Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 1 of 25 PageID #: 1731
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`Plaintiff,
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`Defendants.
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`C.A. No. 12-1701 (RGA)
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`C.A. No. 12-1702 (RGA)
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`C.A. No. 12-1703 (RGA)
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`C.A. No. 12-1704 (RGA)
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`CALLWAVE COMMUNICATIONS, LLC,
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`AT&T INC., AT&T MOBILITY, LLC and
`GOOGLE INC.,
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`v.
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`CALLWAVE COMMUNICATIONS, LLC,
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`SPRINT NEXTEL CORP. and
`GOOGLE INC.,
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`Plaintiff,
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`v.
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`Defendants.
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`CALLWAVE COMMUNICATIONS, LLC,
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`T-MOBILE USA INC. and GOOGLE INC.,
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`Plaintiff,
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`v.
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`Defendants.
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`CALLWAVE COMMUNICATIONS, LLC,
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`VERIZON COMMUNICATIONS INC.,
`CELLCO PARTNERSHIP d/b/a
`VERIZON WIRELESS and GOOGLE INC.,
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`Plaintiff,
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`v.
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`Defendants.
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`Patent Owner Exhibit 2007
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 2 of 25 PageID #: 1732
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`CALLWAVE COMMUNICATIONS, LLC,
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`AT&T MOBILITY, LLC; BLACKBERRY
`LTD., and BLACKBERRY CORP.,
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`Defendants.
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`Plaintiff,
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`C.A. No. 12-1788 (RGA)
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`DEFENDANTS’ OPENING BRIEF IN SUPPORT OF MOTION TO STAY
`PROCEEDINGS ON THE ’970 PATENT PENDING
`INTER PARTES REVIEW BY THE PATENT TRIAL AND APPEAL BOARD
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`Patent Owner Exhibit 2007
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 3 of 25 PageID #: 1733
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`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Karen Jacobs (#2881)
`Stephen J. Kraftschik (#5623)
`Eleanor G. Tennyson (#5812)
`1201 N. Market Street
`P.O. Box 1347
`Wilmington, DE 19899-1347
`(302) 658-9200
`kjacobs@mnat.com
`skraftschik@mnat.com
`etennyson@mnat.com
`Attorneys for Sprint Nextel Corp.
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`OF COUNSEL:
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`Kirk R. Ruthenberg
`Mark L. Hogge
`Shailendra K. Maheshwari
`DENTONS US LLP
`1301 K Street, N.W., Suite 600
`Washington, DC 20005
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`MORRIS, NICHOLS, ARSHT &TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Paul Saindon (#5110)
`1201 N. Market Street
`P.O. Box 1347
`Wilmington, DE 19899-1347
`(302) 658-9200
`jblumenfeld@mnat.com
`psaindon@mnat.com
`Attorneys for Defendant Google, Inc.
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`OF COUNSEL:
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`James F. Hurst
`WINSTON & STRAWN LLP
`35 West Wacker Drive
`Chicago, IL 60601-5600
`(312) 558-5600
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`jhurst@winston.com
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`Scott R. Samay
`Peter Lambrianakos
`Krishnan Padmanabhan
`WINSTON & STRAWN LLP
`200 Park Avenue
`New York, NY 10166-4193
`(212) 294-6700
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`ssamay@winston.com
`plambrianakos@winston.com
`kpadmanabhan@winston.com
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`Patent Owner Exhibit 2007
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 4 of 25 PageID #: 1734
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`CONNOLLY GALLAGHER LLP
`Arthur G. Connolly, III (#2667)
`The Brandywine Building
`1000 West Street, Suite 1400
`Wilmington, DE 19801
`Tel: (302) 888-6318
`Email: AConnolly@connollygallagher.com
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`Attorneys For T-Mobile USA, Inc.
