Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_13-cv-04613/USCOURTS-cand-5_13-cv-04613-13/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

DELPHIX CORP.,

Plaintiff,

v.

ACTIFIO, INC.,

Defendant.

Case No. 13-cv-04613-BLF 

ORDER DENYING MOTION TO 

SEVER AND TRANSFER; STAYING 

ENTIRE ACTION DURING PENDENCY 

OF INTER PARTES REVIEW

[Re: ECF 148, 149, 150]

Before the Court is defendant Actifio, Inc.’s Motion to Sever and Transfer Its Patent 

Claims. Def.’s Mot., ECF 150. Also before the Court are the parties’ respective supplemental 

briefs regarding an extension of the stay this Court entered on November 13, 2014. ECF 148, 149. 

The Court finds Actifio’s motion suitable for submission without oral argument and VACATES 

the July 30, 2015 hearing date. Having carefully considered the parties’ respective written 

submissions, Actifio’s motion is DENIED and this action is STAYED in its entirety. 

I. BACKGROUND

This consolidated action began as a simple patent infringement lawsuit by plaintiff Delphix

Corp. accusing defendant Actifio, Inc. of infringing five of Delphix’s patents. Actifio, in turn, 

accused Delphix of infringing two of its own patents, causing Delphix to file a second lawsuit in 

this district seeking a declaration that it does not infringe the Actifio patents. Actifio moved to 

relate the cases in April 2014, ECF 50, which this Court granted, and the parties subsequently 

stipulated to consolidate the two cases, ECF 58. In September 2014, Delphix obtained leave to 

add a claim against Actifio for trade secret misappropriation. ECF 95.

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While all of this was happening, Actifio filed another lawsuit asserting two more of its 

patents in the District of Massachusetts. Actifio Inc. v. Delphix Corp., No. 1:14-cv-13247 

(“Massachusetts Action”). Delphix sought to transfer the claims in the Massachusetts Action to 

this district, contending that this action was first-filed. Pl.’s Mot. to Amend, ECF 79; Decl. of S. 

Giri Pathmanaban, ECF 150-1 Exh. D. The Massachusetts court denied that motion on March 17, 

2015. Pathmanaban Decl. ¶ 6.

On October 9, 2014, after filing petitions for inter partes review (“IPR”) of all five patents 

asserted by Delphix in this case, Actifio moved to stay this entire action. Mot. to Stay, ECF 103. 

Delphix opposed a stay as vigorously as Actifio advocated in favor of one. On November 13, 

2014, the Court partially granted Actifio’s request and stayed proceedings in connection with 

Delphix’s patents-in-suit pending decision on Actifio’s IPR petitions before the Patent Trial and 

Appeal Board (“PTAB”) of the United States Patent and Trademark Office. Stay Order, ECF 118. 

Unaffected by the stay were Delphix’s claim against Actifio for trade secret misappropriation and 

Actifio’s claims against Delphix for infringement of two Actifio patents. The Court observed that 

in light of the uncertain outcome of the then-just filed IPR petitions, the parties should proceed on 

those claims unlikely to be affected by the IPR “at least until the potential effect of Defendant’s 

IPR petitions can be better evaluated after the PTAB’s decision on those petitions.” Id. at 5. In 

May 2015, the PTAB instituted IPR on all of Delphix’s patents-in-suit. See Updated Joint Case 

Management Statement at 20, ECF 138.

Delphix now requests that the Court stay this entire action during the pendency of IPR 

proceedings. In a surprising turn of events, Actifio now opposes such a stay and requests that the 

Court permit the parties to continue litigating Actifio’s patent infringement claims and Delphix’s 

trade secret misappropriation claim. In the alternative, Actifio requests that the Court sever its 

patent claims from this action and transfer those claims to the District of Massachusetts.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 21 provides that “the court may at any time, on just terms, 

add or drop a party. The court may also sever any claim against a party.” A court’s discretion 

under Rule 21 is broad, and “[t]he court may sever the claims against a party in the interest of 

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fairness and judicial economy and to avoid prejudice, delay or expense.” Apple Inc. v. Wi-LAN 

Inc., No. C 14-2838 CW, 2014 WL 4477362, at *3 (N.D. Cal. Sept. 11, 2014) (citing Coleman v. 

