Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 1 of 16
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
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`SRC LABS, LLC, et al.,
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`CASE NO. C18-0321JLR
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`Plaintiffs,
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`v.
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`MICROSOFT CORPORATION,
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`Defendant.
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`ORDER STAYING CASE
`PENDING INTER PARTES
`REVIEW PROCEEDINGS
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`I.
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`INTRODUCTION
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`Before the court is Defendant Microsoft Corporation’s (“Microsoft”) motion to
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`stay the above-captioned case pending inter partes review (“IPR”). (Mot. (Dkt. # 117).)
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`Microsoft contends that their 10 pending petitions for IPR, which they filed with the
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`Patent and Trademark Office (“PTO”) between August 24, 2018, and September 11,
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`2018, warrant such a stay. (See generally id.) Plaintiffs SRC Labs, LLC (“SRC”) and
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`Saint Regis Mohawk Tribe (“SRMT”) (collectively, “Plaintiffs”) oppose the motion.
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`(Resp. (Dkt. # 123).) Microsoft filed a reply. (Reply (Dkt. # 129).) The court has
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`ORDER - 1
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 1
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 2 of 16
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`considered the parties’ submissions in support of and in opposition to the motion, the
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`relevant portions of the record, and the applicable law. Being fully advised,1 the court
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`GRANTS Microsoft’s motion, STAYS the case pending the PTO’s decisions on
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`Microsoft’s 10 IPR petitions, VACATES all case deadlines that remain as of the date of
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`this order, and ORDERS the parties to file a joint status report regarding the status of
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`Microsoft’s 10 IPR petitions upon receiving decisions on all 10 petitions from the PTO or
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`on May 1, 2019, whichever occurs first.
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`II. BACKGROUND
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`Plaintiffs assert that Microsoft infringes upon United States Patent Nos. 6,076,152
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`(“the ’152 patent”), 6,247,110 (“the ’110 patent”), 6,434,687 (“the ’687 patent”),
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`7,225,324 (“the ’324 patent”), 7,421,524 (“the ’524 patent”), and 7,620,800 (“the ’800
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`patent”). (See generally Am. Compl. (Dkt. # 103); see also ’152 patent (Dkt. # 103-1);
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`’110 patent (Dkt. # 103-2); ’687 patent (Dkt. # 103-3); ’324 patent (Dkt. # 103-4); ’524
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`patent (Dkt. # 103-5); ’800 patent (Dkt. # 103-6).) Plaintiffs filed this case on October
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`18, 2017, in the Eastern District of Virginia. (See Compl. (Dkt. # 1).) The Virginia
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`district court transferred the case to this court on February 26, 2018. (See 2/26/18 Order
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`(Dkt. # 50); see also 3/1/18 Letter (Dkt. # 52).)
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`In a separate action in this court, Plaintiffs asserted patent infringement claims
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`against Amazon Web Services, Inc., Amazon.com, Inc., and VADATA, Inc. See SRC
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`1 Plaintiffs request oral argument (see Resp. at 1), but the court concludes that oral
`argument would not be helpful to its disposition of this motion and denies Plaintiffs’ request.
`See Local Rules W.D. Wash. LCR 7(b)(4).
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`ORDER - 2
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 2
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 3 of 16
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`Labs, LLC v. Amazon Web Services, Inc., No. C18-0317JLR (W.D. Wash), Dkt. # 1.
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`Three of the six patents-at-issue in the present case—the ’110 patent, the ’687 patent, and
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`the ’800 patent—are also at issue in SRC Labs, LLC v. Amazon Web Services, Inc. See
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`id., Dkt. # 1 ¶ 1. Due to the overlapping patents, the parties in the two cases submitted
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`coordinated discovery plans (see, e.g., Discovery Plan (Dkt. # 91)), which the court
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`modified and approved on May 22, 2018 (see Sched. Order (Dkt. # 94)). The court also
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`consolidated the Markman hearing2 and the Markman-related pretrial matters for the two
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`cases, with the Markman hearing scheduled for December 20-21, 2018. (See 5/22/18
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`Min. Order (Dkt. # 95) at 1-2; Sched. Order at 2.) In this case, certain deadlines had
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`expired by the time Microsoft filed the present motion: disclosing preliminary
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`infringement contentions and asserted claims, joining additional parties, disclosing
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`preliminary invalidity contentions, providing expert witness reports on Markman issues,
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`providing rebuttal expert reports on Markman issues, and exchanging preliminary claim
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`charts. (Sched. Order at 1-2; see also 8/31/18 Order (Dkt. # 112); Dkt.)
