Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 1 of 18
`
`
`
`
`GEORGE A. RILEY (S.B. #118304)
`griley@omm.com
`LUANN L. SIMMONS (S.B. #203526)
`lsimmons@omm.com
`MELODY DRUMMOND HANSEN (S.B. #278786)
`mdrummondhansen@omm.com
`O’MELVENY & MYERS LLP
`Two Embarcadero Center, 28th Floor
`San Francisco, California 94111-3823
`Telephone:
`(415) 984-8700
`Facsimile:
`(415) 984-8701
`
`RYAN K. YAGURA (S.B. #197619)
`ryagura@omm.com
`XIN-YI ZHOU (S.B. #251969)
`vzhou@omm.com
`BRIAN M. COOK (S.B. #266181)
`bcook@omm.com
`KEVIN MURRAY (S.B. #275186)
`kmurray2@omm.com
`O’MELVENY & MYERS LLP
`400 South Hope Street
`Los Angeles, California 90071-2899
`Telephone:
`(213) 430-6000
`Facsimile:
`(213) 430-6407
`
`Attorneys for Defendant
`APPLE INC.
`
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`SAN JOSE
`
`OpenTV, Inc., Nagravision, SA, and Nagra
`France S.A.S.,
`
`v.
`
`Apple Inc.,
`
`Plaintiffs,
`
`Defendant.
`
`Case No. 5:15-CV-02008-EJD
`
`DEFENDANT APPLE INC.’S NOTICE
`OF MOTION AND MOTION TO STAY
`PENDING COMPLETION OF USPTO
`PROCEEDINGS
`
`Date: September 15, 2016
`Time: 9:00 a.m.
`Judge: Honorable Edward J. Davila
`Courtroom: 4
`
`
`
`APPLE’S MOTION TO STAY
`5:15-CV-02008-EJD
`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`

`
`Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 2 of 18
`
`TABLE OF CONTENTS
`
`
`Page
`
`
`NOTICE OF MOTION ................................................................................................................... 1
`RELIEF SOUGHT .......................................................................................................................... 1
`I.
`INTRODUCTION .............................................................................................................. 1
`II.
`BACKGROUND ................................................................................................................ 3
`A.
`This Litigation ......................................................................................................... 3
`B.
`America Invents Act ............................................................................................... 3
`ARGUMENT ...................................................................................................................... 4
`A.
`This Court Has Authority to Stay This Case Pending Resolution of the
`USPTO Proceedings ............................................................................................... 4
`All Relevant Factors Favor Staying This Case Pending Resolution of the
`USPTO Proceedings ............................................................................................... 5
`1.
`The Stage of Litigation Weighs in Favor of a Stay Because
`Discovery Is Not Complete and No Trial Date Has Been Set .................... 5
`A Stay Will Simplify the Issues for Trial Because USPTO
`Proceedings Have Been Filed on All Remaining Patents ........................... 6
`OpenTV Will Not Suffer Tactical Disadvantage or Undue Prejudice ........ 9
`a.
`Timing of the Petition for Review and Request for Stay .............. 10
`b.
`Status of Review Proceedings ....................................................... 10
`c.
`Relationship of the Parties ............................................................ 11
`CONCLUSION ................................................................................................................. 12
`
`III.
`
`B.
`
`2.
`
`3.
`
`IV.
