Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01707/USCOURTS-ca13-15-01707-0/pdf.json

Parties Involved:
Exedea, Inc.
Appellant
HTC America, Inc.
Appellant
HTC Corporation
Appellant
Samsung Electronics America, Inc.
Appellant
Samsung Electronics Co., Ltd.
Appellant
Samsung Telecommunications America, LLC
Appellant
Smartflash LLC
Appellee
Smartflash Technologies Limited
Appellee

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

SMARTFLASH LLC, SMARTFLASH 

TECHNOLOGIES LIMITED,

Plaintiffs-Appellees

v.

APPLE INC.,

Defendant-Appellant

______________________ 

2015-1701

______________________ 

Appeal from the United States District Court for the 

Eastern District of Texas in No. 6:13-cv-00447-JRG, 

Judge J. Rodney Gilstrap.

-------------------------------------------------------------------------

SMARTFLASH LLC, SMARTFLASH 

TECHNOLOGIES LIMITED,

Plaintiffs-Appellees

v.

SAMSUNG ELECTRONICS CO., LTD., SAMSUNG 

ELECTRONICS AMERICA, INC., SAMSUNG 

TELECOMMUNICATIONS AMERICA, LLC, HTC 

CORPORATION, HTC AMERICA, INC., EXEDEA, 

INC.,

Defendants-Appellants

Case: 15-1707 Document: 39-2 Page: 1 Filed: 07/30/2015
2 SMARTFLASH LLC v. APPLE INC. 

______________________ 

2015-1707

______________________ 

Appeal from the United States District Court for the 

Eastern District of Texas in No. 6:13-cv-00448-JRG-KNM, 

Judge J. Rodney Gilstrap.

______________________ 

Decided: July 30, 2015

______________________ 

 BRADLEY WAYNE CALDWELL, Caldwell Cassady & 

Curry, Dallas, TX, argued for plaintiffs-appellees. Also 

represented by JASON DODD CASSADY, JOHN AUSTIN 

CURRY, JOHN FRANKLIN SUMMERS. 

 MARK ANDREW PERRY, Gibson, Dunn & Crutcher LLP, 

Washington, DC, argued for defendant-appellant Apple

Inc. Also represented by BLAINE H. EVANSON, Los Angeles, CA; DOUGLAS HALLWARD-DRIEMEIER, KEVIN JOHN 

POST, Ropes & Gray LLP, Washington, DC; JAMES 

RICHARD BATCHELDER, East Palo Alto, CA; CHING-LEE 

FUKUDA, New York, NY.

CHARLES KRAMER VERHOEVEN, Quinn Emanuel Urquhart & Sullivan LLP, San Francisco, CA, argued for 

defendants-appellants Samsung Electronics Co., Ltd., 

Samsung Electronics America, Inc., Samsung Telecommunications America, LLC, HTC Corporation, HTC 

America, Inc., Exedea, Inc. Also represented by MELISSA 

J. BAILY, KEVIN ALEXANDER SMITH. 

______________________ 

Before NEWMAN, LINN, and O’MALLEY, Circuit Judges.

Opinion for the court filed by Circuit Judge O’MALLEY. 

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SMARTFLASH LLC v. APPLE INC. 3

Opinion concurring in part and dissenting in part filed by 

Circuit Judge NEWMAN. 

O’MALLEY, Circuit Judge.

Appellants, Apple Inc. (“Apple”) and Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., 

Samsung Telecommunications America, LLC, HTC Corporation, HTC America, Inc., and Exedea, Inc. (collectively, “Samsung”), appeal from the district court’s order 

denying their motions to stay patent infringement litigation pending covered business method (“CBM”) review of 

the asserted claims. For the reasons set forth below, we 

affirm the district court’s order as to Apple, but reverse as 

to Samsung.

BACKGROUND

Smartflash LLC and Smartflash Technologies Ltd.

(collectively, “Smartflash”), patent licensing companies, 

filed separate suits against Apple and Samsung on May 

29, 2013, alleging infringement of U.S. Patent Nos. 

7,334,720 (the “’720 Patent”); 8,033,458 (the “’458 Patent”); 8,061,598 (the “’598 Patent”); 8,118,221 (the “’221 

Patent”); 8,336,772 (the “’772 Patent”); and 7,942,317 (the 

“’317 Patent”). Subsequently, Smartflash sued Google, 

Inc. (“Google”) on May 7, 2014 and Amazon.com, Inc. 

(“Amazon”) on December 23, 2014 for patent infringement, asserting the same six patents as those asserted 

against Apple and Samsung, as well as an additional 

patent that issued on August 5, 2014, U.S. Patent No. 

8,794,516. All of the asserted patents relate to managing 

access to data via payment information. 

Throughout the course of these cases, both Apple and 

Samsung filed multiple CBM petitions with the Patent 

Trial and Appeal Board (“PTAB”). See America Invents 

Act, Pub. L. No. 112-29, § 18, 125 Stat. 284, 329–31 (2011) 

(“AIA”). Between March 28 and April 3, 2014, Apple filed 

12 separate petitions for CBM review on 35 U.S.C. §§ 102 

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4 SMARTFLASH LLC v. APPLE INC. 

and 103 grounds. And, on April 3, 2014, Apple moved to 

stay the district court action pending CBM review. See 

Defendants’ Motion to Stay Litigation, SmartFlash LLC 

v. Apple Inc., No. 6:13-cv-447 (E.D. Tex. Apr. 4, 2014), 

ECF No. 120. On May 15, 2014, Samsung filed a motion 

to stay based on Apple’s CBM petitions, explaining that, if 

the court were to grant its motion, it “would stipulate to 

be bound to the same extent as Apple is under 

§ 18(a)(1)(D) of the America Invents Act.” Defendants’ 

Motion to Stay Litigation, SmartFlash LLC v. Samsung 

Elecs., Co., No. 6:13-cv-448 at 3 n.4 (E.D. Tex. May 15, 

2014), ECF No. 149. Because the PTAB had not yet 

decided whether to grant these petitions, the district court 

denied both motions without prejudice to refiling if any of 

the petitions were granted. SmartFlash LLC v. Apple 

Inc., No. 6:13-cv-447 (E.D. Tex. July 8, 2014), ECF No. 

