Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 1 of 22 PageID #: 5500
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`PELOTON INTERACTIVE, INC.,
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`C.A. No. 20-662 (RGA)
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`
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`v.
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`
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`iFIT INC.,
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`
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`
`
`Plaintiff and
`Counter-Defendant,
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`Defendant and
`Counterclaimant.
`
`PELOTON’S OPPOSITION TO DEFENDANT’S MOTION TO STAY PELOTON’S
`PATENT CLAIMS PENDING OUTCOME OF INSTITUTED IPR PROCEEDINGS
`
`OF COUNSEL:
`
`Steven N. Feldman
`LATHAM & WATKINS LLP
`355 South Grand Avenue, Suite 100
`Los Angeles, CA 90071-1560
`(213) 485-1234
`
`Lawrence J. Gotts
`Gabriel K. Bell
`LATHAM & WATKINS LLP
`555 Eleventh Street, NW
`Suite 1000
`Washington, D.C. 20004-1304
`(202) 637- 2200
`
`Marc N. Zubick
`LATHAM & WATKINS LLP
`330 North Wabash Avenue, Suite 2800
`Chicago, IL 60611
`(312) 876- 7700
`
`David F. Kowalski
`Patrick C. Justman
`Adam Alexander Herrera
`LATHAM & WATKINS LLP
`12670 High Bluff Drive
`San Diego, CA 92130
`(858) 523-5400
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Michael J. Flynn (#5333)
`Anthony D. Raucci (#5948)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@morrisnichols.com
`mflynn@morrisnichols.com
`araucci@morrisnichols.com
`
`Attorneys for Plaintiff Peloton Interactive, Inc.
`
`William J. Trach
`LATHAM & WATKINS LLP
`200 Clarendon Street
`Boston, MA 02116
`(617) 948-6000
`
`Joseph C. Akalski
`Clement Naples
`Dennis Mai
`LATHAM & WATKINS LLP
`1271 Avenue of the Americas
`New York, NY 10020
`(212) 906-2927
`
`
`January 31, 2022
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`
`
`

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`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 2 of 22 PageID #: 5501
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`
`
`I.
`
`II.
`
`TABLE OF CONTENTS
`
`INTRODUCTION .................................................................................................. ii
`
`SUMMARY OF THE ARGUMENT ......................................................................1
`
`III.
`
`ARGUMENT ...........................................................................................................3
`
`A.
`B.
`
`C.
`
`The Timing of iFIT’s Motion Disfavors a Stay ...........................................3
`A Stay Would Prejudice Peloton and Present iFIT With a Tactical
`Advantage in This Litigation .......................................................................6
`1.
`Peloton and iFIT are Competitors ....................................................6
`2.
`iFIT Chose Not to File its Own IPR Petitions and Subsequently
`Delayed in Moving to Stay ..............................................................7
`The IPRs Will not be Resolved for Another Ten Months, Not
`Counting Appeal ..............................................................................9
`iFIT Overstates the Possible Simplification of This Case ...........................9
`1.
`iFIT Will Not Be Bound by the Full IPR Estoppel Provisions ......10
`
`3.
`
`IV.
