Taction Technology, Inc. v. Apple Inc.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 TACTION TECHNOLOGY, INC., Case No.: 21-CV-812 TWR (JLB)

12 Plaintiff, ORDER GRANTING IN PART AND 13 v. DENYING IN PART DEFENDANT’S MOTION TO STAY 14 APPLE INC.,

15 Defendant. (ECF No. 53) 16 17 Presently before the Court is the Motion to Stay (“Mot.,” ECF No. 53) filed by 18 Defendant Apple Inc. (“Apple”). Plaintiff Taction Technology, Inc. (“Taction”) has filed 19 an Opposition (“Opp’n,” ECF No. 62), to which Defendant has filed a Reply (“Reply,” 20 ECF No. 65). The Court held oral argument on the Motion on January 19, 2022. (See ECF 21 No. 69; see also ECF No. 74 (“Tr.”).) Having carefully reviewed the Parties’ arguments, 22 the record, and the law, the Court GRANTS IN PART AND DENIES IN PART 23 Defendant’s Motion to Stay as follows. 24 BACKGROUND 25 On April 26, 2021, Plaintiff Taction filed its Complaint against Defendant Apple 26 asserting claims for patent infringement. (See ECF No. 1 (“Compl.”)). Taction is a 27 “technology innovator specializing in enhanced haptics for electronic devices.” (Id. ¶ 1.) 28 Taction owns all rights, title, and interest in U.S. Patent Nos. 10,659,885 and 10,820,117 1 (together, the “Asserted Patents”). (Id. ¶ 23.) Taction alleges that Apple has “directly 2 infringed, continues to infringe, and has induced or contributed to the infringement” of the 3 Asserted Patents “by making, using, selling, and offering for sale, without authority or 4 license the Accused Products in violation of 35 U.S.C. § 271(a).” (Compl. ¶¶ 93, 133.) 5 On October 21, 2021, Apple filed petitions for inter partes review (“IPR”) before 6 the Patent Trial and Appeal Board (“PTAB”). (Mot. at 1.) The IPR petitions “seek to 7 invalidate all asserted claims of the patents at issue.” (Id.) “The PTAB must decide 8 whether to institute the IPRs within 6 months after they are filed, and if instituted, must 9 make a final decision on the IPRs within 1 year after institution.” (Id.) Thus, the PTAB’s 10 decision of whether to institute the IPR will be due in April 2022. (Id. at 2.) Apple requests 11 that the Court stay this case pending the outcome of the proceedings in the United States 12 Patent and Trademark Office (“PTO”), in which Apple filed its IPR petitions before the 13 PTAB. (Id. at 1.) 14 LEGAL STANDARD 15 A district court has broad discretion to control its own docket—including the 16 discretion to stay proceedings. See Clinton v. Jones, 520 U.S. 681, 706 (1997). Courts 17 generally consider three factors to determine whether to impose a stay pending parallel 18 proceedings before the PTAB: (1) whether a stay will simplify the issues in question and 19 trial of the case, (2) whether discovery is complete and a trial date set, and (3) whether a 20 stay would unduly prejudice or present a clear tactical disadvantage to the nonmoving 21 party. See Qualcomm Inc. v. Apple Inc., No. 3:17-CV-2403-CAB-MDD, 2018 WL 22 4104966, at *1 (S.D. Cal. Aug. 29, 2018) (citing TAS Energy, Inc. v. San Diego Gas & 23 Elec. Co., No. 12-cv-2777-GPC-BGS, 2014 WL 794215, at *3 (S.D. Cal. Feb. 26, 2014)). 24 “There is no per se rule that patent cases should be stayed pending reexamination, because 25 such a rule ‘would invite parties to unilaterally derail’ litigation.” Presidio Components, 26 Inc. v. Am. Tech. Ceramics Corp., No. 14-CV-2061-H (BGS), 2015 WL 12843213, at *2 27 (S.D. Cal. Apr. 20, 2015) (quoting Verinata Health, Inc. v. Ariosa Diagnostics, Inc., 2014 28 / / / 1 U.S. Dist. LEXIS 4025, at *4 (N.D. Cal. Jan. 13, 2014)). Rather, the review includes the 2 totality of the circumstances. See Qualcomm Inc., 2018 WL 4104966, at *1. 