Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 1 of 23 PageID #:23335
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`
`
`
`
`TRADING TECHNOLOGIES
`INTERNATIONAL, INC.
`
`
`Plaintiff,
`
`
`Case No. 10 C 715
`(Consolidated with:
`10 C 716, 10 C 718,
`10 C 720, 10 C 721,
`10 C 726, 10 C 882,
`10 C 883, 10 C 884,
`10 C 885, 10 C 929,
`10 C 931)
`
`Judge Virginia M. Kendall
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`v.
`
`
`BCG PARTNERS, INC.
`
`
`Defendant.
`
`MEMORANDUM IN SUPPORT OF THE TD AMERITRADE DEFENDANTS’
`MOTION TO STAY PROCEEDINGS PURSUANT TO SECTION 18(b)
`OF THE AMERICA INVENTS ACT
`
`
`
`Page 1 of 23
`
`
`
`TRADING TECH EXHIBIT 2025
`IBG ET AL. v. TRADING TECH
`CBM2015-00179
`
`

`
`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 2 of 23 PageID #:23336
`
`I.
`
`II.
`
`III.
`
`IV.
`
`TABLE OF CONTENTS
`
`Page
`INTRODUCTION .............................................................................................................. 1
`
`BACKGROUND ................................................................................................................ 1
`
`A.
`
`B.
`
`C.
`
`Procedural Posture .................................................................................................. 1
`
`Covered Business Method Patent Review .............................................................. 2
`
`TD Ameritrade’s Petitions ...................................................................................... 4
`
`LEGAL STANDARD ......................................................................................................... 5
`
`ALL FOUR STATUTORY FACTORS STRONGLY FAVOR A STAY ......................... 7
`
`A.
`
`B.
`
`C.
`
`D.
`
`CBM Review Will Greatly Simplify—And Possibly Even Eliminate—The
`Patents and Issues for Trial. .................................................................................... 7
`
`The Early Stage of Litigation Favors a Stay ......................................................... 10
`
`A Stay Will Not Unduly Prejudice Trading Technologies or Present a Clear
`Tactical Advantage to Defendants ........................................................................ 11
`
`A Stay Will Reduce the Burden on the Parties and the Court .............................. 14
`
`V.
`
`CONCLUSION ................................................................................................................. 15
`
`-i-
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`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 3 of 23 PageID #:23337
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`
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`CASES
`
`Bosch Healthcare Sys., Inc. v. ExpressMD Solutions, LLC, No. C 12-00068, 2013
`WL 752474 (N.D. Cal. Feb. 27, 2013) ..............................................................................10
`
`Capital Dynamics AG v. Cambridge Assoc., LLC, No. 13 Civ. 7766, 2014 WL
`1694710 (S.D.N.Y. Apr. 1, 2014) ..................................................................................6, 10
`
`Checkfree Corp. v. Metavante Corp., No. 3:12-cv-15-J-34JBT, 2014 WL 466023
`(M.D. Fla. Jan. 17, 2014) .........................................................................................6, 10, 13
`
`Chicago Mercantile Exchange, Inc. v. 5th Market, Inc., Case CBM2014-00114
`(PTAB Apr. 15, 2014) .........................................................................................................7
`
`Credit Acceptance Corp. v. Westlake Servs., LLC, No. CV 13-01523, 2013 WL
`7144391 (C.D. Cal. Dec. 30, 2013) .................................................................................7, 8
`
`CVI/Beta Ventures, Inc. v. Tura LP, 112 F.3d 1146 (Fed. Cir. 1997) .............................................8
`
`Genzyme Corp. v. Cobrek Pharms., Inc., No. 10-CV-00112, 2011 WL 686807
`(N.D. Ill. Feb. 17, 2011)...............................................................................................12, 13
`
`Gould v. Control Laser Corp., 705 F.2d 1340 (Fed. Cir. 1983) ......................................................9
`
`In re Ameranth Patent Litig. Cases, No. 11cv1810, 2013 WL 7144380 (S.D. Cal.
