UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

Transcription

1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA OVERLAND STORAGE, INC., Plaintiff, vs. BTD AG (GERMANY), et al.; SPECTRA LOGIC CORPORATION; and PIVOTSTOR, LLC, Defendants. CASE NOS. -CV-00 JLS (BLM), 1-CV- JLS (BLM), 1-CV- JLS (BLM) ORDER GRANTING MOTIONS TO STAY (-CV-00, ECF No. ) (1-CV-, ECF No. 1) (1-CV-, ECF No. ) Presently before the Court are three Renewed Motions to Stay Litigation Pending the Final Determination in a Related Inter Partes Review ( IPR ) Proceeding filed by Defendants BTD AG (Germany), et al.; Spectra Logic Corporation ( Spectra Logic ); and Nickel Technologies, Inc. dba Pivotstor (erroneously sued as PivotStor LLC) ( Pivotstor, and, collectively, Defendants ) in three related patent infringement cases brought by Plaintiff Overland Storage, Inc. (-CV-00, ECF No. ; 1-CV-, ECF No. 1; 1-CV-, ECF No..) Plaintiff has filed an Opposition-in-Part to cv00, 1cv, 1cv

2 each Motion. (-CV-00, ECF No. 0; 1-CV-, ECF No. ; 1-CV-, ECF No..) In addition, Defendants have each filed a Reply in Support of the Motions. (-CV-00, ECF No. ; 1-CV-, ECF No. ; 1-CV-, ECF No. 0.) The hearings set for each of the three Motions on January, 01 were vacated, and the matters taken under submission on the papers without oral argument pursuant to Civil Local Rule.1.d.1. (-CV-00, ECF No..) Having considered the parties arguments and the law, the Court GRANTS Defendants Motions. BACKGROUND Presently before the Court are six related cases, all involving patent infringement claims brought by Plaintiff against various defendants. In the lead case Overland Storage, Inc. v. BDT AG (Germany) et al., Case No. -CV-00, filed on August 1, 0, Overland brought claims against Defendants BDT AG; BDT Products, Inc.; BDT-Solutions GmbH & Co. KG; BDT Automation Technology (Zhufai FTZ) Co., Ltd.; BDT de México, S. de R.L. de C.V.; Dell Inc.; and International Business Machines Corp. (collectively, BDT Defendants ) for directly and indirectly infringing two of its patents: (1) U.S. Patent Number,, ( the patent ); and () U.S. Patent Number,,1 ( the 1 patent ). (-CV-00, ECF No. 1.) On October 0, 0, Overland filed a complaint with the International Trade Commission ( ITC ) on the patent seeking to enjoin the importation of BDT Defendants products. (-CV-00, ECF No. 1-1 Ex. A.) BDT Defendants then filed an ex parte motion with this Court to stay litigation pursuant to U.S.C. (a). (-CV-00, ECF No. 1.) On December, 0, this Court issued an Order granting BDT Defendants ex parte motion to stay. (-CV-00, ECF No..) In five later cases, all filed on June, 01, Overland also separately sued Spectra Logic, Pivotstor, Quantum Corporation together with Venture Corporation /// /// /// - - cv00, 1cv, 1cv

