Case 3:20-cv-05784-BRM-DEA Document 35 Filed 09/22/20 Page 1 of 15 PageID: 1071
`
`Erik Dykema
`Koning Zollar LLP
`4 Manheim Road
`Essex Fells, NJ 07021
`www.kzllp.com
`(858) 252-3234
`erik@kzllp.com
`
`
`
`September 22, 2020
`
`VIA CM/ECF
`
`Honorable Douglas E. Arpert
`U.S. District Court for the District of New Jersey
`Clarkson S. Fisher Bldg. & U.S. Courthouse
`402 East State Street Room 2020
`Trenton, New Jersey 08608
`
`Re: OANDA Corporation v. GAIN Capital Holdings, Inc. et al.,
`Civil Action No. 3:20-cv-05784-BRM-DEA
`
`Dear Judge Arpert:
`
`On August 20, 2020, following a status conference, this Court issued an order requiring the parties
`to meet and confer (ECF No. 31), and then set forth their respective positions on discovery in a
`joint submission in light of GAIN’s pending Rule 12(b)(6) motion to dismiss OANDA’s
`Complaint. Pursuant to the Court’s August 20, 2020 Order, the parties held a telephonic meet
`and confer on September 10, 2020. Below are the parties’ respective positions.
`Plaintiff’s Opening
`GAIN’s position that discovery must be stayed for what would be an indefinite period should be
`rejected. The default rule is that discovery proceeds in accordance with Federal Rules of Civil
`Procedure 16 and 26, and that if a defendant wishes to depart from the course contemplated by the
`rules, it must show “good cause” warranting a stay pursuant to Rule 26(c). Galarza v. Whittle-
`Kinard, 2017 WL 2198182, at *1 (D.N.J. May 18, 2017). Moreover, “it is well settled that the
`mere filing of a dispositive motion does not constitute ‘good cause’ for the issuance of a discovery
`stay.” Gerald Chamales Corp. v. Oki Data Americas, Inc., 247 F.R.D. 453, 454 (D.N.J. 2007).
`This Court does, however, have the discretion to stay discovery under Rule 26(c) and Local Civil
`Rule 16.1. In assessing whether to exercise that discretion, the Court must consider: “(1) whether
`a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2)
`whether denial of the stay would create a clear case of hardship or inequity for the moving party;
`(3) whether a stay would simplify the issues and the trial of the case; and (4) whether discovery is
`
`
`
`169 Saxony Road, Suite 115 Encinitas CA 92024
`t: (858) 252-3234 f: (858) 252-3238 www.kzllp.com
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`complete and/or a trial date has been set.” Udeen v. Subaru of Am., Inc., 378 F. Supp. 3d 330, 332
`(D.N.J. 2019). Application of these factors supports allowing discovery to proceed as normal.
`(1) Prejudice to Plaintiff: OANDA would be substantially prejudiced by a stay because (a) there
`is virtually no chance that GAIN’s motion will be case dispositive, and (b) the delay is likely to be
`at least several additional months and perhaps longer.
`First, as to the merits of GAIN’s motion, the Court is permitted to “take a preliminary peek” at the
`motion to see if it “appears to be clearly meritorious and truly case dispositive.” Heinzl v. Cracker
`Barrel Old Country Store, Inc., 2015 WL 5732129, at *2 (W.D. Pa. Sept. 30, 2015). GAIN makes
`two arguments that could theoretically result in dismissal of the Complaint, but both are foreclosed
`by applicable law, and neither, if accepted, would result in dismissal with prejudice. (Dkt. 24-1.)
`GAIN first argues that OANDA has not sufficiently identified an infringing product because the
`product OANDA names—the forex.com trading platform— contains “multiple software platforms
`and services” and cannot be viewed as “a discrete accused product.” (Dkt. 33 at 2.) This factual
`dispute about the precise characterization of forex.com cannot appropriately be resolved on a
`motion to dismiss. (See Dkt. 32 at 4 (citing Ganas, LLC v. Sabre Holdings Corp., No. 2:10-CV-
`320-DF, 2011 WL 13205779, at *7 (E.D. Tex. Mar. 24, 2011)).) Plus, GAIN’s suggestion that
`forex.com is not a “discrete” platform that can properly be accused of infringement is belied by its
`own prior statements. GAIN has described forex.com as its “proprietary platform” in public filings
`with the SEC. (Dkt. 32 at 4.)
