EAGLE VIEW TECHNOLOGIES, INC. et al v. XACTWARE SOLUTIONS, INC. et al

Filing 150

MEMORANDUM OPINION AND ORDER Denying 107 Motion to Stay Pending Inter Partes Review. Signed by Magistrate Judge Joel Schneider on 12/7/16. (js)

[Doc. No. 107]
THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
EAGLE VIEW TECHNOLOGIES, INC.,
et al.,
Plaintiffs,
Civil No. 15-7025 (RBK/JS)
v.
XACTWARE SOLUTIONS, INC.,
et al.,
Defendants.

MEMORANDUM OPINION AND ORDER
This
Solutions,

matter

is

Inc.

and

before

the

Verisk

Court

on

Analytics,

defendants

Inc.’s

Xactware

(collectively,

“defendants”) “Motion to Stay Pending Inter Partes Review” [Doc.
No.

107].

The

Technologies,
(collectively,

Court

is

Inc.

and

in

receipt

of

Pictometry

“plaintiffs”)

plaintiffs

Eagle

International

opposition

[Doc.

View

Corp.’s

No.

130],

defendants’ reply [Doc. No. 137] and plaintiffs’ supplemental
letter [Doc. No. 146]. The Court recently held oral argument. For
the reasons to be discussed, defendants’ motion is DENIED.
Background
Plaintiffs filed this patent infringement action on September
23,

2015,

alleging

defendants

infringed

seven

of

plaintiffs’

patents: U.S. Patent Nos. 8,078,436 (“’436 patent”), 8,170,840
1

(“’840

patent”),

8,209,152

(“’152

patent”),

8,542,880

(“’880

patent”), 8,818,770 (“’770 patent”), 8,823,732 (“’732 patent”) and
8,825,454 (“’454 patent”). Compl. ¶ 1 [Doc. No. 1]. Plaintiffs
amended their complaint on November 30, 2015 to assert infringement
of two additional patents: U.S. Patent Nos. 9,129,376 (“’376
patent”) and 9,135,737 (“’737 patent”). Am. Compl. ¶ 1 [Doc. No.
30]. These patents are generally directed to software technology
for imaging, modeling and rendering aerial rooftop measurements
and reports. Plaintiffs and defendants are competitors in this
market with plaintiffs accusing defendants’ following products of
infringement: Xactimate®, Roof InsightTM, Property InSightTM and
Aerial SketchTM.1 Id. Defendants filed an answer and also asserted
counterclaims seeking declaratory judgment of non-infringement and
invalidity for each of the nine patents asserted. See generally
Am. Answer [Doc. No. 39].
The Fed. R. Civ. P. 16 Scheduling Conference was held on
December 9, 2015. Pursuant to the December 10, 2015 Scheduling
Order [Doc. No. 38], plaintiffs timely served their asserted claims
(153) and infringement contentions. See Defs.’ Br. at 4 [Doc. No.
107-1]. Defendants filed their first set of petitions for inter
partes review (“IPR”) as to all 153 asserted claims in the nine

The Court recently granted plaintiffs’ motion for leave to amend
their infringement contentions to include the “Mass Production
Tool” as an accused product. Oct. 28, 2016 Order [Doc. No. 139].
1

2

asserted patents with the U.S. Patent and Trademark Office (“PTO”)
on February 8, 2016. Defs.’ Br. at 6.
On February 9, 2016, defendants moved before the Honorable
Robert B. Kugler, U.S.D.J. to dismiss the amended complaint on the
ground that each of the nine asserted patents claims ineligible
subject matter under 35 U.S.C. § 101 [Doc. No. 50-1]. Defendants
then moved before this Court on April 8, 2016 to stay discovery
pending Judge Kugler’s ruling on their motion to dismiss [Doc. No.
66]. On May 4, 2016, the Court granted in part and denied in part
the stay motion. In particular, the Court ordered all depositions
and the parties’ Markman submissions stayed; however, defendants’
request to stay all discovery was denied. May 4, 2016 Order at 12 [Doc. No. 75]. In its Oral Opinion the Court expressed that if
the factual circumstances and balance of interests changed the
Court would revisit its decision. May 2, 2016 Oral Op. Tr. 46:846:12 [Doc. No. 79]. The Court also noted the inordinate number of
claims asserted and ordered the parties to “meet and confer to
reduce to a reasonable number the asserted claims (presently 153)
and claim terms to be construed (presently 63).” May 4, 2016 Order
at 2.
On August 2, 2016, Judge Kugler denied defendants’ motion to
dismiss without prejudice. Judge Kugler reasoned that the parties’
submissions “clearly identified a number of factual disputes and
raised issues about the meanings of the claims--even disputing the
3

