Case 6:16-cv-00961-RWS-JDL Document 51 Filed 11/11/16 Page 1 of 18 PageID #: 2247
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
`
`REALTIME DATA LLC d/b/a IXO,
`Plaintiff,
`
`v.
`RACKSPACE US, INC.; NETAPP, INC.;
`and SOLIDFIRE, LLC,
`Defendants.
`
`Case No. 6:16-cv-961
`
`LEAD CASE
`
`JURY
`
`DEFENDANTS NETAPP, INC. AND SOLIDFIRE, LLC MOTION TO STAY
`LITIGATION PENDING INTER PARTES REVIEW OF PATENTS-IN-SUIT
`
`Realtime Ex. 2007
`NetApp v. Realtime
`IPR2017-01660
`
`

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`Case 6:16-cv-00961-RWS-JDL Document 51 Filed 11/11/16 Page 2 of 18 PageID #: 2248
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`TABLE OF CONTENTS
`
`
`Page
`
`
`I.
`
`FACTUAL BACKGROUND ............................................................................................ 2
`
`A.
`
`B.
`
`C.
`
`The Parties and Patents-in-Suit .............................................................................. 2
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`IPR Petitions .......................................................................................................... 3
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`The Related Actions and Pending IPR Petitions.................................................... 3
`
`II.
`
`LEGAL STANDARD ........................................................................................................ 6
`
`A.
`
`Motion to Stay........................................................................................................ 6
`
`III.
`
`ARGUMENT ..................................................................................................................... 6
`
`A.
`
`B.
`
`C.
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`The Case Is at a Very Early Stage of Litigation. ................................................... 7
`
`A Stay Will Not Cause any Undue Prejudice or Tactical Disadvantage to
`Realtime. ................................................................................................................ 8
`
`A Stay Will Simplify the Issues and Conserve the Resources of the Parties
`and the Court. ....................................................................................................... 10
`
`IV.
`
`CONCLUSION ................................................................................................................ 12
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`
`
`
`
`i
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`
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Automated Merch. Sys., Inc. v. Crane Co.,
`357 F. App’x 297 (Fed. Cir. 2009) ............................................................................................6
`
`Brixham Solutions Ltd. v. Juniper Networks, Inc.,
`No. 13-cv-00616-JCS, 2014 WL 1677991 (N.D. Cal. Apr. 28, 2014) ............................8, 9, 10
`
`e-Watch, Inc. v. Lorex Can., Inc.,
`No. H-12-3314, 2013 U.S. Dist. LEXIS 138198 (S.D. Tex. Sept. 26, 2013) ............................9
`
`Ethicon, Inc. v. Quigg,
`849 F.2d 1422 (Fed. Cir. 1988)..................................................................................................6
`
`Evolutionary Intelligence LLC v. Yelp Inc.,
`No. C-13-03587 DMR, 2013 WL 6672451 (N.D. Cal. Dec. 18, 2013).....................................9
`
`Finjan, Inc. v. Symantec Corp.,
`139 F. Supp. 3d 1032 (N.D. Cal. 2015) .............................................................................11, 12
`
`Finjan, Inc. v. Symantec Corp.,
`No. 14-cv-02998-HSG, 2016 WL 6563342 (N.D. Cal. Nov. 4, 2016) ....................................11
`
`Landmark Tech., LLC v. iRobot Corp.,
`No. 6:13cv411 JDL, 2014 WL 486836 (E.D. Tex. Jan. 24, 2014) ..........................................10
`
`Market-Alerts Pty. Ltd. v. Bloomberg Fin. L.P.,
`922 F. Supp. 2d 486 (D. Del. 2013) ...........................................................................................9
`
`NFC Tech. LLC v. HTC Am., Inc.,
`No. 2:13-CV-1058-WCB, 2015 WL 1069111 (E.D. Tex. Mar. 11, 2015) ................................8
`
`Norman IP Holdings, LLC v. TP-Link Techs., Co.,
`No. 6:13-cv-384-JDL, 2014 WL 5035718 (E.D. Tex. Oct. 8, 2014) .........................................7
`
`Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005)................................................................................................11
`
`Smartflash LLC v. Apple Inc.,
`621 F. App’x 995 (Fed. Cir. 2015) ..........................................................................................10
