Case 2:19-cv-06978-PSG-ADS Document 43 Filed 08/19/20 Page1of6 Page ID #:289
`
`UNITED STATES DISTRICT COURT
`
`CENTRALDISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`
`Case No.
`
`SACV 19-1072 PSG (anes
`
`Date August 19, 2020
`
`Title
`
`Caravan CanopyInt’l, Inc. v. Home DepotU.S.A., Inc., et al. (Lead Consolidated Case)
`Caravan CanopyInt’l, Inc. v. WalmartInc., et al. (Member Consolidated Case)
`
`Present: The Honorable
`
`Philip S. Gutierrez, United States District Judge
`
`Wendy Hernandez
`
`Deputy Clerk
`
`Not Reported
`
`Court Reporter
`
`Attorneys Present for Plaintiff(s):
`
`Attomeys Present for Defendant(s):
`
`NotPresent
`
`Not Present
`
`Proceedings (In Chambers):
`
`The Court GRANTSthe motionto stay.
`
`Before the Court is Defendant Walmart Inc.’s (“Defendant”) motionto stay the case
`pendinginter partes review. See Dkt. # 100 (“Mot.’’).'! Plaintiff Caravan CanopyInternational
`Inc. (“Plaintiff”) opposes the motion, see Dkt. # 119 (“Opp.”’), and Defendantreplied, see Dkt. #
`121 (“Reply”). The Court finds the matter appropriate for decision without oral argument. See
`Fed. R. Civ. P. 78; L.R. 7-15. After considering the moving, opposing, and reply papers, the
`Court GRANTSDefendant’s motion tostay.
`
`1
`
`Background
`
`This is a patent infringement case. On August 12, 2019, Plaintiff filed its complaint in
`this Court, accusing Defendantof infringing one ofits patents: U.S. Patent No. 5,944,040 (“the
`‘040 patent”). See Complaint, Dkt. # 1 (“Compl.”). To date, the Court has set dates for trial and
`issued a claim construction order. See Dkts. # 30, 37. The Parties dispute how muchdiscovery
`they have done, but they have not yet taken depositions. See Mot. 6:4—9; Opp. 4:6—-12. Under
`the current scheduling order, opening expert reports are due January 8, 2021, rebuttal expert
`reports are due February 8, 2021, fact discovery closes March 8, 2021, final dispositive motions
`must be filed by March 22, 2021, final pretrial conferences are scheduled for May 24, 2021, and
`a jury trial is scheduled for June 8, 2021. See Dkt. # 122.
`
`
`
`' Given the pre-trial consolidation in this matter, the motion to stay, opposition, and reply are all
`docketed at Caravan Canopy Int'l, Inc. v. Home Depot U.S.A., Inc., et al., No. 8:19-cv-01072-PSG-
`ADS.
`
`CV-90 (10/08)
`
`CIVIL MINUTES - GENERAL
`
`Page | of 6
`Petitioner Walmart Inc.
`Exhibit 1019 - Page 1 of 6
`
`

`

`Case 2:19-cv-06978-PSG-ADS Document 43 Filed 08/19/20 Page 2 o0f6 Page ID #:290
`
`UNITED STATES DISTRICT COURT
`
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`
`Case No.
`
`SACV 19-1072 PSG (ADSx)
`LACV 19-6978 PSG (ADSx)
`
`Date August 19, 2020
`
`Title
`
`Caravan CanopyInt’l, Inc. v. Home DepotU.S.A., Inc., et al. (Lead Consolidated Case)
`Caravan CanopyInt’l, Inc. v. WalmartInc., et al. (Member Consolidated Case)
`
`On June 1, 2020, Defendantfiled a petition for inter partes review (“IPR”) with the
`Patent Office. See Declaration ofKathleen R. Geyer, Dkt. # 100-2 (“Geyer Decl.”) Ex. A.
`Defendant sought review of the ‘040 patent, arguing that all of the patent’s claims are
`unpatentable due to obviousness. See Mot. 6:16—18. The Patent Office issued a Notice of Filing
`Date Accorded for the IPR petition, but has not yet madeaninstitution decision on the ‘040
`patent. See id. 6:18-27. The parties agree that an institution decision will issue by December
`18, 2020, andthat a final decision will happen within a year of that date. See id. 6:27—7:4; Opp.
`5:5-13.
`
`On June 18, 2020, Defendantfiled this motion to stay the case pending the outcome ofthe
`IPR proceedings. See generally Mot.
`
`Il.
`
`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 generally consider three
`factors in deciding whetherto grant a stay during IPR proceedings:
`
`1.
`.
`3.
`
`whether discovery is complete and whethera trial date has beenset;
`whethera stay will simplify the issues in question andtrial of the case; and
`whethera stay would unduly prejudice or presenta clear tactical disadvantage to
`the non-movingparty.
`
`Wonderland Nursery Goods Co. v. Baby Trend, Inc., No. EDCV 14-01153-VAP, 2015 WL
`1809309, at *2 (C.D. Cal. Apr. 20, 2015) (quoting Universal Elecs., Inc. v. Universal Remote
`Control, Inc., 943 F. Supp. 2d 1028, 1030-31 (C.D. Cal. 2013)). Courts should also considerthe
`“totality of the circumstances” in evaluating whethera stay is proper. Jd. (“While the case law
`enumerates several general considerations that are helpful in determining whetherto order a
`stay, ultimately ‘the totality of the circumstances governs.’” (quoting Universal Elecs., 943 F.
`Supp. 2d at 1031)); see also E.Digital Corp. v. Dropcam, Inc., No. 14-CV-04922-JST, 2016 WL
`658033, at *2 (N.D. Cal. Feb. 18, 2016) (“While case law supplies these general considerations,
`the Court ultimately must decide whetherto issue a stay on a case-by-casebasis.’’).
`
`“There is a ‘liberal policy in favor of granting motions to stay proceedings pending the
`outcome’ of re-examination, especially in casesthatare still in the initial stages of litigation and
`
`CV-90 (10/08)
`
`CIVIL MINUTES- GENERAL
`
`Page 2 of 6
`Petitioner Walmart Inc.
`Exhibit 1019 - Page 2 of 6
`
`