number of asserted claims” and thus “the Court finds itself unable
to develop a ‘full understanding of the basic character of the
claimed subject matter.’” Eagle View Techs., Inc. v. Xactware
Sols., Inc., C.A. No. 15-7025 (RBK/JS), 2016 WL 4154136, at *3
(D.N.J. Aug. 2, 2016) (citations omitted).
Defendants filed the instant motion to stay pending IPR
proceedings on September 8, 2016 because a “material change in
factual circumstances has taken place warranting a stay.” Defs.’
Br. at 1. In particular, defendants asked to “stay this case
pending

resolution

of

[IPR]

proceedings

recently

instituted

[August 2016] and to be instituted by the U.S. Patent and Trademark
Office (‘PTO’).” Id. At the time defendants’ motion was filed,
there were nine asserted patents and 153 asserted claims with 63
claim terms to be construed in the case. In August 2016, the PTO
instituted IPR proceedings on six of the nine asserted patents,
encompassing approximately half of the 153 asserted claims. Defs.’
Br. at 2. With regard to the three remaining asserted patents and
other

asserted

claims

not

under

IPR

proceedings,

defendants

averred they would be taking further action by way of requesting
reconsideration and filing new IPR petitions. Id.
Significant changes have occurred since the instant motion
was

filed.

Importantly,

plaintiffs

served

their

amended

contentions on September 16, 2016, reducing their asserted patent
claims from 153 to 46, and asserted patents from nine to seven.
4

See Pls.’ Sept. 25, 2016 Letter at 1 [Doc. No. 119]. This reduction
in the number of asserted claims and patents resulted in IPR
proceedings instituted for only four of the 46 asserted claims and
four of the seven asserted patents.2 In addition, since their
motion to stay was filed defendants filed five additional IPR
petitions
ultimately

which

defendants

simplifying

the

aver

will

issues.3

likely

Also,

be

instituted,

defendants’

three

requests for reconsideration were denied. See Pls.’ Nov. 22, 2016
Letter [Doc. No. 146].
Plaintiffs oppose defendants’ motion to stay because, in
plaintiffs’ view, defendants have repeatedly attempted to delay
this litigation and the instituted IPR reviews only cover four of
the 46 “presently-asserted claims.” Pls.’ Opp’n at 1. Plaintiffs
further point out the PTO rejected defendants’ three requests for
reconsideration. Id. at 2; see also Pls.’ Nov. 22, 2016 Letter.
With regard to defendants’ new IPR petitions, plaintiffs aver they
do not provide any reasonable basis for staying the case because
the PTO will not decide whether to institute IPR proceedings until

The four asserted claims and patents presently under IPR
proceeding are: claim 10 of ’152 patent; claim 11 of ’770 patent;
claim 26 of ’454 patent; and claim 25 of ’737 patent. See Pls.’
Opp’n at 5 [Doc. No. 129].
2

These five additional IPR petitions were filed between September
12, 2016 and October 7, 2016. See Defs.’ Reply Exs. A-E [Doc. Nos.
137-2 to 137-6].
3

5

March 2017 at the earliest. Pls.’ Opp’n at 2. In sum, plaintiffs
oppose a stay on the ground they will be unduly prejudiced by a
stay, defendants will not face hardship or inequity if a stay is
denied, a stay will not simplify the issues, and substantial
progress has been made in the case.
Defendants ask the Court not to focus on the fact the PTO
only instituted IPR proceedings for four of 46 presently-asserted
claims. Defs.’ Reply at 3 [Doc. No. 137]. Defendants argue the PTO
instituted IPR proceedings for a majority of the originallyasserted and currently-asserted patents. Id. Defendants also point
to plaintiffs’ reduction of asserted claims from 153 to 46 only
days after defendants filed the present motion. Id. Defendants
argue the presently-instituted IPR proceedings and defendants’
subsequent filings with the PTO “will likely simplify discovery
and other aspects of the case” and result in “potential invalidity
of asserted claims.” Id. at 13.
Discussion
It is well-settled that “the power to stay proceedings is
incidental to the power inherent in every court to control the
disposition of the cases on its docket with economy of time and
effort for itself, for counsel, and for litigants.” Depomed Inc.
v. Purdue Pharma L.P., C.A. No. 13-0571 (JAP), 2014 WL 3729349, at
*2 (D.N.J. July 25, 2014) (quoting Landis v. North Am. Co., 299
U.S. 248, 254 (1936)). In particular, “[t]he decision to stay a
6