`
`Southwire Co. v. Cerro Wire, Inc.,
`750 F. Supp. 2d 775 (E.D. Tex. 2010) ...................................................................................6, 7
`
`sf-3693525
`
`ii
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`St. Clair Intellectual Prop. Consultants, Inc. v. Canon Inc.,
`412 F. App’x 270 (Fed. Cir. 2011) ..........................................................................................11
`
`VirtualAgility Inc. v. Salesforce.com, Inc.,
`759 F.3d 1307 (Fed. Cir. 2014)..................................................................................................8
`
`Statutes
`
`35 U.S.C. § 314(a) ...........................................................................................................................3
`
`35 U.S.C. § 315(e)(2) .......................................................................................................................9
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`35 U.S.C. § 316(a)(11) .....................................................................................................................3
`
`Other Authorities
`
`77 Fed. Reg. 48,680 (Aug. 14, 2012) (to be codified at 37 C.F.R. § 42.100 et seq.) ......................3
`
`
`
`
`
`
`iii
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`Case 6:16-cv-00961-RWS-JDL Document 51 Filed 11/11/16 Page 5 of 18 PageID #: 2251
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`This is a patent infringement lawsuit involving seven complex, interrelated patents
`
`asserted by non-practicing entity Realtime Data LLC (“Realtime”). Realtime alleges that
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`Defendants NetApp, Inc. (“NetApp”) and SolidFire, LLC (collectively “the NetApp
`
`Defendants”) infringe an as-yet undefined set of the 205 claims in six of the seven patents.1 The
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`NetApp Defendants move to stay all proceedings in this action pending the resolution of nine
`
`petitions for inter partes review (“IPR”) before the Patent Trial and Appeal Board (“PTAB”)
`
`challenging five of the six asserted patents. The other asserted patent is closely related to the
`
`five patents that are already the subject of instituted IPRs or pending IPR petitions. Indeed, all
`
`six patents share the same sole inventor, concern the same technology (data compression), and as
`
`Realtime concedes, share common issues of claim construction. Any narrowing of issues that
`
`occurs in the nine pending IPRs, therefore, will likely streamline questions of claim construction,
`
`validity, and infringement as to all six of the asserted patents.
`
`The circumstances of this case strongly favor a stay under the three factors courts
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`consider in deciding whether to stay an action pending IPR proceedings. First, this case is at its
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`infancy: the pleadings are not settled2 and the initial scheduling conference has not taken place.
`
`Discovery has not even begun and major litigation events, such as the Markman hearing, will not
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`take place until the middle of next year. Second, at this early stage, Realtime would not suffer
`
`any undue prejudice from a stay, especially because monetary damages and prejudgment interest
`
`can fully compensate Realtime for any delay caused by the stay. Finally, given the large number
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`of patents and potential claims at issue, permitting the IPRs to proceed before the litigation
`
`
`1 Realtime has asserted the seventh patent against only Rackspace in this litigation.
`2 Rackspace US, Inc., the other named defendant, has not yet answered the complaint; instead, Rackspace
`filed a motion to dismiss the amended complaint on September 6, 2016. Dkt. No. 26.
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`
`
`1
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`

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`would serve the interests of efficiency by ensuring that the parties and the Court do not waste
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`resources litigating patent claims that are found invalid or that are narrowed by claim
`
`construction positions taken by Realtime during the IPRs.
`
`Accordingly, the NetApp Defendants request that the Court stay the litigation pending the
`
`resolution of the pending IPR petitions.
`
`I.
`
`FACTUAL BACKGROUND
`
`A.
