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`KILPATRICK TOWNSEND & STOCKTON LLP
`
`Steven D. Moore (Bar No. 290875)
`smoore@kilpatricktownsend.com
`Two Embarcadero Center, Suite 1900
`San Francisco, CA 94111
`Telephone: (415) 576-0200
`Facsimile: (415) 576-0300
`
`Megan M. Chung (State Bar No. 232044)
`mchung@kilpatricktownsend.com
`1801 Century Park East, Suite 2300
`Los Angeles, CA 90067
`Telephone: (310) 248-3830
`Facsimile: (310) 860-0363
`
`Attorneys for Defendant WALMART INC.
`(Additional Counsel Included On Signature Page)
`
`
`UNITED STATES DISTRICT COURT
`FOR THE CENTRAL DISTRICT OF CALIFORNIA
`SOUTHERN DIVISION
`
`
`
`
`
`
`CARAVAN CANOPY INT’L, INC.,
`A CALIFORNIA CORPORATION,
`Plaintiff,
`
`Case No.: 2:19-cv-06978-ADS-PSG
`
`Consolidated with Case No. 8:19-cv-
`01072-PSG-ADS
`
`WALMART’S MEMORANDUM OF
`POINTS AND AUTHORITIES IN
`SUPPORT OF ITS MOTION TO STAY
`LITIGATION PENDING INTER
`PARTES REVIEW
`
`DATE: August 24, 2020
`TIME: 1:30 p.m.
`DEPT: Courtroom 6A
`
`Judge: Hon. Philip S. Gutierrez
`
`NO ORAL ARGUMENT UNLESS
`REQUESTED BY THE COURT
`
`
`
`
`v.
`WALMART INC., A DELAWARE
`CORPORATION, AND DOES 1
`THROUGH 10, INCLUSIVE,
`Defendants.
`
`
`
`
`
`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
`PENDING INTER PARTES REVIEW
`CASE NO. 2:19-CV-06978-PSG-ADS
`
`
`
`
`
`Patent Owner CCI
`Ex. 2003 - Page 1
`
`

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`Case 8:19-cv-01072-PSG-ADS Document 100-1 Filed 06/18/20 Page 2 of 14 Page ID
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`I.
`II.
`
`TABLE OF CONTENTS
`
`Page
`
`INTRODUCTION ............................................................................... 1
`FACTUAL AND PROCEDURAL BACKGROUND ............................... 1
`A.
`Caravan’s Lawsuit Against Walmart ............................................. 1
`B.
`The Asserted Patent and Pending IPR ............................................ 2
`III. LEGAL STANDARD .......................................................................... 3
`IV. ARGUMENT ...................................................................................... 4
`A.
`This Proceeding Is in Its Early Stages ............................................ 4
`B. A Stay Will Simplify the Issues in Question and Reduce the
`Burden of Litigation .................................................................... 6
`C. A Stay Will Not Unduly Prejudice or Tactically
`Disadvantage Caravan ................................................................. 8
`The Current Public Health Emergency Further Favors a
`Stay .......................................................................................... 9
`CONCLUSION ................................................................................. 10
`
`D.
`
`V.
`
`
`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
`PENDING INTER PARTES REVIEW
`CASE NO. 2:19-CV-06978-ADS-PSG
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`Ex. 2003 - Page 2
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`TABLE OF AUTHORITIES
`
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`Page
`
`Cases
`Aylus Networks, Inc. v. Apple Inc.,
`856 F.3d 1353 (Fed. Cir. 2017) ................................................................. 10
`Cannarella v. Volvo Car USA LLC,
`No. CV 16-6195-RSWL-JEMx, 2016 WL 9450451 (C.D. Cal. Dec.
