`
`CMI CORP. V. PATENT OF YOSHIHARU HIRAKATA and
`
`SHUNPEI YAMAZAKI
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`IPR 2013-00068
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`JEFFER MANGELS BUTLER & MITCHELL LLP
`STANLEY M. GIBSON (Bar No. 162329)
`s ibsorz
`'mbm.com
`- GO Y S. CORDREY (Bar No. 190144)
`gcordre @jmbm_.com
`Park laza, S1_11te 1100
`Irvme Califorma 92614—2592
`Telepflgne:
`949 623—7200
`Facmmfle:
`949 623—7202
`
`Attorne s for Defendants
`C
`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.
`
`CASE NO. SACVIZ-OOZ 1 JST (JPRX)
`
`DEFENDANTS' REPLY IN SUPPORT
`OF THEIR MOTION TO STAY
`LITIGATION PENDING OUTCOME
`OF INTER PARTES REVIEW
`
`CHIMEI INNOLUX CORPORATION,
`CHI MEI OPTOELECTRONICS USA,
`INC, ACER AMERICA
`CORPORATION, VIEWSONIC
`CORPORATION, VIZIO, INC, and
`CUSTOMER DEFENDANTS
`DIGITAL, LLC,
`
`Defendants.
`
`
`
`Date:
`Tlme:
`Place:
`
`December 21, 2012
`2:30 pm.
`.
`Hon. Josephlne Staton Tucker
`Courtroom 10A
`411 W. 4th St. # 1—053
`Santa Ana, California
`
`REPLY NIEMORANDUM IN SUPPORT OF
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`MOTION TO STAY PENDING OUTCOME OF
`INTER PARTIES REVIEW _
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`Caise 8:12—cv—OOOZ1—JST—JPR Documelg 1;?4 Filed 12/07/12 Page 2 of25 Page ID
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`TABLE OF CONTENTS
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`1'ng
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`I.
`
`INTRODUCTION .................................................................................... ; ...... 1
`
`n. ARGUMENT .............................................................. 3
`
`A.
`
`As Congress Intended, CIVII Will Use The [PR Proceedings To
`Determine The Validity of The Asserted Patents , ................................ 3
`
`1.
`
`2.
`
`Inter Partes Review Proceedings Improved Upon Existing
`Reexamination Proceedings ........................................................ 3
`
`CMI Spared No Expense Preparing And Filing the IPR
`Petitions ....................................................................................... 5
`
`3.
`
`CMI Timely Filed Its IPR Petitions ............................................ 6
`
`The Standard For Staying An Action.................................................... 8
`
`This Case Is In Its Early Stages and Discovery Is Far From
`Complete ......................................................................................... 9
`
`1.
`2.
`
`No Significant Events Have Yet Occurred In This Case ........... 9
`SEL Refused A Claim Construction Briefing Schedule To
`Avoid Any Unnecessary Work................................................. 1 1
`The IPR Proceedings Will Streamline and Simplify the Issues ......... 12
`
`1.
`
`2
`
`The USPTO's Analysis of the Validity Issues Is Valuable to
`a Court Regardless of the Outcome .......................................... 12
`
`The Customer Defendants Agree To Be Bound By The
`Patent Office's Determinations on the IPR Proceedings .......... 14
`
`3
`
`The USPTO's Analysis May Inform, Or Provide Valuable
`Insight Into, Defendants' Section 112 Defenses and Their
`Inequitable Conduct Claims ..................................................... 14
`'
`Defendants Will Expend Enormous Costs and Effort IfThis Case
`Is Not Stayed Pending the IPRs .......................................................... 16
`’
`The IPR Proceeding Is Designed to Avoid Prejudice Caused
`By An Extended Stay................................................................ 17
`
`1.
`
`B.
`
`C.
`
`D.
`
`E.
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`i
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`REPLY MEMORANDUM IN SUPPORT OF
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`INTER PARTIES REVIEW
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`TABLE OF CONTENTS
`[CONTINUED]
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`Page
`
`2.
`
`3.
