Case 4:16-cv-01730-YGR Document 87 Filed 01/12/18 Page 1 of 10
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`COOLEY LLP
`Michael G. Rhodes (116127)
`(mrhodes@cooley.com)
`101 California Street
`San Francisco, CA 94111
`Phone: (415) 693-2000
`
`
`COOLEY LLP
`HEIDI L. KEEFE (178960)
`(hkeefe@cooley.com)
`MARK R. WEINSTEIN (193043)
`(mweinstein@cooley.com)
`REUBEN HO-YEN CHEN (228725)
`(rchen@cooley.com)
`LOWELL D. MEAD (223989)
`(lmead@cooley.com)
`3175 Hanover Street
`Palo Alto, CA 94304-1130
`Telephone:
`(650) 843-5000
`Facsimile:
`(650) 849-7400
`
`COOLEY LLP
`PHILLIP E. MORTON (VA Bar No. 71299)
`(pmorton@cooley.com)
`1299 Pennsylvania Avenue, NW, Suite 700
`Washington, DC 20004
`Telephone: (202) 842-7800
`
`Attorneys for Defendant
`FACEBOOK, INC.
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`OAKLAND DIVISION
`
`WINDY CITY INNOVATIONS, LLC
`Plaintiff,
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`v.
`FACEBOOK, INC.,
`Defendant.
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`Case No. 4:16-cv-01730-YGR
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`DEFENDANT FACEBOOK, INC.’S
`OPPOSITION TO PLAINTIFF
`WINDY CITY INNOVATIONS, LLC’S
`MOTION TO LIFT STAY
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`Date: February 12, 2018
`Time: 2:00 p.m.
`Ctrm: Courtroom 1, Fourth Floor
`Judge: Hon. Yvonne Gonzalez Rogers
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`FACEBOOK, INC.’S OPPOSITION TO MOTION
`TO LIFT STAY
`CASE NO. 4:16-CV-01730-YGR
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`ATTORNEYS AT LAW
`PALO ALTO
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`I.
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`Case 4:16-cv-01730-YGR Document 87 Filed 01/12/18 Page 2 of 10
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`INTRODUCTION
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`Following institution of Facebook’s IPRs, the parties agreed to a stay “for purposes of judicial
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`economy and to avoid the unnecessary expenditure of resources.” (Dkt 76 at 4.) The same
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`circumstances that justified imposing the stay then justify continuing the stay now.
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`First, while Facebook’s IPRs have already streamlined the issues by invalidating nearly three-
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`quarters of Windy City’s asserted claims, appeals before the Federal Circuit have the potential to
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`further streamline the case (or obviate it altogether).
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`Second, the parties have undertaken very little substantive work in this litigation; the vast bulk
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`of the case lies ahead.
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`Third, Windy City has not and cannot identify any undue prejudice or actual harm associated
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`with continuing the stay beyond Windy City’s bare desire to proceed, particularly when all of the
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`remaining asserted claims are expired.
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`Accordingly, Windy City has provided no reason to upset the status quo. The Court should
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`deny their motion and continue the stay pending resolution of all appeals.
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`II.
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`OUTCOME OF FACEBOOK’S IPR PETITIONS
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`As detailed in the parties’ Joint Statement Regarding Status of Inter Partes Review
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`Proceedings (Dkt. 82), the PTAB invalidated 74 claims, including 23 of 32 asserted claims and all
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`asserted claims from two of Windy City’s four asserted patents:
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`Patent
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`Asserted Claims Invalidated
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`Asserted Claims Remaining
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`8,407,356
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`1, 2, 7, 14, 16, 19, 20, 26, 33, 35
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`None
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`8,458,245
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`None
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`8,473,552
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`10, 14, 15, 16, 17, 59, 64
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`19, 22-25
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`None
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`8,694,657
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`189, 465, 477, 482, 487, 492
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`203, 209, 215, 221
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`(See also Dkt. 82 at 2.)
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`FACEBOOK, INC.’S OPPOSITION TO
`MOTION TO LIFT STAY
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`1.
