Case 2:23-cv-00712-TL Document 69 Filed 04/04/24 Page 1 of 8
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
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`IMMERSION CORPORATION,
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`CASE NO. 2:23-cv-00712-TL
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`v.
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`Plaintiff,
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`VALVE CORPORATION,
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`Defendant.
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`ORDER ON MOTION TO STAY
`PENDING INTER PARTES REVIEW
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`This is an action for patent infringement involving the application of haptics to
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`augmented reality (“AR”) and virtual reality (“VR”) technology. This matter is before the Court
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`on Defendant Valve Corporation’s Motion to Stay Case Pending Resolution of Petitions for Inter
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`Partes Review. Dkt. No. 62; see also Dkt. No. 64-1 (praecipe). Having reviewed Plaintiff
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`Immersion Corporation’s response (Dkt. No. 65), Defendant’s reply (Dkt. No. 66), and finding
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`oral argument unnecessary, see LCR 7(b)(4), the Court GRANTS the motion and STAYS the case
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`pending a decision on Defendant’s petitions for inter partes review.
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`ORDER ON MOTION TO STAY PENDING INTER PARTES REVIEW - 1
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`Valve Corp. v. Immersion Corp.
`IPR2024-00556
`Immersion Exhibit 2004
`Page 1 of 8
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`Case 2:23-cv-00712-TL Document 69 Filed 04/04/24 Page 2 of 8
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`I.
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`BACKGROUND
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`On May 14, 2023, Plaintiff commenced this action. Dkt. No. 1. Plaintiff asserts numerous
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`claims involving seven different patents: U.S. Patent No. 7,336,260 (“the ‘260 Patent”); U.S.
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`Patent No. 8,749,507 (“the ‘507 Patent”); U.S. Patent No. 9,430,042 (“the ‘042 Patent”); U.S.
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`Patent No. 9,116,546 (“the ‘546 Patent”); U.S. Patent No. 10,627,907 (“the ‘907 Patent”); U.S.
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`Patent No. 10,665,067 (“the ‘067 Patent”); and U.S. Patent No. 11,175,738 (“the ‘738 Patent”)
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`(collectively, “the Patents-in-Suit”). See Dkt. Nos. 1-2–1-8; Dkt. No. 63 (Kwun declaration) ¶ 3.
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`The Patents-in-Suit “generally teach novel systems and methods for generating haptic signals
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`used to generate haptic feedback in, among other things, video game systems and controllers.”
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`Dkt. No. 1 ¶ 33; see also id. ¶¶ 34–40. On July 24, 2023, Defendant filed a motion to dismiss,
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`which remains pending.1 Dkt. No. 37.
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`Between January 19, 2024, and March 22, 2024, Defendant filed seven petitions for inter
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`partes review (“IPR”) by the Patent Trial and Appeal Board (“PTAB”), challenging all seven of
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`the Patents-in-Suit. See Dkt. No. 63 ¶ 8; Dkt. No. 67 (Dinh declaration) ¶ 3. The PTAB has
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`issued preliminary response dates for all petitions except for the one challenging the ‘907 Patent,
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`which Defendant expects to be issued “soon.” Dkt. No. 67 ¶¶ 5–6; see Dkt. No. 65-1 (Szpajda
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`declaration) ¶ 6. The PTAB’s institution decisions are expected between July and October 2024.
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`35 U.S.C. § 314(b); see Dkt. No. 65-1 ¶ 6. When the PTAB grants a petition, it has one year to
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`complete the review, but may extend the one-year period by up to six months for good cause.
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`35 U.S.C. § 316(a)(11); 37 C.F.R. § 42.100(c). Thus, if the PTAB grants all of Defendant’s
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`petitions and grants an IPR trial on all of the patents, the IPR trials and decisions should
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`conclude by October 2025, but may be extended to April 2026. Id.
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`1 The Court held oral argument on the motion on February 8, 2024.
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`ORDER ON MOTION TO STAY PENDING INTER PARTES REVIEW - 2
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`Valve Corp. v. Immersion Corp.
`IPR2024-00556
`Immersion Exhibit 2004
`Page 2 of 8
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`Case 2:23-cv-00712-TL Document 69 Filed 04/04/24 Page 3 of 8
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`Defendant now moves to stay this matter pending the outcome of its IPR petitions. Dkt.
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`Nos. 62, 64-1; see also Dkt. No. 66 (reply). Plaintiff opposes. Dkt. No. 65.
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`II.