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`Between August 24, 2018, and September 11, 2018, Microsoft filed 10 petitions
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`for IPR with the PTO’s Patent Trial and Appeal Board (“PTAB”). (Mot. at 6.) In these
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`10 petitions, Microsoft challenges all six of the patents-at-issue in this case, alleging 38
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`separate grounds of invalidity based on 20 different prior art patents and publications.
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`(Id.) The PTAB has issued notices establishing patent owner response deadlines for 4 of
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`the 10 IPR petitions, covering the ’687, ’524, ’324, and ’800 patents. (Love Decl. (Dkt.
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`2 Markman v. Westview Instruments, Inc., 517 U.S. 370, 391 (1996).
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`ORDER - 3
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 3
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 4 of 16
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`# 118), ¶¶ 10-13, Exs. H-K.) Microsoft claims that, in the ordinary course, it expects
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`similar notices and response deadlines for the other six petitions to be issued soon. (Mot.
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`at 6.) At the latest, the PTAB will determine whether to grant Microsoft’s first four
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`petitions by March 2019. (See id.); see also 35 U.S.C. § 314(b) (requiring the PTAB to
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`“determine whether to institute” an IPR “within 3 months after . . . receiving a
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`preliminary response to the petition”). The PTAB should determine whether to grant
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`Microsoft’s remaining six petitions by April 2019. See 35 U.S.C. § 314(b). When the
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`PTAB grants a petition, it has one year to complete the review, but may extend the one-
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`year period by up to six months for good cause. 35 U.S.C. § 316(a)(11); 37 C.F.R.
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`§ 42.100(c). Thus, if the PTAB grants all of Microsoft’s petitions and conducts an IPR
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`trial on all of the patents, the IPR trials and decisions should conclude by March or April
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`2020, but may be extended to October 2020. Id.; (see also Mot. at 6.)
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`On October 11, 2018, after confirming that Plaintiffs would not stipulate to a stay
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`pending resolution of Microsoft’s IPR petitions (see Love Decl. ¶ 14, Ex. L), Microsoft
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`moved to stay this case (see Mot.). That motion is now before the court.
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`III. ANALYSIS
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`The court has the authority to stay this case pending the outcome of an IPR
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`petition. See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988); Wre-Hol
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`v. Pharos Sci. & Applications, No. C09-1642MJP, 2010 WL 2985685, at *2 (W.D. Wash.
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`July 23, 2010); DSS Tech. Mgmt., Inc. v. Apple, Inc., No. 14-cv-05330-HSG, 2015 WL
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`1967878, at *2 (N.D. Cal. May 1, 2015). To determine whether to grant such a stay, the
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`court considers “(1) whether a stay will simplify the issues in question and the trial of the
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`ORDER - 4
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 4
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 5 of 16
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`case[s], (2) whether discovery is complete and whether . . . trial date[s] ha[ve] already
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`been set, and (3) whether a stay will unduly prejudice or present a clear tactical
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`disadvantage to the non-moving party.” Pac. Bioscience Labs., Inc. v. Pretika Corp., 760
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`F. Supp. 2d 1061, 1063 (W.D. Wash. 2011). The court applies this “three-factor
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`framework from Pacific Biosciences regardless of whether an IPR petition is pending or
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`has been granted.” See Nat’l Prods., Inc. v. Akron Res., Inc., No. 15-1984JLR (W.D.
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`Wash.), Dkt. # 66 at 6 (citations omitted). “The moving party bears the burden of
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`demonstrating that a stay is appropriate.” DSS Tech., 2015 WL 1967878, at *2.
