Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 1 of 17 PageID #: 9085
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
`
`
`
`Civil Action No. 6:15-cv-724-RWS-KNM
`
`Consolidated with
`
`Civil Action No. 6:16-cv-286-RWS-KNM
`
`JURY TRIAL DEMANDED
`
`§§
`
`
`§
`§
`§
`§
`§
`§
`§
`§
`
`
`RAPID COMPLETIONS LLC,
`
`Plaintiff,
`
`v.
`
`BAKER HUGHES INCORPORATED,
`et al.,
`
`Defendants.
`
`WEATHERFORD’S EXPEDITED MOTION TO STAY PENDING
`INTER PARTES REVIEW PROCEEDINGS
`
`
`
`
`
`
`
`
`
`
`
`
`1 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 2 of 17 PageID #: 9086
`
`
`
`
`I. 
`II. 
`III. 
`
`IV. 
`
`V. 
`
`TABLE OF CONTENTS
`
`Page
`
`INTRODUCTION ...............................................................................................................1 
`LEGAL STANDARDS .......................................................................................................2 
`THE RELEVANT FACTORS FAVOR A STAY ...............................................................3 
`A. 
`A Stay Will Not Unduly Prejudice or Present a Clear Tactical
`Disadvantage to Rapid .............................................................................................3 
`B. 
`A Stay Will Simplify the Issues in Question and Trial of the Case .........................5 
`C. 
`Discovery is Not Complete and This Case is Far From Trial ..................................8 
`EVEN IF IT CHOOSES NOT TO EVALUATE THE FACTORS
`INDEPENDENTLY AS TO WEATHERFORD, THE COURT SHOULD STILL
`STAY THIS CASE ..............................................................................................................9 
`A. 
`The Case Should Be Stayed as to Baker Hughes .....................................................9 
`B.  Weatherford and Peak Should Be Stayed Along with Baker Hughes ...................10 
`CONCLUSION ..................................................................................................................11 
`
`
`1
`
`2 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 3 of 17 PageID #: 9087
`
`
`TABLE OF AUTHORITIES
`
`CASES
`Affinity Labs of Texas LLC v. Samsung Elecs. Co.
` 2014 U.S. Dist. LEXIS 105850 (N.D. Cal. Aug. 1, 2014) ------------------------------------------ 5
`
`CANVS Corp. v. United States
`2014 U.S. Claims LEXIS 1550 (Fed. Cl. Dec. 19, 2014) -------------------------------------------- 5
`
`Capella Photonics, Inc. v. Cisco Sys., Inc.
`2015 U.S. Dist. LEXIS 27953 (N.D. Cal. Mar. 6, 2015) -------------------------------------------- 5
`
`Crossroads Systems, Inc. v. Dot Hill Systems Corp.
` 2015 WL 3773014 (W.D. Tex. June 16, 2015) ------------------------------------------------------- 3
`
`Cutsforth, Inc. v. Westinghouse Air Brake Techs. Corp.
`2015 U.S. Dist. LEXIS 31453 (D. Minn. Jan. 15, 2015) -------------------------------------------- 5
`
`Cypress Semiconductor Corp. v. GSI Tech., Inc.
`2014 U.S. Dist. LEXIS 142858 (N.D. Cal. Oct. 7, 2014) -------------------------------------------- 5
`
`Depomed Inc. v. Purdue Pharma L.P.
`2014 U.S. Dist. LEXIS 102109 (D.N.J. July 25, 2014) ---------------------------------------------- 5
`
`Evolutionary Intelligence, LLC v. Sprint Nextel Corp.
` 2014 U.S. Dist. LEXIS 139066 (N.D. Cal. Sept. 26, 2014) ---------------------------------------- 5
`
`Gentherm Can., Ltd. v. IGB Auto., Ltd.
`2015 U.S. Dist. LEXIS 23180 (E.D. Mich. Feb. 26, 2015) ------------------------------------------ 5
`
`In re CTP Innovations, LLC, Patent Litig.
`2015 U.S. Dist. LEXIS 8142 (D. Md. Jan. 23, 2015) ------------------------------------------------ 5
`
`Intellectual Ventures II LLC v. Suntrust Banks, Inc.