`
`CONCLUSION ......................................................................................................14
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`
`
`i
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`

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`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 3 of 22 PageID #: 5502
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`
`
`TABLE OF AUTHORITIES
`
`CASES
`
`454 Life Scis. Corp. v. Ion Torrent Sys., Inc.,
`C.A. No. 15-595-LPS, 2016 WL 6594083 (D. Del. Nov. 7, 2016) ..........................10, 11
`
`AgroFresh Inc. v. Essentiv LLC,
`C.A. No. 16-662 (MN), 2019 WL 2327654 (D. Del. May 31, 2019) ......................11, 13
`
`Amkor Tech., Inc. v. Synaptics, Inc.,
`C.A. No. 15- 910 (GMS), 2016 WL 9331100 (D. Del. Oct. 25, 2016) ....................11, 13
`
`Belden Techs. Inc. v. Superior Essex Communs. LP,
`C.A. No. 08-63-SLR, 2010 WL 3522327 (D. Del. Sept. 2, 2010) ...........................12, 13
`
`Bonutti Skeletal Innovations, L.L.C. v. Zimmer Holdings, Inc.,
`C.A. No. 12- 1107 (GMS), 2014 WL 1369721 (D. Del. Apr. 7, 2014) .........................12
`
`Bos. Sci. Corp. v. Cordis Corp.,
`777 F. Supp. 2d 783 (D. Del. 2011) .................................................................................6
`
`Copy Prot. LLC v. Netflix, Inc.,
`C.A. No. 14-365-LPS, 2015 WL 3799363 (D. Del. June 17, 2015) ............................5, 9
`
`Courtesy Prods., L.L.C. v. Hamilton Beach Brands, Inc.,
`C.A. No. 13-2012-SLR/SRF, 2015 WL 5145526 (D. Del. Sept. 1, 2015) ...................3, 6
`
`Dragon Intellectual Prop. LLC v. Apple, Inc.,
`C.A. No. 13-2058-RGA, D.I. 87 (D. Del. Apr. 10, 2015) ..............................................12
`
`f’real Foods, LLC v. Hamilton Beach Brands, Inc.,
`C.A. No. 16--41 (GMS), 2017 WL 10619854 (D. Del. Mar. 9, 2017) ..................5, 9, 14
`
`Fairchild Semiconductor Corp. v. Power Integrations, Inc.,
`100 F. Supp. 3d 357 (D. Del. 2015) ...............................................................................13
`
`Greatbatch Ltd. v. AVX Corp.,
`C.A. No. 13-723-LPS, 2015 WL 8483986 (D. Del. Dec. 10, 2015),
`aff’d, 813 F. App’x 609 (Fed. Cir. 2020) .....................................................................8, 9
`
`iFIT, Inc. v. Peloton Interactive, Inc.,
`C.A. No. 20-1386-RGA, D.I. 97 (Dec. 21, 2020) ............................................................6
`
`ImageVision.Net, Inc. v. Internet Payment Exch., Inc.,
`C.A. No. 12-054-GMS-MPT, 2013 WL 663535 (D. Del. Feb. 25, 2013,
`report and recommendation adopted, 2013 WL 1743854 (D. Del. Apr. 22, 2013) .........5
`
`
`
`ii
`
`

`

`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 4 of 22 PageID #: 5503
`
`
`
`Invensas Corp. v. Samsung Elecs. Co.,
`C.A. No. 17-1363-MN-SRF, 2018 WL 4762957 (D. Del. Oct. 2, 2018) .........................4
`
`IOENGINE, LLC v. PayPal Holdings, Inc.,
`C.A. No. 18-452-WCB, 2019 WL 3943058 (D. Del. Aug. 21, 2019) ...........................11
`
`Life Techs. Corp. v. Illumina, Inc.,
`C.A. No. 09-706-RK, 2010 WL 2348737 (D. Del. June 7, 2010) ..............................7, 13
`
`Liqwd, Inc. v. L’Oréal USA, Inc.,
`C.A. No. 17-14-JFB-SRF, 2018 WL 11189633 (D. Del. Dec. 12, 2018) ..............6, 9, 14
`
`Oracle Corp. v. Parallel Networks, LLP,
`C.A. No. 06-414-SLR, 2010 WL 3613851 (D. Del. Sept. 8, 2010) .................................8
`
`Pragmatus Mobile, LLC v. Amazon.com, Inc.,
`C.A. No. 14-436-LPS, 2015 WL 3799433 (D. Del. June 17, 2015) ................................8
`
`President & Fellows of Harvard College v. Micron Tech., Inc.,
`C.A. No. 17-1729-LPS-SRF, 2018 WL 10337332 (D. Del. Jan. 8, 2018) ...................4, 5
`
`Princeton Digital Image Corp. v. Konami Digital Ent., Inc.,
`C.A. No. 12-1461-LPS-CJB, 2014 WL 3819458 (D. Del. Jan. 15, 2014) .....................12
`
`Realtime Adapative Streaming LLC v. Adobe Sys. Inc.,
`No. CV 18-9344, 2019 WL 11717183 (C.D. Cal. May 14, 2019) ...................................7
`
`Realtime Data, LLC v. Rackspace US, Inc.,
`No. 6:16-CV-00961, 2017 WL 772654 (E.D. Tex. Feb. 28, 2017) ...............................11
`
`Riddell, Inc. v. Kranos Corp.,
`No. 16 C 4496, 2017 WL 959019 (N.D. Ill. Mar. 12, 2017) ..........................................11
`
`Siemens Indus., Inc. v. Westinghouse Air Brake Techs. Corp.,
`C.A. No. 16-284-LPS, 2018 WL 3046511 (D. Del. June 20, 2018) ..............................13
`
`Solas OLED Ltd. v. Samsung Display Co.,
`No. 2:19-CV-00152, 2020 WL 4040716 (E.D. Tex. July 17, 2020) ..............................10
`
`Sunoco Partners Mktg. & Terminals L.P. v. Powder Springs Logistics, LLC,
`C.A. No. 17-1390-LPS-CJB, 2020 WL 3060458 (D. Del. June 9, 2020) ......................13
`
`TruePosition, Inc. v. Polaris Wireless, Inc.,
`C.A. No. 12-646-RGA/MPT, 2013 WL 5701529 (D. Del. Oct. 21, 2013),
`report and recommendation adopted, 2013 WL 6020798 (D. Del. Nov. 12, 2013) ........5
`