`
`The Parties and Patents-in-Suit
`
`Realtime filed this action on June 29, 2016, asserting seven patents—with a total of
`
`240 claims—relating to methods of data compression: U.S. Patent Nos. 7,161,506 (“’506
`
`patent”), 9,054,728 (“’728 patent”), 7,378,992 (“’992 patent”), 7,415,530 (“’530 patent”),
`
`8,643,513 (“’513 patent”), 9,116,908 (“’908 patent”), and 7,358,867 (“’867 patent”).3
`
`Compl. ¶¶ 13-486, Dkt. No. 1. Realtime filed an amended complaint on August 31, 2016 to
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`substitute one party, but made no changes to the allegations.4 Dkt. No. 24. On September 6,
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`2016, NetApp and SolidFire filed their answer, and the other defendant in this action,
`
`Rackspace US, Inc., filed a motion to dismiss for failure to state a claim. Dkt. Nos. 26, 28.
`
`Concurrently with this motion, the NetApp Defendants have moved to transfer this
`
`action to the Northern District of California, the forum where the vast majority of evidence
`
`and witnesses are located. No other progress has been made in this litigation—in fact the
`
`initial scheduling conference has yet to take place.
`
`
`3 Realtime has asserted the ’867 patent against only Rackspace in this litigation.
`4 NetApp acquired Solidfire, Inc. in February 2016 and that entity no longer exists. After NetApp made
`this known, Realtime filed an amended complaint to remove Solidfire, Inc. and add Solidfire, LLC (which
`is wholly-owned by NetApp) as a defendant.
`
`
`
`
`2
`
`

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`
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`B.
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`IPR Petitions
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`As this Court is no doubt aware, IPR petitions were created by Congress to “establish a
`
`more efficient and streamlined patent system that will improve patent quality and limit
`
`unnecessary and counterproductive litigation costs” and “to create a timely, cost-effective
`
`alternative to litigation.” 77 Fed. Reg. 48,680 (Aug. 14, 2012) (to be codified at 37 C.F.R.
`
`§ 42.100 et seq.).
`
`IPR institution decisions are made upon a determination that the petitioning party has
`
`established “a reasonable likelihood that the petitioner would prevail with respect to at least
`
`[one] of the claims challenged in the petition.” 35 U.S.C. § 314(a). Once the IPR is
`
`instituted, absent an extension for good cause, the Patent Trial and Appeals Board must make
`
`a final determination on validity within a year after institution. 35 U.S.C. § 316(a)(11).
`
`C.
`
`The Related Actions and Pending IPR Petitions
`
`Realtime has filed eight actions against other technology companies, the earliest of which
`
`was filed on May 8, 2015, asserting nearly the identical set of patents asserted in this action. See
`
`Order of Consolidation, Realtime Data, LLC v. Actian Corp., No. 6:15cv463-RWS-JDL
`
`(“Actian”), Dkt. No. 16 (E.D. Tex. July 23, 2015), attached as Ex. 1 to the Declaration of Colette
`
`Reiner Mayer (“Mayer Decl.”), filed concurrently herewith. Several of the defendants in these
`
`earlier filed actions have filed IPR petitions.
`
`Nine IPR petitions are currently under consideration by the PTAB on five of the six
`
`patents asserted against the NetApp Defendants. There are one or more pending IPRs or IPR
`
`petitions for the ’992, ’530, ’513,’908, and ’728 patents:
`
`
`
`
`3
`
`

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`Case 6:16-cv-00961-RWS-JDL Document 51 Filed 11/11/16 Page 8 of 18 PageID #: 2254
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`Patent No./Filer
`
`Date Filed/Status
`
`IPR No. Claims
`Challenged
`48
`
`’992 patent
`Oracle America, Inc.
`’992 patent
`Riverbed Technology, Inc. et al.5
`
`IPR2016-
`00373
`IPR2016-
`00980
`
`’530 patent
`Riverbed Technology, Inc. et al.
`
`IPR2016-
`00972
`
`’530 patent
`Oracle America, Inc.
`
`’513 patent
`Oracle America, Inc.
`
`IPR2016-
`01671
`
`IPR2016-
`00374
`
`’513 patent
`Riverbed Technology, Inc. et al.
`
`IPR2016-
`00978
`
`’908 patent
`Riverbed Technology, Inc. et al.
