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

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

RESPONSE (re 106 MOTION to Stay Defendants' Motion to Stay Pending Inter Partes Review) filed by IXI IP,LLC, IXI Mobile (R&D) Ltd.

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6 1 John V. Picone III, Bar No. 187226 jpicone@hopkinscarley.com 2 Jennifer S. Coleman, Bar No. 213210 jcoleman@hopkinscarley.com 3 Aleksandr Korzh, Bar No. 286613 akorzh@hopkinscarley.com 4 HOPKINS & CARLEY A Law Corporation 5 The Letitia Building 70 South First Street 6 San Jose, CA 95113-2406 7 mailing address: P.O. Box 1469 8 San Jose, CA 95109-1469 Telephone: (408) 286-9800 9 Facsimile: (408) 998-4790 10 Thomas S. Biemer (Pro Hac Vice) tbiemer@dilworthlaw.com 11 John J. Higson (Pro Hac Vice) jhigson@dilworthlaw.com 12 Joshua Wolson (Pro Hac Vice) jwolson@dilworthlaw.com 13 Dilworth Paxson LLP 1500 Market Street, Suite 3500E 14 Philadelphia, PA 19102 Telephone: (215) 575-7000 15 Facsimile: (215) 575-7200 16 Attorneys for Plaintiffs IXI MOBILE (R&D) LTD. and IXI IP, LLC 17 UNITED STATES DISTRICT COURT 18 NORTHERN DISTRICT OF CALIFORNIA 19 IXI MOBILE (R&D) LTD. and IXI IP, CASE NO. 3:15-CV-03752-HSG 20 LLC, MEMORANDUM OF POINTS AND Plaintiffs, 21 AUTHORITIES IN SUPPORT OF v. RESPONSE IN OPPOSITION TO 22 SAMSUNG ELECTRONICS CO., et al., DEFENDANTS' MOTION TO STAY 23 Defendants. 24 IXI MOBILE (R&D) LTD. and IXI IP, CASE NO. 3:15-CV-03754-HSG LLC, (RELATED CASE) 25 Plaintiffs, 26 v. BLACKBERRY CORPORATION, et 27 al., 28 Defendants. H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 IXI MOBILE (R&D) LTD. and IXI IP, CASE NO. 4:15-CV-03755-HSG LLC, (RELATED CASE) 2 Plaintiffs, 3 v. 4 APPLE, INC. Defendant. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 -2- SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 TABLE OF CONTENTS 2 Page 3 I. INTRODUCTION .............................................................................................................. 1 II. BACKGROUND ................................................................................................................ 2 4 A. IXI Commences These Actions Beginning In June, 2014 ...................................... 3 5 B. IXI, Samsung, BlackBerry And Apple Conduct Pretrial Proceedings.................... 3 6 C. The Transfer To California ..................................................................................... 5 III. ARGUMENT ...................................................................................................................... 5 7 A. A Stay Would Not Simplify The Cases .................................................................. 6 8 B. This Case Is By No Means In Its Early Stages ....................................................... 8 9 C. IXI Will Be Prejudiced By The Imposition Of A Stay ......................................... 10 IV. CONCLUSION ................................................................................................................. 11 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 -i- SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 TABLE OF AUTHORITIES 2 Page 3 Cases 4 Aquatic AV, Inc. v. Magnadyne Corp., No. 14-cv-1931, Dkt. No. 78 (N.D. Cal. Jan. 13, 2015) .......................................................... 6, 9 5 Aylus Networks, Inc. v. Apple, Inc., No. 13-cv-4700, 2014 WL 5809053 (N.D. Cal. Nov. 6, 2014) ................................................... 6 6 Baseball Quick, LLC v. MLB Advanced Media, L.P., 7 No. 11-cv-1735, 2013 WL 2257094 (S.D.N.Y. May 23, 2013) .................................................. 7 Capella Photonics, Inc. v. Cisco Sys., Inc., 8 No. 14-cv-3348, Dkt. No. 131 (N.D. Cal. Oct. 14, 2014) ........................................................ 6, 9 9 Capella Photonics, Inc. v. Cisco Sys., Inc., Nos. 14-cv-3348−3351, 2015 WL 1006582 (N.D. Cal. March 6, 2015) ..................................... 8 10 DSS Tech. Mgmt., Inc. v. Apple, Inc., No. 14-cv-5330, 2015 WL 1967878 (N.D. Cal. May 1, 2015) .............................................. 1, 10 11 e-Watch, Inc. v. FLIR Sys., Inc., 12 No. 13-cv-638, 2013 WL 8695916 (S.D. Tex. Aug. 8, 2013) ..................................................... 8 Finjan, Inc. v. Symantec Corp., 13 No. 14-cv-2998, Dkt. No. 117 (N.D. Cal. Oct. 9, 2015) ........................................................ 1, 10 14 Freeny v. Apple Inc., No. 13-cv-361, 2014 WL 3611948 (E.D. Tex. July 22, 2014) ........................................ 1, 6, 8, 9 15 Hewlett-Packard Co. v. ServiceNow, Inc., No. 14-cv-570, 2015 WL 1737920 (N.D. Cal. Apr. 9, 2015) ...................................................... 