`
`A Stay Will Not Cause SEL Any Injury, Competitive Or
`Otherwise .................................................................................. 18
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`SEL Will Not Suffer Harm tO Its Reputation Because Its
`Practice For Commiting Inequitable Conduct Is Well ~
`Documented .............................................................................. 19
`
`III.
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`CONCLUSION ............................................................................................. 20
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`ii
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`TABLE OF AUTHORITIES
`
`CASES
`
`Egg
`
`Akeena Solar Inc. v. Zep Solar Inc,
`No. C 09-05040 JSW, 2010 WL 1526388 (N.D. Cal. Apr. 14, 2010) ................. 8
`
`Aten Int’l Co v. Emine Tech. Co.,
`No. 09-cv—0843, 2010U.S. Dist. LEXIS 46226 (CD Cal. Apr. 12,
`2010) ........................................................................................................... 8 9 10
`
`Echostar Techs. Corp v. T1 V0 Inc,
`No. 05—cv—81, 2006U.S. Dist. LEXIS 48431 (E.D. TeX. July 14, 2006) .......... 17
`
`Genoa Color Tech, Ltd. 12. Samsung Elec. Am, Inc.,
`No. 7 CiV. 6233 (PKC), 2008 WL 754681 (S.D.N.Y. Mar. 12, 2008) .............. 16
`
`Google, Inc. v. Function Media, L.L. Ci,
`Appeal 2011-010724 .......................................................................................... 15 '
`
`Inogen, Inc. v. [nova Labs, Inc,
`Case No. SACV 1 1—1692-JST (Mar. 20, 2012) ................................................... 8
`
`.LT. Eaton & Co. v. At. Paste & Glue C0,,
`106 F.3d 1563 (Fed. Cir. 1997) .......................................................................... 13
`
`Kornit Digital Ltd. v. All Am. Wg. & Supply Co Am. Mfg. & Supply Co.,
`SAVC 09-689 AG, 2010 US. Dist. LEXIS 48395, (CD. Cal. Jan. 11,
`2010).
`
`............. 8
`
`Krz'ppelz v. Ford Motor Company,
`667 F.3d 1261 ..................................................................................................... 13
`
`Marine Polymer Technologies, Inc. v. HemCon, Inc,
`672 F.3d 1350 (Fed. Cir. 2012) (en banc) ............................................................ 5
`
`MH Sys., Inc. v. Peter McNulty,
`CV 05—7263 DSF, 2006 US. Dist. LEXIS 98642 (CD. 0211. Oct. 23, 2006)....10
`
`Semiconductor Energy Laboratory Co., Ltd. v. Samsung Elecs. Co, Ltd, et al.,
`749 F.Supp.2d 892 (W.D. Wise. Jan. 5, 2010) ................................................... 19
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`TABLE OF AUTHORITIES
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`Pages
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`Semiconductor Energy Laboratory C0., LTD. v. Samsung Electronics Co.,
`' LTD, et al, 204 F. 3d 1368 (Fed. Cir. 2000) ......................................... 17,18,19
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`Symantec Corp. v. M86 Sea, Inc.
`No. SACV 10—1513 -JST (CD. Cal. Mar. 1, 2011) .................................. 8,12,13
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`STATUTES
`
`35 U.S.C. §252 .................................................... 5
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`35 U.S.C. § 307.. ........................................................................................................ 5
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`35 U.S.C. § 313 .........................................'............................................................... 1 6
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`35 U.S.C. § 314(1).................................. . ................................................................... 5
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`35 U.S.C. § 315(c)(2) ................................................................................................. 5
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`35 U.S.C. § 316(a)(11)........................................................................................... 4, 5
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`OTHER AUTHORITIES
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`HR. Rep. No. 112-98, 112th Cong, lst 8658. 46 (June 1, 2011) ......................... 3, 4
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`Rule 3—3..; .................................................‘.................................................................. 7
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`Rule 26(f) ..............‘...............................L ..................................................................... 9
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`Manual of Patent Examining Procedure, 8th ed., rev. 9 (Aug. 2012) ..................... 19
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`I.
