Case 1:20-cv-06879-JPC-SN Document 67 Filed 02/16/21 Page 1 of 6
`LISTON AB RAM SON
`nsncsm
`The Chrysler twang
`DOCUMENT
`'
`- ELECTRONICAL-LY FILED
`405 Lauhguon Avmue, 46th Floor
`NewYork, NewYork [0174
`Doc #:
`2t16t2021
`DATE FILED:
`
`February 10,2021
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`
`
`2/ 1 3/ 2 0 2 12/ 1 6/ 2 0 2 1
`
`Hon. Sarah Netburn
`Thurgood Marshall United States Courthouse
`United States District Court
`40 Foley Square
`New York, NY 10007
`
`Kaufman v. salesforce.com Inc. No. 1:20-cv-06879-JPC' Joint Letter re: DJ. 64
`Re:
`Dear Magistrate Judge Netburn:
`Pursuant to the Court's February 5, 2021 Order (DJ. 64), plaintiff Michael Philip Kauf-
`man “Kaufinan”) and defendant salesforcecom, Inc. (“Salesforce”) respectfully submit this
`joint letter regarding (1) the proposed briefing schedule for Salesforce's Motion to Stay Pending
`Inter Partes Review (“Motion to Staf’) and (2) whether the Court should stay claim construction
`pending a decision on the Motion to Stay.
`Pursuant to the Court’s order, the Parties met and conferred on Friday, February 5, 2021.
`The Parties have reached an agreement regarding the proposed briefing schedule for the Motion
`to Stay. The Parties propose that Kaufman’s opposition to the motion to stay be filed by Febru-
`ary 16, 2021, with Salesforce's reply be filed on February 23, 2021.
`Despite good faith efforts to reach an agreement, the Parties did not reach an agreement
`regarding whether claim construction should be stayed pending a decision on the Motion to Stay.
`Each party's respective position follows:
`Kaufman’s Position
`Kaufman will oppose the Motion to Stay and further opposes any temporary stay pending
`a decision on a motion to stay. Whether the PTAB will institute review in the IPRs is speculative,
`and decisions in this district routinely deny requests for stays before an institution decision in
`IPRs. See, e.g., Intellectual Ventures HL.L.C. v. JPMorgan Chase & Co., No. 13 CIV. 3777
`(AKH), 2014 WL 109195 62, at *4 (S.D.N.Y. Aug. 11, 2014) (J. Hellerstein).
`Claim construction briefing is already complete. All that remains of the claim construc-
`tion process is for the Court to hold a claim construction hearing and issue its ruling. With claim
`construction ripe for decision, a stay would necessarily interrupt that process. This case is also
`progressing through discovery: the parties have exchanged documents, and source code review
`has begun and is ongoing, with fact discovery scheduled to be complete by March 23, 2021.
`A stay at this point would derail the current case schedule that both parties stipulated to
`on October, 26, 2020 (DJ. 24), which Judge Cronan so ordered on October 29, 2020 (DJ. 26),
`and which has been progressing expeditiously. Pursuant to that schedule, this case is set to be
`trial ready by July of this year (DJ. 26 at 4), long before any potential ruling from the PTAB on
`Salesforce’s IPRs, which would occur approximately one year later, if the IPRs are even insti-
`tuted for review, which there is substantial basis to question.
`
`LiscmAbramsonLLP
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`Salesforce Ex. 1036 - Page 1
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`LISTON ABRAMSON
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`Moreover, the PTAB will look to the progress in this case in exercising its own discretion
`to institute an IPR. In addition to examining the merits, the PTAB looks at a set of six non-exclu-
`sive factors, known as the Fin tt'v factors, to determine “whether efficiency, fairness, and the mer-
`its support the exercise of authority to deny institution in view of an earlier trial date in the paral-
`lel proceeding.” Apple Inc. v. F t'ntt'v Inc., IPR2020-00019, Paper 11 at 6 (PTAB Mar. 20, 2020).
`This case is set to be trial ready within approximately a week of any potential IPR institu-
`tion, and this case will long be over before a final PTAB decision, which would be a year after
`institution (mid-2022). The PTAB routinely denies institution in cases where, as here, the ex-
`pected trial date set in the district court precedes the potential final written decision in the [PR
`(which follows from statutory schedules). See, e.g., Cisco 555., Inc. v. Ramot at Tel Aviv Univ
`Ltd, IPR2020-00122, Paper 15 at 7-8 (PTAB May 15, 2020) (denying institution where trial date
`was six months before statutory deadline for final written decision); Apple Inc. v. Moxell, Ltd,
`IPR2020-00203, Paper 12 at 17-18 (PTAB July 6, 2020) (denying institution where trial was set
`to take place four months after the institution decision).
