Case 2:21-cv-19234-JMV-MAH Document 50 Filed 04/04/22 Page 1 of 12 PageID: 1301
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`Plaintiff,
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`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
`____________________________________
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`GESTURE TECHNOLOGY
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`: Civil Action No. 21-19234 (JMV) (MAH)
`PARTNERS, LLC,
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`Defendants.
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`____________________________________:
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`HAMMER, United States Magistrate Judge
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`LG ELECTRONICS INC., AND LG
`ELECTRONICS U.S.A., INC.,
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` OPINION
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`I.
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`INTRODUCTION
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`This matter comes before the Court on Defendants’ motion to stay discovery pending the
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`outcome of petitions for inter partes review (“IPR”) that have been filed before the United States
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`Patent Trial and Appeal Board (“PTAB”). Mot. to Stay, Nov. 24, 2021, D.E. 39. The Court has
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`considered the motion on the papers pursuant to Fed. R. Civ. P. 78 and L. Civ. R. 78.1. For the
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`reasons set forth herein, the Court will grant Defendants’ motion and stay discovery pending
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`outcome of the IPR proceedings.
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`II.
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`BACKGROUND
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`On February 4, 2021, Plaintiff Gesture Technology Partners, LLC (“GTP”) filed a
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`Complaint against Defendants LG Electronics, Inc. and LG Electronics, U.S.A., Inc. (collectively
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`“LG”) in the United States District Court for the Western District of Texas. Compl., Feb. 24, 2021,
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`D.E. 1. GTP alleges that LG infringed five of GTP’s patents; specifically, U.S. Patent Nos.
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`8,194,924 (the “’924 patent”), 7,933,431 (the “’431 patent”), 8,878,949 (the “’949 patent”),
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`8,553,079 (the “’079 patent”), and 7,804,530 (the “’530 patent”) (collectively, the “Asserted
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`Patents”). Id. GTP asserts that it owns all substantial rights, interest, and title in and to all five of
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`the Asserted Patents, and has held these at all relevant times. See id. After filing at least five
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`requests for extensions of time to answer that were either consented to or were unopposed, LG
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`filed an Answer to the Complaint, along with a motion to transfer venue on July 2, 2021. D.E. 9,
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`12, 13, 20, 22, 23, and 24. The parties engaged in targeted venue and jurisdiction discovery, after
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`which they filed a joint motion to transfer venue to this Court on October 21, 2021. Motion to
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`Transfer, D.E. 26, 32. The Western District of Texas Court granted the transfer motion on October
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`22, 2021. Order, D.E. 33.
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`In the meantime, between May and June of 2021, non-party Apple, Inc. filed petitions for
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`IPR of four of the Asserted Patents in this case: IPR2021-09922 for the ’079 Patent; IPR 2021-
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`00920 for the ’431 Patent; IPR 2021-00923 for the ’924 Patent; and IPR 2021-00921 for the ’949
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`Patent (“the Apple IPRs”). Defs.’ Brief in Supp., Nov. 24, 2021, D.E. 39-1, at 3. The Apple IPRs
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`request the PTAB to invalidate all claims of the ’079 Patent, the ’431 Patent, the ’924 Patent, and
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`the ’949 Patent. Id. at 1. On November 5, 2021, LG filed joinders in the Apple IPRs against four
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`of the Asserted Patents.1 Id. at 3. “LG’s IPR petitions challenge each and every asserted claim of
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`the Asserted Patents in this litigation.” Id. On November 24, 2021, LG filed the instant motion,
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`seeking a stay pending the outcome of the IPRs. Defs.’ Brief in Supp., Nov. 24, 2021, D.E. 39-1.
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`After LG filed this motion, the PTAB instituted IPR proceedings for all four of the Apple IPRs.
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`Defs.’ Reply Brief, Jan. 7, 2022, D.E. 47, at 2.
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`1 According to LG, its petitions are “substantively identical to Apple’s, and LG’s joinder
`requests would place LG in an understudy role in Apple’s IPRs, which (if granted) means that
`LG would adhere to all deadlines in the Apple IPRs, submit no separate substantive filings, and
`would not seek additional depositions or deposition time, so long as Apple remains in the case.”
