Case5:11-cv-01846-LHK Document2816 Filed11/20/13 Page1 of 7 1 2 3 4 5 6 7 HAROLD J. MCELHINNY (CA SBN 66781) hmcelhinny@mofo.com MICHAEL A. JACOBS (CA SBN 111664) mjacobs@mofo.com RACHEL KREVANS rkrevans@mofo.com ERIK J. OLSON (CA SBN 175815) ejolson@mofo.com MORRISON & FOERSTER LLP 425 Market Street San Francisco, California 94105-2482 Telephone: (415) 268-7000 Facsimile: (415) 268-7522 8 9 Attorneys for Plaintiff and Counterclaim-Defendant APPLE INC. WILLIAM F. LEE william.lee@wilmerhale.com WILMER CUTLER PICKERING HALE AND DORR LLP 60 State Street Boston, MA 02109 Telephone: (617) 526-6000 Facsimile: (617) 526-5000 MARK D. SELWYN (SBN 244180) mark.selwyn@wilmerhale.com WILMER CUTLER PICKERING HALE AND DORR LLP 950 Page Mill Road Palo Alto, California 94304 Telephone: (650) 858-6000 Facsimile: (650) 858-6100 10 11 12 UNITED STATES DISTRICT COURT 13 NORTHERN DISTRICT OF CALIFORNIA 14 SAN JOSE DIVISION 15 16 17 APPLE INC., a California corporation, Plaintiff, 18 19 v. 22 APPLE’S OPPOSITION TO SAMSUNG’S EMERGENCY MOTION TO STAY TRIAL DURING JURY DELIBERATIONS SAMSUNG ELECTRONICS CO., LTD., a Korean corporation; SAMSUNG ELECTRONICS AMERICA, INC., a New York corporation; and SAMSUNG TELECOMMUNICATIONS AMERICA, LLC, a Delaware limited liability company, 23 Case No. 11-cv-01846-LHK (PSG) Defendants. 20 21 24 25 26 27 28 APPLE’S OPP. TO SAMSUNG’S EMERGENCY MOTION TO STAY TRIAL DURING JURY DELIBERATIONS Case No. 11-cv-01846-LHK (PSG) sf-3357097 Case5:11-cv-01846-LHK Document2816 Filed11/20/13 Page2 of 7 1 Samsung’s strategy to delay entry of final judgment in this case has crossed the bounds of 2 reason: Samsung seeks to halt the damages retrial in the midst of jury deliberations. Granting 3 Samsung’s request would render the Court’s and Apple’s efforts to prepare for and conduct the 4 damages retrial all for naught and be extraordinarily prejudicial to Apple. And there is nothing 5 even resembling good cause for derailing either the jury’s deliberations or post-trial motions. The 6 reexamination proceedings on Apple’s ’915 patent are not final. Apple is still within the period 7 during which it may respond to the July 26 final Office Action and persuade the examiner to 8 withdraw the rejection. The Court should deny Samsung’s latest attempt for a stay. 9 I. 10 SAMSUNG MISSTATES THE STATUS OF THE REEXAMINATION Samsung’s entire motion is premised on the argument that “[t]he Advisory Action is the 11 Examiner’s final word on the invalidity of the ’915 patent” and that Apple’s only option at this 12 point is to appeal. (Dkt. No. 2811 at 1:5-6, 1:23-24.) That premise is wrong. The Advisory 13 Action itself makes that clear, in language omitted from the quote in Samsung’s motion: “Unless 14 a timely appeal is filed, or other appropriate action is taken to overcome all of the 15 outstanding rejection(s), this prosecution of the present ex parte reexamination proceeding 16 WILL BE TERMINATED and a Notice of Intent to Issue Ex Parte Reexamination Certificate 17 will be mailed in due course. Any finally rejected claims or claims objected to WILL BE 18 CANCELLED.” (Dkt. No. 2810 at 4 ¶ 1 (emphasis added, capital letters in original).)1 19 As stated in the Advisory Action, “the period for response is extended to run 5 months 20 from the mailing date of the final rejection.” The “response” referred to is Apple’s response to 21 the final Office Action of July 26, 2013. Accordingly, as was true on July 26, 2013, Apple 22 remains in “after final rejection” proceedings. Between now and December 26, 2013, Apple can 23 take any action a patent-owner may properly take in response to a final Office Action, including 24 (a) filing a response addressing the final Office Action (i.e., supplemental response per MPEP 25 714.03(a)), (b) requesting an interview per MPEP 2281, or (c) filing a notice of appeal per MPEP 26 1 27 28 For an example of a NIRC confirming claims and terminating reexamination proceedings after final rejection and Advisory Action, see Ex Parte Reexamination Control No. 90/011,911 at Reexamination Certificate, NIRC, and