Case 5:19-cv-00036-RWS Document 298 Filed 04/27/20 Page 1 of 7 PageID #: 10197
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
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`MAXELL LTD.,
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`Plaintiff,
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`v.
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`APPLE INC,
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`Defendant.
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`CIVIL ACTION NO. 5:19-CV-00036-RWS
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`ORDER
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`Before the Court is Apple’s Motion to Stay Pending Inter Partes Review of the Patents-in-
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`Suit. Docket No. 239. Having considered the briefing, Apple’s motion is DENIED WITHOUT
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`PREJUDICE.
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`I.
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`Background
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`Maxell filed its initial complaint on March 15, 2019, alleging that Apple’s products
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`infringed ten patents.1 Docket No. 11. Jury selection and trial are set to begin on October 26,
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`2020. Docket No. 232. Apple has petitioned the Patent Trial and Appeal Board (“PTAB”) for
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`inter partes review (“IPR”) of all asserted claims of the ten patents-in-suit. Docket No. 239 at 1.
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`Apple filed petitions for the ’438, ’991, ’794 and ’586 patents on December 19, 2019; for the ’193
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`and ’306 patents on December 20, 2019; for the ’317, ’999 and ’498 patents on January 13, 2020;
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`and for the ’493 patent on March 17, 2020. Docket No. 239-1 ¶¶ 5–14. Apple now moves to stay
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`1 The ten patents-in-suit are U.S. Patent Nos. 6,748,317; 6,580,999; 8,339,493; 7,116,438; 6,408,193; 10,084,991;
`6,928,306; 6,329,794; 10,212,586; and 6,430,498.
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`Case 5:19-cv-00036-RWS Document 298 Filed 04/27/20 Page 2 of 7 PageID #: 10198
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`this case pending resolution of the IPRs. Docket No. 239. Apple anticipates that the PTAB will
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`issue institution decisions on every petition by September 2020.2
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`II.
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`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.” Fall Line Patents, LLC v. Am. Airlines Grp.,
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`No. 6:17-cv-00202-RWS, 2018 WL 4169251, at *1 (E.D. Tex. May 21, 2018); NFC Techs. LLC
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`v. HTC Am., Inc., Case No. 2:13-cv-1058-WCB, 2015 WL 1069111, at *2 (E.D. Tex. Mar. 11,
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`2015).
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`III. Analysis
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`Apple argues that the case should be stayed pending resolution of the IPRs, asserting that
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`all three factors weigh in favor of a stay. Docket No. 239. To the Court’s knowledge, however,
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`the PTAB has not yet acted on any of Apple’s petitions. “Where a motion to stay is filed before
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`the PTAB decides whether to institute, courts often withhold ruling pending action on the petitions
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`by the PTAB or deny the motion without prejudice to refiling in the event that the PTAB institutes
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`a proceeding.” See Fall Line Patents, 2018 WL 4169251, at *1 (collecting cases); see also Trover
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`Group, Inc. v. Dedicated Micros USA, No. 2:13-cv-1047-WCB, 2015 WL 1069179, at *6 (E.D.
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`Tex. Mar. 11, 2015) (“This Court’s survey of cases from the Eastern District of Texas shows that
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`when the PTAB has not yet acted on a petition for inter partes review, the courts have uniformly
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`2 Institution decisions for the first four petitions are anticipated in June 2020, for the second two petitions in July 2020
`and for the third set of petitions in August 2020. Docket No. 239-1 ¶¶ 5–13. The date for the ’493 patent institution
`decision is not set but is expected in September 2020. Id. ¶ 14.
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`Case 5:19-cv-00036-RWS Document 298 Filed 04/27/20 Page 3 of 7 PageID #: 10199
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`denied motions for a stay.”). The circumstances in this case do not warrant deviation from the
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`traditional practice. At this time, the factors weigh against a stay.
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`1. Undue Prejudice
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`Apple argues that Maxell will not suffer undue prejudice or tactical disadvantage because
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`Maxell does not practice the patents-in-suit and can be fully compensated for any alleged harm
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`through monetary damages. Docket No. 239 at 3–4. In opposition, Maxell asserts that the stay
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`would significantly delay vindication of its patent rights and that Apple “waited until the second
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`to last possible day to file the final of its IPR petitions.”3 Docket No. 267 at 3–4.
