Interval Licensing LLC v. AOL, Inc. et al

Filing 254

MOTION for Reconsideration re (13 in 2:11-cv-00717-MJP, 13 in 2:11-cv-00717-MJP, 13 in 2:11-cv-00708-MJP, 13 in 2:11-cv-00708-MJP, 253 in 2:10-cv-01385-MJP, 253 in 2:10-cv-01385-MJP, 11 in 2:11-cv-00713-MJP, 11 in 2:11-cv-00713-MJP, 11 in 2:11-cv-00710-MJP, 11 in 2:11-cv-00710-MJP, 10 in 2:11-cv-00714-MJP, 10 in 2:11-cv-00714-MJP, 15 in 2:11-cv-00711-MJP, 15 in 2:11-cv-00711-MJP, 11 in 2:11-cv-00712-MJP, 11 in 2:11-cv-00712-MJP, 11 in 2:11-cv-00715-MJP, 11 in 2:11-cv-00715-MJP, 11 in 2:11-cv-00709-MJP, 11 in 2:11-cv-00709-MJP, 14 in 2:11-cv-00716-MJP, 14 in 2:11-cv-00716-MJP) Order on Motion to Stay, Case Stayed,,,, by Plaintiffs Interval Licensing LLC, Interval Licensing LLC, Interval Licensing LLC, Interval Licensing LLC, Interval Licensing LLC, Interval Licensing LLC, Interval Licensing LLC, Interval Licensing LLC, Interval Licensing LLC, Interval Licensing LLC, Interval Licensing LLC. (Attachments: #1 Proposed Order)(Nelson, Justin)

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Hon. Marsha J. Pechman

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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INTERVAL LICENSING LLC,
Plaintiff,

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v.

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AOL, INC.,
Defendant.

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INTERVAL LICENSING LLC,
Plaintiff,
v.

Case No. 2:10-cv-01385-MJP
INTERVAL’S MOTION FOR
RECONSIDERATION OF
COURT’S ORDER GRANTING
MOTIONS TO STAY
Note on Motion Calendar:
June 24, 2011
Case No. 2:11-cv-00708 MJP
Lead Case No. 2:10-cv-01385-MJP

APPLE, INC.,
Defendant.
INTERVAL LICENSING LLC,
Plaintiff,
v.

Case No. 2:11-cv-00709 MJP
Lead Case No. 2:10-cv-01385-MJP

EBAY, INC.,
Defendant.
INTERVAL LICENSING LLC,
Plaintiff,
v.

Case No. 2:11-cv-00710 MJP
Lead Case No. 2:10-cv-01385-MJP

FACEBOOK, INC.,
Defendant.
MOTION FOR RECONSIDERATION RE ORDER GRANTING
MOTIONS TO STAY
Case No. 2:10-cv-01385-MJP

Susman Godfrey LLP
1201 Third Avenue, Suite 3800
Seattle WA 98101-3000

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INTERVAL LICENSING LLC,

GOOGLE, INC.,
Defendant.
INTERVAL LICENSING LLC,

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NETFLIX, INC.,
Defendant.
INTERVAL LICENSING LLC,

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OFFICE DEPOT INC.,
Defendant.
INTERVAL LICENSING LLC,

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OFFICEMAX INC.,
Defendant.
INTERVAL LICENSING LLC,

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Case No. 2:11-cv-00715 MJP

Plaintiff,

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Lead Case No. 2:10-cv-01385-MJP

v.

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Case No. 2:11-cv-00714 MJP

Plaintiff,

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Lead Case No. 2:10-cv-01385-MJP

v.

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Case No. 2:11-cv-00713 MJP

Plaintiff,

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Lead Case No. 2:10-cv-01385-MJP

v.

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Case No. 2:11-cv-00712 MJP

Plaintiff,

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Lead Case No. 2:10-cv-01385-MJP

v.

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Case No. 2:11-cv-00711 MJP

Plaintiff,

Lead Case No. 2:10-cv-01385-MJP

v.
STAPLES INC.,
Defendant.

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MOTION FOR RECONSIDERATION RE ORDER GRANTING
MOTIONS TO STAY
Case No. 2:10-cv-01385-MJP

Susman Godfrey LLP
1201 Third Avenue, Suite 3800
Seattle WA 98101-3000

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INTERVAL LICENSING LLC,

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Case No. 2:11-cv-00716 MJP

Plaintiff,

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Lead Case No. 2:10-cv-01385-MJP

v.
YAHOO! INC.,

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Defendant.
INTERVAL LICENSING LLC,

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Case No. 2:11-cv-00717 MJP

Plaintiff,

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Lead Case No. 2:10-cv-01385-MJP

v.
YOUTUBE LLC,

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Defendant.

