Ixi Mobile (R&D) Ltd. et al v. Apple, Inc.

Northern District of California, cand-4:2015-cv-03755

MOTION to Stay Defendants' Motion to Stay Pending Inter Partes Review filed by Apple Inc. Motion Hearing set for 11/5/2015 02:00 PM in Courtroom 15, 18th Floor, San Francisco before Hon. Haywood S Gilliam Jr. Responses due by 10/15/2015. Replies due by 10/22/2015.

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6 1 Harrison J. Frahn IV (CA Bar No. 206822) hfrahn@stblaw.com 2 Patrick E. King (CA Bar No. 211975) 3 pking@stblaw.com Elizabeth A. Gillen (CA Bar No. 260667) 4 egillen@stblaw.com SIMPSON THACHER & BARTLETT LLP 5 2475 Hanover Street Palo Alto, California 94304 6 Telephone: (650) 251-5000 Facsimile: (650) 251-5002 7 Attorneys for Defendant Apple Inc. 8 [Additional counsel on signature page] 9 10 UNITED STATES DISTRICT COURT 11 FOR THE NORTHERN DISTRICT OF CALIFORNIA 12 SAN FRANCISCO DIVISION 13 IXI MOBILE (R&D) LTD. and IXI IP, LLC Case Nos. 15-cv-03755-HSG 14 Plaintiffs, DEFENDANTS' MOTION TO STAY 15 v. PENDING INTER PARTES REVIEW APPLE INC., 16 Date: November 5, 2015 Defendant. Time: 2:00 p.m. 17 Courtroom: 15 Hon. Haywood S. Gilliam, Jr. 18 19 IXI MOBILE (R&D) LTD. and IXI IP, LLC Case Nos. 15-cv-03752-HSG (RELATED CASE) Plaintiffs, 20 v. 21 SAMSUNG ELECTRONICS CO., et al., 22 Defendants. 23 IXI MOBILE (R&D) LTD. and IXI IP, LLC Case Nos. 15-cv-03754-HSG (RELATED CASE) 24 Plaintiffs, v. 25 BLACKBERRY CORPORATION et al., 26 Defendant. 27 28 DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 6 1 TABLE OF CONTENTS 2 NOTICE OF MOTION AND MOTION .................................................................................. 1 3 MEMORANDUM OF POINTS AND AUTHORITIES .......................................................... 1 4 I. INTRODUCTION ................................................................................................... 1 5 II. FACTUAL AND PROCEDURAL BACKGROUND ............................................ 2 6 III. LEGAL STANDARD ............................................................................................. 3 7 IV. ARGUMENT .......................................................................................................... 4 8 a. This Case is in its Early Stages ................................................................... 4 9 b. A Stay Will Simplify the Case .................................................................... 5 10 c. Plaintiffs Will Suffer No Prejudice From a Stay......................................... 7 11 V. CONCLUSION ....................................................................................................... 9 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG i 6 1 TABLE OF AUTHORITIES 2 FEDERAL CASES 3 Advanced Micro Devices, Inc. v. LG Elecs., Inc., No. 14-cv-01012-SI, 2015 WL 545534 (N.D. Cal. Feb. 9, 2015) .............................. 7, 8, 9 4 AT&T Intellectual Property I v. Tivo, Inc., 5 774 F. Supp. 2d 1049 (N.D. Cal. 2011) .............................................................................. 5 6 Brixham Solutions Ltd. v. Juniper Networks, Inc., No. 13-cv-00616-JCS, 2014 WL 1677991 (N.D. Cal. Apr. 28, 2014) ............................... 6 7 Convergence Techs. (USA), LLC v. Microloops Corp., 8 No. 5:10-cv-02051-EJD, 2012 WL 1232187 (N.D. Cal. Apr. 12, 2012) ............................ 8 9 Cypress Semiconductor Corp. v. LG Elecs., Inc., No. 13–cv–04034–SBA, 2014 WL 5477795 (N.D. Cal. Oct. 29, 2014) ........................ 5, 8 10 Delphix Corp. v. Actifio, Inc., 11 No. 13-cv-04613-BLF, 2014 WL 6068407 (N.D. Cal. Nov. 13, 2014) .......................... 3, 7 12 DSS Tech. Mgmt., Inc. v. Apple Inc., No. 14-cv-05330-HSG, 2015 WL 1967878 (N.D. Cal. May 1, 2015) ............................ 4, 7 13 Ethicon Inc. v. Quigg, 14 849 F.2d 1422 (Fed. Cir. 1988) ........................................................................................... 3 15 Evolutionary Intelligence, LLC v. Apple, Inc., No. 13-cv-04201-WHA, 2014 WL 93954 (N.D. Cal. Jan. 9, 2014) ................................... 