Interview Summary of May 16, 2013, available at http://portal.uspto.gov/pair/PublicPair. APPLE’S OPP. TO SAMSUNG’S EMERGENCY MOTION TO STAY TRIAL DURING JURY DELIBERATIONS Case No. 11-cv-01846-LHK (PSG) sf-3357097 1 Case5:11-cv-01846-LHK Document2816 Filed11/20/13 Page3 of 7 1 2273. Put another way, an Advisory Action is a communication that states that the previous 2 response did not completely overcome the rejections in the final Office Action, such that those 3 rejections remain outstanding. See MPEP 706.07(f). It is not the conclusion of reexamination 4 proceedings, or even proceedings before the examiner. The reexamination proceedings 5 concerning the ’381 patent—which were resolved in Apple’s favor—were in this same posture 6 the last time Samsung asked the Court for a stay based on that patent. 7 Moreover, after proceedings at the examination level are completed, the Notice of Intent 8 to Issue Reexamination Certificate still is not a final decision. The examiner may change his 9 position and even reopen prosecution until after he files an examiner’s answer to the appeal brief 10 and considers the patentee’s reply. MPEP 2275 (“Where appellant files a timely reply brief to an 11 examiner’s answer or a supplemental examiner’s answer, the examiner may (A) acknowledge 12 receipt and entry of the reply brief, (B) reopen prosecution to respond to the reply brief[.]”); see, 13 e.g., footnote 1, supra. And of course, if an appeal is filed, the USPTO’s own Patent Trial and 14 Appeal Board may rule in favor of the patent owner, and an unfavorable Board decision (which 15 likely would not issue until late 2016 at the earliest) may be appealed to the Federal Circuit. (See 16 Dkt. Nos. 2309-1 (charts of pre- and post-appeal options from MPEP 2200); 2308 at 1.) 17 II. THE COURT SHOULD ONCE AGAIN DENY SAMSUNG’S STAY REQUEST 18 In denying Samsung’s request for a stay pending reexamination of Apple’s ’381 and ’915 19 patents on April 29, 2013, the Court considered the following factors: “Number one, the stage of 20 the case; two, whether a stay will simplify the court proceedings; and three, whether a stay would 21 unduly prejudice or present a clear tactical disadvantage to the non-moving party.” (Dkt. No. 22 2320 at 10 (citing Telemac Corp. v. Teledigital, Inc. 450 F. Supp. 2d 1107 (N.D. Cal. 2006).) 23 These same factors weigh heavily against Samsung’s current request for a stay. 24 The “Stage of the Case” Weighs Heavily Against a Stay. In April, the Court found that 25 “the stage of the case favors Apple since we are post-trial and post-post-trial motions and post- 26 verdict.” (Dkt. No. 2320 at 11:4-6.) This factor weighs even more heavily in favor of Apple 27 now. In April, the case was more than six months away from the damages retrial. Now, the 28 retrial has been completed. The parties rested two days ago and the jury has already deliberated APPLE’S OPP. TO SAMSUNG’S EMERGENCY MOTION TO STAY TRIAL DURING JURY DELIBERATIONS Case No. 11-cv-01846-LHK (PSG) sf-3357097 2 Case5:11-cv-01846-LHK Document2816 Filed11/20/13 Page4 of 7 1 2 for two days. We may well get a verdict tomorrow morning. In this district, stays pending reexam have been held “untenable” even at far earlier 3 litigation stages. E.g., Interwoven, Inc. v. Vertical Computer Sys., No. C-10-04645, 2012 U.S. 4 Dist. LEXIS 30946, at *11-12 (N.D. Cal. Mar. 8, 2012) (discovery “well underway” and claim 5 construction completed). Courts routinely deny stays at advanced stages of litigation. See, e.g., 6 Viskase Corp. v. Am. Nat’l Can Co., 261 F.3d 1316, 1327-28 (Fed. Cir. 2001) (affirming denial of 7 stay after trial court found infringement); Versata Software, Inc. v. SAP Am., Inc., 12-1029, Dkt. 8 No. 103 (Fed. Cir. July 5, 2013) (denying stay of appeal after PTAB issued finding of invalidity 9 based on covered business method review); Belden Techs., Inc. v. Superior Essex Commc’ns, No. 10 08-63, 2010 U.S. Dist. LEXIS 90960 (D. Del. Sept. 2, 2010) (denying stay on eve of trial); NTP, 11 Inc. v. RIM, Ltd., 397 F. Supp. 2d 785 (E.D. Va. 2005) (denying stay after case remanded). 