Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_17-cv-04738/USCOURTS-cand-3_17-cv-04738-0/pdf.json

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

---

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF DELA WARE 

CONTOUR IP HOLDING, LLC and 

ION WORLDWIDE, INC., 

Plaintiffs, 

v. 

GOPRO, INC. 

Defendant. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

Civil Action No. 15-1108-LPS-CJB 

MEMORANDUM ORDER 

Before the Court is a motion to stay the proceedings in the instant patent infringement case 

(the "Motion"), filed by Defendant GoPro, Inc. ("Defendant" or "GoPro"). (D.I. 14) GoPro seeks 

a stay of this case pending the United States Patent and Trademark Office's ("PTO") resolution of 

inter partes review ("IPR") of the asserted patents, United States Patent Nos. 8,890,954 (the '"954 

patent") and 8,896,694 (the '"694 patent"). For the reasons stated below, the Court GRANTS 

GoPro's Motion. 

I. BACKGROUND 

A. The Asserted Patents 

The PTO issued the asserted patents on November 18 and 25, 2014, respectively. The '694 

patent is a continuation of the '954 patent, and they share the same specification. The patents 

relate to a wearable digital video camera equipped with a wireless connection protocol and having 

the capability to provide remote image acquisition control and viewing. (See, e.g., D.I. 1, exs. 1 & 

2, Abstract) 

B. The Utah Action 

On November 25, 2014, non-party Contour, LLC ("Contour")-a Utah limited liability 

Case 3:17-cv-04738-WHO Document 70 Filed 07/14/16 Page 1 of 10
company and then-assignee of the asserted patents-filed a lawsuit in the United States District 

Court for the District of Utah (the "Utah Court") against Camp Saver, LLC (also a Utah limited 

liability company) and various Doe Defendants; that suit alleged infringement of the '954 and '694 

patents (the "Utah Action"). (D.I. 16, ex. C) Several weeks later, Contour amended its complaint 

to add GoPro as a defendant. (Id., ex. D) On June 16, 2015, the Utah Court granted the parties' 

joint request for an order staying all deadlines pending resolution of the defendants' partial motion 

to dismiss, (id., exs. G, I), a hearing on which was scheduled for January 12, 2016, (id., ex. J at 3 ). 

On April 20, 2015, meanwhile, GoPro had filed its IPR petitions, requesting that the 

PTO' s Patent Trial and Appeal Board ("PT AB") review the validity of all claims of the asserted 

patents. (See id., ex. A at 2; id., ex.Bat 2) On October 28, 2015, the PTAB instituted IPR 

proceedings as to claims 1, 2 and 11-30 of the '954 patent and as to all claims of the '694 patent. 

(Id.) The PTAB's final written decisions are expected by October 28, 2016. (D.1. 20 at 5) 

Almost one month after the PTAB's institution decisions, on November 23, 2015, the 

defendants in the Utah Action moved for a stay pending resolution of the IPR proceedings. (D.I. 

16, ex. J) One week later, on November 30, 2015, Contour voluntarily dismissed its complaint in 

the Utah Action, without prejudice, pursuant to Federal Rule of Civil Procedure 41. (Id., ex. K) 

C. This Action 

After the filing of Go Pro's IPR petitions, Contour entered into an agreement to merge with 

iON Worldwide, Inc., (D.1. 34, ex. C; D.I. 1 at~ 14), a Delaware corporation, (D.I. 1 at~ 2). 

Pursuant to the terms of the agreement, Contour IP Holding, LLC ("CIPH") was formed under 

Utah law, and Contour assigned all rights pertaining to the asserted patents to CIPH. (D.I. 20 at 5 

& ex. D) Contour holds a bare majority stake in CIPH. (D.I. 4; D.I. 20 at 5) It is alleged in the 

2 

Case 3:17-cv-04738-WHO Document 70 Filed 07/14/16 Page 2 of 10
Complaint that CIPH then granted iON an exclusive license to the asserted patents. (D.I. 1 at ifif 

15-16; D.I. 20 at 5) 

On November 30, 2015-the same day that Contour had dismissed the Utah 

Action-CIPH and iON ("Plaintiffs") commenced the instant action against GoPro. (D.I. 1) On 

December 4, 2015, Chief Judge Leonard P. Stark referred this case to the Court for resolution of 

all matters relating to scheduling and any motions to dismiss, stay or transfer venue that are filed 

in the case. (D.1. 5) In lieu of filing an Answer to Plaintiffs' Complaint, on February 1, 2016, 

GoPro filed the instant Motion, (D.1. 14), as well as a Motion to Stay and for Costs ("Motion for 

Costs") pursuant to Federal Rule of Civil Procedure 4l(d), (D.I. 10). 