3 Limited (collectively, Quantum ), 1 Tandberg Data GMBH together with Tandberg Data Corporation (collectively, Tandberg ), and Qualstar Corporation ( Qualstar ). Defendants Spectra Logic, Pivotstor, and Qualstar subsequently filed motions seeking a discretionary stay of the litigation pending the ITC s final determination of the proceeding between Overland and BDT Defendants, In re Certain Automated Media Library Devices, ITC Investigation No. -TA-. (1-CV-, ECF No. 1; 1- CV-, ECF No. 1; 1-CV-0, ECF No..) On December, 01, the Court heard oral argument on the motions, and on December, 01, the Court issued an Order granting in part and denying in part the motions. (1-CV-, ECF No. ; 1- CV-, ECF No. ; 1-CV-0, ECF No. 0.) The Court also issued several Orders continuing the stays in this litigation while the ITC proceedings were ongoing. On July, 01, the parties submitted a joint status report informing the Court that the ITC proceedings had concluded. (-CV-00, ECF No..) On July 1, 01, the Court issued an Order lifting the stay. (-CV-00, ECF No..) Subsequently, in August 01, Defendants and Qualstar filed motions asking that the Court stay the litigation pending the United States Patent and Trademark Office s ( PTO ) decision regarding Spectra Logic s Petition for IPR, filed June 1, 01. (- CV-00, ECF No. ; 1-CV-, ECF No. ; 1-CV-, ECF No. ; 1-CV- 0, ECF No. 0.) On December, 01, the Court denied the motions as premature. (See Order, -CV-00, ECF No..) The same day, the PTO granted IPR of the patent. (See Notice, -CV-00, ECF No..) Defendants subsequently filed the present Renewed Motions to Stay. 1 Overland Storage, Inc. v. Quantum Corporation et al, 1-CV- JLS (BLM). This case is still active and has proceeded on a different schedule from the four cases that are the subject of the present Motions. Overland Storage, Inc. v. Tandberg Data GMBH et al, 1-CV-0 JLS (BLM). On February, 01, this Court granted the parties joint motion to dismiss without prejudice. (See ECF No. 0.) The case remains closed. In the cases against Spectra Logic, Pivotstor, and Quantum, Overland asserted infringement claims based on both the and 1 patents. In the cases against Tandberg and Qualstar, Overland asserted infringement claims based only on the patent. - - cv00, 1cv, 1cv

4 LEGAL STANDARD District courts have inherent authority to stay proceedings before them. Rohan ex rel. Gates v. Woodford, F.d 0, (th Cir. 00). [T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. Landis v. N. Am. Co., U.S., (). This inherent power to stay includ[es] the authority to order a stay pending conclusion of a PTO reexamination. Ethicon, Inc. v. Quigg, F.d 1, 1 (Fed. Cir. ) (citing Gould v. Control Laser Corp., 0 F.d, 1 (Fed. Cir. )). In determining whether to stay an action pending IPR, courts balance three factors: (1) the stage of litigation; () whether a stay would cause undue prejudice or present a clear disadvantage to the non-moving party; and () whether a stay will simplify the issues in question and the trial of the case. Sorensen v. Giant Int l (USA) Ltd., Nos. 0cv et al., 00 WL, at * (S.D. Cal. Dec. 1, 00) (citing Xerox Corp. v. Com Corp., F. Supp. d 0, 0 (W.D.N.Y. )). These considerations are nonexhaustive, and the totality of the circumstances governs. Universal Elecs., Inc. v. Universal Remote Control, Inc., F. Supp. d, (C.D. Cal. 01) (citations and internal quotation marks omitted). The proponent of a stay bears the burden of establishing its need. Clinton v. Jones, 0 U.S. 1, 0 () (citing Landis, U.S. at.) If there is even a fair possibility that the stay for which [the movant] prays for will work damage to someone else, the movant must make out a clear case of hardship or inequity in being required to go forward. CMAX, 00 F.d at (quoting Landis, U.S. at ). Subject to these standards, [a] trial court may, with propriety, find it is efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings which bear upon the case. Leyva v. Certified Grocers of Cal., Ltd., F.d, (th Cir. ). This rule applies whether the separate proceedings are judicial, administrative, or arbitral in - - cv00, 1cv, 1cv

