Case 3:19-cv-05644-SI Document 106 Filed 08/27/20 Page 1 of 5
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`NEODRON, LTD.,
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`Plaintiff,
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`v.
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`LENOVO GROUP, LTD., et al.,
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`Defendants.
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`Case No. 19-cv-05644-SI
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`ORDER GRANTING DEFENDANTS’
`MOTION TO STAY
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`Re: Dkt. No. 92 & 104
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`Before the Court is a motion to stay this action pending inter partes review brought by
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`defendants Lenovo Group, Ltd., Lenovo, Inc., and Motorola Mobility, LLC, (collectively
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`“defendants”). Dkt. No. 92 (Mot. to Stay). Pursuant to Civil Local Rule 7-1(b), the Court
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`determines this matter is appropriate for resolution without oral argument and VACATES the
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`September 4, 2020, hearing. For the reasons set forth below, the motion is GRANTED.
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`BACKGROUND
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`Plaintiff Neodron, Ltd., (“Neodron”) alleges defendants infringe seven patents: United
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`States Patent Nos. 8,102,286 (“the ’286 patent”); 8,451,237 (“the ’237 patent”); 8,502,547 (“the
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`’547 patent”); 8,946,574 (“the ’574 patent”); 9,086,770 (“the ’770 patent”); 10,088,960 (“the ’960
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`patent”); and 7,821,502 (“the ’502 patent) (collectively, “the asserted patents”). Dkt. No. 1 ¶ 1
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`(Complaint). Of these seven asserted patents, four patents are currently pending inter partes review
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`at various stages of proceedings. The ’547 and ’960 patents have already been granted inter partes
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`Case 3:19-cv-05644-SI Document 106 Filed 08/27/20 Page 2 of 5
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`review, while the defendants’ petition for the ’574 patent is still pending. Dkt. No. 92 at 81 (Mot.
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`to Stay); Dkt. No. 105 at 2 (Lenovo’s Notice Regarding Status of IPR Petitions). The petition for
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`the ’502 patent, though already denied by the PTO, is also pending decision through a request for
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`rehearing. Dkt. No. 100 at 8 (Reply). The remaining three patents have either been denied inter
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`partes review (the ’286 patent) or have not as of yet been petitioned by defendants (the ’237 and
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`’770 patents).2 Dkt. No. 99 at 6-7 (Opp’n). Neodron asserts only the ’547 patent against Motorola
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`Mobility, LLC, and all seven asserted patents against Lenovo, Inc. Dkt. No. 92 at 7 (Mot. to Stay).
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`LEGAL STANDARD
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`“Courts have inherent power to manage their dockets and stay proceedings, including the
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`authority to order a stay pending conclusion of a PTO reexamination.” Ethicon, Inc. v. Quigg, 849
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`F.2d 1422, 1426-27 (Fed. Cir. 1988) (citations omitted); see also Clinton v. Jones, 520 U.S. 681,
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`706 (1997) (“The District Court has broad discretion to stay proceedings as an incident to its power
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`to control its own docket.”).
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`In determining whether to grant a stay pending inter partes review, courts consider: (1) the
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`stage of litigation, i.e., whether discovery is complete and whether a trial date has been set; (2)
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`whether a stay will simplify the issues in question and trial of the case; and (3) whether a stay would
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`unduly prejudice or present a clear tactical disadvantage to the non-moving party. Telemac Corp.
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`v. Teledigital, Inc., 450 F. Supp. 2d 1107, 1111 (N.D. Cal. 2006); accord Pi-Net Int'l, Inc. v. Focus
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`Bus. Bank, 2013 U.S. Dist. LEXIS 118723, at *11 (N.D. Cal. Aug. 16, 2013).
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`1 For ease of reference, citations to page numbers refer to the ECF branded number in the
`upper right corner of the page.
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` 2
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` Lenovo, Inc., can file a petition for the ’770 patent until the end of August 2020 (Dkt. No.
`92 at 13 n.7 (Mot. to Stay)), but the Court has not been made aware of such a filing as of the date of
`this Order. The Court trusts Lenovo would have communicated its intent to file the petition by now
`and that Lenovo will be more forthcoming with the Court going forward. Lenovo failed to mention
`its intent to bring the instant motion, despite filing it minutes after the conclusion of the July 1, 2020,
`Markman hearing.
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`Case 3:19-cv-05644-SI Document 106 Filed 08/27/20 Page 3 of 5
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`I.
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`Stage of the Litigation
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`DISCUSSION
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`When determining whether to grant a stay pending inter partes review, Courts first consider
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`whether discovery is complete and a trial date has been set. Neodron argues the litigation is well
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`underway while defendants argue that, despite the Markman order, the matter is in its infancy. Dkt.
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`No. 99 at 13 (Opp’n); Dkt. No. 92 (Mot. to Stay). The Markman order was issued this past July
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`2020, and no deadlines for discovery and trial have been set. Dkt. No. 97 (Markman Order); Dkt.
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`No. 92 at 10 (Mot. to Stay). The case therefore is in neither as early nor as late a stage as either
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`party contends. Accordingly, this factor weighs neither for nor against a stay. Compare
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`PersonalWeb Tech., LLC v. Apple Inc., 69 F. Supp. 3d 1022, 1026-27 (N.D. Cal. 2014) (granting
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`stay despite completion of a Markman hearing and issuance of a claim construction order in part
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`because the court had not set a trial date and significant, costly discovery remained, causing the first
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`factor to “slightly weigh[] in favor of a stay”) with Inverwoven, Inc. v. Vertical Computer Sys., 2012
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`U.S. Dist. LEXIS 30946, at *4 (N.D. Cal. Mar. 8, 2012) (denying stay and noting that discovery
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`was well underway and, “[m]ore importantly, the parties have fully briefed the issue of claim
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`construction, attended a Markman hearing, and received a claim construction order.”) and Universal
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`Elecs., Inc. v. Universal Remote Control, Inc., 943 F. Supp. 2d 1028, 1031 (C.D. Cal. 2013) (denying
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`stay and noting that although little discovery had occurred, a trial date had been set and “the Court
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`spent substantial effort construing the claims”).
