DoDots Licensing Solutions LLC v. Samsung Electronics Co., Ltd. ( 2024 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 DODOTS LICENSING SOLUTIONS LLC, Case No. 23-cv-06521-JSC 8 Plaintiff, ORDER TO STAY PENDING INTER 9 v. PARTES REVIEW 10 SAMSUNG ELECTRONICS CO LTD, et Re: Dkt. No. 126 al., 11 Defendants. 12 13 DODOTS LICENSING SOLUTIONS LLC, Case No. 24-cv-00217-JSC 14 Plaintiff, ORDER TO STAY PENDING INTER 15 v. PARTES REVIEW 16 APPLE INC., et al., Re: Dkt. No. 156 Defendants. 17 18 Plaintiff DoDots Licensing Solutions LLC (DoDots) sues Defendants Samsung Electronics 19 Co., Ltd. and Samsung Electronics America, Inc. (Samsung) and Apple, Inc. (Apple) for 20 infringement of three patents directed to accessing and displaying internet content: U.S. Patent 21 Nos. 9,369,545 (’545 patent), 8,020,083 (’083 patent), and 8,510,407 (’407 patent). (Case No. 23- 22 cv-651, Dkt. No. 97; Case No. 24-cv-217, Dkt. No. 32.)1 Before this Court are Defendants’ 23 motions to stay pending inter partes review. (Dkt. No. 126.)2 Having carefully considered the 24 25 26 1 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the ECF-generated page numbers at the top of the documents. 27 2 Both cases have substantially similar procedural histories and briefing. Unless otherwise 1 briefing, and with the benefit of oral argument on February 15, 2024, the Court GRANTS 2 Defendants’ motions to stay. 3 BACKGROUND 4 DoDots acquired the asserted patents in December 2017. (Dkt. No. 126-2.) The ’545 5 patent expired in March 2021, and the ’083 patent and ’407 patent expired in April 2020. (Dkt. 6 No. 126-3 at 9.) DoDots filed this lawsuit in the Western District of Texas in May 2022. (Dkt. 7 No. 1.) Samsung moved to transfer the case to this District in January 2023. (Dkt. No. 62.) The 8 district court denied Samsung’s transfer motion in July 2023. (Dkt. No. 94.) In September 2023, 9 Samsung sought a writ of mandamus from the Federal Circuit vacating the district court’s denial 10 of Samsung’s transfer motion and transferring the case to this District. (Dkt. No. 126-7.) In 11 December 2023, the Federal Circuit granted Samsung’s mandamus petition and directed transfer 12 to this District. See In re Samsung Elecs. Co., Ltd., No. 2023-146, 2023 WL 8642711 (Fed. Cir. 13 Dec. 14, 2023). 14 While Samsung’s mandamus petition was pending, the Patent Trial and Appeal Board 15 instituted inter partes review on all claims of each asserted patent. See Samsung Elecs. Co., Ltd. 16 v. Dodots Licensing Sols. LLC, No. IPR2023-00621, 2023 WL 6633786 (P.T.A.B. Oct. 11, 2023); 17 Samsung Elecs. Co., Ltd. v. Dodots Licensing Sols. LLC, No. IPR2023-00701, 2023 WL 6976083 18 (P.T.A.B. Oct. 23, 2023); Samsung Elecs. Co., Ltd. v. Dodots Licensing Sols. LLC, No. IPR2023- 19 00756, 2023 WL 6633546 (P.T.A.B. Oct. 11, 2023). The Patent Trial and Appeal Board will issue 20 its final determinations on the asserted patents by October 23, 2024. 35 U.S.C. § 316(a)(11) (“The 21 Director shall prescribe regulations . . . requiring that the final determination in an inter partes 22 review be issued not later than 1 year after the date on which the Director notices the institution of 23 a review under this chapter.”). Defendants now move to stay this case until the Patent Trial and 24 Appeal Board determines the validity of the asserted patents. 