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`OF COUNSEL:
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`Ramsey M. Al-Salam (admitted Pro Hac Vice)
`Email: RAlsalam@perkinscoie.com
`Kaustuv M. Das (admitted Pro Hac Vice)
`Email: KMDas@perkinscoie.com
`PERKINS COIE LLP
`1201 Third Avenue, Suite 4900
`Seattle, WA 98101-3099
`Tel: (206) 359-8000
`Fax: (206) 359-9000
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`Kirk R. Ruthenberg (admitted Pro Hac Vice)
`kirk.ruthenberg@dentons.com
`Mark L. Hogge (admitted Pro Hac Vice)
`Email: mark.hogge@dentons.com
`Shailendra K. Maheshwari (admitted Pro Hac
`Vice)
`Email: shailendra.maheshwari@dentons.com
`DENTONS US LLP
`1301 K Street, N.W., Suite 600
`Washington, DC 20005
`Tel: (202) 408-6400
`Fax: (202) 408-6399
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`SEITZ ROSS ARONSTAM & MORITZ LLP
`Collins J. Seitz, Jr. (Bar No. 2237)
`Benjamin J. Schladweiler (Bar No. 4601)
`100 S. West Street, Suite 400
`Wilmington, DE 19801
`(302) 576-1600
`cseitz@seitzross.com
`bschladweiler@seitzross.com
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`Counsel for Defendant AT&T Mobility, LLC
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`OF COUNSEL:
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`Joseph P. Zammit
`FULBRIGHT & JAWORSKI L.L.P.
`666 Fifth Avenue
`New York, NY 10103-3198
`(212) 318-3000
`jzammit@fulbright.com
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`Daniel S. Leventhal
`Brett McKean
`FULBRIGHT & JAWORSKI L.L.P.
`Fulbright Tower
`1301 McKinney, Suite 5100
`Houston, TX 77010-3095
`(713) 651-5151
`dleventhal@fulbright.com
`bmckean@fulbright.com
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`Mark C. Nelson
`Matthew P. Harper
`Daniel A. Valenzuela
`DENTONS US LLP
`2000 McKinney Avenue
`Suite 1900
`Dallas, TX 75201-1858
`(214) 259-0900
`mark.nelson@dentons.com
`matthew.harper@dentons.com
`daniel.valenzuela@dentons.com
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`Patent Owner Exhibit 2007
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 5 of 25 PageID #: 1735
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`SEITZ ROSS ARONSTAM & MORITZ LLP
`Collins J. Seitz, Jr. (Bar No. 2237)
`Benjamin J. Schladweiler (Bar No. 4601)
`100 S. West Street, Suite 400
`Wilmington, DE 19801
`(302) 576-1600
`cseitz@seitzross.com
`bschladweiler@seitzross.com
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`Counsel for Defendants Verizon
`Communications, Inc. and Cellco Partnership
`d/b/a Verizon Wireless
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`Of Counsel:
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`Kevin P. Anderson
`Karin A. Hessler
`Paul M. Kim
`WILEY REIN LLP
`1776 K Street, N.W.
`Washington, D.C. 20006
`(202) 719-7000
`kanderson@wileyrein.com
`khessler@wileyrein.com
`pkim@wileyrein.com
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`June 16, 2014
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`MORGAN, LEWIS & BOCKIUS LLP
`Colm F. Connolly (Bar No. 3151)
`Jody C. Barillare (Bar No. 5107)
`cconnolly@morganlewis.com
`jbarillare@morganlewis.com
`The Nemours Building
`1007 North Orange Street
`Suite 501
`Wilmington, Delaware 19801
`(302) 574-3000
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`Attorneys for Defendants AT&T Mobility LLC,
`Research In Motion Ltd., and Research In
`Motion Corp.
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`Eric Kraeutler (Pa. I.D. No. 32189)
`John V. Gorman (Pa. I.D. No. 80631)
`Andrew C. Whitney (Pa. I.D. No. 201534)
`Squire J. Servance (Pa. I.D. No. 207623)
`Morgan, Lewis & Bockius LLP
`1701 Market Street
`Philadelphia, PA 19103-2921
`Telephone: 215.963.5000
`Fax: 215.963.5001
`ekraeutler@morganlewis.com
`jgorman@morganlewis.com
`awhitney@morganlewis.com
`sservance@morganlewis.com
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`Patent Owner Exhibit 2007
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 6 of 25 PageID #: 1736
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`TABLE OF CONTENTS
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`I. NATURE AND STAGE OF PROCEEDINGS ........................................................................1
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`II. SUMMARY OF ARGUMENT ................................................................................................2
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`III. STATEMENT OF FACTS .......................................................................................................2
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`IV. ARGUMENT ...........................................................................................................................4
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`A.
