Case 3:20-cv-05784-BRM-DEA Document 36 Filed 10/05/20 Page 1 of 12 PageID: 1086
`
`Erik Dykema (NJ Bar No. 021652010)
`erik@kzllp.com
`Koning Zollar LLP
`4 Manheim Road
`Essex Fells, New Jersey 07021
`T: 858.252.3234
`F: 858.252.3238
`
`Drew Koning (pro-hac vice)
`drew@kzllp.com
`Blake Zollar (pro-hac vice)
`blake@kzllp.com
`Koning Zollar LLP
`169 Saxony Road, Ste. 115
`Encinitas, CA 92024
`T: 858.252.3234
`F: 858.252.3238
`
`ATTORNEYS FOR PLAINTIFF
`OANDA Corporation
`
`Shaun Paisley (pro-hac vice)
`shaun@kzllp.com
`Koning Zollar LLP
`470 James Street, Suite 007
`New Haven, CT 06513
`T: 203.951.1213
`F: 858.252.3238
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
`
`OANDA Corporation,
`
`Plaintiff,
`
`v.
`
`GAIN Capital Holdings, Inc.;
`GAIN Capital Group, LLC.
`
`Defendants.
`
`Civil Action No. (cid:22):20-cv-5784
`Judge: Hon. Brian Martinotti
`Motion Date: October 19, 2020
`
`OANDA’S BRIEF IN OPPOSITION TO
`DEFENDANTS’ MOTION TO STAY (DKT. 34)
`
`

`

`Case 3:20-cv-05784-BRM-DEA Document 36 Filed 10/05/20 Page 2 of 12 PageID: 1087
`
`TABLE OF CONTENTS
`
`
`I.
`
`INTRODUCTION ................................................................................................................. 1
`
`II. ARGUMENT......................................................................................................................... 2
`
`A. THE MOTION TO STAY SHOULD BE DENIED AS PREMATURE IN LINE WITH THE “MAJORITY”
`POSITION ADOPTED BY THIS COURT AND OTHER NEW JERSEY FEDERAL DISTRICT COURTS. ..... 2
`
`B. APPLICATION OF THE AIA FACTORS CONFIRMS THAT THE MOTION TO STAY SHOULD BE
`DENIED HERE. ............................................................................................................................. 3
`
`Before the PTAB’s institution decision, whether a stay will simplify the issues is pure
`1.
`speculation, and this factor thus weighs against a stay. ......................................................... 4
`
`2. While the case is in its relatively early stages, that is because of GAIN’s repeated
`attempts to stall the litigation................................................................................................. 6
`
`3. A stay would unduly prejudice OANDA, a direct competitor of GAIN...................... 7
`
`It is speculative as to whether a stay will reduce the burden of litigation on the parties
`4.
`and on the Court. ................................................................................................................... 7
`
`III. CONCLUSION ..................................................................................................................... 8
`
`
`
`
`
`i
`
`