`
`- i -
`
`APPLE’S MOTION TO STAY
`5:15-CV-02008-EJD
`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`

`
`Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 3 of 18
`TABLE OF AUTHORITIES
`
`
`
`Cases
`
`Page(s)
`
`Acqis, LLC v. EMC Corp.,
`109 F. Supp. 3d 352 (D. Mass. 2015) ........................................................................................ 6
`
`ActiveVideo Networks, Inc. v. Verizon Commc’ns, Inc.,
`694 F.3d 1312 (Fed. Cir. 2012) ............................................................................................ 3, 11
`
`Asetek Holdings, Inc. v. Cooler Master Co.,
`2014 WL 1350813 (N.D. Cal. Apr. 3, 2014) ........................................................................... 10
`
`AT&T Intellectual Property I v. Tivo, Inc.,
`774 F.Supp.2d 1049 (N.D. Cal. 2011) ....................................................................................... 5
`
`Autoalert, Inc. v. Dominion Dealer Solutions, LLC,
`2013 U.S. Dist. LEXIS 171890 (C.D. Cal. May 22, 2013) ..................................................... 12
`
`Black & Decker Inc. v. Positec USA, Inc.,
`2013 WL 5718460 (N.D. Ill. Oct. 1, 2013) .......................................................................... 5, 10
`
`BodyMedia Inc. v. Basis Science, Inc.,
`2013 WL 2462105 (D. Del. June 6, 2013) ................................................................................. 9
`
`Capriola Corp. v. Larose Indus.,
`2013 WL 1868344 (M.D. Fla. Mar. 11, 2013) ..................................................................... 5, 10
`
`Clearlamp LLC v. LKQ Corp.,
`No. 1:12- cv-02533, Dkt. 43, (N.D. Ill. Oct. 18, 2012) ........................................................... 10
`
`Cypress Semiconductor Corp. v. GSI Tech., Inc.,
`2014 U.S. Dist. LEXIS 142858 (N.D. Cal. Oct. 7, 2014) ........................................................ 10
`
`Davol, Inc. v. Atrium Med. Corp.,
`2013 WL 3013343 (D. Del. June 17, 2013) ............................................................................... 7
`
`DSS Tech. Mgmt., Inc. v. Apple Inc.,
`2015 WL 1967878 (N.D. Cal. May 1, 2015) ............................................................... 4, 5, 6, 11
`
`Ever Win Int’l Corp. v. RadioShack Corp.,
`902 F. Supp. 2d 503 (D. Del. Oct. 9, 2012) ............................................................................... 7
`
`Evolutionary Intelligence LLC v. Apple, Inc.,
`2014 WL 93954 (N.D. Cal. Jan. 9, 2014) ............................................................................ 7, 10
`
`Evolutionary Intelligence LLC v. Yelp Inc.,
`2013 WL 6672451 (N.D. Cal. Dec. 18, 2013) ......................................................................... 10
`
`Evolutionary Intelligence, LLC v. Facebook, Inc.,
`2014 WL 261837 (N.D. Cal. Jan. 23, 2014) .............................................................................. 5
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`
`
`
`
`- ii -
`
`APPLE’S MOTION TO STAY
`5:15-CV-02008-EJD
`
`

`
`Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 4 of 18
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`
`e–Watch, Inc. v. Lorex Canada, Inc.,
`2013 WL 5425298 (S.D. Tex. Sept. 26, 2013) .................................................................... 5, 10
`
`Ho Keung Tse v. Apple Inc.,
`2007 WL 2904279 (N.D. Cal. Oct. 4, 2007) ............................................................................ 10
`
`Krippelz v. Ford Motor Co.,
`667 F.3d 1261 (Fed. Cir. 2012) .................................................................................................. 9
`
`Moneycat Ltd. v. Paypal Inc.,
`2014 WL 5689844 (N.D. Cal. Nov. 4, 2014) ............................................................................. 1
`
`OpenTV, Inc. and Nagra France SAS, v. Netflix, Inc.,
`Case No. 1:12-cv-01733-GMS .................................................................................................. 2
`
`PersonalWeb Technologies, LLC v. Facebook, Inc.,
`2014 WL 116340 (N.D. Cal. Jan. 13, 2014) .............................................................................. 6
`
`PersonalWeb Techs., LLC v. Apple Inc.,
`69 F. Supp. 3d 1022 (N.D. Cal. 2014) ....................................................................................... 7
`
`Pi Net Int’l, Inc. v. Hertz Corp.,
`2013 U.S. Dist. LEXIS 81570 (C.D. Cal. June 5, 2013) ......................................................... 11
`
`Pragmatus AV, LLC v. Facebook, Inc.,