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`A Stay Will Simplify the Issues for Trial. .................................................................. 5
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`B.
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`C.
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`This Case Is in the Early Stages of Litigation. ............................................................ 7
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`CallWave Will Not Suffer Undue Prejudice. .............................................................. 8
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`V. CONCLUSION ......................................................................................................................11
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 7 of 25 PageID #: 1737
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`TABLE OF AUTHORITIES
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`CASES
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` PAGE(S)
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`Fresenius USA, Inc. v. Baxter Int’l, Inc., ........................................................................................7
` 721 F.3d 1330 (Fed. Cir. 2013)
`
`Infinite Data v. Amazon.com, Inc.,
`No. 12-1616-RGA, 2014 WL 266798 (D. Del. Jan. 23, 2014) ................................................10
`
`In re Translogic Tech., Inc.,
`504 F.3d 1249 (Fed. Cir. 2008)..................................................................................................7
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`Neste Oil OYJ v. Dynamic Fuels, LLC,
`No. 12-1744-GMS, 2013 WL 3353984 (D. Del. July 2, 2013) .........................................10, 11
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`One Stockduq Holdings, LLC v. Becton, Dickinson and Company,
`No. 2:12-cv-03037-JPM, (W.D. Tenn. Nov. 12, 2013) .............................................................9
`
`Parallel Networks, LLC v Kog Games, Inc.,
` No. 13-178-RGA (D. Del. Dec. 6, 2013) ......................................................................... passim
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`
`
`Riverbed Tech. Inc. v. Silver Peak Sys. Inc.,
`No. 11-484-RGA (D. Del. Sept. 11, 2013) ................................................................................4
`
`
`Round Rock Research LLC v. Dole Food Co., Inc.,
` Nos. 11-1239-RGA, 11-1241-RGA, 11-1242-RGA, 2012 WL 1185022
` (D. Del. Apr. 6, 2012) ................................................................................................................4
`
`SenoRx, Inc. v. Hologic, Inc.
` No. 12-173-LPS-CJB, 2013 WL 144255 (D. Del. Jan 11, 2013) .............................................8
`
`SoftView LLC v. Apple Inc.,
`No. 12-989-LPS, C.A. No. 10-389-LPS, 2013 WL 4757831 (D. Del. Sept. 4,
`2013) ....................................................................................................................................5, 10
`
`Sunpower Corporation v. Panelclaw, Inc.,
`No. 12-1633-GMS (D. Del. May 16, 2014) ...............................................................................7
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`Translogic Tech., Inc. v. Hitachi, Ltd.,
`250 Fed. Appx. 988 (Fed. Cir. 2008) .........................................................................................7
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 8 of 25 PageID #: 1738
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`Defendants Google Inc., Blackberry Corp., Blackberry Ltd., AT&T Mobility LLC, Sprint
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`Nextel Corp., T-Mobile USA, Inc., and Verizon Communications, Inc. (collectively, the
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`“Defendants”) respectfully move the Court to stay the ’970 Track of the patent infringement
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`cases brought by Plaintiff CallWave Communications, LLC (“CallWave”) pending Inter Partes
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`Reviews (“IPR”) of U.S. Patent No. 6,771,970 (“the ’970 patent”).1 The Defendants are not
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`participants in the IPRs, but believe that a stay is appropriate because the IPRs will simplify the
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`proceedings and a stay will avoid unnecessary waste of the Court’s and the parties’ resources.
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`I.
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`NATURE AND STAGE OF PROCEEDINGS
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`For purposes of pretrial organization (including discovery and Markman proceedings),
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`CallWave’s claims are coordinated along three tracks relating to the three different accused
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`technologies (i.e., Location Tracking (’970 Track), Billing Methods (’933 Track), and Call
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`Processing (“Call Processing Track”)) (D.I. 57 in C.A. No. 12-1701). This motion relates solely
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`to the ’970 Track.