`2014 U.S. Dist. LEXIS 142295 (N.D. Ga. Oct. 7, 2014) -------------------------------------------- 5
`
`Intellectual Ventures II LLC v. U.S. Bancorp
`2014 U.S. Dist. LEXIS 153638 (D. Minn. Aug. 7, 2014) ------------------------------------------- 5
`
`Kaneka Corp. v. SKC Kolon PI, Inc.
`2014 U.S. Dist. LEXIS 182809 (C.D. Cal. Dec. 5, 2014) ------------------------------------------- 5
`
`Locata LBS LLC v. Paypal Inc.
` 2014 U.S. Dist. LEXIS 182792 (N.D. Cal. Dec. 4, 2014) ------------------------------------------ 5
`
`i
`
`3 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 4 of 17 PageID #: 9088
`
`
`Motion Games, LLC v. Nintendo Co.
`2014 WL 11678661 (E.D. Tex. Sept. 23, 2014) ------------------------------------------------------ 3
`
`NFC Technology LLC v. HTC America, Inc.
`2015 WL 1069111 (E.D. Tex. Mar. 11, 2015) ----------------------------------------------------- 2, 6
`
`Norman IP Holdings, LLC v. Chrysler Group LLC
`2014 U.S. Dist. LEXIS 182788 (E.D. Tex. Oct. 8, 2014) ------------------------------------------- 5
`
`Odom v. Microsoft Corp.
` 429 F. App’x 967 (Fed. Cir. 2011) --------------------------------------------------------------------- 6
`
`PersonalWeb Techs., LLC v. Google Inc.
`2014 U.S. Dist. LEXIS 116172 (N.D. Cal. Aug. 20, 2014) ----------------------------------------- 5
`
`Procter & Gamble Co. v. Kraft Foods Global, Inc.
` 549 F.3d 842 (Fed. Cir. 2008) -------------------------------------------------------------------------- 6
`
`Safe Storage LLC v. Dell Inc.
` Civil Action No. 12-1624 (D. Del. Jan. 22, 2015) --------------------------------------------------- 5
`
`Service Solutions U.S., L.L.C. v. Autel.US Inc.
`2015 U.S. Dist. LEXIS 9582 (E.D. Mich. Jan. 28, 2015) -------------------------------------------- 5
`
`Smartflash LLC v. Apple Inc.
` 621 Fed. Appx. 995 (Fed. Cir. 2015) ------------------------------------------------------------ 6, 8, 9
`
`Soverain Software LLC v. Amazon.com, Inc.
` 356 F. Supp. 2d 660 (E.D. Tex. 2005) ----------------------------------------------------------------- 2
`
`Surfcast, Inc. v. Microsoft Corp.
` 2014 U.S. Dist. LEXIS 160062 (D. Me. Nov. 14, 2014) -------------------------------------------- 5
`
`Trover Group, Inc. v. Dedicated Micros USA
`2015 U.S. Dist. LEXIS 29572 (E.D. Tex. Mar. 11, 2015) ------------------------------------------- 2
`
`Verinata Health, Inc. v. Ariosa Diagnostics, Inc.
`2015 U.S. Dist. LEXIS 12693 (N.D. Cal. Feb. 2, 2015) --------------------------------------------- 5
`
`VirtualAgility Inc. v. Salesforce.com
` 759 F.3d 1307 (Fed. Cir. 2014) ---------------------------------------------------------------------- 8, 9
`
`STATUTES
`35 U.S.C. § 103 ---------------------------------------------------------------------------------------------- 7
`35 U.S.C. § 314(a) ------------------------------------------------------------------------------------------- 6
`35 U.S.C § 315(e) -------------------------------------------------------------------------------------------- 7
`
`ii
`
`4 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 5 of 17 PageID #: 9089
`
`
`In accordance with the Court’s June 1, 2016 Order, Baker Hughes recently renewed its
`
`prior motion to stay,1 and requested a stay of this litigation pending completion of inter partes
`
`reviews (“IPRs”) that the Patent Trial & Appeal Board (“PTAB”) recently instituted in
`
`connection with the Baker Hughes’ IPR petitions. The Weatherford Defendants (“Weatherford”)
`
`now file their expedited motion to stay based, in part, on their own IPR petitions that were filed
`
`in July.2 Those Weatherford IPR petitions on the ’505, ’634 and ’774 patents will likely be
`
`instituted for the same reasons that the Baker Hughes’ IPRs were instituted, as well as other
`
`reasons based on additional prior art and evidence. Weatherford will also file an IPR petition on
`
`the new ’501 patent later this month.
