Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 1 of 30
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`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF GEORGIA
`ATLANTA DIVISION
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`IRONBURG INVENTIONS LTD. a
`United Kingdom Limited Company,
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`Plaintiff,
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`vs.
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`COLLECTIVE MINDS GAMING
`CO. LTD.,
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`Defendant.
`
`Civil Action No. 1:16-cv-04110-TWT
`
`[ORAL ARGUMENT REQUESTED BY
`PLAINTIFF]
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`PLAINTIFF IRONBURG INVENTIONS LTD’S OPPOSITION TO
`MOTION TO STAY CASE PENDING INTER PARTES REVIEW
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 2 of 30
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`TABLE OF CONTENTS
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`
`I.
`
`II.
`
`Page
`INTRODUCTION .......................................................................................... 1
`
`FACTUAL BACKGROUND......................................................................... 5
`
`A.
`
`The Proceedings in this Case Are at an Advanced Stage and the
`Parties Have Expended Substantial Resources to Prepare for
`Trial ...................................................................................................... 5
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`B. Defendant Could Have Filed The Petitions in March 2016 ................. 6
`
`C. Defendant Has Benefited From the Repeated Challenges to the
`Patents by a Third Party But Failed to Seek a Stay ............................. 6
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`III. LEGAL STANDARD .................................................................................. 11
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`IV. ARGUMENT ................................................................................................ 12
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`A. A Stay Will Not Simplify the Issues in the Case ............................... 12
`
`1.
`
`2.
`
`The PTAB Has Not Instituted a Review Of Defendant’s
`Petitions .................................................................................... 13
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`This Action Involves an Additional Patent Not at Issue in
`Defendant’s IPR Petitions ........................................................ 15
`
`B. Defendant Tactically Delayed Filing IPR Petitions and a Stay
`Now Would Prejudice Plaintiff .......................................................... 17
`
`C.
`
`The Advanced Stage of Litigation Weighs Against a Stay ................ 21
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`V.
`
`CONCLUSION ............................................................................................. 23
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`-i-
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 3 of 30
`
`TABLE OF AUTHORITIES
`
`
`CASES
`
`Page
`
`Affinity Labs of Tex., LLC v. Ford Motor Co.,
`No. 1:12-cv-00582-RC, 2013 WL 7760958
`(E.D. Tex. Sept. 19, 2013) .................................................................................. 20
`
`Affinity Labs of Tex., LLC v. Nike, Inc.,
`No. C 10-5543 CW, 2011 U.S. Dist. LEXIS 51665
`(N.D. Cal. May 13, 2011) ................................................................................... 19
`
`American Vehicular Sciences v. Toyota Motor Corp.,
`Case No. 6:12-CV-404 (Dkt. 221 at p. 3) (E.D. Tx Feb. 19, 2014) ................... 16
`
`Automatic Mfg. Sys., Inc. I, 2013 U.S. Dist. LEXIS 67790, 2013
`WL 1969247 (M.D. Fla. Nov. 21, 2013) ............................................................ 14
`
`Belden Techs. Inc. v. Superior Essex Commc’ns LP,
`Civ. No. 8-63-SLR, 2010 WL 3522327 (D. Del. Sept. 2, 2010) ........................ 18
`
`Colo. River Water Conservation Dist. v. United States,
`424 U.S. 800 (1976) ............................................................................................ 12
`
`Comcast Cable Communications Corp., LLC v. Finisar Corp.
`No. 06-04206 WHA, 2007 WL 1052883 (N.D. Cal. Apr. 5, 2007) ................... 11
`
`Davol, Inc. v. Atrium Med. Corp.,
`Civil Action No. 12-958-GMS, 2013 U.S. Dist. LEXIS 84533
`(D. Del. June 17, 2013) ........................................................................... 15, 17, 19
`
`Encap v. The Scotts Co.,
`Case No. 1:11-CV-685 (E.D. Wis. Nov. 7, 2013) .............................................. 16
`
`Ethicon Inc. v. Quigg,
`849 F.2d 1422 (Fed. Cir. 1988) .......................................................................... 12
`
`Evolutionary Intelligence, LLC v. Apple Inc.,
`No. 3:13-cv-4201, 2014 U.S. Dist. LEXIS 2763
`(N.D. Cal. Jan. 9, 2014) ...................................................................................... 18
`
`Fresenius USA, Inc. v. Baxter Int’l, Inc.,
`582 F.3d 1288 (Fed. Cir. 2009) (Newman, J., concurring) ................................ 11
`
`
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`-ii-
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 4 of 30
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page
`
`Imagevision.net, Inc. v. Internet Payment Exch., Inc.,
`No. 12-054-GMS-MPT, 2013 U.S. Dist. LEXIS 25015 (D. Del.