Quaker Oats Co., 232 F.3d 1271, 1296-97 (9th Cir. 2000)). 

Similar factors inform a court’s discretionary decision to stay litigation pending parallel 

proceedings in the PTAB, as a court must 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 nonmoving party.” PersonalWeb Technologies, LLC v. Apple Inc., ---F. Supp. 3d---, No. 4:14-

CV-1683 YGR, 2014 WL 4757816, at *2 (N.D. Cal. Sept. 24, 2014).

As to discretionary transfers, a district court may do so in the interest of justice for the 

convenience of the parties and of the witnesses. 28 U.S.C. § 1404(a). In a case not involving a 

forum-selection clause, a district court considering a § 1404(a) motion “must evaluate both the 

convenience of the parties and various public-interest considerations.” Atl. Marine Constr. Co., 

Inc. v. United States Dist. Court for the Western Dist. of Texas, ---U.S.---, 134 S. Ct. 568, 581 

(2013). The parties’ convenience and other private interests entails consideration of a number of 

factors including the plaintiff’s choice of forum, the parties’ contacts with the forum, the contacts 

relating to the plaintiff’s claims in the chosen forum, the “‘relative ease of access to sources of 

proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining 

attendance of willing, witnesses; . . . and all other practical problems that make trial of a case easy, 

expeditious and inexpensive.’” Id. at 581 n.6 (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 

241 n.6 (1981)); Jones v. GNC Franchising, Inc., 211 F.3d 495, 498–99 (9th Cir. 2000). No 

single factor is dispositive, though a plaintiff’s choice of forum must be accorded some weight in 

the analysis. Atl. Marine, 134 S. Ct. at 581 n.6. “Public-interest factors may include ‘the 

administrative difficulties flowing from court congestion; the local interest in having localized 

controversies decided at home; [and] the interest in having the trial of a diversity case in a forum 

that is at home with the law.’” Id. (quoting Piper Aircraft, 454 U.S. at 241 n.6) (alteration in 

original). A transfer may not be appropriate if it would “merely shift rather than eliminate the 

inconvenience.” Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir.

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1986). Ultimately, the party seeking to transfer a case bears the burden of demonstrating that 

transfer is appropriate. Id. 

III. DISCUSSION

Fairness, judicial economy and the interest in avoiding prejudice, delay or expense weigh 

in favor of staying this entire action and denying Actifio’s request to sever its patents and transfer 

them to Massachusetts. As this Court previously found, the Delphix patents subject to IPR are a 

significant portion of this action. Stay Order at 4. Now that IPR has been granted on all of 

Delphix’s patents-in-suit, it is clear that a substantial portion of the action will remain stayed. As 

explained below, there are significant overlaps in the evidence, technology, and legal issues that 

the Court and a jury would have to consider in deciding the parties’ respective claims. As such, a 

more comprehensive stay of the entire action is in order pending IPR of the Delphix patents.

Actifio argues that its patents in this case should be severed because they are “substantially 

different” from those asserted by Delphix, attempting to invoke the reasoning of the court in 

Cellectricon AB v. Fluxion Biosciences, Inc., No. C-09-3150 RMW, 2011 WL 1557987 (N.D. Cal. 

Apr. 25, 2011). See Def.’s Mot. 4-5. The trouble with this argument, as Delphix notes, is that 

Actifio has previously represented to the Court the similarities between its and Delphix’s claims. 

Pl.’s Opp. 4-6. Actifio’s attempts to diminish its prior representations to the Court are 

unpersuasive. Def.’s Mot. 5 (“Actifio sought to relate the two cases not because Actifio’s patent 

claims substantially overlap with Delphix’s patent claims, but because both cases were filed

within weeks of each other in the same district, involved the same parties and counsel, no schedule 

had been set in either case, and there was no indication that the Court might stay Actifio’s patent 

claims.”). The Court does not speculate about a party’s intent when it files a motion to relate 

cases; it takes statements in the moving papers at face value. Actifio urged the Court to relate the

action on Actifio’s patents to Delphix’s separate infringement action against Actifio in order to 

avoid “unduly burdensome duplication of labor and expense or conflicting results if the cases are 

conducted before different Judges.” Def.’s Admin. Mot. to Relate at 2, ECF 50 (emphasis added). 

