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

Filing 34

MOTION to Stay by Defendants Foxconn Electronics, Inc., Foxconn International Holdings Ltd., Foxconn Precision Component Co., Ltd., Hon Hai Precision Industry Co., Ltd.. (Attachments: # 1 Declaration of Inchan A. Kwon, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Proposed Order) Noting Date 6/3/2011, (Stewart, Douglas)

The Honorable Richard A. Jones

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IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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MICROSOFT CORPORATION,
Plaintiff,

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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,

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Defendants.

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Civ. Act. 2:11-cv-00485
HON HAI PRECISION INDUSTRY
CO., LTD., FOXCONN
INTERNATIONAL HOLDINGS
LTD., FOXCONN ELECTRONICS,
INC., AND FOXCONN PRECISION
COMPONENT (SHEN ZHEN) CO.,
LTD.’S MOTION TO STAY
NOTE ON MOTION CALENDAR:
JUNE 3, 2011

Hon Hai Precision Industry Co., Ltd., Foxconn International Holdings Ltd., Foxconn
Electronics, Inc. and Foxconn Precision Component (Shen Zhen) Co., Ltd. (collectively, the
“Foxconn Defendants”), by and through their undersigned counsel, make this limited appearance
solely for the purpose of moving to stay this action pursuant to 28 U.S.C. § 1659 pending
resolution of concurrent proceedings before the United States International Trade Commission
(“ITC”) involving the same parties and patents involved in the instant action.
I.

INTRODUCTION
Under 28 U.S.C. § 1659(a), upon a motion to stay by a party who also is named as a

respondent in an ITC investigation, a district court action involving the same patent infringement

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Hon Hai, Foxconn Int., Foxconn Elec. Inc., &
Foxconn Precision Components (Shen Zhen) Co.
Ltd.’s Motion to Stay (2:11-cv-00485 RAJ)

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Dorsey & Whitney LLP
Columbia Center
701 Fifth Avenue Suite 6100
Seattle, WA 98104
[phone]

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claims as the ITC investigation must be stayed. Recently, the ITC instituted an investigation

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based on a complaint filed by the Plaintiff herein, Microsoft Corporation (“Microsoft”) against the

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very same list of companies that Microsoft has named as Defendants herein, including (but not

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limited to) the Foxconn Defendants. Microsoft’s ITC complaint alleges infringement of U.S.

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Patent Nos. 5,778,372, 5,889,522, 6,339,780, 6,891,551, and 6,957,233 (the “patents-in-suit”), the

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same patents that Plaintiff asserts in Counts I, II, III, IV and V of this case. Accordingly, because

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the Foxconn Defendants face the same patent claims in the ITC as they do in this Court, their

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motion to stay Microsoft’s claims against them in this Court must be granted.1

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By making a limited appearance for the purpose of filing this motion to stay, the Foxconn

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Defendants, who have not yet been served with process in this action, do not waive any service of

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process to which they are entitled, nor do they waive any grounds they might otherwise have for

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dismissal of this action pursuant to Federal Rule of Civil Procedure 12, including lack of personal

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jurisdiction.

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II.

BACKGROUND

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On March 21, 2011, Microsoft filed the instant action, alleging infringement by

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Defendants (including, but not limited to, the Foxconn Defendants) of the patents-in-suit. Also on

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March 21, 2011, Microsoft filed a Verified Complaint in the ITC requesting that the ITC institute

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an investigation against the same list of companies as are Defendants in this action alleging unfair

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importation of certain E-reader products accused of infringing the patents-in-suit. Declaration of

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Inchan A. Kwon (“Kwon Decl.”), Exhibit A (Verified Complaint of Microsoft Corporation under

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Section 337 of the Tariff Act of 1930, as Amended). On April 8, 2011, Microsoft filed an

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Amended Verified Complaint in the ITC, with additional exhibits and with amendments to the

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language of certain paragraphs.