25 DISCUSSION 26 “Courts have inherent power to manage their dockets and stay proceedings, including the 27 authority to order a stay pending conclusion of a PTO reexamination.” Ethicon, Inc. v. Quigg, 849 1 (Fed. Cir. 2016) (applying Ethicon to inter partes review proceedings). In determining whether to 2 stay pending inter partes review, courts consider “(1) whether discovery is complete and whether 3 a trial date has been set; (2) whether a stay will simplify the issues in question and trial of the case; 4 and (3) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non- 5 moving party.” Id. As the moving parties, Defendants bear the burden of demonstrating a stay is 6 appropriate. Id. 7 A. Stage of the Case 8 “An early stay may save the parties and the Court from unnecessarily expending 9 significant resources. A stay later in the proceedings will likely produce less benefit and increase 10 the possibility of prejudice.” Topia Tech., Inc. v. Dropbox Inc., No. 23-CV-00062-JSC, 2023 WL 11 3437823, at *3 (N.D. Cal. May 12, 2023) (cleaned up). “Factors indicating the stage of the case 12 include: (1) whether parties have engaged in costly expert discovery and dispositive motion 13 practice; (2) whether the court has issued its claim construction order; and (3) whether the court 14 has set a trial date.” Id. (cleaned up). 15 The stage-of-case factor favors granting a stay. The case was transferred to this District in 16 December 2023, no scheduling order has issued, no trial date has been set, expert discovery and 17 dispositive motion briefing have yet to begin, and Samsung has not yet answered the complaint. 18 See, e.g., Speir Techs. Ltd. v. Apple, Inc., No. 5:23-CV-00095-EJD, 2023 WL 2714931, at *2 19 (N.D. Cal. Mar. 30, 2023) (stage-of-case factor favors granting a stay where the case was recently 20 transferred, discovery has begun but is not completed, no schedule or trial date is set, and the 21 defendant has not yet answered the complaint). The scheduling order from the Western District of 22 Texas no longer controls. BiTMICRO LLC v. Intel Corp., No. 5:23-CV-00625-EJD, 2023 WL 23 4828676, at *2 (N.D. Cal. July 27, 2023) (“This Court has not yet entered a scheduling order in 24 this case, and this Court is not bound by the case schedule entered prior to transfer.”). 25 Although the parties have “engaged in seven months of fact discovery,” (Dkt. No. 150 at 26 5), fact discovery is far from complete. Topia Tech., Inc., 2023 WL 3437823, at *3 (“[C]ase 27 progress, not the length of case pendency is relevant to this factor.”). The parties have noticed ten 1 spanning 131 topics, but only one deposition has occurred. (Dkt. Nos. 126-1 ¶ 2, 126-18, 126-19, 2 126-20, 126-21.) The week the case was transferred to this District, DoDots served its fourth set 3 of requests for production, third and fourth sets of interrogatories, and request for electronically 4 stored information. (Dkt. Nos. 126-9, 126-10, 126-11, 126-14.) While in its proposed schedule, 5 DoDots seeks to extend the fact discovery period until March 22, 2024, (Dkt. No. 133-1 at 2), the 6 proposal is unrealistic given the amount of uncompleted fact discovery. So, this case is not, as 7 DoDots contends, “on the cusp of expert discovery.” (Dkt. No. 150 at 4.) 8 DoDots insists a stay would be inappropriate because the Western District court issued a 9 claim construction order. But courts routinely grant stays even when claim construction has 10 already occurred if substantial work lies ahead. PersonalWeb Techs., LLC v. Facebook, Inc., No. 11 5:13-CV-01356-EJD, 2014 WL 116340, at *3 (N.D. Cal. Jan. 13, 2014) (“The parties and courts 12 have already invested significant time and effort into these matters; a claim construction order has 13 been issued and the close of fact discovery is fast approaching. However, a substantial portion of 14 the work—expert discovery, summary judgment, pre-trial preparation, and trial itself—lies 15 ahead.”); Contour IP Holding, LLC v. GoPro, Inc., No. 17-CV-04738-WHO, 2018 WL 6574188, 16 at *3 (N.D. Cal. Dec. 12, 2018) (“Although