Case 2:12-cv-01369-NBF Document 85 Filed 07/08/13 Page 1 of 9
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
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`KONINKLIJKE PHILIPS N.V. and
`PHILIPS ELECTRONICS NORTH
`AMERICA CORPORATION,
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`ZOLL LIFECOR CORPORATION,
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` v.
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`Plaintiffs,
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`Defendant.
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`Civil Action No. 2:12-cv-1369
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`Judge Nora Barry Fischer
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`Electronically Filed
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`ZOLL LIFECOR CORPORATION’S OPPOSITION TO
`PHILIPS’S MOTION TO LIFT STAY
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`Defendant ZOLL LifeCor Corporation (“ZOLL”), hereby opposes the motion of
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`Plaintiffs Koninklijke Philips N.V. and Philips Electronics North America Corporation
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`(collectively, “Philips”) to lift the stay in the present litigation. ZOLL respectfully requests oral
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`argument on the motion should the Court find it beneficial.
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`I.
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`Introduction
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`Recognizing the size and complexity of this litigation, a complexity Philips engineered
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`by bringing three largely-overlapping lawsuits in three different states, this Court previously
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`opted for efficiency and good sense in temporarily staying this case. It was the Court’s hope that
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`“a hearty mediation with a skilled mediator” might bring about a global resolution to the parties’
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`disputes. Mem. Order at 4, Feb. 6, 2013, ECF No. 45. Despite ZOLL’s best efforts—it brought
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`its President, General Counsel, Director of Intellectual Property, and its lead outside litigation
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`counsel—the mediation was unsuccessful.
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`That the mediation failed, however, does not change the facts that formed the foundation
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`of the Court’s rationale. The parties are currently concentrated on preparing for trial in October
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`Philips Exhibit 2006
`Zoll Lifecor v. Philips
`IPR2013-00606
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`Case 2:12-cv-01369-NBF Document 85 Filed 07/08/13 Page 2 of 9
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`in the Massachusetts litigation, a trial that will decide infringement and validity of five of the
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`eight asserted patents in this matter. The results of that trial are likely to have a significant
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`impact on both the scope of this litigation and the parties’ settlement postures. Efficiency and
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`pragmatism dictate that the stay remain in place for just a few more months, at which time the
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`Court can reevaluate the scope of this case and the parties can reassess their settlement positions.
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`Lifting the stay would only serve Philips’s broader strategy to harry ZOLL with duplicative
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`litigations.
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`II.
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`Nature and Stage of the Proceedings
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`This action is one battle in a broader, multi-state patent war that Philips initiated against
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`ZOLL. The Court is familiar with the background of the parties’ various litigations so ZOLL
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`will not dwell on that here. See, e.g., Mem. Order at 1-3, Feb. 6, 2013, ECF No. 45; ZOLL’s Br.
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`in Supp. of its Mot. for Sanctions for Plaintiffs’ Failure to Mediate in Good Faith at 3-8, May 4,
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`2013, ECF No. 58. At the Court’s direction, the parties engaged in an unsuccessful mediation on
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`April 17, 2013. The Court had stayed this matter to give the ADR process time to play itself out.
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`See Mem. Order, Feb. 6, 2013, ECF No. 45.
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`The most advanced of the parties’ litigations is set for trial in the District of
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`Massachusetts in October. At issue in that trial will be five of the eight patents Philips is
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`asserting in this case.1 While Philips makes the odd assertion that “it is less clear now …
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`whether the Massachusetts trial will commence in October,” Philips’s Mem. in Supp. of its Mot.
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`to Lift Stay at 2, Jun. 21, 2013, ECF No. 82 (hereinafter, “Philips’s Mem.”), the operative
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`scheduling order in the Massachusetts case makes it quite clear that trial is scheduled for
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`October. See Order, No. 10-cv-11041 (D. Mass. Aug. 18, 2011) (Ex. A) (“Jury Trial set for
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`1 Philips dropped from the Massachusetts litigation a sixth patent that had been asserted in
`both cases.
