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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`HUAWEI TECHNOLOGIES, CO, LTD, et
`al.,
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`Plaintiffs,
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`v.
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`SAMSUNG ELECTRONICS CO, LTD., et
`al.,
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`Defendants.
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`Case No. 3:16-cv-02787-WHO
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`
`ORDER GRANTING STAY OF
`INFRINGEMENT CLAIM FOR '197
`AND '166 PATENTS
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`Re: Dkt. No. 295
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`INTRODUCTION
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`Defendants Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and
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`Samsung Research America, Inc. (collectively, “Samsung”) move to stay infringement claims of
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`U.S. Patent Nos. 8,412,197 (the “’197 Patent”) and 8,483,166 (the “’166 Patent”), specifically
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`claim 7 of the ’197 Patent and claim 13 of the ’166 Patent, because those claims are now subject to
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`an instituted inter partes review (IPR) before the Patent Trial and Appeal Board (PTAB) in light
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`of the Supreme Court’s recent decision in SAS Inst., Inc. v. Iancu, ___ U.S. ___, 138 S. Ct. 1348,
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`1352–54 (2018). While this situation differs from the previous circumstances in which I granted
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`Huawei’s motion for a stay of infringement claims subject to IPR proceedings, it does not dictate a
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`different outcome. Samsung’s motion is GRANTED.1
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`BACKGROUND
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`On May 24, 2017, Samsung filed petitions for IPR against claims 1, 2, 5-9, and 13-15 of
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`the ’197 Patent and claims 1-5 and 12-16 of the ’166 Patent. Malmberg Decl., Ex. 1. In
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`December 2017, the PTAB instituted IPR of claims 1, 2, 5, 6, and 13 of the ’197 Patent and claims
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`1 This motion is suitable for determination without oral argument and the hearing is VACATED.
`Civil L. R. 7-1(b).
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`Case 3:16-cv-02787-WHO Document 307 Filed 06/13/18 Page 2 of 7
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`1-5 of the ’166 Patent. Malmberg Decl., Ex. 2. On March 16, 2018, Huawei narrowed this case to
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`assert only claims that were not subject to the PTAB’s original institution decisions, including
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`claim 7 of the ’197 Patent and claim 13 of the ’166 Patent. Huawei’s Updated Election of
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`Asserted Claims and Accused Products Pursuant to the Court’s Case Management Orders (Dkt.
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`No. 255-3[redacted]).
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`On April 24, 2018, the Supreme Court held that a PTAB decision to institute IPR under 35
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`U.S.C. § 314 may not institute on less than all claims challenged in the petition. SAS Inst., Inc. v.
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`Iancu, ___ U.S. ___, 138 S. Ct. 1348, 1352–54 (2018). In light of this decision, on May 8, 2018,
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`the PTAB issued Supplemental Orders to institute review against all challenged claims of the ’197
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`and ’166 patents, including claim 7 of the ’197 patent and claim 13 of the ’166 patent. PTAB’s
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`Supplemental Order in IPR against the ’197 Patent (Malmberg Decl. ¶ 4, Ex. 3, Dkt. No. 295-5);
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`PTAB’s Supplemental Order in IPR against the ’166 Patent (Malmberg Decl. ¶ 5, Ex. 4, Dkt. No.
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`295-6). In those Supplemental Orders, the PTAB invited the parties to voluntarily remove the
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`added claims, for which it had previously found IPR was not warranted:
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`As an alternative, we authorize the parties to file, within one week
`of the date of this Order, a Joint Motion to Limit the Petition by
`removing the claims and grounds upon which we did not originally
`institute trial. See, e.g., Apotex Inc., v. OSI Pharms., Inc., Case
`IPR2016-01284 (PTAB Apr. 3, 2017) (Paper 19) (granting, after
`institution, a joint motion to limit the petition by removing a patent
`claim that was included for trial in the institution decision).
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`Dkt. No. 295-5 at 2; Dkt. No. 295-6 at 2.
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`LEGAL STANDARD
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`“Courts in this District examine three factors when determining whether to stay a patent
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`infringement case pending review or reexamination of the patents: ‘(1) whether discovery is
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`complete and whether a trial date has been set; (2) whether a stay will simplify the issues in
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`question and trial of the case; and (3) whether a stay would unduly prejudice or present a clear
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`tactical disadvantage to the nonmoving party.’” PersonalWeb Techs., LLC v. Apple Inc., 69 F.