9 16 Evolutionary Intelligence, LLC v. Facebook, Inc., 17 No. 13-cv-04202-SI, 2014 WL 261837 (N.D. Cal. Jan. 23, 2014) ............................. 4, 5, 7 18 Evolutionary Intelligence, LLC v. Sprint Nextel Corp., No. 13-cv-03587, 2014 WL 4802426 (N.D. Cal. Sept. 26, 2014) ...................................... 5 19 LELO, Inc. v. Standard Innovation (US) Corp., 20 No. 13-cv-01393-JD, 2014 WL 2879851 (N.D. Cal. June 24, 2014) ................................. 5 21 PersonalWeb Technologies, LLC v. Apple Inc., 69 F. Supp. 3d 1022 (N.D. Cal. 2014) ................................................................................ 8 22 PersonalWeb Techs., LLC v. Facebook, Inc., 23 Case No. 13-cv-01356-EJD, 2014 WL 116340 (N.D. Cal. Jan. 13, 2014) ..................... 4, 6 24 PI-Net Int'l, Inc. v. Focus Bus. Bank, No. 12-cv-4958-PSG, 2013 WL 4475940 (N.D. Cal. Aug. 16, 2013) ................................ 8 25 Pragmatus AV, LLC v. Facebook, Inc., 26 No. 11-cv-01268-EJD, 2011 WL 4802958 (N.D. Cal. Oct. 11, 2011) ............................... 4 27 Roche Molecular Sys., Inc. v. Cepheid, No. 14-cv-3228–EDL, 2015 WL 124523 (N.D. Cal. Jan. 7, 2015) ................................ 4, 7 28 DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG ii 6 1 Security People, Inc. v. Ojmar US, LLC, No. 14–cv–04968-HSG, 2015 WL 3453780 (N.D. Cal. May 29, 2015) ................... passim 2 Semiconductor Energy Lab. Co. v. Chimei Innolux Corp., 3 No. 12-cv-21-JST, 2012 WL 7170593 (C.D. Cal. Dec. 19, 2012)...................................... 9 4 Software Rights Archive, LLC v. Facebook, Inc., No. 12-cv-3970-RMW, 2013 WL 5225522 (N.D. Cal. Sept. 17, 2013) ......................... 6, 8 5 Verinata Health, Inc. v. Ariosa Diagnostics, Inc., 6 No. 12-cv-05501-SI, 2014 WL 121640 (N.D. Cal. Jan. 13, 2014) ..................................... 7 7 FEDERAL STATUTES 8 28 U.S.C. § 1404(a) ................................................................................................................... 2 9 35 U.S.C. § 315(e)(2) ................................................................................................................ 6 10 35 U.S.C. § 316(a)(11) .......................................................................................................... 3, 9 11 37 C.F.R. § 42.100 .................................................................................................................... 1 12 77 Fed. Reg. 48,680–01 ............................................................................................................ 1 13 FRCP 26(f) ................................................................................................................................ 3 14 FRCP 30(b)(6) ........................................................................................................................... 4 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG iii 6 1 NOTICE OF MOTION AND MOTION 2 PLEASE TAKE NOTICE that on November 5, 2015, at 2:00 p.m., Defendants 3 will, and hereby do, move for a stay. Per Local Rules 7-2(b)(3) and 7-4(a)(3), respectively, the 4 relief sought is a stay of this entire action pending inter partes review of U.S. Patent Nos. 5 7,295,532 (the "'532 Patent"), 7,016,648 (the "'648 Patent"), and 7,039,033 (the "'033 Patent") 6 (collectively, the "patents-in-suit") at the United States Patent & Trademark Office Patent Trial 7 and Appeal Board ("PTAB"), and the issue to be decided is whether the Court should exercise its 8 discretion to grant such a stay. 9 MEMORANDUM OF POINTS AND AUTHORITIES 10 I. INTRODUCTION 11 The inter partes review process, adopted by Congress as part of the Leahy-Smith 12 America Invents Act (the "AIA"), permits a party in litigation to challenge the validity of a patent 13 before the PTAB while the litigation is pending. Courts in this district consistently grant motions 14 to stay litigations pending inter partes review proceedings to further Congress's goal of limiting 15 "unnecessary and counterproductive litigation costs." 