Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_13-cv-04205/USCOURTS-cand-4_13-cv-04205-4/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

EVOLUTIONARY INTELLIGENCE, LLC,

Plaintiff,

v.

LIVINGSOCIAL, INC.,

Defendant.

Case No. 13-cv-04205-WHO 

ORDER DENYING PLAINTIFF’S 

MOTION TO LIFT STAY AND 

REOPEN LITIGATION

Re: Dkt. No. 101

INTRODUCTION

On January 17, 2014, I granted defendant Livingsocial, Inc.’s motion to stay pending inter 

partes review (“IPR”) by the Patent Trial and Appeal Board (“PTAB”) of the Patent & Trademark 

Office. Plaintiff Evolutionary Intelligence seeks to lift the stay after the PTAB declined to 

institute IPR over some of the claims asserted in this action. However, the PTAB did institute IPR 

over a significant portion of the claims asserted against Livingsocial in this action. A continued 

stay would therefore simplify the issues in question and promote judicial efficiency. Per Civil 

Local Rule 7-1(b), this motion is suitable for determination without a hearing, and I vacate the 

hearing set for June 18, 2014. Evolutionary Intelligence’s motion is DENIED. 

BACKGROUND

Evolutionary Intelligence sued LivingSocial in October 2012, alleging infringement of 

Evolutionary Intelligence’s ’536 and ’682 patents, which relate to managing and manipulating 

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data. Dkt. No. 1. Evolutionary Intelligence also sued Apple, Facebook, Foursquare Laps, 

Groupon, Millennial Media, Sprint Nextel, Twitter, and Yelp, alleging infringement of the same 

patents. In October 2013, Facebook, Yelp, Twitter, and Apple filed petitions with the PTAB 

requesting IPR of various claims of the ‘536 and ‘682 patents, including the claims asserted in this 

action against LivingSocial. Wytsma Decl. ¶ 2, Ex. 1 [Dkt. No. 82]. LivingSocial moved to stay 

this infringement action pending the outcome of those petitions. Dkt. No. 82. On January 17, 

2014, I granted the motion to stay because (i) this action is at an early stage; ( ii) a stay would 

simplify the issues in question; and (iii) the stay would not unduly prejudice the plaintiff. Dkt. 

No. 96 at 2-5. The order also stated, “Any party may file a motion to lift the stay at any time if the 

PTO decides not to grant any of the pending petitions.” Dkt. No. 96 at 5. 

The PTAB issued its decisions on the petitions on April 25, 2015. The PTAB instituted 

IPR review of some of the claims of the ‘536 patent and declined to institute IPR of any of the 

claims of the ‘682 patent. Corrected Patek Decl. ¶¶ 4, 8, Exs. B, F [Dkt. No. 99]. A final written 

decision on the IPR is expected from the PTAB by April 25, 2015. Corrected Patek Decl. ¶ 12. 

Evolutionary Intelligence has moved to lift the stay and reopen litigation. In the 

alternative, Evolutionary Intelligence seeks to sever the claims that are subject of the IPR and lift 

the current stay with respect to the claims not under review. 

LEGAL STANDARD

“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). Though a stay is never required, it can be 

particularly useful because “[o]ne purpose of the reexamination procedure is to eliminate trial of 

that issue (when the claim is canceled) or to facilitate trial of that issue by providing the district 

court with the expert view of the PTO (when a claim survives the reexamination proceeding).” 

Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir. 1983).

“[T]he court may abandon its imposed stay of litigation if the circumstances that persuaded 

the court to impose the stay in the first place have changed significantly.” Canady v. Erbe 

Elektromedizin GmbH, 271 F. Supp. 2d 64, 75 (D.D.C. 2002). In determining if a stay is 

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appropriate, courts consider: (1) the stage and history of the litigation; (2) whether a stay would 

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 non-moving party. Id. at 1023. “[T]here is a liberal 

policy in favor of granting motions to stay proceedings pending the outcome of USPTO 

reexamination or reissuance proceedings.” ASCII Corp. v. STD Entertainment USA, Inc., 844 

F.Supp. 1378, 1381 (N.D. Cal. 1994). 

DISCUSSION

All the relevant considerations favor keeping the stay: (i) this action is at an early stage; (ii) 

a stay would simplify the issues in question; and (iii) the stay would not unduly prejudice 

Evolutionary Intelligence. 

