Anderson Power Products, Inc. v. Bizlink Technology, Inc.

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA [6] 7 ANDERSON POWER PRODUCTS, INC., Case No. 23-cv-05436-AMO 8 Plaintiff, ORDER GRANTING STAY v. [9] Re: Dkt. No. 62 10 BIZLINK TECHNOLOGY, INC., et al., Defendants. [12] 13 This is an action for patent infringement relating to Defendants’ alleged infringement of 14 United States Patent No. 8,808,017 (“the ’017 patent”). Before the Court is Defendants’ Motion 15 to Stay the case pending inter partes review (“IPR”). The matter is fully briefed and suitable for 16 decision without oral argument. Accordingly, the hearing set for February 27, 2025, is 17 VACATED. See Civ. L.R. 7-6. Having read the parties’ papers and carefully considered their 18 arguments and the relevant legal authority, and good cause appearing, the Court hereby GRANTS 19 the Motion. 20 I. BACKGROUND 21 Plaintiff filed this action on October 23, 2023, alleging infringement of the ’017 patent by 22 Defendants’ BSC-301 series receptacle and BC-330 series plug (collectively, the “Accused 23 Product”). See Compl. (ECF 1). Plaintiff alleges that Defendants infringed 14 claims of the ’017 24 patent, including claims 1-6, 7, 9, and 13-18. See id. Defendants answered Plaintiff’s complaint 25 on March 19, 2024. ECF 27. On June 7, 2024, the Court entered a Case Management Order 26 setting the claim construction hearing date for January 23, 2025. ECF 38, ECF 39. The parties 27 have served and responded to written discovery, exchanged infringement and invalidity 1 On October 29, 2024, Plaintiff filed a Motion for Leave to Amend its Infringement 2 Contentions to add claims 5-6 and 13-18 of the ’017 patent (“Newly Asserted Claims”). ECF 49. 3 The Court then vacated the claim construction hearing, noting that Anderson’s infringement 4 contentions remain “unsettled.” ECF 59. 5 On November 24, 2024, the Patent Trial and Appeal Board (“PTAB”) issued its Decision 6 Granting Inter Partes Review of claims 1-4 and 7-12 of the ’017 patent. Smyth Decl., Ex. 1 (ECF 7 62-6). Defendants filed this Motion to Stay on November 27, 2024. See ECF 62. 8 II. DISCUSSION 9 Courts have inherent power to manage their dockets, “including the discretion to grant a 10 stay pending concurrent proceedings before the PTO.” Capella Photonics, Inc. v. Cisco Sys., Inc., [11] 2015 WL 1006582 , at *1 (N.D. Cal. Mar. 6, 2015) (citing Ethicon, Inc. v. Quigg, 849 F.2d 1422 , 12 1426–27 (Fed. Cir. 1988)). In determining whether to stay a patent infringement case pending 13 review or reexamination of the patents, courts traditionally consider three factors: “(1) whether 14 discovery is complete and whether a trial date has been set; (2) whether a stay will simplify the 15 issues in question and trial of the case; and (3) whether a stay would unduly prejudice or present a 16 clear tactical disadvantage to the nonmoving party.” PersonalWeb, LLC v. Apple, Inc., 69 F. 17 Supp. 3d 1022, 1025 (N.D. Cal. 2014) (citations and quotations omitted). Courts in this district 18 have often recognized a “liberal policy in favor of granting motions to stay” pending IPR. See, 19 e.g., Zomm, LLC v. Apple, Inc., 391 F. Supp. 3d 946, 956 (N.D. Cal. 2019). 20 Here, all factors weigh in favor of staying this case pending PTAB review. 21 A. Stage of Litigation 22 “The first factor the Court considers is whether the litigation is at an early stage.” Zomm, 23 LLC v. Apple Inc., 391 F. Supp. 3d 946, 956 (N.D. Cal. 2019) (citing AT&T Intellectual Property I 24 v. Tivo, Inc., 774 F. Supp. 2d 1049, 1052 (N.D. Cal. 2011)). “An early stay may save the parties 25 and the Court from unnecessarily expending significant resources. A stay later in the proceedings 26 will likely produce less benefit and increase the possibility of prejudice.” Largan Precision Co. v. 27 Motorola Mobility LLC, No. 21-cv-09138-JSW, 2022 WL 294935 , at *4 (N.D. Cal. July 26, 1 dispositive motion practice; (2) whether the court has issued its claim construction order; and 2 (3) whether the court has set a trial date.” Id.; see also PersonalWeb Techs., LLC v. Apple Ins., 69 3 F. Supp. 3d 1022, 1025-26 (N.D. Cal. 2014) (collecting cases). 