Severing and transferring Actifio’s patent claims at this stage would merely revive the specter of 

duplicative labor and expense and conflicting results, this time after the parties have already 

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expended time and resources litigating the claims in this district. 

Actifio’s claim that its patents—and the issues tied to those patents—are substantially 

different from Delphix’s patents is further undercut, as Delphix notes, by the fact that Actifio cites 

Delphix’s patents as “evidence” that Delphix infringes Actifio’s patents in its Patent Local Rule 3-

1(a) infringement contentions.1 Pl.’s Opp. 5; see generally Decl. of Ryan J. Marton, ECF 158-1 

Exh. 1. Actifio argues without any support that this fact “provides no justification to avoid 

severance or transfer.” Def.’s Reply 3, ECF 162. This fact, however, is critical to the Court’s 

consideration of whether Actifio’s patents are similar to Delphix’s and, as such, whether it would 

be fair and efficient to keep Actifio’s patents in this case. Because Actifio is apparently accusing 

Delphix products that may embody Delphix’s patents-in-suit and asserting that features claimed in 

those patents infringe Actifio’s patents, it is clear that the same evidence and witnesses regarding 

Delphix’s patents and products would be relevant to both parties’ patent infringement claims. 

Further, Actifio’s reliance on Delphix’s patents to prove infringement suggests that there are 

overlapping issues of infringement and invalidity that would benefit from adjudication before one 

tribunal. 

Nor is the Court persuaded by Actifio’s complaint of prejudice from staying this action and 

denying its motion to sever. The only prejudice that Actifio identifies comes from having engaged 

in some discovery on the active claims in this case.2 Def.’s Opp. 5-6. As Delphix notes, however, 

the parties have a cross-use agreement allowing discovery in this case to be used in the 

Massachusetts Action. Pl.’s Opp. 8. While it is not clear whether the parties have also agreed to 

use discovery from the Massachusetts Action in this case, there is no reason why they cannot work

out a similar arrangement. Furthermore, given the existing cross-use agreement, the limited 

 

1

The Court observes that Actifio moved for leave to amend those contentions mere days before 

Delphix’s opposition to this motion was due. ECF 152.

2 Because Actifio contends that the parties are not direct competitors, the Court does not 

understand Actifio to be arguing that there is undue prejudice from the mere delay in resolving its 

patent claims. See Def.’s Mot. to Stay at 12-13, ECF 103; Def.’s Stay Reply 12-14, ECF. In any 

case, “delay in having a party's own claims adjudicated in court does not constitute undue 

prejudice.” Riverbed Tech., Inc. v. Silver Peak Sys., Inc., No. C 13-02980 JSW, 2014 WL 

1647399, at *2 (N.D. Cal. Mar. 14, 2014). 

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discovery conducted in this case thus far will not go to waste and will still be available once the 

stay is lifted.

Even if the Court were inclined to undo consolidation and sever Actifio’s patents from this 

case, Actifio has not demonstrated that a transfer to the District of Massachusetts would promote 

the interest of justice. Delphix filed suit in this district seeking a declaration that it does not 

infringe the Actifio’s patents. Delphix’s choice of forum is entitled to some weight in light of the 

fact that it is headquartered in this district and its products are accused of infringing Actifio’s 

patents. Marton Decl. Exh. 2 ¶ 3; Atl. Marine, 134 S. Ct. at 581 n.6 (citing Norwood v. 

