Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-02350/USCOURTS-casd-3_16-cv-02350-3/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:0271 Patent Infringement

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MYGO, LLC, a California corporation,

Plaintiff,

v.

MISSION BEACH INDUSTRIES, LLC, 

a California corporation,

Defendant.

Case No.: 3:16-CV-2350-GPC-RBB

ORDER DENYING DEFENDANT’S 

MOTION TO STAY

[ECF No. 21.]

Before the Court is Defendant and Counterclaimant Mission Beach Industries, 

LLC’s (“Defendant’s” or “MBI’s”) motion to stay pending ex parte reexamination of 

United States Patent No. 9,383,630 (“the ‘630 Patent”). (Dkt. No. 21.1) Plaintiff and 

Counterdefendant MyGo, LLC (“Plaintiff” or “MyGo”) does not oppose the motion. 

(Dkt. No. 23.) The Court deems Defendant’s motion suitable for disposition without oral 

argument pursuant to Civil Local Rule 7.1(d)(1). Having reviewed the moving papers 

and the applicable law, and for the reasons set forth below, the Court DENIES

Defendant’s motion to stay.

 

1 All citations to the record are based upon pagination generated by the CM/ECF system.

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BACKGROUND

In a previous order, the Court recited the facts of this case at length and will 

therefore not repeat them here. (See Dkt. No. 24.) The relevant procedural background

follows.

On September 16, 2016, MyGo filed a Complaint against MBI asserting, among 

other allegations, infringement of its ‘630 Patent. (Dkt. No. 1.) On October 17, 2016, 

MBI filed an Answer with counterclaims and affirmative defenses, including assertions

of patent invalidity. (Dkt. No. 7.) On December 12, 2016, MBI filed a request for ex 

parte reexamination of the ‘630 Patent with the United States Patent and Trademark 

Office (“PTO”) pursuant to 35 U.S.C. § 302 et seq. and 37 C.F.R. § 1.510 et seq. (Dkt.

No. 21-1 at 9:10–16.) To the Court’s knowledge, the PTO has not yet responded to this

initial request.2 (See id.) On December 13, 2016, MBI filed the instant motion to stay 

pending completion of the reexamination. (Dkt. No. 21.) On January 3, 2017, MyGo 

filed a non-opposition regarding the motion to stay. (Dkt. No. 23.)

LEGAL STANDARD

“A patent is presumed to be valid, and this presumption only can be overcome by 

clear and convincing evidence to the contrary.” Enzo Biochem, Inc. Gen–Probe Inc., 424 

F.3d 1276, 1281 (Fed. Cir. 2005) (citation omitted). However, “[a]ny person at any time 

may file a request for reexamination by the [PTO] of any claim of a patent on the basis of 

any prior art.” 35 U.S.C. § 302. The PTO must then “determine whether a substantial 

new question of patentability affecting any claim of the patent concerned is raised by the 

request.” 35 U.S.C. § 303(a).

“Courts have inherent power to manage their dockets and stay proceedings, 

including the authority to order a stay pending conclusion of a PTO reexamination.”

Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426–27 (Fed. Cir. 1988) (citations omitted); TPK 

Touch Sols., Inc. v. Wintek Electro-Optics Corporation (“TPK”), No. 13-CV-02218-JST, 

 

2 Under 35 U.S.C. § 303(a), the PTO has three months to respond to a reexamination request.

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2013 WL 5289015 (N.D. Cal. Sept. 18, 2013). This District has recognized a “liberal 

policy in favor of granting motions to stay proceedings pending the outcome of [PTO]

reexamination or reissuance proceedings.” Palomar Techs., Inc. v. Mrsi Sys., LLC, No. 

15-CV-1484 JLS (KSC), 2016 WL 4496839, at *2 (S.D. Cal. June 14, 2016) (quoting 

ASCII Corp. v. STD Entm’t USA, 844 F. Supp. 1378, 1381 (N.D. Cal. 1994)). However, 

this District also maintains a “strong public policy favoring expeditious resolutions of 

litigation.” LG Elecs., Inc. v. Eastman Kodak Co., No. 09-CV-0344H(BLM), 2009 WL 

1468703, at *2 (S.D. Cal. May 26, 2009) (quoting Kahn v. Gen. Motors Corp., 889 F.2d 

1078, 1080 (Fed. Cir. 1989)) (denying motion for discretionary stay).

“There is no per se rule that patent cases should be stayed pending reexaminations, 

because such a rule ‘would invite parties to unilaterally derail’ litigation.” Tokuyama 

Corp. v. Vision Dynamics, LLC (“Tokuyama”), No. C082781SBA, 2008 WL 4532565, at 

*2 (N.D. Cal. Oct. 9, 2008) (quoting Soverain Software LLC v. Amazon.Com, Inc., 356 F.

