White Knuckle IP v. Electronic Arts
Filing
133
MEMORANDUM DECISION AND ORDER granting 95 Motion to Stay all issues pending resolution of the Federal Circuit appeal in the related case and the IPR of the '350 Patent. Signed by Judge David Nuffer on 7/20/16 (alt)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, NORTHERN DIVISION
WHITE KNUCKLE IP, LLC, a Utah limited
liability company,
Plaintiff,
MEMORANDUM DECISION AND ORDER
GRANTING ELECTRONIC ARTS INC.’S
MOTION TO STAY CASE PENDING
RESOLUTION OF INTER PARTES REVIEW
v.
Case No. 1:15-cv-00036-DN-BCW
ELECTRONIC ARTS INC., a Delaware
corporation,
District Judge David Nuffer
Magistrate Judge Brooke C. Wells
Defendant.
BACKGROUND
This patent infringement action is brought by White Knuckle IP, LLC (“WK”) against
Electronic Arts Inc. (“EA”) for alleged infringement of WK’s U.S. Patent No. 8,529,350 (the
“‘350 Patent”). In the initial scheduling order, 1 the parties agreed that if EA requested inter
partes review (“IPR”) of the ‘350 Patent by July 15, 2015, and the PTAB’s decision on the
request was not made by November 25, 2015, the case would be stayed while the PTAB
considered the request.
On December 4, 2015, an order was entered staying this case (“Partial Stay Order”). 2 The
Partial Stay Order found that EA had requested a stay by July 15, 2015 and that the PTAB had
not decided to initiate IPR by November 25, 2015 and, therefore, a stay was warranted based on
the parties’ agreement. The Stay Order, however, excepted from the stay “Judge Wells’s
November 24 order requirement that EA produce documents and information . . . .” 3 EA was
1
Patent Case Scheduling Order at 3, docket no. 31, entered May 18, 2015.
2
Order Staying Case Deadlines Pending Decision Regarding Institution of IPR (“Partial Stay Order”), docket no.
92, entered Dec. 4, 2015.
3
Id. at 2.
required to “produce such documents and information to WK on or before December 8, 2015.” 4
On December 8, 2015, the parties stipulated to, and the court granted, an extension to allow EA
to produce the documents and information by December 22, 2015. 5 The exception to the stay
order was intended to allow one small piece of the litigation to continue to completion rather
than be interrupted.
On January 27, 2016, EA took the position that it had complied with all of its discovery
obligations, including Judge Wells’s November 24 order requirement that EA produce
documents and information, and moved for a complete stay of the case pending resolution of IPR
proceedings that had since been instituted by the PTAB (“Motion to Stay”). 6 EA’s motion noted
that the IPR had been initiated by the PTO earlier that month. WK’s opposition did not oppose
the general stay, but sought to retain the exception for completion of the pending discovery,
stating that responses were still not acceptable. 7
After the Motion to Stay was fully briefed, WK filed a motion to compel EA to provide
“substantive infringement contentions and responses” to certain interrogatories (“Motion to
Compel”). 8 WK argued that EA still had not fulfilled its discovery obligations. Magistrate Judge
Wells held a hearing regarding the Motion to Compel, and during the hearing noted that District
Judge Parrish, in a separate case, had held that the ‘350 Patent’s parent patent, U.S. Patent No.
4
Id.
5
See Stipulated Motion to Extend Deadline for Electronic Arts, Inc’s Production of Discovery Pursuant to Order
Granting Motion to Compel, docket no. 93, filed Dec. 8, 2015; Order on Stipulated Motion to Extend Deadline for
Electronic Arts, Inc’s Production of Discovery Pursuant to Order Granting Motion to Compel, docket no. 94,
entered Dec. 8, 2015.
6
Electronic Arts Inc.’s Motion to Stay Case Pending Resolution of Inter Partes Review (“Motion to Stay”), docket
no. 95, filed Jan. 27, 2016.
7
White Knuckle’s Opposition to Electronic Arts Inc.’s Motion to Stay Case Pending Resolution of Inter Partes
Review at 1-8, docket no. 98, filed Feb. 10, 2016.
8
White Knuckle’s Renewed Short Form Discovery Motion to Compel (“Motion to Compel”), docket no. 104, filed
Mar. 18, 2016.
2
8,545,575, was invalid because it was “drawn to a patent-ineligible abstract idea[.]” 9 Magistrate
Judge Wells also noted that there was a pending motion for judgment on the pleadings in this
case. 10 Magistrate Judge Wells stated that Judge Parrish’s decision might affect this case due to
the similarity between the patents, and advised the parties to contact Judge Nuffer’s chambers
within 14 days to determine how to proceed.
Each party sent a separate email to chambers stating their positions. EA stated that its
motion for judgment on the pleadings had not been ruled upon and highlighted Judge Parrish’s
recent decision in the related case. 11 WK stated that this case is already stayed pending IPR,
except for the Motion to Compel, and that WK has appealed Judge Parrish’s ruling to the Federal
Circuit. 12 WK stated that it believed it would be appropriate for the “current stay” to remain in
place pending the Federal Circuit appeal and IPR. 13 Certainly, WK’s position is still that any
ongoing stay should not apply to the Motion to Compel.