patent case in which a reexamination by the PTO has been requested
is within the discretion of the district court.” Thermolife Int’l,
LLC v. Prosource Performance Prod., C.A. No. 15-2037 (FLW/LHG),
2015 WL 9480023, at *6 (D.N.J. Dec. 29, 2015) (citing cases from
the Federal Circuit and the District of New Jersey).
Because staying a case pending IPR proceedings offers both
costs and benefits, courts traditionally balance the following
three factors in determining whether to grant a stay: “(1) whether
a

stay

would

unduly

prejudice

or

present

a

clear

tactical

disadvantage to the non-moving party; (2) whether a stay will
simplify the issues in question and trial of the case; and (3)
whether discovery is complete and a trial date has been set.”
Depomed, 2014 WL 3729349, at *2 (citations omitted); see also
Thermolife, 2015 WL 9480023, at *6 (quoting Mondis Tech. Ltd. v.
LG Elecs., Inc., C.A. No. 15-4431 (SRC/CLW), 2015 WL 7012747, at
*6 (D.N.J. Nov. 12, 2015)). While courts in this District have
noted a “generally liberal policy toward granting stays pending
patent reexamination by the PTO,” Mondis Tech., 2015 WL 7012747,
at *5 (citations omitted), a stay is not automatic as a “stay in
litigation inevitably causes further delay in an already lengthy
process, and could potentially harm [the opposing party].” Id.
(quoting Brass Smith, LLC v. RPI Indus., Inc., C.A. No. 09-06344
(NLH/JS), 2010 WL 4444717, at *2 (D.N.J. Nov. 1, 2010)). “The party
seeking a stay of civil litigation bears the burden to show that
7

the stay would be appropriate.” Id. (citing Landis, 299 U.S. at
255).
The Court will now proceed to analyze the relevant factors to
determine if a stay should be granted.
A. Prejudice to the Non-Moving Party
In determining whether a stay will likely result in undue
prejudice

to

plaintiffs

or

place

them

at

a

clear

tactical

disadvantage, the Court considers a number of factors including
“the timing of the request for reexamination, the timing of the
request for [a] stay, the status of the reexamination proceedings
and the relationship of the parties.” Depomed, 2014 WL 3729349, at
*2 (quoting Boston Scientific Corp. v. Cordis Corp., 777 F. Supp.
2d 783, 789 (D. Del. 2011)). For the reasons to be discussed, the
Court finds that plaintiffs will suffer undue prejudice from a
stay.
1. Timing of IPR Petitions
While the parties did not discuss the timing of defendants’
first set of IPR petitions, the Court finds this sub-factor to be
neutral. Defendants filed their original IPR petitions on February
8, 2016, less than five months after plaintiffs commenced this
case. Defs.’ Br. at 6. While courts are reluctant to stay a case
if it appears that the timing of the IPR petition suggests a
dilatory

motive

on

the

movant’s

part,

it

does

not

appear

defendants’ original IPR petitions were motivated by such an
8

intent. Depomed, 2014 WL 3729349, at *3 (finding the timing of IPR
sub-factor to be neutral at best despite the movant filing its IPR
petitions just two weeks short of the one-year statutory deadline
because the movant promptly filed its petitions after two patentsin-suit were voluntarily dismissed from the case) (citing Nexans
Inc. v. Belden Inc., C.A. No. 12-1491 (SLR/SRF), 2014 WL 651913,
at *3 (D. Del. Feb. 19, 2014)).
The fact that defendants filed another set of IPR petitions
is not relevant to the Court’s analysis of whether to grant a stay.
Serial IPR petitions are disfavored.

See

SAS Inst., Inc. v.