`GAIN’s other argument for dismissal of the Complaint as a whole—that OANDA has not alleged
`in sufficient detail how forex.com infringes—is also highly unlikely to succeed. OANDA attached
`claim charts to its Complaint showing how the accused product infringed, which goes far beyond
`the requirements of a patentee at the pleading stage. (Dkt. 32 at 5-7.) Moreover, the argument
`that OANDA’s Complaint is insufficient because it does not include details about the back-end
`functionality of GAIN’s trading system is near-identical to an argument advanced in a recent
`lawsuit before Judge Martinotti, which he considered and rejected. (Id. at 7-8 (discussing Nasdaq,
`Inc. v. IEX Grp., Inc., No. 18-3014-BRM-DEA, 2019 WL 102408, at *9 (D.N.J. Jan. 4, 2019).)
`Second, as to the length of the proposed delay, analysis of Judge Martinotti’s docket shows that he
`takes on average six months to decide motions to dismiss—which does not fully account for any
`backlog caused by COVID-19. Courts have recognized that such a delay prejudices a plaintiff and
`weighs against a stay. See Udeen, 378 F. Supp. 3d at 333 (denying stay in part because given “the
`expected time it will take for the motion to be decided, the case will be in suspense for months if
`defendants’ request is granted”). That is particularly true where the defendant’s conduct is causing
`ongoing harm, such as here, where GAIN, a direct competitor, continues to infringe on OANDA’s
`patent rights. See Cooper Notification, Inc. v. Twitter, Inc., No. 09-865-LPS, 2010 WL 5149351,
`at *5 (D. Del. Dec. 13, 2010) (“Courts are reluctant to stay proceedings where the parties are direct
`competitors”);
`(2) Lack of Prejudice to Defendants: By contrast, GAIN will not be substantially prejudiced if
`discovery goes forward. OANDA will ensure that its discovery is targeted at the core issues in the
`lawsuit, and this Court will ensure that the discovery sought is proportional to the needs of the
`
`
`
`169 Saxony Road, Suite 115 Encinitas CA 92024
`t: (858) 252-3234 f: (858) 252-3238 www.kzllp.com
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`case. See Udeen, 378 F. Supp. 3d at 333 (finding a lack of prejudice where discovery was limited
`to core issues and court intended to monitor scope of discovery); Shire US, Inc. v. Allergan, Inc.,
`No. 17-7716, 2018 WL 10152305, at *1 (D.N.J. June 12, 2018) (“Anticipation of expensive
`discovery is not sufficient to establish undue hardship.”).
`(3) No Simplification of Issues for Trial: Awaiting the outcome of GAIN’s motion is also not
`likely to simplify the issues for trial because, as noted above, GAIN’s motion—even if successful,
`which is unlikely—is not going to result in any of OANDA’s claims being dismissed with
`prejudice. See Galarza v. Whittle-Kinard, No. 16-cv-00764 (ES(SCM), 2017 WL 2198182, at *3
`(D.N.J. May 18, 2017) (“Where there is a motion to dismiss for failure to state a claim upon which
`relief can be granted, the court should take a preliminary look at the allegedly dispositive motion
`to see whether it is a challenge as a matter of law or to the sufficiency of the allegations.”) Putting
`aside their lack of merit, GAIN’s arguments are not case- or even claim-dispositive; they are
`instead directed at the sufficiency of the allegations. The best GAIN could hope for is that its
`motion is granted with leave to amend, in which case OANDA would reassert the exact same
`claims and cure any perceived pleading deficiency. See Galarza, 2017 WL 2198182, at *3 (factor
`weighs against a stay where a motion to dismiss “merely addresses the sufficiency of the
`complaint”).
`(4) No Trial Date: While a trial date has not yet been set, “[i]t is almost always the case that a
`trial date is not set before a motion to dismiss is decided.” Accordingly, this fourth consideration
`“is not a persuasive relevant factor.” Udeen, 378 F. Supp. 3d at 333.
`GAIN has not met its burden of showing good cause for a stay. The Court should order the
`parties to complete the Rule 26(f) conference and allow discovery to commence.
`Defendants’ Opening
`
`As Your Honor will recall, the Court directed the parties to meet and confer to discuss (a)
`“whether and to what extent, if any, discovery should proceed while Defendants’ motions to
`dismiss are pending”; and (b) “related issues such as preservation of evidence, Discovery
`Confidentiality Order, etc.” (ECF No. 31). In accordance with Your Honor’s directive, the
`parties held a telephonic meet and confer on September 10, 2020.