175; SmartFlash LLC v. Samsung Elecs., Co., No. 6:13-cv448 (E.D. Tex. Dec. 30, 2014), ECF No. 424. On September 30, 2014, the PTAB granted Apple’s petitions for CBM 

review on several claims, but denied review for the majority of the challenged claims, including those asserted at 

trial. Neither Apple nor Samsung renewed their motions 

to stay.

On September 26, 2014, Samsung filed ten petitions 

for CBM review of all the patents-in-suit on §§ 101, 102, 

and 103 grounds. Apple also filed six more petitions for 

CBM review between October 30 and November 24, 2014,

this time only asserting that the patents covered patent 

ineligible subject matter. Neither party filed a motion to 

stay with the district court at this time. 

While the parties awaited the PTAB’s decisions regarding the most recent petitions, both the Apple and 

Samsung cases proceeded towards trial. Because the 

cases raised similar issues, the district court held joint 

hearings on claim construction, dispositive motions, and

the parties’ Daubert challenges during 2014, conducted a 

joint pretrial conference in January 2015, and denied both 

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SMARTFLASH LLC v. APPLE INC. 5

defendants’ motions for summary judgment of invalidity 

under § 101. It also set a February 2015 trial date for 

Apple—postponing Samsung’s trial until after the conclusion of Apple’s trial. Thereafter, the district court held 

two additional pretrial conferences for the Apple case and 

the case went to trial. After a six day trial in the Apple 

case, the jury returned a verdict in favor of Smartflash on 

February 24, 2015. See Smartflash LLC v. Apple Inc., No. 

6:13-cv-447 (E.D. Tex. Feb. 24, 2015), ECF No. 503. 

Briefing on post-trial motions then began, and the court 

scheduled a hearing on those motions for July 1, 2015.

In late March and early April 2015, the PTAB instituted CBM review in seven proceedings filed by Apple and 

Samsung on all asserted claims of the ’221, ’720, ’458, 

’598, and ’317 Patents on § 101 grounds. On May 28, 

2015, the PTAB also instituted CBM review on the asserted claims of the ’772 Patent on § 101 grounds. In 

light of these decisions, on April 10, 2015, Samsung filed a 

“renewed” motion to stay all proceedings pending CBM 

review, and on April 23, 2015, Apple filed a motion to stay

post-trial activity in its case, or, in the alternative to stay 

entry of final judgment, pending CBM review.

The district court denied both of these stay requests. 

The court did, however, sua sponte stay the actions

against Google and Amazon.1 Smartflash LLC v. Apple 

Inc., Nos. 6:13-cv-447, 2015 U.S. Dist. LEXIS 70259 (E.D. 

Tex. May 29, 2015) (“Stay Op.”). The district court wrote 

1 After Apple and Samsung filed their motions to 

stay pending CBM review in spring 2015, the district 

court sua sponte ordered Google and Amazon to file 

briefing on the issue of whether their cases should also be 

stayed pending the CBM reviews instituted on the ’221, 

’720, ’458, ’598, and the ’317 Patents. Neither party filed 

a motion to stay pending CBM review prior to this order.

 

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6 SMARTFLASH LLC v. APPLE INC. 

a lengthy opinion analyzing the stay requests and explaining his ruling with respect to the four pending related actions. With respect to Apple, the district court’s 

analysis focused on the timing of Apple’s motion to stay, 

which was two months after the jury trial, and the fact 

that only the resolution of the parties’ post-trial motions 

remained before the case could be appealed to this Court. 

Because “seeing the case to its conclusion maximizes 

judicial and party resources and discourages gamesmanship in filing CBM petitions,” the district court concluded 

that a stay of the Apple litigation was unwarranted. Id. 

at *89 (quotation omitted). Similarly, the district court 

considered the significant resources already expended in 

the Samsung case and Samsung’s decision to wait until 

sixteen months into the litigation to file a CBM petition 

asserting § 101. Because the case was on the eve of trial 

and an appeal to the Federal Circuit of both Samsung and 

Apple’s district court cases would be resolved before an 

appeal from a final PTAB decision, the district court 

concluded that the cases should proceed as scheduled. 

Because the actions against Google and Amazon remained 

in the early stages of litigation, the court found a stay of 

those actions to be appropriate even though there necessarily would be an overlap with respect to many of the 

issues to be decided. 

Appellants timely filed interlocutory appeals to this 

Court. Apple further filed a motion to stay entry of final 

judgment and/or expedite appeal and Samsung filed a 

motion to stay district court proceedings pending appeal 

and to expedite briefing. Two days before oral argument, 

the district court vacated the jury’s damage award and 

ordered a new trial on damages to begin on September 14, 

2015. See Smartflash LLC v. Apple Inc., No. 6:13-cv-447 

(E.D. Tex. July 7, 2015), ECF No. 581. After oral argument this Court, sua sponte, granted both parties motions 

for temporary stays pending disposition of these appeals.

We have jurisdiction pursuant to § 18(b) of the AIA.

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SMARTFLASH LLC v. APPLE INC. 7

DISCUSSION

On appeal, both Apple and Samsung challenge the 

district court’s decision not to stay their cases. In light of 

the PTAB’s decision to institute CBM review on all asserted claims under 35 U.S.C. § 101, both argue that the 

district court should have stayed the litigation pending 

the PTAB’s eligibility determinations because those

decisions could end both cases without any further proceedings, either at the district court or in this one. Apple 

goes so far as to ask this Court to create a bright line rule 

mandating stays whenever CBM review is granted on all 

relevant patent claims, without regard to the state of the 

litigation. Oral Arg. at 9:14–55, available at

http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20

15-1701.mp3. 

