Case 6:12-cv-00799-JRG Document 134 Filed 03/31/14 Page 1 of 8 PageID #: 4045
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`C.A. No. 6:12-cv-00799-LED
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`PLAINTIFF’S SUR-REPLY IN OPPOSITION TO DEFENDANTS’
`MOTION TO STAY LITIGATION PENDING INTER PARTES REVIEW
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`INVENSYS SYSTEMS, INC.,
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`Plaintiff,
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`v.
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`EMERSON ELECTRIC CO. and
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`MICRO MOTION INC.,
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`Defendants,
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`and
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`MICRO MOTION INC.,
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`Counterclaim-Plaintiff,
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`v.
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`INVENSYS SYSTEMS, INC.,
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`Counterclaim-Defendant. §
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`Case 6:12-cv-00799-JRG Document 134 Filed 03/31/14 Page 2 of 8 PageID #: 4046
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`I.
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`DEFENDANTS’ MOTION IS PREMATURE
`The vast majority of courts that have considered motions to stay based upon the pendency
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`of an IPR petition before the petition has been granted have denied the motions as premature. See
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`Opp. at 4 n.2 (outlining recent decisions on point). The two cases cited by Defendants for their
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`assertion that “courts have granted motions to stay pending IPR before the IPR was instituted” are
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`factually inapposite. Reply at 2. In Landmark Tech. v. iRobot Corp., the patents-in-suit were
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`subject to review under the Transitional Program for Covered Business Method Patents (“CBM
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`Review”), not IPR. No. 13-cv-411, 2014 WL 486836, at *1 (E.D. Tex. Jan. 24, 2014). This
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`distinction is significant because the AIA provides a presumption in favor of staying litigation
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`pending CBM Review, but not pending IPR. See id. As recognized by the Landmark court, “[t]he
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`transitional program provides a statutory stay provision under which a party may seek stay of a civil
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`action alleging infringement of the CBM patent,” which “places a very heavy thumb on the scale in
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`favor of a stay being granted.” Id. (emphasis added). Moreover, the motion to stay in Landmark
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`was made almost immediately after the case was filednot, as here, 15 months into the litigation
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`and in the midst of claim construction proceedings. Id. at *3 (noting court “has merely held a
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`scheduling conference, issued several routine and administrative orders, and discovery has just
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`begun”). The Black & Decker case cited by Defendants (Mot. at 7), involved a motion to stay
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`pending one IPR petition, as opposed to seven petitions filed by Micro Motion. Black & Decker,
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`Inc. v. Positec USA, Inc., No. 13-cv-3075, 2013 WL 5718460, at *2 (N.D. Ill. Oct. 1, 2013). In the
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`Black & Decker case, it was much more likely that the litigation would stand or fall along with the
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`outcome of the single IPR petition.
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`Case 6:12-cv-00799-JRG Document 134 Filed 03/31/14 Page 3 of 8 PageID #: 4047
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`II. MICRO MOTION’S DELAY IN FILING THE IPR PETITIONS WAS TACTICAL
`Defendants do not deny that the timing of the filings of the petitions was tactical.1 After
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`Defendants served their invalidity contentions, Micro Motion waited over four months to file all
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`seven of its IPR petitions, and only after the Court denied its motion to transfer venue.2 Indeed,
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`Micro Motion filed all seven IPR petitions on the last three possible days to file under the IPR
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`statute of limitations.3 See 35 U.S.C. § 315(b). Section 315(b) gives a petitioner one year from the
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`date it is served with a complaint for patent infringement to petition for IPR. The fact that § 315(b)
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`allows one year “does not change the fact that delay in seeking the PTO’s review of a patent within
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`that year can adversely affect a district court’s view of a request for a stay pending review.”4
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`Universal Elecs., Inc. v. Universal Remote Control, Inc., 943 F. Supp. 2d 1028, 1030 (C.D. Cal.
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`2013); see also SoftView LLC v. Apple Inc., No. 10-cv-389, 2012 WL 3061027, at *4 (D. Del.