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`The Patent Trial and Appeal Board of the United States Patent and Trademark Office (the
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`“PTAB”) has instituted an IPR of Claim 18 of the ’970 patent. Exhibit 1. The ’970 defendants
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`request a stay of all matters relating to the ’970 patent pending the PTAB’s final determination of
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`this instituted IPR. On June 9, 2014, WaveMarket, Inc. (d/b/a Location Labs) filed another
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`Petition for IPR seeking inter partes review of all of the remaining claims of the ’970 patent.
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`The ’970 defendants further seek a stay pending the PTAB’s final determination of this newly
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`filed Petition for IPR.
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`1 Specifically, the Defendants seek to stay all of the claims relating to the ’970 patent in civil
`action nos. 12-1701 (AT&T & Google), 12-1702 (Sprint), 12-1703 (T-Mobile), 12-1704
`(Verizon), and 12-1788 (Blackberry). The named moving defendants represent all of the
`defendants accused by CallWave of infringing the ’970 patent (the “’970 defendants”).
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`1
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 9 of 25 PageID #: 1739
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`II.
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`SUMMARY OF ARGUMENT
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`The three factors that the Court considers in deciding whether to grant a stay weigh
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`heavily in favor of a stay in this case. First, a stay of the ’970 Track will greatly simplify the
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`issues for trial and could potentially eliminate any need for further litigation. If the PTAB
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`ultimately determines that all of the asserted claims of the ’970 patent are invalid, such a ruling
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`would resolve this litigation in its entirety for the ’970 Track because there would be no valid
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`patent claims CallWave could assert against any of the Defendants. Even if some subset of
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`asserted claims of the ’970 patent survive the IPR proceedings, a stay would still simplify the
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`issues for discovery, claim construction, expert reports and trial. Second, these cases are in the
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`early stages of litigation. Although the Court has entered a Scheduling Order, a trial date has not
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`been set and minimal discovery has occurred. Third, CallWave will not be unduly prejudiced
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`because it does not compete with the Defendants. In fact, it does not make any products or
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`provide any services. Moreover, a stay as to the ’970 Track will not affect CallWave’s ability to
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`proceed on the other two tracks. Finally, in light of all the factors to stay litigation, this Court
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`concluded in Parallel Networks, LLC v KOG Games, Inc.,2 a case in a similar posture to the
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`CallWave ’970 Track, that it is appropriate to grant a stay even before the IPR is instituted.
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`Indeed, Congress expressly contemplated stays of litigation under such timing and circumstances.
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`Here one IPR has already been instituted and another Petition for IPR is pending.
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`III.
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`STATEMENT OF FACTS
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`On January 28, 2014, this Court granted Defendants’ motion to dismiss CallWave’s
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`willfulness and indirect infringement claims. (D.I. 70 in C.A. No. 12-1701). The cases are now
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`2 Exhibit 2, No. 13-178-RGA, Tr. at 66:16-19 (D. Del. Dec. 6, 2013).
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`proceeding solely on the direct infringement claims, which have been organized into three tracks
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`(D.I. 57 in C.A. No. 12-1701).3
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`On November 27, 2013, third-party Location Labs submitted a petition to the USPTO for
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`IPR of the ’970 patent asserting the unpatentability of all claims of the ’970 patent, including
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`those asserted against the Defendants in the ’970 Track.
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`On May 9, 2014, the Patent Trial and Appeal Board of the United States Patent and
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`Trademark Office (the “PTAB”) issued its decision in Case IPR2014-00199 instituting an inter
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`partes review of Claim 18 of the ’970 patent, finding that the Petitioner Location Labs had
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`demonstrated a reasonable likelihood of prevailing in its effort to invalidate Claim 18 (the
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`“Instituted IPR”). Claim 18 of the ’970 patent is being asserted by Plaintiff CallWave in its
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`claims against Defendants. Plaintiff has also asserted Claims 14-17 and 19, as to which the
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`PTAB concluded that Petitioner had not met its burden of showing unpatentability based upon
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`the record before it. On June 9, 2014, Location Labs filed a second Petition for IPR (the
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`“Pending Petition”) requesting that the PTAB institute a trial on the issue of patentability of
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`claims 1-17 and 19, based upon additional grounds relative to the first IPR petition and supported
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`by additional prior art.
