Case 1:15-cv-01307-VJW Document 39 Filed 11/15/16 Page 1 of 22
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`IN THE UNITED STATES COURT OF FEDERAL CLAIMS
`
`No. 15-1307
`
`Judge Victor J. Wolski
`
`)))))))))))))))))
`
`CELLCAST TECHNOLOGIES, LLC and
`ENVISIONIT LLC,
`
`Plaintiffs,
`
`v.
`
`THE UNITED STATES,
`
`Defendant,
`
`and
`
`INTERNATIONAL BUSINESS MACHINES
`CORPORATION,
`
`Third-party Defendant.
`
`DEFENDANTS’ MOTION TO STAY PROCEEDINGS
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`Page 1 of 22
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`Case 1:15-cv-01307-VJW Document 39 Filed 11/15/16 Page 2 of 22
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`TABLE OF CONTENTS
`
`TABLE OF CONTENTS ................................................................................................................. i
`
`TABLE OF AUTHORITIES .......................................................................................................... ii
`
`TABLE OF EXHIBITS .................................................................................................................. v
`
`I.
`
`II.
`
`III.
`
`A.
`
`B.
`
`C.
`
`D.
`
`E.
`
`STATEMENT OF THE ISSUE .......................................................................................... 1
`
`STATEMENT OF THE CASE ........................................................................................... 2
`
`DISCUSSION ..................................................................................................................... 3
`
`RELEVANT LAW .............................................................................................................. 3
`
`1. History of Post-Issuance review of Patents by the U.S. Patent Office ............................ 3
`2.
`The Power to Stay Proceedings ........................................................................................ 6
`
`A DECISION ON INSTITUTION WILL BE MADE BY MAY 7, 2017, AT THE
`LATEST .............................................................................................................................. 6
`
`INTER PARTES REVIEW WILL SIMPLIFY ISSUES IN THIS ACTION ....................... 8
`
`AS THIS CASE IS IN THE INITIAL STAGES, A STAY SHOULD BE GRANTED ... 12
`
`A STAY WOULD PRESENT NO DISADVANTAGE OR UNDUE PREJUDICE
`BECAUSE PLAINTIFFS CAN PURSUE THE SAME REMEDY THEY PRESENTLY
`SEEK AFTER REVIEW IS COMPLETED ..................................................................... 13
`
`CONCLUSION ............................................................................................................................. 16
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`Cases
`
`TABLE OF AUTHORITIES
`
`ASCII Corp. v. STD Entertainment USA, Inc.,
`844 F. Supp. 1378 (N.D. Cal. 1994) ............................................................................................ 7
`
`Asetek Holdings, Inc v. Cooler Master Co., Ltd.,
`2014 WL 1350813 (N.D. Cal. April 3, 2014) ............................................................................ 15
`
`Automatic Mfg. Sys., Inc. v. Primera Tech., Inc.,
`No. 6:12-CV-1727-ORL-37, 2013 WL 1969247 (M.D. Fla. May 13, 2013).............................. 6
`
`Bloom Engineering Co., Inc. v. North American Mfg. Co., Inc.,
`129 F.3d 1247 (Fed. Cir. 1997) ................................................................................................... 9
`
`Boeing Co. v. United States,
`86 Fed. Cl. 303 (2009) ............................................................................................................... 14
`
`CANVS Corp. v. United States,
`118 Fed. Cl. 587 (2014) ............................................................................................................... 6
`
`Cheetah Omni, LLC v. United States,
`No. 1:11-cv-00255-FMA (Fed. Cl. Jun. 7, 2013) ........................................................................ 8
`
`Cherokee Nation of Oklahoma v. United States,
`124 F.3d 1413 (Fed. Cir. 1997) ................................................................................................... 6
`
`Computer Docking Station Corp. v. Dell, Inc.,
`519 F.3d 1366 (Fed. Cir. 2008) ................................................................................................. 11
`
`Conair Corporation v. Tre Milano, LLC,
`No. 3:14-cv-1554-AWT, (D. Conn. July 1, 2015) ...................................................................... 6
`
`Cooper Techs. Co. v. Dudas,
`536 F.3d 1330 (Fed. Cir. 2008) ................................................................................................... 4
`
`Cuozzo Speed Techs., LLC v. Lee,
`No. 15-446, 2016 WL 3369425 (U.S. June 20, 2016) ................................................................. 5
`
`Dataquill Ltd. v. High Tech Computer Corp.,
`No. 08-CV-543, 2009 WL 1391537 (S.D. Cal. May 14, 2009) ................................................ 14
`
`Finjan, Inc. v. Symantec Corp.,
`2016 WL 6563342, *2 (N.D. Cal. Nov. 4, 2016) ...................................................................... 12
`
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`Fresenius USA, Inc.,
`721 F.3d 1330 (Fed. Cir. 2013) ............................................................................................. 9, 10
`
`Health Diagnostic Lab., Inc. v. Bos. Heart Diagnostics Corp.,
`No. 3:14CV796-HEH (E.D. Va. Feb. 4, 2015) ........................................................................... 5
`
`In re Etter,
`756 F.2d 852 (Fed. Cir. 1985) ................................................................................................... 12
`
