Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 1 of 19
`
`
`
`SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
`A Limited Liability Partnership
`Including Professional Corporations
`STEPHEN S. KORNICZKY, Cal. Bar No. 135532
`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
`
`SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
`A Limited Liability Partnership
`Including Professional Corporations
`JASON MUELLER (to be admitted pro hac vice)
`2200 Ross Avenue, 24th Floor
`Dallas, Texas 75201
`Telephone: 469.391.7402
`Email:
`jmueller@sheppardmullin.com
`
`Attorneys for Defendants TikTok Inc.,
`TikTok Pte Ltd., ByteDance Ltd. and
`ByteDance Inc.
`
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA, OAKLAND DIVISION
`
` Case No. 3:21-cv-03868-YGR
`
`DEFENDANTS’ NOTICE OF
`MOTION AND MOTION TO STAY
`THE CASE PENDING INTER PARTES
`REVIEW
`
`
`July 27, 2021
`
`Date:
`2:00 p.m.
`
`Time:
`Courtroom: Courtroom 1
`Judge:
`Hon. Yvonne Gonzalez
`
`
`Rogers
`
`
`
`10TALES INC.,
`
`Plaintiff,
`
`v.
`
`TIKTOK INC., TIKTOK PTE. LTD.,
`BYTEDANCE LTD., and
`BYTEDANCE INC.,
`
`Defendants.
`
`
`
`
`
`
`
`SMRH:4830-6232-0109
`
`
`
`Case No. 3:21-cv-03868-YGR
`
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`PARTES REVIEW
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 2 of 19
`
`
`
`TABLE OF CONTENTS
`
`I.
`II.
`
`Page
`INTRODUCTION ........................................................................................... 2
`STATEMENT OF FACTS ............................................................................. 2
`A. Nature and Stage of the Proceedings ...................................................... 2
`B.
`TikTok Inc.’s Petition for Inter Partes Review of the ’030 Patent ........ 3
`III. ARGUMENT ................................................................................................... 4
`The Early Stage of This Case Strongly Favors a Stay—Even Pre-
`A.
`Institution of The IPR ............................................................................. 5
`B. A Stay Will Simplify the Issues, Streamline the Trial, and
`Reduce the Burden of Litigation on the Parties and Court ..................... 8
`C. A Stay Will Not Unduly Prejudice or Tactically Disadvantage
`10Tales .................................................................................................. 10
`IV. CONCLUSION .............................................................................................. 13
`
`
`
`
`SMRH:4830-6232-0109
`
`
`
`Case No. 3:21-cv-03868-YGR
`-i-
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`PARTES REVIEW
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 3 of 19
`
`
`
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`
`Cases
`Aavid Thermalloy LLC v. Cooler Master, Ltd.
`No. C-17-05363-JSW, 2019 WL 4009166 (N.D. Cal. Aug. 26,
`2019) ....................................................................................................................... 5
`Affinity Labs of Tex. LLC v. Samsung Elecs. Co.
`No. 14-cv-2717-YGR, 2014 WL 3845684 (N.D. Cal. Aug. 1, 2014).................. 11
`Aylus Networks, Inc. v. Apple Inc.
`856 F.3d 1353 (Fed. Cir. 2017) .............................................................................. 9
`Barbaro Techs., LLC v. Niantic, Inc.
`No. 18-cv-02955-RS, Dkt. 104 slip op. (N.D. Cal. Apr. 24, 2019) ....... 7, 9, 11, 12
`Cellwitch Inc. v. Tile, Inc.
`No. 19-cv-01315-JSW, Dkt. 68 slip op. (N.D. Cal. Jan. 17, 2020) ................. 6, 10
`Chrimar Sys. Inc v. Ruckus Wireless, Inc.
`No. 16-CV-00186-SI, 2016 WL 5403595 (N.D. Cal. Sept. 26, 2016) .............. 7, 9
`Clinton v. Jones
`520 U.S. 681 (1997) ............................................................................................... 4
`Coho Licensing LLC v. Glam Media
`No. C-14-01576 JSW, 2014 WL 4681699 (N.D. Cal. Sep. 17, 2014) ................... 5
`Contour IP Holding, LLC v. GoPro, Inc.