Complement, LLC, 825 F.3d 1341, 1357 (Fed. Cir. 2016) (noting that
“[t]he America Invents Act was designed--after a decade of hearings
and revisions--to reduce the cost of patent litigation, to resolve
major validity issues in an expert tribunal, and to put an end to
repetitive

challenges”

and

“abusive

serial

challenges

to

patents”). Further, the parties will not know if the new IPRs will
be instituted until approximately March or April 2017. Davol, Inc.
v. Atrium Med. Corp., C.A. No. 12-958 (GMS), 2013 WL 3013343, at
*2 n.2 (D. Del. June 17, 2013) (“Under the new [IPR] procedures,
the Director of the PTO must decide whether to grant review within
six months of a petition being filed, see 35 U.S.C. § 314(b); 37
C.F.R. § 42.107.”). In addition, courts routinely deny requests
for a stay prior to the PTO’s decision concerning whether to
institute an IPR. Straight Path IP Grp., Inc. v. Vonage Holdings
9

Corp., C.A. No. 14-502 (JLL/JAD), 2014 WL 4271633, at *3 (D.N.J.
Aug. 28, 2014) (declining to rule on whether to grant a stay until
the PTO decides whether it will grant review of the defendants’
IPR petitions); Derma Scis., Inc. v. Manukamed Ltd., C.A. No. 123388

(JAP),

2013

WL

6096459,

at

*1

(D.N.J.

July

18,

2013)

(declining to rule on stay motion until after the PTO’s institution
decision so the court could make a “more informed determination”
on the merits of a stay); Trover Grp., Inc. v. Dedicated Micros
USA, C.A. No. 2:13-CV-1047 (WCB), 2015 WL 1069179, at *5 (E.D.
Tex. Mar. 11, 2015) (noting the majority of courts have postponed
or denied stay requests when the PTO has not yet acted on the
petitions for review).
It does not go unnoticed that the timing of defendants’
petitions could show defendants’ dilatory motive. This is so
because defendants failed to provide the Court with a good reason
for filing a second set of IPR petitions rather than including the
new arguments in defendants’ first set of petitions.4 Unlike the
single set of petitions filed in Depomed, where the court found
the IPR petitions to be in response to the voluntary dismissal of

At oral argument, defendants reasoned that their recent discovery
of previously unknown prior art references led to their second set
of IPR petitions. Defendants explained that despite their diligent
efforts, the prior art references were undiscoverable before
defendants’ first set of IPR petitions. Defendants’ argument is
not convincing.
4

10

two patents-in-suit, the Court is not persuaded that defendants’
second set of petitions was solely in response to plaintiffs’
reduction of asserted claims and patents. Nevertheless, because
the Court considers defendants’ second set of petitions immaterial
to

the

present

motion,

the

Court

finds

the

“timing

of

IPR

petitions” sub-factor is neutral.
2. Timing of the Present Motion to Stay
In

considering

the

timing

of

a

motion

to

stay,

courts

recognize that “a motion to stay pending a review of patent claims
can always be said to seek a tactical advantage” in some sense. LG
Elecs., Inc. v. Toshiba Samsung Storage Tech. Korea Corp., C.A.
No. 12-1063 (LPS/CJB), 2015 WL 8674901, at *5 (D. Del. Dec. 11,
2015); see also Belden Techs. Inc. v. Superior Essex Commc’ns LP,
C.A. No. 08-63 (SLR), 2010 WL 3522327, at *2 (D. Del. Sept. 2,
2010) (“A request for reexamination made well after the onset of
litigation followed by a subsequent request to stay may lead to an
inference

that

the

moving

party

is

seeking

an

inappropriate

tactical advantage.”). Here, defendants filed their original IPR
petitions nearly five months after the litigation commenced, and
the present motion to stay was not filed until one month after
Judge Kugler denied defendants’ motion to dismiss. Under these
circumstances, an inference could be drawn that defendants are
seeking an inappropriate tactical advantage because they waited
until their motion to dismiss was denied to file their present
11

motion to stay. Thus, the Court finds that this sub-factor weighs
against granting a stay.
3. Status of IPR
This factor favors plaintiffs. First, defendants’ first set
of IPR petitions has already been decided, with the PTO instituting
review of only four asserted claims in August 2016.