`Feb. 25, 2013) ..................................................................................................... 17
`
`Indiana Police Pension Trust v. Chrysler LLC,
`129 S. Ct. 2275 (2009) ........................................................................................ 11
`
`Intellectual Ventures II LLC v. SunTrust Banks, Inc.,
`No. 1:13-CV-02454-WSD, 2014 U.S. Dist. LEXIS 142295
`(N.D. Ga. Oct. 7, 2014) ....................................................................................... 12
`
`Interwoven, Inc. v. Vertical Computer Sys.,
`No. C 10-04645 RS, 2012 U.S. Dist. LEXIS 30946 (N.D. Cal.
`Mar. 8, 2012)................................................................................................. 20, 21
`
`Ironburg Inventions Ltd. v. Valve Corporation,
`Case No. 15-cv-04219-TWT (Dkt. 1) (N.D. Ga. Dec. 3, 2015) ........................... 7
`
`Ironburg Inventions Ltd. v. Valve Corporation,
`Case No. 17-cv-01182-TSZ (Dkt. 117) (W.D. Wash. Aug. 4, 2017) .................. 7
`
`Kahn v. Gen. Motors Corp.,
`889 F.2d 1078 (Fed. Cir. 1989) .......................................................................... 11
`
`KLA-Tencor Corp. v. Nanometrics, Inc.
`2006 WL 708661 (N.D. Cal. 2006) .................................................................... 18
`
`Maxlinear, Inc. v. Cresta Technology Corporation,
`IPR2015-00591(PTAB 2015) ............................................................................. 14
`
`NFC Tech. LLC v. HTC Am., Inc.,
`No. 2:13-CV-1058-WCB, 2015 U.S. Dist. LEXIS 29573 (E.D.
`Tex. Mar. 11, 2015) ...................................................................................... 13, 14
`
`Rensselaer Polytechnic Inst. v. Apple Inc.,
`2014 WL 201965 (N.D.N.Y. Jan. 15, 2014) ...................................................... 19
`
`Soverain Software LLC v. Amazon.com, Inc.,
`356 F.Supp.2d 660 (E.D.Tex. 2005) ................................................................... 11
`
`Sunbeam Prods., Inc. v. Hamilton Beach Brands, Inc.,
`No. 3:09-cv-791, 2010 WL 1946262 (E.D. Va. May 10, 2010) ........................ 19
`
`
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 5 of 30
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`TABLE OF AUTHORITIES
`(continued)
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`Page
`
`Ultratec, Inc. v. Sorenson Commc’ns, Inc.,
`No. 13-cv-346-bbc, 2013 WL 6044407 (W.D. Wis. Nov. 14, 2013) ........... 12, 14
`
`Unifi Sci. Batteries, LLC v. Sony Mobile Communs. AB,
`No. 6:12cv224 JDL, 2014 U.S. Dist. LEXIS 129388 (E.D. Tex.
`Jan. 14, 2014 ................................................................................................. 15, 18
`
`Verinata Health, Inc. v. Ariosa Diagnostics, Inc.,
`No. C 12-05501, 2014 WL 121640 (N.D. Cal. Jan. 13, 2014) ........................... 11
`
`Voltstar Techs., Inc. v. Superior Commc’ns, Inc.,
`No. 2:12-cv-00082, 2013 WL 4511290 (E.D. Tex. Aug. 22, 2013) .................. 20
`
`Wonderland Nurserygoods Co. v. Kids II, Inc.,
`No. 1:13-CV-01114-ELR, 2016 U.S. Dist. LEXIS 100585
`(N.D. Ga. Feb. 10, 2016) .............................................................................. 15, 16
`
`STATUTES
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`35 U.S.C. § 315(b) ............................................................................................. 10, 23
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`35 U.S.C. § 315(c) ..................................................................................................... 8
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`35 U.S.C. § 315(e)(1) ............................................................................................... 10
`
`35 U.S.C. § 325(d) ............................................................................................... 4, 14
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`35 U.S.C. § 282(a) ................................................................................................... 10
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`35 U.S.C. § 314(d) ................................................................................................... 10
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 6 of 30
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`I.