`Nov. 26, 2013) .....................................................................................................................6
`
`Intertainer, Inc. v. Hulu, LLC, No. CV 13-05499-CJC, 2014 WL 466034 (C.D.
`Cal. Jan. 24, 2014) .........................................................................................................6, 14
`
`JAB Distribs., LLC v. London Luxury, LLC, No. 09 C 5831, 2010 WL 1882010
`(N.D. Ill. May 11, 2010) ..........................................................................................8, 13, 14
`
`Market-Alerts Pty. Ltd. v. Bloomberg Finance L.P., 922 F. Supp. 2d 486 (D. Del.
`2013) ....................................................................................................................6, 7, 10, 13
`
`Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340 (Fed. Cir. 2004) ......................................9
`
`Pegasus Dev. Corp. v. Directv, Inc., No. Civ.A. 00-1020-GMS, 2003 WL
`21105073 (D. Del. May 14, 2003) .....................................................................................10
`
`Pi-Net Int’l Inc. v. Citizens Fin. Grp. Inc., No. 12-355-RGA, 2013 WL 6094223
`(D. Del. June 21, 2013) ........................................................................................................7
`
`Progressive Cas. Ins. Co. v. Safeco Ins. Co., Nos. 1:10CV01370, 1:11CV00082,
`1:12CV01068, 1:12CV01070, 2013 WL 1662952 (N.D. Ohio Apr. 17,
`2013) ....................................................................................................................................7
`
`-ii-
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`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 4 of 23 PageID #:23338
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`Sightsound Techs., LLC v. Apple, Inc., No. 11-1292, 2013 WL 2457284 (W.D. Pa.
`June 6, 2013) ..................................................................................................................7, 12
`
`Transunion Intelligence LLC v. Search Am., Inc., No. 11-CV-1075, 2014 WL
`753781 (D. Minn. Feb. 26, 2014) ..................................................................................6, 10
`
`Unwired Planet LLC v. Google Inc., No. 3:12-cv-00504-MMD-VPC, 2014 WL
`301002 (D. Nev. Jan. 27, 2014) ...........................................................................................6
`
`Versata Software, Inc. v. Dorado Software, Inc., No. 2:13-cv-00920-MCE-DAD,
`2014 WL 1330652 (E.D. Cal. Mar. 28, 2014) .....................................................................6
`
`Zillow, Inc. v. Trulia, Inc., No. C12-1549JLR, 2013 WL 5530573 (W.D. Wash.
`Oct. 7, 2013) .............................................................................................................7, 8, 10,
`11, 12, 13
`
`STATUTES
`
`35 C.F.R. § 42.301(a).......................................................................................................................3
`
`35 U.S.C. § 101 ................................................................................................................................4
`
`35 U.S.C. § 102 ................................................................................................................................4
`
`35 U.S.C. § 103 ................................................................................................................................4
`
`35 U.S.C. § 112 ................................................................................................................................4
`
`35 U.S.C. § 318(c) ...........................................................................................................................8
`
`AIA § 18 ......................................................................................................................................3, 4
`
`AIA § 18(a)(1)(B) ............................................................................................................................3
`
`AIA § 18(a)(1)(D) ............................................................................................................................4
`
`AIA § 18(b) ..............................................................................................................................4, 5, 7
`14
`
`AIA § 18(b)(1) .................................................................................................................................6
`