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`INTRODUCTION
`
`Defendants Chimei Innolux Corporation ("CIVII"), Chimei Optoelectronics
`. USA, Inc. ("CMO USA"), Acer America Corporation (“Acer”), ViewSonic
`
`Corporation ("ViewSonic”), and VIZIO, Inc. (“VIZIO”) (collectively, the
`“Defendants”) moved to stay the litigation pending the Inter Partes Review ("IPR")
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`of the patents-in—suit. Between October 19, 2012 and November 30, 2012, CMI filed
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`seven [PR petitions, each with a supporting expert declaration, demonstrating that the
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`asserted claims of the patents—in-suit are invalid.1
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`In its motion, Defendants explained that the Court should stay the case pending
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`the inter partes review proceedings by the Patent Trial and Appeals Board for the
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`following three independent reasons: First, the IPR process is fast——the validity of the
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`six patents in suit will be determined by May 2014 (about 17 months from now).
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`Second, the IPR process will either eliminate the need for trial by invalidating the
`patents—in—suit or it will significantly simplify the case. For example, Patent Office
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`statistics for inter partes reexaminations indicate that of the 100 claims SEL asserted,
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`the vast majority of them will be canceled or amended. Finally, staying the case
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`during the pendency of the IPR will prevent the Court and the parties from engaging
`in time consuming and costly parallel proceedings, including claim construction and
`invalidity determinations, which the IPRs will render moot. In this case, the burden
`on the Court and the parties-cannot be understated. SEL has asserted about 100
`claims from six patents dealing with complex technology related to LCD
`manufacturing. In their Joint Claim Construction and Prehearing Statement, the
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`parties identified 31 terms that require construction. 2 Following the Court's
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`‘ See Supplemental Cordrey Declaration in support of Motion to Stay Litigation Pending Inter
`Partes Review, Dkt No. 104, and Exhibits 1-19.
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`2 See Dkt. No. 101 [Joint Claim Construction and Prehearing Statement]. SEL moved the Court ex
`parte for an additional 35 pages for its opening claim construction brief based on its position that
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`construction of those 31 terms, the validity and infringement'of each claim must be
`separately determined. Ifthe litigation and IPR proceedings both proceed at the same
`time, the Court and the parties face the likely prospect of having the PTO canceling
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`or amending a majority of the claims on the eve of the scheduled trial. Such a
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`scenario would likely render much of Court’s and parties’ work useless.
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`.
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`Indeed, for these reasons SEL concedes that there is a "liberal policy in favor
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`of granting motions to stay proceedings pending the outcome of USPTO
`reexamination or reissuance proceedings." But, it asserts that this case involves
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`"strikingly unusual factors" weighing against the liberal policy of granting stays. Yet,
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`SEL fails to identify any "strikingly unusual factors" weighing against staying the
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`litigation. For example, SEL focuses on the number of patents and argues that
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`statistically some claims will survive. Implicit in SEL's argument is a concession that
`many, probably most, claims will not survive—-at least not in their present form. In
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`addition, in the Symantec case, this Court held that "[n]otwithstanding Plaintiffs
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`predictions as to how the patents-in-suit will fare in reexamination, this case will be
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`simplified regardless of the USPTO’S decision" by virtue of having the benefit of the
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`Patent Office’s analysis of the claims.3
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`SEL also asserts that a stay should not be granted because the customer
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`defendants are not bound by the IPR'S estoppel provisions and thus they are free to re—
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`litigate the same validity issues before the Court. To the contrary, CMO USA, Acer,
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`ViewSonic and VIZIO agree to be bound by the estoppel provisions of the IPR
`proceedings.4 Westinghouse Digital also has agreed to be bound by the estoppel
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`the number of disputed terms could not be briefed under the Local Rule's 25 page limit. See Dkt.
`No. 108; Cordrey Decl. 11 9.
`
`3 Symantec Corp 1/. M86 Sec, Inc, No. SACV 10 1513-JST, ECF No. 26, slip op. at 3 (C.D. Cal.
`Mar. 1, 2011).