`Verinata Health, Inc. v. Ariosa Diagnostics, Inc.,
`No. C 12-05501, 2014 WL 121640 (N.D. Cal. Jan. 13, 2014) .......................................12
`
`
`
`iii
`
`

`

`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 5 of 22 PageID #: 5504
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`Viiv Healthcare Co. v. Mylan Inc.,
`C.A. No. 12-1065-RGA, D.I. 56 (D. Del. Sept. 16, 2013) .............................................12
`
`VirtualAgility Inc. v. Salesforce.com, Inc.,
`759 F.3d 1307 (Fed. Cir. 2014) ................................................................................10, 12
`
`
`
`
`
`iv
`
`

`

`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 6 of 22 PageID #: 5505
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`I.
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`INTRODUCTION
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`iFIT’s belated motion to stay parts of this case to await resolution of IPRs a different
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`defendant brought in a different case while proceeding with iFIT’s own affirmative patent
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`infringement claims does not meet this Court’s stated standards for a stay and should be denied.
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`Moreover, iFIT’s free riding on those IPRs by refusing to be bound to the full scope of estoppel is
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`unfair and prejudicial to Peloton.
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`Peloton filed this case against its competitor iFIT nearly two years ago, asserting numerous
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`causes of action, including iFIT’s infringement of Peloton’s U.S. Patents Nos. 10,486,026 (the
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`“’026 patent”) and 10,639,521 (that “’521 patent”). By statute, iFIT had a year to file a petition
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`for inter partes review (“IPR”) of those patents. It did not, choosing instead to litigate the
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`infringement and validity of Peloton’s patents in this forum, as well as by filing counterclaims
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`alleging infringement by Peloton of iFIT’s patents. The parties have thus spent the last twenty
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`months litigating this action, including completing claim construction on both parties’ asserted
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`patents and substantially completing fact discovery, which closes on February 22, 2022.1
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`Now, in the middle of fact depositions, iFIT for the first time asks the Court to halt this
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`case pending the resolution of IPRs that iFIT did not itself bring. iFIT’s request is late and highly
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`prejudicial to Peloton, and its motion should be denied.
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`II.
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`SUMMARY OF THE ARGUMENT
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`The factors that this Court considers on motions to stay pending IPR are well-established;
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`and on balance, they support denying iFIT’s motion. First, there can be no genuine dispute that
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`iFIT unreasonably delayed in bringing its motion. The instituted IPR which iFIT relies upon in its
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`1 The parties are currently negotiating a two-week extension of fact discovery to March 8, 2022,
`which the Court indicated it would consider during a January 24, 2022 hearing in C.A. 19-1903,
`which is on a coordinated pre-trial schedule.
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`
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`1
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`

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`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 7 of 22 PageID #: 5506
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`motion was brought by Echelon Fitness, a different party in a different lawsuit, on May 3, 2021,
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`more than eight months ago. Echelon’s IPR was instituted on November 18, 2021, more than two
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`months ago. iFIT did not seek to join that petition until a month later, on December 17, 2021. Not
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`only did iFIT wait nearly two months to move to stay following institution, it did not even bother
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`to inform Peloton that it intended to move to stay for over a month.
