Bing Xu Precision Co. Ltd v. Acer Incorporated

Filing 69

ORDER denying #62 Motion to Lift Stay. Signed by Judge Edward J. Davila on 4/4/2018. (ejdlc3S, COURT STAFF) (Filed on 4/4/2018)

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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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BING XU PRECISION CO. LTD.,

Case No. 5:16-cv-02491-EJD

Plaintiff,
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ORDER DENYING MOTION TO LIFT
STAY

v.
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Re: Dkt. No. 62

ACER INCORPORATED, et al.,

United States District Court
Northern District of California

Defendants.
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I. INTRODUCTION

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Plaintiff Bing Xu Precision Co., Ltd. filed suit against Defendants, asserting patent

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infringement. The parties stipulated to stay the action pending inter partes review (“IPR”) with

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the U.S. Patent and Trademark Office (“PTO”). Dkt. 61. In January 2018, the Patent Trial and

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Appeal Board (“PTAB”) instituted review on certain claims, but not as to claim 2 of each of the

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three patents in suit. Plaintiff moves to lift the current stay and reopen this action as to claim 2 of

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each of the three patents in suit. The Court finds it appropriate to take the motion under

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submission for decision without oral argument pursuant to Civil Local Rule 7-1(b). For the

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reasons set forth below, Plaintiff’s motion is denied.

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II. BACKGROUND
In May of 2016, Plaintiff filed this suit against Defendants Acer Inc. and Acer America

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Corp., asserting patent infringement of U.S. Patent No. 8,512,071, entitled "Electrical Connector

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Assembly Having a Printed Circuit Board With Soldering Holes Interconnected to a Plurality of

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Contacts" ("the '071 Patent"), No. 8,740,631, entitled "Electrical Connector Assembly" ("the '631

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Patent"), and No. 8,758,044, entitled "Electrical Connector Assembly Having a Printed Circuit

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Case No.: 5:16-cv-02491-EJD
ORDER DENYING MOTION TO LIFT STAY
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Board With Soldering Holes Interconnected to a Plurality of Terminals And a Flat Flexible Cable"

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("the '044 Patent") (collectively "the patents in suit"). In May of 2017, Plaintiff served its

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infringement contentions asserting claims 1-4 of the '071 and '044 Patents and claims 1-2 of the

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'631 Patent. Later in May of 2017, Luxshare Precision Industry Co. ("Luxshare"), filed a petition

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for IPR challenging the patentability of all twenty (20) claims of the '071 Patent, and another IPR

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challenging the patentability of all twenty (20) claims of the '044 Patent. In June of 2017,

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Luxshare filed a third IPR petition challenging the patentability of claims 1 and 2 of the '631

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Patent. Also in June of 2017, Plaintiff filed an amended complaint to include Luxshare and

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Luxshare-ICT, Inc.

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On January 12, 2018, the PTAB instituted review only on claims 1, 3, 4, and 8 of the '071

United States District Court
Northern District of California

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and '044 Patents and claim 1 of the '631 Patent. The PTAB did not institute review on asserted

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claim 2 of the three patents in suit.
III. STANDARDS

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"Courts have inherent power to manage their dockets and stay proceedings, including the

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authority to order a stay pending conclusion of a PTO reexamination." Ethicon, Inc. v. Quigg, 849

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F.2d 1422, 1426–27 (Fed.Cir.1988) (citations omitted). In determining whether to stay

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proceedings pending PTO review, courts consider three factors: (1) the stage of litigation (i.e.

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whether discovery is complete and whether a trial date has been set); (2) whether a stay will

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simplify the issues in question and trial of the case; and (3) whether a stay would unduly prejudice

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or present a clear disadvantage to the non-moving party. Evolutionary Intelligence, LLC v.

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Facebook, Inc., No. 13-4202 SI, 2014 WL 261837, at *1 (N.D. Cal. Jan. 23, 2014).
IV. DISCUSSION

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A. Stage of Litigation
Here, the case is in its early stages. The Luxshare defendants have not responded to the

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complaint. Although some document production and written discovery has been exchanged,

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discovery is not complete. No depositions have been taken. Expert discovery has not started.

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Claim construction has not occurred. No trial date has been set. This first factor weighs in favor

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Case No.: 5:16-cv-02491-EJD
ORDER DENYING MOTION TO LIFT STAY
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of continuing the stay. See id.

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B. Simplification of the Case

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Plaintiff contends that maintaining the stay will not simplify the issues in this case because

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Plaintiff is willing to litigate only non-instituted claim 2 of the three patents in suit and "to drop

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the asserted claims that remain in the IPRs." Plaintiff’s Motion, p.3. Plaintiff contends that the

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PTAB has already decided that claim 2 of each of the patents in suit is not invalid and the PTAB

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proceedings will have no effect on these claims.

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Plaintiff’s argument is unpersuasive. As a preliminary matter, Plaintiff’s offer "to drop"

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the instituted claims is illusory. Plaintiff has not agreed to dismiss the instituted claims from the
case with prejudice. Therefore, Plaintiff could always reassert the claims against Defendants later.

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United States District Court
Northern District of California

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Further, even if Plaintiff dropped the instituted claims, the IPR proceedings could still simplify the

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case. Claim 2 of each of the patents in suit is a dependent claim, based on claim 1 in each of the

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patents in suit. Claim 1 of each of the patents in suit is under IPR review. If, for example, claim 1

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of each of the patents in suit is found invalid, then the question of the validity of claim 2 is likely

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to be simplified. A stay is also justified to avoid the possibility of inconsistent results, such as if

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the PTO upholds claim 1 and the court invalidates claim 2 of the patents in suit. See Microsoft

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Corp. v. Tivo Inc., No. 10-240 LHK, 2011 WL 1748428, at *5 (N.D. Cal. May 6, 2011) (holding

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that because it is possible for the court and the PTO to reach inconsistent conclusions regarding

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the same patent, there is a significant concern of wasting resources by proceeding forward). The

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second factor weighs in favor of maintaining the stay.

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C. Undue Prejudice to Plaintiff

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The last factor is whether a stay would unduly prejudice or present a clear tactical

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disadvantage to the party resisting the stay, namely Plaintiff in this case. See PersonalWeb

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Technologies, LLC v. Apple Inc., 69 F.Supp.3d 1022, 1029 (N.D. Cal. 2014). Plaintiff makes no

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showing of undue prejudice, and instead contends that it has a right to enforce non-instituted claim

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2 of the three patents in suit. Delay alone does not amount to undue prejudice. Id. The third

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factor weighs in favor of continuing the stay.

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Case No.: 5:16-cv-02491-EJD
ORDER DENYING MOTION TO LIFT STAY
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V. CONCLUSION

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For the reasons set forth above, Plaintiff’s motion to lift the stay is DENIED.

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IT IS SO ORDERED.

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Dated: April 4, 2018
______________________________________
EDWARD J. DAVILA
United States District Judge

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United States District Court
Northern District of California

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Case No.: 5:16-cv-02491-EJD
ORDER DENYING MOTION TO LIFT STAY
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