IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`INTELLECTUAL VENTURES I LLC,
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`Plaintiff,
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`v.
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`T MOBILE USA, INC., T-MOBILE US,
`INC., ERICSSON INC.,
`TELEFONAKTIEBOLAGET LM
`ERICSSON,
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`Defendants.
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`CIVIL ACTION NO. 2:17-CV-00577-JRG
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`ORDER DENYING MOTION TO STAY
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`Before the Court is Defendant’s Renewed Motion to Stay Pending Inter Partes Review
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`(Dkt. No. 200) (“the Motion”). For the following reasons, the Motion is DENIED.
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`I.
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`BACKGROUND
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`On August 8, 2017, Intellectual Ventures brought suit against T-Mobile USA, Inc. and
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`T-Mobile US, Inc. (collectively, “T-Mobile”), and Ericsson Inc. and Telefonaktiebolaget LM
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`Ericsson (collectively, “Ericsson”), alleging infringement of United States Patent Nos. 6,628,629
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`(“the ’629 Patent”), 7,359,971 (“the ’971 Patent”), 7,412,517 (“the ’517 Patent”), and RE 46,206
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`(“the ’206 Patent”). (Complaint, Dkt. No. 1.)
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`On November 27, 2017, Plaintiff served Defendants with its initial infringement
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`contentions. (Dkt. No. 42.)
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`Between March 1, 2018 and May 2, 2018, Ericsson filed a total of four IPR petitions,
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`covering “all 17 remaining asserted claims.”. (Dkt. No. 200 at 3.) The PTAB instituted the first
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`three IPRs on October 5, 2018 and instituted the fourth on November 13, 2018.
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`On November 14, Defendant filed the instant motion and moved for expedited briefing.
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`(Dkt. Nos. 200, 201.) The Court granted the motion for expedited briefing on November 15, 2018.
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`On November 19, 2018, prior to Plaintiff’s response, the Parties filed their motions for
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`summary judgment and Daubert motions.
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`Pretrial is currently scheduled for January 4, 2018.
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`Trial is scheduled for February 4, 2018.
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`II.
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`LEGAL STANDARD
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`District courts have broad discretion to manage their dockets, including the power to grant
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`a stay of proceedings. The Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 848–
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`49 (Fed. Cir. 2008) (citing Landis v. N. Am. Co., 299 U.S. 248, 254–55 (1936) (“[T]he power to
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`stay proceedings is incidental to the power inherent in every court to control the disposition of
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`causes on its docket with economy of time and effort for itself, for counsel, and for litigants.”)).
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`When considering motions to stay, courts “must weigh competing interests and maintain an even
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`balance.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936).
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`To strike the balance when a patent challenger moves to stay a litigation pending an IPR,
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`courts in this district consider three factors: (1) whether a stay will unduly prejudice or present a
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`clear tactical disadvantage to the nonmoving party; (2) whether discovery is complete and whether
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`a trial date has been set; and (3) whether a stay will simplify issues in question and trial of the case.
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`Lennon Image Techs., LLC v. Macy’s Retail Holdings, Inc., No. 2:13-CV-00235-JRG, 2014 U.S.
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`Dist. LEXIS 130645, at *8 (E.D. Tex. Sept. 17, 2014). “Essentially, courts determine whether the
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`benefits of a stay outweigh the inherent costs based on those factors.” EchoStar Techs. Corp. v.
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`TiVo, Inc., No. 5:05-CV-00081, 2006 U.S. Dist. LEXIS 48431, at *4 (E.D. Tex. July 14, 2006).
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`III. DISCUSSION
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`A. Whether a Stay Will Unduly Prejudice or Present a Clear Tactical
`Disadvantage to the Nonmoving Party
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`Defendants assert that Plaintiff will not “suffer any undue prejudice from a stay.” (Dkt. No.
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`200 at 12.) While Defendant concedes that delaying Plaintiff’s ability to timely enforce its patent
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`rights is a form of undue prejudice, the “delay in enforcing patent rights is inherent in any stay, . .
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`. ‘it is therefore not sufficient, standing alone, to defeat a stay motion.’” (Id. at 13 (quoting NFC
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`Tech. LLC v. HTC Am., Inc., 2:13-cv-1058-WCB, 2015 U.S. Dist. LEXIS 29573, at *7 (E.D. Tex.
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`Mar. 11, 2015)).) Defendants further assert that “IV can be adequately compensated by money
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`damages to the extent it has suffered any injury to its patent rights,” because “IV seeks only money
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`damages, not injunctive relief,” and “[m]ere delay in collecting money damages does not constitute
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`undue prejudice.” (Id. (citing VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1318 (Fed.