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Interval respectfully requests that the Court reconsider its Order staying these eleven

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actions (Dkt. # 253; the “Stay Order”). Defendants filed their Motions to Stay on March 17,

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2011—within one day of filing their requests for reexaminations with the Patent and Trademark

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Office (“PTO”). (Dkt. # 198) In the intervening three months since the parties briefed the

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Motions to Stay, the parties have undertaken an incredible amount of work, most of which will be

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of limited value should this action be stayed.

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defendants’ arguments and references in granting the requests for reexamination, which further

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supports Interval’s position that the reexaminations will not simplify the issues in these actions.

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In addition, the PTO rejected a number of

To the contrary, the parties will be back before the Court one, two, or six years from now most
likely litigating the exact same issues that are now before the Court.
These new facts warrant reconsideration, and demonstrate that staying these actions is

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counterproductive and inconsistent with Federal Rule of Civil Procedure 1, mandating that the

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Federal Rules “[b]e construed and administered to secure the just, speedy, and inexpensive

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determination of every action and proceeding.”

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MOTION FOR RECONSIDERATION RE ORDER GRANTING
MOTIONS TO STAY
Case No. 2:10-cv-01385-MJP

Susman Godfrey LLP
1201 Third Avenue, Suite 3800
Seattle WA 98101-3000

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A.

The Parties Have Completed Significant Additional Work Since Filing Their Briefs
In March

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The Court issued the Stay Order at 5:15 pm on the day that the parties’ Markman briefs

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were due. Pursuant to the scheduling order, Interval and Defendants were each to submit briefs

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not to exceed 40 pages for each of the two tracks, for a total of 160 pages of briefing. When the

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Court issued its order, the parties had already completed these briefs and were in the process of

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filing them. Indeed, Interval had already filed its Markman brief on the ‘652/’314 track when the
Court issued the Stay Order. Interval’s counsel, alone, spent hundreds of hours preparing and
finalizing Interval’s Markman briefs. Counsel for the eleven defendants likely spent at least that

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much time preparing defendants’ briefs, especially considering that 50 lawyers have entered

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appearances on behalf of defendants.

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In addition to the Markman briefs, the parties spent hundreds of hours completing the

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tasks leading up to the Markman briefs, including submitting a prehearing statement and joint

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claim charts that exceeded 150 pages. During that process, the parties met and conferred for

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hours in an attempt to reach compromise and narrow the issues to present to the Court for

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resolution. If the actions are stayed, then at least one of the twelve parties will no doubt use the

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delay as a justification to reject compromises already reached during this process.

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The parties have also completed an extraordinary amount of discovery since March,

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especially with respect to the production and review of defendants’ source code. When the

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parties submitted their briefs on the Motions to Stay in March, not a single defendant had
produced source code.

Since that time, every defendant has produced code that, together,

amounts to hundreds of thousands of lines of code.

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By its nature, the review of source code is incredibly expensive and time consuming.

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First, Interval retained seven experts to review defendants’ source code. Second, the reviews

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MOTION FOR RECONSIDERATION RE ORDER GRANTING
MOTIONS TO STAY
Case No. 2:10-cv-01385-MJP

Susman Godfrey LLP
1201 Third Avenue, Suite 3800
Seattle WA 98101-3000

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have been conducted at the offices of defendants’ outside counsel throughout the United States,

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including Chicago, Virginia, Palo Alto, San Francisco, and Portland. Third, the code reviews are

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conducted in accordance with seven pages of stringent source code review protocols set forth in ¶
11 of the protective order (Dkt. # 222). These protocols limit the number of pages that Interval’s
experts can print and limit the nature of the notes that Interval’s experts can take. These two

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limitations together make it likely that much of the source code review will have to be repeated

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after the stay is lifted because of the difficulty for Interval’s experts to pickup where they left off

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years earlier because of the lack of comprehensive notes and printed source code.

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In addition, because defendants designated their source code highly confidential under the
protective order, each of Interval’s seven experts had to sign Exhibit A to the protective order
before gaining access to the code. By signing Exhibit A and reviewing the code, the experts are
now subject to the patent prosecution bar in ¶ 6(b) of the protective order (Dkt. # 222). Pursuant
to the prosecution bar, the experts

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shall not prosecute, supervise, or assist in the prosecution of any
patent application involving technology related to software for
recommending information to a user or other information filtering
techniques aimed at notifying users of items that are likely to be of
interest to that user or software directed to the engagement of the
peripheral attention of a person in the vicinity of a display device,
before any foreign or domestic agency, including the United States
Patent and Trademark Office.

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This bar remains in place until one year after the final resolution of this action. Accordingly, the

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Stay Order has the effect of extending the prosecution bar for these seven experts, likely for
years. This places an undue burden on the experts’ ability to pursue future engagements.
These new facts warrant the reconsideration of the Court’s Stay Order.

