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Uniloc United States of America, Inc v. Apple Inc.

United States District Court, N.D. California

May 25, 2018

UNILOC UNITED STATES OF AMERICA, INC., et al., Plaintiffs,
v.
APPLE INC., Defendant.

          ORDER GRANTING DEFENDANT'S MOTIONS TO STAY

          PHYLLIS J. HAMILTON UNITED STATES DISTRICT JUDGE

         Before the court are defendant Apple, Inc.'s (“Apple”) motions to stay the three above-captioned cases pending inter-partes review (“IPR”) by the Patent Trial and Appeal Board (“PTAB”). The matter is fully briefed and suitable for decision without oral argument. Accordingly, the hearing set for May 30, 2018 is VACATED. Having read the parties' papers and carefully considered their arguments and the relevant legal authority, and good cause appearing, the court GRANTS Apple's motions as follows.

         BACKGROUND

         Plaintiffs Uniloc USA, Inc. and Uniloc Luxembourg, S.A. (together “Uniloc”) filed these actions in June 2017, alleging that Apple infringed U.S. Patent Nos. 8, 872, 646 (the “'646 patent”); 7, 653, 508 (the “'508 patent”); 7, 881, 902 (the “'902 patent”); 8, 712, 723 (the “'723 patent”); and 7, 690, 556 (the “'556 patent”).

         The actions were originally filed in the Eastern District of Texas. On August 22, 2017, the three actions were consolidated, along with other cases, in the Eastern District of Texas, with No. 18-cv-00362-PJH as the Lead Case. See No. 18-cv- 00362-PJH, Dkt. 24.[1]

         Apple filed motions to change venue on September 22, 2017 in each of the cases, and the Eastern District of Texas court granted the motions on December 22, 2017.

         On December 8, 2017, Apple filed a petition for IPR of the asserted claims in the ‘646 patent. Dkt. 136-1 (“Vidmar Decl.”), Ex. A2. On December 21, 2018, December 22, 2018, and January 5, 2018, Apple filed petitions for IPR of the ‘508, ‘723, and ‘902 patents, respectively. Id. at Exs. A3-A5. Apple has not petitioned for IPR review of the ‘556 patent, which is the sole patent at issue in No. 18-cv-00362-PJH.

         The cases were transferred to the Northern District of California in January 2018. On February 21, 2018 this court related the three above-captioned cases. Dkt. 103. In ordering the cases related, the court found that “(1) The actions concern substantially the same parties, property, transaction or event; and (2) It appears likely that there will be an unduly burdensome duplication of labor and expense or conflicting results if the cases are conducted before different Judges.” Civ. L.R. 3-12(a).

         Now before the court are Apple's motions to stay the three above-captioned actions pending the IPR. Plaintiffs oppose the motions.

         DISCUSSION

         “Courts have inherent power to manage their dockets and stay proceedings, including the authority to order a stay pending conclusion of a PTO reexamination.” Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (citation omitted). In determining whether to grant a stay pending IPR, courts consider “(1) whether discovery is complete and whether a trial date has been set; (2) whether a stay will 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.” Evolutionary Intelligence, LLC v. Facebook, Inc., 2014 WL 261837 at *1 (N.D. Cal. Jan. 23, 2014); Universal Elecs., Inc. v. Universal Remote Control, Inc., 943 F.Supp.2d 1028, 1030-31 (C.D. Cal. 2013).

         The first factor considers the stage of the litigation. The cases have recently been transferred to the Northern District of California. On April 26, 2018, the court held an initial case management conference at which the court scheduled the claim construction hearings for December 5, 2018. The scheduling order common to the three actions set by the Eastern District of Texas has been vacated, and the parties have been ordered to meet and confer to propose a new case schedule. On May 7, 2018, the parties proposed-but the court has not yet ordered-a single schedule that would control the three actions. The parties propose identical dates for each case and would end fact discovery in February 2019 and conduct trial in “Fall 2019.” Dkt. 157.

         While it is true that the motion to transfer venue resulted in some delay in the progress of the case, other factors have also entered into creating the delay, including Uniloc's amended pleadings. Much of the litigation activity to date has related to the change in venue and the sufficiency of the pleadings.

         The court notes that some limited discovery has taken place. E.g., No. 18-cv-00361-PJH, Dkt. 76 at 5. But even this activity has been mostly preliminary in nature, with most of both fact and expert discovery still largely incomplete and even unscheduled. Although the parties have incurred some costs, significant early litigation costs still remain that could be avoided by a stay, depending on the PTAB's decisions. See PersonalWeb Techs., LLC v. Apple Inc., 69 F.Supp.3d 1022, 1026-27 (N.D. Cal. 2014) (focusing on cost of remaining work in case); Microsoft Corp. v. Tivo Inc., No. 10-cv-00240-LHK, 2011 WL 1748428, at *6 (N.D. Cal. May 6, 2011) (finding that the stage of the litigation weighed in favor of a stay where the parties had ...


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