IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`CYWEE GROUP LTD.,
`
`P laintif.!,
`
`v.
`
`SAMSUNG ELECTRONICS CO. LTD.
`AND SAMSUNG ELECTRONICS
`AMERICA, INC.,
`
`Defendants.
`
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`
`Case No.2: 17-CV-00140-WCB-RSP
`
`MEMORANDUM OPINION AND ORDER
`
`FILED UNDER SEAL
`
`Before the Court is a motion by defendants Samsung Electronics Co., Ltd., and Samsung
`
`Electronics America, Inc., (collectively, "Samsung") for a stay pending inter partes review
`
`proceedings. Dkt. No. 291. The motion is GRANTED.
`
`BACKGROUND
`
`Plaintiff CyWee Group Ltd. ("CyWee") is the owner of US. Patent Nos. 8,441,438 ("the
`
`'438 patent") and 8,552,978 ("the '978 patent"). CyWee filed its initial complaint in this case on
`
`February 17, 2017, and its first amended complaint on March 3, 2017. Dkt. Nos. 1, 19. In its
`
`initial infringement contentions, served on July 12, 2017, CyWee asserted that Samsung had
`
`directly infringed claims 1,3-5,14-17, and 19 of the '438 patent, and claims 10 and 12 of the
`
`'978 patent. See Dkt. No. 291. In supplemental infringement contentions, served in September
`
`and October of2018, CyWee continued to assert the same claims against Samsung. See id
`
`Claim construction in this case has been conducted, and discovery is nearly complete. The
`
`trial is set to begin on May 13,2019. Dkt. No. 280.
`
`1
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0001
`
`

`

`This is one of eight similar cases that CyWee has filed against various companies in five
`
`different districts. On June 14, 2018, Google, Inc., a defendant in one of the other cases, filed
`
`petitions for inter partes review ("IPR") asking the Patent Trial and Appeals Board ("PTAB") to
`
`invalidate claims 1 and 3-5 of the '438 patent and claims 10 and 12 of the '978 patent. On
`
`December 11, 2018, the PT AB instituted inter partes review of the six claims identified by Google
`
`in its petitions, finding that Google had demonstrated a "reasonable likelihood of success" in
`
`showing that the challenged claims are unpatentable. On January 8, 2019, Samsung Electronics
`
`Co., Ltd., moved to join Google's IPRs and filed its own IPR petitions, identifying Samsung
`
`Electronics America, Inc., as the real party in interest. As a result of the IPR proceedings by
`
`Google and Samsung, six of the eleven asserted claims in this case will be reviewed for
`
`unpatentability by the PTAB.
`
`On January 18,2019, Samsung moved for a stay of further proceedings in this case pending
`
`the disposition of the IPR proceedings. Dkt. No. 291. The Court directed that briefing on the
`
`motion be conducted on an expedited basis. Although CyWee has consented to stays in five of the
`
`other six cases that are concurrently pending, 1 on January 25, CyWee filed an opposition to the
`
`motion for a stay in this case. Dkt. No. 297. Samsung filed a reply on January 29,2019. Dkt. No.
`
`300. CyWee filed a sur-reply on February 5, 2019. Dkt. No. 305.
`
`DISCUSSION
`
`The question whether a stay of district court proceedings should be granted when inter
`
`partes review is instituted on some or all of the claims at issue in the district court litigation has
`
`lOne of the original eight cases, CyWee Group Ltd v. Apple Inc., Case NO.4: 14-cv-1853
`(N.D. Ca1.), has been settled.
`
`2
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0002
`
`