`
`I.
`
`INTRODUCTION
`
`The PTAB recently instituted IPRs on all asserted claims of the five original patents-in-
`
`suit, finding that Baker Hughes demonstrated a “reasonable likelihood” of proving invalidity.
`
`See, e.g., Decision to Institute dated August 22, 2016, IPR 2016-00598 at 11. Statutory estoppel
`
`will attach to Baker Hughes when final written decisions issue in the Baker Hughes IPRs. It is
`
`extremely likely that the PTAB will institute additional IPRs based on Weatherford’s IPR
`
`petitions given that those petitions contain grounds similar to those on which the PTAB has
`
`already found a “reasonable likelihood” of proving invalidity, as well as additional grounds and
`
`additional evidence. The PTAB would have to do a complete one-eighty in order to not institute
`
`Weatherford’s IPRs – this will not happen. Accordingly, statutory estoppel will also likely attach
`
`
`1 On March 3, 2016, Baker Hughes moved to stay the first-filed action (Case No. 6:15-cv-724) on the 7,134,505
`(“505”), 7,543,634 (“634”), 7,861,774 (“774”), 8,657,009 (“009”) and 9,074,451 (“451”) patents-in-suit. (Dkt. Nos.
`132, 143.) On April 5, 2016, Rapid filed a separate action (Case No. 6:16-cv-286), asserting the 9,303,501 (“501”)
`patent, which is a continuation of the ‘774 patent-in-suit. On June 15, 2016, the Court consolidated the two actions.
`(Case No. 6:15-cv-724, Dkt. 29).
`2 Weatherford and Rapid have reached an agreement on an expedited briefing schedule as follows: Rapid will file a
`response to this Motion within 5 business days; Weatherford will file a reply within 3 business days of the response;
`and Rapid will file a surreply within 3 business days of the reply.
`
`1
`
`5 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 6 of 17 PageID #: 9090
`
`
`to Weatherford based on its own IPR petitions when the PTAB issues final decisions on
`
`Weatherford’s IPRs.
`
`In refusing to agree to a stay based on the Baker Hughes and Weatherford IPRs, Rapid
`
`ignores recent Federal Circuit case law in Smartflash and VirtualAgility, and asks this Court to
`
`require Defendants to agree to a broader estoppel provision than that required of a petitioner by
`
`the AIA. This is a remarkable request, one for which Rapid provides no justification. The Court
`
`should grant the stay.
`
`II.
`
`LEGAL STANDARDS
`
`As the Court noted in its Order, a district court has the inherent power to control its own
`
`docket, including the power to stay proceedings before it. Dkt. No. 173 at 2; NFC Technology
`
`LLC v. HTC America, Inc., No. 2:13-CV-1058-WCB, 2015 WL 1069111, at *1 (E.D. Tex. Mar.
`
`11, 2015) (Bryson, Cir. J.); Clinton v. Jones, 520 U.S. 681, 706 (1997).
`
`District Courts typically consider three factors when deciding whether to stay litigation
`
`pending inter partes review of a patent-in-suit: “(1) whether a stay will unduly prejudice or
`
`present a clear tactical disadvantage to the nonmoving party, (2) whether a stay will simplify the
`
`issues in question and trial of the case, and (3) whether discovery is complete and whether a trial
`
`date has been set.” Soverain Software LLC v. Amazon.com, Inc., 356 F. Supp. 2d 660, 662 (E.D.
`
`Tex. 2005); see Trover Group, Inc. v. Dedicated Micros USA, No. 2:13-CV-1047, 2015 U.S.
`
`Dist. LEXIS 29572, at *5 (E.D. Tex. Mar. 11, 2015) (Bryson, Cir. J). In cases like this, where the
`
`PTAB has instituted inter partes review, “courts have been nearly uniform in granting motions to
`
`stay proceedings in the trial court.” NFC Tech., 2015 WL 1069111, at *6 (citations omitted).
`
`2
`
`6 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 7 of 17 PageID #: 9091
`
`
`III. THE RELEVANT FACTORS FAVOR A STAY
`
`A.
