Case 6:21-cv-01284-ADA Document 94 Filed 10/18/22 Page 1 of 7
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`SONRAI MEMORY LIMITED,
`Plaintiff,
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`v.
`KINGSTON TECHNOLOGY COMPANY,
`INC. and KINGSTON TECHNOLOGY
`CORPORATION,
`Defendants.
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`6:21-cv-1284-ADA
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`ORDER DENYING KINGSTON TECHNOLOGY COMPANY INC.’S AND
`KINGSTON TECHNOLOGY CORPORATION’S OPPOSED MOTION TO STAY
`PENDING RESOLUTION OF INTER PARTES REVIEW
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`Before the Court is Defendants Kingston Technology Company Inc.’s and Kingston
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`Technology Corporation’s Opposed Motion to Stay Pending Resolution of Inter Partes Review of
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`All Asserted Claims of the Asserted Patent. ECF No. 78 (the “Motion”). Plaintiff Sonrai Memory
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`Limited (“Sonrai”) filed an opposition on January 20, 2022, ECF No. 82, to which Defendants
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`Kingston Technology Company, Inc. and Kingston Technology Corporation (collectively,
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`“Kingston”) replied on September 6, 2022, ECF No. 83.
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`I. BACKGROUND
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`Sonrai filed this Action on June 11, 2021, alleging that Kingston infringes at least claim 1
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`of U.S. Patent Nos. 6,724,241 (the “’241 Patent”) and 6,920,527 (the “’527 Patent”) (collectively,
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`the “Asserted Patents”). On June 22, 2021, Sonrai served Kingston infringement contentions
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`specifically alleging infringement of the ’241 and ’527 Patents. ECF No. 13-14. The Central
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`District of California transferred this litigation to this Court on November 18, 2021. ECF No. 40.
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`Kingston’s claims regarding the ’241 Patent have been severed and stayed, ECF No. 60,
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`and are not at issue here. The Court held a Markman hearing in this Action on June 30, 2022; fact
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`discovery opened the next day. ECF No. 75. On August 16, 2022, Kingston filed the instant
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`Motion, requesting that the Court stay this Action pending “final resolution of the IPR proceedings
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`for the patent-in-suit.” ECF No. 78 at 8. The Court expects to reach a verdict in this Action by the
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`end of June 2023, ECF No. 50-1, while the PTAB is expected to issue its final written decision
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`(“FWD”) in the IPR by July 29, 2023. ECF No. 78-1.
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`II. LEGAL STANDARD
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`“District courts typically consider three factors when determining whether to grant a stay
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`pending inter partes review of a patent in suit: (1) whether the stay will unduly prejudice the
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`nonmoving party, (2) whether the proceedings before the court have reached an advanced stage,
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`including whether discovery is complete and a trial date has been set, and (3) whether the stay will
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`likely result in simplifying the case before the court.” NFC Tech. LLC v. HTC Am., Inc., No. 2:13-
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`cv-1058, 2015 WL 1069111, at *2 (E.D. Tex. Mar. 11, 2015); see also CyWee Grp. Ltd. V.
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`Samsung Elecs. Co., No. 2:17-CV-00140-WCB-RSP, 2019 WL 11023976, at *2 (E.D. Tex. Feb.
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`14, 2019) (Bryson, J.).
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`A.
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`Undue Prejudice to the Non-moving Party
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`III. ANALYSIS
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`The Court finds that a stay would inflict undue prejudice upon non-movant Sonrai for at
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`least the following two reasons.
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`First, a stay risks the loss of testimonial and documentary evidence potentially valuable to
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`Sonrai’s case. See Allvoice Developments US, LLC v. Microsoft Corp., No. 6:09-CV-366, 2010
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`WL 11469800, at *4 (E.D. Tex. June 4, 2010) (holding that a stay of ten months would “create a
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`substantial delay that could cause prejudice by preventing Plaintiff from moving forward with its
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`infringement claims and by risking the loss of evidence as witnesses become unavailable and
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`memories fade”); Allure Energy, Inc. v. Nest Labs, Inc., No. 9-13-CV-102, 2015 WL 11110606,
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`at *1 (E.D. Tex. Apr. 2, 2015); Anascape, Ltd. v. Microsoft Corp., 475 F. Supp. 2d 612, 617 (E.D.
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`Tex. 2007) (holding that delay also risks making witnesses harder to find).
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`Furthermore, This Court denied a motion to stay pending IPR in another Sonrai case on
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`identical grounds. Sonrai Memory Ltd. v. LG Elecs. Inc., No. 6:21-CV-00168-ADA, 2022 WL
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`2307475, at *1 (W.D. Tex. June 27, 2022) (“LG”). This Court wrote, “[s]ome factors may diminish
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`[the risk of loss of valuable evidence], like where the requested stay is of a brief and definite
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`duration.” Id. at *2. As in that motion, the factor is absent here. The statutory deadline for the
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`PTAB to issue a FWD on Kingston’s petition is not until July 29, 2023, and appeals can extend
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`the duration for six months to January 2024. 35 U.S.C. § 316(a)(11); 37 C.F.R. § 42.100(c).