`

`arisen on a number of occasions, and the principles governing the decision whether to stay the case
`
`have been set forth in some detail.
`
`A district court has inherent power to control its own docket, including the power to stay
`
`the proceedings before it. See Clinton v. Jones, 520 U.S. 681, 706 (1997).
`
`In particular, the
`
`question whether to stay proceedings pending review by the Patent and Trademark Office ("PTO")
`
`of the validity of the patent or patents at issue in the lawsuit is a matter committed to the district
`
`court's discretion. See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (request
`
`for a stay pending inter partes reexamination). A stay is particularly justified when "the outcome
`
`of a PTO proceeding is likely to assist the court in determining patent validity or eliminate the
`
`need to try infringement issues." NFC Tech. LLC v. HTC Am., Inc., Case No.2: 13-cv-l058, 2015
`
`WL 1069111, at *1 (E.D. Tex. Mar. 11,2015) (citing cases).
`
`District courts typically consider three factors when determining whether to grant a stay
`
`pending inter partes review of a patent in suit: "(1) whether the stay will unduly prejudice the
`
`nonmoving party; (2) whether the proceedings before the court have reached an advanced stage,
`
`including whether discovery is complete and a trial date has been set; and (3) whether the stay will
`
`likely result in simplifying the case before the court." Papst Licensing GmbH & Co., KG v. Apple,
`
`Inc., Case NO.6: 15-cv-l095, 2018 WL 3656491, at *2 (E.D. Tex. Aug. 1, 2018) (citing cases).
`
`Based on those factors, courts determine whether the benefits of a stay outweigh the inherent costs
`
`of postponing resolution of the litigation. EchoStar Techs. Corp. v. TiVo, Inc., No. 5:05-cv-81,
`
`2006 WL 2501494, at *1 (E.D. Tex. July 14,2006).
`
`The related context of Covered Business Methods ("CBM") review provides guidance as
`
`to the principles that apply to stay applications in the IPR setting. In the uncodified portion of the
`
`Leahy-Smith America Invents Act that was directed to CBM review proceedings, Congress set
`
`3
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0003
`
`

`

`forth four factors that govern whether a stay should be granted pending CBM review proceedings
`
`before the PTAB. Those four factors are:
`
`(A) whether a stay, or the denial thereof, will simplify the issues in question and
`streamline the trial;
`(B) whether discovery is complete and whether a trial date has been set;
`(C) whether a stay, or the denial thereof, would unduly prejudice the nonmoving
`party or present a clear tactical advantage for the moving party; and
`(D) whether a stay, or the denial thereof, will reduce the burden oflitigation on the
`parties and on the court.
`
`Pub. L. No. 112-29, § 18(b)(1), 125 Stat. 284, 331 (2011). Those statutory factors largely track
`
`the three factors traditionally used by courts in determining whether to grant stays pending post-
`
`grant review proceedings, with a fourth factor added. The fourth factor, which requires an inquiry
`
`into whether a stay will reduce the burden of litigation on the parties and the court, indicates that
`
`special attention should be given to minimizing the burdens of litigation. While the four-factor
`
`test that Congress enacted for stays in CBM proceedings does not expressly extend to IPR cases,
`
`the policy considerations that apply in the two contexts are similar, and the Federal Circuit has
`
`held that the fourth factor set forth in the CBM statute may properly be applied to stays in IPR
`
`cases as well. See Murata Mach. USA v. Daifuku Co., 830 F.3d 1357, 1362 (Fed. Cir. 2016); see
`
`also Neuro Cardiac Techs., LLC v. LivaNova, Inc., Civil Action No. H-18-1517, 2018 WL
`
`4901035, at *2 (S.D. Tex. Oct. 9, 2018); Ultratec, Inc. v. Sorenson Commc 'ns, Inc., No. 13-cv-
`
`346, 2013 WL 6044407, at *2 (W.D. Wis. Nov. 14,2013). The Court will therefore address the
`
`"burden of litigation" factor under the rubric of the "simplifying the issues" factor.
`
`The legislative history of the AlA makes it apparent that Congress intended for district
`
`courts to be liberal in granting stays pending CBM review. As Senator Schumer observed
`
`regarding the CBM review provision, Congress intended to place "a very heavy thumb on the scale
`
`4
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0004
`
`

