Case 2:19-cv-06978-PSG-ADS Document 43 Filed 08/19/20 Page 1 of 6 Page ID #:289
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`
`Case No.
`
`SACV 19-1072 PSG (e.DSx)
`LACY 19-6978 PSG (ADSx)
`
`Date August 19, 2020
`
`Title
`
`Caravan Canopy Int' l, Inc. v. Home Depot U.S.A., Inc. , et al. (Lead Consolidated Case)
`Caravan Canopy Int' l, Inc. v. Wal mart lnc., et al. (Member Consolidated Case)
`
`Present: The Honorable
`
`Philip S. Gutierrez, United States District Judge
`
`Wendy Herna ndez
`Deputy Clerk
`
`Not Reported
`Court Reporter
`
`Attorneys Present for Plaintiff(s):
`
`Attorneys Present for Defendant(s):
`
`Not Present
`
`Not Present
`
`Proceedings (In Chambers): The Court GRA~TS the motion to stay.
`
`Before the Court is Defendant Walmart Inc. 's ("Defendant") motion to stay the case
`pending inter partes review. See Dkt. # I 00 ("Mot. "). 1 Plaintiff Caravan Canopy International
`Inc. ("Plaintiff') opposes the motion, see Dkt. # 1 19 ("Opp."), and Defendant replied, 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 GRANTS Defendant's motion to stay.
`
`I.
`
`Background
`
`This is a patent infringement case. On August 12, 20 19, Plaintiff filed its complaint in
`this Court, accusing Defendant of infringing one of its patents: U.S. Patent No. 5,944,040 ("the
`'040 patent"). See Complaint, Dkt. # I ("Comp/."). To date, the Court has set dates for trial and
`issued a claim construction order. See Dkts. # 30, 37. The Parties dispute how much discovery
`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.
`
`1 Given the pre-trial consolidation in this matter, the motion to stay, opposition, and reply are all
`docketed at Caravan Canopy Int '/, Inc. v. Home Depot U.S.A., Inc., et al. , No. 8: 19-cv-01072-PSG(cid:173)
`ADS.
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`CV-90 (10/08)
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`CIVIL M INUTES-GE ERAL
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`Page 1 of 6
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`Petitioners Exhibit 1019
`Patent 5,944,040
`
`

`

`Case 2:19-cv-06978-PSG-ADS Document 43 Filed 08/19/20 Page 2 of 6 Page ID #:290
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`C IV I L M l UTES- GENERAL
`
`Case No. SACV 19-1072 PSG (ADSx)
`LACY 19-6978 PSG (ADSx)
`
`Date August 19, 2020
`
`Title
`
`Caravan Canopy Int' !, Inc. v. Home Depot U.S.A., Inc., et al. (Lead Consolidated Case)
`Caravan Canopy Int' !, Inc. v. Walmart Inc., et al. (Member Consolidated Case)
`
`On June l , 2020, Defendant filed a petition for inter partes review ("lPR") with the
`Patent Office. See Declaration of Kathleen R. Geyer, Dkt. # 100-2 ("Geyer Deel.") 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 made an institution decision on the '040
`patent. See id. 6: 18- 27. The parties agree that an institution decision will issue by December
`18, 2020, and that 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, Defendant filed this motion to stay the case pending the outcome of the
`IPR proceedings. See generally Mot.
`
`11.
`
`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 whether to grant a stay during IPR proceedings:
`
`l.
`2.
`3.
`
`whether discovery is complete and whether a trial date has been set;
`whether a stay will simplify the issues in question and trial of the case; and
`whether a stay would unduly prejudice or present a clear tactical disadvantage to
`the non-moving party.
`
`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. 20 13)). Courts should also consider the
`"totality of the circumstances" in evaluating whether a stay is proper. id. ("While the case law
`enumerates several general considerations that are helpful in determining whether to order a
`stay, ultimately 'the totality of the circumstances governs."' (quoting Universal £lees., 943 F.
`Supp. 2d at 1031)); see also £.Digital Corp. v. Dropcam, inc., No. 14-CY-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 whether to issue a stay on a case-by-case basis.").