Supp. 2d 660, 662 (E.D. Tex. 2005)). “A court is under no obligation to delay its own 

proceedings on account of a PTO patent reexamination, regardless of their relevancy to 

infringement claims which the court must analyze.” Tric Tools, Inc. v. TT Techs., Inc.

(“Tric Tools”), 2012 WL 5289409, at *1 (N.D. Cal. Oct. 25, 2012), on reconsideration, 

2012 WL 6087483 (N.D. Cal. Dec. 6, 2012) (citing Viskase Corp. v. Am. Nat’l Can Co., 

261 F.3d 1316, 1328 (Fed. Cir. 2001)). “‘The proponent of a stay bears the burden of 

establishing its need.’” Presidio Components, Inc. v. Am. Tech. Ceramics Corp., No. 14-

CV-2061-H (BGS), 2015 WL 12843919, at *2 (S.D. Cal. Oct. 5, 2015) (quoting Clinton 

v. Jones, 520 U.S. 681, 708 (1997)).

Courts consider three factors in determining whether to grant a stay pending 

reexamination: “(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.” Telemac Corp. v. Teledigital, Inc. (“Telemac”), 450 F. Supp. 2d 

1107, 1111 (N.D. Cal. 2006) (citing In re Cygnus Telecom. Tech., LLC Patent Litig., 385 

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F. Supp. 2d 1022, 1023 (N.D. Cal. 2005)).

DISCUSSION

A. Stage of Litigation

The first factor considers whether discovery is complete and whether a trial date 

has been set. “‘The early stage of a litigation weighs in favor of a stay pending 

reexamination.’” Palomar Techs., Inc. v. Mrsi Sys., LLC, No. 15-CV-1484 JLS (KSC), 

2016 WL 4496839, at *2 (S.D. Cal. June 14, 2016) (quoting Wireless Recognition Techs. 

v. A9.com Inc., No. 5:12-CV-01217-EJD et al., 2012 WL 4005459, at *2 (N.D. Cal. Sept. 

11, 2012)).

Here, the Complaint was filed approximately four months ago. (Dkt. No. 1.) 

Discovery has commenced, but only limited document exchange has occurred between 

the parties. (Dkt. No. 21-1 at 12:16–28.) No claim construction proceedings have begun,

and no trial date has been set. (Id.)

Accordingly, the relatively early stage of litigation weighs in favor of a stay.

B. Simplification of Issues

The second factor considers whether a stay is likely to simplify the issues in 

litigation. MBI asserts that a stay pending reexamination will “simplify the issues of 

invalidity and potentially narrow the claims,” will afford the Court the PTO’s expertise, 

and will spare the parties and the Court the expense of claim construction proceedings. 

(Id. at 14:9–20.) MBI relies on PTO statistics to support this claim, citing the likelihood 

that the PTO will grant MBI’s request and that a reexamination will result in modification 

of claims. (Dkt. No. 21-1, Ex. 2 at 3.)

MBI’s argument, however, assumes the PTO will grant the reexamination request. 

(Dkt. No. 21-1 at 15:3–8.) See Ultra Prod., Inc. v. Antec, Inc. (“Antec”), No. C 09-04255 

RS, 2010 WL 1688538, at *4 (N.D. Cal. Apr. 26, 2010) (“Especially where the PTO has 

not yet granted the reexamination request, [movant] has not persuasively demonstrated 

that the results of reexamination will simplify the instant litigation”). MBI has only

submitted a request for reexamination. The PTO has not granted that request. Whether 

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any PTO proceedings will even go forward remains to be seen. The Court therefore finds 

that MBI’s motion to stay is premature.

Additionally, even if the PTO grants the reexamination request, there is no 

guarantee that the patent will be canceled, its claims will be modified, or that any 

modification will simplify the litigation. “‘The reexamination process considers only the 

validity of the subject patent with regard to prior art; the PTO does not analyze 

counterclaims or other grounds for patent invalidity.’” Tric Tools, 2012 WL 5289409 at 

*2 (quoting ADA Solutions, Inc. v. Engineered Plastics, Inc., 826 F. Supp. 2d 348, 351 

(D. Mass. 2011)); see also TPK, 2013 WL 5289015 at *3 (noting the limited scope of ex 

parte reexaminations). MBI made multiple invalidity arguments in its counterclaims that 

extend beyond the issue of prior art, including allegations of inequitable conduct and 

fraud on the PTO. (Dkt. No. 7 at 1.) Ex parte reexamination would not address, let alone 

simplify, such issues for the Court.