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`4 To the extent there was any ambiguity on this issue, CMO USA, Acer, VIZIO, and ViewSonic
`hereby expressly confirm their agreement to be bound by the estoppel provisions of the IPRS
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`provisions of the [PR proceedings provided that the Court grants a stay.S
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`As explained below, SEL's other arguments against a stay similarly lack any
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`merit. For these reasons and those explained below, the Defendants' motion to stay
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`pending the IPR proceedings should be granted.6
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`II.
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`ARGUMENT
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`A.
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`As Congress Intended, CM] Will Use The IPR Proceedings To
`
`Determine The Validity of The Asserted Patents
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`1.
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`Inter Partes Review Proceedings Improved Upon Existing
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`Reexamination Proceedings
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`In 1999, Congress enacted an "inter partes" reexamination procedure.
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`However, the procedure proved highly unpopular and fell far short of expectations.7
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`proceedings.
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`' 58ee Dkt. No. 107.
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`5 At least four other district courts now have granted stays pending Inter Partes Review. See
`Proxyconn, Inc. v. Microsoft Corp, et al., Case No. SACV 11-1681 DOC (JPRx) (CD. Cal.);
`Arnouse Digital Devices Corp, v. Motorola Mobility LLC, Case No. 5:11-cv—155 (D. Vermont);
`Tessera, Inc. v. Sony Electronics, Inc. et al., Civil Action No. lO—838-RMB/KNW (D. Del. );
`Clearlamp, LLC V. LKQ Corp, Case No. 1:12—cv-02533 (N.D. 111. ). Counsel for Defendants was
`unable to identify any courts that have denied a stay pending Inter Partes Review.
`
`,
`.
`7 The House Committee Report noted:
`"In 1999, Congress created a second reexamination procedure—walled inter partes
`reexamination—that gave third-party challengers greater input throughout the
`proceeding by permitting them to respond to every pleading submitted by the
`patent holder.
`Congress also eventually gave third—party challengers the right to
`appeal adverse decisions.
`"As part of the 1999 improvements to reexamination, Congress directed
`the USPTO to submit a report to Congress evaluating the inter partes
`‘
`reexamination process and making any recommendations for changes.
`Initially,
`the USPTO projected that in the first year after the creation of inter partes
`reexamination, it would receive 400 such requests and it projected that by 2004 it
`would receive nearly 600. No inter partes reexamination requests were actually
`filed in 2000 and only 27 such requests had been filed by 2004. Over the 5—year
`period studied by the USPTO, it issued 900,000 patents and received only 53
`'
`requests for inter partes reexamination." H.R. Rep. No. 112—98, 112th Cong, lst 8633. 46 (June 1,
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`In the 2011 America Invents Act, Congress responded toi-the inadequacies of
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`reexamination and ex parte examination by amending the reexamination statutes and ’
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`by "creat[ing].adjudicative systems of post-grant and inter partes review." The 2011
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`Act renames inter partes reexamination in Chapter 31 of Title 35 as "Inter Partes
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`Review" and amends its provisions. See AIA 2011 § 6(a); See also HR. Rep. No.
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`112-98, 112th Cong, lst Sess. 46—47 (June 1, 2011) ("The Act converts inter partes
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`reexamination from an examinational to an adjudicative proceeding, and renames the
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`Along with the creation of inter partes review, the America Invents Act
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`(section 6(c)(3)(a)) established a transitional one-year period in which i'm‘er partes
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`reexamination was utilized with a different threshold for granting such
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`reexamination. The standard used during the one—year period was the same as that
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`currently being used in inter partes review. Before the America Invents Act, the
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`Director would grant a petition for inter partes reexamination if the reexamination
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`request established a substantial new question of patentability (SNQ) affecting at
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`least one claim in the patent. The threshold established by the AIA changed this
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`standard to be the same as the standard now implemented by inter partes review. To
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`institute an inter partes reexamination, the request must have shown there is a
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`reasonable likelihood the petitioner will prevail with respect to at least one claim
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`challenged in the request. The purpose of the new standard is to eliminate many of
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`the petitions that would not succeed during review before a review is instituted.