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MOTION FOR RECONSIDERATION RE ORDER GRANTING
MOTIONS TO STAY
Case No. 2:10-cv-01385-MJP

Susman Godfrey LLP
1201 Third Avenue, Suite 3800
Seattle WA 98101-3000

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B.

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In Granting The Requests For Reexaminations, The PTO Rejected A Number Of
Defendants’ Arguments And References

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The Stay Order noted that “Defendants have presented a substantial body of prior art that

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they believe will reshape the four patents at issue in this litigation.” Order at 2. That is not

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entirely accurate because the PTO already rejected a number of those references in granting the

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reexaminations and instead focused on a single reference in granting most of the reexaminations.

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First, in granting reexamination of the ‘314 patent, the examiner declined to reject any
claims based on the Rakavy reference. Instead, the grant of reexamination was premised on a
single primary reference—Kjorsvik.

In addition, the examiner refused to adopt any of the

rejections defendants proposed in their request. (Dkt. # 247-5)
Second, in granting the reexamination of the ‘652 patent, the examiner mentioned only

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one of the references that defendants identified (Petrecca).

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precluded from relying on the other references, the failure even to mention those references in

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Although the examiner is not

granting the reexamination suggests that the examiner discounted defendants’ arguments. (Dkt. #

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247-4)

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Third, the PTO issued an office action concerning the ‘682 patent. In that office action,

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the examiner refused to adopt any of the rejections defendants proposed in their request. Indeed,

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the office action rejected the claims over a single reference—Bezos. (Dkt. # 247-2)

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Fourth, in granting reexamination of the ‘507 patent, the examiner did not mention four of
the references that defendants identified (Joachims, Chesnais, Iwayama, and Yuasa). Again, the
examiner is not precluded from later relying on those references, but the failure to mention them
suggests that the examiner discounts defendants’ arguments. (Dkt. # 247-1)

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In addition, the reexaminations will not simplify the issues for Markman or trial because

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none of the requests for reexamination were joined by all of the defendants who are accused of

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MOTION FOR RECONSIDERATION RE ORDER GRANTING
MOTIONS TO STAY
Case No. 2:10-cv-01385-MJP

Susman Godfrey LLP
1201 Third Avenue, Suite 3800
Seattle WA 98101-3000

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infringing that patent. Defendants undoubtedly will argue when these patents emerge from re-

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examination that at least one of the defendants can still raise all of the arguments now before the

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PTO no matter the result of the reexamination.1 Such tactics reek of gamesmanship and leave

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little doubt that the parties will be in the exact same position as they are now after the
reexaminations are completed years down the road.

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For good reason, courts throughout the country, including other judges in this District and

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in the Federal Circuit, have expressed increasing reluctance to stay cases during the re-

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examination process. It is routine for patents to be involved both in litigation and re-examination

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proceedings at the same time.

Interval can only enforce its patents through litigation, and

delaying that process by as much as a few years is substantially prejudicial to Interval.
Defendants, on the other hand, will not be prejudiced at all by moving forward in a timely fashion
in an Article III court.
CONCLUSION

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Interval respectfully requests that this Court reconsider its Order staying these actions.

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The parties already have spent incredible amounts of time of money getting these eleven actions

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to the brink of the Markman hearing and within six months of the end of fact discovery. Much of
the benefit of this work will be lost after a stay. This Court should deny the stay and keep these
actions on schedule to be heard by a jury next summer. Because the opening Markman briefs are

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complete, Interval has no objection to moving the Markman hearing to a date later in the summer,

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with a corresponding change in the discovery dates.

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Interval will vigorously oppose any attempt by a defendant to argue that it is not bound by a
particular reexamination because it did not joint in the request.
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MOTION FOR RECONSIDERATION RE ORDER GRANTING
MOTIONS TO STAY
Case No. 2:10-cv-01385-MJP

