WSOU INVESTMENTS LLC, Plaintiff, v. JUNIPER NETWORKS INC, Defendant.
Case No. 21-cv-07557-BLF, 21-cv-07558-BLF, 21-cv-07560-BLF, 21-cv-07561-BLF, 21-cv-07562-BLF
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION
January 3, 2022
BETH LABSON FREEMAN
ORDER GRANTING DEFENDANT‘S MOTION TO STAY
Based on the below reasoning, the Court GRANTS Juniper‘s motion.
I. BACKGROUND
A. Factual Background
Brazos is a Delaware corporation with its principal place of business in Texas. Complaint,
The five Asserted Patents are unrelated patents pertaining to computer networking technology. ‘998 Patent, Abstract; ‘990 Patent, Abstract; ‘140 Patent, Abstract; ‘273 Patent, Abstract; ‘656 Patent, Abstract. Brazos is asserting these patents against Juniper networking hardware and software products. See Declaration of Todd M. Briggs (“Briggs Decl.“), ECF No. 117-2, Ex. A, Brazos‘s Disclosure of Asserted Claims and Infringement Contentions (“Brazos Infringement Contentions“) at 3–4.
B. Procedural History
In September 2020, Brazos filed six separate patent infringement cases against Juniper in the Western District of Texas, each asserting one patent: U.S. Patent No. 7,382,781 (“the ‘781 Patent“) in 6:20–cv-00812; the ‘998 Patent in 6:20–cv–00813; the ‘990 Patent in 6:20–cv-00814; the ‘140 Patent in 6:20-cv-00815; the ‘273 Patent in 6:20-cv-00902; and the ‘656 Patent in 6:20-cv-00903. The cases were assigned to Judge Albright. The parties engaged in fact discovery, exchanged infringement and invalidity contentions, and completed briefing for claim construction and a motion to dismiss Brazos‘s indirect infringement claims filed by Juniper. See ECF Nos. 40, 43, 53, 60, 69, 76, 78. On June 24, 2021, Judge Albright issued a claim construction order for the six cases. See ECF No. 87. On August 21, 2021, Brazos indicated that it was asserting the following claims of the Asserted Patents (collectively, “the Asserted Claims“): claims 1, 2, 7, 9, and 18 of the ‘781 Patent; claims 17-19, 21 and 22-23 of the ‘998 Patent; claims 1-4, 6-9, 17, and 18 of the ‘990 Patent; claims 1-6, 13, 15-19, 21-24, 31, and 33-38 of the ‘140 Patent; claims 1-3 of the ‘273 Patent; and claims 1, 2, and 7-10 of the ‘656 Patent. See Brazos Infringement Contentions at 2. On August 30, 2021, the parties stipulated to dismissal of the case involving the ‘781 Patent. See 6:20-cv-00812, ECF No. 94.
On September 27, 2021, the court transferred the five remaining cases to the Northern District of California pursuant to a mandamus order from the Federal Circuit. See In re: Juniper Networks, Inc., 14 F.4th 1313 (Fed. Cir. 2021); 5:21–cv–07557, ECF No. 95; 5:21-cv-07558, ECF No. 89; 5:21-cv–07560, ECF No. 97; 5:21–cv–07561, ECF No. 92; 5:21–cv–07562, ECF No. 94. On October 20, 2021, this Court related the cases following a joint administrative motion by the parties requesting a case relation order. See Related Case Order, ECF No. 104; Joint Administrative Motion to Consider Whether Cases Should Be Related Pursuant to Civil Local Rule 3-12, ECF No. 103. The Court further terminated all currently pending motions without prejudice to refiling in this Court. See Related Case Order, ECF No. 104. On October 28, 2021, Juniper filed a renewed motion to dismiss Brazos‘s indirect infringement claims, which the parties have fully briefed and which is set for hearing on March 3, 2022. See ECF Nos. 106, 113, 116. An Initial Case Management Conference is also set for March 3, 2022. See ECF No. 109.
