EXHIBIT 3001
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`UNITED STATES DISTRICT COURT
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`SOUTHERN DISTRICT OF CALIFORNIA
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`FISHER & PAYKEL I-[EALTHCARE
`LIMITED, a New Zealand corporation,
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`CASE NO. l6cv2068 DMS (WVG)
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`V.
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`ORDER GRANTING RESMED’S
`Plaintiff, MOTION TO STAY PENDING
`RESOLUTION OF INTER PARTES
`REVIEW
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`RESMED CORP., a Minnesota
`corporation,
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` Defendant.
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`This case comes before the Court on ResMed’s motion to stay Fisher & Paykel’s
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`claims pending review by the Patent Trial and Appeal Board (“PTAB”) of ResMed’s
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`petitions for interpartes review ofthe Fisher & Paykel patents-in-suit. Fisher & Paykel
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`filed an opposition to the motion, and ResMed filed a reply. For the reasons discussed
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`below, the motion is granted.
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`1.
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`BACKGROUND
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`This case is one of many currently pending between the parties.
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`In addition to
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`this case, RedMed currently has patent infringement actions against Fisher & Paykel
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`pending in both Germany and New Zealand and before the United States International
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`Trade Commission (“ITC”). Fisher & Paykel also recently filed an action in the High
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`Court of Justice in the United Kingdom seeking a judgment that three ResMed
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`European Patents are invalid and not infringed by the same products accused of
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`1
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`infringement in this case.
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`(ResMed’s Notice of Recent Facts Relevant to Its Mot. to
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`2 Stay at 2.) Fisher & Paykel also instituted an action for patent infringement in the
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`Munich District Court. (Id.) One of the patents at issue there is related to one of the
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`patents at issue here. (Id.)
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`The present case was filed on August 16, 2016.
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`In the Complaint, Fisher &
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`Paykel allege ResMed is infringing nine of its patents. On September 7, 2016, ResMed
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`Corporation filed an Answer and Counterclaim. In the Counterclaim, ResMed asserts
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`claims for declaratoryjudgment ofnoninfringement and invalidity ofFisher & Paykel ’s
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`patents and seven additional claims for infringement of its own patents. On October 3,
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`2016, Fisher & Paykel Healthcare Limited, Fisher & Paykel Healthcare, Inc. and Fisher
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`& Paykel Healthcare Distribution Inc. filed an Answer to the Counterclairns and
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`Counterclaims for declaratoryjudgment ofnoninfringement and invalidity ofResMed’ s
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`patents.
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`On October 6, 2016, Fisher & Paykel Healthcare Limited, Fisher & Paykel
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`Healthcare, Inc. and Fisher & Paykel Healthcare Distribution Inc. filed a motion to stay
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`ResMed’s counterclaims on two of its patents pending proceedings before the ITC on
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`those patents. ResMed did not oppose that motion, and the Court granted the request
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`to stay that portion of this case on November 17, 2016.‘
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`With respect to the present motion, on September 7, 2016, the same day it filed
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`its Answer in this case, ResMed filed fifteen petitions for inter partes review with the
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`PTAB challenging the validity of every asserted claim of the Fisher & Paykel patents-
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`In a recent filing, I_{esMed informed the Court that Fisher & _Pa)£<el has
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`petitionedfor interpartes review of four ofthe seven ResMed patents-in—suit._
`esMed
`indicated in the resent motion that it would not op ose a stay on that portion of the
`case _1frequeste by Fisher & Paykel. Two _of the pa ents at issue in Fisher & Pa keljs
`petition are already subject to the stay pendin the ITC_proceedings, therefore, t ere is
`no need to request a sta as to those patents.
`the parties wish to stay litigation on the
`other two patents, the
`ourt requeststhey dose by_ way of a oint motion. If the_case
`is sta ed as to those two patents, this 11 igation will proc_ee on the three remaining
`Res
`ed patents _only. As to that portion_of the_case, F1S_heI' & Pa kel Healthcare
`Corporation Limited has filed a motion to dismiss it from this case for ack of personal
`urisdiction and failure to state a claim, which motion is scheduled for hearing on
`ecember 22, 2016.
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`1
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`in—suit. Fisher & Paykel has three months, or until December 7, 2016, to file a response
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`to the petitions. The PTAB will have three months from (1) the filing of Fisher &
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`Paykel ’s responses or (2) December 7, 2016, whichever is sooner, to determine whether
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`to institute a trial on the petitions. Ifthe PTAB orders atrial, it will have twelve months
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`to issue a final written decision on the petitions.
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`II.
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`DISCUSSION
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`As stated above, ResMed moves to stay litigation on Fisher & Paykel’s patents
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`pending resolution of its request for inter partes review-. Fisher & Paykel asserts
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`ResMed’s petitions for review are barred by 35 U.S.C. § 3 1 5(a)(1). It also argues the
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`relevant factors weigh against the imposition of a stay.
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`A.