5 character, and does not require that the issues in such proceedings are necessarily controlling of the action before the court. Id. at. The Federal Circuit recognizes the existence of a strong public policy favoring expeditious resolutions of litigation. Kahn v. Gen. Motors Corp., F.d, 0 (Fed. Cir. ). However, this District, in accordance with other California district courts, recognizes a liberal policy in favor of granting motions to stay proceedings pending the outcome of USPTO reexamination or reissuance proceedings. ProtectConnect, Inc. v. Leviton Mfg. Co., No. cv AJB (BGS), 0 WL, at * (S.D. Cal. Apr., 0) (citation and internal quotation marks omitted). ANALYSIS I. The Patent The Court believes that a discretionary stay of the patent would best promote the dual interests of fairness and efficiency. First, Overland does not oppose a stay of the patent pending the IPR. (Opp n-in-part,-cv-00, ECF No. 0; Opp n-in-part, 1-CV-, ECF No. ; Opp n-in-part, 1-CV-, ECF No..) Second, when a claim is cancelled, the patentee loses any cause of action based on that claim, and any pending litigation in which the claims are asserted becomes moot. Fresenius USA, Inc. v. Baxter Int l, Inc., 1 F.d, (Fed. Cir. 01). Moreover, if the any claims survive IPR, then the real party in interest or privy of the petitioner[] may not assert... in a civil action... that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during inter partes review. U.S.C. (e)(). Thus, a stay pending the IPR decision would be far more efficient for the Court, the parties, witnesses, and counsel, as it would avoid potentially duplicative and moot proceedings and decisions. Accordingly, the Court GRANTS Defendants Motions to Stay as to the patent. However, the parties dispute certain particulars with regard to the stay, namely (1) the extent to which Defendants will be collaterally estopped by any IPR decision, and () the duration of the stay. - - cv00, 1cv, 1cv

6 A. Estoppel Under U.S.C. (e)(), privies and real parties in interest of the IPR petitioner are estopped from asserting in later litigation, on any ground that the petitioner raised or reasonably could have raised during [IPR], that any of the claims reviewed during IPR are invalid. Overland argues that BDT Defendants and Pivotstor should be collaterally estopped by the IPR decision either because they are privies or real parties in interest, or because permitting relitigation of such challenges would be inefficient. (Opp n in Part, -CV-00, ECF No. 0; Opp n in Part, 1-CV-, ECF No..) BDT Defendants and Pivotstor, on the other hand, argue that they should not be estopped because: (1) Overland failed to make its request in a separate, formal motion; () Overland s request is not ripe ; and () BDT Defendants and Pivotstor are not privies or parties in interest to the IPR proceeding, and thus estoppel is inappropriate. (Reply, -CV-00, ECF No. ; Reply, 1-CV-, ECF No..) The Court finds it appropriate to compromise and apply a limited form of estoppel here. In e-watch, Inc. v. Lorex Canada, Inc., the Southern District of Texas reasoned, in ruling on a motion to stay pending IPR, that the defendant should be estopped from asserting arguments raised by a third-party defendant in a related IPR proceeding: By its terms, Section does not bind a nonparty to the outcome of the IPR reexamination or the arguments made therein. [Citations.] However, [Defendant] is seeking the benefit of the IPR petitions filed by [Third- Party Defendant] related to the patents in dispute in this case. Estopping [Defendant] from advancing the same grounds or arguments made by [Third-Party Defendant] and relied on by the USPTO during the reexamination will lead to further simplification of the issues herein and prevent [Defendant] from gaining any tactical advantage by reaping the benefit of [Third-Party Defendant s] IPR arguments. The court will not hold [Defendant] accountable for arguments that [Third-Party Defendant] reasonably could have raised before the USPTO because it is neither privy to the information known by [Third-Party Defendant] nor in control of the arguments made by [Third-Party Defendant]. Civil Action No. H-1-1, 01 WL, at * (S.D. Tex. Sept., 01). Here, likewise, BDT Defendants and Pivotstor are benefitting from SpectraLogic s IPR - - cv00, 1cv, 1cv