6 16 Netlist, Inc. v. Smart Storage Sys., Inc., 17 No. 13-cv-5889, 2014 WL 4145412 (N.D. Cal. Aug. 21, 2014) ......................................... 5, 6, 7 Network Appliance Inc. v. Sun Microsystems Inc., 18 No. 07-cv-6053, 2008 WL 2168917 (N.D. Cal. May 23, 2008) .................................................. 7 19 PersonalWeb Techs., LLC v. Facebook, Inc., No. 13-cv-1356, 2014 WL 116340 (N.D. Cal. Jan. 13, 2014) ..................................................... 8 20 Rensselaer Polytechnic Inst. v. Apple Inc., No. 13-cv-633, 2014 WL 201965 (N.D.N.Y. Jan. 15, 2014)..................................................... 11 21 Roy-G-Biv Corp. v. Fanuc Ltd., 22 No. 07-cv-418, 2009 WL 1080854 (E.D. Tex. Apr. 14, 2009).................................................... 7 RR Donnelley & Sons Co. v. Xerox Corp., 23 No. 12-cv-6198, 2013 WL 6645472 (N.D. Ill. Dec. 16, 2013) .................................................... 7 24 SAGE Electrochromics, Inc. v. View, Inc., No. 12-cv-06441, 2015 WL 66415 (N.D. Cal. Jan. 5, 2015) ............................................. 5, 6, 10 25 Sec. People, Inc. v. Ojmar US, LLC, No. 14-cv-4968, 2015 WL 3453780 (N.D. Cal. May 29, 2015) ........................................ 1, 9, 11 26 TPK Touch Sols., Inc. v. Wintek Electro-Optics Corp., 27 No. 13-cv-2218, 2013 WL 6021324 (N.D. Cal. Nov. 13, 2013) ........................................... 6, 10 28 H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 - ii - SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 TABLE OF AUTHORITIES (continued) 2 Page 3 Tric Tools, Inc. v. TT Techs., Inc., No. 12-cv-3490, 2012 WL 5289409 (N.D. Cal. Oct. 25, 2012) .................................................. 6 4 Trover Grp., Inc. v. Dedicated Micros USA, No. 13-cv-1047, 2015 WL 1069179, * 5 (E.D. Tex. Mar. 11, 2015) ................... 1, 6, 7, 8, 9, 11 5 Tyco Fire Prods. LP v. Victaulic Co., 6 No. 10-cv-4645, 2011 WL 4632689 (E.D. Pa. Oct. 4, 2011) .................................................... 10 Verinata Health, Inc. v. Ariosa Diagnostics, Inc., 7 No. 12-cv-5501, 2014 WL 121640 (N.D. Cal. Jan. 13, 2014) ..................................................... 5 8 Viskase Corp. v. Am. Nat'l Can Co., 261 F.3d 1316 (Fed. Cir. 2001) .................................................................................................... 5 9 Wordtech Sys., Inc. v. Microboards Mfg., LLC, No. 09-cv-4612, 2010 WL 1641510 (N.D. Cal. Apr. 22, 2010) .................................................. 5 10 Statutes 11 35 U.S.C. § 315(e)(2) ....................................................................................................................... 7 12 Other Authorities Andrew Liddell, An emerging norm: no stay until PTAB grants IPR petition, Patent Challenges 13 (May 27, 2015), http://www.patentchallenges.com/2015/03/an-emerging-norm-no-stay-until- ptab-grants-ipr-petition/ ............................................................................................................... 1 14 Jeffrey Kushan, 3 Years Of Coordinating Litigation With PTAB Proceedings, Law360 15 (September 14, 2015), http://www.law360.com/articles/700323/3-years-of-coordinating- litigation-with-ptab-proceedings (last visited October 12, 2015) ................................................ 1 16 17 18 19 20 21 22 23 24 25 26 27 28 H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 - iii - SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 I. INTRODUCTION 2 Defendants base their stay request solely on petitions for inter partes review ("IPR") 3 which Samsung and Apple filed in June, 2015 with the United States Patent Office. The Patent 4 Office, however, has not yet actually decided whether to institute any of the requested IPRs. 5 Indeed, it has until January 2, 2016 to do so. Defendants suggest that the Court should simply 6 assume that the Patent Office will accept the petitions. The emerging consensus among courts, 7 however, is to hold off on considering a stay request until the Patent Office actually decides 8 whether to accept the petitions and proceed with the IPR. Indeed, Federal Circuit Judge William 9 C. Bryson, sitting by designation, recently noted that the "majority of courts that have addressed 10 the issue have postponed ruling on stay requests or have denied stay requests when the PTAB has 11 not yet acted on the petition for review." Trover Grp., Inc. v. Dedicated Micros USA, No. 13-cv- 12 1047, 2015 WL 1069179, * 5 (E.D. Tex. Mar. 11, 2015) (collecting cases). Indeed, Judge Bryson 13 considered this fact to be dispositive in denying a stay request in a previous case. See Freeny v. 14 Apple Inc., No. 13-cv-361, 2014 WL 3611948, *1 (E.D. Tex. July 22, 2014). The consensus 15 position acknowledges that it would be speculative to conclude that the Patent Office will 16 institute the IPR. This fact alone should result in the denial of the stay request. 