Case 5:21-cv-03868-VKD Document 113 Filed 08/27/21 Page 1 of 7
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`Stephen S. Korniczky, Cal. Bar No. 135532
`SHEPPARD, MULLIN, RICHTER & HAMPTON
`LLP
`A Limited Liability Partnership
`Including Professional Corporations
`MARTIN R. BADER, Cal. Bar No. 222865
`ERICKA J. SCHULZ, Cal. Bar No. 246667
`12275 El Camino Real, Suite 100
`San Diego, California 92130-4092
`Telephone:
`858.720.8900
`Facsimile:
`858.509.3691
`E-mail
`skorniczky@sheppardmullin.com
`mbader@sheppardmullin.com
`eschulz@sheppardmullin.com
`
`Attorneys for Defendants TikTok inc., TikTok Pte
`Ltd., ByteDance Ltd., and Bytedance Inc.
`
`
`
`Andrew M. Hutchison (SBN 289315)
`COZEN O’CONNOR
`101 Montgomery Street, Suite 1400
`San Francisco, California 94104
`Tel:
`415-593-9625
`Fax: 415-692-3514
`Email: ahutchison@cozen.com
`
`Barry Golob (Pro Hac Vice)
`Thomas J. Fisher (Pro Hac Vice)
`COZEN O’CONNOR
`1200 19TH Street, NW
`Washington, DC 20036
`Tel:
`202-912-4800
`Fax: 202-861-1905
`Email: bgolob@cozen.com
`
`tfisher@cozen.com
`
`William E. Davis, III (Pro Hac Vice)
`Rudolph (Rudy) Fink IV (Pro Hac Vice)
`THE DAVIS FIRM, PC
`213 N. Fredonia Street, Suite 230
`Longview, Texas 75601
`Tel:
`903-230-9090
`Fax: 903-230-9661
`Email: bdavis@davisfirm.com
`
`rfink@davisfirm.com
`
`Attorneys for Plaintiff
`10TALES, INC.
`
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA, OAKLAND DIVISION
`
` Case No.: 3.21-cv-03868-YGR
`
`JOINT STATUS REPORT REGARDING
`THE PTAB’S DECISION AND
`DEFENDANTS’ REQUEST FOR A STAY
`
`
`10TALES, INC.,
`
`Plaintiff,
`
`v.
`
`TIKTOK INC., TIKTOK PTE. LTD.
`BYTEDANCE LTD., AND
`BYTEDANCE INC.,
`
`Defendants.
`
`
`
`
`
`3:21-cv-03868-YGR
`
`JOINT STATUS REPORT REGARDING THE PTAB’S DECISION AND
`DEFENDANTS’ REQUEST FOR A STAY
`
`

`

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`Case 5:21-cv-03868-VKD Document 113 Filed 08/27/21 Page 2 of 7
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`Pursuant to the Court’s July 22, 2021, Order (Dkt. No. 111), the parties hereby file this Joint
`Status Report regarding the PTAB’s August 13, 2021, Decision Denying Institution of Inter Partes
`Review. IPR2021-00476, Paper 13, Decision Denying Institution of Inter Partes Review – 35 U.S.C.
`§ 314 (“PTAB Decision,” Dkt. No. 112-1).
`Plaintiff 10Tales’ Position
`The PTAB resoundingly denied Defendants’ petition following a 20-page ruling:
`
`See PTAB Decision at 21. Defendants’ argument underlying their brief requesting a stay—that the
`PTAB would institute their IPR—is now gone. 10Tales therefore requests the Court set this matter
`for a scheduling conference. Defendants’ response below does not concede the reality of the PTAB
`loss and instead offers new reality-independent grounds for a stay (e.g., that Defendants will prevail
`on reconsideration of the PTAB decision, and if not, that Defendants may file an additional, nearly
`unheard of, ex parte request for yet another PTAB review).
`The reality of Defendants’ loss is straightforward and confirmed the validity of 10Tales patent.
`On August 13, 2021, the PTAB denied Defendants’ Petition for inter partes review of 10Tales’ U.S.
`Patent No. 8,856,030. The PTAB “agree[d] with Patent Owner that the Petition does not demonstrate
`sufficiently that [the asserted prior art], either alone or in combination, disclose ‘retrieving user social
`network information from at least one source external to the presented first composite digital media
`display, wherein the user social network information contains one or more user attributes,’ element
`[1g] in claim 1.” PTAB Decision at 6. The PTAB found that “[t]his deficiency is dispositive of the
`Petition,” and denied Defendants’ Petition finding that “the Petition and evidence in this record does
`not establish by a reasonable likelihood that Petitioner would prevail in showing any of the challenged
`claims of the ’030 patent are unpatentable.” PTAB Decision at 6, 20-21.
`Defendants’ motion to stay (Dkt. No. 96) was premised upon the “PTAB’s institution decision
`indicating … there is a reasonable likelihood that [Defendants] would prevail ….” See Dkt. No. 96 at
`
`1
`3:21-cv-03868-YGR
`JOINT STATUS REPORT REGARDING THE PTAB’S DECISION AND
`DEFENDANTS’ REQUEST FOR A STAY
`
`