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`INTRODUCTION
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`Plaintiff, Ironburg Inventions Ltd. (“Plaintiff”), opposes the motion of
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`defendant Collective Minds Gaming Co. Ltd. (“Defendant” or “Collective Minds”)
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`to stay the action. Defendant contends that its recently filed petitions for inter
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`partes review (“IPR”) with the Patent Trial and Appeal Board (“PTAB”) relating to
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`the Patents-In-Suit justify a stay. But Defendant has engaged in substantial delay
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`in filing those petitions and a premature stay based on those petitions would
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`unfairly prejudice Plaintiff, would increase the burden on the parties, and would
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`not streamline the issues to be adjudicated in this case. Instead, a stay would
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`simply reward Defendant for its procedural gamesmanship. Moreover, despite
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`similar sustained and duplicative efforts to have the patents invalidated by Valve
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`Corporation (“Valve”), a defendant in Plaintiff’s related and now transferred
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`infringement case against Valve (Ironburg Inventions Ltd. v. Valve Corporation,
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`Case No. 17-cv-01182-TSZ (W.D. Wash. Aug. 4, 2017), the patents have not been
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`invalidated. (See Declaration of Robert D. Becker in Support of this Opposition
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`(“Becker Decl.”), ¶ 3-11.) The four IPRs filed by Valve beginning in early 2106
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`against the main ‘525 and ‘770 patents at issue in both the Valve case and this
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`Collective Minds case have resulted in final findings by the PTAB confirming the
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`patentability of claims at issue here. (Id.) Had the court instituted a stay based on
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`Valve’s petitions, it is clear that the stay would have been a highly prejudicial
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 7 of 30
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`waste of time and resources. There is no reason to believe that the petitions filed
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`by Collective Minds will end differently or even be instituted.
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`Plaintiff initiated this action on November 2, 2016, when it filed a complaint
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`against Defendant alleging infringement of five U.S. Patents by two infringing
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`video game controller products – Defendant’s “Strike Pack” product and “Trigger
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`Grips” product (collectively, the “Accused Products”). (Dkt. 1.) The Accused
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`Products compete with video game controller products made by Plaintiff’s
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`licensees, Microsoft and Scuf Gaming, and have caused Plaintiff great harm since
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`their release. (Becker Decl., ¶ 2.)
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`The Complaint specified infringement of five U.S. Patents: 1) Patent No.
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`8,641,525 (“‘525 Patent”); 2) Patent No. 9,089,770 (“‘770 Patent”); 3) Patent No.
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`9,289,688 (“‘688 Patent”); 4) Patent No. 9,352, 229 (“‘229 Patent”); and 5) Patent
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`No. 9,308,450 (“‘450 Patent”) (collectively, the “Patents-in-Suit”). As early as
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`March 4, 2016, Plaintiff notified Defendant that its Accused Products, when used
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`as intended to modify Xbox One gaming controllers, resulted in gaming controllers
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`that infringed Plaintiff’s Patents-in-Suit. (Becker Decl., ¶ 3.)
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`Since Plaintiff filed its Complaint, the parties have engaged in motion
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`practice related to the Complaint, completed disclosure of the asserted patent
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`claims, exchanged infringement and validity contentions, and submitted claim
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`construction briefing. (Becker Decl., ¶ 4.) Plaintiff served discovery requesting
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 8 of 30
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`documents from Defendant. (Id.) The Court set a Markman hearing for February
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`6, 2018. (Id.) While a trial date has not been set, the parties have completed
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`substantial work necessary to try Plaintiff’s claims.