Under the AIA, parties may request a stay of district 

court litigation pending CBM review, but a stay is not 

obligatory. Rather, under § 18(b)(1), the district court is 

required to weigh four factors to determine whether to 

stay the case: 

(A) whether a stay, or denial thereof, will simplify 

the issues in question and streamline the trial; (B) 

whether discovery is complete and whether a trial 

date has been set; (C) whether a stay, or the denial thereof, would unduly prejudice the moving 

party or present a clear tactical advantage for the 

moving party; and (D) whether a stay, or the denial thereof, will reduce the burden of litigation on 

the parties and on the court. 

AIA § 18(b)(1). These factors include the three factors 

courts traditionally have considered when deciding 

whether a stay of litigation is appropriate pending administrative review in the PTO (prejudice to the non-moving 

party, the state of the litigation, and simplification of the 

issues) and a fourth—a consideration of the burdens of 

litigation. Though these factors are statutory, consideraCase: 15-1707 Document: 39-2 Page: 7 Filed: 07/30/2015
8 SMARTFLASH LLC v. APPLE INC. 

tion of them in a particular case remains committed to the 

district court’s discretion. See Benefit Funding Sys. LLC 

v. Advance Am. Cash Advance Ctrs. Inc., 767 F.3d 1383, 

1385–86 (Fed. Cir. 2014); see also NFC Tech. LLC v. HTC 

Am., Inc., No. 2:13-CV-1058, 2015 WL 1069111, at *1

(E.D. Tex. Mar. 11, 2015) (“A district court has the inherent power to control its own docket, including the power 

to stay proceedings before it.” (citing Clinton v. Jones, 520 

U.S. 681, 706 (1997))). We, thus, review a district court’s 

stay decision for abuse of discretion except to the extent 

necessary “[t]o ensure consistent application of established precedent.” Benefit Funding, 767 F.3d at 1385. As 

discussed below, based on this record and the district 

court’s thorough analysis, we see no reason “to conduct [a] 

more searching review.” Id. 

A. Apple’s Motion to Stay

Factor (A): Simplification of the issues in question and 

potential to streamline the trial

The district court concluded that the first factor in 

§ 18(b)(1) weighed against a stay because there was 

“nothing left to simplify” as the district court and the jury 

had already decided nearly every potential issue, including the § 101 issue. Stay Op. at *71. Thus, the district 

court determined that the simplest way for the § 101 

dispute to be resolved now was to allow the district court 

litigation to reach this Court. Id. at *72. We agree that 

this factor does not favor a stay.

Apple does not dispute that “[g]enerally, the time of 

the motion is the relevant time to measure the stage of 

litigation. See VirtualAgility Inc. v. Salesforce.com, Inc., 

759 F.3d 1307, 1317 (Fed. Cir. 2014). Nor can Apple 

dispute that it filed its motion post-trial, a point in time 

when the possibility that the issues will be simplified is 

greatly diminished. Id. at 1314. Apply argues, however, 

that there is a good chance that it will prevail on one or 

more post-trial motions or prevail on one or more issues 

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SMARTFLASH LLC v. APPLE INC. 9

on appeal that could result in a remand. Either way, 

Apple argues that the litigation could remain ongoing. 

And, Apple asserts that, because a CBM review that 

results in invalidation of the patents at issue would 

dispose of the entire litigation, the litigation issues necessarily would be simplified. That is, Apple points out, “The 

ultimate simplification of the issues.” Id. 

But the first factor relates to the simplification of the 

issues before the trial court. In its entirety, the focus of 

this factor is on streamlining or obviating the trial by 

providing the district court with the benefit of the PTO’s 

consideration of the validity of the patents before either 

the court or the jury is tasked with undertaking that 

same analysis. See NFC Tech., 2015 WL 1069111, at *4–

5. When the motion to stay is made post-trial, many of 

the advantages flowing from the agency’s consideration of 

the issues—such as resolving discovery problems, using 

pre-trial rulings to limit defenses or evidence at trial, 

limiting the complexity of the trial, etc.—cannot be realized. The simplification contemplated by the first factor is 

far less likely to occur once all the legal, procedural, and 

evidentiary issues involved in a trial have already been 

resolved. 

Apple attempts to mitigate these realities by noting

that, since the beginning of this appeal, the district court 

vacated the jury’s damage award and ordered a new trial 

on damages to begin on September 14, 2015. In light of 

this new development, Apple argues that this case is no 

longer only a single post-trial order away from final 

appellate review, and that significant work remains. As 

this Court has recognized, a court may “take[] judicial 

notice of post-appeal developments . . . when assessing the 

propriety of a trial court’s ruling on a motion to stay 

premised on the existence of a pending CBM[] proceeding,” so long as it only considers the fact that such an 

event occurred and not the propriety of such developments. Intellectual Ventures II LLC v. JPMorgan Chase 

Case: 15-1707 Document: 39-2 Page: 9 Filed: 07/30/2015
10 SMARTFLASH LLC v. APPLE INC. 

& Co., 781 F.3d 1372, 1374 n.4 (Fed. Cir. 2015) (citing 

VirtualAgility, Inc., 759 F.3d at 1312–13). But taking 

judicial notice of this fact does not change our conclusion 

that this factor does not favor a stay. 

The district court and a jury have already addressed 

infringement and invalidity issues, which are the only 

questions common to the two proceedings which could be 

“simplified” by agency review. The new trial is limited 

solely to a consideration of the appropriate measure of 

damages—an issue with which the PTO is not concerned. 

Although we may take judicial notice of the fact of the 

trial court’s post-trial order, we may not, in the first 

instance, conduct an analysis of what the new trial may 

entail, how long it may take, or the complexity of the 

issues therein. Moreover, the trial court did not revisit 

the request for a stay after ordering a new trial, indicating that it did not believe the new trial impacted its 

reasoning.