`No. 17-cv-04738-WHO, 2018 WL 6574188 (N.D. Cal. Dec. 12,
`2018) ....................................................................................................................... 7
`In re Cygnus Telecommunications Tech., LLC, Pat. Litig.
`385 F. Supp. 2d 1022 (N.D. Cal. 2005) .................................................................. 5
`Cywee Grp. Ltd. v. Samsung Elecs. Co.
`No. 2:17-CV-00140-WCB-RSP, Dkt. 331 (E.D. Tex. Feb. 14, 2019)
`(J. Bryson) .............................................................................................................. 5
`Elekta Ltd. v. ZAP Surgical Sys., Inc.
`No. C 19-02269-JSW, 2019 WL 9100404 (N.D. Cal. Nov. 8, 2019) .................. 10
`
`
`SMRH:4830-6232-0109
`
`
`
`Case No. 3:21-cv-03868-YGR
`-ii-
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`PARTES REVIEW
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 4 of 19
`
`
`
`Ethicon, Inc. v. Quigg
`849 F.2d 1422 (Fed. Cir. 1988) .............................................................................. 4
`Evolutionary Intel., LLC v. Facebook, Inc
`No. C 13-4202 SI, 2014 WL 261837 (N.D. Cal. Jan. 23, 2014) ................ 6, 10, 12
`Finjan, Inc. v. Symantec Corp.
`139 F. Supp. 3d 1032 (N.D. Cal. 2015) .............................................. 4, 6, 9, 10, 13
`Fisher-Price, Inc. v. Dynacraft BSC Inc.
`No. 17-cv-3745-PJH, 2017 WL 5153588 (N.D. Cal. Nov. 7, 2017) ................... 10
`Gould v. Control Laser Corp.
`705 F.2d 1340 (Fed. Cir. 1983) .............................................................................. 4
`Karl Storz Endoscopy-Am., Inc. v. Stryker Corp.
`No. 14-CV-00876-RS, 2015 WL 13727876 (N.D. Cal. Mar. 30,
`2015) ............................................................................................................. 7, 9, 11
`Longitude Licensing Ltd. v. Apple Inc.
`No. 14-cv-04275-EDL, 2015 WL 12778777 (N.D. Cal. Oct. 29,
`2015) ..................................................................................................................... 10
`MasterObjects, Inc. v. eBay Inc.
`No. 16-CV-06824-JSW, 2017 WL 2181132 (N.D. Cal. May 5,
`2017) ........................................................................................................... 8, 10, 13
`Murata Mach. USA v. Daifuku Co.
`830 F.3d 1357 (Fed. Cir. 2016) .............................................................................. 5
`Oyster Optics, LLC v. Ciena Corp.
`No. 17-CV-05920-JSW, 2018 WL 6972999 (N.D. Cal. Jan. 29,
`2018) ..................................................................................................................... 10
`PersonalWeb Tech., LLC v. Apple
`69 F. Supp. 3d 1022 (N.D. Cal. 2014) .................................................................... 8
`Riverbed v. Silver Peak
`No. C 13-02980 JSW, 2014 WL 1647399 (N.D. Cal. Mar. 14, 2014) .................. 8
`Robert Bosch Healthcare Sys., Inc. v. Cardiocom, LLC
`No. C-14-1575 EMC, 2014 WL 3107447 (N.D. Cal. July 3, 2014) ...................... 6
`
`
`SMRH:4830-6232-0109
`
`
`
`Case No. 3:21-cv-03868-YGR
`-iii-
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`PARTES REVIEW
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 5 of 19
`
`
`
`Traverse LLC v. Amprius, Inc.
