U.S. Ethernet Innovations, LLC v. Acer, Inc. et al

Filing 1475

ORDER DENYING MOTION TO STAY ENFORCEMENT PENDING APPEAL by Hon. Claudia Wilken denying 1471 Motion to Stay. (jebS, COURT STAFF) (Filed on 11/13/2015)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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U.S. ETHERNET INNOVATIONS, LLC,

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Plaintiff,

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ACER, INC., et al.,
(Docket No. 1471)
Defendants.

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United States District Court
For the Northern District of California

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ORDER DENYING
MOTION TO STAY
ENFORCEMENT
PENDING APPEAL

v.

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No. C 10-3724 CW

and
ATHEROS COMMUNICATIONS, INC., et
al.,
Intervenors.
________________________________/

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Plaintiff United States Ethernet Innovations, LLC (USEI)

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moves this Court to stay payment of costs pending appeal without

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the requirement of posting a bond or, in the alternative, to

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require a bond that amounts to fifty percent of the taxable costs

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awarded to each Defendant.

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I.

The Court denies USEI's motion.

Background
The Court resolved all asserted claims of infringement of the

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patents-in-suit in favor of Defendants1 and entered judgment

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following cross-motions for summary judgment.

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Order on Summary Judgment Motions at 30; Docket No. 1311, Amended

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Judgment.

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Docket No. 1289,

The Court ordered that Defendants shall recover costs

"Defendants" collectively refers to Acer, Inc., Acer
America Corp., Apple, Inc., Asus Computer International, Asustek
Computer Inc., Dell Inc., Fujitsu Ltd., Fujitsu America, Inc.,
Gateway, Inc., Hewlett Packard Co., Information Systems, Inc., and
Intel Corp.

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from USEI.

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denied Plaintiff's motion to alter or amend the Order on Summary

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Judgment Motions.

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Federal Circuit, primarily arguing the validity of the '872 and

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'094 patents in view of the SONIC prior art reference.2

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No. 1399; Docket No. 1471, Opening Brief at 2.

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still pending.

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Order on Summary Judgment Motions at 30.

Docket No. 1374.

The Court

Plaintiff appealed to the

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Docket

The appeal is

Plaintiff filed motions to review the clerk's order taxing
costs and to stay payment of those costs pending resolution of the

United States District Court
For the Northern District of California

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appeal.

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referred those motions to Magistrate Judge Beeler.

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1435 and 1447.

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without prejudice to USEI's raising it before this Court no later

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than two weeks after entry of the final order taxing costs.

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Docket No. 1462 at 11-12.

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Beeler ruled on the costs.

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motion timely on October 9, 2015.

Docket Nos. 1433, 1434, 1444 and 1445.

The Court
Docket No.

Magistrate Judge Beeler denied the motion to stay

On September 28, 2015, Magistrate Judge
Docket No. 1469.

Plaintiff filed this

Docket No. 1471, Opening Brief.

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Plaintiff moves to stay the enforcement of the costs order

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pending the resolution of the appeal without posting a bond or,

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alternatively, with a bond in the amount of fifty percent of the

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taxable costs awarded to each Defendant.

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response brief, Docket No. 1472, and USEI filed a reply, Docket

Id.

Defendants filed a

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The Order on Summary Judgment Motions held that the
asserted claims of the '872 and '094 patents were not valid, and
that the asserted claims of the '313 and '459 patents were not
infringed.

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Page numbers refer to the ECF-stamped page numbers.
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No. 1474.

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No. 1473.

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II.

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The matter is decided without oral argument.

Docket

Discussion
A. Motion to Stay

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In Hilton v. Braunskill, 481 U.S. 770, 776 (1987), the

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Supreme Court listed four factors to evaluate when considering

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whether to stay an order pending appeal:

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(1) whether the stay applicant has made a strong showing that
he is likely to succeed on the merits; (2) whether the
applicant will be irreparably injured absent a stay;
(3) whether issuance of the stay will substantially injure
the other parties interested in the proceeding; and (4) where
the public interest lies.

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United States District Court
For the Northern District of California

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1. Likelihood of Success on the Merits

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The first question is whether USEI makes a strong showing

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that it is likely to succeed on the merits on appeal.

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that two district courts have found the '872 and '094 patents "not

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invalid," demonstrating the strength of its appeal.

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at 3-4.

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LLC v. Texas Instruments Inc., No. 6:11-cv-491 (E.D. Tex.), "a

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judge and jury rejected the exact same invalidity argument, based

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on the exact same reference and facts, raised in this litigation."

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Opening Brief at 3.

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related to the SONIC prior art's impact on the '872 and '094

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patents.

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judgment order and two jury verdicts.

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summary judgment because there were outstanding factual issues.

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Id.

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Order on Summary Judgment Motions at 8.

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between the two orders is that the Texas Instruments court found

USEI argues

Opening Brief

First, USEI argues that, in U.S. Ethernet Innovations,

Like the dispute at issue here, that case

Texas Instruments, Docket No. 299.

USEI cites a summary

The court there denied

Both courts construed "buffer memory" the same.

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Id. at 6;

The only difference

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evidence in the record supporting a factual dispute as to the

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required size of the buffer, while this Court did not.

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Instruments, Docket No. 299 at 6; Order on Summary Judgment

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Motions at 8.

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showing that USEI is likely to succeed on appeal on the merits.

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It demonstrates at most that two courts in two different circuits

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viewed differently whether a factual dispute existed.

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See Texas

This distinction does not amount to a strong

Thereafter, the first jury returned a verdict finding that
the asserted claims of the '872 and '094 patents were not invalid.

United States District Court
For the Northern District of California

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Texas Instruments, Docket No. 344.

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Texas Instruments infringed the asserted claims of the '872 patent

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and awarded damages.