`AIA § 18(b)(2) .................................................................................................................................6
`
`AIA § 18(d)(1) .................................................................................................................................3
`
`AIA § 32 ..........................................................................................................................................4
`
`RULES
`
`77 Fed. Reg. 48734 (Aug. 14, 2012)................................................................................................4
`
`77 Fed. Reg. 48756, 48757 (Aug. 14, 2012)................................................................................3, 5
`
`Fed. R. Civ. P. 11 ...........................................................................................................................11
`
`-iii-
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`Page 4 of 23
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`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 5 of 23 PageID #:23339
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`Fed. R. Civ. P. 37 ...........................................................................................................................11
`
`
`H.R. REP. No. 112-98, pt. 1 (2011)..................................................................................................3
`
`MISCELLANEOUS
`
`157 Cong. Rec. S1053 (daily ed. Mar. 1, 2011) ..........................................................................3, 4
`
`157 Cong. Rec. S1363 (daily ed. Mar. 8, 2011) ..............................................................................4
`
`157 Cong. Rec. S1363-64 (daily ed. Mar. 8, 2011) .......................................................................14
`
`157 Cong. Rec. S1364 (daily ed. Mar. 8, 2011) ..............................................................................6
`
`157 Cong. Rec. S1379 (daily ed. Mar. 8, 2011) ..............................................................................6
`
`
`
`-iv-
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`Page 5 of 23
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`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 6 of 23 PageID #:23340
`
`TABLE OF EXHIBITS1
`
`
`EX. NO. DESCRIPTION
`
`A
`
`B
`
`C
`
`D
`
`E
`
`F
`
`G
`
`H
`
`I
`
`J
`
`K
`
`L
`
`Excerpts from House Report No. 112-98 dated June 1, 2011
`
`Statement of Senator Schumer on America Invents Act published at 157
`Congressional Record S1053-1054 on March 1, 2011
`
`Office Patent Trial Practice Guide published at 77 Federal Register 48756 -
`48773 on August 14, 2012
`
`Transitional Program for Covered Business Methods Patents - Definitions
`of Covered Business Method Patent and Technological Invention published
`at 77 Federal Register 48734 – 48753 on August 14, 2012
`
`Excerpts from the statements of Senator Schumer and Senator Kyl on the
`Patent Reform Act of 2011 published at 157 Congressional Record S1360-
`1380 on March 8, 2011
`
`Petition for Post-Grant Review of U.S. Patent No. 6,766,304, a Covered
`Business Method under 35 U.S.C. § 321 and the Leahy-Smith America
`Invents Act § 18, filed May 20, 2014
`
`Petition for Post-Grant Review of U.S. Patent No. 6,772,132, a Covered
`Business Method under 35 U.S.C. § 321 and the Leahy-Smith America
`Invents Act § 18, filed May 19, 2014
`
`Petition for Post-Grant Review of U.S. Patent No. 7,533,056, a Covered
`Business Method under 35 U.S.C. § 321 and the Leahy-Smith America
`Invents Act § 18, filed May 19, 2014
`
`Petition for Post-Grant Review of U.S. Patent No. 7,676,411, a Covered
`Business Method under 35 U.S.C. § 321 and the Leahy-Smith America
`Invents Act § 18, filed May 19, 2014
`
`Petition for Post-Grant Review of U.S. Patent No. 7,685,055, a Covered
`Business Method under 35 U.S.C. § 321 and the Leahy-Smith America
`Invents Act § 18, filed May 19, 2014
`
`Patent Trial and Appeal Board AIA Progress Statistics as of 5/8/2014
`available at
`http://www.uspto.gov/ip/boards/bpai/stats/aia_trial_statistics.jsp
`
`Chicago Mercantile Exchange, Inc. v. 5th Market, Inc., Case CBM2014-
`
`
`1 All Exhibits A–N are submitted concurrently with this motion. All emphasis has been added
`throughout unless indicated otherwise. All internal citations and quotations have been omitted
`unless otherwise indicated. All citations to Docket entries (“Dkt. No.”) are to the docket for Case
`No. 1:10-cv-00715 unless otherwise indicated.