On February 12, 2021, Juniper filed an IPR petition challenging the validity of claims 1-7, 13, 15-19, 21-25, 31, and 33-38 of the ‘140 Patent, including all ‘140 Patent claims Brazos is asserting here. See Brazos Infringement Contentions at 2; Motion, ECF No. 117 at 2. The PTAB instituted IPR of the challenged ‘140 Patent claims on August 18, 2021, and a final written decision is expected by August 18, 2022. See Briggs Decl., Ex. C at 17; Motion, ECF No. 117 at 3. On April 5, 2021, Juniper filed petitions for IPR challenging claims 1-2, 7-13, and 15 of the ‘656 Patent and 17-19, 21-23, and 25-26 of the ‘998 Patent, including all claims asserted in these cases. See Brazos Infringement Contentions at 2; Motion, ECF No. 117 at 2. The PTAB instituted IPR of the challenged ‘656 and ‘998 Patent claims on November 22, 2021, and a final written decision is expected by November 22, 2022. See Briggs Decl., Exs. G, H; Motion, ECF No. 117 at 3. Further, on September 9, 2021, Juniper filed a request for ex parte reexamination of claims 1-3 of the ‘273 Patent, which are the only ‘273 Patent claims Brazos is asserting. See Brazos Infringement Contentions at 2; Motion, ECF No. 117 at 2. The USPTO ordered reexamination on October 12, 2021. See Briggs Decl., Ex. D. Accordingly, the asserted claims of four out of the five Asserted Patents—all except for the ‘990 Patent—are now under post-grant review—a total of 38 out of 48 asserted claims. See Motion, ECF No. 117 at 3.
On December 2, 2021, Juniper filed a Motion to stay all five cases pending the post-grant review proceedings. See Motion, ECF No. 117. On December 16, 2021, Brazos filed an Opposition. See Opposition, ECF No. 118. On December 23, 2021, Juniper filed a Reply. See Reply, ECF No. 119. The Court set a hearing on the Motion for April 22, 2022, which is hereby vacated.
II. LEGAL STANDARD
A district court has inherent power to manage its own docket and stay proceedings, “including the authority to order a stay pending conclusion of a PTO reexamination.” Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988) (citation omitted). A court is under no obligation to stay proceedings pending parallel litigation in the PTAB. See Aylus Networks, Inc. v. Apple, Inc., No. C-13-4700 EMC, 2014 WL 5809053, at *1 (N.D. Cal. Nov. 6, 2014) (citations omitted). The factors that courts in this District consider when determining whether to stay litigation are: “(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 nonmoving party.” PersonalWeb Techs., LLC v. Apple, Inc., 69 F.Supp.3d 1022, 1025 (N.D. Cal. 2014) (quoting Telemac Corp. v. Teledigital, Inc., 450 F.Supp.2d 1107, 1111 (N.D.Cal.2006)).
III. DISCUSSION
A. Stage of the Litigation
First, the Court considers whether the cases have progressed significantly enough for a stay to be disfavored. PersonalWeb, 69 F.Supp.3d at 1025. Juniper argues that the case is in its early stages, because (1) no fact discovery deadline has been set by this Court, and only limited fact discovery has taken place, including no exchanges under this District‘s Patent Local Rules, no fact depositions, and incomplete document production; (2) while Judge Albright issued a claim construction order prior to the transfer, further claim construction may be necessary given the parties’ positions in the IPRs and further exchanges pursuant to this District‘s Patent Local Rules; (3) motions to dismiss are pending; (4) no trial date has been set; (5) summary judgment is far in the distance; and (6) the PTAB is likely to issue final written decisions only eight months after the scheduled Initial Case Management Conference on March 3, 2022. See Motion, ECF No. 117
The parties disagree on whether Judge Albright issuing a claim construction order prior to the transfer disfavors a stay. Juniper argues that further claim construction may be necessary given the parties’ positions in the IPRs and any exchanges pursuant to this District‘s Patent Local Rules. See Motion, ECF No. 117 at 5. For example, Juniper points to positions Brazos has taken in the IPRs already that it argues are inconsistent with its positions here. See Reply, ECF No. 119 at 2 (citing Briggs Decl., Ex. L). In response, Brazos argues that courts are generally “deferential” to other courts’ claim construction orders and “loathe” to revisit transferor courts’ decisions. See Opposition, ECF No. 118 at 5 (citing Snyders Heart Valve LLC v. St. Judge Med., No. 18-2030 (JRT/DTS), 2020 WL 1445835, at *4 (D. Minn. Mar. 25, 2020)). Further, Brazos argues that Juniper has failed to specifically identify how (1) the IPRs or (2) this District‘s Patent Local Rules exchange requirements could warrant further claim construction. See id. at 5–6.