`
`I. Status of the Parties
`
`
`
`We regret to report to Your Honor that the parties remain at an impasse regarding
`
`whether discovery should move forward at this time while inter alia, Defendants’ Motion to
`Dismiss is pending. To place GAIN’s position in context, we report to Your Honor the latest
`developments in this case, specifically (1) GAIN’s recently filed United States Patent Office
`reexamination petitions that if granted would be case dispositive here, and (2) GAIN’s Motion to
`Stay this litigation pending the patent office’s review, that amplifies and further strengthens
`GAIN’s position that discovery should abide the outcome of pending proceedings and motions.
`
`II. Latest Developments, Motion to Stay and PTAB Proceedings
`
`
`
`169 Saxony Road, Suite 115 Encinitas CA 92024
`t: (858) 252-3234 f: (858) 252-3238 www.kzllp.com
`
`

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`On September 14 and 15, 2020, GAIN filed petitions for covered business method
`
`(“CBM”) review filed before the U.S. Patent and Trademark Office Patent Trial and Appeal
`Board (“PTAB”). These petitions ask the PTAB to find all claims of both asserted patents
`invalid under 35 U.S.C. §101 because they are directed to the abstract idea of currency trading,
`which is an age-old business practice stretching back generations. On September 17, 2020,
`GAIN filed a Motion to Stay this litigation (ECF No. 34) pending resolution of GAIN’s CBM
`petitions.
`
`This case could be—and GAIN believes will be—stayed pending CBM review. A stay
`
`until completion of the CBM proceedings will simplify—and potentially wholly eliminate—the
`issues for discovery and trial.1 We respectfully submit that there is no principled basis to justify
`moving forward with discovery in view of these proceedings and the motion to stay, especially
`where doing so would likely lead to inefficient, unfocused, and duplicative discovery.
`
`Moreover, even if the request for stay is denied, there is no basis justifying OANDA’s
`request to move forward in the case as if there is nothing else going on in the case—as if there
`were no Motion to Dismiss pending, as if Judge Martinotti’s pending decision on GAIN’s
`Motion to Dismiss will have no impact on discovery, the scope thereof and the case generally,
`and as if the fact that no Answer, defenses or counterclaims have been filed as yet has no impact
`on the case.
`
`Thus, we respectfully submit that discovery should be deferred until the resolution of the
`pending proceedings and motions, and there is a clearer picture of the nature, scope, and claims
`in the case.
`
`
`
`III. Consideration of Pending Matters Compels that Discovery Be Stayed
`
`As noted, since the August 19 conference, GAIN has filed petitions for CBM review of
`both of the asserted patents with the PTAB, which warrants a stay of the litigation, as explained in
`GAIN’s Motion to Stay (ECF No. 34). In light of the foregoing, we respectfully submit that the
`most efficient course is to defer discovery and allow Judge Martinotti to rule on GAIN’s Motion
`to Dismiss and GAIN’s Motion to Stay.
`Further, as discussed during the meet and confer, and as previously discussed during the
`August 19, 2020 telephonic status conference with the Court, Plaintiff’s demand that discovery
`begin is premature given that GAIN’s Motion to Dismiss the Complaint (ECF No. 24) is still
`pending, the resolution of which in GAIN’s favor may result in dismissal of the Complaint.2 Thus,
`no discovery should proceed while the Court considers both motions.
`
`
`1 Defendants did not wish to burden the Court with additional papers, but Defendants would be
`pleased to provide a copy of the motion and CBM papers if the Court so wishes.
`2 Even if the parties proceeded with some discovery now, because the key issue in GAIN’s
`Motion to Dismiss is that OANDA has failed to properly accuse anything of infringement, any
`such discovery will likely have to be redone or repeated later, resulting in an inefficiency and
`waste of resources.
`
`
`
`169 Saxony Road, Suite 115 Encinitas CA 92024
`t: (858) 252-3234 f: (858) 252-3238 www.kzllp.com
`
`

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`This case should be stayed pending the outcome of PTAB proceedings. GAIN filed a
`Motion to Stay (ECF No. 34) pending resolution of GAIN’s petitions for CBM review. As
`explained in GAIN’s Motion to Stay, a stay until completion of the CBM proceedings will
`simplify—and potentially wholly eliminate—the issues for discovery and trial. Because GAIN’s
`CBM petitions request that the PTAB declare invalid all claims of the asserted patents, the
`PTAB’s decisions may end this litigation with the invalidation of all claims currently at issue.