`
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`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 7 of 23 PageID #:23341
`
`EX. NO. DESCRIPTION
`00114, Order, Paper 4 (P.T.A.B. Apr. 1, 2014)
`
`Index of Final Decisions and Results by PTAB in CBM Proceedings FY13
`and FY14 available at http://interpartesreviewblog.com/wp-
`content/uploads/2014/04/Final-Decisions-by-PTAB-in-CMB-
`Proceedings.png
`
`Bloomberg Inc.v. Markets-Alert Pty Ltd., Case CBM2013-00005, Final
`Written Decision (P.T.A.B. Mar. 26, 2014)
`
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., Case CBM2013-
`00004, Final Written Decision (P.T.A.B. Mar. 13, 2014)
`
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., Case CBM2012-
`00010, Final Written Decision (P.T.A.B. Feb. 24, 2014)
`
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., Case CBM2013-
`00002, Final Written Decision (P.T.A.B. Feb. 24, 2014)
`
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., Case CBM2012-
`00003, Final Written Decision (P.T.A.B. Feb. 11, 2014)
`
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., Case CBM2013-
`00009, Final Written Decision (P.T.A.B. Feb. 11, 2014)
`
`Interthinx, Inc. v. CoreLogic Solutions, LLC, Case CBM2012-00007, Final
`Written Decision (P.T.A.B. Jan. 30, 2014)
`
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., Case CBM2012-
`00002, Final Written Decision (P.T.A.B. Jan. 23, 2014)
`
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., Case CBM2012-
`00004, Final Written Decision (P.T.A.B. Jan. 23, 2014)
`
`CRS Advanced Techs., Inc. v. Frontline Techs., Inc., Case CBM2012-
`00005, Final Written Decision (P.T.A.B. Jan. 21, 2014)
`
`SAP America, Inc .v. Versata Dev. Group, Inc., Case CBM2012-00001,
`Final Written Decision (P.T.A.B. June 11, 2013)
`
`Inter Partes Reexamination Filing Data dated September 30, 2013 available
`at http://www.uspto.gov/patents/stats/Reexamination_Information.jsp
`
`M
`
`M-1
`
`M-2
`
`M-3
`
`M-4
`
`M-5
`
`M-6
`
`M-7
`
`M-8
`
`M-9
`
`M-10
`
`M-11
`
`N
`
`
`
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`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 8 of 23 PageID #:23342
`
`I.
`
`INTRODUCTION
`
`This case needs to be simplified. Plaintiff Trading Technologies (“TT”) currently asserts
`
`15 patents against TD Ameritrade2, which amounts to almost 400 claims. In an effort to lessen
`
`the foreseeable burden that litigating 15 patents and almost 400 claims will have on the parties
`
`and this Court, TD Ameritrade recently filed five petitions at the USPTO challenging the validity
`
`and patentability of five of the most important patents in this litigation. The petitions were filed
`
`under a new post-grant review program created by Congress in the America Invents Act, called
`
`“Covered Business Method Review” or “CBM Review.” CBM Review is an expedited
`
`procedure that was designed for cases just like this: it is only for defendants that are engaged in
`
`active litigation over patents that claim activities of a financial nature. According to current
`
`statistics, there is very little chance that any of the five patents will emerge from CBM Review
`
`unscathed. At the very least, the proceeding will create an important record on issues such as
`
`claim construction, scope of disclosure, and prior art. No matter what happens at the PTO, CBM
`
`Review of these five critical patents will have a trickle-down effect and impact those same issues
`
`for the other patents-in-suit. Therefore, for the reasons explained in detail below, TD Ameritrade
`
`respectfully requests that the Court stay this case in its entirety pending the completion of TD
`
`Ameritrade’s petitions for CBM Review.3
`
`II.
`
`BACKGROUND
`
`A.
`
`Procedural Posture
`
`In February and March 2010, TT filed complaints against TD Ameritrade, alleging that
`
`TD Ameritrade’s thinkorswim® securities trading platform infringes five patents. Case No. 1:10-
`
`
`2 “TD Ameritrade” refers collectively to the following defendants: TD Ameritrade Holding
`Corp., TD Ameritrade, Inc., and thinkorswim Group, Inc.
`3 TD Ameritrade understands that some of the other defendants may separately join this motion.
