Skillz Platform Inc. v. AviaGames Inc.

District Court, N.D. California·Decided April 21, 2022·No. 5:21-cv-02436·Unknown

Opinion

SKILLZ PLATFORM INC., Case No. 21-cv-02436-BLF

Plaintiff, ORDER DENYING DEFENDANT v. AVIAGAMES INC.’S MOTION TO STAY PENDING INTER PARTES Defendant. [Re: ECF No. 73]

Before the Court is Defendant AviaGames Inc.’s (“AviaGames”) Motion to Stay Case Pending Inter Partes Review in this patent infringement action brought by Plaintiff Skillz Platform Inc. (“Skillz”). See Motion, ECF No. 73. On February 15, 2022, AviaGames filed an inter partes review (“IPR”) petition before the U.S. Patent Trial and Appeals Board (“PTAB”) on the sole remaining patent asserted in this action—U.S. Patent No. 9,649,564 (the “’564 Patent” or the “Asserted Patent”)—challenging all asserted claims. See IPR2022-00531. AviaGames now moves to stay the case in light of that petition, based on the stage of the case, the potential for IPR proceedings to simplify this case, and the lack of prejudice a stay would cause to Skillz. In the alternative, AviaGames requests that the Court continue the claim construction hearing—currently scheduled for April 29, 2022—until after the PTAB is set to decide whether or not to institute IPR. Skillz opposes AviaGames’ Motion, arguing that a stay is not appropriate in this competitor case, particularly when the PTAB has yet to institute IPR proceedings on AviaGames’ petition. Based on the below reasoning, the Court DENIES AviaGames’ Motion WITHOUT PREJUDICE to filing a renewed stay motion if the PTAB institutes inter partes review of the ’564 Patent. I. BACKGROUND Skillz is a Delaware corporation with its principal place of business in Oregon. See Complaint, ECF No. 1 ¶ 12. Skillz owns the Asserted Patent. See id. ¶ 82. Further, Skillz maintains a mobile gaming platform, and it enables third-party game developers to make games available on the platform through a Software Development Kit (“SDK”). See id. ¶¶ 2, 12, 22–27, 32–44. AviaGames is a Delaware corporation with its principal place of business in California. See id. ¶ 13. Skillz alleges that AviaGames maintains a competing mobile gaming platform—Pocket7Games— which AviaGames developed using Skillz’s intellectual property that it gleaned while developing games for Skillz’s platform. See id. ¶¶ 4–11, 45–56. Skillz asserts a single patent against AviaGames—the ’564 Patent—related to mobile gaming. See id. ¶¶ 79–96. Skillz previously claimed that AviaGames infringed a second patent— U.S. Patent No. 9,479,602 (the “’602 Patent”)—but the Court dismissed Skillz’s second infringement claim due to the ’602 Patent’s lack of patent eligible subject matter under § 101. See Order, ECF No. 80. Skillz alleges that AviaGames’ Pocket7Games application and standalone game applications, including “Bingo Clash,” “Solitaire Clash,” “21 Gold,” “Explodocube,” and “Tile Blitz,” infringe the sole remaining asserted patent—the ’564 Patent. See Complaint ¶¶ 79–96. On February 15, 2022, AviaGames filed an IPR petition with the PTAB as to claims 1–4, 6, 10, 10–14, 16, and 18–21 of the ’564 Patent. See Wang Decl., ECF No. 73-1, Ex. 2. AviaGames’ IPR petition asserted that the challenged claims of the ’564 Patent—which represent all claims of the ’564 Patent asserts in the above-captioned case—are invalid under § 103 based on five obviousness grounds. See id. The PTAB should issue an institution decision by August 28, 2022. See 35 U.S.C. §§ 314(b), 324(c); 37 C.F.R. §§ 42.107(b), 42.207(b). If the PTAB institutes IPR on AviaGames’ petition, then it will issue a final written decision by August 28, 2023. See 35 U.S.C. §§ 316(a)(11), 326(a)(11); 37 C.F.R. §§ 42.100(c), 42.200(c). On March 2, 2022, AviaGames followed up its IPR petition with its Motion to Stay. See ECF No. 73. II. LEGAL STANDARD A district court has inherent power to manage its own docket and stay proceedings, “including the authority to order a stay pending conclusion of a PTO reexamination.” Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988) (citation omitted). A court is under no obligation to stay proceedings pending parallel litigation in the PTAB. See Aylus Networks, Inc. v. Apple, Inc., No. C–13–4700 EMC, 2014 WL 5809053, at *1 (N.D. Cal. Nov. 6, 2014) (citations omitted). The factors that courts in this District consider when determining whether to stay litigation are: “(1) whether discovery is complete and whether a trial date has been set; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether a stay would unduly prejudice or present a clear tactical disadvantage to the nonmoving party.” PersonalWeb Techs., LLC v. Apple, Inc., 69 F.Supp.3d 1022, 1025 (N.D. Cal. 2014) (quoting Telemac Corp. v. Teledigital, Inc., 450 F.Supp.2d 1107, 1111 (N.D.Cal. 2006)). The moving party bears the burden of persuading the court that a stay is appropriate.1 See Evolutionary Intelligence, LLC v. Millenial Media, Inc., No. 5:13–CV–04206–EJD, 2014 WL 2738501, at *3 (N.D. Cal. June 11, 2014). Unsurprisingly, the parties dispute whether the (1) stage of the case; (2) potential for simplification; and (3) prejudice factors support a stay. The Court considers each factor in turn. A. Stage of the Case First, the Court considers whether the case has progressed significantly enough for a stay to be disfavored. PersonalWeb, 69 F.Supp.3d at 1025. AviaGames argues that the case is at an early stage. See Motion, ECF No. 73 at 4. AviaGames points to the fact that Skillz has produced only 572 documents, and AviaGames has produced about 876. See Wang Decl., ECF No. 73-1 ¶ 4. Further, AviaGames argues that the costliest stages of litigation have yet to occur, including the claim construction hearing, ESI discovery, depositions, expert discovery, summary judgment, pre- trial, and trial. See Motion, ECF No. 73 at 4. In response, Skillz argues that the stage of the case

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Skillz Platform Inc. v. AviaGames Inc., (N.D. Cal. 2022).

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