Under the

governing statute, the presently instituted IPR proceedings are
not expected to be fully resolved by the PTO until August 2017 at
the earliest with a possibility of a six-month extension for “good
cause.” 35 U.S.C. 316(a)(11); see also Toshiba Samsung Storage
Tech. Korea Corp. v. LG Elecs., Inc., C.A. No. 15-691 (LPS), 2016
WL 3437605, at *5 (D. Del. June 17, 2016) (finding the “status of
IPR”

sub-factor

weighed

against

a

stay

because

the

recently

instituted IPR and the possibility of a six-month extension for
good cause and/or two or more years of IPR appellate proceedings
would be prejudicial to the non-movant).
Defendants’ second set of IPR petitions, filed approximately
eight months after their first set of IPR petitions, further
supports the Court’s finding that the status of IPR weighs against
a stay. The PTO will not decide whether to institute the IPR
proceedings on defendants’ second set of petitions until March or
April 2017. See 35 U.S.C. § 314(b); 37 C.F.R. § 42.107. Even if
one IPR proceeding is instituted, the final decision will not be
issued until March 2018 at the earliest. Thus, it follows that an
12

additional delay of eight months will occur if the Court accepts
defendants’ argument that their recently filed but uninstituted
IPR petitions are determinative here. Stated differently, the
“status of IPR” sub-factor weighs heavily against a stay if the
Court considers

the IPR status of

defendants’ second set of

petitions. Accordingly, the Court finds the “status of IPR” subfactor weighs against staying the litigation.
4. Relationship of the Parties
Courts are generally reluctant to grant a stay in a matter
where the parties are direct competitors on the rationale that a
stay would likely cause the non-movant to lose substantial profits
and goodwill on the market. See, e.g., Depomed, 2014 WL 3729349,
at *4 (quoting Neste Oil OYJ v. Dynamic Fuels, LLC, C.A. No. 121744 (GMS), 2013 WL 3353984, at *3 (D. Del. July 2, 2013));
Thermolife, 2015 WL 9480023, at *6 (finding because the parties
are direct competitors, a stay of the litigation would result in
prejudice to the non-movant).5
Defendants cite Thermolife to argue that “a court in this district
granted a stay even though the parties were competitors [because]
other factors can and do outweigh the parties status as
competitors.” Defs.’ Reply at 7 (citing Thermolife, 2015 WL
9480023, at *7). However, the decision is inapposite because
defendants fail to note the weight of other factors the court in
Thermolife considered in its analysis. For instance, the court
found the “simplification of issues” factor weighed in favor of a
stay, noting that at least one of the patents-in-suit was under
reexamination for all of its claims. Thermolife, 2015 WL 9480023,
at *7. The court also found the “stage of litigation” factor
weighed in favor of a stay because the factor was uncontested and
5

13

Here,

the

Court

finds

the

parties

are

in

fact

direct

competitors and, thus, this sub-factor weighs against a stay due
to the likelihood of prejudice to plaintiffs. Plaintiffs aver the
parties

are

direct

competitors

“in

the

contentious

aerial

measurement service and reports market.” Pls.’ Opp’n at 9. In
support, plaintiffs point to defendants’ September 2015 “Five Year
Strategy.” Id.; Pls.’ Opp’n Ex. 11 at 14, 19 [Doc. No. 129-1]
(“[Plaintiff] is very active in the market . . . . We need to erode
their market share by selling Roof Insight right now . . . . This
section will focus primarily on our major competitor [plaintiff]
. . . as well as recommend ways that we can aggressively use to
increase our market share.”). In light of defendants’ express
unequivocal strategy to erode plaintiffs’ market share, the Court
finds plaintiffs will be prejudiced by a stay and, thus, this subfactor weighs against staying the litigation.
To the extent defendants focus on the fact that plaintiffs
did not seek a preliminary injunction to support their argument
that plaintiffs will not suffer undue prejudice, the Court finds
this is not determinative. Defs.’ Br. at 10. Defendants argue
plaintiffs’ failure to seek a preliminary injunction and the

discovery was ongoing with no trial date being set. Id. In the
present matter, no patent-in-suit has all of its claims under IPR
proceedings and, as will be discussed, the “stage of litigation”
factor favors plaintiffs. See Defs.’ Reply at 3-4; Pls.’ Opp’n at
14. Therefore, defendants’ reliance on Thermolife is misplaced.
14

availability of other legal or equitable remedies after the stay
is lifted, favor a stay. Defs.’ Reply at 6 (citing MonoSol Rx, LLC
v. BioDelivery Scis. Int’l, Inc., C.A. No. 10-5695 (FLW), 2012 WL
762501,

at

*10

(D.N.J.

