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

Filing 41

RESPONSE, by Plaintiff Microsoft Corporation, to 33 MOTION to Stay, 34 MOTION to Stay. (Attachments: # 1 Proposed Order)(Wion, Christopher)

HONORABLE RICHARD A. JONES

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

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MICROSOFT CORPORATION,

Case No. 11-485 RAJ

Plaintiff,
vs.
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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I.

NOTED FOR:
FRIDAY, JUNE 3, 2011

Defendants.

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MICROSOFT’S COMBINED
RESPONSE TO DEFENDANTS’
MOTIONS FOR STAY

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INTRODUCTION

Defendants Barnes & Noble, Inc. and barnesandnoble.com LLC (collectively “Barnes

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& Noble”) filed a Motion to Stay on May 18, 2011 (Dkt. No. 33), requesting that this action be

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stayed in its entirety pursuant to 28 U.S.C. § 1659(a) pending resolution of a parallel ITC

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investigation: In the Matter of Certain Handheld Electronic Computing Devices, Related

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Software, and Components Thereof, Inv. No. 337-TA-769 (the "ITC Action"). Defendants

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Hon Hai Precision Industry Co., Ltd.; Foxconn International Holdings Ltd.; Foxconn

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Electronics, Inc., and Foxconn Precision Component (Shenzen) Co., Ltd. (the “Foxconn
MICROSOFT’S COMBINED RESPONSE TO
DEFENDANTS’ MOTIONS FOR STAY – 1

LAW OFFICES

DANIELSON HARRIGAN LEYH & TOLLEFSON LLP
999 THIRD AVENUE, SUITE 4400
SEATTLE, WASHINGTON 98104
TEL, [phone] FAX, [phone]

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Defendants”) filed a similar motion on May 19, 2011. (Dkt. No. 34). Defendant Inventec

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Corporation has not moved for a stay or otherwise appeared in this action.
Microsoft does not oppose Defendants’ requests for a stay. However, Microsoft

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requests that such stay be without prejudice to its ability to effect service on the non-U.S.

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defendants — the Foxconn Defendants and Inventec (the "Foreign Defendants"). Microsoft

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should be permitted to serve the Foreign Defendants once the stay has been lifted, without risk

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that such service be deemed untimely.
II.

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FACTS REGARDING SERVICE OF THE FOREIGN DEFENDANTS

Microsoft has yet to effect service on the Foreign Defendants and has no assurance that

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such process could be completed prior to issuance of a stay. Each of the Foreign Defendants

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exists under the laws of either the People’s Republic of China and/or Hong Kong. Complaint

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(Dkt. No. 1), at ¶¶ 4-8. Counsel for the Foxconn Defendants in this action has advised counsel

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for Microsoft that they are not authorized to accept service on their clients' behalf. Counsel for

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Microsoft received a similar response from Inventec's counsel in the ITC Action, who does not

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represent Inventec in this action. To the best of Microsoft's knowledge, Inventec has not

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engaged counsel for purposes of this action.
III.

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A.

AUTHORITY

28 U.S.C. § 1659 Provides for a Mandatory Stay of this Action.
Each Defendant in this action is a respondent in the ITC Action, in which Microsoft is

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asserting the same patents against the same products. Microsoft acknowledges that Defendants

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are entitled to a mandatory stay of this action until the ITC's determination "becomes final":

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In a civil action involving the parties to a proceeding before the 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

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MICROSOFT’S COMBINED RESPONSE TO
DEFENDANTS’ MOTIONS FOR STAY – 2

LAW OFFICES

DANIELSON HARRIGAN LEYH & TOLLEFSON LLP
999 THIRD AVENUE, SUITE 4400
SEATTLE, WASHINGTON 98104
TEL, [phone] FAX, [phone]

claim that involves the same issues involved in the proceeding before the
Commission.

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28 U.S.C. § 1659.

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An ITC determination “becomes final” when the Commission proceedings are no

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longer subject to review (i.e., after all appeals have been exhausted or the time for appeal has

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expired). In re Princo Corp., 478 F.3d 1345, 1355 (Fed. Cir. 2007).

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B.

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The Stay Should Be Without Prejudice to Microsoft’s Right to Effect Service on
the Foreign Defendants.

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Microsoft has yet to effect service on the Foreign Defendants and respectfully requests

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that any order issued under § 1659 expressly preserves Microsoft's ability to do so within a
reasonable amount of time after the stay has been lifted.
There is no clear deadline for service of a foreign defendant under the Federal Rules.

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The 120-day service period provided by Fed. R. Civ. P. 4(m) does not apply to foreign

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defendants. Rule 4(m) (“This subdivision (m) does not apply to service in a foreign country

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under Rule 4(f) or 4(j)(1)”); Lucas v. Natoli, 936 F.2d 432 (9th Cir. 1991) (under Rule 4(m),

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“there is apparently no time limit for [foreign] service”). Nevertheless, Microsoft should not

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be forced to face any argument that it somehow unreasonably delayed service.