`2011 WL 4802958 (N.D. Cal. Oct. 11, 2011) .................................................................. 5, 7, 10
`
`Procter & Gamble Co. v. Kraft Foods Global, Inc.,
`549 F.3d 842 (Fed. Cir. 2008) .................................................................................................... 4
`
`Robert Bosch Healthcare Sys. v. Cardiocom, LLC,
`2014 WL 3107447 (N.D. Cal. July 3, 2014) ............................................................................ 10
`
`Round Rock Research LLC v. Dole Food Co.,
`2012 WL 1185022 (D. Del. Apr. 6, 2012) ................................................................................. 9
`
`Sabert Corp. v. Waddington N. Am., Inc.,
`2007 WL 2705157 (D.N.J. Sept. 14, 2007) ............................................................................... 9
`
`Sec. People, Inc. v. Ojmar US, LLC,
`2015 WL 3453780 (N.D. Cal. May 29, 2015) ............................................................... 1, 4, 5, 6
`
`Select Comfort Corp. v. Tempur Sealy Int’l,
`2014 U.S. Dist. LEXIS 183450 (D. Minn. Oct. 10, 2014) ............................................... 5, 7, 10
`
`Semiconductor Energy Lab. Co. v. Chimei Innolux Corp.,
`2012 WL 7170593 (C.D. Cal. Dec. 19, 2012) ..................................................................... 5, 10
`
`Slip Track Sys., Inc. v. Metal Lite, Inc.,
`159 F.3d 1337 (Fed. Cir. 1998) .................................................................................................. 7
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`
`
`
`
`- iii -
`
`APPLE’S MOTION TO STAY
`5:15-CV-02008-EJD
`
`

`
`Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 5 of 18
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`
`Software Rights Archive, LLC v. Facebook, Inc.,
`2013 WL 5225522 (N.D. Cal. Sept. 17, 2013) .................................................................... 5, 10
`
`SSW Holding Co. v. Schott Gemtron Corp.,
`2013 WL 4500091 (W.D. Ky. Aug. 21, 2013) .................................................................... 5, 10
`
`Star Envirotech, Inc. v. Redline Detection, LLC,
`2013 WL 1716068 (C.D. Cal. Apr. 3, 2013) ....................................................................... 5, 11
`
`Target Therapeutics, Inc. v. SciMed Life Sys., Inc.,
`1995 WL 20470 (N.D. Cal. Jan. 13, 1995) ................................................................................ 9
`
`VirtualAgility Inc. v. Salesforce.com Inc.,
`759 F.3d 1307 (Fed. Cir. 2014) ............................................................................................ 1, 12
`
`Wonderland Nurserygoods Co. v. Baby Trend, Inc.,
`2015 U.S. Dist. LEXIS 53053 (C.D. Cal. Apr. 20, 2015) ............................................ 2, 5, 8, 11
`
`Xilidev, Inc. v. Boku, Inc.,
`2014 WL 3353256 (S.D. Cal. July 1, 2014) .............................................................................. 1
`
`Statutes
`
`35 U.S.C. § 314(a) ........................................................................................................................... 4
`
`35 U.S.C. § 314(b) ..................................................................................................................... 3, 11
`
`35 U.S.C. § 315(b) ......................................................................................................................... 10
`
`35 U.S.C. § 315(e)(2) ............................................................................................................... 2, 4, 8
`
`35 U.S.C. § 316 ................................................................................................................................ 4
`
`35 U.S.C. § 316(a)(11) ................................................................................................................. 3, 4
`
`35 U.S.C. § 318(c) ........................................................................................................................... 9
`
`35 U.S.C. § 324(a) ........................................................................................................................... 4
`
`35 U.S.C. § 324(c) ..................................................................................................................... 3, 11
`
`35 U.S.C. § 326(a)(11) ................................................................................................................. 3, 4
`
`35 U.S.C. § 6(a)-(c) .......................................................................................................................... 4