`12, 2016) ................................................................................................ 10
`DivX, LLC v. Netflix, Inc.,
`No. CV 19-1602 PSG (DFMx), 2020 WL 3026034 (C.D. Cal. May
`11, 2020) .............................................................................................. 8, 9
`Ethicon, Inc. v. Quigg,
`849 F.2d 1422, 1426-27 (Fed. Cir. 1988) ...................................................... 3
`Gould v. Control Laser Corp.,
`705 F.2d 1340 (Fed. Cir. 1983) ................................................................... 4
`In re Cygnus Telecomms. Tech., LLC, Patent Litig.,
`385 F. Supp. 2d 1022 (N.D. Cal. 2005)......................................................... 4
`In re Etter,
`756 F.2d 852 (Fed. Cir. 1985) ..................................................................... 4
`Limestone v. Micron Tech.,
`No. SA CV 15-00278-DOC (RNBx), 2016 WL 3598109 (C.D. Cal.
`Jan. 12, 2016) ................................................................................... passim
`PersonalWeb Techs., LLC v. Apple Inc.,
`69 F. Supp. 3d 1022 (N.D. Cal. 2014) ........................................................ 11
`Polaris Innovations Ltd. v. Kingston Tech. Co.,
`No. SACV 16-00300-CJC(RAOx), 2017 WL 8220599 (C.D. Cal. Jun.
`27, 2017) .................................................................................................. 7
`Purecircle USA Inc. v. SweeGen, Inc.,
`No. SACV 18-1679 JVS (JDEx), 2019 WL 3220021 (C.D. Cal. June
`3, 2019)....................................................................................... 5, 6, 9, 12
`Slip Track Sys., Inc. v. Metal Lite, Inc.,
`159 F.3d 1337 (Fed. Cir. 1998) ................................................................... 9
`SPEX Techs., Inc. v. Kingston Tech. Corp.,
`No. SACV16-01790 JVS(AGRx), 2018 WL 2446801 (C.D. Cal. May
`16, 2018) ................................................................................................ 12
`TAS Energy, Inc. v. San Diego Gas & Elec. Co.,
`12CV2777-GPC(BGS), 2014 WL 794215 (S.D Cal. Feb. 26, 2014) ............... 11
`
`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
`PENDING INTER PARTES REVIEW
`CASE NO. 2:19-CV-06978-ADS-PSG
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`Ex. 2003 - Page 3
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`Page
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`TABLE OF AUTHORITIES
`(continued)
`
`Universal Elecs. Inc. v. Roku, Inc.,
`No. SACV 18-1580 JVS (ADSx), 2019 WL 6974173 (C.D. Cal. Nov.
`4, 2019)............................................................................................ passim
`Universal Elecs., Inc. v. Universal Remote Control, Inc.,
`943 F. Supp. 2d 1028 (C.D. Cal. 2013) ......................................................... 3
`Walmart Inc. v. Caravan Canopy Int’l, Inc.,
`Case IPR2020-01026 (PTAB) ..................................................................... 2
`Wi-LAN Inc. v. Huizhou TCL Mobile Commc’n Co.,
`No. SACV 19-870 JVS (ADSx) 2020 WL 1269837 (C.D. Cal. Feb. 7,
`2020) .............................................................................................. 7, 9, 11
`Wonderland Nursery Goods Co., Ltd. v. Baby Trend, Inc.
`EDCV 14-01153-VAP (SPx), 2015 WL 1809309 (C.D. Cal. Apr. 20,
`2015) .............................................................................................. 6, 9, 10
`XR Commc’ns, LLC v. D-Link Sys., Inc.,
`No. SACV 17-00569-AG-JGC, 2018 WL 2734849 (C.D. Cal. Apr. 10,
`2018) ....................................................................................................... 6
`Statutes
`35 U.S.C. § 314 ............................................................................................ 2
`35 U.S.C. § 316 ............................................................................................ 3
`Regulations
`37 C.F.R. § 42.107 ........................................................................................ 2
`
`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
`PENDING INTER PARTES REVIEW
`CASE NO. 2:19-CV-06978-ADS-PSG
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`Ex. 2003 - Page 4
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`I.
`
`INTRODUCTION
`
`On June 1, 2020, Walmart, Inc. (“Defendant” or “Walmart”) filed a petition
`for inter partes review (“IPR”) with the U.S. Patent and Trademark Office (“Patent
`Office”) that challenges all claims of U.S. Patent No. 5,944,040 (the “’040 patent”).
`The ’040 patent claims a “collapsible tent frame,” and is the only patent at issue
`here. It expired in May 2018, well before Caravan sued Walmart. Thus, Caravan’s
`only claim for relief is for alleged past damages, making this case ideally suited for
`a stay.