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In the absence of a stay, Microsoft is confident that it could effect service of the
Foreign Defendants within a reasonable amount of time.
However, as at least one court has found, § 1659 may bar Microsoft from serving the

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Foreign Defendants while the stay is in place. Overland Storage, Inc. v. BDT Automation

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Technology (Zhuhai FTZ) Co., Ltd., No. 10-CV-1700, 2010 WL 5089002, *2 (S.D.Cal. Dec. 8,

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2010) (“the Court is persuaded that the stay should extend to service of process”). Likewise, in

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Sandisk Corp. v. Phison Electronics Corp., the Court refused to lift a stay to allow the plaintiff

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to serve letters rogatory on foreign defendants. Nos. 07-cv-605-bbc, 07-cv-607-bbc, 2008 WL

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MICROSOFT’S COMBINED RESPONSE TO
DEFENDANTS’ MOTIONS FOR STAY – 3

LAW OFFICES

DANIELSON HARRIGAN LEYH & TOLLEFSON LLP
999 THIRD AVENUE, SUITE 4400
SEATTLE, WASHINGTON 98104
TEL, [phone] FAX, [phone]

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4533715, *1 (W.D. Wisc. Sept. 17, 2008). As the court noted, the plaintiff would have the

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opportunity to serve any un-served defendants once the stay had been lifted. Id.

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Effecting foreign service is a time-consuming and costly process, and Microsoft likely

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will not be able to successfully effect service prior to this Court’s entry of a stay in this matter.

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Microsoft's attempts to streamline the process by dealing directly with counsel for the Foreign

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Defendants were unsuccessful. Microsoft's ability to serve the Foreign Defendants should be

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preserved as part of the stay to which Defendants are entitled under § 1659.

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IV.

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CONCLUSION

While Microsoft does not oppose Defendants’ motions for stay pursuant to 28 U.S.C. §

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1659(a), Microsoft respectfully requests that the stay be without prejudice to Microsoft’s

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ability to proceed with service on the Foreign Defendants once the stay has been lifted.

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Microsoft also requests that any stay order expressly toll any time limitation for service on any

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defendant until 120 days after the stay is lifted, consistent with the (Proposed) Order submitted

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herewith. At a minimum, and in the alternative, Microsoft requests permission to serve the

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Foreign Defendants while the stay is in place.

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DATED this 31st day of May, 2011.

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DANIELSON HARRIGAN LEYH & TOLLEFSON LLP

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By

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s/Christopher Wion
Arthur W. Harrigan, Jr., WSBA #1751
Christopher Wion, WSBA #33207
Shane Cramer, WSBA #35099
T. ANDREW CULBERT (WSBA #35925)
[e-mail]
DAVID E. KILLOUGH (WSBA #40185)
[e-mail]
MICROSOFT CORPORATION
1 Microsoft Way
Redmond, Washington 98052
Telephone: [phone]; Fax: [phone]

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MICROSOFT’S COMBINED RESPONSE TO
DEFENDANTS’ MOTIONS FOR STAY – 4

LAW OFFICES

DANIELSON HARRIGAN LEYH & TOLLEFSON LLP
999 THIRD AVENUE, SUITE 4400
SEATTLE, WASHINGTON 98104
TEL, [phone] FAX, [phone]

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DALE M. HEIST (pro hac vice)
[e-mail]
DANIEL GOETTLE (pro hac vice)
[e-mail]
ALEKSANDER J. GORANIN (pro hac vice)
[e-mail]
JEFFREY W. LESOVITZ (pro hac vice)
[e-mail]
JOSEPH R. KLINICKI (pro hac vice)
[e-mail]
WOODCOCK WASHBURN LLP
2929 Arch Street, 12th Floor
Philadelphia, PA 19104
Telephone:
215-568-3100
Facsimile:
215-568-3439

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COUNSEL FOR PLAINTIFF
MICROSOFT CORPORATION

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MICROSOFT’S COMBINED RESPONSE TO
DEFENDANTS’ MOTIONS FOR STAY – 5

LAW OFFICES

DANIELSON HARRIGAN LEYH & TOLLEFSON LLP
999 THIRD AVENUE, SUITE 4400
SEATTLE, WASHINGTON 98104
TEL, [phone] FAX, [phone]

CERTIFICATE OF SERVICE

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I, Susie Clifford, swear under penalty of perjury under the laws of the State of
Washington to the following:

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1.

I am over the age of 21 and not a party to this action.

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2.

On the 31st day of May, 2011, I caused the preceding document to be served on

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counsel of record in the following manner:

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Counsel for Defendants Barnes & Noble, Inc.
and barnesandnoble.com LLC

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Louis D. Peterson ([e-mail])
Michael R. Scott ([e-mail])
Mary E. Crego ([e-mail])
Hillis Clark Martin & Peterson
1221 Second Avenue, Suite 500
Seattle, WA 98101-2925
Phone: [phone]
Fax: [phone]

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Messenger
US Mail
Facsimile
ECF
Email

Counsel for Foxconn Electronics, Inc., Foxcon
Precision Components (Shen Zhen) Co., Ltd.
Foxconn International Holdings Ltd., and
Hon Hai Precision Industry Co., Ltd.
Douglas Stewart ([e-mail])
Dorsey & Whitney LLP
701 Fifth Avenue, Suite 6100
Seattle, WA 98104
Telephone [phone]
Fax: [phone]

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Messenger
US Mail
Facsimile
ECF
Email

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s/Susie Clifford
Susie Clifford

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MICROSOFT’S COMBINED RESPONSE TO
DEFENDANTS’ MOTIONS FOR STAY – 6

LAW OFFICES

DANIELSON HARRIGAN LEYH & TOLLEFSON LLP
999 THIRD AVENUE, SUITE 4400
SEATTLE, WASHINGTON 98104
TEL, [phone] FAX, [phone]