Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 1 of 24 PageID #: 3713
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`
`
`
`C.A. No. 17-585 (JFB) (SRF)
`
`FILED UNDER SEAL
`
`
`) ) ) ) ) ) ) ) )
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`
`)
`
`UNIVERSAL SECURE REGISTRY LLC,
`
`
`Plaintiff,
`
`
`
`v.
`
`
`APPLE INC., VISA INC. and
`VISA U.S.A., INC.,
`
`
`Defendants.
`
`PLAINTIFF UNIVERSAL SECURE REGISTRY LLC’S ANSWERING BRIEF IN
`OPPOSITION TO DEFENDANT APPLE INC.’S MOTION TO STAY PENDING
`INTER PARTES AND COVERED BUSINESS METHOD REVIEWS
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Jeremy A. Tigan (#5239)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899-1347
`(302) 658-9200
`jblumenfeld@mnat.com
`jtigan@mnat.com
`Attorneys for Universal Secure Registry LLC
`
`
`
`
`
`
`
`OF COUNSEL:
`
`Harold Barza
`Tigran Guledjian
`Valerie Roddy
`Jordan Kaericher
`Nima Hefazi
`Richard H. Doss
`QUINN EMANUEL
`URQUHART & SULLIVAN, LLP
`865 South Figueroa Street, 10th Floor
`Los Angeles, CA 90017
`(213) 443-3000
`
`Sean Pak
`Brian E. Mack
`QUINN EMANUEL
`URQUHART & SULLIVAN, LLP
`50 California Street, 22nd Floor
`San Francisco, CA 94111
`(415) 875-6600
`
`July 6, 2018
`
`
`
`
`
`REDACTED - PUBLIC VERSION
`FILED 07/16/2018
`
`

`

`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 2 of 24 PageID #: 3714
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`TABLE OF CONTENTS
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`Page
`
`I.
`
`II.
`
`The Nature and Stage of the Proceedings ............................................................................1
`
`Summary of Argument ........................................................................................................2
`
`III.
`
`Statement of Facts ................................................................................................................4
`
`A.
`
`B.
`
`C.
`
`The Activity In This Litigation To Date ..................................................................4
`
`Remaining Litigation Activity In This Case ............................................................5
`
`Status Of Proceedings In The PTO ..........................................................................6
`
`IV.
`
`Argument .............................................................................................................................6
`
`A.
`
`The Court Should Deny Apple’s Requested Stay Because There Is No
`Non-Speculative Basis To Conclude That A Stay Will Simplify The Issues
`For Trial ...................................................................................................................7
`
`1.
`
`2.
`
`Courts In This District Disfavor Pre-Institution Stays Because The
`Ability To Simplify The Issues For Trial Is Too Speculative .....................7
`
`None Of Apple’s Arguments Makes The Effect Of A Stay Any
`Less Speculative In This Case ...................................................................11
`
`The Current Status Of This Litigation Favors Denying Apple’s Motion ..............16
`
`A Stay Will Cause Undue Prejudice ......................................................................18
`
`B.
`
`C.
`
`V.
