Fitbit Inc. v. AliphCom et al.

Filing 78

ORDER DENYING 65 MOTION TO STAY. Signed by Judge Beth Labson Freeman on 10/31/2016. (blflc4S, COURT STAFF) (Filed on 10/31/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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FITBIT INC,

Case No. 16-cv-00118-BLF
Plaintiff,

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v.

ORDER DENYING MOTION TO STAY

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ALIPHCOM, et al.,

[Re: ECF 65]

Defendants.

United States District Court
Northern District of California

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Before the Court is Defendant Aliphcom, Inc., d/b/a Jawbone (“Jawbone”)’s motion to stay

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all proceedings in this action until the final resolution of Certain Wearable Activity Tracking

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Devices, Systems, and Components Thereof, Investigation No. 337-TA-937 (Nov. 2, 2015) (the

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“ITC Action”), currently before the International Trade Commission. For the reasons set forth

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below, the Court DENIES Jawbone’s motion.

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I.

BACKGROUND
Separate from the ITC Action, Plaintiff Fitbit, Inc. (“Fitbit”) sued Jawbone in two

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Delaware cases, Fitbit v. Jawbone (D. Del. 15-cv-775) and Fitbit v. Jawbone (D. Del. 15-cv-

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0990), and another case in this District, Fitbit v. Jawbone (N.D. Cal 15-cv-4073), alleging

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infringement of patents relating to wearable devices. Mot. 2-3. Jawbone then moved to transfer

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the two Delaware cases to this District. Id. at 3. The Delaware district court granted the transfer

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of Fitbit v. Jawbone (D. Del. 15-cv-775) to this District, which is now the present action before

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this Court. As for Fitbit v. Jawbone (D. Del. 15-cv-0990), the court stayed the case pursuant to 28

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U.S.C. section 1659 because the three patents implicated in that case are exactly the same patents

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in the ITC Action. Id. at 2-3. Accordingly, the motion to transfer was held in abeyance. Id. at 4.

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After the present case was transferred to this District, Jawbone designated it as related to Fitbit v.

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Jawbone (N.D. Cal 15-cv-4073) but the judge there declined to designate these cases as related.

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Id. at 4 n.3. Jawbone now moves to stay proceedings until the final resolution of the ITC Action.

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The hearing before the ITC Action was completed in August 2016 and the administrative law

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judge is expected to issue an initial determination in December 2016, with a target completion date

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of April 7, 2017. Opp. 8; ITC Action (Procedural History).

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In the present case, Fitbit alleges that Jawbone infringes the following three patents – U.S.

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Patent No. 8,909,543 (“the ’543 patent”), U.S. Patent No. 9,031,812 (“the ’812 patent”), and U.S.

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Patent No. 9,042,971 (“the ’971 patent”). The ITC Action involves a different set of patents –

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U.S. Patent No. 8,868,377 (“the ’377 patent”), U.S. Patent No. 8,920,332 (“the ’332 patent”), and

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U.S. Patent No, 9,089,760 (“the ’760 patent”).

United States District Court
Northern District of California

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II.

LEGAL STANDARD
“Granting a motion to stay is within the sound discretion of the Court.” Fuller v. Amerigas

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Propane, Inc., No. 09-2493, 2009 WL 2390358, at *1 (N.D. Cal. Aug. 3, 2009). The power to

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stay is “incidental to the power inherent in every court to control the disposition of the causes on

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its docket with economy of time and effort for itself, for counsel, and for litigants.” Id. (quoting

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Rivers v. Walt Disney Co., 980 F. Supp. 1358, 1360 (C.D. Cal. 1997) (quoting Landis v. N. Am.

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Co., 299 U.S. 248, 254 (1936) (internal quotation marks omitted)).

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“In considering whether a stay is appropriate, the Court weighs three factors: [1] the

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possible damage which may result from the granting of a stay, [2] the hardship or inequity which a

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party may suffer in being required to go forward, and [3] the orderly course of justice measured in

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

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expected to result from a stay.” See Gustavson v. Mars, Inc., Case No. 13-cv-04537-LHK, 2014

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WL 6986421, at *2 (N.D. Cal. Dec. 10, 2014) (internal quotation marks and citation omitted)

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(brackets in original). These factors are drawn from the Supreme Court’s decision in Landis v.

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North American Co., 299 U.S. 248 (1936). Id. “If there is even a fair possibility that a stay will

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work damage to some one else, the stay may be inappropriate absent a showing by the moving

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party of hardship or inequity.” Dependable Highway Exp., Inc. v. Navigators Ins. Co., 498 F.3d
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1059, 1066 (9th Cir. 2007) (internal quotation marks omitted) (citing Landis, 299 U.S. at 255).

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III.

DISCUSSION

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A.

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The Court first considers the possible damage that could arise from granting the stay.