`

`in favor of a stay being granted" once the PTAB instituted CBM review proceedings. 157 Congo
`
`Rec. S1363 (daily ed. Mar. 8,2011) (statement of Sen. Chuck Schumer).
`
`Congress's desire to enhance the role of the PTO and limit the burden of litigation on
`
`courts and parties was not limited to the CBM review context. The legislative history indicates
`
`that Congress recognized that the same underlying policy considerations that apply to CBM review
`
`apply to inter partes review as well. See H. Rep. No. 112-98, Part I, at 48 (2011) (statutory post-
`
`grant review procedures were designed to be "quick and cost effective alternatives to litigation");
`
`157 Congo Rec. S952 (daily ed. Feb. 28, 2011) (inter partes review was intended to provide a
`
`"faster, less costly alternative[] to civil litigation to challenge patents") (statement of Sen. Chuck
`
`Grassley); id. at S5319 (daily ed. Sept. 6,2011) (post-grant review of patents, including inter partes
`
`review, was meant to be "an inexpensive substitute for district court litigation" that "allows key
`
`issues to be addressed by experts in the field") (statement of Sen. Jon Kyl). In light of the parallel
`
`policies underlying the CBM and inter partes review proceedings, it is not surprising that courts
`
`have applied generally similar analysis to requests for stays in both settings.
`
`The benefits of inter partes review are the same as those served by CBM review: giving
`
`the agency an opportunity to reconsider patents that have become the focus oflitigation, relieving
`
`the courts of some of the burdens of deciding issues of obviousness and anticipation, and saving
`
`the courts from having to adjudicate infringement claims based on patents of questionable validity.
`
`For those reasons, courts have concluded that the "liberal policy" in favor of stays in CBM cases
`
`also applies to stays pending instituted IPR proceedings. See Nautilus, Inc. V. ICON Health &
`
`Fitness, Inc., Case No.1: 17-cv-154, 2018 WL 4215095, at *2 (D. Utah Sept. 4, 2018); Qualcomm
`
`Inc. V. Apple Inc., Case No. 3: 17-cv-2403, 2018 WL 4104966, at *1 (S.D. Cal. Aug. 29, 2018);
`
`Canfield Sci., Inc. V. Drugge, Case No. 16-4636,2018 WL 2973404, at *2 (D.N.J. June 13,2018);
`
`5
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0005
`
`

`

`Chrimar Sys. Inc. v. Ruckus Wireless, Inc., Case No. 16-cv-186, 2016 WL 5403595, at *3 (N.D.
`
`Cal. Sept. 26, 2016); Drink Tanks Corp. v. GrowlerWerks, Inc., 2016 WL 3844209, at *2 (D. Or.
`
`July 15, 2016); Gatearm Techs., Inc. v. Access Masters, LLC, Civil Action No. 14-62697, 2015
`
`WL 13752667, at *1 (S.D. Fla. July 13,2015); Robert Bosch Healthcare Sys., Inc. v. Cardiocom,
`
`LLC, Case No. C-14-1575, 2014 WL 3107447, at *3 (N.D. Cal. July 3, 2014). As this Court
`
`summarized the point, "after the PT AB has instituted review proceedings, the parallel district court
`
`litigation ordinarily should be stayed." NFC Tech., 2015 WL 1069111, at *7.
`
`The Court now turns to an analysis of each of the factors bearing on whether to grant a stay
`
`of the district court proceedings pending the resolution of the IPR proceeding. While those factors
`
`inform the Court's inquiry, the three-part test is not a prescriptive template. The court has the
`
`"discretionary prerogative to balance considerations beyond those captured by the three-factor stay
`
`test." Murata, 830 F.3d at 1362. "[U]1timately the Court must decide stay requests on a case-by-
`
`case basis." Norman IP Holdings, LLC v. TP-Link Techs., Co., Case No. 6: 13-cv-384, 2014 WL
`
`5035718, at *2 (E.D. Tex. Oct. 8, 2014); see also Image Processing Techs., LLC v. Samsung
`
`Elecs. Co., Case No. 2: 16-cv-505, 2017 WL 7051628, at *1 (E.D. Tex. Oct. 25, 2017) ("motions
`
`to stay are highly individualized matters"); Realtime Data LLC v., Actian Corp., Case No. 6:15-
`
`cv-463, at *2 (E.D. Tex. Nov. 29, 2016); LundMotion Prods., Inc. v. T-Max Hangzhou Tech. Co.,
`
`Case No. SACV 17-1914, 2019 WL 116784, at *2 (C.D. Cal. Jan. 2, 2019) ("the totality of the
`
`circumstances governs" (quoting Universal Elecs., Inc. v. Universal Remote Control, Inc., 943 F.
`
`Supp. 2d 1028, 1030-31 (C.D. Cal. 2013))); Qualcomm Inc., 2018 WL 4104966, at *1; Drink
`
`Tanks Corp., 2016 WL 3844209, at *2; Wonderland Nursery Goods Co. v. Baby Trend, Inc., Case
`
`No. EDCV 14-1153, 2015 WL 1809309, at *2 (C.D. Cal. Apr. 20, 2015); PersonalWeb Techs.,
`
`LLC v. Apple Inc., 69 F. Supp. 3d 1022, 1025 (N.D. Cal. 2014).
`
`6
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0006
`
`