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`July 26, 2012) (concluding stay would unduly prejudice plaintiff where defendant “did not file its
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`request for inter partes reexamination until approximately one year after this litigation began” and
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`staying “litigation in favor of the reexamination proceedings would provide [defendant] with its
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`choice of forum without any compelling justification for doing so.”). Moreover, other courts have
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`1 BarTex Research, L.L.C. v. FedEx Corp., 611 F. Supp. 2d 647, 652 (E.D. Tex. 2009) (noting “use of the reexamination
`process as a dilatory tactic must be considered” in reviewing motion to stay); see also Rensselaer Polytechnic Inst. v.
`Apple, Inc., No. 13-cv-633, 2014 WL 201965, at *4 (N.D.N.Y. Jan. 15, 2014) (observing, where accused infringer
`waited until one year after being served with complaint to submit its IPR petition, that fact “at least raise[d] the
`possibility that it was a dilatory tactic.”) (internal quotation omitted).
`2 Defendants served their invalidity contentions on September 13, 2013. On November 19, 2013, Micro Motion filed
`IPR petitions on the ’646, ’761, ’136, and ’854 patents, but Micro Motion did not file the IPR petitions on the ’906,
`’594, and ’062 patents until January 29, January 30, and January 31, 2014, respectively.
`3 Defendants’ citation to Kimberly-Clark Corp. v. Johnson & Johnson, 745 F.2d 1437, 1454 (Fed. Cir. 1984) and Glaxo
`Inc. v. Novopharm Ltd., 52 F.3d 1043, 1052 (Fed. Cir. 1995) in support of their argument that pre-suit knowledge of
`certain Invensys patents-in-suit cannot be “imputed” to them (Reply at 3 n.3), although these patents were identified as
`prior art in the prosecution of Micro Motion and Emerson patents, is nonsensical. Both decisions are inapposite here.
`In Kimberly-Clark, the Federal Circuit rejected the presumption that an inventor has knowledge of all prior art—not the
`presumption that a company that owns patents will be aware of prior art actually identified in the prosecution of those
`patents. See Kimberly-Clark, 745 F.2d at 1449-54. In Glaxo, the Federal Circuit further held that a patent attorney’s
`knowledge related to “best mode” should not be imputed to an inventor for purposes of finding a “best mode” violation.
`Glaxo Inc., 52 F.3d at 1052.
`4 Defendants assert in their reply that Invensys delayed for years in filing this litigation. Reply at 2. This point, even if
`true, is not relevant to this motion. See Dane Techs., Inc. v. Gatekeeper Sys., Inc., No. 12-cv-2730, 2013 WL 4483355,
`at *3 n.5 (D. Minn. Aug. 20, 2013) (“Gatekeeper also argues that Dane cannot complain that it would be unduly
`prejudiced by a stay because Dane delayed bringing its lawsuit for many years. Dane’s alleged delay is not relevant to
`Gatekeeper’s delay in seeking inter partes review.”) (emphasis added).
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`2
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`Case 6:12-cv-00799-JRG Document 134 Filed 03/31/14 Page 4 of 8 PageID #: 4048
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`held that seeking a stay before the PTO has even granted a request for reviewas Defendants have
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`done hereis “an indicator of a tactical delay strategy.” Tric Tools, Inc. v. TT Techs., Inc., No. 12-
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`cv-3490 YGR, 2012 WL 5289409, at *3 (N.D. Cal. Oct. 25, 2012) (noting “Again, only requests for
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`reexamination have been made. The PTO has not granted any of those requests. Seeking a stay at
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`this juncture is, at best, premature, and, at worst, an indicator of a tactical delay strategy.”).
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`III. THIS COURT IS THE MOST APPROPRIATE VENUE TO RESOLVE THE
`ENTIRE DISPUTE BETWEEN THE PARTIES
`Anywhere but here. First, Defendants tried to transfer this case to the District of Colorado.
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`Now, Defendants are trying to effectively transfer this case to the PTO. A stay of this litigation
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`would deny Invensys its chosen forumthis Courtand force Invensys to litigate the validity of
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`the Invensys patents-in-suit before the PTO, while putting Invensys’ claims of infringement on hold
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`indefinitely. The standards for patentability in IPR proceedings are far less favorable to patentees
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`than the standards applied by district courts because the presumption of validity does not apply in
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`IPR proceedings. 35 U.S.C. §§ 282 & 316(e). Moreover, because IPR does not address issues of
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`infringement or damages, those proceedings provide accused infringers with a risk-free forum to
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`litigate the validity of a patentee’s asserted claims. Thus, district courts have held that denying a
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`plaintiff its chosen district court forum in favor of PTO proceedings weighs heavily against a stay.