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Microsoft Corporation under Section 337 of the Tariff Act of 1930, as Amended). On April 25,

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2011, the ITC instituted the investigation (Inv. No. 337-TA-769). Kwon Decl., Exhibit C (Federal

Kwon Decl., Exhibit B (Verified Amended Complaint of

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The Foxconn Defendants understand that the remaining Defendants are filing motions to stay as
well. If so, a stay of the entire action would be appropriate.
Hon Hai, Foxconn Int., Foxconn Elec. Inc., &
Foxconn Precision Components (Shen Zhen) Co.
Ltd.’s Motion to Stay (2:11-cv-00485 RAJ)

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Dorsey & Whitney LLP
Columbia Center
701 Fifth Avenue Suite 6100
Seattle, WA 98104
[phone]

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Register Notice of Institution of Investigation). While a procedural schedule has yet to be set in

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the ITC investigation, the Administrative Law Judge has scheduled a preliminary conference with

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the parties for June 2, 2011. Kwon Decl., Exhibit D (Order No. 2: Notice of Ground Rules and

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Order Setting Date for Submission of Discovery Statements and Date for Preliminary

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Conference).

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III.

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ARGUMENT
A.

Pursuant To Statute, Microsoft’s Claims Against the Foxconn Defendants
Must Be Stayed

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Upon timely request of a party to a civil action which is also a party to a section 337 ITC

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proceeding, 28 U.S.C. § 1659(a) mandates a stay if the civil action involves the same issues raised

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in the ITC proceeding:

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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 issues 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.

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“The purpose of § 1659 is to prevent separate proceedings on the same issues occurring at the
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same time.” In re Princo Corp., 478 F.3d 1345, 1355 (Fed. Cir. 2007). This stay is automatic and
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non-discretionary. See Lincoln Elec. Co. v. Atl. China Welding Consumables, Nos. 1:09 CV 1844,
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1:09 CV 1858, 1:09 CV 1869, 1:09 CV 1886, 2010 U.S. Dist. LEXIS 2721, at *5 (N.D. Ohio Jan.
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4, 2010) (noting that “a respondent in an ITC investigation is entitled to an automatic stay in
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parallel district court litigation as a matter of right with respect to any claim that involves the same
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issues involved in a proceeding before the ITC, until the ITC proceeding is completed. The stay is
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non-discretionary.”).
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All counts in the instant action against the Foxconn Defendants must be stayed. First, this
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stay request is timely, as it is filed by the Foxconn Defendants within 30 days after they were
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Hon Hai, Foxconn Int., Foxconn Elec. Inc., &
Foxconn Precision Components (Shen Zhen) Co.
Ltd.’s Motion to Stay (2:11-cv-00485 RAJ)

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Dorsey & Whitney LLP
Columbia Center
701 Fifth Avenue Suite 6100
Seattle, WA 98104
[phone]

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named as Respondents in the ITC proceeding on April 19, 2011. Second, the parties and patent

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claims are precisely the same. The patents asserted in the ITC proceeding by Microsoft against

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the Foxconn Defendants are the same patents asserted in the instant action by Microsoft against

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the Foxconn Defendants. Compare Dkt. #1 with Kwon Decl., Exhibit B.

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B.

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The Filing of This Motion To Stay Is Not a Waiver of Service Nor of Any
Challenges Available to the Foxconn Defendants Under Fed. R. Civ. P. 12

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28 U.S.C. § 1659(a) specifically requires that any motion to stay pursuant to that section

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must be filed “within - (1) 30 days after the party is named as a respondent in the proceeding

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before the Commission, or (2) 30 days after the district court action is filed, whichever is later.”

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Although the Foxconn Defendants have not yet been served with the Complaint in this action,

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counsel for the Foxconn Defendants could find no legal authority holding that lack of service

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alters the timing requirements of § 1659(a) as to the Foxconn Defendants. Therefore, the Foxconn

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Defendants are making a limited appearance in this action solely for the purpose of requesting a

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mandatory stay under § 1659(a). By such limited appearance, the Foxconn Defendants do not

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waive any service of process to which they are entitled, nor do they waive any jurisdictional or

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other challenges available to them under Fed. R. Civ. P. 12. See Wright v. Yackley, 459 F.2d 287,

