Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-00651/USCOURTS-cand-3_04-cv-00651-0/pdf.json

Parties Involved:
Sproqit Technologies, Inc.
Counter-claimant
Visto Corporation
Counter-claimant

Document Text:

United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

VISTO CORPORATION,

Plaintiff,

v.

SPROQIT TECHNOLOGIES, INC.

Defendant.

___________________________________/

No. C-04-0651 EMC

ORDER DENYING DEFENDANT’S

MOTION FOR FURTHER STAY OF

LITIGATION PENDING OUTCOME OF

REEXAMINATION PROCEEDING;

AND SETTING CASE MANAGEMENT

SCHEDULE

(Docket No. 90)

Defendant Sproqit Technologies, Inc. has filed a motion for further stay of litigation pending

the outcome of a reexamination proceeding for the ‘708 patent. Having considered the parties’

briefs and accompanying submissions, as well as the oral argument of counsel, and good cause

appearing therefor, the Court hereby DENIES the motion and establishes new case management

dates.

I. FACTUAL & PROCEDURAL BACKGROUND

Plaintiff Visto Corporation originally filed suit against Sproqit on February 15, 2004. See

Docket No. 1 (complaint). The complaint alleged infringement of Visto’s ‘192 patent. 

Subsequently, on March 9, 2004, Sproqit filed a motion to dismiss or, in the alternative, stay or

transfer based on litigation taking place in a federal court in Minnesota. See Docket No. 5 (motion). 

On April 26, 2004, the Court issued an order suspending the hearing on Sproqit’s motion until after

the Minnesota court first ruled on a motion to dismiss or transfer that had been filed by Visto. See

Docket No. 29 (order). The Minnesota court did not issue its ruling until some six months later. See

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Docket No. 37 (letter). In its ruling, the court transferred the case from Minnesota to this District. 

This Court then issued an order on November 12, 2004, denying Sproqit’s motion to dismiss as

moot. See Docket No. 38 (order). 

Subsequently, Sproqit filed its answer to Visto’s complaint and also asserted several

counterclaims. See Docket No. 41 (answer and counterclaims). Included in its counterclaims were

claims for a declaratory judgment not only with respect to Visto’s ‘192 patent but also a second

patent owned by Visto, i.e., the ‘708 patent. 

The first case management conference was subsequently held on January 5, 2005. Shortly

thereafter, Sproqit sought a stay of this case pending a reexamination by the PTO of the ‘192 patent. 

See Docket No. 60 (motion). Visto then amended its complaint pursuant to stipulation of the parties

and order of the Court. See Docket No. 81 (amended complaint). In the amended complaint, Visto

asserted patent infringement with respect to a total of four patents: the ‘192 patent, the ‘708 patent,

the ‘131 patent, and the ‘221 patent. Approximately a week later, on April 20, 2005, the Court

issued an order granting Sproqit’s motion to stay. See Docket No. 82 (order). The Court stayed the

entirety of the litigation given the relatedness of the four patents.

On August 9, 2005 -- almost 14 months after the request for reexamination of the ‘192 patent

was initially made (by a third party, Seven) -- the PTO issued a notice of intent to issue ex parte

reexamination certification for the ‘192 patent. Final agency action on the reexamination is

expected to issue soon and Visto thus anticipated that the stay herein would be lifted shortly. 

However, on November 7, 2005, Sproqit filed the instant motion seeking a further stay because

Seven had filed a request for a reexamination of the ‘708 patent on February 15, 2005, and the PTO

had granted that request on April 8, 2005. 

II. DISCUSSION

In ruling on Sproqit’s request for an additional stay, the Court considers whether the stay

would unduly prejudice or present a clear tactical disadvantage the nonmoving party, whether a stay

will simplify the issues in question and trial of the case, whether discovery is completed, and

whether a trial date has been set. See Target Therapeutics, Inc. v. Scimed Life Systems, Inc., 33

U.S.P.Q.2d 2022, 2023 (N.D.Cal. 1995).

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As to prejudice to Visto, the Court notes that this case has now been pending for some 21

months with no substantive action, exchange of preliminary infringement or invalidity contentions, 

or discovery having taken place. This case was stayed shortly after the first case management

conference. The trial date of June 5, 2006, has been set in this matter, but, given that the stay that

has been in effect pending the PTO’s reexamination of the ‘192 patent, that date is not longer

realistic. As indicated herein, assuming the stay is lifted once the impending PTO final action is

taken for the ‘192 patent, a trial date will likely be reset for late spring of 2007, more than three

years after the case was filed.

Visto argues prejudice because the software field at issue in this case is subject to rapid

developments and changes in technology and market conditions. Although, should Visto prevail on

the merits of its infringement claims, it will be entitled to monetary damages, uncertainty and

imprecision in the valuation of damages and consequential effects of infringement may render such

an award less than completely adequate. Consequently, a substantial delay could result in

significant prejudice to Visto in the marketplace.