`
`A Stay Will Not Unduly Prejudice or Present a Clear Tactical Disadvantage
`to Rapid
`
`While it is true that Rapid has an interest in enforcing its patent rights, this Court has
`
`already observed in this case that “‘mere delay in collecting … damages does not constitute
`
`undue prejudice.’” Dkt. No. 173 at 3 (quoting Crossroads Systems, Inc. v. Dot Hill Systems
`
`Corp., No. 13-CA-1025, 2015 WL 3773014, at *2 (W.D. Tex. June 16, 2015)). The Court
`
`similarly discounted Rapid’s other argument—that a stay risks the loss of evidence—observing it
`
`is merely “general in nature and not specific to this case,” and “present[s] no stronger case for
`
`actual prejudice in this case than any other.” Id. at 3, n. 2.
`
`Having had its primary arguments already rejected by the Court, Rapid advances entirely
`
`new arguments in its opposition to Baker Hughes’ renewed motion to stay. Rapid firsts asks the
`
`Court to focus not on the instant set of stay motions, but rather on an “inevitable” request that “if
`
`any of the second round IPRs are instituted, the stay should be extended to cover the second round
`
`IPRs.” Dkt. No. 229 at 7. First, the categorical rule implicitly proposed by Rapid – that IPR
`
`petitions filed toward the end of the allowable one-year period simply “could not justify a stay” –
`
`does not exist. Id. Even the lone case cited by Rapid on this point considered filing later in the
`
`allowable period only as a part of its larger analysis. See, e.g., Motion Games, LLC v. Nintendo
`
`Co., No. 6:12-CV-878-JDL, 2014 WL 11678661 at *3 (E.D. Tex. Sept. 23, 2014). More
`
`importantly, though, Baker Hughes’ IPRs were filed early in the statutory period and have
`
`already been instituted on all five of the original patents-in-suit. The institution of those IPRs, as
`
`well as Weatherford’s own IPR filings, are the basis of this motion. Thus, Rapid’s attempts to
`
`argue against a hypothetical future motion to extend a stay are misplaced. Obviously, the Court
`
`may revisit this issue at any time it chooses, thus vitiating the conjecture advanced by Rapid.
`
`3
`
`7 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 8 of 17 PageID #: 9092
`
`
`Rapid relies more heavily on the wholly unsupported premise that “defendants in this
`
`case have carefully coordinated their IPR efforts to obtain the maximum possible delay in this
`
`case.” Dkt. No. 229 at 6-7. This is simply untrue. Since the very beginning of this case,
`
`Defendants have operated independently with regard to IPRs. Weatherford decided to file its
`
`IPRs when it did on a completely independent basis, with no consultation or agreement – explicit
`
`or implicit – with Baker Hughes or Peak. Furthermore, it was entirely reasonable for
`
`Weatherford to file its IPRs when it did – Rapid did not even make its infringement allegations
`
`clear in this case until it served its supplemental infringement contentions on July 19, 2016.3
`
`Weatherford filed its IPRs a mere 10 days later, on July 29, 2016. Additionally, one of
`
`Weatherford’s primary IPR grounds is based on prior art (the “Yost” publication) that Rapid
`
`failed to produce to Weatherford despite Rapid’s awareness of the reference and its clear
`
`relevance to the claims.4 Had Weatherford filed its IPRs earlier, it would have been forced to do
`
`so without the benefit of compliant infringement contentions or key prior art that was clearly
`
`relevant yet withheld by Rapid.
`
`As this Court observed in its prior order on Baker Hughes’ initial motion, a stay pending
`
`IPR would not unduly prejudice or present a clear tactical disadvantage to Rapid. See Dkt. No.
`
`173 at 4. Rapid’s argument that the Court should now base its analysis on a hypothetical future
`
`motion to continue the stay is unavailing. Nothing has changed, and this factor still favors a stay,
`
`especially given the institution of Baker Hughes’ IPRs and Weatherford’s additional IPR filings.
`
`
`3 This supplementation was not simply voluntary – the Court ordered it because Rapid’s original invalidity
`contentions were deficient. See Dkt. No. 192.
`4 Rapid failed to produce this prior art despite the fact that it was cited during prosecution of a continuation
`application that was eventually asserted by Rapid against Weatherford and consolidated with this case (the ‘501
`patent).
`
`4
`
`8 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 9 of 17 PageID #: 9093
`
`
`B.
