Case 4:16-cv-01730-YGR Document 90 Filed 01/19/18 Page 1 of 9
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`CHRISTOPHER D. BANYS (SBN 230038)
`JENNIFER L. GILBERT (SBN 255820)
`cdb@banyspc.com
`jlg@banyspc.com
`BANYS, P.C.
`1032 Elwell Court, Suite 100
`Palo Alto, CA 94303
`Tel: (650) 308-8505
` Fax: (650) 353-2202
`
`Attorneys for Plaintiff Windy City
`Innovations, LLC
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`BRADLEY W. CALDWELL (pro hac vice)
`bcaldwell@caldwellcc.com
`JASON D. CASSADY (pro hac vice)
`jcassady@caldwellcc.com
`JOHN AUSTIN CURRY (pro hac vice)
`acurry@caldwellcc.com
`WARREN J. MCCARTY, III (pro hac vice)
`wmccarty@caldwellcc.com
`CALDWELL CASSADY & CURRY
`2101 Cedar Springs Road, Suite 1000
`Dallas, Texas 75201
`Telephone: (214) 888-4848
`Facsimile: (214) 888-4849
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`OAKLAND DIVISION
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`WINDY CITY INNOVATIONS, LLC
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`Plaintiff,
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`v.
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`FACEBOOK, INC.
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`Defendant.
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`Case No. 4:16-cv-01730-YGR
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`PLAINTIFF WINDY CITY
`INNOVATIONS, LLC’S REPLY IN
`SUPPORT OF 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
`
`WINDY CITY’S REPLY IN
`SUPPORT OF MOTION TO LIFT
`STAY
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` CASE NO. 4:16-CV-01730-YGR
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`

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`Case 4:16-cv-01730-YGR Document 90 Filed 01/19/18 Page 2 of 9
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`I.
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`INTRODUCTION
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`Facebook’s opposition to Plaintiff Windy City’s motion to lift the stay portrays classic
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`shifting sands litigation tactics. Facebook asked to stay the present litigation “pending Final
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`Written Decisions” in its serial IPR filings in December 2016. Dkt. 76 at 4. After negotiation
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`between the parties, Windy City stipulated to that request because the wording was sufficiently
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`precise: “the parties agree that after the Final Written Decisions have issued in all of the
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`Instituted IPR Proceedings, the parties shall jointly request that the Court schedule a joint status
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`conference at the Court’s convenience . . . .” Id. (emphasis added). And Facebook represented to
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`this Court that the Final Written Decisions, for which the case was stayed, would be issued
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`within a maximum of one year and six months—the time by which the PTO had to issue its
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`decisions pursuant to the Patent Statute. Id. at 3. Since that time, the PTAB has issued its “Final
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`Written Decisions” for “all Instituted IPR proceedings,” finding against Facebook on over fifty
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`of the challenged patent claims. By its very terms, the stay should be over.
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`Yet now—arguing against the plain language of the stipulated stay, overlooking its past
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`representations to the Court, and ignoring the PTAB’s findings—Facebook requests new relief in
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`the form of an extended, indefinite, and potentially years-long stay. This is not the original
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`scope of the stay, and continuing the stay is not the status quo. Facebook’s refusal to
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`acknowledge its Bchange in position confirms that Facebook is merely seeking tactical and
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`prejudicial delay. Having tried and failed at invalidating dozens of Windy City’s claims,
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`Facebook should not be allowed to indefinitely prevent Windy City from proceeding in
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`litigation. This case was filed over two and a half years ago, the time has come for it to proceed.
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`WINDY CITY’S REPLY IN
`SUPPORT OF MOTION TO LIFT
`STAY
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`1
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`CASE NO. 4:16-CV-01730-YGR
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`Case 4:16-cv-01730-YGR Document 90 Filed 01/19/18 Page 3 of 9
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`
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`II.
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`BY ITS TERMS THE STIPULATED STAY IS NOW COMPLETE
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`Facebook’s Opposition skips past the language of the parties’ original agreement, tacitly
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`inviting the Court to disregard the scope and effect of that stipulation altogether. Dkt. No. 76 at
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`3-4. The Court should decline Facebook’s invitation.
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`First, in seeking the stay, the parties framed the request as “pending Final Written
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`Decisions of the Instituted IPR Proceedings.” Dkt. 76 at 4. There can be no dispute that those
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`decisions are no longer pending. The parties’ stipulation also articulated that such a stay would
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`take at most 1 year and 6 months—an 18-month time cap set by the IPR statute:
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`[P]ursuant to the Patent Statute, the PTO must issue a Final Written Decision in
`each Instituted IPR Proceeding within 1 year of the date of institution, which may
`be extended by no more than 6 months for good cause shown.