77 Fed. Reg. 48,680–01 (Aug. 14, 2014) (to 16 be codified at 37 C.F.R. § 42.100 et seq.). Courts weigh three factors to assess whether a stay is 17 justified: (i) the stage of the litigation; (ii) whether a stay may help simplify the issues in the case; 18 and (iii) whether the stay will unduly prejudice or tactically disadvantage the non-moving party. 19 Here, all three factors overwhelmingly weigh in favor of a stay. 20 First, this case is in its early stages. The parties have engaged in minimal 21 discovery, no claim terms have been construed, no party has filed an expert report or dispositive 22 motion, and no trial date has been set. Indeed, the first case management conference before this 23 Court is more than a month away. 24 Second, a stay will simplify the issues in this case. Apple and Samsung filed five 25 inter partes review petitions challenging all of the asserted claims of the three patents-in-suit. 26 Given the PTAB's recent history—and the strength of the petitions filed by Apple and Samsung— 27 the PTAB is likely to initiate a review of and invalidate some or all of the asserted claims. At the 28 DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 1 6 1 very least, the inter partes review will narrow the scope of the case by clarifying the meaning of 2 the terms in the asserted claims and by estopping the petitioners from asserting invalidity 3 arguments raised in the petitions for the claims on which the PTO renders a final decision. 4 Third, a stay will not unduly prejudice or tactically disadvantage the Plaintiffs. 5 Plaintiffs are non-practicing entities who do not compete with Defendants. Accordingly, the only 6 possible prejudice Plaintiffs can claim is a delay in the resolution of this action. But it is well- 7 established that a delay in enforcement of patent rights, standing alone, does not amount to undue 8 prejudice where a patent holder can be compensated fully by monetary damages. 9 Thus, all three factors weigh in favor of a stay of this action. To proceed with 10 wasteful and duplicative litigation while inter partes review petitions are pending is contrary to 11 the objectives of Congress. Defendants respectfully request that the Court exercise its discretion 12 to grant this motion to stay the above-captioned proceedings. 13 II. FACTUAL AND PROCEDURAL BACKGROUND 14 On June 17, 2014, IXI Mobile (R&D) Ltd. ("IXI Mobile") and IXI IP, LLC ("IXI 15 IP") (together, "Plaintiffs") sued Samsung Electronics Co., Ltd., Samsung Electronics America, 16 Inc., and Samsung Telecommunications America, LLC (collectively, "Samsung"), and BlackBerry 17 Limited and BlackBerry Corporation (collectively, "BlackBerry") in the Southern District of New 18 York. See Case No. 3:15-cv-03752-HSG, Dkt. No. 1 (Samsung Complaint); Case No. 3:15-cv- 19 03754-HSG, Dkt. No. 1 (BlackBerry Complaint). Over three months later, on October 2, 2014, 20 Plaintiffs sued Apple Inc. ("Apple") on the same patents, also in the Southern District of New 21 York. See Dkt. No. 1 (Apple Complaint). 22 Relatively little has happened in these related actions. On February 3, 2015, 23 Defendants moved to transfer the action to this Court under 28 U.S.C. § 1404(a) because neither 24 Plaintiffs nor their claims against Defendants had any connection to the original forum. Dkt. Nos. 25 27-30. Six months later, on August 6, 2015, the Honorable Richard J. Sullivan granted the 26 motion. See Dkt. No. 71. While the transfer motion was pending, Defendants served invalidity 27 contentions and began discovery. See Declaration of Elizabeth A. Gillen ("Gillen Decl."), ¶¶ 3-4. 