4 Here, the stage of this litigation favors a stay. Though the parties have filed their claim 5 construction briefs, the Court has not made any substantive determinations on the merits. The 6 schedule also favors a stay. No trial date has been set. ECF 39. In addition, although discovery 7 has begun, it is far from complete. Id. No fact depositions have been taken and no close to 8 discovery has been set. While it is true that the parties have begun or completed several of their 9 obligations under the patent local rules (e.g., infringement contentions, claim construction 10 discovery), these are generally events that happen early in the life of a case and are not, by 11 themselves, enough to weigh against a stay. Far more work lies ahead for the litigants. The Court 12 thus finds this factor weighs in favor of granting a stay. 13 B. Simplification of Issues 14 “A stay pending reexamination is justified where ‘the outcome of the reexamination 15 would be likely to assist the court in determining patent validity and, if the claims were canceled 16 in the reexamination, would eliminate the need to try the infringement issue.’ ” Evolutionary 17 Intelligence, LLC v. Apple, Inc., No. 13-CV-04201-WHA, 2014 WL 93954 , at *2 (N.D. Cal. Jan. 18 9, 2014) (quoting Slip Track Sys., Inc. v. Metal Lite, Inc., 159 F.3d 1337, 1341 (Fed. Cir. 1998)). 19 “The standard is simplification of the district court case, not complete elimination of it by the 20 PTAB.” Finjan v. Symantec Corp., 139 F. Supp. 3d 1032, 1036 (N.D. Cal. 2015) (citing LELO, 21 Inc. v. Standard Innovation (US) Corp., No. 13-cv-01393-JD, 2014 WL 2879851 , at *3 (N.D. Cal. 22 June 24, 2014)). Courts regularly grant stays even before the PTAB has decided whether to 23 conduct IPR and the likelihood of simplification remains somewhat speculative. See, e.g., Topia 24 Tech., Inc. v. Dropbox Inc., No. 23-CV-00062-JSC, 2023 WL 3437823 , at *4-6 (N.D. Cal. May 25 12, 2023) (granting stay request before PTAB made IPR institution decision). 26 Here, the PTAB granted Defendants’ review petition as to all of the six claims currently at 27 issue in the case, including claims 1-4, 7, and 9. Smyth Decl., Ex. 1 at 32 (“Accordingly, it is: 1 claims 1-4 and 7-12 of the ’017 patent based on the unpatentability challenges presented in the 2 Petition”). The PTAB’s final decision on these claims will substantially simplify the issues in this 3 case. Either the claims, already found reasonably likely to be invalid, will become moot, or the 4 Court will have the benefit of the PTAB’s findings. Under either outcome, a stay pending IPR 5 will likely simplify the issues in question, avoid inconsistent outcomes, and preserve limited 6 judicial resources from ruling on issues that may change following PTAB review. The Court 7 concludes that the second factor weighs in favor of a stay. 8 C. Undue Prejudice 9 “Third, the Court looks to whether a stay would unduly prejudice or present a clear tactical 10 disadvantage to the nonmoving party.” PersonalWeb Techs., 69 F. Supp. 3d at 1029. In 11 evaluating undue prejudice, courts consider: (a) the timing of the reexamination request; (b) the 12 timing of the request for a stay; (c) the status of reexamination proceedings; and (d) the 13 relationship between the parties. SAGE Electrochromatics, Inc. v. View, Inc., No. 12-CV-0644114 JST, 2015 WL 66415 , at *3 (N.D. Cal. Jan. 5, 2015). “Courts have repeatedly found no undue 15 prejudice unless the patentee makes a specific showing of prejudice beyond the delay necessarily 16 inherent in any stay.” Palo Alto Networks, inc. v. Packet Intelligence LLC, No. 19-cv-0247117 WHO, 2020 WL 5760475 , at *2 (N.D. Cal. Sept. 28, 2020). 