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`See SoftView, 2012 WL 3061027, at *4 (citing Holmes Grp., Inc. v. Vornado Air Circulation Sys.,
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`535 US. 826, 831 (2002) (observing, “The plaintiff is the master of the complaint [and] the well-
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`pleaded complaint rule enables him . . . to have the cause heard in [the forum of his choice].”)).
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`IV.
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`IF GRANTED, IPR WILL NOT SIMPLIFY THE ISSUES IN THIS CASE
`As mentioned above, this Court is the best venue to handle this case. If IPR is granted by
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`the PTO, there are many issues present in this case that the PTO simply cannot and will not address,
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`including: (1) Invensys’ claim for infringement and damages; (2) Defendants’ defenses under 35
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`U.S.C. § 112; and (3) Defendants’ equitable defenses, such as laches, estoppel, and waiver. Those
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`3
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`Case 6:12-cv-00799-JRG Document 134 Filed 03/31/14 Page 5 of 8 PageID #: 4049
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`issues will have to be litigated in this Court regardless of what may happen at the PTO. Belden
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`Techs. Inc. v. Superior Essex Communs. LP, No. 08-cv-63, 2010 WL 3522327, at *2 (D. Del.
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`Sept. 2, 2010) (noting, “[A] stay is more appropriate when the only issues left for trial completely
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`overlap with those typically resolved upon reexamination . . . . [A] stay is not favored when
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`infringement, validity under 35 U.S.C. § 112, or other issues . . . remain to be tried.”). Judicial
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`finality is the only way to resolve this dispute.
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`V.
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`DEFENDANTS’ STATUS AS INVENSYS’ COMPETITOR WEIGHS AGAINST A
`STAY
`Defendants also argue that Invensys would not be prejudiced by a stay because Defendants
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`are not the only suppliers in the market. Reply at 2. While the presence of other competitors “may
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`lessen the prospect of undue prejudice,”5 this point does not negate the fact that, given Defendants’
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`widespread sales of the accused products, there exists a “reasonable chance” that the stay would
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`have “outsized consequences” to Invensys, including the potential for a loss in market share and an
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`erosion of goodwill. VirtualAgility, Inc. v. Salesforce.com, Inc., No. 13-cv-011, 2014 WL 94371, at
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`*5 (E.D. Tex. Jan. 9, 2014).
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`Notably missing from Defendants’ reply is any contention of hardship or inequity that would
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`result without a stay, which provides additional confirmation that a stay is inappropriate here. See,
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`e.g., Cooper Notification, Inc. v. Twitter, Inc., No. 09-cv-865, 2010 WL 5149351, at *2 (D. Del.
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`Dec. 13, 2010) (finding that “Defendants’ failure to articulate a clear hardship or inequity they
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`would suffer in the absence of a stay” supported denial of stay). Because a stay would work
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`substantial harm to Invensysand no harm to Defendantsthe only appropriate course is to
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`continue this case as scheduled.
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`VI.
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`THIS ACTION IS WELL UNDERWAY
`“Staying a case in its infancy can be said to advance judicial efficiency and maximize the
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`5 Davol, Inc. v. Atrium Med. Corp., No. 12-cv-958, 2013 WL 3013343, at *3 (D. Del. June 17, 2013) (emphasis added).
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`4
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`Case 6:12-cv-00799-JRG Document 134 Filed 03/31/14 Page 6 of 8 PageID #: 4050
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`likelihood that neither the Court nor the parties expend their assets addressing invalid claims.”