Although a trial date has been set, for the same reasons stated above, this case is in its very

early stages. For example, no discovery has occurred. Since nothing has been invested or

committed by the parties in this litigation, Visto will not be subject to a clear tactical disadvantage in

the litigation were an additional stay granted. Furthermore, the Court notes that Sproqit was not the

party that initiated the reexamination of either the ‘192 or ‘708 patent. Other than a general delay

and the real world consequences thereof, Sproqit would gain no particular tactical advantage within

this litigation were the additional stay granted.

The pivotal factor is the likelihood that the additional stay will significantly simplify the

issues and trial. Concomitantly, the Court examines the degree of inefficiency, duplication, and

prejudice that will accrue to Sproqit should the stay denied. Here, there are three other patents at

issue in addition to the ‘708 patent. The ‘192 patent has already been subject to reexamination; the

other two patents are not subject to any pending reexamination by the PTO. Thus, the pending

reexamination affects only one of the patents at issue (i.e., the ‘708 patent).

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To be sure, these four patents are related (e.g., same accused products, similar technology,

and overlapping inventors). This suggests, as Sproqit contends, that, if the 708 patent were amended

as a result of the reexamination months or years from now after discovery has commenced, (a) the

parties may be required to amend the infringement and invalidity contentions as to the affected

claims, (b) Sproqit may be required to take a supplemental deposition of the inventor, (c) amended

expert reports may have to be filed and supplemental expert depositions taken (if reexamination is

not completed prior to expert disclosure likely to occur in late 2006), and (d) additional terms may

have to be construed. 

But this degree of inefficiency and duplication is likely to be discrete, contained, and not

overwhelming. The Court notes that the parallel Texas case has already proceeded through a

Markman hearing and appears ready to proceed to trial within the next several months absent a new

stay therein. Also, this Court now has the benefit of the PTO’s reexamination of the ‘192 patent. If

the ‘708 patent is reexamined and amended, the Court will then have the benefit in construing the

claims of the PTO’s action at that point.

Most important, apart from the duplication of effort and inefficiency of having to amend

positions and take supplemental depositions, Sproqit has not identified any irreparable strategic

prejudice that would accrue to it were the stay denied. At the hearing, it could not identify any

position taken that it might not take which could not be fairly revised without prejudice in response

to any subsequent reexamination by the PTO of the ‘708 patent.

On balance, the Court concludes that the degree of simplification of issues and efficiencies

that might obtain is not substantial enough to warrant a further stay in the context of the entirety of

this case, including the fact that this case has now been pending for 21 months without any

progression. Accordingly, Sproqit’s motion for an additional stay is denied.

III. CASE MANAGEMENT SCHEDULE

The Court also sets the new case management conference dates.

1. TRIAL DATE

a. Jury trial will begin on 5/7/2007 at 8:30 a.m. in Courtroom C, 15th Floor, 450

Golden Gate, San Francisco, CA 94102.

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b. The length of the trial will be not more than twenty (20) days. Court hours for trial

are 8:30 a.m. to 1:30 p.m. Wednesdays are reserved for law and motion and other matters.

2. DEADLINES

Obligation or Deadline Schedule

Visto’s Disclosure of Asserted

Claims & Preliminary Infringement

Contentions

December 28, 2005

Sproqit’s Preliminary Invalidity

Contentions

February 8, 2006

Exchange of Proposed Terms and

Claim Elements for Construction

February 22, 2006

Exchange of Preliminary Claim

Constructions and Extrinsic

Evidence

March 15, 2006

Joint Claim Construction and

Prehearing Statement

April 12, 2006

Visto’s Opening Claim

Construction Brief

May 24, 2006

Sproqit’s Responsive Claim

Construction Brief

June 7, 2006

Visto’s Reply Claim Construction

Brief

June 16, 2006

Claim Construction Hearing July 5, 2006

Ruling on Claim Construction Court’s Discretion

Visto’s Final Infringement

Contentions

30 days after ruling on Claim

Construction

Sproqit’s Final Invalidity

Contentions

50 days after ruling on Claim

Construction

Fact Discovery Cut-off September 27, 2006

Expert Reports Due October 25, 2006

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Obligation or Deadline Schedule

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Rebuttal Expert Reports Due November 15, 2006

Expert Discovery Cut-off December 27, 2006

Last Day to File Motion for

Summary Judgment

January 3, 2007

Last Day to Hear Motion for

Summary Judgment

February 7, 2007

3. PRETRIAL CONFERENCE

a. A pretrial conference shall be held on 4/18/2007 at 3:00 p.m. in Courtroom C, 15th