18 Here, Defendants timely filed the petition for IPR on May 13, 2024, well before their 19 statutory, one-year deadline to file. Smyth Decl., Ex. 2 (ECF 62-4). This filing came before the 20 parties submitted their initial joint case management conference statement (ECF 33) or attended 21 the initial case management conference (ECF 38), demonstrating that Defendants did not delay in 22 pursuing reexamination. Further, Defendants timely filed this Motion to Stay, filing it only one 23 week after the PTAB issued its institution decision. ECF 62. Defendants’ timely filings, 24 satisfying the first two subfactors, undercut any purported prejudice towards Plaintiff. 25 Further, the PTAB has instituted IPR, and the final written decision will be issued no later 26 than November 22, 2025. See 35 U.S.C. § 316 (a)(11). This is not a premature motion anticipating 27 whether the PTAB will review the patent in question. Rather, the PTAB already instituted IPR 1 [BizLink will] prevail in establishing the unpatentability of at least one challenged claim of the 2 ’017 patent.” Smyth Decl., Ex. 1 at 2. This subfactor also weighs against prejudice. Netflix, Inc. 3 v. CA, Inc., No. 21-CV-03649-EMC, 2022 WL 1144631 , at *2 (N.D. Cal. Mar. 30, 2022) (finding 4 that the third sub-factor weighed in favor of a stay when the PTAB’s IPR decisions were expected 5 in eleven months). 6 The fourth subfactor – the relationship between the parties – weighs against a stay, because 7 the parties are direct competitors and the alleged risk of marketplace harms, including diminished 8 market recognition and price erosion, may not be readily compensable by money damages. But 9 that risk is not so substantial as to outweigh the other subfactors that favor a stay. 10 Ultimately, Plaintiff identifies no specific prejudice that a stay would impose. Plaintiff 11 instead argues only vaguely that “[a] stay would leave Plaintiff unduly prejudiced and would 12 allow Defendants to gain a tactical advantage.” Opp. at 7. But courts “have long acknowledged 13 that a delay inherent to a stay does not, in and of itself, constitute prejudice.” Oyster Optics, LLC 14 v. Ciena Corp., No. 17-CV-05920-JSW, 2018 WL 6972999 , at *3 (N.D. Cal. Jan. 29, 2018) 15 (citation omitted). The Court thus finds no undue prejudice or tactical disadvantage to Plaintiff, 16 particularly where IPR proceedings have already been instituted. 17 III. CONCLUSION 18 The Court ORDERS this case STAYED pending inter partes review. The Court further 19 ORDERS that the parties file with the Court a joint case management statement within seven days 20 of any and all of the following events: (1) issuance of a final written decision in IPR; (2) filing of a 21 notice of appeal regarding a final written decision; (3) expiration of time to file a notice of appeal 22 of a final written decision; or (4) issuance of the mandate after entry of judgment on appeal of a 23 final written decision. The joint case management statement shall apprise the Court of the 24 PTAB’s decision and describe the parties’ respective positions regarding whether the stay should 25 continue in light of the remaining steps before the Patent Trial and Appeal Board. 26 Pending the stay, the Court TERMINATES Plaintiff’s Motion for Leave to Amend its 27 Infringement Contentions (ECF 49) subject to resubmission after the stay is lifted. 1 The Court ORDERS the parties to submit a proposed omnibus sealing order resolving all 2 || pending administrative motions to seal. The proposed omnibus order shall include a chart as 3 illustrated on page six of the Court’s Civil Standing Order. The proposed order shall be both filed 4 || onthe docket and submitted as a Word version to amopo @cand.uscourts.gov by no later than 5 11:59 a.m. on February 21, 2025. [6] 7 IT IS SO ORDERED. 8 Dated: February 12, 2025 9 ) | | - 1. 10 : ARACELI MARTINEZ-OLGUIN I United States District Judge [16] = 17 Z 18