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`Case 5:21-cv-03868-VKD Document 113 Filed 08/27/21 Page 3 of 7
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`2. Now that the PTAB has denied institution, 10Tales respectfully submits that this Court should deny
`Defendants’ motion to stay.
`As explained in 10Tales’ opposition (Dkt. No. 109) to Defendants’ motion, this case was filed
`in September 2020—11 months ago—and Defendants still have yet to answer the Amended
`Complaint. Despite Defendants’ delay efforts (evidenced in their response below), the parties made
`significant progress in this case prior to its transfer, and 10Tales respectfully requests that the case be
`set for a Case Management Conference at the Court’s earliest convenience. The parties have already
`exchanged infringement and validity contentions, produced initial technical documents, and have
`substantially completed claim construction briefing. Now that Defendants’ IPR Petition has been
`denied—there is no reason to delay any longer. 10Tales has begun preparing the Joint Case
`Management Statement and has prepared a proposed Protective Order.
`Defendants’ position below is a transparent attempt to further delay this case, and flies in the
`face of its arguments before Judge Albright in Texas that transferring this action to this Court would
`not delay the trial. The Court’s Order is clear—this joint status report is to provide the “PTAB’s
`decision and the impact, if any, on the pending motion [to stay].” Defendants have not addressed the
`Court’s question, but rather attempt to use this report to argue the PTAB decision was in error and to
`inappropriately argue for a brand new motion to stay, based on either a hypothetical motion for
`reconsideration at the PTAB (less than 5% of requests for rehearing of institution decisions are
`granted)1 or a new a reexamination request—neither of which have been filed by Defendants to date.
`Defendants claim Administrative Patent Judge Laney made a basic claim construction error, but Judge
`Laney has about 20 years of experience in patent law, including the last 6 years as an APJ2 and about
`116 patent cases in private practice.3 Defendants’ newly imagined grounds should be rejected.
`At bottom, it is time for Defendants’ delay tactics to end. Since the motion to stay is now
`moot, 10Tales respectfully requests that the Court issue an Order denying the motion to stay. 10Tales
`also respectfully requests that the Court order the parties to prepare for a Case Management
`
`
`1 See, e.g., https://www.foley.com/en/insights/publications/2019/10/ptab-requests-rehearing-face-
`long-odds
`2 See, e.g., https://www.linkedin.com/in/chris-laney-a7269458/
`3 See, e.g., https://search.docketnavigator.com/patent/attorney/12600/0
`3:21-cv-03868-YGR
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`2
`JOINT STATUS REPORT REGARDING THE PTAB’S DECISION AND
`DEFENDANTS’ REQUEST FOR A STAY
`
`

