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

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

OPPOSITION/RESPONSE (re 135 MOTION to Lift Stay) Defendants' Opposition to IXI's Motion to Lift Stay filed by Apple, Inc.

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9 1 Harrison J. Frahn IV (CA Bar No. 206822) hfrahn@stblaw.com 2 SIMPSON THACHER & BARTLETT LLP 2475 Hanover Street 3 Palo Alto, California 94304 Telephone: (650) 251-5000 4 Facsimile: (650) 251-5002 5 Attorneys for Defendant Apple Inc. 6 [Additional Counsel Listed on Signature Page] 7 8 UNITED STATES DISTRICT COURT 9 FOR THE NORTHERN DISTRICT OF CALIFORNIA 10 SAN FRANCISCO DIVISION 11 IXI MOBILE (R&D) LTD. and IXI IP, LLC, Case No. 4:15-cv-03755-HSG 12 Plaintiffs, DEFENDANTS' OPPOSITION TO 13 v. IXI'S MOTION TO LIFT STAY APPLE INC., Date: February 21, 2019 14 Defendant. Time: 2:00 p.m. 15 Courtroom: 2, Fourth Floor Judge: Hon. Haywood S. Gilliam, Jr. 16 IXI MOBILE (R&D) LTD. and IXI IP, LLC, Case No. 4:15-cv-03754-HSG 17 (RELATED CASE) Plaintiffs, 18 v. 19 BLACKBERRY CORPORATION et al., Defendants. 20 21 IXI MOBILE (R&D) LTD. and IXI IP, LLC, Case No. 4:15-cv-03752-HSG Plaintiffs, (RELATED CASE) 22 v. 23 SAMSUNG ELECTRONICS CO., et al., 24 Defendants. 25 26 27 28 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 TABLE OF CONTENTS 2 Page 3 I. INTRODUCTION ................................................................................................ 2 4 II. BACKGROUND ................................................................................................... 3 5 A. IXI's Assertions Against Defendants ......................................................... 3 6 B. Defendants' IPR and Reexamination Proceedings on Asserted Claims .. 4 7 C. IXI's Newly-Obtained '033 Claims and Apple's IPRs ............................. 5 8 D. The Court's Stay of This Case ................................................................... 5 9 III. ARGUMENT ........................................................................................................ 5 10 A. Whether Discovery Is Complete and a Trial Date Has Been Set ............. 6 11 B. Whether a Stay Will Simplify the Issues in Question and Trial of the Case ............................................................................................................. 7 12 C. Whether a Stay Would Unduly Prejudice or Present a Clear Tactical 13 Disadvantage to the Non-Moving Party .................................................... 11 14 D. IXI's Proposed Additional Claims Support Maintaining the Stay. ......... 12 15 IV. CONCLUSION ..................................................................................................... 13 16 17 18 19 20 21 22 23 24 25 26 27 28 i OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 TABLE OF AUTHORITIES 2 Page(s) 3 Cases 4 Akeena Solar Inc. v. Zep Solar Inc., 5 No. C 09-05040 JSW, 2011 WL 2669453 (N.D. Cal. July 7, 2011) .................................................. 7 6 AT&T Intellectual Prop. v. Tivo, Inc., 774 F. Supp. 2d 1049 (N.D. Cal. 2011)......................................................................................... 8, 9 7 Belden Techs. Inc. v. Superior Essex Commc'ns LP, 8 No. 08-63 (SLR), 2010 WL 3522327 (D. Del. Sept. 2, 2010).......................................................... 10 9 DSS Tech. Mgmt., Inc. v. Apple, Inc., 10 No. 14-CV-05330-HSG, 2015 WL 1967878 (N.D. Cal. May 1, 2015) .............................................. 8 11 Dura Glob. Techs., LLC v. Magna Int'l Inc., No. 11-CV-10551-SFC-MKM, 2011 WL 5039883 (E.D. Mich. Oct. 24, 2011) .............................. 11 12 Evolutionary Intelligence, LLC v. Facebook, Inc., 13 No. 13-cv-04202-SI, 2014 WL 261837 (N.D. Cal. Jan. 23, 2014) ................................................. 4, 8 14 Fisher-Price, Inc. v. Dynacraft BSC, Inc., 15 No. 17-CV-3745-PJH, 2017 WL 5153588 (N.D. Cal. Nov. 7, 2017)................................................. 8 16 Grobler v. Apple Inc., No. 12-CV-01534-JST, 2013 WL 6441502 (N.D. Cal. Dec. 8, 2013)................................................ 5 17 Internet Patents Corp. v. eBags, Inc., 18 No. C 12-03385 ................................................................................................................................ 8 19 IXI Mobile (R&D) Ltd. v. Samsung Elecs. Co. Ltd., No. 15-CV-03752-HSG, 2015 WL 7015415 (N.D. Cal. Nov. 12, 2015)................................... passim 20 21 Lighting Sci. Grp. Corp. v. Shenzhen Jiawei Photovoltaic Lighting Co., No. 16-CV-03886-BLF, 2017 WL 2633131 (N.D. Cal. June 19, 2017)............................................. 8 22 MasterObjects, Inc. v. eBay Inc., 23 No. 16-CV-06824-JSW, 2017 WL 2181132 (N.D. Cal. May 5, 2017) .............................................. 