Comcast Corporation et al v. Rovi Corporation et al

Filing 101

OPINION AND ORDER: re: 90 MOTION for Reconsideration Notice of Plaintiffs' Motion for Reconsideration of the Court's December 14, 2016 Opinion and Order filed by Comcast STB Software I, LLC, Comcast Corporation, Comcast C able Communications, LLC, Comcast of Houston, LLC, Comcast Shared Services LLC, Comcast Business Communications, LLC, Comcast Holdings Corporation, Comcast Cable Communications Management, LLC. For the foregoing reasons, Comcast's motion for reconsideration of the Court's December 14, 2016, order and Comcasts' and ARRIS's motions to stay are DENIED. The Clerk of Court is directed to close the motion at Docket Number 90. SO ORDERED. (Signed by Judge J. Paul Oetken on 5/15/2017) (ama)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
COMCAST CORPORATION; COMCAST
CABLE COMMUNICATIONS, LLC;
COMCAST CABLE COMMUNICATIONS
MANAGEMENT, LLC; COMCAST OF
HOUSTON, LLC; COMCAST BUSINESS
COMMUNICATIONS, LLC; COMCAST
HOLDINGS CORPORATION; COMCAST
SHARED SERVICES, LLC; and COMCAST
STB SOFTWARE I, LLC,

16-CV-3852 (JPO)
OPINION AND ORDER

Plaintiffs,
-vROVI CORPORATION; ROVI GUIDES, INC.;
ROVI TECHNOLOGIES CORP.; and VEVEO,
INC.,
Defendants.
J. PAUL OETKEN, District Judge:

On June 1, 2016, Comcast 1 filed a motion for preliminary injunction, seeking to enjoin
Rovi 2 from continuing to prosecute their patent infringement claims against Plaintiffs in the
Eastern District of Texas and before the International Trade Commission (“ITC”). (See Dkt. No.
25). On August 16, 2016, the Court denied Plaintiffs’ motion for a preliminary injunction, granted
Defendants’ motion to the extent that it requested a stay, and denied as moot Plaintiffs’ letter motion
to stay the ITC proceedings. (See Dkt. No. 75.) In an Opinion and Order dated December 14,

2016, the Court further denied Comcast’s motion to enjoin Rovi from prosecuting its ITC action.

1

Comcast Corporation; Comcast Cable Communications, LLC; Comcast Cable
Communications Management, LLC; Comcast of Houston, LLC; Comcast Business
Communications, LLC; Comcast Holdings Corporation; Comcast Shared Services, LLC; and
Comcast STB Software I, LLC (collectively, “Comcast” or “Plaintiffs”).
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Rovi Corporation; Rovi Guides, Inc.; Rovi Technologies Corp.; and Veveo Inc.
(together, “Rovi” or “Defendants”).
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See Comcast Corp. v. Rovi Corp., No. 16 Civ. 3852, 2016 WL 7235802 (S.D.N.Y. Dec. 14,
2016).
Comcast has moved for reconsideration of the December Order pursuant to Local Civil
Rule 6.3. (Dkt. No. 90.) For the reasons that follow, the motion is denied.
In addition, on October 25, 2016, when the United States District Court for the Eastern
District of Texas granted Plaintiffs’ motions to change venue to this Court (Dkt. No. 79-1), that
court had before it two fully briefed motions to stay, Rovi Guides, Inc. v. Comcast Corp., No. 16
Civ. 9278 (S.D.N.Y. June 9, 2016), Dkt. Nos. 108, 109. For the reasons that follow, those
motions are also denied.
I.

Motion to Reconsider
A.

Legal Standard

“A motion for reconsideration is an extraordinary remedy to be employed sparingly in the
interests of finality and conservation of scarce judicial resources.” Indergit v. Rite Aid Corp., 52
F. Supp. 3d 522, 523 (S.D.N.Y. 2014) (internal quotation marks omitted) (quoting Drapkin v.
Mafco Consol. Grp., Inc., 818 F. Supp. 2d 678, 695 (S.D.N.Y. 2011)). “To prevail, the movant
must demonstrate either (i) an intervening change in controlling law; (ii) the availability of new
evidence; or (iii) the need to correct clear error or prevent manifest injustice.” Id. (quoting Jacob
v. Duane Reade, Inc., 293 F.R.D. 578, 580-81 (S.D.N.Y. 2013)). “[T]he movant cannot rely
upon facts, issues, or arguments that were previously available but not presented to the court, or
reargue issues that have already been considered.” Id. A motion for reconsideration is not “a
second bite at the apple.” Goonan v. Fed. Reserve Bank of N.Y., No. 12 Civ. 3859, 2013 WL
1386933, *2 (S.D.N.Y. Apr. 5, 2013).
B.