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`By statute, the USPTO is scheduled to complete the Instituted IPR by May 9, 2015.4 The
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`Petitioner has requested that the Pending Petition be joined with the Instituted IPR and that the
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`PTAB adopt the same schedule so that the final determinations in both IPR proceedings would
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`be rendered at the same time.
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`3The parties requested that the Court coordinate the claims for pretrial purposes (including
`discovery and Markman proceedings) along the three tracks described above: ’970 Track, ’933
`Track and the Call Processing Track. (D.I. 48 in C.A. No. 12-1701).
`4 The Director of the USPTO may, for good cause shown, extend the one-year period by not
`more than six months, but the experience with the PTAB panels to date is that they issue their
`final determinations early, sometimes well before the one year deadline.
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 11 of 25 PageID #: 1741
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`With regard to the ’970 Track of the CallWave case pending before the Court, limited
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`discovery has occurred to date, including Rule 26(a) initial disclosures, Plaintiff’s disclosure of
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`accused products and asserted claims, production of core technical documents, plaintiff’s
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`infringement contentions, defendants’ invalidity contentions and responses to certain discovery
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`requests and interrogatories. The parties are still in the process of negotiating the Protective
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`Order and an ESI Order to govern certain aspects of discovery. Thus, the actions against the
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`Defendants are in the early stages of litigation.5
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`IV. ARGUMENT
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`This Court weighs three factors in determining whether to grant a stay of litigation
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`pending USPTO reexamination proceedings: “(1) whether granting the stay will simplify the
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`issues for trial; (2) whether discovery is complete and a trial date is set; and (3) whether granting
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`a stay would cause the non-moving party to suffer undue prejudice from any delay, or a clear
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`tactical disadvantage.” Round Rock Research LLC v. Dole Food Co., Inc., Nos. 11-1239-RGA,
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`11-1241-RGA, 11-1242-RGA, 2012 WL 1185022, at *1 (D. Del. Apr. 6, 2012). All three factors
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`favor a stay in this case.
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`Staying the cases now would simplify the issues relating to the ’970 patent, advance
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`judicial efficiency and avoid unnecessary and unproductive litigation costs. The parties are
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`about to engage in expensive and time consuming discovery regarding the ’970 patent without
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`the benefit of the PTAB’s decisions in the IPRs, which may invalidate the ’970 patent and, at a
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`minimum, will clarify the invalidity issues to be considered by this Court. Now that the PTAB
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`5 Even where some discovery has occurred and a trial date has been set, this Court has found that
`the simplification achieved through reexamination procedures can justify a stay. See Exhibit 3,
`Riverbed Tech. Inc. v. Silver Peak Sys. Inc., No. 11-484-RGA, slip op. at 1 (D. Del. Sept. 11,
`2013) (“[S]implification favors a stay. It appears reasonably likely that two of the three patents
`will go away, and, if they do not, invalidity challenges will be limited due to the binding effect of
`the inter partes reexam. The Markman decision on the two patents may never need to be
`issued.”)
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`has instituted the IPR with regard to Claim 18, it is a certainty that the PTAB will rule on its
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`validity and, in the process, make valuable findings regarding claim construction that will affect
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`the other claims of the ’970 patent and change the intrinsic record relating to the patent. The
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`Pending Petition may result in invalidation of all of the claims of the ’970 patent, thus
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`eliminating the need for any further proceedings.6 Also, a stay will minimize the risk that the
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`Court and the parties unnecessarily expend their resources litigating invalid patent claims.
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`A.
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`A Stay Will Simplify the Issues for Trial.