`
`-1-
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`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 9 of 23 PageID #:23343
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`cv-00883, Dkt. Nos. 1, 14. Over a year later, in June 2011, TT amended its complaint, adding 10
`
`additional patents to the case against TD Ameritrade. Dkt. No. 231. In total, TT has asserted 15
`
`patents and almost 400 claims against TD Ameritrade. TT has never sought a preliminary
`
`injunction.
`
`Eventually, the case against TD Ameritrade was consolidated with cases against other TT
`
`defendants involving the same patents. Since consolidation, the parties have been engaged
`
`primarily in early summary judgment practice on particular issues that would impact up to 9
`
`different patents, with the majority of their efforts focusing on one patent in particular. The Court
`
`initially granted two of defendants’ motions for summary judgment (Dkt. No. 448), but at TT’s
`
`request, allowed TT to file an interlocutory appeal of its order with the Federal Circuit (Dkt. No.
`
`486). TT filed its notice of appeal in August 2012. This Court did not set any schedule with
`
`respect to the patents not on appeal, and TT accepted a de facto stay of the litigation. The Federal
`
`Circuit’s decision was made final in November 2013 when it denied a petition for rehearing en
`
`banc, and its mandate finally issued on December 4, 2013.
`
`Thus, four years into the litigation, the case against TD Ameritrade is essentially at the
`
`beginning. The parties have never exchanged initial disclosures, have not conducted any
`
`discovery, and are years away from trial. See Dkt. No. 71; Dkt. No. 544-1. The other
`
`consolidated cases are similarly situated; some parties exchanged initial disclosures and limited
`
`written discovery, but that was before TT amended its complaints adding numerous patents. Dkt.
`
`No. 71. No depositions have been taken in any case.
`
`B.
`
`Covered Business Method Patent Review
`
`While the parties were occupied with consolidation, summary judgment, and appeal,
`
`Congress passed what is generally recognized as the most significant overhaul of this country’s
`
`patent system in the last 50 years (cid:650) the America Invents Act of 2011 (AIA). One of the most
`
`-2-
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`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 10 of 23 PageID #:23344
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`important elements of the AIA was the introduction of a new post-grant patent review program at
`
`the USPTO designed specifically for “Covered Business Method Patents,” what is now known as
`
`“CBM Review.” AIA § 18. Recognizing that the dot-com bubble of the late 1990’s and early
`
`2000’s led to “poor business-method patents” and costly litigation (H.R. REP. NO. 112-98, pt. 1
`
`at 54 (2011), Ex. A), Congress created CBM Review to “allow companies that are the target of
`
`one of these frivolous business method patent lawsuits to go back to the PTO and demonstrate,
`
`with the appropriate prior art, that the patent shouldn’t have been issued in the first place” (157
`
`Cong. Rec. S1053 (daily ed. Mar. 1, 2011), Ex. B). The procedure is relatively fast and efficient;
`
`the USPTO must issue its final written decision within 12 months of granting review, which
`
`means the entire proceeding lasts no more than 18 months:
`
`
`
`See Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48757 (Aug. 14, 2012), Ex. C.
`
`CBM Review is different from other USPTO review and reexamination procedures in a
`
`few key ways. First, CBM Review is statutorily limited to parties who are already engaged in
`
`litigation. AIA § 18(a)(1)(B). Second, CBM Review is statutorily limited to patents that claim “a
`
`method or corresponding apparatus for performing data processing or other operations used in
`
`the practice, administration, or management of a financial product or service.” AIA § 18(d)(1);
`
`35 C.F.R. § 42.301(a). According to the PTO, this includes all patents claiming activities that are
`
`financial in nature, incidental to a financial activity or complementary to a financial activity. See
`
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`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 11 of 23 PageID #:23345
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`77 Fed. Reg. 48734 (Aug. 14, 2012), Ex. D at 48734-35. Also unique to CBM Review is that a
`
`petitioner may challenge the validity or patentability of a CBM patent based on essentially any
`
`ground available under the Patent Act. See AIA §§ 18, 32 (“any ground that could be raised
`
`under paragraph (2) or (3) of section 282(b)” of the Patent Act, i.e., 35 U.S.C. §§ 101, 102, 103,
`
`or 112). The petitioner (here, TD Ameritrade) is estopped from raising those grounds again in
`
`the litigation, however. AIA § 18(a)(1)(D).