`

`1. Prejudice
`
`CyWee argues that the delay inherent in granting a stay in this case would be unduly
`
`prejudicial. In its brief, CyWee relies mainly on the contention that any delay in the vindication
`
`of patent rights is prejudicial to a patent owner. To be sure, the interest in prompt enforcement of
`
`patent rights is entitled to weight. See NFC Tech., 2015 WL 1069111, at *2 (citing cases).
`
`However, that factor is present in every case in which a patentee resists a stay, and it is therefore
`
`not sufficient, standing alone, to defeat a stay motion. CyWee Grp. Ltd v. Huawei Device Co.,
`
`Case No.2: 17-cv-495, 2018 WL 4002776, at * 3 (E.D. Tex. Aug. 22, 2018); VirnetX Inc. v. Apple
`
`Inc., Case NO.6: 12-cv-855, 2018 WL 398433, at *3 (E.D. Tex. Jan. 12,2018); NFC Tech., 2015
`
`WL 1069111, at *2.
`
`Samsung argues that CyWee will suffer no undue prejudice from a stay because CyWee is
`
`a non-practicing entity and will be adequately compensated by a damages award in the event that
`
`a judgment is ultimately entered in its favor. CyWee responds that it is not a non-practicing entity,
`
`that it "is in the business of developing and providing cutting-edge motion sensing technologies
`
`for handheld devices such as videogame controllers and smartphones," that it developed "an early
`
`prototype gaming smartphone that incorporated CyW ee' s proprietary sensor fusion technologies,"
`
`and that it licenses its technology to others, and thus directly competes with companies such as
`
`Samsung that use their own sensor fusion technology or technology offered by third parties. Dkt.
`
`No. 297, at 2.
`
`Despite CyWee's claim to have participated in making a prototype gaming smartphone,
`
`nothing in CyWee's description of its current activities suggests that it is a competitor of
`
`Samsung's in the smartphone market. Instead, CyW ee' s claim to status as a Samsung competitor
`
`is based on its contention that it licenses its technology and that Samsung's use of different sensor
`
`7
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0007
`
`

`

`fusion systems injures CyWee by denying it potential licensing fees. But that is a claim that any
`
`non-practicing entity can make. The objective of every non-practicing entity is to license, and thus
`
`monetize, its technology either retrospectively in the form of a damages award or settlement, or
`
`prospectively in the form of a royalty agreement. Nothing in CyWee's characterization of its
`
`activities suggests any reason why a damages award, with pre-judgment interest, would not fully
`
`compensate it for any injury served, even if there is some delay in the resolution of the litigation.
`
`In such cases, the Federal Circuit has held, "[a] stay will not diminish the monetary
`
`damages to which [the plaintiff] will be entitled if it succeeds in its infringement suit-it only
`
`delays realization of those damages and delays any potential injunctive remedy." VirtualAgility
`
`Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1318 (Fed. Cir. 2014); see also Stragent LLC v. BMW
`
`ofN Am, LLC, Case No. 6: 16-cv-446, 2017 WL 3709083, at *2 ("mere delay in collecting those
`
`damages does not constitute undue prejudice" (quoting Crossroads Sys., Inc. v. Dot Hill Sys. Corp.,
`
`Case No. 13-ca-l025, 2015 WL 3773014, at *2 (W.D. Tex. June 16,2015))). And in a case such
`
`as this one, where CyWee is not a competitor of Samsung' s in the market for products that contain
`
`the technology at issue, the prospect of an injunction is low. Further undermining CyWee's
`
`suggestion as to the urgency of obtaining judicial relief is the fact that CyWee delayed for more
`
`than three years after the issuance of the' 438 and '978 patents before bringing suit against
`
`Samsung. See VirtualAgility, 759 F.3d at 1319 (undue prejudice not found where plaintiff waited
`
`nearly a year after the patent issued before bringing suit); LundMotion Prods., 2019 WL 116784,
`
`at *2 ("Plaintiff's own delay in bringing the instant action renders its arguments of undue prejudice
`
`unpersuasive.").
`
`In its reply brief, Samsung offers evidence that currently CyWee "is merely a holding
`
`company and does not sell any products or services." Dkt. No. 300, at 1; see Dkt. No. 300-2, at 3.
`
`8
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0008
`
`