`
`Conclusion .........................................................................................................................20
`
`
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`
`
`
`
`
`i
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`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 3 of 24 PageID #: 3715
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`TABLE OF AUTHORITIES
`
`CASES
`
`Page
`
`454 Life Scis. Corp. v. Ion Torrent Sys., Inc.,
`No. CV 15-595-LPS, 2016 WL 6594083 (D. Del. Nov. 7, 2016) ...................................... 9
`
`Advanced Microscopy Inc. v. Carl Zeiss Microscopy, LLC,
`No. CV 15-516-LPS-CJB, 2016 WL 558615 (D. Del. Feb. 11, 2016) ............... 7, 8, 10, 17
`
`CANVS Corp. v. United States,
`118 Fed. Cl. 587 (2014) .................................................................................................... 15
`
`Copy Prot. LLC v. Netflix, Inc.,
`No. CV 14-365-LPS, 2015 WL 3799363 (D. Del. June 17, 2015) ................................. 8, 9
`
`DermaFocus LLC v. Ulthera, Inc.,
`No. 1:15-CV-00654-JFB-SRF, 2018 WL 2733363 (D. Del. June 7, 2018) ..................... 13
`
`Freeny v. Apple Inc.,
`No. 2:13-CV-00361-WCB, 2014 WL 3611948 (E.D. Tex. July 22, 2014) .................... 8, 9
`
`Koninklijke Philips N.V. v. ASUSTeK Computer Inc.,
`C.A. No. 15-1125-GMS (D. Del. Mar. 30, 2017) ............................................................... 8
`
`McRo, Inc. v. Bethesda Softworks LLC,
`No. CV 12-1509-LPS-CJB, 2014 WL 1711028 (D. Del. May 1, 2014) ...................... 8, 17
`
`Nexans Inc. v. Belden, Inc.,
`C.A. No. 12-1491-SLR-SRF, 2014 WL 651913 (D. Del. Feb. 9, 2014) .......................7, 18
`
`NuVasive, Inc. v. Neurovision Med. Prod., Inc.,
`No. CV 15-286-LPS-CJB, 2015 WL 3918866 (D. Del. June 23, 2015) ...................... 8, 16
`
`Personalized User Model, L.L.P. v. Google, Inc.,
`No. CA 09-525-LPS, 2012 WL 5379106 (D. Del. Oct. 31, 2012) ................................... 19
`
`Personalweb Technologies, LLC v. Google, Inc.,
`No. 5:13-CV-01317-EJD, 2014 WL 4100743 (N.D. Cal. Aug. 20, 2014) ....................... 15
`
`Pragmatus Mobile, LLC v. Amazon.com, Inc.,
`C.A. No. 14-436-LPS, 2015 WL 3799433 (D. Del. June 17, 2015) ................................... 8
`
`SAS Institute, Inc. v. Iancu,
`138 S. Ct. 1348 (2018) .................................................................................................. 6, 12
`
`Sioux Chief Mfg. Co. v. Zurn Indus., LLC,
`No. 1-18-cv-00163 RGA (D. Del. June 7, 2018) ................................................................ 8
`
`
`
`ii
`
`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 4 of 24 PageID #: 3716
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`Textron Innovations Inc. v. Toro Co.,
`No. CIV. A. 05-486 GMS, 2007 WL 7772169 (D. Del. Apr. 25, 2007) .......................... 12
`
`Thermo Fisher Scientific Inc. v. Agilent Techs., Inc.,
`No. 1-17-cv-00600 LPS CJB (D. Del. Apr. 26, 2018)........................................................ 7
`
`Toshiba Samsung Storage Tech. Korea Corp. v. LG Elecs., Inc.,
`No. CV 15-691-LPS-CJB, 2015 WL 7824098 (D. Del. Dec. 3, 2015) .................. 9, 10, 11
`
`Transocean Offshore Deepwater Drilling, Inc. v. Seadrill Americas, Inc.,
`No. CIV. A. H-15-144, 2015 WL 6394436 (S.D. Tex. Oct. 22, 2015) ............................ 19
`
`VirtualAgility Inc. v. Salesforce.com, Inc.,
`759 F.3d 1307 (Fed. Cir. 2014)......................................................................................... 19
`
`Wi-LAN, Inc. v. LG Elecs., Inc.,
`No. 3:17-cv-00358-BEN-MDD, 2018 WL2392161 (S.D. Cal. May 22, 2018) ............... 13
`
`Yodlee, Inc. v. Plaid Techs. Inc.,
`No. CV 14-1445-LPS-CJB, 2017 WL 401896 (D. Del. Jan. 27, 2017) ........................... 19
`
`STATUTES
`
`35 U.S.C. § 101 ............................................................................................................................... 4
`
`35 U.S.C. § 315(e)(2) .............................................................................................................. 14, 16
`
`Leahy-Smith America Invents Act, Pub. L. No. 112-29 § 18(b)(1)(D) .......................................... 7
`
`Fed. R. Civ. P. 26(a)(1) ................................................................................................................... 5
`
`
`
`
`
`iii
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`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 5 of 24 PageID #: 3717
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`Plaintiff Universal Secure Registry LLC (“USR”) respectfully opposes Defendant Apple
`
`Inc.’s (“Apple”) motion to stay this litigation pending resolution of its pre-institution petitions
`
`for inter partes review (“IPR”) and covered business method review (“CBM review”). For the
`
`reasons set forth below, the Court should deny Apple’s motion or, at minimum, deny it without
`
`prejudice to renew after the Board has made its institution decisions on Apple’s pending
`
`petitions.
