Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 1 of 13 PageID #: 1022
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`C.A. No. 21-323-MN
`
`JURY TRIAL DEMANDED
`
`)))))))))
`
`ECOBEE, INC.,
`
`Plaintiff,
`
`v.
`
`ECOFACTOR, INC.,
`
`Defendant.
`
`ECOBEE, INC.’S OPPOSITION TO MOTION TO STAY
`
`OF COUNSEL:
`
`Timothy Carroll
`Steven Lubezny
`VENABLE LLP
`227 West Monroe Street, Suite 3950
`Chicago, IL 60606
`Tel: (312) 820-3400
`
`Manny J. Caixeiro
`VENABLE LLP
`2049 Century Park E, Ste. 2300
`Los Angeles, CA 90067
`Tel: (310) 229-9900
`
`Dated: July 13, 2021
`7294695 / 51061
`
`David E. Moore (#3983)
`Bindu A. Palapura (#5370)
`POTTER ANDERSON & CORROON LLP
`Hercules Plaza, 6th Floor
`1313 N. Market Street
`Wilmington, DE 19801
`Tel: (302) 984-6000
`dmoore@potteranderson.com
`bpalapura@potteranderson.com
`
`Attorneys for Plaintiff ecobee, Inc.
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 1
`
`

`

`Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 2 of 13 PageID #: 1023
`
`TABLE OF CONTENTS
`
`NATURE AND STAGE OF PROCEEDINGS .............................................................................. 1
`
`SUMMARY OF ARGUMENT ...................................................................................................... 2
`
`STATEMENT OF FACTS ............................................................................................................. 3
`
`ARGUMENT .................................................................................................................................. 4
`
`I. The Mandatory Stay Provisions of 28 U.S.C. § 1659 Are Inapplicable ....................... 4
`
`II. The Court Should Decline to Enter a Discretionary Stay ............................................ 5
`
`CONCLUSION ............................................................................................................................. 10
`
`i
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 2
`
`

`

`Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 3 of 13 PageID #: 1024
`
`TABLE OF CITATIONS
`
`
`
`Page(s)
`
`Cases
`
`Advanced Micro Devices, Inc. v. ATI Technologies ULC,
`C.A. No. 19-70-CFC, 2019 WL 4082836 (D. Del. Aug. 29, 2019) ........................................10
`
`Aliphcom v. Fitbit, Inc.,
`154 F. Supp. 933 (N.D. Cal.) .....................................................................................................9
`
`Elan Microelectronics Corp. v. Apple Inc.,
`C 90-1531, 2010 WL 11719115 (N.D. Cal. June 1, 2010) ....................................................4, 9
`
`Energetiq Tech. v. AMSL Netherlands B.V.,
`15-cv-10240, 2016 WL 11727302 (D. Mass. Apr. 1, 2016) ..................................................4, 8
`
`In re Princo,
`468 F.3d 1365 (Fed. Cir. 2007)..................................................................................................9
`
`Statutes
`
`19 U.S.C. § 1337 ..............................................................................................................................1
`
`28 U.S.C. § 1659 ..................................................................................................................2, 4, 8, 9
`
`35 U.S.C. § 101 ................................................................................................................................9
`
`ii
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 3
`
`