`This case is in its early stages. The Court has not yet held a Markman hearing
`nor construed the disputed claim terms. The parties are in the early stages of fact
`discovery and far away from costly expert discovery. While fact discovery is
`underway, the parties have not taken any depositions and only limited discovery has
`occurred. Dkt. 36 at 4 (“Claim construction proceedings are just getting underway.
`Fact discovery will not close until 119 days after the claim construction order
`issues.”). A stay will simplify the issues for trial and may resolve the entire
`proceeding if Walmart’s IPR petition results in the cancellation of all of the asserted
`claims. Moreover, a stay will not prejudice Caravan, where the patent has long
`expired. Finally, a stay will conserve the resources of the parties and the Court
`during the current public health crisis.
`Because all of the relevant factors favor a stay, Walmart thus respectfully
`moves for a stay pending resolution of its petition by the Patent Trial and Appeal
`Board (“PTAB”).
`II. FACTUAL AND PROCEDURAL BACKGROUND
`A. Caravan’s Lawsuit Against Walmart
`Caravan filed its Complaint on August 12, 2019 alleging infringement of the
`’040 patent. Dkt. 1. The ’040 patent expired in May 2018, over one year before the
`Complaint was filed.
`A schedule was entered in this case in February 2020, setting the Markman
`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
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`hearing for June 29, 2020 and trial for June 8, 2021. Dkts. 63, 67, 68. The majority
`
`of the deadlines in this case—final contentions, expert discovery, close of discovery,
`dispositive motions—are keyed off the claim construction order.
`Discovery in the case is in its early stages. Dkt. 36 at 4. Neither party has
`taken any depositions. Parties have exchanged initial discovery requests, and just
`recently served narrow second sets of discovery. There has been limited document
`production to date. Further, no depositions have been taken (none are even
`scheduled yet). Discovery is not set to close until 119 days after the Court issues its
`claim construction order. Id.
`While parties have completed claim construction briefing, the Court has not
`conducted a Markman hearing. Final infringement contentions and final invalidity
`contentions are not due for months. No expert discovery has been conducted. No
`summary judgment motions have been filed. Importantly, the defendants in
`Caravan’s other related cases do not oppose this motion.
`B. The Asserted Patent and Pending IPR
`On June 1, 2020, Walmart filed an IPR petition1 with the Patent Office,
`asserting that all of the claims of the ’040 patent are unpatentable due to
`obviousness. See Declaration of Kathleen R. Geyer (“Geyer Decl.”), Ex. A. On
`June 18, 2020, the Patent Office issued Notice of Filing Date Accorded for
`Walmart’s IPR petition. Id., Ex. B. Caravan has three months from the date of this
`notice (i.e., until September 18, 2020) to provide a preliminary response. 37 C.F.R.
`§ 42.107(b). “A patent owner may expedite the proceeding by filing an election to
`waive the patent owner preliminary response.” Id. Accordingly, Caravan could
`expedite the timing of the institution decision if it so chooses. The Patent Office
`must decide within three months of the receipt of the preliminary response, or
`waiver thereof, whether to institute the IPR. 35 U.S.C. § 314(b). Thus, institution
`decision for the IPR will issue, at the latest, on December 18, 2020.
`
`1 Walmart Inc. v. Caravan Canopy Int’l, Inc., Case IPR2020-01026 (PTAB).
`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
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`Upon institution, the Patent Office must conduct its review quickly. 35
`
`U.S.C. § 316(a)(11) requires “that the final determination in an inter partes review
`be issued not later than 1 year after the date on which the Director notices the
`institution of a review.”
`III. LEGAL STANDARD
`“Courts have inherent power to manage their dockets and stay proceedings,
`including the authority to order a stay pending conclusion of a PTO reexamination.”
`Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (citation omitted).
