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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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 U.S. ETHERNET INNOVATIONS, LLC, 5 Plaintiff, 6 7 ACER, INC., et al., (Docket No. 1471) Defendants. 9 United States District Court For the Northern District of California 11 12 ORDER DENYING MOTION TO STAY ENFORCEMENT PENDING APPEAL v. 8 10 No. C 10-3724 CW and ATHEROS COMMUNICATIONS, INC., et al., Intervenors. ________________________________/ 13 14 Plaintiff United States Ethernet Innovations, LLC (USEI) 15 moves this Court to stay payment of costs pending appeal without 16 the requirement of posting a bond or, in the alternative, to 17 require a bond that amounts to fifty percent of the taxable costs 18 awarded to each Defendant. 19 20 I. The Court denies USEI's motion. Background The Court resolved all asserted claims of infringement of the 21 patents-in-suit in favor of Defendants1 and entered judgment 22 following cross-motions for summary judgment. 23 Order on Summary Judgment Motions at 30; Docket No. 1311, Amended 24 Judgment. 25 26 27 28 1 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. 1 from USEI. 2 denied Plaintiff's motion to alter or amend the Order on Summary 3 Judgment Motions. 4 Federal Circuit, primarily arguing the validity of the '872 and 5 '094 patents in view of the SONIC prior art reference.2 6 No. 1399; Docket No. 1471, Opening Brief at 2. 7 still pending. 8 9 Order on Summary Judgment Motions at 30. Docket No. 1374. The Court Plaintiff appealed to the 3 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 10 appeal. 11 referred those motions to Magistrate Judge Beeler. 12 1435 and 1447. 13 without prejudice to USEI's raising it before this Court no later 14 than two weeks after entry of the final order taxing costs. 15 Docket No. 1462 at 11-12. 16 Beeler ruled on the costs. 17 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. 18 Plaintiff moves to stay the enforcement of the costs order 19 pending the resolution of the appeal without posting a bond or, 20 alternatively, with a bond in the amount of fifty percent of the 21 taxable costs awarded to each Defendant. 22 response brief, Docket No. 1472, and USEI filed a reply, Docket Id. Defendants filed a 23 24 25 26 2 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. 27 3 28 Page numbers refer to the ECF-stamped page numbers. 2 1 No. 1474. 2 No. 1473. 3 II. 4 The matter is decided without oral argument. Docket Discussion A. Motion to Stay 5 In Hilton v. Braunskill, 481 U.S. 770, 776 (1987), the 6 Supreme Court listed four factors to evaluate when considering 7 whether to stay an order pending appeal: 8 (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. 9 United States District Court For the Northern District of California 10 11 12 1. Likelihood of Success on the Merits 13 The first question is whether USEI makes a strong showing 14 that it is likely to succeed on the merits on appeal. 15 that two district courts have found the '872 and '094 patents "not 16 invalid," demonstrating the strength of its appeal. 17 at 3-4. 18 LLC v. Texas Instruments Inc., No. 6:11-cv-491 (E.D. Tex.), "a 19 judge and jury rejected the exact same invalidity argument, based 20 on the exact same reference and facts, raised in this litigation." 21 Opening Brief at 3. 22 related to the SONIC prior art's impact on the '872 and '094 23 patents. 24 judgment order and two jury verdicts. 25 summary judgment because there were outstanding factual issues. 26 Id. 27 Order on Summary Judgment Motions at 8. 28 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. 3 Id. at 6; The only difference 1 evidence in the record supporting a factual dispute as to the 2 required size of the buffer, while this Court did not. 3 Instruments, Docket No. 299 at 6; Order on Summary Judgment 4 Motions at 8. 5 showing that USEI is likely to succeed on appeal on the merits. 6 It demonstrates at most that two courts in two different circuits 7 viewed differently whether a factual dispute existed. 8 9 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 10 Texas Instruments, Docket No. 344. 11 Texas Instruments infringed the asserted claims of the '872 patent 12 and awarded damages. 13 the patents not invalid based on identical facts lends some 14 support to USEI's likelihood of winning on appeal. The second jury found that Id. at Docket No. 413. That a jury found 15 While post-judgment briefing was underway in Texas 16 Instruments, this Court issued its Order on Summary Judgment 17 Motions and Judgment, prompting the Texas Instruments court to 18 order the parties to brief the applicability of collateral 19 estoppel in that case. 20 The Texas Instruments court held that USEI was precluded from 21 recovering damages on the '872 patent because this Court had 22 declared it invalid. 