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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 1 of 23
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
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`CYWEE GROUP LTD.,
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`CASE NO. C17-0932JLR
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`Plaintiff,
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`V.
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`HTC CORPORATION, et al.,
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`ORDER ON THIRD-PARTY
`DEFENDANT’S MOTION FOR
`SUMMARY JUDGMENT AND
`ON CROSS‘MOTIONS FOR
`STAY
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`Defendants/Third—Party Plaintiffs, W
`139%
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`V.
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`CYWEE MOTION GROUP LTD,
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`Third-Party Defendant.
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`I.
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`INTRODUCTION
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`Before the court are three motions. First, Third-Party Defendant CyWee Motion
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`20 Group Ltd. (“CyWee MOtion”) moves for summary judgment against Defendants and
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`Third-Party Plaintiffs HTC Corporation (“HTC Corp”) and HTC America, Inc. (“HTC
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`22 America”) (collectively, “HTC”). (MSJ (Dkt. # 107).) HTC opposes CyWee Motion’s
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`ORDER - l
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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 2 of 23
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`summary judgment motion. (Resp. (Dkt. ## 112 (redacted), 113 (sealed).) Second,
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`Plaintiff CyWee Group Ltd. (“CyWee Group”) and CyWee Motion (collectively,
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`“CyWee”) move for a partial stay of this matter pending interpartes review (“IPR”)
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`proceedings. (CyWee MTS (Dkt. # 123).) Third, HTC cross-moves for a complete stay
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`pending IPR proceedings.
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`(HTC MTS (Dkt. # 126).) The court has considered the
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`motions, the parties’ submissions concerning the motions, the relevant portions of the
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`record, and the applicable law. Being fully advised,1 the court DENIES CyWee Motion’s
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`motion for summary judgment without prejudice to refiling according to the timeline set
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`forth herein. The court further GRANTS in part and DENIES in part CyWee’s motion
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`for a partial stay and GRANTS in part and DENIES in part HTC’s motion for a complete
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`stay.
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`II.
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`BACKGROUND
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`This case features patent infringement and other disputes between technology
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`companies. The court identifies the parties before summarizing the factual and
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`procedural background.
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`A.
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`The Parties
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`CyWee Group provides products and services in the areas of “motion processing,
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`Wireless high definition video delivery, and facial tracking technology.” (SAC (Did.
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`1 CyWee Motion and HTC request oral argument on CyWee Motion’s summary
`judgment motion (see MSJ at Title Page; Resp. at Title Page), and HTC requests oral argument
`on its cross—motion for a complete stay (see HTC MTS at Title Page), but the court finds that oral
`argument is unnecessary to its disposition of the motions, see Local Rules W.D. Wash. LCR
`7(b)(4)-
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`ORDER — 2
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`

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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 3 of 23
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`# 61) 'fl 2.) CyWee Group owns two patents protecting technology that detects, measures,
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`and calculates the movements of machines: United States Patent No. 8,441,438 and
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`United States Patent No. 8,552,978 (collectively, “the Patents-in-Suit”).
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`(Id. W 15,
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`20-22, 122—24.) CyWee Motion, which is “affiliated” with CyWee Group, specializes in
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`“wireless streaming, facial tracking, and motion proCessing technology solutions for
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`home entertainment and mobile devices,” (CyWee Motion Am. Countercl. (Dkt. # 104)
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`ll 7-)
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`HTC Corp. manufactures consumer electronics, including mobile phones and _
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`tablets.
`(SAC 11 3; Answer to SAC (Dkt. # 62) 11 3.) HTC’America, a wholly-owned
`subsidiary of HTC Corp, imports and sells HTC Corp.’s mobile phones and tablets in the
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`United States. (SAC 11 4; Answer to SAC 1] 4.)
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`B.
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`Factual Background
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`2 HTC also filed a sealed copy of the License Agreement. (See Yoon Decl. (Dkt.
`# 112—1) 1] 14, Ex. 3 (sealed).) When citing the License Agreement, the court cites specific
`paragraph numbers, where applicable. Where no paragraph number corresponds to the cited
`material, the court cites the Bates number at the bottom-right corner of the document.
