Smartflash LLC v. Apple Inc.

621 F. App'x 995
CourtCourt of Appeals for the Federal Circuit
DecidedJuly 30, 2015
Docket2015-1701, 2015-1707
StatusUnpublished
Cited by12 cases

This text of 621 F. App'x 995 (Smartflash LLC v. Apple Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smartflash LLC v. Apple Inc., 621 F. App'x 995 (Fed. Cir. 2015).

Opinions

Opinion for the court filed by Circuit Judge O’MALLEY.

Opinion concurring in part and dissenting in part filed by Circuit Judge NEWMAN.

O’MALLEY, Circuit Judge.

Appellants, Apple Inc. (“Apple”) and Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung Telecommunications America, LLC, HTC Corporation, HTC America, Inc., and Exedea, Inc. (collectively, “Samsung”), appeal from the district court’s order denying their motions to stay patent infringement litigation pending covered business method (“CBM”) review of the asserted claims. For the reasons set forth below, we affirm the district court’s order as to Apple, but reverse as to Samsung.

BackgRound

Smartflash LLC and Smartflash Technologies Ltd.. (collectively, “Smartflash”), patent licensing companies, filed separate suits against Apple and Samsung on May 29, 2013, alleging infringement of U.S. Patent Nos. 7,334,720 (the “'720 Patent”); 8,033,458 (the “'458 Patent”); 8,061,598 (the “'598 Patent”); 8,118,221 (the “'221 Patent”); 8,336,772 (the “'772 Patent”); and 7,942,317 (the “'317 Patent”). Subsequently, Smartflash sued Google, Inc. (“Google”) on May 7, 2014 and Amazon.com, Inc. (“Amazon”) on December 23, 2014 for patent infringement, asserting the same six patents as those asserted against Apple and Samsung, as well as an additional patent that issued on August 5,2014, TJ.S. Patent No. 8,794,516. All of the asserted patents relate to managing access to data via payment information.

Throughout the course of these cases, both Apple and Samsung filed multiple CBM petitions with the Patent Trial and Appeal Board (“PTAB”). See America Invents Act, Pub.L. No. 112-29, § 18, 125 Stat. 284, 329-31 (2011) (“AIA”). Between March 28 and April 3, 2014, Apple filed 12 separate petitions for CBM review on 35 U.S.C. §§ 102 and 103 grounds. And, on April 3, 2014, Apple moved to stay the district court action pending CBM review. See Defendants’ Motion to Stay Litigation, SmartFlash LLC v. Apple Inc., No. 6:13-cv-447 (E.D.Tex. Apr. 4, 2014), ECF No, 120. On May 15, 2014, Samsung filed a motion to stay based on Apple’s CBM petitions, explaining that, if the court were to grant its motion, it “would stipulate to be bound to the same extent as Apple is under § 18(a)(1)(D) of the America Invents Act.” Defendants’ Motion to Stay Litigation, SmartFlash LLC v. Samsung Elecs., Co., No. 6:13-cv-448 at 3 n. 4 (E.D.Tex. May 15, 2014), ECF No. 149. Because the PTAB had not yet decided whether to grant these petitions, the district court denied both motions without prejudice to refiling if any of the petitions were granted. SmartFlash LLC v. Apple Inc., No. 6:13-cv-447, 2014 WL 3366661 (E.D.Tex. July 8, 2014), ECF No. 175; SmartFlash LLC v. Samsung Elecs., Co., No. 6:13-cv-448 (E.D.Tex. Dec. 30, 2014), ECF No. 424. On September 30, 2014, the PTAB granted Apple’s petitions for CBM review on several claims, but denied review for [998]*998the majority of the challenged claims, including those asserted at trial. Neither Apple nor Samsung renewed their motions to stay.

On September 26, 2014, Samsung filed ten petitions for CBM review of all the patents-in-suit on §§ 101, 102, and 108 grounds. Apple also filed six more petitions for CBM review between October 30 and November 24, 2014, this time only asserting that the patents covered patent ineligible subject matter. Neither party filed a motion to stay with the district court at this time.

While the parties awaited the PTAB’s decisions regarding the most recent petitions, both the Apple and Samsung cases proceeded towards trial. Because the cases raised similar issues, the district court held joint hearings on claim construction, dispositive motions, and the parties’ Daubert challenges during 2014, conducted a joint pretrial conference in January 2015, and denied both defendants’ motions for summary judgment of invalidity under § 101. It also set a February 2015 trial date for Apple — postponing Samsung’s trial until after the conclusion of Apple’s trial. Thereafter, the district court held two additional pretrial conferences for the Apple case and the case went to trial. After a six day trial in the Apple case, the jury returned a verdict in favor of Smartflash on February 24, 2015. See Smartflash LLC v. Apple Inc., No. 6:13-cv-447 (E.D.Tex. Feb. 24, 2015), ECF No. 503. Briefing on post-trial motions then began, and the court scheduled a hearing on those motions for July 1, 2015.

In late March and early April 2015, the PTAB instituted CBM review in seven proceedings filed by Apple and Samsung on all asserted claims of the '221, '720, '458, '598, and '317 Patents on § 101 grounds. On May 28, 2015, the PTAB also instituted CBM review on the asserted claims of the '772 Patent on § 101 grounds. In light of these decisions, on April 10, 2015, Samsung filed a “renewed” motion to stay all proceedings pending CBM review, and on April 23, 2015, Apple filed a motion to stay post-trial activity in its case, or, in the alternative to stay entry of final judgment, pending CBM review.

The district court denied both of these stay requests. The court did, however, sua sponte stay the actions against Google and Amazon.1 Smartflash LLC v. Apple Inc., Nos. 6:13-cv-447, 2015 U.S. Dist. LEXIS 70259 (E.D.Tex. May 29, 2015) (“Stay Op.”). The district court wrote a lengthy opinion analyzing the stay requests and explaining his ruling with respect to the four pending related actions. With respect to Apple, the district court’s analysis focused on the timing of Apple’s motion to stay, which was two months after the jury trial, and the fact that only the resolution of the parties’ post-trial motions remained before the case could be appealed to this Court. Because “seeing the case to its conclusion maximizes judicial and party resources and discourages gamesmanship in filing CBM petitions,” the district court concluded that a stay of the Apple litigation was unwarranted. Id. at *89 (quotation omitted). Similarly, the district court considered the significant resources already expended in the Samsung case and Samsung’s decision to wait until sixteen months into the litigation to file a [999]*999CBM petition asserting § 101. Because the case was on the eve of trial and an appeal to the Federal Circuit of both Samsung and Apple’s district court cases would be resolved before an appeal from a final PTAB decision, the district court concluded that the cases should proceed as scheduled, Because the actions against Google and Amazon remained in the early stages of litigation, the court found a stay of those actions to be appropriate even though there necessarily would be an overlap with respect to many of the issues to be decided.

Appellants timely filed interlocutory appeals to this Court. Apple further filed a motion to stay entry of final judgment and/or expedite appeal and Samsung filed a motion to stay district court proceedings pending appeal and to expedite briefing. Two days before oral argument, the district court vacated the jury’s damage award and ordered a new trial on damages to begin on September 14, 2015. See Smartflash LLC v. Apple Inc., No. 6:13-cv-447 (E.D.Tex. July 7, 2015), ECF No. 581. After oral argument this Court, sua sponte,

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