Interval Licensing LLC v. AOL, Inc. et al

Filing 256

RESPONSE RE #254 MOTION for Reconsideration, by Defendants AOL Inc, Apple Inc, Facebook Inc, Google Inc, Netflix Inc, Office Depot Inc, OfficeMax Inc, Staples Inc, Yahoo! Inc, YouTube LLC, eBay Inc, (Jost, Shannon) Modified on 7/5/2011: added link to motion (HBR).

HONORABLE MARSHA J. PECHMAN

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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INTERVAL LICENSING LLC,
CASE NO. C10-1385-MJP

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Plaintiff,

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v.

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AOL, INC.,

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DEFENDANTS’ JOINT RESPONSE TO
PLAINTIFF’S MOTION FOR
RECONSIDERATION OF ORDER
STAYING CASES PENDING
REEXAMINATION

Defendant.

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Note on Motion Calendar: July 5, 2011

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INTERVAL LICENSING LLC,
CASE NO. C11-708-MJP

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Plaintiff,

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v.

LEAD CASE NO. C10-1385-MJP
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APPLE, INC.,

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Defendant.

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INTERVAL LICENSING LLC,
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CASE NO. C11-709-MJP
Plaintiff,

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LEAD CASE NO. C10-1385-MJP
v.

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EBAY INC.,
Defendant.

DEFENDANTS’ JOINT RESPONSE TO PLAINTIFF’S
MOTION FOR RECONSIDERATION
(LEAD CASE NO. C10-1385-MJP)

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000
SEATTLE, WASHINGTON 98104-3179
[phone]

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INTERVAL LICENSING LLC,
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CASE NO. C11-710-MJP
Plaintiff,
LEAD CASE NO. C10-1385-MJP
v.

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FACEBOOK, INC.,
Defendant.
INTERVAL LICENSING LLC,
CASE NO. C11-711-MJP

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Plaintiff,
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LEAD CASE NO. C10-1385-MJP
v.

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GOOGLE INC.,
Defendant.
INTERVAL LICENSING LLC,
CASE NO. C11-712-MJP
Plaintiff,
LEAD CASE NO. C10-1385-MJP

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v.

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NETFLIX, INC.,
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Defendant.
INTERVAL LICENSING LLC,
CASE NO. C11-713-MJP

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Plaintiff,

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v.

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LEAD CASE NO. C10-1385-MJP

OFFICE DEPOT, INC.,
Defendant.

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DEFENDANTS’ JOINT RESPONSE TO PLAINTIFF’S
MOTION FOR RECONSIDERATION
(LEAD CASE NO. C10-1385-MJP)

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000
SEATTLE, WASHINGTON 98104-3179
[phone]

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INTERVAL LICENSING LLC,
CASE NO. C11-714-MJP
Plaintiff,
LEAD CASE NO. C10-1385-MJP

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v.

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OFFICEMAX, INC.,
Defendant.
INTERVAL LICENSING LLC,
Plaintiff,

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CASE NO. C11-715-MJP
LEAD CASE NO. C10-1385-MJP

v.

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STAPLES, INC.,
Defendant.
INTERVAL LICENSING LLC,
CASE NO. C11-716-MJP

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Plaintiff,
LEAD CASE NO. C10-1385-MJP

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v.
YAHOO! INC.,

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Defendant.
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INTERVAL LICENSING LLC,
CASE NO. C11-717-MJP

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Plaintiff,

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v.

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LEAD CASE NO. C10-1385-MJP

YOUTUBE, LLC,
Defendant.

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DEFENDANTS’ JOINT RESPONSE TO PLAINTIFF’S
MOTION FOR RECONSIDERATION
(LEAD CASE NO. C10-1385-MJP)

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000
SEATTLE, WASHINGTON 98104-3179
[phone]

Pursuant to the Court’s Minute Order dated June 29, 2011 (Dkt. 255), Defendants

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respectfully file this joint response to Plaintiff’s motion for reconsideration. (Dkt. 254.)

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Plaintiff’s motion should be denied because Plaintiff has not presented a proper basis for

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reconsideration of the Court’s order staying this action. The Court’s order was correct and based

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on a reasoned analysis. Plaintiff does not identify any error, let alone any “manifest error,” in the

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Court’s reasoning or analysis. The Court considered the same three factors used by district

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courts throughout the United States (factors not disputed by Interval), and properly granted a stay

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in this case following the PTO’s decision to order reexamination of all four patents-in-suit. (Dkt.

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251.) Plaintiff does not identify new legal authority to alter that outcome, and Plaintiff’s

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purported “new facts” are neither new nor provide a basis to alter the Court’s Order.