Briefing on the instant Motion was complete on February 29, 2016, (D.1. 26), and the 

Court heard oral argument on April 19, 2016, (D.I. 41 (hereinafter, "Tr.")). Immediately 

following oral argument on the pending motions, the Court conducted a Rule 16 Case 

Management Conference. (Id.) The Court then issued a Scheduling Order on April 28, 2016. 

(D.1. 37) 

With respect to issues of standing, by February 19, 2016-the deadline for Plaintiffs' 

opposition to the instant Motion-iON's status as an exclusive licensee was very much in flux. 

The opposition brief to the Motion was filed by CIPH only, and CIPH explained therein that 

iON's "exclusive license has been terminated due to non-payment of royalties." (D.I. 20 at 5 n.2) 

On the same date, CIPH filed an Amended Complaint that now named itself as the sole Plaintiff. 

(D.1. 19) Then, three days later, CIPH and iON filed a Notice withdrawing the Amended 

Complaint-rendering the original Complaint (filed by both Plaintiffs) as the operative Complaint 

in this matter. (D.I. 22) And yet by the time of oral argument on the Motion, iON's status as an 

3 

Case 3:17-cv-04738-WHO Document 70 Filed 07/14/16 Page 3 of 10
exclusive licensee was again unclear. At oral argument, Plaintiffs' counsel explained that 

Contour's and iON's attempted merger had been unsuccessful, that the parties were currently 

working to unwind the merger, and that they were trying to resolve a dispute about whether iON 

held and would continue to hold an exclusive license to the asserted patents. (Tr. at 51-56) 

On June 21, 2016, Plaintiffs filed a letter informing the Court that, pursuant to a new 

agreement between Contour, CIPH and iON, iON was now a non-exclusive licensee of the 

asserted patents, and that iON had agreed to be removed as a Plaintiff in this action. (D.I. 58; see 

also D.I. 66, ex.Bat~~ l(b), (g)) Plaintiffs' letter indicated that they soon intend to file a motion 

for leave to file an amended complaint, or, in the alternative, to dismiss iON as a named Plaintiff. 

(D.I. 58) At GoPro's request, (D.I. 60), the Court held a teleconference with the parties regarding 

this development on July 7, 2016. 

II. STANDARD OF REVIEW 

A court has discretionary authority to grant a motion to stay. See Cost Bros., Inc. 

v. Travelers lndem. Co., 760 F.2d 58, 60 (3d Cir. 1985). This Court has typically considered three 

factors when deciding a motion to stay: ( 1) whether granting the stay will simplify the issues for 

trial; (2) the status of the litigation, particularly whether discovery is complete and a trial date has 

been set; and (3) whether a stay would cause the non-movant to suffer undue prejudice from any 

delay, or allow the movant to gain a clear tactical advantage. See, e.g., Toshiba Samsung Storage 

Tech. Korea Corp. v. LG Elecs., Inc., -F. Supp. 3d-, Civil Action No. 15-691-LPS, 2016 WL 

3437605, at* 1 (D. Del. June 17, 2016); Cooper Notification, Inc. v. Twitter, Inc., Civ. No. 09-

865-LPS, 2010 WL 5149351, at *1 (D. Del. Dec. 13, 2010). The Court will discuss these factors 

in turn below. 