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`Given the stage of the litigation, iFIT’s unreasonable delay is significant. The parties
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`completed substantial production of documents more than seven months ago, and are in the middle
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`of completing fact depositions; by the time of the hearing on this motion, depositions will be
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`completed. The parties’ substantial investment of time and resources in fact discovery and
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`depositions and iFIT’s lack of diligence in moving for a stay strongly weighs against one. iFIT’s
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`motion should be denied for that reason alone.
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`Second, iFIT’s requested stay is designed to provide iFIT a tactical advantage while
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`prejudicing Peloton. iFIT only asks the Court to stay Peloton’s affirmative patent infringement
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`claims while proceeding full speed ahead on its own patent infringement claims against Peloton,
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`which is highly prejudicial to Peloton. Moreover, much of the relevant fact and expert discovery—
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`including how the parties’ products work and damages—are relevant to multiple causes of action
`
`at issue in the case, meaning that iFIT’s motion is inefficient as well.
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`Third, because iFIT wants to have its cake and eat it too, a stay will not simplify issues for
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`trial unless the PTAB finds all claims of both Peloton patents invalid, and those findings are upheld
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`on appeal. iFIT’s motion seeks to stay this case with respect to both Peloton’s ’026 and ’521
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`patents based on IPRs file by Echelon. iFIT, however, has moved to join only one of those IPRs,
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`involving Peloton’s ’521 Patent, and wants to avoid any estoppel as to the ’026 Patent and be free
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`to assert at trial any prior art with respect to the ’026 Patent, including the very same three
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`2
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`

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`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 8 of 22 PageID #: 5507
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`reference-combinations at issue in the ’521 patent IPR.2 And even with respect to the ’521 Patent,
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`iFIT suggests that it would only be precluded from asserting at trial the exact same three reference-
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`combinations asserted by Echelon that formed the basis for the institution of Echelon’s IPR against
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`the ’521 patent at the PTAB. Moreover, iFIT admits that it intends to proceed with respect to its
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`own affirmative patent infringement claims if Peloton’s infringement claims are stayed. Many of
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`the issues are overlapping, and the Court will still need to deal with these claims as well as the
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`parties’ respective claims for false advertising and unfair competition.
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`In addition, huge swaths of discovery related to Peloton’s affirmative patent infringement
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`claims and iFIT’s responsive patent infringement claims overlap, including the accused products,
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`invention stories, relevant art, and damages. Allowing the case to proceed on iFIT’s patent while
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`staying Peloton’s patent infringement claims would be highly inefficient. Thus, the result would
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`be increased inefficiencies and—at best—only a partial simplification of issues.
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`III. ARGUMENT
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`The relevant factors in considering a stay are: “(i) whether a stay would unduly prejudice
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`or present a clear tactical disadvantage to the non-moving party; (ii) whether a stay will simplify
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`the issues in question and trial of the case; and (iii) whether discovery is complete and whether a
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`trial date has been set.” Courtesy Prods., L.L.C. v. Hamilton Beach Brands, Inc., C.A. No. 13-
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`2012-SLR/SRF, 2015 WL 5145526, at *1 (D. Del. Sept. 1, 2015) (citation omitted). All these
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`considerations weigh against a stay.
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`A.
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`The Timing of iFIT’s Motion Disfavors a Stay
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`iFIT claims that this case is at a “relatively early stage.” According to iFIT, because fact
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`discovery is not yet complete, and trial is approximately nine months away, the law favors a stay.
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`2 The PTAB has not yet decided iFIT’s motion for joinder.
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`3
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`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 9 of 22 PageID #: 5508
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`D.I. 215 at 5-6. This argument ignores the realities of the last two years the parties have spent
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`litigating this case—and, in particular, the extensive fact discovery that has taken place in the last
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`year and that will be completed by early March. This and other courts have denied motions to stay
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`where cases are much less far along than this one.