claim construction is complete and some substantial 17 discovery has already occurred, several costlier stages of pretrial preparation remain, not to 18 mention the trial itself.”); Trusted Knight Corp. v. Int'l Bus. Machines Corp., No. 19-CV-01206- 19 EMC, 2020 WL 5107611, at *2 (N.D. Cal. Aug. 31, 2020) (“[G]iven that no discovery has yet 20 occurred, no motions for summary judgment have been prepared or filed, and no trial date has yet 21 been set, notwithstanding the fact that claim construction has already occurred, this factor favors a 22 stay.”); RJ Tech. LLC v. Apple Inc., No. 822CV01874JVSJDEX, 2023 WL 8188475, at *2 (C.D. 23 Cal. Oct. 4, 2023) (“Thus, although the Markman hearing has taken place and this Court issued its 24 Claim Construction Order, there is still much more work ahead.”). Additionally, the Western 25 District court’s claim construction order merely states the court’s “final claim construction 26 rulings” without providing any analysis as to how those rulings were reached. (Dkt. No. 101.) 27 The Western District court “plan[ned] to issue a more-detailed Order explaining its analysis in due 1 will likely have to reconsider, or at least reevaluate, claim construction anyway. In sum, 2 substantial work lies ahead at this stage of the case, which weighs in favor of a stay pending inter 3 partes review. 4 B. Simplification of the Issues 5 “Under the second factor, the court considers whether granting a stay could simplify the 6 litigation. The standard is simplification of the district court case, not complete elimination of it 7 by the [Patent Trial and Appeal Board].” Finjan, Inc. v. Symantec Corp., 139 F. Supp. 3d 1032, 8 1036 (N.D. Cal. 2015) (cleaned up). A stay is justified where “the outcome of the reexamination 9 would be likely to assist the court in determining patent validity and, if the claims were canceled 10 in the reexamination, would eliminate the need to try the infringement issue.” Slip Track Sys., Inc. 11 v. Metal Lite, Inc., 159 F.3d 1337, 1341 (Fed. Cir. 1998). 12 The simplification factor weighs in favor of a stay. By instituting inter partes review on 13 all claims of each asserted patent, the Patent Trial and Appeal Board determined Samsung “made a 14 sufficient showing of a reasonable likelihood” of invalidating the asserted claims. See Samsung 15 Elecs. Co., Ltd., 2023 WL 6633786 at *1, *16-*19; Samsung Elecs. Co., Ltd., 2023 WL 6976083 16 at *1, *9, *17-*19, *21; Samsung Elecs. Co., Ltd., 2023 WL 6633546 at *1, *24-*25, *28-*29. 17 When, as here, the Patent Trial and Appeal Board’s review could dispose of a matter in its entirety 18 or significantly narrow the scope of the issues, the simplification factor “weighs heavily in favor 19 of granting a stay.” Aavid Thermalloy LLC v. Cooler Master, Ltd., No. C 17-05363 JSW, 2019 20 WL 4009166, at *2 (N.D. Cal. Aug. 26, 2019) (quoting VirtualAgility Inc. v. Salesforce.com, Inc., 21 759 F.3d 1307, 1314 (Fed. Cir. 2014)); see also Capella Photonics, Inc. v. Cisco Sys., Inc., No. C- 22 14-3348 EMC, 2015 WL 1006582, at *2 (N.D. Cal. Mar. 6, 2015) (“The [Patent and Trademark 23 Office] has agreed to review the validity of all of the patent claims Capella has asserted against 24 Defendants in this action. Thus, [inter partes review] proceedings will almost certainly simplify 25 the issues in this case and serve the goal of advancing judicial efficiency.”). 26 If the Patent Trial and Appeal Board “modifies or cancels some or all of the claims subject 27 to review, both the court and the parties benefit because the scope of this case may be narrowed 1 2015 WL 1006582, at *2 (cleaned up). And even if the challenged claims survive inter partes 2 review, Samsung “will be bound by the estoppel provisions” of 35 U.S.C. § 315(e)(2), limiting the 3 prior art it may assert in this Court, “which would also simply [sic] the issues.” LBT IP II LLC v. 4 Uber Techs. Inc., No. 22-CV-03985-WHO, 2023 WL 322894, at *2 (N.D. Cal. Jan. 19, 2023). 