`
`Even if the PTAB does not invalidate all of the claims, a stay will allow the Court and the
`parties to avoid wasting resources on discovery, contentions, a Markman hearing, and trial to
`address claims that may be amended or canceled. And even if OANDA’s patents emerge from
`CBM review intact (which is the least likely outcome, according to PTAB statistics), the Court
`will have the benefit of the PTAB’s final decision on the scope of the claims and on the §101
`issue. Indeed, courts generally recognize the efficiencies and benefits to be gained from
`allowing the PTAB to complete its review before proceeding with costly litigation, and therefore
`routinely stay litigations while PTAB review proceeds when (a) all patents are under PTAB
`review, (b) there are no non-patent issues in the litigation, and (c) the case is in its early stages.
`See Mot. to Stay Br. (ECF No. 34-1), at pp 13-17.
`
`OANDA’s Complaint may be dismissed. GAIN has already identified several key
`reasons why discovery should not proceed while GAIN’s Motion to Dismiss is pending. See
`GAIN’s July 29, 2020 letter to the Court (ECF No. 28). If Judge Martinotti grants GAIN’s
`Motion in whole, then this matter will be dismissed, and no discovery will be necessary. Indeed,
`if dismissed, OANDA would never have been entitled to any discovery in the first place. If the
`motion is granted in part, or if OANDA is permitted to amend its Complaint to cure its many
`deficiencies, then discovery will be limited to OANDA’s surviving and/or amended claims. The
`surviving or amended claims will shape the proper scope of discovery, as will GAIN’s answer
`(and/or any counterclaims) to such surviving or amended claims.
`
`Importantly, OANDA’s Complaint fails to accuse any specific GAIN product of
`infringement, and thus the Complaint falls short of the requirements for a sufficient patent
`infringement complaint, thereby making the scope of the allegations and the scope of discovery
`unclear. While OANDA maintains that it has identified an accused product by generally
`identifying “forex.com,” that is a website that describes GAIN’s entire business. Not only does
`it describe the available market products, various account types and trader resources, market
`analyses and webinars offered by GAIN, education tools and resources offered by GAIN, and
`support services, it also describes multiple software platforms, systems, and trading tools,
`including those created by third parties. See forex.com. Even focusing on only the “Platforms”
`listed on the website, to date, OANDA has been unable to confirm whether all are accused, or
`only a subset.
`
`For example, during the parties’ meet and confer on September 10, 2020, counsel for
`GAIN asked counsel for OANDA whether OANDA is accusing “MetaTrader” of infringement,
`which is listed on GAIN’s website under “Platforms.” Counsel for OANDA was unable to say
`whether this is accused or not. Thus, GAIN is still left wondering what is accused of
`infringement and what is not. How can a proper scope of discovery be identified and carved out
`when the accused products are unknown?
`
`
`
`
`169 Saxony Road, Suite 115 Encinitas CA 92024
`t: (858) 252-3234 f: (858) 252-3238 www.kzllp.com
`
`

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`OANDA’s counsel proposed that the parties begin discovery on “things labeled forex.com
`that you can login to and start trading with.” But even this does not resolve the ambiguity problem
`or provide an identifiable scope of discovery. A user can log into multiple platforms and services
`from forex.com, including Web Trading, Trading View, and MetaTrader Web.
` See
`https://www.forex.com/en-us/account-login/. None of Web Trading, Trading View or MetaTrader
`are accused in OANDA’s Complaint, nor could OANDA’s counsel confirm that MetaTrader is
`actually accused of infringement. Until OANDA cures the deficiencies in its Complaint or the
`Court resolves GAIN’s Motion to Dismiss, discovery is simply premature, and will most likely
`result in a waste of resources and/or a duplication of efforts once the scope of the accused products
`is properly identified and accused.
`
`In sum, because of the potential effect of the Court’s decision on the pending Motion to
`Dismiss, the pending CBM proceedings, and the pending Motion to Stay, we respectfully submit
`that it is in the best interest of the parties and the Court and request that discovery be deferred
`until each of these pending motions has been decided.