`The PTAB is likely going to deny institution under the Fintt'v test alone. Kaufman was
`surprised that Salesforce even filed IPRs in this case with such long odds of success. Further-
`more, the IPRs themselves are based on recycled and otherwise irrelevant prior art, and for those
`and other reasons are substantively lacking, as will be shown at the PTAB. Indeed, one of the pa-
`tents in this suit was already litigated through a jury verdict against Microsoft Corporation and
`has withstood two prior IPR challenges fi'om Microsoft, which were denied institution, without
`there having been a stay. Should the PTAB nevertheless act months from now to institute review,
`and Salesforce were to renew its request for a stay then, the Court would be able to reevaluate
`the situation at that time.
`Salesforce filed its IPRs on December 31, 2020 and allowed the claim construction work
`to progress for a month thereafter, including two separate rounds of claim construction briefing,
`before even raising the possibility of a request for a stay. This seems like gamesmanship, to have
`Kaufman lock in all of the claim construction arguments in this litigation and only then to move
`for a stay.
`W
`Salesforce respectfully requests the Court stay all proceedings in this matter, including
`further claim construction proceedings, pending resolution of Salesforce’s motion to stay (Dkt.
`63). See Sofiview Computer Prod. Corp. v. Haworth, Inc., No. 97 CIV. 8815 KMW HBP, 2000
`WL 1134471, at *3 (S.D.N.Y. Aug. 10, 2000) (finding it would be “a serious waste of both the
`parties’ and the Court’s resources if the Markman and summary judgment proceedings went for-
`ward and the claims were subsequently declared invalid or were amended as a result of the
`
`1 Salesforce now raises its pending motion to transfer. The current case schedule was ordered by Judge Cronan qfi‘er
`the transfer motion was made. See Oct. 30, 2020 Minute Entry. Salesforce’s motion to stay (D.I. 61, 63) was based
`solely on its inter partes review petitions. (Motion to Stay “Pending Inter Panes Review”) Salesforce now cites In
`re SK hynir Inc, in which the Federal Circuit granted a partial mandamus. In that case, the Western District of
`Texas, which has been repeatedly mandamused regarding transfer motions, failed to rule on a transfer motion that
`was pending for eight months, where the transfer requester had specifically requested a stay pending the determina-
`tion of the transfer motion. Salesforce’s transfer motion, which is not the basis of Salesforce’s Motion to Stay, has
`been briefed for two months and will presumably be decided in due course. Kaufman hopes the Court sees this addi-
`tional Salesforce argument for what it is, a kitchen sink argument to try to stall this case.
`
`Salesforce Ex. 1036 - Page 2
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`Case 1:20-cv-06879-JPC-SN Document 67 Filed 02/16/21 Page 3 of 6
`LISTON ABRAMSON
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`reexamination proceeding”). As an alternative and independent basis for Salesforce’s request,
`this action should be stayed until this Court rules on Salesforce’s pending motion to transfer,
`consistent with Federal Circuit guidance. See In re SK hynix Inc., No. 2021-113, 2021 WL
`321071, at *2 (Fed Cir. Feb. 1, 2021) (ordering district court before approaching Markman hear-
`ing to “stay all proceedings concerning the substantive issues of the case and all discovery until
`such time that it has issued a ruling” on transfer). A short stay until the Court resolves these fun-
`damental motions will conserve significant party and judicial resources without any prejudice to
`Plaintiff.
`Although the parties have completed Markman briefing, a great deal of work remains be-
`fore claim construction is completed—particularly for this Court. If this action is not stayed,
`considerable resources will be spent preparing for the technology tutorial and Markman hearing.
`More importantly, this Court could also waste significant resources on the laborious task of con-
`struing 14 terms (including learning the associated technology), when it could later decide that
`(i) the PTAB should first complete its review of the asserted claims, or (ii) this case should be re-
`solved in another venue (which has no obligation to adopt claim constructions issued in this fo-
`rum). As detailed in the stay motion, the strong likelihood that the asserted claims will be found
`unpatentable further jeopardizes judicial economy. See Dkt. 63 at 6. This district, and others
`within this circuit, have recognized that stays are appropriate to avoid “a serious waste of both
`the parties’ and the Court's resources” in the event the PTAB cancels or limits claims. Sofiview,
`2000 WL 1134471 at *3; see also Firepass IP Holdings, v. Airbus Americas, No. 09-CV-4234
`ENV LB, 2011 WL 2650484, at *2 (E.D.N.Y. July 6, 2011) (granting a stay after submission of
`claim construction briefs because “the rest of the usual landmarks on the road to trial in a patent
`case—the Markman hearing, a claim construction decision from the Court, expert discovery, and
`summary judgment briefing—all still lie ahead”); Goodman v. Samsung Elecs. Am., No. 17-cv-
`5539 (JGK), 2017 WL 5636286, *2 (S.D.N.Y. Nov. 22, 2017).