12 Samsung has not cited a single case staying litigation post-trial. Its inapposite cases 13 address far earlier stages of proceedings. See Juxtacomm-Texas Software, LLC v. Lanier Parking 14 Sys. of Virginia, Inc., No. 11-CV-299, 2011 WL 3322554, *2 (E.D. Va. Aug. 2, 2011) (no 15 discovery, case schedule, Markman hearing date, or trial date); Network Appliance, Inc. v. Sun 16 Microsystems Inc., No. C-07-06053, 2010 WL 545855, *3 (N.D. Cal. Feb. 11, 2010) (no damages 17 discovery or trial date). Samsung also improperly cites a pre-2007 unpublished Federal Circuit 18 opinion. Standard Havens Prod. v. Gencor Indus., 996 F.2d 1236 (Fed. Cir. 1993) (unpublished); 19 see Fed. Cir. R. 32.1(c). Even if considered, the Federal Circuit has distinguished Standard 20 Havens where, as here, “the court is being asked to stay proceedings at the relative end of the 21 litigation process pending a lengthy administrative process that even the appellants predict will 22 take at least 10-14 months to complete. Under these circumstances, we deem it appropriate to 23 deny the motions to stay.” SynQor, Inc. v. Artesyn Techs., Inc., No. 2011-1191, 2012 U.S. App. 24 LEXIS 1992, at *6-7 (Fed. Cir. Jan. 31, 2012) (non-precedential). (See also Dkt. No. 2304 at 1 25 (Samsung states reexaminations would take up to 18 months, not including Fed. Cir. appeal); Dkt. 26 No. 2308 at 1 (Apple states that any final adverse decisions in reexaminations would likely not 27 occur until mid-2017 or later).) 28 “Whether a Stay Would Simplify the Court Proceedings” Weighs Heavily Against a APPLE’S OPP. TO SAMSUNG’S EMERGENCY MOTION TO STAY TRIAL DURING JURY DELIBERATIONS Case No. 11-cv-01846-LHK (PSG) sf-3357097 3 Case5:11-cv-01846-LHK Document2816 Filed11/20/13 Page5 of 7 1 Stay. In April, the Court weighed this factor in Samsung’s favor because it would simplify the 2 proceedings “to have the ’381 or ’915 patents not be retried.” (Dkt. No. 2320 at 11.) That 3 rationale is now moot, however, because the retrial has already occurred. Rather than simplify 4 proceedings, it would be extraordinarily inefficient and wasteful to halt the jury deliberations on 5 the damages award for infringement of the five patents at issue, particularly given that the ’915 6 reexamination proceedings are not complete. See Largan Precision Co. v. Fujifilm Corp., No. C- 7 10-1318, 2011 U.S. Dist. LEXIS 25423, at *7 (N.D. Cal. Mar. 1, 2011) (reexamination must 8 finally resolve all issues to simplify litigation).2 9 “Prejudice to Apple” Weighs Heavily Against the Stay. In its April ruling, the Court 10 stated that if “Apple is forced to file a notice of appeal . . . that third factor may then swing into 11 Samsung’s favor” because “it would be more prejudicial, and more of a tactical disadvantage to 12 Samsung to have to do a second trial” and further litigation on “IP that may ultimately not be 13 valid.” (Dkt. No. 2320 at 11-12.) Applying that standard here weighs heavily in favor of Apple. 14 First, the rationale of allowing Samsung to avoid “hav[ing] to do a second trial” is moot. The 15 retrial has been completed and the jury is deliberating. Nor has Apple been “forced to file a 16 notice of appeal.” Apple still has time to persuade the examiner to change his position. 17 Terminating the jury’s deliberations would render the entire trial a nullity, and cause an 18 extraordinary waste of the Court’s and Apple’s resources in preparing for and conducting the 19 trial. Apple would suffer extreme prejudice from having the deliberations aborted, which 20 ultimately would require a retrial of the retrial. Samsung cannot justify terminating deliberations 21 22 23 24 25 26 27 28 2 Samsung’s argument that Apple made a “deliberate, strategic decision” to present the jury with “no method to calculate damages on a per-patent basis” (Dkt. No. 2811 at 4) is wrong. Apple presented per-patent royalty amounts and per-product royalty totals to the jury, as shown in pages 4 and 16 of PX25F, an admitted trial exhibit. Apple presented per-product lost profits claims, all of which