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the patents not invalid based on identical facts lends some

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support to USEI's likelihood of winning on appeal.

The second jury found that

Id. at Docket No. 413.

That a jury found

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While post-judgment briefing was underway in Texas

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Instruments, this Court issued its Order on Summary Judgment

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Motions and Judgment, prompting the Texas Instruments court to

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order the parties to brief the applicability of collateral

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estoppel in that case.

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The Texas Instruments court held that USEI was precluded from

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recovering damages on the '872 patent because this Court had

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declared it invalid.

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collateral estoppel application in Texas Instruments makes USEI's

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arguments less forceful.

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counterargument; that one district court's judgment precluded

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another court's does not make USEI's success on appeal any less

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likely.

Texas Instruments, Docket No. 488 at 2.

Id. at 5.

Defendants argue that this

The Court agrees with USEI's

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Second, USEI argues that a "very similar invalidity argument

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involving the same patents at issue here was" rejected in 3Com

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Corp. v. Realtek Semiconductor Corp., No. 03-02177 (N.D. Cal.).

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Opening Brief at 8.

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claims, including '872 and '094 patent claims, were not invalid.

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3Com, Docket No. 690 at 3-4.

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defense in 3Com as based on the "SONIC's predecessor (a similar

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piece of prior art with a small FIFO) as an invalidating

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reference."

There, a jury found that several patent

USEI characterizes the invalidity

Reply Brief at 2.

Defendants respond that the

United States District Court
For the Northern District of California

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verdict "involved completely different prior art and is not an

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'identical issue of validity' as USEI claims."

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Response Brief at 3.

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support, Docket No. 1472-3, Constant Dec., Ex. B, Defendants

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explain that the jury found that the patents "were not invalid

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over other prior art, not the SONIC chip that this Court found to

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invalidate these two patents."

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the prior art in 3Com is not the same prior art that was at issue

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here, this argument is unpersuasive.

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Docket No. 1472,

Introducing the trial exhibit list as

Response Brief at 3 n.8.

Because

2. Irreparable Injury Absent Stay
The second question is whether USEI will be irreparably

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harmed absent the stay.

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explained that neither speculative injury nor potential reversal

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or reassessment of costs following reversal on appeal constitutes

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irreparable harm.

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WL 8961328, at *3 (N.D. Cal.) (citing Goldie's Bookstore, Inc. v.

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Super. Ct. of State of Cal., 739 F.2d 466, 472 (9th Cir. 1984));

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Emblaze Ltd. v. Apple Inc., 2015 WL 1304779, at *2 (N.D. Cal.)

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(denying a stay pending appeal where Emblaze made "no showing that

Other courts in this district have

See In re Ricoh Co., Ltd. Patent Litig., 2010

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it will be irreparably injured absent a stay").

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Techs., Inc. v. Hewlett-Packard Co., 2014 WL 5494906, at *2 (N.D.

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Cal.) (holding that, even if Linex had properly moved to defer

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awarding costs pending appeal, its request failed because it did

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not show that it would be irreparably harmed absent a stay).

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USEI did not address this factor, and thus made no showing
that it would be irreparably harmed absent a stay.

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See also Linex

3. Substantial Injury to Other Interested Parties
The third factor is whether issuing the stay would

United States District Court
For the Northern District of California

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substantially injure other parties interested in the proceeding.

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Both USEI and Defendants discuss only Defendants' potential

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injuries.

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substantially injure Defendants, because the costs are small when

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compared with each company's market capitalization.

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not, however, address the injury of further delay of payment of

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costs, which is presumptively injurious.

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1304779, at *2.

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the delay in payment that a stay would cause is injurious.

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USEI argues that staying payment of costs will not

USEI does

See Emblaze, 2015 WL

Thus, even though the costs are small in amount,

Defendants argue that USEI may default if there is a stay

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without a bond because it is a shell corporation with few assets.4

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USEI responds only that Defendants' argument is innuendo, and that

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Defendants lack factual support for their position.

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4. Public Interest
The fourth factor to consider is the public interest.

USEI

argues that this factor weighs in favor of granting a stay because

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Defendants raised this concern in its briefing before
Magistrate Judge Beeler. Docket No. 1440. USEI did not respond
to this contention in its reply brief. Docket No. 1446.
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the appeal will be finished soon.

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As Defendants argued in response, no appellate hearing has yet

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been scheduled, so the timing of the appeal's completion is not

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clear.

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Defendants have an "interest in the immediate payment for [their]

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taxable costs."

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843104, at *5 (N.D. Cal.).

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This argument is unpersuasive.

Further, as another court in this district explained,

Kilopass Tech. Inc. v. Sidense Corp., 2013 WL

USEI also argues that obtaining a bond may increase
litigation costs.

This argument is also unpersuasive.

See id.

United States District Court
For the Northern District of California

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(explaining that returning or reassessing paid costs would be "a

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mere inconvenience, and not an irreparable injury").

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On balance, the factors weigh against a stay of costs pending

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appeal, particularly because USEI has made no showing of

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irreparable harm.

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stay.

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Thus, this Court DENIES USEI's motion for a

B. Reduced Bond

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In the alternative, USEI proposes to post a bond in the

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amount of fifty percent of taxable costs to each Defendant.

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However, as Defendant argues, USEI provides no reason why the

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Court should grant USEI's motion to post a reduced bond.

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alternative is also DENIED.

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//

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//

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//
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This

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III. Conclusion
For all the reasons stated, USEI's motion to stay enforcement

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of the costs order without a bond or to allow a bond reduced by

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fifty percent (Docket No. 1471) is DENIED.

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IT IS SO ORDERED.

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Dated: November 13, 2015

CLAUDIA WILKEN
United States District Judge

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United States District Court
For the Northern District of California

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