`

`Case 2:19-cv-06978-PSG-ADS Document 43 Filed 08/19/20 Page 3o0f6 Page ID #:291
`
`UNITED STATES DISTRICT COURT
`
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`
`Case No.
`
`SACV 19-1072 PSG (ADSx)
`LACV 19-6978 PSG (ADSx)
`
`Date August 19, 2020
`
`Title
`
`Caravan CanopyInt’l, Inc. v. Home DepotU.S.A., Inc., et al. (Lead Consolidated Case)
`Caravan CanopyInt’l, Inc. v. Walmart Inc., et al. (Member Consolidated Case)
`
`wherethere has beenlittle or no discovery,” but “[c]ourts are not required to stay judicial
`proceedings pending re-examination of a patent.” Pi-Net Int’l, Inc. v. Hertz Corp., No. CV 12-
`10012 PSG (JEMx), 2013 WL 7158011, at *2 (C.D. Cal. June 5, 2013) (quoting Aten Int’l Co.
`Ltd. v. Emine Tech. Co., No. SACV 09-0843, AG (MGLx), 2010 WL 1462110, at *6 (C.D. Cal.
`Apr. 12, 2010)).
`
`Il.
`
`Discussion
`
`A.
`
`Stage of the Proceedings
`
`Thefirst factor asks the Court to consider the progress already made in the case, such as
`the completion of discovery, the setting of a trial date, and whether claim construction has
`occurred. See Wonderland Nursery, 2015 WL 1809309, at *2. “[D]istrict courts have adopted
`the date of the filing of the motion to stay” as the “proper time to measure the stage of
`litigation.” VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1316 (Fed. Cir. 2014)
`(collecting cases).
`
`The parties dispute whetherthis actionis in its early stages. They have exchangedinitial
`discovery requests and served secondsets of discovery, but no depositions have been taken yet.
`See Mot. 6:4—9; Opp. 4:6—-12. This supports Defendant’s position. See Pi-Net, 2013 WL
`7158011, at *2 (holding that the parties were in the early stages when they had exchanged
`infringement contentions, served interrogatories, and the plaintiff had made documents available
`for review); Locata LBS, LLC v. Yellowpages.com, LLC, No. CV 13-7664 JAK, 2014 WL
`8103949, at *2—3 (C.D. Cal. July 11, 2014) (holding that the parties were in the early stages
`whenthey had engaged in somepreliminary discovery, including initial disclosures and serving
`document requests and interrogatories, but depositions had yet to take place). However, the
`Court issued its Claim Construction Order on June 23, 2020, which favorsPlaintiff's position.
`Cf. Telesign Corp. v. Twilio, Inc., No. CV 15-3240 PSG (SSx), 2016 WL 6821111, at *2 (C.D.
`Cal. Mar. 9, 2016) (parties had notyet filed claim construction briefs, which favored granting a
`stay).
`
`Ultimately, while Plaintiff is correct that this factor is a closer issue than Defendant
`acknowledges, the Court agrees with Defendantthat this caseisstill in its early stages. The
`parties still must (1) finish documentproduction, (2) conduct depositions, (3) complete and
`exchange expert reports, (4) file any dispositive motions, and (5) potentially proceed through a
`trial. Therefore, there remains “more workahead ofthe parties and the Court than behind
`
`CV-90 (10/08)
`
`CIVIL MINUTES- GENERAL
`
`Page 3 of 6
`Petitioner Walmart Inc.
`Exhibit 1019 - Page 3 of 6
`
`

