Case 3:24-cv-02296-JSC Document 126 Filed 11/20/24 Page 1 of 6
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`HAPTIC, INC.,
`Plaintiff,
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`v.
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`APPLE, INC.,
`
`Defendant.
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`Case No. 3:24-cv-02296-JSC
`
`ORDER RE: DEFENDANT’S MOTION
`TO STAY PENDING IPR
`PROCEEDINGS
`Re: Dkt. No. 114
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`Haptic alleges Apple infringes on four claims of its patent, U.S. Patent No. 9,996,738 (the
`“‘738 patent”). Apple now moves to stay these proceedings pending inter partes review (“IPR”).
`(Dkt. No. 114.)1 After carefully considering the parties’ pleadings, and having had the benefit of
`oral argument on November 14, 2024, the Court DENIES Apple’s motion to stay.
`BACKGROUND
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`I.
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`Complaint Allegations
`The asserted patent was invented by Swan Solutions, Inc. (Dkt. No. 1 ¶ 22.) Swan
`Solutions, Inc. changed its name to Haptic, Inc. and now Haptic is the “exclusive owner of all
`rights, title, and interest in the” asserted patent. (Dkt. No. 1 ¶¶ 22-23.) The technology provides
`coverage of a “tap-based control system that converts a surface into a controller for a … device.”
`(Id. at ¶ 15.) Haptic accuses Apple of infringing its patent through its Back Tap feature which has
`been offered on every model of iPhone since the iPhone 8. (Id. at ¶ 44.) The Back Tap feature
`“allows a user to tap the back of the handset to perform functions on the iPhone and control other
`external devices.” (Id. at ¶ 45.)
`
`1 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the
`ECF-generated page numbers at the top of the documents.
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`Case 3:24-cv-02296-JSC Document 126 Filed 11/20/24 Page 2 of 6
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`II.
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`Procedural History
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`On November 3, 2023, Haptic filed a complaint in the Western District of Texas against
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`Apple for alleged patent infringement. (Dkt. No. 1.) Apple filed a Motion to Transfer on January
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`29, 2024. (Dkt. No. 21.) The Western District of Texas granted the Motion on April 15, 2024,
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`and the case was transferred to the Northern District of California. (Dkt. No. 44.) An initial case
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`management conference was held on May 14, 2024. (Dkt. No. 73 at 1.) Following the
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`conference, the Court set a schedule through trial. (Dkt. No. 73.) The Markman hearing is
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`scheduled for December 6, 2024. (Id.) Fact discovery closes on February 28, 2025. (Id.) Expert
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`discovery closes on May 30, 2025. (Id.) The dispositive and Daubert motion filing deadline is
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`June 26, 2025, and trial is scheduled to commence September 29, 2025. (Id. at 1, 2.)
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`More than four months after the Court set the case schedule, Apple filed two petitions for
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`IPR challenging “all asserted claims”. (Dkt. No. 114 at 6.) The Patent Trial and Appeal Board
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`(“PTAB”) is expected to make institution decisions for the ‘738 patent by April 2025 and issue a
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`final written decision by April 2026. (Dkt. No. 114 at 7-8.) Apple filed the current pending
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`Motion to Stay Pending IPR on October 7, 2024. (Dkt. No. 114.)
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`I.
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`Motion to Stay
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`DISCUSSION
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`“[T]he power to stay is incidental to the power inherent in every court to control the
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`disposition of the causes on its docket with economy of time and effort for itself, for counsel, and
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`for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). In particular, a “district court has
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`inherent power to stay proceedings pending resolution of parallel actions in other courts.” Dietz v.
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`Bouldin, 579 U.S. 40, 47 (2016) (citing Landis, 299 U.S. at 254). This inherent power extends to
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`staying proceedings pending resolution of inter partes review. See Topia Tech., Inc. v. Dropbox
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`Inc., No. 2023-cv-00062-JSC, 2024 WL 3437823 at *3 (N.D. Cal. May 12, 2023). “The
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`proponent of a stay bears the burden of establishing its need.” Clinton v. Jones, 520 U.S. 681, 708
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`(1997).
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`In deciding whether to stay a case, courts must “weigh [the] competing interests” of
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`“economy of time and effort for itself, for counsel, and for litigants” and “maintain an even
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`Case 3:24-cv-02296-JSC Document 126 Filed 11/20/24 Page 3 of 6
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`balance.” Landis, 299 U.S. at 254-55. Courts often consider the following in guiding this
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`balancing exercise:
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`(1) the stage of the litigation, including whether discovery is or will
`be almost completed and whether the matter has been marked for
`trial;
`(2) whether a stay will unduly prejudice or tactically disadvantage the
`nonmoving party; and
`(3) whether a stay will simplify the issues in question and streamline
`the trial, thereby reducing the burden of litigation on the parties
`and on the court.