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`Therefore, staying the case could result in a delay of up to 17 months. See Multimedia Content
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`Mgmt. LLC v. Dish Network, No. 6:18-CV-00207-ADA, 2019 U.S. Dist. LEXIS 236670, at *5
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`(W.D. Tex. May 30, 2019) (noting the length of appeal and the statutory scheme’s provision for
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`delaying a FWD by six months if necessary).
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`Another risk-mitigating factor this Court considered in LG was whether “the proceeding-
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`to-be-stayed and the parallel proceeding implicate discovery of a similar scope and evidence in the
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`latter can later be used in the former.” LG, 2022 WL 2307475, at *2. Due to the limited scope—
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`determinations made based on prior art alone—and minimal discovery of IPRs, this factor typically
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`is not implicated in a motion to stay pending IPR. Id. (citing 35 U.S.C. § 311(b) (providing the
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`limited scope of validity challenges in an IPR petition) and 37 C.F.R. § 42.51 (providing the limited
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`scope of IPR discovery)).
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`Secondly, a stay may result in undue prejudice to Sonrai because Sonrai, like all patent
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`holders, “has an interest in the timely enforcement of its patent rights.” LG, 2022 WL 2307475, at
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`*2; see also Kirsch Research & Dev., LLC v. Tarco Specialty Products, Inc., No. 6:20-CV-00318-
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`ADA, 2021 WL 4555804, at *2 (W.D. Tex. Oct. 4, 2021) (citing MiMedx Group, Inc. v. Tissue
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`Transplant Tech. Ltd., No. SA-14-CA-719, 2015 WL 11573771, at *2 (W.D. Tex. Jan 5, 2015)).
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`The Federal Circuit has long favored “expeditious resolution of litigation.” Kahn v. GMC, 889
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`F.2d 1078, 1080 (Fed. Cir. 1989); see also United States ex rel. Gonzalez v. Fresenius Med. Care
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`N. Am., 571 F. Supp. 2d 758, 763 (W.D. Tex. 2008) (“[T]he compensation and remedy due a civil
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`plaintiff should not be delayed.” (quoting Gordon v. FDIC, 427 F.2d 578, 580 (D.C. Cir. 1970))).
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`To that end, Congress established the PTAB to provide “quick and cost-effective” resolutions of
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`patent disputes. LG, 2022 WL 2307475, at *2; see also Ethicon Endo-Surgery, Inc. v. Covidien
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`LP, 826 F.3d 1366, 1367 (Fed. Cir. 2016).
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`As in LG, this Court is set to resolve the parties’ patent disputes before the PTAB
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`determines “only invalidity based only on prior-art publications.” 2022 WL 2307475, at *3.
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`Pushing back trial for a limited proceeding (that may not eliminate the need for a jury trial) makes
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`little sense here. See id. (denying LG’s motion to stay pending IPR when PTAB expected to issue
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`its FWD a month after this Court would reach a resolution); USC IP P'ship, L.P. v. Facebook, Inc.,
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`No. 6-20-CV-00555-ADA, 2021 WL 6201200, at *2 (W.D. Tex. Aug. 5, 2021) (denying stay
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`where a FWD was expected months after the scheduled jury trial); Kerr Mach. Co. v. Vulcan Indus.
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`Holdings, LLC, No. 6-20-CV-00200-ADA, 2021 WL 1298932, at *2, 2021 U.S. Dist. LEXIS
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`67384, at *6 (W.D. Tex. Apr. 7, 2021) (“[T]he Court believes that allowing this case to proceed to
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`completion will provide a more complete resolution of the issues including infringement, all
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`potential grounds of invalidity, and damages.”).
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`Accordingly, this factor weighs against granting a stay.
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`B.
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`Stage of the Proceedings
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`The advanced stage of the proceedings weighs against granting a stay. “[I]f the protracted
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`and expansive discovery has already occurred, or the court has expended significant resources,
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`then courts have found that this factor weighs against a stay. CANVS Corp. v. United States, 118
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`Fed. Cl. 587, 595 (2014). Simply put, this case is not in an early stage. The Markman hearing
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`occurred on June 30, 2022. ECF No. 75. The Central District of California transferred the case
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`nearly a year ago. See ECF No. 40. This Court has resolved Kingston’s motion to sever Sonrai’s
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`’241 Patent claims and stay them pending the resolution of the Kioxia and Western Digital Actions.