arise from Samsung’s infringement of the ’915 patent. (PX25F.4.) Apple presented per-product Samsung’s profits claims, none of which arises from Samsung’s infringement of the ’915 patent. (Id.) Apple did not present per-unit averages for each of these categories, but that was not a “strategic decision” on Apple’s part—it was Samsung’s successful objection that prevented Apple from presenting that information to the jury. (Dkt. No. 2669 at 6; Dkt. No. 2696 at 5.) Samsung’s suggestion that the jury’s damages award will be “tainted for every product other than the Replenish” is at best premature—if the jury awards Apple’s requested amounts, for example, the Court will be able to determine exactly what portions correspond to the ’915 patent, consistent with the information Apple presented at trial. APPLE’S OPP. TO SAMSUNG’S EMERGENCY MOTION TO STAY TRIAL DURING JURY DELIBERATIONS Case No. 11-cv-01846-LHK (PSG) sf-3357097 4 Case5:11-cv-01846-LHK Document2816 Filed11/20/13 Page6 of 7 1 involving damages concerning the ’915, much less the four other patents in this case. Because 2 the reexamination proceedings are not final (and will not be final even at the USPTO level until 3 the end of 2016 at the earliest), Samsung’s request is based on pure speculation. 4 The same is true of Samsung’s alternative request that the Court stay all post-trial motions 5 and thus prevent the Federal Circuit from reviewing both verdicts in this case until several years 6 from now. It is almost 15 months since the first jury found that 28 Samsung products infringed 7 Apple’s IP and that all those patents, including the ’915, are valid. Samsung now seeks a tactical 8 advantage—to avoid its burden of trying to overturn the jury’s validity finding on appeal, in 9 hopes that the ultimate decision on reexamination (including any appeal to the Federal Circuit) 10 might be against Apple and thus preempt the jury’s verdict. That delay would severely prejudice 11 Apple. 12 Since the 2012 verdict, Samsung has continually attempted to delay a final resolution of 13 this action. Further delay would be fundamentally inconsistent with the patent system, which 14 confers the exclusive right to use the patented invention or design and entitles the patentee to 15 money damages for any past infringement. A prevailing party at trial “has an interest in pursuing 16 the finality of the jury’s verdict,” and faces “undu[e] prejdudice” from a stay of post-trial 17 proceedings. Orion IP, LLC v. Mercedes-Benz USA, LLC, No. 05-CV-322, 2008 U.S. Dist. 18 LEXIS 103607, at *22-24 (E.D. Tex. Dec. 22, 2008) (“[Plaintiff’s] certain prejudice if the stay is 19 continued pending the re-examination proceeding outweighs [Defendant’s] speculative prejudice 20 if the stay is not continued”), rev’d on other grounds, 605 F.3d 967 (Fed. Cir. 2010); 21 MercExchange, L.L.C v. eBay, Inc., 500 F. Supp. 2d 556, 564-65, n.6 (E.D. Va. 2007) (denying 22 stay of post-trial proceedings where movant was “unsuccessful litigant seeking a second bite at 23 the apple through an administrative process” and noting primary benefit of reexamination in 24 narrowing issues for trial was no longer present); see also Dkt. No. 2320 at 11:12-23 (finding stay 25 would prejudice Apple by delaying actual relief). Samsung has infringed and continues to 26 infringe, but it has yet to face any consequences. Delay in the post-trial motions regarding the 27 retrial, and the corresponding additional delay until the jury’s infringement verdict is reviewed by 28 the Federal Circuit, would substantially prejudice Apple. APPLE’S OPP. TO SAMSUNG’S EMERGENCY MOTION TO STAY TRIAL DURING JURY DELIBERATIONS Case No. 11-cv-01846-LHK (PSG) sf-3357097 5 Case5:11-cv-01846-LHK Document2816 Filed11/20/13 Page7 of 7 1 Dated: November 20, 2013 MORRISON & FOERSTER LLP 2 3 4 5 By: /s/ Harold J. McElhinny HAROLD J. McELHINNY Attorneys for Plaintiff APPLE INC. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 APPLE’S OPP. TO SAMSUNG’S EMERGENCY MOTION TO STAY TRIAL DURING JURY DELIBERATIONS Case No. 11-cv-01846-LHK (PSG) sf-3357097 6