`

`Case 3:20-cv-05784-BRM-DEA Document 36 Filed 10/05/20 Page 3 of 12 PageID: 1088
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Cordis v. Abbott Labs.,
`Nos. 07-2265 (JAP), 2009 WL 8591527 (D.N.J. Feb. 3, 2009) ................................................7
`
`Derma Scis., Inc. v. Manukamed Ltd.,
`No. 12–3388 (JAP), 2013 WL 6096459 (D.N.J. July 18, 2013) ...........................................3, 4
`
`DiCon Fiberoptics, Inc. v. Preciseley Microtech. Corp.,
`No. 15-cv-01362-BLF, 2015 WL 12859346 (N.D. Cal. Oct. 13, 2015)....................................4
`
`Loyalty Conversion Sys. Corp. v. Am. Airlines, Inc.,
`No. 2:13-CV-655, 2014 WL 3736514 (E.D. Tex. July 29, 2014) .............................................2
`
`Nasdaq, Inc. v. Miami Int’l Holdings, Inc.
` No. 17-6664-BRM-DEA, 2018 WL 3814280 (D.N.J. Aug. 10, 2018) ........................... passim
`
`Nasdaq, Inc. v. IEX Grp., Inc.
` No. 18-3014 (BRM)(DEA), 2019 WL 8268544 (D.N.J. Sept. 13, 2019) .................................3
`
`Nippon Steel & Sumito Metal Corp. v. POSCO,
`No. 12-2429 (DMC), 2013 WL 1867042 (D.N.J. May 2, 2013) ...............................................7
`
`Oy Ajat, Ltd. v. Vatech Am., Inc.,
`No. 10–4875 (PGS), 2012 WL 1067900 (D.N.J. Mar. 29, 2012) ..............................................3
`
`Robbins v. H.H. Brown Shoe Co.,
`No. 08 CIV. 6885(WHP), 2009 WL 2170174 (S.D.N.Y. June 30, 2009) .................................5
`
`Roy-G-Biv Corp. v. Fanuc Ltd.,
`No. 2:07-cv-418 (DF), 2009 WL 1080854 (E.D. Tex. Apr. 14, 2009) ......................................4
`
`Straight Path IP Grp., Inc. v. Vonage Holdings Corp.,
`No. 14–502 (JLL)(JAD), 2014 WL 4271633 (D.N.J. Aug. 28, 2014) ..................................2, 3
`
`Viskase Corp. v. Am. Nat’l Can Co.,
`261 F.3d 1316 (Fed. Cir. 2001)..................................................................................................3
`
`Statutes
`
`America Invents Act (125 Stat. 284 (2011)) ....................................................................................4
`
`Other Authorities
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48756 (Aug. 14, 2012) .......................................1
`
`
`
`ii
`
`

`

`Case 3:20-cv-05784-BRM-DEA Document 36 Filed 10/05/20 Page 4 of 12 PageID: 1089
`
`
`
`I.
`
`INTRODUCTION
`Having previously asked the Magistrate to stay discovery on the basis of having filed a
`questionable Rule 12(b)(6) motion to dismiss, GAIN now advances a new theory 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 Trial and Appeal Board (“PTAB”). The
`mere filing of a petition for CBM review, however, does not justify bringing this litigation to a
`standstill.
`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. Office Patent Trial Practice
`Guide, 77 Fed. Reg. 48756-7 (Aug. 14, 2012). 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 the end of December
`2020, and the PTAB will not reach a decision on whether to institute review of the patents at issue
`until late March 2021. GAIN’s request for a stay is thus based on nothing more than speculation
`about whether the PTAB will—six months from now—decide to actually hear this matter.
`While one would not know it from reading GAIN’s motion, courts in this District have
`consistently rejected efforts to stay litigation based upon the mere filing of a petition for CBM
`review. In Nasdaq, Inc. v. Miami Int’l Holdings, Inc., for example, when faced with an almost
`identical procedural posture, this Court denied a motion to stay litigation following the filing of a
`petition for CBM review, holding 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.” No.
`17-6664-BRM-DEA, 2018 WL 3814280, at *3 (D.N.J. Aug. 10, 2018) (“Nasdaq”).
`
`
`
`1
`
`

