Microsoft Corporation v. Barnes & Noble, Inc. et al

Filing 33

MOTION to Stay by Defendants Barnes & Noble, Inc., Barnesandnoble.Com LLC, Counter Claimants Barnes & Noble, Inc., Barnesandnoble.Com LLC. (Attachments: # 1 Proposed Order) Noting Date 6/3/2011, (Peterson, Louis)

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THE HONORABLE RICHARD A. JONES

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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MICROSOFT CORPORATION,
No. 2:11-cv-00485 RAJ

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Plaintiff,

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DEFENDANTS BARNES & NOBLE, INC.
AND BARNESANDNOBLE.COM LLC’S
MOTION TO STAY

v.
BARNES & NOBLE, INC.,
BARNESANDNOBLE.COM LLC, HON HAI
PRECISION INDUSTRY CO., LTD.,
FOXCONN INTERNATIONAL HOLDINGS
LTD., FOXCONN ELECTRONICS, INC.,
FOXCONN PRECISION COMPONENT
(SHENZHEN) CO., LTD., AND INVENTEC
CORPORATION,

NOTED ON MOTION CALENDAR:
JUNE 3, 2011

Defendants.

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Defendants Barnes & Noble, Inc. and
barnesandnoble.com LLC’s Motion to Stay
(2:11-cv-00485 RAJ) - 1

HILLIS CLARK MARTIN & PETERSON P.S.
1221 Second Avenue, Suite 500
Seattle, Washington 98101-2925
Telephone: [phone]
Facsimile: [phone]

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Pursuant to 28 U.S.C. § 1659(a), Defendants Barnes & Noble, Inc. and
barnesandnoble.com LLC (collectively, “Barnes & Noble”) ask this Court to stay all

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proceedings in this action. Barnes & Noble moves at this time for a stay because of the

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statutory requirement to file this request within 30 days of being named as a respondent in a

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related litigation in the U.S. International Trade Commission (“ITC”) or within thirty days of

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the filing of this action, whichever is later. See 28 U.S.C. § 1659(a).

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By virtue of this motion, Barnes & Noble does not consent to personal jurisdiction,

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venue, sufficiency of process, or sufficiency of service of process. Barnes & Noble does not

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waive any other substantive or procedural rights or defenses. Rather, Barnes & Noble

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expressly reserves its rights to raise by motion, or otherwise, all defenses available, including

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but not limited to, any defenses under Rule 12 of the Federal Rules of Civil Procedure.
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Plaintiff Microsoft Corporation (“Microsoft”) filed this action for patent infringement

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on March 21, 2011, alleging infringement by Barnes & Noble of five patents: U.S. Patent

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Nos. 6,957,233 (“the ‘233 patent”), 5,778,372 (“the ‘372 patent”), 5,889,522 (“the

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‘522 patent”), 6,891,551 (“the ‘551 patent”), and 6,339,780 (“the ‘780 patent”) (collectively,

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“the Patents-in-Suit”). On the same day, Microsoft also filed a separate complaint at the ITC

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under Section 337 of the Tariff Act of 1930, as amended, seeking an exclusion order and a

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cease and desist order to prevent Barnes & Noble’s importation into or sale after importation

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within the United States of products that allegedly infringe the Patents-in-Suit. On

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April 8, 2011 and April 12, 2011, respectively, Microsoft filed an amended complaint and

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additional exhibits with the ITC. A copy of the ITC amended complaint (excluding exhibits)

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is attached as Exhibit A. On April 19, 2011, the ITC served Barnes & Noble with a Notice of

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Defendants Barnes & Noble, Inc. and
barnesandnoble.com LLC’s Motion to Stay
(2:11-cv-00485 RAJ) - 2

HILLIS CLARK MARTIN & PETERSON P.S.
1221 Second Avenue, Suite 500
Seattle, Washington 98101-2925
Telephone: [phone]
Facsimile: [phone]

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Investigation indicating that it was instituting an investigation based on Microsoft’s complaint
and naming Barnes & Noble as a respondent in the investigation. On April 25, 2011, the

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Notice of Investigation was published in the Federal Register. 76 Fed. Reg. 22918 (Apr. 25,

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2011); In the Matter of Certain Handheld Electronic Computing Devices, Related Software,

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and Components Thereof, Inv. No. 337-TA-769 (the “ITC Investigation”).

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Section 1659 of Title 28 mandates that a district court action, such as the present

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action, be stayed upon the timely request of a party in the district court action that is also a

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respondent in a Section 337 investigation before the ITC. Specifically, Section 1659(a) of

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Title 28 provides:

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(a) Stay - In a civil action involving parties that are also parties to a proceeding
before the United States International Trade Commission under section 337 of
the Tariff Act of 1930, at the request of a party to the civil action that is also a
respondent in the proceeding before the Commission, the district court shall
stay, until the determination of the Commission becomes final, proceedings in
the civil action with respect to any claim that involves the same issue involved
in the proceeding before the Commission, but only if such request is made
within - (1) 30 days after the party is named as a respondent in the proceeding
before the Commission, or (2) 30 days after the district court action is filed,
whichever is later.
(Emphasis added).
First, as noted above, Barnes & Noble is a party in this action as well as a respondent
in the ITC Investigation. See 19 C.F.R. § 210.3 (defining “respondent” as “any person

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named in a notice of investigation”).