1 17 The other factors courts consider similarly weigh against the entry of a stay. First, this 18 case is sufficiently advanced that a stay is not appropriate. Defendants wrongly suggest that these 19 cases are in their "early stages." IXI originally brought these three related patent infringement 20 1 IXI is mindful of this Court's stay decisions in Finjan, Inc. v. Symantec Corp., No. 14-cv- 21 2998, Dkt. No. 117 (N.D. Cal. Oct. 9, 2015), DSS Tech. Mgmt., Inc. v. Apple, Inc., No. 14-cv- 22 5330, 2015 WL 1967878 (N.D. Cal. May 1, 2015) and Sec. People, Inc. v. Ojmar US, LLC, No. 14-cv-4968, 2015 WL 3453780 (N.D. Cal. May 29, 2015). As discussed below, however, the 23 evolving trend is to deny a request for a stay when the PTAB has not yet acted on the petition for review. See also Jeffrey Kushan, 3 Years Of Coordinating Litigation With PTAB Proceedings, 24 Law360 (September 14, 2015), http://www.law360.com/articles/700323/3-years-of-coordinating- litigation-with-ptab-proceedings (last visited October 15, 2015)), a copy of the article is attached 25 as Exhibit A to the Declaration of John J. Higson ("Higson Dec."); ("[I]n cases involving stay 26 requests made after a petition is filed but before a trial is instituted by the PTAB, courts are increasingly denying or deferring the stay request."); Andrew Liddell, An emerging norm: no stay 27 until PTAB grants IPR petition, Patent Challenges (May 27, 2015), http://www.patentchallenges.com/2015/03/an-emerging-norm-no-stay-until-ptab-grants-ipr- 28 petition/ (last visited October 15, 2015), Exhibit B, Higson Dec. H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 -1- SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 actions in the Southern District of New York in June, 2014 against the Samsung and BlackBerry 2 defendants. In early October, 2014, IXI commenced the related action against Apple. 3 Importantly, Samsung and Apple waited until Samsung's statutory deadline (in June, 2015) – 4 nearly one year after Samsung was served with the complaint – to file their IPR petitions. Prior to 5 that, all parties engaged in substantial pre-trial activity with a fact discovery deadline of 6 November 10, 2015. More specifically, over the past year, the parties have engaged in extensive, 7 costly discovery, including: (a) written discovery followed by meet-and-confer negotiations; 8 (b) review of Defendants' source code, including hiring outside consultants; (c) preparation of 9 infringement contentions, including amendments; (d) preparation of invalidity contentions, 10 including amendments; (e) negotiation and filing of a Joint Claim Terms Chart; (f) IXI's 11 preparation of its opening claim construction brief and accompanying expert declaration; 12 (g) IXI's service of third party subpoenas on mobile phone carriers and ongoing negotiations 13 about their responses; (h) Apple's service of four subpoenas, including on third-party inventors; 14 (i) Defendants' deposition of a third-party inventor; and (j) Defendants' deposition of IXI's claim 15 construction expert.2 This case is not in its "early stages." 16 Second, IXI would suffer undue prejudice from a stay, both because the timing suggests a 17 dilatory motive and because staying this case could interfere with IXI's case preparation. 18 Samsung and Apple waited until one year after Samsung was served with a complaint to submit 19 the IPR petitions. IXI subsequently filed its claim construction brief, and Defendants deposed 20 IXI's expert. Defendants thus obtained a free look at the positions that IXI might assert in 21 response to the IPR. This, coming on the heels of Defendants' belated request to transfer, 22 demonstrates gamesmanship on the part of the Defendants. Defendants' motion to stay should be 23 denied. 