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`Statutory Bar
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`Fisher & Paykel’s first argument in response to ResMed’s motion to stay is that
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`the petitions for interpartes review are barred by 35 U.S.C. § 3 l5(a)(1). This statute
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`provides: “An inter partes review may not be instituted if, before the date on which the
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`petition for such a review is filed, the petitioner or real party in interest filed a civil
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`action challenging the validity ofa claim of the patent.” 35 U.S.C. § 3l5(a)(l). On
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`August 16, 2016, three weeks before it filed the petitions for review, ResMed filed a
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`Complaint against Fisher & Paykel in this Court challenging the validity of Fisher &
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`Paykel’s patents. See ResMedInc. v. Ffisher & Paykel Healthcare Corporation Limited,
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`Case No. 16cv2072.2 Fisher & Paykel argue that filing falls within the plain language
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`ofthe statute and precludes the PTAB from granting ResMed’s petitions for review, and
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`thus the motion for stay should be denied.
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`2 ResMed’s Com laint was not the first to be filed. On August 15, 2_016 the day
`before Re_sMed filed its omglaint, Fisher & Paykel _file_d a Com _ amtagainst ResMed
`in the United States District ourt for the Central District of Ca ifornia. See Fjsher &
`P_aykel Healthcare Limited v. ResMed Corp, Case No._l 6c_v6099. The follqwirjig day,
`Fisher & Palyu/)lgel filed the Complaint in this case, and dismissed the Complaint
`1 ed in
`the Central
`istr_ict. Within an hour of Fisher & Paykel’s filing in this case, ResMed
`filed its Complaint.
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`ResMed does not dispute that it filed the above-referenced Complaint. It argues,
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`however, that it dismissed that case without prejudice, thereby avoiding the statutory
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`bar to inter partes review. ResMed argues the PTAB has found that interpartes review
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`is not barred if the previously filed complaint is dismissed without prejudice. See, e. g.,
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`Trisrar Products, Inc. v. Choon ’s Design, LLC, Case IPR20l5-01883, 2016 WL
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`2865739 (Patent Trial and Appeal Bd. Mar. 9, 2016); Microsoft Corp. V. Parallel
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`Networks Licensing, LLC, Case IPR2015-00483, 2015 WL 4760575 (Patent Trial and
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`Appeal Bd. July 15, 2015); Cyanorech Corp. 12. Bd. of Trustees ofthe Univ. ofIllinois,
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`Case IPR2013-00401, 2013 WL 8563804 (Patent Trial and Appeal Bd. Dec. 19, 2013).
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`In those cases, the PTAB correctly notes that voluntary dismissal of an action leaves
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`“‘the parties as though the action had never been brought. ’” Tristar Products, 2015 WL
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`2865739, at * 4 (quoting Macauto USA. v. BOS GmbH& KG, Case IPR2012—0004,
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`slip. op. at 15 (Patent Trial and Appeal Bd. Jan. 24, 2013)). See also 9 Charles Alan
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`Wright & Arthur R. Miller, Federal Practice and Procedure § 2637, at 321 (2d ed. 1995)
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`(stating “as numerous federal courts have made clear, a voluntary dismissal without
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`prejudice under Rule 41(a) leaves the situation as if the action never had been filed”).
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`ResMed further argues that when § 315(a)(1) was enacted in 201 1, at least eight
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`Circuits had already determined that a dismissal without prejudice makes the situation
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`as if the action never had been filed. Quoting Astoria Federal Sav. and Loan Ass ’n v.
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`Solimino, 501 U.S. 104, 108 (1991), ResMed points out: “‘[W]here a c0mmon—law
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`principle is well established,’
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`‘the courts may take it as given that Congress has
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`legislated with an expectation that the principle will apply[.] ’” (Reply Br. at 4.) ResMed
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`argues that § 3 1 5(a)( 1) uses the word “filed” consistently with the settled understanding
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`that a suit dismissed without prejudice is treated as if it was not “filed” at all, and thus
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`does not bar institution of an IPR. This Court agrees.
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`Accordingly, “[b]ecause the effect of a voluntary dismissal without prejudice is
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`to render the prior action a nullity, such actions cannot give rise to a statutory bar under
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`35 U.S.C. § 315(a)(1).” Tristar Products, 2015 WL 2865739, at * 4. The reasoning of
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`the PTAB decisions is persuasive, and this Court adopts it here. Under that reasoning,
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`ResMed’s petitions would not be barred by § 315(a)(l). Thus, Fisher & Paykel’s
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`statutory bar argument does not warrant denial of the motion to stay.
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`B. Motion to Stay
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`“Courts have inherent power to manage their dockets and stay proceedings,
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`including the authority to order a stay pending conclusion of a PTO reexamination.”
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`Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (citations omitted).
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`District courts in the Ninth Circuit consider three factors in determining whether to
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`order a stay pending inter partes review of a patent. Those factors are: “‘( 1) the stage
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`of litigation; (2) whether a stay would cause undue prejudice or present a clear
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`disadvantage to the non—moving party; and (3) whether a stay will simplify the issues
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`in question and the trial of the case?” Palomar Techs, Inc. v. MRSI Sys.. LLC, No. 15-
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`cv—1484 JLS (KSC), 2016 U.S. Dist. LEXIS 143624, at *2—3 (S.D. Cal. June 14, 2016)
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`(quoting Sorensen v. Giant Int’! (USA) Ltd, Nos. 07cv2l2l, et seq., 2009 U.S. Dist.