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`Now, more than a year after Plaintiff filed the Complaint, and almost two
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`years after Plaintiff notified Defendant that the Accused Products infringe the
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`Patents-in-Suit, Defendant filed four petitions for IPR (collectively, the
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`“Petitions”). Defendant’s late filing of the Petitions is a clear delay tactic.
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`Defendant could have filed IPRs in March of 2016 when it was contacted by
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`Plaintiff with notice of infringement. Instead, Defendant delayed, seeking to take
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`advantage of substantially identical IPRs filed by others. Now that four prior IPR
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`petitions have been filed, and the PTAB has issued final written decisions finding
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`numerous claims from the Patents-in-Suit to be patentable, Defendant seeks to file
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`another set of similar IPR petitions regarding some but not all of the Patents-in-
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`Suit. Plaintiff does not believe that these new Petitions will be instituted by the
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`PTAB, does not believe that institution will result in the invalidation of the patents,
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`and is certain that it will not impact the ‘450 Patent as Defendant did not file a
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`Petition against the ‘450 Patent.
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`Defendant claims that the PTO’s decision on the Petitions, if any, “could
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`entirely avoid the need to expend . . . resources” litigating Plaintiff’s infringement
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`claims regarding the Patents-in-Suit. (Defendant’s Motion to Stay, Dkt. 46, p. 2.)
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 9 of 30
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`In support of its contention, Defendant points to the IPRs filed by Valve contesting
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`claims related to four of the Patents-in-Suit: ‘525 Patent, ‘727 Patent, ‘668 Patent,
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`and ‘229 Patent. (Id., at p. 3.) Valve’s IPRs do not support Defendant’s assertion
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`that the Petitions may relieve the need for a trial on Plaintiff’s infringement claims.
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`To the contrary, Valve’s IPRs resulted in final written decisions that confirmed the
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`need for trial on the Patents-in-Suits. For that reason, the Washington District
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`Court overseeing Plaintiff’s infringement action against Valve recently denied
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`Valve’s similar motion for a stay. (See Becker Decl., ¶ 13, Ex. J.) And the District
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`Court’s denial was before the recent developments this month, where the PATB
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`denied Valve’s request for rehearing on the first filed petition against the ‘525
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`patent, and terminated entirely the second set of IPRs filed by Valve against the
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`‘525 and ‘770 patents. (Becker Decl., ¶¶ 10-11.) All IPRs against the ‘525 and
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`‘770 patents have now gone final or been terminated, and the PTAB has found
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`patentable numerous claims at issue in this litigation.
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`Defendant’s proposed stay is highly inappropriate and should be denied.
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`First, the Petitions do not address all of the Patents-in-Suit, and any simplification
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`of the issues is purely speculative. The PTAB has not accepted the Petitions;
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`Defendants merely filed them. A stay of litigation based on these new Petitions is
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`also unfairly premature and speculative at this point. There is a substantial
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`likelihood that PTAB will reject institution of the Petitions under 35 U.S.C. §
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 10 of 30
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`325(d) because Defendant is presenting “the same or substantially the same prior
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`art or arguments” that were previously presented to the PTAB by Valve, and
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`Defendant has not demonstrated that its Petitions are anything other than a new
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`“bite at the apple” against the Patents-in-Suit.
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`Second, seeking to take advantage of Valve’s IPRs as long as it could,
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`Plaintiff purposefully waited until the final day of the statutory period to file its
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`Petitions. This delay further prejudices Plaintiff, who seeks a swift adjudication of
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`its patent rights regarding the Patents-in-Suit.
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`Third, this case is at an advanced stage. All that is left is the Markman
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`hearing, issuance of an order, and the close of discovery. The Court has already
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`expended resources to become familiar with the patents and technology at issue,
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`prior art, accused products and claim construction. Based on the PTO’s prior
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`decisions regarding the Patents-in-Suit, a trial will be necessary to adjudicate
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`Plaintiff’s claims after any issuance of an IPR. Therefore, a stay of litigation
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`pending IPR will not decrease the burden on the parties or the Court. For all of
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`these reasons, the Motion should be denied in its entirety.
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`II.
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`FACTUAL BACKGROUND
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`A.