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`Cir. 2014)).)
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`Plaintiff responds that “a patent holder has ‘a recognized interest in the timely enforcement
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`of its patent rights,’” and that, although “‘a delay in vindication of patent rights alone is insufficient
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`to prevent a motion to stay from being granted,’ the Court has explained that ‘such a delay should
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`still be considered in determining the extent of undue prejudice.’” (Dkt. No. 230 at 12 (quoting
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`Unifi Sci. Batteries, LLC v. Sony Mobile Commc’ns AB, No. No. 6:12-cv-221-LED-JDL, 2014
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`U.S. Dist. LEXIS 129388, at *9–10 (E.D. Tex. Jan. 14, 2014); Intellectual Ventures II LLC v.
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`Sprint Spectrum, L.P., No. 2:17-cv-00662-JRG-RSP (E.D. Tex. Nov. 19, 2018) (Dkt. No. 233)).)
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`It is well established that Plaintiff’s timely enforcement of its patent rights is entitled to
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`some weight, even if that factor is not dispositive. Further, there is no question that Plaintiff will
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`be adequately compensated with monetary relief. Accordingly, the Court finds that this factor
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`weighs slightly against a stay.
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`B. Whether Proceedings Have Reached an Advanced Stage
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`Defendants argue that “[t]he stage of the litigation also favors a stay [because m]uch of the
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`work to be done remains ahead of the parties and the Court in this case[, t]he prior art has not yet
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`been substantively considered by the Court[, and e]xpert discovery closes on November 15, 2018.”
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`(Dkt. No. 200 at 9.) Defendants further assert that the “bulk of expert depositions are ongoing,
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`with Defendants deposing all three of IV’s experts and IV deposing Defendants’ invalidity and
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`damages experts between November 13–15 alone.” (Id.) Finally, “[d]ispositive and Daubert
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`briefing and pretrial disclosures have not yet begun, with dispositive and Daubert motions due on
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`November 19, 2018, and opening pretrial disclosures due on November 20, 2018.” (Id. at 8–9.) “A
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`stay will therefore ‘obviate the need to prepare for trial concerning some or all of the patents’
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`claims, thus reducing the burden of litigation on the parties and the Court.’” (Id. at 9 (quoting
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`Stingray Music USA, Inc. v. Music Choice, 2:16-cv-586-JRG-RSP, 2017 WL 9885167, at *2 (E.D.
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`Tex. Dec. 12, 2017)).)
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`Plaintiff argues that the stage of the case “weighs against a stay,” especially as “most of
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`the examples that Defendants cite in support of [their] argument have since come and gone in the
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`two weeks since Defendants filed their stay motion.” (Dkt. No. 230 at 7.) Further, Plaintiff argues
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`that there are only 82 days before jury selection, “well within the range in which multiple courts
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`have denied requests to stay proceedings pending IPRs (or the close related post-grant review).”
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`(Id. (citing Chrimar Sys. v. Adtran, Inc., No. 6:15-cv-618-JRG-JDL, 2016 U.S. Dist. LEXIS
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`188613 (E.D. Tex. Dec. 8, 2016) (denying motion to stay filed 41 days before jury selection); Carl
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`Zeiss A.G. v. Nikon Corp., No. 217-cv-07083-RGK-MRW, 2018 U.S. Dist. LEXIS 181120 (C.D.
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`Cal. Oct. 16, 2018) (denying motion to stay filed 56 days before trial); Realtime Data LLC v.
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`Actian Corp., No. 6:15-cv-463-RWS-JDL, 2016 U.S. Dist. LEXIS 187446 (E.D. Tex. Nov. 29,
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`2016) (denying motion to stay filed 186 days before jury selection); Tinnus Enters., LLC v.
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`Telebrands Corp., No. 6:16-cv-033-RWS, 2017 U.S. Dist. LEXIS 110691 (E.D. Tex. April 5,
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`2017) (denying motion to stay filed 256 days before jury selection) (regarding post-grant review
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`rather than IPR)).)