24 II. BACKGROUND 25 IXI brought these related actions against Samsung, BlackBerry and Apple, seeking to 26 2 In January, 2015 – over six months after the cases originally commenced – Defendants 27 filed a motion to transfer these cases from New York to this Court. Discovery and related pretrial proceedings continued. On August 6, 2015, the day before Defendants' claim construction brief 28 was due, the New York court granted the transfer request. H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 -2- SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 enforce the same patents involving technology for improving communications and network 2 services in cellular phones and other related devices. Each Defendant manufactures and sells 3 devices which incorporate the technology at issue.3 4 A. IXI Commences These Actions Beginning In June, 2014 5 On June 17, 2014, IXI filed the original action against the Samsung Defendants in the 6 Southern District of New York. [Higson Dec. at ¶ 2.] On June 18, 2014, IXI filed a second 7 action involving the same patents-in-suit against BlackBerry, also in the New York forum. [Id. at 8 ¶ 3.] Samsung and BlackBerry filed answers and counterclaims on September 26, 2014. [Id. at ¶ 9 4.] On October 2, 2014, IXI filed a complaint against Apple, asserting the same patents as against 10 Samsung and BlackBerry. [Id. at ¶ 5.] Apple filed its answer on November 24, 2014. [Id.] 11 B. IXI, Samsung, BlackBerry And Apple Conduct Pretrial Proceedings 12 IXI, Samsung, BlackBerry and Apple negotiated and eventually submitted an agreed-upon 13 case management schedule which was approved by the court and included the completion of 14 claim construction briefing by August 14, 2015 and fact discovery by November 10, 2015. [Id. at 15 ¶ 6.] Beginning in October, 2014, the parties served and responded to various rounds of written 16 and document discovery, and that process continued over the next eleven months. [Id. at ¶ 7.] 17 All parties participated in numerous meet and confers regarding discovery and made various 18 written and document productions, including tens of thousands of pages of documents. [Id.] 19 Indeed, in May, 2015, Apple took the position that, with some electronically-stored information 20 exceptions, its document production was "largely complete."4 [Id. at ¶ 9.] Moreover, after 21 lengthy negotiations, the parties submitted, and the court approved, a proposed protective order 22 governing the production of confidential information in the case in April, 2015. [Id. at ¶ 8.] 23 On January 20, 2015, IXI served its disclosure of Asserted Claims and Infringement 24 Contentions upon Samsung, BlackBerry and Apple. [Id. at ¶ 11 .] IXI has since served two sets 25 3 26 Examples of the infringing devices include lines of the popular Samsung Galaxy, the BlackBerry and the Apple iPhone. 27 4 IXI did not agree with Apple's assessment and continues to pursue discovery deficiencies 28 from all Defendants. [Higson Dec. at ¶ 9.] H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 -3- SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 of amended contentions (in March, 2015 and April, 2015) at the request of Defendants and after 2 multiple meet and confers. [Id.] Defendants served a set of Invalidity Contentions in March, 3 2015 and similarly served an amended set after IXI raised concerns. [Id. at ¶ 12.] The parties 4 continued to address alleged deficiencies in their respective contentions to date. [Id. at ¶ 13.] 5 Moreover, after further negotiations, IXI agreed to drop one of the original patents-in-suit from 6 the case and filed a stipulation of dismissal reflecting that decision. [Id. at ¶ 10.] 7 IXI has served each Defendant with a Notice of Deposition pursuant to Federal Rule 8 30(b)(6), all of which await final scheduling. [Id. at ¶ 15.] In July, 2015, Defendants deposed a 9 third-party inventor on all three of the patents-in-suit. [Id. at ¶ 16.] In addition, IXI and Apple 10 have served several third-party subpoenas requesting documents and depositions and various 11 productions have been made. [Id. at ¶ 17.] 12 Beginning in May, 2015, IXI began the process of reviewing source code for each of the 13 Defendants. [Id. at ¶ 14.] That process has been time-consuming, required the retention of 14 outside consultants, and continues to date. [Id.] 15 On June 18 and 19, 2015, only days before Samsung's one-year limitations period from 16 service of the complaint, Samsung and Apple filed IPR petitions challenging the validity of the 17 asserted claims in the three patents-in-suit. [Id. at ¶ 18.] Although Samsung and Apple filed the 18 petitions, the pretrial procedures and related discovery continued. [Id. at ¶ 19.] In fact, both 19 Apple and Samsung recently served IXI with their Second Sets of Interrogatories, on September 20 25 and October 13, 2015, respectively. [Id.] 21 In accordance with the previous case management order, claim construction was well 22 underway. The parties submitted a Joint Claim Chart on June 8, 2015, and IXI filed its opening 23 claim construction brief on July 8, 2015. [Id. at ¶ 20.] In the midst of this process, on July 2, 24 2015, Defendants filed a pre-motion letter with the New York court, seeking permission to file a 25 motion to stay these matters pending IPR. [Id. at ¶ 21.] Pursuant to the Court's policies, IXI's 26 response letter in opposition was due on July 8, 2015―the same day it was scheduled to file its 27 opening claim construction brief. [Id.] The New York court did not stay the matters. 