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`Case 4:16-cv-01730-YGR Document 87 Filed 01/12/18 Page 3 of 10
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`Instead of addressing the PTAB’s resounding rejection of the majority of its asserted claims,
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`Windy City attempts to paint the IPR proceedings as some sort of victory. (See Dkt. 83 at 2-6
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`(repeatedly referencing PTAB affirmation of validity of “over 50 claims”).) This rose-tinted view
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`willfully ignores the actual impact of the PTAB’s decisions on this litigation. Zero asserted claims
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`remain in the case for either the ’356 or the ’552 patent. For the two patents with some asserted claims
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`remaining, the ’245 and ’657 patents, both patents are expired.1 In fact, only five asserted claims were
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`found not unpatentable for the ’245 patent—and the limitations from these five claims correspond
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`nearly exactly to other claims the PTAB found unpatentable. (See Morton Decl. Ex. A.) Only four
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`dependent claims remain for the ’657 patent, while the underlying independent claims were found
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`unpatentable.
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`Both Facebook and Windy City have the right to appeal adverse decisions to the Federal Circuit
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`by February 7, 2018. Nearly a month early, Facebook filed its notices of appeal to the Federal Circuit
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`for all claims that the PTAB found not unpatentable. (Morton Decl. Exs. C-F.) Despite repeated
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`requests, Windy City refuses to confirm or deny whether it will seek appeal on any issue – either in
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`its briefing to this Court on this motion, or in response to direct requests from Facebook’s counsel.
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`III. THE STAY SHOULD NOT BE LIFTED AT THIS TIME
`A.
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`Resuming the Litigation Now Would Complicate—Not Simplify—the Issues for
`Trial
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`Windy City is correct that “Facebook’s IPRs have greatly simplified the issues.” (Dkt. 83 at
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`4.) Only two of four patents-in-suit remain and only nine asserted claims of the original thirty-two
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`survived IPR. (See Dkt. 82 at 2.) Windy City is incorrect, however, that “[t]he final written decisions
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`conclusively end the IPR proceedings.” (Dkt. 83 at 5.) Both Facebook and Windy City have until
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`February 7, 2018 to file notices of appeal with the Federal Circuit. (See Dkt. 82 at 2.) Facebook has
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`1 The ’657 patent expired on April 1, 2016. The ’245 patent expired on December 12, 2017.
`FACEBOOK, INC.’S OPPOSITION TO
`MOTION TO LIFT STAY
`CASE NO. 4:16-CV-01730-YGR
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`Case 4:16-cv-01730-YGR Document 87 Filed 01/12/18 Page 4 of 10
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`appealed all of the PTAB’s adverse decisions, including the decisions finding the nine asserted claims
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`in the two remaining expired patents (’245 and ’657) unpatentable. Moreover, Windy City has the
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`right to appeal the PTAB’s invalidation of the 23 other asserted claims. Nothing about Facebook’s
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`IPR petitions is settled until the appeals process is complete.
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`Maintaining the stay at this juncture ensures that the litigation will reap the benefits of
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`simplification achieved through IPR. Lifting the stay ensures only that the specter of reversal, remand,
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`or modification hangs over these proceedings if it is no longer stayed. The parties and the Court would
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`be wasting resources pursuing discovery, conducting claim construction and preparing for a trial that
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`may never be needed. Unlike Windy City’s inapposite case law, Facebook’s IPR petitions have
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`already invalidated the vast majority of asserted claims and Facebook’s appeal has the potential to be
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`entirely case-dispositive.2 See VirtualAgility Inc. v. Salesforce.com, Inc. 759 F.3d 1307, 1314 (Fed.