`
`I.
`
`The Nature and Stage of the Proceedings
`
`On May 21, 2017, USR filed suit against Apple, along with Visa Inc. and Visa U.S.A.,
`
`Inc. (collectively, “Visa”) for direct, induced, and contributory infringement of U.S. Patent
`
`Nos. 8,577,813 (“the '813 patent”); 8,856,539 (“the '539 patent”); 9,100,826 (“the '826 patent”);
`
`and 9,530,137 (“the '137 patent” and, with the '813 patent, '539 patent, and '826 patent, “the
`
`Asserted Patents”). D.I. 1.
`
`As set forth in more detail in the Statement of Facts, motions to dismiss and to transfer
`
`are pending; a scheduling order has been entered and trial date set; initial disclosures have been
`
`exchanged; and the parties have served responses to extensive written discovery requests. The
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`parties are currently engaged in active discovery.
`
`On April 3, 4, and 12 and May 3, 2018, Apple filed eleven IPR and CBM review
`
`petitions before the Patent Trials and Appeals Board (“Board” or “PTAB”) of the United States
`
`Patent & Trademark Office (“USPTO”). Institution decisions on all eleven petitions are due no
`
`later than December 12, 2018. See Declaration of Jeremy Tigan, filed concurrently herewith
`
`(“Tigan Decl.”) Ex. 1.1 To date, the Board has instituted review of certain claims of only one of
`
`
`1 One day prior to filing this opposition, USR received notice that Visa had filed two
`additional IPR petitions against the '539 patent on July 3, 2018. Because Visa has not joined in
`Apple’s request for a stay, and because these petitions relate to a patent as to which Apple has
`
`
`
`1
`
`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 6 of 24 PageID #: 3718
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`the Asserted Patents, the '813 patent, on the basis of an IPR petition filed by third party Unified
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`Patents, Inc. (“Unified Patents”). A final written decision on the merits on the instituted claims
`
`of the '813 patent is expected by May 3, 2019. Id. ¶ 4.
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`II.
`
`Summary of Argument
`
`1.
`
`The Court should deny Apple’s motion for a stay. Only one of four (or, if USR is
`
`granted leave to amend its complaint, seven) Asserted Patents is the subject of an instituted IPR,
`
`and Apple makes no serious argument that a stay of this entire case pending review of some
`
`claims of a single patent is warranted. Instead, Apple argues that its mere filing of eleven more
`
`petitions for IPR and CBM review justifies a case-wide stay. In doing so, Apple urges the Court
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`to depart from this District’s sound and well-established practice of denying pre-institution
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`motions to stay, asking the Court to stay this case before the Board has even decided whether it
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`will institute review on Apple’s petitions. Courts have repeatedly concluded that, until the Board
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`decides to institute review, attempting to determine if a stay will simplify the issues for trial—
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`one of three factors in considering whether to stay proceedings—is too speculative for this factor
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`to weigh in favor of a stay. Movants can always tout that review by the PTO may yield some
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`simplifying effect on the issues for trial. But all such simplifying effects first require that the
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`Board actually institute review, and there is simply no way of predicting, without resorting to
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`pure speculation, whether the Board will institute review in any specific case. By December 12,
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`2018, however, the Board will have made its institution decisions and the parties and the Court
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`will know how many Asserted Patents and how many claims will be reviewed by the Board, and
`
`
`already filed petitions challenging all claims, USR is not taking the position in this opposition
`that Apple should necessarily be required to wait to renew its motion to stay until after the Board
`issues institution decisions on Visa’s newly-filed petitions. Depending on the outcomes of the
`institution decisions on Apple’s petitions, however, USR reserves the right to argue that a stay
`prior to the institution decision on Visa’s petitions is premature at that time.