28 The parties have served and responded to limited interrogatories, requests for admission, and DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 2 6 1 document requests. See id. Only two depositions have taken place (one of an inventor and one of 2 Plaintiffs' claim construction expert). See id. at ¶ 7. The parties have not filed dispositive 3 motions or served expert reports. See id. at ¶ 8. Plaintiffs served their opening claim construction 4 brief on July 8, 2015, Dkt. Nos. 61-63, but the case was transferred to this Court before 5 Defendants filed a responsive brief. No claim construction hearing date has been calendared. Id. 6 On June 18 and 19, 2015, over a month before this case was transferred, Apple and 7 Samsung filed five petitions for inter partes review ("IPR") challenging the validity of each 8 asserted claim in all three patents-in-suit. Gillen Decl. at ¶ 5, Exs. A-E. Shortly thereafter, on 9 July 2, 2015, Apple and Samsung requested that Judge Sullivan stay the proceedings pending 10 resolution of the petitions, but the court transferred the case prior to addressing this request. Id. at 11 ¶ 6, Ex. F. Plaintiffs' preliminary responses to the IPR petitions are due on October 2, 2015. See 12 id. at ¶ 5. The PTAB must decide whether to institute trial on the petitions no later than three 13 months after receiving Plaintiffs' response (by January 2, 2016), and must issue a final written 14 determination within one year of institution (by January 2017). See 35 U.S.C. § 316(a)(11). 15 The case reached this Court on September 10, 2015 (following transfer from the 16 Southern District of New York and after consolidation with the Samsung and BlackBerry actions). 17 Dkt. No. 86. The Court scheduled a case management conference for November 17, 2015. Dkt. 18 No. 87. On September 28, 2015, the Court granted Plaintiffs' unopposed administrative motion to 19 advance the hearing date of the case management conference to November 3, 2015. Dkt. No. 96. 20 III. LEGAL STANDARD 21 This Court has the "inherent power to manage [its] dockets and stay proceedings, 22 including the authority to order a stay pending conclusion of a PTO reexamination." Ethicon Inc. 23 v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988); Security People, Inc. v. Ojmar US, LLC, No. 24 14–cv–04968-HSG, 2015 WL 3453780, at *2 (N.D. Cal. May 29, 2015) (same). A stay is 25 justified where it will promote interests of "judicial efficiency and the desire to avoid inconsistent 26 results. . . even before the PTAB has acted on a petition for IPR." Delphix Corp. v. Actifio, Inc., 27 No. 13-cv-04613-BLF, 2014 WL 6068407, at *2 (N.D. Cal. Nov. 13, 2014). In furtherance of 28 those interests, courts in this district generally adopt "a liberal policy in favor of granting motions DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 3 6 1 to stay proceedings pending the outcome" of post-grant proceedings, such as IPR petitions. 2 Security People, 2015 WL 3453780, at *2 (quoting Pragmatus AV, LLC v. Facebook, Inc., No. 11- 3 cv-01268-EJD, 2011 WL 4802958, at *2 (N.D. Cal. Oct. 11, 2011)); see also Roche Molecular 4 Sys., Inc. v. Cepheid, No. 14-cv-3228–EDL, 2015 WL 124523, at *4 (N.D. Cal. Jan. 7, 2015) 5 (explaining that "[c]ourts in this district often grant stays pending this new IPR process in light of 6 the liberal policy") (internal quotations omitted). 7 This Court considers three factors in determining whether a stay is warranted: 8 "(1) whether discovery is complete and whether a trial date has been set; (2) whether a stay will 9 simplify the issues in question and trial of the case; and (3) whether a stay would unduly prejudice 10 or present a clear tactical disadvantage to the non-moving party." Evolutionary Intelligence, LLC 11 v. Facebook, Inc., No. 13-cv-04202-SI, 2014 WL 261837, at *1 (N.D. Cal. Jan. 23, 2014). Each 12 of these factors weighs in favor of granting Defendants' motion to stay. 13 IV. ARGUMENT 14 a. This Case is in its Early Stages 15 To assess whether the litigation is at an early stage, courts primarily look to 16 "whether discovery is complete and whether a trial date has been set." Evolutionary Intelligence, 17 2014 WL 261837, at *2; DSS Tech. Mgmt., Inc. v. Apple Inc., No. 14-cv-05330-HSG, 2015 WL 18 1967878, at *2 (N.D. Cal. May 1, 2015) (same). Here, fact discovery is still many months from 19 completion. The parties have served and responded to limited discovery and only two depositions 20 have taken place (one of an inventor of the patents-in-suit and one of Plaintiffs' claim construction 21 expert). No 30(b)(6) depositions have been conducted. The parties have not filed dispositive 22 motions or served expert reports. Summary judgment motions were not scheduled to be submitted 23 in the transferor court until 2016. See id. No claim construction hearing or trial date has been set. 24 Indeed, this Court's first case management conference is over a month away. See supra at 3. 