Ultimately, the existence of a new damages trial does 

not alter our finding that the district court did not err 

when assessing this factor.2

Factor (B): Whether Discovery is Complete and Whether a 

Trial Date has been Set 

Turning to the second factor, the district court determined that the status of the case weighed heavily against 

granting a stay. Stay Op. at *75–79. Specifically, it noted 

that, not only was discovery complete and a trial date set, 

2 Under our jurisprudence, the damages proceedings could be bifurcated from the liability determination 

such that we could review an appeal from the district 

court even though the damages determination is still 

outstanding. Robert Bosch, LLC v. Pylon Mfg. Corp., 719 

F.3d 1305, 1319–20 (Fed. Cir. 2013).

 

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SMARTFLASH LLC v. APPLE INC. 11

but a jury had already rendered a verdict on February 24, 

2015. The district court also considered Apple’s lack of 

diligence in filing its petitions for CBM review on § 101 

grounds. The district court concluded that this delay—

over seventeen months from start of the case—negated 

the intent of the CBM review process, which was designed 

to provide a cost-effective alternative to litigation and to 

reduce the burden on the courts. Id. at *78 (citing 157 

Cong. Rec. S1367 (Mar. 8, 2011) (statement of Sen. Kyl)). 

The district court further explained that granting Apple’s 

motion to stay “at the latest conceivable stage of district 

court litigation” would “encourage parties to misuse CBM 

review.” Id. at *77–78.

Apple disagrees that this factor weighs heavily 

against a stay, contending that the stage of this litigation 

does not preclude the issuance of a stay because even a 

stay post-trial would avoid wasting judicial resources to 

resolve post-trial motions and any resulting appeal. 

Apple also argues that it was improper for the district 

court to consider the timeliness of Apple’s CBM petitions

because there is no statutory deadline to file such a 

petition. 

We agree with the district court that this factor 

weighs against a stay. At the time of Apple’s motion to 

stay on April 23, 2015, discovery had been complete since

September 2014, and there had been a six day jury trial. 

Apple downplays these facts, arguing that the work yet to 

be done in the case is still significant, but Apple’s argument addresses whether a stay would reduce the burden 

of litigation on the parties and on the court—a different 

and separate factor in the analysis—and does not alter 

the finding that discovery is complete and there has been 

a jury trial. See VirtualAgility, Inc., 759 F.3d at 1313 

(“We cannot, as VA requests, collapse the four-factor test 

expressly adopted by Congress into a three-factor test.”). 

While there may be circumstances where a stay is appropriate post-trial, on this record, where Apple filed its 

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12 SMARTFLASH LLC v. APPLE INC. 

motion to stay well until after the jury had rendered its 

verdict, the stage of litigation factor clearly favors a stay. 

And the existence of a new damages trial does not modify 

this conclusion, both for the reasons previously noted and 

because a trial date has already been set for September 

14, 2015. 

We also find Apple’s argument regarding its diligence 

in filing unpersuasive. The district court considered the 

timing of these petitions in order to assess the state of the 

proceeding when Apple actually filed its petitions and 

when it could have filed its petitions. Stay Op. at *75-78. 

Finding Apple could have reasonably raised § 101 issues 

in petitions well before three months prior to trial, the 

district court concluded that, but for Apple’s own decision 

to delay filing its petitions, the stage of the litigation had 

progressed to a point that no longer justified a stay. We 

see no error in this analysis. It was not an abuse of 

discretion for the district court to consider why the litigation was so advanced. And, although Apple argues its

delay in filing its CBM petitions on § 101 grounds was 

justified in light of the Supreme Court’s decision in Alice 

Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014), which 

issued in June 2014, Alice did not create a new § 101 

defense, but rather clarified § 101 jurisprudence. A party 

cannot wait to assert an available defense as litigation 

marches on and then argue that the stage of litigation 

facing the court is irrelevant to its right to a stay. In any 

event, the Supreme Court issued Alice in June 2014 but 

Apple did not file its petition until late October 2014, four 

months later. Without any explanation for this additional 

delay, we find no special circumstances that would justify 

an extended grace period for filing a CBM petition. 

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SMARTFLASH LLC v. APPLE INC. 13

Accordingly, we find that the timing factor, although not 

of significant weight, mitigates against a stay.3

Factor (C): Undue Prejudice or Tactical Advantage 

The district court concluded that the undue prejudice

factor also weighed against a stay. By waiting until the 

eve of trial to pursue CBM proceedings on § 101 grounds, 

the district court determined that Apple had multiple 

opportunities to challenge the eligibility of the asserted 

patents in two separate forums, which gave Apple a clear 

tactical advantage over Smartflash. Stay Op. at *83. 

Thus, even though there was no undue prejudice to 

Smartflash because Smartflash does not compete with 

Apple, the district court found that this factor disfavored 

a stay. Id. at *82–83. 

Apple disputes these findings, arguing that the district court erred when it determined that Apple improperly gained the opportunity to challenge the validity of 

Smartflash’s asserted patents in multiple forums. According to Apple, the entire purpose of CBM review is to 

create an alternative avenue to challenge the validity of a 

claim, thus, the district court’s decision to weigh this fact 

against it is illogical. Additionally, Apple argues against 

any finding of tactical advantage, asserting that it is 

actually at a disadvantage now because it must continue

to litigate its case, whereas the cases against its competitors, Google and Amazon, have been stayed. We find 

these arguments unpersuasive. 

Congress enacted the AIA, in part, to address concerns about business method patents. With this Court’s 

3 Although delay in filing a CBM petition is not one 

of the express factors listed in § 18(b)(1), it is not improper for the trial court to have considered traditional equitable factors, such as unclean hands, in its analysis. 

 

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14 SMARTFLASH LLC v. APPLE INC. 

decision in State Street Bank & Trust Co. v. Signature 

Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), the 

test for patent eligibility greatly expanded until the 

Supreme Court’s decision in Bilski v. Kappos, 561 U.S. 

593 (2010), which significantly curtailed the patentability 

of business methods. As a result of “[t]his judicial expansion and subsequent judicial retraction of U.S. patentability standards . . . a large number of business-method 

patents” issued that may not be valid. 157 Cong. Rec. 

S1379 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl). 