`
`A Stay Will Simplify the Issues in Question and Trial of the Case
`
`Once an IPR is instituted – especially on all claims asserted in the litigation – courts
`
`rarely deny a stay.5 Stays are granted upon IPR institution because of the substantial probability
`
`of invalidation of claims is likely to simplify the issues in question and trial of the case by
`
`eliminating claims entirely. Ex. 1 – PTAB Trial and Appeal Board Statistics at 10 (July 31,
`
`2016),
`
`available
`
`at
`
`http://www.uspto.gov/sites/default/files/documents/2016-07-
`
`31%20PTAB.pdf (showing that only 15% of IPRs that reach a final written decision [158 trials
`
`out of 1,086] result in all claims being confirmed; 85% result in at least some claims being
`
`invalidated; 70% [more than 2/3] result in invalidation of all challenged claims). Of the few
`
`claims that do survive, many are amended during the IPR proceeding. This type of amendment
`
`would render any court proceeding on the original claims merely an exercise in futility.
`
`Surely, many cases have been decided on different facts, but as Judge Bryson recently
`
`observed with regard to the simplification of issues factor: the “[the] near-uniform line of
`
`authority reflects the principal point made by the court in VirtualAgility—that after the PTAB
`
`
`5 See Capella Photonics, Inc. v. Cisco Sys., Inc., No. C-14-3348, 2015 U.S. Dist. LEXIS 27953 (N.D. Cal. Mar. 6,
`2015); Gentherm Can., Ltd. v. IGB Auto., Ltd., No. 13-11536, 2015 U.S. Dist. LEXIS 23180, 2015 WL 804657
`(E.D. Mich. Feb. 26, 2015); Verinata Health, Inc. v. Ariosa Diagnostics, Inc., No. 12-cv-5501, 2015 U.S. Dist.
`LEXIS 12693, 2015 WL 435457 (N.D. Cal. Feb. 2, 2015); Service Solutions U.S., L.L.C. v. Autel.US Inc., No. 13-
`10534, 2015 U.S. Dist. LEXIS 9582, 2015 WL 401009 (E.D. Mich. Jan. 28, 2015); In re CTP Innovations, LLC,
`Patent Litig., MDL 14-MD-2581, 2015 U.S. Dist. LEXIS 8142, 2015 WL 317149 (D. Md. Jan. 23, 2015); Safe
`Storage LLC v. Dell Inc., Civil Action No. 12-1624 (D. Del. Jan. 22, 2015); Cutsforth, Inc. v. Westinghouse Air
`Brake Techs. Corp., Civil No. 12-1200, 2015 U.S. Dist. LEXIS 31453 (D. Minn. Jan. 15, 2015); CANVS Corp. v.
`United States, No. 10-540 C, 2014 U.S. Claims LEXIS 1550 (Fed. Cl. Dec. 19, 2014); Kaneka Corp. v. SKC Kolon
`PI, Inc., No. CV 11-3397, 2014 U.S. Dist. LEXIS 182809 (C.D. Cal. Dec. 5, 2014); Locata LBS LLC v. Paypal Inc.,
`No. C 14-1864, 2014 U.S. Dist. LEXIS 182792 (N.D. Cal. Dec. 4, 2014); [19] Surfcast, Inc. v. Microsoft Corp., No.
`2:12-cv-333, 2014 U.S. Dist. LEXIS 160062, 2014 WL 6388489 (D. Me. Nov. 14, 2014); Norman IP Holdings,
`LLC v. Chrysler Group LLC, No. 6:13-cv-278, 2014 U.S. Dist. LEXIS 182788 (E.D. Tex. Oct. 8, 2014); Cypress
`Semiconductor Corp. v. GSI Tech., Inc., No. 13-cv-2013, 2014 U.S. Dist. LEXIS 142858, 2014 WL 5021100 (N.D.
`Cal. Oct. 7, 2014); Intellectual Ventures II LLC v. Suntrust Banks, Inc., No. 1:13-cv-2454, 2014 U.S. Dist. LEXIS
`142295, 2014 WL 5019911 (N.D. Ga. Oct. 7, 2014); Evolutionary Intelligence, LLC v. Sprint Nextel Corp., No. C-
`13-4513, 2014 U.S. Dist. LEXIS 139066, 2014 WL 4802426 (N.D. Cal. Sept. 26, 2014); PersonalWeb Techs., LLC
`v. Google Inc., No. 5:13-cv-1317, 2014 U.S. Dist. LEXIS 116172, 2014 WL 4100743 (N.D. Cal. Aug. 20, 2014);
`Intellectual Ventures II LLC v. U.S. Bancorp, Civil No. 13-2071, 2014 U.S. Dist. LEXIS 153638, 2014 WL 5369386
`(D. Minn. Aug. 7, 2014); Affinity Labs of Texas LLC v. Samsung Elecs. Co., No. 14-cv-2717, 2014 U.S. Dist.