`
`IPR2016-
`01002
`
`’908 patent
`Oracle America, Inc.
`
`’728 patent
`Oracle America, Inc.
`
`Mayer Decl. Exs. 2-16.
`
`IPR2016-
`01672
`
`IPR2017-
`00108
`
`48, 49
`
`1-5, 9-12,
`14, 18, 19,
`24
`1-5, 9-12,
`14, 18, 19,
`24
`1, 2, 4, 6,
`11-16, 18-
`20, 22
`1-4, 6, 10-
`16, 18-20,
`22
`1, 2, 4-6, 9,
`11, 21, 22,
`24, 25
`1, 2, 4-6, 9,
`11, 21, 22,
`24, 25
`1, 17
`
`Dec. 22, 2015
`Institution granted June 27, 2016
`Apr. 29, 2016
`Corrected petition, May 11, 2016
`Institution granted Nov. 1, 2016
`Apr. 29, 2016
`Institution granted Nov. 1, 2016
`
`Sept. 6, 2016
`No institution decision yet
`
`Dec. 22, 2015
`Institution granted June 27, 2016
`
`Apr. 29, 2016
`Institution granted Nov. 1, 2016
`
`May 5, 2016
`Institution granted Nov. 4, 2016
`
`Sept. 6, 2016
`No institution decision yet
`
`Oct. 24, 2016
`No institution decision yet
`
`In its complaint, Realtime identified only one exemplary asserted claim in each of the six
`
`patents asserted against the NetApp Defendants. The above IPR proceedings will impact these
`
`asserted claims as well as the other claims of the asserted patents. In total, five of the six
`
`asserted patents against NetApp are the subject of instituted IPRs or pending IPR petitions that
`
`
`5 Riverbed Technology, Inc.; Dell Inc.; SAP America, Inc.; Sybase, Inc.; Hewlett-Packard Enterprise Co.;
`HP Enterprise Services, LLC; Teradata Operations, Inc.; EchoStar Corporation; and Hughes Network
`Systems, LLC.
`
`
`
`
`4
`
`

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`have yet to be instituted. For the four patents on which IPRs have already been instituted (the
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`’992, ’530, ’513, and ’908 patents), all of the claims asserted against the NetApp Defendants in
`
`the complaint are under review by the PTAB. See Mayer Decl. Exs. 2-3 (Petition and Institution
`
`Decision for IPR2016-00373), Exs. 4-5 (Petition and Institution Decision for IPR2016-00980),
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`Exs. 9-10 (Petition and Institution Decision for IPR2016-00374), Exs. 11-12 (Petition and
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`Institution Decision for IPR2016-00978), Exs. 6-7 (Petition and Institution Decision for
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`IPR2016-00972), Exs. 13-14 (Petition and Institution Decision for IPR2016-01002). For an
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`additional patent (the ’728 patent), a pending IPR petition covers the asserted claim from the
`
`complaint. (Mayer Decl. Ex. 16 (Petition for IPR2017-00108).) Finally, although one patent
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`asserted against the NetApp Defendants—the ’506 patent—is not part of an instituted IPR or
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`pending IPR petition, it is related to the patents for which IPR proceedings are already instituted
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`and will be impacted those proceedings.
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`For example, all six patents asserted against the NetApp Defendants name the same
`
`inventor—James Fallon—and are closely related in subject matter (data compression). Four of
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`the six patents are “related” in that they are members of the same patent family and share the
`
`same specification—the ’506, ’992, ’513, and ’728 patents. The remaining two patents—the
`
`’530 and ’908 patents—are related to each other. As shown in the table above, both families of
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`patents have instituted IPR proceedings pending before the PTAB.
`
`There are also similar claim terms among the family members and even between the two
`
`families. The lead actions on these patents have already had a Markman hearing6 and the claim
`
`terms in dispute are telling regarding the overlapping issues among the patents. For example, the
`
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`6 The Court construed five patents, four of which are asserted in this action: 7,378,992, 7,415,530,
`8,643,513, and 9,116,908.