8 24 MLC Intellectual Prop., LLC v. Micron Tech., Inc., No. 14-CV-03657-SI, 2016 WL 9175599 (N.D. Cal. Mar. 29, 2016) .............................................. 10 25 Network-1 Sec. Sols., Inc. v. Alcatel-Lucent USA Inc., 26 No. 6:11CV492, 2015 WL 11439060 (E.D. Tex. Jan. 5, 2015) ......................................................... 6 27 PersonalWeb Techs., LLC v. Facebook, Inc., 28 No. 5:13-CV-01356-EJD, 2014 WL 116340 (N.D. Cal. Jan. 13, 2014) ............................................. 8 ii OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 Pragmatus AV, LLC v. Facebook, Inc., No. 11-CV-02168-EJD, 2011 WL 4802958 (N.D. Cal. Oct. 11, 2011).............................................. 8 2 Pro-Troll, Inc. v. Shortbus Flashers, LLC, 3 No. 16-CV-04062-VC, 2016 WL 11432003 (N.D. Cal. Dec. 23, 2016) ............................................ 9 4 Roche Molecular Sys., Inc. v. Cepheid, 5 No. C-14-3228-EDL, 2015 WL 124523 (N.D. Cal. Jan. 7, 2015) ...................................................... 8 6 Sec. People, Inc. v. Ojmar US, LLC, No. 14-CV-04968-HSG, 2015 WL 3453780 (N.D. Cal. May 29, 2015) ............................................ 8 7 Smart Modular Techs., Inc. v. Netlist, Inc., 8 No. 212CV02319TLNEFB, 2016 WL 5159524 (E.D. Cal. Sept. 21, 2016) ................................... 5, 6 9 Uniloc United States of Am., Inc. v. Apple Inc., 10 No. 18-CV-00361-PJH, 2018 WL 2387855 (N.D. Cal. May 25, 2018) ............................................. 8 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 I. INTRODUCTION 2 This case has been stayed while the United States Patent and Trademark Office has evaluated the 3 validity of the 41 patent claims asserted in IXI Mobile (R&D) Ltd.'s and IXI IP, LLC's (collectively, 4 "IXI") infringement contentions. To date, the Patent Office has invalidated 40 of the 41 asserted claims. 5 The remaining asserted claim—claim 10 of the '532 patent—remains subject to ongoing reexamination 6 proceedings, in which the claim currently stands rejected on four separate grounds. Maintaining the 7 present stay will allow the Patent Office to finish evaluating the validity of that single remaining claim 8 without requiring the Court or the parties to invest any further resources in a litigation that is likely to 9 become moot. 10 Notably, all of the reasons that the Court articulated when it first entered the current stay still 11 apply, and weigh strongly in favor of leaving the stay in place. In particular, the case remains in its 12 early stages, it is highly likely that the issues will be simplified via the Patent Office's determination 13 regarding the remaining asserted claim, and the availability of future money damages is sufficient to 14 compensate IXI for any provable infringement, should that claim somehow be held valid. 15 IXI's motion fails to account for any of those facts, or to explain why the Court's original 16 rationale for granting a stay should no longer apply. For example, IXI asserts that the stage of the 17 proceeding is a neutral factor, without addressing the Court's previous determination that this factor 18 favors a stay. Yet, the proceedings have been stayed since the Court issued that previous determination, 19 and thus, no activity in this case has taken place in the interim. Similarly, IXI ignores the fact that it is 20 even more likely now than it was before that waiting for all of Defendants' validity challenges to 21 conclude will greatly simplify the issues in this case. Whereas, the Patent Office had not even decided 22 whether to review any of the asserted claims when the stay was first entered, now all but one of the 23 claims has been invalidated—and the single claim still under review currently stands rejected. Likewise, 24 although IXI continues to make vague arguments regarding supposed prejudice, the Court previously 25 rejected the same objections when it first entered the stay. IXI cannot point to any new circumstances 26 that would warrant altering the Court's analysis or changing the status quo. To the contrary, if anything, 27 the present facts favor a stay even more than the prevailing circumstances did when the Court first 28 entered it. 2 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 Moreover, IXI's stated intent to seek leave to assert unspecified "new" claims of the otherwise 2 completely-invalidated '033 patent further supports maintaining the stay. Those claims issued on 3 February 1, 2018 from an ex parte reexamination requested by IXI, amid briefing on IXI's appeal of the 4 PTAB's decision finding unpatentable all challenged and asserted claims of the '033 patent. Since that 5 time, Defendant Apple Inc. ("Apple") has filed six inter partes reviews ("IPRs") against all of these new 6 claims. To the extent the Court considers these currently unasserted claims as part of its stay analysis— 7 which it should not—Apple's pending IPRs favor maintaining the stay, for the same reasons that the 8 Court granted a stay in the first place. 