28 On July 28, 2015, Defendants deposed IXI expert, Joel Williams, with respect to his H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 -4- SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 anticipated claim construction opinions. [Id. at ¶ 22.] Defendants' claim construction brief was 2 due by August 7, 2015, with IXI's anticipated reply due August 14, 2015. [Id. at ¶ 23.] IXI was 3 scheduled to depose Defendants' claim construction expert on August 11, 2015. [Id.] 4 C. The Transfer To California 5 Despite being served in June, 2014 (Samsung and BlackBerry) and October, 2014 6 (Apple), Defendants did not file their motion to transfer until January, 2015. [Id. at ¶ 24.] 7 Briefing was completed by early March, 2015, and the parties continued to engage in the 8 aforementioned pretrial procedures and related discovery. [Id.] On August 6, 2015, the day 9 before Defendants' claim construction brief was due, the New York court transferred the matters 10 for further proceedings in the present forum. [Id. at ¶ 25.] The cases were eventually transferred 11 and coordinated before this Court on September 10, 2015. [Id.] 12 III. ARGUMENT 13 There is no per se rule that patent cases should be stayed pending an IPR petition because 14 such a rule "'would invite parties to unilaterally derail' litigation." Netlist, Inc. v. Smart Storage 15 Sys., Inc., No. 13-cv-5889, 2014 WL 4145412, *1 (N.D. Cal. Aug. 21, 2014) (quotation omitted); 16 see also, Viskase Corp. v. Am. Nat'l Can Co., 261 F.3d 1316, 1328 (Fed. Cir. 2001). In other 17 words, a "court is under no obligation to delay its own proceedings by yielding to ongoing PTO 18 patent reexaminations, regardless of their relevancy to infringement claims which the court must 19 analyze." Verinata Health, Inc. v. Ariosa Diagnostics, Inc., No. 12-cv-5501, 2014 WL 121640, 20 *2 (N.D. Cal. Jan. 13, 2014) (quotation omitted); see also, Wordtech Sys., Inc. v. Microboards 21 Mfg., LLC, No. 09-cv-4612, 2010 WL 1641510, *1 (N.D. Cal. Apr. 22, 2010). Instead, the 22 decision to grant a stay is within the court's discretion, taking into account the totality of the 23 circumstances. The moving party bears the burden of demonstrating that a stay is appropriate. 24 Netlist, 2014 WL 4145412 at *1. When considering whether a stay is warranted, courts consider: 25 (1) whether a stay will simplify the issues in question and trial of the case; (2) the stage of the 26 proceedings; and (3) whether a stay will prejudice the nonmoving party. SAGE Electrochromics, 27 Inc. v. View, Inc., No. 12-cv-06441, 2015 WL 66415, *1 (N.D. Cal. Jan. 5, 2015). Here, these 28 factors strongly weigh against the entry of a stay. H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 -5- SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 A. A Stay Would Not Simplify The Cases 2 The PTAB has not decided to institute the requested proceedings and, unless and until it 3 does, it would be too speculative to conclude that an IPR would simplify the issues in the case. 4 There is a growing consensus to deny stay requests under these circumstances. Judge Bryson 5 recently noted that the "majority of courts that have addressed the issue have postponed ruling on 6 stay requests or have denied stay requests when the PTAB has not yet acted on the petition for 7 review." Trover Grp., 2015 WL 1069179 at * 5. Indeed, in another case, he considered this fact 8 to be dispositive. See Freeny, 2014 WL 3611948 at *1 ("The most important—indeed, the 9 dispositive—factor bearing on the Court's exercise of its discretion in this case is that the PTAB 10 has not yet acted on [the defendant's] petition for inter partes review."). 11 Courts in this district have recognized this principle in similar circumstances. See, e.g., 12 SAGE, 2015 WL 66415 at *3-4 (holding that when the PTAB has not yet accepted the IPR for 13 review, this creates "uncertainty" which weighs against finding that the IPR would result in a 14 likely simplification of issues); Aylus Networks, Inc. v. Apple, Inc., No. 13-cv-4700, 2014 WL 15 5809053, *2 (N.D. Cal. Nov. 6, 2014) (denying Apple's motion for a pre-institution stay); 16 Capella Photonics, Inc. v. Cisco Sys., Inc., No. 14-cv-3348, Dkt. No. 131 at 3 (N.D. Cal. Oct. 14, 17 2014) ("Because it is speculative whether the PTAB will grant the petition, [this] factor does not 18 cut in favor of a stay.") (quotations omitted); TPK Touch Sols., Inc. v. Wintek Electro-Optics 19 Corp., No. 13-cv-2218, 2013 WL 6021324, *4 (N.D. Cal. Nov. 13, 2013) ("[I]n most cases, the 20 filing of an IPR request by itself does not simplify the issues in question and trial of the case. . . . 