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`“The mere fact that [Maxell] is not currently practicing the patents does not mean that, as
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`a matter of law, it is not prejudiced by a substantial delay of an imminent trial date.” See
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`Rembrandt Wireless Techs., LP v. Samsung Elecs. Co., No. 2:13-cv-213-JRG-RSP, 2015 WL
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`627887, at *2 (E.D. Tex. Jan. 29, 2015). Maxell has an interest in the timely enforcement of its
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`patent rights. See Realtime Data LLC v. Actian Corporation, No. 6:15-cv-463-RWS-JDL, 2016
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`WL 3277259, at *2 (E.D. Tex. June 14, 2016); NFC Tech., 2015 WL 1069111, at *2 (finding that
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`interest in timely vindication of rights is entitled weight and cuts slightly against a stay). Assuming
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`the PTAB institutes at least one IPR petition, the time allowed for the IPR decision as well as a
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`potential appeal could cause a lengthy delay that would significantly prejudice Maxell. Realtime
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`Data, 2016 WL 3277259, at *2 (explaining the potential delay awaiting completion of the IPR and
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`appeals and finding that delay weighed against a stay). The prejudice factor at this time, therefore,
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`cuts slightly against a stay.
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`3 Maxell also argues that monetary damages will be an insufficient remedy because it seeks injunctive relief. Docket
`No. 289 at 5. However, the fact that Maxell did not seek a preliminary injunction “contradicts [its] assertion that it
`needs injunctive relief as soon as possible.” See Virtual Agility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1319 (Fed.
`Cir. 2014); Uniloc 2017 LLC v. Samsung Elec. Am., Inc., No. 2:19-cv-00259-JRG-RSP, 2020 WL 1433960, at *4
`(E.D. Tex. Mar. 24, 2020) (finding that failure to seek a preliminary injunction weighs against any potential prejudice
`a patentee may suffer).
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`Case 5:19-cv-00036-RWS Document 298 Filed 04/27/20 Page 4 of 7 PageID #: 10200
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`2. Stage of the Proceedings
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`Apple argues that the parties are still engaged in discovery and that it diligently filed the
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`petitions within four-and-a-half months of Maxell’s preliminary claim election. Docket No. 239
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`at 3. Moreover, Apple asserts that, because trial is seven months away, the bulk of the expenses
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`the parties would incur are still in the future. Id. at 4. In response, Maxell asserts that fact
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`discovery is nearly complete and that Apple unreasonably delayed in filing the IPRs. Docket No.
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`267 at 8–9.
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`This factor includes two sub-factors: “(1) whether discovery is complete and whether a
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`trial date has been set; and (2) whether the movant has unreasonably delayed filing its IPR petition
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`and motion to stay.” Stragent, LLC v. BMW of N. Am., LLC, Case No. 6:16-cv-446-RWS-KNM,
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`2017 WL 2839260, at *2 (E.D. Tex. Apr. 20, 2017).4 Maxell initiated this action more than a year
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`ago, and trial for this matter is scheduled for October 26, 2020. Docket No. 232. Claim
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`construction is complete, and the parties have nearly completed fact discovery, save for depositions
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`that could not be completed due to COVID-19. See Docket No. 231 (requesting the deadline to
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`conduct depositions be extended to April 21, 2020 in view of complications arising from COVID-
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`19). The case is not in its infancy and is far enough along that a stay would interfere with ongoing
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`proceedings. See Uniloc 2017, 2020 WL 143360, at *5 (finding progress of case partially through
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`discovery weighed slightly against a stay even though defendant was not dilatory in filing the IPR
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`petitions); NFC, 2015 WL 1069111, at *4 (finding that stage of case, with a month remaining in
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`discovery, was neutral or weighed slightly against a stay).
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`As to the second factor, Apple has not sufficiently explained its delay in filing the petitions.
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`Apple filed its first wave of petitions nine months after Maxell filed suit and six months after
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`4 Some courts evaluate delayed IPR filings under the “undue prejudice” prong. See e.g., TracBeam, L.L.C. v. T-Mobile
`US, Inc., No. 6:14-cv-678, 2016 WL 9225574, at *1 (E.D. Tex. Mar. 29, 2016).
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`Case 5:19-cv-00036-RWS Document 298 Filed 04/27/20 Page 5 of 7 PageID #: 10201
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`Maxell served its initial infringement contentions.5 Apple filed its last petition, however, nearly a
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`year after the action was filed, one day short of the one-year deadline, and nine months after
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`receiving Maxell’s initial infringement contentions. Docket No. 267 at 8–9. Courts in this district
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`have found that such delay weighs against a stay. See Tessera Advanced Technologies, Inc. v.