Mar.

7,

2012)).

However,

MonoSol

is

distinguishable because the parties are direct competitors. In
MonoSol, the court expressed “appreciation” for the plaintiff’s
contention that the defendants were competitors but did not find
the parties to be direct competitors. MonoSol, 2012 WL 762501, at
*10. As noted, the parties here are direct competitors

with

defendants’ express strategy to erode plaintiffs’ market share and
“aggressively

.

.

.

increase”

defendants’

market

share.

In

particular, defendants’ “Five Year Strategy” shows defendants’
market share relative to plaintiffs’ increased from less than 1%
in 2013 to approximately 10% in 2015. See Pls.’ Reply Ex. 11 at
21-23. Therefore, defendants’ reliance on MonoSol is misplaced.
See Nippon Steel & Sumito Metal Corp. v. POSCO, C.A. No. 12-2429
(DMC), 2013 WL 1867042, at *5 (D.N.J. May 2, 2013) (“[W]hen parties
are directly competing and the landscape of the relevant market is
changing, it presents a circumstance where justice demands that
the allegedly aggrieved party be given an opportunity to litigate
its claims--and sooner than later.”).
Moreover,

courts

have

rejected

arguments

similar

to

defendants based on the rationale “that there could be a variety
of

reasons

that

a

patentee

does
15

not

move

for

a

preliminary

injunction.” VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d
1307, 1319 (Fed. Cir. 2014); Nippon Steel, 2013 WL 1867042, at *6
n.6 (“[T]he failure to move for a preliminary injunction does not
erase the fact that [the non-movant] would likely suffer tangible
harm from a stay.”).6
Accordingly, the Court finds the majority of sub-factors for
determining whether plaintiffs would suffer undue prejudice from
a stay pending IPR proceedings weighs against a stay.
B. Simplification of Issues
Courts have noted several ways in which a stay pending IPR
proceedings can simplify a pending litigation:
(1) a review of all prior art presented to a court by
the PTO, with its particular expertise; (2) the
potential alleviation of numerous discovery problems
relating to prior art by PTO examination; (3) the
potential dismissal of a civil action should invalidity
of a patent be found by the PTO; (4) encouragement to
settle based upon the outcome of the PTO reexamination;
(5) an admissible record at trial from the PTO
proceedings which would reduce the complexity and length
of the litigation; (6) a reduction of issues, defenses
Plaintiffs have not offered a detailed reason for why they did
not seek a preliminary injunction. However, courts recognize the
“need for discovery” as a legitimate reason because a preliminary
injunction requires a showing of a “likelihood of success on the
merits.” Nippon Steel, 2013 WL 1867042, at *6 n.6 (“[W]here
plaintiff needed ‘substantial discovery (possibly including access
to [d]efendants’ source code)’ to prove infringement, the failure
to seek a preliminary injunction ‘present no reason’ to stay the
case.”) (citing Cooper Notification, Inc. v. Twitter, Inc., C.A.
No. 09-865 (LPS), 2010 WL 5149351, at *3 (D. Del. Dec. 13, 2010)).
Nevertheless, the Court will not speculate about plaintiffs’
motive for not seeking a preliminary injunction. Plaintiffs’
decision is not determinative as to whether to stay the case.
6

16

and evidence during pre-trial conferences; and (7) a
reduction of costs for the parties and a court.
Eberle v. Harris, C.A. No. 03-5809 (SRC), 2005 WL 6192865, at *2
(D.N.J. Dec. 8, 2005) (citing GPAC, Inc. v. D.W.W. Enters., Inc.,
144 F.R.D. 60, 63 (D.N.J. 1992)).
The “issue simplification” factor does not require a complete
invalidation of all asserted claims by the IPR proceedings and
simplification can occur even where “some or all of the claims are
found not invalid.” See Depomed, 2014 WL 3729349, at *5 (quoting
Softview LLC v. Apple Inc., C.A. No. 10-389 (LPS), 2013 WL 4757831,
at *1 (D. Del. Sept. 4, 2013)). Issue simplification can occur
where the number of asserted claims and patents are reduced due to
invalidation or the estoppel effect of the IPR proceedings. Id.;
see also 35 U.S.C. § 315(2)(e) (barring the petitioner in an IPR
proceeding that results in a final decision by the PTO from
asserting

