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GoPro, Inc. v. C&A Marketing, Inc.

United States District Court, N.D. California

June 15, 2017

GOPRO, INC., Plaintiff,
v.
C&A MARKETING, INC., et al., Defendants.

          ORDER DENYING MOTION TO STAY RE: ECF NO. 40

          JON S. TIGAR United States District Judge.

         Before the Court is Defendants C&A Marketing, Inc., C&A Licensing, LLC, and PLR IP Holding, LLC's (collectively, “C&A”) Motion to Stay Litigation Pending Inter Partes Review. ECF No. 40. The Court will deny the motion without prejudice.

         I. BACKGROUND

         GoPro filed its complaint in this action on June 27, 2016, alleging infringement of U.S. Patent Nos. 9, 025, 896 (the “'896 patent”) and 9, 282, 226 (the “'226 patent”). ECF No. 1. GoPro is a consumer electronics company known for its “versatile cameras and accessories as well as its proprietary technology for capturing images, transmitting, editing, and viewing those images.” Id. ¶ 10. GoPro's primary product line is its HERO series of cameras, including the “square-front” HERO4 Session. Id. ¶¶ 12, 21. GoPro accuses C&A of infringing through its manufacture and sale of Polaroid brand photography equipment, including specifically the Polaroid Cube and Polaroid Cube products, in conjunction with related software applications.[1] Id. at 5-9. C&A filed its answer to GoPro's complaint on August 2, 2016, asserting counterclaims for declaratory judgment of non-infringement and invalidity. ECF No. 12 at 12-13.

         On November 18, 2016, the Court entered a case schedule setting the close of fact discovery on August 14, 2017. ECF No. 33 at 2. GoPro served its infringement contentions on C&A on December 2, 2016, and C&A served its invalidity contentions on January 16, 2017. ECF No. 40 at 6. The parties began making their claim construction disclosures in February 2017. See ECF No. 33 at 1. On March 17, 2017, the parties filed their Joint Claim Construction and Prehearing Statement pursuant to Patent Local Rule 4-3, indicating that they disputed the constructions of four claim terms of the '896 patent. ECF No. 38.

         On April 21, 2017, C&A filed a petition for inter partes review (“IPR petition”) with the Patent Trial and Appeal Board (“PTAB”) challenging the validity of each asserted claim of the '896 patent pursuant to 35 U.S.C. § 311. ECF No. 40-2. GoPro's patent owner response is due no later than three months after the filing date accorded the petition, or July 21, 2017. 37 C.F.R. § 42.107(b); C&A Marketing, Inc. v. GoPro, Inc., Case No. IPR2017-01300, Paper 5 (P.T.A.B. May 16, 2017) (according filing date for the petition of April 21, 2017). The PTAB is statutorily required to issue an institution order (1) within three months after receiving a preliminary response to the petition under Section 313; or (2) if no such preliminary response is filed, the last date on which such response may be filed. 35 U.S.C. § 312(b). The PTAB must issue its final written decision on the petition by no later than one year following the institution decision. 35 U.S.C. § 316(a)(11). On April 24, 2017, C&A filed the instant motion to stay pending resolution of its IPR petition. ECF No. 40.

         GoPro filed its opening claim construction brief on April 28, 2017, ECF No. 42, C&A filed its responsive claim construction brief on May 12, 2017, ECF No. 48, and GoPro filed its reply on May 19, 2017, ECF No. 53.[2] The Court held a technology tutorial on May 30, 2017. ECF No. 61. A Markman hearing is scheduled for June 15, 2017.