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291 (9th Cir. 1972) (no waiver of personal jurisdiction as long as jurisdictional challenge timely

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asserted no later than any other Rule 12 defenses); see also Ciolli v. Iravani, 625 F. Supp. 2d 276,

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290-91 (E.D. Pa. 2009) (motion to stay does not seek affirmative relief and thus does not waive

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personal jurisdiction). Any such challenges will be asserted on or before the due date for the

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Foxconn Defendants to respond to the complaint in this action, whenever such date shall be

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established. See Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344 (1999)

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(“[O]ne becomes a party officially, and is required to take action in that capacity, only upon

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service of a summons or other authority-asserting measure stating the time within which the party

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served must appear and defend.”).

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Hon Hai, Foxconn Int., Foxconn Elec. Inc., &
Foxconn Precision Components (Shen Zhen) Co.
Ltd.’s Motion to Stay (2:11-cv-00485 RAJ)

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Dorsey & Whitney LLP
Columbia Center
701 Fifth Avenue Suite 6100
Seattle, WA 98104
[phone]

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IV.

REQUEST FOR JUDICIAL NOTICE OF EVIDENCE RELIED UPON BY THE
FOXCONN DEFENDANTS

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Pursuant to Federal Rule of Evidence 201, the Foxconn Defendants hereby request that the

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Court take judicial notice of Exhibits A through D attached to the Kwon Decl., which are all
published or publicly-filed documents in connection with ITC Investigation No. 337-TA-769.
V.

CONCLUSION
For the foregoing reasons, the Foxconn Defendants respectfully request that the claims

against them be stayed in their entirety until the ITC’s determination in ITC Investigation No.
337-TA-769 becomes final.
Respectfully submitted,

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Dated: May 19, 2011

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DORSEY & WHITNEY LLP
__/s/ Douglas F. Stewart______________________
Douglas Stewart, WSBA #34068
DORSEY & WHITNEY LLP
701 Fifth Avenue Suite 6100
Seattle, WA 98104
Tel: [phone]
Fax: [phone]

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HAYNES AND BOONE, LLP
(pro hac vice pending)
Glenn E. Westreich
Steven M. Levitan
Inchan A. Kwon
2033 Gateway Place, Suite 300
San Jose, CA 95110
Tel: [phone]
Fax: [phone]

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Attorneys for Defendants,
FOXCONN ELECTRONICS, INC., FOXCONN
PRECISION COMPONENTS (SHEN ZHEN) CO.,
LTD., FOXCONN INTERNATIONAL HOLDINGS
LTD., AND HON HAI PRECISION INDUSTRY CO.,
LTD.

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Hon Hai, Foxconn Int., Foxconn Elec. Inc., &
Foxconn Precision Components (Shen Zhen) Co.
Ltd.’s Motion to Stay (2:11-cv-00485 RAJ)

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Dorsey & Whitney LLP
Columbia Center
701 Fifth Avenue Suite 6100
Seattle, WA 98104
[phone]

CERTIFICATE OF SERVICE

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I, Douglas F. Stewart, certify that on May 19th, 2011, the foregoing HON HAI
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PRECISION INDUSTRY CO., LTD., FOXCONN INTERNATIONAL HOLDINGS
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LTD.,

FOXCONN

ELECTRONICS,

INC.,

AND

FOXCONN

PRECISION

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COMPONENT (SHEN ZHEN) CO., LTD.’S MOTION TO STAY, a PROPOSED
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ORDER, and the DECLARATION OF INCHAN A. KWON were filed with the Clerk of
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the Court using ECF Notification. Counsel were served by ECF Notification and/or via
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US Mail.
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DATED this 19th day of May, 2011.
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/s/Douglas F. Stewart
Douglas F. Stewart

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Hon Hai, Foxconn Int., Foxconn Elec. Inc., &
Foxconn Precision Components (Shen Zhen) Co.
Ltd.’s Motion to Stay (2:11-cv-00485 RAJ)

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Dorsey & Whitney LLP
Columbia Center
701 Fifth Avenue Suite 6100
Seattle, WA 98104
[phone]