9 Similarly, IXI recently proposed adding 32 new claims to the '532 patent during that patent's 10 pending reexamination proceeding. If any of these proposed claims issue, IXI presumably will seek to 11 assert them against Defendants as well. Given that fact, maintaining the present stay would have the 12 added advantage of preventing the disruption that will occur if this case moves forward now and IXI 13 later attempts to add new claims, after the litigation has reached a more advanced stage. 14 For all of these reasons—which are set forth in more detail below—Defendants respectfully 15 submit that the present stay should remain in place pending the conclusion of the '532 patent's 16 reexamination and the six IPRs challenging the "new" claims of the '033 patent. 17 II. BACKGROUND 18 A. IXI's Assertions Against Defendants 19 IXI filed this lawsuit against defendants Apple, BlackBerry Limited, BlackBerry Corporation, 20 Samsung Electronics Co. Ltd., and Samsung Electronics America Inc. (collectively, "Defendants") on 21 June 17, 2014 in the Southern District of New York. In its Complaint, IXI asserted four patents: the 22 '033, '398, '532, and '648 patents-in-suit. The '398 patent was voluntarily dismissed before the case 23 was transferred to this Court. 24 In its most recent infringement contentions, served on April 15, 2015, IXI asserted 41 claims 25 from the three remaining patents-in-suit: 26 27 28 3 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 Patent Claims Asserted in IXI Contentions 2 '033 1, 4-7, 12, 14-15, 22-23, 25, 28, 34, 39, 3 40, 42, 46 4 '532 1, 4-5, 7-10, 12, 14-16, 23, 24 5 '642 1-2, 7, 9, 14-16, 22-23, 27, 30 6 (Ex. 1, 4/15/15 IXI Second Amend. Disclosure of Asserted Claims at 2). 7 On February 3, 2015, Defendants moved to transfer this case from the Southern District of New 8 York to this Court. That motion was granted on August 6, 2015. 9 B. Defendants' IPR and Reexamination Proceedings on Asserted Claims 10 Apple and Samsung filed IPRs on the asserted claims of the three remaining patents-in-suit on 11 June 18-19, 2015. On December 30, 2015, the PTAB instituted review of all of the challenged claims, 12 except for claim 10 of the '532 patent. The PTAB subsequently held that all of the instituted claims 13 were unpatentable. (Exs. 2-5, 12/21/16 PTAB Final Written Decisions re '033 Patent, '532 Patent, and 14 '648 Patent). 15 IXI appealed the invalidity ruling regarding the '033 patent to the Federal Circuit, but did not 16 challenge the PTAB's rulings regarding the '532 and '648 patents. On September 10, 2018, the Federal 17 Circuit affirmed the invalidity ruling for the '033 patent. (Ex. 6, 9/10/18 Federal Circuit Decision re 18 '033 Patent). 19 On April 3, 2018, Apple requested reexamination of several claims of the '532 patent, including 20 asserted claim 10. In its request, Apple proposed four separate grounds for invalidity of claim 10. On 21 May 23, 2018, the Patent Office granted Apple's request for reexamination proceedings for all of the 22 challenged claims of the '532 patent, including claim 10—the only claim upon which the PTAB did not 23 institute IPR previously. On September 25, 2018, the Patent Office issued its first Office Action, in 24 which it rejected all of the challenged claims. (Ex. 7, 9/25/18 Office Action). The Patent Office 25 rejected claim 10 on each of the four separate grounds proposed by Apple, and claim 10 therefore stands 26 rejected in the ongoing reexamination. (Id. at 12-26). 27 28 4 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 C. IXI's Newly-Obtained '033 Claims and Apple's IPRs 2 In March 2017, after the PTAB had invalidated all asserted claims of the '033 patent and during 3 the pendency of IXI's appeal of that decision, IXI sought an ex parte reexamination of the invalidated 4 '033 patent claims to avoid the results of the IPR and of IXI's subsequent Federal Circuit appeal. In 5 February 2018, before the Federal Circuit affirmed the PTAB's decision in whole, that ex parte 6 reexamination concluded and it resulted in one revised claim (claim 56) and 68 new claims (claims 57 7 through 124). IXI has now represented to this Court in its Motion that it intends to assert those 8 additional claims in this litigation. 