Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_15-cv-04073/USCOURTS-cand-5_15-cv-04073-0/pdf.json

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

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Case No.: 5:15-cv-04073-EJD

ORDER GRANTING PLAINTIFF’S MOTION TO BIFURCATE AND STAY DEFENDANTS’ 

ANTITRUST COUNTERCLAIM

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

FITBIT, INC.,

Plaintiff,

v.

ALIPHCOM, et al.,

Defendants.

Case No. 5:15-cv-04073-EJD 

ORDER GRANTING PLAINTIFF’S 

MOTION TO BIFURCATE AND STAY 

DEFENDANTS’ ANTITRUST 

COUNTERCLAIM

Re: Dkt. No. 64

Plaintiff FitBit, Inc. (“Plaintiff”) filed a complaint against Defendants Aliphcom, Body 

Media, Inc., and Body Media (collectively “Defendants”) alleging infringement of a number of 

Plaintiff’s patents related to wearable fitness tracking devices. Defendants filed an answer denying 

these allegations and asserting a counterclaim of monopolization in violation of 15 U.S.C. § 2. 

Federal jurisdiction arises pursuant to 28 U.S.C. § 1331. Dkt. No. 64. Presently before the 

court is Fitbit’s motion to bifurcate and stay Aliphcom’s antitrust counterclaim. Aliphcom opposes 

the motion. Having carefully considered the pleadings and motion papers filed by the parties, the 

court finds, concludes and orders as follows:

1. Courts have broad discretion under Federal Rule of Civil Procedure Pro 42(b) to bifurcate 

and stay counterclaims. Rule 42(b) rule provides as follows:

The court, in furtherance of convenience or to avoid prejudice, or 

when separate trials will be conducive to expedition and economy, 

may order a separate trial of any claim, cross-claim, counterclaim, or 

third-party claim, or of any separate trial of any number of claims, 

cross-claims, counterclaims, third-party claims. When ordering a 

separate trial, the court must preserve any federal right to a jury trial.

Rule 42(b)’s standards are read “in the disjunctive instead of in the conjunctive.” Giro Sport 

Design Inc. v. Pro-Tec Inc., 1989 WL 418774, at *2 (N.D. Cal. Mar. 16, 1989) (citing In Re Paris 

Air Crash of March 3, 1974, 69 F.R.D. 310 (1975)). As such, satisfaction of even one of the 

standards constitutes sufficient grounds for bifurcation. The burden of proving that bifurcation is 

Case 5:15-cv-04073-EJD Document 76 Filed 05/27/16 Page 1 of 4
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Case No.: 5:15-cv-04073-EJD

ORDER GRANTING PLAINTIFF’S MOTION TO BIFURCATE AND STAY DEFENDANTS’ 

ANTITRUST COUNTERCLAIM

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Northern District of California

justified rests with the party seeking it. Chip-Mender Inc. v. Sherwin-Williams Co., No. C-05-

3465-PJH, 2006 WL 13058, at *13 (N.D. Cal. Jan 3, 2006) (citing Spectra-Physics Lasers, Inc. v. 

Uniphase Corp., 144 F.R.D. 99, 101 (N.D. Cal. 1992)).

2. In the context of patent suits, district courts often stay an antitrust counterclaim until the 

issues of patent infringement and validity are resolved. In re Innotron Diagnostics, 800 F. 2d 1077, 

1084 (Fed. Cir. 1986); see also Eurand, 2009 WL 3172197, at *1. Those courts reason that such a 

separation simplifies issues, reduces jury confusion, and helps courts manage the volume and 

complexity of evidence presented to the jury. Masimo Corp v. Philips Elec. N. Am. Corp., 742 F. 

Supp. 2d 492, 496 (D. Del. 2010); see Baldwin Hardware Corp. v. Franksu Enter. Corp., No. CV90-4919-WDK, 1990 WL 357312, at *2 (C.D. Cal. Dec. 28, 1990) (“[S]eparating complex 

antitrust issues of market power and monopoly from patent, unfair competition and trade dress 

issues would reduce the likelihood of jury confusion and result in an earlier resolution of the 

issues in dispute.”); see also Orthophoenix, LLC v. Dfine, Inc., No. 13-1004-LPS, 2015 WL 

1938702, at *1 (D. Del. Apr. 28, 2015) (observing that trying patent infringement, patent validity, 

and antitrust issues before the same jury may lead to confusion).

3. Plaintiff argues that judicial economy, convenience of the parties, and 

streamlining of complex litigation favors the bifurcation and stay of the antitrust claim. 

Additionally, Plaintiff contends that Defendant’s characterization of the market as one for 

connected fitness trackers differs from its own, and is precisely the type of issue that broadens the 

scope of discovery, requires expert economic testimony, and increases overall litigation expenses. 

Finally, Plaintiff concludes that the immense cost, scope, and expense associated with allowing 

antitrust discovery to continue is contrary to Rule 42(b)’s goal of resource preservation.

