IOENGINE LLC v. PayPal Holdings, Inc.

District Court, D. Delaware·Decided October 26, 2020·No. 1:18-cv-00452·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

IOENGINE, LLC, § § Plaintiff, § § v. § Civil Action No. 18-452-WCB § PAYPAL HOLDINGS, INC., § § Defendant. § § ________________________________________

INGENICO INC., § § Plaintiff, § § v. § § Civil Action No. 18-826-WCB IOENGINE, LLC, § § Defendant. § § § ________________________________________

IOENGINE, LLC, § § Counterclaim Plaintiff, § § v. § § INGENICO INC., § INGENICO CORP., and § INGENICO GROUP S.A., § § Counterclaim Defendants. § ________________________________________ MEMORANDUM OPINION AND ORDER Before the court is a request to lift a stay of proceedings in the two above-captioned cases that was issued in August of last year. Case No. 18-452, Dkt. No. 129 (regarding the stay issued at Dkt. No. 116); Case No. 18-826, Dkt. No. 143 (regarding the stay issued at Dkt. No. 128). The

request is GRANTED, and the parties are directed to propose a revised scheduling order for the two cases. BACKGROUND These two patent cases have been consolidated for pretrial proceedings. In Case No. 18- 452, IOENGINE, LLC, alleged that PayPal Holdings, Inc., was infringing U.S. Patent Nos. 8,539,047 (“the ’047 patent”), 9,059,969 (“the ’969 patent”), and 9,774,703 (“the ’703 patent”). In Case No. 18-826, Ingenico Inc. filed a declaratory judgment action against IOENGINE, alleging that certain products Ingenico Inc. had provided to PayPal, which were the subjects of IOENGINE’s infringement action against PayPal, did not infringe the three patents that IOENGINE asserted against PayPal. IOENGINE subsequently filed a counterclaim asserting that Ingenico Inc.,

Ingenico Corp., and Ingenico Group S.A. (referred to collectively as “Ingenico”), were infringing those patents. Across both cases, IOENGINE asserted infringement of a total of 20 claims from the three patents. IOENGINE asserted infringement of claims 1, 2, 4, 12, and 25 of the ’047 patent; claims 2–4 and 7 of the ’969 patent; and claims 55–57, 61, 100, 104–06, 110, 111, and 123 of the ’703 patent. Ingenico Inc. subsequently filed a total of 12 petitions for inter partes review (“IPR”) with the Patent Trial and Appeal Board (“PTAB”) relating to the three asserted patents. Three of those petitions were granted. The three instituted IPRs covered all 20 of the claims asserted in the two actions in this court. See IPR2019-00416 (’047 patent), IPR2019-00879 (’969 patent), and IPR2019-00929 (’703 patent). Following the PTAB’s institution of review of the ’047 patent in IPR2016-00416, PayPal

and Ingenico moved for a stay of the litigation in this court pending a final decision in the IPR proceedings. On August 21, 2019, I granted those motions and entered a stay of all proceedings in these cases “pending the completion of the ’047 inter partes review proceeding before the PTAB.” Case No. 18-452, Dkt. No. 116, at 29; Case No. 18-826, Dkt. No. 128, at 29. Subsequently, the PTAB instituted IPRs in IPR2019-00879, covering various claims of the ’969 patent, and IPR2019- 00929, covering various claims of the ’703 patent. The PTAB denied institution of Ingenico Inc.’s remaining nine IPR petitions. The PTAB recently issued final written decisions in the three instituted IPR proceedings. The decisions held that all 26 of the challenged claims of the ’047 patent were unpatentable; that 19 claims of the ’969 patent were unpatentable, but 5 claims of that patent were not shown to be

unpatentable; and that 53 claims of the ’703 patent were unpatentable, but 10 claims of that patent were not shown to be unpatentable. Among the 20 claims from the patents asserted in these consolidated cases, the PTAB held that 17 of the claims were unpatentable and 3 were not shown to be unpatentable. The three surviving asserted claims are claim 3 of the ’969 patent and claims 56 and 105 of the ’703 patent. IOENGINE now requests that I lift the stay entered in August 2019 so that the infringement actions in this court can proceed on the three surviving asserted claims. PayPal and Ingenico oppose the request to lift the stay. They contend that the stay should be maintained in effect pending the disposition of any request for rehearing before the PTAB or appeal to the Federal Circuit. PayPal

and Ingenico have not stated that they intend to seek rehearing before the PTAB or to appeal to the Federal Circuit, but they urge that the stay be continued at least until a determination has been made as to whether there will be any requests for rehearing or appeals in any of the IPRs. Ingenico argues, in part, that if IOENGINE takes an appeal from the portions of the PTAB’s decisions that were adverse to IOENGINE and prevails on some or all of the claims asserted in this action, IOENGINE

