Case 2:16-cv-00980-JRG Document 141 Filed 10/24/17 Page 1 of 6 PageID #: 5316
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`Plaintiff,
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`INTELLECTUAL VENTURES II LLC,
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`v.
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` FEDERAL
`FEDEX CORPORATION,
`EXPRESS CORPORATION,
` FEDEX
`GROUND PACKAGE SYSTEM,
`INC.,
`FEDEX FREIGHT, INC., FEDEX CUSTOM
`CRITICAL, INC., FEDEX OFFICE AND
`PRINT SERVICES,
`INC.,
` GENCO
`DISTRIBUTION SYSTEM, INC.,
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`Defendants.
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`CIVIL ACTION NO. 2:16-CV-00980-JRG
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`MEMORANDUM OPINION AND ORDER
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`Before the Court is Defendants’ Motion to Stay Pending Inter Partes Review (Dkt. No.
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`104) (“the Motion”). Having considered the Motion and for the reasons set forth below, the Motion
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`is DENIED.
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`I.
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`Background
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`On August 31, 2016, Plaintiff Intellectual Ventures II LLC (“Intellectual Ventures” or
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`“Plaintiff”) sued Defendants FedEx Corporation, Federal Express Corporation, FedEx Ground
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`Package System, Inc., FedEx Freight, Inc., FedEx Custom Critical, Inc., FedEx Office and Print
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`Services, Inc., and GENCO Distribution System, Inc. (collectively, “FedEx” or “Defendants”).
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`(Dkt. No. 1.) Plaintiff alleges that Defendants infringe five different patents: U.S. Patent Nos.
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`6,633,900 (“the ’900 Patent”); 6,909,356 (“the 356 Patent”); 7,199,715 (“the ’715 Patent”);
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`8,494,581 (“the ’581 Patent”); and 9,047,586 (“the ’586 Patent”) (collectively, “the Asserted
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`Patents”).
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`Exhibit 2125 Page 1
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`IV Exhibit 2125
`FedEx v. IV
`Case IPR2017-02028
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`Case 2:16-cv-00980-JRG Document 141 Filed 10/24/17 Page 2 of 6 PageID #: 5317
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`In January and February of 2017, Defendants filed six petitions for inter partes review
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`(“IPR”) covering all of the Asserted Claims. (Dkt. No. 104 at 1.) The Patent Trial and Appeal
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`Board (“PTAB”) instituted review on twenty-three of the Asserted Claims and denied institution
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`on the remaining twenty-eight claims. (Dkt. No. 112 at 1.)
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`After some of its challenges were denied, FedEx filed a second round of “follow-on”
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`petitions on August 31, 2017, seeking review on the uninstituted claims. (Dkt. No. 104 at 1; Dkt.
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`No. 112 at 4). The PTAB has not rendered an institution decision for these “follow-on” petitions.
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`(Id.)
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`On September 1, 2017, Defendants filed the instant Motion seeking a stay in light of the
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`instituted IPRs and the then recently filed “follow-on” petitions. (Dkt. No. 104.) At that point,
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`the Parties had already filed claim construction briefing (Dkt. No. 91; Dkt. No. 102) and engaged
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`in substantial discovery. (Dkt. No. 112 at 12.) Additionally, the close of discovery is a few months
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`away and trial is set for May 7, 2018. (Dkt. No. 135.)
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`II.
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`Legal Standard
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`A district court has the inherent power to control its own docket, including the power to
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`stay proceedings. Clinton v. Jones, 520 U.S. 681, 706 (1997). “District courts typically consider
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`three factors when determining whether to grant a stay pending inter partes review of a patent in
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`suit: (1) whether the stay will unduly prejudice the nonmoving party, (2) whether the proceedings
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`Exhibit 2125 Page 2
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`before the court have reached an advanced stage . . . and (3) whether the stay will likely result in
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`simplifying the case before the court.” NFC Techs. LLC v. HTC Am., Inc., Case No. 2:13-cv-1058-
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`WCB, 2015 WL 1069111, at *2 (E.D. Tex. Mar. 11, 2015) (Bryson, J.). Ultimately, the party
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`requesting a stay bears the burden of establishing that a stay is justified. Clinton, 520 U.S. at 709.
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`III.
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`Discussion
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`A. Whether a Stay Will Simplify the Issues
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`The Court finds that a stay would do little to simplify the issues here. Indeed, the PTAB
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`has declined to institute on a majority of the Asserted Claims. (Dkt. No. 112 at 1.) This sets the
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`present case apart from those in which this Court has stayed a case even as to uninstituted claims
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`because all but a few claims were the subject of an IPR. See, e.g., Intellectual Ventures II LLC v.
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`BITCO Gen. Ins. Corp., No. 6:15-cv-00059, 2016 WL 4394485, at *3 (E.D. Tex. May 12, 2016)
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`(“[T]he Court finds that the likelihood of simplification of issues is high since the PTAB has
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`instituted review of [nine of the ten] claims at issue in this case.”). Defendants’ “follow-on”
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`petitions do not alter that calculus. Cellular Commc’ns Equip., LLC v. Samsung Elecs. Co., No.