21 While an IPR proceeding might simplify a case once IPR has been granted, at this point it is too 22 early to draw that conclusion.") (original emphasis); Tric Tools, Inc. v. TT Techs., Inc., No. 12- 23 cv-3490, 2012 WL 5289409, *3 (N.D. Cal. Oct. 25, 2012) ("[O]nly requests for reexamination 24 have been made. The PTO has not granted any of those requests. Seeking a stay at this juncture is, 25 at best, premature, and, at worst, an indicator of a tactical delay strategy."); see also, Hewlett- 26 Packard Co. v. ServiceNow, Inc., No. 14-cv-570, 2015 WL 1737920, *2 (N.D. Cal. Apr. 9, 2015); 27 Aquatic AV, Inc. v. Magnadyne Corp., No. 14-cv-1931, Dkt. No. 78 at 3 (N.D. Cal. Jan. 13, 28 2015); Netlist, 2014 WL 4145412 at *2. H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 -6- SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 Defendants attempt to diffuse the speculative nature of their petitions by pointing to a 2 number of general statistics. That reliance, however, has been soundly rejected by the emerging 3 consensus of courts. As Judge Bryson explained: "overall statistics for the number of petitions 4 that are reviewed and the number of claims that are invalidated are not especially enlightening as 5 to the likely disposition of any particular patents or claims …." Trover Grp., 2015 WL 1069179 6 at *4. Thus, it "would be speculative for the Court to extrapolate from the statistics and conclude 7 that it is likely that the PTAB will institute inter partes review in this case." Id.; see also, Netlist, 8 2014 WL 4145412 at *3 ("[T]he mere filing of a petition for inter partes review tells the Court 9 little about whether such a decision is likely."); RR Donnelley & Sons Co. v. Xerox Corp., No. 12- 10 cv-6198, 2013 WL 6645472, *3 (N.D. Ill. Dec. 16, 2013) ("[T]he Court finds Xerox's assumption 11 that the PTO will grant its petitions based solely on statistics too speculative."); Baseball Quick, 12 LLC v. MLB Advanced Media, L.P., No. 11-cv-1735, 2013 WL 2257094, *1 (S.D.N.Y. May 23, 13 2013) ("[N]one of these statistics are of much use [in] resolving the present motion—the statistics 14 provided by the Commissioner for Patents are simply too general to serve as a reliable indicator 15 of the outcome of this particular reexamination given its own procedural and substantive 16 characteristics."); Roy-G-Biv Corp. v. Fanuc Ltd., No. 07-cv-418, 2009 WL 1080854, *2 (E.D. 17 Tex. Apr. 14, 2009) ("To convince this Court that a stay will actually simplify a case, the 18 requesting party must do more than merely proffer oft-cited reexamination statistics and generic 19 judicial efficiency arguments."); Network Appliance Inc. v. Sun Microsystems Inc., No. 07-cv- 20 6053, 2008 WL 2168917, *4 (N.D. Cal. May 23, 2008) ("The Court concludes that these general 21 and limited statistics are not very helpful in predicting the outcome of issuing a stay in this 22 case."). 23 Finally, IPR proceedings would not simplify this action because BlackBerry has not 24 joined the petitions. "The petitioner in an inter partes review of a claim in a patent under this 25 chapter that results in a final written decision under section 318(a) . . . may not assert. . . in a civil 26 action arising in whole or in part under section 1338 of title 28. . . that the claim is invalid on any 27 ground that the petitioner raised or reasonably could have raised during that inter partes review." 28 35 U.S.C. § 315(e)(2) (emphasis added). In a footnote, Defendants acknowledge that BlackBerry H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 -7- SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 is not a party to the IPR but state that, if required, BlackBerry is "willing to agree to be estopped 2 and bound by the arguments actually raised and addressed in written decisions by the PTAB not 3 subject to further appeal." Courts, however, have "conditioned the grant of stays pending IPR … 4 on the non-party co-defendants agreeing to be bound … as if they themselves had filed the 5 relevant IPR petitions." Capella Photonics, Inc. v. Cisco Sys., Inc., Nos. 14-cv-3348−3351, 2015 6 WL 1006582, * 2, n.3 (N.D. Cal. March 6, 2015); see also, PersonalWeb Techs., LLC v. 7 Facebook, Inc., No. 13-cv-1356, 2014 WL 116340, *6 (N.D. Cal. Jan. 13, 2014); e-Watch, Inc. v. 8 FLIR Sys., Inc., No. 13-cv-638, 2013 WL 8695916 (S.D. Tex. Aug. 8, 2013). Defendants' offer 9 that BlackBerry would only be estopped by issues "actually" addressed and decided is more 10 restrictive than that which the statute requires