Case 1:20-cv-00393-LMB-WEF Document 422 Filed 12/03/20 Page 1 of 21 PageID# 9649
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`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
`
`
`
`Civil Action No. 1:20-cv-393
`
`
`
`RAI STRATEGIC HOLDINGS, INC. and
`R.J. REYNOLDS VAPOR COMPANY,
`
`
`Plaintiffs and
`Counterclaim Defendants,
`
`v.
`
`
`
`
`ALTRIA CLIENT SERVICES LLC; PHILIP
`MORRIS USA INC.; and PHILIP MORRIS
`PRODUCTS S.A.
`
`Defendants and
`Counterclaim Plaintiffs.
`
`
`
`REPLY IN SUPPORT OF DEFENDANTS’
`PARTIAL MOTION TO STAY PLAINTIFFS’ CLAIMS
`REGARDING U.S. PATENT NOS. 9,814,268 AND 10,492,542
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`

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`TABLE OF CONTENTS
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`Page
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`I.
`
`II.
`
`INTRODUCTION .............................................................................................................. 1
`
`A PROMISE OF A STAY UPON INSTITUTION, OR A SHORT STAY, IS
`NECESSARY TO AVOID DEPRIVING EVEN THE MOST DILIGENT
`DEFENDANTS AN OPPORTUNITY FOR PTAB REVIEW .......................................... 2
`
`
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`
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`The PTAB Found The Merits Of The ’268 Patent “Particularly Strong” ............... 4
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`The PTAB Denied Institution Of The ’268 IPR Solely Because Of This
`Court’s Expected Trial Date ................................................................................... 5
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`The PTAB’s Decision Is unprecedented ................................................................. 5
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`Defendants Seek Limited Relief ............................................................................. 6
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`III.
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`ALL FOUR FACTORS FAVOR A STAY ........................................................................ 8
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`
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`A Stay Is Likely To Simplify The Issues And Streamline The Trial ...................... 8
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`The Case Is In The Early Stages Because Discovery In Not Complete And
`A Trial Date Has Not Been Set ............................................................................. 10
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`A Stay Will Not Unduly Prejudice Plaintiffs Or Give Defendants A Clear
`Tactical Advantage ............................................................................................... 12
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`A Stay Will Reduce The Burden On The Parties ................................................. 14
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`IV.
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`CONCLUSION ................................................................................................................. 15
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`i
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`
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`TABLE OF AUTHORITIES
`
`Cases
`
`Ancora Techs., Inc. v. TCT Mobile (US), Inc.,
`No. SACV 19-2192, slip op. (C.D. Cal. Nov. 12, 2020) ............................................................ 3
`
`Audio MPEG, Inc. v. Hewlett-Packard Co.,
`No. 2:15cv73, 2015 WL 5567085 (E.D. Va. Sept. 21, 2015) ................................................... 13
`
`Bushnell Hawthorne, LLC v. Cisco Sys., Inc.,
`No. 1-18-cv-760, slip op. (E.D. Va. Apr. 22, 2019) ................................................................... 9
`
`buySAFE, Inc. v. Google, Inc.,
`No. 3:13-cv-00781, 2014 WL 2714137 (E.D. Va. June 16, 2014) ............................. 3, 7, 11, 13
`
`Centripetal Networks, Inc. v. Cisco Sys., Inc.,
`No. 2:18-cv-94, 2019 WL 8888193 (E.D. Va. Feb. 25, 2019) ................................................. 10
`
`Cobalt Boats, LLC v. Sea Ray Boats, Inc.,
`No. 2:15CV21, 2015 WL 7272199 (E.D. Va. Nov. 16, 2015) ................................................... 9
`
`Cont’l Auto. Sys. Inc. v. Hamaton Auto. Tech. Co.,
`No. 2-16-cv-00226, Memorandum Order (E.D. Va. Feb. 7, 2017) ............................................ 9
`
`Date, Inc. v. AMP Plus, Inc.,
`No. 18-cv-7090, 2019 U.S. Dist. LEXIS 224636 (C.D. Cal. Dec. 13, 2010) ..................... 10, 11
`
`Limelight Networks, Inc. v. XO Commc’ns, LLC,
`No. 15-cv-720, slip op. (E.D. Va. Sept. 2, 2016) ...................................................................... 11
`
`Philip Morris Prods., S.A. v. RAI Strategic Holdings, Inc.,
`IPR2020-00921, Paper No. 9 (PTAB Nov. 16, 2020) ................................................................ 7
`
`Sharpe Innovations, Inc. v. T-Mobile USA, Inc.,
`No. 2:17-CV-351, 2018 WL 11198604 (E.D. Va. Jan. 10, 2018) .............................................. 8
`
`Smartflash LLC v. Apple Inc.,
`621 F. App’x 995 (Fed. Cir. 2015) ........................................................................................... 11