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`iFIT cannot credibly claim that this case is at a “relatively early stage.” In the last year,
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`the parties have produced over 750,000 documents comprising over 2.9 million pages, served and
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`answered extensive written discovery, and more recently, begun taking depositions of fact
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`witnesses. Fact discovery will be closed by the time of the scheduled hearing on this motion on
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`March 9. By the time briefing is complete on this motion, 5 of Peloton’s witnesses (including
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`those designated for over 25 of iFIT’s noticed 30(b)(6) topics) will have been deposed, and 8 of
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`iFIT’s witnesses (including those designated for over 40 of Peloton’s noticed 30(b)(6) topics) will
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`have been deposed. More iFIT witnesses would have been deposed but for iFIT’s deliberate choice
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`to schedule the bulk of its witnesses at the end of the fact discovery period, a decision that now
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`appears intentionally linked to its decision to file this motion. The parties completed the claim
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`construction process long ago, and the Court heard argument on the disputed terms, issuing its
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`claim construction Order nearly four months ago. And as iFIT recognizes, trial is set for October
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`2022. Although expert discovery has not yet formally begun, the parties are of course already
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`working with their experts (and have been for months), as opening expert reports are due March
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`18, 2022.
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`In these circumstances the great weight of authority denies motions to stay. See Invensas
`
`Corp. v. Samsung Elecs. Co., C.A. No. 17-1363-MN-SRF, 2018 WL 4762957, at *4 (D. Del. Oct.
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`2, 2018) (denying stay where “fact discovery is substantially underway and claim construction
`
`briefing is complete.”); President & Fellows of Harvard College v. Micron Tech., Inc., C.A. No.
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`
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`4
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`

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`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 10 of 22 PageID #: 5509
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`17-1729-LPS-SRF, 2018 WL 10337332, at *1 (D. Del. Jan. 8, 2018) (denying stay where case has
`
`been pending for more than 18 months, in which “much discovery and litigation has occurred,”
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`and in which “trial is scheduled and will begin just ten months from now”); Copy Prot. LLC v.
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`Netflix, Inc., C.A. No. 14-365-LPS, 2015 WL 3799363, at *1 (D. Del. June 17, 2015) (denying
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`stay where parties “have engaged in a substantial amount of discovery and are set to complete
`
`claim construction briefing shortly”); TruePosition, Inc. v. Polaris Wireless, Inc., C.A. No. 12-
`
`646-RGA/MPT, 2013 WL 5701529, at *4 (D. Del. Oct. 21, 2013) (denying stay where there was
`
`no set trial date, but “substantially completed document production, completed claim construction
`
`briefing” and a “recent Markman hearing”), report and recommendation adopted, 2013 WL
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`6020798 (D. Del. Nov. 12, 2013); ImageVision.Net, Inc. v. Internet Payment Exch., Inc., C.A. No.
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`12-054-GMS-MPT, 2013 WL 663535, at *4 (D. Del. Feb. 25, 2013) (finding the status of litigation
`
`disfavored a stay where “ongoing discovery and milestones in the schedule [were] to occur within
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`the next six months”), report and recommendation adopted, 2013 WL 1743854 (D. Del. Apr. 22,
`
`2013).
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`iFIT cites to f’real Foods, LLC v. Hamilton Beach Brands, Inc., in which another court in
`
`this District denied a motion to stay as unduly prejudicial to plaintiff despite the stage of that case.
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`C.A. No. 16-41 (GMS), 2017 WL 10619854, at *1 n.3 (D. Del. Mar. 9, 2017). Nonetheless, iFIT’s
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`parenthetical citation stating only “finding case to be in early stages where trial not anticipated for
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`eight months,” is incomplete and misleading. D.I. 215 at 6. The court’s full finding in that case
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`was that: “A schedule has not been entered in this action, fact discovery and Markman are not
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`completed, and a trial will not be scheduled before October 30, 2017 at the earliest.” f’real Foods,
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`2017 WL 10619854, at *1 n.5.3 Here, this Court entered a schedule long ago, fact discovery closes
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`3 After denying the stay in f’real, the court set a trial date nearly two years later in February 2019.
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`5
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`

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`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 11 of 22 PageID #: 5510
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`in five weeks, Markman proceedings are complete, and a trial is set for less than nine months from
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`now. The stage of the case strongly disfavors a stay.
`
`B.
`
`A Stay Would Prejudice Peloton and Present iFIT With a Tactical
`Advantage in This Litigation
`
`In determining whether a stay would unduly prejudice the nonmoving party, courts further
`
`assess the following sub-factors: (1) the timing of the request for review; (2) the timing of the
`
`request for a stay; (3) the status of the review proceedings; and (4) the relationship of the parties.