4 

Case 3:17-cv-04738-WHO Document 70 Filed 07/14/16 Page 4 of 10
III. DISCUSSION 

A. Simplification of Issues 

With regard to simplification, a very high percentage of the asserted patents' claims are at 

issue in the IPR proceedings: every claim of the '694 patent and 22 of the 30 claims of the '954 

patent. GoPro has thus demonstrated to the PT AB that there is a reasonable likelihood that it will 

prevail as to its arguments regarding the invalidity of those many claims. 35 U.S.C. § 314(a). In 

light of this, and in light of the fact that estoppel will apply to Go Pro (as to claims it raised or 

reasonably could have raised in the PT AB) for non-cancelled claims on which trial is instituted, 

35 U.S.C. § 315( e )(2), the Court agrees with GoPro that a stay will significantly help further the 

simplification of issues in this case. 

While it is true that claims 3-10 of the '954 patent1 are not before the PTAB, even 

Plaintiffs acknowledge that this group of claims "contain[ s] terms identical or similar to terms 

found in claims instituted for review." (D.I. 20 at 2; see also id. at 8; Tr. at 91-92) Moreover, the 

'954 patent is closely related to the '694 patent (all claims as to which are currently at issue before 

the PTAB). Thus, as Plaintiffs' counsel further acknowledged at oral argument, "[s]urely the 

PTAB's sound judgment with respect to other [claim] terms [in the two patents that also happen 

to be found within claims 3-10 of the '954 patent] or how the art might generally read could be 

instructive to this Court" with respect to claims 3-10. (Tr. at 64)2 

Claim 3 is an independent claim and claims 4-10 depend on claim 3. (See '954 

patent, cols. 29:46-30:56) 

2 For example, in its decisions to institute review of certain other claims in the two 

asserted patents, the PT AB construed two claim terms ("scene to be recorded" and "record") that 

are either found in claim 3 of the '954 patent (i.e., "record") or where a variant thereof is found in 

that claim (i.e., "record the scene" and "recording the scene"). (D.I. 16, ex. A at 6-9; id., ex.Bat 

5 

Case 3:17-cv-04738-WHO Document 70 Filed 07/14/16 Page 5 of 10
In light of the above, this factor weighs in favor of a stay. 

B. Status of the Litigation 

As to the litigation's status, the Court has explained that "staying a case in its early stages 

in favor of an IPR proceeding can advance judicial efficiency, in that this prevents the court and 

parties from expending resources on claims that may later be rendered invalid." Toshiba Samsung 

Storage Tech. Korea Corp., 2016 WL 3437605, at *3. Here, this case was certainly in its early 

stages when the Motion was filed. (D .I. 15 at 11; D .I. 20 at 12-13) The Motion was brought 

about as early as it could have been-in lieu of an Answer, and just a little over a month after the 

filing of the Complaint. In such circumstances, the Court has found that this factor weighs 

strongly in favor of a stay. See Ever Win Int'! Corp. v. Radioshack Corp., 902 F. Supp. 2d 503, 

508 (D. Del. 2012); see also Market-Alerts Pty. Ltd. v. Bloomberg Fin. L.P., 922 F. Supp. 2d 486, 

494 (D. Del. 2013). 3 

Plaintiffs argue that nevertheless, this factor should weigh against a stay since the PT AB' s 

decision is expected by late October 2016-that is, within a few months. (D .I. 20 at 12-13) In 

these circumstances, they contend, "'[t]he potential benefits of reduced discovery are not likely to 

6-9; see also '954 patent, cols. 29:62-30:5) 

The Court did thereafter issue a Scheduling Order in April 2016, and, in light of 

this, the parties and the Court have since completed some additional work. Since the Scheduling 

Order was issued: ( 1) the parties have exchanged initial disclosures; (2) Plaintiffs have identified 

the accused products and served infringement contentions; and (3) the parties have sought Court 

assistance with respect to disputes regarding the content of a protective order and the sufficiency 

of GoPro's production of core technical documents. (DJ. 43-46; D.I. 61-65) But even if it were 

appropriate to consider the case's status today (and not as of the date of the filing of the Motion), 

it is clear that many significant case events are still very far off. Claim construction briefing is 

not set to begin until January 18, 2017, the Markman hearing is scheduled for March 6, 2017, and 

trial is scheduled to begin on April 9, 2018. (D.I. 3 7) Such a state of affairs would still favor a 

stay as to this factor. 