`“Courts in this District consider three factors in determining whether to stay a case
`pending IPR: ‘(1) whether discovery is complete and whether a trial date has been
`set; (2) whether a stay will simplify the issues in question and trial of the case; and
`(3) whether a stay would unduly prejudice or present a clear tactical disadvantage to
`the nonmoving party.’” Limestone v. Micron Tech., No. SA CV 15-00278-DOC
`(RNBx), 2016 WL 3598109, at *2 (C.D. Cal. Jan. 12, 2016), citing Universal Elecs.,
`Inc. v. Universal Remote Control, Inc., 943 F. Supp. 2d 1028, 1030–31 (C.D. Cal.
`2013). “The inquiry is not limited to these three factors.” Limestone, 2016 WL
`3598109, at *2. Rather, “the totality of the circumstances governs.” Id.
`A stay may be “particularly justified where the outcome of the reexamination
`would be likely to assist the court in determining patent validity and, if the claims
`were cancelled in the reexamination, would eliminate the need to try the
`infringement issue.” In re Cygnus Telecomms. Tech., LLC, Patent Litig., 385 F.
`Supp. 2d 1022, 1023 (N.D. Cal. 2005) (citing Gould v. Control Laser Corp., 705
`F.2d 1340, 1342 (Fed. Cir. 1983)). Indeed, “an auxiliary function [of the IPR] is to
`free the court from any need to consider prior art without the benefit of the PTO’s
`initial consideration.” In re Etter, 756 F.2d 852, 857 (Fed. Cir. 1985). “Thus, there
`is a liberal policy in favor of granting motions to stay proceedings pending the
`outcome of re-examination, especially in cases that are still in the initial stages of
`litigation and where there has been little or no discovery.” Limestone, 2016 WL
`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
`PENDING INTER PARTES REVIEW
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`3598109, at *2 (citation and internal quotations omitted).
`
`IV. ARGUMENT
`All of the factors considered in deciding whether to grant a stay weigh
`strongly in favor of granting a stay here.
`A. This Proceeding Is in Its Early Stages
`This case is in its early stages. Fact discovery is ongoing, and expert
`discovery, summary judgement, and pre-trial preparation remain months away.
`Thus, “there is more work ahead of the parties and the Court than behind the parties
`and the Court.” Limestone, 2016 WL 3598109, at *3 (citation and internal
`quotations omitted). By staying the case now, the parties can simplify, if not avoid
`altogether, extraneous discovery on issues of validity that may be resolved by the
`IPR proceeding.
`In evaluating “the stage of the proceedings,” the Court looks to “the progress
`of discovery, the status of claim construction, and whether a trial date has been set.
`Purecircle USA Inc. v. SweeGen, Inc., No. SACV 18-1679 JVS (JDEx), 2019 WL
`3220021, at *2 (C.D. Cal. June 3, 2019). Generally this Court has “a liberal policy
`in favor of granting motions to stay proceedings pending the outcome of re-
`examination, especially in cases that are still in the initial stages of litigation and
`where there has been little or no discovery.” Limestone, 2016 WL 3598109, at *2.
`While a trial date has been set for June 2021, 2 discovery remains in its early
`stages. Discovery is not set to close until November 2020 at the earliest, roughly
`five months away. While parties have exchanged requests for production and
`interrogatories, limited document production has occurred. No deposition has taken
`place. Expert discovery has not yet begun.
`While claim construction briefing recently concluded, a Markman hearing has
`not yet occurred, weighing in favor of a stay. See Wonderland Nursery Goods Co.,
`
`2 The same trial date was set for all five defendants in the consolidated cases. It is
`likely that trial may be further off should all cases proceed to trial.
`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
`PENDING INTER PARTES REVIEW
`CASE NO. 2:19-CV-06978-ADS-PSG
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`Ltd. v. Baby Trend, Inc. EDCV 14-01153-VAP (SPx), 2015 WL 1809309, at *3
`
`(C.D. Cal. Apr. 20, 2015) (staying the case when claim construction briefing had
`concluded but no Markman hearing had been held); XR Commc’ns, LLC v. D-Link
`Sys., Inc., No. SACV 17-00569-AG-JGC, 2018 WL 2734849, at *2 (C.D. Cal. Apr.
`10, 2018) (same).