Susman Godfrey LLP
1201 Third Avenue, Suite 3800
Seattle WA 98101-3000

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Dated: June 24, 2011

Respectfully submitted,

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/s/ Justin A. Nelson
Justin A. Nelson
WA Bar No. 31864
E-Mail: [e-mail]
Edgar G. Sargent
WA Bar No. 28283
E-Mail: [e-mail]
Matthew R. Berry
WA Bar No. 37364
E-Mail: [e-mail]
SUSMAN GODFREY L.L.P.
1201 Third Ave, Suite 3800
Seattle, WA 98101
Telephone: [phone]
Facsimile: [phone]
Max L. Tribble, Jr.
E-Mail: [e-mail]
SUSMAN GODFREY L.L.P.
1000 Louisiana Street, Suite 5100
Houston, Texas 77002
Telephone: [phone]
Facsimile: [phone]
Oleg Elkhunovich
E-Mail: [e-mail]
SUSMAN GODFREY L.L.P.
1901 Avenue of the Stars, Suite 950
Los Angeles, California 90067
Telephone: [phone]
Facsimile: [phone]
Michael F. Heim
E-mail: [e-mail]
Eric J. Enger
E-mail: [e-mail]
Nathan J. Davis
E-mail: [e-mail]
Niraj P. Patel
E-mail: [e-mail]
HEIM, PAYNE & CHORUSH, L.L.P.
600 Travis, Suite 6710
Houston, Texas 77002
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MOTION FOR RECONSIDERATION RE ORDER GRANTING
MOTIONS TO STAY
Case No. 2:10-cv-01385-MJP

Susman Godfrey LLP
1201 Third Avenue, Suite 3800
Seattle WA 98101-3000

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Telephone: [phone]
Facsimile: [phone]
Attorneys for INTERVAL LICENSING LLC

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MOTION FOR RECONSIDERATION RE ORDER GRANTING
MOTIONS TO STAY
Case No. 2:10-cv-01385-MJP

Susman Godfrey LLP
1201 Third Avenue, Suite 3800
Seattle WA 98101-3000

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CERTIFICATE OF SERVICE

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I hereby certify that on June 24, 2011, I electronically filed the foregoing with the Clerk of
the Court using the CM/ECF system which will send notification of such filing to the following
counsel of record:

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Attorneys for AOL, Inc.
Cortney Alexander
Robert Burns
Elliot Cook
Gerald Ivey
Scott Johnson
Molly Terwilliger

[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Attorneys for Apple, Inc.
David Almeling
Brian Berliner
George Riley
Jeremy Roller
Scott Wilsdon
Neil Yang
Xin-Yi Zhou

[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Attorneys for eBay, Inc.
Chris Carraway
Kristin Cleveland
Klaus Hamm
Arthur Harrigan, Jr.
Jeffrey Love
Derrick Toddy
John Vandenberg
Christopher Wion

[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Attorneys for Facebook, Inc.
Chris Durbin
Heidi Keefe
Sudhir Pala
Michael Rhodes
Elizabeth Stameshkin
Mark Weinstein

[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Attorneys for Google, Inc.
Aaron Chase
Dimitrios Drivas
John Handy
Warren Heit

[e-mail]
[e-mail]
[e-mail]
[e-mail]

MOTION FOR RECONSIDERATION RE ORDER GRANTING
MOTIONS TO STAY
Case No. 2:10-cv-01385-MJP

Susman Godfrey LLP
1201 Third Avenue, Suite 3800
Seattle WA 98101-3000

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Scott Johnson
Shannon Jost
Kevin McGann
Wendi Schepler
Theresa Wang

[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Attorneys for Netflix, Inc.
Chris Carraway
Kristin Cleveland
Klaus Hamm
Arthur Harrigan, Jr.
Jeffrey Love
Derreck Toddy
John Vandenberg

[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Attorneys for Office Depot, Inc.
Chris Carraway
Kristin Cleveland
Klaus Hamm
Arthur Harrigan, Jr.
Jeffrey Love
Derreck Toddy
John Vandenberg

[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Attorneys for OfficeMax, Inc.
Kevin Baumgardner
Steven Fogg
John Letchinger
Jeffrey Neumeyer
Douglas Rupert

[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Attorneys for Staples, Inc.
Chris Carraway
Kristin Cleveland
Klaus Hamm
Arthur Harrigan, Jr.
Jeffrey Love
Derrick Toddy
John Vandenberg

[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Attorneys for Yahoo! Inc.
Francis Ho
Richard S.J. Hung
Michael Jacobs
Matthew Kreeger
Dario Machleidt
Eric Ow

[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
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MOTION FOR RECONSIDERATION RE ORDER GRANTING
MOTIONS TO STAY
Case No. 2:10-cv-01385-MJP

Susman Godfrey, LLP
1201 Third Avenue, Suite 3800
Seattle WA 98101-3000

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Mark Walters
Gregory Wesner

[e-mail]
[e-mail]

Attorneys for YouTube, LLC
Aaron Chase
Dimitrios Drivas
John Handy
Warren Heit
Scott Johnson
Shannon Jost
Kevin McGann
Wendi Schepler
Theresa Wang

[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
By: _/s/ Tammie DeNio___________
Tammie DeNio

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MOTION FOR RECONSIDERATION RE ORDER GRANTING
MOTIONS TO STAY
Case No. 2:10-cv-01385-MJP

Susman Godfrey, LLP
1201 Third Avenue, Suite 3800
Seattle WA 98101-3000