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I.

Legal Standard for Motions for Reconsideration
“Motions for reconsideration are disfavored” and will ordinarily be denied “in the

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absence of manifest error in the prior ruling or a showing of new facts or legal authority which

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could not have been brought to [court’s] attention earlier with reasonable diligence.” L.R.

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7(h)(1); Avocent Redmond Corp. v. Rose Elecs., Inc., No. C 06-1711 MJP, 2008 WL 3875869, at

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*1-2 (W.D. Wash. Aug. 18, 2008) (Pechman, J.) (denying motion for reconsideration of order

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staying patent litigation pending reexamination). Failure to “point out with specificity the

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matters which the movant believes were overlooked or misapprehended by the court [and] any

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new matters being brought to the court’s attention for the first time” may be grounds for denial

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of the motion. L.R. 7(h)(2). Interval’s motion does not meet these requirements for

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reconsideration.

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II.

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Interval Fails To Identify Any New Facts, New Legal Authority or Manifest Error
Interval’s argument that a stay would be inappropriate given its allegedly significant

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investment in the litigation is not a basis for reconsideration. As reflected in the Order, the Court

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considered the current stage of the litigation and that the parties were about to submit claim

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construction briefs and argue claim construction. (Dkt. 251 at 2:2-4, 2:16-3:1.) The Court

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specifically rejected the argument that work done on the case to date would be wasted. (Id. at

DEFENDANTS’ JOINT RESPONSE TO
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PLAINTIFF’S MOTION FOR RECONSIDERATION
(LEAD CASE NO. C10-1385-MJP)

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000
SEATTLE, WASHINGTON 98104-3179
[phone]

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2:22-3:1.) Moreover, the “work” Plaintiff claims to have done is typical of patent litigation,

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certainly could have been (and was) raised by Plaintiff earlier, and was consistent with the

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Scheduling Order in place during the original briefing on the Motion to Stay.

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Interval has made no credible showing that any of the work of its experts would be

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“wasted,” and its argument provides no basis for reconsideration. The Protective Order

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expressly allows Interval’s experts to memorialize the results of their analysis by taking notes

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and printing out portions of the Defendants’ source code to the extent necessary to prepare expert

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reports or infringement contentions. (Dkt. 222, at 15:16-20, 15:24-26.) Interval’s experts could

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simply pick up where they left off in the unlikely event the patents-in-suit survive reexamination

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in their current form. None of the purportedly “additional work” identified by Plaintiff (Dkt. 255

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at 4:1-5:25) was unexpected or unknown to Interval when it opposed the Defendants’ initial

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motion or when it filed a further opposition on June 7, 2011. (Dkt. 246.)

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Interval’s allegedly wasted effort pales in comparison to the enormous waste of judicial

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resources that might have resulted had the Court proceeded with claim construction while all

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four patents-in-suit are under reexamination. Claim construction would waste the Court’s and

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parties’ time and resources if even one of the following events takes place: (1) the claims do not

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survive reexamination, (2) the claims are amended, or (3) Interval makes arguments to the Patent

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Office attempting to distinguish its purported inventions from the prior art. (Dkt. 198 at 6:15-

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8:13, 11:5-12:2; Dkt. 211 at 4:14-5:15.) The Court’s Order came just in time to eliminate this

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potential waste by saving the Court and the parties from investing further resources in claim

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construction and the work that would follow.

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Interval does not dispute that the PTO has issued Office Actions rejecting nearly all of the

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asserted claims (29 of 31 claims rejected) of two of the patents-in-suit. (Dkt. 247-2 at p. 26

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(rejecting 14 of 16 claims at issue in ’682 patent); Dkt. 247-5 at p. 15 (rejecting all 15 claims at

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issue in the ’314 patent).) Interval is now obligated to concede the invalidity of those claims,

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amend them, or make arguments to the PTO as to their validity that will necessarily affect claim

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scope. See, e.g., Vitronics Corp. v. Conceptronic, Inc., 36 F. Supp. 2d 440, 442 (D.N.H. 1997)

DEFENDANTS’ JOINT RESPONSE TO
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PLAINTIFF’S MOTION FOR RECONSIDERATION
(LEAD CASE NO. C10-1385-MJP)

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000
SEATTLE, WASHINGTON 98104-3179
[phone]

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(“Because determining the scope of the disputed claim is central to the resolution of this case, it

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would be inefficient for the court to expend time and resources engaging in claim interpretation

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while the scope of the claim is still under review at the PTO.”). Nor does Interval dispute that

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the PTO has also ordered a reexamination of all asserted claims of the other two patents-in-suit

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(the ’507 and ’652 patents). Interval’s re-argument that certain defendants joined particular

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petitions (Dkt. 206, at p. 6) misses the point. The proper construction of the patents-in-suit

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necessarily affects all defendants, and there is no doubt that the intrinsic record that the Court

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must consult to construe those patents will change as a result of the ongoing reexaminations.