I. THE EARLY STAGE OF THIS ACTION FAVORS A STAY

The case remains in its early stages. As I noted when granting the stay on January 17, 

2014, “[o]nly limited discovery has occurred in this case. No pretrial dates have been scheduled 

and no claim construction or other substantive briefs have been filed or scheduled.” Dkt. No. 96 at 

3. That remains true. The early stage of this case weighs in favor of a stay. See, e.g., 

Evolutionary Intelligence LLC v. Yelp Inc., 2013 WL 6672451 (N.D. Cal. Dec. 18, 2013) (granting 

stay where “only limited discovery had occurred, most of it restricted to the issue of venue; no trial 

date a discovery deadline has been set and only limited pretrial dates have been set....”); KLATencor Corp. v. Nanometrics, Inc., 2006 WL 70866, at *2 (N.D. Cal. Mar. 16, 2006) (granting 

stay where discovery had just begun); Target Therapeutics, Inc. v. SciMed Life Sys., Inc., 1995 

WL 20470, at *2 (N.D. Cal. Jan. 13, 1995) (lack of significant discovery and no trial date weighed 

in favor of stay).

II. A STAY WOULD SIMPLIFY THE ISSUES IN QUESTION

Evolutionary Intelligence alleges that LivingSocial infringes claims 1-4, 7-9, and 11-16 of 

the ’536 patent. The PTAB has instituted IPR of all but three of those claims (claims 1, 13, and 

15). Corrected Patek Decl. ¶ 8, Ex. F. As I stated in my order granting the initial stay, “[t]his case 

will be simplified if the PTO narrows or cancels any of the asserted claims, even if other claims 

remain in their original form.” Dkt. No. 96 (emphasis in original). The PTAB’s decision to 

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institute IPR of 10 of the asserted claims of the ’536 patent necessarily means that there is “a 

reasonable likelihood” that those claims will be found unpatentable.1 Corrected Patek Decl. ¶ 8, 

Ex. F at 2 (citing 35 U.S.C. § 314(a)); see also Star Envirotech, Inc. v. Redline Detection, LLC, 

2013 WL 1716068, at *2 (C.D. Cal. Apr. 3, 2013) (“the amended standards for granting inter 

partes review probably results in an even higher likelihood than under the prior standard that the 

issues in this action will be simplified by the reexamination”). Even if the claims are not 

cancelled, they may be amended or clarified. Staying this case pending resolution of the IPR will

therefore simplify the issues in question; it is of no moment that not all of the asserted claims of 

the ‘536 patent are subject to the IPR or that some of the claims subject to IPR may survive. See, 

e.g., Pragmatus Telecom, LLC v. NETGEAR, Inc., 2013 WL 2051636, at *2 (N.D. Cal. May 14, 

2013) (“a stay request is not contingent upon the reexamination proceeding being coterminous and 

resolving every claim and issue in this action. Rather, the salient question is whether the 

reexamination will aid the Court or otherwise streamline the litigation.”).

Evolutionary Intelligence also alleges that LivingSocial infringes claims 1, 3-7, 10-11, 14-

16, 19 and 21 of the ’682 patent. Corrected Patek Decl. ¶ 11. The PTAB declined to institute IPR 

of those claims. In the event that I do not lift the stay, Evolutionary Intelligence requests that 

those claims be severed from those subject to IPR and that litigation as to those claims 

recommences. But the ’682 patent is a continuation of the ’536 patent, claiming the same 

invention: a “system and method for creating and manipulating information containers with 

dynamic registers.”2 Dkt. No. 1, Exs. A-B (‘536 and ‘682 patents). Several claim terms are 

 

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In addition, claims 1 and 13 of ’536 patent, which are not subject to the IPR, are related to the 

claims that are subject to review. Claims 3-4, 7-9, and 11-12, and 14 are dependent on claims 1 

and 2. Claim 13 is also dependent on claims 1 and 2. Claims 1 and 13 may therefore be clarified 

by the PTAB’s review.

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In its reply, Evolutionary Intelligence contends that the patents are not directed at the same 

invention because “each is directed to a completely distinct invention (an apparatus comprised of 

time- and location-based information containers vs. a method for implementing searches), with 

little overlap in terminology or subject matter.” Reply at 3 (emphasis in original). But as noted 

above, the patents have common claim terms and are both directed to a “System and method for 

creating and manipulating information containers with dynamic registers.”

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common to the asserted claims of both patents, including “register,” “gateway,” “container,” and 

“information.” These claim terms may be clarified during the IPR.3Litigating the patent ’682 

patent now and the ’536 patent following resolution of the IPR would be inefficient and may result 

in duplication of effort. See, e.g., Methode Elec., Inc. v. Infineon Technologies Corp., 2000 WL 

35357130, at *3 (N.D. Cal. Aug. 7, 2000) (“Duplicative discovery may result if only the ’408 

patent is stayed since there are likely to be common documents and witnesses regarding the 

infringement litigation of the ’408 and ’468 patents.”). Under such circumstances, staying the 

entire case is appropriate. See, e.g., Sonics, Inc. v. Arteris, Inc., 2013 WL 503091, at *3 (N.D. 