9 On November 8, 2018, Apple filed six IPRs challenging the validity of newly-added claims 65 10 through 124 of the '033 patent.1 The PTAB will issue its institution decisions regarding these IPRs on 11 or before June 4, 2019.2 12 D. The Court's Stay of This Case 13 On October 1, 2015, Defendants moved to stay this case in view of the initial IPR filings that had 14 been made at that time. The Court granted Defendants' motion on November 12, 2015 and stayed the 15 case pending a decision by the PTAB regarding institution of the IPRs. Dkt. 133, IXI Mobile (R&D) 16 Ltd. v. Samsung Elecs. Co. Ltd., No. 15-CV-03752-HSG, 2015 WL 7015415 (N.D. Cal. Nov. 12, 2015). 17 The Court subsequently continued the stay through the completion of the IPR proceedings, the 18 conclusion of IXI's appeal, and the pendency of IXI's current motion to lift the stay. (Dkts. 137, 141, 19 143). 20 III. ARGUMENT 21 "Courts consider three factors when determining whether to grant a stay pending IPR: '(1) 22 whether discovery is complete and whether a trial date has been set; (2) whether a stay will simplify the 23 24 1 In particular, IPR No. 2019-00124 seeks to invalidate claims 65–69, 71–74, 79, and 85–87; IPR No. 25 2019-00125 seeks to invalidate claims 65, 75–78, and 80–82; IPR No. 2019-00139 seeks to invalidate claims 65, 70, 83, 84, 123, and 124; in IPR No. 2019-00140 seeks to invalidate claims 88– 26 100; IPR No. 2019-00141 seeks to invalidate claims 101–111; and IPR No. 2019-00181 seeks to invalidate claims 112–122. 27 2 The only independent claim not challenged in the current IPRs is original claim 56, which IXI had 28 never asserted in this action; nor do the IPRs challenge the claims that depend from original claim 56. Every other claim (sixty in total) is currently subject to IPR. 5 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 issues in question and trial of the case; and (3) whether a stay would unduly prejudice or present a clear 2 tactical disadvantage to the non-moving party.'" Dkt. 133, IXI Mobile (R&D) Ltd. v. Samsung Elecs. 3 Co. Ltd., No. 15-CV-03752-HSG, 2015 WL 7015415, at *2 (N.D. Cal. Nov. 12, 2015), quoting 4 Evolutionary Intelligence, LLC v. Facebook, Inc., No. 13-cv-04202-SI, 2014 WL 261837, at *1 (N.D. 5 Cal. Jan. 23, 2014). The Court analyzed each of those factors when it granted the stay in this case, and 6 found that each factor supported implementing a stay. Dkt. 133, IXI Mobile, 2015 WL 7015415 at *2-4. 7 Given the present facts, each factor now weighs even more forcefully in favor of leaving the stay in 8 place through the conclusion of the '532 reexamination and the six IPRs addressing the 60 new claims 9 of the '033 patent that IXI has now represented it seeks to add to this case. 10 A. Whether Discovery Is Complete and a Trial Date Has Been Set 11 The Court previously found that this first factor weighs in favor of a stay, because "[n]o 12 discovery, dispositive motions, pretrial, or trial deadlines have been set." Id. at *2. The Court also 13 observed that "[c]laim construction briefing, though underway, is not complete, and there is no claim 14 construction or tutorial hearing set." Id. In the time since that decision, none of those facts has changed. 15 Moreover, because this case has already been stayed for some time, maintaining the status quo will not 16 result in any disruption of workflow or of previously-planned case activities. This factor therefore 17 continues to weigh in favor of maintaining the stay. 18 IXI nevertheless argues that the "status of discovery and trial date [factor] is neutral." (Dkt. 144, 19 IXI Mot. at 7). IXI disregards the Court's previous conclusion that this factor favors a stay, and it makes 20 no attempt to explain how the relevant facts have allegedly changed. Instead, IXI cites rulings in cases 21 that involved different facts. Specifically, in the Smart Modular case, the Patent Office had already 22 rejected the defendant's challenges to the validity of the patents at issue, and the court was considering 23 whether to maintain a stay pending appeals from those rejections. See Smart Modular Techs., Inc. v. 24 Netlist, Inc., No. 212CV02319TLNEFB, 2016 WL 5159524, at *1-*2 (E.D. Cal. Sept. 21, 2016). On 25 those facts, the court found that further delay pending appeal was a neutral factor. Id. at *3. Similarly, 26 in the Grobler case, the defendant's validity challenges likewise already had been rejected, and the 27 Court noted "there is no proceeding in the USPTO to justify the stay, since the USPTO already has 28 6 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 denied [defendant's] petitions and its first motion for reconsideration." Grobler v. Apple Inc., No. 12- 2 CV-01534-JST, 2013 WL 6441502, at *2 (N.D. Cal. Dec. 8, 2013).3 3 This case presents the opposite scenario from those two decisions. Far from having had their 4 challenges rejected by the Patent Office, Defendants have already succeeded in invalidating 40 of the 41 5 claims asserted in IXI's infringement contentions—and the remaining asserted claim has been rejected 6 in an ongoing reexamination. Accordingly, the present facts provide ample justification for maintaining 7 the current stay pending the final disposition of that single remaining claim. Indeed, given the outcome 8 of Defendants' validity challenges to date, the current circumstances support a stay even more strongly 9 than did the facts when this stay was first entered (which took place before the Patent Office had even 10 ruled on instituting the IPRs, let alone begun invalidating the claims). 