`LEXIS 105850, 2014 WL 3845684 (N.D. Cal. Aug. 1, 2014); Depomed Inc. v. Purdue Pharma L.P., Civil Action
`No. 13-571, 2014 U.S. Dist. LEXIS 102109, 2014 WL 3729349 (D.N.J. July 25, 2014).
`
`5
`
`9 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 10 of 17 PageID #: 9094
`
`
`has instituted review proceedings, the parallel district court litigation ordinarily should be stayed.
`
`The decisions … have applied the same general approach in the analogous setting of inter partes
`
`review.” NFC Tech. LLC v. HTC Am., Inc., No. 2:13-CV-1058-WCB, 2015 U.S. Dist. LEXIS
`
`29573, at *23 (E.D. Tex. Mar. 11, 2015). The reason is clear: there is a 70% chance with respect
`
`to each challenged patent in IPR that all challenged claims will be invalidated. That is a
`
`substantial likelihood of simplification of issues.
`
`In evaluating this factor in opposing Baker Hughes’ renewed motion, Rapid relies on two
`
`cases from the Federal Circuit that did not pertain to IPRs and pre-dated the AIA. See Dkt. No.
`
`229 at 7-8 (citing Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 849 (Fed.
`
`Cir. 2008); Odom v. Microsoft Corp., 429 F. App’x 967, 974 (Fed. Cir. 2011)). This is curious,
`
`considering the statutory rules governing PTO/PTAB proceedings, estoppel, and stays have all
`
`been completely overhauled by the AIA – not to mention the fact that numerous courts have
`
`addressed these issues directly with respect to IPRs and CBMs, even in a Federal Circuit case
`
`involving Rapid’s counsel. See, e.g., Smartflash LLC v. Apple Inc., 621 Fed. Appx. 995, 1005
`
`(Fed. Cir. 2015).
`
`Rapid also argues that “[u]nlike other IPR decisions, the PTAB did not analyze the
`
`invalidity of all asserted claims.” Dkt. No. 229 at 8. In doing so, Rapid implies that the PTAB
`
`made some finding in this case that is meaningfully different than other IPR proceedings. This is
`
`pure obfuscation. In fact, 35 U.S.C. § 314(a) explicitly charges the PTAB with “determin[ing]
`
`whether [petitioner] has demonstrated a reasonable likelihood that ‘at least 1 of the claims
`
`challenged in the petition’ is unpatentable.” IPR2016-598, Paper 8 at 5 (citing 35 U.S.C. §
`
`314(a)). In reaching its institution decision on the ‘774 patent, the PTAB answered this question
`
`6
`
`10 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 11 of 17 PageID #: 9095
`
`
`directly: “we determine that Baker Hughes has demonstrated a reasonable likelihood of success
`
`in proving that at least independent claim 1 of the ’774 patent is unpatentable.” Id. at 11.
`
`The PTAB then ordered that “pursuant to 35 U.S.C. § 314(a), an inter partes review of
`
`claims 1–16 of the ’774 patent is instituted on the statutory grounds of obviousness under 35
`
`U.S.C. § 103 as asserted in the Petition.” Id. The fact that the PTAB based the bulk of its
`
`analytical text on claim 1, and then parroted the statutory language in its conclusion, is both
`
`ordinary and insignificant from a legal perspective.6 Even if the Court were inclined to delve into
`
`the body of the institution decisions as Rapid suggests – and it is unnecessary to do so here – the
`
`Court will find that the PTAB roundly rejected every argument advanced by Rapid, leaving little
`
`quarter for Rapid during the pendency of the IPR proceedings. Rapid’s arguments on the
`
`remaining patents and claims fail for the same reason.