`Thus, some of the costliest stages of litigation have yet to occur: depositions
`(fact, expert, and potentially foreign discovery of the Korean inventor named on the
`’040 patent), expert discovery, and dispositive motions. With “more work ahead of
`the parties and the Court than behind, this factor weighs in favor of granting a stay.”
`Purecircle, 2019 WL 3220021, at *2.
`This Court in Universal Elecs. Inc. v. Roku, Inc., No. SACV 18-1580 JVS
`(ADSx), 2019 WL 6974173, at *1 (C.D. Cal. Nov. 4, 2019), found a similar stage of
`proceedings to weigh in favor of a stay. In Universal, “no depositions ha[d] been
`taken or scheduled” and “expert discovery ha[d] not begun and the parties ha[d] not
`filed summary judgment motions.” Id. Even though more than a year passed before
`the IPR was filed, a Markman hearing had taken place, and “dispositive motion
`practice” was already underway, the Court found that a “stay would save the parties
`and this Court significant resources.” Id., at *2; see also Wi-LAN Inc. v. Huizhou
`TCL Mobile Commc’n Co., No. SACV 19-870 JVS (ADSx) 2020 WL 1269837, at
`*2 (C.D. Cal. Feb. 7, 2020) (finding that the stage of the litigation weighed in favor
`of a stay when “no witnesses have been deposed, no expert discovery has occurred,
`and trial is set [for the following year]”).
`Indeed, this District has regularly stayed cases further along than the present
`litigation. See, e.g., Polaris Innovations Ltd. v. Kingston Tech. Co., No. SACV 16-
`00300-CJC(RAOx), 2017 WL 8220599, at *2 (C.D. Cal. Jun. 27, 2017) (explaining
`that the stage of the litigation favored stay where the case had been “pending for
`sixteen months” but “[n]o expert discovery ha[d] occurred,” “the parties [we]re
`continuing to take depositions,” the “proceedings to date, while numerous, d[id] not
`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
`PENDING INTER PARTES REVIEW
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`place the parties on the cusp of trial”). By contrast, allowing this litigation to
`
`progress, even during the relatively short six months that it will take the PTAB to
`render its institution decision, would require the parties to expend substantial effort
`and resources on extraneous issues that will be effectively resolved by the IPR
`proceedings.
`Further, as this Court has noted, the “coronavirus pandemic is also a relevant
`consideration under this factor.” DivX, LLC v. Netflix, Inc., No. CV 19-1602 PSG
`(DFMx), 2020 WL 3026034, at *3 (C.D. Cal. May 11, 2020). Even Caravan has
`already been impacted by the pandemic, stating that it has hindered Caravan’s
`ability to meet agreed-upon targets to provide discovery responses. See Geyer
`Decl., Ex. C at 101 (“Our sincere apologies for not supplementing on April 27th.
`Coordination during these strange quarantine times has made things difficult.”) and
`Ex. D at 111 (“We are likewise disappointed with Walmart’s behavior, in particular
`pretenting [sic] there is urgency early in discovery for supplementing discovery
`responses during the COVID-19 pandemic, when we and our client are dealing with
`much more important ‘life’ issues.”). And “[i]t is likely that if these cases were to
`proceed on their current schedule, hearings and trial would be subject to delays,
`particularly because criminal matters will take priority over these patent
`infringement actions.” DivX, 2020 WL 3026034, at *3.
`Overall, the early nature of the proceedings strongly favors a stay here.
`B. A Stay Will Simplify the Issues in Question and Reduce the Burden
`of Litigation
`Walmart’s IPR will likely simplify this case regardless of its ultimate
`outcome. First, because the IPR challenges all of the claims of the ’040 patent, it is
`potentially case-dispositive, as the PTAB may cancel all of the claims. Even if the
`PTAB cancels only some of the claims, the scope of this litigation will be
`significantly reduced. Thus, granting a stay pending IPR proceedings will simplify
`the issues and reduce the burden of litigation.
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`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
`PENDING INTER PARTES REVIEW
`CASE NO. 2:19-CV-06978-ADS-PSG
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`Courts in this District regularly stay proceedings pending IPRs that have not
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`yet been instituted where all asserted claims have been challenged. See, e.g.,
`Wonderland, 2015 WL 1809309, at *3; Universal Elecs., 2019 WL 6974173, at *2;
`Wi-LAN, 2020 WL 1269837, at *2. In the context of inter partes review, a stay is
`justified where “the outcome of the reexamination would be likely to assist the court
`in determining patent validity and, if the claims were canceled in the reexamination,
`would eliminate the need to try the infringement issue.” Slip Track Sys., Inc. v.