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`ORDER - 3
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`—_—
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`CyWee
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`Motion, Inc. is a wholly-owned subsidiary of CyWee Motion. (Liou ,Decl. (Dkt. # 107-2)
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`ll 2)
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`——_
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`Specifically, HTC
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`integrated into its mobile phones STMsensor hub modules with CyWee Software.
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`(Id.
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`11 4.) Whenever HTC required new sensor fusion functionalities, “HTC would request the
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`support from CyWee Motion to develop the new functionalities in the CyWee Software.”
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`(Id. 11 6.)_
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`HTC asserts that “CyWee Motion provided each
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`3 Both CyWee Motion and’HTC imply that that the—
`—. (See CyWee Motion Am. Countercl. 1] 9; HTC MTS at 2.)
`As discussed below, however, on the record before the court, the relationship between the
`Patents-in—Suit and the CyWee Software remains unclear. See infra § 111.32.
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`ORDER — 4
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`version of the CyWee Software directly to HTC in binary form” and “did not place any
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`restrictions on HTC’s use of the CyWee Software in HTC devices.” (Id. {[117-8.) HTC
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`further contends that it understood that CyWee Motion was compensated for the CyWee
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`Software_ and that CyWee
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`Motion “has never requested payment from HTC for the integration and use of CyWee
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`Software in HTC devices” (Id. 11 8.)
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`The same day, CyWee Motion (notified HTC—
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`_ (CyWee Motion Am. Countercl. 11 18, Ex. B at 1.5) CyWee Motion
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`demanded that HTC “immediately cease and desist any use of [the CyWee S]0ftware”
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`and “immediately return any and all copies of the software to CyWee Motion.” (Id)
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`4 Although CyWee Motion’s amended counterclaims authenticate Exhibit A, the exhibit
`is appended to CyWee Moti‘on’s counterclaims. (See CyWee Motion Countercl. (Dkt. # 102)
`11 17, Ex. A.)
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`5 Although CyWee Motion’s amended counterclaims authenticate Exhibit B, the exhibit
`is appended to CyWee Motion’s counterclaims.
`(See CyWee Motion Countercl. 11 18, Ex. B.)
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`. ORDER — 5
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`

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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 6 of 23
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`CyWee Motion contends that HTC refused to return its copies of the CyWee Software
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`and, to this day, continues to use the CyWee Software in HTC devices. (MSJ at 2.)
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`C.
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`Procedural History
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`On June 16, 2017, CyWee Group filed an action for patent infringement against
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`HTC, alleging that certain HTC devices impermissibly practice the Patents-in—Suit.
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`(See
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`Compl. (Dkt. # 1); see also SAC.) This suit is one of seven pending cases in which
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`CyWee Group alleges that a technology company has infringed the Patents-in-Suitr (See
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`CyWee Motion MTS at 2 n.7 (listing cas’es).) Among other affirmative defenses, HTC
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`asserts that CyWee Group’s patent infringement claims arebarred by the patent
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`exhaustion doctrine and that HTC holds “an express or implied license” to practice the
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`Patents-‘in-Suit. (Answer to SAC at 19.) In addition, HTC brings counterclaims against
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`CyWee Group for declaratory judgments of patent invalidity and noninfringement.
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`(Id.
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`W 26—41.)
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`On January 11, 2018, HTC filed a third—party complaint against CyWee Motion
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`and STM.
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`(TPC (Dkt. # 43).) HTC alleged that the STM components HTC purchased
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`for incorporation into the accused HTC products were covered by the License
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`Agreement, such that STM was obligated to indemnify and defend HTC against CyWee
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`Group’s patent infringement claims.
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`(Id. 1111 23, 39—50.) HTC also brought a claim for
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`unfair business practices under Washington law against CyWee Motion and sought
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`contribution from both CyWee Motion and STM.
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`(Id. 111] 51-61.)