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`A.
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`Simplification of the Case
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`The court first considers whether and to what extent staying these cases pending
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`the outcome of the IPR petitions would simplify the issues and the trial in this case. See
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`Pac. Bioscience, 760 F. Supp. 2d at 1063. Microsoft argues that, in light of the multiple
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`IPR petitions, there is a significant chance that a stay pending the IPRs would simplify
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`the issues. (Mot. at 8-10.) Microsoft relies heavily on PTO statistics to support its claim.
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`(See id.) Plaintiffs argue that Microsoft’s motion is premature because the PTAB has not
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`yet assigned each IPR petition to a panel, and has not yet instituted any of the IPRs.
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`(Resp. at 7-9.) In addition, Plaintiffs assert that, even assuming the PTAB grants the IPR
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`petitions, Microsoft’s invalidity claims in this case are different than its invalidity claims
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`in the IPRs. (Resp. at 12-13.) Therefore, according to Plaintiffs, any decision the PTAB
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`reaches will not simplify the issues here. (Id.) Lastly, Plaintiffs claim that this court is a
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`more expeditious and efficient forum to try the patents-at-issue because trial is currently
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`22
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`//
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`ORDER - 5
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 5
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 6 of 16
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`scheduled for November 4, 2019, while the PTAB will not reach a decision until March
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`2020 at the earliest. (Id. at 13; see also Sched. Order at 1.)
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`The court agrees that it is less likely that a “pre-institution” IPR—meaning, the
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`PTAB has not yet decided whether to grant the IPR—will simplify litigation because the
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`IPR may never occur. VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1316
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`(Fed. Cir. 2014) (“While a motion to stay could be granted even before the PTAB rules
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`on a post-grant review petition, no doubt the case for a stay is stronger after post-grant
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`review has been instituted.”). But, contrary to Plaintiffs’ assertion (see Resp. at 7-9), a
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`motion to stay pending an IPR is not “premature” simply because the PTAB has not yet
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`instituted the IPR. Id.; Nat’l Prods., No. 15-1984JLR, Dkt. # 66 at 6; see also Pragmatus
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`AV, LLC v. Facebook, Inc., No. 11-CV-02168-EJD, 2011 WL 4802958, at *3 (N.D. Cal.
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`Oct. 11, 2011) (collecting cases that demonstrate “it is not uncommon for [the Northern
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`District of California] to grant stays pending reexamination prior to the PTO deciding to
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`reexamine the patent”).
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`This court has relied on PTO statistics to help determine if a pre-institution IPR
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`will simplify litigation. See Nat’l Prods., No. 15-1984JLR, Dkt. # 66 at 7; see also Pac.
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`Biosciences, 760 F. Supp. 2d at 1063-64. Of the 6,937 IPR petitions decided by the
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`PTAB as of August 31, 2018, the PTAB instituted trial on 4,650 (67%) petitions and
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`denied trial on 2,287 (33%) petitions. (See Love Decl. ¶ 4, Ex. B (“PTAB Statistics) at
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`11.)3 The PTAB’s institution rate for patents in the “Electrical/Computer” field, which
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`3 For this exhibit, the court cites to the page numbers at the bottom-right of the pages.
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`ORDER - 6
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 6
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 7 of 16
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`all the patents-at-issue fall within, is almost identical at 67.66%. (Id. at 8.) The court
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`therefore concludes that, for each of Microsoft’s IPR petitions, there is approximately a
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`33% chance that the PTAB denies the petition and approximately a 67% chance that the
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`PTAB grants the petition.
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`Moreover, of the 2,308 petitions that had reached a final written decision by
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`August 31, 2018, the PTAB determined that all instituted claims were unpatentable in
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`1,488 cases (64%), that some claims were unpatentable in 379 cases (16%), and that no
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`claims were unpatentable in 441 cases (19%). (Id. at 11.) The parties have provided no
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`persuasive reason to believe that Microsoft’s IPR petitions, if granted, are more or less
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`likely to succeed than the average petition submitted to the PTAB. And although
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`Plaintiffs are correct that the invalidity grounds that Microsoft has asserted in this case
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`are not addressed in the IPR petitions (see Resp. at 12-13; see also Reply at 6), if the
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`PTAB invalidates the claims, Microsoft’s invalidity defenses in this case would be moot.
