Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-01931/USCOURTS-cand-3_14-cv-01931-6/pdf.json

Parties Involved:
Aquatic AV, Inc.
Plaintiff
Magnadyne Corporation
Defendant
SSV Works, Inc.
Defendant

Document Text:

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

AQUATIC AV, INC., a California

corporation, 

Plaintiff,

 v.

MAGNADYNE CORPORATION, 

a California corporation, and SSV

WORKS, INC., a California corporation, 

Defendants. /

No. C 14-01931 WHA

ORDER DENYING WITHOUT

PREJUDICE MOTION TO STAY

ACTION PENDING INTER PARTES

REVIEW AND VACATING HEARING

After this patent-infringement action had been pending for eight months, defendants filed

a motion to stay the entire case while the PTAB decides whether to institute inter partes review

of claims in one of the two asserted patents. Plaintiff responds that either the entire case should

be stayed or nothing should be stayed. For the reasons stated herein, defendants’ motion to stay

is DENIED. The January 20 hearing is hereby VACATED. 

* * *

In April 2014, plaintiff Aquatic AV, Inc. commenced this lawsuit. This action was

subsequently reassigned to the undersigned judge in September. A case management scheduling

order followed which included a July 2015 fact discovery deadline and a November 2015 trial

date. Plaintiff then filed a third amended complaint (Dkt. Nos. 56, 67).

In brief, Aquatic alleged that defendants Magnadyne Corporation and SSV Works, Inc.

infringed two patents — U.S. Patent No. 7,831,756 (“the ’756 patent”) and its continuation-inpart, U.S. Patent No. 8,578,081 (“the ’081 patent”). The accused products were defendants’

“digital media docking stations” (Compl. ¶¶ 12, 17, 18, 22, 23, 48, 65, 85, 104).

Case 3:14-cv-01931-WHA Document 78 Filed 01/13/15 Page 1 of 3
United States District Court

For the Northern District of California

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While this action was underway — in November 2014 — defendants filed a petition for

inter partes review (“IPR”) of claims in one of the two asserted patents (the ’081 patent only). 

The PTAB has not yet decided whether to institute review of those claims.

Defendants then filed a motion to stay the entire action pending resolution of the inter

partes review petition. Plaintiff responded that it did not oppose the proposed stay, but would

oppose a partial stay due to the “substantial overlap of the claims, patented subject matter,

accused products, discovery, and damages.”

Recently, the parties have confirmed that the PTAB has not yet decided whether to

institute inter partes review. The decision deadline is in May 2015 — more than four months

away (Dkt. No. 73). 

* * *

Courts have the inherent power to manage their dockets and to stay proceedings. In

determining whether to grant a stay, three factors are considered: (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 non-moving party. Aylus Networks, Inc. v. Apple, Inc., No.

3:13-cv-04700-EMC, 2014 WL 5809053, at *1 (N.D. Cal. Nov. 6, 2014) (Judge Edward Chen).

The first factor weighs against a stay. This action has been pending for more than eight

months. During this time, progress has been made. The case management order set, among

other things, a fact discovery deadline, a dispositive motion deadline, and a November 2015 trial

date. The parties have exchanged discovery, including Magnadyne’s production of 4,800 pages

of documents and three product samples, SSV’s production of 2,000 pages of documents and

five product samples, plaintiff’s production of 1,500 pages of documents, and plaintiff’s

subpoena against third-party Scosche Industries (Bohrer Decl. ¶¶ 4, 11, 13, 16, 40). The parties

have also exchanged infringement and invalidity contentions. In November 2014, defendants

sent plaintiff a letter stating defendants’ intent to move for summary judgment of noninfringement as to the ’756 patent (not subject to the pending IPR petition). Fact discovery

closes in July 2015. On this record, this factor weighs against a stay because progress has been

Case 3:14-cv-01931-WHA Document 78 Filed 01/13/15 Page 2 of 3
United States District Court

For the Northern District of California

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made and much hard work can be done before the PTAB even decides whether to institute

review. 

The second factor is neutral. No inter partes review proceeding has been instituted by

the PTAB. Indeed, the deadline for the PTAB to decide whether to institute review of the ’081

patent (the only patent at issue in the pending IPR proceeding) is in May 2015. Although both

sides argue that inter partes review could simplify the issues in question, that remains to be seen

because the threshold institution question has not yet been decided.

The third factor is neutral as well. On the one hand, a stay could conserve some of the

parties’ resources; on the other hand, a stay would cause additional delay and needless additional

expense because the PTAB may very well decline to institute inter partes review. This order

rejects counsel for Magnadyne’s speculative assumption that if the case is not stayed, “the

parties will have to conduct discovery prior to institution that may have to be repeated after the

final decision” (Lorelli Decl. ¶ 3). It is hard to see how progress taken now could or would

result in undue prejudice to defendants, especially since they believe it would be productive for

them to “consider petitions related to the asserted claims of the ’756 patent” and/or file an early

summary judgment motion.

Accordingly, this order — in its discretion — finds that defendants’ motion to stay the

entire action pending the PTAB’s decision whether to institute inter partes review of one of the

two asserted patents is DENIED. This is without prejudice to a fresh motion after the PTAB’s

decision. The January 20 hearing is hereby VACATED. To be clear, no deadline is stayed for

now. All existing deadlines remain in place. 

IT IS SO ORDERED.

Dated: January 13, 2015. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:14-cv-01931-WHA Document 78 Filed 01/13/15 Page 3 of 3