`No. 20-CV-00484-RS, 2020 WL 6820942 (N.D. Cal. Nov. 6, 2020) ........... 10, 11
`Uniloc USA Inc. v. Apple
`No. 18-cv-00361-PJH, 2018 WL 2387855 (N.D. Cal. May 25, 2018) ................ 12
`Uniloc USA Inc. v. LG Elecs. USA Inc.
`No. 18-cv-05737-JST, 2019 WL 1905161 (N.D. Cal. April 29,
`2019) ................................................................................................................. 7, 10
`Viavi Sols. Inc. v. Platinum Optics Tech. Inc.
`No. 5:20-CV-05501-EJD, 2021 WL 1893142 (N.D. Cal. May 11,
`2021) ................................................................................................................. 6, 10
`Statutes
`35 U.S.C. § 314(b) ....................................................................................................... 4
`35 U.S.C. § 315(e)(1) .................................................................................................. 9
`Other Authorities
`37 C.F.R. § 42.107(b) .................................................................................................. 4
`
`
`
`SMRH:4830-6232-0109
`
`
`
`Case No. 3:21-cv-03868-YGR
`-iv-
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`PARTES REVIEW
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 6 of 19
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`NOTICE OF MOTION AND MOTION
`TO ALL PARTIES AND THEIR COUNSEL OF RECORD:
`PLEASE TAKE NOTICE that on July 27, 2021, at 2:00 p.m., or as soon
`thereafter as the motion may be heard, in the courtroom of The Honorable Judge
`Yvonne Gonzalez Rogers, located at the Oakland Federal District Courthouse, 1301
`Clay Street, Courtroom 1, Fourth Floor, defendants TikTok Inc., TikTok Pte. Ltd.,
`ByteDance Ltd., and ByteDance Inc. (“Defendants”) will and hereby do move this
`Court, pursuant to the Court’s discretion, for an order staying proceedings pending
`the outcome of the inter partes review (“IPR”) of the patent-in-suit, U.S. Patent No.
`8,856,030 (“the ’030 patent”), filed by Defendant TikTok Inc. (“TTI”) in the United
`States Patent and Trademark Office (“PTO”) that is currently pending before the
`Patent Trial and Appeal Board (“PTAB”) as IPR Case No. IPR2021-00476 and
`resolution of any possible appeals. The motion is based on this notice, the
`supporting memorandum of points and authorities, the supporting declaration of
`Ericka J. Schulz (“Schulz Decl.”) and exhibits submitted therewith (“Schulz Decl.
`Ex. __”), the pleadings and records on file in this action, all matters of which the
`Court may take judicial notice, and any other argument or evidence that may be
`presented in support of this motion.
`RELIEF REQUESTED
`Defendants respectfully request the Court stay this action pending the
`outcome of inter partes review of the ’030 patent before the PTAB in the
`proceeding captioned, TikTok Inc. v. 10Tales, Inc., IPR2021-00476 and resolution
`of any possible appeals.
`STATEMENT OF ISSUES TO BE DECIDED
`Whether to stay this case pending the outcome of the inter partes review
`(IPR) of the ’030 patent in light of the judicial efficiency that the IPR would
`provide, the early stage of the litigation, the simplification of issues from a stay, and
`the lack of undue prejudice to Plaintiff 10Tales Inc. (“10Tales”).
`Case No. 3:21-cv-03868-YGR
`
`-1-
`SMRH:4830-6232-0109 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`PARTES REVIEW
`
`
`
`
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 7 of 19
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`I.
`
`MEMORANDUM OF POINTS AND AUTHORITIES
`INTRODUCTION
`A stay pending the PTAB’s resolution of TTI’s inter partes review petition
`(“IPR”) of the asserted patent is warranted to save time, expense, and to promote
`judicial economy and avoid inconsistent and potentially parallel activity regarding
`invalidity. This case is in an early stage of litigation, the Initial Case Management
`Conference has yet to occur in this Court, a schedule has yet to be set, and no fact
`discovery has taken place. Further, all claims of the single asserted patent have been
`presented to the PTAB in TTI’s petition, and thus, this case can benefit from the IPR
`by simplifying the issues, if not mooting the case entirely. Additionally, the
`PTAB’s institution decision indicating whether the PTAB believes that there is a
`reasonable likelihood that TTI would prevail with respect to at least one of the
`claims challenged in TTI’s petition is currently due on or before August 17, 2021.