`Intellectual Ventures I LLC v. PNC Fin. Servs. Grp., Inc.,
`2014 WL 3942277 (W.D. Pa. Aug. 12, 2014) ........................................................................... 10
`
`Landis v. North American Co.,
`299 U.S. 248 (1936) .................................................................................................................... 6
`
`Leesona v. United States,
`599 F.2d 958 (Ct. Cl. 1979) ....................................................................................................... 14
`
`Moffitt v. Garr,
`66 U.S. 273 (1861) ...................................................................................................................... 9
`
`Orbital Australia Pty v. Daimler AG,
`No. 15-CV-12398, 2015 WL 5439774 (E.D. Mich. Sept. 15, 2015) .......................................... 7
`
`Pleasurecraft Marine Engine Co. v. Indmar Products Co.,
`2015 WL 5437181 (D.S.C. Sept. 15, 2015) ................................................................................ 7
`
`Pragmatus AV, LLC v. Yahoo! Inc.,
`2014 WL 1922081 (N.D. Cal. May 13, 2014) ........................................................................... 11
`
`Procter & Gamble Co. v. Kraft Foods Global,
`549 F.3d 842 (Fed. Cir. 2008) ................................................................................................... 12
`
`Sec. People, Inc. v. Ojmar US, LLC,
`No. 14-CV-04968-HSG, 2015 WL 3453780 (N.D. Cal. May 29, 2015) .................................... 7
`
`Semiconductor Energy Lab. Co. v. Chimei Innolux Corp.,
`No. SACV 12-21-JST JPRX, 2012 WL 7170593 (C.D. Cal. Dec. 19, 2012) ............................. 6
`
`Spectrum Int’l v. Sterilite Corp.,
`164 F.3d 1372 (Fed. Cir. 1998) ................................................................................................. 11
`
`Straight Path IP Group, Inc. v. Vonage Holdings Corp.,
`No. 14–502, 2014 WL 4271633 (D.N.J. Aug. 28, 2014) ............................................................ 6
`
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`Statutes
`
`35 U.S.C. § 252 ............................................................................................................................. 10
`
`35 U.S.C. § 311 ........................................................................................................................... 2, 4
`
`35 U.S.C. § 314 ........................................................................................................................... 3, 5
`
`35 U.S.C. § 316 ............................................................................................................................. 15
`
`35 U.S.C. § 318 ........................................................................................................................... 5, 9
`
`Pub. L. No. 96-517, 94 Stat. 3015 .................................................................................................. 3
`
`Rules
`157 Cong. Rec. S5319 (daily ed. Sept. 6, 2011) (Statement of Sen. Kyl) ...................................... 4
`
`H.R. Rep. No. 1307 Part I, 96th Cong., 2d Sess. (1980) ................................................................ 3
`
`H.R. Rep. No. 98, 112th Cong., 1st Sess. (2011) ........................................................................... 4
`
`Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011) .............................. 4
`
`Regulations
`
`37 C.F.R. § 42.107 ..................................................................................................................... 3, 5
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`TABLE OF EXHIBITS
`
`A - As-filed Petition for Inter Partes Review in Case No. IPR2017-00160 ................................. A1
`
`B - As-filed Petition for Inter Partes Review in Case No. IPR2017-00180 ............................... A81
`
`C - As-filed Petition for Inter Partes Review in Case No. IPR2017-00183 ............................. A134
`
`D - As-filed Petition for Inter Partes Review in Case No. IPR2017-00185 ............................. A213
`
`E - As-filed Petition for Inter Partes Review in Case No. IPR2017-00186 .............................. A286
`
`F - Patent Trial and Appeal Board Statistics (as of September 30, 2016) ................................ A358
`
`G - Lex Machina Motion Metric Report from June 25, 2015 ................................................... A373
`
`H - Email Correspondence ........................................................................................................ A374
`
`I – Letter of D. Ruddy to P. Chassman dated November 15, 2016 .......................................... A377
`
`J - Combined deposition Notices served by Plaintiffs on November 2, 2016 .......................... A380
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`INTRODUCTION
`
`Defendants jointly and respectfully request that this action be stayed pending institution
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`decisions for five separate Inter Partes review (IPR) petitions filed with the U.S. Patent and
`
`Trademark Office (PTO). Because the PTO will make its institution determinations on or before
`
`May 7, 2017, amidst the parties’ claim construction briefing presently scheduled to conclude on
`
`May 24, 2017, Defendants request that this Court stay this action until the PTO decides whether
`
`to institute the IPRs and order the parties to submit a Joint Status Report on May 15, 2017, that:
`
`(1) informs the Court of the determination made by the PTO with respect to the pending
`
`petitions; and (2) proposes further proceedings, including whether the stay should be maintained
`
`or lifted.