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`Dkt. 76 at 3:23-25. Facebook fails to even mention the 18-month time cap in its
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`Opposition.
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`Second, Facebook’s attempt to paint Windy City’s motion as “prematurely lifting
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`the stay,” is a red-herring. Opp. at 9. While Facebook now suggests that the IPR
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`proceedings are not over until “the appeal process is complete,” id at 2, the stipulated stay
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`language contemplates no such thing. Indeed, no reference to one’s rights to appeal the
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`PTAB’s decisions, the Federal Circuit, or the other post-IPR relief is even mentioned.
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`Rather, the parties’ agreed-upon language forecloses Facebook’s new interpretation,
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`tying the stay duration to resolution of the Final Written Decisions. See Dkt. 76 at 3-4.
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`Facebook’s new position also flies in the face of arguments made by Facebook’s
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`outside law firm in other matters where their client stood in Windy City’s shoes and
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`argued against extending an IPR-based stay pending exhaustion of appeals:
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`[Defendant] was adamant in its original stay arguments that it was requesting only
`a short [] stay. It made this request knowing that it could lose the IPRs. It made this
`request knowing that if it lost the IPRs, appeal to the Federal Circuit was a
`possibility. Nothing unpredictable has happened since the original hearing that
`WINDY CITY’S REPLY IN
`CASE NO. 4:16-CV-01730-YGR
`SUPPORT OF MOTION TO LIFT
`STAY
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`Case 4:16-cv-01730-YGR Document 90 Filed 01/19/18 Page 4 of 9
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`
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`justifies [defendant] now changing its request . . . [Defendant] asked for a [] stay,
`was granted that stay, and should now be held to its original request.
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`Ex. A (ACQIS Memorandum in Opposition to Further Stays at 12, ACQIS, LLC v. EMC
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`Corp., No. 14-CV-13560 (D. Mass. Apr. 4, 2016), Dkt. No 128). Well said. Just as the
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`defendant in ACQIS, LLC v. EMC Corp. was held to the terms of its original requested
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`relief, Facebook should be too—Facebook made its request knowing that it could lose
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`some or all of its IPRs.
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`Finally, although Facebook is entitled to appeal the Final Written Decisions,
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`granting a new stay request based on that entitlement is impractical. Its appeal to the
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`Federal Circuit is a new and different proceeding to be conducted in an entirely different
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`forum, requiring the parties and the Court to formulate new language covering a wide
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`array of possibilities and unknowns. The tail-end of Facebook’s appeal rights would
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`likely extend the stay for at least two years (or more),1 pushing any trial in this case until
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`2021 or 2022—six or seven years after the case was filed. Besides impeding the just and
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`speedy determination of this action, delaying resolution until some undetermined future
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`date discourages substantive progress in resolving this case altogether.
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`III.
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`FURTHER DELAY HAS LITTLE CHANCE OF SIMPLIFYING ANYTHING
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`The original stay was predicated on the IPRs simplifying the issues for trial. That has
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`occurred. Now that the PTAB has issued Final Written Decisions in the IPRs, the universe of
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`patent claims have been narrowed and a record has been established. And importantly, Facebook
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`is now estopped from raising invalidity defenses, significantly reducing the issues to be tried to a
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`1 The median disposition time for Federal Circuit merits panels’ decisions exceeds 13 months
`without considering any subsequent appeals. See http://www.cafc.uscourts.gov/sites/default
`/files/the-court/statistics/Med_Disp_Time_MERITS_chart.pdf. Unlike the IPR proceedings,
`however, there is no set date at which all appeals would be certain to be finished. Moreover, it
`would likely take a year or more to trial in this Court once the case resumed.
`WINDY CITY’S REPLY IN
`CASE NO. 4:16-CV-01730-YGR
`SUPPORT OF MOTION TO LIFT
`STAY
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`3
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`

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`Case 4:16-cv-01730-YGR Document 90 Filed 01/19/18 Page 5 of 9
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`jury. This estoppel applies immediately, irrespective of the pendency of any appeals. Thus,
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`there is no need to wait until any future appeals are completed.
