Interval's arguments (a) and (b) are neither here nor there. The court considered (a) in deciding to grant the stay, and it is unlikely it will change its mind on this point. Similarly, while (b) may work a hardship on the experts retained by Interval, Interval has not cited anything to substantiate who these experts are and why it would work a harm on them. Are they, in fact, all patent attorneys? Don't know, but the argument is not overly persuasive.
That leaves Interval's (d) argument, and this one has some merit. If the stay is to remain in place the court should consider requiring all defendants to be bound by the results of the current reexaminations. To do otherwise does leave the door open to further significant delay and uncertainty. If it is not unfair to Interval to set aside (and potentially diminish the value of) all of the Markman work, then Interval should not have to face the specter of future delays as one defendant after another files its own petition for reexamination of the Interval patents.
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
INTERVAL LICENSING LLC,
Plaintiff,
v.
AOL, INC. et al,
Defendant.
Case No. 2:10-cv-01385-MJP
INTERVAL’S MOTION FOR
RECONSIDERATION
OF
COURT’S ORDER GRANTING
MOTIONS TO STAY
Interval respectfully requests that the Court reconsider its Order staying these eleven
actions (Dkt. # 253; the “Stay Order”). Defendants filed their Motions to Stay on March 17,
2011—within one day of filing their requests for reexaminations with the Patent and Trademark
Office (“PTO”). (Dkt. # 198) In the intervening three months since the parties briefed the
Motions to Stay, the parties have undertaken an incredible amount of work, most of which will be
of limited value should this action be stayed. In addition, the PTO rejected a number of
defendants’ arguments and references in granting the requests for reexamination, which further
supports Interval’s position that the reexaminations will not simplify the issues in these actions.
To the contrary, the parties will be back before the Court one, two, or six years from now most
likely litigating the exact same issues that are now before the Court.
These new facts warrant reconsideration, and demonstrate that staying these actions is
counterproductive and inconsistent with Federal Rule of Civil Procedure 1, mandating that the
Federal Rules “[b]e construed and administered to secure the just, speedy, and inexpensive
determination of every action and proceeding.”
A. The Parties Have Completed Significant Additional Work Since Filing Their Briefs In March
The Court issued the Stay Order at 5:15 pm on the day that the parties’ Markman briefs
were due. Pursuant to the scheduling order, Interval and Defendants were each to submit briefs
not to exceed 40 pages for each of the two tracks, for a total of 160 pages of briefing. When the
Court issued its order, the parties had already completed these briefs and were in the process of
filing them. Indeed, Interval had already filed its Markman brief on the ‘652/’314 track when the
Court issued the Stay Order. Interval’s counsel, alone, spent hundreds of hours preparing and
finalizing Interval’s Markman briefs. Counsel for the eleven defendants likely spent at least that
much time preparing defendants’ briefs, especially considering that 50 lawyers have entered
appearances on behalf of defendants.
In addition to the Markman, the parties spent hundreds of hours completing the
tasks leading up to the Markman briefs, including submitting a prehearing statement and joint
claim charts that exceeded 150 pages. During that process, the parties met and conferred for
hours in an attempt to reach compromise and narrow the issues to present to the Court for
resolution. If the actions are stayed, then at least one of the twelve parties will no doubt use the
delay as a justification to reject compromises already reached during this process.
The parties have also completed an extraordinary amount of discovery since March,
especially with respect to the production and review of defendants’ source code. When the
parties submitted their briefs on the Motions to Stay in March, not a single defendant had
produced source code. Since that time, every defendant has produced code that, together,
amounts to hundreds of thousands of lines of code.
By its nature, the review of source code is incredibly expensive and time consuming.
First, Interval retained seven experts to review defendants’ source code. Second, the reviews have been conducted at the offices of defendants’ outside counsel throughout the United States,
including Chicago, Virginia, Palo Alto, San Francisco, and Portland. Third, the code reviews are
conducted in accordance with seven pages of stringent source code review protocols set forth in ¶
11 of the protective order (Dkt. # 222). These protocols limit the number of pages that Interval’s
experts can print and limit the nature of the notes that Interval’s experts can take. These two
limitations together make it likely that much of the source code review will have to be repeated
after the stay is lifted because of the difficulty for Interval’s experts to pickup where they left off
years earlier because of the lack of comprehensive notes and printed source code.