`
`IV. Preservation of Evidence and Discovery Confidentiality Order
`
`
`
`We are pleased to report that the parties did not identify any disputes with regard to the
`preservation of evidence. With respect to the Discovery Confidentiality Order, OANDA
`provided a draft, and GAIN provided its edits to the draft on August 31, 2020. During the meet
`and confer, OANDA stated that it would be providing responsive edits. GAIN awaits a further
`draft with such edits from OANDA. Thus, we submit that there is nothing for the Court to
`address at this time with respect to a Discovery Confidentiality Order as the parties have not
`finished meeting and conferring with respect to such an order.
`
`
`Plaintiff’s Reply
`Having previously requested, and met and conferred with OANDA about, a stay of discovery on
`the basis of having filed a Rule 12(b)(6) motion to dismiss, GAIN has now added a new argument
`for delaying the litigation: that the entire lawsuit should be stayed because GAIN has filed a
`petition for covered business method (“CBM”) review before the U.S. Patent and Trademark
`Office Patent Trial and Appeal Board (“PTAB”). Neither the filing of a motion of a motion to
`dismiss, nor the filing of a petition for CBM review, justifies bringing this litigation to a standstill.
`First, in arguing for a stay of discovery pending resolution of its Rule 12(b)(6) motion to dismiss,
`GAIN does not engage with the controlling case law identified by OANDA or explain how it has
`met the burden of establishing “good cause” for a discovery stay. Instead, GAIN’s argument
`consists of continuing to plead ignorance about what product OANDA is accusing of infringement,
`insisting that discovery cannot proceed because it is “still left wondering what is accused of
`infringement and what is not” and the “accused products are unknown.” The accused product,
`however, is expressly identified in the Complaint: forex.com. While GAIN might take the position
`that forex.com is not a “product” that can be accused of infringement, that, as OANDA has
`explained, is an issue of fact that cannot be resolved on a motion to dismiss. Moreover, even if
`
`
`
`169 Saxony Road, Suite 115 Encinitas CA 92024
`t: (858) 252-3234 f: (858) 252-3238 www.kzllp.com
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`this factual dispute could properly be resolved at the pleading stage, GAIN’s position that
`forex.com is its “entire business” and cannot be considered a discrete product that could be accused
`of infringement is groundless. Not only has GAIN acknowledged in a public filing with the SEC
`that forex.com is a “proprietary platform,” but in the Customer Agreement GAIN enters into with
`users of the forex.com website, GAIN repeatedly describes the platform the customer will use as
`the “FOREX.com Online Trading System.” (See Customer Agreement at ¶¶ 4, 14, 17
`https://application.forex.com/docs/en-us/agreements/agreement_v3.0.14_20200723.pdf) Indeed,
`in that agreement, GAIN claims intellectual property protection over the “FOREX.com Online
`Trading System,” making a mockery of its current insistence that forex.com cannot be viewed as
`a product for purposes of patent infringement. (Id. at ¶17.) Given that GAIN’s principal arguments
`for dismissal are not only fact-bound, but meritless, it is highly unlikely that the Court will dismiss
`the Complaint at the pleading stage.
`Second, GAIN’s effort to use its filing of a petition for CBM review to delay the litigation fares
`no better. After the parties met and conferred on September 10, 2020, about discovery (during
`which GAIN made no mention of any petition for CBM review), GAIN filed the petition on
`September 14 and 15, 2020. Then, on September 17, 2020, GAIN filed a motion with this Court
`to stay not just discovery, but all proceedings until the CBM petition is resolved.
`OANDA will file its opposition to GAIN’s stay motion on October 5, 2020, and will explain its
`position in further detail there. But for now, OANDA explains briefly why this newly-filed motion
`provides no basis for a stay either. CBM proceedings are initiated “with the filing of a petition
`that identifies all of the claims challenged and the grounds and supporting evidence on a claim-
`by-claim basis,” and the patentee then has three months to file a preliminary response to the
`petition. 77 Fed. Reg. 48756-7. The PTAB will then “determine whether to institute a trial within
`three months of the date the patent owner’s preliminary response was due or was filed, whichever
`is first.” Id. Here, with GAIN having filed its petitions for CBM review on September 14 and
`15, 2020, OANDA’s preliminary response is not due until mid-December 2020, at the earliest, and
`the PTAB will not reach a decision on whether to institute a trial until late March 2021. With no
`proceedings having been instituted yet, GAIN’s request for a stay is thus based on speculation
`about how the PTAB will rule in six months’ time.