11 B. Whether a Stay Will Simplify the Issues in Question and Trial of the Case 12 The Court previously explained that a stay "is 'particularly' likely to simplify the case 'when a 13 party has obtained PTO review of each of the asserted claims in the patents-in-suit.'" Dkt. 133, IXI 14 Mobile, 2015 WL 7015415, at *3. Again, in this case, the Patent Office has already invalidated all but 15 one of IXI's asserted claims, including the base claim from which the single remaining asserted claim 16 depends (and eleven of its companion claims). And with respect to that remaining claim, the Patent 17 Office has not only agreed to review its validity, but has already rejected it on four separate grounds. 18 Given those facts, it is even more likely than it was when the Court first granted the stay that waiting for 19 the Patent Office challenge to conclude will greatly simplify the issues in this case—as it is highly likely 20 that no asserted claims will remain. 4 21 IXI does not deny that the pending reexamination is likely to result in invalidity of the final 22 asserted claim. Instead, IXI attempts to cite the Smart Modular case for the purported proposition that 23 simplification of the issues can no longer occur once IPR proceedings have concluded. (Dkt. 144, IXI 24 Mot. at 4). That assertion is incorrect. As explained above, Smart Modular involved termination of IPR 25 26 3 Contrary to IXI's assertion, the Grobler case did not rely on the timing of Apple's IPRs as a factor 27 for lifting the stay. 4 28 When the stay was originally entered, the Patent Office had not yet even decided whether to review any of the asserted claims. 7 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 proceedings following a rejection of the defendant's validity challenges, with no further challenges 2 (other than the defendant's appeal). In contrast, the IPR proceedings in this case were terminated due to 3 a finding of invalidity of 40 out of 41 of the challenged claims, and the remaining asserted claim is 4 currently subject to rejection during its reexamination. Accordingly, the analysis in Smart Modular is 5 not remotely applicable. 6 Nor is IXI correct when it cites the Network-1 case for the proposition that "[u]nder similar 7 circumstances, courts have lifted stays—even where appeals or other proceedings existed." (Dkt. 144, 8 IXI Mot. at 5-6). In Network-1, as in the Smart Modular case, "the Board [had] found all the asserted 9 claims valid" and the defendant was attempting to challenge that finding on appeal. Network-1 Sec. 10 Sols., Inc. v. Alcatel-Lucent USA Inc., No. 6:11CV492, 2015 WL 11439060, at *2 (E.D. Tex. Jan. 5, 11 2015). Again, that is essentially the opposite of the situation here. 12 IXI also argues that the Patent Office's present rejection of the remaining asserted claim should 13 be disregarded because Apple supposedly "strategically-delayed" in seeking reexamination. (Dkt. 144, 14 IXI Mot. at 4-5). However, this Court previously rejected similar "delay" arguments from IXI regarding 15 Defendants' original IPR petitions, "declin[ing] to read a dilatory motive into Defendants' timely 16 exercise of their statutory rights, standing alone." Dkt. 133, IXI Mobile, 2015 WL 7015415, at *2; 17 Akeena Solar Inc. v. Zep Solar Inc., No. C 09-05040 JSW, 2011 WL 2669453, at *3, 5 (N.D. Cal. July 7, 18 2011) (continuing stay in light of second reexamination being requested where first inter partes 19 reexamination led to the cancellation of nine out of the ten claims at issue). The pending reexamination 20 proceeding is also a proper exercise of Defendants' statutory rights—and it has resulted in placing the 21 remaining asserted claim under rejection by the Examiner. 22 Further, IXI's assertion that "the vast majority of the claims at issue in this litigation will remain 23 entirely unaffected by the '532 Reexam" is an obvious red herring. (Dkt. 144, IXI Mot. at 5). Again, 24 with the exception of claim 10 of the '532 patent, all of the other claims currently asserted in IXI's latest 25 infringement contentions have already been held unpatentable by the PTAB. Thus, the rejection of 26 claim 10 in the ongoing reexamination of the '532 patent is highly likely to simplify the remaining 27 issues in this case by eliminating the last remaining asserted claim. 