`

`Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 4 of 13 PageID #: 1025
`
`NATURE AND STAGE OF PROCEEDINGS
`
`This case is part of a large-scale patent assertion campaign, in which defendant/
`
`counterclaim plaintiff EcoFactor, Inc. (“EcoFactor”) is alleging that plaintiff/counterclaim
`
`defendant ecobee, Inc. (“ecobee”) infringes patents relating to certain smart thermostat
`
`technologies. The campaign includes: (1) International Trade Commission (“ITC”) Investigation
`
`No. 337-TA-1185 (the “First ITC Action”) against ecobee and other participants in the smart
`
`thermostat market, instituted in November 2019, which to date has resulted in an initial
`
`determination by the Administrative Law Judge that no violation of 19 U.S.C. § 1337 has
`
`occurred, that ecobee is not infringing the patents in issue in the First ITC Action (which are
`
`different from the patents in issue in the instant case), that claims asserted against ecobee are
`
`invalid, and that EcoFactor does not satisfy § 1337’s domestic industry requirement;1 (2) a
`
`District Court action filed in the District of Massachusetts (EcoFactor, Inc. v. ecobee, Inc., 19-
`
`cv-12325 (D. Mass.)); (3) a District Court action filed in the Western District of Texas
`
`(EcoFactor, Inc. v. ecobee, Inc., 20-cv-00078 (W.D. Tex.)), (4) a second District Court action
`
`filed in the Western District of Texas (EcoFactor, Inc. v. ecobee, Inc., 21-cv-00428 (W.D. Tex.),
`
`which involves certain patents that are family members of patents in issue in this lawsuit, and (5)
`
`a second ITC action (ITC Investigation No. 337-TA-1258, complaint filed in February 2021, the
`
`“Second ITC Action”), which involves allegations that ecobee is infringing the same patents as
`
`those in issue in this case.
`
`The instant case was commenced by ecobee on March 2, 2021. ecobee seeks declaratory
`
`judgments that it does not infringe four patents that EcoFactor contends to be infringed by
`
`1 The public version of the Administrative Law Judge’s Initial Determination is attached hereto
`as Exhibit 1.
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 4
`
`

`

`Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 5 of 13 PageID #: 1026
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`ecobee: U.S. Patent Nos. 8,019,567; 10,612,983; 8,596,550; 8,886,488 (collectively, the
`
`“Patents in Suit”). See D.I. 1.
`
`On May 5, 2021, EcoFactor filed an answer and counterclaims, in which it alleges that
`
`ecobee is infringing the Patents in Suit. See D.I. 9.
`
`On May 26, 2021, ecobee filed an answer to EcoFactor’s counterclaims, which included,
`
`among other things, defenses that the Patents in Suit are invalid. See D.I. 10.
`
`SUMMARY OF ARGUMENT
`
`1.
`
`28 U.S.C. § 1659 does not require that the instant case be stayed. The mandatory
`
`stay provisions of that statute only apply if the respondent in an ITC investigation (i.e., ecobee)
`
`asks the District Court to stay a litigation—which has not occurred.
`
`2.
`
`The Court should not enter a discretionary stay because there is no simplification
`
`or efficiency to be gained by entering a stay. As EcoFactor itself notes, the ITC’s rulings are not
`
`binding on the District Court. While EcoFactor contends that a stay would allow this Court to
`
`receive the “benefits” of rulings and events in the Second ITC Action, that is true regardless of
`
`whether the Court enters a stay because under the parties’ stipulated schedule (D.I. 14) the most
`
`important events in this case will occur well after the corresponding events in the Second ITC
`
`Action. Moreover, the parties can work together to create efficiencies and avoid duplication in
`
`discovery and other matters.
`
`3.
`
`A stay will only delay the proceedings and create prejudice. Waiting several
`
`years to adjudicate this case is unnecessary, and creates a risk that witnesses (including ecobee’s
`
`Canada-based employees) will become unavailable, memories will fade, and evidence will
`
`become more difficult to collect. In contrast, EcoFactor—which has been prolific in its litigation
`
`campaign, and has not sought to stay other actions concerning related patents—would suffer no
`
`prejudice if the Court denies the instant motion.
`
`2
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 5
`
`