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`The Proceedings in this Case Are at an Advanced Stage and the
`Parties Have Expended Substantial Resources to Prepare for Trial.
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`Plaintiff alleges that Defendant infringes five of its patents: (i) the ‘525
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`Patent; (ii) the ‘770 Patent which is a continuation of the ‘525 Patent; (iii) the ’688
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 11 of 30
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`Patent; (iv) the ‘229 Patent; and (v) the ‘450 Patent.
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`Since Plaintiff filed its Complaint over a year ago, the parties have engaged
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`in motion practice on the pleadings, completed disclosure of the asserted patent
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`claims, exchanged infringement and validity contentions, and conducted discovery.
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`(See e.g. Dkts. 14, 17, 20, 24, 34, 38, 39, 41, and 42, and Becker Decl., ¶ 4.) The
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`parties will participate in a Markman hearing on February 6, 2018. (Id.) Once this
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`Court issues its Markman order, the parties will proceed to the close of discovery
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`and trial.
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`B. Defendant Could Have Filed The Petitions in March 2016.
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`Plaintiff notified Defendant that its Accused Products infringed Plaintiff’s
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`Patents-in-Suit in March 4, 2016. (Becker Decl., ¶ 3.) Defendant had the
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`opportunity to file its Petitions after it first received notice of infringement from
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`Plaintiff. Plaintiff filed its Complaint on November 2, 2016 and served it on
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`January 4, 2017. (See Dkt. 1.) Defendant filed a motion to dismiss on February
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`24, 2017, which this Court denied on April 11, 2017. (See Dkts. 14, 24.) Even if
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`Defendant waited to file petitions until after the parties exchanged infringement
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`and invalidity contentions in June and July 2017, Defendant subsequently delayed
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`filing for another six months after the parties exchanged infringement and
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`invalidity contentions. In fact, Defendant postponed filing IPR petitions until the
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`last day of the statutory period. 35 U.S.C. § 315(b). Defendant offered no
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 12 of 30
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`explanation for its delay in filing its Petitions.
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`C. Defendant Has Benefited From the Repeated Challenges to the
`Patents by a Third Party But Failed to Seek a Stay.
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`Plaintiff filed a patent infringement action against Valve in this Court on
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`December 3, 2015. Ironburg Inventions Ltd. v. Valve Corporation, Case No. 15-
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`cv-04219-TWT (Dkt. 1) (N.D. Ga. Dec. 3, 2015). The case was transferred to
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`United States District Court for the Western District of Washington on August 4,
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`2017. Ironburg Inventions Ltd. v. Valve Corporation, Case No. 17-cv-01182-TSZ
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`(Dkt. 117) (W.D. Wash. Aug. 4, 2017). Plaintiff filed suit against Collective
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`Minds on November 2, 2016. (Becker Decl., ¶ 2.) Thus, Plaintiff’s infringement
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`actions against Valve and Defendant were litigated in tandem before this Court,
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`prior to the transfer of the Valve action.
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`As Defendant states in its Motion, Valve filed numerous IPR petitions
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`contesting claims related to four of the Patents-in-Suit: ‘525 Patent, ‘727 Patent,
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`‘668 Patent, and ‘229 Patent. (Defendant’s Motion to Stay, Dkt. 46, p. 3.)
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`Specifically, Valve filed two Petitions with the PTAB on April 22, 2016 (the “948”
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`and “949” IPRs), seeking review of all twenty claims in the ‘525 Patent and the
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`‘770 Patent,” which is a continuation of the ‘525 Patent. (Becker Decl., ¶ 5). In
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`September 2016, the PTAB agreed to institute review of all but three of the claims
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`in the ‘525 (claims 12 and 15) and ‘770 (claim 13) patents. (Becker Decl., ¶ 6.)
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`All of this took place while Collective Minds was on notice of infringement, but
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 13 of 30
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`before Plaintiff filed suit against Collective Minds. (Becker Decl., ¶¶ 2-3.)
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`Collective Minds was free at that time to copy and file the same petitions, join1 the
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`petitions filed by Valve, and/or file additional petitions with different arguments.
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`It did not.