Furthermore, because MBI requested ex parte reexamination, as opposed to inter 

partes reexamination, any PTO findings would have no estoppel effect on MBI with 

respect to later litigation. See 35 U.S.C. § 315(e)(2); AT&T Intellectual Prop. I v. Tivo, 

Inc., 774 F. Supp. 2d 1049, 1053 (N.D. Cal. 2011). Ex parte reexaminations involve an 

independent review by the PTO, whereas inter partes reexaminations allow the parties to 

participate more actively in the review process.3 Thus, a petitioner in an inter partes

reexamination is estopped from asserting invalidity arguments in subsequent litigation 

that it could have raised during the administrative review process. 35 U.S.C. § 315(e)(2). 

In contrast, no such estoppel provision exists for ex parte reexaminations. TPK, 2013 

WL 6021324 at *3. Thus, even a successful and thorough ex parte reexamination would 

not preclude MBI from litigating the same invalidity contentions asserted in the instant 

case.

 

3 For example, in inter partes reexaminations, the parties are entitled to an oral hearing and may conduct 

limited discovery and present evidence. 35 U.S.C. § 316(a).

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Due to the prematurity of the motion and the uncertainty regarding simplification 

of issues, the Court finds that this factor weighs against a stay.

C. Prejudice

The final factor considers whether a stay will unduly prejudice or produce a clear 

tactical disadvantage to the non-moving party. MBI asserts that a stay will not prejudice 

MyGo, but rather will save cost and effort for both parties, because only limited 

discovery has been produced, and claim construction has not yet begun. (Dkt. No. 21-1 

at 15:22–16:23.) It is true that MBI filed the reexamination request and motion to stay in 

a timely manner after Plaintiff filed the Complaint and before discovery advanced beyond

its early stages. However, the Court already accounted for this timing consideration

supra in its analysis of the stage of litigation factor. The Court finds that other 

considerations tip the balance of the prejudice factor against a stay, or at minimum leave 

this factor neutral.

Most importantly, as the Court has emphasized above, MBI’s motion is premature. 

Because the PTO has not granted or responded to MBI’s request at all, a stay would 

prematurely and prejudicially delay litigation with no guarantee that any reexamination 

will occur. See, e.g., Antec, 2010 WL 1688538 at *1 (finding prejudice in part because 

the PTO had not granted the reexamination request); Tokuyama Corp. v. Vision 

Dynamics, LLC, 2008 WL 4532565, at *1 (N.D. Cal. Oct. 9, 2008) (“That no PTO 

proceedings are underway creates a delay to the plaintiffs which is prejudicial.”).

4

 Thus, 

the Court is not prepared, nor required, to stall litigation when the PTO could deny the 

reexamination request altogether. See Tric Tools, 2012 WL 5289409 at *1.

Additionally, the prejudice of prematurely delaying litigation is compounded by 

the fact that MBI and MyGo are direct competitors in the sale of the product at issue. 

 

4 The Court acknowledges that other courts have found differently. See, e.g., Graphon Corp. v. Juniper 

Networks, Inc., No. C 10-1412 JSW, 2010 WL 3619579, at *2 (N.D. Cal. Sept. 13, 2010) (granting 

motion to stay even though the PTO had not yet granted the reexamination request). However, the 

existence of decisions on both sides is demonstrative of the Court’s discretion in this respect.

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(See Dkt. No. 1 at ¶¶ 8–10.) See Allergan Inc. v. Cayman Chemical Co., 2009 WL 

8591844 at *1 (C.D. Cal. 2009) (denying stay partly because parties were direct 

competitors). “Unlike patent infringement actions involving non-practicing entities, 

infringement among competitors can cause harm in the marketplace that is not 

compensable by readily calculable money damages.” Avago Tech. Fiber IP (Singapore) 

Pte. Ltd. v. IPtronics Inc., No. 10–cv–02863–EJD, 2011 WL 3267768, at *5 (N.D. Cal. 

July 28, 2011) (citing Acumed LLC v. Stryker Corp., 551 F.3d 1323, 1327–28 (Fed. Cir. 

2008)).

The Court acknowledges that MyGo has not opposed MBI’s motion to stay. 

However, considering the fact that other considerations weigh against a stay, MyGo’s 

non-opposition at most neutralizes the prejudice factor. Therefore, the Court finds that

the prejudice factor does not weigh in favor of a stay.

In sum, the first factor weighs in favor of a stay; the second factor weighs against a 

stay; and the final factor weighs against a stay or is neutral at best. The movant bears the 

burden to show the need for a stay, and the balance of the factors does not affirmatively 

show such a need. In light of the Court’s discretion and the applicable law, the Court 

declines to stay the case.

CONCLUSION

For the foregoing reasons, the Court DENIES Defendant MBI’s motion to stay.

IT IS SO ORDERED.

Dated: January 31, 2017

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