Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_10-cv-03724/USCOURTS-cand-4_10-cv-03724-104/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 

For the Northern District of California 

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IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

U.S. ETHERNET INNOVATIONS, LLC, 

 

 Plaintiff, 

 

 v. 

ACER, INC., et al., 

 Defendants. 

 and 

ATHEROS COMMUNICATIONS, INC., et 

al., 

 Intervenors. 

________________________________/ 

No. C 10-3724 CW 

ORDER DENYING 

MOTION TO STAY 

ENFORCEMENT 

PENDING APPEAL 

(Docket No. 1471) 

 

 Plaintiff United States Ethernet Innovations, LLC (USEI) 

moves this Court to stay payment of costs pending appeal without 

the requirement of posting a bond or, in the alternative, to 

require a bond that amounts to fifty percent of the taxable costs 

awarded to each Defendant. The Court denies USEI's motion. 

I. Background 

 The Court resolved all asserted claims of infringement of the 

patents-in-suit in favor of Defendants1 and entered judgment 

following cross-motions for summary judgment. Docket No. 1289, 

Order on Summary Judgment Motions at 30; Docket No. 1311, Amended 

Judgment. The Court ordered that Defendants shall recover costs 

 1 "Defendants" collectively refers to Acer, Inc., Acer 

America Corp., Apple, Inc., Asus Computer International, Asustek 

Computer Inc., Dell Inc., Fujitsu Ltd., Fujitsu America, Inc., 

Gateway, Inc., Hewlett Packard Co., Information Systems, Inc., and 

Intel Corp.

Case 4:10-cv-03724-CW Document 1475 Filed 11/13/15 Page 1 of 8
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from USEI. Order on Summary Judgment Motions at 30. The Court 

denied Plaintiff's motion to alter or amend the Order on Summary 

Judgment Motions. Docket No. 1374. Plaintiff appealed to the 

Federal Circuit, primarily arguing the validity of the '872 and 

'094 patents in view of the SONIC prior art reference.2 Docket 

No. 1399; Docket No. 1471, Opening Brief at 2. 3 The appeal is 

still pending. 

 Plaintiff filed motions to review the clerk's order taxing 

costs and to stay payment of those costs pending resolution of the 

appeal. Docket Nos. 1433, 1434, 1444 and 1445. The Court 

referred those motions to Magistrate Judge Beeler. Docket No. 

1435 and 1447. Magistrate Judge Beeler denied the motion to stay 

without prejudice to USEI's raising it before this Court no later 

than two weeks after entry of the final order taxing costs. 

Docket No. 1462 at 11-12. On September 28, 2015, Magistrate Judge 

Beeler ruled on the costs. Docket No. 1469. Plaintiff filed this 

motion timely on October 9, 2015. Docket No. 1471, Opening Brief. 

 Plaintiff moves to stay the enforcement of the costs order 

pending the resolution of the appeal without posting a bond or, 

alternatively, with a bond in the amount of fifty percent of the 

taxable costs awarded to each Defendant. Id. Defendants filed a 

response brief, Docket No. 1472, and USEI filed a reply, Docket 

 2 The Order on Summary Judgment Motions held that the 

asserted claims of the '872 and '094 patents were not valid, and 

that the asserted claims of the '313 and '459 patents were not 

infringed. 

3 Page numbers refer to the ECF-stamped page numbers. 

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No. 1474. The matter is decided without oral argument. Docket 

No. 1473. 

II. Discussion 

A. Motion to Stay 

In Hilton v. Braunskill, 481 U.S. 770, 776 (1987), the 

Supreme Court listed four factors to evaluate when considering 

whether to stay an order pending appeal: 

(1) whether the stay applicant has made a strong showing that 

he is likely to succeed on the merits; (2) whether the 

applicant will be irreparably injured absent a stay; 

(3) whether issuance of the stay will substantially injure 

the other parties interested in the proceeding; and (4) where 

the public interest lies. 

1. Likelihood of Success on the Merits 

The first question is whether USEI makes a strong showing 

that it is likely to succeed on the merits on appeal. USEI argues 

that two district courts have found the '872 and '094 patents "not 

invalid," demonstrating the strength of its appeal. Opening Brief 

at 3-4. First, USEI argues that, in U.S. Ethernet Innovations, 

LLC v. Texas Instruments Inc., No. 6:11-cv-491 (E.D. Tex.), "a 

judge and jury rejected the exact same invalidity argument, based 

on the exact same reference and facts, raised in this litigation." 

Opening Brief at 3. Like the dispute at issue here, that case 

related to the SONIC prior art's impact on the '872 and '094 

patents. Texas Instruments, Docket No. 299. USEI cites a summary 

judgment order and two jury verdicts. The court there denied 

summary judgment because there were outstanding factual issues. 

Id. Both courts construed "buffer memory" the same. Id. at 6; 

Order on Summary Judgment Motions at 8. The only difference 

between the two orders is that the Texas Instruments court found 

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evidence in the record supporting a factual dispute as to the 

required size of the buffer, while this Court did not. See Texas 

Instruments, Docket No. 299 at 6; Order on Summary Judgment 

Motions at 8. This distinction does not amount to a strong 

showing that USEI is likely to succeed on appeal on the merits. 

It demonstrates at most that two courts in two different circuits 

viewed differently whether a factual dispute existed. 

Thereafter, the first jury returned a verdict finding that 

the asserted claims of the '872 and '094 patents were not invalid. 