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`On May 31, 2018, HTC filed a stipulated motion to dismiss with prejudice all its
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`claims against STM. (Stip. MTD (Dkt. # 93); see also 6/1/18 Order (Dkt. # 94) at 2
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`ORDER — 6
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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 7 of 23
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`(granting the stipulated motion to dismiss).) HTC now represents that it agreed to
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`dismiss its claims against STM because STM threatened to stop supplying HTC with
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`STM sensor hub modules if the litigation continued.6 (Siddiqui Decl. (Dkt. # 113-2)
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`1111 5—6 (sealed).)
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`On September 26, 2018, approximately two months after terminating the License
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`Agreement, CyWee Motion filed counterclaims against HTC for conversion, unjust
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`enrichment, and declaratory judgment of unauthorized possession.
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`(See CyWee Motion
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`Countercl'. (Dkt. # 102) 1111 20-33; see also CyWee Motion Am. Countercl.’ 1111 20-38.)
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`_ Additionally, on November 19, 2018, CyWee Motion asserted a replevin claim against .
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`HTC.
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`(See CyWee Motion Am. Countercl. 11‘“ 24-27.) In brief, CyWee Motion alleges
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`that HTC impermissibly retained possession of the CyWee Software after CyWee Motion
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`terminated the License Agreement.
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`(Id. 1111 17-19.) On November 28, 2018, CyWee
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`Motion filed the present motion for summary judgment on its conversion and replevin
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`claims.
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`(See MSJ.)
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`On March 4, 2019, CyWee filed a motion to partially stay this case pending IPR
`proceedings involving the Patents-in-Suit.
`(See CyWee MTS at2.) Months earlier, in
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`connection with an unrelated suit, non-party Google, Inc. filed IPR petitions with the
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`Patent and Trademark Office’s Patent Trial and Appeal Board (“PTAB”), seeking to
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`(See
`6 HTC also asserted claims against STMicroelectronics, Inc, an affiliate of STM.
`generally 3d—Party Compl. (Dkt. # 43).) HTC’s claims against STMicroelectronics, Inc. were
`dismissed with prejudice. (4/23/18 Order (Dkt. # 79) at 1.) Additionally, HTC withdrew its
`motion for leave to file an amended third-party complaint, which would have asserted claims
`against STMicroelectronics Asia Pacific Ltd., another STM affiliate.
`(See Mot. for Leave to File
`Am. 3d-Party Compl. (Dkt. # 87) at 2; 6/1/18 Order at 2.)
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`ORDER — 7
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`

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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 8 of 23
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`invalidate claims in each of the Patents-in—Suit.
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`(Id. (citing CyWee Grp. v. Google, Inc.
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`No. l—l8—cv—OOS71 (D. Del.).) The PTAB granted Google, Inc’s IPR petitions on
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`December 11, 2018. (Id) CyWee now seeks to stay CyWee Group’s patent infringement
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`claims against HTC, HTC’s patent invalidity and noninfringement counterclaims against
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`CyWee Group, and HTC’s third—party claims against CyWee Motion for contribution and
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`unfair business practices.
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`(Id. at 4.) In other words, CyWee seeks to stay all claims
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`except CyWee Motion’s counterclaims against HTC.
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`(See id.) HTC cross-moves for a
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`complete stay pending the outcome of the IPR proceedings. (See generally HTC MTS at
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`1.)
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`The court now considers the motions.
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`III. ANALYSIS
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`A.
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`Summary Judgment Motion
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`CyWee Motion argues that it is entitled to summary judgment on its conversion
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`and replevin claims because there is no genuine dispute that HTC continued to use the
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`CyWee Software “without authorization” after CyWee Motion terminated the License
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`Agreement. (MSJ at 7-8; see also Reply at 3.) HTC contends that the court should deny
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`the motion pursuant to Federal Rule Of Civil Procedure 56(d) because CyWee Motion
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`filed the motion before HTC could conduct sufficient discovery on CyWee Motion’s
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`cross-counterclaims and HTC’s affirmative defenses to those claims.
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`(Resp. at 1—2,
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`13—14, 23; Yoon Decl. 11 10); see also Fed. R. Civ. P. 56(d). HTC also asserts that
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`genuine disputes of material fact preclude summary judgment.
