Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_14-cv-05647/USCOURTS-cand-5_14-cv-05647-7/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 28:1337 Sherman-Clayton Act

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

IPTRONICS INC., et al.,

Plaintiffs,

v.

AVAGO TECHNOLOGIES U.S., INC., et 

al.,

Defendants.

Case No. 14-cv-05647-BLF 

ORDER GRANTING DEFENDANTS’

MOTION TO STAY CASE

[Re: ECF 70]

Before the Court is Defendants’ Motion to Stay this case pending the resolution of another 

action between the parties in this district claiming patent infringement (“Patent Action”). ECF 70. 

Defendants argue that a stay is warranted because resolution of the Patent Action will prove 

dispositive for this action, while denial of the stay may force Defendants to choose between 

protecting their attorney-client privilege in the Patent Action and best defending against this 

action. ECF 70-1. Plaintiffs oppose the motion, arguing that the Patent Action will not be

dispositive and that a stay would prejudice them in discovery. ECF 76. For the reasons set forth 

below, the Court GRANTS the motion.

I. BACKGROUND

The Court’s Order Denying Motion to Dismiss sets forth the factual background of this 

case. ECF 65 at 2-7. The Court summarizes the allegations relevant to the instant motion below.

On June 29, 2010, Defendants Avago Technologies U.S. Inc., Avago Technologies 

General IP (Singapore) Pte. Ltd., Avago Technologies Trading Ltd., and Avago Technologies 

International Sales Pte. Ltd. (collectively “Avago”)

1

filed a patent infringement action against 

 

1 Avago Technologies Fiber IP (Singapore) Pte. Ltd., also a Plaintiff in the Patent Action, has been 

dismissed from this case. ECF 35.

Case 5:14-cv-05647-BLF Document 83 Filed 12/15/15 Page 1 of 5
2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Plaintiffs IPtronics A/S (now known as Mellanox Technologies Denmark ApS) and IPtronics Inc. 

(collectively “IPtronics”) in this district. Defendants claimed that Plaintiffs had infringed two of 

Defendants’ patents, including U.S. Patent No. 6,947,456 (the “’456 Patent”). See Avago Techs. 

U.S., Inc., et al. v. IPtronics, Inc., et al., Case No. 5:10-CV-02863-EJD (PSG) (“Patent Action 

Docket”), ECF 1.

On September 25, 2012, Defendants filed another action asserting that Plaintiffs infringed

the ’456 Patent, this time before the International Trade Commission (“ITC Action”). See Compl., 

ECF 1 ¶ 16. The ITC concluded that Defendants had failed to demonstrate such infringement by a 

preponderance of the evidence. Memorandum in Support of Mot. at 3.

The Patent Action, which had been stayed pending the ITC Action, is now scheduled for 

trial in June 2016, with jury deliberations set through June 8, 2016. Reply, ECF 77 at 1; see also 

Patent Action Docket, ECF 533.

In this case, Plaintiffs contend that the ITC Action was a sham aimed at impeding 

competition and gaining monopoly power for Defendants in violation of Section 2 of the Sherman 

Antitrust Act, 15 U.S.C. § 2. Compl. ¶¶ 40, 72-83. Trial is set to begin on June 5, 2017. ECF 69.

On October 1, 2015, Defendants filed the instant motion to stay pending resolution of the 

Patent Action. Plaintiffs opposed on October 15, 2015 and Defendants replied on October 22, 

2015. The Court heard argument on November 19, 2015.

II. LEGAL STANDARD

District courts have the “discretionary power to stay proceedings.” Lockyer v. Mirant 

Corp., 398 F.3d 1098, 1109 (9th Cir. 2005) (citing Landis v. North American Co., 299 U.S. 248, 

254 (1936)). This power is “incidental to the power inherent in every court to control the 

disposition of the cases on its docket with economy of time and effort for itself, for counsel, and 

for litigants.” Landis, 299 U.S. at 254. The court may “find it is efficient for its own docket and 

the fairest course for the parties to enter a stay of an action before it, pending resolution of 

independent proceedings which bear upon the case.” Dependable Highway Exp., Inc. v. 

Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007) (quoting Levya v. Certified Grocers of 

California, Ltd., 593 F.2d 863-864 (9th Cir. 1979)).

Case 5:14-cv-05647-BLF Document 83 Filed 12/15/15 Page 2 of 5
3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

In determining whether to grant a stay, “the competing interests which will be affected by 

the granting or refusal to grant a stay must be weighed.” CMAX, Inc. v. Hall, 300 F.2d 265, 268 

(9th Cir. 1962) (citing Landis, 299 U.S. at 254-55). “Among these competing interests are [1] the 

possible damage which may result from the granting of a stay, [2] the hardship or inequity which a 

party may suffer in being required to go forward, and [3] the orderly course of justice measured in 

terms of the simplifying or complicating of issues, proof, and questions of law which could be 

expected to result from a stay.” Id.

 III. DISCUSSION

A. Possible Damage From Granting Stay

The Court first considers the possible damage that could arise from granting the stay. Id. 

Plaintiffs argue that a stay will prejudice them in two ways: first, by delaying their remedy and, 

second, by weakening the recollections of key witnesses. Opp. at 8-9. Plaintiffs assert that, by

requesting a stay pending “conclusive” resolution of the Patent Action—which suggests the 

possibility of appeals—Defendants ask for an indefinite stay. Id. at 8-9. Defendants respond that 

they seek a stay “until the trial in the [Patent Action] is completed in June 2016.” Reply at 1. 