7 petition, as their litigation will be stayed pending the IPR proceedings and any decision adverse to Overland will also benefit them. And, like in e-watch, the Court finds that this determination is appropriately considered as part of the present Motions to Stay. Accordingly, upon recommencement of this proceeding following the lifting of the stay, [BDT Defendants and Pivotstor] will be estopped from challenging the validity of any claims of [Overland s patent] on the same grounds asserted by [Spectra Logic] and relied upon by the USPTO in reaching its final decision in the reexamination[]. Obviously, the full estoppel provision as set out in Section will apply to [Spectra Logic s] challenges to the [ ] patent because it is the petitioner in that IPR proceeding. Id. at *. B. Duration of Stay Defendants request that the Court s stay extend to any final decision in the IPR, which would include any appeal of the PTAB s decision by either party to the Court of Appeals for the Federal Circuit. (Reply, 1-CV-, ECF No. ; see also Reply, -CV-00, ECF No. ; Reply, 1-CV-, ECF No. 0.) Overland, on the other hand, asks that the stay end when the IPR certificate issues, as [t]he appeal process to the Federal Circuit would take at least 1 more months. (Opp n-in-part, -CV-00, ECF No. 0; Opp n-in-part, 1-CV-, ECF No. 1; Opp n-in-part, 1-CV-, ECF No..) The Court notes that other California district courts typically issues stays pending final exhaustion of the patent reexamination proceedings, including any appeals. See, e.g., Robert Bosch Healthcare Sys., Inc. v. Cariocom, LLC, No. :1- CV--EJD, 01 WL 0001, at * (N.D. Cal. Dec., 01); Pragmatus Telecom, LLC v. NETGEAR, Inc., No. C 1- SBA, 01 WL 0, at * (N.D. Cal. May 1, 01); Wireless Recognition Techs. v. A.com Inc., No. :1-CV-01-EJD et al., 01 WL 00, at * (N.D. Cal. Sept., 01); Star Envirotech, Inc. v. Redline Detection, LLC, No. SACV 1-01 JGB (MLGx), 01 WL 0, at * (C.D. Cal. Apr., 01). The Court finds that an automatic stay through a final determination of the IPR proceedings seems most efficient, as proceedings in this Court pending - - cv00, 1cv, 1cv

8 appeal to the Federal Circuit may be unnecessary and duplicative. Of course, the Court also recognizes that circumstances may change in the interim, and the particular facts of this case may ultimately warrant a different course of action. Accordingly, the Court preliminarily grants the stay through any appeal, but the Court will entertain motions to lift the stay following the issuance of the IPR certificate. II. The 1 Patent The Court next considers whether the 1 patent, which is not subject to the IPR proceedings, should also be stayed. A. Stage of the Litigation First, the Court considers the stage of litigation, i.e., whether discovery is almost complete and whether a trial date has been set. Wave Loch, Inc. v. Am. Wave Machs., Inc., No. 0cv-MMA(WMc), 00 WL, at *1 (S.D. Cal. Feb., 00) (citations omitted). The early stage of a litigation weighs in favor of a stay pending reexamination. Wireless Recognition Techs., 01 WL 00, at *. As to discovery, the concern is not so much how much discovery has already occurred as whether discovery is nearing completion. Sorensen ex rel. Sorensen Research & Dev. Trust v. Black & Decker Corp., No. 0cv BTM (CAB), 00 WL 0, at * (S.D. Cal. Sept., 00). In other words, if a significant amount of discovery remains, a stay is more appropriate. Here, while the case against BDT Defendants is nearly three and one-half years old, the action was stayed for a significant period of time due to Overland s decision to engage in proceedings before the ITC. Moreover, the parties only submitted their joint case management statements and discovery plans on January, 01. (See -CV- 00, ECF No. 1; 1-CV-, ECF No. ; 1-CV-, ECF No..) The case management conferences took place on January, 01. (See -CV-00, ECF No. ; 1-CV-, ECF No. 0; 1-CV-, ECF No..) Thus, formal discovery has hardly begun, so discovery is nowhere near completion, and no trial date has been set. Accordingly, this factor weighs in favor of a stay. - - cv00, 1cv, 1cv