`Expending judicial and party resources before a ruling on Salesforce's motion to transfer
`would likewise be inefficient. The Federal Circuit has provided clear guidance that district
`courts should determine the “proper and convenient venue before addressing any substantive
`portion of the case.” In re Nintendo, 544 F. App'x. 934, 941 (Fed. Cir. 2013). Once a transfer
`motion has been filed, it should “unquestionably take top priority” and be resolved ahead of “a
`Markman hearing and claim construction order[,]” “two of the most important and time-inten-
`sive substantive tasks.” In re Apple, 979 F.3d 1332, 1337 (Fed. Cir. 2020) (emphasis added); see
`also In re SK hynix, 2021 WL 321071, at *2 (“[W]e find . . . that the district court must stay all
`proceedings concerning the substantive issues of the case and all discovery until . . . it has issued
`a ruling on the [transfer] motion”). The Court and the parties risk unnecessarily expending re-
`sources if this case proceeds with the venue question unresolved
`Moreover, the Court should not only stay the claim construction process, but also all
`other non-venue or stay-related proceedings in this action. Otherwise, Plaintiff and Salesforce
`will continue incurring expenses to provide discovery regarding claims and patents that are likely
`to be invalidated or could be litigated in a different forum. Such expenditures will only increase
`if the case proceeds through claim construction and discovery (such as depositions and expert re-
`ports). A short stay (at most a few months) of the entirety of this litigation to allow the Court to
`resolve Salesforce’s motions would not prejudice Plaintiff, particularly given that the transfer
`briefing has been complete since early December 2020 and the motion to stay will be fully
`briefed in two weeks. Plaintiff does not currently market or sell any products that practice the
`
`Salesforce Ex. 1036 - Page 3
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`Case 1:20-cv-06879-JPC-SN Document 67 Filed 02/16/21 Page 4 of 6
`LISTON ABRAMSON
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`asserted patents, does not compete with Salesforce, and would be fully compensated by mone-
`tary damages. In such circumstances, the Federal Circuit has held that a stay is not unduly preju-
`dicial. PiriualAgiligz Inc. v. Salesforcecom, Inc., 759 F.3d 1307, 1318 (Fed. Cir. 2014); see
`also ThinkProds. v. ACCO Brands Corp, No. CV 14-6659 (SIL), 2015 U.S. Dist. LEXIS
`196129, *9 (E.D.N.Y. June 19, 2015) (“Because the parties are not direct competitors, Plaintiff
`‘does not 2risk irreparable harm . . . and can be fully restored to the status quo ante with monetary
`relief.” .
`While the parties’ respective positions on the merits of the stay motion are distinct from
`the Court’s request for positions on a temporary stay, Salesforce briefly addresses three points in
`Plaintiff ’s argument on the merits of the underlying motion. First, the IPRs are likely to be insti-
`tuted.3 There are six Fin iiv factors the PTAB evaluates on institution, five of which have nothing
`to do with the expected trial date, the sole factor addressed by Plaintiff. Apple Inc. v. Fintiv Inc.,
`IPR2020-00019, Paper 11 at 6 (PTAB Mar. 20, 2020). Moreover, it is not uncommon for the
`PTAB to grant institution when the expected trial date is earlier than the projected final decision.
`See, e.g., Verizon v. Huawei Techs, IPR2020-01117, Paper 10 at 18-20, 22-23 (PTAB Feb. 3,
`2021) (granting institution where the PTAB’s final decision was due four months after the sched-
`uled trial date given Petitioner’s diligence in filing the IPR three months after being served in-
`fringement contentions). Here, Salesforce promptly filed both IPRs within roughly two months
`of receiving initial infringement contentions (on October 28, 2020). Second, the fact Plaintiff
`previously sued Microsoft on one of the asserted patents has no bearing on whether Salesforce's
`IPRs will be instituted. Here, Salesforce has raised unique challenges to the ’981 and ’801 pa-
`tents, the latter of which has not been previously litigated or challenged at the PTAB. None of
`the prior art combinations raised in Salesforce's IPRs have been previously considered by either
`the PTAB or a district court. Third, Plaintiff misleadingly suggests a stay was denied in the Mi-
`crosofi litigation. To the contrary, that case was not stayed because Microsoft never sought a
`stay; not because any court found a stay was not warranted. Here, Salesforce has moved for a
`stay.
`
`For the foregoing reasons, Salesforce respectfully requests a stay of all proceedings in
`this case until the pending motions to stay and transfer are resolved.
`
`2 Plaintiff ’s accusation of “gamesmanship” is unfounded. Salesforce filed its [PR petitions just before the New Year’s
`holiday and had prepared a letter requesting leave to file its motion to stay pursuant to Judge Cronan’s requirements
`when this action was referred to Your Honor for pretrial matters on January 12, requiring Salesforce to meet and confer
`with Plaintiff and prepare a full motion to comply with the new procedures. The motion was filed the next business
`day after the meet and confer, deadline for the responsive claim construction brief, and document production deadline.