The Court finds Judge Albright‘s claim construction order weighs against a stay. The claim construction order indicates that the case is not in its early stages and most of the effort accompanying claim construction on the part of the parties and the Court has already been expended. Juniper does not identify any specific claim construction disputes resulting from the IPRs except through improper reply evidence, which the Court declines to consider. See Briggs Decl., Ex. L; Provenz v. Miller, 102 F.3d 1478, 1483 (9th Cir. 1996). While the Court takes no position at this stage on whether further claim construction will be necessary in these cases, it considers the fact that a claim construction order has been issued to weigh against a stay, regardless of whether further claim construction is necessary. See, e.g., Int‘l Test Sols., Inc. v. Mipox Int‘l Corp., No. 16–cv–00791–RS, 2017 WL 1316549, at *2 (N.D. Cal. Apr. 10, 2017). However, given the unique procedural position of these cases—Judge Albright has issued a claim construction order, but this Court has not had a chance to consider claim construction issues and the parties have not made exchanges pursuant to this District‘s Patent Local Rules—the Court finds that Judge Albright‘s claim construction order does not weigh heavily against a stay.
The parties further disagree on whether the extent of discovery that has taken place thus far supports or disfavors a stay. Juniper argues that discovery is in its early stages, given that (1) discovery was only open three and a half months prior to the transfer, during which limited discovery took place; (2) neither party has taken fact depositions, except for two related to the transfer; (3) no fact discovery deadline has been set; (4) the parties are treating fact discovery as suspended until the March 3, 2022 Initial Case Management Conference; and (5) expert discovery has not opened. See Motion, ECF No. 117 at 5. Brazos points to the fact that (1) the parties have exchanged initial and final invalidity and infringement contentions; (2) the parties have engaged in claim construction discovery; (3) Juniper has responded to 11-13 interrogatories and 23 requests for production and Brazos has responded to 12 interrogatories and 47 requests for production; (4) Brazos‘s experts have spent 10 days reviewing Juniper‘s source code; and (5) around 2,000 documents have been produced, including documents from six third parties. See Opposition, ECF No. 118 at 4.
On balance, the Court finds that the extent of discovery that has taken place favors a stay. While the parties have completed a substantial amount of work meeting their discovery obligations thus far, this pales in comparison to the amount of work that has yet to take place, particularly with only around 2,000 documents produced, only around half of the parties’ interrogatories propounded pursuant to
Juniper also cites the lack of a trial date and the fact that summary judgment lies ahead in support of a stay. Motion, ECF No. 117 at 4–5. The Court notes that these considerations weigh further in favor a stay, particularly when the Court is currently scheduling trials for the latter half of 2024. See VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1317 (Fed. Cir. 2014).
On balance, with a prior claim construction order weighing slightly against a stay and the status of discovery and the lack of trial or summary judgment dates weighing in favor of a stay, the Court finds that the stage of litigation factor favors granting Juniper‘s stay request. See PersonalWeb, 2014 WL 116340, at *3 (stage of litigation favors a stay where “a claim construction order has been issued” but “a substantial portion of the work—expert discovery, summary judgment, pre-trial preparation, and trial itself—lies ahead“); Cypress Semiconductor Corp. v. LG Elecs., Inc., No. 13-cv-04034–SBA, 2014 WL 5477795, at *2 (N.D. Cal. Oct. 29, 2014) (stage of litigation favors a stay following claim construction briefing where “[t]here has been no dispositive motion practice, the claims have not been construed, and no deadlines for completing discovery, motion practice or trial have been set“).