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`Between October 25, 2016 and August 9, 2017, Valve filed four additional
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`IPR petitions with the PTAB challenging the validity of the patents-in-suit.
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`(Becker Decl. ¶ 7.) The PTAB instituted all four IPRs (two additional petitions
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`directed to the ‘525 and ‘770 patents and two petitions directed to the ‘229 and
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`‘688 patents), but refused to institute on various claims, including the same three
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`claims from the ‘525 (claims 12 and 15) and ‘770 (claim 13) patents. The PTAB
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`also narrowed its review to just claim 20 of the ‘525 patent and a subset of the
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`claims it previously agreed to review from the ‘770 patent. (Id.) All of this took
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`place while Collective Minds was on notice of infringement and most of it took
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`place after the filing of the Complaint in this action. Collective Minds was again
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`free to copy and file the same petitions, join the Petitions filed by Valve, and/or file
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`additional petitions with different arguments. It did not. It was also free to file a
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`motion for a stay based on the petitions and could have done so when it filed its
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`1 Under 35 U.S.C. Section 315(c), after an IPR is instituted, the Patent Trial and
`Appeal Board (PTAB) may join a petitioner in a subsequently-filed IPR “that the
`director, after receiving a preliminary response under section 313 or the expiration
`of the time for filing such a response, determines warrants the institution of an inter
`partes review under section 314.”
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 14 of 30
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`answer more than a year ago or at any point during 2017. It did not, even though it
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`borrowed prior art and arguments from the Valve petitions for its invalidity
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`contentions in this case. (See, e.g., Defendant’s Invalidity Contentions, attached to
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`Becker Decl. as Exhibit L, at p. 8, and Valve’s Petition against the ‘525 Patent
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`attached to Becker Decl., as Exhibit A, at pp. 4-5, both asserting the ‘525 Patent is
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`anticipated by U.S. Patent 5,989,123 to Tosaki et al.)
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`On September 22, 2017, the PTAB issued final written decisions adverse to
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`Valve in IPR2016-00948 (“948 IPR”) and IPR2016-00949 (“949 IPR”), finding
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`that numerous claims from the ‘525 and ‘770 patents are patentable (the “Final
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`Decisions”). (Becker Decl., ¶¶ 8-9, Exs. E-F.) The Final Decisions eliminated
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`Valve’s invalidity defenses to the primary asserted patent claims, many of which
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`are also asserted by Defendant. The PTAB found claims 2, 3, 4, 5, 7, 8, 9, 10, 11,
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`and 18 under the ‘525 Patent patentable, and claim 14 under the ‘770 Patent
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`patentable. (Id.) These claims are in addition to the claims the PTAB refused to
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`include in the IPRs.
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`Valve filed its own motion to stay litigation pending IPR on September 28,
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`2017. (Becker Decl., ¶ 13.) On December 6, 2017, the court denied Valve’s
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`motion to stay with respect to infringement claims against the ‘525 Patent and ‘770
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`Patent, finding a stay in litigation “would serve no purpose and might unduly
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`prejudice plaintiff.” (Becker Decl., ¶ 13, Ex. J, 2:3-4.) The court bifurcated the
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 15 of 30
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`infringement claims related to the ‘688 and ‘229 patents and stayed the claims
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`pending the outcome of the PTAB proceedings. (Id. at 2:8-16.)
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`Based on the Final Decisions, Plaintiff sought and obtained an Order from
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`the PTAB authorizing Plaintiff to file a motion to terminate Valve’s two follow-on
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`IPR petitions against the ‘525 and ‘770 Patents. (Becker Decl., ¶ 10.) On January
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`25, 2018, the PTAB granted Plaintiff’s motion to terminate Valve’s pending IPR
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`petitions on the grounds that Valve is estopped from maintaining the IPRs under 35
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`U.S.C. § 315(e)(1). (Becker Decl., ¶ 10, Ex. G.)