`

`Case 3:20-cv-05784-BRM-DEA Document 36 Filed 10/05/20 Page 5 of 12 PageID: 1090
`
`
`
`There is no principled reason why this Court should reach a different result here. GAIN’s
`motion to stay should be denied, and when the PTAB makes its institution decision, GAIN may,
`if appropriate, refile its motion.
`
`II.
`
`ARGUMENT
`A.
`
`The Motion to Stay Should be Denied as Premature in Line With The
`“Majority” Position Adopted by this Court and Other New Jersey Federal
`District Courts.
`At the outset, OANDA notes a telling omission from GAIN’s motion—any explanation of
`how the motion is not premature until and unless the PTAB decides to institute the CBM petitions.
`GAIN attempts to gloss over this issue by claiming that “many courts” grant stays prior to
`institution of a CBM review, citing a handful of decisions from outside this District. (Dkt. No. 34-
`1 (“Motion” or “Mot.”) at 14-15.) But, in what is becoming a habit (see Dkt. No. 32 at 8-9, 13),
`GAIN’s description of the state of the law is at best selective and at worst misleading. While
`cobbling together decisions from a scattering of courts, GAIN neglects to inform this Court that
`the “majority” position among federal courts is to “postpone[] ruling on stay requests or . . . den[y]
`[the] stay request[] when the PTAB has not yet acted on the petition for review.” See Loyalty
`Conversion Sys. Corp. v. Am. Airlines, Inc., No. 2:13-CV-655, 2014 WL 3736514, at *1 (E.D.
`Tex. July 29, 2014). GAIN also neglects to mention that this is not only the majority position
`nationwide, but it is also the consistent position taken by courts in this District, including this
`Court. See Nasdaq, 2018 WL 3814280, at *3 (this Court holding that the “proper course to follow”
`when the PTAB has yet to make its institution decision is to deny the motion to stay)1; see also
`Straight Path IP Grp., Inc. v. Vonage Holdings Corp., No. 14–502 (JLL)(JAD), 2014 WL
`
`
`1 GAIN attempts to distinguish Nasdaq by pointing out that plaintiffs in that case had alleged
`additional claims on top of the patent infringement. (Mot. at 16.) In Nasdaq, however, this Court
`did not weigh that factor heavily noting that “[s]hould CBM review be granted, it undoubtedly
`could narrow the number of issues to be litigated,” including the trade secret claims. Nasdaq, Inc.,
`2018 WL 3814280, at *3. But the more cogent point was that, like here, “a debate regarding
`potential issue simplification is entirely hypothetical at this stage.” Id. (emphasis added).
`2
`
`
`
`

`

`Case 3:20-cv-05784-BRM-DEA Document 36 Filed 10/05/20 Page 6 of 12 PageID: 1091
`
`
`
`4271633, at *2-3 (D.N.J. Aug. 28, 2014) (denying pre-institution motion to stay as “premature”);
`Derma Scis., Inc. v. Manukamed Ltd., No. 12–3388 (JAP), 2013 WL 6096459, at *1 (D.N.J. July
`18, 2013) (denying motion to stay “until a determination is made on the initial application, at which
`time the Court can more fully evaluate the PTO’s view and make a more informed determination
`of whether the reexamination proceeding merits a stay of this action”).2
`
`Having failed to candidly acknowledge the applicable law, GAIN has also failed to provide
`this Court with any reason to depart from the majority position. Hence, the “proper course” is to
`deny the motion until an institution decision is made, and address the matter at that time, if
`necessary. Nonetheless, OANDA addresses the relevant stay factors below, just as this Court did
`in Nasdaq, and explains why they should lead this Court to reach the same outcome.
`
`B.
`
`Application of the AIA Factors Confirms That the Motion to Stay Should be
`Denied Here.
`“There is no conflict between a reexamination and a challenge to a patent in federal court,
`despite the fact that the two forums may come to differing conclusions on the same patent.”
`Straight Path IP Grp., Inc., 2014 WL 4271633, at *2 (citing Ethicon, Inc. v. Quigg, 849 F.2d 1422,
`1428-29 & n.3 (Fed. Cir. 1988)). Accordingly, district courts are “under no obligation to delay
`their own proceedings by yielding to ongoing USPTO patent reexaminations, regardless of their
`relevancy to infringement claims which the court must analyze.” Oy Ajat, Ltd. v. Vatech Am., Inc.,
`No. 10–4875 (PGS), 2012 WL 1067900, at *19 (D.N.J. Mar. 29, 2012) (citations omitted).
`Of course, district courts have discretion to stay litigation pending reexamination
`proceedings. See Viskase Corp. v. Am. Nat’l Can Co., 261 F.3d 1316, 1328 (Fed. Cir. 2001). In
`determining whether to exercise that discretion pending a CBM review, section 18(b)(1) of the
`America Invents Act (125 Stat. 284 (2011) (“AIA”)) directs the Court to consider:
`
`
`2 In support of its motion, GAIN cites to this Court’s decision to grant a stay in Nasdaq, Inc. v. IEX
`Grp., Inc., No. 18-3014 (BRM)(DEA), 2019 WL 8268544 (D.N.J. Sept. 13, 2019). (Mot. at 13,
`14, 22.) In that case, however, the Court granted the motion after the PTAB had already ruled on
`whether to institute various CBMs. Nasdaq, Inc., 2019 WL 8268544, at *1 (emphasis added).
`3
`
`
`
`