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`Accordingly, the court concludes that, if instituted, each IPR trial would have
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`approximately a 64% chance of substantially simplifying this case, a 16% chance of
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`insubstantially simplifying the case by concluding that some but not all claims are
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`unpatentable, and a 19% chance of not affecting the case.
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`Based on these calculations, the court roughly approximates that, for each separate
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`IPR petition that Microsoft filed, there is a 43%4 chance that the petition substantially
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`//
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`//
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`4 0.67 x 0.64 = 0.4288.
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`ORDER - 7
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 7
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 8 of 16
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`simplifies the case, an 11%5 chance that the petition insubstantially simplifies the case,
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`and a 46%6 chance that the petition does not affect the case.
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`However, these statistics change significantly when factoring in the number of IPR
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`petitions at issue. The chance that 0 of the 10 petitions substantially simplifies this case
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`could be as low as 0.4%.7 This calculation may be inaccurate because, as Microsoft
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`admits, the PTAB may not consider the 10 IPR petitions independently. (See Mot. at 9
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`n.3) In other words, because the 10 petitions involve 6 patents, which concern closely
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`related subject matter, it is more likely that the PTAB rules similarly on all 10 petitions.
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`Regardless, the essential point is that because there are 10 IPR petitions pending, it is far
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`more likely than 43% that at least 1 of the IPR petitions substantially simplifies this case,
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`and far less likely than 46% that none of the IPR petitions substantially simplifies this
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`case.
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`Based on the foregoing calculations and analysis, the court finds that there are
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`significant odds that the IPR petitions will substantially simplify this case.8 Accordingly
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`the court concludes that this factor weighs in favor of granting the stay.
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`//
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`//
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`5 0.67 x 0.16 = 0.1072.
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` (0.67 x 0.19) + 0.37 = 0.4573.
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` (1 – 0.43)10 = .0036.
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` 8
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` Neither party asks the court to consider this factor in light of the consolidated Markman
`hearing and overlapping patents-at-issue with SRC Labs, LLC v. Amazon Web Services, Inc., No.
`C18-0317JLR (W.D. Wash). (See generally Mot.; Resp.; Reply.) The court therefore declines to
`do so.
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`ORDER - 8
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 8
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 9 of 16
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`B.
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`Stage of the Litigation
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`The second factor that the court considers is the stage of the litigation. Pac.
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`Bioscience, 760 F. Supp. 2d at 1063. “[T]he proper time to measure the stage of the
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`litigation” is at “the date of the filing of the motion to stay.” VirtualAgility, 759 F.3d at
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`1316. Here, when Microsoft filed its motion on October 11, 2018, document production
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`and written discovery had taken place, but only one fact witness deposition had been
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`scheduled. (Mot. at 10.) In addition, the parties had not yet filed their joint claim chart
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`and prehearing statement, or their opening claim construction briefs. (See generally Dkt.)
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`The December 20-21, 2018, Markman hearing was over two months away, the May 24,
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`2019, discovery cutoff date was over seven months away, and the November 4, 2019,
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`trial was over a year away. (See Sched. Order at 1-2.)
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`This court has stayed patent cases at similar stages. See, e.g., Pac. Bioscience, 760
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`F. Supp. 2d at 1066; Nat’l Prods., No. 15-1984JLR, Dkt. # 66 at 9-11. For example, in
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`Pacific Bioscience, the court considered a motion to stay at a time when the parties had
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`performed “limited written discovery and document production,” but discovery was “far
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`from complete.” 760 F. Supp. 2d at 1066. In addition, the Markman hearing had not yet
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`taken place, nor had the parties submitted claim construction briefs. Id. Trial was also a
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`year away. Id. at 1063. On these facts, the court found that “[n]either the parties, nor the
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`court, have invested the kind of resources that would render a stay pending reexamination
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`untenable. To the contrary, the fact that substantial additional discovery, claim
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`construction, and other issues lie ahead in this case weighs in favor of a stay.” Id. at
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`1066.