23 collateral estoppel application in Texas Instruments makes USEI's 24 arguments less forceful. 25 counterargument; that one district court's judgment precluded 26 another court's does not make USEI's success on appeal any less 27 likely. Texas Instruments, Docket No. 488 at 2. Id. at 5. Defendants argue that this The Court agrees with USEI's 28 4 1 Second, USEI argues that a "very similar invalidity argument 2 involving the same patents at issue here was" rejected in 3Com 3 Corp. v. Realtek Semiconductor Corp., No. 03-02177 (N.D. Cal.). 4 Opening Brief at 8. 5 claims, including '872 and '094 patent claims, were not invalid. 6 3Com, Docket No. 690 at 3-4. 7 defense in 3Com as based on the "SONIC's predecessor (a similar 8 piece of prior art with a small FIFO) as an invalidating 9 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 10 verdict "involved completely different prior art and is not an 11 'identical issue of validity' as USEI claims." 12 Response Brief at 3. 13 support, Docket No. 1472-3, Constant Dec., Ex. B, Defendants 14 explain that the jury found that the patents "were not invalid 15 over other prior art, not the SONIC chip that this Court found to 16 invalidate these two patents." 17 the prior art in 3Com is not the same prior art that was at issue 18 here, this argument is unpersuasive. 19 20 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 21 harmed absent the stay. 22 explained that neither speculative injury nor potential reversal 23 or reassessment of costs following reversal on appeal constitutes 24 irreparable harm. 25 WL 8961328, at *3 (N.D. Cal.) (citing Goldie's Bookstore, Inc. v. 26 Super. Ct. of State of Cal., 739 F.2d 466, 472 (9th Cir. 1984)); 27 Emblaze Ltd. v. Apple Inc., 2015 WL 1304779, at *2 (N.D. Cal.) 28 (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 5 1 it will be irreparably injured absent a stay"). 2 Techs., Inc. v. Hewlett-Packard Co., 2014 WL 5494906, at *2 (N.D. 3 Cal.) (holding that, even if Linex had properly moved to defer 4 awarding costs pending appeal, its request failed because it did 5 not show that it would be irreparably harmed absent a stay). 6 7 USEI did not address this factor, and thus made no showing that it would be irreparably harmed absent a stay. 8 9 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 10 substantially injure other parties interested in the proceeding. 11 Both USEI and Defendants discuss only Defendants' potential 12 injuries. 13 substantially injure Defendants, because the costs are small when 14 compared with each company's market capitalization. 15 not, however, address the injury of further delay of payment of 16 costs, which is presumptively injurious. 17 1304779, at *2. 18 the delay in payment that a stay would cause is injurious. 19 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 20 without a bond because it is a shell corporation with few assets.4 21 USEI responds only that Defendants' argument is innuendo, and that 22 Defendants lack factual support for their position. 23 24 25 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 26 4 27 28 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. 6 1 the appeal will be finished soon. 2 As Defendants argued in response, no appellate hearing has yet 3 been scheduled, so the timing of the appeal's completion is not 4 clear. 5 Defendants have an "interest in the immediate payment for [their] 6 taxable costs." 7 843104, at *5 (N.D. Cal.). 8 9 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 10 (explaining that returning or reassessing paid costs would be "a 11 mere inconvenience, and not an irreparable injury"). 12 On balance, the factors weigh against a stay of costs pending 13 appeal, particularly because USEI has made no showing of 14 irreparable harm. 15 stay. 16 Thus, this Court DENIES USEI's motion for a B. Reduced Bond 17 In the alternative, USEI proposes to post a bond in the 18 amount of fifty percent of taxable costs to each Defendant. 19 However, as Defendant argues, USEI provides no reason why the 20 Court should grant USEI's motion to post a reduced bond. 21 alternative is also DENIED. 22 // 23 // 24 // 25 // 26 // 27 // 28 // 7 This 1 2 III. Conclusion For all the reasons stated, USEI's motion to stay enforcement 3 of the costs order without a bond or to allow a bond reduced by 4 fifty percent (Docket No. 1471) is DENIED. 5 IT IS SO ORDERED. 6 7 8 Dated: November 13, 2015 CLAUDIA WILKEN United States District Judge 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8

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