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`Supp. 3d 1022, 1025 (N.D. Cal. 2014)(“PersonalWeb II”). Courts decide stay requests on a case-
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`by-case basis. Id. Under the second factor,”[a] stay pending reexamination is justified where ‘the
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`outcome of the reexamination would be likely to assist the court in determining patent validity
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`Case 3:16-cv-02787-WHO Document 307 Filed 06/13/18 Page 3 of 7
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`and, if the claims were canceled in the reexamination, would eliminate the need to try the
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`infringement issue.’” Evolutionary Intelligence, LLC v. Apple, Inc., No. C 13-04201 WHA, 2014
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`WL 93954, at *2 (N.D. Cal. Jan. 9, 2014)(quoting Slip Track Sys., Inc. v. Metal Lite, Inc., 159
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`F.3d 1337, 1341 (Fed. Cir. 1998)). “A stay may also be granted in order to avoid inconsistent
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`results, obtain guidance from the PTAB, or avoid needless waste of judicial resources.” Id.
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`DISCUSSION
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`Almost three months have passed since I issued the Prior Order granting Huawei’s motion
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`to stay Samsung’s infringement claims for the ’588 Patent based on PTAB’s decision to institute
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`IPR of the ’588 Patent claims. Order Granting Stay of Infringement Claim for ’588 Patent
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`Pending Inter Partes Review (“Prior Order”)(Dkt. No. 267). Samsung insists that the same
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`reasoning governing the Prior Order applies to its present motion and dictates that a corresponding
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`stay should issue. Samsung’s Mot. to Stay at 5–8 (Dkt. No. 295). But it oversimplifies the
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`analysis. Given that PTAB issued the Supplemental Orders only because of the Supreme Court’s
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`SAS Institute decision—not because Samsung had demonstrated a reasonable likelihood that
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`claims 7 and 13 are unpatentable—I will begin with the glaring issue of whether a stay will
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`simplify this case.
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`I.
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`WHETHER A STAY WILL SIMPLIFY THE ISSUES
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`In its motion, Samsung neglects to directly address the differences between its present
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`motion based on PTAB’s Supplemental Orders and Huawei’s previous motion based on PTAB’s
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`initial decision to institute IPR of the ’588 claims. The PTAB issued the Supplemental Orders to
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`review claim 7 of the ’197 Patent and claim 13 of the ’166 Patent only because the SAS Institute
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`decision dictates that result—not because Samsung had demonstrated a reasonable likelihood that
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`those claims were unpatentable on the challenged grounds. To the contrary, PTAB initially found
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`that Samsung’s patentability challenges were lacking. See ’197 Patent PTAB 12/8/17 Decision at
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`26 (“Petitioner has failed to demonstrate a reasonable likelihood of showing claims 7–9, 14, and
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`15 are unpatentable as obvious over R2-075161 and R2-080338, with or without
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`Eerolainen.”)(Malmberg Decl. ¶ 2, Ex. 1, Dkt. No. 295-3); ’166 Patent PTAB 12/5/17 Decision at
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`34 (“Petitioner has failed to demonstrate a reasonable likelihood of showing claims 12–14 and 16
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`Case 3:16-cv-02787-WHO Document 307 Filed 06/13/18 Page 4 of 7
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`are unpatentable as obvious over TS 23.236 and S2-073255, with or without Shaheen …
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`.”)(Malmberg Decl. ¶ 3, Ex. 2, Dkt. No. 295-4).
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`Huawei urges that this distinction is critical. Opp’n at 3 (Dkt. No. 296). In the absence of
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`a PTAB decision finding a reasonable likelihood that a claim is unpatentable, the question of
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`whether a stay will simplify issues is not so clear. Samsung argues that claim 7 of the ’197 Patent
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`and claim 13 of the ’166 Patent are similar to instituted claims, so the PTAB is likely to find them
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`unpatentable as well. See Mot. at 4 (“The only difference between claims 1 and 7 [of the ’197
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`Patent] is that the former recites a method while the latter recites an apparatus.”); id. at 5 (“Claim
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`13 [of the ’166 Patent] includes nearly identical subject matter as claim 2, which the PTAB found
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`reasonably likely to be obvious in its institution decision.”). But Huawei highlights reasons to
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`question the probability of this outcome. The PTAB initially determined that Samsung had failed
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`to comply with 37 C.F.R. § 42.104(b)(3), which provides that the petition must identify “[h]ow the
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`challenged claim is to be construed.” Under the regulation, for means-plus-function limitations,
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`the petitioner “must identify the specific portions of the specification that describe the structure,
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`material, or acts corresponding to each claimed function[.]” 37 C.F.R. § 42.104(b)(3). Since
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`Samsung failed to identify the corresponding structure, Huawei argues that it will be unable to
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`meet its “burden of proving a proposition of unpatentability by a preponderance of the evidence.”