`

`Case 3:20-cv-05784-BRM-DEA Document 36 Filed 10/05/20 Page 7 of 12 PageID: 1092
`
`
`
`(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).
`
`1.
`
`Before the PTAB’s institution decision, whether a stay will simplify the
`issues is pure speculation, and this factor thus weighs against a stay.
`
`GAIN argues that “a stay in this action pending resolution of the CBM petitions will
`simplify and streamline the issues and may eliminate this case entirely” simply because it has filed
`a CBM petition challenging the patents at issue. (Mot. at 1.) But the assertion that a stay “will
`simplify” the issues is based on pure speculation that does not justify a stay. The PTAB has not
`yet decided whether to undertake review, and so while the CBM proceedings could, if instituted,
`simplify the issues for trial, any “debate regarding potential issue simplification is entirely
`hypothetical at this stage.” See Nasdaq, 2018 WL 3814280, at *3. As this Court noted in Nasdaq,
`“[a]ll Defendants have done is filed CBM petitions, which by itself does not simplify the issues in
`this case.” Id.; see also Derma Scis., 2013 WL 6096459, at *1 (denying stay because, until the
`PTAB acts on a request for review, the court could not make a fully informed determination as to
`whether administrative review will simplify issues); DiCon Fiberoptics, Inc. v. Preciseley
`Microtech. Corp., No. 15-cv-01362-BLF, 2015 WL 12859346, at *2 (N.D. Cal. Oct. 13, 2015)
`(“Until the PTAB makes a decision on whether to grant the IPR petition, any argument about
`whether the IPR process will simplify issues in th[e] litigation is highly speculative.”).
`Attempting to convince this Court that there is some basis beyond speculation to conclude
`that the mere filing of a CBM petition will simplify issues in this litigation, GAIN relies on PTAB
`
`
`
`4
`
`

`

`Case 3:20-cv-05784-BRM-DEA Document 36 Filed 10/05/20 Page 8 of 12 PageID: 1093
`
`
`
`statistics suggesting that review has been instituted on 67% of IPR, PGR, and CBM petitions
`involving mechanical and business method patents, and that in 62% of all final written decisions,
`all claims are found to be unpatentable. (Mot. at 2.) GAIN, however, presents no argument or
`evidence whatsoever that its petition is more like the 67% that have been granted than the 33%
`that have been denied. And, as courts have made clear, “[t]o convince [a] Court that a stay will
`actually simplify a case, the requesting party must do more than merely proffer oft-cited
`reexamination statistics and generic judicial efficiency arguments.” Roy-G-Biv Corp. v. Fanuc
`Ltd., No. 2:07-cv-418 (DF), 2009 WL 1080854, at *2 (E.D. Tex. Apr. 14, 2009); see also Robbins
`v. H.H. Brown Shoe Co., No. 08 CIV. 6885(WHP), 2009 WL 2170174, at *2 (S.D.N.Y. June 30,
`2009) (argument that “more than 70% of patents have their claims amended in the reexamination
`process” was “insufficient to warrant a stay”).
`Even accepting GAIN’s invitation to look at bare statistics, which are completely divorced
`from the merits of GAIN’s CBM petition, GAIN hardly presents a compelling case that the
`petitions “will simplify” the issues in this litigation. Based on the statistics GAIN cites, review is
`instituted on 67% of petitions filed, and 62% of those instituted petitions resulting in all claims
`being found unpatentable (with an additional 18% resulting in some claims being found
`unpatentable). (Mot. at 2.) But that amounts to a barely 40% chance of all claims being found
`unpatentable here (67 x 0.62), and about a 50/50 chance of some claims being held unpatentable
`(67 x 0.80).
`Rather than engage in speculation, the Court and the parties can simply wait until the PTAB
`decides whether to institute review of GAIN’s CBM petitions. As the Court noted in Nasdaq, “it
`would be wise . . . to wait to stay the case until the PTAB has instituted review of the challenged
`petitions.” Nasdaq, 2018 WL 3814280, at *3. Just as in Nasdaq, this factor weighs in favor of
`denying the motion to stay.
`
`
`
`5
`
`