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`Cir. 2014) (PTAB proceedings that “could dispose of the entire litigation [are] the ultimate
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`simplification of issues.”). As the court in ACQIS, LLC v. EMC Corp.—a case relied upon by Windy
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`City—recognized: “If the PTAB had invalidated the underlying patents, then a stay pending appeal
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`would likely be warranted, since an affirmance of the PTAB’s decision would moot all or some of the
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`case.” 2016 WL 4250245, at *2 (citing SurfCast, Inc. v. Microsoft Corp., No. 2:12-CV-333, 2014 WL
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`6388489, at *2 (D. Me. Nov. 14, 2014) for proposition that granting defendant’s motion to stay
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`proceeding pending appeal of IPR that found claims unpatentable was proper in part because “[a]n
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`2 Grobler v. Apple, Inc., No. 12-cv-01534-JST, 2013 WL 6441502, at *1-*3 (N.D. Cal. Dec. 8, 2013)
`(IPR terminated before decision because defendant chose not to join); Zoll Med. Corp. v. Respironics,
`Inc., No. 12-1778-LPS, 2015 WL 4126741 (D. Del. July 8, 2015 (zero claims invalidated by IPR;
`stipulated stay presumed only 18-month delay); ACQIS, LLC v. EMC Corp., No. 14-CV-13560, 2016
`WL 4250245, *2-*3 (D. Mass. Aug. 8, 2016) (zero claims invalidated by IPR; defendant “repeatedly
`emphasized how short the stay would be”); Zipit Wireless Inc. v. Blackberry Ltd., No. 6:13-cv-02959-
`JMC, 2016 WL 3452735, at *1, *3 (D. S.C. Jun. 24, 2016) (only 9 claims invalidated; two patents left
`entirely intact; parties agreed that defendant had at least a 34% chance to declare bankruptcy during
`stay); Network-1 Sec. Solutions, Inc. v. Alcatel-Lucent USA Inc., No. 6:11cv492, 2015 WL
`11439060, at *2, *4 (E.D. Tex. Jan. 5, 2015) (zero claims invalidated; 14 new claims added, rendering
`appeal non-dispositive).
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`3.
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`FACEBOOK, INC.’S OPPOSITION TO
`MOTION TO LIFT STAY
`CASE NO. 4:16-CV-01730-YGR
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`

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`Case 4:16-cv-01730-YGR Document 87 Filed 01/12/18 Page 5 of 10
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`
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`appellate ruling upholding the PTO’s Final Written Decision would eliminate most of the issues before
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`this Court.”). Because the PTAB has already disposed of the majority of Windy City’s claims, the
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`Federal Circuit’s decision on Facebook’s appeal has the potential to “moot all or some of the case”
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`and a stay pending appeal is warranted. Id. Moreover, other potential outcomes of Facebook’s appeal
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`similarly counsel against lifting the stay. A modification or remand from the Federal Circuit may
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`change the prosecution history of the patents-in-suit and could impact claim construction. See Aylus
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`Networks, Inc. v. Apple Inc., 856 F.3d 1353, 1361 (Fed. Cir. 2017). A reversal could require the parties
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`to essentially redo any work done during the pendency of the appeal if the stay is lifted.3
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`Without the benefit of a continued stay, the parties will be subjected to parallel litigation in
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`two separate venues without any certainty as to what ultimate conclusion will govern this case. Such
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`an outcome is untenable. This factor clearly favors maintaining they stay. See Safe Storage LLC v.
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`Dell Inc., No. 12-1624-GMS, 2016 U.S. Dist. LEXIS 181116, at fn. 1 (D. Del. Mar. 11, 2016) (denying
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`motion to lift stay and finding that “the Federal Circuit’s final adjudication on the IPR appeals will
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`simplify the issues for trial.”); In re: Ameranth Pat. Lit. Cases, No. 11cv1810 DMS (WVG), 2015 WL
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`12868116, at *2(S.D. Cal. Jun. 4, 2015) (denying motion to lift stay and noting “[i]t makes little sense
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`to proceed on those claims that are not on appeal when related claims are on appeal.”); see also Los
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`Angeles Biomed. Research Institute at Harbor-UCLA Med. Ctr. v. Eli Lilly and Co., No. LA CV13-
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`08567 JAK (JCGx), 2015 WL 10635643 (C.D. Cal. Dec. 1, 2015) (denying motion to lift stay because
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`completion of pending appeals “may obviate or simplify the issue”); Pragmatus AV, LLC v. Facebook,
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`Inc., No. 5:11-CV-2168 JED, 2012 WL 381214, at *4 (N. D. Cal. Feb. 6, 2012) (continuing stay
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`pending BPAI appeal “will simplify the issues in question in this case”).