`
`Universal Electronics, Inc. v. Universal Remote Control, Inc.,
`943 F. Supp. 2d 1028 (C.D. Cal. 2013) .................................................................................... 10
`
`Statutes
`
`35 U.S.C. § 314(a) .......................................................................................................................... 4
`
`35 U.S.C. § 315(e)(2) .................................................................................................................... 14
`
`ii
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`35 U.S.C. § 325(e)(2) .................................................................................................................... 14
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`Rules
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`37 C.F.R. § 42.108(c)...................................................................................................................... 4
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`37 C.F.R. § 42.208(c)...................................................................................................................... 4
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`iii
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`I.
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`INTRODUCTION
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`Plaintiffs are treating Defendants’ request as a run-of-the-mill stay request, but it is not.
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`The PTAB’s new (and disappointing) approach of denying institution of PTAB petitions when the
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`PTAB’s decision would be preceded by a district court (or ITC) trial date, regardless of the other
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`factors the PTAB purports to consider (including the merits of the petition, the stage of the court
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`case, and the petitioner’s diligence), compels revisiting how courts, and particularly fast-moving
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`courts such as this one, treat pre-institution stays to avoid PTAB application of a per se rule,
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`divorced from the merits, to deny PTAB review. Here, Defendants could have done no more than
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`they did. Defendants filed their PTAB petitions with extraordinary diligence – and as the PTAB
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`expressly acknowledged for the ’268 – they are particularly strong.
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`Although Plaintiffs make much of the fact that Defendants heeded this Court’s precedent
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`from the outset by opting not to seek what may have been a futile pre-institution stay under this
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`Court’s current precedent, Plaintiffs appear to miss the critical point. Namely, the PTAB’s change
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`in practice now warrants reconsideration of this Court’s practice regarding pre-institution stays, at
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`least in the case of diligently filed, meritorious PTAB petitions as in this case.1 Given the PTAB’s
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`new approach, this motion presents an issue of first impression for this Court.
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`The totality of the circumstances in this case – including the diligently-filed petitions, the
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`strength of those petitions, and the PTAB’s new approach to denying post-grant petitions in fast
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`forums regardless of other facts – justify at minimum a ruling that this Court will stay on
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`1 Defendants do not here suggest that pre-institution stays should be automatic, or that they should
`not be considered in light of the circumstances of each particular case. For example, a party should
`not be permitted to delay filing its IPR until a case is well advanced and then belatedly file an IPR.
`And parties should not be encouraged to adopt a “wait and see” approach as to how they perceive
`they are doing in the district court before proceeding in the PTAB. Such “forum shopping” should
`not be condoned.
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`1
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`

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`institution, if not a limited stay until the PTAB has the opportunity to address the merits of the
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`’542 petition. Otherwise, the ’542 patent will suffer the same perverse result as did the ’268 patent:
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`namely that even the strongest of IPRs will never be considered by the PTAB when the Court’s
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`projected trial date precedes the PTAB’s predicted final decision date, as it will in most cases in
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`this forum.