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`See Bos. Sci. Corp. v. Cordis Corp., 777 F. Supp. 2d 783, 789 (D. Del. 2011).
`
`1.
`
`Peloton and iFIT are Competitors
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`Despite iFIT’s attempts to muddy the waters, there is no dispute that Peloton and iFIT
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`compete with one another. D.I. 125 at 8. Indeed, iFIT has even admitted this in other litigation
`
`between the parties. iFIT, Inc. v. Peloton Interactive, Inc., C.A. No. 20-1386-RGA, D.I. 97 at 5:4-
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`5 (Dec. 21, 2020). Courts in this district have held that this is enough to establish prejudice. See
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`f’real Foods, 2017 WL 10619854, at *1 n.3 (denying stay where defendant’s “own antitrust
`
`counterclaims demonstrate that [the parties] compete in the relevant market”); Courtesy Prods.,
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`2015 WL 5145526, at *2 (denying stay where plaintiff was competing with and “lost business to”
`
`defendant). Thus, iFIT’s own admission should be the end of the inquiry, and a stay of Peloton’s
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`patent infringement claims would prejudice Peloton and provide iFIT with an unfair tactical
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`advantage in this litigation. See, e.g., Liqwd, Inc. v. L’Oréal USA, Inc., C.A. No. 17-14-JFB-SRF,
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`2018 WL 11189633, at *4 (D. Del. Dec. 12, 2018).
`
`Furthermore, iFIT’s motion entirely ignores the fact that there are a total of three patents
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`at issue in this case. In addition to the ’026 and ’521 patents asserted by Peloton, iFIT also asserted
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`two patents, one of which the Court invalidated during the Markman proceedings. Allowing iFIT’s
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`affirmative patent infringement case to proceed while staying its competitor’s patent infringement
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`
`
`6
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`

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`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 12 of 22 PageID #: 5511
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`
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`case is not only vastly inefficient, as discussed above, but is also clearly prejudicial to Peloton.
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`See Life Techs. Corp. v. Illumina, Inc., C.A. No. 09-706-RK, 2010 WL 2348737, at *3 (D. Del.
`
`June 7, 2010) (“The prejudice that would result from the indefinite nature of the stay is increased
`
`by the fact that the stay would apply to the four counterclaim patents while the three patents alleged
`
`in the Complaint would continue on.”). Peloton would be forced to defend itself in this litigation
`
`while continuing to indulge iFIT’s infringement of its own patent. And if Peloton wins at the
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`PTAB and/or at the Federal Circuit (in the case of an adverse PTAB ruling), it would be forced to
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`expend additional time, resources, and money on two trials. See id. (“We agree . . . there is a
`
`strong possibility that we will have to try the issues before two different juries, each of which
`
`would have to go through the same educational process”).4 This too favors denying iFIT’s motion.
`
`2.
`
`iFIT Chose Not to File its Own IPR Petitions and Subsequently
`Delayed in Moving to Stay
`
`The nature and timing of iFIT’s motion to stay also disfavors granting that motion. There
`
`is no dispute that iFIT chose not to file an IPR petition on either the ’026 or ’521 patents within
`
`the statutory one-year timeframe. Only after Echelon’s IPR petitions were instituted on both those
`
`patents did iFIT bother to move to join one of those IPRs, which it did to avoid any preclusion if
`
`Peloton is successful on any claims in the IPR proceedings. iFIT thus chose to zealously litigate
`
`this case without filing its own IPR petitions, and even now seeks to avoid all risks while making
`
`Peloton wait for the PTAB before it can continue to litigate its patent infringement claims in this
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`Court. That gamesmanship alone cuts against iFIT’s motion. See Realtime Adaptive Streaming
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`LLC v. Adobe Sys. Inc., No. CV 18-9344, 2019 WL 11717183, at *4 (C.D. Cal. May 14, 2019)
`
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`4 Although the schedule contemplates separate trials on Peloton’s and iFIT’s Patents, a stay would
`greatly expand the time between such trials, forcing Peloton to wait several months or even years
`for its day in court while enduring infringement by iFIT. Further, it is unclear in which of the
`separate trials the non-patent causes of action would be tried.