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`35 U.S.C. § 316(e).2
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`Samsung brushes off the regulations as mere “procedural requirements” that will have no
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`bearing on PTAB’s review on the merits. Reply at 3. According to Samsung, SAS Institute
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`dictates that the PTAB “must address every claim the petitioner has challenged.” 138 S. Ct. at
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`2 Huawei cites to two decisions by the PTAB in which it instituted review on means-plus-function
`claims, determined there was no identified corresponding structure, and terminated review as to
`those claims without reaching a determination as to unpatentability. Opp’n at 6 (citing Microsoft
`Corp. v. Enfish, LLC, IPR2013-00559, Paper 65 at 10-14 (March 3, 2015); Blackberry Corp. v.
`Mobilemedia Ideas LLC, IPR2013-00036, Paper 65 at 20-21 (March 7, 2014). Samsung counters
`that the Microsoft v. Enfish decision supports granting a stay because the PTAB concluded that the
`specification lacked sufficient disclosure of structure, thus “the scope of the claims cannot be
`determined without speculation and, consequently, the differences between the claimed invention
`and the prior art cannot be ascertained.” Microsoft Corp., Petitioner, IPR2013-00562, 2015 WL
`1009213, at *9 (Mar. 3, 2015). Since those claims were not amenable to construction, PTAB
`terminated the proceeding with respect to those claims. Id.
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`Case 3:16-cv-02787-WHO Document 307 Filed 06/13/18 Page 5 of 7
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`1354 (emphasis in original). Samsung has indicated its intent to supplement the record in the IPR
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`proceedings with arguments from Huawei’s experts that the specifications disclose sufficient
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`corresponding structure for the means-plus-function limitations in claims 7 and 13. And it points
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`out that Huawei has indicated that it intends to ask the PTAB for a five-week extension and 5000-
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`word submission to address the newly instituted claims, suggesting that “Huawei expects the
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`PTAB to decide the patentability of these claims, not simply rubberstamp its institution decision.”
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`Reply at 3 n.2.
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`Samsung also contends that this case will be simplified regardless of whether the PTAB
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`determines the patentability of claims 7 and 13 because the PTAB’s “findings on issues such as
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`claim interpretation, the teachings of the prior art, and motivation to combine … ‘will assist the
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`court in determining patent validity.’” Mot. at 5 (quoting Evolutionary Intelligence, 2014 WL
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`93954, at *2).3 Huawei disagrees. It reasons that if the PTAB’s final written decisions repeat its
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`earlier conclusion that Samsung failed to carry its burden of proof on these claims, then Samsung
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`will be estopped from challenging the validity of claims 7 and 13. Samsung responds that the
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`applicability of estoppel under these circumstances would present an issue of first impression, but
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`even if Samsung was estopped, it would “simplif[y] the issues by preventing [Samsung] from
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`relitigating the same validity issues before the PTO and the court.” Evolutionary Intelligence,
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`LLC v. Sprint Nextel Corp., No. C-13-4513-RMW, 2014 WL 819277, at *4 (N.D. Cal. Feb. 28,
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`2014).
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`Both sides ignore the reality of this case. While a decision to stay claims 7 and 13 will
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`reduce the list of claims available to Huawei and the corresponding scope of work in the
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`remaining expert discovery and dispositive motions, I am unlikely to benefit from the PTAB’s
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`final findings because this case will barrel on without those claims. The breadth of this case
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`distinguishes it from the cases analyzing the propriety of a stay under different circumstances. Cf.
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`PersonalWeb Techs., LLC v. Apple Inc., 69 F. Supp. 3d 1022, 1027–28 (N.D. Cal. 2014)(“Either
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`3 It specifically highlights that the PTAB will be deciding the obviousness of claim 1 of the ’197
`Patent and claims 2 of the ’166 Patent, which include “nearly identical subject matter” as claims 7
`and 13.