`
`
`
`2
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`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 7 of 24 PageID #: 3719
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`on what grounds, and the parties can then intelligently address the simplifying effects a stay
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`pending review might have (if any) in that scenario. Until then, however, the speculative nature
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`of any analysis of the simplification factor at this pre-institution stage weighs strongly against
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`imposing a stay prior to the Board’s institution decisions and warrants denial of Apple’s motion
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`or, at minimum, denial without prejudice to refile.
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`2.
`
`The current stage of these proceedings also favors denial of Apple’s pre-
`
`institution motion to stay. Although the parties will expend some resources on initial discovery
`
`and disclosures in the time until the Board must issue its last institution decision on Apple’s
`
`petitions, the lion’s share of the parties’ and this Court’s future resources will be consumed on
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`activities that are scheduled to occur after the Board makes its institution decisions. Thus, the
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`Court can revisit Apple’s motion to stay (if Apple asks it to do so) after the Board makes its
`
`institution decisions and still be able to stay most of the same litigation activity Apple seeks to
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`stay today—including the briefing and hearing of claim construction, deposition discovery,
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`expert disclosures and discovery, summary judgment, and trial—if it is appropriate to do so at
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`that time.2 Moreover, the activity that will occur in the time until the Board must issue its final
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`institution decision—including the identification of asserted claims—will further inform the
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`likelihood that a stay will (or will not) result in the simplification of issues for trial. In contrast,
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`if the Court grants Apple’s request to stay the case at the pre-institution stage and the stay proves
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`to have been unwarranted once the Board makes its institution decisions, the pre-institution stay
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`will have thrown this case off course and disrupted the Court’s orderly case management for no
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`reason. All dates would almost certainly have to be reset, including the trial date.
`
`
`2 To the extent any delay in the schedule arises from USR’s imminent proposed amendment
`to add three additional patents, even less activity will occur in the time until the Board issues its
`institution decisions. USR anticipates, however, that these patents can be added to the case while
`causing little or no delay in the case schedule.
`
`
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`3
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`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 8 of 24 PageID #: 3720
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`3.
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`Finally, the undue prejudice that Apple’s requested pre-institution stay may cause
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`USR further warrants denial of Apple’s motion.
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`Apple’s motion or, at minimum, deny it without prejudice to refile it, if appropriate to do so,
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`, USR respectfully urges the Court to deny
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`after the Board has made its institution decisions.
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`III.
`
`Statement of Facts
`
`A.
`
`The Activity In This Litigation To Date
`
`On May 21, 2017, USR filed suit against Apple and Visa for direct, induced, and
`
`contributory infringement of the four Asserted Patents. D.I. 1. In the year that has passed since
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`Defendants were served with the complaint, two significant pretrial motions have been filed that
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`remain pending. On August 25, 2017, Defendants moved to dismiss the complaint, arguing that
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`the asserted patent claims are patent-ineligible under 35 U.S.C. § 101. D.I. 16-17. USR opposed
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`that motion on September 29, 2017. D.I. 30. On September 19, 2017, Defendants further moved
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`to transfer this case to the United States District Court for the Northern District of California.
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`D.I. 21. The Court heard argument on both motions on December 13, 2017.
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`On April 10, 2018, following a scheduling conference held April 3, 2018, the Court
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`entered a scheduling order governing this litigation. D.I. 57. On June 25, 2018, the Court also
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`held a telephonic discovery conference in which it resolved a number of disputes between the
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`parties regarding various disputes regarding a protective order to govern discovery in this case.