`10Tales would not be prejudiced by a stay, as it does not seek an injunction, and
`monetary damages, which would not decrease during a stay, are sufficient here
`where the parties are not competitors. Finally, TTI expeditiously filed its IPR
`petition and, along with the related Defendants, the present motion for stay.
`Defendants therefore respectfully request that the Court conserve judicial and party
`resources by placing this matter on hold to allow the completion of the IPR
`proceedings.
`STATEMENT OF FACTS
`II.
`A. Nature and Stage of the Proceedings
`10Tales initiated this action on September 2, 2020 in the Western District of
`Texas, accusing TTI of infringing the ’030 patent. Dkt. 1. On November 19, 2020,
`TTI responded with a motion to dismiss for failure to state a claim, for improper
`venue, and for transfer to the Northern District of California. Dkt. 24. TTI likewise
`sought an extension of the schedule or a stay pending a decision on the motion to
`dismiss and motion to transfer. The motion to stay was subsequently denied. See
`Case No. 3:21-cv-03868-YGR
`
`-2-
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`SMRH:4830-6232-0109
`PARTES REVIEW
`
`
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 8 of 19
`
`
`
`Dkt. 27 at 2-3 (requesting stay pending Motion to Dismiss) and Schulz Decl. Ex. 1
`(denying stay). Shortly thereafter, on December 10, 2020, 10Tales filed an
`Amended Complaint that added the remaining Defendants. Dkt. 28. On January 27,
`2021 the newly added Defendants filed a notice of joinder to TTI’s motion to
`transfer and on February 2, 2021 all Defendants filed a motion to dismiss the
`Amended Complaint for failure to state a claim, which is fully briefed. Dkts. 47, 48,
`51, 53. Venue discovery proceeded until Defendants’ transfer motion was fully
`briefed on April 28, 2021. Dkts. 71, 75. During that time, 10Tales served its
`preliminary infringement contentions on December 14, 2020 and Defendants served
`their preliminary invalidity contentions on March 1, 2021. See Dkts. 41, 56. On
`May 6, 2021, the Court held oral argument on Defendants’ motion to transfer, and
`on May 24, 2021, the case was transferred to the Northern District of California.
`Dkts. 77, 89. The motion to dismiss is pending, but given the change in districts,
`supplemental briefing is required.
`Upon transfer, this case was initially assigned to Magistrate Spero and then to
`this Court. The Initial Case Management Conference has yet to be scheduled,
`leaving the current schedule entirely blank.
`TikTok Inc.’s Petition for Inter Partes Review of the ’030 Patent
`B.
`TTI filed its IPR petition on February 9, 2021—less than two months after
`10Tales served its preliminary infringement contentions—challenging the
`patentability of all claims in the ’030 patent.1 Schulz Decl. Ex. 2. On February 18,
`2021, the PTAB issued its Notice of Filing Date Accorded to Petition and Time for
`Filing Patent Owner Preliminary Response for the Petition. Schulz Decl. Ex. 3. On
`May 17, 2021, 10Tales filed its Patent Owner Preliminary Response. Schulz Decl.
`
`
`1 The remaining Defendants were identified as Real Parties-in-Interest in TTI’s IPR
`petition, and any estoppel effects will accordingly apply to all Defendants in this action.
`Case No. 3:21-cv-03868-YGR
`
`-3-
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`SMRH:4830-6232-0109
`PARTES REVIEW
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 9 of 19
`
`
`
`Ex. 4. Accordingly, the PTAB is required to render its institution decision by no
`later than August 17, 2021. See 35 U.S.C. § 314(b); 37 C.F.R. § 42.107(b).