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`ORDER - 9
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 9
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 10 of 16
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`Plaintiffs argue that this case not at its earliest stages, that the parties have
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`exchanged extensive written discovery, and that many depositions have been taken.
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`(Resp. at 13-14.) But most of these depositions occurred after Microsoft filed its motion.
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`(Reply at 7.) And even though written discovery has been exchanged, many months of
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`discovery remain. (See Sched. Order at 2.) Thus, measured at the time that Microsoft
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`filed the present motion, the court does not see any meaningful difference between the
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`litigation stage in Pacific Bioscience and the litigation stage here.9 The court therefore
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`finds that this factor weighs in favor of a stay.
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`C.
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`Prejudice to the Non-Moving Party
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`The final factor in the court’s analysis is undue prejudice to Plaintiffs. See Pac.
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`Bioscience, 760 F. Supp. 2d at 1063. Courts, including this one, “have found that mere
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`delay does not demonstrate undue prejudice.” Implicit Networks, Inc. v. Advanced Micro
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`Devices, Inc., No. C08-0184JLR, 2009 WL 357902, at *3 (W.D. Wash. Feb. 9, 2009).
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`“Courts are hesitant to grant a stay if the parties are direct competitors.” Palomar
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`Techs., Inc. v. Mrsi Sys., LLC, No. 15-CV-1484 JLS (KSC), 2016 WL 4496839, at *5
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`(S.D. Cal. June 14, 2016). Plaintiffs do not allege that SRC or SRMT compete with
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`Microsoft. (See Resp. at 14-15.) Rather, Plaintiffs argue that a stay would unduly
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`prejudice them because SRC’s sister company, DirectStream, directly competes with
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`Microsoft. (Id. at 14.) But Plaintiffs do not provide any law that says the court can
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`9 Plaintiffs also argue that granting Microsoft’s motion would “reward Microsoft for
`filing its IPR petitions belatedly, almost a year after this case was first filed.” (Resp. at 14.) To
`the contrary, Microsoft’s petitions are timely in that Microsoft sought IPR within one year of
`being served with a suit for patent infringement. See 35 U.S.C. § 315(b).
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`ORDER - 10
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 10
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 11 of 16
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`consider prejudice to a sister company. (See generally id.) To the contrary, when a
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`corporation divides into two distinct entities, courts consider these entities as separate for
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`purposes of litigation. See, e.g., Ply-Am, L.P. v. GSE Lining Tech., Inc., 383 F.3d 1303,
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`1311 (Fed. Cir. 2004) (explaining that when a corporation divides, the entity that holds
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`the patent and alleges infringement cannot claim damages caused to the non-patent
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`holding entity). Therefore, the court does not find that Plaintiffs would suffer any undue
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`prejudice resulting from direct competition with Microsoft.
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`Plaintiffs also argue that a lengthy delay in litigation could cause a loss of critical
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`evidence and accurate testimony. (Id. at 15.) And any delay here will be longer than
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`usual, according to Plaintiffs, because of the ongoing case, Saint Regis Mohawk Tribe v.
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`Mylan Pharmaceuticals Inc., 896 F.3d 1322 (Fed. Cir. 2018), which concerns whether
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`patents owned by a Tribe are shielded by the Tribe’s sovereign immunity (see Mot. at 12;
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`Resp. at 15). In that case, the Federal Circuit determined that “tribal immunity does not
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`extend to” IPR decisions. Mylan Pharms., 896 F.3d at 1329. Plaintiffs were denied en
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`banc review, but may seek review from the Supreme Court. (Resp. at 15; Reply at 9 n.5.)