`
`On November 10-11, 2016, counsel for the Defendants’ conferred with plaintiffs’
`
`counsel, who stated that plaintiffs will not consent to the requested stay of proceedings. See
`
`A374 (Exhibit H) (email correspondence).1 The government suggested an expedited briefing
`
`schedule “[i]n the interest of resolving the motion to stay quickly,” A375, however, Plaintiffs did
`
`not agree to the proposed expedited briefing schedule, nor did they agree to postpone depositions
`
`in this matter pending resolution of this motion. A374.
`
`I.
`
`STATEMENT OF THE ISSUE
`
`Whether, in considering the three factors courts generally examine, this action should be
`
`stayed pending a decision by the PTO on whether to institute Inter Partes Review of the five
`
`patents-in-suit.
`
`1 “A___” refers to the corresponding page number in the attached Appendix.
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`II.
`
`STATEMENT OF THE CASE
`
`In this lawsuit, plaintiffs, CellCast Technologies, LLC (CellCast) and EnvisionIT, LLC
`
`(EnvisionIT) are seeking compensation pursuant to 28 U.S.C. § 1498. The Complaint references
`
`“the Integrated Public Alert Warning System (‘IPAWS’)” and alleges that “IPAWS utilizes the
`
`inventions claimed in the Asserted Patents.” Complaint at ¶ 20. The Complaint specifically
`
`identifies IPAWS as the system whose manufacture or use is allegedly covered by each asserted
`
`patent. See Complaint at ¶¶ 50, 55, 60, 65, and 70. Plaintiffs’ Complaint asserts five separate
`
`patents, see Complaint at ¶¶ 48-72, namely: 7,693,938; 8,103,719; 8,438,221; 8,438,212; and
`
`9,136,954 (collectively, the Asserted Patents).
`
`Following a request from Plaintiffs, in an Order dated September 23, 2016, the Court
`
`extended the default deposition limits to “twenty oral depositions, and twenty-five depositions in
`
`total of either variety (oral or by written questions).” Docket No. 38 at 2. On October 14, 2016,
`
`Plaintiffs identified a list of allegedly infringed claims from the five asserted patents.
`
`(hereinafter, “the asserted claims”). Then, on November 1 and November 2, 2016, undersigned
`
`government counsel filed five (5) Inter Partes Review Petitions before the United States Patent
`
`Trial and Appeal Board (PTAB or Board), pursuant to 35 U.S.C. §§ 311-319, requesting Inter
`
`Partes Review of the patentability of the each of the asserted claims from the five patents
`
`patents-in-suit. The five IPR Petitions were assigned the following case numbers: IPR 1 (claims
`
`1, 2, 4, 17, and 23, of the ’954 Patent) was assigned case number IPR2017-00180; IPR2 (claim
`
`19 of the ’221 patent) IPR2017-00160; IPR3 (claim 1, 11, 12, 13, 42, 47, and 57 of the ’938
`
`Patent) IPR2017-00183; IPR4 (claims 14, 15, 23, 27, and 30, of the ’719 Patent) IPR2017-
`
`00186; IPR5 (13, 14, 15, and 20 of the ’212 Patent) IPR2017-00185. Copies of the five petitions
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`are attached hereto as Exhibits A-E, respectively.2 See A1-357.