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`3 Indeed, if Windy City files an appeal from the PTAB, this weighs even more strongly in favor of
`maintaining the stay because the outcome of Windy City’s appeal could result in asserted claims that
`have been found unpatentable coming back into the case, potentially requiring, for example, new
`rounds of claim construction, fact discovery, expert discovery and motions practice.
`FACEBOOK, INC.’S OPPOSITION TO
`MOTION TO LIFT STAY
`CASE NO. 4:16-CV-01730-YGR
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`PALO ALTO
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`Case 4:16-cv-01730-YGR Document 87 Filed 01/12/18 Page 6 of 10
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`B.
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`This Case Remains in its Infancy
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`The second factor clearly and overwhelmingly favors maintaining the stay: discovery is not
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`complete and no trial date has been set. This case is still in its nascent stages: (1) fact discovery is
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`nowhere near complete (the parties have engaged only in limited initial fact discovery); (2) no
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`depositions have taken place; (3) claim construction proceedings have not even begun; (4) no
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`Markman hearing has been scheduled; (5) expert discovery has not commenced;4 (6) no case schedule
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`is in effect; and (7) no pretrial or trial deadlines have been set. Under these facts, there can be no
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`genuine dispute that this factor favors a stay. See Affinity Labs of Tex. LLC v. Samsung Elecs. Co., Ltd.
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`No. 14-CV-2717 YGR, 2014 WL 3845684 (N.D. Cal. Aug. 1, 2014) (factor favored stay even where
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`claim construction order had issued); PersonalWeb Techs., LLC v. Apple Inc., 69 F. Supp. 3d 1022
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`(N.D. Cal. Sep. 24, 2014) (same); PersonalWeb Techs., LLC v. Facebook, Inc.., 5:13-CV-01356-EJD,
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`2014 WL 116340 (N.D. Cal. Jan. 13, 2014) (same); Netlist, Inc. v. Smart Storage Sys., Inc., No. 13-
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`cv-5889-YGR, 2015 WL 1738192, at *2 (N.D. Cal. Apr. 9, 2015) (granting stay even where written
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`discovery had concluded). In support of this factor, Windy City merely cited preliminary discovery
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`activities that took place before this Court initially stayed this case. Tellingly, Windy City cites no
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`authority whatsoever supporting its bald conclusion that “this factor weighs against continuing the
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`stay.” (Dkt. 83 at 6.)
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`Moreover, the parties agreed to stay this litigation at a very early stage. (See Dkt. 76 at 3
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`(stipulating to stay, in part, because “the Court has not yet conducted claim construction proceedings
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`or scheduled the close of discovery or trial”).) And Windy City admits that “no substantive case
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`activity has occurred during the pendency of the Court’s stay” (Dkt. 83 at 3). Accordingly, the parties,
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`4 That “Windy City has also retained multiple experts and expended considerable resources in
`reviewing and analyzing initial productions of source code” is of absolutely no import. (Dkt. 83 at 5-
`6.) Unsurprisingly, Windy City identifies no support for the proposition that a plaintiff’s voluntary
`expenditures on experts somehow justify lifting a stay.
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`5.
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`FACEBOOK, INC.’S OPPOSITION TO
`MOTION TO LIFT STAY
`CASE NO. 4:16-CV-01730-YGR
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`Case 4:16-cv-01730-YGR Document 87 Filed 01/12/18 Page 7 of 10
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`the Court, and this litigation are in the exact same posture as when the stay began.5 Windy City’s five
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`sentences of conclusory attorney argument do nothing to change this fact. This case simply “has not
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`advanced to the point of a claim construction decision, assessment of the merits, trial, or other ‘point
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`of no return.’” Netlist, 2015 WL 1738192, at *1 (quoting Convergence Techs. (USA), LLC v.
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`Microloops Corp., 5:10-CV-002051 EJD, 2012 WL 1232187 at *4 (N.D. Cal. Apr. 12, 2012)). Despite
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`Windy City’s attorneys’ unsupported averment to the contrary, this factor strongly favors maintaining
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`the stay. See id.
