Ramot at Tel Aviv University Ltd. v. Cisco Systems, Inc.

Filing 235

MEMORANDUM OPINION AND ORDER. Signed by District Judge Rodney Gilstrap on 1/13/2021. (ch, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
RAMOT AT TEL AVIV UNIVERSITY
LTD.,

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Plaintiff,
v.
CISCO SYSTEMS, INC.,
Defendant.

CIVIL ACTION NO. 2:19-CV-00225-JRG

MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Cisco Systems, Inc.’s (“Cisco”) Renewed Motion to Stay
Pending Ex Parte Reexamination of U.S. Patent No. 10,270,535, No. 10,033,465, and
No. 10,461,866 (the “Motion”). (Dkt. No. 221.) Having considered the Motion and the related
briefing, the Court finds that the Motion should be and hereby is GRANTED.
I.

BACKGROUND

Plaintiff Ramot at Tel Aviv University Ltd. (“Ramot”) alleges Defendant Cisco Systems,
Inc. (“Cisco”) infringes U.S. Patent No. 10,270,535 (the “’535 Patent”); U.S. Patent
No. 10,033,465 (the “’465 Patent”); and U.S. Patent No. 10,461,866 (the “’866 Patent”)
(collectively, the “Asserted Patents”). (Dkt. No. 48.)
Cisco previously filed an Opposed Motion to Stay Pending Inter Partes Review of U.S.
Patent No. 10,270,535 and No. 10,033,465. (Dkt. No. 36.) The Court denied the Motion to Stay
Pending IPR without prejudice, noting that no decision on institution of the inter partes reviews
(“IPRs”) had yet been made, and instructing Cisco that it could subsequently seek a stay “if and
when IPR proceedings are instituted by the PTAB.” (Dkt. No. 54.)
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The Patent Trials and Appeal Board (“PTAB”) subsequently denied institution of the IPRs,
and Cisco filed Requests for Ex Parte Reexamination at the United States Patent and Trademark
Office (“PTO”) on all three patents-in-suit. (Dkt. No. 107.) In this Court, Cisco also filed a Motion
to Stay Pending Ex Parte Reexamination. (Id.)
In response to the Requests for Ex Parte Reexamination, the PTO found substantial new
questions of patentability as to each of the asserted claims in the patents-in-suit, granting all
Requests for Reexamination. (Id.) Subsequently, when the PTO had issued preliminary Office
Actions rejecting all challenged claims of the ’465 and ’866 Patents but had not yet made an initial
determination as to the ’535 Patent, the Court denied Cisco’s request for a stay without prejudice
to refile the request if and when any relief by way of the reexams became less speculative or
incomplete. (Dkt. Nos. 171, 180, 205, 216.)
Cisco has now renewed its request for a stay pending the resolution of the ex parte
reexaminations.
II.

LEGAL STANDARD

“The district court has the inherent power to control its own docket, including the power
to stay proceedings.” Soverain Software LLC v. Amazon.com, Inc., 356 F. Supp. 2d 660, 662 (E.D.
Tex. 2005) (citing Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)); see also Ethicon, Inc. v. Quigg,
849 F.2d 1422, 1426–27 (Fed. Cir. 1988) (“Courts have inherent power to manage their dockets
and stay proceedings, including the authority to order a stay pending conclusion of a PTO
reexamination.” (internal citation omitted)). How to best manage the Court’s docket “calls for the
exercise of judgment, which must weigh competing interests and maintain an even balance.”
Landis, 299 U.S. at 254–55.

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In deciding whether to stay litigation pending reexamination, courts typically consider:
(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).
III.

