Corel Software v. Microsoft

Filing 271

MEMORANDUM DECISION AND ORDER granting 230 Microsofts Motion to Stay. This action is STAYED pending resolution of the Reexamination with the United States Patent and Trademark Office. Signed by Magistrate Judge Paul M. Warner on 5/14/2019. (jds)

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

COREL SOFTWARE, LLC,

MEMORANDUM DECISION
AND ORDER

Plaintiff,
Case No. 2:15-cv-00528-JNP-PMW
v.
MICROSOFT CORPORATION,
Defendant.

District Judge Jill N. Parrish
Chief Magistrate Judge Paul M. Warner

District Judge Jill N. Parrish referred this case to Chief Magistrate Judge Paul M. Warner
pursuant to 28 U.S.C. § 636(b)(1)(A). 1 Before the court is Defendant Microsoft Corporation’s
(“Microsoft”) motion to stay this action. 2 The court has carefully reviewed the written
memoranda submitted by the parties. Pursuant to Civil Rule 7-1(f) of the Rules of Practice for
the United States District Court for the District of Utah, the court has concluded that oral
argument is not necessary and will decide the motion on the basis of the written memoranda. See
DUCivR 7-1(f).
RELEVANT BACKGROUND
On February 20, 2019, Microsoft filed a request for ex parte reexamination
(“Reexamination”) with the United States Patent and Trademark Office (“USPTO”), challenging
the validity of the two asserted claims (5 and 18) of U.S. Patent No. 8,700,996 (“996 Patent”).

1

See docket no. 25.

2

See docket no. 230.

The 996 Patent is one of the three related patents that are the subject of this infringement action.
On April 8, 2019, Microsoft filed a notice with the court indicating that the USPTO has decided
to conduct the Reexamination. 3
In the motion before the court, Microsoft seeks a stay of this action pending the
resolution of the Reexamination. Plaintiff Corel Software, LLC (“Corel”) opposes Microsoft’s
motion.
ANALYSIS
“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)
(footnote and citation omitted). 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.” Pool Cover Specialists Nat’l, Inc. v. Cover-Pools Inc.,
No. 2:08CV879DAK, 2009 WL 2999036, at *1 (D. Utah Sept. 18, 2009).
I.

Simplification of the Issues
Microsoft argues that the Reexamination will likely result in cancellation of claims 5 and

18 of the 996 Patent, thereby streamlining this case. Corel contends that Microsoft’s argument is
speculative, and that the Reexamination likely will not simplify this case.

3

See docket no. 245.
2

Given that the USPTO has decided to conduct the Reexamination, the court concludes
that the Reexamination has at least the potential to simplify the issues in this case. The court
also concludes that allowing this case to proceed while the Reexamination takes place,
particularly if the Reexamination results in cancellation of claims 5 and 18 of the 996 Patent,
could complicate the issues before the court, require reconsideration of certain issues, and result
in piecemeal litigation. Furthermore, “‘even if the reexamination [does] not lead to claim
amendment or cancellation, it could still provide valuable analysis to the district court.’” Id. at
*2 (quoting Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1428 (Fed. Cir. 1989)).
“Courts 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)). Under that liberal
policy, and considering the interests of judicial economy, the court concludes that this factor
weighs in favor of a stay.
II.

Status of the Action
When this court previously imposed a stay in this case, the court considered this factor

and concluded that it weighed in favor of a stay. 4 On June 6, 2018, that stay was lifted. 5 Since
the lift of that stay, the parties have moved this case forward to some degree, but there are

4

See docket no. 127.

5

See docket no. 158.
3

substantial proceedings yet to be completed. While the parties have recently begun the claim
construction process and summary judgment proceedings, as when the prior stay was imposed,
no trial date has been set. In short, the court concludes that the status of the case has not changed
substantially since the imposition of the prior stay. Accordingly, the court again concludes that
this factor weighs in favor of a stay. See, e.g., EMSAT Advanced v. T-Mobile USA, Inc., No.
4:08cv00817, 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.”).
III.

Undue Prejudice or Tactical Advantage
The court is not persuaded that Corel will be unduly prejudiced by the imposition of a

stay. As the court noted when imposing the prior stay, “[t]he delay inherent to the reexamination
process does not constitute, by itself, 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) (quotations
and citations omitted) (alteration in original). Furthermore, as the court noted in its prior order
imposing a stay, Corel has not sought 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 cases). Thus, Corel’s “prior lack of
urgency in this matter belies [any] insistence that the litigation move forward with all dispatch

4

now.” Id. at *7 (quotations and citations omitted). While Corel 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 Microsoft would gain any tactical advantage by the
imposition of a stay pending resolution of the Reexamination. While Corel takes issue with the
timing of Microsoft’s decision to challenge claims 5 and 18 of the 996 Patent, Microsoft filed its
reexamination request soon after receiving Corel’s amended final infringement contentions and
before serving its final invalidity contentions. Additionally, Microsoft moved for a stay soon
after filing its reexamination request and made that motion within the deadline provided by this
court’s Local Patent Rules. See L.P.R. 3.5. Finally, while Corel argues that Microsoft could have
challenged claims 5 and 18 of the 996 Patent sooner, it does not appear that Microsoft had any
reason to do so until November 2018, when the court granted Corel’s request for leave to amend
its infringement contentions to assert those claims. 6 Given those facts, the court is not persuaded
that Microsoft is somehow seeking to gain a tactical advantage through seeking a stay of this
case pending resolution of the Reexamination.
CONCLUSION AND ORDER
After consideration of the relevant factors, the court concludes that a stay of this action is
appropriate pending the resolution of the Reexamination. Accordingly, IT IS HEREBY
ORDERED:
1.

Microsoft’s motion to stay this action 7 is GRANTED.

6

See docket no. 205.

7

See docket no. 230.
5

2.

This action is STAYED pending resolution of the Reexamination.

IT IS SO ORDERED.
DATED this 14th day of May, 2019.
BY THE COURT:

PAUL M. WARNER
Chief United States Magistrate Judge

6