Interval Licensing LLC v. AOL, Inc. et al

Filing 257

REPLY, filed 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, TO RESPONSE to (Attachments: #1 Exhibit 1, #2 Exhibit 2)(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.,

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

Defendant.

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INTERVAL LICENSING LLC,

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Plaintiff,
v.

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Case No. 2:11-cv-00708 MJP
Lead Case No. 2:10-cv-01385-MJP

APPLE, INC.,

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REPLY TO INTERVAL’S
MOTION FOR
RECONSIDERATION OF
COURT’S ORDER GRANTING
MOTIONS TO STAY

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.,
REPLY TO 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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Defendant.
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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REPLY TO 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 files this Reply to its Motion for Reconsideration of the Court’s

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Order Granting Defendants’ Motions to Stay (Dkt. # 254; the “Motion”). Defendants filed a joint

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opposition to the Motion on July 5, 2011. (Dkt. # 256). Interval files this short Reply to respond

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to two of the arguments raised in defendants’ opposition.

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Defendants argue that “district courts continue to routinely grant stays pending

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reexaminations.” Opposition at 4. But none of the three cases that defendants cite supports their

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position that a stay is appropriate here. In LMT Mercer Group v. Maine Ornamental, LLC, 2011

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WL 2039064, *4 (D.N.J. May 24, 2011), the parties had not produced a single document, had not

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responded to discovery requests, and no trial date had been set. Similarly, the Ohio Willow Wood
Co. v. Alps South LLC action had not proceeded past the initial stages of discovery—the parties
had only recently exchanged infringement and validity contentions and no Markman hearing or

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trial date had been set. 2011 WL 2358649, *4 (S.D. Ohio June 9, 2011). Likewise, there was no

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trial date set in Microsoft Corp. v. TiVo Inc., 2011 WL 1748428, *3, *6 (N.D. Cal. May 6, 2011),

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and the parties had exchanged a total of 834 documents. In addition, Microsoft had filed a

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REPLY TO 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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complaint with the International Trade Commission in which it accused the same TiVo products

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and asserted patents that are related to the patents asserted in the district court. Id. at *2.

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Unlike the cases cited by defendants, two recent cases denying motions to stay pending
reexamination are on point. The Northern District of California recently denied Apple’s request
for a stay pending reexamination in Affinity Labs of Texas, LLC v. Nike, Inc. and Apple Inc., 2011

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WL 1833122 (N.D. Cal. May 13, 2011). In that action, Apple moved to stay the case at a time

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when the parties had “exchanged very little discovery,” “[n]o trial date ha[d] been set, and the

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parties ha[d] not yet appeared for a case management conference.” Id. at *1. But Judge Wilken

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denied the stay because she concluded that the “second factor—whether a stay would simplify the

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issues presented in this action—is neutral.” Id. As Judge Wilken correctly noted, “it is unlikely
that the reexamination proceeding will resolve all of the issues regarding the two patents in
question in this lawsuit. Thus, the Court would be left to adjudicate the remaining issues.” Id. In

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addition, the court noted that “[a] stay may prejudice Affinity’s ability to enforce and license its

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patents, and could lead to a loss of evidence.” Id. at 2. The court also pointed out that “Apple

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waited nine months after Affinity filed the present suit before requesting the reexaminations.” Id.

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Here, the facts supporting a denial of the stay are even more compelling than in Affinity Labs
because the parties have engaged in substantial discovery and the actions are set for trial in
approximately one year.

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Similarly, the District of Delaware recently denied a motion to stay in Nokia Corp. v.

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Apple Inc., 2011 WL 2160904 (D. Del. June 1, 2011). Importantly, in that case Apple opposed

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the stay, relying on many of the same arguments that Interval has asserted here. Apple argued

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that “[a]s to the five re-examination requests that the Patent Office has granted, they are weak on

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the merits.

Thus, the likelihood that re-examination will eliminate or narrow Apple’s

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REPLY TO 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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infringement claims is very low and, at this point, speculative.” Ex. 1 at p. 5 of 23 (Apple’s

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Opposition to Motion for a Stay)1. Similar to Interval’s argument here, Apple pointed out that

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“[t]he whole re-examination process can thus be expected to take at least two years and perhaps
over six years. By that time, the district court trial and appeal should be long finished.” Id. at 12
of 23. Apple also noted that “Nokia has sought ex parte re-examination, and therefore, even if

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Nokia loses completely on every argument before the Patent Office, it will no doubt seek to return

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to this Court and repeat the same losing arguments based on the same prior art.” Id. at 14 of 23.

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The same is true here. Two of the four reexaminations are ex parte reexaminations, and not all of

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the defendants against whom the patents are asserted signed on to the two inter partes

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reexaminations. Finally, Apple argued that the reexamination would not necessarily simplify the
case because the “Patent Office review on a re-examination is limited to a narrow scope of issues;
specifically whether prior art or printed publications are invalidating. See 35 U.S.C. §§ 301, 302.

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Nokia can lose on those issues and still return to this Court and continue to litigate the validity of

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the patents under different theories and evidence.” Id. at 15 of 23. Apple is absolutely correct,

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and that argument applies with equal weight here.

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Defendants contend that “Interval’s re-argument that certain defendants joined particular
petitions [] misses the point.” Opposition at 3. Not true. Despite multiple opportunities,
defendants have made no attempt to explain why only certain defendants signed the requests for

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reexamination. As Interval made clear in its motion, the only explanation for such conduct is

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gamesmanship. Interval will vigorously oppose any attempt by defendants (1) to evade the

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results of the reexamination by arguing that a particular defendant did not sign a particular request

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When the District of Delaware denied the stay, the PTO had issued a notice of allowance of one
patent and issued three rejections of the other patents. See Ex. 2 (Jan. 3, 2011 Letter to The
Honorable Gregory M. Sleet.). Relevant portions of Exhibits 1 and 2 are highlighted in yellow.
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REPLY TO 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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or (2) to perpetuate the stay by having a party who did not originally sign the request for

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reexamination submit a new request for reexamination.

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CONCLUSION
For the reasons set forth in its Motion, Interval respectfully requests that this Court
reconsider its Order staying the actions pending reexamination, and order that they proceed to

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trial on a schedule consistent with the Court’s revised scheduling order (Dkt. # 248).

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Dated: July 6, 2011

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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]

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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]
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REPLY TO 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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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
Telephone: [phone]
Facsimile: [phone]

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Attorneys for INTERVAL LICENSING LLC

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REPLY TO 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 July 6, 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]

REPLY TO 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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REPLY TO 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 J. DeNio________
Tammie J. DeNio

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REPLY TO 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