Case 8:19-cv-02115-DOC-JDE Document 55 Filed 05/08/20 Page 1 of 5 Page ID #:1530
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` UNITED STATES DISTRICT COURT JS-6
`CENTRAL DISTRICT OF CALIFORNIA
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`CIVIL MINUTES – GENERAL
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`Date: May 8, 2020
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`Case No. SA CV 19-02115-DOC-JDE
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`Title: MEDTRONIC, INC. ET AL. v. AXONICS MODULATION TECHNOLOGIES,
`INC.
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`PRESENT:
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`THE HONORABLE DAVID O. CARTER, JUDGE
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`Kelly Davis
`Courtroom Clerk
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` Not Present
`Court Reporter
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`ATTORNEYS PRESENT FOR
`PLAINTIFF:
`None Present
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`ATTORNEYS PRESENT FOR
`DEFENDANT:
`None Present
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`PROCEEDINGS (IN CHAMBERS): ORDER GRANTING
`DEFENDANT’S MOTION TO STAY
`LITIGATION PENDING INTER
`PARTES REVIEW [49]
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`Before the Court is Defendant Axonics Modulation Technologies, Inc.’s
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`(“Defendant”) Motion to Stay Litigation Pending Inter Partes Review (“Motion”)
`(Dkt. 49). The Court finds this matter appropriate for resolution without oral argument.
`See Fed. R. Civ. P. 78; C.D. Cal. R. 7-15. Having reviewed the parties’ moving papers,
`the Court GRANTS Defendant’s Motion.
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`Background
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`I.
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`This case arises out of a dispute over seven asserted patents between Plaintiffs1
`and Defendant. Plaintiffs initiated this action on November 4, 2019 (Dkt. 1), and filed a
`First Amended Complaint (Dkt. 28) on November 26, 2019. On March 13, 2020, the
`Court issued its Scheduling Order (Dkt. 42). On March 16, 2020, Defendant filed
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`1 Viz., Medtronic, Inc.; Medtronic Puerto Rico Operations Co.; Medtronic Logistics, LLC; and
`Medtronic USA, Inc.
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`APPLE 1039
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`1
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`Case 8:19-cv-02115-DOC-JDE Document 55 Filed 05/08/20 Page 2 of 5 Page ID #:1531
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`CIVIL MINUTES – GENERAL
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`Case No. SA CV 19-02115-DOC-JDE
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`Date: May 8, 2020
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` Page 2
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`petitions for inter partes review with the U.S. Patent and Trademark Office (“PTO”) as to
`all seven patents at issue, and filed the instant Motion with this Court on April 10, 2020,
`asking the Court to stay the action pending inter partes review.
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`Legal Standard
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`II.
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`“Courts have inherent power to manage their dockets and stay proceedings,
`including the authority to order a stay pending conclusion of a PTO reexamination.”
`Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (citations omitted). “To
`be sure, a court is under no obligation to delay its own proceedings by yielding to
`ongoing PTAB patent reexaminations—even if the reexaminations are relevant to the
`infringement claims before the Court.” Robert Bosch Healthcare Sys., Inc. v. Cardiocom,
`LLC, No. C-14-1575 EMC, 2014 WL 3107447, at *3 (N.D. Cal. July 3, 2014); see also
`Viskase Corp. v. Am. Nat’l Can Co., 261 F.3d 1316, 1328 (Fed. Cir. 2001).
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`To determine whether to stay a case pending reexamination or inter partes review,
`courts in this district typically consider three factors: “(1) whether discovery is complete
`and whether a trial date has been set; (2) whether a stay will simplify the issues in
`question and trial of the case; and (3) whether a stay would unduly prejudice or present a
`clear tactical disadvantage to the nonmoving party.” Universal Elecs., Inc. v. Universal
`Remote Control, Inc., 943 F. Supp. 2d 1028, 1030-31 (C.D. Cal. 2013). The three factors
`“are not exhaustive, however, as the decision whether to order a stay must be based on
`the totality of the circumstances.” Polaris Innovations Ltd. v. Kingston Tech. Co., Inc.,
`No. 8:16-cv-00300-CJC-RAO, 2016 WL 7496740, at *1 (C.D. Cal. Nov. 17, 2016)
`(citing Universal Elecs., Inc., 943 F. Supp. 2d at 1030-31).
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`III. Discussion
`In support of the instant Motion, Defendant argues that a stay is appropriate
`because the Scheduling Order was issued very recently and little discovery has been
`conducted, reexamination will potentially dispose of or simplify the issues in this action,
`and a stay will not unduly disadvantage Plaintiffs. See generally Mot. Plaintiff disagrees,
`arguing that the stay will only delay litigation and prejudice its position. See generally
`Opp’n.
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`First factor: discovery and trial date. According to Defendant, “this case is still in
`its early stages,” as a trial date was set in the Court’s Scheduling Order less than a month
`before the Motion was filed, no depositions have been taken, claim construction briefing
`has not begun, no expert discovery has occurred, and no summary judgment motions
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`2
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`Case 8:19-cv-02115-DOC-JDE Document 55 Filed 05/08/20 Page 3 of 5 Page ID #:1532
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`CIVIL MINUTES – GENERAL
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`Case No. SA CV 19-02115-DOC-JDE
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`Date: May 8, 2020
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` Page 3
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`have been filed. Mot. at 3. Plaintiffs respond that the Court has now set a trial date, and
`that Plaintiffs have already “provid[ed] Axonics a substantial amount of the discovery it
`has requested.” Opp’n at 1. Plaintiffs also point out that “Axonics has admittedly spent
`years, since 2013, studying Medtronic’s patent portfolio . . . [and] could have filed its IPR
`petitions at any time.” Id.