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The first argument in the only claim construction brief Interval filed (for the ’652/’314

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patents) is an example of the reasons that a stay was appropriate here. In that claim construction

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brief, Interval argued that the asserted claims of the ’314 patent do not cover the screen saver

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embodiment disclosed in the specification. (Dkt. 251, at pp. 4-5.) In ordering reexamination and

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rejecting the ’314 patent claims over Kjorsvik’s disclosure of a screen saver, the Examiner

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appears to have reached exactly the opposite conclusion. (Dkt. 247-5 at p. 7.) Thus, contrary to

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Interval’s arguments (which it could have raised before), the PTO’s actions confirm that

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pursuing litigation while the intrinsic record remains in flux is certain to waste judicial and party

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resources.

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Interval’s assertion that the Patent Office has not adopted the Defendants’ invalidity

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proposals is misleading. All four orders granting reexamination and the two Office Actions

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issued to date rely exclusively on the prior art cited in the reexamination requests. That the

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Examiner used somewhat different grounds for the rejections does not change the fact that the

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claims were rejected, or that Interval is now obligated to respond to those rejections. Interval’s

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related contention that the Examiner used only a subset of the prior art identified in the

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reexamination requests is also irrelevant, and Interval concedes that the Examiner is free to use

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that art later in the reexaminations. (Dkt. 254, at 6:13-14, 6:22-24.)

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Interval’s argument that the stay imposes an undue burden on its experts due to their
continuing obligations under the Protective Order is not a “new” fact and has no bearing here.

DEFENDANTS’ JOINT RESPONSE TO
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PLAINTIFF’S MOTION FOR RECONSIDERATION
(LEAD CASE NO. C10-1385-MJP)

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000
SEATTLE, WASHINGTON 98104-3179
[phone]

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Interval has been on notice that Defendants were likely to pursue reexamination since the parties

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submitted their first Joint Status Report. Interval’s experts voluntarily undertook paid positions

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knowing that there would be restrictions on their participation in patent prosecution matters

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going forward, and they knew that there were no guarantees as to how long those obligations

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would continue. In fact, the Protective Order makes clear that the prosecution bar does not

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expire until a full year “after the final resolution of this action, including all appeals.” (Dkt. 222,

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at 5:24-6:1.) Interval has not approached any defendant seeking release from these provisions,

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nor has it explained why relief as to a particular individual is presently required.

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Finally Interval’s suggestion of a recent trend denying stays pending reexamination

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despite the resulting waste of judicial resources and prejudice to defendants is unsupported and

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raises no new facts or law. In their original moving papers, Defendants detailed both the

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potential for undue prejudice to the Defendants and the inaccuracy of Interval’s argument about

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any “trend” to deny stay motions. (Dkt. 198 at 10:27-12:2; Dkt. 211 at 5:16- 6:24 and 2:20-

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3:19.) Further, upon a brief review, Defendants have identified several new cases confirming

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that district courts continue to routinely grant stays pending reexamination. See, e.g., Ohio

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Willow Wood Co. v. Alps South LLC, No. 2:05–cv–1039, 2011 WL 2358649, at *5 (D. Ohio June

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9, 2011); LMT Mercer Group, Inc. v. Maine Ornamental, LLC, No. 10–4615, 2011 WL

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2039064, at *13 (D.N.J. May 24, 2011); Microsoft Corp. v. TiVo Inc., No. 10–CV–00240, 2011

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WL 1748428, at *7 (N.D. Cal. May 6, 2011). There simply is no “trend” against granting stays.

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CONCLUSION

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Interval’s request for reconsideration should be summarily denied because it fails to meet

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the requirements for reconsideration. Interval does not identify a manifest error, nor does it

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identify new facts or new legal authority. Moreover, the “facts” Interval does rely upon and the

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arguments it makes were either considered by the Court, confirm the Court’s decision was

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correct – or both. Defendants respectfully request that the Court deny Plaintiff’s motion for

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reconsideration.