Given that trial in this action is not set until June 2017, the Court finds that a stay until June 2016 

will not significantly delay Plaintiffs’ remedy, if at all.

Plaintiffs next argue that a stay will prejudice their ability to effectively question 

witnesses. Plaintiffs explain that, to prove that the ITC Action was a sham, they must prove, first, 

that it was objectively baseless “in the sense that no reasonable litigant could realistically expect 

success on the merits” and, second, that Defendants brought it for an “improper, malicious 

purpose.” Prof’l Real Estate Investors, Inc. v. Columbia Pictures Indus. Inc., 508 U.S. 49, 60, 62 

(1993). Plaintiffs argue that the second element, and potentially the first, will “require an intact 

recollection of facts by [Defendants’] decision makers concerning the ITC [Action] that was 

brought already three years ago.” Opp. at 9. Defendants respond that this speculative harm is 

unlikely because the same witnesses are currently preparing for and will be testifying in the Patent 

Action trial. Reply at 5. 

The Court agrees with Defendants and finds that Plaintiffs have not sufficiently shown that 

Case 5:14-cv-05647-BLF Document 83 Filed 12/15/15 Page 3 of 5
4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

they would face hardship or inequity as a result of a stay. Accordingly, the first factor does not 

weigh against imposing a stay.

B. Possible Hardship or Inequity From Denying Stay

The Court next considers the possible damage that could arise from going forward. CMAX, 

300 F.2d at 268. Defendants argue that denial of the stay could harm them in two ways: first, by 

enabling Plaintiffs to circumvent the recent close of fact discovery in the Patent Action and, 

second, by possibly forcing them to choose between protecting privileges in the Patent Action and 

“defending this action by producing documents and evidence relating to its legal strategy in 

bringing the ITC Action.” Memorandum in Support of Mot. at 10. Defendants additionally 

contend that denying the stay will burden the Court with numerous discovery disputes. Id.

Plaintiffs respond that a stipulation limiting cross-use of information between this case and 

the Patent Action should assuage any fears about circumvention of the close of discovery in the 

Patent Action. Opp. at 10. The Court agrees. With regard to Defendants’ second claimed harm, 

Plaintiffs argue that it is speculative and not sufficiently strong to represent a hardship. 

Recognizing the potential difficulties for Defendants, the Court finds that the potential hardship

from denying the stay weighs slightly in favor of granting it.

C. Orderly Course of Justice

The Court finds the third interest—whether a stay will complicate or simplify the issues 

before it—to be most instructive in this case. Defendants argue that the Patent Action will prove 

dispositive for the first prong of the sham litigation inquiry—that is, whether or not the ITC 

Action was objectively baseless—because a victory by Defendants in the Patent Action “will

conclusively demonstrate that [the] ‘456 patent infringement claims had merit and were not

objectively baseless.” Memorandum in Support of Mot. at 8. Conversely, a second defeat by 

Defendants will likely support a finding that the ITC Action lacked merit and was objectively 

baseless. In addition, Defendants assert that staying antitrust claims related to patent infringement 

until after resolution of the patent infringement issues is “now-standard practice.” In re Innotron 

Diagnostics, 800 F.2d 1077, 1084 (Fed. Cir. 1986).

Plaintiffs respond that every case that has granted such a stay is distinguishable because, in

Case 5:14-cv-05647-BLF Document 83 Filed 12/15/15 Page 4 of 5
5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

those cases, the antitrust claims relate directly to the patent infringement claims before the same 

court. Plaintiffs argue that, in contrast, here, the ITC Action they challenge is over and the ongoing 

Patent Action involves products, rules, and standards of proof that differ from those in the ITC

Action: The Patent Action accuses a broader array of Plaintiffs’ products of infringement and 

asserts only induced infringement, not contributory infringement as in the ITC Action.

Given the differences between the two Actions, the Court cannot agree with Defendants 

that the Patent Action will “have controlling effect” on this case. However, the Court finds that 

resolution of the Patent Action is likely to “bear upon” this case. See Leyva, 593 F. 2d at 863-4. 

The Patent Action’s finding regarding whether or not certain of Plaintiffs’ products induced

infringement of the ‘456 patent will inform the determination in this case of whether or not 

Defendants’ claim in the ITC Action that those same products contributorily infringed the same 

patent were objectively baseless. Accordingly, the Court finds that the third factor weighs in favor 

of granting the stay.

 IV. ORDER

Based on the likely simplification of issues and unlikely harm to the parties from granting 

the stay, the slight potential for damage to Defendants from denying the stay, and the limited 

length of the stay, the Court GRANTS Defendants’ Motion to Stay until June 17, 2016. The trial, 

final pretrial conference, and final hearing date for dispositive motions will remain set on the dates 

previously ordered by the Court. See ECF 69. The parties are ORDERED to file a stipulated 

proposed schedule for the remaining dates to trial on June 17, 2016. See ECF 75. In addition, the 

parties are ORDERED to provide the Court with a status statement regarding this case by no later 

than June 17, 2016. 

Dated: December 15, 2015

 ______________________________________

BETH LABSON FREEMAN

United States District Judge

Case 5:14-cv-05647-BLF Document 83 Filed 12/15/15 Page 5 of 5