`
`Because CBM Review was designed to be an efficient alternative to litigation, Congress
`
`specifically contemplated stays of co-pending litigation during the period of CBM Review. See
`
`AIA § 18(b). Congress enumerated a four-factor test, unique to motions to stay in light of CBM
`
`Review petitions, which is designed to “place[] a very heavy thumb on the scale in favor of a
`
`stay.” 157 Cong. Rec. S1363 (stmt. of Sen. Schumer) (daily ed. Mar. 8, 2011), Ex. E. In fact,
`
`Congress envisioned that “it is nearly impossible to imagine a scenario in which a district court
`
`would not issue a stay” during the pendency of a CBM Review. 157 Cong. Rec. S1053 (daily ed.
`
`Mar. 1, 2011), Ex. B.
`
`In other words (cid:650) Congress created CBM Review for cases just like this.
`
`C.
`
`TD Ameritrade’s Petitions
`
`On May 19 and 20, 2014, TD Ameritrade filed five petitions for CBM Review covering
`
`all claims of the five most important patents asserted against TD Ameritrade in the litigation,
`
`namely, U.S. Patent Nos. 6,766,304 (“’304”); 6,772,132 (“’132”); 7,533,056 (“’056”); 7,676,411
`
`(“’411”); and 7,685,055 (“’055”) (collectively the “CBM Patents”). Exs. F–J. The petitions raise
`
`numerous grounds of invalidity and unpatentability, and explain, in great detail: why all five
`
`patents fail to claim patentable subject matter (§ 101); why certain combinations of prior art
`
`references disclose each element of each claim of all five patents (§ 103); and why some claims
`
`are insolubly ambiguous and, therefore, invalid (§ 112). Ex. F at pp. 12-79; Ex. G at pp. 12-79;
`
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`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 12 of 23 PageID #:23346
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`Ex. H at pp. 17-79; Ex. I at pp. 11-79; Ex. J at pp. 10-62. All told, TD Ameritrade prepared over
`
`1000 pages of petitions and supporting declarations, in accordance with USPTO procedures.4
`
`By statute, TT has three months to file a preliminary response to TD Ameritrade’s
`
`petitions, and then the PTO has three months to determine whether to grant the petitions and
`
`institute CBM Review. See Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48757 (Aug.
`
`14, 2012), Ex. C.
`
`It is highly likely that the USPTO will grant TD Ameritrade’s petitions and take up
`
`review of these five patents. According to recent statistics, the USPTO instituted trials in 82% of
`
`CBM Review petitions filed in its FY2013, and so far in FY2014 has granted 78% of CBM
`
`Review petitions filed. See Patent Trial and Appeal Board AIA Progress, Ex. K.
`
`Assuming that the PTO takes up CBM Review of these five patents, the proceedings will
`
`occur on a much faster track than this litigation. As noted above, the PTO is statutorily required
`
`to issue its final written decision within one year from the date review is instituted.
`
`III.
`
`LEGAL STANDARD
`
`Under the AIA, an accused infringer pursuing CBM Review may seek a stay of litigation
`
`while its petition for review is pending. AIA § 18(b). Congress enumerated four criteria for the
`
`Court to consider in deciding whether to enter a stay:
`
`(1) IN GENERAL.--If a party seeks a stay of a civil action alleging infringement
`of a patent . . . relating to a transitional proceeding for that patent, the court shall
`decide whether to enter a stay based on--
`(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;
`
`
`4 Because the CBM filings are voluminous, Exhibits F-J include only the five CBM petitions
`(which total over 370 pages) and do not include supporting declarations or exhibits filed with the
`petitions. If the Court would like copies of the supporting declarations and exhibits, TD
`Ameritrade will provide them upon the Court’s request.
