“Courts have inherent power to manage their dockets and stay proceedings, including the authority to order a stay pending conclusion of a PTO reexamination.” (internal citation omitted)
How later courts described this case
- “Courts have inherent power to manage their dockets and stay proceedings, including the authority to order a stay pending conclusion of a PTO reexamination.” (internal citation omitted)
Written by the judges who cited it.
The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
AGIS SOFTWARE DEVELOPMENT LLC, §
§
Plaintiff, §
§
v. § CIVIL ACTION NO. 2:19-CV-00361-JRG
§ (Lead Case)
GOOGLE LLC, §
§ CIVIL ACTION NO. 2:19-CV-00359-JRG
§ (Member Case)
WAZE MOBILE LIMITED §
§ CIVIL ACTION NO. 2:19-CV-00362-JRG
§ (Member Case)
SAMSUNG ELECTRONICS CO., LTD, §
SAMSUNG ELECTRONICS AMERICA, §
INC. §
§
Defendants. §
MEMORANDUM OPINION AND ORDER
Before the Court is Defendants’ Motion to Stay Pending Ex Parte Reexamination (the
“Motion”). (Dkt. No. 202). Having considered the Motion and the related briefing, the Court finds
that the Motion should be and hereby is GRANTED.
I. BACKGROUND
Plaintiff AGIS Software Development LLC (“AGIS”) alleges Defendants Google LLC
(“Google”), Waze Mobile Limited (“Waze”), and Samsung Electronics Co., Ltd., and Samsung
Electronics America, Inc. (collectively, “Samsung”) (altogether, collectively, “Defendants”)
infringe U.S. Patent Nos. 9,749,829 (“the ’829 Patent”); 9,820,123 (“the ’123 Patent”); 9,408,055
(“the ’055 Patent”); 9,445,251 (“the ’251 Patent”); 9,467,838 (“the ’838 Patent”); and 8,213,970
(“the ’970 Patent”) (collectively, the “Asserted Patents”). (Dkt. No. 1).
The Defendants previously filed an Opposed Motion to Stay Pending Inter Partes Review
of the ’829 Patent and the ’123 Patent and Ex Parte Reexamination of the remainder of the
Asserted Patents. (Dkt. No. 97). The Court denied the Motion to Stay Pending Inter Partes Review
and Ex Parte Reexamination without prejudice, as premature, noting that institution decisions as
to the pending Inter Partes reviews (“IPRs”) and Ex Parte Reexaminations (“EPRs”) had not then
been made. (Dkt. No. 114). The Court, in its denial Order, advised the Defendants that they could
subsequently seek a stay “following the PTAB’s institution decision regarding the last of the
patents-in-suit to be acted upon by the PTAB.” (Id.). This is consistent with this Court’s well-
established practice where institution decisions remain pending.
The Patent Trials and Appeal Board (“PTAB”) subsequently denied institution of the IPRs
as to the ’829 Patent and the ’123 Patent, and Google and Samsung filed Requests for Ex Parte
Reexamination at the United States Patent and Trademark Office (“PTO”) on those patents in
addition to the remainder of the Asserted Patents. (Dkt. No. 202).
In response to the Requests for Ex Parte Reexamination, the PTO found substantial new
questions of patentability as to each of the asserted claims in the patents-in-suit and granted
all Requests for Reexamination. (Id.). The Defendants have now renewed their request for a
stay pending the resolution of the EPRs.
II. LEGAL STANDARD
“The district court has the inherent power to control its own docket, including the power
to stay proceedings.” Soverain Software LLC v. Amazon.com, Inc., 356 F. Supp. 2d 660, 662 (E.D.
Tex. 2005) (citing Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)); see also Ethicon, Inc. v. Quigg,
849 F.2d 1422, 1426–27 (Fed. Cir. 1988) (“Courts have inherent power to manage their dockets
and stay proceedings, including the authority to order a stay pending conclusion of a PTO
reexamination.” (internal citation omitted)). How to best manage the Court’s docket “calls for the
exercise of judgment, which must weigh competing interests and maintain an even balance.”
Landis, 299 U.S. at 254–55.
In deciding whether to stay litigation pending reexamination, courts typically consider:
(1) whether a stay will unduly prejudice or present a clear tactical disadvantage to the nonmoving
party, (2) whether a stay will simplify the issues in question and trial of the case, and (3) whether
discovery is complete and whether a trial date has been set. Soverain, 356 F. Supp. 2d at 662.
III. ANALYSIS
The Defendants argue that this case should be stayed in light of the ERPs because (1) all
asserted claims of all Asserted Patents now stand subject to granted ERPs; (2) all of the PTO’s
EPR grant orders and all three Office Actions issued to date for the Asserted Patents have stated
that the priority date for those patents is likely much earlier—October 31, 2014—and that the
parent patent to the Asserted Patents, U.S. Patent No. 7,630,724 (the “’724 Patent”) anticipates
and renders obvious all challenged claims; and (3) it would not be expeditious to proceed to trial
on the current claims. (Dkt. No. 202). AGIS asserts that the case need not be stayed because (1) any
rejections remain speculative, just as they did when the Court denied the Defendants’ previous
request for a stay; and (2) AGIS will suffer undue prejudice if the case is stayed. (Dkt. No. 210.)