5 Though the Patent Trial and Appeal Board denied institution of Apple’s inter partes 6 review petitions on the asserted patents, Apple’s petitions for Director Review seeking to overturn 7 those denials are pending. (See, e.g., Case No. 24-cv-217, Dkt. No. 162-3.) Apple conditionally 8 moved to join the Samsung inter partes review proceedings if Apple’s petitions for Director 9 Review are denied. (See, e.g., Case No. 24-cv-217, Dkt. No. 162-4 at 3-7.) If the Patent Office 10 denies Apple’s petitions, Apple expects to be joined to Samsung’s instituted proceedings by the 11 end of May 2024. (Case No. 24-cv-217, Dkt. No. 162 at 4.) If Apple is joined as a party to 12 Samsung’s proceedings, Apple stipulates it “will not pursue in the parallel district court 13 proceeding the same grounds as in the petition or any grounds that could have been reasonably 14 raised in the petition.” (Id.) Even if Apple is not joined as a party to Samsung’s proceedings, 15 “[f]or those claims that survive the reexamination, this court may have a richer prosecution history 16 upon which to base necessary claim construction determinations or reconsideration.” In re Cygnus 17 Telecommunications Tech., LLC, Pat. Litig., 385 F. Supp. 2d 1022, 1024 (N.D. Cal. 2005). 18 So, DoDots’s arguments the review proceedings are unlikely to moot either case or cancel 19 the asserted patents’ claims fail to persuade the Court the proceedings are not highly likely to 20 simplify the case. The simplification factor weighs in favor of a stay because a stay pending inter 21 partes review would preserve the resources of the Court and parties by simplifying the issues and 22 streamlining trial. 23 C. Prejudice 24 “This factor considers whether a stay would unduly prejudice or present a clear tactical 25 disadvantage to the nonmoving party.” Topia Tech., Inc., 2023 WL 3437823, at *6 (cleaned up). 26 DoDots concedes this factor weighs in favor of a stay because DoDots, as a non-practicing entity, 27 “cannot be prejudiced by a stay because monetary damages provide adequate redress for 1 Oe Ok 2 As DoDots concedes, it will not be prejudiced by a stay. Given the Patent Trial and 3 Appeal Board instituted review on all claims in all three asserted patents, it is highly likely inter 4 || partes review will, at a minimum, simplify the case. In light of these circumstances and given the 5 substantial amount of work that must be completed before the cases are ready for the unscheduled 6 || trial, Defendants have met their burden of showing a stay is warranted and consistent with Federal 7 Rules of Civil Procedure 1. 8 CONCLUSION 9 Accordingly, Defendants’ motion for a stay pending inter partes review is GRANTED. A 10 further case management conference is scheduled for November 14, 2024 at 1:30 p.m. via Zoom 11 video. An updated joint case management conference statement is due one week in advance. 12 || Defendants are ordered to file a status report with the Court no later than five business days after 5 13 || the Patent Trial and Appeal Board issues its final written determinations on any of Samsung’s 14 || three petitions. The parties may request an earlier status conference if circumstances warrant. 3 15 This Order disposes of Docket No. 126 in Case No. 23-cv-651 and Dkt. No. 156 in Case 16 || No. 24-cv-217. IT IS SO ORDERED. || Datea: February 16, 2024 19 20 Put st □□ ACQWELINE SCOTT CORLEY 21 United States District Judge 22 23 24 25 26 27 28