SEL EXHIBIT NO. 2002
`
`
`CHI MEI INNOLUX CORP. v. PATENT OF SEMICONDUCTOR ENERGY
`LABORATORY CO., LTD.
`
`IPR2013-00064
`
`
`
`
`
`

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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 1 of 23 Page ID
` #:1887
`
`JEFFER MANGELS BUTLER & MITCHELL LLP
`STANLEY M. GIBSON (Bar No. 162329)
`sgibson@jmbm.com
`GREGORY S. CORDREY (Bar No. 190144)
`gcordrey@jmbm.com
`3 Park Plaza, Suite 1100
`Irvine, California 92614-2592
`Telephone: (949) 623-7200
`Facsimile:
`(949) 623-7202
`Attorneys for Defendants
`CHIMEI INNOLUX CORPORATION,
`CHIMEI OPTOELECTRONICS USA, INC.,
`ACER AMERICA CORPORATION,
`VIEWSONIC CORPORATION,
`VIZIO, INC.
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`SEMICONDUCTOR ENERGY
`LABORATORY CO., LTD.,
`Plaintiff,
`
`v.
`CHIMEI INNOLUX CORPORATION,
`CHI MEI OPTOELECTRONICS USA,
`INC., ACER AMERICA
`CORPORATION, VIEWSONIC
`CORPORATION, VIZIO, INC., and
`WESTINGHOUSE DIGITAL, LLC,
`Defendants.
`
`CASE NO. SACV12-0021-JST (JPRx)
`DEFENDANTS' NOTICE OF
`MOTION AND MOTION TO STAY
`LITIGATION PENDING OUTCOME
`OF INTER PARTES REVIEW;
`MEMORANDUM OF POINTS AND
`AUTHORITIES IN SUPPORT OF
`MOTION AND DECLARATION OF
`GREGORY S. CORDREY IN
`SUPPORT THEREOF
`
`[Notice of Motion, Motion and [Proposed] Order
`Filed Concurrently Herewith]
`
`Date:
`Time:
`Place:
`
`December 21, 2012
`2:30 p.m.
`Hon. Josephine Staton Tucker
`Courtroom 10A
`411 W. 4th St. # 1-053
`Santa Ana, California
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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 2 of 23 Page ID
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`TABLE OF CONTENTS
`
`Page
`
`I.
`
`II.
`
`INTRODUCTION ....................................................................................... 2
`
`STATEMENT OF FACTS .......................................................................... 3
`
`A.
`
`B.
`
`C.
`
`D.
`
`E.
`
`F.
`
`SEL’s Prior Litigation and Inequitable Conduct................................. 3
`
`CMI and SEL are Not Competitors.................................................... 4
`
`The Status of the Proceedings in this Case......................................... 5
`
`Defendants Have, Or Will Have, Filed Their Petitions For Inter
`Partes Review With The PTO Within A Few Weeks ......................... 5
`
`If The Stay Is Not Granted, The Parties Will Be Addressing The
`Same Issues In Two Different Forums At The Same Time ................ 6
`
`The New IPR Review Process Is Fast, Fair And Will Either
`Eliminate The Need For Trial Or Streamline The Remaining
`Issues................................................................................................. 8
`
`III.
`
`STAYING THE CASE IS WARRANTED BECAUSE THE CASE IS
`IN ITS EARLY STAGES, THE REVIEW WILL SIMPLIFY THE
`ISSUES AT TRIAL AND NEITHER PARTY WILL BE PREJUDICED
`BY A STAY ................................................................................................ 9
`
`A.
`
`B.
`
`C.
`
`D.