25 The case, therefore, is in its earliest stages, and this factor weighs heavily in favor 26 of a stay. In fact, even when cases are substantially further along, courts often find that this factor 27 supports a stay. See, e.g., PersonalWeb Techs., LLC v. Facebook, Inc., Case No. 13-cv-01356- 28 EJD, 2014 WL 116340, at *4 (N.D. Cal. Jan. 13, 2014) (finding that this factor weighs in favor of DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 4 6 1 a stay following the issuance of claim construction order where "a substantial portion of the 2 work—expert discovery, summary judgment, pre-trial preparation, and trial itself—lies ahead"); 3 Cypress Semiconductor Corp. v. LG Elecs., Inc., No. 13–cv–04034–SBA, 2014 4 WL 5477795, at *2 (N.D. Cal. Oct. 29, 2014) (finding that this factor weighs in favor of a stay 5 even where claim construction briefing had been completed but "[t]here has been no dispositive 6 motion practice, the claims have not been construed, and no deadlines for completing discovery, 7 motion practice or trial have been set"); see also AT&T Intellectual Property I v. Tivo, Inc., 774 F. 8 Supp. 2d 1049, 1052 (N.D. Cal. 2011) (finding this factor favored a stay pending reexamination 9 where claim construction issues were fully briefed but no hearing had occurred). 10 b. A Stay Will Simplify the Case 11 Courts also evaluate whether a stay will result in a "simplification of the district 12 court case, not [a] complete elimination of it by the PTAB." LELO, Inc. v. Standard Innovation 13 (US) Corp., No. 13-cv-01393-JD, 2014 WL 2879851, at *3 (N.D. Cal. June 24, 2014). To 14 measure whether granting a stay will simplify the case by focusing or streamlining the issues, 15 courts look to whether the pending IPR implicates "each of the asserted claims in the patents-in- 16 suit." Evolutionary Intelligence, 2014 WL 261837, at *2. 17 Here, the petitions filed by Apple and Samsung target each asserted claim in the 18 patents-in-suit. See Gillen Decl. at ¶ 5. For several reasons, this case will be simplified if the 19 PTAB institutes an IPR, regardless of the outcome. As an initial matter, statements made during 20 the IPR process "could disclaim claim scope, aid the court in understanding the meaning of the 21 terms, or otherwise affect the interpretation of key terms." Evolutionary Intelligence, LLC v. 22 Sprint Nextel Corp., No. 13-cv-03587, 2014 WL 4802426, at *4 (N.D. Cal. Sept. 26, 2014) 23 (finding that a stay would "allow the full intrinsic record to be before the court at claim 24 construction"). This Court has noted that "the PTAB's claim construction and invalidity analysis 25 would likely prove helpful to this [c]ourt, whether or not the standard applied is identical to the 26 one this Court must apply in the litigation." Security People, 2015 WL 3453780, at *3 (noting 27 that the PTAB's claim construction analyses are valuable to the district court "whether or not the 28 standard applied is identical to the one this Court must apply in the litigation"). DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 5 6 1 There is a strong likelihood that the PTAB proceedings will narrow the scope of the 2 litigation. Since the new IPR rules were enacted, the "vast majority of requests" for IPR have 3 been granted, and the PTAB has cancelled some or all of the challenged claims "in virtually all of 4 the cases in which final written decisions have been issued." Brixham Solutions