B. Simplification of Issues
The second factor courts consider in assessing whether a stay is appropriate is “whether a stay will simplify the issues in question and trial of the case[.]” PersonalWeb, 69 F.Supp.3d at 1025. Juniper argues that a stay will simplify the issues in these cases because the vast majority of the Asserted Claims—38 out of 48—and four out of the five Asserted Patents are under post-grant review, which will either lead to invalidated claims or Juniper being estopped from raising certain invalidity defenses before this Court. See Motion, ECF No. 117 at 5–7. Further, Juniper argues that the one patent not under review—the ‘990 Patent—is asserted against only one of Juniper‘s products. See id. at 6. In response, Brazos argues that a stay would do nothing to simplify the case involving the ‘990 Patent because that patent is not under review, so at a minimum the Court should
Regarding the Challenged Patents, the Court agrees with Juniper. All the asserted claims of the Challenged Patents are under post-grant review, so there is a good likelihood that simplification will occur based on the invalidation of at least some of the asserted claims. See Motion, ECF No. 117 at 6-7 (citing recent PTAB invalidation statistics). Further, even if the PTAB does not invalidate some or any of the asserted claims, Juniper will be estopped from raising certain invalidity grounds as to those claims under
Regarding the ‘990 Patent, the Court agrees with Brazos that a stay will not lead to simplification as to this patent alone, because this patent is not under post-grant review. Further, Juniper does not argue that post-grant review of the other patents could lead to any simplification as to the ‘990 Patent. However, even where some patents are not under post-grant review, courts commonly find the simplification factor favors a complete stay of the case. See, e.g., Dolby Labs, Inc. v. Intertrust Techs. Corp., No. 19–cv–03371–EMC, 2021 WL 5322695, at *4 (N.D. Cal. Nov. 16, 2021) (“[A] number of courts have stayed an entire case where PTO proceedings have been instituted only to some of the patents if the stay would eliminate duplicative discovery and avoid having to spend the ‘time and expense of educating a judge and jury twice on similar technology.‘“) (citing Murata Mach. USA, Inc. v. Daifuku Co., No. 2:13CV866 DAK, 2015 WL 5178456, at *1 (D. Utah Sept. 4, 2015), aff‘d in part Murata Mach. USA v. Daifuku Co., Ltd., 830 F.3d 1357 (Fed. Cir. 2016)); Sonics, Inc. v. Arteris, Inc., No. C 11–05311 SBA, 2013 WL 503091, at *3 (N.D. Cal. Feb. 8, 2013) (“Given the stage of the litigation, the Court is not familiar with the technology at issue in this case. Thus, regardless of the outcome of the reexamination proceedings, the Court‘s interest in simplifying the proceedings by waiting for the PTO to reexamine six of the seven patents-in-suit weighs in favor of granting a stay.“); Evolutionary Intelligence, LLC v. LivingSocial, Inc., No. 13-cv-04205–WHO, 2014 WL 2735185, at *3 (N.D. Cal. June 16, 2014) (“Litigating the . . . ‘682 patent now and the ‘536 patent following resolution of the IPR would be inefficient and may result in duplication of effort.“); LELO, Inc. v. Standard Innovation (US) Corp., No. 13–cv-01393-JD, 2014 WL 2879851, at *3 (N.D. Cal. June 24, 2014) (“The standard is simplification of the district court case, not complete elimination of it by the PTAB.“). Brazos points to the fact that the ‘990 Patent is asserted in a separate case from the others, but it has not adequately explained how this should impact the Court‘s analysis for these related cases. Opposition, ECF No. 118 at 7.