`
`Legal Standard................................................................................... 9
`
`Discovery Has Just Begun and Is Not Close to Being Completed .... 10
`
`A Stay Will Simplify the Issues in Question and Streamline the
`Trial................................................................................................. 12
`
`A Stay Will Not Unduly Prejudice SEL or Present a Clear Tactical
`Disadvantage for SEL, Which is Not a Competitor of CMI ............. 16
`
`IV. CONCLUSION ......................................................................................... 18
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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 3 of 23 Page ID
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`TABLE OF AUTHORITIES
`
`Page
`
`CASES
`Akeena Solar Inc. v. Zep Solar Inc.,
`No. C 09-05040 JSW, 2010 WL 1526388 (N.D. Cal. Apr. 14, 2010)...............16
`Anascape, Ltd. v. Microsoft Corp.,
`475 F. Supp. 2d 612 (E.D. Tex. 2007)........................................................11, 12
`ASCII Corp. v. STD Entm’t,
`844 F. Supp. 1378 (N.D. Cal. 1994)...................................................................9
`Aten Int’l Co. v. Emine Tech. Co.,
`No. 09-cv-0843, 2010 U.S. Dist. LEXIS 46226 (C.D. Cal. Apr. 12, 2010) ..........
`.................................................................................................................8, 9, 15
`Avago Tech. Fiber IP (Singapore) Pte. Ltd. v. IPtronics, Inc.,
`No. 10- CV-02863-EJD, 2011 WL 3267768 (N.D. Cal. July 28, 2011) ...........11
`Bausch & Lomb Inc. v. Alcon Lab., Inc.,
`914 F. Supp. 951 (W.D.N.Y. 1996)..................................................................13
`Brass Smith, LLC v. Advanced Design Mfg. LLC,
`CV 10-4945 PSG, 2010 U.S. Dist. LEXIS 141422 (C.D. Cal. Dec. 20,
`2010) .................................................................................................................8
`Echostar Techs. Corp. v. TiVo, Inc.,
`No. 05-cv-81, 2006 U.S. Dist. LEXIS 48431 (E.D. Tex. July 14, 2006) ..............
`....................................................................................................... 10, 11, 12, 14
`eSoft, Inc. v. Blue Coat Sys., Inc.,
`505 F. Supp. 2d 784 (D. Colo. 2007) .........................................................11, 12
`Gould v. Control Laser Corp.,
`705 F.2d 1340 (Fed. Cir. 1983)..........................................................................7
`In re Translogic Tech., Inc.,
`504 F.3d 1249 (Fed. Cir. 2007)........................................................................14
`Inogen, Inc. v. Inova Labs, Inc.
`Case No. SACV 11-1692-JST (Mar. 20, 2012)..................................8, 9, 11, 16
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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 4 of 23 Page ID
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`TABLE OF AUTHORITIES
`(CONTINUED)
`
`Page
`
`J.T. Eaton & Co. v. At. Paste & Glue Co.,
`106 F.3d 1563 (Fed. Cir. 1997)........................................................................12
`Krippelz v, Ford Motor Company,
`667 F.3d 1261 (Fed. Cir. 2012)........................................................................12
`Lincoln Nat’l Life Ins. Co. v. Transamerica Fin. Life Ins. Co.,
`No. 08-cv-135, 2009 U.S. Dist. LEXIS 35121 (N.D. Ind. April 24, 2009) .......11
`Marine Polymer Technologies, Inc. v. HemCon, Inc.,
`672 F.3d 1350 (Fed. Cir. 2012) (en banc) ..........................................................8
`MH Sys., Inc. v. Peter McNulty,
`CV 05-7263 DSF, 2006 U.S. Dist. LEXIS 98642 (C.D. Cal. Oct. 23, 2006)........
`......................................................................................................... 8, 10, 12, 15
`Pragmatus AV, LLC v. Facebook, Inc.,
`No. 11-CV-02168-EJD, 2011 WL 4802958 (N.D. Cal. Oct. 11, 2011) ............11
`Semiconductor Energy Laboratory Co., LTD. v. Samsung Electronics Co.,
`LTD., et al.,
`204 F. 3d 1368 (Fed. Cir. 2000).....................................................................2, 3
`Softview Computer Prods. Corp. v. Haworth, Inc.,
`No. 97-cv-8815, 2000 U.S. Dist. LEXIS 11274 (S.D.N.Y. Aug. 10, 2000)..........
`...................................................................................................................10, 12
`Translogic Tech., Inc. v. Hitachi, Ltd.,
`250 Fed. Appx. 988 (Fed. Cir. 2007) ...............................................................14
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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 5 of 23 Page ID
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`TABLE OF AUTHORITIES
`(CONTINUED)
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`Page
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`STATUTES
`
`35 U.S.C.