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`Case 3:16-cv-02787-WHO Document 307 Filed 06/13/18 Page 6 of 7
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`the claims, already found reasonably likely to be invalid, will become moot, or the Court will have
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`the benefit of the PTAB’s findings. Under both outcomes, the issues in question and trial of the
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`case will be simplified.”). Yet and still, staying claims 7 and 13 would have the effect of
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`removing them from this case. It is hard to see how this result does not simplify the case.
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`II.
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`STAGE OF LITIGATION
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`Under this factor, I look to “whether discovery is complete and whether a trial date has
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`been set… .” PersonalWeb II, 69 F. Supp. 3d at 1025. In previously arguing that a stay was
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`warranted for the ’588 Patent infringement claims, Huawei highlighted that “[a] substantial
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`amount of work must still be done by the parties and the Court, including expert discovery, the
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`construction of additional claim terms as necessary, and the submission and resolution of
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`dispositive motions.” Huawei’s Mot. for Stay at 4 (Dkt. No. 260). In opposing Samsung’s present
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`motion, it underscores the progression over the previous two months—its motion was filed “eight
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`weeks ago, before the close of fact discovery, shortly after the parties made their elections of
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`narrowed asserted claims, and prior to the opening of expert discovery.” Opp’n at 5. Now “[f]act
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`discovery is complete; expert discovery is already well underway, with opening reports served
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`(including opening reports addressing the ’197 and ’166 patents) and rebuttal reports due in less
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`than two weeks.” Opp’n at 5. It insists that the “[t]he December 3, 2018 trial date is rapidly
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`approaching.”
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`Samsung minimizes the differences and focuses on the remaining events at the time it filed
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`its Reply on May 15, 2018—rebuttal expert reports, expert depositions, Daubert motions,
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`dispositive motions, additional claim construction, trial preparation, and trial.” Reply at 2 (Dkt.
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`No. 297). But rebuttal expert reports were due May 25, and expert discovery cut off is June 22,
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`2018. Stipulated Request and Order to Adjust Certain Discovery Dates (Dkt. No. 272).
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`Nonetheless, the developments since I last analyzed this issue do not alter the conclusion that “this
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`case is not so far advanced that a stay would be improper.” Prior Order at 2 (quoting
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`PersonalWeb Techs., LLC v. Facebook, Inc., No. 5:13-CV-01356-EJD, 2014 WL 116340, at *4
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`(N.D. Cal. Jan. 13, 2014)).
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`Case 3:16-cv-02787-WHO Document 307 Filed 06/13/18 Page 7 of 7
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`III.
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`PREJUDICE TO HUAWEI
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`Granting a stay on claim 7 of the ’197 Patent and claim 13 of the ’166 Patent would leave
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`Huawei with only four remaining patents. But Huawei does not contend that this amounts to any
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`cognizable prejudice. Rather, it focuses on the Court’s claim narrowing process, under which it
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`has until October 19, 2018 to reduce its asserted claims from ten to five. Civil Pretrial Order at 2
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`(Dkt. No. 208). It argues that “Samsung’s motion seeks to eliminate two of Huawei’s ten claims,
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`months before any such reduction is to be made, and to unjustifiably force Huawei to choose five
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`claims from that reduced set.” Opp’n at 6. It insists that this will result in “significant[]
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`prejudice” because the PTAB’s final written order is likely to find the claims patentable given
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`Samsung’s failure to comply with the regulations. Id.
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`Huawei may face some prejudice if the PTAB decides these claims are patentable. But,
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`given that it will only proceed to trial on five claims, the prejudice is minimal. And as the parties
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`sometimes acknowledge, a great deal of this case revolves around FRAND-related issues.
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`Granting a stay of claims 7 and 13 would not “unduly prejudice or present a clear tactical
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`disadvantage” to Huawei. PersonalWeb II, 69 F. Supp. 3d at 1025.
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`Given the unique circumstances of this case, granting a stay of claim 7 of the ’197 Patent
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`and claim 13 of the ’166 patent is justified, even though the PTAB initially found that Samsung
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`had not demonstrated a reasonable likelihood of showing these claims unpatentable as obvious.
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`In accordance with the foregoing, Samsung’s motion is GRANTED.
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`CONCLUSION
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`IT IS SO ORDERED.
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`Dated: June 13, 2018
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`William H. Orrick
`United States District Judge
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