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`II.
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`Simplification of the Case
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`The second factor considers whether a stay simplifies matters for the Court. “[W]aiting for
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`the outcome of the reexamination could eliminate the need for trial if the claims are cancelled or, if
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`the claims survive, facilitate trial by providing the court with expert opinion of the PTO and
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`clarifying the [claims’] scope...” Target Therapeutics, Inc. v. SciMed Life Sys., Inc., 1995 U.S. Dist.
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`LEXIS 22517, at *4-5 (N.D. Cal. Jan. 13, 1995); see also Fresenius USA, Inc. v. Baxter Int'l, Inc.,
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`721 F.3d 1330, 1340 (Fed. Cir. 2013) (“[W]hen a claim is cancelled, the patentee loses any cause
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`of action based on that claim, and any pending litigation [asserting the claim] becomes moot.”).
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`Case 3:19-cv-05644-SI Document 106 Filed 08/27/20 Page 4 of 5
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`Defendants argue that a stay will likely simplify the case because up to twenty-eight of the
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`seventy-five asserted claims could be eliminated if the petitions for inter partes review are granted.
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`Dkt. No. 92 at 12 (Mot. to Stay). Neodron counters, arguing a stay will not actually simplify the
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`case because only one3 of the seven asserted patents, the ’547 patent, has been granted inter partes
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`review. Dkt. No. 99 at 6 (Opp’n).
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`The Court agrees with defendants. Even if all the asserted claims survive inter partes review,
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`the case could still be simplified because defendants would be bound by the estoppel provisions for
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`inter partes review and thus could not raise before this Court any arguments it raised, or reasonably
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`could have raised, at the PTO in its petitions. See 35 U.S.C. § 315(e)(2); Software Rights Archive,
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`LLC v. Facebook, Inc., 2013 U.S. Dist. LEXIS 133707, at *15 (N.D. Cal. Sept. 17, 2013). There
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`are four patents pending inter partes review at varying stages of proceedings. Dkt. No. 92 at 8 (Mot.
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`to Stay); Dkt. No. 100 at 8 (Reply); Dkt. No. 105 at 2 (Lenovo’s Notice Regarding Status of IPR
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`Petitions). Because the four patents pending inter partes review make up a majority of the asserted
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`patents, this factor weighs in favor of granting a stay.
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`III. Undue Prejudice
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`The third factor considers whether a stay unduly prejudices the non-movant. “Unlike patent
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`infringement actions involving non-practicing entities, infringement among competitors can cause
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`harm in the marketplace that is not compensable by readily calculable money damages.” Avago
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`Techs. Fiber IP (Sing.) Pte Ltd. v. Iptronics Inc., 2011 U.S. Dist. LEXIS 82665, at *16 (N.D. Cal.
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`Jul. 28, 2011). “Courts have repeatedly found no undue prejudice unless the patentee makes a
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`specific showing of prejudice beyond the delay necessarily inherent in any stay.” PersonalWeb, 69
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`F. Supp. 3d at 1029; see also Esco Corp. v. Berkeley Forge & Tool, Inc., 2009 U.S. Dist. LEXIS
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`94017, at *3 (N.D. Cal. Sept. 28, 2009) (“delay inherent in the reexamination process does not
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`constitute, by itself, undue prejudice”) (citations omitted).
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`3 The PTO has now granted two petitions for inter partes review (Dkt. No. 105 at 2
`(Lenovo’s Notice Regarding Status of IPR Petitions)), but only one petition had been granted at the
`time of the filing of Neodron’s Opposition brief.
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`Case 3:19-cv-05644-SI Document 106 Filed 08/27/20 Page 5 of 5
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`Here, Neodron concedes that it is a non-practicing entity. Dkt. No. 99 at 16 (Opp’n). As
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`such, Neodron would not experience irreparable harm and therefore would not be unduly prejudiced
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`by a stay. See Chrimar Sys. v. Ruckus Wireless, Inc., 2016 U.S. Dist. LEXIS 131681, at *16-17
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`(N.D. Cal. Sept. 26, 2016) (“Staying the case in the interest of conserving resources and streamlining
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`litigation would not irreparably harm [the non-practicing entity], as damages can adequately
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`compensate it later on.”). Therefore, this third factor also weighs in favor of grating a stay.
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`CONCLUSION
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`On balance, the factors favor staying the actions pending inter partes review of the asserted
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`patents. Accordingly, for the foregoing reasons and for good cause shown, the Court GRANTS the
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`motion to stay pending inter partes review. Neodron is free to bring a motion to lift the stay based
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`on subsequent developments in the relevant inter partes review proceedings.
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`In light of the Court’s instant order, the defendants’ motion to amend its invalidity
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`contentions (Dkt. No. 104) is DENIED as moot without prejudice to being refiled if and when the
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`stay is lifted.
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`The parties shall file a quarterly joint status report updating the Court on the inter
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`partes review proceedings as well as relevant litigation taking place in other jurisdictions. The
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`first such report shall be filed no later than October 1, 2020.
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`In light of the stay, the case management conference scheduled for September 4, 2020, is
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`vacated.
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`IT IS SO ORDERED.
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`Dated: August 27, 2020
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`______________________________________
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`SUSAN ILLSTON
`United States District Judge
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