Judicial economy principles favor a stay as to the ‘990 Patent. Moving the 21-cv-7561 case forward on a different schedule than the other related cases could lead to multiple rounds of expert discovery, multiple trials, and other potentially duplicative efforts by the parties and the Court, as
Based on the above reasoning, the Court finds that the simplification factor strongly weighs in favor of a stay for the cases involving the Challenged Patents and somewhat favors a stay for the case involving the ‘990 Patent.
C. Undue Prejudice
The third factor courts consider in assessing whether a stay is appropriate is “whether a stay would unduly prejudice or present a clear tactical disadvantage to the nonmoving party.” PersonalWeb, 69 F.Supp.3d at 1025. Courts typically consider four subfactors (the “Uniloc subfactors“): “(1) the timing of the petition for review; (2) the timing of the request for the stay; (3) the status of review proceedings; and (4) the relationship of the parties.” Uniloc USA Inc. v. LG Elecs. U.S.A. Inc., No. 4:18–cv–06737, 2019 WL 1905161, at *5 (N.D. Cal. Apr. 29, 2019).
As a threshold matter, the Court considers Brazos‘s argument that since the ‘990 Patent is
1. Timing of Petitions
Under the first subfactor, the Court considers whether the timing of Juniper‘s petitions for post-grant review indicates that a stay would unduly prejudice Brazos. Id. Juniper argues that the timing of its IPR and ex parte reexamination petitions favors a stay because it filed all its IPR petitions within seven months of being served with the complaints—several months ahead of the one-year statutory deadline. See Motion, ECF No. 117 at 7–8;
The Court agrees with Juniper that this subfactor supports a lack of undue prejudice to
2. Timing of Request for Stay
Under the second subfactor, the Court considers whether the timing of Juniper‘s stay motion indicates prejudice to Brazos. Uniloc, 2019 WL 1905161, at *5. Juniper argues that the timing of its stay motion supports a lack of prejudice to Brazos, because it filed its stay motion on December 2, 2021, less than two weeks after the PTAB instituted IPR on its last two petitions—for the ‘656 and ‘998 Patents—on November 22, 2021. See Motion, ECF No. 117 at 8. Juniper further argues that while IPR had previously been instituted on the ‘140 Patent on August 18, 2021, and ex parte reexamination had been instituted on the ‘273 Patent on October 12, 2021, fewer than half of the asserted claims were subject to post-grant review based on those two petitions, so a stay would have been less clearly warranted. See id. at 8. In response, Brazos argues that since it is asserting each patent in a separate litigation, Juniper should have moved to stay the ‘140 and ‘273 Patent cases immediately after post-grant review of those patents was instituted. See Opposition, ECF No. 118 at 10. Brazos argues that by not seeking to stay these cases earlier, Juniper prejudiced Brazos by requiring it to continue to expend resources on these cases, including by filing motions to dismiss Brazos‘s indirect infringement claims. See id. On reply, Juniper points to language in
The Court agrees with Juniper. Waiting until post-grant review had been instituted on a majority of Asserted Claims was reasonable, not dilatory. See DiCon Fiberoptics, Inc. v. Precisely Microtechnology Corp., No. 15–cv–01362–BLF, 2015 WL 12859346, at *2 (N.D. Cal. Oct. 13, 2015); see also Wireless Recognition Techs. v. A9.com Inc., 5:12–CV-01217–EJD, 2012 WL 4005459, at *4 (N.D. Cal. Sep. 11, 2012) (defendants’ actions were “reasonable and not dilatory” where they waited to file request for a stay “only after a likelihood that [the patent-in-suit] would be found invalid“). Brazos points to the fact that the patents here are asserted in separate cases. But the Court does not see how this changes the calculus for the appropriate timing of Juniper‘s stay motion for these related cases.