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`LEGAL STANDARD
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`“The [district] court has the authority to stay [a] case pending the outcome of an IPR
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`petition.” WAG Acquisition, LLC v. Amazon.com, Inc., No. C22-1424, 2023 WL 1991888, at *1
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`(W.D. Wash. Feb. 14, 2023); see also Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426–27 (Fed. Cir.
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`1988). “To determine whether to grant such a stay, the court considers (1) whether a stay will
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`simplify the court proceedings; (2) the stage of the case; and (3) whether a stay will unduly
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`prejudice or present a clear tactical disadvantage to the non-moving party.” WAG Acquisition,
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`2023 WL 1991888, at *1 (citing Pac. Bioscience Lab’ys, Inc. v. Pretika Corp., 760 F. Supp. 2d
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`1061, 1063 (W.D. Wash. 2011)); accord WSOU Invs., LLC v. F5 Networks, Inc., No. C20-1878
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`et al., 2022 WL 766997, at *1 (W.D. Wash. Mar. 14, 2022) (citing the same).
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`III. DISCUSSION
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`Defendant argues that all relevant factors weigh in favor of granting a stay. See Dkt.
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`No. 64-1 at 8–14. Specifically, Defendant argues: (1) a stay would simplify the issues and trial of
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`this matter (id. at 9–12); (2) the matter is in its early stages (id. at 12–13); and (3) Plaintiff would
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`suffer no undue prejudice or tactical disadvantage (id. at 13–14). In opposition, Plaintiff argues
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`that all factors weigh against a stay. See Dkt. No. 65 at 8–15.
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`A.
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`Simplification of the Case
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`The Court first considers “whether and to what extent staying these cases pending the
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`outcome of the IPR petitions would simplify the issues and the trial in this case.” SRC Labs, LLC
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`v. Microsoft Corp., No. C18-321, 2018 WL 6065635, at *2 (W.D. Wash. Nov. 20, 2018) (citing
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`Pac. Bioscience, 760 F. Supp. 2d at 1063).
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`ORDER ON MOTION TO STAY PENDING INTER PARTES REVIEW - 3
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`Valve Corp. v. Immersion Corp.
`IPR2024-00556
`Immersion Exhibit 2004
`Page 3 of 8
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`

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`Case 2:23-cv-00712-TL Document 69 Filed 04/04/24 Page 4 of 8
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`Defendant’s IPR petitions challenge every asserted claim of the Patents-in-Suit. Compare
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`Dkt. No. 63 ¶ 3 (asserted claims) with id. ¶ 8 (challenged claims). Thus, IPR may be dispositive
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`of this matter. See WAG Acquisition, 2023 WL 1991888, at *2 (“[T]here is a substantial risk that
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`both the court and the parties will needlessly expend valuable resources in determining the
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`validity of patent claims that are ultimately cancelled or amended by the USPTO.”). The PTAB’s
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`2023 fiscal year-end statistics indicate that the PTAB instituted review on 67 percent of petitions
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`filed. Dkt. No. 63 at 11. The institution rate rises to 70 percent for patents directed to
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`“Electrical/Computer” technology, like the Patents-in-Suit. Id. at 13. The PTAB previously
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`instituted review of claims 1 and 2 of the ‘260 Patent—a strong indication that it is likely to
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`institute review here, given the same patent and the related other Patents-in-Suit. Id. ¶ 11. And
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`the “closely related subject matter” among the Patents-in-Suit makes it “more likely that the
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`PTAB rules similarly” on all seven petitions. SRC Labs, 2018 WL 6065635, at *3.
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`Plaintiff argues that data regarding IPR petitions about its own patents suggest institution
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`is unlikely, as only 166 of 463 claims (challenged across 43 IPRs) have been reviewed and only
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`29 claims cancelled. See Dkt. No. 65 at 10–11. However, Defendant explains that 14 of the 43
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`IPRs were mooted by settlements before an institution decision, and five others were denied
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`because they were second petitions filed after institution decisions in prior IPRs challenging the
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`same patents. See Dkt. No. 66 at 7. Moreover, “[o]f the 24 petitions where the PTAB considered
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`the merits, it granted review in 19 (79.1%) IPRs.” Id. These data demonstrate a strong likelihood
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`of institution.
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`Finally, even if some claims survive IPR, the Court would benefit from the expert
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`analysis of the PTAB in managing multiple aspects of this matter. Plaintiff points out that
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`Defendant “has not asked the PTAB to construe any terms” (Dkt. No. 65 at 11), but the Court
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`still believes that the PTAB’s analysis will shed light on the meaning and scope of the Patents-in-
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`ORDER ON MOTION TO STAY PENDING INTER PARTES REVIEW - 4
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`Valve Corp. v. Immersion Corp.
