Bascom Research, LLC v. Facebook, Inc.

Filing 108

ORDER GRANTING DEFENDANTS' MOTIONS TO STAY 123 in case 3:12-cv-06294-SI; 99 in case 3:12-cv-06293-SI (Illston, Susan) (Filed on 1/13/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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United States District Court
For the Northern District of California

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No. C 12-6293 SI and C 12-6294 SI

BASCOM RESEARCH LLC,

ORDER GRANTING DEFENDANTS’
MOTIONS TO STAY

Plaintiff,
v.

Order to be filed in both cases

FACEBOOK, INC.,

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Defendant.

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/

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BASCOM RESEARCH LLC,
Plaintiff,

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v.
LINKEDIN CORPORATION,
Defendant
/

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Defendants’ motions to stay are scheduled for a hearing on January 17, 2014. Pursuant to Civil

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Local Rule 7-1(b), the Court determines that the matters are appropriate for resolution without oral

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argument, and VACATES the hearing.

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DISCUSSION
Defendants seek a stay pending the United States Supreme Court’s decision in Alice Corp. v.
CLS Bank Int’l, No. 13-298, cert. granted (U.S. Dec. 6, 2013). In Alice Corporation, the Supreme

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Court granted certiorari to answer “[w]hether claims to computer-implemented inventions – including

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claims to systems and machines, processes, and items of manufacture – are directed to patent-eligible

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subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court?” The Supreme

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Court’s decision is expected by June 2014. The patents-in-suit are directed to computer-implemented

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inventions that create “link relationships” between “document objects” on a computer network, and

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assigning “attributes” to those relationships. A Markman hearing is currently scheduled for March 12,

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2014, and the opening brief on claim construction is due January 31, 2014.
Defendants contend that a stay will conserve resources because until the Supreme Court issues

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its decision in Alice Corp., it is unclear what will be required to perform a section 101 patent-eligibility

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United States District Court
For the Northern District of California

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analysis in these cases. Defendants have stated that they intend to bring a motion regarding patent

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eligibility, and they assert that “the section 101 issues affect all four patents in suit.” Docket No. 105

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at 2:28.1 Defendants assert that “the Supreme Court could announce a clear rule that sounds the death

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knell for Bascom’s patents and hundreds of thousands like them . . . [o]r the Court could articulate a

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clear rule that would permit some computer-related patents but still eliminate the claims Bascom asserts

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in this case, [or] [t]he Court could also articulate a standard – currently unknown – which may (or may

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not) require this Court to construe certain elements of the claims as part of, or as a predicate to, the

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section 101 analysis.” Id. at 4:3-9.

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The Court has discretion to stay proceedings if in the interest of judicial efficiency. See Landis

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v. North American Co., 299 U.S. at 254. In evaluating the propriety of a stay, the Court should consider

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“the possible damage which may result from the granting of a stay, the hardship or inequity which a

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party may suffer in being required to go forward, and the orderly course of justice measured in terms

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of the simplifying or complicating of issues, proof, and questions of law which could be expected to

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result from a stay.” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). The Court finds that these

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factors weigh in favor of the limited stay sought here because the Supreme Court’s decision in Alice

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Corporation will provide important guidance regarding software patentability. The Court agrees with

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defendants that it does not make sense to proceed with claim construction just months before the

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The parties filed identical papers in both related cases, and the docket numbers refer to C 12-

6293 SI.
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Supreme Court is expected to issue its decision in Alice Corp. The Court also finds that a brief stay of

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up to five months will not prejudice plaintiff, a non-practicing entity, because the monetary damages

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period will continue to run while the case is stayed.
Plaintiff opposes a stay on the ground that defendants have not demonstrated irreparable harm

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or likelihood of success on the merits. However, as defendants note, plaintiff relies on cases addressing

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the legal standard applicable for preliminary injunctions or stays of judgments pending appeal, not stays

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of district court proceedings when in the interest of judicial efficiency. Compare Nken v. Holder, 556

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U.S. 418, 425-26 (2009) (discussing standard to stay removal of alien pending appeal), with Landis v.

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North American Co., 299 U.S. 248, 254 (1936) (“The [Court’s] power to stay proceedings is incidental

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United States District Court
For the Northern District of California

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to the power inherent in every court to control the disposition of the causes on its docket with economy

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of time and effort for itself, for counsel, and for litigants.”).

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Plaintiff also argues that a stay will not conserve resources because plaintiff asserts it is unlikely

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that the Supreme Court will invalidate all patents claiming inventions implemented in computer

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software, and thus the Court will likely be required to construe the claims of the patents-in-suit in order

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to determine section 101 eligibility. However, the Federal Circuit “has never set forth a bright line rule

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requiring district courts to construe claims before determining subject matter eligibility.” Ultramercial,

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LLC v. Hulu, LLC, 657 F.3d 1323, 1325 (Fed. Cir. 2011), vacated sub nom. WildTangent, Inc. v.

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Ultramercial, LLC, 132 S. Ct. 2431 (2012); see also Cardpool, Inc. v. Plastic Jungle, Inc., No. C 12-

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4182 WHA, 2013 WL 245026, at *3 (N.D. Cal. Jan. 22, 2013) (“There is no authority for the

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proposition that a patent may not be deemed ineligible subject matter on a motion to dismiss.”). Thus,

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claim construction may not be required prior to evaluating subject matter eligibility, and if it is required,

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the scope of claim construction is likely to be impacted by the Supreme Court’s decision in Alice Corp.

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Accordingly, the Court GRANTS defendants’ motions for a stay. Docket No. 99 in C 12-6293

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SI and Docket No. 123 in C 12-6294 SI.

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IT IS SO ORDERED.

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Dated: January 13, 2014
SUSAN ILLSTON
UNITED STATES DISTRICT JUDGE

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