`
`35 U.S.C. §§ 311-319 ....................................................................................................................... 4
`
`AIA § 18(a)(1)(D) .................................................................................................................... 2, 4, 8
`
`AIA § 18(b)(1) ................................................................................................................................. 1
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`
`
`
`
`- iv -
`
`APPLE’S MOTION TO STAY
`5:15-CV-02008-EJD
`
`

`
`Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 6 of 18
`TABLE OF AUTHORITIES
`(continued)
`
`
`Regulations
`
`Page(s)
`
`37 C.F.R. 42.300(a) .......................................................................................................................... 4
`
`77 Fed. Reg. 48680-01 ..................................................................................................................... 4
`
`- v -
`
`APPLE’S MOTION TO STAY
`5:15-CV-02008-EJD
`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`

`
`Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 7 of 18
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`NOTICE OF MOTION
`Defendant Apple Inc. (“Apple”) gives notice that on September 15, 2016, at 9:00 a.m., in
`
`Courtroom 4, 280 South 1st Street, San Jose, CA 95113, Apple will and hereby does move for a
`
`stay of this matter pending inter partes and covered business method reviews of the patents-in-
`suit.1
`
`RELIEF SOUGHT
`Apple moves for a stay of this matter pending inter partes and covered business method
`
`reviews of the patents-in-suit (IPR Nos. 2016-00961 and 2016-00992 and CBM No. 2016-
`
`00066).
`
`I. INTRODUCTION
`Each of the three remaining patents in this case is subject to either a petition for inter
`
`partes review (“IPR”) or a petition for covered business method review (“CBM”) pending before
`
`the United States Patent and Trademark Office (“USPTO”). The outcome of these USPTO
`
`proceedings will either resolve this case completely or substantially narrow the issues in dispute.
`
`The case is still in a relatively early stage, and Apple’s motion is timely filed less than a week
`
`after the IPR and CBM petitions were filed. Thus, Apple respectfully submits that staying this
`
`case at the current stage would conserve the Court’s and the parties’ time and resources, promote
`
`judicial economy, result in no unnecessary delay, and avoid the potential for inconsistent
`
`judgments. Each of the factors courts typically consider when deciding a motion to stay favors
`granting Apple’s motion.2
`
`
`1 Apple met-and-conferred with Plaintiffs and understands that Plaintiffs will oppose this motion.
`2 The factors relevant to a stay pending IPR and those relevant to a stay pending CBM are
`identical except that for a CBM there is a fourth factor: whether a stay, or denial thereof, will
`reduce the burden of litigation on the parties and on the court. Compare Sec. People, Inc. v.
`Ojmar US, LLC, 2015 WL 3453780, at *2 (N.D. Cal. May 29, 2015) with VirtualAgility Inc. v.
`Salesforce.com, Inc., 759 F.3d 1307, 1309 (Fed. Cir. 2014) (citing AIA § 18(b)(1)); see also
`Xilidev, Inc. v. Boku, Inc., 2014 WL 3353256, at *1 (S.D. Cal. July 1, 2014) (“The primary
`difference between this [CBM] test and the one employed by courts in the ordinary patent
`reexamination context is the inclusion of the fourth factor regarding whether a stay will reduce
`the burden of litigation.”) Because two of the patents-in-suit are subject to petitions for IPR and
`the factors relevant to a stay pending IPR are more stringent than those for a stay pending CBM,
`Apple focuses its arguments on those factors relevant to a stay pending IPR. See Moneycat Ltd.
`v. Paypal Inc., 2014 WL 5689844, at *2 (N.D. Cal. Nov. 4, 2014) (noting that, with respect to
`
`APPLE’S MOTION TO STAY
`- 1 -
`5:15-CV-02008-EJD
`
`
`
`
`
`

`
`Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 8 of 18
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`First, the stage of this case favors a stay. The case has been pending for less than a year
`
`and is still in a relatively early stage—the parties have yet to take any depositions, claim
`
`construction has not been heard or decided, the close of fact discovery has not been scheduled,
`
`expert discovery has not begun, and no trial date has been set.