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`ZOLL’S OPPOSITION TO PHILIPS’S MOTION TO LIFT STAY—PAGE 2
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`10/7/2013 at 9:00 AM in Courtroom 4 before Judge Nathaniel M. Gorton.”). Indeed, just days
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`after making this representation to this Court, in trying to get ZOLL precluded from relying on
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`certain allegedly-late produced documents, Philips argued to Judge Gorton that its prejudice was
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`particularly acute because trial is “fast approaching” and “imminent.” Mem. in Supp. of
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`Plaintiffs’ Mot. to Preclude ZOLL’s Reliance on Documents Not Produced as Required by Rule
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`26(a) at 4, No. 10-cv-11041 (D. Mass. Jun. 26, 2013) (Ex. B) (“[A]t this juncture, trial is fast
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`approaching. The pre-trial conference is set for September 10, 2013, and the trial, which the
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`parties expect to last three weeks, is set to begin on October 7, 2013.”); see also id. at 7 (“trial is
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`imminent”). The parties have also had conversations with the clerk about that date, and the
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`Court has been issuing orders setting deadlines for pretrial disclosures that reflect that trial will
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`indeed commence on October 7.
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`III. The Court Should Leave the Stay in Place For a Few More Months to Conserve
`Judicial and Party Resources
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`Despite the failure of the Court-ordered mediation, compelling reasons exist to maintain
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`the stay in place for a little while longer. First, the Court’s original rationales for temporarily
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`staying the litigation—that “the parties’ numerous pending litigations in multiple jurisdictions
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`are a burden both on judicial resources and on the parties” (ECF No. 45 at 4), and “the general
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`principle [] to avoid duplicative litigation,” Colorado River Water Cons. Dist. v. United States,
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`424 U.S. 800, 817 (1976)—still hold true. At present, the parties are busy preparing for trial in
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`the first Massachusetts case. Summary judgment motions have been briefed and pretrial
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`preparations are well underway. Meanwhile, the parties have been content to let the second
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`Massachusetts litigation (transferred from Washington State) sit relatively idle. The parties are
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`exchanging initial contentions in that matter, but discovery and claim construction are on hold
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`until after the October trial in the first Massachusetts litigation. The Delaware litigation is
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`ZOLL’S OPPOSITION TO PHILIPS’S MOTION TO LIFT STAY—PAGE 3
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`likewise still in its initial phases, and Philips—relying on the stay that ZOLL obtained in this
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`case—has moved to stay the Delaware case for about eighteen months on the grounds that
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`economies and efficiencies will abound as a result of its recently filed (but not yet granted)
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`challenge to the validity of ZOLL’s patent in the U.S. Patent & Trademark Office (“USPTO”).2
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`There simply is no reason, at a time when the parties are focusing their resources on preparing
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`for the October trial, to ramp up activity in this case.
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`The jury verdict expected in October will materially affect the scope of this case and
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`should also affect the parties’ views of the overall set of cases between them. The jury will pass
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`judgment on the alleged infringement and validity of five of the asserted patents in this matter, as
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`well as three others. That is approximately one-third of the total number of patents Philips is
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`asserting against ZOLL in the various litigations. Additionally, in light of “the general principle
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`[] to avoid duplicative litigation,” the Court would likely want to take stock of where this case
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`stands following the October verdict. For example, a finding of invalidity with regard to any of
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`the overlapping patents will be binding on Philips in this litigation as well. It would make little
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`sense to require the same parties to appear in this District to make the same arguments a second
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`time.
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`2 On May 31, 2013, Philips’s subsidiary Respironics Inc. filed in the USPTO a Petition for
`Inter Partes Review (“IPR”) against ZOLL’s U.S. Patent No. 6,681,003, the patent at issue in the
`Delaware litigation. IPR is a new USPTO procedure akin to reexamination, where the parties
`engage in a limited amount of discovery on narrow questions of validity followed by a decision
`from USPTO Administrative Law Judges as to whether the patent’s claims should remain intact,
`be modified, or be cancelled altogether. The USPTO has not decided yet whether to institute an
`IPR against ZOLL’s patent—Philips’s petition will only be granted if it establishes a “reasonable
`likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in
`the petition,” 35 U.S.C. § 314(a)—but, by statute, the USPTO must make that decision no later
`than November 30, 2013. 35 U.S.C. § 316(a)(11). Even though granting the petition is only the
`first step in the process (if the petition is granted, the parties will engage in a 12-18 month
`process to dispute the patent’s validity before the USPTO), the USPTO’s decision as to whether
`to grant the petition should provide the parties with some additional clarity.