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`(Resp. at 17—22.) The
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`ORDER — 8
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`

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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 9 of 23
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`court finds that HTC is entitled to relief under Rule 56(d) and thus does not reach the
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`merits of CyWee Motion’s summary judgment motion.
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`1. Conversion and Replevin
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`Before addressing HTC’s arguments under Rule 56(d), the court summarizes the
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`standards that govern CyWee Motion’s conversion and replevin claims. Under
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`Washington law, conversion “occurs when'a person intentionally interferes with chattel
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`belonging to another, either by taking or unlawfully retaining it, therebydepriving the
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`rightful owner of possession.” Alhadefiv. Meridian 0n Bainbridge Island, LLC, 220P.3d
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`1214, 1223 (Wash. 2009). “Wrongful intent is not an element of conversion, and good
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`faith is not a defense.” Brown ex rel. Richards 12. Brown, 239 P.3d 602, 610 (Wash. Ct.
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`App. 2010). “‘Chattel’ includes both tangible and intangible goods, such as corporate
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`property.” Lang v. Hattgan, 150 P.3d 622, 637 (Wash. Ct. App. 2007).
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`In a replevin action, a plaintiff “must prove its title and right to possession” of the
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`property at issue. Crystal Recreation, Inc. v. Seattle Ass’n ofCredit Men, 209 P.2d 358,
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`361 (Wash. 1949). Under Washington law, replevin is a statutory cause of action. See
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`Graham v. Nottt, 196 P.3d 1070, 1072 (Wash. Ct. App. 2008) (citing RCW 7 .64.020(2)).
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`A plaintiff bringing a replevin action must show:
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`(1) that “the plaintiff is the owner of
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`the property or is lawfully entitled to the possession of the property by virtue of a special
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`property interest”; (2) that “the property is wrongfully detained” by the defendant; (3)
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`that “the property has not been taken for a tax, assessment, or fine pursuant to a statute”;
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`and (4) that “[t]he approximate value of the property.” Graham, 196 P.3d at 1072. In
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`//
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`ORDER - 9
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`replevin, the plaintiff “seeks a return of his goods, and damages for the interruption to his
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`possession.” Hofiv. Lester, 168 P.2d 409, 413 (Wash. 1946).
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`CyWee Motion’s theories of conversion and replevin are straightforward. In
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`short, CyWee Motion argues that HTC wrongfully retained possession of the CyWee
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`‘ Software after the termination of the License Agreement. According to CyWee Motion,
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`“when the [License Agreement] was terminated, HTC’s right to possess and use the
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`CyWee Software pursuant to the [License Agreement] terminated as well.” (Reply at 3.)
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`CyWee. Motion insists that, “[r]egard1ess of whether the Patents-in-Suit are infringed or
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`not, CyWee Motion [Group] is still entitled to its property,” and HTC must return—ta,
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`destroy its copies of—the CyWee Software. (MSJ at 8.) HTC, for its part, argues that
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`CyWee Motion’s summary judgment motion is “premature” and that HTC is entitled to
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`conduct discovery into various areas related to HTC’S alleged right to continue
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`integrating the CyWee Software into its products.
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`(See Resp. at 1.)
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`2. Rule 56(d) Analysis 1
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`Under Rule 56(d), if the nonmoving party “shows by affidavit or declaration that,
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`for specified reasons, it cannot present facts essential to justify its opposition, the court
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`may:
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`(1) defer considering the motion or deny it; (2) allow time toobtain affidavits or
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`declarations or to take discovery; or (3) issue any other appropriate order.” Fed. R. Civ.
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`P. 56(d). A Rule 56(d) “continuance of a motion for summary judgment for purposes of
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`discovery should be granted almost as a matter of course unless the non-moving party has
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`not diligently pursued discovery of the evidence.” Burlington N. Santa Fe RR Co. v.
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`Assintboz‘ne & Sioux Tribes of the Fort Peck Reservation, 323 F.3d 767, 773—74 (9th Cir.
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`ORDER - 10
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`2003) (internal quotation marks and citations omitted); see also Metabolz’fe Int’l, Inc. v.