`Metal Lite, Inc., 159 F.3d 1337, 1341 (Fed. Cir. 1998). “Although courts in this
`District have acknowledged the speculative nature of simplification where, as here,
`the PTAB has not yet made an institution decision, many courts have ultimately
`been persuaded that the potential to save significant judicial resources sways the
`analysis in favor of stay.” Purecircle, 2019 WL 3220021, at *2. This Court, for
`example, has found that even in cases where some but not all asserted claims are
`challenged, the simplification inquiry weighs in favor of a stay. DivX, 2020 WL
`3026034, at *3.
`Any concern Caravan may raise regarding staying the litigation prior to
`institution of the IPR is obviated by the relatively short time frame by which the
`PTAB must issue its decision as to whether to institute the IPR. Wonderland, 2015
`WL 1809309, at *3. If, however, the case is not stayed but the IPR is instituted, the
`court risks expending resources either wastefully (as to patents invalidated by the
`PTAB), or on issues that will necessitate reconsideration based on the developments
`of the IPR proceedings (e.g., claim construction, see Aylus Networks, Inc. v. Apple
`Inc., 856 F.3d 1353, 1362 (Fed. Cir. 2017)). Thus, “the risk of delay attending an
`unnecessary stay is minimal relative to the risk of unnecessary expenditure of
`resources should the stay be denied and an IPR subsequently commence.”
`Wonderland, 2015 WL 1809309, at *3.
`Therefore, this factor weighs in favor of a stay.
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`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
`PENDING INTER PARTES REVIEW
`CASE NO. 2:19-CV-06978-ADS-PSG
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`C. A Stay Will Not Unduly Prejudice or Tactically Disadvantage
`
`Caravan
`Walmart timely filed its IPR and this motion to stay. Moreover, the ’040
`patent has expired; there can be no ongoing infringement nor any right to exclude.
`Thus, Caravan will not be unduly prejudiced by a stay.
`Generally, courts consider four sub-factors when addressing this issue:
`“(1) the timing of the review request; (2) the timing of the request for stay; (3) the
`status of the review proceedings; and (4) the relationship of the parties.” Cannarella
`v. Volvo Car USA LLC, No. CV 16-6195-RSWL-JEMx, 2016 WL 9450451, at *13
`(C.D. Cal. Dec. 12, 2016). “Courts have repeatedly found no undue prejudice
`unless the patentee makes a specific showing of prejudice beyond the delay
`necessarily inherent in any stay.” Limestone, 2016 WL 3598109, at *5 (quoting
`PersonalWeb Techs., LLC v. Apple Inc., 69 F. Supp. 3d 1022, 1029 (N.D. Cal.
`2014)).
`Here, Walmart filed an IPR within the statutory time frame and promptly
`moved for a stay the same day the PTAB’s Notice of Filing Date Accorded was
`received, which favors a stay. See Universal, 2019 WL 6974173, at *3 (finding that
`waiting a year to file the IPR “has helped this action become more focused and
`manageable and it will allow the IPRs to focus on those claims that [plaintiff] has
`chosen to stand behind”).
`Further, the relationship of the parties does not support any claim of undue
`prejudice. Walmart and Caravan are not competitors. Indeed, Caravan is a supplier
`to Walmart. Thus, Caravan “cannot be prejudiced by a stay.” Wi-Lan, 2020 WL
`1269837, at *3 (internal quotations omitted); TAS Energy, Inc. v. San Diego Gas &
`Elec. Co., 12CV2777-GPC(BGS), 2014 WL 794215, at *5 (S.D Cal. Feb. 26, 2014)
`(“The fact that the parties are not competitors weighs in favor of a stay . . . .”).