9 B. Undue Prejudice or Disadvantage to Overland Second, the Court considers whether a stay would cause undue prejudice or present a clear disadvantage to the non-moving party. Sorensen, 00 WL, at *. The delay inherent in the reexamination process does not constitute, by itself, undue prejudice. ProtectConnect,, 0 WL, at * (citations and internal quotation marks omitted). Rather, proper considerations include whether the nonmovant will be prejudiced by delaying access to discovery and allowing Defendants alleged infringement to continue in the interim. George Kessel Int l Inc. v. Classic Wholesales, Inc., F. Supp. d, 1 (D. Ariz. 00). The Northern District of California has adopted a set of four sub-factors to assist in making this assessment: (1) the timing of the reexamination request; () the timing of the request for stay; () the status of reexamination proceedings; and () the relationship of the parties. TPK Touch Solutions, Inc. v. Wintek Electro-Optics Corp., Case No. 1-cv- 0-JST, 01 WL 01, at * (N.D. Cal. Nov. 1, 01) (internal quotation marks and citation omitted). Defendants argue that Overland will not be prejudiced by the stay because Overland s leisurely pace in filing these lawsuits and engaging in other administrative proceedings against Defendants suggests it is in no rush to obtain a decision in this case. (Mot. to Stay, -CV-00, ECF No. -1; Mot. to Stay, 1-CV-, ECF No. 1-1; Mot. to Stay, 1-CV-, ECF No. -1.) Plaintiffs also will not be prejudiced because Defendants are bound to preserve all potentially relevant documents, and because Overland has licensed the patents and is therefore entitled only to money damages. (Mot. to Stay, -CV-00, ECF No. -1; Mot. to Stay, 1- CV-, ECF No. 1-1; Mot. to Stay, 1-CV-, ECF No. -1.) Overland contests Defendants assertion that Overland has delayed in pursuing its claims against Defendants. The suit against BDT Defendants was statutorily stayed for more than two years, and the cases against Spectra Logic and Pivotstor were also stayed pending the ITC proceedings. (Opp n-in-part, -CV-00, ECF No. 0; - - cv00, 1cv, 1cv

10 Opp n-in-part, 1-CV-, ECF No. ; Opp n-in-part, 1-CV-, ECF No..) Overland requested that the Court lift the stay soon after it decided not to pursue an appeal of the ITC s decision. (Opp n-in-part, -CV-00, ECF No. 0; Opp n-in-part, 1-CV-, ECF No. ; Opp n-in-part, 1-CV-, ECF No..) i. Timing of Reexamination Request and Request for Stay Because of the delay that may accrue by virtue of the PTO instituting an IPR trial on a patent-in-suit, this Court expects defendants to evaluate whether to file, and then to file, IPR petitions as soon as possible after learning that a patent may be asserted against them. TPK Touch Solutions, 01 WL 01, at *. [T]he less time that a party waits to file a motion to stay pending reexamination, the less that the movant s conduct gives rise to an inference that the delay in so doing was impermissibly tactical. Ever Win Int l Corp. v. Radioshack Corp., 0 F. Supp. d 0, 0 (D. Del. 01) (citations omitted). The Court finds that these two sub-factors weigh in favor of a stay. The procedural history of the case clearly establishes that Defendants have been diligent in seeking IPR and the instant stay. Overland s suit against BDT Defendants was filed in August 0. (ECF No. 1.) In October 0, Overland filed a complaint against BDT Defendants with the ITC as to both of the patents-in-suit. (See Mot. for Stay, ECF No. 1.) On November, 0, the ITC issued notice of initiation of its investigation. (See Order, ECF No..) That notice was published in the Federal Register on November, 0. (Id.) That same day, BDT Defendants requested that the Court stay the case. (See generally Mot. for Stay, ECF No. 1.) In December 0, this Court granted a nondiscretionary stay pursuant to U.S.C. (a). (See Order, ECF No..) In June 01, Overland also sued Pivotstor and Spectra Logic. (See Order, ECF No..) The Court stayed these proceedings as well. (Id.) On May, 01, the ITC issued a final determination. (Id.) Overland then filed a status report informing - - cv00, 1cv, 1cv