4. Defendants counter that Plaintiff’s motion to bifurcate and stay its antitrust counterclaim 

should be denied for several reasons. First, they argue the efficiency gained by a bifurcation is 

outweighed by the harm suffered by Defendants. According to Defendants, a stay would give 

Plaintiff the chance to consolidate its control over the market for connected activity trackers and 

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Case No.: 5:15-cv-04073-EJD

ORDER GRANTING PLAINTIFF’S MOTION TO BIFURCATE AND STAY DEFENDANTS’ 

ANTITRUST COUNTERCLAIM

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increase a competitor’s barrier to entry to such an extent that Defendants would be excluded from 

the market. Second, Defendants assert that a bifurcation and stay would not improve efficiency 

because the discovery relevant to the antitrust claim is not substantively distinct from the 

discovery relevant to patent infringement claims. Finally, Defendants argue that even if the 

antitrust claim were bifurcated, the existence of significant evidentiary overlap between patent and 

antitrust issues favors the continuation of discovery. 

5. The court finds that bifurcation and stay of the antitrust counterclaim is appropriate for 

multiple reasons. First, resolving issues of patent validity and infringement before addressing the

antitrust counterclaim may render the antitrust claim moot - thereby conserving judicial economy. 

Apotex, Inc. v. Senju Pharm. Co., Ltd., 921 F. Supp. 2d 308, 314 (D. Del. Feb. 7, 2013) (“The 

court has stayed antitrust litigation where there was a possibility that the resolution of the 

underlying patent claims could moot, narrow, or otherwise simplify the antitrust claims.”); see 

also Iptronics v. Avago Technologies U.S., Inc., No. 14-CV-05647-BLF, 2015 WL 5029282, at *8 

(N.D. Cal. Aug. 25, 2015) (same). In addition, to prevail on the antitrust claim, Defendants must 

prove that Plaintiff’s suit is “objectively baseless,” which requires convincing a court that no 

“reasonable patent owner” could believe that Defendants’ products infringed Plaintiff’s patents. 

Eurand, 2009 WL 3172197, at * 2. And even if Defendant prevails on the question of 

infringement, a court may still rule that the suit was not objectively baseless because Plaintiff may

well have filed the suit with a realistic expectation of prevailing on the merits. Id.; see also

Apotex, 921 F. Supp. 2d 308, 314-15 (D. Del. Feb. 7, 2013) (reasoning that while a winning 

lawsuit is by definition a reasonable effort at petitioning for redress and therefore not a sham, a 

losing lawsuit does not necessarily mean that the litigation was a sham because a party may have

had entirely reasonable ground for bringing the suit) (citations and internal quotations omitted). 

As such, it is highly likely that the antitrust issues will be resolved or rendered moot upon 

resolution of patent infringement and validity issues. Therefore a bifurcation and stay would

conserve judicial economy.

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Case No.: 5:15-cv-04073-EJD

ORDER GRANTING PLAINTIFF’S MOTION TO BIFURCATE AND STAY DEFENDANTS’ 

ANTITRUST COUNTERCLAIM

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6. Second, the lack of evidentiary overlap between patent validity, infringement, and antitrust 

issues will cause jury confusion. The antitrust claim involves the analysis of anticompetitive and 

monopolistic behavior on the part of a party, while patent infringement focuses on “the products 

of a patentee and the alleged infringer.” Masimo Corp., 742 F. Supp. 2d at 498. The antitrust 

claim restricts monopolistic behavior, while a patent grants its owner certain monopolistic powers.

Id. at 499. A jury presented with evidence alleging “the lawful exercise of patent rights” and “the 

unlawful exercise of anticompetitive behavior,” could easily “blur the distinction between 

legitimate patent enforcement” and the exercise of “unlawful” monopolistic powers. Id. Allowing 

Defendants to introduce evidence related to antitrust issues would increase the likelihood of just 

such confusion among the jury, and interfere with their ability to address the more pertinent issue 

of patent infringement. As such, a bifurcation of the antitrust claim is warranted.

7. Defendants contend that even if the court bifurcates Defendant’s counterclaim, 

discovery associated with the antitrust counterclaim should continue because there is significant 

evidentiary overlap between patent and antitrust issues. The court rejects this argument for the 

reasons stated above, and finds that allowing discovery to proceed with respect to the antitrust 

counterclaim would be unnecessary and burdensome.

On balance, the court finds that the antitrust counterclaim should be bifurcated and stayed 

in the interests of conserving judicial economy and reducing jury confusion. As such, the court 

GRANTS Plaintiff’s motion to bifurcate and stay Defendants’ antitrust counterclaim and stays 

discovery with respect to the same. The hearing scheduled for June 2, 2016 is VACATED.

IT IS SO ORDERED.

Dated: May 27, 2016

______________________________________

EDWARD J. DAVILA

United States District Judge

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