Through the enactment of Section 18 of the AIA, Congress 

sought to clarify this confusion by providing “a relatively 

inexpensive administrative alternative to litigation for 

addressing disputes concerning the validity of [CBM] 

patents.” 157 Cong. Rec. S1379 (daily ed. Mar. 8, 2011) 

(statement of Sen. Kyl); see also 157 Cong. Rec. S1364 

(daily ed. Mar. 8, 2011) (statement of Sen. Schumer) 

(noting that the fundamental purpose of the CBM review 

process is “to provide a cost-efficient alternative to litigation”). 

But in order to realize Congress’s intent to establish 

an alternative to district court litigation for CBM issues, 

parties must file CBM petitions in a manner that facilitates this goal. We recognize that there is no statutory 

deadline to file a CBM petition, unlike other post-grant 

proceedings, but we nevertheless conclude the timing of 

the petitions in this case created a tactical advantage for 

Apple. See VirtualAgility, Inc., 759 F.3d 1319–20 (considering the timing of a CBM petition to assess whether a 

party sought to gain a tactical advantage or had a “dilatory motive”). By waiting to submit its petitions until 

almost the eve of trial and well after it filed its motion for

summary judgment on the § 101 issue, Apple was able to 

first pursue its § 101 defense at the district court and 

then at the PTAB. As the district court correctly found, 

this strategy thus afforded Apple multiple opportunities 

to pursue a single defense—a clear tactical advantage. 

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SMARTFLASH LLC v. APPLE INC. 15

See Segin Sys., Inc. v. Stewart Title Guar. Co., 30 F. Supp. 

3d 476, 484 (E.D. Va. 2014) (“[T]wo separate opportunities 

in two separate forums to challenge the validity of Plaintiffs’ patent does raise a concern of an unfair tactical 

advantage, giving them two bites of the apple as to a 

central defense.”). 

This finding is not negated by the alleged prejudice 

now suffered by Apple. The district court did not arbitrarily decide to stay Google and Amazon, but not Apple. 

Rather, the district court carefully considered the statutory factors for each party, taking into account the stage of 

each litigation. Because the cases involving Google and 

Amazon were still in their relative infancy, the factors 

weighed in favor of a stay, while in Apple’s case, they did 

not. Thus, Apple’s arguments related to its prejudice are 

unpersuasive, especially considering that its suffering is

largely self-inflicted. Therefore, we find that this factor 

does not weigh in favor of a stay. 

Factor (D): Burden of litigation on the parties and on the 

court

Finally, the district court found that the fourth factor 

weighed against a stay. Stay Op. at *89. Recognizing the 

potential benefits of a CBM review in reducing litigation 

costs, the district court nevertheless found that those 

benefits did not exist here. Specifically, because Apple 

waited to file its petitions, the district court found that it 

and the parties had already spent substantial time and 

resources on the litigation, as evidenced by the six day 

jury trial, the hundreds of pages of court-issued orders 

and opinions, and the thousands of pages of briefing and 

exhibits submitted by the parties. The district court also 

explained that, under the current post-trial schedule, the 

parties could appeal the entire litigation to this Court 

prior to any appeal from a PTAB final determination. 

Thus, the district court determined that it was more 

efficient not to stay the case. The district court found this 

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16 SMARTFLASH LLC v. APPLE INC. 

to be true even if it were to ultimately order a new trial on 

damages.4 

Apple alleges that the district court erred in its decision, because it improperly focused on the resources 

already expended in litigation (i.e., sunk costs) and failed 

to properly consider the reduction in the burden of remaining litigation. This burden is significant, according 

to Apple, especially considering that the district court did 

actually order a new damages trial. If this Court were to 

reweigh the evidence, Apple argues that this factor would 

favor a stay.

As previously indicated, we may consider the new 

damages trial in our review of the district court’s decision. 

But this fact does not alter our ultimate conclusion that 

the district court properly considered whether a stay, or 

the denial thereof, would reduce the burden of litigation 

on the parties and on the court. In reaching its decision, 

the district court found that “the vast majority of civil 

li[ti]gation costs have already been spent and the heavy 

burden of litigation has already fallen upon the Court.” 

Id. at *86. We see no error in this conclusion. 

The primary cost of litigation is incurred pretrial and 

in a trial on the merits. See Am. Intell. Prop. Law Ass’n, 

Report of the Economic Survey 34 (2013). Where a case 

has advanced past trial, it is not unreasonable for a 

district court to conclude that it is more efficient to resolve all the post-trial motions so that the case can be 

appealed. This is especially true here, where the district 

court is intimately familiar with the case, the technology, 

and the patents at issue after hearing six days of evidence 

4 At the time of the district court’s order, Apple had 

filed a motion for a new trial on damages, but the district 

court had yet to rule on it.

 

Case: 15-1707 Document: 39-2 Page: 16 Filed: 07/30/2015
SMARTFLASH LLC v. APPLE INC. 17

and testimony. See VirtualAgility, Inc., 759 F.3d at 1314 

n.4 (“[T]he reduced burden of litigation factor may implicate other considerations, such as the number of plaintiffs 

and defendants, the parties’ and witnesses’ places of 

residence, issues of convenience, the court’s docket, and in 

particular its potential familiarity with the patents at 

issue.”); see also Apple Inc. v. Samsung Elecs. Co., No. 11-

cv-01846, 2013 U.S. Dist. LEXIS 168683, at *50 (N.D. Cal. 

Nov. 25, 2013) (“[T]he Court finds it would be most efficient . . . to move forward with post-trial motions concerning the damages retrial and finally enter a final judgment 

in this case so that the Federal Circuit may review the 

entire case on appeal including the validity of all of Apple’s patents as soon as possible.”). And although Apple 

argues that the district court improperly weighed the 

sunk costs in its analysis, such considerations can be 

informative, so long as they are viewed in the context of 

how much work remains, which the district court did in 

this case. Even with a limited retrial on damages, the 

ongoing burden of litigation on the parties and the district 

court is minimal compared to the substantial effort already expended by all involved in this case. Accordingly, 

we see no error in the district court’s conclusion that a 

stay would not reduce the burden of litigation on the 

parties and on the court. 