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`Oyster Optics, LLC v. Ciena Corp., No. 20-cv-02354-JSW, 2021 WL 4027370, at *1 (N.D. Cal.
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`Apr. 22, 2021).
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`A. Stage of Litigation
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`“The first factor the Court considers is whether the litigation is at an early stage.” Zomm,
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`LLC v. Apple Inc., 391 F. Supp. 3d 946, 956 (N.D. Cal. 2019) (citing AT&T Intellectual Property I
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`v. Tivo, Inc., 774 F. Supp. 2d 1049, 1052 (N.D. Cal. 2011)). “An early stay may save the parties
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`and the Court from unnecessarily expending significant resources. A stay later in the proceedings
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`will likely produce less benefit and increase the possibility of prejudice.” Largan Precision Co. v.
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`Motorola Mobility LLC, No. 21-cv-09138-JSW, 2022 WL 294935, at *4 (N.D. Cal. July 26,
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`2022). Courts typically consider “(1) whether parties have engaged in costly expert discovery and
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`dispositive motion practice; (2) whether the court has issued its claim construction order; and (3)
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`whether the court has set a trial date.” Id.
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`The Court must consider “the posture and circumstances of each case on an individual
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`basis” to determine “whether litigation has progressed significantly enough for a stay to be
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`disfavored.” PersonalWeb Techs., LLC v. Apple Ins., 69 F. Supp. 3d 1022, 1025 (N.D. Cal. 2014)
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`(collecting cases). “Although courts generally evaluate the state of litigation at the time the
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`motion to stay was filed, they may also consider subsequent progress in the case.” Uniloc USA
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`Inc. v. LG Elecs. U.S.A. Inc., No. 18-CV-06737-JST, 2019 WL 1905161, at *2 (N.D. Cal. Apr. 29,
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`2019).
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`The stage of litigation weighs against a stay here. At the time Apple filed this motion, the
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`parties had undertaken significant work on the case. A substantial amount of fact discovery has
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`Case 3:24-cv-02296-JSC Document 126 Filed 11/20/24 Page 4 of 6
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`been completed: the parties have exchanged infringement contentions, invalidity contentions,
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`damages contentions, expert reports, several sets of interrogatories and requests for production and
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`have produced over 555,000 pages. (Dkt. No. 117-2 ¶¶2-10.) Further, both Haptic’s opening
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`claim construction brief and Apple’s responsive claim construction brief have already been
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`submitted. (Dkt. No. 119; Dkt. No. 121.)
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`Entangled Media, LLC v. Dropbox Inc. is instructive. No. 23-CV-03264-PCP, 2024 WL
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`1974554 (N.D. Cal. May 3, 2024). There, the court held the stage of litigation weighed against a
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`stay because the parties had engaged in “significant discovery” having spent “over fourteen
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`months engaged in discovery, including written discovery, the production of over 47,000 pages of
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`documents, the issuance of subpoenas, and extensive negotiation of a protective order.” Id. at *2.
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`The court had also resolved a motion to dismiss and, a month prior to the defendant’s petition for
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`inter partes review, scheduled a trial date. Id.
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`Here, the parties have spent eleven months engaged in discovery and, just as in Entangled
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`Media, engaged in extensive negotiation of a protective order. See id.; (Dkt. No. 79.) The Court
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`has also denied a motion to dismiss and, four months prior to Apple even filing its petitions,
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`scheduled a trial date. (Dkt. No. 81; Dkt. No. 73 at 2; Dkt. No. 114-3 at 127; Dkt. No. 114-4 at
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`106.) In fact, this case has progressed beyond Entangled Media because both the opening and
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`responsive claim construction briefs have already been filed. See 2024 WL 1974554 at *2; (Dkt.
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`No. 119; Dkt. No. 121.)
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`The cases Apple cites do not persuade the Court otherwise. In two, no trial date had been
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`set. See Largan, 2022 WL 2954935 at *4 (“No trial date has been set.”); Viavi Sols. Inc. v.
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`Platinum Optics Tech. Inc., No. 5:20-CV-05501-EJD, 2021 WL 1893142 at *1 (N.D. Cal. May
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`11, 2021) (“fact discovery is in its early stages, expert discovery has not begun, and a trial date has
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`not been set.”). And in Anza Tech., Inc. v. Toshiba Am. Elec. Components Inc., No. 17-CV-
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`07289-LHK, 2018 WL 4859167, at *1 (N.D. Cal. Sept. 28, 2018), while a trial date had been set,
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`claim construction briefing had not commenced.
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`So, this factor weighs against a stay.