`§ 252..............................................................................................................1, 7
`§§ 301-319, et seq..............................................................................................6
`§ 307..................................................................................................................7
`§§ 311-319.....................................................................................................1, 2
`§ 313................................................................................................................15
`§ 314(1) .............................................................................................................7
`§ 314(b) .............................................................................................................7
`§ 315(e)(2).........................................................................................................7
`§ 316(a)(8).......................................................................................................15
`§ 316(a)(11).......................................................................................................7
`§ 316(c) .............................................................................................................6
`§ 319................................................................................................................15
`OTHER AUTHORITIES
`
`37 C.F.R. pt. 42.......................................................................................................2
`
`37 C.F.R. § 42.100 Et Seq.......................................................................................1
`
`77 Fed. Reg. 157 (August 14, 2012) ...................................................................2, 5
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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 6 of 23 Page ID
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`NOTICE OF MOTION AND MOTION
`TO ALL PARTIES AND THEIR COUNSEL OF RECORD:
`PLEASE TAKE NOTICE THAT ON December 21, 2012 at 2:30 p.m.,
`or as soon thereafter as the matter may be heard before the Honorable Josephine
`Staton Tucker in Courtroom 10A of the United States District Court for the Central
`District of California, Southern Division, located at 411 West Fourth Street, Santa
`Ana, CA 92701-4516, Defendants Chimei Innolux Corporation ("CMI"), Chimei
`Optoelectronics USA, Inc. ("CMO USA"), Acer America Corporation (“Acer”),
`ViewSonic Corporation (ViewSonic”), and VIZIO, Inc. (“VIZIO”) (collectively, the
`“Defendants”) will move the Court to stay the litigation pending the outcome of the
`Inter Partes Review of each of the asserted patents to be conducted by the Patent
`Trial and Appeals Board of the United States Patent and Trademark Office.
`The Motion is made on the grounds that discovery has just begun, a stay
`will eliminate, or greatly simplify, the issues in question and trial of the case; and a
`stay will not cause SEL any undue prejudice or a clear tactical disadvantage.
`The Motion is based on this Notice, the attached Memorandum of Points
`and Authorities, the Cordrey Declaration, all matters which this Court takes judicial
`notice, the Court's files in this matter, and any other evidence and argument as may
`be presented at the hearing on the Motion.
`This Motion is further made following the conference of counsel
`pursuant to L.R. 7-3 which took place on September 5, 2012.
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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 7 of 23 Page ID
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`MEMORANDUM OF POINTS AND AUTHORITIES
`Defendants CMI, CMO USA, Acer, ViewSonic, and VIZIO (collectively
`"Defendants") respectfully submit this Memorandum in Support of their Motion to
`Stay the Action Pending the Outcome of the Inter Partes Review.
`I.
`INTRODUCTION
`On October 19, 2012, Defendants filed their first petition for inter partes
`review ("IPR") of the Asserted Patents with the U.S. Patent and Trademark Office
`(“PTO”).1 Defendants will file petitions on the remaining five patents-in-suit no later
`than November 15, 2012.
`The Court should stay the case pending the inter partes review proceedings by
`the Patent Trial and Appeals Board of the United States Patent Office on of the
`Asserted Patents for the following three independent reasons:
`First, the IPR process is fast and efficient. Taking a maximum of eighteen
`months (and more likely twelve to fifteen months), the IPR will be completed before
`the scheduled trial date for this matter.
`Second, the IPR process will either eliminate the need for trial by invalidating
`the patents-in-suit or it will streamline the remaining issues for trial by narrowing the
`number of claims, narrowing the prior art, and interpreting claim terms. For instance,
`if the U.S. Patent and Trademark Office ("PTO") determines that the prior art
`invalidates all of the asserted claims, then this case would end. In the event that the
`review results in amended claims, this Court and the parties will have the benefit of
`the PTO’s expertise and its decision. Past damages also will be eliminated (thus
`saving significant litigation expense) pursuant to 35 U.S.C. § 252. Review will thus
`simplify claim construction and invalidity issues, and potentially push the parties
`
`1 Request for Inter Partes Review of U.S. Patent No. 6,404,480 Under 35 U.S.C. §§ 311-319 and 37
`C.F.R. § 42.100 Et Seq. was assigned Trial Number 2013-00028. A copy is attached as Ex. 1 to the
`Declaration of Gregory S. Cordrey ("Cordrey Decl.") in support of Motion to Stay Pending
`Completion of the Inter Partes Review.