`

`Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 6 of 13 PageID #: 1027
`
`STATEMENT OF FACTS
`
`EcoFactor is a litigious entity, which has commenced two ITC investigations and more
`
`than 16 patent infringement litigations since November 2019, and it also has been named as a
`
`defendant in multiple declaratory actions concerning its patent infringement allegations.
`
`EcoFactor’s cases have targeted participants in the smart thermostat industry. Many of the cases
`
`involve identical or related patents, the same accused products, and the same or overlapping
`
`witnesses and evidence.
`
`In its campaign, EcoFactor has commenced two ITC investigations against ecobee and,
`
`apart from this case, has commenced three District Court patent infringement litigations against
`
`ecobee.2 EcoFactor has not hesitated to simultaneously assert the same or related patents against
`
`an overlapping set of ecobee products in multiple jurisdictions. For example, several of the
`
`patents asserted in this case are family members of the patents that EcoFactor is actively
`
`asserting against the same accused products in one of the two Western District of Texas cases
`
`against ecobee.3 EcoFactor has pursued this course even though the ITC recently determined in
`
`the First ITC Action that ecobee was not infringing various patents that were part of EcoFactor’s
`
`litigation campaign, that the claims asserted against ecobee were invalid, and that EcoFactor is
`
`not a substantial participant in the domestic smart thermostat industry. See Exh. 1 hereto.
`
`EcoFactor was undeterred by the ITC’s determination, and persisted with commencing the
`
`2 EcoFactor, Inc. v. ecobee, Inc., 20-cv-00078 (W.D. Tex.), EcoFactor, Inc. v. ecobee, Inc., 21-
`cv-00428 (W.D. Tex.), EcoFactor, Inc. v. ecobee, Inc., 19-cv-12325 (D. Mass.)
`
`3 Among the patents being asserted in EcoFactor, Inc. v. ecobee, Inc., 21-cv-00428 (W.D. Tex.)
`are U.S. Patent No. 9,194,597 (which is a child of U.S. Patent No. 8,886,488 at issue in this case)
`and U.S. Patent No. 8,751,186 (which is a child of U.S. Patent No. 8,596,550 at issue in this
`case).
`
`3
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 6
`
`

`

`Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 7 of 13 PageID #: 1028
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`Second ITC Action and asserting the additional infringement allegations that give rise to this
`
`lawsuit.
`
`There are, at minimum, overlapping witnesses, evidence, accused products and issues in
`
`all of the litigations between EcoFactor and ecobee. Nevertheless, EcoFactor is simultaneously
`
`pressing forward with the Second ITC case and its Western District of Texas cases without
`
`regard to supposed inefficiencies or duplication of efforts. EcoFactor contends in this Court,
`
`however, that such considerations should lead the Court to stay this particular litigation.
`
`ARGUMENT
`
`I.
`
`The Mandatory Stay Provisions of 28 U.S.C. § 1659 Are Inapplicable
`
`EcoFactor’s motion refers to 28 U.S.C. § 1659, which states in relevant part:
`
`In a civil action involving parties that are also parties to a proceeding before
`the United States International Trade Commission under section 337 of the Tariff
`Act of 1930, at the request of a party to the civil action that is also a respondent
`in the proceeding before the Commission, the district court shall stay, until the
`determination of the Commission becomes final, proceedings in the civil action
`with respect to any claim that involves the same issues involved in the proceeding
`before the Commission… [Emphasis added]
`
`Because ecobee is the respondent in the Second ITC Action, § 1659 would only apply if ecobee
`
`were requesting a stay. Id. It has no application where, as here, the ITC complainant (i.e.,
`
`EcoFactor) seeks a stay of an associated district court action. Energetiq Tech. v. AMSL
`
`Netherlands B.V., 15-cv-10240, 2016 WL 11727302, at *1 (D. Mass. Apr. 1, 2016); Elan
`
`Microelectronics Corp. v. Apple Inc., C 90-1531, 2010 WL 11719115, *1 (N.D. Cal. June 1,
`
`2010). Thus, there is no requirement under § 1659 that the Court stay this action.
`
`EcoFactor’s argument that other targets in its patent litigation campaign (such as Carrier)
`
`have invoked § 1659’s mandatory stay provision is irrelevant. ecobee does not, and cannot,
`
`know the considerations of other entities, and why they believed it was beneficial to file a
`
`declaratory judgment action and then stay the case pursuant to § 1659. Nor does EcoFactor offer
`
`4
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 7
`
`