`
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`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 13 of 23 PageID #:23347
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`(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). The statute also allows for “an immediate interlocutory appeal” of a stay
`
`decision to ensure its consistent application. AIA § 18(b)(2).
`
`There is a “congressional policy strongly favoring stays when proceedings are instituted
`
`under . . . section [18].” 157 Cong. Rec. S1379 (daily ed. Mar. 8, 2011) (stmt. of Sen. Kyl), Ex.
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`E; Transunion Intelligence LLC v. Search Am., Inc., No. 11-CV-1075, 2014 WL 753781, at *1
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`(D. Minn. Feb. 26, 2014) (“The legislative history of the AIA contains evidence that Congress
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`intended that stays would be granted in almost all cases”). Denial of a stay would require “an
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`extraordinary and extremely rare set of circumstances not contemplated in any of the existing
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`case law related to stays pending reexamination.” 157 Cong. Rec. S1364 (daily ed. Mar. 8, 2011)
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`(stmt. of Sen. Schumer), Ex. E. “Absent some exceptional circumstance, the institution of a
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`business-methods proceeding—which requires a high up-front showing and will be completed in
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`a relatively short period of time—should serve as a substitute for litigation, and result in a stay of
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`co-pending district court litigation.” Id.
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`In recognition of this Congressional policy strongly favoring stays pending the outcome
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`of CBM Review proceedings, district courts across the country regularly grant such stays.5
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`5 See, e.g., Market-Alerts Pty. Ltd. v. Bloomberg Finance L.P., 922 F. Supp. 2d 486 (D. Del.
`2013); Capital Dynamics AG v. Cambridge Assoc., LLC, No. 13 Civ. 7766, 2014 WL 1694710
`(S.D.N.Y. Apr. 1, 2014); Versata Software, Inc. v. Dorado Software, Inc., No. 2:13-cv-00920-
`MCE-DAD, 2014 WL 1330652 (E.D. Cal. Mar. 28, 2014); Transunion Intelligence LLC v.
`Search Am., Inc., No. 11-CV-1075, 2014 WL 753781 (D. Minn. Feb. 26, 2014); Unwired Planet
`LLC v. Google Inc., No. 3:12-cv-00504-MMD-VPC, 2014 WL 301002 (D. Nev. Jan. 27, 2014);
`Intertainer, Inc. v. Hulu, LLC, No. CV 13-05499-CJC, 2014 WL 466034 (C.D. Cal. Jan. 24,
`2014); Checkfree Corp. v. Metavante Corp., No. 3:12-cv-15-J-34JBT, 2014 WL 466023 (M.D.
`Fla. Jan. 17, 2014); Credit Acceptance Corp. v. Westlake Servs., LLC, No. CV 13-01523, 2013
`WL 7144391 (C.D. Cal. Dec. 30, 2013); In re Ameranth Patent Litig. Cases, No. 11cv1810,
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`-6-
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`Case: 1:10-cv-00715 Document #: 546 Filed: 05/22/14 Page 14 of 23 PageID #:23348
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`Courts also routinely grant stays before knowing whether the USPTO will grant the petitions and
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`take up CBM Review. See, e.g., Credit Acceptance Corp., 2013 WL 7144391, at *3 (“electing to
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`wait until review is firmly granted before issuing a stay could result in significant wasted effort
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`by both parties and the Court”); Sightsound Techs., 2013 WL 2457284, at *3 (“the relevant stay
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`provisions of the AIA apply when the petition for review is filed, and not when the PTAB
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`institutes such review.”); Market-Alerts, 922 F. Supp. 2d at 495.6
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`IV.
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`ALL FOUR STATUTORY FACTORS STRONGLY FAVOR A STAY
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`The circumstances in this case strongly favor staying the litigation pending resolution of
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`TD Ameritrade’s petitions for CBM Review.
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`A.