`
`The patent owner may file a preliminary response to each of the five (5) petitions
`
`implicated in this matter on or before February 7, 2017. See 37 C.F.R. § 42.107(b) (setting a 3-
`
`month time-period from the date of a notice indicating that the request to institute an inter partes
`
`review has been granted a filing date). Thus, pursuant to the time period set forth in 35 U.S.C.
`
`§ 314(b), the PTAB will make its institution determinations on or before May 7, 2017, i.e.,
`
`within 3 months of the filing of a patent owners preliminary response (or if no such response is
`
`filed, within 3 months of February 7, 2017).
`
`III.
`
`DISCUSSION
`
`A.
`
`RELEVANT LAW
`
`1.
`
`History of Post-Issuance review of Patents
`by the U.S. Patent Office
`
`Congress authorized the PTO to revisit the patentability of claims in issued patents in
`
`1980 when it enacted the ex parte reexamination scheme, which remains in effect today. See Act
`
`of Dec. 12, 1980, Pub. L. No. 96-517, 94 Stat. 3015 (codified as amended at 35 U.S.C. 301-307).
`
`As explained by Congress in legislative history, reexamination was intended to “strengthen[]
`
`investor confidence in the certainty of patent rights by creating a system of administrative
`
`reexamination of doubtful patents.” H.R. Rep. No. 1307 Part I, 96th Cong., 2d Sess. at 3,
`
`reprinted in 1980 U.S.C.C.A.N. 6460, 6462. The House Report further notes “[i]t is anticipated
`
`that these measures provide a useful and necessary alternative for challengers and for patent
`
`2 Copies of the exhibits accompanying the as-filed petitions have not been appended to this
`motion. However, electronic copies of the as-filed exhibits are publically available for viewing
`and download from the filing dockets using the Patent Trial and Appeal Board End to End
`System, at available at https://ptab.uspto.gov/#/login (then search IPR case number or patent
`number for filing docket).
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`owners to test the validity of United States patents in an efficient and relatively inexpensive
`
`manner.” Id. at 3, 6463.
`
`In 1999, Congress expanded the PTO’s authority to review the patentability of claims in
`
`issued patents, by creating the inter partes reexamination process. 35 U.S.C. 311-318 (2000).
`
`Under this now-superseded process, a third party that requested reexamination enjoyed a greater
`
`opportunity to participate in the patent’s reexamination, and, after 2002, in any subsequent
`
`appeal. See Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1332 (Fed. Cir. 2008).
`
`In 2011, Congress overhauled and expanded the inter partes reexamination processes for
`
`reconsidering the patentability of such claims. See Leahy-Smith America Invents Act, Pub. L.
`
`No. 112-29, § 6, 125 Stat. 284, 299-305 (AIA or Act). Enacted in response to “a growing sense
`
`that questionable patents are too easily obtained and are too difficult to challenge,” H.R. Rep.
`
`No. 98, 112th Cong., 1st Sess. Pt. 1, at 39 (2011) (2011 House Report), the AIA replaced inter
`
`partes reexamination with inter partes review, an adversarial proceeding before the new Patent
`
`Trial and Appeal Board. See 35 U.S.C. § 311 et seq.; see also 35 U.S.C. § 6. Congress created
`
`inter partes review to “establish a more efficient and streamlined patent system that will improve
`
`patent quality and limit unnecessary and counterproductive litigation costs.” 2011 House Report
`
`at 40. As recently explained by the Supreme Court, “[t]he new statute [i.e., 35 U.S.C. § 314]
`
`provides a challenger with broader participation rights. It creates within the Patent Office a
`
`Patent Trial and Appeal Board (Board) composed of administrative patent judges, who are patent
`
`lawyers and former patent examiners, among others. §6.” These administrative patent judges
`
`have considerable expertise in evaluating patent validity. See, e.g., 157 Cong. Rec. S5319 (daily
`
`ed. Sept. 6, 2011) (Statement of Sen. Kyl) (noting that the IPR serves as “an inexpensive
`
`substitute for district court litigation [that] allows key issues to be addressed by experts in the
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`field”); Health Diagnostic Lab., Inc. v. Bos. Heart Diagnostics Corp., No. 3:14CV796-HEH, slip
`
`op. at 1 n.1 (E.D. Va. Feb. 4, 2015) (“While the Court has undertaken review of various patents,
`
`there is no substitute for the considerable expertise of three administrative patent judges.”).