`Defs.’ Reply Brief, Jan. 7, 2022, D.E. 47, at 2; see also Mot. for Joinder to Inter Partes Review,
`D.E. 39-11, at 2.
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`2
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`On March 29, 2022, LG filed a letter updating the Court on the status of the IPR
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`proceedings. LG Letter, Mar. 29, 2022, D.E. 48. LG represents the following:
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`On March 17, 2022, the PTAB instituted IPR proceedings on all the
`asserted claims of U.S. Patent Nos. 8,194,924, 8,553,079, and
`7,933,431. The PTAB also granted LG’s request for joinder with the
`ongoing Apple IPRs associated with the same patents, thereby
`making it likely that the IPR proceedings will conclude by year-end.
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`Id.; see also LG Electronics, Inc. and LG Electronics U.S.A., Inc. v. Gesture Technology
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`Partners, LLC, IPR2022-000993 Decision (Patent 8,194,924 B2), IPR2022-00090 Decision
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`(Patent 8,553,079 B2), IPR 2022-00091 Decision (Patent 7,933,431 B2), D.E. 48-1. LG’s IPR
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`petition for the ‘949 Patent is also pending before the PTAB.2 LG Letter, Mar. 29, 2022, D.E.
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`48.
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`LG argues that a stay would not unduly prejudice GTP, would simplify the issues before
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`the Court, and is appropriate considering the status of this case. Defs.’ Brief in Supp., Nov. 24,
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`2021, D.E. 39-1. In its reply brief, LG further argues that the need for a stay is strengthened
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`because the PTAB instituted the Apple IPRs for four of the five Asserted Patents, and because of
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`developments in other related cases in which the proceedings have been stayed. See Defs.’ Reply
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`Brief, Jan. 7, 2022, D.E. 47, 2, 6-7. LG forecasts that it is “very likely” that the PTAB will
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`invalidate the asserted claims of the Asserted Patents.3 Defs.’ Brief in Supp., Nov. 24, 2021, D.E.
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`39-1, at 1.
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`2 On April 1, 2022, GTP responded to LG’s update, asserting that the PTAB’s decision to
`institute IPR proceedings on the asserted claims of three of the four patents and to grant LG’s
`joinder request does not affect the analysis of LG’s motion to stay. Letter, Apr. 1. 2022, D.E. 49.
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` 3
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` In support of this assertion, LG cites a similar case involving GTP in the Western District of
`Texas (WDTX). Defs.’ Reply Brief, Jan. 7, 2022, D.E. 47, at 2. In that case, the Court granted a
`stay of GTP’s litigation against Apple, Inc. pending the outcome of the IPR petitions, which are
`“substantively identical” to the petitions at issue in this case. Id. at 2, 7 (citing Gesture
`Technology Partners, LLC v. Apple Inc., Case No. 6:21-cv-00121 (W.D. Tex.). Additionally, in
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`GTP opposes a stay, contending that LG’s motion is premature because its requests for
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`joinder to the Apple IPRs are still pending, LG was not diligent in filing its joinder requests in the
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`Apple IPRs, it is impossible to predict whether the granting of the motion will simplify the issues
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`before the Court, and GTP will suffer prejudice from further delay of this litigation. Pl.’s Mem.
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`in Opp’n, Dec. 31, 2021, D.E. 46, at 1.
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`III. ANALYSIS
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`A district court has the inherent authority to control its own docket, including the power to
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`stay proceedings. Clinton v. Jones, 520 U.S. 681, 706 (1997). When determining whether to grant
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`a stay pending reexamination, courts in this District generally consider three factors: “(1) whether
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`a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2)
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`whether a stay will simplify the issues in question and trial of the case; and (3) whether discovery
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`is complete and whether a trial date has been set.” Stryker Trauma S.A. v. Synthes (USA), No. 01-
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`3879, 2008 WL 877848, at *1 (D.N.J. Mar. 28, 2008) (quoting Xerox Corp. v. 3Com Corp., F.
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`Supp. 2d 404, 406 (W.D.N.Y. 1999)). The party requesting a stay bears the burden of establishing
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`that a stay is justified. Clinton, 520 U.S. at 709.