`
`Rapid’s final argument in opposition to Baker Hughes’ renewed motion is that there is no
`
`simplification here because “in this case, IPR estoppel will only be beneficial if all Defendants
`
`agree to be bound to the same extent as every other defendant. Of course, they have not done
`
`so.” Dkt. No. 229 at 9. Rapid attempts to paint Baker Hughes and Weatherford as attempting to
`
`shirk the estoppel provisions provided by the AIA. Nothing could be further from the truth – the
`
`estoppel provisions provided by § 315(e) will apply to Baker Hughes and Weatherford when
`
`final written decisions issue in their respective IPRs.
`
`What Rapid has actually demanded of Defendants is far beyond the estoppel provisions
`
`provided by § 315(e) – it asks that “all Defendants agree to be bound to the same extent as every
`
`other defendant.” Id. at 8-9. In other words, even though Baker Hughes and Weatherford will be
`
`bound by the estoppel provisions of § 315(e) when final written decisions issue in their
`
`6 Obviously, Rapid cites no case for the remarkable distinction that it proposes, and Weatherford is aware of no
`Court that has ever parsed the body of an IPR in the way suggested by Rapid for any meaningful analysis, much less
`using it to reject a stay.
`
`7
`
`11 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 12 of 17 PageID #: 9096
`
`
`respective IPRs, Rapid demands that Baker Hughes agree to Weatherford’s estoppel and vice
`
`versa. Rapid is asking both Weatherford and Baker Hughes to be bound by an estoppel greater
`
`than that provided by Section 315(e). Such a request is illogical where parties have separately
`
`petitioned for IPR. Notably, not a single case cited by Rapid addresses a plaintiff’s demand that a
`
`defendant who has itself successfully petitioned for institution agree to a broader estoppel than
`
`the AIA already provides.
`
`The PTAB has instituted an IPR on every Asserted Claim in the original five patents-in-
`
`suit. Rapid’s contention that this IPR situation is somehow different from the others that have
`
`been the basis of numerous granted stays is unavailing. So too is Rapid’s plea that Defendants
`
`agree to even broader estoppel than that already provided by statute. Accordingly, this factor
`
`favors a stay.
`
`C.
`
`Discovery is Not Complete and This Case is Far From Trial
`
`Even if the Court chooses to evaluate this factor based on the filing date of the instant
`
`motion, this factor weighs against a stay. The bulk of discovery remains, no Markman briefs
`
`have been filed, and the hearing is over two months away (although Rapid curiously argues that
`
`the parties are “on the doorstep of a Markman hearing”).
`
`The Federal Circuit has weighed in on this issue, finding this factor weighs in favor of a
`
`stay even where the Court has completed virtually every task except for trial. Smartflash, 621
`
`Fed. Appx. at 1005. This case is far earlier than Smartflash – significant discovery remains, the
`
`Markman briefing process has just begun, no pretrial issues have been presented to the Court –
`
`these factors weigh in favor of granting a stay. Id. Further, the timeline of this case is very
`
`similar to that of VirtualAgility, one of the only other post-AIA Federal Circuit cases to address
`
`this question. VirtualAgility Inc. v. Salesforce.com, 759 F.3d 1307, 1315 (Fed. Cir. 2014). In that
`
`case, the district court found that the posture of the case favored a stay (but noted that the stage
`
`8
`
`12 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 13 of 17 PageID #: 9097
`
`
`of the case was outweighed by other factors). Id. The Federal Circuit reversed the district court
`
`and was even more decisive on this factor, finding that regardless of whether this factor was
`
`analyzed at the time the initial motion was filed or when review was instituted, “the timing factor
`
`heavily favors a stay.” Id. The Federal Circuit then granted the stay. Id.
`
`Further, there has been no delay in filing the motion itself. In fact, Rapid previously
`
`argued (in keeping with the traditional approach in this District) that a pre-institution motion was
`
`premature because it was filed prior to institution of any IPR. See Dkt. No. 136 at 1. With this in
`
`mind, it would be virtually impossible for any defendant to file a viable motion to stay
`
`substantially sooner, unless it had advance notice (and the opportunity to prepare an IPR
`
`petition) before a case were filed. Thus, any notion that this case is too far advanced for a stay
`
`would virtually eliminate IPR stays altogether – which clearly conflicts with reams of case law
`
`addressing this factor. See, e.g., VirtualAgility, 759 F.3d at 1315.
`
`For the reasons discussed above, this factor heavily favors a stay.
`
`IV.