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`The PTAB’s decision in the ’268 patent’s IPR established a new de facto rule that an IPR
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`is unavailable in a fast-moving jurisdiction, such as this one, absent a stay. This cannot be what is
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`contemplated in the statutes, is not in the interest of this Court, and it simply is unjust. Plaintiffs
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`should not be permitted to, as a practical matter, deprive defendants of a PTAB remedy by merely
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`filing in fast moving forums, such as this Court. Giving Defendants an opportunity to be heard at
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`the PTAB is not an unfair tactical advantage – it is what Congress intended.
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`II.
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`A PROMISE OF A STAY UPON INSTITUTION, OR A SHORT STAY, IS
`NECESSARY TO AVOID DEPRIVING EVEN THE MOST DILIGENT
`DEFENDANTS AN OPPORTUNITY FOR PTAB REVIEW
`
`The PTAB’s new and unprecedented decision in the ’268 patent’s IPR created the
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`untenable situation here, where the ’542 patent’s PGR/IPR2 petitions will be denied regardless of
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`the merits. (Mot. 1-7.) We know this – because the PTAB has already done so with regard to the
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`‘268 patent IPR.
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`Plaintiffs do not meaningfully dispute (or in some cases do not even acknowledge) the key
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`facts that gave rise to this question of first impression, and Defendants’ resulting request that
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`warrants the relief Defendants seek:
`
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`2 For procedural reasons, Defendants filed a PGR petition in parallel with an IPR petition in the
`alternative. The PTAB will grant institution to just one of the two petitions. (See Mot. 6 n.6.)
`2
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`

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`• The PTAB found merits of the ’268 patent “particularly strong,” with a “strong
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`showing” that the asserted claims were invalid for two separate and independent
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`reasons (Mot. 3-6);
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`• The PTAB denied institution of the ’268 IPR solely because of this Court’s
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`expected (though not set) trial date (Mot. 3-6; Opp. 6); and
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`• The PTAB’s decision in the ’268 patent’s case is unprecedented. (Mot. 5.)
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`The PTAB’s unprecedented and extraordinary decision in the ’268 case, created a unique circular
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`dilemma that must be reckoned with. This is true for the ’542 patent as well as the ’268.
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`For this reason, Defendants ask the Court to at least rule that it will stay if the PTAB
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`institutes review, as did the Ancora court, or alternatively, briefly stay the case with regard to the
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`’268 and ’542 patents until the PTAB issues the ’542 patent’s institution decision. Ancora Techs.,
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`Inc. v. TCT Mobile (US), Inc., No. SACV 19-2192, slip op. at 6 (C.D. Cal. Nov. 12, 2020) (stating
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`“that it would find Defendants’ arguments persuasive as to whether a stay should be granted should
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`the PTAB institute IPR.”) (Dkt. 371-19, Exhibit 18); buySAFE, Inc. v. Google, Inc., No. 3:13-cv-
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`00781, 2014 WL 2714137, at *3 (E.D. Va. June 16, 2014) (granting a “partial limited stay” pending
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`institution, allowing discovery to move forward until the PTAB decides whether to institute).
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`Defendants seek similar relief for the ’268 patent itself, but recognize that if the PTAB denies
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`review of the ’542 patent for the same discretionary reasons despite a court order stating that this
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`case will be or is stayed, its rehearing request as to the ’268 is likely futile.
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`Plaintiff is hard-pressed to identify any prejudice stemming from a ruling by this Court that
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`this Court will stay if the PTAB institutes. Although PTAB institution is by definition
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`“prejudicial” to a patentee, it is not the sort of prejudice that supports precluding a stay. (Mot. 17-
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`21.) Similarly, a modest several-week stay until the PTAB rules on the ’542 petition would pose
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`3
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`little or no prejudice, particularly in the context of this case where Plaintiffs have repeatedly sought
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`extensions.