Ltd. v. Juniper 5 Networks, Inc., No. 13-cv-00616-JCS, 2014 WL 1677991, at *1 (N.D. Cal. Apr. 28, 2014); see 6 also AIA Progress Report (as of August 31, 2015) at Slide 7, available at 7 http://www.uspto.gov/patents-application-process/appealing-patent-decisions/statistics/aia-trial- 8 statistics and attached as Ex. G to the Gillen Decl. (showing that nearly 70% of all IPRs filed in 9 2015 were instituted). Along the same lines, of the 482 written decisions on instituted IPRs over 10 the past three years, nearly 85 percent of petitions with a final written decision yielded at least one 11 invalid claim, with 68 percent finding all claims unpatentable. See id. at 9. If the PTAB finds the 12 asserted claims of the patents-in-suit invalid, this action will be rendered entirely moot. Even if 13 only certain claims are "cancelled in the reexamination [or IPR, in this case], [it] would eliminate 14 the need to try the infringement issue," relieving the parties from litigating those claims and 15 narrowing the scope of the case. Software Rights Archive, LLC v. Facebook, Inc., No. 12-cv- 16 3970-RMW, 2013 WL 5225522, at *2 (N.D. Cal. Sept. 17, 2013) (internal citation omitted). 17 In addition, IPR petitioners are estopped from asserting invalidity "on any ground 18 that the petitioner raised or reasonably could have raised during that inter partes review" for the 19 claims on which the PTO reaches a final decision.1 35 U.S.C. § 315(e)(2). Thus, even a finding 20 by the PTAB that petitioners have failed to show invalidity over the asserted prior art would 21 simplify the issues in this case. See PersonalWeb Techs., 2014 WL 116340, at *4 (explaining that, 22 even if the PTAB does not invalidate the patents, the case would be simplified by "streamlining 23 the presentation of evidence and benefit the trier of fact by providing the expert opinion of the 24 PTO"). The IPR petitions here rely on some of the same references as the invalidity contentions 25 1 26 BlackBerry is a non-party to the IPRs and thus is not bound by the estoppel rules. However, to the extent this Court requires such an estoppel as a condition precedent to 27 granting a stay of this litigation and the related litigations, BlackBerry is willing to agree to be estopped and bound by the arguments actually raised and addressed in written decisions 28 by the PTAB not subject to further appeal. DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 6 6 1 already served in this case, Gillen Decl. at Exs. A-E, and the presentation of evidence at trial will 2 be streamlined if Defendants are precluded from introducing certain references. 3 This Court consistently recognizes that it is inefficient for the parties and the court 4 to expend resources litigating issues that "could eventually be mooted by the IPR decision." DSS 5 Tech., 2015 WL 1967878, at *4; see also Advanced Micro Devices, Inc. v. LG Elecs., Inc., No. 14- 6 cv-01012-SI, 2015 WL 545534, at *4 (N.D. Cal. Feb. 9, 2015); Verinata Health, Inc. v. Ariosa 7 Diagnostics, Inc., No. 12-cv-05501-SI, 2014 WL 121640, at *2 (N.D. Cal. Jan. 13, 2014). For this 8 reason, courts in this district also acknowledge that the "status of the IPR proceeding does not 9 change this result. Several cases have granted a stay even where, as here, the PTAB has not yet 10 decided whether to institute an IPR." Roche Molecular Sys., Inc., 2015 WL 124523, at *4; see, 11 e.g., Security People, 2015 WL 3453780 (issuing stay on May 29, 2015, where PTAB decision 12 was expected in October 2015); see also DSS Tech., 2015 WL 1967878, at *4 (holding that 13 "staying the case for two months pending the PTO's decision whether to institute IPR is the most 14 efficient use of resources at this juncture"). 