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`4
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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 9 of 24 PageID #: 3721
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`Some initial discovery and disclosures have already taken place. The parties served their
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`initial disclosures under Rule 26(a)(1) of the Federal Rules of Civil Procedure on April 16, 2018,
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`D.I. 59-61, and their initial disclosures pursuant to paragraph 3 of the Delaware Default Standard
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`for Discovery on May 3, 2018. D.I. 69-71. The parties have already collectively propounded
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`and served written objections and responses to 393 requests for production and 10 common
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`interrogatories. D.I. 67, 68, 74, 78, 85, 86, 88, 98, 99, 103.3 Apple has served document
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`subpoenas on five third parties, D.I. 79-83, to which the third parties have served objections.
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`Defendants have also begun their initial production of core technical documents.
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`B.
`
`Remaining Litigation Activity In This Case
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`Except for Paragraph 4(c) disclosures (August 10, 2018) and Paragraph 4(d) disclosures
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`(October 2, 2018), D.I. 57 at 2, most remaining significant litigation events will occur after
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`December 12, 2018, the institution decision deadline for the last of Apple’s eleven petitions.
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`Document production must be completed by February 8, 2019; the fact discovery cutoff is July
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`2, 2019; opening expert reports are due August 6, 2019; and the expert discovery cutoff is
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`November 8, 2019. D.I. 57 at 1, 2, 4. With respect to claim construction, the Joint Claim
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`Construction Chart is due December 14, 2018; opening claim construction briefs are due January
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`16, 2019; responsive claim construction briefs are due February 13, 2019; the claim construction
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`hearing will occur on March 6, 2019; and the Court will issue its decision on claim construction
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`on May 10, 2019. Id. at 8-10. Dispositive motions are due January 17, 2020; the pretrial
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`conference is June 25, 2020; and a ten-day trial will begin on July 20, 2020. Id. at 10, 12.
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`Significantly prior to the deadline for the Board to issue the last institution decision on
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`Apple’s eleven petitions, USR intends to seek leave to amend its complaint to assert three
`
`
`3 Responses to four of the common interrogatories will become due after the filing of this
`brief but before the filing of Apple’s reply. D.I. 87.
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`5
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`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 10 of 24 PageID #: 3722
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`additional patents that had yet to issue when it filed its original complaint. USR expects to file
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`its motion for leave to amend as soon as the third patent issues, which is imminent. As of this
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`writing, Apple has not responded to USR’s June 29, 2018 letter asking if Defendants will
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`consent to the amendment.4
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`C.
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`Status Of Proceedings In The PTO
`
`On May 2, 2018, the PTO instituted third party Unified Patents’ IPR on claims 1-3 and 5-
`
`26 of the '813 patent. D.I. 77. Notably, the Board expressly stated that it found that Unified
`
`Patents had not met the standard for institution for two of the claims challenged by its petition,
`
`but the Board instituted on all challenged claims in light of the United States Supreme Court’s
`
`decision in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348, 1354 (2018). D.I. 77-1 at 5-6, 20, 24. A
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`final decision on the merits of Unified Patents’ '813 patent IPR is expected by May 3, 2019.
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`Tigan Decl. ¶ 4. On April 3, 4, and 12 and May 3, 2018, Apple filed eleven IPR and CBM
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`petitions which, collectively, are directed to all four of the presently-Asserted Patents. USR’s
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`preliminary responses to those petitions are due July 10, August 11, August 18, August 29,
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`September 11, and September 12, 2018. Id. Ex. 1. Institution decisions by the Board on the
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`eleven petitions are due between October 10 and December 12, 2018. Id.5
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`IV. Argument
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`Courts in this District consider three factors in determining whether to stay an action
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`pending IPR or CBM review: “(1) whether granting the stay will simplify the issues for trial;
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`(2) the status of the litigation, particularly whether discovery is complete and a trial date has
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`been set; and (3) whether a stay would cause the non-movant to suffer undue prejudice from any
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`4 The deadline to seek leave to amend the pleadings is November 30, 2018. USR
`anticipates filing its motion for leave to amend well in advance of that deadline.