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`Valve requested a rehearing of the Final Decisions in the 948 IPR and 949
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`IPR. (Becker Decl., ¶ 11.) The PTAB denied Valve’s request for a hearing of the
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`Final Decision in 949 IPR in November 2017. (Becker Decl., ¶ 11, Ex. H.) On
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`January 26, 2018, the PTAB denied Valve’s motion for reconsideration of the 948
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`IPR, and upheld claims of the ‘525 Patent and ‘770 Patent are patentable. (Becker
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`Decl., ¶ 11, Ex. I.)
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`The PTAB’s Final Decisions, Orders, and decisions not to institute review of
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`certain claims in the Valve IPRs demonstrate that there are asserted claims under
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`the ‘525 Patent, ‘727 Patent, and ‘668 Patent that remain patentable after IPR
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`review.2 (See Becker Decl., ¶¶ 8-11, Exs. E-I.) In short, the Final Decisions
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`2 This is because (1) the PTAB’s institution decisions are not appealable under 35
`U.S.C. § 314(d); (2) all issued claims (except for claims under review by the PTO)
`carry a presumption of validity under 35 U.S.C. § 282(a); and (3) the PTAB has
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 16 of 30
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`
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`confirmed the need for a trial in Plaintiff’s litigation against Valve, and can be used
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`as a guide to simplify issues to be tried in this action.
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`III. LEGAL STANDARD
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`As the moving party, Defendant bears the burden of demonstrating that a
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`stay is warranted. Indiana Police Pension Trust v. Chrysler LLC, 129 S. Ct. 2275,
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`2276-77 (2009). The Federal Circuit recognizes the existence of a “strong public
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`policy favoring expeditious resolution of litigation.” Kahn v. Gen. Motors Corp.,
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`889 F.2d 1078, 1080 (Fed. Cir. 1989). As such, “[t]here is no per se rule that
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`patent cases should be stayed pending reexaminations, because such a rule would
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`invite parties to unilaterally derail litigation.” Soverain Software LLC v.
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`Amazon.com, Inc., 356 F.Supp.2d 660, 662 (E.D.Tex. 2005); Verinata Health, Inc.
`
`v. Ariosa Diagnostics, Inc., No. C 12-05501, 2014 WL 121640, at *2 (N.D. Cal.
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`Jan. 13, 2014). “If litigation were stayed every time a claim in suit undergoes
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`reexamination, federal infringement actions would be dogged by fits and starts.
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`Federal Court calendars should not be hijacked in this manner.” Comcast Cable
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`Communications Corp., LLC v. Finisar Corp. No. 06-04206 WHA, 2007 WL
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`1052883 at *1 (N.D. Cal. Apr. 5, 2007).
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`In exercising discretion within the context of IPR proceedings, courts
`
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`not ruled on Valve’s ‘229 petition. Otherwise, because the original and amended
`complaints against Valve were all filed more than one year ago, Valve may not
`filing additional petitions regarding the patents in suit under 35 U.S.C. Section
`315(b).
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 17 of 30
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`“should consider the effect of delay upon a patentee,” see Fresenius USA, Inc. v.
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`Baxter Int’l, Inc., 582 F.3d 1288, 1305 n. 1 (Fed. Cir. 2009) (Newman, J.,
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`concurring), “while keeping in mind the ‘virtually unflagging obligation of the
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`federal courts to exercise jurisdiction’ in cases properly before them, absent
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`exceptional circumstances.” Ultratec, Inc. v. Sorenson Commc’ns , Inc., No. 13-
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`cv-346-bbc, 2013 WL 6044407, at *2 (W.D. Wis. Nov. 14, 2013) (emphasis
`
`added) (quoting Colo. River Water Conservation Dist. v. United States, 424 U.S.
`
`800, 817 (1976)). In determining whether or not to grant a stay pending IPR,
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`courts consider: (1) whether a stay would unduly prejudice or present a tactical
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`disadvantage to the nonmovant; (2) whether a stay will simplify the issues in the
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`case; and (3) whether discovery is complete and a trial date has been set. See
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`Intellectual Ventures II LLC v. SunTrust Banks, Inc., No. 1:13-CV-02454-WSD,
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`2014 U.S. Dist. LEXIS 142295, at *5 (N.D. Ga. Oct. 7, 2014).