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`Wornick, 264 F.3d 832, 846 (9th Cir. 2001) (“Although Rule 56(f)7 facially gives judges
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`the discretion to disallow discovery when the non—moving party cannot yet submit
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`evidence supporting its opposition, the Supreme Court has restated the rule as requiring,
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`rather than merely permitting, discovery ‘where the nonmoving party has not had the
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`opportunity to discover information that is essential to its opposition.” (citing Anderson
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`v. Liberty Lobby, Inc., 477 US. 242, 250 n.5 (1986)) (footnote added). To prevail under
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`. Rule-56(d), “parties Opposing a motion for summary judgment must make ‘(a) a timely '
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`'
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`application which (b) specifically identifies (c) relevant information, (d) where there is.
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`some basis for believing that the information sought actually exists.” Emp ’rs Teamsters
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`Local Nos. 175 & 505 Pension Trust Fund v. Clorox, 353 F.3d 1125, 1129 (9th Cir.
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`2004) (quoting VISA Inl’l Serv. Ass ’n v. Bankcard Holders ofAm., 784 F.2d 1472, 1475
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`(9th Cir. 1986)).
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`HTC makes its Rule 56(d) request in its opposition to CyWee’s summary
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`judgment motion and the accompanying declaration of HTC’s counsel, James C. Yoon,
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`(See generally Resp; Yoon Decl. 11 10.) The court finds that HTC satisfies all four
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`requirements for relief under Rule 56(d).
`First, HTC’s request is timely:
`it was filed within the time HTC had to oppose
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`CyWee Motion’s summary judgment motion.
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`(See MSJ at 1 (showing that CyWee
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`7 Effective December 1, 2010, Federal Rule of Civil Procedure 5 6(f) was renumbered 56(d). The
`Advisory Committee’s notes to Rule 56 with respect to the 2010 amendments state that “[s]ubdivision (d)
`carries forward without substantial change the provisions of former subdivision (f).” See Fed. R. Civ. P.
`56 Advisory Comm. Notes.
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`Motion’s motion was initially noted for [December 28, 2018); Resp. at 24 (showing that
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`HTC filed its response on December 24, 2018)); see also IVC Highlands TT, LLC v.
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`DirectBuy, Inc., No. Cl6—0327RAJ, 2016 WL 3690127, at *2 (W.D. Wash. July 12,
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`2016) (stating that a “request [is] timely if made prior to the summary judgment hearing”
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`(citations and quotations omitted)). CyWee Motion does not dispute that HTC timely
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`invoked Rule 56(d).
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`(See generally Reply.)
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`Second, Mr. Yoon’s declaration “specifically identifies” information that HTC
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`contends is essential to support its opposition to CyWee Motion’s summary judgment
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`motion. See Emp ’rs Teamsters, 353 F.3d at 1129', (Yoon Decl. 11 10.) HTC represents
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`that its discovery requests will clarify, among other issues:
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`(1) the relationship between
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`CyWee Motion and its affiliates, and whether CyWe Motion, CyWee Motion, Inc, and
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`CyWee Tech are “collectively licensors or owners of the CyWee Software]; as CyWee
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`Motion claims; (2) “[t]he nature and extent of any royalty payments”_
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`‘— under the License Agreement; (3) whether HTC may
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`; and (4) “factual
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`issues underlying HTC’s affirmative defense of equitable estoppel.” (Id; see also Resp.
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`at 13—17.)
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`CyWee Motion does not dispute that the fourth factor in the Rule 56(d) analysis—
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`that “there is some basis for believing that the information [HTC seeks] actually
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`exists ——is satisfied. See Emp ’rs Teamsters, 353 F.3d at 1129; (see generally Reply.)
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`Rather, CyWee Motion appears to argue that the areas of discovery that HTC identifies
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`ORDER — 12
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`

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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 13 of 23
`e
`.
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`are not relevant because, whatever discovery HTC might obtain, HTC cannot show that it
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`has a right to possess the CyWee Software in light of the termination of the License
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`Agreement.
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`(See Reply at 2.) The court disagrees.