Cal. Feb. 8, 2013) (“When there are overlapping issues between the reexamined patents and other 

non-reexamined patents-in-suit, courts have found that staying the entire case is warranted.”); 

KLA–Tencor Corp. v. Nanometrics, Inc., 2006 WL 708661, at *4 (N.D. Cal. March 16, 2006) 

(same); Methode Elec., 2000 WL 35357130, at *3 (“granting a stay with respect to only the ’408 

patent would be problematic since the ’468 patent involves the same accused device”).

The cases cited by Evolutionary Intelligence do not support lifting the stay in this action. 

In Cellectricon AB v. Fluxion Biosciences, Inc., 2011 WL 1557987, at *3 (N.D. Cal. Apr. 25, 

2011), the court found that lifting the stay on one patent was warranted because the patent was 

significantly different from the other patents and it was owned by a different plaintiff. In 

Tokuyama Corp. v. Vision Dynamics, LLC, 2008 WL 4452118, at *4 (N.D. Cal. Oct. 3, 2008), the 

court lifted the stay in large part because the defendant alleged a counterclaim involving various

antitrust violations “none of which is within the scope of the PTO.” In Fresenius Med. Care 

Holdings, Inc. v. Baxter Int’l, Inc., 2007 WL 1655625, at *3 (N.D. Cal. June 7, 2007), the court 

held that a stay pending reexamination was inappropriate since it was a four year old case in which 

pretrial preparation was completed and a trial had been held. None of those circumstances are 

 

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Evolutionary Intelligence argues that the Court will not benefit from the PTAB’s discussion of 

those terms because the PTAB already construed the terms and the PTAB applies a different 

standard of claim construction than the one this Court will be required to apply. Perhaps, but the 

point is that the asserted claims in the ’536 and ’682 patents are so related that the PTAB’s 

discussion of the asserted claims of the ’536 patent will almost certainly clarify the asserted claims 

of the ’682 patent.

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present here.

III. MAINTAINING THE STAY WOULD NOT UNDULY PREJUDICE 

EVOLUTIONARY INTELLIGENCE

Evolutionary Intelligence requests that I reconsider its prior argument, which I previously 

rejected, that a continued stay will cause it undue prejudice because “delaying the resolution of 

this case effectively provides a license to LivingSocial to continue its infringement.” However, 

“[m]ere delay, without more though, does not demonstrate undue prejudice.” Nanometrics, Inc. v. 

Nova Measuring Instruments, Ltd., 2007 WL 627920, at *3 (N.D. Cal. Feb. 26, 2007); Telemac 

Corp. v. Teledigital, Inc., 450 F.Supp. 2d 1107, 1111 (N.D.Cal.2006) (“[T]he likely length of 

reexamination is not, in itself, evidence of undue prejudice.”). Evolutionary Intelligence will have

an opportunity to litigate LivingSocial’s alleged infringement of its patents when the PTAB 

provides its final decision.

Evolutionary Intelligence also repeats its argument that LivingSocial’s employee turnover 

and weak financial position could result in loss of evidence. Evolutionary Intelligence points to a 

recent article for the proposition that while Livingsocial recently posted a profit, “analysts have 

decried that profit as ‘accounting alchemy’ used to hide an actual $22M loss.” Corrected Mot. at 

8; Corrected Patek Decl. ¶ 14, Ex. K. As it was before, this assertion is speculative. Evolutionary 

Intelligence does not provide specific examples of evidence or potential witnesses that may be 

lost. See Evolutionary Intelligence, 2013 WL 6672451, at *7 (“Speculative assertions that 

evidence may be lost as a result of a stay pending reexamination are insufficient.”); Software 

Rights Archive, LLC v. Facebook, Inc., 2013 WL 5225522, at *5 (N.D.Cal. Sept. 17, 2013) 

(“[Plaintiff’s] assertions of prejudice based on delay alone are merely speculative. [Plaintiff] has 

not identified a particular expert witness who is likely to be lost, nor is the court convinced that the 

relevant technology or evidence thereof would become ‘unavailable’ for the purposes of a patent 

infringement analysis.”). Evolutionary Intelligence’s speculative assertion that a continued stay 

will cause loss of evidence does not warrant lifting the stay.

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CONCLUSION

Evolutionary Intelligence’s motion to lift the stay is DENIED. This case is stayed pending 

a final written decision from the PTAB. The parties shall file a joint status update every six 

months from the date of this Order and upon completion of the IPR.

IT IS SO ORDERED.

Dated: June 16, 2014

______________________________________

WILLIAM H. ORRICK

United States District Judge

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