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Doc 246 Vz Response to TiVo Motion for Status Conference

Doc 246 Vz Response to TiVo Motion for Status Conference

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Published by Sam Biller
Verizon's response to TiVo's Motion for a proposed status conference on TiVo's IP lawsuit
Verizon's response to TiVo's Motion for a proposed status conference on TiVo's IP lawsuit

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Published by: Sam Biller on Jan 24, 2012
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01/24/2012

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UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF TEXASMARSHALL DIVISION
TIVO INC., a Delaware corporation,Plaintiff,v.VERIZON COMMUNICATIONS, INC.,a Delaware corporation, et al.,Defendants.Civil Action No. 2:09-cv-257-DF
RESPONSE TO TIVO’S OPPOSED MOTION FOR A STATUS CONFERENCE
TiVo seeks a status conference “to discuss lifting the stay and entering a schedule in thismatter.” TiVo Mot. at 1. This request is premature. It makes no sense to lift the stay for threereasons.
First 
, a key basis for the stay – the absence of a
 Markman
ruling, which has beendelayed due to TiVo’s insistence on construing a large number of terms (forty five) – has notchanged.
Second 
, half of the patents in suit (two of the three TiVo patents and two of the fiveVerizon counterclaim patents) are now in reexamination before the U.S. Patent and Trademark Office (“PTO”), and awaiting the PTO’s ruling will promote efficient and expeditiousdisposition of the claims, conserve judicial resources, and allow the Court to benefit from thePTO’s analysis.
Third 
, this case should follow the
 Motorola Mobility v. TiVo
case (Case No.5:11-CV-53), because Motorola is Verizon’s supplier of the accused devices and, if Motorolaprevails, it could greatly simplify the issues in this case. Because the stay should remain inplace, a status conference at this juncture would needlessly consume the resources of the Courtand the parties. TiVo’s motion should therefore be denied.
Case 2:09-cv-00257-DF-CMC Document 246 Filed 01/24/12 Page 1 of 9 PageID #: 8740
 
1
1.
 
This case was stayed “[d]ue to the Court’s schedule.” Order (Nov. 10, 2011),ECF No. 237. At the November 10, 2011 hearing at which the Court announced its intention tostay this case, the Court cited the considerable amount of work that remained to be done toconstrue the claim terms as a basis for the stay.
See
Nov. 10, 2011 Tr. at 3-4. That has notchanged. The Court is in the same position with respect to a
 Markman
ruling as it was when thestay was imposed
sua sponte
. Unless and until the
 Markman
ruling is issued, it makes littlesense and would be inefficient to proceed with discovery in this case. Indeed, that is why thisCourt’s docket control order originally linked future deadlines in this case, including theexchange of revised infringement and invalidity contentions and all stages of expert discovery(which has not begun), to the issuance of a
 Markman
ruling.
See
Joint Agreed Docket ControlOrder (May 18, 2010), ECF No. 88. Even remaining fact discovery would be more productivepost-
 Markman
, as the parties will be able to focus on a narrower set of disputes.TiVo has no basis to complain that maintaining the stay until a
 Markman
ruling wouldcause undue delay. At the
 Markman
hearing on June 2, 2011, this Court encouraged TiVo toreduce the number of terms it was seeking to have construed,
see
Markman Hr’g, Tr. at 31-33(June 2 2011); when TiVo refused, the Court made note of the delay that would likely result,
seeid.
at 120. Over the next five months, TiVo took no steps to reduce the number of terms forconstruction. And in the more than two months since the November 10, 2011 hearing, TiVo stillhas not reduced the number of terms it seeks to construe.
2.
The stay should be maintained for an additional, independent reason: Half of thepatents-in-suit are currently undergoing reexamination at the PTO. On June 2 & 3, 2011, TiVofiled reexamination requests for four of the five asserted Verizon patents. On July 22, 2011,Verizon moved for reexamination of two of the three asserted TiVo patents. The PTO has issued
Case 2:09-cv-00257-DF-CMC Document 246 Filed 01/24/12 Page 2 of 9 PageID #: 8741
 
2final office actions reaffirming the validity of two of the four patents that TiVo challenged (the’748 and ’684), and proceedings on the other two patents (the ’979 and ’078) are ongoing. In the
inter partes
reexamination proceedings on the TiVo patents (the ’465 and ’015), the PTO alsohas issued office actions rejecting all subject claims of the two patents as invalid, and TiVo hasrecently filed responses. Verizon’s responses in these reexaminations are due in February.
 
In deciding whether litigation should be stayed pending the outcome of a reexaminationproceeding, this Court considers three factors: “(1) whether a stay will unduly prejudice orpresent a clear tactical disadvantage to the nonmoving party; (2) whether a stay will simplify theissues in question and trial of the case; and (3) whether discovery is complete and whether a trialdate has been set.”
 Datatreasury Corp. v. Wells Fargo & Co.
,
 
490 F. Supp. 2d 749, 754 (E.D.Tex. 2006) (Folsom, J.) (quoting
Soverain Software LLC v. Amazon.Com
, 356 F. Supp. 2d 660,662 (E.D. Tex. 2005)). These factors, both individually and collectively, strongly weigh in favorof maintaining the stay.
See Constellation IP, LLC v. Allstate Corp.
, No. 5:07-CV-132, 2008WL 4787625, at *1 (E.D. Tex May 12, 2008) (“Essentially, courts determine whether thebenefits of a stay outweigh the inherent costs based on these factors”);
see also ASCII Corp. v.STD Entm’t USA, Inc.
, 844 F. Supp. 1378, 1381 (N.D. Cal. 1994) (There is a “liberal policy infavor of granting motions to stay proceedings pending the outcome of USPTO reexamination orreissuance proceedings.”).
First 
, a stay will not unduly prejudice TiVo or give it a tactical disadvantage. TiVo hasno basis to claim otherwise given that it was the party who first filed for reexamination of Verizon’s counterclaim patents, more than 16 months after Verizon asserted those patents.Moreover, TiVo waited four years to file this suit against Verizon from the time when Verizon
Case 2:09-cv-00257-DF-CMC Document 246 Filed 01/24/12 Page 3 of 9 PageID #: 8742

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