`
`EVEN IF IT CHOOSES NOT TO EVALUATE THE FACTORS
`INDEPENDENTLY AS TO WEATHERFORD, THE COURT SHOULD STILL
`STAY THIS CASE
`
`The facts of the case strongly counsel in favor of a stay for Baker Hughes, and because
`
`the parties are joined (albeit improperly) rather than simply consolidated for pretrial, that stay
`
`should extend to Weatherford and Peak as well, especially since Weatherford has filed its own
`
`IPR petitions that will almost certainly be instituted.
`
`A.
`
`The Case Should Be Stayed as to Baker Hughes
`
`Baker Hughes has filed IPRs that were instituted as to all asserted claims in the original
`
`suit. Baker Hughes is bound by statutory estoppel, and Rapid’s argument that Baker Hughes
`
`should be forced to agree to an even broader estoppel is unavailing. The facts of this case, were a
`
`stay denied, would be even more egregious than the facts presented in Smartflash as discussed
`
`9
`
`13 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 14 of 17 PageID #: 9098
`
`
`above. Accordingly, as discussed above, the case should be stayed based on Baker Hughes’
`
`motion even without considering any arguments as to Weatherford or Peak.
`
`B. Weatherford and Peak Should Be Stayed Along with Baker Hughes
`
`Even if the Court chooses not to analyze Weatherford individually as requested in
`
`Section III above, once the Court agrees that it must stay the case as to Baker Hughes, it must
`
`consider how to deal with the remaining Defendants. One issue not raised by either Baker
`
`Hughes or Rapid is the fact that Defendants in this case are not merely consolidated.
`
`Traditionally, the Court is faced with an instance where a plaintiff sued multiple defendants that
`
`are merely consolidated for pre-trial for convenience purposes. What usually follows is a request
`
`from those defendants to stay a series of consecutive cases based solely on an IPR filing
`
`originating from one defendant sued in an individual case. But here, Rapid chose to join all
`
`Defendants in the same case. This is exceedingly rare, given the severe limitations placed on
`
`joinder by the AIA. Thus, the cases cited by Rapid overwhelmingly apply to cases that are
`
`merely consolidated for convenience (and thus have few “overlapping” facts), rather than cases
`
`that are actually joined.
`
`Because Rapid joined the defendants here, it follows that to the extent a stay is granted
`
`for Baker Hughes, it should also be granted for Weatherford. Defendants continue to believe that
`
`joinder here is improper, but Rapid has already argued to the Court that the alleged overlap
`
`between the cases means that the case must proceed as a single unit:
`
`Defendants argue that separate trials are necessary because there is insufficient
`overlap between the accused products and services to justify joinder under § 299.
`This argument is specious. Many of the asserted claims in this case cover not just
`tools, but actual fracturing methods. When an operator enlists the pumping
`services of one Defendant and the tools of another Defendant for a single accused
`that Rapid Completions’
`fracturing operation, Defendants cannot deny
`infringement allegations relate to “the same accused product or process.” At best,
`Defendants argue that this sort of multi-defendant infringement is unlikely to
`occur very often. But Defendants admit that they don’t actually know the extent
`
`10
`
`14 of 17
`
`Exhibit 2038
`IPR2016-01517
`
`

`
`Case 6:15-cv-00724-RWS-KNM Document 231 Filed 09/13/16 Page 15 of 17 PageID #: 9099
`
`
`of the overlap. Even if their speculation turns out to be correct, the Court should
`at least allow the parties time to conduct discovery into this issue and other
`overlapping facts between the defendants before deciding how to structure trial in
`this case.
`
`Dkt. No. 76-2 (footnote omitted).
`
`Rather than taking the approach mandated by the AIA, Rapid chose to join all Defendants
`
`in a single case and set forth a host of reasons why the Defendants must be lumped together. As
`
`noted both above and in the earlier letter briefing to the Court, Defendants disagree, but the
`
`Court should not permit Rapid to obtain the benefit of its joinder without being subject to the
`
`concomitant risks and obligations. See Dkt. No. 76. Accordingly, Baker Hughes’ IPRs – and the
`
`Motion it filed to stay the case – are enough grounds to stay this entire case without necessitating
`
`individual analysis on a per-Defendant basis.
`
`V.
`
`CONCLUSION
`
`The Court should exercise its discretion and stay this case until the PTAB issues final
`
`written decisions in the pending IPRs of the ’774, ’505, ’634, ’009 and ’451 patents-in-suit.
`
`Once the PTAB considers whether there are any claims le