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`Plaintiffs circular suggestion that Defendants should wait to pursue a stay until after any
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`petition is instituted ignores the new and unprecedented rule that the PTAB has adopted by denying
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`the ’268 IPR. Plaintiffs argument is nonsensical and again disregards that such eventuality will
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`never occur in this Court in light of the PTAB’s new precedent.
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`
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`The PTAB Found The Merits Of The ’268 Patent “Particularly Strong”
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`Plaintiffs cannot credibly dispute the merits of the ’268 petition or the PTAB’s finding that
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`the ’268 petition is “particularly strong.” Indeed, Plaintiffs concede that the “PTAB engaged in a
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`thorough analysis of each Fintiv factor.” (Opp. 6 (emphasis added).) Defendants agree, and the
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`PTAB’s thorough analysis of the six individual Fintiv factors included Fintiv factor 6. There, and
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`after a thorough analysis of the prior art, the PTAB concluded that the merits of the ’268 petition
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`“are particularly strong,” and that Defendants made a “strong showing” that the asserted claims
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`are invalid for each of two independent reasons. (Mot. 4-5; Dkt. 371-3, Exhibit 3 at 20-27.)
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`Elsewhere in their opposition brief, Plaintiffs contradict themselves, disputing that the
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`PTAB’s analysis was thorough, contending that the PTAB’s analysis was instead “one-sided.”
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`(Opp. 12.)3 The PTAB’s analysis of the merits speaks for itself. The PTAB carefully dissected
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`each one of Plaintiffs’ several arguments, and repeatedly found that all of Plaintiffs’ assertions
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`were contradicted by the record and the law. (Dkt. 371-3, Exhibit 3 at 22-23, 24, 25, 26-27.) For
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`3 Plaintiffs incorrectly argue—without support—that the PTAB views the evidence in the light
`most favorable to petitioners when deciding whether to institute. (Opp. 5, 12.) Not true. 35 U.S.C.
`§ 314(a). Had Plaintiffs submitted expert testimony, any genuine issue of material fact created by
`such expert testimony would have been viewed in the light most favorable to Defendants.
`37 C.F.R. §§ 42.108(c), 42.208(c). Plaintiffs chose not to submit any such testimony. Regardless,
`the PTAB’s decision was based on its independent evaluation of prior art itself, not any expert
`testimony. (Dkt. 371-3, Exhibit 3 at 20-27.)
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`4
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`example, the PTAB found that “Patent Owner twice misstates Petitioner’s contention regarding
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`the heater limitation of claim 16 as relying on Morgan Figure 2.” (Id. at 26-27.) As a result, the
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`PTAB found that the prior art indeed disclosed the teachings identified in the petition, and
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`dismissed Defendants’ “weak” “substantive response.” (Id.)
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`
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`The PTAB Denied Institution Of The ’268 IPR Solely Because Of This Court’s
`Expected Trial Date
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`It cannot be meaningfully disputed that, despite all of the factors that warranted institution,
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`the PTAB denied institution solely because of this Court’s then-expected trial date:
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`[W]e determine that, in this instance, the anticipated EDVA trial between the same
`parties eight to nine months before the projected statutory deadline, outweighs
`slightly the factors that favor institution, including Petitioner’s diligence in filing
`the Petition, the strength of the Petition on the merits, the relatively modest
`investment in the district court action to date, and the lack of exact overlap based
`on Petitioner’s narrow stipulation.4
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`(Mot. 5; Dkt. 371-3, Exhibit 3 at 28-29; Opp. 6-7, 12 (same quote).)
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`Plaintiffs’ arguments (and insinuations) in tension with the PTAB’s actual findings should
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`be ignored. (E.g., Opp. 12 (“Defendants’ outsized emphasis on the PTAB’s comments about the
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`merits ‘on the preliminary record’, ignores that this is just one consideration of one factor ….”).)