`
`Under the new procedure, the Board must decide whether to institute an IPR within six
`
`months of the notice indicating that a filing date has been granted to the petitioner. See 35 U.S.C.
`
`§ 314(b); 37 C.F.R. § 42.107(b). If instituted, the “Board conducts the proceedings, reaches a
`
`conclusion, and sets forth its reasons.” Cuozzo Speed Techs., LLC v. Lee, No. 15-446, 2016 WL
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`3369425, at *5 (U.S. June 20, 2016). When review is instituted, at its conclusion, the Director of
`
`the PTO will issue “a certificate [1] canceling any claim of the patent finally determined to be
`
`unpatentable, [2] confirming any claim of the patent determined to be patentable, and [3]
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`incorporating in the patent by operation of the certificate any new or amended claim determined
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`to be patentable.” 35 U.S.C. § 318 (b) (numerical annotations added).
`
`Current statistics from the Patent Office show that the Board institutes 64% of petitions
`
`(excluding 696 petitions that were terminated by the parties prior to the Board’s institution
`
`decision). See Exhibit F (Patent Trial and Appeal Board Statistics (as of September 30, 2016), at
`
`10.3 A367. In 84% of instituted petitions that are not terminated by the parties prior to a final
`
`decision, the Board invalidated some or all of the challenged claims. See id. In light of these
`
`overwhelming statistics and Congress’s intent that IPRs “limit unnecessary and
`
`counterproductive litigation costs,” (2011 House Report at 40), district courts have stayed
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`parallel district court litigation in a majority of cases. See Exhibit G (Lex Machina Motion
`
`Metric Report from June 25, 2015) A373 (reflecting a figure of 89% for the Eastern District of
`
`Virginia and a figure of 71% as the national average).
`
`3 Also available at
`https://www.uspto.gov/sites/default/files/documents/aia_statistics_september2016A.pdf
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`2.
`
`The Power to Stay Proceedings
`
`The power of a federal trial court to stay its proceedings, even for an indefinite
`period of time, is beyond question. This power springs from the inherent
`authority of every court to control the disposition of its cases. When and how to
`stay proceedings is within the sound discretion of the trial court.
`
`Cherokee Nation of Oklahoma v. United States, 124 F.3d 1413, 1416 (Fed. Cir. 1997) (citing
`
`Landis v. North American Co., 299 U.S. 248, 254-55 (1936)). Courts considering whether to
`
`stay proceedings in favor of inter partes review proceedings before the PTO have weighed three
`
`factors: (1) the impact of inter partes review, including whether a stay would simplify the issues
`
`in question and streamline the trial; (2) how far the litigation has progressed, taking into account
`
`whether discovery is complete and a trial date has been set; and (3) whether a stay would unduly
`
`prejudice or present a clear tactical disadvantage to the non-moving party. See, e.g., Straight
`
`Path IP Group, Inc. v. Vonage Holdings Corp., No. 14–502(JLL) (JAD), 2014 WL 4271633, at
`
`*2 (D.N.J. Aug. 28, 2014); CANVS Corp. v. United States, 118 Fed. Cl. 587, 592 (2014);
`
`Semiconductor Energy Lab. Co. v. Chimei Innolux Corp., No. SACV 12-21-JST JPRX, 2012
`
`WL 7170593, at *1 (C.D. Cal. Dec. 19, 2012). Some district courts have noted that additional
`
`factors may also be considered in the analysis and that “the totality of the circumstances
`
`governs.” Automatic Mfg. Sys., Inc. v. Primera Tech., Inc., No. 6:12-CV-1727-ORL-37, 2013
`
`WL 1969247, at *1 (M.D. Fla. May 13, 2013); Conair Corporation v. Tre Milano, LLC, C.A.
`
`No. 3:14-cv-1554-AWT, Ruling on Motion to Stay, at 12 (D. Conn. July 1, 2015) (noting that
`
`three-factor test “does not capture every relevant consideration” and that “the totality of the
`
`circumstances governs” (internal citations omitted)).
`
`B.