For the reasons stated below, the Motion to Stay is GRANTED. The entire case,
including further action on the Motion to Compel, is stayed pending resolution of the Federal
Circuit appeal in the related case and IPR of the ‘350 Patent. The Motion to Compel remains
pending during the stay and will be decided, as necessary, after resolution of the Federal Circuit
appeal in the related case and IPR of the ‘350 Patent.
9
Memorandum Decision and Order Granting Defendant’s Motion to Dismiss in White Knuckle Gaming, LLC v.
Electronic Arts Inc., Case No. 1:15-cv-00150-JNP-PMW (D. Utah June 2, 2016), Ex. A. to Electronic Arts Inc.’s
Notice of Supplemental Authority, docket no. 129-1, filed June 10, 2016.
10
Electronic Arts Inc.’s Motion for Judgment on the Pleadings Based on Unpatentability under 35 U.S.C. § 101,
docket no. 55, filed Aug. 6, 2015.
11
Email from H. Dickson Burton, counsel for EA, to Chambers of District Judge David Nuffer (July 18, 2016) (on
file in chambers).
12
Email from Joseph Shapiro, counsel for WK, to Chambers of District Judge David Nuffer (July 18, 2016) (on file
in chambers).
13
Id.
3
DISCUSSION
A district court has discretion to grant a motion to stay based on the following factors:
“(1) whether granting a stay would likely simplify the issues before the court; (2) the stage of the
litigation; and (3) a balancing of prejudice to the parties.” 14 “[T]here is a liberal policy in favor
of granting motions to stay proceedings pending the outcome of USPTO reexamination
proceedings.” 15
The first factor weighs strongly in favor of extending the stay and applying it to the entire
case. The PTAB instituted IPR on January 14, 2016, which means the PTAB found that there is a
reasonable likelihood that EA will prevail in showing the claims are not patentable. 16
Furthermore, Judge Parrish’s decision on the ‘350 Patent’s parent patent suggests that the ‘350
Patent may also be invalid due to it being drawn on a patent-ineligible abstract idea. Allowing
the Federal Circuit appeal and the IPR proceedings to proceed while this case is stayed will
clarify and simplify the issues in this case. Accordingly, the first factor weighs in favor of a stay.
The second factor also weighs in favor of a stay. Although the case was filed more than a
year ago, the partial stay has been in effect for more than six months and therefore the parties
have exchanged limited fact discovery, no depositions have been scheduled, and no expert
discovery has taken place. There have been no claim construction activities and there is no trial
date. Thus, the second factor weighs in favor of extending the stay and applying it to the entire
case. Allowing WK to continue to pursue discovery during IPR of the ‘350 Patent and the
Federal Circuit appeal may turn out to be wasteful and unnecessary if WK’s patent is invalidated.
14
Lifetime Prods., Inc. v. Russell Brands, LLC, Case No. 1:12-cv-00026-DN, 2013 WL 5408458, at *2 (D. Utah
Sept. 25, 2013).
15
Pool Cover Specialists Nat., Inc. v. Cover-Pools Inc., Case No. 2:08-cv-00879-DAK, 2009 WL 2999036, at *2
(D. Utah Sept. 18, 2009).
16
See 35 U.S.C. § 314(a).
4
The better course is to stay the entire case, including the Motion to Compel, until the viable
issues can be defined. If the ‘350 Patent is invalidated, this case will be dismissed. On the other
hand, if there are any remaining issues at the conclusion of IPR on the ‘350 Patent and the
Federal Circuit’s resolution of the case regarding the parent patent, those issues, including the
issues raised in the Motion to Compel, may be addressed without concern about concurrent
proceedings on related matters.
The third factor, prejudice to the parties, also weighs in favor of a stay of the entire case.
There is significant prejudice to EA if it is required to divulge information during a case that is
later dismissed due to invalidity, whereas the prejudice to WK is not as significant if their claims
are placed on hold while the IPR and appeals processes run their course. The IPR process is
statutorily limited in time and is required to take place within twelve months, 17 which makes it
less likely that WK will suffer prejudicial delay. While there is no such limit on review of Judge
Parrish’s decision at the Federal Circuit, the delay is not likely to be much more than that time. 18
When the Partial Stay Order was entered, IPR proceedings had not been instituted by the
PTAB and Judge Parrish had not yet invalidated the parent patent to the patent at issue in this
case. Now that those two events have occurred, a complete stay is warranted because of the
higher likelihood that the ‘350 Patent will be invalidated.
17
See 35 U.S.C. §§ 316(a)(11), 319, 141; 37 C.F.R. § 42.100.
18
United States Court of Appeals for the Federal Circuit, Median Time to Disposition in Cases Terminated After
Hearing or Submission at
http://www.cafc.uscourts.gov/sites/default/files/Median%20Disposition%20Time%20for%20Cases%20Terminated
%20after%20Hearing%20or%20Submission%20%28Detailed%20table%20of%20data%202006-2015%29.pdf last
visited July 20, 2016.
5
ORDER
IT IS HEREBY ORDERED that the Motion to Stay 19 is GRANTED. All issues in this
case, including the issues raised in WK’s Motion to Compel, are stayed pending resolution of the
Federal Circuit appeal in the related case and the IPR of the ‘350 Patent.
Dated July 20, 2016.
BY THE COURT:
____________________________
David Nuffer
United States District Judge
19
Electronic Arts Inc.’s Motion to Stay Case Pending Resolution of Inter Partes Review (“Motion to Stay”), docket
no. 95, filed Jan. 27, 2016.
6
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