`

`In its surreply brief, CyWee responds with evidence that CyWee Group Ltd. has a sister company,
`
`CyWee Motion, that was formed as a "more focused business unit," and that "has routinely
`
`licensed its sensor fusion solutions and software to competitors in the mobile technology space."
`
`Dkt. No. 305, at 1-2. Quoting testimony by a CyWee Motion corporate officer, CyWee contends
`
`that "the CyWee entities" would "receiv[e] more in royalties if companies like Samsung didn't
`
`steal their technology." Id at 2. Based on that testimony, CyWee argues that it is not a non-
`
`practicing entity, and that it should not be treated as such for purposes of determining whether a
`
`stay would prejudice CyWee.
`
`Nothing in CyWee's presentation persuades us that it should be regarded as a competitor
`
`of Samsung's. The testimony cited by CyWee acknowledges that CyWee does not currently
`
`produce any products, but owns and seeks to license at least the two patents at issue in this case.
`
`Based on the testimony of the CyWee Motion corporate officer, CyWee argues that it has
`
`"routinely licensed its sensor fusion solutions and software to competitors in the mobile technology
`
`space." Dkt. No. 305, at 2. The evidence cited by CyWee shows that in the past CyWee has
`
`licensed its technology on the condition that the licensee use CyWee software in the licensees'
`
`products. Dkt. No. 305-3, at 8-10. However, the evidence also shows that at about the time
`
`CyWee Motion was formed, in September 2014, CyWee "made the business decision to focus on
`
`patent licensing," and has "license[ d] its motion sensing technologies to other people, ...
`
`[i]ncluding licensing [the] 438 patent and 978 patent to other companies." Dkt. No. 300-2, at 3;
`
`Dkt. No. 305-3, at 15.
`
`Based on that evidence, the Court concludes that although CyWee (i.e., plaintiff CyWee
`
`Group Ltd., as opposed to CyWee Motion) may have been involved in the manufacture and sale
`
`of products in the past, it is properly characterized at present as a non-practicing entity focused on
`
`9
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0009
`
`