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`The PTAB expressly ruled that the projected trial date outweighed all of the other factors and was
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`the reason for the PTAB’s denial of the petition.
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`The PTAB’s Decision Is unprecedented
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`Plaintiffs do not take a position on whether the PTAB’s decision is unprecedented, but they
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`are unable to cite any counterexamples. Instead, they distract attention away from that the
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`unprecedented nature of the PTAB’s position and contend that the “NHK case has been
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`4 To reduce duplication of effort, Defendants stipulated that, if the Board institutes review,
`Defendants will drop the IPR’s invalidity grounds from the case before this Court.
`5
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`precedential since May 2019, and Fintiv was designated precedential in May 2020.” (Opp. 17.)
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`But Plaintiffs fail to identify any previous PTAB decision applying those cases where the trial date
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`outweighed all of the favorable factors presented by the ’268 patent’s IPR. There is none.
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`Instead, up until denial of the ’268 IPR, the PTAB has regularly instituted review in
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`instances with a similar gap between the projected date for a jury trial and the PTAB’s final
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`decision. (Mot. 5 & n.5; see also Dkt. 371-13, Exhibit 12 at 1-5 (citing cases).)
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`Plaintiffs’ arguments that the PTAB might decide differently with the ’542 patent are
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`unwarranted, as discussed below.
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`Defendants Seek Limited Relief
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`Defendants seek a ruling from this Court that it will stay if the PTAB institutes review (or
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`a short pre-institution stay) so that the PTAB will not deny institution solely on the grounds of the
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`projected early trial date. Such an unequivocal order from this Court will give the PTAB the
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`information it needs to know that there will be no jury verdict or Court ruling on the invalidity of
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`the patents before Defendants’ IPR is resolved on the merits by the PTAB.
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`With regard to the ’542 patent, Plaintiffs argue that no such relief is needed because a
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`different PTAB panel is assigned to the ’542 patent and may arrive at a different result. (Opp. 7.)
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`Not so. First, Plaintiffs cite no support for their conclusion that the ’542 patent is assigned a
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`different panel. To the best of Defendant’s knowledge, the panel assignment is not public. In
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`general, the PTAB keeps the same panels (or at least some members of the panel) consistent for
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`related cases. Indeed, the first three IPRs filed on Plaintiffs' asserted patents (for the ’123, 591,
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`and 268 patents) have identical panels, and same should be expected for the ’542 IPR.
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`Second, even if the ’542 petitions are decided by a different panel, Plaintiffs argued that
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`the panel should follow the ’268 decision and deny review for exactly the same reason:
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`6
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`Just days ago, the Board denied institution of IPR of another patent being asserted
`by RAI against Petitioner in that same lawsuit (U.S. Patent No. 9,814,268, the “’268
`patent”), finding that the “anticipated EDVA trial between the same parties eight to
`nine months before the projected statutory deadline [for the Final Written
`Decision]” outweighed any factors favoring institution. Philip Morris Prods., S.A.
`v. RAI Strategic Holdings, Inc., IPR2020-00921, Paper No. 9 at 28-29 (PTAB Nov.
`16, 2020). The Board should reach the same conclusion here and deny institution.
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`(Exhibit 25 at 1.) Plaintiffs cannot now tell this Court that the PTAB will inexplicably depart from
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`its decision in the ’268 patent’s IPR and decide whether to institute the ’542 petition on its merits
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`when they argued just the opposite a short time ago.
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`Plaintiffs also mischaracterize the relief sought here with regard to the ’268 patent. (E.g.,
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`Opp. 13; 15-16, 18, 19.) Defendants reasonably expect a prompt decision from the PTAB for the
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`’268 patent (Mot. 11-12), but recognize that the ’542 patent decision is limited by a statutory
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`deadline and, if issued first, may inform the parties and the Court whether reconsideration for the
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`’268 patent is futile. (Mot. 23.)
