NantWorks, LLC et al v. Niantic, Inc.

Filing 71

ORDER GRANTING 62 MOTION TO STAY PENDING INTER PARTES REVIEW. In the attached order, the court stays the case pending the PTO's resolution of the IPR petitions. Within 14 days of the PTO's decisions, the parties must file a joint case-management statement with their proposed next steps. (lblc2S, COURT STAFF) (Filed on 7/15/2021)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 San Francisco Division United States District Court Northern District of California 11 NANTWORKS, LLC, et al., Case No. 20-cv-06262-LB Plaintiffs, 12 13 v. 14 NIANTIC, INC., Defendant. 15 ORDER GRANTING MOTION TO STAY PENDING INTER PARTES REVIEW Re: ECF No. 62 16 INTRODUCTION 17 18 NantWorks — which develops “various technologies to advance healthcare, commerce, and 19 digital entertainment” — sued Niantic for allegedly infringing NantWorks’ patents in Niantic’s 20 augmented-reality game apps “Pokémon Go” and “Harry Potter: Wizards Unite.” Niantic filed 21 petitions for inter partes review of all asserted claims in the patents in litigation and then moved to 22 stay the case pending the Patent and Trademark Office’s resolution of the IPRs.1 The court can 23 decide the motion without oral argument and grants it. N.D. Cal. Civ. L. R. 7-1(b). 24 25 26 27 28 Third Amend. Compl. (TAC) – ECF No. 50 at 2–3 (¶¶ 1–6); Mot. – ECF No. 62. Citations refer to material in the Electronic Case File (ECF); pinpoint citations are to the ECF-generated page numbers at the top of documents. 1 ORDER – No. 20-cv-06262-LB ANALYSIS 1 Courts have the power to stay a case pending the PTO’s review of the patents involved in the 2 3 lawsuit. Pi–Net Int’l, Inc. v. Focus Bus. Bank, No. C-12-4958-PSG, 2013 WL 4475940, at *3 4 (N.D. Cal. Aug. 16, 2013). The party seeking the stay has the burden of showing that a stay is 5 appropriate. Id. Courts consider the following non-exhaustive factors in determining whether to 6 stay the case: (1) whether discovery is complete and whether a trial date has been set; (2) whether 7 a stay will simplify the issues in question and trial of the case; and (3) whether a stay would 8 unduly prejudice or present a clear tactical disadvantage to the non-moving party.” Id. (cleaned 9 up). The factors support a stay here. First, the case is in its early stages. The court invalidated one patent earlier this year because it 10 United States District Court Northern District of California 11 did not recite any patent-eligible invention and thus was invalid under 35 U.S.C. § 101.2 Claims 12 construction has been scheduled, but only NantWorks has submitted its brief. No depositions have 13 been taken. Courts have granted stays in cases that were in similar procedural postures. GoPro, Inc. 14 v. C&A Mktg., Inc. No. 16-CV-03590-JST, 2017 WL 2591268, at *3 (N.D. Cal. June 15, 2017) 15 (parties exchanged infringement and invalidity contentions and corresponding document 16 productions, exchanged written discovery, made their initial claims-construction disclosures, and 17 provided their technology tutorials; court prepared for the tutorial and Markman hearing); Brixham 18 Sols. Ltd. v. Juniper Networks, Inc., No. 13-CV-00616-JCS, 2014 WL 1677991, at *2 (N.D. Cal. 19 Apr. 28, 2014) (written and document discovery; parties briefed claims construction). Second, the IPR petitions challenge every claim in the patents in litigation. Given the legal 20 21 standard for instituting an IPR (“reasonable likelihood that the petitioner would prevail with 22 respect” to at least one claim) and the rate that the PTO initiates review, it is likely that a stay will 23 simplify the issues in the case. Uniloc USA Inc. v. LG Electr. Inc., No. 18-cv-06740-JST, 2019 24 WL 1905161, at *3–5 (N.D. Cal. Apr. 29, 2019) (collecting cases in this district where courts hold 25 that the potential for simplification outweighs the uncertainty inherent in a pre-institution stay); 26 Pi–Net, 2013 WL 4475940, at *4 (cleaned up). 27 28 2 Order – ECF No. 35. ORDER – No. 20-cv-06262-LB 2 1 Third, a stay would not unduly prejudice NantWorks. In weighing prejudice to the non-moving 2 party, courts consider the following: “(1) the timing of the petition for review; (2) the timing of the 3 request for the stay; (3) the status of review proceedings; and (4) the relationship of the parties.” 4 Uniloc, 2019 WL 1905161, at *5 (cleaned up). Niantic filed the petitions well within the one-year 5 statutory limit. Id. It filed the request to stay shortly thereafter. Id. at *6. NantWorks’ speculation 6 about the prejudice from disappearing evidence and deteriorating witness memories is insufficient 7 to establish undue prejudice. See id.; Evolutionary Intel. LLC v. Yelp Inc, No. C-13-03587 DMR, 8 2013 WL 6672451, at *8 (N.D. Cal. Dec. 18, 2013) (discovery difficulties and faded memories are 9 “consequences that apply to any case where reexamination is sought and cannot alone demonstrate undue prejudice”). NantWorks’ other arguments — harm to its reputation, inability to license its 11 United States District Court Northern District of California 10 patents, and employees who might leave — do not establish undue harm either.3 Uniloc, 2019 WL 12 1905161, at *6. The parties are not direct competitors, and damages can compensate NantWorks 13 for any harm. Id. CONCLUSION 14 15 The court stays the case pending the PTO’s resolution of the IPR petitions. Within 14 days of 16 the PTO’s decisions, the parties must file a joint case-management statement with their proposed 17 next steps. 18 IT IS SO ORDERED. 19 Dated: July 15, 2021 ______________________________________ LAUREL BEELER United States Magistrate Judge 20 21 22 23 24 25 26 27 28 3 Opp’n – ECF No. 64 at 8. ORDER – No. 20-cv-06262-LB 3

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