Here, all four factors weigh against a stay in this case. 

On this record, we conclude that the district court did not 

abuse its discretion when it denied Apple’s motion to stay.

B. Samsung’s Motion to Stay

As an initial matter, Samsung disputes at what point 

the court should measure the stage of litigation for the 

purposes of the stay analysis. Samsung argues that, 

because its April 10, 2015, motion was a “renewed” motion to stay, the district court erred when it failed to 

consider May 2014—when Samsung filed its first motion 

to stay—as the relevant time for application of the 

Case: 15-1707 Document: 39-2 Page: 17 Filed: 07/30/2015
18 SMARTFLASH LLC v. APPLE INC. 

§ 18(b)(1) factors. We disagree. Samsung’s April 2015 

motion was wholly unrelated to its May 2014 motion; 

Samsung’s second motion to stay was based on entirely 

different CBM petitions. Accordingly, the relevant time to 

measure the stage of litigation in Samsung’s case is when 

Samsung filed its second motion to stay, not its first. See 

VirtualAgility, Inc., 759 F.3d at 1317. 

Even if April 2015 is the appropriate benchmark, 

Samsung submits that the district court’s analysis was 

flawed because it failed to properly consider the significant proceedings that remain in the case, including trial. 

Despite the trial court’s careful consideration of the 

factors involved and with due deference to the court’s 

right to exercise its discretion in the face of a stay request, 

we ultimately agree with Samsung. 

Using essentially the same reasoning that it applied 

to Apple, the district court concluded that all four stay 

factors weighed against granting Samsung’s motion to 

stay. We agree that much of our preceding analysis for 

Apple applies to Samsung. But the critical distinction 

between the Apple and Samsung cases is that Samsung 

has yet to go to trial. This fact affects the analysis of two 

of the four factors: simplification of the issues and reduction of the burden of litigation on the parties and on the 

court. While the district court is extremely familiar with 

the Apple case at this juncture, there are different claims 

at issue and different accused technology in the Samsung

case. Oral Arg. at 30:18–31:24, available at

http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20

15-1707.mp3. Additionally, the Samsung case involves 

three co-defendants: Exedea, Inc.; the Samsung entities; 

and the HTC entities. The trial will involve fact witnesses from overseas and require the use of interpreters for 

some foreign witnesses. The additional complexities and 

cost of the Samsung trial counsel us to find that these two 

factors weigh in favor of a stay. 

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SMARTFLASH LLC v. APPLE INC. 19

We recognize that, originally, the Samsung trial was 

set for trial at the same time as the Apple case, but was 

rescheduled in January 2015 to allow the parties to take 

advantage of the district court’s rulings following the 

Apple trial. Slip Op. at *92–93. Therefore, when Samsung filed its latest CBM petitions in September and 

October 2014, it was mere months away from its trial 

date. As it was with Apple, this delay is not irrelevant to 

the stay analysis. Ultimately, we do not believe either 

that fact or the overlap in the legal and evidentiary issues 

between the Apple and Samsung cases is enough to tip 

the scales in favor of a stay. 

Despite the substantial time and effort already spent

in this case, the most burdensome task is yet to come. A 

determination from the PTAB that all the asserted claims 

are patent ineligible will spare the parties and the district 

court the expense of any further litigation, including a 

trial. See VirtualAgility, Inc., 759 F.3d at 1314 (finding 

that “where CBM review has been granted on all claims of 

the only patent at issue, the simplification factor weighs 

heavily in favor of [a] stay” and may “entirely eliminate” 

the burden of litigation). It is true, moreover, that our 

resolution of the Apple appeal may impact or streamline 

the issues to be decided in the Samsung case. Because 

the district court did not properly consider the significance of this fact in its analysis, we find that the district 

court abused its discretion when it denied Samsung’s 

motion to stay. And, on balance, we conclude that the 

totality of the factors weigh in favor of a stay.

CONCLUSION

For the foregoing reasons, we affirm the district 

court’s order denying Apple’s motion to stay the district 

court proceedings pending CBM review. But we reverse 

its order denying Samsung’s motion to stay and remand 

with instructions to grant the motion. In light of this 

decision, we vacate the temporary stays pending disposiCase: 15-1707 Document: 39-2 Page: 19 Filed: 07/30/2015
20 SMARTFLASH LLC v. APPLE INC. 

tion of these appeals entered on July 10, 2015. We also 

hereby expedite issuance of the mandate in this matter. 

AFFIRMED AS TO APPEAL NO. 2015-1701

REVERSED AS TO APPEAL NO. 2015-1707

Case: 15-1707 Document: 39-2 Page: 20 Filed: 07/30/2015
NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

SMARTFLASH LLC, SMARTFLASH 

TECHNOLOGIES LIMITED,

Plaintiffs-Appellees

v.

APPLE INC.,

Defendant-Appellant

______________________ 

2015-1701

______________________ 

Appeals from the United States District Court for the 

Eastern District of Texas in No. 6:13-cv-00447-JRG, 

Judge J. Rodney Gilstrap.

-------------------------------------------------------------------------

SMARTFLASH LLC, SMARTFLASH 

TECHNOLOGIES LIMITED,

Plaintiffs-Appellees

v.

SAMSUNG ELECTRONICS CO., LTD., SAMSUNG 

ELECTRONICS AMERICA, INC., SAMSUNG 

TELECOMMUNICATIONS AMERICA, LLC, HTC 

CORPORATION, HTC AMERICA, INC., EXEDEA, 

INC.,

Defendants-Appellants

______________________ 

Case: 15-1707 Document: 39-2 Page: 21 Filed: 07/30/2015
2 SMARTFLASH LLC v. APPLE INC. 

2015-1707

______________________ 

Appeal from the United States District Court for the 

Eastern District of Texas in No. 6:13-cv-00448-JRG-KNM, 

Judge J. Rodney Gilstrap.