3 ANALYSIS 4 I. Simplification of Issues 5 First, the Court considers whether a stay will help simplify the issues in question and 6 the trial proceedings. See TAS Energy, 2014 WL 794215, at *3. The IPR can help 7 streamline a case because “when a claim is cancelled, the patentee loses any cause of action 8 based on that claim, and any pending litigation in which the claims are asserted becomes 9 moot.” See Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1340 (Fed. Cir. 2013). 10 “Even if no patent claim is eliminated, the intrinsic record developed during the IPR may 11 inform on issues like claim construction.” Core Optical Techs., LLC v. Fujitsu Network 12 Commc’ns, Inc., No. SACV1600437AGJPRX, 2016 WL 7507760, at *2 (C.D. Cal. 13 Sept. 12, 2016). 14 Apple has petitioned for review of both Asserted Patents at issue in this case and 15 filed four IPR petitions. (Mot. at 2.) Taction argues that it is speculative for the Court to 16 stay the case prior to the PTAB’s decision whether to institute the IPR. (Opp’n at 6.) If 17 the PTAB decides to institute the IPR, however, there are only two outcomes—either the 18 PTAB cancels the claim, or it does not. If it invalidates the claim, the action is rendered 19 moot. If it confirms the claim, Apple would be “estopped from asserting invalidity 20 challenges in this case that it raised or could reasonably have raised in the IPR.” See 21 Qualcomm Inc., 2018 WL 4104966, at *2. This binary outcome weighs in favor of a 22 “limited stay of proceedings until the PTAB issues its decisions on whether to institute 23 IPR.” See Qualcomm Inc., 2018 WL 4104966, at *2. Given that the PTAB will decide 24 whether to institute the IPR within three months, the potential to save the parties and the 25 Court from expending resources during the waiting period weighs in favor of a temporary 26 stay. See Clinicomp Int’l, Inc. v. Cerner Corp., No. 17CV2479-GPC(BLM), 2018 WL 27 5617694, at *7 (S.D. Cal. Oct. 30, 2018) (finding a short stay appropriate because of the 28 / / / 1 potential simplification of issues if the PTAB instituted IPR proceedings where a decision 2 by the PTAB was expected in roughly four months). 3 II. Stage of Litigation 4 Second, the Court considers the stage of litigation—how close discovery is to 5 completion and whether a trial date has been set. See Blast Motion, Inc. v. Zepp Labs, Inc., 6 No. 15-CV-700 JLS (NLS), 2016 WL 5107678, at *2 (S.D. Cal. Mar. 29, 2016). “If a 7 significant amount of discovery remains, a stay is more appropriate.” Id. 8 Thus far, Taction has produced “roughly 20,000 pages of documents and 9 propounded 12 interrogatories and 85 RFPs.” (Opp’n at 3.) Apple has “produced over 10 400,000 pages of documents and propounded 13 interrogatories and 79 requests for 11 production.” (Id.) The parties have additionally met and conferred over discovery disputes 12 and have fully briefed discovery motions. (Id.) But the “concern is not so much how much 13 discovery has already occurred as whether discovery is nearing completion.” Blast Motion, 14 2016 WL 5107678, at *2 (citing Sorensen ex rel. Sorensen Research & Dev. Trust v. Black 15 & Decker Corp., No. 06cv1572 BTM (CAB), 2007 WL 2696590, at *4 (S.D. Cal. Sept. 10, 16 2007)). To date, no depositions have been noticed; fact discovery is not scheduled to close 17 until July 29, 2022; and expert discovery and dispositive motions will not occur until fall 18 of 2022. (Mot. at 5.) In other words, discovery is not nearing completion, and there is still 19 an abundance of work ahead of the parties to complete the discovery process, which weighs 20 in favor of a brief stay. See Qualcomm Inc., 2018 WL 4104966, at *2–3 (granting a stay 21 when “significant fact and expert discovery and dispositive motion practice” was ahead); 22 Blast Motion, 2016 WL 5107678, at *2–3 (same). 