Kirkpatrick, 349 U.S. 29, 32 (1955)). While anticipatory suits may be disfavored as “aspects of 

forum-shopping,” Alltrade Inc., v. Uniweld Prods., Inc., 946 F.2d 622, 628 (9th Cir. 1991), so is 

outright forum-shopping. Indeed, Actifio’s own argument against Delphix’s choice of forum is 

undermined by its failure to seek transfer earlier in this litigation. No rule of this Court required 

Actifio to affirmatively seek relation of the two actions Delphix filed in this district. Nor did 

Actifio need to stipulate to consolidate the actions once related. Even at the time it moved to stay 

this entire action in October 2014, or when it opposed Delphix’s efforts to transfer the 

Massachusetts patents to this district, Actifio could have requested a severance of its claims. 

Instead, Actifio waited until after the PTAB had instituted IPR on all of Delphix’s patents-in-suit 

to now claim that a stay of the entire action is no longer warranted. Given Actifio’s apparent 

willingness to litigate in this forum until recently, the Court finds that Delphix’s choice of forum is 

entitled to weight in the transfer analysis. 

As to the other private interest factors, Delphix has identified a number of party and nonparty witnesses that reside in this judicial district. Pl.’s Opp. 11. “The convenience of witnesses 

is said to be the most important factor in passing on a transfer motion.” Los Angeles Mem’l 

Coliseum Comm’n v. NFL, 89 F.R.D. 497, 501 (C.D. Cal. 1981). Of particular importance is the 

convenience of non-party witnesses and their relative importance in the case. Saleh v. Titan 

Corp., 361 F. Supp. 2d 1152, 1160-61 (S.D. Cal. 2005) (quoting Aquatic Amusement Assoc., Ltd. 

v. Walt Disney World Co., 734 F. Supp. 54, 57 (N.D. N.Y. 1990)). Actifio disputes whether 

litigation in Massachusetts would really inconvenience Delphix’s non-party witnesses, Def.’s 

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Reply 4, but fails to identify any significant improvement in convenience from transferring the 

Actifio patents to Massachusetts. While this and the other pragmatic factors are essentially 

neutral, it serves to underscore the fact that transfer would “merely shift rather than eliminate the 

inconvenience.” Decker, 805 F.2d at 843. That is not sufficient to satisfy Actifio’s burden to 

demonstrate that transfer is warranted.

As a final practical matter, Actifio cannot guarantee that there would be any increased 

efficiency to the Court or to the parties from severance and transfer. As Actifio has already argued 

vociferously to the Massachusetts court that its patents in this case are different from the patents in 

that action, it is unlikely that the Massachusetts court would simply fold these patents into its 

current schedule, as Actifio so optimistically contends. Def.’s Mot. 8; Pl.’s Opp. 9-10. Were this 

Court to grant Actifio’s motion, the end result would more likely be three different cases tried to 

three different juries, thereby compounding the inconvenience to the parties and congesting the 

docket of the court that receives the severed claims. 

In sum, Actifio has failed to demonstrate that severance and transfer of its patent claims 

against Delphix would be in the interest of justice. As a stay of this entire action, which is still in 

the early stages of discovery, is likely to simplify the issues in question and would not unduly 

prejudice either party, the Court finds that the stay entered November 13, 2014 should be extended 

and expanded to include all claims in this action. 

IV. ORDER

For the foregoing reasons, IT IS HEREBY ORDERED that Actifio’s Motion to Sever and 

Transfer Its Patent Claims is DENIED. 

This action is HEREBY STAYED during the pendency of inter partes review proceedings 

on Delphix’s patents-in-suit (U.S. Patent Nos. 8,150,808 (’808 Patent); 8,161,077 (’077 Patent); 

8,548,944 (’8944 Patent); 8,566,361 (’361 Patent); and 8,468,174 (’174 Patent)). The stay will not 

preclude the parties from completing briefing on Actifio’s motion for leave to amend infringement 

contentions, nor will it preclude Magistrate Judge Howard R. Lloyd from hearing and deciding 

that motion. The case schedule, with the exception of the hearing date on Actifio’s motion for 

leave to amend infringement contentions, is VACATED. 

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The parties shall provide the Court with a joint report by no later than December 3, 2015

regarding the status of IPR.

IT IS SO ORDERED.

Dated: July 8, 2015

______________________________________

BETH LABSON FREEMAN

United States District Judge

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