`III. ARGUMENT
`The Court has broad discretion to stay these proceedings. Clinton v. Jones,
`520 U.S. 681, 706 (1997). This includes the “inherent power to manage [its]
`dockets and stay proceeding[s], including the authority to order a stay pending
`conclusion of a PTO reexamination.” Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-
`27 (Fed. Cir. 1988). The power to stay a case pending IPR “resides with the Court
`to prevent costly pretrial maneuvering which attempts to circumvent the
`reexamination procedure.” Gould v. Control Laser Corp., 705 F.2d 1340, 1342
`(Fed. Cir. 1983) (emphasis in original) (quoting H.R. Rep. No. 1307 Part I, 96th
`Cong., 2d Sess. 4 (1980)). Indeed, IPRs were intended to “create a timely, cost-
`effective alternative to litigation.” Finjan, Inc. v. Symantec Corp., 139 F. Supp. 3d
`1032, 1034 (N.D. Cal. 2015) (citing 77 Fed. Reg. 48680-01 (August 14, 2012)). As
`such, interests of “judicial efficiency and the desire to avoid inconsistent results . . .
`counsel in favor of a limited stay, even before the PTAB has acted on a petition for
`IPR.” Id. at 1035 (noting the “liberal policy in favor of granting motions to stay
`proceedings pending the outcome of USPTO reexamination or reissuance
`proceedings.”) (citations omitted).
`Courts in this district use the traditional three factor test for granting a stay
`pending reexamination or IPR to determine whether each factor supports a stay: (1)
`the stage of the litigation, including whether discovery is or will be almost
`completed and whether the matter has been marked for trial; (2) whether a stay will
`simplify the issues in question and streamline the trial, thereby reducing the burden
`of litigation on the parties and on the court; and (3) whether a stay will unduly
`
`
`SMRH:4830-6232-0109
`
`
`
`Case No. 3:21-cv-03868-YGR
`-4-
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`PARTES REVIEW
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 10 of 19
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`prejudice or tactically disadvantage the nonmoving party.2 See In re Cygnus
`Telecommunications Tech., LLC, Pat. Litig., 385 F. Supp. 2d 1022, 1022–23 (N.D.
`Cal. 2005) (applying three-factored test to grant stay pending IPR). Here, all three
`factors that courts consider in determining whether to stay litigation after a petition
`for IPR has been filed weigh in favor of granting the stay requested by Defendants:
`this litigation is at an early stage with an entirely empty schedule; staying this
`litigation while the PTAB reviews the § 102 and § 103 deficiencies of the two
`claims in the ’030 patent will greatly simplify the issues before the Court (if not
`resolving them entirely); and a stay will not prejudice or tactically disadvantage
`10Tales at least because it does not compete with Defendants and because
`Defendants acted expeditiously to bring the IPR petition and motion to stay.
`A. The Early Stage of This Case Strongly Favors a Stay—Even Pre-
`Institution of The IPR
`This case is in its infancy. When analyzing this first factor, courts have
`favored staying cases when deadlines have not been set, fact discovery is in its early
`
`
`2 The Federal Circuit has also accepted consideration of a fourth factor: whether a
`stay will reduce the burden of the litigation for the parties and the Court. See
`Murata Mach. USA v. Daifuku Co., 830 F.3d 1357, 1362 (Fed. Cir. 2016) (finding
`no abuse of discretion where district court considered this factor in granting stay
`pending IPR); see also Aavid Thermalloy LLC v. Cooler Master, Ltd., No. C-17-
`05363-JSW, 2019 WL 4009166, at *2–3 (N.D. Cal. Aug. 26, 2019). Another
`approach taken by Courts in this district is to combine the consideration of litigation
`burden (fourth factor) with the simplification of the issues (second factor), since
`they are closely related. Coho Licensing LLC v. Glam Media, No. C-14-01576
`JSW, 2014 WL 4681699, at *1 (N.D. Cal. Sep. 17, 2014); see also Cywee Grp. Ltd.
`v. Samsung Elecs. Co., No. 2:17-CV-00140-WCB-RSP, Dkt. 331, at 4 (E.D. Tex.