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`5
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`parties identified eighteen terms for construction and submitted agreed constructions for four
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`additional terms. Joint Claim Construction and Prehearing Statement, Actian, Dkt. No. 295
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`(E.D. Tex. Apr. 18, 2016) (Mayer Decl. Ex. 17). Terms such as “data block” and “compression”
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`appear in every one of the asserted patents and were construed (by agreement) without
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`distinction to which patent the terms appeared in. Claim Construction Order at 39-40, Actian,
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`Dkt. No. 362 (E.D. Tex. Jul. 28, 2016) (Mayer Decl. Ex. 18). It is clear that any narrowing of
`
`issues that occurs in any of the above IPR proceedings may bear on all of the asserted patents.
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`II.
`
`LEGAL STANDARD
`
`A. Motion to Stay
`
`“Courts have inherent power to manage their dockets and stay proceedings, including the
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`authority to order a stay pending conclusion of a PTO reexamination.” Ethicon, Inc. v. Quigg,
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`849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (internal citations omitted); see also Automated Merch.
`
`Sys., Inc. v. Crane Co., 357 F. App’x 297, 303 (Fed. Cir. 2009).
`
`Courts consider three factors when determining whether to grant a stay pending IPR: (1)
`
`the status of litigation; (2) whether a stay would unduly prejudice or present a clear tactical
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`disadvantage to the non-moving party; and (3) whether a stay will simplify the issues and the
`
`trial of the case. Southwire Co. v. Cerro Wire, Inc., 750 F. Supp. 2d 775, 778 (E.D. Tex. 2010).
`
`III. ARGUMENT
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`All three factors strongly favor granting an immediate stay: (1) This case is in its infancy;
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`(2) no prejudice will result because Realtime is a non-practicing entity that does not compete
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`with defendants; and (3) the possible elimination of 44 claims from five of the six asserted
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`patents would significantly simplify the issues and promote efficiency.
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`6
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`A.
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`The Case Is at a Very Early Stage of Litigation.
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`“Courts often find the stage of litigation weighs in favor of a stay if there remains a
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`significant amount of work ahead for the parties and the court, even when the parties and/or the
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`court have already devoted substantial resources to the litigation.” Norman IP Holdings, LLC v.
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`TP-Link Techs., Co., No. 6:13-cv-384-JDL, 2014 WL 5035718, at *3 (E.D. Tex. Oct. 8, 2014)
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`(granting a stay where discovery and claim construction were not complete, and IPR could
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`reduce the issues in litigation).
`
`In Norman IP Holdings, the Court granted a stay despite the fairly late-stage of the
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`action. This case is at the opposite end of the spectrum—it is in its infancy. Here, the NetApp
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`Defendants have only just answered, and no other substantive actions have taken place.
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`Moreover, venue is in flux given Realtime’s tenuous ties to this forum, and the undeniable
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`efficiencies that would be gained by transferring this case to the Northern District of California.
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`There has been no initial scheduling conference, and therefore, no scheduling order,
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`infringement contentions, or invalidity contentions. The pleadings are not settled with respect to
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`one defendant (Rackspace), and claim construction is far in the future. The parties have
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`conducted no fact or expert discovery and no depositions. Because Realtime has yet to serve its
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`infringement contentions, even the scope of discovery is still unknown. In short, very little
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`resources have been expended to date.
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`In fact, this case is at an earlier stage than most other cases in which courts in this District
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`have granted stays. See, e.g., Order Granting Mot. to Stay at 5-6, e-Watch Inc. v. Apple, Inc.,
`
`No. 2:13-CV-1061, Dkt. No. 333 (E.D. Tex. Mar. 25, 2015) (Mayer Decl. Ex. 19) (granting a
`
`stay where the claim construction process was not complete and the close of discovery was not
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`for several months); Southwire, 750 F. Supp. 2d at 780 (noting that “[a]lthough the Court places
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`7
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`great importance on going to trial on the date set in the scheduling order,” the timing nonetheless
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`favored a stay where discovery was not complete).