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`A stay of the ’970 Track will greatly simplify the issues for trial and could potentially
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`eliminate any need for further litigation of that patent. “The purpose of the Leahy-Smith
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`America Invents Act and this final rule is to establish a more efficient and streamlined patent
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`system that will improve patent quality and limit unnecessary and counterproductive litigation
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`costs.” Changes to Implement Inter Partes Review Proceedings, 77 Fed. Reg. 157 (Aug. 14,
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`2012); see Exhibit 2, Parallel Networks, Tr. at 40:15-20 (noting that IPR procedure allows the
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`Patent Office expertise to bear on complex questions and to cut down the cost of patent
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`litigation). If the PTAB ultimately determines that all of the asserted claims of the ’970 patent
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`are invalid, such a ruling would resolve this litigation in its entirety for the ’970 Track. See
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`SoftView LLC v. Apple Inc., No. 12-989-LPS, No. 10-389-LPS, 2013 WL 4757831, at *1 (D. Del.
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`Sept. 4, 2013) (“Should all of the asserted claims be found invalid, this litigation would be
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`‘simplified’ because it would be concluded.”). Even if some subset of claims of the ’970 patent
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`survives both the Instituted IPR and the Pending Petition, a stay would still simplify the issues
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`6 Inter partes review of all asserted claims is still likely. In fact, in fiscal year 2013, 167
`Petitions
`for
`IPRs were granted
`and only 26 were denied.
` Exhibit 4,
`http://www.uspto.gov/ip/boards/bpai/stats/aia_statistics_06_05_2014.pdf. Currently, the PTAB
`has granted 356 IPR Petitions and denied 101 IPR Petitions during this fiscal year. Id. Thus,
`over 80% of the IPR Petitions for 2013 and 2014 have been granted, making it highly likely that
`the IPR of the ’970 patent will be instituted to resolve or clarify certain invalidity issues.
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`5
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`relating to discovery, claim construction, expert reports and trial. See Exhibit 2, Parallel
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`Networks, Tr. at 46:9-47:16 (noting that “[t]he IPR is supposed to do something. You’re right.
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`And the baseline is, it’s never going to decide infringement[,]” but “having any more than [a]
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`qualified person who’s neutral spending time looking at something . . . then writing down . . .
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`what they think about it, . . . it is going to be the rare time when that is not helpful.”). Similarly,
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`if the patent owner is able to avoid invalidity by amending any of the subject claims, the parties
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`would then only need to litigate the newly amended claims.
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`In the Parallel Networks case, this Court found it is “beyond argument” that granting a
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`stay pending an IPR determination will simplify the issues whether or not an IPR is instituted. Id.
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`at 64:1-65:6. As the Court observed in Parallel Networks, if the PTAB institutes an IPR, as it
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`has with regard to the ’970 patent, then the issues determined in the IPR will simplify the
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`invalidity case to be considered by the Court, and will shape the Court’s claim construction
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`analysis, even if the patent is not invalidated. Id. at 64:20-21. Here, a stay should be granted
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`pending the resolution of the Instituted IPR and the Pending Petition.
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`The PTAB’s decision to institute the IPR with regard to Claim 18 and not the other
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`asserted claims does not lessen the need for a stay. First, the PTAB may still order the institution
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`of the IPR with regard to the other claims by granting the Pending Petition. Second, it is well
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`recognized that the court may stay cases pending IPRs even where the scope of the issues in
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`litigation exceeds the scope of the USPTO review:
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`SunPower’s argument that a stay is disfavored here because “the scope of
`the issues in litigation substantially exceed the scope of the USPTO review” is
`unavailing. Contrary to SunPower’s suggestion, the issues raised by the IPR
`petitions need not be identical to those in the litigation in order for a stay to be
`granted. See, e.g., Nexans, Inc. v. Belden, Inc., No. 12-1491-SLR-SRF, 2014 U.S.
`Dist. LEXIS 20116, at *11 (D. Del. Feb. 19, 2014) (“[A] complete overlap of the
`issues in the litigation and the IPR is not required to establish simplification of the
`case.”), adopted by 2014 U.S. Dist. LEXIS 32322 (D. Del., Mar. 12, 2014); Neste
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`6
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`Patent Owner Exhibit 2007
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 14 of 25 PageID #: 1744
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`Oil OYJ, 2013 U.S. Dist. LEXIS at *15 (“Finally, while the court recognizes that
`this case likely presents certain questions that simply cannot be addressed through
`inter partes review, it notes that the ‘issue simplification’ factor does not require
`complete overlap.”)