`IPR2024-00556
`Immersion Exhibit 2004
`Page 4 of 8
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`Case 2:23-cv-00712-TL Document 69 Filed 04/04/24 Page 5 of 8
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`Suit, even if it will not conclusively resolve any claim construction disputes. Plaintiff also argues
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`that “the IPR may not fully resolve even the invalidity arguments put forth by [Defendant],” as
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`Defendant did not file a Sotera stipulation and is raising defenses that will not be addressed by
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`IPR. See Dkt. No. 65 at 11–12. But even without a Sotera stipulation, if the PTAB issues a final
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`written decision on IPR, Defendant will be estopped from raising the same arguments in this
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`matter. See 35 U.S.C. § 315(e)(2). And even if IPR would not address some of Defendant’s
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`defenses, “if the PTAB invalidates the claims, [Defendant’s] invalidity defenses would be moot.”
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`SRC Labs, 2018 WL 6065635, at *3. For all these reasons, simplification of the case weighs in
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`favor of a stay.
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`B.
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`Stage of the Litigation
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`Next, the Court considers “the stage of the litigation.” SRC Labs, 2018 WL 6065635, at
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`*4 (citing Pac. Bioscience, 760 F. Supp. 2d at 1063). “‘[T]he proper time to measure the stage of
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`the litigation’ is at ‘the date of the filing of the motion to stay.’” Id. (quoting VirtualAgility Inc. v.
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`Salesforce.com, Inc., 759 F.3d 1307, 1316 (Fed. Cir. 2014)).
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`This matter is in its early stages, and Defendant’s motion to dismiss remains pending. See
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`Dkt. No. 37. Plaintiff argues that “the parties have made substantial progress in litigation.” Dkt.
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`No. 65 at 13. While some discovery has occurred and preliminary infringement and validity
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`contentions have been exchanged (see id. at 6), only “minimal documents” have been exchanged,
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`and no depositions have been scheduled (see Dkt. No. 64-1 at 7). Further, at the time Defendant
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`filed its motion to stay, the close of fact discovery was more than five months away, the close of
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`expert discovery was almost nine months away, the Markman hearing was four months away,
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`and trial was nearly 16 months away. See Dkt. No. 46 (scheduling order); see also, e.g., Pac.
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`Bioscience, 760 F. Supp. 2d at 1066 (“The fact that substantial additional discovery, claim
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`construction, and other issues lie ahead in this case weighs in favor of a stay.”). Further, the
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`ORDER ON MOTION TO STAY PENDING INTER PARTES REVIEW - 5
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`Valve Corp. v. Immersion Corp.
`IPR2024-00556
`Immersion Exhibit 2004
`Page 5 of 8
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`Case 2:23-cv-00712-TL Document 69 Filed 04/04/24 Page 6 of 8
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`Parties had not yet filed their joint claim chart and prehearing statement, though they are filed
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`now. See Dkt. No. 68. Therefore, the stage of the litigation weighs in favor of a stay.
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`C.
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`Prejudice to the Non-Moving Party
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`Finally, the Court considers “undue prejudice” to Plaintiff. SRC Labs, 2018 WL 6065635,
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`at *4 (citing Pac. Bioscience, 760 F. Supp. 2d at 1063). “Courts . . . ‘have found that mere delay
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`does not demonstrate undue prejudice.’” Id. (quoting Implicit Networks, Inc. v. Advanced Micro
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`Devices, Inc., No. C08-184, 2009 WL 357902, at *3 (W.D. Wash. Feb. 9, 2009)).
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`Plaintiff makes no showing that it will suffer any prejudice or clear tactical disadvantage
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`from a stay. Plaintiff argues that a stay “would harm [its] commercial interests,” although it
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`concedes that it “does not directly compete with [Defendant] in the video game industry.” Dkt.
