Speir Technologies Ltd. v. Apple Inc.

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION [7] 8 SPEIR TECHNOLOGIES LTD, Case No. 5:23-cv-00095-EJD 9 Plaintiff, ORDER GRANTING MOTION TO STAY PENDING INTER PARTES 10 v. REVIEW 11 APPLE, INC., Re: Dkt. No. 81 Defendant. [12] 13 Before the Court is Defendant Apple, Inc.’s (“Apple”) Motion to Stay Pending Inter Partes 14 Review (“Motion”), filed on February 9, 2023. ECF No. 81 (“Mot.”). Apple has sequentially 15 filed petitions for inter partes review (“IPR”) on all asserted patents-in-suit to the Patent and 16 Trademark Office’s (“PTO”) Patent Trial and Appeal Board (“PTAB”), with the most recent one 17 filed eight days before the instant Motion. Mot. 3. The Court heard oral arguments on March 30, 18 2023. Based on the parties’ briefs and arguments raised in the hearing, the Court GRANTS 19 Apple’s Motion to Stay this case pending IPR before the PTAB. 20 I. BACKGROUND 21 A. Procedural History 22 On January 20, 2022, Plaintiff Speir Technologies, Ltd. (“Speir”) filed suit against Apple 23 in the Western District of Texas, alleging infringement of two patents: Patent Nos. 8,345,780 and 24 7, 321,777. ECF No. 4, at 1. On March 22, 2022, Speir amended its complaint to include two 25 additional patents: Patent Nos. 7,110,779 and 7,765,399. ECF No. 8, at 1 (“FAC”). 26 On April 4, 2022, Apple filed a motion to dismiss the infringement claims as to the ’399 27 Patent, which was fully briefed by April 26, 2022. ECF No. 13. 1 On April 19, 2022, Speir served its preliminary infringement contentions, and on June 14, 2 2022, Apple served its preliminary invalidity contentions. Decl. Drew B. Hollander (“Hollander 3 Decl.”) ¶¶ 2–3, ECF No. 84-1. In August and September 2022, the parties engaged in claim 4 construction briefing. ECF Nos. 36, 41, 43, 47. Around the same period, Apple moved to transfer 5 venue in the case to the Northern District of California. ECF No. 37. 6 On December 15, 2022, the district court for the Western District of Texas transferred this 7 case to this district without holding a claims construction hearing or issuing an order on Apple’s 8 motion to dismiss. ECF Nos. 67, 69, 71. 9 B. IPR Proceedings 10 On May 27, 2022, third-party Unified Patents filed a petition for IPR of the ’777 patent-in11 suit. Hollander Decl. ¶ 4. Apple also filed an IPR petition for the ’777 patent-in-suit on 12 September 9, 2022 (id. ¶ 5), and then requested conditional joinder with Unified Patents’ IPR 13 proceedings. Mot. 3 n.5. On November 9, 2022, the PTAB instituted Unified Patents’ petition for 14 IPR of the ’777 patent, finding there to be “not only a reasonable likelihood of unpatentability, but 15 also a compelling unpatentability challenge.” Hollander Decl., Ex. A (“PTAB ’777 Decision”), at 16 13, ECF No. 84-2. 17 Between November 30, 2022 and February 1, 2023, Apple filed IPR petitions for the 18 remaining ’779, ’780, and ’399 patents-in-suit. Mot. 3. The parties agree that the PTAB is 19 expected to decide whether or not to institute IPR for the patents-in-suit at some time between 20 May and August 2023. Id.; see also Opp. 2. 21 II. LEGAL STANDARD 22 Courts have inherent power to manage their dockets, “including the discretion to grant a 23 stay pending concurrent proceedings before the PTO.” Capella Photonics, Inc. v. Cisco Sys., Inc., [24] 2015 WL 1006582 , at *1 (N.D. Cal. Mar. 6, 2015) (citing Ethicon, Inc. v. Quigg, 849 F.2d 1422 , 25 1426–27 (Fed. Cir. 1988)). In determining whether to stay a patent infringement case pending 26 review or reexamination of the patents, courts traditionally consider three factors: “(1) whether 27 discovery is complete and whether a trial date has been set; (2) whether a stay will simplify the 1 issues in question and trial of the case; and (3) whether a stay would unduly prejudice or present a 2 clear tactical disadvantage to the nonmoving party.” PersonalWeb, LLC v. Apple Inc., 69 F. Supp. 3 3d 1022, 1025 (N.D. Cal. 2014) (citations and quotations omitted). Courts in this district have 4 often recognized a “liberal policy in favor of granting motions to stay” pending IPR. E.g., Zomm, 5 LLC v. Apple Inc., 391 F. Supp. 3d 946, 956 (N.D. Cal. 2019). 6 III. DISCUSSION 7 Here, all factors weigh in favor of staying this case pending the PTAB’s final decision on 8 the ’777 patent’s IPR, as well as its decisions on instituting IPR of the remaining patents-in-suit. 9 First, the current stage of litigation weighs in favor of granting a stay. Discovery has 10 begun but is not completed, and a trial date has not been set. Apple also has not yet answered the 11 FAC on account of its pending motion to dismiss. And because this case was recently transferred 12 into this district, there is not even a case management schedule in this case. Although the parties 13 have exchanged preliminary infringement and invalidity contentions and prepared for claim 14 construction, “these are generally events that happen early in the life of a case and are not, by 15 themselves, enough to weigh against a stay.” Regents of Univ. of Minnesota v. LSI Corp., 2018 16 WL 2183274 , at *2 (N.D. Cal. May 11, 2018). Accordingly, this factor weighs soundly in favor 17 of granting a stay, especially given the case’s recent transfer into this district. 