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`C. Windy City Will Suffer No Undue Prejudice if the Stay Continues
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`Windy City identifies only a single source of alleged prejudice if the Court does not lift the
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`stay: “having its enforcement rights delayed.” (Dkt. 83 at 6.) Yet it is axiomatic that “[d]elay alone is
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`not [] sufficient to establish prejudice.” Netlist, 2015 WL 1738192, at *1 (citing Convergence Techs.,
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`2012 WL 1232187 at *2 (collecting cases)); see also Asetek Holdings, Inc. v. Cooler Master Co., Ltd.,
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`No. 13-cv-00457-JST, 2014 WL 1350813, at *4 (N.D. Cal. Apr. 3, 2014) (“Delay alone does not
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`usually constitute undue prejudice, because the parties having protection under the patent statutory
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`framework may not complain of the rights afforded to others by that same statutory framework”)
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`(internal quotations omitted). Indeed, “[c]ourts have repeatedly found no undue prejudice unless the
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`patentee makes a specific showing of prejudice beyond the delay necessarily inherent in any stay.”
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`PersonalWeb, 69 F. Supp. 3d. at 1029 (collecting cases). Here, Windy City has not even attempted
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`to make such a specific showing; relying instead on the generalized, unspecified harm of delay—
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`5 At that time, the Court’s Markman hearing was still six months away. (Dkt. 68 at 5.) The remaining
`deadlines (close of fact discovery, expert discovery, summary judgment and Daubert briefing) were
`contingent on the Court’s issuance of a claim construction order, but were at least ten months (and
`likely longer) from being complete. (Id. at 6.) Hearings on summary judgment, the pretrial conference,
`and trial were not yet scheduled. (Id.) Thus, were the stay lifted and the parties were to adopt the a
`similar schedule, the Federal Circuit’s decision—which would undoubtedly affect the posture of the
`case—could issue after the Court and the parties have completed some or all of these case activities.
`Depending on the outcome at the Federal Circuit, the Court and the parties may be forced to redo the
`work done during the pendency of the appeal if the stay is lifted now.
`FACEBOOK, INC.’S OPPOSITION TO
`MOTION TO LIFT STAY
`CASE NO. 4:16-CV-01730-YGR
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`“harm” which is “present in every case in which a patentee resists a stay, and . . . is therefore not
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`sufficient, standing alone, to defeat a stay motion.” NFC Tech. LLC v. HTC Am., Inc., Case No. 2:13-
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`cv-1058-WCB, 2015 WL 1069111, at *2 (E.D. Tex. Mar. 11, 2015) (Bryson, J., sitting by designation)
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`(collecting cases). Moreover, the two remaining patents with asserted claims that were not found
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`unpatentable by the PTAB are both expired, eviscerating any claim of ongoing harm by Windy City.
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`See Robert Bosch Healthcare Sys., Inc. v. Cardiocom LLC, No. 14-cv-01575-EMC, 2017 U.S. Dist.
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`LEXIS 38264, at *5-6 (N.D. Cal. Mar. 16, 2017) (denying motion to lift stay pending additional
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`reexamination when asserted patents had either expired or would soon expire because “any relief
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`would only be for past damages” and “[b]ecause, there will be no threat of ongoing harm, waiting for
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`the PTO proceedings to complete will not inflict any substantial or irreparable harm to [patent
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`owner]”).
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`As the Federal Circuit has instructed, determining whether a patentee will be “unduly
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`prejudiced by a stay in the district court proceedings. . . focuses on the patentee’s need for an
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`expeditious resolution of its claim.” VirtualAgility, 759 F.3d at 1318 (emphasis in original). Windy
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`City—as a non-practicing entity seeking only monetary damages for expired patents—needs no such
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`resolution. Id. at 1318. (“A stay will not diminish the monetary damages to which [plaintiff] will be
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`entitled if it succeeds in its infringement suit—it only delays realization of those damages.”);
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`Evolutionary Intelligence, LLC v. Sprint Nextel Corp., No. C-13-04513, 2014 WL 4802426, at *6
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`(Non-practicing entity was “not at risk for irreparable harm from defendants’ continued use of the
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`accused technology, and [could] be fully restored to the status quo ante with monetary relief.”) (citing
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`ActiveVideo Networks, Inc. v. Verizon Commc’ns, Inc., 694 F.3d 1312, 1339-42 (Fed. Cir. 2012)); Safe
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`Storage, 2016 U.S. Dist. LEXIS 181116, fn. 1 (denying motion to lift stay and finding that “[a]s a non-
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`practicing entity, the plaintiff faces no risk of a competitive disadvantage or eroded market share.”);
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`InvestPic LLC, v. Algorithmics (US), Inc., No. 10-1028-RGA (D. Del. Dec. 29, 2016) (Morton Decl.