11 the Court that, on or before July, 01, it would decide whether or not to appeal the ITC s opinion. (Id.) In the meantime, on June 1, 01, Spectra Logic filed its petition for IPR. (Mot. to Stay, ECF No..) On July, 01, the parties informed the Court that Overland did not intend to appeal the ITC s determination, and on July 1, 01, the Court lifted the stay. (Order, ECF No..) In August 01, Defendants filed motions to stay pending IPR. (Order, ECF No..) On December, 01, the Court denied the motions. (Id. at.) That same day, the PTO granted IPR. (See ECF No..) Shortly thereafter, on December 1, 01, Defendants filed the instant Renewed Motions to Stay. In light of the foregoing, it is clear that Defendants have been diligent in seeking IPR. Spectra Logic filed for IPR only one-half of a month after the ITC issued its decision, and before Overland decided whether it wanted to appeal and the Court lifted the stay. Defendants have also been diligent in seeking a stay pending IPR. Defendants first requested such a stay only several weeks after the Court lifted its prior stay. Moreover, once the PTO granted IPR, Defendants filed their Renewed Motions within a matter of days. Conversely, Overland decided to pursue parallel proceedings in the ITC that tied this action up for nearly three years. Accordingly, these sub-factors favor a stay. ii. Status of Reexamination Proceedings Because the PTO has already granted IPR as to the patent, this sub-factor favors a stay. See TPK Touch Solutions, 01 WL 01, at * (citing Tokuyama Corp. v. Vision Dynamics, LLC, No. 0-cv-1SBA, 00 WL, at *1 (N.D. Cal. Oct., 00)). Although IPR was only granted in December, pursuant to the America Invents Act ( AIA ), the PTAB is required to issue a final determination within one year, unless good cause can be established for a six-month extension. See U.S.C. (a)(). In light of these revisions, cases finding that this factor weighs against a stay when reexamination was granted only recently have lost much of their persuasive force. See, e.g., Ever Win Int l, 0 F. Supp. d at 0(citing the pre-aia - - cv00, 1cv, 1cv

12 month average length of time between filing to issuance of a certificate in an IPR proceeding as weighing against a stay). The Court concedes that the early stage of the IPR proceedings somewhat mitigates this factor, but nonetheless finds that it favors Defendants. iii. Relationship of the Parties Courts are hesitant to grant a stay if the parties are direct competitors. See Tric Tools, Inc. v. TT Techs., Inc., No. 1-CV-0 YGR, 01 WL 0, at * (N.D. Cal. Oct., 01) (compiling cases). This is because of the risk that Plaintiff may suffer harm that is not compensable by readily calculable money damages. TPK Touch Solutions, 01 WL 01, at * (quoting Avago Techs. Fiber IP (Singapore) Pte. Ltd. v. Iptronics Inc., No. -CV-0-EJD, 0 WL, at * (N.D. Cal. July, 0)). Here, Defendants assert that Overland previously conceded that... it has licensed IBM under the 1 patent. (Reply, -CV-00, ECF No..) Because Overland is merely a licensor, it is unlikely that the parties are in direct competition with regards to manufacturing and marketing the data storage libraries at issue. As a consequence, the damages issue is simplified: the Court need not calculate lost profits due to any lost market share, the Court can more easily calculate the damage to Overland of any infringement, and an award of cash damages should make Overland whole. Accordingly, this sub-factor favors a stay. iv. Totality of the Circumstances In sum, the Court finds that Defendants have been diligent in seeking IPR and a stay pending IPR. IPR has already been granted, and the proceedings are underway. And, because Overland is a licensor rather than a direct market participant, the parties relationship is not problematic. Meanwhile, Overland chose to institute the parallel proceedings in front of the ITC that resulted in the more than two and one-half year stay of this litigation. Accordingly, upon weighing the various relevant considerations, the Court finds that Overland would not be unduly prejudiced by granting a stay pending IPR. Accordingly, this factor favors a stay cv00, 1cv, 1cv