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DEFENDANTS’ JOINT RESPONSE TO
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PLAINTIFF’S MOTION FOR RECONSIDERATION
(LEAD CASE NO. C10-1385-MJP)

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000
SEATTLE, WASHINGTON 98104-3179
[phone]

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DATED this 5th day of July, 2011.
/s/Molly A. Terwilliger (with permission)
Gerald F. Ivey (pro hac vice)
[e-mail]
Robert L. Burns (pro hac vice)
[e-mail]
Elliot C. Cook (pro hac vice)
[e-mail]
FINNEGAN, HENDERSON, FARABOW,
GARRETT & DUNNER, LLP
901 New York Avenue, N.W.
Washington, D.C. 20001-4413
Tel: [phone]

Molly A. Terwilliger, WSBA No. 28449
[e-mail]
SUMMIT LAW GROUP PLLC
315 Fifth Avenue S., Suite 1000
Seattle, Washington 98104
Tel: [phone]

Cortney S. Alexander (pro hac vice)
[e-mail]
FINNEGAN, HENDERSON, FARABOW,
GARRETT & DUNNER, LLP
3500 SunTrust Plaza
303 Peachtree Street, NE
Atlanta, Georgia 30308-3263
Tel: [phone]
Attorneys for Defendant AOL Inc.
/s/Scott T. Wilsdon (with permission)
Brian M. Berliner (pro hac vice)
[e-mail]
Xin-Yi Zhou (pro hac vice)
[e-mail]
Neil L. Yang (pro hac vice)
[e-mail]
O’MELVENY & MYERS LLP
400 South Hope Street
Los Angeles, California 90071
Tel: [phone]

Scott T. Wilsdon, WSBA No. 20608
[e-mail]
Jeremy E. Roller, WSBA No. 32021
[e-mail]
YARMUTH WILSDON CALFO PLLC
818 Stewart Street, Suite 1400
Seattle, Washington 98101
Tel: [phone]

George A. Riley (pro hac vice)
[e-mail]
David S. Almeling (pro hac vice)
[e-mail]
O’MELVENY & MYERS LLP
Two Embarcadero Center, 28th Floor
San Francisco, California 94111
Tel: [phone]
Attorneys for Defendant Apple Inc.

DEFENDANTS’ JOINT RESPONSE TO
5
PLAINTIFF’S MOTION FOR RECONSIDERATION
(LEAD CASE NO. C10-1385-MJP)

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000
SEATTLE, WASHINGTON 98104-3179
[phone]

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/s/John D. Vandendberg (with permission)
J. Christopher Carraway, WSBA No. 37944
[e-mail]
Kristin L. Cleveland (pro hac vice)
[e-mail]
Klaus H. Hamm (pro hac vice)
[e-mail]
Derrick W. Toddy (pro hac vice)
[e-mail]
John D. Vandenberg, WSBA No. 38445
[e-mail]
Jeffrey S. Love
[e-mail]
KLARQUIST SPARKMAN, LLP
121 S.W. Salmon Street, Suite 1600
Portland, Oregon 97204
Tel: [phone]

Christopher T. Wion, WSBA No. 33207
[e-mail]
Arthur W. Harrigan, Jr., WSBA No. 1751
[e-mail]
DANIELSON HARRIGAN LEYH &
TOLLEFSON LLP
999 Third Avenue, Suite 4400
Seattle, Washington 98104
Tel: [phone]

Attorneys for Defendants eBay Inc., Netflix, Inc., Office Depot, Inc., and Staples, Inc.

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/s/Christopher B. Durbin (with permission)
Christopher B. Durbin, WSBA No. 41159
[e-mail]
COOLEY LLP
719 Second Avenue, Suite 900
Seattle, Washington 98104
Tel: [phone]

Michael G. Rhodes (pro hac vice)
[e-mail]
COOLEY LLP
101 California St., 5th Floor
San Francisco, California 94111
Tel: [phone]

Heidi L. Keefe (pro hac vice)
[e-mail]
Mark R. Weinstein (pro hac vice)
[e-mail]
Sudhir A. Pala (pro hac vice)
[e-mail]
Elizabeth L. Stameshkin (pro hac vice)
[e-mail]
COOLEY LLP
3175 Hanover St.
Palo Alto, California 94304
Tel: [phone]
Attorneys for Defendant Facebook, Inc.