in

a

civil

action

invalidity

arguments

that

the

petitioner raised or reasonably could have raised during the IPR
proceedings). Therefore, the number of claims asserted in the
pending litigation relative to the number of claims subject to the
IPR proceedings is a significant factor for the Court to consider.
See Depomed, 2014 WL 3729349, at *5 (“The more the scope of the
litigation exceeds the scope of the IPR proceedings, the less
likely the IPR proceedings and requested stay will simplify the
issues.”) (citing Princeton Digital Image Corp. v. Konami Digital

17

Entm’t Inc., C.A. No. 12-1461 (LPS/CJB), 2014 WL 3819458, at *3
(D. Del. Jan. 15, 2014)).
At present, there are 46 asserted claims and seven asserted
patents in the case. Only four asserted claims and four asserted
patents are under IPR proceedings. See supra note 2. While the
Court notes that the “‘issue simplification’ factor does not
require complete overlap” of the issues as defendants argue, even
under the best-case scenario for defendants, only four of the 46
asserted

claims

may

be

invalidated,

clarified

or

limited,

representing less than 10% of the claims at issue in the case. See
Defs.’ Reply at 11 (“‘Cancellation, clarification, or limitation
of claims,’ even if not all claims, helps simplify the litigation.”
(quoting Mondis Tech., 2015 WL 7012747, at *7)).
The

Court

acknowledges

there

is

a

possibility

some

simplification may occur; however, such a low percentage of the
asserted claims at issue before the PTO weighs heavily against a
stay. See Toshiba Samsung, 2016 WL 3437605, at *2-3 (finding the
“issue simplification” factor weighed against a stay where, inter
alia, only 13 of the 43 asserted claims (roughly 30%) were under
IPR and even considering the originally asserted claims, only 30
of the 60 originally asserted claims would be under review); Dane
Techs., Inc. v. Gatekeeper Sys., Inc., C.A. No. 12-2730 (ADM/AJB),
2013 WL 4483355, at *2 (D. Minn. Aug. 20, 2013) (denying stay where
the movant only petitioned for review of two of the three patents18

in-suit); Pentair Water Pool & Spa, Inc. v. Hayward Indus., Inc.,
C.A. No. 5:11-459-D, 2012 WL 6608619, at *3 (E.D.N.C. Dec. 18,
2012) (finding the “issue simplification” factor weighed against
a stay where the PTO instituted IPR proceedings for only four of
the seven patents-in-suit).7
Defendants also point to their second set of IPR petitions in
support of their argument that the “issue simplification” factor
weighs in favor of a stay. Defs.’ Reply at 12 (citing Richmond v.
Ningbo Hangshun Elec. Co., C.A. No. 13-1944 (MLC), slip op. at 47 (D.N.J. Sept. 21, 2015)). In particular, defendants point to the
court’s advice in Richmond “to await the issuance of all decisions
concerning the invalidity and the patentability of the [patentsin-suit]--as well as decisions concerning the Related Patents
issued in any IPRs that any party may soon feel emboldened to
institute.” Id. (quoting Richmond, slip op. at 5).
However,

defendants’

reliance

on

Richmond

is

misplaced.

Richmond was a consolidated civil action involving an individual
plaintiff patentee and multiple defendant entities, whereas the
present matter involves a single action. Richmond, slip op. at 1-

The Court notes that defendants focus on the percentage of claims
and patents originally asserted by plaintiffs that would be under
the IPR proceedings had the number of originally asserted claims
and patents remained the same. Defs.’ Reply at 3-4. However, the
relevant consideration for “issue simplification” is the number of
claims and patents presently asserted rather than the number
originally asserted.
7