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`ECF No. 60. The Court completed claim construction. ECF No. 79. Importantly, the Court has
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`expended significant resources getting to this point and is prepared to move forward on this Action.
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`See Sonrai Memory Ltd. v. Texas Instruments Inc., No. 6:21-CV-1066-ADA-DTG, 2022 WL
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`2782744, at *1 (W.D. Tex. May 18, 2022) (denying motion to stay pending IPR in another Sonrai
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`case where the parties had not started claim construction briefing, where fact discovery was not
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`open, and the “placeholder date” for trial was still over a year out).
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`Given the foregoing, this factor weighs against granting a stay.
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`C.
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`Simplification of Issues
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`Simplification of the issues is the “most important factor” in the stay analysis. Tarco, 2021
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`WL 4555804, at *3; see also LG, 2022 WL 2307475, at *3.
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`1. Strength of Kingston’s IPR Petition
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`Without doubt, this case would be simplified if the PTAB invalidated all asserted claims
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`of the ’527 Patent in Kingston’s upcoming IPR, assuming the Federal Circuit upheld that decision
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`on a potential appeal. But for this factor to favor a stay, Kingston “must show more than a
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`successful petition, they must show that the PTAB is likely to invalidate every asserted claim.”
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`Kirsch, 2021 WL 4555804, at *3 (quoting Scorpcast v. Boutique Media, No. 2:20-cv-00193-JRG-
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`RSP, 2021 WL 3514751, at *3 (E.D. Tex. June 7, 2021)). Kingston failed to meet that burden.
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`The IPR institution ruling does not indicate that the PTAB is likely to invalidate every
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`asserted claim. To be sure, it states that “[p]etitioner has established a reasonable likelihood that it
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`would prevail in showing the unpatentability of at least one of claims 1–7, 9–12, and 14–18 of the
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`’527 patent. Accordingly, we institute an inter partes review as to all of the challenged claims of
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`the ’527 Patent and all of the asserted grounds of unpatentability.” ECF No. 78-1 at 2. The PTAB,
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`however, writes, “[o]ur determination . . . is based on the evidentiary record currently before us.
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`This decision . . . is not final . . . as to patentability of any claim for which inter partes review has
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`been instituted. Our final decision will be based on the full record developed during trial.” Id.
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`Moreover, the PTAB determined that Kingston had only “established adequately for purposes of
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`this Decision” that the asserted combinations teach or suggest the claim limitations at issue, and
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`repeatedly stated that its findings were only “for purposes of institution.” ECF No. 78-1 at 8, 14,
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`17, 18, 19, 22, 25 (emphasis added).
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`The language in the institution ruling does not support Kingston’s claim that the PTAB is
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`likely to invalidate all asserted claims. Rather, the PTAB merely indicates that Kingston met its
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`initial institution burden. Kingston’s motion and supporting arguments attempt to shoehorn the
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`institution ruling to favor granting a stay. That attempt was unsuccessful. See Ravgen, Inc. v. Lab.
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`Corp. of Am. Holdings, No. 6:20-cv-00969-ADA, ECF No. 185 at 8 (W.D. Tex. Aug. 16, 2022)
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`(movant’s failure to show that “the Board is likely to invalidate every asserted claim” was a “fatal
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`error,” as “[i]nstitution alone is not enough”).
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`2.
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`IPR Estoppel Does Not Sufficiently Simplify the Issues
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`Section 315(e) of Title 35 subjects IPR petitioners to estoppel once the PTAB issues a
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`FWD. Kingston’s speculative assertion that “estoppel will likely apply to both parties” (ECF No.
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`78 at 7) is unavailing. Kingston “can still challenge in this Court the invalidity of the asserted
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`claims on other grounds, especially those grounds that rely on system prior art, which could not
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`be relied on during IPRs.” USC, 2021 WL 6201200, at *2. In fact, Kingston’s final invalidity
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`contentions identify eight different systems and purport to reserve the right to “supplement these
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`contentions with third-party prior art systems.” ECF No. 82-1 at 7–10. “It is unclear how forcing
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`[Kingston] to rely on other prior art for its invalidity case constitutes a ‘simplification’ of the
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`invalidity issue as opposed to simply a second chance to invalidate the asserted claims.” LG, 2022
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`WL 2307475, at *4.
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`Therefore, this factor weighs against a stay.
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`IV. CONCLUSION
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`The Court finds that no factor weighs in favor of granting a stay. Sonrai would be
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`prejudiced by delay of this trial, slated to occur before the PTAB issues a FWD in the Kingston
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`IPR. This Action is in an advanced stage, and Kingston has failed to support its claims about the
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`strength of its IPR petition.
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`Kingston’s Motion to Stay, ECF No. 78, is therefore DENIED.
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`SIGNED this 18th day of October, 2022.
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