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`A. A Stay Will Not Unduly Prejudice or Tactically Disadvantage GTP
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`In determining whether undue prejudice or an unfair tactical advantage would result from
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`a stay, courts consider the following subfactors: (1) the timing of the request for reexamination;
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`(2) the timing of the request for a stay; (3) the status of reexamination proceedings; and (4) the
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`relationship of the parties. Depomed Inc. v. Purdue Pharma L.P., No. 13-571, 2014 WL 3729349,
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`a parallel case involving GTP in the Eastern District of Texas, the USPTO instituted
`reexamination proceedings for three of the asserted patents in which the court acknowledged a
`“substantial new question of patentability” was raised by Samsung, Inc. Id. at 2-3 (citing
`Gesture Technology Partners, LLC v. Samsung Electronics Co. Ltd., Case No. 6:21-cv-00040
`(E.D. Tex.)).
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`at *2 (D.N.J. July 25, 2014). While the Court is mindful that any delay in the final resolution of a
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`case pending IPR proceedings may result in some inherent prejudice to GTP, the fact of a “delay
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`inherent to the review process is, itself, insufficient to establish undue prejudice.” Id. (citing Brass
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`Smith, LLC v. RPI Indus., Inc., No. 09-6344, 2010 WL 4444717, *4 (D.N.J. Nov. 1, 2010)).
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`1.
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`Timing of Request for Reexamination Favors a Stay
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`LG contends that its requests to join the Apple IPRs were diligently filed because Apple
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`filed IPR petitions within four months of the initiation of this case, and LG sought joinder within
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`four months of Apple filing those petitions. Defs.’ Brief in Supp., Nov. 24, 2021, D.E. 39-1, at
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`10. LG further contends that it diligently filed its joinder requests because they were submitted
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`just two weeks after the case was transferred to this Court. Defs.’ Reply Brief, Jan. 7, 2022, D.E.
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`47, at 3-4. GTP, on the other hand, argues LG did not file its own IPR petitions, or request to join
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`the Apple IPRs, until nine months after the commencement of this litigation, and five months after
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`Apple filed its IPR petitions. Pl.’s Mem. in Opp’n, Dec. 31, 2021, D.E. 46, at 4. GTP further
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`contends that LG used dilatory tactics in seeking multiple extensions, during which time LG was
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`aware of the Apple IPRs, rendering their requests for reexamination untimely. Id.
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`A petition for inter partes review must be filed within one year of the date on which the
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`complaint is served. 35 U.S.C. § 315(b). Courts have found IPR petitions filed before any
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`significant occurrences and proceedings in the underlying district court actions timely. Bonutti
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`Skeletal Innovations, L.L.C. v. Zimmer Holdings, Inc., No. 12-1107, 2014 WL 1369721, at *3 (D.
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`Del. Apr. 7, 2014). Here, LG filed requests to join the Apple IPRs nine months after GTP
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`commenced this litigation, and not long after the transfer issue had been resolved in the Western
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`District of Texas. Thus, LG acted within the statutory one-year deadline for doing so. Moreover,
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`LG made that request before any significant occurrences and proceedings took place in the instant
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`litigation. Other than limited venue and jurisdiction discovery and the motion to transfer venue,
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`no significant substantive actions have occurred. Thus, the Court finds that the timing of LG’s
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`requests for IPR favors a stay in this case.
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`The Court is not persuaded by GTP’s contention that the Court should deny a stay because
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`LG engaged in dilatory tactics. GTP’s assertion that LG delayed filing its joinder requests by
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`seeking multiple extensions of time to file an answer in this action is speculative at best. First,
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`GTP either consented to, or did not oppose, those motions to extend LG’s time to answer. If GTP
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`had a legitimate concern with respect to LG’s requests to extend time to answer, it could have
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`voiced them instead of consenting to or not opposing those requests. Second, GTP seems to
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`conflate two different issues. A request to extend time to answer in this case seems inconsequential
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`to determining whether LG sought to join the Apple IPRs in a timely manner.
