In Re Koninklijke Philips Patent Litigation
Opinion
1 2 3 6 7 IN RE KONINKLIJKE PHILIPS PATENT Case No. 18-cv-01885-HSG LITIGATION 8 ORDER GRANTING MICROSOFT’S MOTION TO STAY ’064 CLAIMS 9 This Document Relates To: Re: Dkt. No. 656 10 ALL ACTIONS 11
12 13 Pending before the Court is Microsoft’s motion to stay all claims and counterclaims 14 relating to U.S. Patent No. 7,184,064 (the “’064 Patent”), pending a decision from the Federal 15 Circuit on the Patent Trial & Appeal Board’s (“PTAB’s”) invalidation of all claims of U.S. Patent 16 No. 6,690,387 (the “’387 Patent”). Dkt. No. 656 (“Mot.”) After carefully considering the parties’ 17 arguments, the Court GRANTS Microsoft’s motion. 19 Plaintiffs Koninklijke Philips N.V. and U.S. Philips Corp. (collectively, “Philips”) 20 instituted this patent infringement action in December 2015, alleging infringement of eleven 21 patents. In November 2016, Microsoft intervened in the actions against several of the Defendants, 22 and Philips counterclaimed against Microsoft for infringement of nine of the patents-in-suit. Dkt. 23 Nos. 69, 86. Two of the patents asserted against Microsoft are the ’064 Patent and the ’387 24 Patent, which are directed to techniques for scrolling content on a touch screen. Mot. at 3. The 25 ’064 Patent is a continuation of the ’387 Patent. Id. 26 On April 10, 2019, after an inter partes review (“IPR”), the PTAB issued a Final Written 27 Decision finding all claims in the ’387 Patent unpatentable based on obviousness over certain 1 infringement claims under the ’387 Patent. Dkt. Nos. 649, 650. According to Microsoft, Philips 2 has indicated that it intends to appeal the PTAB’s decision invaliding the ’387 Patent. Mot. at 2. 3 Microsoft now moves to stay all claims and counterclaims for the related ’064 Patent until the 4 Federal Circuit affirms or reverses the PTAB’s decision. See generally Mot. In the alternative, 5 Microsoft seeks leave to file an early motion for summary judgment. Id. 7 “Courts have inherent power to manage their dockets and stay proceedings, including the 8 authority to order a stay pending conclusion of [PTO proceedings].” Ethicon, Inc. v. Quigg, 849 9 F.2d 1422, 1426–27 (Fed. Cir. 1988) (citations omitted); IXI Mobile (R & D) Ltd. v. Samsung 10 Elecs. Co., No. 15-cv-03752-HSG, 2015 WL 7015415, at *2 (N.D. Cal. Nov. 12, 2015). Courts 11 consider three factors in determining whether to grant a stay pending PTO proceedings: “(1) 12 whether discovery is complete and whether a trial date has been set; (2) whether a stay will 13 simplify the issues in question and trial of the case; and (3) whether a stay would unduly prejudice 14 or present a clear tactical disadvantage to the non-moving party.” IXI Mobile (R & D) Ltd., 2015 15 WL 7015415, at *2 (quoting Evolutionary Intelligence, LLC v. Facebook, Inc., No. 13-cv-04202- 16 SI, 2014 WL 261837, at *1 (N.D. Cal. Jan. 23, 2014)). The moving party bears the burden of 17 demonstrating that a stay is appropriate. DSS Tech. Mgmt., Inc. v. Apple, Inc., No. 14-cv-05330- 18 HSG, 2015 WL 1967878, at *2 (N.D. Cal. May 1, 2015). Whether to stay is always within the 19 court’s discretion. 21 A. Stage of Proceedings 22 When considering whether to grant a stay, courts consider whether the litigation is at an 23 early stage. See AT&T Intellectual Property I v. Tivo, Inc., 774 F. Supp. 2d 1049, 1052 (N.D. Cal. 24 2011). Specifically, courts consider “whether discovery is complete and whether a trial date has 25 been set.” Evolutionary Intelligence, 2014 WL 261837, at *1. 