`5 As noted, Visa filed two IPR petitions challenging claims of the '539 patent on July 3,
`2018. See n.1, supra.
`
`
`
`6
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`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 11 of 24 PageID #: 3723
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`delay, or allow the movant to gain a clear tactical advantage.” Advanced Microscopy Inc. v. Carl
`
`Zeiss Microscopy, LLC, No. CV 15-516-LPS-CJB, 2016 WL 558615, at *1 (D. Del. Feb. 11,
`
`2016). Where CBM review is involved, courts consider a fourth factor: “whether a stay, or the
`
`denial thereof, will reduce the burden of litigation on the parties and on the court.” Leahy-Smith
`
`America Invents Act, Pub. L. No. 112-29, § 18(b)(1)(D). Ultimately, however, whether to stay
`
`litigation (including whether to stay pending resolution of PTO proceedings) is a matter left to
`
`the Court’s discretion. Nexans Inc. v. Belden, Inc., C.A. No. 12-1491-SLR-SRF, 2014 WL
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`651913, *2 (D. Del. Feb. 9, 2014). Considering these factors, the Court should exercise its
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`discretion to deny Apple’s premature request to stay these proceedings or, at minimum, deny it
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`without prejudice to refile once the Board issues its institution decisions.
`
`A.
`
`The Court Should Deny Apple’s Requested Stay Because There Is No Non-
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`Speculative Basis To Conclude That A Stay Will Simplify The Issues For Trial
`
`1.
`
`Courts In This District Disfavor Pre-Institution Stays Because The Ability
`
`To Simplify The Issues For Trial Is Too Speculative
`
`The weight of authority in this District disfavors staying litigation merely because
`
`petitions for IPR or CBM review have been filed, with courts typically denying such overeager
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`motions without prejudice and with leave to refile once the Board has made its institution
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`decision. See, e.g., Thermo Fisher Scientific Inc. v. Agilent Techs., Inc., No. 1-17-cv-00600 LPS
`
`CJB, Oral Order, D.I. 92 (D. Del. Apr. 26, 2018) (Burke, M.J.) (attached as Exhibit 1) (denying
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`pre-institution motion to stay without prejudice to ability to renew motion after institution
`
`decision); Advanced Microscopy, 2016 WL 558615, at *3 (same); Toshiba Samsung Storage
`
`Tech. Korea Corp. v. LG Elecs., Inc., No. CV 15-691-LPS-CJB, 2015 WL 7824098, at *2 (D.
`
`Del. Dec. 3, 2015) (same); NuVasive, Inc. v. Neurovision Med. Prod., Inc., No. CV 15-286-LPS-
`
`
`
`7
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`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 12 of 24 PageID #: 3724
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`CJB, 2015 WL 3918866, at *2 (D. Del. June 23, 2015) (same); Copy Prot. LLC v. Netflix, Inc.,
`
`No. CV 14-365-LPS, 2015 WL 3799363, at *1 (D. Del. June 17, 2015) (Stark, J.) (denying pre-
`
`institution motion to stay and noting that “Defendant may renew its Motion if and when its
`
`petition is instituted, and the simplification factor may be evaluated differently at that time”);
`
`McRo, Inc. v. Bethesda Softworks LLC, No. CV 12-1509-LPS-CJB, 2014 WL 1711028, at *2 (D.
`
`Del. May 1, 2014) (denying motion to stay without prejudice to renew following institution
`
`decision); Koninklijke Philips N.V. v. ASUSTeK Computer Inc., C.A. No. 15-1125-GMS, slip
`
`order n.1 (D. Del. Mar. 30, 2017) (Sleet, J.) (attached as Exhibit 2) (“Because the USPTO has
`
`not instituted inter partes review with respect to the patents at issue, the court will deny the
`
`Motion.”); Pragmatus Mobile, LLC v. Amazon.com, Inc., C.A. No. 14-436-LPS, 2015 WL
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`3799433 (D. Del. June 17, 2015) (denying pre-institution motion to stay without prejudice);6
`
`accord Freeny v. Apple Inc., No. 2:13-CV-00361-WCB, 2014 WL 3611948, at *1 (E.D. Tex.