`

`Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 8 of 13 PageID #: 1029
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`any evidence explaining why those entities chose to stay their respective cases. The Court
`
`should not accept EcoFactor’s invitation to speculate as to those parties’ motivations, and to
`
`assume ecobee is similarly situated.
`
`II.
`
`The Court Should Decline to Enter a Discretionary Stay
`
`The Court should consider EcoFactor’s request for a discretionary stay in context.
`
`EcoFactor has commenced almost two dozen patent infringement proceedings in
`
`numerous venues, and is currently litigating at least three other matters (i.e., the Second
`
`ITC Action and the two Western District of Texas matters) against ecobee in forums
`
`chosen by EcoFactor—several of which involve the same or related patents as the Patents
`
`in Suit. EcoFactor gave no consideration to efficiency, duplication, undue burdens or
`
`overlapping issues when designing its campaign and executing on it by suing in venues it
`
`chose. For example, as described in Footnote 3, one of the existing Western District of
`
`Texas cases (21-cv-00428) involves family members of patents asserted in this case and
`
`the Second ITC Action—but EcoFactor has not expressed any desire to stay the
`
`adjudication of that case on the basis of efficiency or simplification of issues. To the
`
`contrary, when it has been in EcoFactor’s interest, it has been more than willing to have
`
`multiple judicial bodies consider the same or similar issues at the same time, and it has
`
`shown no concern over the duplication of evidence, witness depositions, or the like.
`
`Thus, on their face, EcoFactor’s arguments in favor of staying only this case should be
`
`viewed with skepticism. And, certainly, this context weighs against any argument that
`
`EcoFactor would be prejudiced by a stay.
`
`EcoFactor’s primary argument is that staying this case would supposedly simplify
`
`issues. However, EcoFactor does not identify any specific issues that would supposedly
`
`5
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 8
`
`

`

`Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 9 of 13 PageID #: 1030
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`be simplified by a stay; rather, EcoFactor speaks in conclusory generalities about the two
`
`cases having the same arguments, documents and depositions.
`
`Contrary to EcoFactor’s arguments, there are numerous issues that are different
`
`between ITC and District Court actions. For example, as noted in footnote 2 in
`
`EcoFactor’s brief, the declaratory judgments sought by ecobee in this action are not
`
`necessarily limited to the products accused of infringement in the Second ITC action. In
`
`addition, the District Court action involves questions of damages that are not present in
`
`the ITC, and the ITC action involves questions of “domestic industry” and remedies that
`
`are inapplicable in the District Court. Moreover, discovery in the ITC is relatively
`
`limited in scope and brief, whereas the Federal Rules of Civil Procedure allow ecobee to
`
`take the necessary discovery to build a more robust defense than is generally permitted in
`
`the ITC.
`
`Moreover, EcoFactor itself argues that “the ITC Investigation will not have a
`
`preclusive effect on this Court” (D.I. 13 at 4), which further weakens EcoFactor’s request
`
`for a stay because the ITC’s decisions would not be dispositive of this case. EcoFactor
`
`contends that “[b]y staying this case, the Court will have the benefit of the record and
`
`rulings adduced in the ITC Investigation,” which “will help prevent inconsistent rulings
`
`and promote judicial economy”(D.I. 13 at 4)—but, under the parties’ proposed case
`
`schedule, that is true regardless of whether the Court enters a stay. The ITC case is fast
`
`moving, and as the below table indicates, the parties will complete all major milestones in
`
`the ITC well before those milestones occur in this case:
`
`6
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 9
`
`