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`Given the initial stage of this litigation, the substantial work necessary for the case to
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`proceed through trial, and the open question of venue, this is precisely the type of case where a
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`stay could avoid a substantial duplication of effort. The first factor thus weighs strongly in favor
`
`of a stay.
`
`B.
`
`A Stay Will Not Cause any Undue Prejudice or Tactical Disadvantage to
`Realtime.
`
`Realtime will suffer no undue prejudice or tactical disadvantage as a result of the stay.
`
`While Realtime may complain of minor inconveniences resulting from the brief delay in
`
`enforcing its patent rights, the patentee’s interest in the timely enforcement of its patents is
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`“present in every case in which a patentee resists a stay, and it is therefore not sufficient,
`
`standing alone, to defeat a stay motion.” NFC Tech. LLC v. HTC Am., Inc., No. 2:13-CV-1058-
`
`WCB, 2015 WL 1069111, at *2 (E.D. Tex. Mar. 11, 2015).
`
`This is especially true where, as here, the patentee seeks only monetary relief. Realtime’s
`
`First Amended Complaint seeks only damages, interest, and costs—not an injunction. See First
`
`Am. Compl. at 23-24, Dkt. No. 24. Staying the case “will not diminish the monetary damages to
`
`which [Realtime] will be entitled if it succeeds,” VirtualAgility Inc. v. Salesforce.com, Inc., 759
`
`F.3d 1307, 1318 (Fed. Cir. 2014), including via prejudgment interest. Nor can Realtime point to
`
`any competitive effects flowing from the stay. Realtime does not compete with any of the
`
`defendants, and a stay would have no effect on Realtime’s ongoing business of licensing
`
`activities.7 See NFC Tech., 2015 WL 1069111, at *3 (“NFCT does not dispute HTC’s
`
`
`7 Realtime is a non-practicing entity that does not market or sell any products. Brixham Solutions Ltd. v.
`(Footnote continues on next page.)
`
`8
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`contention that it does not compete with HTC and that monetary relief will be sufficient to
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`compensate it for any injury to its patent rights”); Market-Alerts Pty. Ltd. v. Bloomberg Fin. L.P.,
`
`922 F. Supp. 2d 486, 495 (D. Del. 2013) (“There is no evidence, however, that Market-Alerts
`
`directly competes with any of the defendants’ accused products, and its own responsive brief
`
`indicates that, at this point, patent infringement litigation represents its primary business. As
`
`such, this consideration does not suggest that a stay would cause Market-Alerts undue
`
`prejudice.”) (internal citations omitted).
`
`Even here, where certain IPRs have not yet been instituted, the risk of prejudice is slight.
`
`As the Southern District of Texas recently explained:
`
`If the USPTO declines the petitions for IPR, the stay will quickly be lifted
`resulting in little delay. However, if the USPTO accepts the IPR petitions, the
`continuation of this litigation will likely result in the unnecessary expenditure of
`the parties’ and court’s time and resources on claims that may be fundamentally
`altered by the USPTO’s determination regarding the patents-in-suit. Finding no
`undue prejudice, this factor weighs in favor of granting the stay.
`
`e-Watch, Inc. v. Lorex Can., Inc., No. H-12-3314, 2013 U.S. Dist. LEXIS 138198, at *5-6 (S.D.
`
`Tex. Sept. 26, 2013). Realtime itself will benefit from a narrower invalidity case, as the NetApp
`
`Defendants will be stopped from re-litigating the invalidity of any claims remaining after the
`
`IPRs on grounds they raised or reasonably could have raised during the IPRs. 35 U.S.C.
`
`§ 315(e)(2). In short, Realtime has no basis to assert that a stay pending resolution of IPR
`
`proceedings would cause any specific undue prejudice or tactical disadvantage. This factor thus
`
`weighs strongly in favor of granting a stay.
`(Footnote continued from previous page.)