`
`A DECISION ON INSTITUTION WILL BE MADE BY MAY 7,
`2017, AT THE LATEST
`
`As noted above, pursuant to the time period set forth in 35 U.S.C. § 314(b), the PTAB
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`will make its institution determinations on or before May 7, 2017, i.e., within 3 months of the
`
`filing of a patent owners preliminary response (or if no such response is filed, within 3 months of
`
`February 7, 2017). The graphic below is reproduced from the Office Patent Trial Practice Guide,
`
`77 Fed. Reg. 48756 (Aug. 14, 2012) and demonstrates the expedited nature of IPR proceedings.
`
`77 Fed. Reg. at 48757.
`
`“[T]here is a liberal policy in favor of granting motions to stay proceedings pending the
`
`outcome of USPTO [post-issuance review proceedings].” ASCII Corp. v. STD Entertainment
`
`USA, Inc., 844 F. Supp. 1378, 1381 (N.D. Cal. 1994). Other courts have explained that “[a] stay
`
`is particularly appropriate for cases in the initial stages of litigation or in which there has been
`
`little discovery.” Sec. People, Inc. v. Ojmar US, LLC, No. 14-CV-04968-HSG, 2015 WL
`
`3453780, at *2 (N.D. Cal. May 29, 2015) (internal citations omitted); Orbital Australia Pty v.
`
`Daimler AG, No. 15-CV-12398, 2015 WL 5439774, at *3 (E.D. Mich. Sept. 15, 2015) (granting
`
`a stay pending a requested but not yet granted petition for IPR); Pleasurecraft Marine Engine
`
`Co. v. Indmar Products Co., No. 8:14–cv–04507, 2015 WL 5437181, at *1 (D.S.C. Sept. 15,
`
`2015) (same) (“Preventing potentially futile expenditures of time and resources by the parties
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`and the Court weigh in favor of granting a stay at this stage in the litigation. This is true even
`
`though review has not yet been initiated by the USPTO, given that there has not already been
`
`significant efforts expended in discovery and/or claim construction.”); see Cheetah Omni, LLC v.
`
`United States, Case No. 1:11-cv-00255-FMA (Fed. Cl. Jun. 7, 2013), ECF No. 54 (granting a
`
`preliminary stay pending a requested but not yet granted petition for IPR).
`
`This case is in its initial stages and no depositions have taken place yet. Despite seeking
`
`leave of court to surpass the default deposition limits established by this court’s rules, Plaintiffs
`
`did not serve any deposition notices until the day after the first two IPR Petitions were served.
`
`Compare A78-80; A131-133) (reflecting November 1, 2016, as the service date of first two
`
`Petitions), with A380 (Exhibit J) (fronting email for combined deposition Notices reflecting a
`
`delivery time of November 2, 2016, at 5:05PM).4 The parties have not yet embarked upon a
`
`series of exchanges and briefs relating to claim construction presently scheduled to occur on
`
`January 13, 2017; February 10, 2017; March 10, 2017; April 12, 2017; and May 24, 2017. See
`
`Docket No. 33 (scheduling order). Even at the time institution decisions are due, i.e., May 7,
`
`2017, the parties will remain embroiled in claim construction briefing scheduled to conclude on
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`May 24, 2017, followed by a hearing on claim construction before this Court. Given the initial
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`stage of this litigation, a brief stay until the Board’s decisions on institution has the potential to
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`greatly preserve the resources of the parties and the Court.
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`C.
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`INTER PARTES REVIEW WILL SIMPLIFY ISSUES IN THIS
`ACTION
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`The first factor to be considered in whether to grant a stay is the impact of inter partes
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`4 As reflected in Exhibit H, the government had asked plaintiffs to postpone depositions until the
`Court rules on this motion to stay, and to agree to an expedited briefing schedule. A375.
`Plaintiffs agreed to neither request. A374.
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`review, including whether a stay would simplify the issues in question and streamline the trial.
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`Should the IPRs be instituted, all outcomes from the requested review of the patents-in-suit have
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`the potential to greatly simplify and clarify the issues in this case. Accordingly, this factor
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`weighs heavily in favor of granting a stay.