`
`"There is a 'liberal policy in favor of granting motions to stay proceedings pending the
`outcome' ofre-examination, especially in cases that are still in the initial stages oflitigation and
`
`CV-90 (10/08)
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`c rvrL MINUTES. GE:-.'ERAL
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`Case 2:19-cv-06978-PSG-ADS Document 43 Filed 08/19/20 Page 3 of 6 Page ID #:291
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CI V IL M INUT ES - G ENERAL
`
`Case No. SACV 19-1072 PSG (ADSx)
`LACY 19-6978 PSG (ADSx)
`
`Date August 19, 2020
`
`Title
`
`Caravan Canopy Int' !, Inc. v. Home Depot U.S.A., Inc., et al. (Lead Consolidated Case)
`Caravan Canopy Int'!, Inc. v. Walmart lnc., et al. (Member Consolidated Case)
`
`where there has been little or no discovery," but "[ c ]ourts are not required to stay judicial
`proceedings pending re-examination of a patent." Pi-Net Int'!, Inc. v. Hertz Corp. , No. CV 12-
`100 12 PSG (JEMx), 2013 WL 7 1580 11 , at *2 (C.D. Cal. June 5, 2013) (quoting Aten int 'I Co.
`Ltd. v. Emine Tech. Co., No. SACV 09-0843, AG (MGLx), 2010 WL 146211 0, at *6 (C.D. Cal.
`Apr. 12, 2010)).
`
`III. Discussion
`
`A.
`
`Stage of the Proceedings
`
`The first 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 Nursety, 201 5 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." Virtua/Agility Inc. v. Salesforce.com, inc. , 759 F.3d 1307, 1316 (Fed. Cir. 20 14)
`( collecting cases).
`
`The parties dispute whether this action is in its early stages. They have exchanged initial
`discovery requests and served second sets of d iscovery, 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
`7 1580 11, 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, 20 14 WL
`8103949, at *2- 3 (C.D. Cal. July 11 , 2014) (holding that the parties were in the early stages
`when they had engaged in some preliminary discovery, including initial disclosures and serving
`document requests and interrogatories, but depositions had yet to take place). However, the
`Court issued its C laim Construction Order on June 23, 2020, wh ich favors Plaintiffs position.
`Cf Telesign Cotp. v. Twilio, inc., No. CV 15-3240 PSG (SSx), 20 16 WL 6821111, at *2 (C.D.
`Cal. Mar. 9, 20 l 6) (parties had not yet 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 Defendant that this case is still in its early stages. The
`parties still must ( 1) fi nish document production, (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 work ahead of the parties and the Court than beh ind
`
`CV-90 ( 10/08)
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`CM L Ml 11JTES-GEN"ERAL
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`Case 2:19-cv-06978-PSG-ADS Document 43 Filed 08/19/20 Page 4 of 6 Page ID #:292
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CI V IL M IN UT ES - GENERAL
`
`CaseNo. SACVl9-1072 PSG(ADSx)
`LACY 19-6978 PSG (ADSx)
`
`Date August l 9,2020
`
`Title
`
`Caravan Canopy Int' !, Inc. v. Home Depot U.S.A., Inc., et al. (Lead Consolidated Case)
`Caravan Canopy Jnt' l, Inc. v. Walmart Inc., 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 whether a 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
`challenges all of the claims of the '040 patent. See Mot. I 0:23- 28. Therefore, if the Patent
`Office agrees with Defendant, it is case-dispositive. See Mot. I 0:23- 28. And, Defendant
`asserts, even if the Patent Office cancels only some of the '040 patent's claims, the scope of this
`suit would be narrowed. See Mot. 10:23- 28.
`
`Here, Defendant seeks a stay before the Patent Office has made an institution decision on
`Defendant's IPR. Although courts in this District have acknowledged that it is speculative to
`argue simplification before the Patent Office makes an institution decision, many courts have
`ultimate ly decided that saving scarce judicial resources "sways the analysis in favor of [a] stay,"
`especially when a stay will be relatively short. See Purecircle USA Inc. v. SweeGen, Inc., No.
`SACV 18-1679 NS (JD Ex), 2019 WL 3220021, at *2 (C.D. Cal. June 3, 20 19). Accordingly,
`the Court finds this factor weighs in favor of a stay because the IPR challenges all of the claims
`in a single patent, which means the scope of this suit is likely to be substantially narrowed if the
`Patent Office agrees with Defendant.
`
`C.