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`LEXIS 118748, at *2 (S.D. Cal. Dec. 21, 2009)).
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`L
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`Stage of Litigation
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`Here, the first factor, stage of litigation, weighs in favor of granting a stay. This
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`case was filed just over three months ago on August 16, 2016. ResMed filed an Answer
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`and Counterclaim on September 7, 2016, and filed the present motion the following
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`day. The Court has not yet scheduled an Early Neutral Evaluation Conference, and the
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`parties have yet to conduct any discovery. Given the early stage of the litigation, this
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`factor weighs in favor of granting a stay. See Market—Aler2‘s Pty. Ltd. v. Bloomberg
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`Finance L.P. , 922 F.Supp.2d 486, 494 (D. Del. 2013) (quoting SenoRx, Inc. v. Hologic,
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`Inc., No. 12-173-LPS-CJB, 2013 WL 144255, at *5 (D. Del. Jan. 11, 2013)) (“Staying
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`a case at an early juncture ‘can be said to advancejudicial efficiency and maximize the
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`likelihood that neither the [c]ourt nor the parties expend their assets addressing invalid
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`claims. ’”)
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`2,
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`Undue Pre'udice/Clear Disadvantage to Fisher & Paykel
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`The next factor is whether the imposition of a stay would unduly prejudice or
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`present a clear disadvantage to Fisher & Paykel. ResMed asserts a stay would not do
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`so. Fisher & Paykel disagrees.
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`In support of its assertion that it would suffer prejudice, Fisher & Paykel relies
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`heavily on the parties’ relationship as direct business competitors. “Courts are hesitant
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`to grant a stay if the parties are direct competitors.” Palomar Techs, 2016 U.S. Dist.
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`8 LEXIS 143624, at * 10. “This is ‘because of the risk that Plaintiff may suffer harm that
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`is not eompensable by readily calculable money damages.” Id. at * 10-1 1 (quoting TPK
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`10 Touch Solutions, Inc. v. Wintek Electra-Optics C0rp., No. 13-cv—022 l 8-] ST, 2013 U.S.
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`1 1 Dist. LEXIS 162521, at *6 (N.D. Cal. Nov. 13, 2013)) (internal quotation marks
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`12 omitted). Here, there is no dispute the parties are direct business competitors.
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`13 However, Fisher & Paykel fails to present any evidence or argument as to why that
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`relationship would cause it to suffer harm that would not be eompensable by money
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`damages. In the absence of such a showing, the prejudice factor does not weigh against
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`the imposition of a stay.
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`Whether a stay would place Fisher & Paykel at a clear disadvantage is a closer
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`18 question, but ultimately, it, too, does not warrant denial of the motion. Clearly, Fisher
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`19 & Paykel would be placed at a disadvantage if its claims were put on hold while
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`20 ResMed’s claims were allowed to proceed. However, Fisher & Paykel has its own
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`claims in other jurisdictions that would not be affected if a stay is imposed here.
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`22 Furthermore, in defending against ResMed’s claims here, Fisher & Paykel has the
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`opportunity to invalidate ResMed’s patents, the opportunity to prove noninfringement
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`and the opportunity to resolve at least some ofthe issues underlying the parties’ present
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`disputes. Thus, this factor does not warrant denial of the motion to stay.
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`;
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`Simplification of Issues and Trial
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`The final factor for consideration is whether imposition ofa stay will simplify the
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`issues and streamline any trial. ResMed argues a stay will accomplish both of these
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`objectives. Fisher & Paykel does not necessarily disagree, but instead argues ResMed’s
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`argument is speculative.
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`The Court agrees with Fisher & Paykel that any analysis of this factor is
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`inherently speculative. However, should the PTAB grant the petitions for review, it is
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`likely those proceedings would simplify the issues in this case and streamline the trial
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`in a number of possible ways. The PTAB could invalidate certain or all of Fisher &
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`Paykel’s patents.
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`It could also affirm the validity of those patents, and in the course
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`thereof, provide the Court with guidance on the interpretation and construction of the
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`patent claim terms. The proceedings could also narrow ResMed’s invalidity defenses
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`by way of estoppel. In light ofthese possible outcomes, a stay could simplify the issues
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`in this case and streamline any trial. Accordingly, this factor weighs in favor of a stay.
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`III.
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`CONCLUSION AND ORDER
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`Considering the factors discussed above, the Court grants ResMed’s motion to
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`stay Fisher & Paykel ’s claims pending resolution ofResMed’s petitions for interpartes
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`review. Counsel shall inform the Court when the PTAB decides to grant or deny the
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`petitions for review, and at that time advise the Court whether the stay should be
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`continued.
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`IT IS SO ORDERED.
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`DATED: November 22, 2016
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`iio_N. DANA M. S_ABRAW
`United States D1str1ct Judge
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