Texas Instruments, Docket No. 344. The second jury found that 

Texas Instruments infringed the asserted claims of the '872 patent 

and awarded damages. Id. at Docket No. 413. That a jury found 

the patents not invalid based on identical facts lends some 

support to USEI's likelihood of winning on appeal. 

While post-judgment briefing was underway in Texas 

Instruments, this Court issued its Order on Summary Judgment 

Motions and Judgment, prompting the Texas Instruments court to 

order the parties to brief the applicability of collateral 

estoppel in that case. Texas Instruments, Docket No. 488 at 2. 

The Texas Instruments court held that USEI was precluded from 

recovering damages on the '872 patent because this Court had 

declared it invalid. Id. at 5. Defendants argue that this 

collateral estoppel application in Texas Instruments makes USEI's 

arguments less forceful. The Court agrees with USEI's 

counterargument; that one district court's judgment precluded 

another court's does not make USEI's success on appeal any less 

likely. 

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Second, USEI argues that a "very similar invalidity argument 

involving the same patents at issue here was" rejected in 3Com 

Corp. v. Realtek Semiconductor Corp., No. 03-02177 (N.D. Cal.). 

Opening Brief at 8. There, a jury found that several patent 

claims, including '872 and '094 patent claims, were not invalid. 

3Com, Docket No. 690 at 3-4. USEI characterizes the invalidity 

defense in 3Com as based on the "SONIC's predecessor (a similar 

piece of prior art with a small FIFO) as an invalidating 

reference." Reply Brief at 2. Defendants respond that the 

verdict "involved completely different prior art and is not an 

'identical issue of validity' as USEI claims." Docket No. 1472, 

Response Brief at 3. Introducing the trial exhibit list as 

support, Docket No. 1472-3, Constant Dec., Ex. B, Defendants 

explain that the jury found that the patents "were not invalid 

over other prior art, not the SONIC chip that this Court found to 

invalidate these two patents." Response Brief at 3 n.8. Because 

the prior art in 3Com is not the same prior art that was at issue 

here, this argument is unpersuasive. 

2. Irreparable Injury Absent Stay 

The second question is whether USEI will be irreparably 

harmed absent the stay. Other courts in this district have 

explained that neither speculative injury nor potential reversal 

or reassessment of costs following reversal on appeal constitutes 

irreparable harm. See In re Ricoh Co., Ltd. Patent Litig., 2010 

WL 8961328, at *3 (N.D. Cal.) (citing Goldie's Bookstore, Inc. v. 

Super. Ct. of State of Cal., 739 F.2d 466, 472 (9th Cir. 1984)); 

Emblaze Ltd. v. Apple Inc., 2015 WL 1304779, at *2 (N.D. Cal.) 

(denying a stay pending appeal where Emblaze made "no showing that 

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it will be irreparably injured absent a stay"). See also Linex 

Techs., Inc. v. Hewlett-Packard Co., 2014 WL 5494906, at *2 (N.D. 

Cal.) (holding that, even if Linex had properly moved to defer 

awarding costs pending appeal, its request failed because it did 

not show that it would be irreparably harmed absent a stay). 

USEI did not address this factor, and thus made no showing 

that it would be irreparably harmed absent a stay.

3. Substantial Injury to Other Interested Parties 

The third factor is whether issuing the stay would 

substantially injure other parties interested in the proceeding. 

Both USEI and Defendants discuss only Defendants' potential 

injuries. USEI argues that staying payment of costs will not 

substantially injure Defendants, because the costs are small when 

compared with each company's market capitalization. USEI does 

not, however, address the injury of further delay of payment of 

costs, which is presumptively injurious. See Emblaze, 2015 WL 

1304779, at *2. Thus, even though the costs are small in amount, 

the delay in payment that a stay would cause is injurious. 

Defendants argue that USEI may default if there is a stay 

without a bond because it is a shell corporation with few assets.4 

USEI responds only that Defendants' argument is innuendo, and that 

Defendants lack factual support for their position. 

4. Public Interest 

The fourth factor to consider is the public interest. USEI 

argues that this factor weighs in favor of granting a stay because 

 4 Defendants raised this concern in its briefing before 

Magistrate Judge Beeler. Docket No. 1440. USEI did not respond 

to this contention in its reply brief. Docket No. 1446.

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the appeal will be finished soon. This argument is unpersuasive. 

As Defendants argued in response, no appellate hearing has yet 

been scheduled, so the timing of the appeal's completion is not 

clear. Further, as another court in this district explained, 

Defendants have an "interest in the immediate payment for [their] 

taxable costs." Kilopass Tech. Inc. v. Sidense Corp., 2013 WL 

843104, at *5 (N.D. Cal.). 

USEI also argues that obtaining a bond may increase 

litigation costs. This argument is also unpersuasive. See id. 

(explaining that returning or reassessing paid costs would be "a 

mere inconvenience, and not an irreparable injury"). 

 On balance, the factors weigh against a stay of costs pending 

appeal, particularly because USEI has made no showing of 

irreparable harm. Thus, this Court DENIES USEI's motion for a 

stay. 

B. Reduced Bond 

In the alternative, USEI proposes to post a bond in the 

amount of fifty percent of taxable costs to each Defendant. 

However, as Defendant argues, USEI provides no reason why the 

Court should grant USEI's motion to post a reduced bond. This 

alternative is also DENIED. 

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III. Conclusion 

For all the reasons stated, USEI's motion to stay enforcement 

of the costs order without a bond or to allow a bond reduced by 

fifty percent (Docket No. 1471) is DENIED. 

IT IS SO ORDERED. 

Dated: November 13, 2015 CLAUDIA WILKEN 

United States District Judge 

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