`

`Case 2:19-cv-06978-PSG-ADS Document 43 Filed 08/19/20 Page4of6 Page ID #:292
`
`UNITED STATES DISTRICT COURT
`
`CENTRALDISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`
`Case No.
`
`SACV 19-1072 PSG (ADSx)
`LACV 19-6978 PSG (ADSx)
`
`Date August 19, 2020
`
`Title
`
`Caravan CanopyInt’l, Inc. v. Home DepotU.S.A., Inc., et al. (Lead Consolidated Case)
`Caravan CanopyInt’l, Inc. v. WalmartInc., et al. (Member Consolidated Case)
`
`[them].” See Limestone v. Micron Tech., No. SACV 15-00278-DOC (RNBx), 2016 WL
`3598109, at *3 (C.D. Cal. Jan. 12, 2016). Accordingly, the Court finds that this factor weighs
`slightly in favor of granting a stay.
`
`B.
`
`Simplify
`
`Issues
`
`The Court next considers whethera stay will simplify the issues in the case. See
`Wonderland Nursery, 2015 WL 1809309,at *2.
`
`Defendant argues that staying the case would simplify the issues because the IPR
`challengesall of the claims of the ‘040 patent. See Mot. 10:23—28. Therefore, if the Patent
`Office agrees with Defendant, it is case-dispositive. See Mot. 10:23—28. And, Defendant
`asserts, even if the Patent Office cancels only some ofthe ‘040 patent’s claims, the scope ofthis
`suit would be narrowed. See Mot. 10:23-28.
`
`Here, Defendant seeks a stay before the Patent Office has made aninstitution decision on
`Defendant’s IPR. Although courts in this District have acknowledgedthatit is speculative to
`argue simplification before the Patent Office makes an institution decision, many courts have
`ultimately decided that saving scarce judicial resources “sways the analysis in favorof [a] stay,”
`especially whena stay will be relatively short. See Purecircle USA Inc. v. SweeGen, Inc., No.
`SACV 18-1679 JVS (JDEx), 2019 WL 3220021, at *2 (C.D. Cal. June 3, 2019). Accordingly,
`the Court finds this factor weighs in favor of a stay because the IPR challengesall of the claims
`in a single patent, which meansthe scopeofthis suit is likely to be substantially narrowed if the
`Patent Office agrees with Defendant.
`
`C.
`
`Undue Prejudice
`
`Thefinal factor is whether a stay would unduly prejudice or presenta cleartactical
`disadvantage to the non-moving party—here,Plaintiffs. See Wonderland Nursery, 2015 WL
`1809309, at *2. “In weighing the prejudice to the non-moving party, courts consider four sub-
`factors: ‘(1) the timing ofthe petition for review; (2) the timing of the requestfor the stay; (3)
`the status of review proceedings; and (4) the relationship ofthe parties.’” E. Digital, 2016 WL
`658033, at *4 (quoting Cypress Semiconductor Corp. v. GSI Tech, Inc., No. CV 13-2013 JST,
`2014 WL 5021100, at *3 (N.D. Cal. Oct. 7, 2014)).
`
`CV-90 (10/08)
`
`CIVIL MINUTES- GENERAL
`
`Page 4 of 6
`Petitioner Walmart Inc.
`Exhibit 1019 - Page 4 of 6
`
`