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DEFENDANTS’ JOINT RESPONSE TO
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PLAINTIFF’S MOTION FOR RECONSIDERATION
(LEAD CASE NO. C10-1385-MJP)

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000
SEATTLE, WASHINGTON 98104-3179
[phone]

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/s/Shannon M. Jost____________________
Shannon M. Jost, WSBA No. 32511
[e-mail]
Scott A.W. Johnson, WSBA No. 15543
[e-mail]
Theresa H. Wang, WSBA No. 39784
[e-mail]
STOKES LAWRENCE, P.S.
800 Fifth Avenue, Suite 4000
Seattle, Washington 98104
Tel: [phone]
Warren S. Heit - [phone]
(pro hac vice)
[e-mail]
Wendi Schepler - [phone]
(pro hac vice)
[e-mail]
WHITE & CASE LLP
3000 El Camino Real
Building 5, 9th Floor
Palo Alto, California 94306

Kevin X. McGann - [phone]
(pro hac vice)
[e-mail]
Dimitrios T. Drivas - [phone]
(pro hac vice)
[e-mail]
John Handy - [phone] (pro hac vice)
[e-mail]
Aaron Chase - [phone] (pro hac vice)
[e-mail]
WHITE & CASE LLP
1155 Avenue of the Americas
New York, New York 10036

Attorneys for Defendants Google Inc. and YouTube, LLC

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/s/Kevin C. Baumgardner (with permission)
Kevin C. Baumgardner, WSBA No. 14263
[e-mail]
Steven W. Fogg, WSBA No. 23528
[e-mail]
CORR CRONIN MICHELSON
BAUMGARDNER & PREECE LLP
1001 4th Avenue, Suite 3900
Seattle, Washington 98154
Tel: [phone]

John S. Letchinger (pro hac vice)
[e-mail]
Douglas S. Rupert (pro hac vice)
[e-mail]
WILDMAN, HARROLD, ALLEN & DIXON
LLP
225 West Wacker Drive, Suite 2800
Chicago, Illinois 60606
Tel: [phone]

Jeffrey D. Neumeyer, WSBA No. 35183
[e-mail]
OfficeMax Incorporated
1111 West Jefferson Street, Suite 510
Boise, Idaho 83702
Tel: [phone]
Attorneys for Defendant OfficeMax Incorporated

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DEFENDANTS’ JOINT RESPONSE TO
7
PLAINTIFF’S MOTION FOR RECONSIDERATION
(LEAD CASE NO. C10-1385-MJP)

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000
SEATTLE, WASHINGTON 98104-3179
[phone]

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/s/Mark P. Walters (with permission)
Mark P. Walters, WSBA No. 30819
[e-mail]
Gregory F. Wesner, WSBA No. 30241
[e-mail]
Dario A. Machleidt, WSBA No. 41860
[e-mail]
FROMMER LAWRENCE & HAUG LLP
1191 Second Avenue Suite 2000
Seattle, Washington 98101
Tel: [phone]

Michael A. Jacobs (pro hac vice)
[e-mail]
Matthew I. Kreeger (pro hac vice)
[e-mail]
Richard S.J. Hung (pro hac vice)
[e-mail]
Francis Ho (pro hac vice)
[e-mail]
Eric W. Ow (pro hac vice)
[e-mail]
MORRISON & FOERSTER LLP
425 Market Street
San Francisco, California 94105
Tel: [phone]

Attorneys for Defendant Yahoo! Inc.

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DEFENDANTS’ JOINT RESPONSE TO
8
PLAINTIFF’S MOTION FOR RECONSIDERATION
(LEAD CASE NO. C10-1385-MJP)

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000
SEATTLE, WASHINGTON 98104-3179
[phone]

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CERTIFICATE OF SERVICE

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I hereby certify that on July 5, 2011, I caused the foregoing Defendants’ Joint Response to
Plaintiff’s Motion for Reconsideration to be:
electronically filed with the Clerk of the Court using the CM/ECF system which will send
notification of such filing to the following:

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Attorneys for Plaintiff Interval Licensing LLC
Justin A. Nelson ([e-mail])
Eric J. Enger ([e-mail])
Matthew R. Berry ([e-mail])
Max L. Tribble ([e-mail])
Michael F. Heim ([e-mail])
Nathan J. Davis ([e-mail])
Edgar G. Sargent ([e-mail])
Oleg Elkhunovich ([e-mail])
Douglas R. Wilson ([e-mail])
Niraj P. Patel ([e-mail])

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s/ Shannon M. Jost
Shannon M. Jost (WSBA #32511)
Stokes Lawrence, P.S.
800 Fifth Avenue, Suite 4000
Seattle, WA 98104
[phone]
Fax: [phone]
[e-mail]

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Attorneys for Defendants Google Inc. and
YouTube, LLC

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DEFENDANTS’ JOINT RESPONSE TO
9
PLAINTIFF’S MOTION FOR RECONSIDERATION
(LEAD CASE NO. C10-1385-MJP)

STOKES LAWRENCE, P.S.
800 FIFTH AVENUE, SUITE 4000
SEATTLE, WASHINGTON 98104-3179
[phone]