`

`patent licensing. The activities of CyWee' s related company, CyWee Motion, are irrelevant to the
`
`prejudice inquiry, since CyWee Motion is not the patent owner and is not a party to this action.
`
`See Poly-Am., L.P. v. GSI Lining Tech., Inc., 383 F.3d 1303, 1311 (Fed. Cir. 2004) (sister
`
`companies "may not enjoy the advantages of their separate corporate structure and, at the same
`
`time, avoid the consequential limitations of that structure-in this case, the inability of the patent
`
`holder to claim the lost profits of its non-exclusive licensee"). As such, any injury to CyWee
`
`Motion would not serve as the basis for a claim of prejudice to CyWee Group Ltd. In any event,
`
`nomenclature aside, nothing set forth in CyWee's briefs persuades the Court that an award of
`
`damages would be inadequate as a remedy if Samsung is ultimately found to have infringed
`
`CyWee's patents.
`
`CyWee's next argument regarding prejudice is that Samsung did not act reasonably
`
`promptly in filing its motion for a stay. CyWee first complains that Samsung "made no effort to
`
`stay this case for over seven months after the Google IPRs were filed." Dkt. No. 294, at 10
`
`(emphasis in original). But Samsung cannot be faulted for that delay. This Court (and many
`
`others) have made clear that an application for a stay after an IPR petition has been filed but before
`
`the petition has been granted is very likely to be denied. See NFC Tech., 2015 WL 1069111, at *4
`
`("While the PTAB's decision to institute inter partes review ordinarily means that there is a
`
`substantial likelihood of simplification of the district court litigation, that likelihood is far more
`
`speculative before the PTAB decides whether to institute inter partes review."); Trover Grp., Inc.
`
`v. Dedicated Micros USA, Case No.2: 13-cv-l047, 2015 WL 1069179, at *5-6 (E.D. Tex. Mar.
`
`11,2015); Freeny v. Apple Inc., Case No.2: 13-cv-361, 2014 WL 3611948, at *1 (E.D. Tex. July
`
`22, 2014). It would have been virtually pointless for Samsung to have sought a stay before the
`
`10
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0010
`
`

`

`IPR was instituted, as this Court would have almost certainly denied it; the decisions of courts in
`
`this district as well as other district courts make that abundantly clear.
`
`CyWee makes the further point that Samsung delayed for five weeks after the institution
`
`of Google's IPR before filing its motion for a stay. During that period, according to CyWee,
`
`Samsung "persisted in aggressively litigating this case." Dkt. No. 297, at 10. CyWee complains,
`
`in particular, that it was forced to expend substantial resources in preparing for and defending the
`
`depositions of its experts during that period.
`
`Google's IPR was instituted on December 11, 2018; Samsung moved to join that IPR on
`
`January 8, 2019; Samsung sought CyWee's agreement to a stay pending the resolution of the IPR
`
`on January 15, 2019, see Dkt. No. 297-15; and when CyWee on January 16, 2019, declined
`
`Samsung's invitation to join in a motion for a stay, see id, Samsung filed the present motion for a
`
`stay two days later, on January 18,2019. It is true that Samsung could have been more prompt in
`
`moving for a stay once the PTAB instituted the IPR proceedings in Google's case. Nonetheless,
`
`a period of five weeks is not exorbitant, particularly in light of the intervening holiday period and
`
`the need for Samsung to file papers seeking to join Google's IPR. Moreover, the Court does not
`
`perceive any severe and unilateral prejudice to CyWee from that five-week delay. Even if
`
`Samsung had filed its motion for a stay within, say, two weeks of the date on which the PTAB
`
`instituted the IPR proceedings, the briefing of the stay motion would have extended until the last
`
`week of January 2019, and the Court would have needed at least some time to consider the motion.
`
`Thus, even in the event of a prompt filing on Samsung's part, CyWee would not have been able to
`
`avoid the need to continue with the expert depositions in the interim. Moreover, while it is true
`
`that CyWee has had to engage in significant discovery-related work during the period after the
`
`IPRs were instituted, that work, now done, will have moved CyW ee' s preparation for the court
`
`11
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0011
`
`