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`Exhibit 5, Sunpower Corporation v. Panelclaw, Inc., C.A. No. 12-1633-GMS, slip op. at 4-5 (D.
`Del. May 16, 2014).
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`Without a stay, the time, expense, party resources and judicial resources dedicated to
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`resolving issues surrounding the current claims will likely be unproductive. Moreover, an IPR of
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`the ’970 patent will add significantly to the intrinsic record. The totality of this intrinsic record
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`should be taken into account for, at a minimum, issues related to contentions and claim
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`construction. Id. at 24:23-26:15. Further, if these cases and the IPRs proceed simultaneously,
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`and CallWave is able to obtain a jury verdict on the ’970 patent before conclusion of the IPRs,
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`the PTAB’s subsequent determination in the IPRs that claims of the ’970 patent are invalid
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`would trump the jury verdict. See, e.g., Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330
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`(Fed. Cir. 2013) (holding that the Patent Office’s final determination of invalidity moots the
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`plaintiff’s cause of action, and requires the district court’s judgment, on appeal, to be vacated); In
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`re Translogic Tech., Inc., 504 F.3d 1249 (Fed. Cir. 2008) (holding patent invalid on
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`reexamination that had been previously upheld by a jury); Translogic Tech., Inc. v. Hitachi, Ltd.,
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`250 Fed. App’x 988 (Fed. Cir. 2008) (vacating jury verdict of $86 million in damages as a result
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`of affirmance of PTO finding of invalidity on reexamination). For these reasons, proceeding
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`with the district court cases in parallel with the pending IPR proceeding will only complicate the
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`issues before the Court and could result in duplicative, unnecessary and wasteful effort by this
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`Court and the parties.
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`B.
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`This Case Is in the Early Stages of Litigation.
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`These cases are in the early stages of litigation. Although the Court has entered a
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`Scheduling Order, a trial date has not been set and, as discussed in the Facts above, minimal
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`7
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`Patent Owner Exhibit 2007
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 15 of 25 PageID #: 1745
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`
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`discovery has occurred.7 The only other substantive activity that has occurred is the motion
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`practice challenging the Complaint and Amended Complaint, which resulted in this Court’s
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`January 28, 2014 Order granting Defendants’ motion to dismiss CallWave’s willfulness and
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`indirect infringement claims. (D.I. 70 in C.A. No. 12-1701). The Court is not scheduled to have
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`a status conference to identify the remaining parties, pending motions and issues remaining for
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`trial until August 21, 2015, after the PTAB is scheduled to have issued a final written decision on
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`the IPR by May 9, 2015.8
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`Thus, at this early stage, this factor weighs strongly in favor of granting Defendants’
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`motion to stay. See SenoRx, Inc. v. Hologic, Inc., No. 12-173-LPS-CJB, 2013 WL 144255, at *6
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`(D. Del. Jan. 11, 2013) (favoring a stay pending reexamination where the parties were six
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`months into litigation and discovery was just beginning).
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`C.
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`CallWave Will Not Suffer Undue Prejudice.
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`CallWave would suffer no undue prejudice from a stay. The PTAB has already decided
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`to institute an IPR and is scheduled to rule by May 9, 2015. With regard to the Pending Petition,
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`a decision whether to institute is scheduled within six months and the Petitioner has sought an
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`earlier institution that will permit both IPRs to follow the schedule of the Instituted IPR.
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`Although this Court has noted that a non-moving party may experience some prejudice from a
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`stay if the IPR ultimately is not instituted, a short delay pending the PTAB decision does not
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`outweigh other factors favoring a stay. Exhibit 2, Parallel Networks, Tr. at 65:12-16. Here the
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`uncertainty has been eliminated because the PTAB has already instituted the IPR review of
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`7 The timing of a stay would be particularly appropriate at this time to avoid the unnecessary and
`counterproductive discovery regarding the ’970 Track that will be wasted in the event the ’970
`patent is invalidated or the PTAB clarifies the invalidity issues.