ANALYSIS

Cisco argues that this case should be stayed in light of the ex parte reexams because (1) all
asserted claims now stand rejected in Office Actions; (2) the claims are likely to be modified in
some way, and therefore it would not be expeditious to proceed to trial on the current claims; and
(3) Ramot has been delaying the progression of the reexams by requesting extensions for its
responses to the Office Actions. (Dkt. No. 221.) Ramot asserts that the case need not be stayed
because (1) any rejections remain speculative, just as they did when the Court denied Cisco’s
previous request for a stay; and (2) separate counsel requested the extensions at the reexams and
the extensions do not substantially delay the proceedings at all, but actually have the potential to
speed them up. (Dkt. No. 226.)
“A stay is particularly justified when ‘the outcome of a PTO proceeding is likely to assist
the court in determining patent validity or eliminate the need to try infringement issues.’” Ericsson
Inc. v. TCL Commc’n Tech. Holdings, Ltd., No. 2:15-cv-00011, 2016 WL 1162162, at *1 (E.D.
Tex. Mar. 23, 2016) (quoting NFC Tech. LLC v. HTC Am., No. 2:13-CV-1058, 2015 WL 1069111,
at *1 (E.D. Tex. Mar. 11, 2015). In the context of ex parte reexams, a stay is appropriate when
there is a “significant likelihood that the outcome of the reexamination proceeding will streamline
the scope of this case to an appreciable extent if not dispose of it entirely.” Veraseal LLC v.
Wal-Mart Sores, Inc. et al., No. 2:17-cv-00527 (E.D. Tex. May 10, 2018).

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Having considered the factors outlined above and the unique facts and circumstances of
this case, the Court is persuaded that the benefits of a stay outweigh the costs of postponing
resolution of the litigation in this particular case. All asserted claims of all Asserted Patents have
been rejected in preliminary Office Actions in the ex parte reexams. (Dkt. Nos. 171, 180, 209.)
When claims are rejected in an ex parte reexamination proceeding, the patent owner can narrow,
cancel, or submit new claims. See M.P.E.P. § 2258. Thus, the asserted claims that have been
rejected in the reexamination proceedings are almost surely to be modified in some material way
in response to their rejection, and they may be dropped completely. They will not likely stay as
they were when this suit was filed. If the case were to proceed to trial on the current claims, there
is a serious risk of wasted resources as to the parties and the Court.
As the Court previously noted in its denial of such a stay, “[g]iven the resources that the
parties and the Court have already invested in this case, staying the case, based solely on
speculation of what might possibly happen during reexamination, would be inefficient and
inappropriate.” (Dkt. No. 205 at 4 (citing Soverain, 356 F.Supp.2d at 663).) Ramot is entitled to
its day in court and resolution of the present disputes. See ThinkOptics, Inc. v. Nintendo of
America, Inc., 2014 WL 4477400, at *1 (E.D. Tex. Feb. 27, 2014) (holding that patentees “ha[ve]
an interest in timely enforcing [their] patents.”). Nevertheless, the reexams have now progressed
past the point of speculation, and simplification of the issues to be tried pending the resolution of
the reexams is near certain.
Although this stay comes late in the progression of this case—with discovery complete,
pretrial briefing submitted, and jury selection impending—there remain significant resources yet
to be expended by the parties, including at the pretrial conference and preparations leading up to
an actual trial of this case. In light of the high probability that the asserted claims will change in

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scope as part of the reexamination proceedings noted above, the Court finds that considering the
totality of the circumstances in this case at this time, a stay is warranted.
Accordingly, having considered prejudice to Ramot, simplification of the issues to be tried,
and the stage of the case, the Court finds that the relevant factors weigh in favor of granting a stay
of this case pending resolution of the ex parte reexaminations.
IV.

CONCLUSION

In light of the foregoing, the Court finds that Defendant Cisco Systems, Inc.’s Renewed

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Motion to Stay Pending Ex Parte Reexamination of U.S. Patent No. 10,270,535, No. 10,033,465,
and No. 10,461,866 (Dkt. No. 221) should be and hereby is GRANTED.
The parties are ORDERED to file a joint notice updating the Court as to the status of the
claims within thirty (30) days of any ultimate resolution in the ex parte reexamination. The parties
are further ORDERED to file periodic joint notices with the Court to report on the status of the
reexamination proceeding every 120 days until this case is either unstayed or terminated.
So ORDERED and SIGNED this 13th day of January, 2021.

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RODNEY GILSTRAP
UNITED STATES DISTRICT JUDGE

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