“A stay is particularly justified when ‘the outcome of a PTO proceeding is likely to assist
the court in determining patent validity or eliminate the need to try infringement issues.’” Ericsson
Inc. v. TCL Commc’n Tech. Holdings, Ltd., No. 2:15-cv-00011, 2016 WL 1162162, at *1 (E.D.
Tex. Mar. 23, 2016) (quoting NFC Tech. LLC v. HTC Am., No. 2:13-CV-1058, 2015 WL 1069111,
at *1 (E.D. Tex. Mar. 11, 2015). In the context of EPRs, a stay is appropriate when there is a
“significant likelihood that the outcome of the reexamination proceeding will streamline the scope
of this case to an appreciable extent if not dispose of it entirely.” Veraseal LLC v. Wal-Mart Sores,
Inc. et al., No. 2:17-cv-00527 (E.D. Tex. May 10, 2018).
It has been this Court’s consistent and long established practice to deny motions to stay
pending IPR and ERP when the PTAB or PTO have instituted review on less than all asserted
claims of all asserted patents1 because at least one or more originally asserted claims will be
unaffected by the outcome of those parallel proceedings and left intact before this Court to be
tried. See, e.g., Uniloc 2017 LLC v. Samsung Elecs. Am., Inc., 2:19-cv-00125-JRG, Dkt. No. 34
(E.D. Tex. Feb. 4, 2020); Greenthread LLC v. Samsung Elecs. Co., Ltd., 2:19-cv-00147-JRG,
Dkt. No. 43 (E.D. Tex. Feb. 4, 2020); Solas OLED Ltd. v. Samsung Display Co., Ltd., 2:19-
cv-00152-JRG, Dkt. No. 69 (E.D. Tex. Feb. 4, 2020); Oyster Optics, LLC v. Infinera Corp.,
No. 2:19-cv-00257-JRG, Dkt. No. 62 (E.D. Tex. Feb. 4, 2020). However, where the PTAB has
instituted IPR proceedings or the PTO has granted EPR’s as to all claims of all asserted patents,
this Court has likewise routinely stayed cases because the Court there does not retain before it
any intact (as originally asserted) claims that are ready to move forward toward trial. In the
context where all claims have been instituted upon, the Court understands that all the claims
may potentially be modified, dropped, or canceled in light of such parallel proceedings. Image
Processing Techs., LLC v. Samsung Elecs. Co., No. 2:16-cv-505-JRG, 2017 WL 7051628, *1–
2 (E.D. Tex. Oct. 25, 2017); Arbor Global Strategies LLC v. Samsung Elecs. Co., No. 2:19-
cv-333-JRG-RSP, 2021 WL 66531 (E.D. Tex. Jan. 7, 2021).
Having considered the factors outlined above and the specific facts and circumstances of
this case, the Court is persuaded that the benefits of a stay outweigh the costs of
postponing resolution of the litigation in this particular case. Since all the asserted claims of
1 Or in a pre-SAS Institute Inc. v. Iancu world, where the PTAB instituted IPRs on some but not all challenged claims.
See SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018).
all Asserted Patents, pending before this Court, are now subject to granted EPRs the prejudice
to AGIS is outweighed by the benefit of such parallel review. When claims are rejected in
an ex parte reexamination proceeding, the patent owner can narrow, cancel, or submit new
claims. See M.P.E.P. § 2258. The asserted claims which have been rejected in the reexamination
proceedings have a high likelihood of being modified in some material way in response to their
rejection. They may also be dropped or canceled completely. It is unlikely that they will stay as
they were when suit was originally filed, and if—in this specific situation—the case were to
proceed to trial on the current claims, as is, there is a serious risk of wasted resources as between
both the parties and the Court.
Although this particular stay comes late in the progression of this case—with discovery
complete, pretrial briefing submitted, and jury selection pending—there remain significant
resources yet to be expended by the parties, including at the pretrial conference and preparations
leading up to an actual trial of this case. In light of the increased probability that the asserted
claims will change in scope, or be dropped or canceled altogether, the Court finds that upon
considering the totality of the circumstances in this case at this time, a stay is warranted.
Accordingly, having considered prejudice to AGIS, simplification of the issues to be tried,
and the stage of the case, the Court finds that the relevant factors weigh in favor of granting a stay
of this case pending resolution of the ex parte reexaminations.
IV. CONCLUSION
In light of the foregoing, the Defendants’ Motion to Stay Pending Ex Parte Reexamination (Dkt.
No. 202) should be and hereby is GRANTED. Accordingly, the above-captioned cases are
hereby STAYED until the ultimate resolution in each of the ex parte reexaminations instituted as
to all the Asserted Patents.
The parties are ORDERED to file a joint notice updating the Court as to the status of the
Asserted Claims and the ex parte reexaminations within thirty (30) days of the ultimate
disposition in the last and final ex parte reexamination. The parties are additionally
ORDERED to file periodic joint notices with the Court to report on the current status of
these reexamination proceedings every 120 days until this case is either unstayed or terminated.
So ORDERED and SIGNED this 9th day of February, 2021.
RODNEY GILSTRAP \
UNITED STATES DISTRICT JUDGE