6 

Case 3:17-cv-04738-WHO Document 70 Filed 07/14/16 Page 6 of 10
be so significant to the parties that they warrant taking this case off of its present scheduling 

track"' since the Court can simply "incorporate the [PT AB' s] decision[ s ]" into this case. (Id. 

(quoting Nexans Inc. v. Belden Inc., C.A. No. 12-1491-SLR-SRF, 2014 WL 651913, at *4 (D. 

Del. Feb. 19, 2014)). 

Plaintiffs' point has some merit. As compared, for example, to a case where the PTAB's 

decisions were not due for another year, this few-month timeframe limits the amount of caserelated effort that might turn out to be wasted, were the PT AB to later invalidate some or all of the 

claims at issue. And yet as Defendant notes, it is at least true that absent a stay, Defendant will 

soon be required to produce invalidity contentions, (see D.I. 37 at~ 7(d) (setting August 5, 2016 

as GoPro's deadline to serve initial invalidity contentions)), and it may also need to respond to 

infringement- and validity-related discovery inquiries shortly thereafter. Such work could be 

undone by the PTAB's rulings. (Tr. at 61-62 (Plaintiffs' counsel acknowledging that some 

invalidity contentions could amount to wasted work, were the PT AB to invalidate certain claims 

at issue before it)) 

Because the case is surely at an early stage, and because there is the prospect that a stay 

could save the parties from at least some work that might later be preempted by the PT AB' s 

decisions, the Court concludes that this factor favors a stay. 

C. Undue Prejudice 

This Court has analyzed whether a non-movant would suffer undue prejudice (and whether 

a movant would gain an unfair tactical advantage) if a stay is granted by examining four factors: 

(1) the timing of the request for review; (2) the timing of the request for stay; (3) the status of the 

review proceedings; and (4) the relationship of the parties. Neste Oil OYJ v. Dynamic Fuels, LLC, 

7 

Case 3:17-cv-04738-WHO Document 70 Filed 07/14/16 Page 7 of 10
Civil Action No. 12-1744-GMS, 2013 WL 3353984, at *2 (D. Del. July 2, 2013); Boston Sci. 

Corp. v. Cordis Corp., 777 F. Supp. 2d 783, 789 (D. Del. 2011). 

The timing of Go Pro's requests for IPR and for a stay do not support the conclusion that it 

is pursuing an inappropriate tactical advantage. To the contrary, GoPro filed its IPR petitions 

seven months before this action commenced (and only a few months after GoPro was added to the 

Utah Action). It also filed the instant Motion very early in this case, and at an understandable 

time (e.g., at a time when, if GoPro did not take action, litigation and discovery regarding 

Plaintiffs' infringement claims would soon proceed). With respect to the status of the PTAB 

proceedings, the Court has described the posture of these proceedings above. That posture 

demonstrates that a stay in favor of the PT AB' s decisions will be short, and that it may at least 

save the parties from some amount of potentially wasted effort. And as for the relationship 

between the parties, CIPH is a holding company and does not compete in any market with GoPro.4 

(D.I. 26 at 4; Tr. at 35) 

4 In opposing the instant Motion, CIPH argued that a stay would severely prejudice 

Plaintiffs because, inter alia, the accused GoPro products compete directly with non-party 

Contour's products in the market for action cameras. (D.I. 20 at 10) This position is in conflict 

with the Court's general practice when assessing the undue prejudice factor, which is to 

determine whether the ''parties are direct competitors." Ever Win Int 'l Corp., 902 F. Supp. 2d at 

510 (emphasis added). The Court is unsure whether it would ever be appropriate to consider the 

status of a non-party company that is the parent corporation of a party when assessing the "direct 

competition" subfactor. But even ifthere were a scenario in which it made sense to do so, this is 

not it. That is so for a number of reasons, but particularly because, as Go Pro accurately notes, 