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`For example, Plaintiffs argue that “rehearing is rarely granted, and the Board has no
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`particular deadline to decide such a request.” (E.g., Opp. 2.) While that may be true in a typical
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`case, it is of no moment. Here, Defendants are not seeking a blanket indefinite stay until the
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`rehearing is decided. Rather, the parties and the Court will be informed no later than January 16,
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`2021, by the PTAB’s decision for the ’542 patent as to the likely outcome of the ’268 request for
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`rehearing. If the PTAB denies review of the ’542 patent for the same discretionary reasons as in
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`the ’268 patent, despite a stay or an indication that a stay would issue upon institution, Defendants
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`agree that the rehearing for the ’268 patent (if it has not already issued) is likely futile. In that
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`instance, a Court order staying the case should be revisited and likely rescinded. (Mot. 23.) This
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`short wait minimizes any possible prejudice or burden, should the PTAB deny institution. See
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`buySAFE, Inc. v. Google, 2014 WL 2714137, at *3 (cited by Plaintiffs at Opp. 14 because it
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`“grant[ed] [a] limited stay to be revisited ‘immediately after PTAB decides whether to grant the
`7
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`Petition’”). For this reason, as part of the requested stay relief, Defendants have suggested a status
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`conference to revisit the stay shortly after the PTAB issues its institution decision.
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`Furthermore, a ruling that the Court will stay if the PTAB institutes causes no prejudice at
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`all. The parties and the Court will maintain the same single-track schedule in the meantime, unless
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`and until the PTAB institutes review.
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`Only if the PTAB institutes review would a stay take effect. In that case, the stay would
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`avoid proceeding to trial on patent claims that are likely to be found invalid at the PTAB, or at the
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`very least, found valid and protected by statutory estoppels.
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`III. ALL FOUR FACTORS FAVOR A STAY
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`Plaintiffs’ analysis of the traditional stay factors likewise does not support denial of the
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`relief Defendants seek here. Plaintiffs focus on irrelevancies, but cannot meaningfully dispute the
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`totality of the unique facts that compel Defendants’ requested relief.
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`A Stay Is Likely To Simplify The Issues And Streamline The Trial
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`Plaintiffs do not dispute that this case will be simplified if the PTAB institutes review. As
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`discussed, the PTAB is much more likely to do so if this Court issues an Order that it will stay the
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`case on that patent if the PTAB institutes or the limited stay relief requested. If successful, the
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`’542 patent’s PGR or IPR and the ’268 patent’s IPRs will simplify the case by removing the
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`Plaintiffs’ only two un-stayed patents from this case. (Mot. 13-15; Opp. 10-13 (not disputing this
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`point).) If some asserted claims survive instituted PTAB proceedings, this case will still be
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`simplified due to the statutory estoppels (which are especially harsh for the ’542 patent’s PGR),
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`and the Court will have the benefit of the PTAB’s reasoning and analysis. (Mot. 14-15; Opp. 10-
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`13 (not disputing this point).) And any surviving patent claims can be adjudicated after the ITC
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`proceeding, along with Plaintiffs’ other three (stayed) patents, with little additional burden. (Mot.
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`22.) Plaintiffs do not dispute this point, either.
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`8
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`This factor does not demand certainty. E.g., Sharpe Innovations, Inc. v. T-Mobile USA,
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`Inc., No. 2:17-CV-351, 2018 WL 11198604, at *3 (E.D. Va. Jan. 10, 2018) (evaluating the
`
`potential simplification if IPR is instituted); Cobalt Boats, LLC v. Sea Ray Boats, Inc., No.
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`2:15CV21, 2015 WL 7272199, at *3 (E.D. Va. Nov. 16, 2015) (evaluating the “possibility” the
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`IPR will simplify the case). And here, unlike any previous cases, the Court already has the benefit
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`of the PTAB’s thinking that the merits of the invalidity arguments against the ’268 patent are
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`strong. The PTAB expressly concluded that the petition’s merits are “particularly strong,”
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`reducing any uncertainty significantly, provided the Court’s order addresses the PTAB’s concern
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`regarding the trial date. Mot. 14-15. The only similar PTAB case is Sand Revolution, and there,
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`the PTAB reversed itself and granted institution once the trial date was no longer an issue – and
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`then designated the decision “Informative” to guide future parties and panels. (Mot. 11-12.)