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`To begin, HTC’s intended discovery into the relationship between CyWee Motion,
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`CyWee Motion Inc., CyWee .Tech, and other CyWee affiliates is warranted. CyWee
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`Motion refers to CyWee Motion, CyWee Tech, and CyWee Motion, Inc. “collectively as
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`licensors or owners of the CyWee Software.” (MSJ at 2 n.l.) To support the proposition
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`that CyWee Motion has an ownership interest in the CyWee Software, however, Cywee
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`Motion cites only the License Agreement and the Assignment.
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`(See id. at. 4,9; see
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`generally id.)_
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`_ B
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`ut, on the record before the court, the relationships between CyWee Motion and other
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`CyWee entities remain unclear. HTC is entitled to discovery into the nature of those
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`relationships, their bearing on the ownership of the CyWee Software, and whether
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`.
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`CyWee Motion has a property interest in the CyWee Software sufficient to confer
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`standing for its conversion and replevin claims. See Davenport v. Wash. Educ. Ass ’74,
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`197 P.3d 686, 696 (Wash. Ct. App. 2008) (explaining that, to assert a conversion claim,
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`the plaintiff must “have a possessory or other ‘property interest’ in the chattel”); RCW
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`9.64.020(2).
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`Moreover, HTC is entitled to obtain discoVery on its theory that—
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`——
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`ORDER - l3
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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 14 of 23
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`That argument misses the point, however.—
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`HTC is entitled to further examine which CyWee affiliates received royalties from STM,
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`when the royalties ceased, if ever, and whether the royalties encompassed HTC’s
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`post-termination use of the CyWee Software. These issues bear on whether HTC might
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`benefit from the_
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`CyWee Motion argues that HTC collaterally estopped itself from-invoking the
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`protection of the License Agreement when HTC dismissed its claims against STM. (MSJ
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`at 8.) Specifically, CyWee Motion insists that “[a]ny rights HTC may have claimed
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`under the [License Agreement] are extinguished because HTC voluntarily and with
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`prejudice dismissed its claims that it was a third-party beneficiary of the [License
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`ORDER — 14
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`

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`
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`Caaasasiiaaaaabasainaaalritaaaaiasasgaaaaa 23
`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 15 of 23
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`Agreement] and entitled to indemnity or contribution from the STM entities.” (Id.
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`(emphasis omitted).) CyWee Motion is mistaken. “Issue preclusion, also known as
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`collateral estoppel, ‘attaches only when an issue of fact or law is actually litigated and
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`determined by a valid and final judgment, and the determination is essential to the
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`judgment” Amadeo 1/. Principal Mai. Life Ins. Co., 290 F.3d 1152, 1159 (9th Cir. 2002) '
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`(quoting Arizona v. California, 530 U.S. 392, 414 (2000)). “A voluntary dismissal of a
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`claim prior to any adjudication and without any stipulated findings of fact does not
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`actually litigate any issue.” Id. HTC voluntarily dismissed its claims against STM prior
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`to any adjudication of those claims and without any stipulated findings of fact.
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`(See Stip.
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`MTD at 2-3.) Thus, in defending against CyWee Motion’s counterclaims, HTC is not
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`precluded from arguing that HTC is a third-party beneficiary of the License Agreement.
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`Finally, as of the filing of CyWee Motion’s summary judgment motion, there was
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`no indication that HTC had failed to diligently pursue its intended discovery. See
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`Burlington, 323 F.3d at 773-74. CyWee Motion filed its summary judgment motion
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`approximately two months after filing its counterclaims and just nine days after amending
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`those claims.
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`(See MS]; CyWee Motion Counterclg CyWee Motion Am. Countercl.) In
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`his declaration, Mr. Yoon chronicles the discovery efforts HTC made before CyWee
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`Motion filed its motion for summary judgment, as well as the discovery requests by HTC
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`that were pending at the time it filed its opposition. (Yoon Decl. 1111 6-10.) That HTC
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`lacked facts “essential to justify its opposition,” see Fed. R. Civ. P. 56(d), reflected the
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`relatively early date at which CyWee Motion filed its summary judgment motion rather
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`than a failure to diligently pursue discovery.