`In Nasdaq, Inc. v. Miami Int'l Holdings, Inc., No. CV 17-6664-BRM-DEA, 2018 WL 3814280
`(D.N.J. Aug. 10, 2018), faced with an almost identical procedural posture, Judge Martinotti denied
`a motion to stay litigation following the filing of a petition for CBM review. There, Judge
`Martinotti held that the “proper course” was “to defer ruling on the motion to stay until the PTAB
`has made its decision whether to grant the petition for CBM review.” Id. at *3. This Court held
`that while the relevant stay factors did “not cut strongly in one direction or the other, the most
`significant point is that the uncertainty as to whether the PTAB will grant the petitions for CBM
`review predominates and weighs against granting the Motion to Stay.” Id. at *5.
`The facts here are not meaningfully distinguishable from those in Nasdaq, and thus there is no
`principled reason why this Court would reach a different result here. Accordingly, the most likely
`outcome of GAIN’s stay motion, consistent with Judge Martinotti’s prior reasoning, is that GAIN’s
`motion to stay will be denied without prejudice, and that GAIN will be allowed to refile the motion,
`
`
`
`169 Saxony Road, Suite 115 Encinitas CA 92024
`t: (858) 252-3234 f: (858) 252-3238 www.kzllp.com
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`if appropriate, in six months once the PTAB makes its institution decision.
`GAIN has not satisfied its burden to establish good cause for a stay of either discovery or of the
`proceedings as a whole. Discovery should be allowed to proceed in the ordinary course.
`
`Defendants’ Reply
`GAIN notes that the parties agreed to simultaneously exchange opening positions and
`then subsequently simultaneously exchange replies on the morning of filing this report. OANDA
`provided its “Opening” position above after briefing for GAIN’s motion to dismiss was complete
`and after GAIN filed its CBM petitions and motion to stay pending the PTAB’s completion of its
`review of these CBM petitions. OANDA then improperly used its “Reply” position in this joint
`letter to introduce new arguments regarding the merits of GAIN’s motion to dismiss that have
`never been raised before and to raise arguments about GAIN’s stay motion that it did not but
`could have raised in its opening position, thereby attempting to prevent GAIN from responding
`to those new arguments. Accordingly, GAIN included a brief response to each at the end below.
`
`I. Response to OANDA’s “Opening” position.
`
`GAIN responds to the issues raised in OANDA’s “Opening” position above as follows:
`
`First, the status quo is that no discovery is occurring: no Rule 16 conference has been
`set, thus the parties have not conducted their Rule 26(f) conference, and, therefore, discovery has
`not begun. This is expected given that no answer has yet been filed in the case, and the initial
`conference is scheduled “within 60 days of filing of an initial answer, unless deferred by the
`Magistrate Judge due to the pendency of a dispositive or other motion.” L.Civ.R. 16(a)(1).
`Pursuant to Local Civil Rule 16.1(b)(1), the scheduling order is usually issued at or after the
`initial conference. L.Civ.R. 16(b)(1).
`
`OANDA seems to ignore this and applies a “good cause” standard. But a “good cause”
`standard is applicable when a party seeks to modify a scheduling order, and no scheduling order
`has been entered here. See Santiago v. Port Auth. of N.Y., No. 11-4254 (WJM), 2014 U.S. Dist.
`LEXIS 139144, at *4-5 (D.N.J. Oct. 1, 2014) (“Pursuant to Rule 16, a scheduling order will only
`be modified upon a showing of ‘good cause and with the judge’s consent.’”) (quoting Fed. R.
`Civ. P. 16(b)(4)) (emphasis added)). Rather, here, it is within the Court’s discretion to defer
`discovery until the pending motion to dismiss, motion to stay, and CBM proceedings are
`resolved. See id. (“Rule 16 vests the Court with broad discretion to control and manage
`discovery.”) (citations omitted); see also Conway v. Davis, Case No. 1:16-cv-04511-NLH-AMD,
`2018 U.S. Dist. LEXIS 47866, at *9 n.5 (D.N.J. Mar. 23, 2018) (finding defendant had no
`obligation to participate in formal discovery process during the pendency of his Rule 12(b)(1)
`motion because such motion does not constitute an answer, stating “the discovery process does
`not begin until after the initial scheduling conference, which is triggered by a defendant filing his
`answer to plaintiff’s complaint.”). Thus, the framework of OANDA’s argument is legally
`incorrect as it applies an inapplicable framework given the current posture of this case.
