California Federal Judge Partly Stays Patent Case Pending Inter Partes Review

(March 25, 2016, 1:25 PM ET) -- SAN FRANCISCO — A motion for default judgment by a patent infringement plaintiff was denied March 22 by a California federal judge, who instead issued a partial stay with regard to litigation of various claims of mobile communication patents (E. Digital Corporation v. Ivideon LLC, No. 15-691, N.D. Calif.; 2016 U.S. Dist. LEXIS 38026).
(Order available. Document #16-160404-013R.)

U.S. Judge Jon S. Tigar of the Northern District of California denied a stay as it relates to two claims of plaintiff E. Digital Corp.’s U.S. patent No. 8,311,522 because the claims are not part of the inter partes review (IPR) instituted by the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB).

Social Hierarchy

The ‘522 patent, titled “System and Method for Managing Mobile Communications,” discloses a device to “automatically provide differing information levels according to a predetermined social hierarchy” including a “memory and a processor.” In a 2015 complaint, E. Digital accused Ivideon LLC of infringing the ‘522 patent and four other patents. The plaintiff later moved for entry of a default judgment against the defendant.

In December 2015, the PTAB issued a decision to institute IPR of all five patents in suit, however. In a similar action involving the same patents, the U.S. District Court for the Northern District of California issued a stay in light of the IPR. Judge Tigar in the instant dispute ordered E. Digital to show why the case against Ivideon should not also be stayed.

Reasonable Likelihood

Citing Cygnus Telecomms. Tech LLC Patent Litig. (285 F. Supp. 2d 1022, 1023 [N.D. Calif. 2005]) and Universal Elecs. Inc. v. Universal Remote Control Inc. (943 F. Supp. 2d 1028, 1030-31 [C.D. Calif. 2013]), the judge noted that the relevant factors for consideration include whether discovery is complete, whether a stay would simplify the issues and whether a stay would unduly prejudice a nonmoving party. As an initial matter, Judge Tigar wrote that because claims 22 and 23 are not included in the IPR of the ‘522 patent, “the Court will not stay the case with respect to these two claims.”

A stay is warranted with regard to the remaining claims, however, according to the judge, who noted that under 35 U.S. Code Section 314(a), institution of IPR “is an indication” that the PTAB “has found a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.”

“If the PTAB invalidates some or all of these claims, then the Court will not be required to rule on Plaintiff’s motion for default judgment regarding these claims, thus simplifying the eventual resolution of this case with respect to those claims. The Court is not inclined to rule on Plaintiff’s motion for default judgment involving claims, which the PTAB has determined are reasonably likely to be found invalid, simply because Defendants might be able to challenge any such default judgment ruling in the future were the PTAB to invalidate the underlying claims. Instead, the Court determines that the better course of action is to stay the case regarding these claims pending inter partes review,” Judge Tigar concluded.

Detail Lacking

Lastly, the judge denied without prejudice E. Digital’s request for default judgment on claims 22 and 23 because the complaint or the motion “provides any detail regarding how these claims read on the allegedly infringing products.”

E. Digital is represented by Anton N. Handal, Gabriel Hedrick and Pamela C. Chalk of Handal & Associates in San Diego. Ivideon has not entered an appearance in the action.