`
`Second, a stay will likely simplify the issues in this litigation. If the USPTO invalidates
`
`the three patents still at issue through IPR and CBM, this entire case will be moot. Even if the
`
`USPTO finds patentable some of the claims of the patents-in-suit, the Court will have the benefit
`
`of the Patent Trial and Appeal Board’s (“PTAB’s”) findings, and Apple will be estopped from
`
`raising certain invalidity defenses in the district court litigation. See 35 U.S.C. § 315(e)(2); AIA
`
`§ 18(a)(1)(D). Under either outcome, the issues remaining for trial will be greatly simplified after
`
`the conclusion of the USPTO proceedings. Further, because an IPR was previously instituted for
`one of the patents-in-suit3 on similar grounds and prior art as Apple’s current petition and because
`the standard for instituting an IPR remains unchanged, institution of an IPR is nearly certain for at
`
`least one patent in this case. But even in the unlikely event USPTO proceedings are not instituted
`
`on any of the patents-in-suit, the stay will be short and will not waste judicial resources. See
`
`Wonderland Nurserygoods Co. v. Baby Trend, Inc., 2015 U.S. Dist. LEXIS 53053, at *8 (C.D.
`
`Cal. Apr. 20, 2015) (a stay is appropriate even where it is unclear the USPTO will institute an IPR
`
`because the stay will be relatively short and the action can continue with minimal delay if an IPR
`
`is not instituted).
`
`Finally, a stay will not put OpenTV at a tactical disadvantage. Apple’s IPRs and CBM
`
`were timely filed, and Apple filed this motion promptly thereafter. OpenTV will not be unduly
`
`
`motions for stay pending CBM review, “Congress apparently adopted the fourth factor to place a
`thumb on the scale in favor of granting stays.”) However, the fourth factor, relevant to CBMs
`only—whether a stay, or denial thereof, will reduce the burden of litigation on the parties and on
`the court—also favors granting Apple’s motion. The IPR and CBM proceedings have the
`potential to resolve the entire case, narrow the invalidity defenses that may be raised at trial,
`and/or simplify the issues for the Court, and give the Court the benefit of the Patent Trial and
`Appeal Board’s (“PTAB’s”) findings, all of which would reduce the burden of litigation on the
`Court and the parties.
`3 Netflix filed an IPR petition regarding U.S. Patent No. 6,233,736. The IPR was instituted but
`was terminated by Netflix, Inc. when Netflix and OpenTV reached a settlement. See OpenTV,
`Inc. and Nagra France SAS, v. Netflix, Inc., Case No. 1:12-cv-01733-GMS, IPR2014-00269.
`
`APPLE’S MOTION TO STAY
`5:15-CV-02008-EJD
`
`- 2 -
`
`
`
`
`
`

`
`Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 9 of 18
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`prejudiced by a stay. OpenTV and Apple are not competitors in the market because they provide
`
`different products to different consumers. See ActiveVideo Networks, Inc. v. Verizon Commc’ns,
`
`Inc., 694 F.3d 1312, 1337-38 (Fed. Cir. 2012) (holding that the plaintiff and defendant were not
`
`competitors where the plaintiff sold hardware and software to providers of media services and the
`
`defendant marketed and sold media services to end users). Accordingly, there is no potential for
`
`irreparable harm, and monetary damages will be more than sufficient compensation for any delay
`
`that may result from a stay. Thus, Apple respectfully submits that judicial comity and case
`
`efficiencies warrant a stay of this case pending the outcome of the USPTO’s reviews of the three
`
`remaining patents.
`
`II. BACKGROUND
`A.
`This Litigation
`Plaintiffs OpenTV, Inc., Nagravision, SA, and Nagra France S.A.S. (collectively,
`
`“OpenTV” or “the plaintiffs”) asserted five patents in this lawsuit against defendant Apple, Inc.