for IPR participants. The IPR would not 11 necessarily simplify matters because BlackBerry is retaining the right to raise issues which 12 "could" be but were not raised by Apple and Samsung in the IPR. 13 B. This Case Is By No Means In Its Early Stages 14 These cases are sufficiently advanced that a stay is not appropriate. As noted, the parties 15 have engaged in substantial pre-trial activity. These cases were commenced over one year ago, 16 with Samsung and BlackBerry commencing in June, 2014 and Apple in October, 2014. Despite 17 this, Samsung and Apple waited until Samsung's statutory deadline (in June, 2015) to file their 18 IPR petitions. Prior to that, all parties engaged in substantial pre-trial activity with a fact 19 discovery deadline of November 10, 2105. The parties engaged in extensive, costly discovery, 20 including written discovery, production of tens of thousands of documents, service of various 21 third-party subpoenas, an inventor deposition, an expert deposition, source code review, 22 preparation of infringement contentions, including amendments and preparation of invalidity 23 contentions, including amendments. The parties also made significant progress on claim 24 construction. Indeed, Defendants' response claim construction brief was due the day after the 25 New York court granted transfer. With a November 10, 2015 fact discovery deadline, these cases 26 are well beyond the "early stages." 27 In both Trover Grp. and Freeny, Judge Bryson rejected the stay motions in part because 28 the defendants "waited for nearly a year after the complaints were filed against them before filing H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 -8- SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 their petition for inter partes review." Trover Grp., 2015 WL 1069179 at * 3; see also Freeny, 2 2014 WL 3611948 at *2 ("[T]here is at least one other factor cutting against granting a stay. . . 3 [The defendant] waited for a year after the complaint was filed before filing its petition for inter 4 partes review."). In those cases, as here, Defendants waited until the statutory deadline to file 5 their IPR petitions. They filed for an IPR and a stay after engaging in substantial discovery and 6 after the start of the claim construction process. In Trover Grp., Judge Bryson chastised the 7 defendants for their delay in terms that apply equally here: "The defendants could have filed their 8 motion for a stay at a time when the case could truly be said to have been in its infancy. 9 …Because this factor was within the defendants' control, the Court is not sympathetic with the 10 defendants' contention that they will be exposed to potentially unnecessary expenses in the 11 absence of a stay." Id. at * 4. 12 Moreover, courts within this district have denied stay requests pending IPR where even 13 less had occurred in the underlying matters.5 For instance, in Aquatic AV, the court found that the 14 first factor weighed against a stay when the action had only been pending for eight months. No. 15 14-cv-1931, Dkt. No. 78 at 2. In that time, however, the parties had exchanged discovery, 16 including the defendants' production of 6,800 pages of documents and multiple product samples 17 and the plaintiff's production of 1,500 pages of documents, and the plaintiff had subpoenaed a 18 third-party. Id. The parties had also exchanged infringement and invalidity contentions. Id. 19 Likewise, in Capella Photonics, the court denied a stay where the matter had only been pending 20 8-9 months, preliminary infringement and invalidity contentions were exchanged, and a limited 21 scheduling order had been issued. No. 14-cv-3348, Dkt. No. 131 at 2. These matters have been 22 pending even longer―over a year―and, as made plain above, substantially more has taken place, 23 including depositions, source code review, and claim construction. As such, this factor does not 24 25 5 Additionally, substantially more has taken place in these matters than what occurred in the 26 Sec. People case. There, the defendant had not yet served its invalidity contentions, and the claim construction process had not commenced. Sec. People, 2015 WL 3453780 at *1. Here, on the 27 other hand, multiple sets of infringement and invalidity contentions have been exchanged, discovery has been underway for many months, depositions have taken place, and the claim 28 construction process had started. H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 -9- SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 warrant stay. 2 C. IXI Will Be Prejudiced By The Imposition Of A Stay 3 IXI would suffer undue prejudice from a stay, both because the timing suggests a dilatory 4 motive and because staying this case now could interfere with IXI's case preparation. To 5 evaluate whether the non-movant would be unduly prejudiced or whether a stay would place the 6 non-movant in a clear tactical disadvantage, the Northern District of California has considered 7 four sub-factors which include: "(1) the timing of the reexamination request; (2) the timing of the 8 request for stay; (3) the status of reexamination proceedings; and (4) the relationship of the 9 parties." SAGE, 2015 WL 66415 at *3 (quotation omitted); see also, TPK Touch Sols., 2013 WL 10 6021324 at *4. 