Discussion

Familiarity with the underlying facts of this case, as set forth in the Court’s December 14,
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2016, Opinion and Order, is presumed. In relevant part, the Court determined that the forum
selection clause of the expired patent license agreement (the “Patent Agreement”) did not cover
the present action. (Dkt. No. 84 at 7.) The Court reasoned that, while patent infringement claims
do arise from license agreements, the present action did not trigger the forum-selection clause of
the Patent Agreement because Rovi is seeking relief for allegedly infringing activity that
occurred only after the expiration of the agreement. (Id. (citing Texas Instruments Inc. v.
Tessera, Inc., 231 F.3d 1325, 1328 (Fed. Cir. 2000); Innovative Display Techs. LLC v. Microsoft
Corp., No. 13 Civ. 783, 2014 WL 2757541 (E.D. Tex. June 17, 2014)).)
Comcast now requests that the Court reconsider its holding in light of statements made by
Rovi before the ITC. Comcast argues that these statements demonstrate that, despite Rovi’s
prior assurances to this Court, Rovi is indeed seeking relief as to alleged unfair acts that occurred
before the expiration of the Patent Agreement. (See Dkt. No. 91.) If true, according to Comcast,
the forum-selection clause in the Patent Agreement is triggered and the Court should enjoin the
ITC action. (See Dkt. No. 91 at 11-12.)
As an initial matter, the statements made by Rovi in the ITC proceedings were not
available to the Court when it issued its December 14, 2016, order. As such, they are properly
considered on a motion for reconsideration. 3 See Indergit, 52 F. Supp. 3d at 523.
In particular, Comcast points to two aspects of the now-developed ITC record that it
argues undermines Rovi’s previous assertions that it is seeking only post-expiration relief: (1)
Comcast’s alleged stockpiling of infringing products while the Patent Agreement was in effect,
and (2) Comcast’s testing of infringing products after importation while the Patent Agreement

3

Comcast also argues that its invocation of the Patent Agreement as a defense is
sufficient to trigger the forum-selection clause. (Dkt. No. 91 at 10.) But this argument is not
appropriate on a motion for reconsideration, as Comcast previously made this argument to the
Court. (See Dkt. No. 27 at 13, 19.) See Indergit, 52 F. Supp. 3d at 523.
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was in effect.
First, in Rovi’s pre-hearing brief filed with the ITC, Rovi claimed that Comcast
“import[ed] and stockpile[d] . . . products . . . under license” so that it could “distribute those
infringing imported products with impunity immediately after” the LDA expired, and that
Comcast “buil[t] up its inventory with imported products under license” that it is
“leas[ing] . . . after the license has expired.” (Dkt. No. 94-1 at 3, 9.) Comcast now argues that
Rovi is seeking relief in the ITC for this “stockpiling,” which took place before the expiration of
the Patent Agreement, thus triggering the forum-selection clause. Indeed, Comcast argues that
the ITC does not have jurisdiction over Rovi’s claims unless Rovi’s claims are based on the
unfair act of importing and stockpiling the allegedly infringing products. (Dkt. No. 91 at 7.)
Second, Rovi represented to the ITC that Comcast’s testing of the allegedly infringing
products upon receipt infringes the asserted patents. (See id. at 4.) Comcast argues that,
because Comcast had not acquired any allegedly infringing products since three months prior to
the expiration of the Patent Agreement, any testing activity must have occurred while the Patent
Agreement was still in effect. (Id. at 10.) Thus, Comcast argues, Rovi has sought relief in the
ITC for unfair acts that occurred before the expiration of the Patent Agreement. (Id.)
But Rovi continues to plausibly maintain that it is not seeking the relief that Comcast
believes it to be seeking. Instead, it argues that it is seeking relief in the ITC based on two
alleged unfair acts: (1) importation of products after the expiration of the Patent Agreement, and
(2) sales/distribution of products from inventory after the expiration of the Patent Agreement.
(Dkt. No. 96 at 4.)
Comcast has not shown that Rovi is seeking relief in the ITC for any unfair act consisting
of pre-expiration activity, including any stockpiling or testing of the allegedly infringing
products. Throughout its representations to the ITC, Rovi has consistently asserted that
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Comcast’s activity before the expiration of the Patent Agreement was lawful and that it is
seeking relief for unfair acts that occurred only after the expiration of that agreement. (See, e.g.,
Dkt. No. 94-1 at 9 (arguing that Comcast does not “point to any authority that that would allow
the distribution of imported, infringing products after a license has expired, and they cite no
authority to suggest that the Commission is powerless to reach the millions of imported
infringing products deployed by Comcast.” (emphasis added)); Dkt. No. 97-1 at 3 (“To be clear:
Rovi’s claims in this Investigation are based solely on violations of Section 337 that have taken
place after the expiration of the Patent License. All such violations fall within the purview of the
Commission, including ‘importations’ that violate Section 337, and independently, ‘sales after
importation’ that violate Section 337.”); id. at 6 (“Comcast’s rights to practice the Asserted
Patents terminated with [the Patent Agreement.]”).)
This is consistent with Rovi’s representations to the ITC that “an Accused Product
imported under license might still serve as a basis for a violation of Section 337 if a ‘sale after
importation’ takes place after expiration of the Patent License,” regardless of “whether or not the
product was licensed when imported.” (Dkt. No. 97-1 at 3.) And while this Court does not
presume to decide any jurisdictional issue that the parties may raise at the ITC, Rovi’s arguments
appear consistent with the scope of the ITC’s jurisdiction. See Certain Elec. Devices with Image
Processing Sys., Components Thereof, & Associated Software, Inv. No. 337-TA-724, 2012 WL
3246515, at *11 (U.S.I.T.C. Dec. 21, 2011) (“[T]he statutory language of section 337 now
expressly defines the relevant unfair acts to be importation, sale for importation, and sale after
importation of ‘articles that – infringe’ U.S. patents.” (quoting 19 U.S.C. § 1337(a)(1)(B)(i))).
Given the “extraordinary” nature of a motion for reconsideration, and because Comcast
has failed to demonstrate that the forum-selection clause in the expired Patent Agreement was
triggered by Rovi’s statements in the ITC proceedings—which is the only new evidence raised
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on the motion for reconsideration—Comcast’s motion is denied. See Indergit, 52 F. Supp. 3d at
523.
II.