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`7.
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`FACEBOOK, INC.’S OPPOSITION TO
`MOTION TO LIFT STAY
`CASE NO. 4:16-CV-01730-YGR
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`Case 4:16-cv-01730-YGR Document 87 Filed 01/12/18 Page 9 of 10
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`Ex. B) (Court denying motion to lift stay while noting “Plaintiff seeks money damages. That typically
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`means that delay does not tactically disadvantage it...”); see also Convergence Techs., 2012 WL
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`1232187, at *2–3 (granting stay, in part, because non-practicing plaintiff did not compete with
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`defendant); see also NFC Tech., 2015 WL 106911, at *2 (same). Because Windy City has made no
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`specific showing of harm and because delay inherent in resolving Facebook’s IPRs cannot constitute
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`undue prejudice, this factor clearly weighs in favor of maintaining the stay.6
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`Finally, Windy City’s motion mischaracterizes the scope and conditions of the stay entered by
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`the Court. (Dkt. 83 at 6 (arguing “the stay was ordered ‘pending Final Written Decisions of the
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`Instituted IPR proceedings’” (quoting Dkt. 76 at 4).) Contrary to Windy City’s claim that “the
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`stipulated stay no longer applies” (Dkt. 83 at 6), the stipulation expressly states that the stay applies
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`“until further order of the Court” (Dkt. 76 at 4). Moreover, the stipulation conditioned the stay only
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`on the parties’ request for a joint status conference following final written decisions—a requirement
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`that the parties have already fulfilled. (See Dkt. 82 at 3.) Any concerns regarding lifting the stay should
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`have been addressed (and may still be) at the status conference, not through Windy City’s hastily filed
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`motion and post hoc attempts to impose additional limitations on the stipulated stay.
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`Windy City has utterly failed to show that it will be prejudiced by maintaining the stay it agreed
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`to just one year ago. The only purported harm—delay associated with resolving Facebook’s and
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`(potentially) Windy City’s appeals—is insufficient to lift the stay. In short, Windy City will not suffer
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`any prejudice, much less undue prejudice, if the Court maintains the status quo and continues the
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`parties’ stipulated stay.
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`6 Windy City’s off-point citations to Zoll Medical and Network-1 do not change this simple conclusion.
`(Dkt. 83 at 6.) All of the asserted claims survived IPR and 14 new claims were added to the case in
`Network-1. 2015 WL 11439060, *4. The parties and the Court in Zoll Medical agreed that the original
`stay would last only through IPR and defendants explicitly sought, “[a]t most. . . an eighteen month
`stay.” 2015 WL 4126741, *1. No such circumstances exist here.
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`8.
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`FACEBOOK, INC.’S OPPOSITION TO
`MOTION TO LIFT STAY
`CASE NO. 4:16-CV-01730-YGR
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`PALO ALTO
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`Case 4:16-cv-01730-YGR Document 87 Filed 01/12/18 Page 10 of 10
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`IV. CONCLUSION
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`Final resolution of Facebook’s IPRs will simplify the issues for trial; this case has not advanced
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`past its initial stages; and Windy City has identified no prejudice in continuing the stay. Thus,
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`prematurely lifting the stay serves no purpose other than needlessly expending the parties’ and the
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`Court’s resources. The Court should deny Windy City’s premature motion.
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`Dated: January 12, 2018
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`COOLEY LLP
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`/s/ Heidi L. Keefe
`Heidi L. Keefe (178960)
`Attorney for Defendant
`Facebook, Inc.
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`9.
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`FACEBOOK, INC.’S OPPOSITION TO
`MOTION TO LIFT STAY
`CASE NO. 4:16-CV-01730-YGR
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