Possible Damage from Granting Stay

Fitibit argues that a stay would delay the resolution of Fitbit’s claim for at least another one and a

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half to two and a half years, causing substantial harm, such as fading witnesses’ memories and lost

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evidence. Opp. 6-7. Fitbit further asserts that Jawbone is experiencing deteriorating financial

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health and may become insolvent. Id. at 7. Jawbone argues that whatever delay from a stay

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would be caused by Fitbit’s own doing, specifically because of its “strategy of filing multiple

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patent cases in courts on opposite sides of the country.” Mot. 8-9. According to Jawbone, the

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United States District Court
Northern District of California

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present case is also at an early procedural posture so that deadlines can be extended without case

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management issues. Id. at 9. The Court does not find persuasive Fitbit’s argument that Jawbone

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will not be able to pay a judgment based on certain news articles on Jawbone’s financial situation.

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Nevertheless, the Court finds that Fitbit may suffer some harm because of the delay in the

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resolution of this case. Accordingly, this factor does not weigh strongly in favor of a stay.

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B.

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The Court next considers the possible damage that could arise from going forward.

Possible Hardship or Inequity from Denying Stay

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CMAX, 300 F.2d at 268. Jawbone contends that if the stay is denied, it would “be required to

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simultaneously fight a three-front war, involving 3 patents in the ITC, 3 patents in this case, and 3

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patents in [another case in this District].” Mot. 10. According to Fitbit, Jawbone created its own

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multi-front battle because it has also separately asserted its own patents against Fitbit in different

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venues. Opp. 8. Fitbit also argued at the hearing that the parties have agreed to share discovery

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across all of the cases. Id. at 8. As such, Fitbit claims that this agreement should mitigate any

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duplication or conflict. Id.

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Although this patent case would impose additional burden on both parties, the Court notes

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that the parties are already facing many other pending disputes. In light of the history of litigation

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between the parties and the cross-use agreement the parties have, the Court does not find this

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factor determinative as to whether a stay should be granted.
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C.

Orderly Course of Justice

Turning now to the third interest–whether a stay will complicate or simplify the issues,
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Jawbone makes its main argument for stay based on this factor. Jawbone asserts that the ITC
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Action and the present case are similar enough that the Court should stay this case in the interest
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of efficiency and fairness. Mot. 6. Jawbone makes the following points in support of this
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argument. First, Fitbit designated the present case (before its transfer from the district of
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Delaware) as related to the other Delaware case, Fitbit v. Jawbone (D. Del. 15-cv-0990), which
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involved the same patents as the ones in the ITC Action. Id. Second, the accused products are in
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the same product line so there will be overlapping non-inventor witnesses. Third, the ’760 patent
is a parent patent of the ’543 patent in this case, and they share the same specification, share the

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same two inventors, and will have similarities with respect to what is claimed. Id. at 6-7.
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United States District Court
Northern District of California

Additionally, other patents implicate similar subject matter, have some overlapping inventorship,
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and were prosecuted by the same firm. Id. at 7.
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Fitbit claims that Jawbone wrongly assumes that there would be judicial efficiency if a stay
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were to be granted. Fitbit contends that its designation of Fitbit v. Jawbone (D. Del. 15-cv-0990)
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as related to this case is not relevant to this motion. Opp. 3. This is because, Fitbit argues,
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nothing suggests that the once the stay is lifted in the Delaware case, the case will be transferred
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and consolidated with the present case. Id. Fitbit then concludes that this alleged hypothetical
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judicial efficiency may never come to pass. Id. More importantly, Fitbit disagrees with Jawbone
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that the patents and the issues are substantially similar and argues that the asserted claims are not
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similar despite the familial relationship. Id. at 4-5.
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After a preliminary examination of the patent claims, the Court finds that the patent claims
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asserted here are not the same as those in the ITC Action. The Court acknowledges that the ’543
patent is a continuation-in-part of the ’760 patent, and the patents share the same specification.
The ’812 patent asserted here also has “activity metric” as a claim limitation, similar to the
limitation of “activity point,” required by the ’377 patent claims. Nevertheless, it is uncertain that

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the degree of similarity rises to a level that warrants a stay in the interest of judicial efficiency.
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The Court finds more dispositive the fact that the ITC action resolution is imminent so a stay in
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this action would not significantly impact judicial efficiency, if at all. Based on publicly available

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information, the administrative law judge in the ITC Action is expected to issue an initial

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determination on December 7, 2016 and has set a target date of completing the investigation by

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April 7, 2017. ITC Action (Procedural History). In light of the rapidly-approaching resolution of

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the ITC action, as well as the parties’ agreement to share discovery material across different

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federal actions and their ITC actions, the Court finds that allowing the case to proceed would not

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significantly affect judicial efficiencies. Accordingly, the Court finds that the third factor fails to

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weigh in favor of a stay.

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IV.

ORDER
The Court does not find the Landis factors weigh in favor of a stay. Although Fitbit might

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United States District Court
Northern District of California

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suffer some harm if the case is stayed, both parties would have to bear the burden of litigating this

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case if the case were to proceed. Hence, the Court does not find the first two Landis factors

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determinative as to whether to grant a stay. Further, the Court is not persuaded that staying this

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action would simplify issues or questions of law because the patent claims are not identical.

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Given the parties’ agreement sharing discovery materials, duplicative efforts can be minimized.

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Most importantly, the benefit of a stay is questionable because the ITC resolution is fast

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approaching. For the foregoing reasons, the Court DENIES Jawbone’s motion to stay.

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Dated: October 31, 2016
______________________________________
BETH LABSON FREEMAN
United States District Judge

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