`Under the substantial new question standard, around 95% ofrequests were being
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`granted (HR. Rep. No. 112—98 (Part 1), at 47).
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`Beginning on September 16, 2012, the Patent Trial and Appeals Board
`(“PTAB”), which is constituted of a technically trained, panel ofthree Administrative
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` proceeding "inter partes review").
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`2011).
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`3 1 within the PTO. To institute an IPR, the petitioner must demonstrate to the Patent
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`Patent Judges (“APJs”) will examine patents for validity based on prior art in the
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`form of printed publications. 35 U.S.C. § 316(c). The APJs are the highest authority
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`Trial and Appeals Board that there is a reasonable likelihood that he/she would
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`prevail as to at least one of the claims challenged. 35 U.S.C. § 314(1). Once a
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`petition is filed, the PTO is statutorily required to decide whether to institute a review
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`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
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`be filed. 35 U.S.C. § 314(b).
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`If the proceeding is instituted and not dismissed, a final determination by the
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`11 Board will be issued within one year (extendable for good cause by six months). 35
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`12 U.S.C. § 316(a)(11). When the entire review process is complete, the PTO will issue
`13%
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`an order that affirms the validity ofthe patent, cancels the patent, or modifies the
`5E
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`patent. 35 U.S.C. § 307. Once a decision is made by the PTAB, both parties will be
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`estopped from re-litigating the same invalidity issues that were raised or reasonably
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`could have been raised during the IPR. See 35 U.S.C. § 315(e)(2). Any amendment
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`or change to the claims gives rise to absolute or equitable intervening rights pursuant
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`to 35 U.S.C. § 252, which excludes from liability any activities occurring before the
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`amendment. See Marine Polymer Technologies, Inc. v. HemCon, Inc., 672 F.3d 1350
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`(Fed. Cir. 2012) (en banc).
`2.
`CMI Spared No Expense Preparing And Filing the IPR
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`Petitions
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`- At great effort and expense, the Defendants have presented the PTO with
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`invalidity rejections that previously were not considered by the PTO.8 See supra note
`A
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`. 8 SEL misleadingly focuses on whether the prior art was before the examiner during the prosecution
`of each patent. Yet, for four out of six patents CMI’s petitions are based, in part, on prior art that
`was not cited1n the original prosecution of the patents. The petitions for the remaining patents, the
`’480 and ‘978 patents, like the other petitions, include arguments that were not made during any
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`1. Supported by expert declarations from experts in the field of LCD manufacturing,
`each petition CMI contained multiple arguments demonstrating that the asserted
`claims are invalid. Id. The filing fees alone for each petition are at least $27,000. In
`this case, CMI spent upwards of almost $200,000 to file seven petitions
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`demonstrating that the asserted claims are invalid. This cost excludes the attorney
`and expert fees required to prepare the petitions. These efforts Show that CMI did not
`file these petitions merely as a delay tactic, as SEL suggests, but intended to use IPR
`proceedings as Congress intended, which is to be an alternativeto litigation for
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`determining the validity of a patent. Had CMI merely intended to delay the
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`enforcement of SEL’s patents, it would have filed ex parte or inter partes
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`reexamination requests given that such proceedings routinely take more than three
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`years to complete. 9
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`3.
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`CMI Timely Filed Its IPR Petitions
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`Before CMI could begin to prepare its IPR petitions, it first needed to
`understand which claims SEL was asserting. In its complaint, SEL identified only 8 1
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`claims from all six patents. Had CMI prepared and filed petitions based on the
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`complaint, over 90 claims would have been left unresolved by the invalidity
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`proceedings at the Patent Office. On the other hand, had CMI filed petitions for
`every claim in each ofthe asserted patents, it would have had to include invalidity
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`arguments for 288 claims.lo Thus, as a practical matter, CMI could not begin
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`preparation of its petitions until SEL identified the claims it intended to assert. ”
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`previous examination of the patents. Thus, contrary to SEL’s insinuation, the petitions do not
`merely rehash arguments that previously were made.