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`ORDER — 15
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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 16 of 23
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`For the foregoing reasons, the court concludes that‘HTC is entitled to relief under
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`Rule 56(d). The court thus DENIES CyWee Motion’s motion for summary judgment
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`without prejudice to refiling, if appropriate, according to the timeline set forth in the
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`prevailing scheduling order and as explained more fully in the penultimate section of this
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`order.
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`(See 8/7/ 18 Order (Dkt. # 101) at 2); see infra § III.B.2.
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`B.
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`Cross-Motions to Stay
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`In light of the pending IPR’proceedings, CyWee moves to stay CyWee Group’s
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`patent infringement claims against HTC and HTC’s counterclaims for declaratory
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`judgments of noninfringement and patent invalidity against CyWee Group (collectively,
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`“the patent claims”). (CyWee MTS at 4—6; see also CyWee MTS Reply (Dkt. # 129) at
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`6—l2.) Additionally, CyWee urges the court to stay HTC’s third—party claims against
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`CyWee Motion while allowing CyWee Motion’s counterclaims against CyWee Motion to
`proceed.
`(CyWee MTS at 5-6.) HTC, in contrast, insiststhat a complete stay is
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`warranted. (HTC MTS at 6—10; HTC MTS Reply (Dkt. # 130) at 1-6.) The court begins
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`by considering whether to stay the patent claims.
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`,
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`1. Patent Claims
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`“Courts have inherent power to manage their dockets and stay proceedings,”
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`including the authority to stay a case pending IPR proceedings. Ethicon, Inc. v. Quigg,
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`849 F.2d 1422, 1426—27 (Fed. Cir. 1988); Wre-Hol v. Pharos Sci. & Applications, No.
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`C09-1642MJP, 2010 WL 2985685, at *2 (W.D. Wash. July 23, 2010). To determine
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`whether to grant such a stay, the court considers “(1) whether a stay will simplify the
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`issues in question and the trial of the case, (2) whether discovery is complete and
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`ORDER - l6
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`

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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 17 of 23
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`whether a trial date has already been set, and (3) whether a stay will unduly prejudice or
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`present a clear tactical disadvantage to the non—moving party.” Pac. Bioscience Labs,
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`Inc. v. Pretz'ka Corp, 760 F. Supp. 2d 1061, 1063 (W.D. Wash. 2011). “The moving
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`party bears the burden of demonstrating that a stay is appropriate.” DSS Tech. Mgmt.,
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`Inc. v. Apple, Inc., No. 14-cv-05330-HSG, 2015 WL 1967878, at *2 (ND. Cal. May 1,
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`‘ 2015).
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`The court finds each of the relevant factors weighs in favor of staying the patent
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`claims. First, the IPR proceedings are likely to simplify the issues for trial. The PTAB
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`, already granted the IPR petitions. (CyWee MTS at 2.) Staying the case pending the
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`outcome of IPR could clarify the scope of the patent claims, render some or all of the
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`infringement claims moot, and provide the court with the PTAB’s expert opinion. See
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`Finjan, Inc. v. Symantec Corp, 139 F. Supp. 3d 1032, 1036 (N.D. Cal. 2015). Moreover,
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`the stage of the litigation favors a stay. Although a trial date is set and the discovery
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`cut-off near, the court has yet to hold a claims construction hearing, and the parties have
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`not engaged in dispositive motions practice with respect to the patent claims.8 See, e. g,
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`PersonalWeb Techs, LLC v. Facebook, Inc., No. l3-cv-Ol356-EJD, 2014 WL 116340, at
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`*3 (N.D. Cal. Jan. 13, 2014) (finding that the second factor favored a stay where <‘a claim
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`construction order ha[d] been issued and the close of fact discovery [wa]s fast
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`approaching” but i‘a substantial portion of the work——expertdiscovery, summary
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`judgment, pre-trial preparation, and trial itself—Hay] ahead”). Finally, HTC does not
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`8 After the parties filed their cross-motions to stay this matter, the court vacated the
`remaining claim construction deadlines.
`(See 3/6/19 Order (Dkt. # 125) at 2.)
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`ORDER — 17
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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 18 of 23
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`argue that it will suffer prejudice if the court stays the patent claims.