`More importantly, the concerns raised in competitor patent infringement
`suits—loss of profits, market share, and goodwill—are not at issue when the patent
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`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
`PENDING INTER PARTES REVIEW
`CASE NO. 2:19-CV-06978-ADS-PSG
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`has expired. SPEX Techs., Inc. v. Kingston Tech. Corp., No. SACV16-01790
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`JVS(AGRx), 2018 WL 2446801, at *2 (C.D. Cal. May 16, 2018) (finding that,
`because the patents had expired, “[w]hatever concern the Court might have for the
`patent holder’s ability to protect market share by excluding others is simply absent
`here”). Since the ’040 patent is expired, Caravan can be readily compensated by
`calculable money damages. Compare Universal, 2019 WL 6974173 at *3
`(“[I]nfringement among competitors can cause harm in the marketplace that is not
`compensable by readily calculable money damages.”) (internal quotations omitted).
`Moreover, Caravan was assigned all rights in the ’040 patent in March of 2001, but
`Caravan waited almost 18 years to file this lawsuit. “The mere possibility of delay”
`of receiving such damages “is insufficient to constitute undue prejudice.”
`Purecircle, 2019 WL 3220021, at *3 (citation omitted).
`Thus, the lack of undue prejudice to Caravan here clearly favors a stay.
`D. The Current Public Health Emergency Further Favors a Stay
`The “totality of the circumstances governs” the inquiry into whether to stay
`proceedings pending IPR. Limestone, 2016 WL 3598109, at *2. The public health
`emergency declared in California (and other states) in response to the spread of
`COVID-19 further favors staying this case now. This District’s courthouse in Los
`Angeles remains open for criminal matters, but is otherwise closed to the public.
`See Geyer Decl., Ex. E. As indicated by this District’s own guidelines, the Court’s
`already limited resources are better directed in the near term to addressing criminal
`matters, for which the Constitutional right to a speedy trial applies, rather than
`overseeing discovery in this intellectual property dispute between two corporations.
`The Patent Office, on the other hand, has no criminal docket or accompanying
`Constitutional obligations, and is ready to assess the validity of the patents without
`delay. Indeed, its prompt issuance of notice of filing date accorded in Walmart’s
`IPR proceeding indicates that it is generally business as usual at the Patent Office.
`See Geyer Decl., Ex. F. The Patent Office has also heavily relied on virtual
`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
`PENDING INTER PARTES REVIEW
`CASE NO. 2:19-CV-06978-ADS-PSG
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`proceedings for hearings and trials even before the pandemic, making it an even
`
`more suitable forum to address the validity issue. Thus, the current climate due to
`the threat of COVID-19 further favors a stay.
`V. CONCLUSION
`For the foregoing reasons, Walmart requests that the Court stay this
`litigation pending final determination in the IPR proceedings.
`DATED: June 18, 2020
`Respectfully submitted,
`KILPATRICK TOWNSEND & STOCKTON LLP
`
`By:
`
`/s/ Dario A. Machleidt
`DARIO A. MACHLEIDT
`Steven D. Moore (Bar No. 290875)
`smoore@kilpatricktownsend.com
`Two Embarcadero Center, Suite 1900
`San Francisco, CA 94111
`Telephone: (415) 576-0200
`Facsimile: (415) 576-0300
`
`Megan M. Chung (Bar No. 232044)
`mchung@kilpatricktownsend.com
`1801 Century Park East, Suite 2300
`Los Angeles, CA 90067
`Telephone: (310) 248-3830
`Facsimile:
`(310) 860-0363
`
`Dario A. Machleidt (admitted pro hac vice)
`dmachleidt@kilpatricktownsend.com
`Kathleen R. Geyer (admitted pro hac vice)
`kgeyer@kilpatricktownsend.com
`1420 Fifth Avenue, Suite 3700
`Seattle, WA 98101
`
`Edward J. Mayle (admitted pro hac vice)
`tmayle@kilpatricktownsend.com
`1400 Wewatta St., Ste. 600
`Denver, CO 80202
`Attorneys for Defendant WALMART INC.
`WALMART’S MEMO ISO MOTION TO STAY LITIGATION
`PENDING INTER PARTES REVIEW
`CASE NO. 2:19-CV-06978-ADS-PSG
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`Ex. 2003 - Page 14
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