         II. LEGAL STANDARD

         “Courts have inherent power to manage their dockets and stay proceedings, including the authority to order a stay pending conclusion of a PTO [Patent and Trademark Office] reexamination.” Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed.Cir.1988) (internal citations omitted). In determining whether to stay a case pending review by the PTO, courts consider the following factors: (1) whether discovery in the case is complete and whether a trial date has been set; (2) whether a stay would 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 non-moving party. Cygnus Telecomms. Tech., LLC, Patent Litig., 285 F.Supp.2d 1022, 1023 (N.D.Cal.2005); see also SAGE Electrochromics, Inc. v. View, Inc., No. 12-cv-06441-JST, 2015 WL 66415, at *1 (N.D. Cal. Jan. 5, 2015) (applying the framework applicable to motions to stay pending reexamination by the PTO to motions to stay pending the newer inter partes review process). While case law supplies these general considerations, the Court ultimately must decide whether to issue a stay on a case-by-case basis. Asetek Holdings, Inc. v. Cooler Master Co., Ltd., No. 13-cv-00457-JST, 2014 WL 1350813, at * 1 (N.D. Cal. Apr. 3, 2014).

         III. DISCUSSION

         A. Stage of the Proceedings

         C&A argues that this case is in its early stages. According to C&A, discovery “is in its infancy, ” as “[n]o depositions have been taken; no expert testimony has been conducted; no dispositive motions have been scheduled or heard, and the Court has not yet held a claim construction hearing.” ECF No. 40 at 8-9. C&A argues that document production as of the date of its motion was limited, with GoPro having only made a small production of technical documents pursuant to Patent Local Rule 3-2. Id. at 9. GoPro counters that “the parties are far along in this litigation, ” and “[f]act discovery is well under way and closes August 14, 2017.” ECF No. 50 at 2. It notes that “[t]he parties have exchanged written discovery and . . . have produced a number of documents.” Id. at 2. GoPro disputes C&A's characterization of the state of discovery, as the parties stipulated to the use of over 17, 000 documents produced in a separate matter in the District of New Jersey involving the same parties and accused products. Id. at 3. GoPro notes that C&A has produced a significant number of source code files relevant to the '896 patent and that GoPro has already scheduled seven depositions in mid-June. Id. GoPro also notes that it has “engaged in substantial third-party discovery, ” negotiating with relevant third parties to secure documents and schedule depositions. Id. at 3. Finally, GoPro points out that claim construction briefing is now complete, with a Markman hearing scheduled for June 15, 2017. See id. at 4.

         The Court first considers the relevant time period to evaluate the stage of proceedings. Citing the Federal Circuit's opinion in VirtualAgility, C&A argues that “[t]he stage of the litigation generally is measured as of the time that the motion to stay was filed.” ECF No. 40 at 8 (citing VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1315 (Fed. Cir. 2014)). In its reply brief, C&A criticizes GoPro for citing events subsequent to the filing of the motion to stay in its arguments that discovery is far along. ECF No. 56 at 3. While C&A is correct that the Court should consider the state of the litigation as of the date of the filing of the motion to stay, the Federal Circuit has also made clear that “courts are not obligated to ignore advances in the litigation” at the time it considers the motion.[3] Versata Software, Inc. v. Callidus Software, Inc., 771 F.3d 1368, 1373 (Fed. Cir. 2014) (holding that a district court may properly wait for an institution decision before resolving a motion to stay pending IPR, and that the court can consider subsequent developments in the litigation from the filing date of the motion until the date of the institution order) (vacated on other grounds, 780 F.3d 1134 (Fed. Cir. 2015)).

         Here, “[d]iscovery has not significantly advanced and a trial date has not yet been set, ” “[n]o dispositive motions have been scheduled or heard, and only written discovery has taken place.” SAGE Electrochromics, Inc., 2015 WL 66415 at *2; see also Cypress Semiconductor Corp. v. GSI Tech., Inc., No. 13-cv-02013-JST, 2014 WL 5021100, *2 (N.D. Cal. Oct. 7, 2014) (finding stay appropriate where “parties have engaged in some discovery [but] . . . no depositions have been taken or scheduled, little expert discovery has been conducted, claim construction has only occurred with respect to the patents that are not the subject of this motion, and no dispositive motions have been scheduled or heard.”). On the other hand, when the motion to stay was filed, the parties had already exchanged infringement and invalidity contentions and made their corresponding document productions under Patent Local Rules 3-2 and 3-4, exchanged written discovery, and made their initial claim construction disclosures. See ECF No. 40 at 8. The parties were ready to begin claim construction briefing with the technology ...


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