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`Finally, the Court is convinced that LG has taken steps to speed up the IPR process rather
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`than attempt to delay those proceedings. For example, because LG will step into an understudy
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`position in the Apple IPRs if its motion for joinder is granted, LG will comply with all deadlines
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`in the Apple IPRs, will make no separate substantive filings, and will not seek any additional
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`depositions. It is not unreasonable to predict that LG’s understudy approach will streamline the
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`process before the PTAB. Accordingly, the Court finds that a stay will not tactically disadvantage
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`or unduly prejudice GTP.
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`2.
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`LG Moved to Stay Litigation in a Timely Manner
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`GTP similarly contends that LG improperly delayed moving to stay until nine months after
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`GTP filed the Complaint. Pl.’s Mem. in Opp’n, Dec. 31, 2021, D.E. 46, at 4. In support of this
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`assertion, GTP maintains that LG waited to file the motion to stay until after the case was
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`transferred to this Court from the Western District of Texas “in a clear attempt to gain [a] tactical
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`advantage, and employ yet another dilatory tactic.” Id. LG contends that it moved to stay the
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`litigation only three weeks after moving to join the Apple IPRs. Defs.’ Brief in Supp., Nov. 24,
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`2021, D.E. 39-1, at 11. LG further argues that the delay in moving to stay was not due to a dilatory
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`motive, but rather was due to its need to investigate and analyze the prior art before filing its IPR
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`petitions and the instant motion. Id.
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`The Court finds that it was reasonable for LG to undertake an investigation into the
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`allegations against it, the claims of the Asserted Patents, as well as the prior art before deciding to
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`file IPR petitions, joinder requests, and moving to stay this litigation. LG moved to stay this action
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`only three weeks after filing its IPR petitions and joinder requests. That is not an unreasonable
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`amount of time. See, e.g., Canfield Scientific, Inc. v. Drugge, No. 16-4636, 2018 WL 2973404 at
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`*2 (D.N.J. June 13, 2018) (finding that a “less than two-month delay between the filing of the
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`petition and the present motion [to stay]” does not demonstrate a dilatory motive.); Nestle Oil OYJ
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`v. Dynamic Fuels LLC, No. 12-1744, 2013 WL 3353984, at *2 (D. Del. July 2, 2013) (“Given the
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`prompt filing of both the petition for inter partes review and the motion to stay, the court cannot
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`discern an improper dilatory motive.”). Additionally, the parties were engaged in targeted
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`jurisdictional discovery and the venue transfer motion was pending for more than three months
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`between the time that GTP filed its Complaint and LG filed its IPR petitions and joinder requests.
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`Under these circumstances, the Court concludes that any delay in filing the IPR petitions and stay
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`request was not due to dilatory motive on LG’s part. Thus, the timing of the request to stay the
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`litigation does not support a finding that a stay will unduly prejudice GTP.
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`3.
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`The Status of the IPR Proceedings Favors a Stay
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`GTP argues that LG’s request for a stay is premature because the PTAB has not yet
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`rendered a decision as to LG’s joinder requests. GTP explains that courts have denied stays
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`pending IPR where the PTAB has not yet ruled on a pending joinder motion. Pl.’s Mem. in Opp’n,
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`Dec. 31, 2021, D.E. 46, at 6. Further, GTP argues, even if the PTAB grants joinder, the average
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`length of time that it takes to resolve IPR proceedings weighs against granting a stay. Id. LG
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`counters that the status of the IPR proceedings favors a stay because even though LG’s joinder
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`requests have not been granted, the PTAB has instituted IPRs for four of the Asserted Patents.
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`Defs.’ Reply Brief, Jan. 7, 2022, D.E. 47.
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`GTP’s reliance on the question of whether the PTAB will grant LG’s joinder request is
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`now moot. See LG Letter, Mar. 29, 2022, D.E. 48. Since the filing of this motion, the PTAB has
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`granted LG’s joinder request and instituted proceedings on three of the five Asserted Patents. LG
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`Electronics, Inc. and LG Electronics U.S.A., Inc. v. Gesture Technology Partners, LLC, IPR2022-
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`000993 Decision (Patent 8,194,924 B2), IPR2022-00090 Decision (Patent 8,553,079 B2), IPR
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`2022-00091 Decision (Patent 7,933,431 B2), D.E. 48-1. The Court therefore cannot conclude that
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`LG’s request for a stay is premature. Moreover, because the PTAB granted LG’s joinder petitions,
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`the IPR proceedings will likely conclude by the end of 2022. LG Letter, Mar. 29, 2022, D.E. 48;
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`see also Pl.’s Mem. in Opp’n, Dec. 31, 2021, D.E. 46, at 2 (“LG would be seeking to delay the
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`case until at least December 2022, when the Board is scheduled to provide its final written decision
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`in Apple’s inter partes review petitions.”). Accordingly, the Court finds that the status of the IPR
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`proceedings weighs heavily in favor of a stay.