`
`(“Apple”)—U.S. Patent Nos. 7,725,740 (“the ’740 Patent”), 7,644,429 (“the ’429 Patent”),
`
`7,055,169 (“the ’169 Patent”), 6,233,736 (“the ’736 Patent”), and 6,148,081 (“the ’081 Patent”).
`
`ECF No. 1 ¶ 3. On January 28, 2016, this Court invalidated the ’081 and ’429 Patents for
`
`claiming ineligible subject matter. See ECF No. 72. Thus only three patents remain at issue—the
`
`’740, ’169, and ’736 Patents. Each of these remaining patents is subject to either an IPR or CBM
`
`petition filed by Apple in April and May of 2016. Simmons Decl. ¶ 3. The USPTO should issue
`
`its decisions regarding whether it will institute review of the patents-in-suit before November 2,
`
`2016. See id.; 35 U.S.C. § 314(b), 324(c). If reviews are instituted, the PTAB will issue its final
`
`determinations regarding the validity of these three patents by November 2, 2017. See 35 U.S.C.
`
`§ 316(a)(11), 326(a)(11).
`
`B.
`America Invents Act
`“By enacting the Leahy-Smith America Invents Act (‘AIA’), Congress sought to
`
`‘establish a more efficient and streamlined patent system that will improve patent quality and
`
`limit unnecessary and counterproductive litigation costs’ and ‘to create a timely, cost-effective
`
`alternative to litigation.’” Sec. People, Inc. v. Ojmar US, LLC, 2015 WL 3453780, at *1 (N.D.
`
`
`
`
`
`
`
`- 3 -
`
`APPLE’S MOTION TO STAY
`5:15-CV-02008-EJD
`
`

`
`Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 10 of 18
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`Cal. May 29, 2015); DSS Tech. Mgmt., Inc. v. Apple Inc., 2015 WL 1967878, at *1 (N.D. Cal.
`
`May 1, 2015) (both citing 77 Fed. Reg. 48680-01). The AIA created the IPR and CBM
`
`procedures, by which the PTAB may review the patentability of one or more claims in a patent.
`
`See 35 U.S.C. §§ 311-319; 37 C.F.R. 42.300(a).
`
`A party petitioning for an IPR must establish “a reasonable likelihood that the petitioner
`
`would prevail with respect to at least [one] of the claims challenged in the petition” in order for
`
`the USPTO to institute IPR (35 U.S.C. § 314(a)); a party petitioning for a CBM must demonstrate
`
`that it is “more likely than not” that at least one challenged claim is unpatentable (35 U.S.C. §
`
`324(a)). If the USPTO decides to institute IPR or CBM, the proceeding is conducted before a
`
`panel of three technically-trained Administrative Patent Judges of the PTAB. See 35 U.S.C. §§
`
`6(a)-(c), 316. Absent good cause to extend the schedule, each IPR and CBM must conclude
`
`within one year of institution. See 35 U.S.C. § 316(a)(11), 326(a)(11). Following a final
`
`determination, the petitioning party is estopped from asserting invalidity during a later civil action
`
`“on any ground that the petitioner raised or reasonably could have raised during” the IPR (35
`
`U.S.C. § 315(e)(2)) or any ground that the petitioner raised during the CBM (AIA § 18(a)(1)(D)).
`
`III. ARGUMENT
`A.