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`Case 5:21-cv-03868-VKD Document 113 Filed 08/27/21 Page 4 of 7
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`Conference so that a schedule can be set for closing the pleadings, holding a Markman hearing,
`commencing with discovery, and trial. 10Tales’ right to enforce its patent rights, and to address
`Defendants’ ongoing infringement, has already been prejudiced by Defendants’ delay. Defendants
`may or may not choose to pursue further expensive proceedings at the PTO, but their choice should
`not delay 10Tales’ rights.4
`Defendants’ Position
`Defendants’ motion to stay pending the PTAB’s decision on TikTok Inc.’s IPR petition
`remains prudent, as the PTAB proceeding is not yet complete. Defendants are diligently pursuing
`their statutory right to request a rehearing, which must be filed no later than September 13, 2021. See
`37 C.F.R. § 42.71. The request for rehearing seeks to address an improper claim interpretation adopted
`by the PTAB that violates the canons of claim construction and misapprehends the facts. Pursuant to
`the PTAB Trial Practice Guide, the PTAB will endeavor to rule on such a request about one month
`after it is filed. See PTAB Nov. 2019 Trial Practice Guide at 90. Given the relatively short time period
`necessary to resolve the request, a stay is appropriate for the same reasons expressed in Defendants’
`motion to stay. ECF No. 96. Courts in this district and elsewhere agree. MLC Intellectual Property,
`LLC v. Micron Tech., Inc., No. 3:14-cv-3657-SI, Dkt. No. 35 (N.D. Cal. July 28, 2015); see also
`Lineweight LLC v. Firstspear, LLC, No. 4:18-CV-00387-JAR, 2020 WL 85153, at *1 (E.D. Mo. Jan.
`6, 2020) (the court “concludes that extending the stay [pending the rehearing request] is appropriate
`for many of the same reasons expressed in its order staying the case”).
`Defendants’ request for rehearing is based on significant merit. The PTAB construed element
`[1g] narrowly, “deviat[ing] from the plain and ordinary meaning,” which is not appropriate unless “the
`inventor acted as his own lexicographer or intentionally disclaimed or disavowed claim scope.”
`Aventis Pharm. Inc. v. Amino Chemicals Ltd., 715 F.3d 1363, 1373 (Fed. Cir. 2013). The PTAB made
`no such finding here. Element [1g] requires retrieving information “from at least one source external
`to the presented first composite digital media display.” The PTAB sua sponte limited the generic
`
`
`4 See Pro-Troll, Inc. v. Shortbus Flashers, LLC, 16-CV-04062-VC, 2016 WL 11432003, at *1 (N.D.
`Cal. Dec. 23, 2016) (denying motion to stay pending ex parte reexamination because “the
`reexamination will have no estoppel effect” and therefore is “much less likely to advance the ball in
`this case” than in inter partes review).
`
`3
`3:21-cv-03868-YGR
`JOINT STATUS REPORT REGARDING THE PTAB’S DECISION AND
`DEFENDANTS’ REQUEST FOR A STAY
`
`

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`Case 5:21-cv-03868-VKD Document 113 Filed 08/27/21 Page 5 of 7
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`term “source” to a specific source, a social network, and required this social network “source” to be
`external to the entire system. PTAB Decision at 17-19. This limiting construction was not proposed
`by either party, as it would require equating the “first composite digital media display” to the entire
`system, which is not supported by the intrinsic record or any extrinsic evidence identified. To reach
`this construction, the PTAB erroneously relied on a statement by the Examiner in the Notice of
`Allowance, which the Federal Circuit has deemed inappropriate because “the examiner's unilateral
`remarks alone do not affect the scope of the claim” and “cannot amount to a clear and unmistakable
`disavowal of claim scope.” See Salazar v. Procter & Gamble Co., 414 F.3d 1342, 1347 (Fed. Cir.
`2005) (citations omitted) (vacating narrow construction of “elastic” that excluded nylon based on
`examiner’s reasons for allowance); see also Ancora Techs., Inc. v. Apple, Inc., 744 F.3d 732, 737 (Fed.
`Cir. 2014). Thus, this narrow construction is improper.
`Moreover, Defendants’ motion to stay should be granted on the additional ground that
`Defendants are preparing a request for ex parte reexamination of the ’030 patent based on newly
`identified prior art not asserted in the IPR. The reexamination could result in a rewrite or complete
`invalidation of 10Tales’ asserted claim. Should the request for rehearing be denied, Defendants will
`file the request for reexamination.5 Defendants therefore seek a stay for this separate basis, and in
`light of the “liberal policy” and common practice in favor of stays pending reexamination recognized
`by this district. AT & T Intell. Prop. I v. Tivo, Inc., 774 F. Supp. 2d 1049, 1052 (N.D. Cal. 2011).
`Because district courts in the Ninth Circuit apply the same framework to motions to stay pending
`reexamination as they do motions to stay pending an IPR petition, the reasoning in Defendants’ motion
`to stay is equally applicable here. See, e.g., Semiconductor Energy Lab'y Co. v. Chimei Innolux Corp.,
`No. 12-cv-21, 2012 WL 7170593, at *1 n.1 (C.D. Cal. Dec. 19, 2012). Indeed, Defendants’ request
`is supported by a decision in the Central District of California, which granted a stay under these same
`circumstances—i.e., where defendant filed a request for ex parte reexamination after the PTAB denied
`both institution of defendant’s IPR and defendant’s request for rehearing. See Wi-LAN Inc. v. Huizhou
`TCL Mobile Commc'n Co., No. 19-cv-870, 2020 WL 6193311, at *2-3 (C.D. Cal. Oct. 15, 2020).
`
`5 Although the request for reexamination to the PTO (not the PTAB) is based on new prior art, it
`cannot be filed before the PTAB completes the IPR proceeding without risking a procedural denial
`of the request. See Ariosa v. Illumina, Inc., IPR 2014-01093, Paper 81 (PTAB May 24, 2016).
`
`4
`3:21-cv-03868-YGR
`JOINT STATUS REPORT REGARDING THE PTAB’S DECISION AND
`DEFENDANTS’ REQUEST FOR A STAY
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`