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`Samsung Electronics Co., Ltd., Case No. 2:17-cv-00671-JRG, 2018 WL 3472700, at *3 (E.D. Tex.
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`July 19, 2018) (finding IPRs filed nine months after initiation of trial and five months after service
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`of infringement contentions weighed against a motion to stay).
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`Apple notes that it filed the petitions within four months of Maxell’s preliminary claim
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`election but does not explain how the narrowed claims assisted in its preparation of the petitions.
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`Realtime Data v. Actian Corporation, Case No. 6:15-cv-463-RWS-JDL, 2016 WL 9340796, at *2
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`(E.D. Tex. Nov. 29, 2016); Parthenon Unified Memory Architecture LLC v. HTC Corps. & HTC
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`Am., Inc., No. 2:14-cv-00690, 2016 WL 3365855, at *2 (E.D. Tex. June 17, 2016); see also e-
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`Watch, Inc. v. Mobotix Corp., Case No. SA-12-CA-492-FB, 2013 WL 12091167, at *6 (W.D. Tex.
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`May 21, 2013) (finding that waiting for infringement contentions did not justify delay in filing
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`IPRs where defendant sought IPR on more claims than those asserted). Apple does not address,
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`let alone deny, the fact that its petitions are not limited to the elected claims and instead challenge
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`86 of the 90 originally asserted claims. Moreover, even if Apple’s initial petitions were to be
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`considered timely, Apple has not explained the three-month delay between its initial and final IPR
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`filings.
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`Combined, the stage of the case and Apple’s delayed filing weigh against a stay.
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`5 Maxell served supplemental infringement contentions on March 13, 2020.
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`Case 5:19-cv-00036-RWS Document 298 Filed 04/27/20 Page 6 of 7 PageID #: 10202
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`3. Simplification of Issues
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`The final factor—whether the stay is likely to simplify the issues at trial—is the most
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`important factor bearing on whether to grant a stay. Uniloc 2017, 2020 WL 1433960, at *5.
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`However, as Maxell points out, the PTAB has not yet granted any of Apple’s IPR petitions. Docket
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`No. 267 at 9. Apple contends that, in view of historical IPR decisions, there is a “ ‘fair inference
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`that the issues in this case are apt to be simplified and streamlined to some degree as a result of the
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`[IPR] proceedings.’ ” Id. at 6–7 (citing Ever win Int’l Corp. v. RadioShack Corp., 902 F. Supp.
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`2d 503, 506 (D. Del. 2012)). As this Court has repeatedly found, any finding at this time as to the
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`likelihood of simplification would be pure speculation. See NFC, 2015 WL 1069111 at *4. The
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`Court declines to speculate on the likelihood of simplification absent any action by the PTAB.
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`Accordingly, this factor weighs against a stay.
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`IV. Conclusion
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`The factors here clearly weigh against granting a stay at this time. However, the Court
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`declines to deny Apple’s motion with prejudice. Maxell argues that the motion should be denied
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`with prejudice because the institution decisions will not be complete until September 25, 2020, at
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`which point the parties will be deep in the throes of pre-trial preparation. Docket No. 267 at 13.
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`The late stage of the proceedings will certainly weigh against granting a stay. However, the Court
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`cannot say now that the late stage would necessarily outweigh the potential simplification of issues
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`following institution decisions. See Image Processing Techns., LLC v. Samsung Electronics Co.,
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`Ltd., Case No. 2:16-cv-505-JRG, Docket No. 306 (E.D. Tex. Oct. 25, 2017) (staying the case
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`following IPR institutions on three of four patents in suit after completion of Pretrial Conference
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`and three weeks before trial). Accordingly, denial without prejudice is appropriate.
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`Case 5:19-cv-00036-RWS Document 298 Filed 04/27/20 Page 7 of 7 PageID #: 10203
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`Based on the circumstances described above, Apple’s motion is premature and a stay in
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`the proceedings at this time is not warranted. Accordingly, Apple’s motion to stay (Docket No.
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`239) is DENIED WITHOUT PREJUDICE.
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`.
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`____________________________________
`ROBERT W. SCHROEDER III
`UNITED STATES DISTRICT JUDGE
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`So ORDERED and SIGNED this 27th day of April, 2020.
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