Motion to Stay
On October 25, 2016, the United States District Court for the Eastern District of Texas

granted Plaintiffs’ motions to change venue to this Court. (Dkt. No. 79-1.) Pending before that
court was a motion to stay the proceedings. (Rovi Guides, Inc. v. Comcast Corp., No. 16 Civ.
9278 (S.D.N.Y. June 9, 2016), Dkt. No. 108 (“Motion to Stay”)). 4
In the Motion to Stay, Comcast argues for a stay of proceedings as they relate to U.S.
Patent 8,755,666 (“the ’666 patent”). 5 The ’666 patent is closely related to three patents at issue
in the ITC action: U.S. Patent No. 8,578,413 (“the ’413 patent”), which is the ’666 patent’s
immediate parent; U.S. Patent No. 8,046,801 (“the ’801 patent”), which is the ’666 patent’s
grandparent; and U.S. Patent No. 8,006,263 (“the ’263 patent”), which also descends from the
’801 patent. All four patents share the same inventors and title. Moreover, the ’666 patent’s
specification is identical to that of the ’413 and ’801 patents. (See Motion to Stay at 3-4.)
Accordingly, Comcast argues, proceedings on the ’666 patent should be stayed.

4

Defendants ARRIS International plc, ARRIS Group, Inc., ARRIS Technology,
Inc., ARRIS Enterprises LLC, ARRIS Solutions, Inc., Pace Ltd. (now known as “ARRIS Global
Ltd.”)1, Pace Americas Holdings, Inc., Pace Americas Investments, LLC, and Pace Americas,
LLC (collectively, “ARRIS”), joined Comcast’s motion to stay with respect to the ’666 patent.
Rovi Guides, Inc. v. Comcast Corp., No. 16 Civ. 9278 (S.D.N.Y. June 9, 2016), Dkt. No. 109.
5

Comcast’s request for a stay of the entire case pending the disposition of a motion
before the Eastern District of Texas to change venue (which was granted at Dkt. No. 79-1), and a
motion before this Court for a preliminary injunction (which was denied at Dkt. No. 84), is
denied as moot. (See Motion to Stay at 13-15.) The portion of ARRIS’s separate motion
seeking to stay proceedings pending the disposition of the motion to transfer is similarly denied
as moot. Rovi Guides, Inc. v. Comcast Corp., No. 16 Civ. 9278 (S.D.N.Y. June 9, 2016), Dkt.
No. 109.
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A.

Legal Standard

“[T]he power to stay proceedings is incidental to the power inherent in every court to
control the disposition of the causes on its docket with economy of time and effort for itself, for
counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936); see also TradeWinds
Airlines, Inc. v. Soros, No. 08 Civ. 5901, 2011 WL 309636, at *3 (S.D.N.Y. Feb. 1, 2011). On a
motion to stay, the Eastern District of Texas (the court to which the motion was originally
submitted) considers: “(1) whether a stay will unduly prejudice or present a clear tactical
disadvantage to the nonmoving party, (2) whether a stay will simplify the issues in question and
trial of the case, and (3) whether discovery is complete and whether a trial date has been set.”
Soverain Software LLC v. Amazon.com, Inc., 356 F. Supp. 2d 660, 662 (E.D. Tex. 2005). 6 “[I]f
there is even a fair possibility that the stay for which [the movant] prays will work damage to
someone else,” the movant “must make out a clear case of hardship or inequity in being required
to go forward.” Landis, 299 U.S. at 255.
B.