`

`case closer to completion for the time when the IPR is concluded and this litigation resumes. Also,
`
`during the same period, Samsung was facing the same discovery deadlines as CyWee and bore the
`
`expenses of preparing for, and conducting the expert depositions. So the expenses incurred during
`
`the period of delay were not borne by CyWee alone. 2
`
`CyWee next argues that a stay would give Samsung an unfair tactical advantage because
`
`Samsung would have "the luxury of many months to examine and dissect CyW ee' s expert reports
`
`and depositions in order to prepare dispositive motions and Daubert motions that would otherwise
`
`be due on February 6, 2019," and the motion for a stay would "allow Samsung to escape this
`
`looming deadline." Dkt. No. 297, at 11. That argument no longer has any force. February 6 has
`
`come and gone, and Samsung has filed its dispositive motions and its Daubert motions, so there
`
`is no prejudice to CyWee from any tactical benefit Samsung might have been thought to have
`
`obtained from the delay in the due dates for Samsung's pretrial motions. To the contrary, a stay
`
`issued at this point would arguably benefit CyWee by giving it extra time to respond to Samsung's
`
`motions.
`
`Furthermore, CyWee makes no claim of loss of memory, aged witnesses, or any other
`
`extraneous burdens imposed by the delay that would result from a stay. In a footnote (Dkt. No.
`
`297, at 6 n.22), CyWee complains that the work connected with the depositions "will have to be
`
`completely redone to refresh the witnesses' recollection if the case were delayed by a year or
`
`more." That argument is unpersuasive. There is no reason the depositions would need to be
`
`2 CyWee does not argue that the stay should be denied because it was Google, not
`Samsung, that filed the IPR petitions that were granted in December 2018. While that fact pattern
`is unusual, and Samsung has not explained why it did not file petitions on its own behalf prior to
`Google's petition, Samsung's decision is not fatal to its request for a stay. See E.Digital Corp. v.
`Arcsojt, Inc., Case No. 15-cv-56, 2016 WL 452152, at *1 (S.D. Cal. Feb. 3, 2016) (stay granted
`after IPR of a third party was granted).
`
`12
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0012
`
`

`

`redone, and as for refreshing the witnesses' recollection, the transcripts of the depositions that are
`
`presumably available will make that process much less expensive than preparing for and
`
`conducting the depositions in the first instance.
`
`Finally, the Court notes that CyWee has consented to stays pending the IPR proceedings
`
`in all but one of the other co-pending cases. While not dispositive, CyWee's acquiescence in stays
`
`in those five cases tends to impeach its claim that it will be unduly prejudiced by delay in the
`
`enforcement of its rights under the patents in suit in each of those cases.
`
`In sum, the Court finds that the only element of prejudice that CyWee has been able to
`
`demonstrate is the prejudice that always accompanies a delay in the disposition of a case-a
`
`postponement in the plaintiff s obtaining a judgment. As that is the only source of prejudice shown
`
`in this case, the Court regards the prejudice factor as cutting in CyWee's favor, but only slightly
`
`so.
`
`2. The State of the Proceedings
`
`This action was instituted two years ago. By the time the motion to stay was filed, claim
`
`construction had been conducted and discovery was nearly complete. 3 However, the most
`
`burdensome parts of the case-filing and responding to pretrial motions, preparing for trial, going
`
`through the trial process, and engaging in post-trial motions practice-all lie in the future. See
`
`Smartjlash LLC v. Apple Inc., 621 F. App'x 995, 1005 (Fed. Cir. 2015) (noting, in a similar
`
`situation, where the trial was "mere months away," that "[d]espite the substantial time and effort
`
`already spent in this case, the most burdensome task is yet to come").
`
`3 The state of the proceedings is generally assessed as of the date the motion to stay is
`filed. VirtualAgility, 759 F.3d at 1317.
`
`13
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0013
`
`