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`Case 5:21-cv-03868-VKD Document 113 Filed 08/27/21 Page 6 of 7
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`Accordingly, Defendants request that their motion to stay be granted pending resolution of
`their request for rehearing and, to the extent necessary, a request for ex parte reexamination. The stay
`should be granted for the same reasons set forth in Defendants’ motion to stay (ECF No. 96), including
`that a stay will not prejudice 10Tales. 10Tales’ belabored attempts to impart a sense that this case has
`somehow been improperly “delayed” are misplaced and/or untrue. Defendants have exercised their
`right to move for relief necessitated by 10Tales’ own gamesmanship. For example, Defendants’
`motion to dismiss was necessitated by 10Tales’ repeated failure and inability to state a claim upon
`which relief can be granted. Likewise, Defendants’ successful motion to transfer was necessitated by
`10Tales’ decision to file its complaint in a district that was clearly inconvenient to both parties, and to
`which 10Tales had absolutely no connection. In another instance, 10Tales rebuked Defendants’ efforts
`to expedite the six-month jurisdictional and transfer discovery period. See ECF No. 40, 42. Indeed,
`10Tales waited two months to serve any transfer discovery requests, sought overbroad corporate
`testimony that forced TikTok to defend five witness depositions, and refused to produce 10Tales’ sole
`corporate witness until the eve of transfer discovery closing. Thus, to the extent there was any
`unreasonable delay, it was all self-imposed by 10Tales.
`Finally, 10Tales will face no prejudice from a stay. The parties are not competitors, 10Tales
`is not seeking an injunction, and its sole remedy for monetary damages will be unaffected by the stay.
`This case is also in its infancy. The Court has not issued a case management schedule, there is no
`protective order in place, claim construction briefing has yet to be finalized, and fact discovery has
`not yet opened. Accordingly, for the reasons discussed herein and in Defendants’ motion to stay (ECF
`No. 96), the most efficient course of action that avoids expending valuable litigant and judicial
`resources on a patent that could be invalidated by the Patent Office is to stay this case pending
`resolution of Defendants’ pending IPR petition and/or request for ex parte reexamination.
`///
`///
`///
`///
`///
`
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`3:21-cv-03868-YGR
`5
`JOINT STATUS REPORT REGARDING THE PTAB’S DECISION AND
`DEFENDANTS’ REQUEST FOR A STAY
`
`

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`Case 5:21-cv-03868-VKD Document 113 Filed 08/27/21 Page 7 of 7
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`Dated: August 27, 2021
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`Dated: August 27, 2021
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`Respectfully submitted,
`
`COZEN O’CONNOR
`
`
`
`By:
`
`
`
`
`
`
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`
`
`
`
`/s/ Andrew M. Hutchison
`Andrew M. Hutchison
`Barry Golob
`Thomas J. Fisher
`
`
`
`
`
`THE DAVIS FIRM PC
`William E. Davis, III
`Rudolph (Rudy) Fink IV
`Attorneys for Plaintiff, 10Tales, Inc.
`
`Respectfully submitted,
`
`SHEPPARD, MULLIN, RICHTER & HAMPTON
`LLP
`
`
`By:
`
`
`
`
`
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`
`
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`
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`
`
`/s/ Stephen S. Korniczky
`STEPHEN S. KORNICZKY
`MARTIN R. BADER
`ERICKA J. SCHULZ
`ERIC K. GILL
`MICHAEL J. HOPKINS
`JAMES HURT
`KRYSTI PAPADOPOULOS
`Attorneys for Defendants TikTok Inc., TikTok
`Pte Ltd., ByteDance Ltd. and ByteDance Inc.
`
`3:21-cv-03868-YGR
`6
`JOINT STATUS REPORT REGARDING THE PTAB’S DECISION AND
`DEFENDANTS’ REQUEST FOR A STAY
`
`