28 8 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 IXI's stated intent to seek to add "new" claims that resulted from its tactical reexamination of the 2 '033 patent also does not support lifting the stay. (Dkt. 144, IXI Mot. at 3). The relevant consideration 3 for determining whether to maintain the current stay of proceedings is whether "a stay will simplify the 4 issues in question and trial of the case." Any new claims that IXI may seek to add in the future are not 5 currently "in question" or part of "the case." Moreover, to date, IXI has not even filed a motion to add 6 these claims, and assuming it will do so, IXI cannot justify the addition of these new claims. 5 7 Regardless, it is beyond dispute that the pending reexamination is likely to simplify the actual current 8 issues. 9 Moreover, even if one assumes that new claims will eventually be added to this case—which is 10 far from certain—that hypothetical development does not eliminate the present justification for the stay. 11 The PTAB currently is evaluating the validity of the vast majority of the new claims in connection with 12 the six '033 IPRs recently filed by Apple. In the previous IPRs of IXI's asserted claims, the PTAB 13 invalidated 40 out of the 41 challenged claims. It therefore is likely that the PTAB will institute the 14 recently-filed '033 IPRs and invalidate some or all of the challenged claims, which will significantly 15 simplify, if not completely eliminate, the issues in this case, even assuming those claims would be 16 added. Notably, to the extent IXI may attempt to again argue that a stay is not warranted because the 17 PTAB has yet to institute Apple's recently filed IPRs, this Court already rejected that argument after 18 reviewing the robust caselaw from this District that holds otherwise.6 19 5 20 The appropriateness of adding such claims to the case is doubtful for several reasons, including the need to revisit claim construction exchanges and initial briefing, not to mention that such a maneuver 21 would represent an obvious attempt by IXI to circumvent dispositive invalidity rulings midway through the case. Defendants will address such issues more fully if and when IXI moves for leave to 22 add new claims. 6 23 See Dkt. 133, IXI Mobile, 2015 WL 7015415, at *3 (citing DSS Tech. Mgmt., Inc. v. Apple, Inc., No. 14-CV-05330-HSG, 2015 WL 1967878, at *3 (N.D. Cal. May 1, 2015) (granting stay before IPRs at 24 issue had been instituted); Sec. People, Inc. v. Ojmar US, LLC, No. 14-CV-04968-HSG, 2015 WL 3453780, at *3 (N.D. Cal. May 29, 2015) (same); Pragmatus AV, LLC v. Facebook, Inc., No. 11- 25 CV-02168-EJD, 2011 WL 4802958, at *3 (N.D. Cal. Oct. 11, 2011) (same)); see also Roche Molecular Sys., Inc. v. Cepheid, No. C-14-3228-EDL, 2015 WL 124523, at *4 (N.D. Cal. Jan. 7, 26 2015) (granting stay prior to institution of IPRs at issue); PersonalWeb Techs., LLC v. Facebook, Inc., No. 5:13-CV-01356-EJD, 2014 WL 116340, at *4 (N.D. Cal. Jan. 13, 2014) (same); 27 Evolutionary Intelligence, 2014 WL 261837, at *3. And since this Court's grant of the stay in 2015, the caselaw has only become stronger. See, e.g., MasterObjects, Inc. v. eBay Inc., No. 16-CV- 28 06824-JSW, 2017 WL 2181132, at *3 (N.D. Cal. May 5, 2017) (granting pre-institution stay); Lighting Sci. Grp. Corp. v. Shenzhen Jiawei Photovoltaic Lighting Co., No. 16-CV-03886-BLF, 9 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 In any event, as this Court previously noted, the "standard is simplification of the district court 2 case, not complete elimination of it." Dkt. 133, IXI Mobile, 2015 WL 7015415, at *3. Other courts in 3 this District have likewise "recognized that 'if the reexamination proceeding should narrow any of the 4 asserted claims of the [patent-in-suit], the scope of th[e] litigation may be significantly simplified.'" 5 AT&T Intellectual Prop. v. Tivo, Inc., 774 F. Supp. 2d 1049, 1053 (N.D. Cal. 2011) (emphasis in 6 original); see also Internet Patents Corp. v. eBags, Inc., No. C 12-03385 SBA, 2013 WL 4609533, at *1, 7 3 (N.D. Cal. Aug. 28, 2013) (explaining that a "stay is not contingent upon the reexamination 8 proceeding resolving every claim and issue in this action. Rather, the salient question is whether the 9 reexamination will aid the Court or otherwise streamline the litigation"). Thus, the likely simplification 10 of the issues with regard to the single currently-asserted remaining claim, which is presently subject to 11 rejection by the Patent Office, is sufficient to favor maintaining the stay. 12 Finally, there is no basis for IXI's suggestion that a stay is somehow not warranted