`
`Undue Prejudice
`
`The furn! factor is whether a stay would unduly prejudice or present a clear tactical
`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(cid:173)
`factors: '(l) the timing of the petition for review; (2) the timing of the request for the stay; (3)
`the status of review proceedings; and ( 4) the relationship of the parties."' E. Digital, 2016 WL
`658033, at *4 (quoting Cypress Semiconductor Corp. v. GS! Tech, Inc., No. CV 13-2013 JST,
`2014 WL 5021100, at *3 (N.D. Cal. Oct. 7, 2014)).
`
`CV-90 (10108)
`
`CIVlL MfNUTES - GENERAL
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`Case 2:19-cv-06978-PSG-ADS Document 43 Filed 08/19/20 Page 5 of 6 Page ID #:293
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`C IV I L M l UTES- GENERAL
`
`Case No. SACV 19- 1072 PSG (ADSx)
`LACY 19-6978 PSG (ADSx)
`
`Date August 19, 2020
`
`Title
`
`Caravan Canopy Jnt' l, Inc. v. Home Depot U.S.A., Inc., et al. (Lead Consolidated Case)
`Caravan Canopy Int'l, Inc. v. Walmart Inc., et al. (Member Consolidated Case)
`
`i.
`
`Timing of the Petition for Review
`
`Plaintiff filed its Complaint on August 12, 2019, see Comp!. , and Defendant did not
`petition for IPR until June 1, 2020, see Geyer Deel. 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 reduced if it had not waited almost ten months between the 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
`whether to file, and then to file, IPR petitions as soon as possible after learning that a patent may
`be asserted against them." See Int'/ Test Sols., Inc. v. Mipox Int '/ Corp. , No. 16-CV-00791-RS,
`2017 WL 1316549, at *3 (N.D. Cal. Apr. 10, 2017) (cleaned up).
`
`ii.
`
`Timing of the Request for Stay
`
`Defendant moved to stay seventeen days after filing its IPR petition, on June 18, 2020,
`which was the 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 favor of the stay.
`
`iii.
`
`Status of Review Proceedings
`
`The Patent Office has not yet made an institution decision on the '040 patent. See Mot.
`6: 18- 27. Its institution decis ion is expected by December 18, 2020, and it will make a final
`detennination within one year of that date. See Opp. 5 :4-13. This delay will result in a final
`determination up to six months after the originally scheduled trial date, and this delay was
`caused by Defendant's delay in seeking IPR review. See id. 5 :3- 16. Therefore, this factor
`weighs against granting a stay.
`
`iv.
`
`The Relationship of the Parties
`
`Defendant claims that the parties are not competitors. Mot. 12:22. Rather, it asserts that
`P laintiff is one of its suppliers. Id. 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- 5, or (b) loss of profits, market share, and goodwill, see id. 12:26- 13:1.
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`CV-90 ( I 0/08)
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`CIVIL MINUTES - GENERAL
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`Case 2:19-cv-06978-PSG-ADS Document 43 Filed 08/19/20 Page 6 of 6 Page ID #:294
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`C IV IL Ml UTES-GENERAL
`
`Case No. SACV 19-1072 PSG (ADSx)
`LACY 19-6978 PSG (ADSx)
`
`Date August 19, 2020
`
`Title
`
`Caravan Canopy Int' !, Inc. v. Home Depot U.S.A., Inc., et al. (Lead Consolidated Case)
`Caravan Canopy Int' ), Inc. v. Walmart Inc., et al. (Member Consolidated Case)
`
`Plaintiff counters that the parties are, in fact, competitors. Opp. 4: 15 n.3. However, the
`Court agrees with Defendant that 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 of the 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 Defendant a clear tactical advantage. While it wou ld have been preferable for
`Defendant to petition for IPR long before it did, there is no ongoing infringement in this case,
`and therefore the only prejudice Plaintiff will suffer if a stay is granted is a delay in resolving
`whether it can recover damages for Defendant's past conduct. This is the same prejudice that is
`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 weigh in favor of granting a
`stay. While Defendant could have petitioned for fPR sooner to avoid delaying this 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 prejudice its 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 w ill 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 patty 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 of all IPR proceedings.
`
`IT IS SO ORDERED.
`
`CV-90 ( I 0/08)
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`c rvrL MINUTES. CE1''ERAL
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