`Feb. 14, 2019) (J. Bryson). Defendants have followed this approach.
`Case No. 3:21-cv-03868-YGR
`
`-5-
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`SMRH:4830-6232-0109
`PARTES REVIEW
`
`
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 11 of 19
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`stages, and expert discovery has not begun—even if the IPR institution decision is
`pending. Viavi Sols. Inc. v. Platinum Optics Tech. Inc., No. 5:20-CV-05501-EJD,
`2021 WL 1893142, at *1 (N.D. Cal. May 11, 2021) (granting motion to stay prior to
`an IPR institution decision); Cellwitch Inc. v. Tile, Inc., No. 19-cv-01315-JSW, Dkt.
`68 slip op. at 4 (N.D. Cal. Jan. 17, 2020) (granting motion to stay prior to PTAB’s
`institution decision where “the parties have not met for a case management
`conference or set case deadlines”). This factor also favors a stay where “substantial
`work remain[s] in the case,” and where it is possible to “save the parties and the
`Court the unnecessary expenditure of judicial resources.” Finjan Inc., 138 F. Supp.
`at 1035-36 (granting motion to stay prior to PTAB’s decision to institute, after the
`Markman hearing); Robert Bosch Healthcare Sys., Inc. v. Cardiocom, LLC, No. C-
`14-1575 EMC, 2014 WL 3107447, at *4 (N.D. Cal. July 3, 2014); see also
`Evolutionary Intel., LLC v. Facebook, Inc, No. C 13-4202 SI, 2014 WL 261837, at
`*2 (N.D. Cal. Jan. 23, 2014).
`Here, this case’s substantive progress is negligible. The lack of progress is a
`direct result of 10Tales’ strategy to delay its response to TTI’s transfer motion for
`five months in order to pursue expensive and irrelevant venue discovery (10Tales
`served 39 30(b)(6) deposition topics, 71 requests for production, 15 interrogatories,
`and conducted 4 depositions) to drive up the cost of litigation. Substantial judicial
`and litigant resources were spent towards showing this case has no ties whatsoever
`to Texas, something 10Tales knew from the beginning. Now that this case is
`properly in front of this Court, the parties await a new case management conference
`and case schedule. As such, fact discovery has not started, and no trial date has
`been set. Moreover, as discussed in Defendants’ motion to dismiss, this case should
`not even move past the pleading stage, as 10Tales has tried and repeatedly failed to
`provide a sufficient infringement allegation for each element of 10Tales’ asserted
`‘030 Patent Claim 1. Even if this case does move forward, the bulk of the litigation
`lies ahead and the “costlier stages of pretrial preparation remain.” Contour IP
`Case No. 3:21-cv-03868-YGR
`
`-6-
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`SMRH:4830-6232-0109
`PARTES REVIEW
`
`
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 12 of 19
`
`
`
`Holding, LLC v. GoPro, Inc., No. 17-cv-04738-WHO, 2018 WL 6574188, at *3
`(N.D. Cal. Dec. 12, 2018).
`Moreover, the work prepared thus far in the case, i.e., the motion to dismiss
`and some claim construction briefing, does not detract from the costs that lie ahead.
