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)

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