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`9 See Cordrey Decl. Ex. 3 [Inter Partes Reexamination Filing Data dated June 30, 2012] (average
`pendency of an inter partes reexamination is 36 months).
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`1° At $600 for each claim over 20, this would have resulted in additional Patent Office filing fees of
`$88,800, notwithstanding the additional attorney and expert fees which are much more significant.
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`” SEL asserts that CMI should have filed a request for "Inter Partes reexamination at the beginning
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`Under the scheduling order in this case, the last day for SEL to serve its
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`infringement contentions was July 30, 2012. Dkt. No. 50. SEL waited until the last
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`day to serve its infringement contentions. Cordrey Deal. 11 7. In its infringement
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`contentions, SEL identified nearly 100 claims from the six patents-in—suit and
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`provided claim charts and related exhibits totaling more than 35,000 pages. Id. Thus,
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`it was not until July 30 GMT first learned of the claims that SEL was asserting and
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`only then could'CMI begin preparing its IPR petitions.12
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`From July 30 until September 13, the Defendants had a little over six weeks to
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`prepare invalidity contentions (Patent Rule 3-3) for each of the asserted claims.
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`Those invalidity contentions constituted approximately 700 pages of claim charts
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`(including exhibits) along with nearly 2000 pages of prior art. Cordrey Decl. ‘ll 8.
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`During this time, SEL aggressively sought discovery from the Defendants by serving
`almost 500 document requests on them on the first day possible, knowinglthat the
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`Defendants were busy preparing their invalidity contentions and their submissions to
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`the Patent Office.13 Id.
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`of the case" and "sought and been granted a stay at that time." Opp'n at 6. As explained above,
`CMI waited until SEL identified the asserted claims in this action and the September 16, 2012
`implementation of the IPR proceedings. SEL further asserts that, as a result, it "was forced to
`oppose motions to dismiss, to transfer, to delay the claim construction, to sever and stay and to
`bring a motion to compel. " Id. SEL's argument is flawed. All but one of the motions that SEL
`"was forced" to oppose were granted. See Dkt No.54 (granting,1n part, Defendants' motion to
`dismiss); Dkt No.89 (granting Defendants' motion to continue Markman hearing date); Dkt No.99
`(denying SEL's motion to compel production of documents for 51 out of 66 document requests).
`The hearing on the Customer Defendants’ motion to sever and stay has been continued to January
`25, 2013. See Dkt. No. 106.
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`’2 For the same reason, SEL’s assertion that CMI should have made substantial preparations so that
`it could file all of its IPR petitions on the September 16,2012 date when IPR proceedings were
`implementedIS unreasonable.
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`‘3 In their proposed schedule, the Defendants proposed that the invalidity contentions be due on
`November 23,2012in order to avoid having to simultaneously work on both the invalidity
`contentions and the IPR petitions. SEL opposed Defendants' proposal and successfiilly argued for
`the September 13, 2012 deadline. See Dkt. No. 55—1 [Exhibit A] at 1. The Defendants also
`proposed to phase discovery to focus the initial discovery on the technical issues and defer the
`damages—related discovery until after the claim construction hearing. Dkt. No. 55 at 7.
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`LA 9163153vl
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`Despite the heavy (and unnecessary) demands SEL imposed on the
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`Defendants, CMI was able to work with its technical experts to prepare seven IPR
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`petitions with supporting expert declarations and file the first petition within ten
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`weeks of SEL serving its infringementcontentions.14 CMI filed the remaining six
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`petitions over the subsequent six weeks. Accordingly, at great cost and effort, in a
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`reasonably short amount of time from the date when SEL first identified the asserted
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`claims, CMI was able to prepare and file comprehensive IPR petitions for each of the
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`patents-in—suit, addressing rejections for each asserted claims on multiple grounds.
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`See Dkt. No. 104 [Supplemental Cordrey Decl.] and Exs. 1—19 (constituting over
`3,000 pages of analysis and claim charts). This does not constitute delay and
`certainly not "inexcusable delay."15
`B.