Floor. Lead counsel who will try the case (or the party if pro se) must attend. The timing of

disclosures required by Federal Rule of Civil Procedure 26(a)(3) and other pretrial disclosures shall

be governed by this order.

b. 3/19/2007, thirty (30) days prior to the date of the pretrial conference, lead counsel

shall meet and confer regarding:

(1) Preparation and content of the joint pretrial conference statement;

(2) Preparation and exchange of pretrial materials to be served and lodged

pursuant to paragraph 5(c) below; and

(3) Settlement of the action.

c. 3/29/2007, twenty (20) days prior to the pretrial conference, counsel and/or parties

shall:

(1) Serve and file a joint pretrial statement that includes the pretrial disclosures

required by Federal Rule of Civil Procedure 26(a)(3) as well as the following

supplemental information:

(a) The Action.

(i) Substance of the Action. A brief description of the substance

of claims and defenses which remain to be decided.

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(ii) Relief Prayed. A detailed statement of all the relief claims,

particularly itemizing all elements of damages claimed as well

as witnesses, documents or other evidentiary material to be

presented concerning the amount of those damages.

(b) The Factual Basis of the Action.

(i) Undisputed Facts. A plain and concise statement of all

relevant facts not reasonably disputable, as well as which facts

parties will stipulate for incorporation into the trial record

without the necessity of supporting testimony or exhibits.

(ii) Disputed Factual Issues. A plain and concise statement of all

disputed factual issues which remain to be decided.

(iii) Agreed Statement. A statement assessing whether all or part of

the action may be presented upon an agreed statement of facts.

(iv) Stipulations. A statement of stipulations requested or proposed

for pretrial or trial purposes.

(c) Disputed Legal Issues.

Without extended legal argument, a concise statement of each

disputed point of law concerning liability or relief, citing

supporting statues and decisions.

(d) Trial Preparation.

(i) Witnesses to Be Called. With regard to witnesses disclosed

pursuant to Federal Civil Rule of Civil Procedure 26(a)(3)(A),

a brief statement describing the substance of the testimony to

be given.

(ii) Estimate of Trial Time. An estimate of the number of hours

needed for the presentation of each party’s case, indicating

possible reductions in time through proposed stipulations,

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agreed statements of facts, or expedited means of presenting

testimony and exhibits.

(iii) Use of Discovery Responses. Designate excerpts from

discovery that the parties intend to present at trial, other than

solely for impeachment or rebuttal, from depositions

specifying the witness page and line references, from

interrogatory answers, or from responses to requests for

admission.

(e) Trial Alternatives and Options.

(i) Settlement Discussion. A statement summarizing the status of

settlement negotiations and indicating whether further

negotiations are likely to be productive.

(ii) Amendments, Dismissals. A statement of requested or

proposed amendments to pleadings or dismissals of parties,

claims or defenses.

(f) Miscellaneous.

Any other subjects relevant to the trial of the action or material to its

just, speedy and inexpensive determination.

(2) Serve and file trial briefs, motions in limine (including any motion regarding

the qualifications or testimony or any expert witness), proposed voir dire

questions, jury instructions, verdict forms and excerpts from discovery that

will be offered at trial (include a copy of the deposition testimony or

admission). The parties shall submit proposed jury instructions jointly. If

there are any instructions on which the parties cannot agree, those instructions

may be submitted separately;

(3) Serve and file an exhibit setting forth the qualifications and experience for

each expert witness;

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(4) Serve and file a list of each party’s exhibits by number (plaintiff) or letter

(defendant), including a brief statement describing the substance and purpose

of each exhibit and the mane of the sponsoring witness;

(5) Exchange exhibits which shall be premarked (plaintiff shall use umbers;

defendant shall use letters) and tabbed; and

(6) Deliver two sets of all premarked exhibits to chambers (exhibits are not to be

filed).

No party shall be permitted to call any witness or offer any exhibit in its case in chief that is

not disclosed in its pretrial statement without leave of the Court and for good cause.

d. 4/9/2007, ten (10) days prior to the pretrial conference, after meeting and conferring

in a good faith attempt to resolve any objections, counsel and/or parties shall serve and file: (1) any

objections to exhibits or to use of deposition excerpts or other discovery; (2) any objections to

witnesses, including the qualifications of an expert witness; (3) any objection to proposed voir dire

questions, jury instructions and verdict forms that the parties have been unable in good faith to

resolve; (4) any opposition to a motion in limine. No replies shall be filed.

e. All motions in limine and objections shall be heard at the pretrial conference.

IV. CONCLUSION

For the foregoing reasons, Sproqit’s motion for an additional stay is denied.

This order disposes of Docket No. 90.

IT IS SO ORDERED.

Dated: November 16, 2005

 EDWARD M. CHEN

United States Magistrate Judge

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