______________________ 

NEWMAN, Circuit Judge, concurring in part, dissenting in 

part.

I concur in the court’s decision to stay further proceedings with respect to the Samsung litigation. However, the

stay should also be applied to defendant Apple. Although 

the proceedings against Apple have gone to trial, a new 

trial has been ordered with respect to damages, and the 

reasons for separating the several defendants may not 

exist if intervening events in the PTO materially change 

the status of the patents-in-suit. The post-grant PTO 

proceedings for the SmartFlash patents are progressing 

on an expedited schedule, wherein the Patent Trial and 

Appeal Board (PTAB) has already held that the SmartFlash patents are Covered Business Method (CBM)

patents and that it is “more likely than not” that claims 

are invalid. 35 U.S.C. §324(a).

My colleagues require that the litigation against Apple nonetheless proceed, to a complex new damages trial, 

certain to be followed by post-trial proceedings on all of 

the issues of validity and infringement, then also certain 

to be followed by appeals—while the PTO will have completed its post-grant review of these CBM patents that 

have already been described by the PTAB as “more-likelythan-not” invalid under section 101. The court cannot 

remain oblivious to the reports that, as of June 20, 2015, 

the PTO has invalidated every claim for which it has 

instituted CBM review based on section 101. There have 

Case: 15-1707 Document: 39-2 Page: 22 Filed: 07/30/2015
SMARTFLASH LLC v. APPLE INC. 3

been no exceptions since the inception of the America 

Invents Act. See Robert R. Sachs, The One Year Anniversary: The Aftermath of #Alicestorm, BILSKIBLOG (June 20,

2015), available at 

http://www.bilskiblog.com/blog/business-methods/ (reporting PTO statistics on review of business method patents).

It cannot be ignored that under the protocols of postgrant PTO review, claims are more easily invalidated by 

the PTO tribunal than in the district court. In In re 

Cuozzo Speed Technologies, LLC, No. 14-1301 (Fed. Cir. 

July 8, 2015),1 the court held that the PTAB may apply 

what’s called the “broadest reasonable interpretation” to

claims of issued patents, thus rendering the claims more 

vulnerable to invalidity than if reviewed on the legally 

correct claim interpretation. In addition, in PTAB proceedings unpatentability is determined by preponderance 

of the evidence, whereas in the district court invalidity 

requires clear and convincing evidence, which in this case 

is accompanied by the deferential standard applied to jury 

verdicts.

In enacting the America Invents Act, it was recognized that the possibility of concurrent district court and 

PTO proceedings, with the same patents and the same 

issues, could lead to a variety of concerns. Thus, this 

court is authorized to review “stay” rulings, with the goal 

of establishing reasonably consistent national standards 

to guide district courts and litigants. As applied to the 

case here at bench, the only question is whether, in light 

of the stay that is today granted to co-defendant Samsung

and that the district court previously granted to co1 The initial panel opinion and dissent in Cuozzo issued on February 4, 2015. 778 F.3d 1271 (Newman, J., 

dissenting). A revised panel opinion and dissent issued 

on July 8, 2015. On the same day, the court by 6 to 5 vote 

denied rehearing en banc. 

 

Case: 15-1707 Document: 39-2 Page: 23 Filed: 07/30/2015
4 SMARTFLASH LLC v. APPLE INC. 

defendants Google and Amazon, the proceedings against 

Apple should continue at this stage.

The inequity, as well as the inefficiency, of continuing 

against Apple overpowers my colleagues’ reasoning that

since the Apple trial process is fairly well advanced, it 

should continue to the scheduled retrial of damages and 

completion of the district court proceedings. (I cannot 

guess whether any appeal of the district court decision 

would also proceed expeditiously in the Federal Circuit if 

the PTO proceedings remain pending.) The reasonable 

possibility that the patent landscape will be altered, while

requiring Apple to proceed while staying the proceedings 

against Samsung, Google, and Amazon, provides inequities that outweigh any convenience of wrapping up the 

district court proceedings against Apple, especially in 

view of the possibility of remand or other accommodation 

of any change in the patent landscape.

Equity counsels in favor of uniform treatment of defendants equally at risk, and pragmatism requires that

the courts take notice of the PTO’s decision to institute 

CBM review based on the section 101 challenge to all of 

the SmartFlash claims in suit. I outline my concerns with 

the ruling of the panel majority:

1. CONCURRENT PTO AND DISTRICT COURT PROCEEDINGS— 

After SmartFlash sued all of the defendants for patent infringement, and the district court implemented the 

then-reasonable procedure of trying the case against 

Apple first, Apple and Samsung initiated post-grant 

review under the newly enacted America Invents Act, 

selecting the procedure relating to covered business 

method patents. The PTAB accepted the petitions to 

institute review, implementing the requirement of 35 

U.S.C. §324(a) (requiring threshold determination that it 

is “more likely than not that at least 1 of the claims . . . is 

unpatentable”).

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SMARTFLASH LLC v. APPLE INC. 5

In view of the ongoing PTO proceedings, the possibility arises whereby the theory of patent validity presented 

at the Apple trial might change as to the other defendants. It is no longer clear that the Apple decision in the 

district court could serve as the model for which it was 

intended, depending on the outcome of the CBM proceeding in the PTO. 

Thus the fact of the concurrent proceedings, even 

without my other reasons, weighs in favor of a stay 

against Apple if there is to be a stay against Samsung, 

whose trial was scheduled for September 14, 2015.

2. THE PTAB DECISION TO INSTITUTE CBM REVIEW—

Section 324(a) provides: “The determination by the 

Director whether to institute a post-grant review under 

this section shall be final and nonappealable.” On the 

“broadest reasonable” claim construction, and in view of

the “more likely than not” determinations and the unreviewability at the threshold2 of the decision to institute

post-grant review, the SmartFlash claims at this stage 

are not cloaked in optimism.