`The Standard For Staying An Action
`As this Court is well aware, in considering whether to stay an action, courts in
`the Central District of California generally consider three factors: (1) whether
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`discovery is complete and whether a trial date has been set; (2) whether a stay will
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`simplify the issues in question and trial of the case; and (3) whether a stay will cause
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`undue prejudice or a clear tactical disadvantage to the non-moving party. Symantec
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`Corp. v. M86 Sec, Inc. , No. SACV 10-1513—JST (CD. Cal. Mar. 1, 2011). Courts in
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`this District also repeatedly have held that there is a liberal policy in favor of granting
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`20 motions to stay proceedings pending the outcome of a review in the patent office.
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`21
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`See Inogen, Inc. v. [nova Labs, Inc. Case No. SACV 1-1—1692-JST (ANx), ECF No.
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`15 See Inogen, Case No. SACV ll-l692—JST (ANx) (Document No. 39) (March 20, 2012) (ruling
`that a several month delay between the time when the Defendant knew about the infringement
`claims to when the Defendant sough reexamination did not "suggest a dilatory motive"); see also
`26 Akeena Solar Inc. v. Zep Solar Inc., No. C 09—05040 JSW, 2010 WL 1526388, at *3 (N.D. Cal. Apr.
`14, 2010) (finding no evidence of a dilatory motive when defendant requested a reexamination
`27 months after plaintiff filed its complaint and filed a motion to stay on the same day).
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`‘4 It is also noteworthy that one of CMI‘s experts was unable to work on the petitions for a while due
`to the loss of power caused by Hurricane Sandy. This significantly contributed to the delay in filing
`all seven IPR petitions from the planned date of November 15 to November 30.
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`LA 9163153v1
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`39 (Mar. 20, 2012); Aten Int’l Co. v. Emine Tech. Co., No. O9—cv—0843, 2010 US.
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`Dist. LEXIS 46226, at *20 (CD. Cal. Apr. 12, 2010); Korm'z‘ Digital Ltd. v. All Am.
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`Mfg. & Supply Co, SAVC 09—689 AG, 2010 US. Dist. LEXIS 48395, at *5 (CD.
`Cal. Ian. 11, 2010). As CMI demonstrated in its motion, under the circumstances
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`present in this case these factors strongly favor staying this action. SEL fails to raise
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`any facts that alter this conclusion.
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`C.
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`This Case Is In Its Early Stages and Discovery Is Far From
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`Complete
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`SEL does not dispute that this factor weighs in- favor of staying the litigation
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`where, as here, the motion to stay is filed in the early stages of the case. See e. g,
`Aten, 2010 US. Dist. LEXIS 46226, at *21 (“This factor weighs in favor of a stay
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`when the case is in the early stages of litigation”). While SEL argues that this case
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`has "moved far fiom its beginning," it concedes (as it must) that this case "is not near
`its end." Opp'n at 4. Yet, the events upon which SEL relies merely relate to activities
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`that routinely occur in the early part of every case (e.g., filing of the complaint,
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`responding to the complaint, serving initial disclosures, and serving initial
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`contentions under the Patent Rules). And, the fact that the parties have exchanged
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`documents is mostly due to SEL's efforts to accelerate discovery once it learned that
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`the Defendants intended to initiate invalidity proceedings before the United States
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`Patent and Trademark Office and stay the litigation pending the outcome of those
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`proceedings.16
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`1.
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`No Significant Events Have Yet Occurred In This Case
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`Notably, SEL does not dispute that the following key events have not yet
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`occurred in this case:
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`‘6 See Dkt. No. 55 [Joint Rule 26(1) Report] at 5-6 (disclosing Defendants' intention to. have the
`patents-in—suit reexamined or reviewed at the USPTO and to stay the litigation).
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`- Defendants have not served any document requests or written discovery
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`on SEL
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`o No parties have taken any depositions
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`0 Claim constructing briefs have not been filed
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`a No claim construction hearing has taken place
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`0 No expert discovery has taken place
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`0 No summary judgment motions have been filed
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`0 Trial remains about 18 months away (May 6, 2014)
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`The Defendants explained in their motion that courts in this District have found
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`that a stay was appropriate in cases more advanced