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Second, Barnes & Noble has timely moved to stay this action under Section 1659(a).

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Third, courts have uniformly enforced this mandatory stay provision, recognizing that

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to do so not only avoids duplicative litigation, but also allows for a narrowing of the issues

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before a knowledgeable federal agency. See, e.g., Verve, LLC v. Verifone, Inc., 2004 U.S.

Defendants Barnes & Noble, Inc. and
barnesandnoble.com LLC’s Motion to Stay
(2:11-cv-00485 RAJ) - 3

HILLIS CLARK MARTIN & PETERSON P.S.
1221 Second Avenue, Suite 500
Seattle, Washington 98101-2925
Telephone: [phone]
Facsimile: [phone]

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Dist. LEXIS 23602, Case No. C 04-03659 JF (N.D. Cal. Nov. 15, 2004); Universal Tool &
Stamping Co. v. Ventra Group, Inc., 46 U.S.P.Q.2d 1799, 1998 U.S. Dist. LEXIS 11541

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(N.D. Ind. Jan. 28, 1998). The mandatory stay remains in effect “until the [ITC] proceedings

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are no longer subject to judicial review,” i.e., until all appeals are exhausted. In re Princo

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Corp., 478 F.3d 1345, 1353-55 (Fed. Cir. 2007).

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Therefore, the Court should stay this action as a matter of right as to all claims that

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involve the issues involved in the proceeding before the Commission, including the

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infringement allegations with respect to the Patents-in-Suit, as well as any counterclaims

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arising as a result of those allegations.

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Defendants Barnes & Noble, Inc. and
barnesandnoble.com LLC’s Motion to Stay
(2:11-cv-00485 RAJ) - 4

HILLIS CLARK MARTIN & PETERSON P.S.
1221 Second Avenue, Suite 500
Seattle, Washington 98101-2925
Telephone: [phone]
Facsimile: [phone]

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For all of the reasons set forth above, Barnes & Noble respectfully requests that the
Court stay all proceedings in this action until the ITC’s determination in the ITC Investigation

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becomes final and is no longer subject to judicial review.
DATED this 18th day of May, 2011.
HILLIS CLARK MARTIN & PETERSON P.S.
By
s/ Louis D. Peterson
Louis D. Peterson, WSBA #5776
Michael R. Scott, WSBA #12822
Mary E. Crego, WSBA #31593
Hillis Clark Martin & Peterson P.S.
1221 Second Avenue, Suite 500
Seattle WA 98101-2925
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail]; [e-mail];
[e-mail]
KENYON & KENYON LLP
(ADMITTED PRO HAC VICE)
Richard L. DeLucia
A. Antony Pfeffer
Kenyon & Kenyon LLP
One Broadway
New York, NY 10004-1007
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail];
[e-mail]
CRAVATH, SWAINE, & MOORE LLP
(ADMITTED PRO HAC VICE)
Peter T. Barbur
CRAVATH, SWAINE, & MOORE LLP
Worldwide Plaza
825 Eighth Avenue
New York, N.Y. 10019-7475
Phone: [phone]
Fax: [phone]
[e-mail]
Attorneys for Defendants
Barnes & Noble, Inc. and barnesandnoble.com LLC
Defendants Barnes & Noble, Inc. and
barnesandnoble.com LLC’s Motion to Stay
(2:11-cv-00485 RAJ) - 5

HILLIS CLARK MARTIN & PETERSON P.S.
1221 Second Avenue, Suite 500
Seattle, Washington 98101-2925
Telephone: [phone]
Facsimile: [phone]

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CERTIFICATE OF SERVICE

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I hereby certify that on the 18th day of May, 2011, I electronically filed the foregoing

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with the Clerk of the Court using the CM/ECF system which will send notification of such

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filing to the following:

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Shane P. Cramer - [e-mail],[e-mail]

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T. Andrew Culbert - [e-mail]
Daniel J. Goettle - [e-mail],[e-mail]
Aleksander J. Goranin - [e-mail],[e-mail]
Arthur W. Harrigan , Jr. - [e-mail],[e-mail],[e-mail]

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Dale M Heist - [e-mail],[e-mail]

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David E. Killough - [e-mail],[e-mail]

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Joseph R. Klinicki - [e-mail]

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Jeffrey W. Lesovitz - [e-mail],[e-mail]

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Christopher T Wion - [e-mail],[e-mail]
DATED this 18th day of May, 2011 at Seattle, Washington.

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By___s/ Louis D. Peterson____________
Louis D. Peterson, WSBA #5776
1221 Second Avenue, Suite 500
Seattle WA 98101-2925
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail]

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ND: 20288.002 4827-6503-0153v3

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Certificate of Service (2:11-cv-00485 RAJ) - 6

HILLIS CLARK MARTIN & PETERSON
1221 Second Avenue, Suite 500
Seattle, Washington 98101-2925
Telephone: [phone]
Facsimile: [phone]

P.S.

EXHIBIT A

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