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`towards settlement as a clearer understanding of the scope and validity of the claims
`emerges.
`Third, staying the case during the pendency of the IPR will prevent the parties
`from engaging in costly parallel proceedings and prevent the Court from having to
`spend time on issues that potentially will be rendered moot.
`Defendants have filed this motion to stay immediately after the filing of the
`IPR petitions. The IPR petitions themselves are being filed only about one month
`after September 16, 2012 date they went into effect and about 10 weeks after SEL
`first identified for the claims it is asserting in this action. 2 Consequently, there has
`been no delay on the part of Defendants presenting this motion to the Court for
`consideration. Additionally, because this case is in its early stages and there has been
`very minimal discovery, this case is ripe for a stay. For these reasons and the reasons
`set forth below, Defendants respectfully requests that this litigation be stayed as to the
`Asserted Patents.
`
`II.
`
`STATEMENT OF FACTS
`A.
`SEL’s Prior Litigation and Inequitable Conduct
`
`Semiconductor Energy Laboratories Co., Ltd. ("SEL") is a non-practicing
`entity that “licenses” its patent portfolio through litigation. In the process of
`defending its patents, SEL has been found to have engaged in inequitable conduct.
`See Semiconductor Energy Laboratory Co., LTD. v. Samsung Electronics Co., LTD.,
`et al., 204 F. 3d 1368 (Fed. Cir. 2000). Specifically, SEL has intentionally deceived
`the PTO by limiting the disclosure of and mischaracterizing material information. Id.
`at 1376 ("the record as a whole reflects a clear pattern and practice of initial
`
`2 See Cordrey Decl. Ex. 2 [Changes to Implement Inter Partes Review Proceedings, Post-Grant
`Review Proceedings, and Transitional Program for Covered Business Method Patents, 77 Fed. Reg.
`157 (August 14, 2012) (amending 37 C.F.R. pt. 42)]; see also 35 U.S.C. §§ 311-319.
`
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`disclosure, followed by incremental disclosure only when compelled by the
`circumstances to do so, followed, at times, by mischaracterization") (citing SEL v.
`Samsung, 4 F.Supp.2d 477 (E.D. Va. 1998)).
`Eight years ago in 2004, SEL sued Chi Mei Optoelectronics (“CMO”) in a
`failed attempt to force CMO to take a license to its patent portfolio. After litigating
`against SEL for two years, CMO was able to whittle SEL’s infringement claims
`involving four patents down to a single patent (SEL voluntarily dismissed claims of
`one patent after claim construction, Judge Patel in the Northern District of California
`ruled that two others were not infringed, and one of those two also was invalid).
`Consistent with SEL's history of inequitable conduct, Judge Patel also set a bench
`trial on the inequitable conduct of the '480 patent. Cordrey Decl., ¶ 4, Ex. 3. Shortly
`after these rulings and the scheduling of the bench trial for inequitable conduct, the
`parties settled the litigation.
`Nevertheless, as addressed in CMI's Answer to SEL's Complaint, SEL is once
`again asserting claims based upon patents, including claims based upon the '480
`patent, despites their inequitable conduct. See CMI's Answer and Counterclaims to
`Complaint for Patent Infringement, Dkt. No. 76 at 20-25.
`
`B.
`
`CMI and SEL are Not Competitors
`CMI manufactures and supplies TFT-LCD panel modules to consumer
`electronics product makers worldwide.3 CMI's products span the full range of TFT-
`LCD panel modules and touch panels, including TV panels, desktop monitors and
`notebook computer panels, and AV & mobile panels. Conversely, SEL "engages in
`no manufacturing and supports its research efforts from revenues from patent
`licensing." Semiconductor Energy Laboratory Co., LTD. supra, 204 F. 3d at 1371.
`
`3 http://www.chimei-innolux.com/opencms/cmo/about_us/company_overview/?__locale=en (last
`accessed on October 18, 2012).
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`Consequently, CMI and SEL are not competitors.
`
`C.