`8 A final decision on an IPR that may be instituted based on the Pending Petition would be
`scheduled to occur after the Court’s August 21, 2015 scheduling conference, but the Court can
`revisit the grounds for the stay at such time.
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`8
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`Patent Owner Exhibit 2007
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 16 of 25 PageID #: 1746
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`
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`Claim 18 of the ’970 patent. The only open issue is whether the IPR will be expanded to the
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`other asserted claims. As noted above, the final decision on the Pending Petition may occur at
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`the same time as the Instituted IPR since the Petitioner filed a Motion to Join requesting that the
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`PTAB adopt the same scheduling order for both proceedings.
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`A stay pending final resolution of the IPR would not significantly prejudice CallWave,
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`especially because CallWave does not seek an injunction and the stay would significantly
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`simplify—or completely dispose of—the issues currently being litigated for the ’970 patent. See
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`Exhibit 6, One Stockduq Holdings, LLC v. Becton, Dickinson and Company, No. 2:12-cv-03037-
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`JPM, slip op. at 11, D.I. 85 (W.D. Tenn. Nov. 12, 2013) (granting a motion to stay pending inter
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`partes review and finding “to the extent that Plaintiff suffers any prejudice as a result of the
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`delay, the prejudice is outweighed by the benefits of the Court having the record of the inter
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`partes review proceeding, which will assist the Court in reducing the complexity and length of
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`the litigation”) (internal quotation omitted). This Court has also found that prejudice claimed by
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`a plaintiff such as memories fading, losing some amount of licensing opportunity or value, and
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`the denial of a day in court chosen by the plaintiff are merely generic factors that are present in
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`every case and do not cause undue prejudice. Exhibit 2, Parallel Networks, Tr. at 66:2-14.
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`CallWave also will not be unduly prejudiced because it does not compete with the
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`Defendants. In fact, it does not make any products or provide any services. See Round Rock,
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`2012 WL 1185022, at *1 (granting motion to stay pending reexamination where parties were not
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`competitors); see also Neste Oil OYJ, No. 12-1744-GMS, 2013 WL 3353984 at *4 (D. Del. July
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`2, 2013) (noting that the relationship factor weighed in favor of a stay where parties were not
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`“direct” competitors). CallWave became an exclusive licensee of the ’970 patent on November
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`29, 2012, solely to prosecute these actions, and thus cannot claim any harm in the marketplace or
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`9
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`Patent Owner Exhibit 2007
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`Case 1:12-cv-01702-RGA Document 104 Filed 06/16/14 Page 17 of 25 PageID #: 1747
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`
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`entitlement to injunctive relief. See, e.g., SoftView, 2013 WL 4757831, at *1-2 (granting a
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`motion to stay pending inter partes review before launching the parties into the expense of
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`expert discovery and “given that [plaintiff] is a non-practicing entity and not seeking injunctive
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`relief, the limited delay . . . resulting from the Court’s order should not severely prejudice
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`[plaintiff]”). Because CallWave is not a competitor of the Defendants, any prejudice from delay,
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`if any, would be minor. Infinite Data v. Amazon.com, Inc., No. 12-1616-RGA, 2014 WL 266798
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`at *1 (D. Del. Jan. 23, 2014) (“Infinite Data is not a competitor, so it can be recompensed by
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`monetary damages. Thus, any prejudice is not particularly great, as a monetary judgment at a
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`later time should still adequately compensate Infinite Data for its injury.”)
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`Although some of the Defendants commenced their public use of the allegedly infringing
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`products (location tracking technology) several years ago and the ’970 patent issued on August 3,
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`2004, neither the inventor nor any assignee of the ’970 patent asserted any infringement
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`allegations until the lawsuits were filed on December 12, 2012. Given that long delay, CallWave
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`cannot credibly claim undue prejudice by a short additional delay to permit the IPR proceedings
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`to resolve. Indeed, IPRs involve a more expeditious and judicial-like process that provides an
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`even stronger justification for a stay than would the previously-available reexamination
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`proceedings. This Court found in a similar