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`(See generally HTC
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`MTS; HTC MTS Reply.) Accordingly, the court STAYS, pending the outcome of the
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`IPR proceedings, CyWee Group’s patent infringement claims against HTC and HTC’s
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`counterclaims for declaratory judgments of noninfringement and patent invalidity against
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`CyWee Group.
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`2. Non—Patent Claims
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`The court now confronts the more difficult question whether to extend the stay to
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`the parties’ non-patent claims—that is, HTC’s third-party claims against CyWee Motion
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`for contributionand unfaircompetition, and CyWee Motion’s counterclaims against HTC
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`for conversion, replevin, unjust enrichment, and declaratory judgment of unauthorized
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`possession. The parties appear to agree that HTC’s third—party claims against CyWee
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`Motion are sufficiently related to the patent claims to warrant a stay of those claims.9
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`(See CyWee Motion MTS at 4; HTC MTS at 9.) Accordingly, the parties’ dispute
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`centers on whether the court should stay CyWee Motion’s counterclaims against HTC, in
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`addition to the parties’ other claims, and thereby stay the entire action.
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`Even outside the IPR context, “[a] district court has inherent power to control the
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`disposition of the causes on its docket in a manner which will promote economy of time
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`and effort for itself, for counsel, and for litigants.” CMAX, Inc, v. Hall, 300 F.2d 265,
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`268 (9th Cir. 1962). Considerations of judicial economy alone, however, are generally
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`9 However, HTC appears to argue that, should the court choose not to stay CyWee
`Motion’s counterclaims against HTC, it should likewise decline to stay HTC’s third-party claims
`against CyWee Motion.
`(See HTC MTS Reply at l.) The court need not reach that argument,
`given the parameters of the stay the court imposes, as described below.
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`ORDER - 18
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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 19 of 23
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`insufficient to warrant a stay, See Dependable Highway Exp, Inc. v. Navigators Ins. Co,
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`498 F.3d 1059, 1066 (9th Cir. 2007). The court must also consider “the possible damage
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`which may result from the granting of a stay, the hardship or inequity which a party may
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`suffer in being required to go forward, and the orderly course ofjustice measured in
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`terms of the simplifying or complicating of issues, proof, and questions of law which
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`could be expected to result from a stay.” CMAX, 300 F.2d at 268 (citing Landis v. N. Am.
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`Ca, 299 US. 248, 254-55 (1936)).
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`'lAt the outset, the court acknowledges CyWee’s argument that, even if the PTAB
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`wereto invalidate the Patents-in—Suit, CyWee Motion’s counterclaims against HTC
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`“would survive unaffected.” (CyWee MTS Reply at l.) The court cannot evaluate the
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`merits of that argument because the parties‘have failed to provide any evidence that sheds
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`light on the relationship between the Patents-in-Suit and the CyWee Software. Both
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`parties imply that the Patents-in-Suit are not coextensive with the CyWee Software, and
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`that the License Agreement encompassed more than simply a license to practice the
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`Patents-in—Suit. (See HTC MTS at 2; CyWee MTS Reply at 2-3.) But the role of the
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`Patents-in-Suit within the CyWee Software remains unclear; and, on the limited record
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`before the court, the court cannot with confidence rule out the possibility that outcome of
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`the IPR proceedings may have some bearing on CyWee Motion’s counterclaims against
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`Moreover, the court finds that considerations ofjudicial efficiency and “the
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`orderly course ofjustice” favor a complete stay; See CMAX, 300 F.2d at 268. Should the
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`court allow CyWee Motion’s counterclaims to proceed, it would create the potential for
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`ORDER — 19
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`Case 2:17-cv-00932-JLR Document 143 Filed 08/16/19 Page 20 of 23
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`two trials on factually intertwined causes of action: one on CyWee Motion’s allegations
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`that HTC has wrongfully retained the Cywee Software, and one on CyWee Group’s
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`patent infringement claims against HTC and HTC’s unfair competition and contribution
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`claims against CyWee Motion. These claims are best tried together, however. CyWee
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`Group’s patent infringement claims, HTC’s unfair business practices claim, and CyWee
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`Motion’s counterclaim