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`Again, “mere delay does not demonstrate undue prejudice.” Implicit Networks,
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`2009 WL 357902, at *3. Moreover, the delay in Saint Regis Mohawk Tribe v. Mylan
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`Pharmaceuticals Inc. is the result of SRMT’s appeals. See Mylan Pharms., 896 F.3d at
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`1329 (affirming the PTAB’s decision that tribal immunity does not apply to IPR). That
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`said, it is not feasible for this court to consider the potentialities of other matters,
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`especially without an adequate record before it. More importantly, Plaintiffs do not point
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`to any evidence or testimony that could be lost due to a stay—even an extended one.
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`ORDER - 11
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 11
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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 12 of 16
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`(See Resp. at 14-15.) In sum, the delay caused by Microsoft’s IPR petitions does not
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`demonstrate undue prejudice resulting from a loss of evidence or testimony.
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`Lastly, Plaintiffs argue that a stay will endorse Microsoft’s “efficient
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`infringement” business strategy, whereby Microsoft is actively “free-riding on the
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`inventions of others without compensating the inventors.” (Resp. at 15; Griffin Decl.
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`(Dkt. # 124) ¶ 4, Ex. C at 2.) Plaintiffs point to Microsoft’s history as a top-five filer of
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`IPRs, and the large settlements that Microsoft has had to pay as a result of past patent
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`infringement. (Resp. at 15; Griffin Decl. ¶¶ 5-6.) Plaintiffs seem to imply that the court
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`should deny the stay because Microsoft filed the IPR petitions at issue with nefarious
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`intent. To the extent that is Plaintiffs’ argument, they have not supported it, and the court
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`does not agree. Further, if a delay increases Plaintiffs’ damages, this can be remedied by
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`increased monetary relief if Microsoft is ultimately found liable.
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`Regardless, trial in this case is currently scheduled for November 4, 2019. (See
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`Sched. Order at 1.) The IPR trials—to the extent any occur—should be completed by
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`March or April 2020. This five-month delay is not significant, especially where the
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`parties are not direct competitors. Cf. Nat’l Prods., No. 15-1984JLR, Dkt. # 66 at 12
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`(noting that a four-and-a-half month delay caused by a stay pending IPR was minor
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`compared to the four-and-a-half years during which the parties shared the marketplace as
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`direct competitors). Thus, due to the lack of direct competition between the parties and
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`the short duration of the delay, the court concludes that this factor weighs slightly in
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`favor of granting a stay.
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`//
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`ORDER - 12
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 12
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 13 of 16
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`D.
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`Balancing the Factors
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`In sum, two of the three factors weigh in favor of a stay, and one weighs slightly
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`in favor of a stay. The high likelihood of substantial simplification of this case, the early
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`stage of this litigation, and the lack of undue prejudice lead the court to conclude that a
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`stay pending resolution of the 10 IPR petitions is appropriate.
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`E.
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`Judicial Estoppel
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`Separate from the normal factors that the court weighs when considering a stay,
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`Plaintiffs argue that Microsoft should be judicially estopped from moving for a stay.
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`(Resp. at 9-10.) Plaintiffs’ argument is based on the fact that Microsoft sought and
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`achieved a transfer of this case from the Eastern District of Virginia by claiming that the
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`Western District of Washington is the appropriate venue for this case. (Id.) Plaintiffs say
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`that Microsoft should not now be able to achieve a stay after filing 10 IPR petitions with
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`the PTAB, which is based in Alexandria, Virginia. (Id. at 9.) Allowing the stay,
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`Plaintiffs claim, would “create the perception that either [the Eastern District of Virginia]
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`or this Court was misled.” (Id. at 10.) Plaintiffs further claim that Microsoft’s
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`inconsistent positions evidence gamesmanship, which has unfairly delayed this case from
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`the June 2019 trial date in the Eastern District of Virginia, to the November 2019 trial
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`date in this court, to the potential March or April 2020 trial date in the PTAB. (Id.)