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`It is clear to the Court that Defendants are speaking out of both sides of their mouths. In
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`fact, the Court finds it bizarre that Defendants simultaneously assert that “the bulk of expert
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`depositions are ongoing” and that “[m]uch of the work to be done remains ahead of the parties and
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`the Court in this case” while also asserting that they will have completed “deposing all three of
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`IV’s experts and IV deposing Defendants’ invalidity and damages experts” within a day of the
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`filing of this Motion. Additionally, despite Defendants moving for and obtaining expedited
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`briefing on this Motion, the Parties still filed nine dispositive and Daubert motions prior to
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`Plaintiff’s response to this Motion. Indeed, it appears that during the pendency of the briefing on
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`this Motion that the vast majority of the Parties’ work has already taken place.
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`While this Court has previously held that delay in filing of IPR petitions of seven months
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`from the filing of the Complaint is not inherently unreasonable, see NFC Tech., 2015 U.S. Dist.
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`LEXIS 29573, at *10–11, Defendants’ choice to do so put it firmly at the mercy of the PTAB’s
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`institution timing. Defendants’ choice is further complicated by their insistence of continually
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`referencing their first filed IPR in their pleadings when it is the last and most recent IPR that is
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`relevant here. Defendants’ last IPR was filed two months after their first IPR and as such delayed
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`full institution from October 5, 2018 to November 13, 2018. Then, on November 14, 2018, one
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`day later, Defendants’ filed the present Motion. Having elected to engage in parallel proceedings
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`before the PTAB and engaged in conduct that elongated the institution proceedings, Defendants
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`must now accept the consequences.
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`The Court finds that this case is at an advanced stage. Discovery and claim construction
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`have concluded. The Parties have filed initial and supplemental expert reports and deposed such
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`experts. Dispositive and Daubert motions have been filed, and the Court has expended material
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`judicial resources to prepare for the January 4, 2019 pretrial. Accordingly, the Court finds that this
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`factor weighs strongly against a stay.
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`C. Whether a Stay Will Simplify Issues in Question and Trial of the Case
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`Defendants argue that staying the case will simplify the issues before the Court because
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`“the PTAB has instituted IPR of every remaining claim in this case.” (Dkt. No. 200 at 7.)
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`Defendants assert that, because the PTAB only institutes review if it finds that “there is a
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`reasonable likelihood that the petition would prevail with respect to at least 1 of the claims
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`challenged in the petition,” (Id. (citing 35 U.S.C. § 314(a)),) “the PTAB’s decisions will either
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`resolve IV’s infringement case entirely or streamline it by disposing of at least some of the asserted
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`claims and/or estopping Defendants from raising certain invalidity defenses for any claims that
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`may survive.” (Id. at 8.) Defendants further argue that any proceedings at the PTAB are part of the
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`prosecution history, and so “may cause the parties to revisit claim construction and/or dispositive
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`motions in the future.”1 (Id. at 8–9.)
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`IV responds that, “in a post-SAS world,” any simplification of the issues is speculative
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`because the PTAB need only determine “whether the petitioner is likely to succeed on at least 1
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`claim. Once that single claim threshold is satisfied, it doesn’t matter whether the practitioner is
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`likely to prevail on any additional claims.” (Dkt. No. 230 at 3–4 (quoting SAS Inst., Inc. v. Iancu,
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`138 S. Ct. 1348, 1356 (2018)).) IV further responds that Defendants’ “argument that ‘allowing the
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`litigation to proceed while challenges at the PTAB are ongoing risks complicating the issues’
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`1 The Court notes that IPRs are parallel proceedings that are not binding on the Court.
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`ignores that further development of a patent’s prosecution history is true for any post-grant
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`proceeding.” (Id. at 6 (citing Dkt. No. 200 at 8).)
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`The Court finds that, regardless of whether there is a substantial likelihood of invalidating
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`the asserted claims, there is still a substantial likelihood that the issues will be narrowed. Each
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`asserted claim will either be invalidated by the PTAB or Defendants will lose the right to bring
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`any §§ 102 or 103 argument that they could have reasonably brought before the PTAB.2 Therefore,
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`even if every asserted claim is upheld by the PTAB, the issues before the Court will still be
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`simplified.
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`Accordingly, the Court finds this factor weighs in favor a stay.
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`IV. CONCLUSION
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`After weighing all the factors that bear on whether to grant a stay pending IPR, the Court
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`finds that the balance of those factors weighs against a stay. Accordingly, in the exercise of its
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`discretion, the Court DENIES the motion to stay all proceedings in this case pending completion
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`of the various instituted IPRs before the PTAB.
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`2 While only Ericsson filed IPRs, T-Mobile has agreed “to be bound by the same estoppel that applies to Ericsson
`under 35 U.S.C. § 315(e)(2).” (Dkt. No. 230 at 8 n.4.)
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