ClearPlay v. Dish Network LLC et al

Filing 352

MEMORANDUM DECISION AND ORDER granting 341 Motion to Stay pending resolution of reexamination proceedings. Parties must notify the court within 5 days of completion of reexamination proceedings at the USTPO. Signed by Magistrate Judge Cecilia M. Romero on 6/18/21 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
MEMORANDUM DECISION AND
ORDER GRANTING MOTION TO
STAY

CLEARPLAY,
Plaintiff,

v.

Case No. 2:14-cv-00191-DN-CMR

DISH NETWORK LLC, et al.,

District Judge David Nuffer

Defendant.

Magistrate Judge Cecilia M. Romero

This matter is referred to the undersigned pursuant to 28 U.S.C. § 636(b)(1)(A) (ECF
296). Before the court is Defendants Dish Network, LLC and EchoStar Technologies, LLC’s
(DISH) Motion to Stay (ECF 341) (the Motion) this action pending reexamination proceedings
in the United States Patent and Trademark Office (USPTO). Plaintiff ClearPlay (ClearPlay)
opposes this request as untimely (ECF 342). Having carefully considered the relevant filings, the
court finds that oral argument is not necessary and will decide this matter on the basis of written
memoranda. See DUCivR 7-1(f). For the reasons set forth below, the court will GRANT the
Motion.
I.

BACKGROUND

This court previously imposed a stay in this case on February 11, 2015, pending inter
partes review by the USPTO requested by a third party (ECF 80). The stay was lifted on
October 31, 2016 (ECF 85). DISH served its final non-infringement contentions on the July 28,
2017 deadline (ECF 89). The case thereafter proceeded through claim construction until 2019
(ECF 309). In October 2020, DISH filed a series of petitions for ex parte reexamination with the

USPTO (ECF 342 at 2). Four reexaminations have been ordered by the USPTO of “all asserted
claims” in this infringement action (ECF 341 at 1).
On December 22, 2020, DISH filed the instant Motion seeking a stay of this action
pending resolution of these reexaminations, ClearPlay filed an opposition (ECF 342), and DISH
filed a reply (ECF 344) and a notice of supplemental authority (ECF 346). At the time the
Motion was filed, trial was set for September 2021, and the expert discovery and dispositive
motion deadlines had not yet expired (ECF 332). Upon request of the parties, the court extended
the expert discovery deadline (ECF 348), and later vacated all deadlines in the scheduling order
pending resolution of the Motion (ECF 351).
II.

DISCUSSION

“The Federal Circuit has recognized that a district court may properly stay proceedings
in a patent case pending the [USPTO]’s reexamination of a patent by that Office.” Larson
Archery Co. v. Mathews, Inc., No. 1:11-CV-126 TS, 2013 WL 139472, at *1 (D. Utah Jan. 10,
2013) (citing Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir. 1983)). In
general, courts consider the following factors in determining whether to stay litigation
proceedings pending USPTO reexamination: “(1) whether a stay will simplify the issues in
question and trial of the case; (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.” Buttercup Legacy LLC v. Michilin Prosperity Co., Ltd., No. 2:11-cv-262TS, 2012 WL 1493947, at *1 (D. Utah Apr. 27, 2012) (quoting Pool Cover Specialists Nat.,
Inc. v. Cover–Pools Inc., 2009 WL 2999036, at *1 (D. Utah Sept. 18, 2009)).

2

A.

Simplification of Issues

DISH argues that this factor weighs in favor of a stay because the cancellation or
amendment of claims during reexamination would “narrow—and perhaps eliminate—the
infringement dispute in this case,” especially where, as here, the USPTO has found a “substantial
new question of patentability” (ECF 341 at 2). In response, ClearPlay relies on statistical
information to support its argument that reexamination is not likely to impact the outcome of this
suit because only a small percentage of reexaminations result in cancellation of all claims, and its
patents have already survived numerous, exhaustive challenges (ECF 342 at 9–10).
The court is not persuaded by ClearPlay’s arguments. “[C]ourts have recognized that the
reexamination process is beneficial in the ‘simplification of litigation that might result from the
cancellation, clarification, or limitation of claims, and even if the reexamination did not lead to
claim amendment or cancellation, it could still provide valuable analysis to the district court.’”
Icon Health & Fitness, Inc. v. Park City Entm’t, Inc., No. 1:10-cv-195-DAK, 2011 WL 5239733,
at *2 (D. Utah Nov 1, 2011) (quoting Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1428 (Fed. Cir.
1988)). Given that the USPTO has decided to reexamine all of the asserted claims, the court
concludes that the reexamination proceedings are likely to simplify the issues in this case, by
either resulting in the cancellation or amendment of some of these claims or at least providing
valuable analysis about any remaining claims. Moreover, “[c]ourts have recognized that ‘there is
a liberal policy in favor of granting motions to stay proceedings pending the outcome of USPTO
reexamination proceedings.’” Id. (quoting ASCII Corp. v. STD Entm’t USA, Inc., 844 F. Supp.
1378, 1381 (N.D. Cal. 1994)). In light of this liberal policy, the court concludes that this factor
weighs in favor of a stay.

3

B.