15 Finally, courts typically recognize that any delay while waiting for an institution 16 decision is outweighed by the interest in "conserv[ing] judicial resources and avoid[ing] 17 inconsistent results." Delphix, 2014 WL 6068407, at *2 (ordering pre-institution stay to promote 18 efficiency where PTAB decision was five months away); see also PersonalWeb Techs., 2014 WL 19 116340, at *4 (granting pre-institution stay during "relatively short" three-month period). Any 20 argument that a stay is premature is blunted by "the short time frame of the initial stay and the 21 Court's willingness to reevaluate the stay if inter partes review is not instituted for all of the 22 asserted claims." Evolutionary Intelligence, 2014 WL 261837, at *3. Here, the PTAB will render 23 its institution decision within three months. See supra at 3. And should the PTAB decide not to 24 institute proceedings, "either party may file a motion to lift the stay if any part of the petitions for 25 IPR are denied." Security People, 2015 WL 3453780, at *3. Accordingly, this factor also weighs 26 heavily in favor of granting a stay. 27 c. Plaintiffs Will Suffer No Prejudice From a Stay 28 The third factor is whether Plaintiffs will be unduly prejudiced by a stay. The DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 7 6 1 purpose of this prong is to protect litigants who are competitors, recognizing that a delay in the 2 case may result in lost profits, erosion of market share, or other competitive harms. See Cypress 3 Semiconductor Corp., 2014 WL 5477795, at *3. Where the parties are not competitors, courts 4 find that plaintiffs do not "risk irreparable harm by defendants' continued use of the accused 5 technology and can be fully restored to the status quo ante with monetary relief." Software Rights 6 Archive, 2013 WL 5225522, at *6. 7 In this case, a stay will not result in any prejudice to Plaintiffs, much less undue 8 prejudice. IXI IP, the patent owner, does not make any products or compete with the Defendants, 9 so there is no risk of "irreparable harm." Id.; see also Gillen Decl. at ¶ 11.2 Indeed, Plaintiffs 10 have presented no evidence that suggests the infringement claims cannot be "addressed through a 11 final damages award." Advanced Micro Devices, 2015 WL 545534, at *4 (finding no prejudice 12 due to "the fact that the parties are not competitors").3 13 Moreover, delays "based on the length of the [PTAB's] review standing alone do 14 not amount to undue prejudice." PI-Net Int'l, Inc. v. Focus Bus. Bank, No. 12-cv-4958-PSG, 2013 15 WL 4475940, at *4 (N.D. Cal. Aug. 16, 2013) (emphasis in original); see also, e.g., Convergence 16 Techs. (USA), LLC v. Microloops Corp., No. 5:10-cv-02051-EJD, 2012 WL 1232187, at *2 (N.D. 17 Cal. Apr. 12, 2012) ("[N]umerous courts have determined that a general claim of delay is not 18 enough on its own to constitute undue prejudice"). Any claim by Plaintiffs that a delay will 19 prejudice its case will be speculative at best. See, e.g., PersonalWeb Technologies, LLC v. Apple 20 Inc., 69 F. Supp. 3d 1022, 1029 (N.D. Cal. 2014) (finding that potential harm to licensing efforts 21 2 22 Before transfer, Apple submitted a pre-motion letter seeking permission to file a motion to dismiss IXI Mobile for lack of standing on the grounds that IXI Mobile has transferred all 23 of its rights in the patents to IXI IP, and no longer has either substantial or exclusionary rights, either express or implied. See Gillen Decl., Ex. H. While Apple maintains that IXI 24 Mobile lacks standing and that its interests are thus irrelevant, this is inconsequential to the instant motion, because IXI Mobile does not make or sell any products either. 25 3 26 This Court has even stayed competitor cases where the risk of irreparable injury was far greater, but the "degree of prejudice" was speculative. See, e.g., Security People, 2015 27 WL 3453780, at *5 (granting stay even where litigants were direct competitors but "back of the napkin" lost profits estimate did not provide the Court sufficient evidence to 28 evaluate the degree of prejudice). DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 8 6 1 does not supply a reason to deny a stay); Evolutionary Intelligence, LLC v. Apple, Inc., No. 13-cv- 2 04201-WHA, 2014 WL 93954, at *3 (N.D. Cal. Jan. 9, 2014) (rejecting plaintiffs' spoliation 3 argument as "entirely speculative"). 