`
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`169 Saxony Road, Suite 115 Encinitas CA 92024
`t: (858) 252-3234 f: (858) 252-3238 www.kzllp.com
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`Second, OANDA also ignores GAIN’s pending motion to stay while the PTAB conducts
`its review of the patents-in-suit which provides good cause to maintain the status quo at least
`until that motion and GAIN’s motion to dismiss are decided. None of the arguments OANDA
`advances justify plowing ahead with costly discovery when GAIN’s motion to dismiss may, at
`the very least, change the scope of this case and its motion to stay may likely put this case on
`hold while the PTAB determines if OANDA has valid patents to assert in this case. Moreover,
`beginning discovery will not cause prejudice to OANDA and will likely cause inefficiencies and
`waste resources.
`
`In particular, absent the appropriate focus and knowing which claims, if any, will remain
`in the case, there will surely be disputes about the scope of discovery, whether discovery
`demands are overbroad and burdensome, whether objections that may be raised will be
`sustained, etc. Notwithstanding any efforts to meet and confer before any dispute is submitted to
`Your Honor, most assuredly there will be discovery disputes for Your Honor to resolve. But
`how can the Court determine the proper scope of an interrogatory or document requests absent
`knowing whether the subject matter of those discovery requests are consistent with the matters in
`issue in the case? How can the Court determine whether, under the appropriate legal standard,
`such discovery demands are justifiable?
`
`Thus, even if this were not a situation where no discovery has proceeded to-date, the
`most practical course would still be to permit the critical issues raised in the pending motions to
`be decided first before plowing forward with unfocused and unwieldy discovery without the
`basic knowledge of what claims and allegations will be permitted to proceed or not in the case.
`
`The factors under AIA § 18(b)(1) weigh in favor of a stay pending CBM review.
`
`If the Court is going to take a preliminary look at a motion in determining whether to
`defer discovery, it should be GAIN’s request to stay the litigation pending CBM review because
`it is the most likely to affect the overall case schedule. In determining whether a stay is
`appropriate pending a CBM review, section 18(b)(1) of the AIA directs the district court to
`consider:
`(A) whether a stay, or the denial thereof, will simplify the issues in
`question and streamline the trial;
`(B) whether discovery is complete and whether a trial date has been set;
`(C) whether a stay, or the denial thereof, would unduly prejudice the
`nonmoving party or present a clear tactical advantage for the moving
`party; and
`(D) whether a stay, or the denial thereof, will reduce the burden of
`litigation on the parties and on the court.
`
`AIA § 18(b)(1). This case will likely be stayed because the facts weigh strongly in favor of
`immediately staying this litigation, which is only in its infancy: (1) no schedule has been set and
`no discovery has taken place; (2) a stay until completion of the CBM proceedings will
`simplify—and potentially wholly eliminate—the issues for trial; (3) OANDA will suffer no
`undue prejudice or tactical disadvantage from a stay because OANDA delayed in filing this
`litigation and elected to forgo seeking a preliminary injunction; (4) and a stay will reduce the
`
`
`
`169 Saxony Road, Suite 115 Encinitas CA 92024
`t: (858) 252-3234 f: (858) 252-3238 www.kzllp.com
`
`

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`burden of litigation on the parties and the Court by preventing the parties from engaging in
`potentially unnecessary and costly discovery, particularly to the extent any claims of the asserted
`patents are canceled or amended.
`
`
`The factors under AIA § 18(b)(1) overlap with the factors that OANDA argues should be
`applied by the Court in considering whether to stay discovery under Rule 26(c): “(1) whether a
`stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2)
`whether denial of the stay would create a clear case of hardship or inequity for the moving party;
`(3) whether a stay would simplify the issues and the trial of the case; and (4)
`whether discovery is complete and/or a trial date has been set.” See, supra Plaintiff’s Opening
`(citing Udeen v. Subaru of Am., Inc., 378 F. Supp. 3d 330, 332 (D.N.J. 2019)).
`
`There is good cause for deferring discovery.
`
`OANDA argues that GAIN must show “good cause” to stay discovery, but unlike in the