Status of the Action

DISH argues that the second factor also weighs in favor of staying this case because
several significant stages remain (ECF 341 at 2). ClearPlay notes that the parties have spent
substantial resources litigating this case for seven years, and there have already been lengthy
delays due to COVID-related extensions of case deadlines (ECF 342 at 6–7).
While the court is mindful of the age of this case and the recent delays resulting from
COVID, the court concludes that the status of this case nonetheless warrants a stay. Since the
lift of the previous stay, the parties have moved this case forward, but there are substantial
proceedings yet to be completed, including expert discovery, dispositive motions, and trial.
Accordingly, the court concludes that this factor weighs in favor of a stay. See, e.g., EMSAT
Advanced v. T-Mobile USA, Inc., No. 4:08-cv-00817, 2011 WL 843205, at *2 (N.D. Ohio
Mar. 8, 2011) (“[T]here remain several costly stages of this litigation that may be eliminated
or reduced depending upon the result of the reexamination of the patents-in-suit.
Accordingly, the phase of this litigation, while not in its earliest stages, does not warrant
denial of the motion to stay.”).
C.

Undue Prejudice or Tactical Advantage

DISH argues that the final factor weighs in its favor because there is no risk of
significant prejudice to ClearPlay where it does not compete with DISH in the marketplace
and seeks only a reasonable royalty (ECF 341 at 3). ClearPlay claims it will be prejudiced by
a stay because of fading memories and the impending expiration of its remaining patents,
arguing that DISH’s delayed filing was “designed to prevent ClearPlay from amending its
patents” (ECF 342 at 8).
The court is not persuaded that ClearPlay will be unduly prejudiced by the imposition
of a stay. “[T]he delay inherent to the reexamination process does not constitute, by itself,
4

undue prejudice.” CCP Sys. AG v. Samsung Elecs. Corp., Ltd., No. 09-CV-4354 DMC-JAD,
2010 WL 5080570, at *3 (D.N.J. Dec. 7, 2010) (quoting Photoflex Products, Inc. v. Circa 3
LLC, No. C04-03715JSW, 2006 WL 1440363, at *2 (N.D. Cal. May 24, 1996)). Further, the
court notes that ClearPlay has not sought preliminary injunctive relief in this case. “Many
courts have found . . . that attempts by a patentee to argue undue prejudice are undermined if
the patentee has elected not to pursue preliminary injunctive relief.” Zillow, Inc. v. Trulia, Inc.,
No. C12-1549JLR, 2013 WL 5530573, at *6 (W.D. Wash. Oct. 7, 2013) (citing Ever Win
Intern. Corp. v. Radioshack Corp., 902 F. Supp. 2d 503, 511 (D. Del. 2012)). Thus,
ClearPlay’s “prior lack of urgency in this matter belies [any] insistence that the litigation move
forward with all dispatch now.” See id. at *7 (quoting Pacific Bioscience Labs., Inc. v. Pretika
Corp., 760 F. Supp. 2d 1061, 1067 (W.D. Wash. 2011)). While ClearPlay may suffer some
prejudice through the imposition of a stay, the court does not consider that prejudice to be
undue.
The court is also not persuaded that DISH would gain any tactical advantage by the
imposition of a stay pending resolution of reexamination proceedings. While ClearPlay argues
that DISH could have challenged ClearPlay’s claims sooner based on at least one of the prior
art references known to DISH since 2017 (ECF 342 at 4), DISH argues that it could not have
requested reexamination of all asserted claims until it discovered the two new references that
prompted the reexamination requests in June and July 2020 (ECF 343 at 6). Given those facts,
the court is not persuaded that DISH is seeking to gain a tactical advantage through seeking a
stay of this case pending resolution of the reexamination proceedings. The court therefore
concludes that this factor also weighs in favor of a stay.

5

D.

Timeliness

Local Patent Rule 3.5 provides that “[a]bsent exceptional circumstances, no party may
file a motion to stay the lawsuit pending reexamination . . . in the [USPTO] after the due date for
service of the Final Non-infringement Contentions[.]” ClearPlay argues that even if the above
factors favor a stay, the court should deny the Motion as untimely because it was filed over three
years after the deadline for final non-infringement contentions, and DISH cannot show
exceptional circumstances to justify the delay (ECF 342 at 3–4). DISH responds that the
circumstances in this case are exceptional because (1) the USPTO ordered reexamination of all
asserted claims, and (2) the USPTO will likely resolve “inconsistent validity and infringement
arguments” made by ClearPlay (ECF 343 at 1). 1
The court agrees that DISH’s three-year delay in requesting reexamination proceedings is
significant. However, as explained above, DISH filed its requests for reexamination of all of
ClearPlay’s asserted claims soon after its discovery of two of the references forming the basis of
these requests and could not have filed these plenary requests until making this discovery. More
importantly, the court agrees that the USPTO’s decision to reexamine all the claims in this case
renders the circumstances here exceptional because of the greater likelihood of reexamination
proceedings nearing this case towards its complete resolution. Considering these facts, the court
concludes that DISH has demonstrated exceptional circumstances justifying its delay in seeking
reexamination proceedings.

The court does not find that alleged inconsistencies in ClearPlay’s arguments have any bearing on the timeliness
issue because this circumstance would not rise to the level of exceptional. However, the court notes that DISH’s
arguments in this regard further bolster the need for a stay pending reexamination proceedings to simplify the issues
in this case.

1

6

III.

CONCLUSION AND ORDER

After consideration of the relevant factors, the court concludes that a stay of this action is
appropriate pending the resolution of reexamination proceedings. Accordingly, IT IS HEREBY
ORDERED that:
1.

Defendants’ Motion to Stay (ECF 341) is GRANTED;

2.

This action is STAYED pending resolution of reexamination proceedings;

and
3.

The parties must notify the court within five (5) days of completion of

reexamination proceedings at the USTPO, and if needed, request a lift of the stay.
IT IS SO ORDERED.
DATED this 18 June 2021.

Magistrate Judge Cecilia M. Romero
United States District Court for the District of Utah

7