`This Court Has Authority to Stay This Case Pending Resolution of the
`USPTO Proceedings
`
`“The Supreme Court has long recognized that district courts have broad discretion to
`
`manage their dockets, including the power to grant a stay of proceedings.” The Procter &
`
`Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 848-49 (Fed. Cir. 2008). While courts are
`
`“under no obligation to stay proceedings pending parallel litigation in the PTAB, . . . judicial
`
`efficiency and the desire to avoid inconsistent results may, after a careful consideration of the
`
`relevant factors, counsel in favor of a limited stay, even before the PTAB has acted on a petition
`
`for IPR.” Sec. People, 2015 WL 3453780, at *2; DSS Tech, 2015 WL 1967878, at *2 (citations
`
`omitted). Indeed, courts in this district recognize “a liberal policy in favor of granting motions to
`
`stay proceedings pending the outcome of USPTO reexamination or reissuance proceedings.” See
`
`id. (citing Pragmatus AV, LLC v. Facebook, Inc., 2011 WL 4802958, at *2 (N.D. Cal. Oct. 11,
`
`
`
`
`
`
`
`- 4 -
`
`APPLE’S MOTION TO STAY
`5:15-CV-02008-EJD
`
`

`
`Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 11 of 18
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`2011)).4
`
`B.
`
`All Relevant Factors Favor Staying This Case Pending Resolution of the
`USPTO Proceedings
`
`Courts in this district consider three factors when determining whether to grant a stay
`
`pending IPR proceedings: “(1) whether discovery is complete and whether a trial date has been
`
`set; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether a
`
`stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party.”
`
`Sec. People, 2015 WL 3453780, at *2; DSS Tech., 2015 WL 1967878, at *2 (citations omitted).
`
`Each of these factors favors granting Apple’s motion.
`
`1.
`
`The Stage of Litigation Weighs in Favor of a Stay Because Discovery Is
`Not Complete and No Trial Date Has Been Set
`The first factor the courts consider is the stage of the litigation. See AT&T Intellectual
`
`Property I v. TiVo, Inc., 774 F. Supp. 2d 1049, 1052 (N.D. Cal. 2011). Specifically, courts
`
`consider “whether discovery is complete and whether a trial date has been set.” Evolutionary
`
`Intelligence, LLC v. Facebook, Inc., 2014 WL 261837, at *1 (N.D. Cal. Jan. 23, 2014). This case
`
`is in its early stage: fact discovery is far from complete, no deposition has been noticed or taken,
`
`claim construction has not been heard or decided, expert discovery has not yet begun, and a trial
`
`date has not been set. A stay of the case at its current stage would further the goals of the AIA by
`
`eliminating unnecessary litigation costs and conserving the valuable judicial resources of this
`
`Court.
`
`
`4 Courts in this and other districts have regularly granted motions to stay before IPR petitions are
`instituted. See, e.g., Select Comfort Corp. v. Tempur Sealy Int’l, 2014 U.S. Dist. LEXIS 183450,
`at *11 (D. Minn. Oct. 10, 2014) (“Congress did not categorically decide that patent suits should
`or should not be stayed pending a decision by the USPTO to grant or deny a petition for an IPR.
`Instead, courts were left with the discretion to decide whether the specific facts presented by the
`motion warranted a stay.”); Black & Decker Inc. v. Positec USA, Inc., 2013 WL 5718460, at *3
`(N.D. Ill. Oct. 1, 2013); Semiconductor Energy Lab. Co., Ltd. v. Chimei Innolux Corp., 2012 WL
`7170593, at *4 (C.D. Cal. Dec. 19, 2012); Software Rights Archive, LLC v. Facebook, Inc., 2013
`WL 5225522, at *1 (N.D. Cal. Sept. 17, 2013); SSW Holding Co. v. Schott Gemtron Corp., 2013
`WL 4500091, at *4 (W.D. Ky. Aug. 21, 2013); Capriola Corp. v. Larose Indus., LLC, 2013 WL
`1868344, at *2 (M.D. Fla. Mar. 11, 2013); e–Watch, Inc. v. Lorex Canada, Inc., 2013 WL
`5425298, at *2 (S.D. Tex. Sept. 26, 2013); Star Envirotech, Inc. v. Redline Detection, LLC, 2013
`WL 1716068, at *2 (C.D. Cal. Apr. 3, 2013); Wonderland, 2015 U.S. Dist. LEXIS 53053, at *8.