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`4.
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`The Relationship of the Parties Favors a Stay
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`LG contends that the relationship of the parties weighs in favor of a stay because the parties
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`are not direct competitors, and GTP is a “non-practicing entity.” Defs.’ Brief in Supp., Nov. 24,
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`2021, D.E. 39-1, at 12-13. GTP responds that even though GTP does not manufacture products or
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`engage in direct competition with LG, the inventor does “routinely seek to license his patented
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`technology, and prefers to do so at this time given his seniority.” Pl.’s Mem. in Opp’n, Dec. 31,
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`2021, D.E. 46, at 6-7.
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`It is true that inventors may seek to license their technology rather than bring works to
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`market themselves. Id. at 7; eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 393 (2006).
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`However, it remains that GTP does not engage in direct competition with LG. GTP does not allege
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`that it is a direct competitor of LG, nor does it assert that it “designs, produces, sells and/or markets
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`smart phones, tablets or other devices that employ the features and functionalities that are covered
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`by [the] Asserted Patents.” Defs.’ Brief in Supp., Nov. 24, 2021, D.E. 39-1, at 13. Where, as here,
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`the plaintiff is a non-practicing entity, any prejudice suffered as a result of a delay in the
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`proceedings can be remedied by monetary damages. See, e.g., Bonutti, 2014 WL 1369721, at *3
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`(plaintiff’s status as “a non-practicing entity composed solely of the [patent]’s inventor”
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`diminished its assertions of prejudice); Walker Digital, LLC v. Google, Inc., No. 11-309, 2013
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`U.S. Dist. LEXIS 52176, at *7 (D. Del. Apr. 11, 2013) (finding that because the plaintiff was a
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`non-practicing entity, an award of damages would be sufficient to cure any prejudice resulting
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`from the stay). Because GTP is a non-practicing entity that does not directly compete with LG,
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`and can be compensated by money damages, the Court finds the relationship of the parties favors
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`granting a stay.
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`B. A Stay Would Likely Simplify the Issues in this Case
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`Courts have identified “several ways in which a stay pending IPR proceedings can
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`simplify” a case:
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`(1) a review of all prior art presented to a court by the PTO, with its
`particular expertise; (2) the potential alleviation of numerous
`discovery problems relating to prior art by PTO examination; (3) the
`potential dismissal of a civil action should invalidity of a patent be
`found by the PTO; (4) encouragement to settle based upon the
`outcome of the PTO reexamination; (5) an admissible record at trial
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`from the PTO proceedings which would reduce the complexity and
`length of the litigation; (6) a reduction of issues, defenses and
`evidence during pre-trial conferences; and (7) a reduction of costs
`for the parties and a court.
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`Canfield, 2018 WL 2973404, at *4 (citing Eberle v. Harris, No. 03-5809, 2005 WL 6192865
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`(D.N.J. Dec. 8, 2005)) (citation omitted). It is well settled that “issue simplification” does not
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`require a complete invalidation of all claims in the IPR proceedings. It is equally well-settled that
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`where the scope of the civil litigation exceeds the scope of the IPR proceedings, it is less likely
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`that resolution of the IPR proceedings will simplify the civil litigation’s issues. Depomed, 2014
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`WL 3729349, at *5.