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`Defendants submit that the merits of the ’542 PGR petition are likewise strong, and the
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`PTAB is likely to agree. Plaintiffs cannot credibly contend otherwise, as they barely disputed the
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`merits in their preliminary response. (See Dkt. 371-13, Exhibit 12, ’542 PGR Petitioner’s Reply
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`at 3-4 (summarizing Plaintiffs’ deficient response on the merits).)
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`If the Court rules that it will stay if the PTAB institutes review, the PTAB should have the
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`assurance it needs to institute review based on the merits, and would also remove the traditional
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`objections to a pre-institution stay by eliminating the uncertainty regarding whether the PTAB will
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`institute.5 Alternatively, this Court could pause this case by staying pending institution of the ’542
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`patent, and if review is instituted, extend the stay.
`
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`5 Contrary to Plaintiffs’ insinuations (Opp. 17), this Court has often and understandably denied
`pre-institution stays because the simplification factor takes into account the likelihood of
`institution. See Mot. 15 (citing Bushnell Hawthorne, LLC v. Cisco Sys., Inc., No. 1-18-cv-760,
`slip op. at 1-2 (E.D. Va. Apr. 22, 2019) (Dkt. 371-22, Exhibit 21) (denying a pre-institution stay
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`9
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`The Case Is In The Early Stages Because Discovery In Not Complete And A
`Trial Date Has Not Been Set
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`This factor weighs strongly in favor of a stay where, as here, discovery has not completed,
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`no trial date has been set, and the future trial date is unpredictable at best due to the continuing
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`COVID crisis. Centripetal Networks, Inc. v. Cisco Sys., Inc., No. 2:18-cv-94, 2019 WL 8888193,
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`at *2 (E.D. Va. Feb. 25, 2019). Fact and expert discovery are far from complete, as they will not
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`close until January 27, 2021. (Mot. 8, 16-17.) Dispositive motions, the final pretrial conference,
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`and so forth, will likely be in mid-late February at the earliest – despite Plaintiffs’ insistence that
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`the pretrial conference will somehow occur on January 15, before the close of discovery. (Mot. 8,
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`16-17; Opp. 2.) No trial date is set, and “civil jury trials remain suspended indefinitely” in this
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`District. (Dkt 371-14 at 2 n.1); see also Exhibit 26 (similar order for the Western District of
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`Virginia postponing all trials until March 1, 2021, because “the pandemic has worsened.”).
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`Plaintiffs disagree, but focus on cases regarding run-of-the-mill requests for rehearing
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`(Opp. 15), while ignoring that the PTAB has not yet addressed the ’542 patent and the ’268 patent
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`presents the unique situation of first impression, as described above.
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`Plaintiffs point to inapposite cases, such as Universal Electronics, Inc. v. Universal Remote
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`Control, Inc., 943 F. Supp. 2d 1028 (C.D. Cal. 2013). In that case, defendants failed to file their
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`IPRs until after the court issued its claim construction order, “negatively impact[ing] the likelihood
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`that this [stay] motion would be granted.” Id. at 1032; see also Date, Inc. v. AMP Plus, Inc., No.
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`18-cv-7090, 2019 U.S. Dist. LEXIS 224636, at *19 (C.D. Cal. Dec. 13, 2010) (denying a stay for
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`an IPR when a trial date had been set, fact discovery had closed, and expert discovery was
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`“because it is uncertain whether the PTAB will grant” institution); Cont’l Auto. Sys. Inc. v.