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`Moreover, the probability that the Federal Circuit will overturn the PTAB’s findings is
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`scant. As commentators have noted, “[t]he Federal Circuit has overwhelmingly affirmed the
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`rulings of the Patent Trial and Appeal Board on the validity of patents” and “[t]he odds are
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`clearly against success when you bring a PTAB case to the Federal Circuit.” Ex. B (Federal
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`Circuit Mostly Affirming Patent Board Validity Rulings, 92 PTCJ 178 (May 20, 2016)). Indeed,
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`as of December 2017, the Federal Circuit has affirmed approximately 75% of PTAB appeals on
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`every issue. Ex. C (Federal Circuit PTAB Appeal Statistics – December 15, 2017).
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`Facebook’s generic arguments as to why it will succeed on appeal can be easily rejected,
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`and in any event are not enough to warrant extending the stay. For example, Facebook argues
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`that the surviving asserted claims of the ’245 patent are similar to claims that were found invalid.
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`As an initial matter, it is unremarkable that claims in the same patent family are comparable. But
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`more to the point, Facebook made these arguments to the PTAB and the board rejected them.
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`The same PTAB panel considered all of Facebook’s IPRs and that panel upheld the validity of
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`the surviving claims. On appeal, the Board’s rejection of Facebook’s arguments will be affirmed
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`if supported by substantial evidence. See Kennametal, Inc. v. Ingersoll Cutting Tool Co., 780
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`F.3d 1376, 1381 (Fed. Cir. 2015) (“[O]bviousness under § 103 is a question of law based on
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`underlying findings of fact. . . .We review the Board’s factual findings for substantial evidence . .
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`. .”). There is no reason to believe that Facebook’s once-rejected arguments will be successful at
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`the Federal Circuit. And Facebook’s speculative hope that it might obtain a different result is
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`plainly insufficient to warrant extending the stay. See Zoll Med. Corp. v. Respironics, Inc., No.
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`CV 12-1778-LPS, 2015 WL 4126741, at *1 (D. Del. July 8, 2015) (“The pendency of an appeal
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`from the IPR, and the possibility that the Federal Circuit may reverse the PTO (and thereby
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`WINDY CITY’S REPLY IN
`SUPPORT OF MOTION TO LIFT
`STAY
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`CASE NO. 4:16-CV-01730-YGR
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`Case 4:16-cv-01730-YGR Document 90 Filed 01/19/18 Page 6 of 9
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`simplify this litigation by, presumably, making it disappear), is not, in and of itself, a sufficient
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`basis to make the patentee here continue to wait to enforce patent rights that it currently holds.”).
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`IV.
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`FACEBOOK’S CHARACTERIZATION OF THE STAGE OF THIS CASE ARE
`MISPLACED AND SHOULD BE REJECTED
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`Facebook also argues that this case is in its “nascent stages” because inter alia “discovery
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`is nowhere near completed” and “no pretrial or trial deadlines have been set.” Opp. at 5. First,
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`this characterization ignores the significant work that has been completed to date. See Dkt. 83 at
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`5-6. Second, this argument can be made in virtually any stayed case—nothing more has
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`happened and there is no schedule because the case has been stayed. The circular logic that a
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`further stay is warranted merely because the stay already existed is unavailing. Such an
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`argument would result in perpetual stays and deter future litigants from jointly stipulating to
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`stays pending IPRs for fear that such stays would never end. Once the stay is lifted, the Court
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`can set deadlines and allow discovery and further case deadlines to progress from there.
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`V. A FURTHER STAY WILL PREJUDCE WINDY CITY AND GIVE FACEBOOK AN
`UNFAIR TACTICAL ADVANTAGE
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`Finally, a further stay for an indefinite amount of time will severely prejudice Windy
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`City. Facebook seeks to diminish the prejudice to Windy City by arguing that, because Windy
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`City is a non-practicing entity (“NPE”), it categorically cannot be harmed by any delay. Opp. at
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`7. But once again this flies in the face of the previous representations that Facebook’s law firm
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`took in ACQIS. There, Facebook’s law firm argued that further delay risked negatively
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`impacting the damages owed to the NPE patent owner because its patents were expiring soon:
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`[W]ith [defendant]’s proposed additional stay, the majority of patents will be
`expired or on the verge of expiration. Both [defendant] and the other infringers
`could present this short to nonexistent life span as a reason for the jury to lower
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`the reasonable royalty rate. . . . As a result, the further stay [defendant] seeks will
`create an unfair tactical advantage to [defendant] and significantly prejudice [the
`patent owner].
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`Ex. A (ACQIS Memorandum in Opposition to Further Stays at 11).