`

`Case 3:20-cv-05784-BRM-DEA Document 36 Filed 10/05/20 Page 9 of 12 PageID: 1094
`
`
`
`2. While the case is in its relatively early stages, that is because of GAIN’s
`repeated attempts to stall the litigation.
`
`As to the second factor, it is true, as GAIN argues, that this case remains in its relatively
`early stages, with the Complaint having been filed in May 2020, and a trial date not having been
`set. (Mot. at 13.) OANDA notes, however, that GAIN’s reliance on the fact that there “has not
`yet been a Rule 16 conference,” “no schedule has been set,” and that the parties have not yet
`exchanged discovery, rings hollow. (Id. at 1, 4.) No schedule has been set and no discovery has
`been conducted because GAIN has been determined to hinder any progress in this lawsuit from
`the outset. GAIN has consistently refused to engage in a Rule 26(f) conference (engaging in a
`partial conference about document preservation only upon order of the Court), and, before filing
`this motion, requested a stay of all discovery based on having filed a baseless Rule 12(b)(6) motion
`to dismiss. (See Dkt. No. 35.) Accordingly, to the extent this factor may weigh in favor of granting
`a stay (see Nasdaq, 2018 WL 3814280, at *4), it should do so only modestly to prevent GAIN
`benefitting from its delay tactics.
`GAIN also raises the odd argument that the coronavirus pandemic should be a relevant
`consideration in favor of a stay because “the Court, the parties, and their respective counsel face
`unprecedented challenges from COVID-19,” and so “there is no reason to push forward with
`litigation under current health guidelines, social distancing, and travel restrictions, which have
`disrupted everyday life, access, and routines otherwise expected during discovery.” (Mot. at 16-
`17.) This argument is difficult to take seriously given that GAIN is seeking a stay based on having
`initiated a separate legal proceeding during the pandemic. The “unprecedented challenges” of
`COVID did not stop GAIN from preparing and filing three CBM petitions, and the argument that
`it is somehow unwise to “push forward” with litigation but prudent to push forward with
`reexamination proceedings, is difficult to apprehend. GAIN’s appeal to the pandemic as a reason
`to halt this litigation should be rejected.
`
`
`
`6
`
`