`
`APPLE’S MOTION TO STAY
`5:15-CV-02008-EJD
`
`- 5 -
`
`
`
`
`
`

`
`Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 12 of 18
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`In DSS Technology Management, this Court found the stage of the litigation to favor a
`
`stay even though the parties had already engaged in some discovery, including a deposition. 2015
`
`WL 1967878, at *2-3. The Court explained a stay was warranted because “significant work
`
`remains to be done, and fact discovery is not scheduled to close for another six months.” Id. at 2.
`
`This case is at an even earlier stage in discovery—no deposition has been taken, scheduled, or
`
`even noticed, and the Court has yet to set a date for the close of fact discovery.
`
`As this Court recognized in Security People, “[c]ourts have found that this factor weighs
`
`in favor of a stay even where litigation has progressed substantially further than the instant
`
`action.” 2015 WL 3453780, at *2. The court in PersonalWeb Technologies, LLC v. Facebook,
`
`Inc. granted defendant’s motion to stay even though “a claim construction order has been issued
`
`and the close of fact discovery is fast approaching” because “a substantial portion of the work—
`
`expert discovery, summary judgment, pre-trial preparation, and trial itself—lies ahead.” 2014
`
`WL 116340, at *3 (N.D. Cal. Jan. 13, 2014); see also Acqis, LLC v. EMC Corp., 109 F. Supp. 3d
`
`352, 356 (D. Mass. 2015) (finding the “stage of the litigation” factor to favor a stay even though
`
`“a Markman hearing has taken place, and a claim construction opinion has been issued”). Thus,
`
`even though the parties have briefed their claim construction positions, a substantial portion of the
`
`case remains. See ECF No. 81, 82. In addition to the tasks identified in PersonalWeb—expert
`
`discovery, summary judgment, pretrial, and trial—this Court has yet to hold a Markman hearing
`
`or construe the disputed claim terms. Accordingly, the first factor—the stage of the litigation—
`
`favors a stay.
`
`2.
`
`A Stay Will Simplify the Issues for Trial Because USPTO Proceedings
`Have Been Filed on All Remaining Patents
`
`The second factor considered by courts is whether a stay will simplify the issues for trial.
`
`When a motion to stay is based on pending USPTO proceedings, “this factor … weighs heavily in
`
`favor of granting the stay.” Sec. People, 2015 WL 3453780, at *4. “A stay is favored where ‘the
`
`outcome of the reexamination would be likely to assist the court in determining patent validity
`
`and, if the claims were canceled in the reexamination, would eliminate the need to try the
`
`infringement issue.’” PersonalWeb Techs., LLC v. Apple Inc., 69 F. Supp. 3d 1022, 1027 (N.D.
`
`
`
`
`
`
`
`- 6 -
`
`APPLE’S MOTION TO STAY
`5:15-CV-02008-EJD
`
`

`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`Case 5:15-cv-02008-EJD Document 92 Filed 05/03/16 Page 13 of 18
`
`
`
`Cal. 2014) (quoting Slip Track Sys., Inc. v. Metal Lite, Inc., 159 F.3d 1337, 1341 (Fed. Cir.
`
`1998)). “A stay may also be granted in order to avoid inconsistent results, obtain guidance from
`
`the PTAB, or avoid needless waste of judicial resources.” Evolutionary Intelligence LLC v.
`
`Apple, Inc., 2014 WL 93954, at *2 (N.D. Cal. Jan. 9, 2014). “Indeed, it is not uncommon for this
`
`court to grant stays pending reexamination prior to the PTO deciding to reexamine the patent.”
`
`Pragmatus, 2011 WL 4802958, at *3 (emphasis added); see also Evolutionary Intelligence, 2014
`
`WL 93954, at *2. In this case, a stay will either eliminate the need for trial or significantly
`
`simplify the remaining disputes.
`
`First, statistics show a high probability that the PTAB will institute reviews for all or a
`
`substantial number of the challenged claims. Recent statistics published by the USPTO show that
`
`the PTAB has institu