Discussion

Comcast does not argue that it is entitled to a mandatory stay under 28 U.S.C. § 1659(a),
which gives a respondent in an ITC proceeding a statutory right to stay “proceedings in [a] civil
action with respect to any claim that involves the same issues involved in the proceeding before

6

The standard in the Eastern District of Texas does not vary significantly from that
in this district. This Court considers “(1) the private interests of the plaintiffs in proceeding
expeditiously with the civil litigation as balanced against the prejudice to the plaintiffs if
delayed; (2) the private interests of and burden on the defendants; (3) the interests of the courts;
(4) the interests of persons not parties to the civil litigation; and (5) the public interest.” In re
OxyContin Antitrust Litig., No. 04 MD 1603, 2012 WL 5184949, at *6–7 (S.D.N.Y. Oct. 19,
2012) (internal quotation marks omitted) (quoting Soros, 2011 WL 309636, at *3). “In
balancing these factors, ‘the basic goal is to avoid prejudice.’” Id. (quoting Soros, 2011 WL
309636, at *3). Because the parties’ briefs are addressed to the transferor court, and because the
parties did not provide supplemental materials, the Court addresses the arguments as made to
that court, where this motion to stay was filed in June 2016.
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the Commission.” Instead, it argues that the Court should use its inherent power to stay the case
given the close relationship between the patents at issue in the ITC proceedings and the ’666
patent. But the Court is not convinced that a stay is justified.
First, the claims against Comcast in this case and the claims against Comcast in the ITC
are not identical. Rovi points out that the ’666 patent raises issues that will not be addressed by
the ITC, such that a stay of the case with respect to the ’666 patent pending disposition of the
ITC proceeding will not significantly simplify the case. (Rovi Guides, Inc. v. Comcast Corp.,
No. 16 Civ. 9278 (S.D.N.Y. June 9, 2016), Dkt. No. 121 at 13-14.) See, e.g., Saxon Innovations,
LLC v. Palm, Inc., No. 09 Civ. 272, 2009 WL 3755041, at *2 (E.D. Tex. Nov. 4, 2009) (finding
it “unlikely that a stay would simplify the issues in question” where the ITC “will not consider
[the movant’s] arguments and theories regarding infringement or invalidity” of the patent-atissue).
Moreover, some significant discovery on the ’666 patent has already taken place in this
case. On April 17, 2017, the parties submitted a Joint Claim Terms Chart for the eight patentsat-issue, including the ’666 patent. Rovi Guides, Inc. v. Comcast Corp., No. 16 Civ. 9278
(S.D.N.Y. June 9, 2016), Dkt. No. 268. While the motion has been pending for over a year,
presently, the parties are in the process of briefing and arguing their preferred constructions to
the Court. Rovi Guides, Inc. et al. v. Comcast Corporation et al., No. 16 Civ. 9278 (S.D.N.Y.
June 9, 2016), Dkt. No. 199. Staying the case as to the ’666 patent at this stage of discovery to
wait for the ITC proceedings to conclude, would only delay the resolution of issues for which the
parties have already conducted significant discovery.
Furthermore, Rovi argues that if the Court were to grant the stay, Rovi will be unable to
seek a timely remedy for Comcast’s alleged infringement of this patent. Rovi Guides, Inc. v.
Comcast Corp., No. 16 Civ. 9278 (S.D.N.Y. June 9, 2016), Dkt. No. 121 at 10. And because
8

Comcast and Rovi compete for market share, a delay in Rovi’s ability to pursue its legal claims
may prejudice Rovi to the extent that it loses customers to Comcast, which might also harm Rovi
in related markets. See id. at 11. See Systemation, Inc. v. Engel Indus., Inc., 194 F.3d 1331,
1999 WL 129640, at *3, 6 (Fed. Cir. 1999) (finding that “damages would be very difficult to
calculate due in part to the sales that would be lost in related markets to the claimed product
market”).
The Court, therefore, declines to exercise its discretion to stay the case with respect to the
’666 patent where, as here, “there is . . . a fair possibility that the stay for which [Comcast] prays
will work damage to” Rovi and where Comcast has made no showing “of hardship or inequity in
being required to go forward.” Landis, 299 U.S. at 255.
III.

Conclusion
For the foregoing reasons, Comcast’s motion for reconsideration of the Court’s

December 14, 2016, order and Comcast’s and ARRIS’s motions to stay are DENIED.
The Clerk of Court is directed to close the motion at Docket Number 90.
SO ORDERED.
Dated: May 15, 2017
New York, New York
____________________________________
J. PAUL OETKEN
United States District Judge

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