`Juniper Networks, Inc., No. 13-cv-00616-JCS, 2014 WL 1677991, at *2 (N.D. Cal. Apr. 28, 2014) (“a
`non-practicing entity . . . cannot demonstrate any irreparable harm that might result from a stay”) (citation
`omitted). Since Realtime “does not market any products or services covered by the claims of the patents-
`in-suit and does not seek a preliminary injunction,” it “does not risk irreparable harm by the defendant’s
`continued use of the accused technology and can be fully restored to the status quo ante with monetary
`relief.” Evolutionary Intelligence LLC v. Yelp Inc., No. C-13-03587 DMR, 2013 WL 6672451, at *8
`(N.D. Cal. Dec. 18, 2013).
`
`
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`9
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`C.
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`A Stay Will Simplify the Issues and Conserve the Resources of the Parties
`and the Court.
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`The complexity of this case strongly favors a stay pending IPR. “[T]he focus of this
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`factor is on streamlining or obviating the trial by providing the district court with the benefit of
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`the PTO’s consideration of the validity of the patents before either the court or the jury is tasked
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`with undertaking that same analysis.” See Smartflash LLC v. Apple Inc., 621 F. App’x 995, 1000
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`(Fed. Cir. 2015) (discussing a stay pending a CBM petition). Given the high institution rate for
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`IPR petitions,8 IPR proceedings are likely to simplify the issues for litigation and trial for all of
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`the asserted patents. See, e.g., Landmark Tech., LLC v. iRobot Corp., No. 6:13cv411 JDL, 2014
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`WL 486836, at *2 (E.D. Tex. Jan. 24, 2014) (finding PTAB review could reduce discovery
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`problems, and streamline and narrow the issues for trial).
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`Here, nine IPR petitions are pending on five of the six asserted patents.9 See supra
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`Section I.C (all exemplary claims in complaint for these five patents raised in IPR petitions).
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`Moreover, institution has already been granted on four of the asserted patents covering both
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`patent families at issue in this litigation. PTAB review thus has the potential to significantly
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`streamline this action, especially given the high rate of invalidation of instituted claims.10
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`Regardless of the outcome of PTAB proceedings, a stay will simplify this case. Any
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`claims that are cancelled will not need to be litigated in this case. As to all claims—even ones
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`that survive the IPR process—Realtime’s distinctions to the PTO regarding the prior art used to
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`8 See Brixham Solutions, 2014 WL 1677991, at *1 (“Given the high rate at which the PTO grants
`petitions for inter partes review, even a petition requesting review is likely to simplify the issues in the
`case, at least where, as here, the petition[s] contain[ ] no obvious deficiencies.”) (citations omitted).
`9 The ’992, ’530, ’513, ’728, and ’908 patents.
`10 See, e.g., PTAB Kill Rates: How IPRs Are Affecting Patents (2015), available at
`http://www.law360.com/articles/699860/ptab-kill-rates-how-iprs-are-affecting-patents (noting that
`“[o]nce an IPR is instituted . . . the PTAB continues to invalidate those challenged claims at a very high
`rate”) (Mayer Decl. Ex. 20).
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`Case 6:16-cv-00961-RWS-JDL Document 51 Filed 11/11/16 Page 15 of 18 PageID #: 2261
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`challenge the claims in the IPR proceedings will likely clarify the scope of the claims and affect
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`claim construction and infringement. Phillips v. AWH Corp., 415 F.3d 1303, 1317 (Fed. Cir.
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`2005) (statements made in prosecuting the patent can result in narrowed claim scope); St. Clair
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`Intellectual Prop. Consultants, Inc. v. Canon Inc., 412 F. App’x 270, 275-76 (Fed. Cir. 2011)
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`(“Reexamination statements are relevant prosecution history when interpreting claims.”) (citation
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`and internal quotation marks omitted); Finjan, Inc. v. Symantec Corp., No. 14-cv-02998-HSG,
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`2016 WL 6563342, at *2 (N.D. Cal. Nov. 4, 2016) (based on statements patent owner made
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`during IPR proceedings, granting motion for additional claim construction after Markman
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`briefing and hearing were previously completed). Furthermore, the PTAB’s decisions regarding
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`any claims that are affirmed may provide guidance to the Court in ruling on validity issues.