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`IV. ARGUMENT
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`All three of the factors to be considered in determining whether to grant a
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`stay litigation pending IPR weigh against granting a stay in this case. Courts have
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`the “inherent power” to manage their dockets and stay proceedings. Ethicon Inc. v.
`
`Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988). The decision to grant a stay is
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`within the court's discretion, taking into account the totality of the circumstances.
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`Id.
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 18 of 30
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`A. A Stay Will Not Simplify the Issues in the Case.
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`Defendant’s request for a stay of litigation at this point is at best speculative
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`and unfairly premature because (1) PTAB will likely deny Defendant’s request to
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`institute another set of IPRs having already been through two sets on the same
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`patents, and (2) even if the Petitions are instituted, an IPR decision will not
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`eliminate the parties’ need to try Plaintiff’s infringement claims or further simplify
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`the issues in this case.
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`1.
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`The PTAB Has Not Instituted a Review Of Defendant’s
`Petitions
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`The PTAB has not accepted Defendant’s IPR Petitions to institute review,
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`and any “simplification of issues” afforded by a stay pending IPR is purely
`
`speculative. A stay is simply premature given the PTAB has not indicated that it
`
`has any intention to institute the Petitions. IPR proceedings begin with the filing of
`
`a petition that identifies all of the challenged claims and the grounds and
`
`supporting evidence on a claim-by-claim basis. The PTAB must determine
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`whether to institute a trial in response to Defendant’s Petitions. Therefore, whether
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`the PTAB decides to grant IPR is a highly significant factor in the court’s decision
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`to stay a case pending PTAB review. NFC Tech. LLC v. HTC Am., Inc., No. 2:13-
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`CV-1058-WCB, 2015 U.S. Dist. LEXIS 29573, at *14 (E.D. Tex. Mar. 11, 2015).
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`This is especially relevant here, where the PTAB has issued Final Decisions
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`related to the ‘525 and ‘770 Patents in response to Valve’s IPR petitions and
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 19 of 30
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`terminated two additional petitions filed by Valve related to the ‘525 and ‘770
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`Patents. Like Valve, Defendant raises “obviousness” arguments regarding these
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`patents in its Petitions and has failed to show why the PTAB should institute the
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`Petitions after having reviewed the ‘525 and ‘770 Patents multiple times. It is
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`likely that the PTAB will not grant review of the Petitions pursuant to its discretion
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`under 35 U.S.C. § 325(d), especially considering Defendant and Valve both
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`defended against Plaintiff’s patent infringement claims in this Court. See,
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`Maxlinear, Inc. v. Cresta Technology Corporation, IPR2015-00591, attached to
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`Becker Decl. as Exhibit K (PTAB denied institution of petition where petitioner
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`was a co-defendant in district-court litigation and that the co-defendant had already
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`challenged the patent on each of the grounds presented by the petitioner).
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`Several courts have concluded that the factors relevant to a stay analysis
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`cannot be meaningfully addressed until the PTO determines whether to institute an
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`IPR. NFC Tech. LLC v. HTC Am., Inc., supra, 2015 U.S. Dist. LEXIS 29573, at
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`*14. In Automatic Mfg. Sys., Inc. I, the court reasoned that a patent owner should
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`be able to prosecute its claims at least until the PTO has decided it will review any
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`challenged claims “because a petition does not shed much light on the potential
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`scope of an [IPR], and because a stay could delay [the district court] proceedings
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`for at least six months with little to show.” Automatic Mfg. Sys., Inc. I, 2013 U.S.
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`Dist. LEXIS 67790, 2013 WL 1969247, at *3 (M.D. Fla. Nov. 21, 2013); see also,
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`Case 1:16-cv-04110-TWT Document 50 Filed 02/02/18 Page 20 of 30
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`Ultratec, Inc., supra, 2013 U.S. Dist. LEXIS 162459, 2013 WL 6044407, at *3
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`(denying the defendants’ motion to stay because, inter alia, “the fact that the [PTO]
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`has not yet granted the petitions to review the nine patents [at issue] adds an
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`additional layer of doubt whether the [IPR] will even occur”); Davol, Inc. v.
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`Atrium Med. Corp., Civil Action No. 12-958-GMS, 2013 U.S. Dist. LEXIS 8453,
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`at *2