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`By November, the parties should also know whether the USPTO has granted Philips’s
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`IPR Petition, which may have an immediate impact on the Delaware litigation (e.g., even if
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`Philips’s Petition is not granted, it will still be estopped from using any of the prior art that it
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`raised in its Petition, or could have raised). Thus, the most sensible and efficient approach is to
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`maintain the current stay in this action through the Massachusetts trial, then hold a status
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`conference in November to reevaluate the scope of this case and reassess the parties’ interests in
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`additional mediation.
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`To the extent Philips suggests that the Court’s stay has expired, see Philips’s Mem. at 2-
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`3, the Court’s stay powers are broad, discretionary, and “incidental to the power inherent in
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`every court to control the disposition of causes on its docket with economy of time and effort for
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`itself, for counsel and for litigants.” Bechtel Corp. v. Local 215, Laborers’ Int’l Union, 544 F.2d
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`1207, 1215 (3d Cir. 1976) (quoting Landis v. North Amer. Co., 299 U.S. 248, 254-55 (1936));
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`see also Wonderland Nurserygoods Co., Ltd. v. Thorley Indus., LLC, 858 F. Supp. 2d 461, 463
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`(W.D. Pa. 2012). Thus, it is well within the Court’s discretion to forego lifting the stay for a few
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`more months while the events in Massachusetts play out. See Complaint of Bankers Trust Co. v.
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`Chatterjee, 636 F.2d 37, 40 (3d Cir. 1980) (“a district court may properly consider the
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`‘conservation of judicial resources and comprehensive disposition of litigation,’ and attempt to
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`avoid duplicating a proceeding already pending in a federal district court.”) (quoting Kerotest
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`Manufacturing Co. v. C-O-Two Fire Equipment Co., 342 U.S. 180, 183 (1952), quoted in
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`Colorado River, 424 U.S. at 817); Crosley Corp. v. Hazeltine Corp., 122 F.2d 925, 929 (3d Cir.
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`1941), cert. denied, 315 U.S. 813 (1942) (“Courts already heavily burdened with litigation with
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`which they must of necessity deal should therefore not be called upon to duplicate each other’s
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`work in cases involving the same issue and the same parties.”).
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`Philips correctly points out that any verdict in Massachusetts will not dispose of all of the
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`issues pending in this litigation and that any verdict in that case is likely to be appealed.
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`Philips’s Mem. at 6-7. But that by no means renders the October trial insignificant. It cannot be
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`disputed that any verdict in Massachusetts will be a significant development in the parties’
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`broader patent war, and will provide a greater degree of clarity than the parties currently possess,
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`particularly in view of the high degree of overlap between this case and the Massachusetts case.
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`Leaving the stay intact for a few more months is not only the most minimal of inconveniences to
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`Philips, but an entirely sensible and efficient conservation of resources. Even when parallel
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`proceedings are not “truly duplicative” (thus precluding strict application of Colorado River
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`abstention), courts routinely have found it well-advised and well within their discretionary
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`powers to stay cases based on the presence of overlapping of issues. E.g. Landis, 299 U.S. at
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`255 (“we find ourselves unable to assent to the suggestion that before proceedings in one suit
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`may be stayed to abide the proceedings in another, the parties to the two causes must be shown
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`to be the same and the issues identical.”); U.S. ex. rel. FLFMC, LLC v. William Bounds, Ltd.,
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`2010 WL 2990725 (W.D. Pa. Jul. 28, 2010) (“In exercising its discretion, a district court can
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`‘hold one lawsuit in abeyance to abide the outcome of another which may substantially affect it
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`or be dispositive of the issues.’ The issues and the parties to the two causes need not be identical
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`before one suit may be stayed to abide the proceedings of another.”) (quoting Bechtel, 544 F.2d
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`at 1215); Mediterranean Enterprises, Inc. v. Ssangyong Corp., 708 F.2d 1458, 1465 (9th Cir.
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`1983) (trial court may properly “find it is efficient for its own docket and the fairest course for
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`the parties to enter a stay of an action before it, pending resolution of independent proceedings
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`which bear upon the case. This rule applies whether the separate proceedings are judicial,
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`administrative, or arbitral in character, and does not require that the issues in such proceedings
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`are necessarily controlling of the action before the court.”) (quoting Leyva v. Certified Grocers of
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`California, Ltd., 593 F.2d 857, 864 (9th Cir.), cert. denied, 444 U.S. 827 (1979) ); Gov’t of
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`Virgin Islands v. Neadle, 861 F. Supp. 1054, 1055-56 (M.D. Fla. 1994) (district court has
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`discretion to stay an action which duplicates one pending in another federal district court even
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`without complete identity of parties and issues).