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`In response, Microsoft says that it has not taken inconsistent positions. (Reply at
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`4-5.) Microsoft claims that it appropriately sought to transfer this case because the
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`alleged infringing activity occurred in the Western District of Washington, and
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`Microsoft’s witnesses reside here. (Id. at 4.) The Eastern District of Virginia agreed with
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`ORDER - 13
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 13
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 14 of 16
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`this position. (See 2/26/18 Order at 1-4.) Microsoft also distinguishes Plaintiffs’
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`infringement claims that are at issue in this case, from Microsoft’s validity claims that are
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`at issue in the IPRs. Microsoft argues that adjudicating these claims will involve separate
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`evidence. (Reply at 4-5.) Lastly, Microsoft says that it filed its IPR petitions
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`electronically with the PTO, which is the only way such petitions can be filed. (Id. at 5.)
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`Although the PTO is based out of Alexandria, Virginia, it has satellite offices throughout
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`the country. (Id. at 5 n.5.) At its discretion, the PTO assigned Microsoft’s IPRs to the
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`Virginia office rather than one of its other offices. (Id.)
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`Judicial estoppel “is an equitable doctrine invoked by a court at its discretion.”
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`Russell v. Rolfs, 893 F.2d 1033, 1037 (9th Cir. 1990) (citing Religious Tech. Ctr. v. Scott,
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`869 F.2d 1306, 1311 (9th Cir. 1989)). The doctrine “is invoked to prevent a party from
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`changing its position over the course of judicial proceedings when such positional
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`changes have an adverse impact on the judicial process.” Id. It “is most commonly
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`applied to bar a party from making a factual assertion in a legal proceeding which
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`directly contradicts an earlier assertion made in the same proceeding or a prior one.” Id.
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`The court should consider the following three factors to determine if judicial estoppel
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`should be applied in a given case: (1) if a party’s later position is “clearly inconsistent”
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`with its earlier position; (2) if the party succeeded on its earlier position such that
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`succeeding on its later inconsistent position would create the impression that one of the
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`courts was misled; and (3) whether the party would achieve an unfair advantage if not
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`estopped. See Milton H. Greene Archives, Inc. v. Marilyn Monroe LLC, 692 F.3d 983,
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`//
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`ORDER - 14
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 14
`
`

`

`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 15 of 16
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`994 (9th Cir. 2012) (citing New Hampshire v. Maine, 539 U.S. 742, 750-51 (2001)). The
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`court finds that none of these factors counsels in favor of judicial estoppel.
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`There is no inconsistency in Microsoft’s positions. In seeking IPR, Microsoft did
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`not claim that the Western District of Washington is not “the hub of infringing activity”
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`or where “the bulk of the evidence likely relevant to this case is located,” which is what
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`Microsoft argued to the Virginia district court. (See 2/26/18 Order at 1-4.) Rather,
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`Microsoft filed its IPR petitions—for validity, not infringement—the only way it could:
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`with the PTO, which then assigned the petitions to Virginia at its discretion. See 37
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`C.F.R. § 42.6(b); (Reply at 5 n.5.) Consequently, neither the Virginia district court, nor
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`the PTAB, nor this court, were misled by Microsoft filing IPR petitions with the PTO and
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`thereafter seeking a stay. And while this matter is delayed by Microsoft’s IPR petitions,
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`the court does not find that Microsoft achieved an unfair advantage by inconsistent
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`positions. Moreover, as discussed, the Plaintiffs will not suffer undue prejudice as a
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`result of this delay. See supra § III.C. Thus, the court finds that Microsoft should not be
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`judicially estopped from moving to stay this case.
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`IV. CONCLUSION
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`Based on the foregoing analysis, the court GRANTS Microsoft’s motion (Dkt.
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`# 117), STAYS the case pending the PTO’s decisions on Microsoft’s 10 IPR petitions,
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`VACATES all case deadlines that remain as of the date of this order, and ORDERS the
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`parties to file a joint status report regarding the status of Microsoft’s 10 IPR petitions
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`//
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`//
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`ORDER - 15
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 15
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`

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`Case 2:18-cv-00321-JLR Document 139 Filed 11/20/18 Page 16 of 16
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`within seven (7) days of receiving decisions on all 10 petitions from the PTO or on May
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`1, 2019, whichever occurs first.
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`Dated this 20th day of November, 2018.
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`A
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`JAMES L. ROBART
`United States District Court Judge
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`ORDER - 16
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`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2017, p. 16
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