`

`Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 10 of 13 PageID #: 1031
`
`Event
`
`Claim Construction
`Briefing
`Fact Discovery Cut-off
`Expert Discovery
`
`Markman/Claim
`Construction Decision
`
`Trial/Hearing
`
`ITC Deadline (See
`D.I. 13-2)
`
`July 14, 2021 - July
`28, 2021
`Sept. 3, 2021
`Sept. 14, 2021 –
`Oct. 8, 2021
`Approx. Apr. 4,
`2022 (Target Date
`for Initial
`Determination), if
`not earlier
`Dec. 13, 2021-
`Dec. 17, 2021
`
`Proposed
`District Court
`Deadline (D.I.
`14)
`May 19, 2022 -
`July 14, 2022
`Nov. 21, 2022
`Dec. 15, 2022-
`Mar. 3, 2023
`Approx.
`September 2022
`(based on Aug.
`23, 2022
`Markman date)
`Aug. 7, 2023
`
`Thus, if the Court does not enter a stay, every major event in the instant action will occur
`
`well after—and have the benefit of being informed by—the corresponding event in the Second
`
`ITC Action. There is no need to stay this case until the Second ITC Action is over to obtain the
`
`“benefits” that EcoFactor touts.
`
`Staying this case will only delay the resolution of the matters at issue here, by putting off
`
`until after August of 2022 the work that can be done in the meantime. Assuming this case has a
`
`schedule involving an approximately two-year period through trial, that would mean that
`
`adjudication of this matter will be unnecessarily delayed until sometime in late 2024. During
`
`that time, witnesses (including, potentially, ecobee’s Candada-based employees) may cease to be
`
`affiliated with the parties, memories may fade, and circumstances may change. Thus, evidence
`
`is likely to be more difficult to obtain in the future than it is today. Accordingly, the longer it
`
`takes for this case to be resolved, the more likely it is that ecobee will be prejudiced by a stay.
`
`Moreover, substantial efficiencies can be gained if the Court does not stay the action.
`
`The parties’ document collections in the two matters will likely overlap, thus requiring fewer
`
`document collection efforts (i.e., the parties will not need to search through the same documents
`
`7
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 10
`
`

`

`Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 11 of 13 PageID #: 1032
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`multiple times). The parties can discuss designating portions of ITC or Western District of
`
`Texas depositions and discovery as applicable in this case, so as to avoid unnecessary
`
`duplication of efforts. Expert witnesses will not need to be retained for extended periods, thus
`
`reducing costs to all parties. And the parties and their attorneys will be closer in time to the
`
`events as they unfold in the Second ITC Action, placing them in a better position to adjust their
`
`cases rather than waiting several years and trying to remember what occurred in the Second ITC
`
`Action, and how and why those things occurred.
`
`Courts considering similar requests have agreed with ecobee’s positions, and denied an
`
`ITC complainant’s request for a stay of District Court proceedings. For example, in Energetiq
`
`Tech., 2016 WL 11727302, the court denied a motion to stay that was brought by the
`
`complainant in an associated ITC matter, and in the process rejected many of the arguments now
`
`raised by EcoFactor. As an initial matter, the court confirmed that “[t]he mandatory stay
`
`provision of this statute [i.e. 28 U.S.C. § 1659] … does not apply here because the respondents
`
`in the Commission proceeding have not made a stay request.” 2016 WL 11727302, at *1
`
`(emphasis added). The court then declined to issue a discretionary stay. First, the court noted
`
`that the non-moving party would be prejudiced by delay, because the ITC’s decision was not
`
`binding on the District Court and, in any event, the issues in the two matters did not completely
`
`overlap (i.e., there were patents in issue in the district court case that were not in issue in the ITC
`
`investigation). Id. at *2. Second, the court rejected the notion that the moving party would
`
`suffer hardship if a stay were entered, because it was the moving party that had initiated the
`
`various litigations. Third, there was no efficiency to be granted through a stay due to the lack of
`
`complete identity of issues between the ITC and district court cases, and because of the
`
`procedural posture of the two matters.
`
`8
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 11
`
`