during 13 pendency of an ex parte reexamination. (Dkt. 144, IXI Mot. at 5-6). Courts in this District have 14 confirmed that although "ex parte reexamination requests" do not implicate estoppel, "a stay pending 15 reexamination. . . would nevertheless simplify the issues and trial in [a] case." AT&T, 774 F. Supp. 2d 16 at 1053. In particular, a stay pending ex parte reexamination is warranted when "[t]here are no issues in 17 the case unrelated to patent infringement for which the PTO's expertise resulting from the reexamination 18 would not be helpful." Id. Here, the parties' disputes relate exclusively to issues of patent infringement, 19 and the PTO's expertise will obviously be helpful in simplifying those issues.7 20 21 22 23 24 2017 WL 2633131, at *3 (N.D. Cal. June 19, 2017) (same); Fisher-Price, Inc. v. Dynacraft BSC, Inc., No. 17-CV-3745-PJH, 2017 WL 5153588, at *1 (N.D. Cal. Nov. 7, 2017) (same); Uniloc 25 United States of Am., Inc. v. Apple Inc., No. 18-CV-00361-PJH, 2018 WL 2387855, at *2 (N.D. Cal. May 25, 2018) (same). 26 7 The Pro-Troll case that IXI cites on this point misses the mark, because it involved a party that "had 27 a choice of applying for ex parte reexamination or inter partes review" and that deliberately chose the "strategically advantageous" option to avoid estoppel. Pro-Troll, Inc. v. Shortbus Flashers, LLC, 28 No. 16-CV-04062-VC, 2016 WL 11432003, at *1 (N.D. Cal. Dec. 23, 2016). Here, ex parte reexamination was not chosen in an attempt to avoid estoppel. 10 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 C. Whether a Stay Would Unduly Prejudice or Present a Clear Tactical Disadvantage to the Non-Moving Party 2 The Court previously held that "a stay will not cause undue prejudice to Plaintiffs" and that "this 3 factor weighs in favor of granting the stay." Dkt. 133, IXI Mobile, 2015 WL 7015415, at *4. The Court 4 explained, for example, that "where, as here, the parties are not direct competitors," any alleged harm to 5 IXI can be fully compensated "with monetary relief" when the stay is lifted. Id. Again, the facts upon 6 which the Court relied to reach its finding are unchanged. If anything, continuing the stay would impose 7 even less potential prejudice on IXI than did initially granting it, because continuing the stay simply 8 entails preserving the status quo. 9 Although IXI alleges prejudice, it fails even to address—let alone to distinguish—the Court's 10 previous findings on this issue. Specifically, while IXI asserts that its "ability to enforce its property 11 rights will be unjustifiably prejudiced" by maintaining the stay, (Dkt. 144, IXI Mot. at 6), the Court 12 already rejected that argument and found that the availability of monetary damages after the stay is lifted 13 will be sufficient to compensate IXI for any provable infringement. Dkt. 133, IXI Mobile, 2015 WL 14 7015415, at *4. Similarly, while IXI speculates that unspecified witnesses may forget information or 15 become third parties (Dkt. 144, IXI Mot. at 6), the Court likewise previously rejected IXI's "general 16 statement that they have 'preservation concerns'" regarding evidence. Dkt. 133, IXI Mobile, 2015 WL 17 7015415, at *4. And, again, while IXI accuses Apple of waiting too long to seek reexamination, the 18 Court previously "decline[d] to read a dilatory motive into Defendants' timely exercise of their statutory 19 rights, standing alone." Dkt. 133, IXI Mobile, 2015 WL 7015415, at *4.8 20 Rather than addressing the Court's previous findings regarding these issues, IXI again resorts to 21 citing cases that involved different facts. For example, in the MLC case that IXI cites, "the PTO [had] 22 issued a decision denying the petition to institute the IPR." MLC Intellectual Prop., LLC v. Micron 23 Tech., Inc., No. 14-CV-03657-SI, 2016 WL 9175599, at *1 (N.D. Cal. Mar. 29, 2016). The court 24 declined to maintain a stay after the defendants' request for a rehearing had been pending for over seven 25 months, with no action from the Patent Office. Id. Once again, such facts are in obvious contrast with 26 27 8 Any attempt by IXI to cast aspersions upon Apple's reexamination filing is further belied by the 28 Patent Office's acceptance of each and every one of Apple's substantive arguments, including the four separate grounds for invalidity of claim 10 of the '532 patent. 