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`
`
`7
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`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 13 of 22 PageID #: 5512
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`
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`(denying motion to stay and finding that “Adobe’s election not to [join the existing third-party
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`IPRs], let alone be bound by the full scope of IPR statutory estoppel relevant to those petitions,
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`significantly decreases the likelihood of issue simplification and increases the likelihood of delay
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`in this action.”); Pragmatus Mobile, LLC v. Amazon.com, Inc., C.A. No. 14-436-LPS, 2015 WL
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`3799433, at *1 (D. Del. June 17, 2015) (“[T]he Court finds that Moving Defendants’ delay in
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`petitioning for IPR could create at least some tactical disadvantage for Plaintiff . . . and a stay may
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`unduly prejudice Plaintiff”).
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`In any event, there is likewise no dispute that the timing of iFIT’s motion creates undue
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`prejudice to Peloton. Echelon’s IPR on the ’026 patent was instituted 10 months before iFIT
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`moved for a stay. Even after the PTAB instituted Echelon’s IPR petition on the ’521 patent in
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`November, iFIT waited six weeks to inform Peloton that it intended to move for a stay, and then
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`waited another week after the parties met and conferred to file its motion. See Ex. 1. This
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`additional two-month delay—right when the parties were about to start fact depositions in
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`earnest—creates a clear tactical disadvantage for Peloton and disfavors granting a stay. See
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`Greatbatch Ltd. v. AVX Corp., C.A. No. 13-723-LPS, 2015 WL 8483986, at *1 (D. Del. Dec. 10,
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`2015) (denying motion to stay where defendants’ “delay in combination with the parties’ status
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`as competitors . . . persuade that [sic] Court that this factor weights against a stay”) (emphasis in
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`original), aff’d, 813 F. App’x 609 (Fed. Cir. 2020); see also Oracle Corp. v. Parallel Networks,
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`LLP, C.A. No. 06-414-SLR, 2010 WL 3613851, at *2 (D. Del. Sept. 8, 2010) (denying motion to
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`stay where motion came years into the litigation and following favorable judgment from appellate
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`court, noting that defendant “moved for a stay only following having ‘tested the waters’ . . . and,
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`consequently, the timing of its motion cuts against a stay”).
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`
`
`8
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`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 14 of 22 PageID #: 5513
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`3.
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`The IPRs Will Not Be Resolved for Another Ten Months, Not
`Counting Appeal
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`While the PTAB has instituted IPR of the ’026 and ’521 patents, that does not mean that
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`the proceedings are near resolution. To the contrary, a Final Written Decision for the ’521 patent
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`is not expected until November 18, 2022, nearly ten months from now and after scheduled October
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`trial in this case. This delay, particularly after this case has been pending—and actively litigated
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`by the parties—for two years, prejudices Peloton. See Copy Prot., 2015 WL 3799363, at *1
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`(staying a case pending PTAB review “risks prolonging the final resolution of the dispute and
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`thereby may result in some inherent prejudice to the plaintiff.”) (citation omitted); f’real Foods,
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`2017 WL 10619854, at *1 n.6 (“[T]he court is concerned that plaintiffs will suffer undue prejudice
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`should they be compelled to continue competing with defendants accused products without being
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`permitted to advance their infringement claims.”). As explained above, fact discovery will be
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`completed soon, and opening expert reports are due in six weeks from the date of this filing.
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`Delaying the case by another year and forcing Peloton to further indulge iFIT’s infringement of its
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`patents, particularly at the current stage of the litigation, would prejudice Peloton. See Liqwd,
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`2018 WL 11189633, at *4 (denying motion to stay where stay would delay the resolution of the
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`case by a year and a final written decision was expected a month after the scheduled jury trial);
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`see also Greatbatch, 2015 WL 8483986, at *1.
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`The prejudice to Peloton and unfair tactical advantage to iFIT strongly disfavors granting
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`the stay.
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`C.
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`iFIT Overstates the Possible Simplification of This Case
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`iFIT’s main argument is that the Court should stay this case because it will allegedly
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`simplify the issues in question. iFIT’s evaluation of this factor oversimplifies the possible
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`outcomes of the IPR proceedings, and largely ignores the other claims at issue in this case.