“may seek to re-litigate previously invalidated claims.” Case No. 18-452, Dkt. No. 130, at 3; Case No. 18-826, Dkt. No. 144, at 3. For its part, IOENGINE does not state whether it intends to seek rehearing or appeal to the Federal Circuit in IPR2019-00879 or IPR2019-00929.1 However, with regard to Ingenico’s concern that IOENGINE may seek further review and then seek to relitigate some of the claims that were invalidated by the PTAB, IOENGINE states that it is prepared to proceed in these consolidated cases on only the three asserted claims that were not held unpatentable by the PTAB, so “there is no possibility of this outcome.” Case No. 18-452, Dkt. No. 131, at 1; Case No. 18-826, Dkt. No. 145, at 1. DISCUSSION The question whether to grant a stay pending review by the Patent and Trademark Office of

the validity of the patent or patents at issue in a lawsuit is committed to the discretion of the district court. See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426–27 (Fed. Cir. 1988); AgroFresh Inc. v. Essentiv LLC, No. 16-662, 2019 WL 2327654, at *1 (D. Del. May 31, 2019); Ethicon LLC v. Intuitive Surgical, Inc., No. 17-871, 2019 WL 1276029, at *1 (D. Del. Mar. 20, 2019). The same is true of decisions whether to lift or extend such a stay. See Murata Mach. USA v. Daifuku Co., 830 F.3d 1357, 1361 (Fed. Cir. 2016); Oyster Optics, LLC v. Ciena Corp., No. 17-cv-5920, 2019 WL 4729468, at *2 (N.D. Cal. Sept. 23, 2019); Personal Audio LLC v. Google, Inc., 230 F. Supp.

1 IOENGINE sought rehearing in IPR2019-00416, but rehearing was denied on September 10, 2020. 3d 623, 626 (E.D. Tex. 2017); Think Optics, Inc. v. Nintendo of Am., Inc., No. 6:11-CV-455, 2014 WL 4477400, at *2 (E.D. Tex. Feb. 27, 2014). “A court may lift a stay if the circumstances supporting the stay have changed such that the stay is no longer appropriate.” Murata, 830 F.3d at 1361; DermaFocus LLC v. Ulthera, Inc., No.

15-654, 2018 WL 5113960, at *2 (D. Del. Oct. 19, 2018); Network-1 Sec. Sols., Inc. v. Alcatel- Lucent USA Inc., No. 6:11cv492, 2015 WL 11439060, at *1 (E.D. Tex. Jan. 5, 2015). In considering whether to issue a stay pending IPR review, courts typically consider three factors: (1) whether granting the stay would simplify the issues in question and the trial of the case; (2) the status of the district court litigation, particularly whether discovery is complete and a trial date has been set; and (3) whether the stay would cause the non-movant to suffer undue prejudice or allow the movant to gain a clear tactical advantage. Murata, 830 F.3d at 1361; FMC v. Summit Agro USA, LLC, No. 14-51, 2014 WL 3703629, at *2 (D. Del. July 21, 2014); SoftView LLC v. Apple Inc., No. 10-389, 2012 WL 3061027, at *2 (D. Del. July 26, 2012). Those same factors govern the question whether to extend the stay, after the PTAB has issued its decision in an IPR proceeding, pending a request

for rehearing before the PTAB or an appeal to the Federal Circuit.

Free access — add to your briefcase to read the full text and ask questions with AI

IOENGINE LLC v. PayPal Holdings, Inc., (D. Del. 2020).

IOENGINE LLC v. PayPal Holdings, Inc. (IOENGINE LLC v. PayPal Holdings, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related