19

2. More significantly, the court in Richmond specifically found
that the PTO’s decisions whether to institute IPR proceedings
provided “comprehensive analysis and claim construction” for each
of the patents at issue. Id. at 2-4. The court noted that under
these circumstances, the “issue simplification” may weigh in favor
of a stay to conserve time and resources for the multiple parties,
including those who did not participate in the IPR filings and to
await “comprehensive analysis and claim construction” by the PTO.
See id. at 2.
In contrast, thus far the PTO’s decisions here have not
provided any comprehensive claim construction. Of the nine PTO
decisions regarding whether to institute review, the PTO provided
only a limited claim construction of the term “database” of the
’880 patent and “geo-referenced” of the ’732 patent,8 which are no
longer asserted in the case. Defs.’ Br. Ex. D at 6 [Doc. No. 1077]; Id. Ex. F at 4-5 [Doc. No. 107-9]. The PTO did not provide a
claim construction for the remaining claims. See Defs.’ Br. Ex. AF [Doc. Nos. 107-4 to 107-9]; Pls.’ Opp’n Ex. 1-3 [Doc. No. 130].
It is entirely speculative that defendants’ second set of petitions
will be more successful than its first set.

To be clear, the PTO accepted defendants’ unopposed proposed
construction of the term “geo-referenced” as being the “broadest
reasonable construction in light of the specification of the ’732
patent.” Defs.’ Br. Ex. F at 5.
8

20

It is no surprise, therefore, that Richmond is not controlling
here. The case is factually distinguishable and defendants’ second
set

of

IPR

petitions

is

not

determinative

on

the

“issue

simplification” factor. See, e.g., Straight Path, 2014 WL 4271633,
at *3; Depomed, 2014 WL 3729349, at *1 (determining that the
movant’s request for a stay was premature in light of the PTO’s
pending decision whether to institute IPR proceedings); Derma
Scis., 2013 WL 6096459, at *1 (denying a motion to stay pending
IPR).
Accordingly, the Court finds that the “issue simplification”
factor weighs against a stay because the result of IPR proceedings
on four asserted claims, representing less than 10% of the asserted
claims, will not materially simplify the issues in the litigation.
C. Stage of the Litigation
Courts are more willing to stay a case in its early stages
pending IPR proceedings because it can advance judicial efficiency
by conserving resources expended by the parties and the Court on
claims that may subsequently be found invalid. Toshiba Samsung,
2016 WL 3437605, at *3. On the other hand, “when a matter has
already reached its later stages with discovery being complete
and/or a trial date being set, requests to stay are less frequently
granted.” Depomed, 2014 WL 3729349, at *6. Where the parties and
the court have expended “substantial time and resources . . . in
[the] case to scheduling and the resolution of discovery disputes”
21

and other motion practices, the “litigation stage” factor weighs
against a stay even at a relatively early stage. SoftView LLC v.
Apple Inc., C.A. No. 10-389 (LPS), 2012 WL 3061027, at *4 (D. Del.
July 26, 2012).
Here, the Court finds that the stage of litigation weighs
against a stay. The Court notes that even though no depositions
have yet been taken and Markman briefs have not been filed, the
parties

and

the

Court

have

devoted

substantial

resources

to

scheduling, discovery disputes and motion practice. For instance,
Judge Kugler ruled on defendants’ motion to dismiss under 35 U.S.C.
§ 101. See Aug. 2, 2016 Op. [Doc. No. 104]. Likewise, this Court
ruled

on

Kugler’s

defendants’
ruling

and

motion

to

plaintiffs’

stay

discovery

motion

to

pending

amend

Judge

infringement

contentions. See May 4, 2016 Order [Doc. No. 75]; Oct. 28, 2016
Order

[Doc.

No.

139].

Of

course,

the

Court

also

notes

the

substantial amount of time and resources spent by the parties in
presenting their current arguments. Accordingly, the Court finds
that the “litigation stage” factor weighs against a stay. This is
especially true in an instance like this where the parties already
substantially completed their costly and time-consuming document
and ESI production.

22

Conclusion
In sum, the Court finds that all three factors in determining
whether to stay a case pending IPR proceedings weigh against
imposing a stay.
ORDER
Accordingly, for the reasons discussed,
IT IS HEREBY ORDERED this 7th day of December, 2016 that
defendant’s “Motion to Stay Pending Inter Partes Review” [Doc. No.
107] is DENIED.
/s/ Joel Schneider
JOEL SCHNEIDER
United States Magistrate Judge

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