The PTO has stated that a district court’s determination does not provide collateral estoppel and is not res 

judicata against PTAB determinations. See, e.g., Interthinx, Inc. v. Corelogic Sols., LLC, No. CBM2012-00007 

(P.T.A.B. Jan. 30, 2014) (“[W]e conclude that res judicata 

and collateral estoppel do not limit the Board’s ability to 

decide the challenges at issue . . . .”). Much remains to be 

2 Although this court held in Versata Development 

Group, Inc. v. SAP America, Inc., No. 2014–1194, 2015 

WL 4113722 (Fed. Cir. July 9, 2015), that any issues 

relevant to the decision to “institute” are subject to review 

on appeal of final judgment, the court sustained the 

restriction on interlocutory appeal of the threshold determination of whether to institute post-grant review. 

 

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6 SMARTFLASH LLC v. APPLE INC. 

resolved; the present state of uncertainty of law and 

procedure, and the ongoing search for the optimum mechanism for determining patent validity, weigh heavily on 

the side of staying the Apple proceedings, rather than 

continuing to finality in the district court. 

The issue is not simply that of deference between tribunals of different assignments, nor of constitutional 

dimension as to the relationship between the judiciary 

and an executive agency. Included must be the overarching concern for serving the national interest in technological advance, and how best to achieve it. Until these 

issues are resolved, prudent adjustment is appropriate. 

3. UNANSWERED QUESTIONS OF STANDARDS OF REVIEW AND 

THE APPELLATE OBLIGATION— 

On continuing with the Apple litigation in the district 

court, as the panel majority today orders, it is far from 

clear how the appellate process will proceed. What happens to possibly conflicting rulings? Are we creating 

another race-to-the-courthouse, where the interests of 

justice succumb to the fleet of foot, or the deepness of the 

pocket? This court is already burdened with irregular 

precedent, as in Fresenius, where a panel sustained the 

district court’s final judgment of validity and infringement, and then held that since post-judgment damages 

remained for determination, the Federal Circuit’s affirmance of the district court’s judgment gave way to the 

Federal Circuit’s sustenance of the PTO’s later determination of invalidity. Fresenius USA, Inc. v. Baxter Int’l, 

Inc. 721 F.3d 1330, 1344, 1347 (Fed. Cir. 2013) (Newman, 

J., dissenting).

Stay of district court proceedings as to Apple would 

acknowledge the CBM review in the PTO, and the PTAB’s 

expert determination would, at a minimum, be available 

for application to all defendants. And meanwhile, I urge 

the communities of innovators, competitors, and legislators, to collaborate to design a system of innovation 

Case: 15-1707 Document: 39-2 Page: 26 Filed: 07/30/2015
SMARTFLASH LLC v. APPLE INC. 7

incentive, competitive fairness, and post-grant review 

that best serves the nation. 

4. THE FACTOR OF JUDICIAL ECONOMY— 

My colleagues state that the district court’s investment in the Apple case should not be wasted, in the 

interest of judicial economy. My colleagues state that “the 

only questions common to the two proceedings which 

could be ‘simplified’ by agency review” are “infringement 

and validity.” Maj. Op. at 10. Indeed so! What else is 

there? 

Here, to press forward with active Apple litigation, 

followed inevitably by post-trial disputes as to all of the 

issues decided by the judge and the jury, and undoubtedly

the appeal, offers scant judicial efficiency. The PTO has 

already determined that it is more likely than not, that at 

least some of the claims in suit are invalid, and it is also 

possible that the damages proceeding would be affected if 

only some of the claims survive in the PTO. In such 

likelihoods, any judicial investment in the trial proceedings thus far conducted will not be satisfied.

CBM review of the SmartFlash patents is now proceeding, apparently with weight on section 101. The 

litigation efficiencies extolled by the panel majority may 

diminish, if new grounds of invalidity become available to 

Samsung and the other stayed defendants. This factor 

should not be overlooked.

5. LITIGATION DELAY— 

Apple stresses that SmartFlash would not be prejudiced by delaying the district court proceedings, for 

SmartFlash is not a market competitor, and is compensated by money damages based on infringement by the 

defendants, rather than by profits from its own sales. 

While the past litigation expense has been sunk, this is 

not a sound reason to add additional litigation expense, 

starting with the scheduled new trial of damages, when 

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8 SMARTFLASH LLC v. APPLE INC. 

validity has been facially challenged under the new 

America Invents Act procedures.

My colleagues deem it a fatal flaw that Apple did not 

request CBM post-grant review of the SmartFlash patents earlier in this litigation. However, this timing

accords with the Supreme Court’s action on the Alice 

Corporation case, first the petitions to the Court, then the 

grant of certiorari in 2013, then the briefing and argument and widespread amicus participation, and then the 

Court’s decision reported at Alice Corporation v. CLS 

Bank International, 134 S. Ct. 2347 (2014). That Apple 

waited while this section 101 issue was wending its way 

to Court review and resolution was not imprudent, for the 

section 101 arguments in the PTO take their guidance 

from the Court’s rulings in Alice Corporation. That it took 

Apple only four months thereafter to apply Alice Corporation to the complex new CBM procedures is not grounds 

for punishing Apple for tardiness.

My colleagues also criticize Apple for “first pursu[ing] 

its § 101 defense at the district court and then at the 

PTAB.” Maj. Op at 14. Indeed, one wonders what else 

Apple might have done, for surely it would have been 

imprudent to discard either of these paths of defense—

such scold is unfair.

6. MY PREFERENCE— 

The only difference between Apple and Samsung as 

defendants is that the Samsung case was placed on a 

later calendar, as the district court reasonably chose to 

proceed with one case at a time, moving the cases against 

Google and Amazon even further into the future. But the 

landscape changed after the Court decided Alice Corporation, and even more so after experience was gained with 

the CBM section of the America Invents Act. In view of 

the PTO’s institution of post-grant review of all of the 

claims in suit, it is fair and just that all of the defendants 

be treated equally, and thus that the stay be granted to 

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SMARTFLASH LLC v. APPLE INC. 9

all. From my colleagues’ contrary decision as to Apple, I 

respectfully dissent.

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