4 Moreover, the potential for prejudice resulting from a delay is minimal in light of 5 the expedited nature of the IPR process. See, e.g., Semiconductor Energy Lab. Co. v. Chimei 6 Innolux Corp.., No. 12-cv-21-JST, 2012 WL 7170593, at *3, (C.D. Cal. Dec. 19, 2012) ("[T]he 7 delay caused by the new IPR procedure is significantly less than the delay caused by the old 8 procedure"); Advanced Micro Devices, 2015 WL 545534, at *4 (finding no prejudice due to 9 "expedited IPR resolution"). If the PTAB institutes the IPRs, it will issue a final written 10 determination within one year of institution. 35 U.S.C. § 316(a)(11). If the PTAB denies all five 11 petitions (which will occur no later than January 2016, three months after Plaintiffs' responses are 12 due), the Court can consider lifting the stay and the delay will amount to only a few months. 13 Here, there is no risk of irreparable injury or any prejudice resulting from a short 14 delay in the case schedule. Accordingly, this factor also weighs in favor of granting the motion to 15 stay. 16 V. CONCLUSION 17 Because all three factors support a stay of this action pending resolution of Apple 18 and Samsung's IPR petitions, Defendants respectfully request that the Court grant their motion. 19 20 21 22 23 24 25 26 27 28 DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 9 6 1 October 1, 2015 Respectfully submitted, 2 By /s/ Harrison J. Frahn IV Harrison J. Frahn IV (CA Bar No. 206822) 3 Patrick E. King (CA Bar No. 211975) 4 Elizabeth A. Gillen (CA Bar No. 260667) SIMPSON THACHER & BARTLETT LLP 5 2475 Hanover Street Palo Alto, California 94304 6 Telephone: (650) 251-5000 Facsimile: (650) 251-5002 7 hfrahn@stblaw.com pking@stblaw.com 8 egillen@stblaw.com 9 Gregory T. Chuebon (pro hac vice application forthcoming) 10 SIMPSON THACHER & BARTLETT LLP 425 Lexington Avenue 11 New York, New York 10017 Telephone: (212) 455-2000 12 Facsimile: (212) 455-2502 gchuebon@stblaw.com 13 Attorneys for Apple Inc. 14 15 By /s/ Gregory S. Arovas Gregory S. Arovas, P.C. (admitted pro hac vice) 16 Todd M. Friedman, P.C. (admitted pro hac vice) KIRKLAND & ELLIS LLP 17 601 Lexington Avenue New York, New York 10022 18 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 19 greg.arovas@kirkland.com todd.friedman@kirkland.com 20 David Rokach (admitted pro hac vice) 21 KIRKLAND & ELLIS LLP 300 N. LaSalle 22 Chicago, Illinois 60654 Telephone: (312) 862-2000 23 Facsimile: (212) 862-2200 david.rokach@kirkland.com 24 Brandon Brown 25 KIRKLAND & ELLIS LLP 555 California Street 26 San Francisco, California 94104 Telephone: (415) 439-1400 27 Facsimile: (415) 439-1500 brandon.brown@kirkland.com 28 DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 10 6 1 Attorneys for Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc. 2 3 By /s/ Franklin D. Kang Franklin D. Kang (CA Bar No. 192314) 4 MCGUIREWOODS LLP 1800 Century Park East, 8th Floor 5 Los Angeles, California 90067-1501 Telephone: (310) 315-8231 6 Facsimile: (310) 956-3102 fkang@mcguirewoods.com 7 Jason W. Cook (admitted pro hac vice) 8 Shaun W. Hassett (admitted pro hac vice) MCGUIREWOODS LLP 9 2000 McKinney Avenue, Suite 1400 Dallas, Texas 75201 10 Telephone: (214) 932-6400 Facsimile: (214) 932-6499 11 jcook@mcguirewoods.com shassett@mcguirewoods.com 12 Attorneys for Blackberry Limited and Blackberry 13 Corporation 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 11 6 1 ATTESTATION OF CONCURRENCE IN FILING 2 Pursuant to the Northern District of California Local Rule 5-1(i)(3), I attest that 3 concurrence in the filing of this document has been obtained from Gregory S. Arovas and Franklin 4 D. Kang. By /s/ Harrison J. Frahn IV 5 Harrison J. Frahn IV (CA Bar No. 206822) SIMPSON THACHER & BARTLETT LLP 6 2475 Hanover Street Palo Alto, California 94304 7 Telephone: (650) 251-5000 Facsimile: (650) 251-5002 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANTS' MOTION TO STAY PENDING IPR CASE NO. 15-CV-03755-HSG 12