"in opposing GoPro's Motion for Costs [], CIPH went to great lengths to point out that Contour 

is not a party to this lawsuit"-since, as to that motion, Contour's status as a non-party 

potentially benefitted CIPH. (D.I. 26 at 4 (emphasis added) (citing D.I. 21 at 2 ("As an initial 

matter, Rule 41(d) does not apply here, because the parties are different. For example, the 

originally-named plaintiffs here, CIPH and iON, are different from the plaintiff in the prior 

action, Contour ... . "));see also Tr. at 48 (Plaintiffs' counsel noting, in discussing a different 

issue, that when it comes to the distinction between Contour and CIPH, the "corporate forms will 

matter")) 

8 

Case 3:17-cv-04738-WHO Document 70 Filed 07/14/16 Page 8 of 10
Finally, as to this factor, there is another consideration that counsels in favor of a stay. As 

Go Pro notes, it has been Plaintiffs' own actions that have stymied the process of having their 

rights in the asserted patents timely adjudicated. (D.I. 26 at 7-8; Tr. at 20) After all, it was iON's 

decision (along with Contour) that the two would merge and that rights in the asserted patents 

would be assigned to CIPH. These events later resulted in the dismissal of the Utah Action, as 

well as the filing of this action in this Court-all of which meant more delay in having an 

infringement case as to the asserted patents move forward. (Tr. at 22-23) Moreover, iON's 

tortured "are they or aren't they?" status as an exclusive licensee to the asserted patents-the 

subject of much conflict between it, Contour and CIPH over the last many months-has been a 

roadblock to the efficient progress of this case. iON's status was potentially relevant to both 

pending motions in the case. And the uncertainty as to its status has necessitated a number of 

filings and letters that have required Court attention-most recently in the July 7, 2016 status 

teleconference with the parties. (See, e.g., D.I. 19, 22, 34-36, 58, 60, 66; see also Tr. at 6-7, 9) In 

short, if a stay would cause any prejudice to Plaintiffs, it cannot be "undue" prejudice, in light of 

the many hurdles that Plaintiffs have placed in their own way so far. 

Due to all of these considerations, the Court finds that this factor weighs in favor of a stay. 

IV. CONCLUSION 

The potential for simplifying the issues, the current status of this litigation and the amount 

of undue prejudice associated with the stay request all favor a stay. In light of that, the Court 

concludes that a stay pending resolution of the IPR proceedings is warranted. 

Therefore, it is ORDERED that: 

(1) GoPro's Motion is GRANTED. The proceedings are STAYED from the date of 

9 

Case 3:17-cv-04738-WHO Document 70 Filed 07/14/16 Page 9 of 10
this Memorandum Order until a decision is issued by the PT AB in both IPR 

proceedings, with the following exceptions: (1) to the extent that the parties 

cannot agree on whether iON should be dismissed from the case and/or the proper 

procedure for dismissal of iON, and if motion practice is needed to resolve that 

issue, then the Court will resolve the issue during the pendency of the stay; and (2) 

GoPro shall produce to Plaintiffs GoPro's core technical documents, consistent 

with the substance of Chief Judge Stark's July 6, 2016 Oral Order. (D.I. 65) 

(2) The parties shall timely advise the Court when decisions are issued by the PT AB in 

both of the IPR proceedings. To the extent that one or both of those proceedings 

conclude prior to the issuance of a PTAB decision (e.g., due to settlement), the 

parties shall also timely advise the Court of that fact. 

Because this Memorandum Order may contain confidential information, it has been 

released under seal, pending review by the parties to allow them to submit a single, jointly 

proposed, redacted version (if necessary) of the Memorandum Order. Any such redacted version 

shall be submitted no later than July 21, 2016 for review by the Court, along with a motion for 

redaction that includes a detailed explanation as to why disclosure of any proposed redacted 

material would "work a clearly defined and serious injury to the party seeking closure." Pansy v. 

Borough of Stroudsburg, 23 F.3d 772, 786 (3d Cir. 1994) (internal quotation marks and citation 

omitted). The Court will subsequently issue a publicly-available version of its Memorandum 

Order. 

Dated: July 14, 2016 

Christopher J. Burke 

UNITED ST A TES MAGISTRATE JUDGE 

10 

Case 3:17-cv-04738-WHO Document 70 Filed 07/14/16 Page 10 of 10