`
`The Status of the Proceedings in this Case
`
`In its Complaint, SEL has accused thirteen different CMI modules of infringing
`one or more of the six asserted patents.4 Defendants filed their answer to the
`Complaint on July 17, 2012. Pursuant to Patent L.R. 3-1 and 3-2, SEL has served
`652 pages of infringement contentions with 35,000 pages of support document
`production.5 Pursuant to Patent L.R. 3-3 and 3-4, CMI served its invalidity
`contentions constituting approximately 700 pages of claim charts (including exhibits)
`along with nearly 2000 pages of prior art.
`Aside from these required disclosures, very little has been done thus far in this
`case. For instance, while Defendants have produced some documents, much of the
`discovery expected in this matter has yet to be started. Moreover, the Customer
`Defendants sued in the Complaint have filed a Motion to Sever and Stay the case and
`thus have not participated in any discovery up to this point. See Dkt. No. 92.6 No
`depositions have been taken or scheduled and no subpoenas have been served.
`Furthermore, SEL has not sought a preliminary injunction.
`
`D.
`
`Defendants Have, Or Will Have, Filed Their Petitions For Inter
`Partes Review With The PTO Within A Few Weeks
`
`On October 19, 2012 Defendants filed with the PTO its first of its petitions for
`
`4 Many of these modules are accused of infringing on multiple patents and thus, counted
`individually, there are forty-seven (47) different infringement claims against CMI modules.
`
`5 In this case, the Court has adopted the Patent Local Rules for the Northern District of California
`(“Patent L.R.”).
`
`6 On October 17, 2012, Magistrate Judge Rosenbluth denied SEL’s motion to compel production of
`documents from the Customer Defendants in response to Request for Production (“RFP”) Nos. 1-
`13, 15-26, 27-33, 36, 37, 39, 40, 42-45, 47-52, 54-55, 58, 63, and 66 and granted SEL’s motion with
`respect to RFP Nos. 14, 34, 35, 38, 41, 46, 53, 56, 57, 59-62, 64 and 65. See Dkt. No. 99.
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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 11 of 23 Page ID
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`IPR (at least one petition for each of the Asserted Patents). Cordrey Decl., Ex. 1.
`Defendants will file petitions for each of the remaining patents over the next few
`weeks and complete the filings no later than November 15, 2012. Consequently, all
`petitions will be submitted before the Court hears this motion.
`Defendants' petitions for IPR establish that there is prior art that discloses each
`and every feature claimed in the Asserted Patents. Indeed, in light of SEL's past
`conduct, as shown in their answer, Defendants believe that SEL acted deceptively
`when filing the applications for the Asserted Patents in order to get its claims allowed
`over the prior art. See e.g., Dkt. No. 76 at 20-25. Consequently, Defendants believe
`that the IPR will result in a finding by the Patent Trial and Appeal Board that the
`disclosed prior art anticipates and/or renders obvious each and every claim of the
`Asserted Patents.
`
`E.
`
`If The Stay Is Not Granted, The Parties Will Be Addressing The
`Same Issues In Two Different Forums At The Same Time
`A comparison of the upcoming events, both in the litigation (as prescribed by
`the Court's Scheduling Order entered on July 11, 2012 (Dkt. 56) and modified on
`September 5, 2012 (Dkt. 89)) and the IPR (applying the schedule outlined in Office
`Patent Trial Practice Guide, 77 Fed. Reg. 157 (August 14, 2012)), is shown in the
`table below. As this comparison illustrates, if the stay is not granted, the parties will
`be addressing many of the same issues in two different forums at the same time.