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`No. 65 at 14. Still, Plaintiff insists “that is not the relevant comparison under the circumstances”
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`because it is “in the business of licensing its haptics technology” to, among others, operators in
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`the video game industry. Id. But as another court in this District has observed, “[c]ourts have
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`consistently found that a patent licensor cannot be prejudiced by a stay because monetary
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`damages provide adequate redress for infringement.” WAG Acquisition, 2023 WL 1991888, at *3
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`(citation omitted); see also VirtualAgility, 759 F.3d at 1318 (“A stay will not diminish the
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`monetary damages to which [plaintiff] will be entitled if it succeeds in its infringement suit—it
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`only delays realization of those damages . . . .”).2
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`Moreover, Plaintiff’s invocation of clear tactical disadvantage based on the timing of
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`Defendant’s IPR petitions (see Dkt. No. 65 at 14) is conclusory and unavailing; while Defendant
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`2 Plaintiff points to Walker Digital, LLC v Google, Inc., No. C11-318, 2014 WL 2880474 (D. Del. June 24, 2014),
`where the court noted that the longer the defendant was allowed to engage in allegedly infringing activity, the lower
`the value of the patents would become as licensing assets. Dkt. No. 65 at 15. However, in that case, the patents-in-
`suit were set to expire in two years, so any delay affected the plaintiff’s ability to license the patents. Walker Digit.,
`2014 WL 2880474, at *1. Here, Plaintiff makes no such argument about the impending expiration of any of the
`Patents-in-Suit.
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`ORDER ON MOTION TO STAY PENDING INTER PARTES REVIEW - 6
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`Valve Corp. v. Immersion Corp.
`IPR2024-00556
`Immersion Exhibit 2004
`Page 6 of 8
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`Case 2:23-cv-00712-TL Document 69 Filed 04/04/24 Page 7 of 8
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`could have filed its petitions earlier, it is not “clear” what the tactical disadvantage to Plaintiff
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`would be, beyond the prejudice or disadvantage inherent in any stay. Plus, trial is currently
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`scheduled for June 2025 and Defendant’s IPR petitions (if instituted) would likely be resolved by
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`October 2025. This four-month delay “is not significant, especially where the parties are not
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`direct competitors.” SRC Labs, 2018 WL 6065635, at *5. Therefore, this lack of demonstrable
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`prejudice or tactical disadvantage weighs in favor of a stay.
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`D.
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`Balancing the Factors
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`As a general matter, this Court remains wary of issuing a stay before the PTAB has made
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`a decision on whether to institute an IPR petition. See, e.g., RealD Spark LLC v. Microsoft Corp.,
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`No. C22-942, 2023 WL 5836459, at *1 (W.D. Wash. Aug. 25, 2023) (denying motion for stay as
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`premature). However, there is no blanket rule; as the Pacific Bioscience factors make clear, a
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`court’s inquiry is ultimately dependent on the facts of a particular case. And in this case, all
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`factors weigh in favor of a stay. See supra Sections III.A–C. Further, at least two circumstances
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`mitigate the Court’s usual concerns about pre-institution stays. First, as noted above, the PTAB
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`previously instituted review on claims in the ‘260 Patent—historical evidence that was not
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`present in RealD. Dkt. No. 63 ¶ 11. Second, RealD included non-infringement claims like breach
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`of contract and misappropriation of trade secrets. However, this matter presents only
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`infringement claims; there are no independent claims that would be prejudiced by a stay of the
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`full case.3 For all the reasons explained above, the Court finds a pre-institution stay appropriate
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`in this matter.
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`//
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`//
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`3 Even when non-patent claims were present, this Court ultimately granted a stay after the PTAB instituted review.
`See RealD Spark LLC v. Microsoft Corp., No. C22-942, 2024 WL 343224, at *2 (W.D. Wash. Jan. 30, 2024).
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`ORDER ON MOTION TO STAY PENDING INTER PARTES REVIEW - 7
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`Valve Corp. v. Immersion Corp.
`IPR2024-00556
`Immersion Exhibit 2004
`Page 7 of 8
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`Case 2:23-cv-00712-TL Document 69 Filed 04/04/24 Page 8 of 8
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`IV. CONCLUSION
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`Accordingly, it is hereby ORDERED:
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`(1)
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`(2)
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`(3)
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`(4)
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`(5)
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`Defendant’s motion (Dkt. Nos. 62, 64-1) is GRANTED.
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`This matter is STAYED pending the PTAB’s decision on Defendant’s IPR
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`petitions.
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`Defendant’s Motion to Dismiss (Dkt. No. 37) is STRICKEN with leave to refile.
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`All case deadlines that remain as of the date of this Order are VACATED.
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`The Parties SHALL meet and confer and file a joint status report within fourteen
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`(14) days of receiving the PTAB’s decision on all seven petitions, or by
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`November 1, 2024, whichever occurs earlier.
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`Dated this 4th day of April 2024.
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`Tana Lin
`A
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`United States District Judge
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`Valve Corp. v. Immersion Corp.
`IPR2024-00556
`Immersion Exhibit 2004
`Page 8 of 8
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