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`B. Simplification of Issues
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`Case 3:24-cv-02296-JSC Document 126 Filed 11/20/24 Page 5 of 6
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`“[T]he filing of an IPR request does not by itself simplify the issues in a case.” DiCon
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`Fiberoptics, Inc. v. Precisely Microtechnology Corp., No. 15-cv-1362-BLF, 2015 WL 12859349,
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`at *2 (N.D. Cal. Oct. 13, 2015). A stay is appropriate when a Patent and Trademark Office
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`(“PTO”) proceeding “would be likely to assist the court in determining patent validity and, if the
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`claims were canceled in the reexamination, would eliminate the need to try the infringement
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`issue.” Slip Track Sys., Inc. v. Metal Lite, Inc., 159 F.3d 1337, 1341 (Fed. Cir. 1998).
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`This factor weighs slightly against a stay or is neutral. While it is true, as Apple contends,
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`“significant efficiency … can result from an early stay even where the PTAB has not yet instituted
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`its review,” (Dkt. No. 114 at 11), that is not always true. And, in this case, unlike many others,
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`including those Apple cites, there is only one independent claim from one patent at issue. See
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`Viavi, 2021 WL 1893142 at *1 (three patents at issue); Finjan, Inc. v. Symantec Corp., 139 F.
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`Supp. 3d 1032, 1034 (N.D. Cal. 2015) (eight patents at issue); Evolutionary Intel. LLC v. Yelp Inc,
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`No. C-13-03587 DMR, 2013 WL 6672451 at *1 (N.D. Cal. Dec. 18, 2013) (two patents at issue);
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`Qualcomm Inc. v. Apple Inc., No. 3:17-CV-2403-CAB-MDD, 2018 WL 4104966 at *2 (S.D. Cal.
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`Aug. 29, 2018) (“with five patents and numerous claims at issue, the PTAB’s decisions whether to
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`institute will impact the contours of the case”.)
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`So, this factor weighs slightly against a stay or is neutral.
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`C. Prejudice to Haptic
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` “Third, the Court looks to whether a stay would unduly prejudice or present a clear
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`tactical disadvantage to the nonmoving party.” PersonalWeb, 69 F. Supp. 3d at 1029.
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`The potential prejudice to Haptic weighs against a stay.
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`Given the statutory deadline for the PTAB to issue a final written decision is seven months
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`after the trial date (assuming IPR is even instituted), “[a] stay has the potential to prejudice
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`[plaintiff] by delaying discovery and the timely resolution of this action, including trial by jury.”
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`Entangled Media, 2024 WL 1974554 at *4; see 35 U.S.C. § 316(a)(11) (“requiring that the final
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`determination in an inter partes review be issued not later than 1 year after the date on which the
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`Director notices the institution of a review under this chapter.”) Haptic argues that as a “growth-
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`stage tech company” the ‘738 Patent “underpins the novel capabilities of Knocki and is essential
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`Case 3:24-cv-02296-JSC Document 126 Filed 11/20/24 Page 6 of 6
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`to Haptic’s product roadmap and growth.” (Dkt. No. 117-1 at ¶¶ 4, 8.) And “because of the
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`ongoing litigation, Haptic has had to withhold sensitive information from potential investors,”
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`which has impeded its ability to fundraise. (Id. ¶ 8.) Indeed, Haptic’s CEO has also paused
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`drawing a salary and reduced the size of its engineering staff. (Id.) So, Haptic presents
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`compelling evidence of “harm in the marketplace that is not compensable by readily calculable
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`money damages.” See Avago Techs. Fiber IP (Singapore) Pte. Ltd. v. IPtronics Inc., No. 10-CV-
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`02863-EJD, 2011 WL 3267768, at *5 (N.D. Cal. July 28, 2011).
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`That Haptic and Apple are not direct competitors, and that Haptic did not seek preliminary
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`injunctive relief, does not undermine the above prejudice. See Avago, 2011 WL 3267768 at *6
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`(holding that the failure to seek preliminary injunctive relief does not necessarily mean a stay is
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`warranted given a plaintiff “might have other reasons for deciding not to pursue injunctive relief”).
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`Further, Apple incorrectly argues “Haptic… is not seeking injunctive relief.” (Dkt. No. 114 at 13.)
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`In fact, Haptic does seek injunctive relief in the complaint. (Dkt. No. 1 at 15.) In sum, the balance
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`of hardships weighs in favor of Haptic because Haptic “is much smaller and the [Knocki] is its
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`flagship product.” Acumed LLC v. Stryker Corp., 551 F.3d 1323, 1327 (Fed. Cir. 2008).
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`CONCLUSION
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`For the above reasons, and in the exercise of its discretion, the Court DENIES Apple’s
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`motion to stay without prejudice to renewal if the PTAB institutes IPR review.
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`This Order disposes of Docket No. 114.
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`IT IS SO ORDERED.
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`Dated: November 20, 2024
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`JACQUELINE SCOTT CORLEY
`United States District Judge
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