`

`Courts in this district have held that stay motions filed late in the pre-trial period are less
`
`favored than those filed at the outset of the case. However, the courts have noted, as did the Federal
`
`Circuit in the Smartjlash case, that even after the completion of claim construction and most of the
`
`discovery in the case, the most burdensome part of the case, for both the parties and the court, is
`
`the period immediately before, during, and after trial. That fact informs the court's judgment as
`
`to the significance of the stage of the case at which the stay motion is filed. As the court explained
`
`in Norman IP Holdings, 2014 WL 5035718, at *3 (quoting Destination Maternity Corp. v. Target
`
`Corp., No. Civ. A. No. 12-5680,2014 WL 1202941, at *6 (E.D. Pa, Mar. 24,2014)):
`
`"A case need not be in its infancy to warrant a stay. Courts often find the stage of
`litigation weighs in favor of a stay if there remains a significant amount of work
`ahead for the parties and the court, even when the parties and/or the court have
`already devoted substantial resources to the litigation."
`
`Based on that observation, courts in this district have granted stays at various points roughly
`
`equivalent to the stage of this case, where discovery was nearly complete and the trial date was
`
`four months away at the time the stay motion was filed. In Motion Games, LLC v. Nintendo Co.,
`
`Case NO.6: 12-cv-878, 2015 WL 13404313 (E.D. Tex. June 8, 2015), the court granted a stay when
`
`the trial was only four months away and fact and expert discovery had been completed. The court
`
`explained that "[w]hile it is true that significant resources have been invested to this point, there is
`
`little doubt that a substantial amount of pretrial, trial and post-trial resources have yet to be
`
`expended." Id at *1; see also Image Processing Techs., 2017 WL 7051628, at *1 (stay granted
`
`three weeks before trial); SSL Servs., LLC v. Cisco Sys., Inc., Case No.2: 15-cv-433, 2016 WL
`
`3523871, at *2 (E.D. Tex. June 28, 2016) (stay granted 2Yz months before trial); Ericsson Inc. v.
`
`TCL Commc'n Tech. Holdings, Ltd, Case No. 2:15-cv-11, 2016 WL 1162162, at *2 (E.D. Tex.
`
`Mar. 23,2016) (stay granted two months before trial); SynQor, Inc. v. Vicor Corp., Case No.2: 14-
`
`cv-287, 2015 WL 12916396, at *4 (E.D. Tex. Nov. 24, 2015) (stay granted seven weeks before
`
`14
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0014
`
`

`

`pretrial conference: "Much work has been done, but there is still substantial work that needs to be
`
`done by the Court and the parties before this case will be ready for tria1. A stay has the potential
`
`to reduce costs and avoid the expenditure of significant resources that would go into trial
`
`preparation and tria1.").
`
`Denying a stay because of the progress of the case to this point would impose significant
`
`expenses on the parties that might be avoided if the stay results in the simplification of further
`
`court proceedings. Because the case is relatively far along, the Court regards this factor as cutting
`
`somewhat against issuing a stay, but not so much as to overcome the counterbalancing benefits
`
`that could result from a stay.
`
`3. Simplification of the Issues
`
`The most important factor bearing on whether to grant a stay is whether the stay is likely
`
`to simplify the issues at tria1. As this Court explained in NFC Technology,
`
`Congress's purpose in creating an inter partes review procedure was to allow the
`administrative agency that issues patents to consider new information bearing on
`whether those patents should be canceled or confirmed. Giving the agency the
`authority to consider the validity of patents in the inter partes review process was
`designed in large measure to simplify proceedings before the courts and to give the
`courts the benefit of the expert agency's full and focused consideration of the effect
`of prior art on patents being asserted in litigation.
`
`NFC Tech., 2015 WL 1069111, at *4; see In re Etter, 756 F.2d 852, 857 (Fed. Cir. 1985) ("When
`
`the patent is concurrently involved in litigation [one function of reexamination] is to free the court
`
`from any need to consider prior art without the benefit of the PTO's initial consideration.").
`
`In this case, the likelihood of some or all of those benefits flowing from inter partes review
`
`is high. If the proceedings before the PT AB result in confirming the validity of the claims being
`
`asserted in court, the defendant will be estopped from challenging the validity of those claims on
`
`any ground that was, or could reasonably have been, asserted in the inter partes proceeding. 35
`
`15
`
`ZTE v Fractus
`IPR2018-01461
`
`ZTE
`Exhibit 1030.0015
`
`

`

`U.S.C. § 315(e)(2). On the other hand, if the proceedings result in cancellation of some or all of
`
`the asserted claims that have been challenged in the IPR proceeding, a large portion of the litigation
`
`will fall away.
`
`CyWee responds with several arguments against issuance of a stay. First, CyWee argues
`
`that the IPR may not be instituted after all, because CyWee has sought rehearing of the institution
`
`decision by the PTAB. Dkt. No. 297, at 12.
`
`In fact, the PTAB has recently denied CyWee's
`
`petition for rehearing of the institution decision, so that argument fails.
`
`Second, CyWee argues that the fact that Samsung is not relying on the prior art references
`
`that are the focus of Go ogle's IPR petition means that Samsung "has precluded itself from claiming
`
`that any of the prior art at issue in the Google IPRs is invalidating art in this case," and that
`
`Sa