13 C. Simplification of Issues and Trial Third, the Court considers whether a stay will simplify the issues in question and the trial of the case. Sorensen, 00 WL, at *. With regards to IPR, [s]ome of the advantages of a stay include the fact that the record of the reexamination may be entered at trial[;] that the PTO s expertise will govern[,] thus simplifying the case; that evidentiary and other issues will be further narrowed following a reexamination; and that costs will be reduced. Spellbound Dev. Grp., Inc. v. Pac. Handy Cutter, Inc., No. SACV 0-1 DOC (Anx), 0 WL 1, at * (C.D. Cal. May 1, 0) (citations omitted). IPR may also alleviate discovery problems and lead to settlement. See Allergan Inc. v. Cayman Chem. Co., No. SACV 0-01-JVS (RNBx), 00 WL, at *1 (C.D. Cal. Apr., 00). A stay is unwarranted if IPR will eliminate only one issue out of many. IMAX Corp. v. In-Three, Inc., F. Supp. d 0, (C.D. Cal. 00). The parties primarily contest whether or not the two patents are sufficiently related that the IPR proceedings concerning the patent will simplify the issues concerning the 1 patent. Defendants argue that Overland chose to package and tie its causes of action against [Defendants] in the same lawsuit. Overland thus considered the causes of action to be related.... Indeed, Overland accused the exact same products and the exact same parties of infringing both patents. (Mot. to Stay, - CV-00, ECF No. -1; Mot. to Stay, 1-CV-, ECF No. 1-1; Mot. to Stay, 1-CV-, ECF No. -1.) Thus, it would be inefficient and potentially duplicative to have litigation proceed as to one patent and not the other. (Mot. to Stay, -CV- 00, ECF No. -1; Mot. to Stay, 1-CV-, ECF No. -1.) Both patents concern automated data storage systems, and there will likely be common fact witnesses called upon to testify with respect to both patents since Overland s complaint in this lawsuit identifies the same accused products for both of the patents. (Reply, -CV-00, ECF No. ; Reply, 1-CV-, ECF No. 0.) Also, many of the BDT Defendants witnesses reside overseas. (Reply, -CV-00, ECF No..) And, if cv00, 1cv, 1cv

14 the Court denies the request to stay proceedings as to the 1 patent, there will likely be two separate claim construction hearings and trials. (Id.) Overland, on the other hand, argues that, while it owns both patents and has asserted both of them against the same tape libraries, the patents are otherwise unrelated, as they claim different components of a tape library. (Opp n-in-part, - CV-00, ECF No. 0; Opp n-in-part, 1-CV-, ECF No. ; Opp n-in-part, 1-CV-, ECF No..) In the ITC proceedings, there were no overlapping claim construction issues, the prior art asserted against the patents was different, and different experts were called to address invalidity and infringement as to each patent. (Opp n-in-part, -CV-00, ECF No. 0; Opp n-in-part, 1-CV-, ECF No. ; Opp n-in-part, 1-CV-, ECF No..) The Court believes that the parties may have missed the mark in addressing only the simplification of issues concerning the 1 patent. It may well be true that the PTAB s IPR determination as to the patent will have little bearing on this Court s adjudication of issues specific to the 1 patent. In this regard, the Court supposes that this factor weighs against granting a stay. However, other courts have stated that the possibility of simplification is particularly true where... a party has requested reexamination of each of the patentsin-suit. See, e.g., Semiconductor Energy Lab. Co. v. Chimei Innolux Corp., No. SACV 1-1-JST (JPRx), 01 WL 0, at * (C.D. Cal. Dec., 01) (emphasis added) (citations omitted). That simplification is particularly true rather than only true when all of the patents are subject to IPR means that simplification could still be possible even if not all of the patents subject to litigation are before the PTAB. Thus, it seems that the simplification issue is best considered holistically, and not with regard to each individual patent. The fact remains that the potential invalidation of some or all of the claims of the patent would simplify this case as a whole by narrowing the issues, reducing the complexity and length of trial,... and encouraging settlement. Pragmatus AV, LLC cv00, 1cv, 1cv