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`
`
`9
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`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 15 of 22 PageID #: 5514
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`
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`First, while iFIT is correct that the PTAB has instituted IPR of the ’026 and ’521 patents,
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`the outcome of those proceedings are unknown at this time. While the institution decisions mean
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`that the PTAB believes there is a reasonable likelihood that the petitioner would prevail with
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`respect to at least one of the challenged claims, Peloton intends to defend its patents vigorously.5
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`While courts generally find institution of all asserted claims to cut in favor of a stay, the other
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`factors at issue here overcome this fact. See, e.g., Verinata Health, Inc. v. Ariosa Diagnostics,
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`Inc., No. C 12-05501, 2014 WL 121640, at *3-4 (N.D. Cal. Jan. 13, 2014) (denying motion to stay
`
`where PTAB instituted review of all asserted claims of the patents-in-suit); Solas OLED Ltd. v.
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`Samsung Display Co., No. 2:19-CV-00152, 2020 WL 4040716, at *3 (E.D. Tex. July 17, 2020)
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`(denying motion to stay where PTAB instituted IPRs on all asserted claims).6
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`1.
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`iFIT Will Not Be Bound by the Full IPR Estoppel Provisions
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`Furthermore, when considering the potential for issue simplification, courts find persuasive
`
`the fact that defendants will be estopped from asserting any ground for invalidity that they raised
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`or reasonably could have raised during the IPR proceeding. See, e.g., 454 Life Scis. Corp. v. Ion
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`Torrent Sys., Inc., C.A. No. 15-595-LPS, 2016 WL 6594083, at *3 (D. Del. Nov. 7, 2016) (“Even
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`if the IPR proceedings result in all of the Asserted Claims remaining valid, the fact that Defendants
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`will be estopped . . . will simplify the issues left to be litigated in this case.”). A defendant’s
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`“simplification argument [is] stronger if all of the prior art of relevant invalidity issues” are in the
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`IPR review. See VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1314 (Fed. Cir. 2014)
`
`
`5 The PTAB’s Final Written Decision on the ’026 Patent IPR is due to issue by March 3, 2022.
`Even if the PTAB were to find all of the claims of the ’026 Patent invalid, Peloton may appeal that
`decision to the Federal Circuit.
`6 Peloton anticipates that iFIT will raise the PTAB’s recent final written decisions on two
`unasserted Peloton patents to argue that the PTAB is likely to invalidate the ’026 and ’521 patents.
`Peloton intends to appeal those decisions, and in any event, they are on different patents with
`different claim limitations.
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`
`
`10
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`Case 1:20-cv-00662-RGA Document 230 Filed 01/31/22 Page 16 of 22 PageID #: 5515
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`
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`(noting where defendant saved “two pieces of its important prior art for district court proceedings
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`instead of placing it before the PTAB has reduced efficiencies”).
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`Here, iFIT wants all the advantages of the IPRs, but none of the attendant risks.
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`Specifically, iFIT chose not to file its own IPR petitions and instead only sought to join Echelon’s
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`IPR on the ’521 patent (but not the ’026 IPR). Thus, iFIT will not be precluded at all with respect
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`to the ’026 patent and could raise any prior art invalidity arguments it wanted at trial. Even with
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`respect to the ’521 patent, iFIT argues that it can only be estopped from raising the same reference
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`combinations at issue in the ’521 Patent IPR because it could not reasonably have raised any
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`grounds other than those in Echelon's petition. D.I. 215 at 5. The end result is little to no
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`simplification at all. See Riddell, Inc. v. Kranos Corp., No. 16 C 4496, 2017 WL 959019, at *5
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`(N.D. Ill. Mar. 12, 2017) (denying motion to stay because plaintiff “would be put at risk of a
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`tactical disadvantage due to the fact [that defendant who did not petition for IPR and to whom
`
`estoppel did not apply] will get to replay before the Court all of the invalidity contentions that
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`[third-party] Kranos asserts before the PTAB, even on points which Kranos loses during the IPR
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`proceedings”); Realtime Data, LLC v. Rackspace US, Inc., No. 6:16-CV-00961, 2017 WL 772654,
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`at *3 (E.D. Tex. Feb. 28, 2017) (denying motion to stay where defendant was not bound by full
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`estoppel and did not join in filing of IPR petitions against the asserted patents).
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`Indeed, the cases iFIT cites involve either full estoppel being applied to defendants,7 or at
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`least a limited estoppel that is applied to all non-participating defendants in all of the IPR
`
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`7 See IOENGINE, LLC v. PayPal Hold