11 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 the present situation, where Defendants prevailed on their IPRs and a Patent Office reexamination of the 2 single remaining asserted claim is ongoing.9 3 Ultimately, given the facts of this case, there is no undue prejudice to IXI from maintaining the 4 stay pending the conclusion of the reexamination of the '532 patent and the IPRs of the '033 patent. Nor 5 will IXI suffer any tactical disadvantage simply from waiting for the Patent Office to offer further 6 guidance regarding the validity of the one remaining asserted claim. To the contrary, maintaining the 7 stay will continue to benefit both parties, as well as the Court, by preserving resources that otherwise 8 might be wasted if litigation is resumed on issues that are likely to be rendered moot. 9 D. IXI's Proposed Additional Claims Support Maintaining the Stay. 10 Although there is no need for the Court to go beyond the three factors discussed above to 11 determine that maintaining the stay is warranted, a recent development further strengthens that 12 conclusion. Specifically, in its November 26, 2018 Patent Owner response submitted during the 13 reexamination of the '532 patent, IXI proposed adding 32 new claims to the '532 patent. (Ex. 8, 14 11/26/18 Patent Owner Response at 20-23). To the extent any such new claims issue in the future, IXI 15 presumably will seek to assert them against Defendants—just as IXI now states it will seek to add a 16 number of new claims obtained during the reexamination of the '033 patent that IXI initiated. 17 Maintaining the stay will prevent the inevitable disruption that would occur if this case now moves 18 forward and IXI then attempts to add such new claims after the litigation has reached a more advanced 19 stage. See Dura Glob. Techs., LLC v. Magna Int'l Inc., No. 11-CV-10551-SFC-MKM, 2011 WL 20 5039883, at *6-7 (E.D. Mich. Oct. 24, 2011) (explaining that where plaintiff has sought to add new 21 claims during reexamination, it "makes sense for the USPTO to determine the patentability and final 22 language of these claims before the parties continue with the case"). 23 24 25 26 9 The Belden case that IXI cites likewise is not applicable, because it involved a reexamination request 27 and a request for a stay that were submitted close to trial, such that the "untimeliness of [defendant's] oral motion clearly cuts against a stay." Belden Techs. Inc. v. Superior Essex 28 Commc'ns LP, No. 08-63 (SLR), 2010 WL 3522327, at *2 (D. Del. Sept. 2, 2010). Here, as noted above, no trial date has been set, and the case remains in its early stages. 12 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 IV. CONCLUSION 2 For the foregoing reasons, Defendants respectfully request that the Court deny IXI's motion and 3 maintain the present stay pending the conclusion of the Patent Office's reexamination of the '532 patent 4 and of the six IPRs challenging the "new" claims of the '033 patent. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 December 7, 2018 Respectfully submitted, 2 By /s/ Harrison J. Frahn IV Harrison J. Frahn IV (CA Bar No. 206822) 3 SIMPSON THACHER & BARTLETT LLP 2475 Hanover Street 4 Palo Alto, California 94304 Telephone: (650) 251-5000 5 Facsimile: (650) 251-5002 hfrahn@stblaw.com 6 Attorneys for Apple Inc. 7 8 By /s/ Todd M. Friedman, P.C. Gregory S. Arovas, P.C. (admitted pro hac vice) 9 Todd M. Friedman, P.C. (admitted pro hac vice) KIRKLAND & ELLIS LLP 10 601 Lexington Avenue New York, New York 10022 11 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 12 greg.arovas@kirkland.com todd.friedman@kirkland.com 13 David Rokach (admitted pro hac vice) 14 KIRKLAND & ELLIS LLP 300 N. LaSalle 15 Chicago, Illinois 60654 Telephone: (312) 862-2000 16 Facsimile: (212) 862-2200 david.rokach@kirkland.com 17 Brandon Brown 18 KIRKLAND & ELLIS LLP 555 California Street 19 San Francisco, California 94104 Telephone: (415) 439-1400 20 Facsimile: (415) 439-1500 brandon.brown@kirkland.com 21 Attorneys for Samsung Electronics Co., Ltd. and Samsung 22 Electronics America, Inc. 23 By /s/ Alicia A. Baiardo 24 Alicia A. Baiardo (CA Bar No. 254228) MCGUIREWOODS LLP 25 2 Embarcadero Center, Suite 1300 San Francisco, CA 94111-3821 26 Telephone: (415) 844-1973 Facsimile: (415) 844-1916 27 abaiardo@mcguirewoods.com 28 Jason W. Cook (admitted pro hac vice) 14 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 Shaun W. Hassett (admitted pro hac vice) MCGUIREWOODS LLP 2 2000 McKinney Avenue, Suite 1400 Dallas, Texas 75201 3 Telephone: (214) 932-6400 Facsimile: (214) 932-6499 4 jcook@mcguirewoods.com shassett@mcguirewoods.com 5 Attorneys for Blackberry Limited and Blackberry 6 Corporation 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG 9 1 ATTESTATION OF CONCURRENCE IN FILING 2 Pursuant to the Northern District of California Local Rule 5-1(i)(3), I attest that concurrence in 3 the filing of this document has been obtained from the other Signatories to this document. 4 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 hfrahn@stblaw.com 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 OPPOSITION TO MOTION TO LIFT STAY CASE NO. 15-CV-03755-HSG