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`CBM Review Will Greatly Simplify—And Possibly Even Eliminate—The
`Patents and Issues for Trial
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`Current statistics suggest that it is highly likely that none of the five CBM Patents will
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`survive CBM Review unscathed. According to recent statistics, the USPTO instituted trials in
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`82% of CBM Review petitions filed in its FY2013, and so far in FY2014 has granted 78% of
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`CBM Review petitions filed. See Patent Trial and Appeal Board AIA Progress, Ex. K. In the
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`eleven CBM Review proceedings that have reached a final written decision, 100% of the claims
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`at issue have been cancelled. See Exs. M, M-1 – M-11. And although patent owners have an
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`opportunity to seek amendment of their claims, to date the PTO has not granted any motion to
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`2013 WL 7144380 (S.D. Cal. Nov. 26, 2013); Zillow, Inc. v. Trulia, Inc., No. C12-1549JLR,
`2013 WL 5530573 (W.D. Wash. Oct. 7, 2013); Pi-Net Int’l Inc. v. Citizens Fin. Grp. Inc., No.
`12-355-RGA, 2013 WL 6094223 (D. Del. June 21, 2013); Sightsound Techs., LLC v. Apple, Inc.,
`No. 11-1292, 2013 WL 2457284 (W.D. Pa. June 6, 2013); Progressive Cas. Ins. Co. v. Safeco
`Ins. Co., Nos. 1:10CV01370, 1:11CV00082, 1:12CV01068, 1:12CV01070, 2013 WL 1662952
`(N.D. Ohio Apr. 17, 2013).
`6 To the extent TT intends to rely on Chicago Mercantile Exchange, Inc. v. 5th Market, Inc. (see
`Dkt. No. 544 at 7), the case is inapposite. See Case CBM2014-00114, Order (Paper 4) (P.T.A.B.
`Apr. 15, 2014), Ex. L. This PTAB case involved a request to stay an inter partes reexamination
`pending the outcome of a subsequently-filed CBM Review petition. Id. at 2. It did not involve
`concurrent district court litigation, did not arise under AIA § 18(b), and does not reflect the
`strong Congressional policy favoring a stay of district court litigation pending CBM Review.
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`-7-
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`amend claims in a CBM Review proceeding. Id. The historical results of inter partes
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`reexamination (an established patent cancellation procedure analogous to CBM Review) are also
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`instructive. See Zillow, 2013 WL 5530573, at *4 (considering such statistics “to be the best
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`available indicator at this time of the likelihood of amendment or cancellation of claims in a
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`CBM review”). Historically, 93% of requests for inter partes reexamination are granted, 31% of
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`inter partes reexaminations result in the cancellation of all claims, and 61% result in amended
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`claims. Inter Partes Reexamination Filing Data, Ex. N. Therefore, it is highly likely that all
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`claims of the five patents at issue will either be canceled entirely or, at a minimum, amended.
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`Either way, the outcome of the CBM Review will greatly simplify and narrow the issues
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`in suit. See, e.g., Credit Acceptance Corp., 2013 WL 7144391, at *3 (“a final written decision by
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`the PTAB that does not result in cancellation of the [patent-in-suit] will still simplify the issues
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`presented before this Court.”). The obvious example is that litigation would be rendered moot if
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`any claims are cancelled as a result of CBM Review. But even if any claims were to survive
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`CBM Review, they will most likely be substantively amended or narrowed, which will in turn
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`reduce TD Ameritrade’s potential liability in this suit under the doctrine of intervening rights
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`(which effectively resets the clock for damages to the date of the reissuance of the patent with
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`modified claims). See 35 U.S.C. § 318(c). Furthermore, the record created by the CBM Review
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`will simplify any issues remaining in litigation by, for example: providing guidance on claim
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`construction; determining, informing, or altering the meaning of claim terms; determining the
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`scope of the patent’s specification and disclosure; and providing expert analysis of prior art. See,
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`e.g., CVI/Beta Ventures,