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`To analyze this factor, courts in the Central District of California often consider
`whether “there is more work ahead of the parties and the Court than behind the parties
`and the Court.” Limestone v. Micron Tech., Nos. SA CV 15-0278-DOC (RNBx) et al.,
`2016 WL 3598109, at *3 (C.D. Cal. Jan. 12, 2016) (quoting Semiconductor Energy Lab.
`Co., Ltd. v. Chimei Innolux Corp., No. SA CV 12-21-JST (JPRx), 2012 WL 7170593,
`at *2 (C.D. Cal. Dec. 19, 2012)). Here, although a trial date has been set, and although
`Defendant may have been able to file for inter partes review earlier, with respect to this
`litigation, the amount of work still to do far outweighs that which has already been
`completed. The Court therefore finds that this factor weighs in favor of a stay.
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`Second factor: simplification of issues. Here, Defendant has filed for inter partes
`review against all seven patents at issue. The PTO has until September 2020 to decide
`whether to institute the inter partes review proceedings. Should the PTO decline to
`institute inter partes review, the discovery timeline will undoubtedly be compressed, but
`the parties will still have over two months—until December 7, 2020—to conduct fact
`discovery. See Scheduling Order. Moreover, if the PTO does institute inter partes review,
`there is a strong likelihood that issues would be simplified or resolved at the summary
`judgment or trial stage. Although inter partes review would not be completed until
`September 2021, which is later than the current trial date, the conservation of judicial
`resources stemming from the simplification of issues would justify continuing the trial
`date. As such, the Court finds that there is a sufficient chance that inter partes review
`would simplify the issues in this case, and that the second factor supports a stay.
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`Third factor: undue prejudice. Defendant argues that no undue prejudice will
`result because it filed its inter partes review petitions expediently, Plaintiffs have not
`identified any product that practices the patents at issue, and the parties are not sole
`competitors. Mot. at 13-14. Defendant also points out that Plaintiffs “did not move for a
`preliminary injunction . . . which indicates that any prejudice to Medtronic that might
`result from delaying the resolution of this suit is not severe.” Id. at 14. Medtronic
`responds that the parties do directly compete—and as sole competitors, with respect to at
`least one product—and that Plaintiffs in their interrogatory responses have identified
`products that practice the patents. Opp’n at 13. Plaintiffs further argue that their choice to
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`Case 8:19-cv-02115-DOC-JDE Document 55 Filed 05/08/20 Page 4 of 5 Page ID #:1533
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`CIVIL MINUTES – GENERAL
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`Case No. SA CV 19-02115-DOC-JDE
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`Date: May 8, 2020
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` Page 4
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`forgo a preliminary injunction should not be held against them, and that if a stay is
`granted, it “will amount to a compulsory license” for the remaining term of two of the
`patents, which will expire in November 2021 and February 2022. Id. at 14-15.
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`The Court notes that Plaintiffs do not explain why they did not move for a
`preliminary injunction, and the Federal Circuit has more recently given increased
`importance to this consideration. See VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d
`1307, 1318-20 (Fed. Cir. 2014) (finding that “rational reasons for not pursuing a
`preliminary injunction” nevertheless contradicted the plaintiff’s “assertion that it needs
`injunctive relief as soon as possible”). Plaintiffs also do not explain why an eventual
`award of damages would be an inadequate remedy. These considerations suggest that a
`stay should not be granted.
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`Thus, even if the parties’ products were sole market competitors—the briefing
`conflicts on this issue, and the Court makes no factual determination as to competition—
`the competition factor is mitigated by Plaintiffs’ failure to move for preliminary
`injunction or to show why damages would be inadequate. At most, then, this factor tilts
`slightly against a stay.
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`Other circumstances: The Court also notes that the Panel Mediator scheduled a
`mediation date for October 20, 2020 (Dkt. 51). Independent of inter partes review, this
`provides the parties yet another opportunity to simplify or resolve issues before summary
`judgment or trial, and the possibility for the conservation of judicial resources.
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`Considering the totality of the circumstances, and guided by the factors established
`in our case law, the Court finds that a stay pending inter partes review is warranted.
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`IV. Disposition
`For the reasons set forth above, the Court GRANTS Defendant’s Motion to Stay
`Litigation Pending Inter Partes Review, and the case is hereby STAYED. The parties
`shall file a joint status report within 30 days of the PTO’s decision whether to institute
`inter partes review. Should the PTO begin inter partes review, the parties shall inform
`the Court within 30 days of the PTO issuing its decisions on inter partes review.
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`The Clerk shall serve this minute order on the parties.
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`Case 8:19-cv-02115-DOC-JDE Document 55 Filed 05/08/20 Page 5 of 5 Page ID #:1534
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`CIVIL MINUTES – GENERAL
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`Case No. SA CV 19-02115-DOC-JDE
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`Date: May 8, 2020
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` Page 5
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`MINUTES FORM 11
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`Initials of Deputy Clerk: kd
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`CIVIL-GEN
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