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`First, should review result in cancellation of every claim in the patents-in-suit, this entire
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`lawsuit will be rendered moot. This is because “cancelled claims [a]re void ab initio,” Fresenius
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`USA, Inc., 721 F.3d 1330, 1346 (Fed. Cir. 2013). Indeed, as explained by the Supreme Court,
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`“unless [the patent] exists, and is in force at the time of trial and judgment, the suits fail.” Moffitt
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`v. Garr, 66 U.S. 273, 283 (1861). See Fresenius USA, Inc., 721 F.3d at 1347 (“[i]n light of the
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`cancellation of [the patentee's] remaining claims, [the patentee] no longer has a viable cause of
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`action against [the accused infringer]. Therefore, the pending litigation is moot.”).
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`Although not requiring dismissal of this action, alternative outcomes will significantly
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`simplify the issues in question in this action. For example, should only some claims be cancelled
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`during review, Plaintiffs will no longer be entitled to assert infringement of such cancelled
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`claims in this action, thereby significantly simplifying aspects of liability, validity, and damages
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`in this case.
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`Under another scenario, should Plaintiffs successfully narrow their patent claims by
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`amendment during the review, such an amendment would have a direct effect on the scope of
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`accused infringement in this action and preclude any recovery for pre-amendment infringement.
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`This is because when claims are narrowed during post-grant review, a patentee may only recover
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`for infringement of such claims occurring after the issuance of the final certificate. See 35
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`U.S.C. § 318(c); Bloom Engineering Co., Inc. v. North American Mfg. Co., Inc., 129 F.3d 1247,
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`1249–50 (Fed. Cir. 1997) (“Unless a claim granted or confirmed upon reexamination is identical
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`to an original claim, the patent cannot be enforced against infringing activity that occurred before
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`issuance of the reexamination certificate.”) (applying 35 U.S.C. § 252, which by statue has the
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`same effect as section 318(c)). Thus, under this scenario, any advances made in discovery in the
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`interim would be rendered moot and the litigation resources expended by the parties and the
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`Court, including those relating to claim construction proceedings, would be wasted.
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`The Fresenius case in particular illustrates how the timely ordering of a stay can prevent
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`waste of significant judicial and party resources. In Fresenius, the district court declined to stay
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`the case pending the concurrent reexaminations of the patents-in-suit. Fresenius USA, Inc., 721
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`F.3d at 1332-33. Although the district court granted judgment that the patents were not invalid
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`and awarded the plaintiff significant damages, on appeal, the Federal Circuit reversed and
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`remanded the case. Id. On remand, the district court again awarded the plaintiff damages. Id. at
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`1333-34. During the pendency of the litigation, however, the PTO invalidated all of the relevant
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`patent claims, and the Federal Circuit affirmed the PTO’s decision. Id. 1334-35. As such, the
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`Federal Circuit ended up vacating the district court’s judgment and remanding to dismiss the
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`case. Id.at 1347. Such costly litigation that ultimately resulted in a vacated judgment could have
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`been avoided had the case initially been stayed pending the reexamination.
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`Even if one or more of the claims in each of the patents-in-suit were to survive the IPR
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`review, any statements made by Plaintiffs to the PTO in distinguishing their claims from the
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`prior art should be fully considered by this Court in any future claim constructions proceedings,
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`as statements made during prosecution of the patent become part of the intrinsic record and have
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`a meaningful impact on the scope of the surviving claims. See, e.g., Intellectual Ventures I LLC
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`v. PNC Fin. Servs. Grp., Inc., 2014 WL 3942277, at *2 (W.D. Pa. Aug. 12, 2014) (“[T]he PTO’s
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`decisions will become part of the intrinsic records of the patents, and will therefore, simplify the
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`issues to be decided by this Court”); Pragmatus AV, LLC v. Yahoo! Inc., 2014 WL 1922081, at
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`*5 (N.D. Cal. May 13, 2014) (“Under Federal Circuit law, comments made by a patent holder
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`during inter partes reexamination proceedings can limit claim scope. The same should be true
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`now that inter partes review, rather than inter partes reexamination, is in effect.” (internal
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`citations omitted)). The potential for the review proceedings to affect claim construction, and
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`any invalidity grounds not before the PTO (such as Section 101 grounds), counsels in favor of a
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`stay.
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`For example, statements made to the PTO by a patentee or applicant during examination,
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`including statements characterizing the claimed invention and arguments distinguishing the
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`claims from the prior art, can narrow the scope of a claim by requiring that claim terms be
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`construed more restr