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`6:14-CV-759, 2015 WL 11143485, at *3 (E.D. Tex. Dec. 16, 2015) (“The likelihood of
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`simplification is far more speculative before the PTAB decides whether to institute inter partes
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`review.”). Defendants’ argument that these “follow-on” petitions will most assuredly be granted
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`is no less speculative than a plaintiff’s possible assertion that the pending constitutional challenge
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`to the continued existence of the PTAB will most assuredly be granted by the Supreme Court.
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`Predictions and future projections of these types do not move the Court.
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`Additionally, the instituted IPRs only cover a narrow slice of the invalidity arguments
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`Defendants have raised in this case. For example, Defendants have argued that the ’715 Patent is
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`invalid under § 102 with respect to at least eight references (Dkt. No. 112 at 15–16), under § 103
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`Exhibit 2125 Page 3
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`with respect to at least twenty-six combinations (id. at 22–24), under § 112 (id. at 73–75), and
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`under § 101 (id. at 85–86). The PTAB’s decision will address a single theory, obviousness, with
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`respect to a single reference. (Dkt. No. 112 at 7.) Therefore, even a favorable PTAB decision for
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`Defendants leaves their other defenses, at least with respect to the uninstituted claims, in need of
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`resolution. Saint Lawrence Commc’ns LLC v. ZTE Corp., No. 2:15-CV-349-JRG, 2017 WL
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`3396399, at *2 (E.D. Tex. Jan. 17, 2017) (concluding that pending IPRs would “have a negligible
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`impact on potentially streamlining the case” where numerous defenses would remain live even
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`after IPR decision).
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`Accordingly, the Court concludes that this factor does not weigh in favor of granting a stay.
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`B. Whether a Stay Will Result in Prejudice
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`Defendants argue that Plaintiff will suffer no prejudice because Intellectual Ventures “does
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`not produce or sell any products” and thus it can be compensated, if infringement were eventually
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`found, through damages, including for the period covered by the stay. (Dkt. No. 104 at 9–10
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`(“[A]ny potential prejudice Intellectual Ventures may assert—receiving alleged damages later
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`rather than sooner—is minimal and entirely compensable through the ordinary damages phase of
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`the litigation.”).) However, as this Court explained in Saint Lawrence when presented with this
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`same argument, “a plaintiff has a right to timely enforcement of its patent rights.” Saint Lawrence,
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`2017 WL 3396399, at *2 (E.D. Tex. Jan. 17, 2017). See also Trover Grp., Inc. v. Dedicated Micros
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`USA, No. 2:13-CV-1047-WCB, 2015 WL 1069179, at *2 (E.D. Tex. Mar. 11, 2015) (Bryson, J.)
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`(collecting cases and concluding that prejudice to timely enforcement of plaintiff’s patent rights
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`cuts against granting a stay). Although Defendants argue that any prejudice is minimal because
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`the PTAB decisions must be rendered within the statutory one-year deadline, the PTAB can extend
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`Exhibit 2125 Page 4
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`those deadlines, 37 C.F.R. § 42.100(c), and appellate review of the decision may also delay the
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`case many additional months. (Dkt. No. 112 at 15.)
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`C. The Stage of the Case
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`Defendants argue that this case is in its early stages and therefore a stay is appropriate.
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`(Dkt. No. 104 at 11–12.) Plaintiff responds by arguing that this case is set to go to trial several
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`months before the PTAB’s deadline for issuing a written decision with respect to claims it has
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`instituted on and nearly a year before it would issue a decision on the remaining claims (if the
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`PTAB decides to institute) and therefore proceeding to trial is “the fastest, most complete, and
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`most efficient way to resolve the parties’ disputes.” (Dkt. No. 112 at 11–12.) Plaintiff also argues
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`that this case has proceeded through substantial discovery and claim construction and thus a stay
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`would be inefficient. (Id.)
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`The Court agrees that the Parties have already invested substantial effort and resources
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`during discovery and in preparing claim construction briefing. (Dkt. No. 91; Dkt. No. 102; Dkt.
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`No. 112 at 12.) These circumstances weigh against staying this case. See, e.g., Unifi Sci. Batteries,
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`LLC v. Sony Mobile Commc’ns AB, No. 6:12CV221 LED-JDL, 2014 WL 4494479, at *3 (E.D.
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`Tex. Jan. 14, 2014). This is particularly true with respect to Defendants’ “follow-on” petitions,
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`which were filed well after this case was underway.
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`IV.
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`Conclusion
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`Taking the factors discussed above together and for the reasons set forth herein, the Court
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`concludes that Defendants failed to carry their burden to show that a stay is warranted in light of
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`their IPR petitions. Accordingly, their Motion to Stay (Dkt. No. 104) is DENIED. However,
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`Defendants may re-urge their motion in light of the PTAB’s decisions on the uninstituted claims.
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`Exhibit 2125 Page 5
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`Exhibit 2125 Page 6
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