`Hamaton Auto. Tech. Co., No. 2-16-cv-00226, Memorandum Order at 10 (E.D. Va. Feb. 7, 2017)
`(Exhibit 20) (“At this stage, the Court cannot predict the impact of a stay because it is unknown
`whether PTAB will institute post grant review.”).)
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`scheduled to close within the month). In contrast with those cases, fact discovery here is not yet
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`complete, opening expert reports have not been served, and no trial date has been set, all facts that
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`weighed in favor of a stay even in Plaintiffs’ Date, Inc. case. See Date at *19-20.
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`Plaintiffs cite buySAFE, a case that is particularly instructive. (Opp. 14.) As Plaintiffs
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`recognize, the buySAFE court granted a limited stay to be revisited immediately after the PTAB’s
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`institution decision. (Opp. 14.) Until the PTAB decided whether to institute, however, “discovery
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`and settlement discussions … move[d] forward.” buySAFE, Inc., 2014 WL 2714137, at *6. That
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`is essentially the relief Defendants seek here.
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`And in buySAFE, “the trial date ha[d] been set, [but] it was scheduled early in the
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`proceedings,” discovery was “ongoing,” and dispositive motions had not been filed. Id. *5-6. That
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`is the case here, except the trial date has not yet been set. “Thus, this case is approaching its most
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`critical stages,” which weighs in favor of a stay. Id.; see also Smartflash LLC v. Apple Inc., 621
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`F. App’x 995, 1005 (Fed. Cir. 2015) (reversing the district court and granting a stay because “the
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`critical distinction between the Apple [case],” where denial of the stay was justified, “and Samsung
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`cases is that Samsung has yet to go to trial.”).6 Here, much like buySafe, fact discovery is ongoing,
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`opening expert reports have not been served, and no trial date has been set. The most “burdensome
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`task[s],” including trial, are “yet to come.” See Smartflash, 621 F. App’x at 1005; see also
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`Limelight Networks, Inc. v. XO Commc’ns, LLC, No. 15-cv-720, slip op. at 23 (E.D. Va. Sept. 2,
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`2016) (Dkt. 371-22) (after Markman, briefly continuing the trial as to certain claims while the
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`PTAB decides whether to institute). Accordingly the facts here warrant a stay.
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`6 Plaintiffs mistakenly assume that Defendants were referring to the Apple portion of the Federal
`Circuit’s opinion at page 17 of its opening brief. (Opp. 15 & n.7, also incorrectly stating that
`Defendants quoted the Smartflash case.)
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`Consequently, this factor favors a stay and even more strongly favors a ruling that the Court
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`will stay if the PTAB institutes.
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`A Stay Will Not Unduly Prejudice Plaintiffs Or Give Defendants A Clear
`Tactical Advantage
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`Plaintiffs do not dispute that a ruling that the Court “will” stay the case if the PTAB
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`institutes review does not, in itself, impose any prejudice whatsoever. Likewise, a short stay until
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`the ’542 patent’s institution decision is no more, if not less, prejudicial than the delays that
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`Plaintiffs have already inflicted on themselves. Plaintiffs do not dispute that they sought to extend
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`the expert discovery deadlines (Dkt. 334) and repeatedly sought extensions to Court-ordered
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`deadlines. (Dkt. 249, 299, 306.) Plaintiffs did not seek a preliminary injunction, and it is
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`undisputed that they delayed filing this suit for years. (Mot. 18-20.) Further, a ruling that the
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`Court will stay if the PTAB institute causes no prejudice at all, so long as Plaintiffs are correct
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`and the PTAB does not institute review of either patent.
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`Plaintiffs only complaint regarding this factor (Opp. 16-19) is that Defendants did not
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`immediately seek a pre-institution stay, which Plaintiffs would have certainly opposed. Such a
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`stay would have been just as prejudicial, if not more so, to Plaintiffs’ alleged interest in prompt
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`enforcement of their patent rights because Defendants would have had to ask this Court and
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`Plaintiffs to wait six months for an institution decision instead of less than six we