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`1 2 3 4 5 6 7 8 9 1
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`Litigation (assuming no stay)
` Opening Claim Construction Brief
` Responsive Claim Construction Brief
` Reply Claim Construction Brief
` Claim Construction Hearing
`
` Expert and Party Depositions
`
`Inter Partes Review
` No action - await PTO ruling on the
`petitions
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`Date
`December 2012 -
`February 2013
`
`
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` Work on scheduling order and
`discovery timeline with PTO
`Prepare and submit supplemental
`information to PTO
` Expert Depositions
`
`March 2013
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`April-June 2013
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`Review
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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 12 of 23 Page ID
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`Litigation (assuming no stay)
` Engage in discovery
`
`Inter Partes Review
` Engage in Motion Practice
`
`Date
`
` Close of Fact Discovery
`
` Opening Expert Reports
` Responsive Expert Reports
` Reply Expert Reports
` Expert Depositions
`
` Expert Depositions
`SEL's Arguments
`
` Defendants' Response
` Complete arguments
`
`July 2013
`
`August 2013
`September 2013
`
`
`
`File motions to exclude evidence
`
`October 2013
`
` Close of Expert Discovery
` Motion Filing Deadline
`
` Oral hearing at PTO on petitions
`
` Decision from the PTO
`
` Opening Deposition Designations
`Second and Third Rounds of
`
`Deposition Designations and
`Objections
` Exhibit Lists Exchanged
` Objections to Exhibit Lists
` Last Day to Conduct Settlement
`Proceedings
` Last Day for Law & Motion Hearings
`Final Pretrial Conference
`
` Exhibit Conference
` Trial
`
`November -
`December 2013
`
`January - March
`2014
`
`April - May 2014
`
`Inter Partes Review was designed to be a cost effective alternative to litigation
`and minimize the duplication of efforts:
`Likewise, it is anticipated that the rules will minimize
`duplication of efforts. In particular, the AIA provides more
`coordination between district court infringement litigation and
`inter partes review to reduce duplication of efforts and costs.
`For instance, 35 U.S.C. 315(b), as amended, will require that a
`petition for inter partes review be filed within one year of the
`date of service of a complaint alleging infringement of a patent.
`By requiring the filing of an inter partes review petition earlier
`than a request for inter partes reexamination, and by providing
`shorter timelines for inter partes review compared with
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`Review
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`

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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 13 of 23 Page ID
` #:1899
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`reexamination, it is anticipated that the current high level of
`duplication between litigation and reexamination will be
`reduced.
`Ex. 2 at 48721.
`F.
`The New IPR Review Process Is Fast, Fair And Will Either
`Eliminate The Need For Trial Or Streamline The Remaining Issues
`An inter partes review is an administrative proceeding conducted by the PTO
`for the purposes of determining the validity and scope of an existing patent. See 35
`U.S.C. §§ 301-319, et seq. Beginning on September 16, 2012, the Patent Trial and
`Appeals Board (“PTAB”), which is constituted of a technically trained, panel of three
`Administrative Patent Judges will examine patents for validity based on prior art in
`the form of printed publications. 35 U.S.C. § 316(c).
`To institute an IPR, the petitioner must demonstrate to the Patent Trial and
`Appeals Board that there is a reasonable likelihood that he/she would prevail as to at
`least one of the claims challenged. 35 U.S.C. § 314(1). Once a petition is filed, the
`PTO is statutorily required to decide whether to institute a review within three
`months of the PTO receiving a preliminary response by the patent owner or if no such
`preliminary response is filed, the last date on which such response may be filed. 35
`U.S.C. § 314(b).
`If the proceeding is instituted and not dismissed, a final determination by the
`Board will be issued within one year (extendable for good cause by six months). 35
`U.S.C. § 316(a)(11). When the entire review process is complete, the PTO will issue
`an order that affirms the validity of the patent, cancels the patent, or modifies the
`patent. 35 U.S.C. § 307. Thus, the entire review process is completed quickly.
`In this case, Defendants have presented the PTO with prior art that has not
`previously been considered by the PTO and that affects and/or renders obvious the
`asserted claims. See Cordrey Decl., Ex. 1. Even though the Defendants are confident
`that this prior art invalidates all of the asserted claims, once a decision is made by the
`PTAB, both parties will be estopped from re-litigating the same invalidity issues that
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`Of Motion to Stay Pending Outcome of Inter Partes
`Review
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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 14 of 23 Page ID
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`were raised or reasonably could have been raised during the IPR. See 35 U.S.C. §
`315(e)(2).
`Even if the Asserted Patents survive the review process, any remaining claims
`could be substantively modified. These amendments to the claims and the arguments
`that result will narrow them and/or inform the parties and Court of the scope and
`construction of claim terms in the asserted claims. 7
`Any amendment or change of the Asserted Patents also could result in a
`determination of no liability for activities occurring before the claims were amended
`as a consequence of absolute or equitable intervening rights pursuant to 35 U.S.C. §
`252; Marine Polymer Technologies, Inc. v. HemCon, Inc., 672 F.3d 1350 (Fed. Cir.