`Courts have issued stays notwithstanding much longer delays than the short time Salesforce took to file its motion
`after submitting its [PR petitions. See, e.g., Goodman, 2011 WL 5636286, *3 (issuing stay after two months and citing
`cases in which the delay was nearly a year).
`3 Salesforce’s IPRs provide a detailed analysis of all Finiiv factors. https:iis3-us-west-l.amazonawseomiptab-fil-
`ings%2FIPR2021-00397”/«2Fl ; https:iis3-us~west-l .amazonaws.comiptab-filings%2FIPR2021-00396%2Fl .
`
`Salesforce Ex. 1036 - Page 4
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`Case 1:20-cv-06879-JPC-SN Document 67 Filed 02/16/21 Page 5 of 6
`LISTON ABRAMSON
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`Respectfully submitted,
`/s Ronald Abramson
`Ronald Abramson
`David G. Liston
`Ari J. Jaffess
`Alex G. Patchen
`M. Michael Lewis
`LISTON ABRAMSON LLP
`The Chrysler Building
`405 Lexington Avenue, 46th Floor
`New York, New York 10174
`(212) 257-1630
`
`Attorneys for Plaintiff Michael Philip
`Kaufman
`
`ls Ray R. Zado
`Kevin RB. Johnson (Bar No. 2542082)
`Ray R. Zado (admitted pro hac vice)
`Sam S. Stake (admitted pro hac vice)
`555 Twin Dolphin Drive, 5th Floor
`Redwood Shores, CA 94065
`Tel.: 650-801-5000
`Fax: 650-801-5100
`kevinjohnson@quinnemanuel.com
`
`The parties' briefing schedule on the motion to stay proceedings is adopted as proposed in the
`T h e p arti es' bri efi n g s c h e d ul e o n t h e m oti o n t o st a y pr o c e e di n gs is a d o pt e d as pr o p os e d i n t h e
`T h e p arti es' bri efi n g s c h e d ul e o n t h e m oti o n t o st a y pr o c e e di n gs is a d o pt e d as pr o p os e d i n t h e
`parties‘ joint letter. Plaintiff's opposition to Defendant‘s motion to stay proceedings shall be filed by
`p arti es' j oi nt l ett er. Pl ai ntiff's o p p ositi o n t o D ef e n d a nt's m oti o n t o st a y pr o c e e di n gs s h all b e fil e d b y
`p arti es' j oi nt l ett er. Pl ai ntiff's o p p ositi o n t o D ef e n d a nt's m oti o n t o st a y pr o c e e di n gs s h all b e fil e d b y
`February 16, 2021. Defendant‘s reply shall be filed by Februaiy 23, 2021. The Court STAYS all
`F e br u ar y 1 6, 2 0 2 1. D ef e n d a nt's r e pl y s h all b e fil e d b y F e br u ar y 2 3, 2 0 2 1. T h e C o urt S T A Y S all
`F e br u ar y 1 6, 2 0 2 1. D ef e n d a nt's r e pl y s h all b e fil e d b y F e br u ar y 2 3, 2 0 2 1. T h e C o urt S T A Y S all
`further proceedings as to claim construction until further order of the Court.
`f urt h er pr o c e e di n gs as t o cl ai m c o nstr u cti o n u ntil f urt h er or d er of t h e C o urt.
`f urt h er pr o c e e di n gs as t o cl ai m c o nstr u cti o n u ntil f urt h er or d er of t h e C o urt.
`SO ORDERED.
`S O O R D E R E D.
`S O O R D E R E D.
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`Dated: February 16, 2021
`D at e d: F e br u ar y 1 3, 2 0 2 1
`D at e d: F e br u ar y 1 6, 2 0 2 1
`New York, New York
` N e w Y or k, N e w Y or k
` N e w Y or k, N e w Y or k
`
`AWL,— Hmfi
`SAfiAH NETBURN
`United States Magistrate Judge
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`Salesforce Ex. 1036 - Page 5
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`Case 1:20-cv-06879-JPC-SN Document 67 Filed 02/16/21 Page 6 of 6
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`STATENIENT 0F INTERRUPTION 0F ECF SYSTEM
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`Due to an interruption of the Court’s ECF System, this joint letter was unable to be filed
`on February 10, 2021 . The Court’s ECF system was offline when we attempted to file this joint
`letter between 6:00 PM and 12:00 AM on February 10, 2021.
`
`This joint letter is being submitted on February 11, 2021 as soon as the system is re-
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`stored.
`
`ls Ronald Abramson
`Ronald Abramson
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`Salesforce Ex. 1036 - Page 6
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