Further, Brazos‘s contention that it was prejudiced by Juniper‘s motions to dismiss is unconvincing. See Opposition, ECF No. 118 at 10. Brazos acknowledges that these were renewed motions to dismiss following Juniper‘s original filing of its motions on May 26, 2021, which were terminated without prejudice when the cases were transferred to this Court. Id. at 3–4. Further, since Juniper filed its motions to dismiss as a single document applicable to each case, Brazos would have likely expended a similar amount of effort responding to Juniper‘s motions regardless of whether the ‘140 and ‘273 cases were stayed. See generally Brazos‘s Opposition to Juniper‘s Motion to Dismiss, ECF No. 113 (addressing all asserted patents in parallel). And the Court finds it difficult to place much weight on Brazos‘s complaints about expending resources when Brazos also seeks to fault Juniper for not filing separate stay motions in each case, which would have likely involved significantly more effort for the parties and the Court than a single stay motion that applies to all five cases. See Opposition, ECF No. 118 at 10. Accordingly, the Court is not convinced by Brazos‘s attempts to characterize Juniper‘s facially diligent efforts as prejudicial.
Based on the above reasoning, the Court finds that this subfactor favors a finding that Brazos would not be unduly prejudiced by a stay.
3. Status of Review Proceedings
Under the third subfactor, the Court considers whether the status of Juniper‘s post-grant
The Court agrees with Juniper. Given that the Initial Case Management Conference is not until March 3, 2022 and the Court is currently scheduling trials for the latter half of 2024, a stay that lasts until November 2022 would only constitute a modest delay in the progress of these cases. While the stay may last longer than November 2022 given that the duration of the ex parte reexamination of the ‘273 Patent is difficult to predict, the Court agrees with other courts that have found the “delay inherent in the reexamination process does not constitute, by itself, undue prejudice.” PersonalWeb, 69 F.Supp.3d at 1029. Further, regarding Brazos‘s argument for the 21–cv–7561 case involving the ‘990 Patent, the Court has already addressed this above.
Accordingly, the Court finds that the status of review proceedings weighs against a finding of undue prejudice.
4. Relationship of the Parties
Under the fourth subfactor, the Court considers whether the relationship between the parties indicates that a stay would prejudice Brazos. Uniloc, 2019 WL 1905161, at *5. Juniper argues that the relationship of the parties favors a stay because Brazos is a non-practicing entity and does not compete with Juniper, so monetary damages would adequately compensate Brazos and a stay would only delay realization of those damages. See Motion, ECF No. 117 at 9. In support of its argument, Juniper cites Brazos‘s failure to seek a preliminary injunction. See id. Brazos fails to rebut Juniper‘s arguments about the relationship between the parties. See Opposition, ECF No. 118 at 8–10.
The Court agrees with Juniper. The fact that the parties are not competitors and that Brazos
* * *
Since all of the subfactors weigh against a finding that Brazos would be unduly prejudiced by a stay, the Court finds that the undue prejudice factor strongly supports granting Juniper‘s stay request.
D. Balancing of the Factors
As outlined above, for the cases involving the ‘998, ‘273, ‘656, and ‘140 Patents, all three factors weigh in favor of staying the cases pending post-grant review. For the 21–cv–7561 case involving the ‘990 Patent, the stage of litigation and simplification factors somewhat favor a stay, while the undue prejudice factor is either neutral or in favor of a stay. Accordingly, the Court finds that on balance, the factors support a stay as to all five of Brazos‘s related cases against Juniper.
IV. ORDER
For the foregoing reasons, as to the 21-cv-07557, 21-cv-07558, 21-cv-07560, 21-cv-07561, and 21-cv-07562 cases, IT IS HEREBY ORDERED that:
- Juniper‘s motion to stay pending post-grant review of the ‘998, ‘273, ‘656, and ‘140 Patents is hereby GRANTED;
- the cases are hereby STAYED during the pendency of inter partes review proceedings as to the ‘998, ‘656, and ‘140 Patents and the ex parte reexamination
proceedings as to the ‘273 Patent, with the exception that the scheduled Case Management Conference will proceed as set so that a trial schedule can be established; and - the case schedule is hereby VACATED, except the Case Management Conference set for March 3, 2022 SHALL remain set.
Dated: January 3, 2022
BETH LABSON FREEMAN
United States District Judge