`

`Case 3:20-cv-05784-BRM-DEA Document 36 Filed 10/05/20 Page 10 of 12 PageID: 1095
`
`
`
`3.
`
`A stay would unduly prejudice OANDA, a direct competitor of GAIN.
`
`In Nasdaq, this Court found this “undue prejudice” factor to be neutral. Given the near-
`identical facts, the same should be true here. Nasdaq, Inc., 2018 WL 3814280, at *4-5.
`OANDA would be prejudiced by a stay because GAIN is a direct competitor that is
`engaged in ongoing infringement of OANDA’s patents. District courts are “hesitant to stay patent
`cases when ‘direct market competitors’ are involved.” Nippon Steel & Sumito Metal Corp. v.
`POSCO, No. 12-2429 (DMC), 2013 WL 1867042, at *4 (D.N.J. May 2, 2013); see also Cordis v.
`Abbott Labs., Nos. 07-2265 (JAP), 2009 WL 8591527, at *1 (D.N.J. Feb. 3, 2009) (denying stay
`pending reexamination because “the Court agrees that Cordis will be prejudiced by the imposition
`of a stay. According to Cordis, Abbott’s product directly competes with its product and has caused
`a significant decline in Cordis’s market share. If Cordis is required to wait for the PTO to complete
`its reexamination before enforcing its patents against Abbott, Cordis may be harmed even
`further.”). “[W]hen parties are directly competing and the landscape of the relevant market is
`changing, it presents a circumstance where justice demands that the allegedly aggrieved party be
`given an opportunity to litigate its claims-and sooner rather than later.” Nippon Steel & Sumito
`Metal Corp., 2013 WL 1867042, at *5. As such, the fact that GAIN and OANDA are direct
`competitors “weighs highly against granting the stay.” Nasdaq, 2018 WL 3814280, at *5
`(emphasis added). There are, however, some relevant countervailing considerations, just as there
`were in Nasdaq, namely that OANDA has not sought a preliminary injunction, and that the delays
`that would result from the stay are simply the inherent delays of the reexamination process.
`Accordingly, just as in Nasdaq, this factor should be considered neutral. Nasdaq, 2018
`WL 3814280, at *4-5.
`
`4.
`
`It is speculative as to whether a stay will reduce the burden of
`litigation on the parties and on the Court.
`
`Finally, as to whether granting a stay would “reduce the burden of litigation” on the parties
`and the Court, there is (as with the first factor) no way to know before the PTAB makes its
`
`
`
`7
`
`

`

`Case 3:20-cv-05784-BRM-DEA Document 36 Filed 10/05/20 Page 11 of 12 PageID: 1096
`
`
`
`institution decision. As this Court in Nasdaq noted, “it is speculative whether the petitions for
`review will be granted,” and so “the Court cannot determine at this stage whether staying this
`matter will reduce the burden of litigation on the parties and on the Court.” Nasdaq, Inc., 2018
`WL 3814280, at *5.
`Accordingly, this factor too weighs against a stay.
`****
`Just as this Court held in Nasdaq, while the relevant factors do 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.” Nasdaq, Inc., 2018 WL 3814280, at *5. Because the procedural posture here is not
`meaningfully distinguishable from the one faced by this Court in Nasdaq, application of these
`same factors leads to the same outcome: the motion should be denied.
`III. CONCLUSION
`For all the foregoing reasons, GAIN’s motion to stay should be denied.
`Date: October 5, 2020
`Respectfully Submitted,
`
`/s/ Erik Dykema
`
`By:
`
`Drew Koning (pro-hac vice)
`drew@kzllp.com
`Blake Zollar (pro-hac vice)
`blake@kzllp.com
`Koning Zollar LLP
`169 Saxony Road, STE 115
`Encinitas, CA 92024
`T: 858.252.3234
`F: 858.252.3238
`Shaun Paisley (pro-hac vice)
`shaun@kzllp.com
`Koning Zollar LLP
`470 James Street, Suite 007
`New Haven, CT 06513
`T: 203.951.1213
`F: 858.252.3238
`
`Erik Dykema
`(NJ Bar No. 021652010)
`erik@kzllp.com
`Koning Zollar LLP
`4 Manheim Road
`Essex Fells, New Jersey 07021
`T: 858.252.3234
`F: 858.252.3238
`
`
`ATTORNEYS FOR PLAINTIFF
`OANDA Corporation
`
`
`
`
`8
`
`

`

`Case 3:20-cv-05784-BRM-DEA Document 36 Filed 10/05/20 Page 12 of 12 PageID: 1097
`
`CERTIFICATE OF SERVICE
`I, Erik Dykema, certify as follows:
`I am an attorney of the State of New Jersey and a member of the firm Koning Zollar LLP,
`counsel for Plaintiff OANDA Corporation (“Plaintiff”) in this matter.
`
`On 5 Oct. 2020 I caused a copy of OANDA’s Brief in Opposition to Defendants’ Motion
`to Stay to be served on counsel of record in this matter via CM/ECF.
`
`
`
`
`
`
`/s/ Erik Dykema
`
` Erik Dykema
`
`
`
`
`
`1
`
`