`
`July 22, 2014) (same).
`
`As these decisions recognize, attempting to determine whether a stay pending completion
`
`of PTAB review proceedings will simplify the issues for trial is simply too speculative before the
`
`Board even decides whether to grant review. If the Board institutes review, there will be at least
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`some simplification of the issues for trial in many cases, even if claims are not ultimately
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`canceled or amended. But if the Board declines to institute review, the mere fact that IPR or
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`CBM review petitions were filed does nothing to simplify the issues for trial in any case. Thus,
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`“[g]enerally, the simplification issue does not cut in favor of granting a stay prior to the time the
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`PTAB decides whether to grant the petition for inter partes review.” Copy Prot. LLC, 2015 WL
`
`
`6 Cf. Sioux Chief Mfg. Co. v. Zurn Indus., LLC, No. 1-18-cv-00163 RGA, Oral Order
`D.I. 45 (D. Del. June 7, 2018) (Andrews, J.) (attached as Exhibit 3) (ordering parties to
`“promptly notify the Court after the PTAB decides whether to institute review” and noting that
`“[i]f review is instituted, the Court will schedule oral argument on the Motion to Stay”).
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`
`
`8
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`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 13 of 24 PageID #: 3725
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`3799363, at *1 (D. Del. June 17, 2015); see also Freeny, 2014 WL 3611948, at *1 (“The most
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`important—indeed, the dispositive—factor bearing on the Court’s exercise of its discretion in
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`this case is that the PTAB has not yet acted on Netgear’s petition for inter partes review.”).
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`Instead, after the Board makes its institution decisions “is generally the ideal time at
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`which to file such a request [to stay litigation pending IPR or CBM review].” 454 Life Scis.
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`Corp. v. Ion Torrent Sys., Inc., No. CV 15-595-LPS, 2016 WL 6594083, at *4 (D. Del. Nov. 7,
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`2016); Toshiba Samsung Storage Tech. Korea Corp., 2015 WL 7824098, at *2 (acknowledging
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`that “denial of the instant [stay] motion without prejudice to renew will allow for a better, more
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`fully developed record as to the ‘simplification of issues’ factor”).
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`Seemingly recognizing that most recent District of Delaware decisions support denial of
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`its premature motion, Apple argues that “courts in this District occasionally grant[] motions to
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`stay prior to institution of IPR or CBM review,” citing cases dating from 2013 to September
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`2015. Br. at 16 (emphasis added). But as one Court has noted:
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`[A]s time has passed since the new IPR process was instituted, the
`Court has become less and less sure about the merit of granting a
`stay in favor of an IPR proceeding, when the PTAB has not even
`weighed in on whether to institute review. As compared to the
`results from IPR institution decisions in 2013 (when the PTAB was
`granting review as to “nearly all” of the IPR petitions on which it
`had then issued decisions), . . . more recent data suggests that
`review is being instituted in far fewer cases, see Toshiba Samsung
`Storage Tech. Korea Corp., 2015 WL 7824098, at *2 n.3 (noting
`evidence indicating that as of February 2015, the PTAB had
`initiated review as to 75% of petitions filed in that calendar year,
`and on 60% of petitions filed overall). The more that the
`statistical likelihood of the PTAB instituting review on any petition
`seems less like “near certainty” and more like “fair probability,”
`the less reasonable it seems to stop a district court proceeding after
`it has started—only to perhaps be required to start it up again later
`if the PTAB issues an unfavorable decision to the petitioner. A
`court’s interest in efficiently managing its docket—and in making
`one good decision at one point when the key data is at hand—can
`be undermined by that kind of “start and stop” process.
`
`
`
`9
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`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 14 of 24 PageID #: 3726
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`Advanced Microscopy, 2016 WL 558615, at *2; see also Toshiba, 2015 WL 7824098, at *2. As
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`the cases cited above show, the majority and more recent approach in this District has been to
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`deny pre-institution stay motions without prejudice to refile following the Board’s institution
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`decision.