15 v. Facebook, Inc., No. -CV-0-EJD, 0 WL 0, at * (N.D. Cal. Oct., 0); see also Star Envirotech, 01 WL 0 (finding a stay pending IPR appropriate where Plaintiff brought claims of patent infringement, false advertising, and unfair competition, and not all issues would be determined by PTAB); Wireless Recognition Techs., 01 WL 00, at * (granting stay in case involving two patents where only one patent was subject to IPR and only one claim of other patent would be resolved by IPR). Moreover, Defendants have satisfied this Court that the patents have some overlap, certainly with regards to witnesses and other matters bearing on general efficiency. Accordingly, given that a stay would simplify the trial as a whole but not issues related to the 1 patent specifically, the Court finds this factor to be neutral. D. Totality of the Circumstances [U]ltimately the court must decide stay requests on a case-by-case basis. TPK Touch Solutions, 01 WL 01, at *1. Part of this determination encompasses the Court s ability to control its docket to ensure that cases are managed in the interest of justice. Universal Elecs., F. Supp. d at. Here, the Court is concerned that severing the proceedings as to the two patents would adversely affect its control over its docket. Holding two separate claim construction hearings and two separate trials, potentially years apart, would be a significant waste of judicial resources. See Largan Precision Co. v. Fujifilm Corp., No. C -1 SBA, 0 WL, at * (N.D. Cal. Mar. 1, 0) (denying requested stay of proceedings as to only one patent in two patent case in part because, [w]hile the patents-in-suit do not share any inventors and are not from the same patent family, they contain similar technology and scientific principles. Plaintiff presumably recognized this in choosing to bring this lawsuit including both patents. Staying this case as to the [second patent] while proceeding with the [first patent] would likely result in two full patent infringement trials in this Court, with overlapping evidence, by the same parties, but years apart. ). It would be more efficient for not only the Court, but also for the - - cv00, 1cv, 1cv

16 parties, witnesses, and counsel, to have the trial proceed simultaneously as to both patents, as Overland intended when it filed suit in the first place. In sum, while staying the litigation pending IPR may not simplify issues specific to the 1 patent, it would as a whole further a more efficient judicial process, and possibly even lead to a settlement of the dispute. Thus, the simplification factor is, at worst, neutral. The other factors, however, favor a stay, as the litigation is still in its infancy and Overland will not be unduly prejudiced. Accordingly, on balance, the Court finds it appropriate to GRANT Defendants Motions to Stay as to the 1 patent as well. CONCLUSION It is ordered that these proceedings are STAYED in their entirety pending IPR. The stay will automatically extend through final exhaustion of the IPR proceeding, including any appeal. Within seven () days of issuance of the Certificate, however, the parties SHALL FILE a Notice with this Court informing it of the PTAB s decision. Within fourteen (1) days of issuance of the Certificate, the Court will entertain any motions to lift the stay. As to the patent, Spectra Logic will be estopped to the full extent permitted by U.S.C. (e)(). As agreed by Spectra Logic and Overland, the stay extends to any counterclaims asserted by Spectra Logic. Further, this stay is contingent on BDT Defendants and Pivotstor s consent to be estopped from raising any invalidity defense that Spectra Logic raises in the IPR proceedings. BDT Defendants and Pivotstor MUST FILE their consent with the Court within seven () days of the date on which this Order is electronically docketed, or the stay will not go into effect. IT IS SO ORDERED. DATED: February, 01 Honorable Janis L. Sammartino United States District Judge - - cv00, 1cv, 1cv