`See, e.g., Uniloc USA Inc. v. LG Elecs. USA Inc., No. 18-cv-05737-JST, 2019 WL
`1905161, at *3 (N.D. Cal. April 29, 2019) (granting a stay pending the PTAB’s
`institution decisions despite parties’ expenditure of resources on granted motions to
`transfer and a pending motion to dismiss).3 Indeed, the outstanding briefing must
`also be supplemented or revised according to district-specific precedents and the
`patent local rules. This may include revising Defendants’ motion to dismiss to
`cover Ninth Circuit and Northern District of California case law—as opposed to
`Fifth Circuit and Western District of Texas law—and re-briefing claim construction
`following claim construction discovery pursuant to this district’s local rules—
`discovery that did not take place in the Western District of Texas. Additionally,
`
`
`3 See, also, Chrimar Sys. Inc v. Ruckus Wireless, Inc., No. 16-CV-00186-SI, 2016 WL
`5403595, at *3 (N.D. Cal. Sept. 26, 2016) (granting stay pending the PTAB’s institution
`decisions where “the parties [were] nearly three months away from the claim construction
`hearing, ha[d] conducted limited discovery and ha[d] only recently filed a joint claim
`construction statement” and “[t]he Court has not set deadlines for fact or expert discovery,
`nor has it set a trial date”); Karl Storz Endoscopy-Am., Inc. v. Stryker Corp., No. 14-CV-
`00876-RS, 2015 WL 13727876, at *2 (N.D. Cal. Mar. 30, 2015) (granting stay pending the
`PTAB’s institution decisions where “the parties ha[ve] already filed their opening claim
`construction briefs . . . [and] have also taken expert depositions in preparation for claim
`construction”); Barbaro Techs., LLC v. Niantic, Inc., No. 18-cv-02955-RS, Dkt. 104 slip
`op. at 1-2 (N.D. Cal. Apr. 24, 2019) (granting stay pending the PTAB’s institution
`decisions where “the parties have completed their claim construction briefing and . . .
`discovery is already underway”).
`
`SMRH:4830-6232-0109
`
`Case No. 3:21-cv-03868-YGR
`-7-
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`PARTES REVIEW
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 13 of 19
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`issues stemming from 10Tales’ improperly disclosed claim construction expert must
`be resolved. See Schulz Decl. Ex. 5. Here, the scale of the litigation that remains
`ahead—case management conference and schedule, Rule 12(b) motion practice, fact
`and expert discovery, claim construction, summary judgment motions, and trial—
`strongly weighs in favor of a stay. Riverbed v. Silver Peak, No. C 13-02980 JSW,
`2014 WL 1647399, at *2 (N.D. Cal. Mar. 14, 2014) (early stages of claim
`construction briefing, no discovery, and no date set for trial favored a stay pending
`the PTAB’s institution decisions).
`Therefore, this factor weighs in favor of a stay as the parties and the Court
`may conserve significant resources if Defendants’ requested stay is granted.
`B. A Stay Will Simplify the Issues, Streamline the Trial, and Reduce
`the Burden of Litigation on the Parties and Court
`Streamlining the case will conserve resources. The second factor strongly
`favors a stay where the outcome of the IPR will simplify the issues such as
`invalidity, claim construction, and non-infringement—even more so where an IPR
`could eliminate the need for litigation entirely. Riverbed, 2014 WL 1647399, at *2
`(granting stay where IPR petition covered almost all asserted claims and could
`potentially streamline invalidity, claim construction, and infringement issues);
`PersonalWeb Tech., LLC v. Apple, 69 F. Supp. 3d 1022, 1025–28 (N.D. Cal. 2014)
`(stay justified because cancellation of claims would moot litigation and IPR would
`simplify issues before the court). Likewise, preventing inconsistent rulings and
`needless waste of judicial resources strongly supports a stay pending the outcome of
`an IPR. MasterObjects, Inc. v. eBay Inc., No. 16-CV-06824-JSW, 2017 WL
`2181132, at *1 (N.D. Cal. May 5, 2017).
`Here, TTI’s petition challenges every claim of the ’030 patent, and the
`Defendants have waived their right to pursue the invalidity grounds upon which TTI
`relies in the IPR, if it is instituted. Thus, the IPR has the potential to significantly
`
`
`SMRH:4830-6232-0109
`
`
`
`Case No. 3:21-cv-03868-YGR
`-8-
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`PARTES REVIEW
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 14 of 19
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`simplify, or moot entirely, this litigation. Statistically speaking, that potential is
`high.
`
`The PTAB institutes petitions at a rate of 66% in the “Electrical/Computer”
`patent category that the ’030 patent falls within. See Schulz Decl. Ex. 6 (FY21 Trial
`Statistics) at 9. Once instituted, there is an even higher likelihood that some, if not
`all, claims will be found unpatentable, as the statistics reflect that 82% of the
`PTAB’s final written decisions result in the cancellation of at least some claims.