In addition, because defendants designated their source code highly confidential under the
protective order, each of Interval’s seven experts had to sign Exhibit A to the protective order
before gaining access to the code. By signing Exhibit A and reviewing the code, the experts are
now subject to the patent prosecution bar in ¶ 6(b) of the protective order (Dkt. # 222). Pursuant
to the prosecution bar, the experts
shall not prosecute, supervise, or assist in the prosecution of any
patent application involving technology related to software for
recommending information to a user or other information filtering
techniques aimed at notifying users of items that are likely to be of
interest to that user or software directed to the engagement of the
peripheral attention of a person in the vicinity of a display device,
before any foreign or domestic agency, including the United States
Patent and Trademark Office.
This bar remains in place until one year after the final resolution of this action. Accordingly, the
Stay Order has the effect of extending the prosecution bar for these seven experts, likely for
years. This places an undue burden on the experts’ ability to pursue future engagements.
These new facts warrant the reconsideration of the Court’s Stay Order.
B. In Granting The Requests For Reexaminations, The PTO Rejected A Number Of
Defendants’ Arguments And References
The Stay Order noted that “Defendants have presented a substantial body of prior art that
they believe will reshape the four patents at issue in this litigation.” Order at 2. That is not
entirely accurate because the PTO already rejected a number of those references in granting the
reexaminations and instead focused on a single reference in granting most of the reexaminations.
First, in granting reexamination of the ‘314 patent, the examiner declined to reject any
claims based on the Rakavy reference. Instead, the grant of reexamination was premised on a
single primary reference—Kjorsvik. In addition, the examiner refused to adopt any of the
rejections defendants proposed in their request. (Dkt. # 247-5)
Second, in granting the reexamination of the ‘652 patent, the examiner mentioned only
one of the references that defendants identified (Petrecca). Although the examiner is not
precluded from relying on the other references, the failure even to mention those references in
granting the reexamination suggests that the examiner discounted defendants’ arguments. (Dkt. #
247-4)
Third, the PTO issued an office action concerning the ‘682 patent. In that office action,
the examiner refused to adopt any of the rejections defendants proposed in their request. Indeed,
the office action rejected the claims over a single reference—Bezos. (Dkt. # 247-2)
Fourth, in granting reexamination of the ‘507 patent, the examiner did not mention four of
the references that defendants identified (Joachims, Chesnais, Iwayama, and Yuasa). Again, the
examiner is not precluded from later relying on those references, but the failure to mention them
suggests that the examiner discounts defendants’ arguments. (Dkt. # 247-1)
In addition, the reexaminations will not simplify the issues for Markman or trial because
none of the requests for reexamination were joined by all of the defendants who are accused of infringing that patent. Defendants undoubtedly will argue when these patents emerge from reexamination
that at least one of the defendants can still raise all of the arguments now before the
PTO no matter the result of the reexamination.1 [FN.1 - Interval will vigorously oppose any attempt by a defendant to argue that it is not bound by a
particular reexamination because it did not joint in the request.] Such tactics reek of gamesmanship and leave
little doubt that the parties will be in the exact same position as they are now after the
reexaminations are completed years down the road.
For good reason, courts throughout the country, including other judges in this District and
in the Federal Circuit, have expressed increasing reluctance to stay cases during the reexamination
process. It is routine for patents to be involved both in litigation and re-examination
proceedings at the same time. Interval can only enforce its patents through litigation, and
delaying that process by as much as a few years is substantially prejudicial to Interval.
Defendants, on the other hand, will not be prejudiced at all by moving forward in a timely fashion
in an Article III court.
CONCLUSION
Interval respectfully requests that this Court reconsider its Order staying these actions.
The parties already have spent incredible amounts of time of money getting these eleven actions
to the brink of the Markman hearing and within six months of the end of fact discovery. Much of
the benefit of this work will be lost after a stay. This Court should deny the stay and keep these
actions on schedule to be heard by a jury next summer. Because the opening Markman briefs are
complete, Interval has no objection to moving the Markman hearing to a date later in the summer,
with a corresponding change in the discovery dates.
Dated: June 24, 2011
Respectfully submitted,
/s/ Justin A. Nelson
Justin A. Nelson
WA Bar No. 31864
E-Mail: jnelson@susmangodfrey.com
Edgar G. Sargent
WA Bar No. 28283
E-Mail: esargent@susmangodfrey.com
Matthew R. Berry
WA Bar No. 37364
E-Mail: mberry@susmangodfrey.com
SUSMAN GODFREY L.L.P.
1201 Third Ave, Suite 3800
Seattle, WA 98101
Telephone: (206) 516-3880
Facsimile: (206) 516-3883
[Other attorneys for Interval not listed.]
Attorneys for INTERVAL LICENSING LLC