`

`Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 12 of 13 PageID #: 1033
`
`The court in Elan Microelectronics Corp., 2010 WL 11719115, reached a similar
`
`conclusion. After rejecting the notion that a stay was mandatory under 28 U.S.C. § 1659, the
`
`Court declined to impose a discretionary stay. 2010 WL 11719115 at *1. First, the Court noted
`
`that the statutory protection for ITC respondents—but not complainants—reflects the fact that
`
`patent holders have the ability to prevent litigation in multiple forums by limiting litigation. Id.
`
`With respect to the arguments concerning efficiency and duplication of efforts, the court deemed
`
`it “speculative” that the ITC could lead to a narrowing of issues. Id. Moreover, the court noted
`
`that the parties could work cooperatively to limit duplication or inefficiency in discovery. Id.
`
`In contrast, the cases cited by EcoFactor are non-binding and distinguishable. In re
`
`Princo, 468 F.3d 1365 (Fed. Cir. 2007) did not address the question of whether a case should be
`
`stayed; rather, it discussed when an ITC proceeding should be deemed “final” such that the stay
`
`should be lifted. The case also involved a unique and distinguishable procedural posture, in
`
`which the District Court case had proceeded to summary judgment, which was reversed, and a
`
`stay was entered on remand.
`
`Aliphcom v. Fitbit, Inc., 154 F. Supp. 933 (N.D. Cal.) is distinguishable because: (a) it
`
`involved an ITC complainant, who was also the plaintiff that first invoked the District Court’s
`
`jurisdiction, seeking a stay, and (b) the defendant had made an early motion under Rule 12(c)
`
`seeking a determination that patents in issue in the ITC proceeding were not patent eligible under
`
`35 U.S.C. § 101. In contrast, it is ecobee who first invoked this Court’s jurisdiction and, more
`
`importantly, ecobee has not filed a Section 101 motion or other Rule 12 motion that might put
`
`the District Court in a position to make substantive rulings concerning the patents prior to the
`
`ITC.
`
`9
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 12
`
`

`

`Case 1:21-cv-00323-MN Document 18 Filed 07/13/21 Page 13 of 13 PageID #: 1034
`
`In Advanced Micro Devices, Inc. v. ATI Technologies ULC, C.A. No. 19-70-CFC, 2019
`
`WL 4082836 (D. Del. Aug. 29, 2019), the ITC had issued a final decision in the relevant
`
`investigation and the matter was already on appeal to the Federal Circuit. In that circumstance,
`
`where a final decision on appeal by the Federal Circuit was only a few months away, the Court
`
`determined it to be more efficient to wait for the Federal Circuit to rule before moving forward
`
`with the District Court case.
`
`Thus, none of the cases cited by EcoFactor support a stay under the circumstances
`
`presented here.
`
`Accordingly, for all the reasons set forth herein, the Court should DENY EcoFactor’s
`
`CONCLUSION
`
`Motion to Stay this case.
`
`OF COUNSEL:
`
`Timothy Carroll
`Steven Lubezny
`VENABLE LLP
`227 West Monroe Street, Suite 3950
`Chicago, IL 60606
`Tel: (312) 820-3400
`
`Manny J. Caixeiro
`VENABLE LLP
`2049 Century Park E, Ste. 2300
`Los Angeles, CA 90067
`Tel: (310) 229-9900
`
`Dated: July 13, 2021
`7294695 / 51061
`
`Respectfully submitted,
`POTTER ANDERSON & CORROON LLP
`
`By: /s/ David E. Moore
`David E. Moore (#3983)
`Bindu A. Palapura (#5370)
`Hercules Plaza, 6th Floor
`1313 N. Market Street
`Wilmington, DE 19801
`Tel: (302) 984-6000
`dmoore@potteranderson.com
`bpalapura@potteranderson.com
`
`Attorneys for Plaintiff ecobee, Inc.
`
`10
`
`ECOBEE V. ECOFACTOR
`IPR2022-00969
`Exhibit 2003
`Page 13
`
`