23 Further, although the parties have “exchanged preliminary and responsive claim 24 constructions and have filed a Joint Hearing Statement, Joint Claim Construction Chart, 25 and Joint Claim Construction Worksheet,” (Opp’n at 3), and Claim Construction Briefs, 26 (see ECF Nos. 72, 73), no trial date has been set, and the claim construction hearing is set 27 for February 18, 2022. (Opp’n at 3.) The early stage of this litigation therefore weighs in 28 favor of a stay. See Qualcomm Inc., 2018 WL 4104966, at *2–3 (granting a stay when the 1 claim construction hearing had not yet taken place and no trial date had been set); see also 2 Blast Motion, 2016 WL 5107678, at *2–3 (same). 3 III. Undue Prejudice 4 Finally, the Court considers “whether a stay would unduly prejudice or present a 5 clear tactical disadvantage to the nonmoving party.” Qualcomm Inc., 2018 WL 4104966, 6 at *1. “Mere delay in litigation does not establish undue prejudice.” Core Optical Techs., 7 LLC v. Fujitsu Network Commc’ns, Inc., No. SACV1600437AGJPRX, 2016 WL 7507760, 8 at *2 (C.D. Cal. Sept. 12, 2016). Further, “[t]he fact that the parties are not competitors 9 weigh[s] in favor of a stay as any harm from a stay can be addressed through damages.” 10 TAS Energy, 2014 WL 794215, at *5. 11 Apple asserts that Taction is not a direct competitor, (Mot. at 9)—an assertion that 12 Taction does not contest. Taction argues that “staying the case would frustrate [its] ability 13 to timely obtain discovery from Apple’s key fact witnesses who may be inaccessible, 14 unavailable, or have faded memories if and when the stay is lifted.” (Opp’n at 14.) The 15 PTAB’s decision whether to institute the IPR, however, is expected in April 2022. Thus, 16 a temporary stay is not likely to cause undue prejudice to Taction or affect the availability 17 of witnesses. Additionally, at oral argument on January 19, 2022, Taction expressed 18 concern that a stay would provide Apple with two opportunities to construe the claims— 19 first as the “plain meaning” by the PTAB and second under narrower terms by the Court. 20 (See Tr. at 8:23–12:4.) While this issue may arise under a stay pending all PTAB 21 proceedings, the Court is not persuaded that a temporary stay pending the PTAB’s decision 22 whether to institute the IPR would similarly provide Apple this tactical advantage and 23 unduly prejudice Taction. 24 Further, neither Party has employed dilatory tactics or strategery in the timing of 25 their motions. “Taction initiated this action within months after determining that Apple 26 was using its technology without permission.” (Opp’n at 14.) Apple has been similarly 27 expedient, as acknowledged by Taction at the hearing, (see Tr. at 11:5–7), filing its four 28 IPR petitions six months before the statutory one-year deadline and four months after filing Answer. (Mot. at 8.) Thus, it does not appear that Apple delayed intending to prejudice 2 || Taction, meaning this factor weighs in favor of granting a temporary stay. 3 CONCLUSION 4 In light of the foregoing, the Court GRANTS IN PART AND DENIES IN 5 ||PART Defendant’s Motion to Stay (ECF No. 53). Specifically, the Court STAYS this 6 || action pending the PTAB’s decision whether to institute the IPR but DENIES WITHOUT 7 || PREJUDICE Apple’s request to stay these proceedings pending the PTAB’s final 8 ||decision on Apple’s IPR petitions. The Parties SHALL FILE a joint status report within 9 || seven (7) days of the PTAB issuing its decision whether to institute IPR. 10 Additionally, the Court GRANTS the request to stay the Claim Construction hearing 11 |/currently set for February 18, 2022. The Court therefore STAYS the Parties’ remaining 12 |}claim construction briefing and VACATES the February 18, 2022 hearing, with the 13 || briefing schedule and hearing to be reset once this stay is lifted. 14 IT IS SO ORDERED. 15 || Dated: January 26, 2022 — 16 | oS) (2 (re 7 Honorable Todd W. Robinson United States District Judge 18 19 20 21 22 23 24 25 26 27 28