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`IV.
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`Lifting the Stay Would Only Further Philips’s Litigation Strategy
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`Philips’s broad-based litigation strategy involves bringing multiple patent infringement
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`suits against ZOLL on overlapping patents and technology in courts around the country to
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`increase its leverage in licensing discussions. Once the parties’ initial discussions turned to
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`cross-licensing (because of Philips’s exposure to ZOLL’s patent portfolio), Philips launched a
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`wave of patent lawsuits against ZOLL—first in Massachusetts, then Washington State, then
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`Pennsylvania—in a transparent attempt to gain leverage in the negotiations. In furtherance of its
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`strategy, Philips prefers to keep ZOLL on defense so that it can pursue its various offensive
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`actions against ZOLL while tabling discussion of its own exposure. Lifting the stay in this case
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`would only advance that strategy.
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`When ZOLL countersued in Delaware for infringement of ZOLL’s ‘003 patent, Philips
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`filed a Petition for Inter Partes Review and moved to stay that litigation indefinitely. Mem. in
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`Supp. of Respironics, Inc.’s Mot. to Stay Pending Inter Partes Review, No. 12-1778 (D. Del.
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`May 31, 2013), ECF No. 19 (Ex. C). Despite the fact that the USPTO has not even decided
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`whether to grant the petition yet, Philips argued that significant efficiencies are virtually
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`guaranteed. Id. at 6-7. Philips sees no prejudice to ZOLL in staying ZOLL’s case for at least 12-
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`18 months through the completion of the IPR (not counting appeal). Id. at 8-9. If, as Philips
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`contends, an incipient USPTO procedure that might affect the scope of the asserted patent is
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`grounds to stay a litigation indefinitely, then surely an “imminent” jury verdict, which will, one
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`way or another, tell us something about the strength of Philips’s patents justifies continuing the
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`stay in this case for just a few more months.
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`V.
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`Conclusion
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`In light of the foregoing, ZOLL respectfully requests that the Court deny Philips’s
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`motion.
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`Dated: July 8, 2013
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`Respectfully submitted,
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`By: /s/Henry M. Sneath
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`Henry M. Sneath (Pa. ID No. 40559)
`Robert L. Wagner (Pa. ID No. 308499)
`Joseph R. Carnicella (Pa. ID No. 200294)
`PICADIO SNEATH MILLER & NORTON, P.C.
`Four Gateway Center
`444 Liberty Avenue, Suite 1105
`Pittsburgh, PA 15222
`(412) 288-4000
`(412) 288-2405 (fax)
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`OF COUNSEL:
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`Kurt L. Glitzenstein (pro hac vice)
`Adam J. Kessel (pro hac vice)
`Brian K. Wells (pro hac vice)
`Gauri M. Dhavan (pro hac vice)
`FISH & RICHARDSON P.C.
`One Marina Park Drive
`Boston, MA 02210
`(617) 542-5070
`(617) 542-8906 (fax)
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`Attorneys for Defendant
`ZOLL LifeCor Corporation
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`Case 2:12-cv-01369-NBF Document 85 Filed 07/08/13 Page 9 of 9
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`CERTIFICATE OF SERVICE
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`I hereby certify that this document(s) filed through the ECF system will be sent
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`electronically to the following registered participants as identified on the Notice of Electronic
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`Filing (NEF) on this 8th day of July, 2013.
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`Dara A. DeCourcy
`George N. Stewart
`Zimmer Kunz
`600 Grant Street
`3300 USX Tower
`Pittsburgh, PA 15219
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`David K. Mroz
`Michael Jakes
`Robert F. Shaffer
`Finnegan, Henderson Farabow, Garrett & Dunner, LLP
`901 New York Avenue, NW
`Washington, DC 20001
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`Denise W. DeFranco
`Finnegan, Henderson Farabow, Garrett & Dunner, LLP
`Two Seaport Lane
`Sixth Floor
`Boston, MA 02210-2001
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`/s/ Henry M. Sneath
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`Henry M. Sneath, Esquire
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