Personalized User Model LLP v. Google Inc.

Filing 407

MEMORANDUM ORDER re 385 MOTION for Stay of the Proceedings filed by Google Inc. is DENIED. Signed by Judge Leonard P. Stark on 10/31/12. (ntl)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

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PERSONALIZED USER MODEL, L.L.P.,

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Plaintiff,

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C.A. No. 09-525-LPS

GOOGLE, INC.,

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Defendant.

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MEMORANDUM ORDER
Pending before the Court is Defendant Googl¢, Inc.'s ("Google") Motion for a Stay ofthe
Proceedings. (D.I. 385) For the reasons set forth belbw, the Court will DENY the motion.
1.

Plaintiff, Personalized User Model, LL.P. ("PUM"), filed this patent infringement

lawsuit on July 16, 2009. (D.I. 1)
2.

PUM asserts that Google infringes U.S. Patent Nos. 6,981,040 (the '"040 patent")

and 7,685,276 (the "'276 patent") (collectively, the "patents-in-suit"). (!d.)
3.

On August 30, 2012, Google moved to stay the proceedings (D.I. 385) based on

the reexamination ofthe patents-in-suit. The United!States Patent and Trademark Office
("PTO") issued a Final Office Action rejecting all as$erted claims of the '276 patent on August
17, 2012. On August 19, 2012, the PTO issued an Action Closing Prosecution ("ACP") finding
all asserted claims of the '040 patent invalid. The '040 patent is listed as "ready for Examiner
Action Following ACP."
4.

Courts typically consider three factors in determining whether a stay is

appropriate: (1) whether a stay will simplify the issues for trial, (2) whether discovery is
complete and a trial date has been set, and (3) whether a stay would unduly prejudice or present a

clear tactical disadvantage to the non-moving party. 'See Landis v. North American Co., 299 U.S.
248, 254-55 (1936); Enhanced Sec. Research, LLC. v. Cisco Sys., Inc., 2010 WL 2573925, at *3
(D. Del. June 25, 2010). Courts may also consider whether the moving party would face undue
hardship or inequity in the absence of a stay. See Co()per Notification, Inc. v. Twitter, Inc., 2010
WL 5149351, at *2 (D. Del. Dec. 13, 2010).
5.

Applying these considerations here, tQ'e Court finds that the potential for

simplification favors a stay, but only slightly.

Googl~

is correct that if the patents-in-suit are

invalidated by the reexaminations then the Court mu$t dismiss this case. Given that all asserted
claims ofboth patents-in-suit stand rejected, and given the stage of the reexaminations, there is a
significant likelihood that this will occur, resulting in the maximum"simplification" of this
litigation by ending it. PUM, of course, asserts that it has reasons to believe it will overcome the
Examiner's rejections. (D.I. 398 at 6-7) More importantly, final conclusion of the
reexaminations (including appeals) is likely to take quite some time, and certainly longer than it
is likely to take to bring this case to trial. Additionally, there are issues pending in this litigation
which cannot be addressed during the reexamination (other than by being rendered moot if the
PTO invalidates both patents-in-suit), including issues of infringement and invalidity under 35
U.S.C. §§ 101, 102, 103, and 112. (D.I. 398 at 16) Often "a stay is not favored when
infringement, validity under 35 U.S.C. § 112, or othey issues outside the purview of
reexamination remain to be tried." Belden Techs. Ina,. v. Superior Essex Commc 'ns LP, 2010
WL 3522327, at *2 (D. Del. Sept. 2, 2010).
6.

The stage of the instant proceedings s~ongly disfavors a stay. Indeed, the fact that

Google waited to seek a stay until after the parties, and the Court, had invested substantial

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resources in this case is a central consideration in the! Court's evaluation ofGoogle's motion.
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The Court has already construed the disputed claim t~rms (D.I. 347), fact discovery is complete
(D.I. 32), 1 the parties have served opening and rebutt~l expert reports, expert discovery will be
complete by November 14, 2012, and case dispositive motions are due shortly thereafter.
Though no trial date is set, the case will be ready for trial following resolution of case dispositive
motions. All of this, again, disfavors granting a stay_I
7.

The prejudice factor does not weigh ~eaningfully in favor of either side. In

assessing the prejudice to the non-moving party, the Court may consider (1) the timing of the
request for reexamination, (2) the timing of the requ~st for a stay, (3) the status of reexamination
proceedings, and (4) the relationship of the parties. See Vehicle IP, LLC v. Wal-Mart Stores,

Inc., 2010 WL 4823393, at *2 (D. Del. Nov. 22, 2010). Google did not request reexamination of
the patents-in-suit early in the lawsuit. Google requ~ted inter partes reexamination ofthe '040
patent on March 31,2011 and ofthe '276 patent on August 3, 2011. By August 2011, the Court
had already held a Markman hearing and fact discovttry was nearly closed. Likewise, Google did
not move to stay until August 2012, one year after re~uesting reexamination, and more than two
years after commencement of this litigation. On the other hand, the reexamination proceedings
are somewhat advanced- the PTO has issued a Final Office Action for the '276 patent and the
Final Office Action for the '040 patent may issue soon- and the parties are not direct
competitors.
8.

A stay may tactically disadvantage PUM. Resuming litigation after the likely long

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The Court recently re-opened fact discovery for the limited purpose of allowing
discovery on Google's Portrait functionality. That dilscovery is now complete. (D.I. 398 at 4)
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process of reexamination would potentially present

i~sues

of"staleness" of evidence. For

example, PUM' s infringement claims depend on how the allegedly infringing products function
today, as described by witnesses who may suffer from faded memories as time passes. (See D.I.
398 at 10-11) (citing transcript rulings assessing similar circumstances) Google may not suffer
the same disadvantage in pressing its invalidity claims, as those claims rely on prior art. See

generally Cooper, 2010 WL 5149351, at *4 (stating •hat non-movant's reliance on "stale
evidence, faded memories, and lost documents," as cpmpared to movant's evidence rooted in
prior art references, disfavors stay).
9.

Google points to no other hardship otber than the expense oflitigation and the risk
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that the reexaminations will render the case moot. Under the circumstances here, these do not
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rise to the level of undue hardship favoring a stay. See Cooper, 2010 WL 5149351, at *2.
10.

Overall, the Court concludes that the factors discussed above disfavor granting

Google's requested stay. See generally Vehicle IP, 2010 WL 4823393, at *3 ("[I]t is the court's
foremost obligation to see litigations through to trial in a timely and efficient manner.").
Accordingly, Google's Motion to Stay (D.I. 385) is DENIED.

Dated: October 31,2012
Wilmington, Delaware

UN~STATES DISTRICT COURT

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