26 Philips argues that a stay is not warranted because fact discovery is complete and trial is 27 set for February 2020. Dkt. No. 659 (“Opp.”) at 20. In addition, Philips asserts that a partial stay 1 would be “burdened with a second trial.” Id. at 21. The Court does not doubt the parties have 2 already expended significant resources on this litigation, but does not find that the case is so far 3 advanced that a partial stay is unwarranted. The hearing on the parties’ dispositive and Daubert 4 motions is not until November 27, 2019, and the pretrial conference is approximately three months 5 away. See Dkt. Nos. 631, 922. Given the substantial work that still must be done in this case for 6 the other patents-in-suit, the Court finds that this factor weighs slightly in favor of a stay. 7 B. Simplification of Issues 8 Microsoft contends that because the claims of the ’387 and ’064 Patent are nearly identical, 9 a decision by the Federal Circuit affirming the invalidity of the ’387 Patent would “conclusively 10 establish” the invalidity of the ’064 Patent, simplifying the issues in this case. Mot. at 6–11. 11 Philips appears to concede that the claims are nearly identical, but disputes the preclusive effect a 12 decision on the ’387 Patent would have on the ’064 Patent. Opp. at 4, 6–20. 13 The Court finds that this factor weighs in favor of a stay. At this time, the Court need not 14 conclusively decide whether the Federal Circuit’s affirmance of the invalidity of the ’387 Patent 15 would have a preclusive effect on the ’064 Patent. However, the Court finds persuasive the 16 reasoning of Judge Saris of the District of Massachusetts, who held that “PTAB decisions have a 17 collateral-estoppel effect in district court on unadjudicated claims that do not ‘materially alter the 18 question of invalidity.’” See Intellectual Ventures I, LLC v. Lenovo Grp. Ltd., 370 F. Supp. 3d 19 251, 253 (D. Mass. 2019). Because there is some potential that collateral estoppel would apply, 20 this case may well be greatly simplified after the Federal Circuit rules on the PTAB’s invalidation 21 of the ’387 Patent, given its similarities to the ’064 Patent. If the Federal Circuit reverses the 22 PTAB’s decision invalidating the ’387 Patent, the parties can resume litigating the ’064 Patent 23 claims without having to grapple with the collateral estoppel question. Therefore, the Court finds 24 that a stay of the claims based on the ’064 Patent will simplify the issues in this case. 25 C. Undue Prejudice 26 The final factor courts consider is whether a stay would unduly prejudice the nonmoving 27 party. Courts here consider whether the moving party engaged in dilatory tactics, such as seeking 1 || WL 2591268, at *4 (N.D. Cal. June 15, 2017). 2 According to Philips, even though Microsoft knew about the PTAB’s IPR examination 3 since May 2018, and was aware of the final decision in April 2019, it “chose to wait to raise its 4 || collateral estoppel issue.” Opp. at 22. But Microsoft filed this motion about a month after the 5 || PTAB’s final decision and around two weeks after Philips dismissed the 387 Patent. The Court 6 || declines to read a dilatory motive into Microsoft’s filing of the motion. 7 Philips also accuses Microsoft of attempting to gain a “tactical advantage” by seeking a 8 || partial stay while the other Defendants in this case have not. Opp. at 22—23. If the other 9 Defendants (ASUS and HTC) choose not to seek a stay of the ’064 Patent claims, Philips alleges 10 || that Microsoft may “watch these proceedings from the sidelines and, should the patent be un- 11 stayed, use what it learns in the later trial against Philips.” Jd. at 23. But the circumstances here 12 || are no different than the common situation in which litigation regarding the same or similar 5 13 patents proceeds at different times in different cases. Accordingly, this factor weighs in favor of a 14 stay. 15 || IV. CONCLUSION a 16 The Court GRANTS Microsoft’s motion to stay all claims related to the ’064 Patent, 3 17 || pending an order from the Federal Circuit affirming or reversing the PTAB’s decision on the □□□□ 18 Patent. The Court will consider lifting the stay upon the issuance of a final order from the Federal 19 Circuit and will not continue the stay pending any petitions for rehearing.
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