18 Second, a stay pending IPR will likely simplify the issues in question, avoid inconsistent 19 outcomes, and preserve limited judicial resources from ruling on issues that may change following 20 PTAB review. Speir argues that a stay is not warranted when the PTAB has not yet decided to 21 institute IPR, Opp. 4–7; however, the undisputed fact is that the PTAB has instituted IPR with 22 respect to at least one patent-in-suit. See PTAB ’777 Decision. Furthermore, there is a significant 23 likelihood of simplification, given that the PTAB had found there is “not only a reasonable 24 likelihood of unpatentability, but also a compelling unpatentability challenge” as to the ’777 25 patent. Id. at 13. In any event, courts in this district have frequently stayed cases pending IPR 26 even when the PTAB has not yet issued a decision on institution. See, e.g., Viavi Sols. Inc. v. 27 Platinum Optics Tech. Inc., 2021 WL 1893142 (N.D. Cal. May 11, 2021); Anza Tech., Inc. v. 1 Toshiba Am. Elec. Components Inc., 2018 WL 4859167 , at *2 (N.D. Cal. Sept. 28, 2018) (noting 2 that “it is not uncommon for courts to grant stays pending reexamination prior to the PTO 3 deciding to reexamine the patent”) (internal brackets omitted); Evolutionary Intelligence v. Yelp, [4] 2013 WL 6672451 , at *7 (N.D. Cal. Dec. 18, 2013) (highlighting the “liberal policy favoring stays 5 pending reexamination . . . even if the Patent Office is still considering whether to grant a party’s 6 reexamination request”). Apple’s IPR petitions also cover all asserted claims, and even a single 7 PTAB decision has the potential to streamline the case significantly. The second factor of 8 simplification, therefore, favors a stay. 9 Third, a stay will not unduly prejudice Speir. Although Speir makes much ado about 10 Apple’s sequentially filed IPR petitions close to the filing deadline, close filings are still timely 11 filings. See Finjan, Inc. v. Symantec Corp., 139 F. Supp. 3d 1032, 1036 (N.D. Cal. 2015) 12 (declining to “condition a stay on [defendant] seeking IPR earlier than the end of its statutory 13 deadline, or to read a dilatory motive into the timely exercise of its statutory rights”). 14 Furthermore, unlike other cases where a stay could unduly prejudice the business dealings 15 between parties who are direct competitors, see Zomm, 391 F. Supp. 3d at 958 , Speir is a non16 practicing entity that “cannot be prejudiced by a stay because monetary damages provide adequate 17 redress for infringement.” Contour IP Holding, LLC v. GoPro, Inc., 2018 WL 6574188 , at *6 18 (N.D. Cal. Dec. 12, 2018). In its opposition, Speir generally cites prejudice arising from delays 19 and potentially lost evidence. Opp. 7–9. Delay, however, does not result in “undue prejudice” 20 unless Speir makes a “specific showing of prejudice beyond the delay necessarily inherent in any 21 stay,” which it has not done so here. Synthego Corp. v. Agilent Techs., Inc., 2022 WL 2704121 , at 22 *3 (N.D. Cal. July 12, 2022). Nor do Speir’s remarks regarding lost evidence identify any specific 23 witness or evidence that is at risk of being lost. See Software Rts. Archive, LLC v. Facebook, Inc., [24] 2013 WL 5225522 , at *5 (N.D. Cal. Sept. 17, 2013) (rejecting delay concerns where plaintiff had 25 not “identified a particular expert witness who is likely to be lost” or shown that “relevant 26 technology or evidence thereof would become ‘unavailable’”). In sum, Speir is not likely to suffer 27 undue prejudice, which in turn supports granting a stay. 1 All three factors favor a stay pending IPR in this case. Speir argues that, notwithstanding 2 || these factors, the totality of circumstances weighs against a stay because “the parties’ disputes can 3 || be resolved more quickly and efficiently by simply proceeding to trial” and “allowing the progress 4 || of the court’s docket to depend on the status of proceedings elsewhere” would impair the Court’s 5 ability to manage its own docket. Opp. 10. As to the first point, given the early stages of the 6 || litigation here and the expected dates of the PTAB’s decisions, Speir’s expectation to complete— 7 at a minimum—claim construction, fact discovery, and possibly expert discovery before August 8 2023 is optimistic albeit flattering. Opp. 4. Additionally, if the PTAB were to institute IPR and 9 cancel any of the patents-in-suit, any such expedited discovery would potentially be in vain. And 10 || finally, a stay pending IPR would not deprive the Court of the ability to control its own docket; if 11 anything, a stay “effectuates the intent of the AIA by allowing the agency with expertise to have 12 || the first crack at cancelling any claims that should not have issued in the patents-in suit before 13 costly litigation continues.” Software Rts. Archive, 2013 WL 5225522 , at *6. 14 || Iv. CONCLUSION 15 Based on the foregoing, Apple’s Motion to Stay Pending Inter Partes Review is a 16 GRANTED. This case is hereby STAYED, and the Clerk SHALL administratively close the file 3 17 in this case. Apple is ORDERED to file a status report with the Court no later than five (5) days 18 after the PTAB issues any final written or institution decision on any of the six IPR petitions listed 19 || in Apple’s Motion. Mot. 3. 20 IT IS SO ORDERED. 21 Dated: March 30, 2023 [22] 23 ee. EDWARD J. DAVILA 24 United States District Judge [27] 28 || Case No.: 5:23-cv-00095-EJD ORDER GRANTING STAY PENDING INTER PARTES REVIEW