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`Davol, 2013 WL 3013343, at *6. On the other hand, “when a party requests a stay in the later
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`stages of litigation, it is likely that the Court and the parties have already expended significant
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`resources ... and the principle of maximizing the use of judicial and litigant resources is best served
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`by seeing the case through to its conclusion.” Id. Contrary to Defendants’ assertion and as outlined
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`in Invensys’ opposition (see Opp. at 5-6), this case, which was filed on October 22, 2012, has
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`reached an advanced stage, is nearing the end of the fact discovery period, and is beyond the point
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`where a stay would be appropriate.6 See Nidec Corp. v. LG Innotek Co., Ltd., No. 07-cv-108, 2009
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`WL 3673433, at *8 (E.D. Tex. Apr. 3, 2009) (noting, “Currently, the parties are fully engaged in
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`discovery with a Markman and trial date set. The circumstances in this case lead the Court to
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`conclude that, given the advanced stage of the proceedings in this case, the third and final factor
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`weighs against granting a stay.”).
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`VII. GRANTING A STAY WOULD DISSERVE THE PUBLIC INTEREST
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`Finally, granting a stay in this case would disserve the public interest. As one court recently
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`held in denying a similar motion to stay pending a petition for IPR:
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`[A]llowing the progress of [the court’s] docket to depend on the status of
`proceedings elsewhere can interfere with its obligation “to secure the just, speedy,
`and inexpensive determination of every action.” If litigation were stayed every time
`a claim in suit undergoes reexamination, federal infringement actions would be
`dogged by fits and starts. Federal court calendars should not be hijacked in this
`manner. This consideration weighs against stay.
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`Universal Elecs., Inc. v. Universal Remote Control, Inc., 943 F. Supp. 2d 1028, 1035 (C.D. Cal.
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`2013). If a stay is granted in this matter, simply on Micro Motion’s filing of requests for PTO
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`review, the Court can expect most patent defendants to follow in similar course, hijacking the
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`docket and flooding an already overextended PTO with petitions for IPR to achieve a litigation stay.
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`6 As discussed in Defendants’ reply, the depositions noticed by Defendants have not been taken only due to Defendants’
`refusal to engage in the discovery process. Whether Defendants’ inaction was a general delay tactic or one specifically
`aimed at supporting its motion to stay, Defendants should not be permitted to successfully advance the argument that a
`stay should be granted because “no depositions have been taken.” Reply at 5.
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`5
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`Case 6:12-cv-00799-JRG Document 134 Filed 03/31/14 Page 7 of 8 PageID #: 4051
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`Dated: March 31, 2014
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`Respectfully submitted,
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`/s/ Claudia Wilson Frost
`Claudia Wilson Frost
`Texas Bar No. 21671300
`claudia.frost@dlapiper.com
`Jeffrey L. Johnson
`Texas Bar No. 24029638
`jeffrey.johnson@dlapiper.com
`Dawn M. Jenkins
`Texas Bar No. 24074484
`dawn.jenkins@dlapiper.com
`DLA PIPER LLP (US)
`1000 Louisiana, Suite 2800
`Houston, TX 77002-5005
`Telephone: 713-425-8450
`Facsimile: 713-425-8401
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`Nicholas G. Papastavros
`nick.papastavros@dlapiper.com
`Daniel E. Rosenfeld
`daniel.rosenfeld@dlapiper.com
`DLA PIPER LLP (US)
`33 Arch Street, 26th Floor
`Boston, MA 02110-1447
`Telephone: 617-406-6000
`Facsimile: 617-406-6100
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`Courtney Stewart
`Texas Bar No. 24042039
`courtney.stewart@dlapiper.com
`Todd Scott Patterson
`Texas Bar No. 24060396
`todd.patterson@dlapiper.com
`DLA PIPER LLP (US)
`401 Congress Avenue, Suite 2500
`Austin, TX 78701-3799
`Telephone: 512-457-7000
`Facsimile: 512-457-7001
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`ATTORNEYS FOR
`INVENSYS SYSTEMS, INC.
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`6
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`Case 6:12-cv-00799-JRG Document 134 Filed 03/31/14 Page 8 of 8 PageID #: 4052
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a true and correct copy of the above and foregoing
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`document has been served on March 31, 2014, to all counsel of record who are deemed to have
`consented to electronic service via the Court’s CM/ECF system per Local Rule CV-5(a)(3). Any
`other counsel of record will be served by a facsimile and/or first class mail.
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`/s/ Claudia Wilson Frost
`Claudia Wilson Frost
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`EAST\74298490.1
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`7