United States District Court, S.D. California
ORDER GRANTING DEFENDANT'S MOTION TO STAY [ECF.
GONZALO P. CURIEL UNITED STATES DISTRICT JUDGE.
TraceLink, Inc. (“Defendant” or
“TraceLink”) filed a motion to stay the case on
November 12, 2019. Plaintiff Unisone Strategic IP, Inc.
(“Plaintiff” or “Unisone”) filed an
opposition on December 2, 2019. ECF No. 132. TraceLink filed
a reply on December 10, 2019. ECF No. 133. The Court finds
the motion suitable for disposition without oral argument
pursuant to Civil Local Rule 7.1(d)(1). Upon review of the
moving papers, the Court GRANTS Defendant's motion to
25, 2013, Plaintiff filed its initial Complaint asserting
infringement of U.S. Pat. No. 6, 996, 538 (“the
'538 patent”) against Defendant. ECF No. 1. After a
period of motion practice, Plaintiff filed a first amended
complaint alleging infringement of that same patent on
January 6, 2014. ECF No. 26. On January 16, 2014, Defendant
subsequently filed a motion to stay pending an ex
parte reexamination of the '538 patent by the U.S.
Patent and Trademark Office (“PTO”). ECF No. 27.
The Court granted that motion and stayed this instant action
on April 2, 2014, pending the reexamination of the '538
patent. ECF No. 34. On January 7, 2015, the Court lifted the
stay. ECF No. 52.
Technologies Corporation (“Life
Tech”) filed two subsequent covered business
method (“CBM”) patent reviews with the Patent
Trial and Appeal Board (“PTAB”). On December 5,
2014, Life Tech filed a Petition with the PTAB seeking CBM
review of '538 patent claims 52, 62, 67, 70-76, 81,
83-85, and 96 (the “first CBM”). On April 8,
2015, the Court granted a motion to stay this action, pending
the final outcome the first CBM. ECF No. 59. On December 30,
2015, Life Tech filed a second petition with the PTAB
requesting CBM patent review of the '538 patent claims 1,
14, 19, 22-28, 32, 34-36, and 45 (the “second
CBM”). In total, Life Tech requested CBM review of
claims 1, 14, 19, 22-28, 32, 34-36, 52, 62, 67, 70-76, 81,
83-85, and 96. See CBM2015-00037, Paper No. 1;
CBM2016-00025, Paper No. 2. None of these challenged claims
survived review and were thus declared invalid by the PTAB on
June 20, 2019.
August 26, 2019, the Court granted Plaintiff leave to file a
second amended complaint. ECF No. 119. On September 27, 2019,
Plaintiff filed the currently operative second amended
complaint, which asserts fifty-three dependent claims that
were not at issue in the prior CBM reviews. ECF No. 120.
Specifically, Plaintiff asserted infringement of claims 4, 6,
8-12, 15-18, 21, 29-31, 39-40, 42-43, 46, 49, 57-58, 60, 63,
66, 69, 77-78, 86, and 93-94. ECF No. 120 at ¶¶ 24,
November 1, 2019, Life Tech filed two CBM petitions
requesting that the PTO institute CBM review of all remaining
dependent claims of the '538 patent on the ground that
the claims are unpatentable under 35 U.S.C. § 101.
See CBM2020-00001 (ECF 127, Ex. 1); CBM2020-00005.
The PTAB will reach a decision on institution by May 8, 2020
and, if instituted, reach a final decision no later than May
3, 2021. Defendants allege that cancellation of all claims
that Life Tech has raised in the current CBM petitions would
resolve this instant action. ECF No. 127-1 at 8.
Leahy-Smith America Invents Act (the “AIA”)
provides a “transitional program” to review CBM
patents. AIA § 18. The AIA further grants district
courts authority to stay proceedings, pending CBM review
before the U.S. Patent and Trademark Office (the
“USPTO”), upon the consideration of four factors:
(A) whether a stay, or the denial thereof, will simplify the
issues in question and streamline the trial; (B) whether
discovery is complete and whether a trial date has been set;
(C) whether a stay, or the denial thereof, would unduly
prejudice the nonmoving party or present a clear tactical
advantage for the moving party; and (D) whether a stay, or
the denial thereof, will reduce the burden of litigation on
the parties and on the court. Id. § 18(b)(1);
VirtualAgility Inc. v. Salesforce.com, Inc., 759
F.3d 1307, 1310 (Fed. Cir. 2014).
argues that the four factors weigh in favor of denying the
motion to stay or, alternatively, continuing this motion
until the PTAB decides to undertake review of the two latest
CBM's filed by Life Tech. Defendant opposes.
first factor considers whether a stay will simplify the
issues. AIA § 18(b)(1)(A). The two latest CBM petitions
filed by Life Tech challenge all remaining claims. ECF No.
127-1 at 7. Plaintiff argues that this factor does not weigh
in favor a stay because Life Tech is using the CBM petition
as a delay tactic. ECF No. 132 at 14-15. TraceLink counters
that the current CBM reviews will substantially simplify or
moot the present infringement claims, noting that not a
single claim in the '538 patent that was challenged in
the earlier CBM petitions remains at issue in this
litigation. The Court agrees. Plaintiff's fifty-three new
dependent claims asserted in its SAC were not at issue in the
prior CBM reviews, and a CBM review of these remaining claims
can simplify the issues. See Versata Software, Inc. v.
Callidus Software, Inc., 771 F.3d 1368, 1371-73 (Fed.
Cir. 2014) vacated on other grounds by 780 F.3d
1134, 2015 WL 981523 (Fed. Cir. Feb. 27, 2015). If, any
dependent claims are invalidated based on a CBM review, those
claims will not need to be litigated.
further argues that it would be premature to grant a stay
even before PTAB has made its decision on institution and
that the Court should therefore defer ruling on the motion to
stay, citing Loyalty Conversion Sys. Corp., 2014 WL
3736514 (E.D. Tex. July 29, 2014) and other cases. Defendant
counters that it is not premature to issue a stay at this
juncture, and additionally, Life Tech's prior success in
challenging similar claims (i.e., invalidity under