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`To date, only one of the four Asserted Patents is the subject of an instituted IPR or CBM
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`review proceeding.7 The other three Asserted Patents are merely subjects of Apple’s barrage of
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`IPR and CBM petitions, none of which have been instituted at this time. Apple’s petitions for
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`IPR and CBM review will have no simplifying effect on the issues for trial in this case if they are
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`denied, in which case the only result of a pre-institution stay will be an unnecessary, multiple-
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`month delay. The Court should deny Apple’s motion or, at minimum, deny it without prejudice
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`to renew it after the Board issues its institution decisions on Apple’s eleven petitions (i.e., in
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`December 2018) if it is appropriate to do so at that time, when the Court and the parties will
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`know which Asserted Patents and claims will actually be reviewed. “[D]enial of the instant
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`motion without prejudice to renew will allow for a better, more fully developed record as to the
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`‘simplification of issues’ factor. . . . [F]urther clarity will come simply from receiving the
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`PTAB’s decision itself. If no review is instituted, the asserted basis for a stay will fall away.”
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`Toshiba, 2015 WL 7824098, at *2; see id. at *3 (finding that despite “some good arguments in
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`favor of a stay,” “the circumstances counsel in favor of having the benefit of the PTAB’s
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`[institution] decision before any decision to grant a stay is made”).
`
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`7 Apple does not appear to argue that the Court should stay the entire case merely because
`an IPR has been instituted against the '813 patent. Any stay based on the IPR proceedings
`instituted against this single patent should be limited to proceedings specific to the '813 patent.
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`
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`10
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`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 15 of 24 PageID #: 3727
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`2.
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`None Of Apple’s Arguments Makes The Effect Of A Stay Any Less
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`Speculative In This Case
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`Apple urges the Court to ignore the wisdom of considering stays pending IPR or CBM
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`review only if and after review has actually been instituted or denied and instead impose an
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`immediate, pre-institution stay of the entire case. But none of Apple’s arguments makes the
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`effect of a pre-institution stay on the simplification of issues for trial in this case any less
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`speculative.
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`First, Apple argues that most or all of its petitions will be instituted and, further, that they
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`will ultimately result in the cancellation or amendment of all asserted claims. See, e.g., Br. at 7
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`(“The PTO is likely to grant review of Apple’s IPR and CBM petitions.”); id. (“Apple’s IPRs
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`and CBM petitions are likely to resolve this case”); id. at 9 (referring to “the unlikely event that
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`Apple’s IPR and CBM petitions do not completely resolve this litigation”).8 But the only way
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`for the Court to evaluate the likelihood that Apple’s pending petitions will be instituted is to
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`either (i) simply take Apple’s partisan word for it or (ii) review more than a thousand pages of
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`petitions and prior art to prejudge the merits of Apple’s pending petitions—even before the
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`deadline for USR to submit preliminary responses to them to the Board. Neither is prudent or
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`practical.
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`Second, Apple attempts to bolster its prediction that the Board will institute review of all
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`of the Asserted Patents by citing cherry-picked statistics that 67.4% of post-AIA IPR, CBM, and
`
`
`8 Apple’s opening brief divides its analysis of the simplification factor into two sections
`based on the varying degrees of success it hopes to achieve, i.e., invalidation of all ultimately
`asserted claims and invalidation of less than all of the ultimately asserted claims. Because both
`sections speculatively assume that Apple’s petitions will be instituted, USR synthesizes Apple’s
`relevant arguments in responding to them for efficiency. For clarity, USR notes that the
`numbering below therefore does not mirror Apple’s argument numbering in Section A.2 of its
`brief.
`
`
`
`11
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`

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`Case 1:17-cv-00585-JFB-SRF Document 113 Filed 07/16/18 Page 16 of 24 PageID #: 3728
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`post-grant review petitions have been instituted since the relevant provisions of the AIA went
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`into effect, with instituted petitions reaching a final written decision