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`These benefits will not only apply to the five asserted patents that are currently the
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`subject of IPR petitions and proceedings, but also to the other asserted patent. All six asserted
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`patents are closely related, and not surprisingly, many of the claim terms have previously been
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`construed consistently across the two separate families of patents. See supra Section I.C. For
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`the same reasons, all six patents will likely be subject to many of the same prior art references.
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`Thus, regardless of the outcome of the IPR proceedings, the entire case will be simplified by
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`Realtime’s distinctions to the PTO as well as the PTAB’s guidance in ruling on the petitions.
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`Accordingly, immediately staying the case pending the resolution of the IPR proceedings
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`will simplify the litigation, provide guidance for the Court on the pertinent issues, and ensure
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`that the parties and the Court do not waste resources on litigation matters that would be pointless
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`to pursue. A stay is also warranted here as it will “effectuate[ ] the intent of the AIA by allowing
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`the agency with expertise to have the first crack at cancelling any claims that should not have
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`issued in the patents-in-suit before costly litigation continues.” Finjan, Inc. v. Symantec Corp.,
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`Case 6:16-cv-00961-RWS-JDL Document 51 Filed 11/11/16 Page 16 of 18 PageID #: 2262
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`139 F. Supp. 3d 1032, 1038 (N.D. Cal. 2015) (citing Software Rights Archive, LLC v. Facebook,
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`Inc., No. 12-cv-03970-RMW, 2013 WL 5225522, at *6 (N.D. Cal. Sept. 17, 2013)).
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`IV. CONCLUSION
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`Because all three factors as discussed above weigh strongly in favor of a stay, the NetApp
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`Defendants request that the Court stay the litigation pending the resolution of the IPR petitions.
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`Dated: November 11, 2016
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`Respectfully submitted,
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`
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`/s/ Colette Reiner Mayer
`Melissa R. Smith
`State Bar No. 24001351
`GILLAM & SMITH, L.L.P.
`303 S. Washington Avenue
`Marshall, Texas 75670
`Telephone: (903) 934-8450
`Facsimile: (903) 934-9257
`melissa@gillamsmithlaw.com
`
`Michael A. Jacobs (CA SBN 111664)
`(admitted in the Eastern District of Texas)
`Robert J. Esposito (CA SBN 267031)
`MORRISON & FOERSTER LLP
`425 Market Street
`San Francisco, California 94105-2482
`Telephone: (415) 268-7000
`Facsimile: (415) 268-7522
`mjacobs@mofo.com
`resposito@mofo.com
`
`Colette Reiner Mayer (CA SBN 263630)
`(admitted in the Eastern District of Texas)
`MORRISON & FOERSTER LLP
`755 Page Mill Road
`Palo Alto, CA 94304
`Telephone: (650) 813-5600
`Facsimile: (650) 494-0792
`CRMayer@mofo.com
`
`Attorneys for Defendants
`NETAPP, INC. and SOLIDFIRE, LLC
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`Case 6:16-cv-00961-RWS-JDL Document 51 Filed 11/11/16 Page 17 of 18 PageID #: 2263
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a true and correct copy of the foregoing document
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`has been served on November 11, 2016, to all counsel of record who are deemed to have
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`consented to electronic service via the Court’s CM/ECF system per Local Rule CV-5(a)(3).
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`/s/ Colette Reiner Mayer
`Colette Reiner Mayer
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`Case 6:16-cv-00961-RWS-JDL Document 51 Filed 11/11/16 Page 18 of 18 PageID #: 2264
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`CERTIFICATE OF CONFERENCE
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`The undersigned hereby certifies that counsel for Defendants NetApp, Inc. and SolidFire,
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`LLC, met and conferred with Plaintiff’s counsel pursuant to Local Rule CV-7(h) regarding this
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`substance of this motion. Plaintiff’s counsel indicated that Plaintiff opposes this motion.
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`/s/ Colette Reiner Mayer
`Colette Reiner Mayer
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