`See Schulz Decl. Ex. 6 at 11. Here, all claims of the ’030 patent are challenged in
`the IPR, including the independent claim asserted in the litigation. Thus, the high
`likelihood that the PTAB will institute the IPR and invalidate the asserted claim
`supports a stay. See, e.g., Chrimar, 2016 WL 5403595 at *4 (relying on PTAB
`statistics to conclude that “the USPTO review processes currently underway . . .
`have the potential of simplifying this litigation significantly”); Karl Storz, 2015 WL
`13727876 at *3 (finding “the available statistical evidence . . . militate[s] in favor of
`a stay”); see also Barbaro, No. 18-cv-02955-RS, Dkt. 104 slip op. at 4.
`Likewise, apart from cancellation of the ’030 Patent claims, the IPR’s
`estoppel effect on Defendants’ use of prior art weighs in favor of granting a stay as
`it too will streamline the case. See 35 U.S.C. § 315(e)(1); Finjan, 139 F.Supp.3d at
`1036, 1038 (granting stay before institution of IPRs). Indeed, Defendants have
`provided written notice to 10Tales’ counsel to this effect. Defendants stipulated that
`“in the event the PTAB institutes an IPR based on the Petition, [Defendants] will not
`rely on the [IPR] References to challenge the validity of the claims of U.S. Patent
`No. 8,856,030 in the [district court] Litigation.” See Schulz Decl. Ex. 7.
`Additionally, statements made by 10Tales in the IPR proceedings will add to the
`’030 patent file history and may further clarify and potentially limit the scope of the
`claims. See, e.g., Aylus Networks, Inc. v. Apple Inc., 856 F.3d 1353, 1362 (Fed. Cir.
`2017) (“[S]tatements made by a patent owner during an IPR proceeding, whether
`
`
`SMRH:4830-6232-0109
`
`
`
`Case No. 3:21-cv-03868-YGR
`-9-
`DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STAY CASE PENDING INTER
`PARTES REVIEW
`
`

`

`Case 5:21-cv-03868-VKD Document 96 Filed 06/17/21 Page 15 of 19
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`before or after an institution decision, can be considered for claim construction and
`relied upon to support a finding of prosecution disclaimer.”).
`Given the above benefits of simplifying issues for the litigation, if not
`mooting litigation all together, courts in this district have regularly granted a stay
`even before institution of the IPR. See, e.g., Viavi Sols. Inc. v. Platinum Optics
`Tech. Inc., No. 5:20-CV-05501-EJD, 2021 WL 1893142, at *1 (N.D. Cal. May 11,
`2021).4 Any concern that 10Tales may raise “regarding the premature nature of
`Defendant’s stay request is obviated by the relatively short time frame by which the
`PTAB must issue its decision as to whether to institute IPR,” which, in this case, is
`expected two months from now. See MasterObjects, 2017 WL 2181132, at *3.
`The numerous ways in which a stay will simplify the issues and streamline
`this case for trial heavily favor a stay pending the outcome of the IPR.
`C. A Stay Will Not Unduly Prejudice or Tactically Disadvantage
`10Tales
`Given 10Tales’ forum shopping, self-inflicted delays caused by 10Tales’
`prior litigation antics, needlessly opposing the transfer motion, demanding extensive
`venue discovery, and twice failing to state a claim upon which relief could be
`granted, 10Tales will be hard pressed to find a tactical disadvantage or prejudice that
`
`
`4 See also CF Traverse LLC v. Amprius, Inc., No. 20-CV-00484-RS, 2020 WL 6820942, at
`*1 (N.D. Cal. Nov. 6, 2020); Cellwitch, No. 19-cv-01315-JSW, Dkt. 68 slip op. at 3-4;
`Elekta Ltd. v. ZAP Surgical Sys., Inc., No. C 19-02269-JSW, 2019 WL 9100404, at *2
`(N.D. Cal. No