`WINDY CITY’S REPLY IN
`SUPPORT OF MOTION TO LIFT
`STAY
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`5
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`CASE NO. 4:16-CV-01730-YGR
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`Case 4:16-cv-01730-YGR Document 90 Filed 01/19/18 Page 7 of 9
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`Windy City suffers the same risk of prejudice here. Windy City recently settled with
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`Microsoft on favorable terms despite the pending IPRs. But an extended stay would stymy
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`similar progress with Facebook. For example, the stay prevents Windy City from producing this
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`license to Facebook (because to do so would violate the stay).
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`Moreover, because of the asserted patents’ expiration date, Facebook could eventually
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`leverage the stayed litigation to a jury in making the (improper) argument that the remaining
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`patents’ short or nonexistent life spans is a basis for lowering the reasonable royalty rate owed to
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`Windy City. The court in ACQIS identified this problem, finding “that an additional, indefinite
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`stay, which could potentially last well in excess of a year, would prejudice [the patent owner] in
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`this litigation as well as its business generally, especially given that [the patent owner’s] asserted
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`patents will begin expiring [within two years].” ACQIS, LLC v. EMC Corp., No. 14-CV-13560,
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`2016 WL 4250245, at *3 (D. Mass. Aug. 10, 2016); see also Walker Digital, LLC v. Google,
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`Inc., No. 11-cv-318-LPS, 2014 WL 2880474, at *1 (¶ 5) (D. Del. June 24, 2014) (denying stay of
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`a year within 2 years of expiration of patents, finding stay would “significantly prejudice[] [NPE
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`plaintiff’s] ability to license the patents”))).2
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`Windy City filed this case in 2015 when these patents still had several years remaining.
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`But the additional delays that Facebook is now seeking could delay a trial in this case until 2021
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`or later—years after Windy City filed the case and after all its patents are expired. Now that the
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`parties’ stipulated stay is complete and the issues are simplified, this case should proceed on the
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`merits. Windy City respectfully requests that the Court lift the stay
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`2 Facebook also attempts to distinguish Windy City’s other cases by suggesting that these cases
`are limited to situations where the appeal lacked any potential for being case-dispositive. This
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`distinction is unfounded. Any appeal of a PTAB decision could be characterized as case-
`dispositive where a Defendant challenges all patent claims and appeals all decisions adverse to
`them, as Facebook has done here. Second, this distinction ignores the reality of the PTAB’s
`findings in this case—affirmance of over fifty claims—and the statistical improbability that the
`Federal Circuit overturns the PTAB’s work.
`WINDY CITY’S REPLY IN
`SUPPORT OF MOTION TO LIFT
`STAY
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`CASE NO. 4:16-CV-01730-YGR
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`Case 4:16-cv-01730-YGR Document 90 Filed 01/19/18 Page 8 of 9
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`Dated: January 19, 2018
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`Respectfully submitted,
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`/s/ Warren J. McCarty, III
`Warren J. McCarty, III (pro hac vice)
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`BANYS, P.C.
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`Christopher D. Banys (SBN 230038)
`Jennifer L. Gilbert (SBN 255820)
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`BANYS, P.C.
`1032 Elwell Court, Suite 100
`Palo Alto, CA 94303
`Tel: (650) 308-8505
`Fax: (650) 353-2202
`cdb@banyspc.com
`jlg@banyspc.com
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`Bradley W. Caldwell (pro hac vice)
`bcaldwell@caldwellcc.com
`Jason D. Cassady (pro hac vice)
`jcassady@caldwellcc.com
`John Austin Curry (pro hac vice)
`acurry@caldwellcc.com
`Warren J. McCarty, III (pro hac vice)
`wmccarty@caldwellcc.com
`CALDWELL CASSADY & CURRY
`2101 Cedar Springs Rd., Suite 1000
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`Dallas, TX 75201
`Telephone: (214) 888-4848
`Facsimile: (214) 888-4849
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`Attorneys for Plaintiff,
`Windy City Innovations, LLC
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`WINDY CITY’S REPLY IN
`SUPPORT OF MOTION TO LIFT
`STAY
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`7
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`CASE NO. 4:16-CV-01730-YGR
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`Case 4:16-cv-01730-YGR Document 90 Filed 01/19/18 Page 9 of 9
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`CERTIFICATE OF SERVICE
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`I, hereby certify on this 19th day of January, 2018, that a copy of the foregoing was filed
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`electronically through the Court’s CM/ECF system and automatically served upon all counsel of
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`record at the time of filing.
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`Dated: January 19, 2018
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`/s/ Warren J. McCarty, III
`Warren J. McCarty, III (pro hac vice)
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`Attorney for Plaintiff
`Windy City Innovations, LLC
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`CERTIFICATE OF SERVICE
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`1
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`CASE NO. 4:16-CV-01730-YGR
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