`2012) (en banc).
`Consequently, simply engaging in the IPR process will significantly shape and
`impact/limit both the extent of this litigation and the arguments put forth by each
`party. Accordingly, because the IPR will be fair, quick and most importantly, will
`drastically limit, if not completely eliminate, the issues to be litigated, staying the
`case pending the outcome of the IPR is appropriate.
`
`III.
`
`STAYING THE CASE IS WARRANTED BECAUSE THE CASE IS IN
`ITS EARLY STAGES, THE REVIEW WILL SIMPLIFY THE ISSUES
`AT TRIAL AND NEITHER PARTY WILL BE PREJUDICED BY A
`STAY
`A.
`Legal Standard
`As this Court is aware, it has the inherent power to grant a stay. MH Sys., Inc.
`v. Peter McNulty, CV 05-7263 DSF, 2006 U.S. Dist. LEXIS 98642, at *2 (C.D. Cal.
`
`7 “One purpose of the [review] procedure is to eliminate trial of [a patent claim validity] issue (when
`the claim is cancelled) or to facilitate trial of that issue by providing the district court with the
`expert view of the PTO (when the claim survives the [review] proceeding).” Gould v. Control Laser
`Corp., 705 F.2d 1340, 1342 (Fed. Cir. 1983).
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`Memorandum of Points and Authorities In Support
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`Review
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`

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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 15 of 23 Page ID
` #:1901
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`Oct. 23, 2006). “In patent infringement actions, district courts have often stayed
`actions until pending administrative proceedings are resolved.” Brass Smith, LLC v.
`Advanced Design Mfg. LLC, CV 10-4945 PSG, 2010 U.S. Dist. LEXIS 141422, at *2
`(C.D. Cal. Dec. 20, 2010).
`Furthermore, as this Court has noted, there is a liberal policy within this
`District in favor of granting motions to stay proceedings pending the outcome of a
`review in the patent office. See Inogen, Inc. v. Inova Labs, Inc. Case No. SACV 11-
`1692-JST (ANx) (Document No. 39) (Mar. 20, 2012); Aten Int’l Co. v. Emine Tech.
`Co., No. 09-cv-0843, 2010 U.S. Dist. LEXIS 46226, at *20 (C.D. Cal. Apr. 12,
`2010); Kornit Digital Ltd. v. All Am. Mfg. & Supply Co., SAVC 09-689 AG, 2010
`U.S. Dist. LEXIS 48395, at *5 (C.D. Cal. Jan. 11, 2010). This is particularly true in
`circumstances where, as here, the case is in its early stages and much of the discovery
`remains to be conducted. Aten, 2010 U.S. Dist. LEXIS 46226, at *20; Kornit, 2010
`U.S. Dist. LEXIS 48395, at *5.
`In considering whether to stay an action, courts in this district generally
`consider three factors:
`(1) whether discovery is complete and whether a trial date has been set;
`(2) whether a stay will simplify the issues in question and trial of the
`case; and
`(3) whether a stay will cause undue prejudice or a clear tactical
`disadvantage to the non-moving party.
`Inogen, Case No. SACV 11-1692-JST (ANx) (Dkt. No. 39) (March 20, 2012); ASCII
`Corp. v. STD Entm’t, 844 F. Supp. 1378, 1381 (N.D. Cal. 1994).
`Applying these factors, the Court should find that a stay pending review by the
`PTO with respect to the Asserted Patents is appropriate.
`
`Discovery Has Just Begun and Is Not Close to Being Completed
`B.
`Because this case is in its early stages, this factor favors staying the case. See
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`Of Motion to Stay Pending Outcome of Inter Partes
`Review
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`Case 8:12-cv-00021-JST-JPR Document 100 Filed 10/22/12 Page 16 of 23 Page ID
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`Aten, 2010 U.S. Dist. LEXIS 46226, at *21 (“This factor weighs in favor of a stay
`when the case is in the early stages of litigation.”); Kornit, 2010 U.S. Dist. LEXIS
`48395