all proceedings for
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`one of the three patents-in-suit. D.I. 1, 5, 8-9. Ironworks has not demonstrated any urgency in
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`prosecuting this case, and its