`

`Case 2:19-cv-06978-PSG-ADS Document 43 Filed 08/19/20 Page 5of6 Page ID #:293
`
`UNITED STATES DISTRICT COURT
`
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`
`Case No.
`
`SACV 19-1072 PSG (ADSx)
`LACV 19-6978 PSG (ADSx)
`
`Date August 19, 2020
`
`Title
`
`Caravan CanopyInt’l, Inc. v. Home Depot U.S.A., Inc., et al. (Lead Consolidated Case)
`Caravan CanopyInt’l, Inc. v. WalmartInc., et al. (Member Consolidated Case)
`
`i.
`
`Timing of the Petition for Review
`
`Plaintiff filed its Complaint on August 12, 2019, see Compl., and Defendant did not
`petition for IPR until June 1, 2020, see Geyer Decl. Ex. A. While a plaintiff must make “a
`specific showing of prejudice beyond the delay necessarily inherent in any stay,” Plaintiff has
`done so here because the delay caused by Defendant’s recently-filed IPR would have been
`substantially reducedif it had not waited almost ten months betweenthe filing of Plaintiffs
`complaint and Defendant’s IPR petition. See Affinity Labs of Texas LLC v. Samsung Elecs. Co.,
`No. 14-CV-2717 YGR, 2014 WL 3845684, at *4 (N.D. Cal. Aug. 1, 2014). Such a lengthy
`delay weighs against granting a stay because the court “expect[s] accused infringers to evaluate
`whetherto file, and then to file, IPR petitions as soon as possible after learning that a patent may
`be asserted against them.” See Int’l Test Sols., Inc. v. Mipox Int’l Corp., No. 16-CV-00791-RS,
`2017 WL 1316549,at *3 (N.D. Cal. Apr. 10, 2017) (cleaned up).
`
`ii.
`
`Timing of the Requestfor Stay
`
`Defendant moved to stay seventeen daysafter filing its IPR petition, on June 18, 2020,
`which wasthe day it received the Patent Office’s Notice of Filing Date Accorded. See Mot.
`12:14-17. Therefore, the timing of the request for the stay weighs in favorofthe stay.
`
`iil.
`
`Status ofReview Proceedings
`
`The Patent Office has not yet made an institution decision on the ‘040 patent. See Mot.
`6:18—27. Its institution decision is expected by December 18, 2020, and it will make a final
`determination within one yearof that date. See Opp. 5:4—-13. This delay will result in a final
`determination up to six monthsafter the originally scheduledtrial date, and this delay was
`caused by Defendant’s delay in seeking IPR review. See id. 5:3-16. Therefore, this factor
`weighs against grantingastay.
`
`iv.
`
`The Relationship ofthe Parties
`
`Defendantclaimsthat the parties are not competitors. Mot. 12:22. Rather, it asserts that
`Plaintiff is one of its suppliers. /d. 12:20—23. And, even if they were competitors, Defendant
`notes that the ‘040 patent has expired, and, as such,there is no (a) ongoing infringement,id.
`12:2—S, or (b) loss of profits, market share, and goodwill, see id. 12:26—13:1.
`
`CV-90 (10/08)
`
`CIVIL MINUTES- GENERAL
`
`Page 5 of 6
`Petitioner Walmart Inc.
`Exhibit 1019 - Page 5 of 6
`
`

`

`Case 2:19-cv-06978-PSG-ADS Document 43 Filed 08/19/20 Page 6of6 Page ID #:294
`
`UNITED STATES DISTRICT COURT
`
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`
`Case No.
`
`SACV 19-1072 PSG (ADSx)
`LACV 19-6978 PSG (ADSx)
`
`Date August 19, 2020
`
`Title
`
`Caravan CanopyInt’l, Inc. v. Home Depot U.S.A., Inc., et al. (Lead Consolidated Case)
`Caravan CanopyInt’l, Inc. v. WalmartInc., et al. (Member Consolidated Case)
`
`Plaintiff counters that the parties are, in fact, competitors. Opp. 4:15 n.3. However, the
`Court agrees with Defendantthat the relationship of the parties favors a stay because, while
`Plaintiff might be right that the parties used to be competitors, now that the ‘040 patent has
`expired, they are no longer competitors for the purposes ofthe patent at issue in this case. Reply
`7:17-23.
`
`In sum, these subfactors are mixed, but the Court finds that they weigh slightly in favor of
`granting a stay because Plaintiff has not shown that Defendant’s delay will unduly prejudice
`Plaintiff or give Defendanta clear tactical advantage. While it would have been preferable for
`Defendantto petition for IPR long beforeit did, there is no ongoing infringementin this case,
`and therefore the only prejudice Plaintiff will suffer if a stay is granted is a delay in resolving
`whetherit can recover damages for Defendant’s past conduct. This is the same prejudice thatis
`inherent in any stay. See Affinity Labs, 2014 WL 3845684 at *4.
`
`D.
`
`Balancing the Factors and Totality of the Circumstances
`
`Ultimately, the Court finds that the factors addressed above weighin favor of granting a
`stay. While Defendant could havepetitioned for IPR sooner to avoid delayingthis litigation, the
`Patent Office’s review of the IPR is potentially case-dispositive, and Plaintiff has not offered any
`legitimate reason (other than the delay inherent in any stay) why a stay would prejudiceits case.
`
`Accordingly, the Court finds that (1) this case is in its early stages, (2) the IPR might
`significantly simplify the issues, and (3) that the stay will not unduly prejudice Plaintiff.
`Therefore, a stay is appropriate.
`
`IV.
`
`Conclusion
`
`For the foregoing reasons, the Court GRANTS Defendant’s motion to stay pending the
`Patent Office’s decision on Defendant’s IPR petition. This order administratively closes No. CV
`19-6978 PSG (ADSx). Either party may apply ex parte to reopen the case (a) in the event that
`the Patent Office declines to institute the IPR, or (b) after the conclusion ofall IPR proceedings.
`
`IT IS SO ORDERED.
`
`CV-90 (10/08)
`
`CIVIL MINUTES - GENERAL
`
`Page 6 of 6
`Petitioner Walmart Inc.
`Exhibit 1019 - Page 6 of 6
`
`