11 The fact that Defendants waited until one year after being served with a complaint in an 12 infringement action to submit the IPR petitions at least raises the possibility that it was a dilatory 13 tactic. The timing here is even more suspicious. Defendants waited to file their motion to stay 14 until IXI's opening claim construction brief was due.6 Courts have held that such timing "raise[s] 15 some alarm bells that [the IPR petitions] are a litigation gambit." Tyco Fire Prods. LP v. 16 Victaulic Co., No. 10-cv-4645, 2011 WL 4632689, *4 (E.D. Pa. Oct. 4, 2011). Indeed, 17 Defendants' decision to seek a stay after deposing a non-party inventor and on a schedule that 18 ensured them access to IXI's claim construction brief "shows a clear tactical motivation."7 Id. 19 Despite many opportunities, they also did not inform IXI or the Court of their plan to file for an 20 6 On July 2, 2015, Defendants filed a pre-motion letter with the New York court, seeking 21 permission to file a motion to stay these matters pending IPR. [Higson Dec. at ¶ 21.] Pursuant to the former court's individual policies, IXI's response letter in opposition was due on July 8, 22 2015―the same day it was scheduled to file its opening claim construction brief. [Id.] The timing of Defendants' request to file a motion to stay ensured that Defendants would see IXI's 23 claim construction arguments before any court could rule on a motion to stay. Furthermore, 24 despite having the opportunity to stay these matters pending IPR, the New York court did not do so and instead transferred the matters for further proceedings. 25 7 26 IXI has been placed in a clear tactical disadvantage in this regard. With respect to this factor, the present matter is substantially different than those the Court confronted in Finjan, Inc. 27 and DSS Tech. Mgmt., where both sides had completed their claim construction briefing. Moreover, in DSS Tech. Mgmt., there was one defendant and one patent at issue. Here, there are 28 multiple patents and defendants, one of whom (BlackBerry) has not joined in the IPR petitions. H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 - 10 - SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY 6 1 IPR or a stay, even though they must have been planning for months to do so. Compare 2 Rensselaer Polytechnic Inst. v. Apple Inc., No. 13-cv-633, 2014 WL 201965, *5 (N.D.N.Y. 3 Jan. 15, 2014) (denying stay after concluding that "Apple's failure to notify the court and 4 plaintiffs of the filing of its IPR petition in a telephone conference in which scheduling was 5 discussed was calculated to secure tactical advantage"), with Sec. People, 2015 WL 3453780 at 6 *4 (granting stay where defendant "was transparent about its intention to move for a stay from the 7 outset of [the] litigation").8 A stay would also risk undermining IXI's preparation of its case. IXI 8 has served subpoenas on third parties and is engaged in negotiations with each of them about the 9 documents that it will produce. Where a plaintiff requires proof from third parties, preservation 10 concerns highlight the potential prejudice of a stay. See Trover Grp., 2015 WL 1069179 at *2. 11 IV. CONCLUSION 12 Because the relevant factors weigh against the entry of a stay, Defendants have failed to 13 meet their burden, and the motion to stay should be denied. 14 Dated: October 15, 2015 HOPKINS & CARLEY A Law Corporation 15 16 By: /s/ John V. Picone III 17 John V. Picone III Jennifer S. Coleman 18 Aleksandr Korzh 19 DILWORTH PAXSON LLP Thomas S. Biemer 20 John J. Higson Joshua Wolson 21 Attorneys for Plaintiffs 22 IXI MOBILE (R&D) LTD. and IXI IP, LLC 23 24 25 26 8 27 Unlike the defendant from the Court's prior decision, Sec. People, Defendants here have not been transparent about their intention to file for IPR. In fact, IXI did not learn about the IPR 28 petitions until it received formal notice of filing. [Higson Dec. at ¶ 18.] H OPKINS & C ARLEY ATTORNEYS AT LAW 614\1259821.1 - 11 - SAN JOSE PALO ALTO MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO BURBANK STAY