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`LG argues that a stay will simplify the issues in this matter because “the petitions challenge
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`each of the asserted claims on multiple independent grounds[,]” and that even if the PTAB does
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`not invalidate every claim, invalidation of some of the claims would reduce the number of asserted
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`claims to be litigated. Defs.’ Brief in Supp., Nov. 24, 2021, D.E. 39-1, at 7. LG also argues that
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`statutory estoppel would prevent re-litigation of claims at issue in the IPR proceeding, and that the
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`risk of inconsistent proceedings weighs in favor of a stay. Id. GTP responds that statutory estoppel
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`“would not fully limit the issues to be argued before the court because LG is not currently estopped
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`from presenting the grounds included in non-party Apple’s inter partes review proceedings or
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`those that could reasonably have been raised.” GTP further argues that LG has not shown that the
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`Asserted Patents will be found unpatentable. Pl.’s Mem. in Opp’n, Dec. 31, 2021, D.E. 46, at 7-
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`8.
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`The Court finds that this factor favors granting a stay. The PTAB has now instituted IPR
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`proceedings for the ‘924, ‘079, and ‘431 patents, and granted LG’s joinder request. A stay may
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`reduce the risk of inconsistent and duplicative results between this litigation and the PTO/PTAB
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`in the various proceedings challenging the validity of the Asserted Patents by allowing the
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`PTO/PTAB to adjudicate the validity of the claims in the Asserted Patents first. Ioengine, 2019
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`WL 3943058, at *10; Defs.’ Brief in Supp., Nov. 24, 2021, D.E. 39-1, at 8. This can “minimize
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`the risk of inconsistent results and conserve resources,” as there is “little benefit to be gained from
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`having two forums review the validity of the same claims at the same time.” Evolutionary
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`Intelligence, LLC v. Apple, Inc., No. 13-04201, 2014 WL 93954, at *3 (N.D. Cal. Jan. 9, 2014).
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`The possibility of estoppel further supports this finding because “[i]ssue simplification can
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`occur where the number of asserted claims and patents are reduced due to the invalidation or the
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`estoppel effect of the IPR proceedings.” Canfield, 2018 WL 2973404 at *4. The Court would
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`benefit from the PTAB’s decision because the IPR proceedings challenge all claims as to four of
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`the Asserted Patents; even if the PTAB invalidates only some of the claims, it would simplify the
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`issues for litigation and reduce the burden on both the Court and the parties.
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`C. The Stage of this Case
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` LG argues that because this case is in its early stages a stay is appropriate. Defs.’ Brief in
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`Supp., Nov. 24, 2021, D.E. 39-1, at 9. GTP responds that the litigation is not in as early a stage as
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`LG contends, but rather that the litigation has been active for nearly a year. Pl.’s Mem. in Opp’n,
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`Dec. 31, 2021, D.E. 46, at 10. Further, GTP argues that even if the case is in its nascent stages,
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`this fact weighs against a stay, “as it prolongs the prejudice that would be suffered by GTP given
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`LG’s deliberate litigation tactics to delay the case.” Id.
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`As LG aptly mentions in its brief, “courts are more willing to stay a case in its early stages
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`pending IPR proceedings because it can advance judicial efficiency by conserving resources
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`expended by the parties and the Court on claims that may subsequently be found invalid.” Eagle
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`View Techs., Inc. v. Xactware Sols., Inc., No. 15-7025, 2016 WL 7165695, at *8 (D.N.J. Dec. 7,
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`2016); Defs.’ Brief in Supp., Nov. 24, 2021, D.E. 39-1, at 9. This action was only transferred to
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`Case 2:21-cv-19234-JMV-MAH Document 50 Filed 04/04/22 Page 12 of 12 PageID: 1312
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`this District in October 2021. Moreover, the Court has not yet scheduled a Rule 16 conference
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`and the parties have only exchanged requests for production and engaged in limited discovery
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`related to venue and jurisdiction. See id. In addition, no depositions have been conducted, claim
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`construction has not been scheduled, and no trial date has been set. Thus, this Court finds that
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`because this litigation is in its infancy, a stay is appropriate.
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`IV. CONCLUSION
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`Accordingly, the Court will grant LGs’ motion, D.E. 39, and stay discovery pending
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`outcome of the IPR proceedings. If circumstances change, either party may move before this Court
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`to lift or modify the stay. Within fourteen days of resolution of the IPR, the parties will submit a
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`joint status report and a proposed amended scheduling order.
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`Dated: April 4, 2022
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`s/ Michael A. Hammer
`United States Magistrate Judge
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