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Civil Action No. 13-1881-GMS

Civil Action No. 13-1883-GMS


WHEREAS, on November 11, 2013, the plaintiff Message Notification Technologies
LLC ("MNT") filed the separate patent infringement lawsuits against the above-captioned
defendants Microsoft Corporation ("Microsoft") (C.A. 13-1881-GMS) and Unify Inc. ("Unify").
(C.A. 13-1883-GMS.) MNT alleges that Microsoft and Unify both infringe U.S. Patent No.
5,944,786 (''the '786 Patent");
WHEREAS, on January 3, 2014, Microsoft filed a motion to dismiss MNT's complaint.
(C.A. 13-1881-GMS, D.I. 8.) In response, MNT filed its Amended Complaint against Microsoft
on January 17, 2014. 1 (D.I. 11.) On January 22, 2014, Unify also filed its own motion to


Microsoft withdrew its initial motion in light of the Amended Complaint. (D.I. 13.)

dismiss. (C.A. 13-1883-GMS, D.I. 13.) MNT filed its Amended Complaint against Unify on
March 12, 2014 (D.I. 23); 2
WHEREAS, presently before the court are several motions: Microsoft's Motion to
Dismiss the Amended Complaint for Failure to State a Claim (C.A. 13-1881-GMS, D.I. 14);
Unify's Motion to Dismiss the Amended Complaint for Failure to State a Claim and Lack of
Subject Matter Jurisdiction (C.A. 13-1883-GMS, D.I. 25); and Microsoft and Unify's motions to
stay proceedings pending inter partes review (C.A. 13-1881-GMS, D.I. 30; C.A. 13-1883-GMS,
D.I. 36);
WHEREAS, the court having considered the motions, the parties' positions as set forth in
their papers, as well as the applicable law;
1. Unify's Motion to Dismiss the Original Complaint (C.A. 13-1883-GMS, D.I.

13) is DENIED as moot;

2: Microsoft's Motion to Dismiss the Amended Complaint (C.A. 13-1881-GMS,
D.I. 14) and Unify's Motion to Dismiss the Amended Complaint (C.A. 131883-GMS, D.I. 25) are DENIED; 3


Unlike Microsoft, Unify did not withdraw its motion to dismiss the original complaint. In light ofMNT's
Amended Complaint against Unify, however, the original complaint has "no legal effect." See Semu/ka v. Moschell,
401 F. App'x 628, 629 (3d Cir. 2010) (quoting King v. Dogan, 31F.3d344, 346 (5th Cir. 1994)). The court will
denyUnify's initial motion to dismiss (C.A. 13-1883-GMS, D.I. 13) as moot.
3 Microsoft and Unify attack MNT's Amended Complaint on largely the same grounds; thus, the court will
address their arguments together where possible.
Federal Rule of Civil Procedure 12(b)(6) provides for dismissal where the plaintiff "fail[s] to state a claim
upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). In considering a motion to dismiss, the court "accept[s]
all factual allegations as true, construe[s] the complaint in the light most favorable to the plaintiff, and deterrnine[s]
whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cnty. of
Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). The issue for the court is "not whether the plaintiff will ultimately
prevail, but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S.
232, 236 (1974). As such, the touchstone of the pleading standard is plausibility. Bistrian v. Levi, 696 F.3d 352 365
(3d Cir. 2012). Plaintiffs must provide sufficient factual allegations "to state a claim to relief that is plausible on its
face." Bell At/. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A complaint that merely pleads facts that are
consistent with a defendant's liability 'stops short of the line between possibility and plausibility."' In re Bill of


3. Microsoft and Unify's Motions to Stay pending inter partes review (C.A. 131881-GMS, D.I. 30; C.A. 13-1883-GMS, D.I. 36) are GRANTED; 4

Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1332 (Fed. Cir. 2012) (quoting Twombly, 550
U.S. at 546). "Determining whether a complaint states a plausible claim for relief will ... be a context-specific task
that requires the reviewing court to draw on its judicial experience and common sense." Ashcroft v. Iqbal, 556 U.S.
662, 679 (2009).
The court finds that MNT's Amended Complaints, both as to Microsoft and Unify, include sufficient
factual allegations to state a claim for direct and/or indirect infringement of the '786 Patent. The pleading standard
in a patent infringement lawsuit is no more demanding than in other contexts. Form 18-found in the Appendix to
the Federal Rules of Civil Procedure-offers an example patent infringement pleading, sufficient to satisfy the
requirements of Rule 8. It requires only:
(1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the
patent; (3) a statement that defendant has been infringing the patent by making,
selling, and using [the device] embodying the patent; (4) a statement that the
plaintiff has given the defendant notice of its infringement; and (5) a demand for
an injunction and damages.
In re Bill of-Lading, 681 F.3d at 1334 (alteration in original) (quoting McZeal v. Sprint Nextel Corp.,
501-F.3d 1354, 1357 (Fed. Cir. 2007)). Following the guidance of Form 18, "a plaintiff [need not] plead facts
establishing that each element of an asserted claim is met. Indeed, a plaintiff need not even identify which claims it
asserts are being infringed." Id. at 1335 (internal citation omitted).
Microsoft and Unify ask too much of MNT at this stage, and would require that MNT identify each claim
element that is practiced by the accused products. The burden of pleading is not so high. Regarding direct
infringement, MNT identifies the defendants' products-"Unified Messaging Voice Access" for Microsoft; "Unify
OpenScape UC Suite" for Unify-and alleges that they practice the '786 Patent. This is sufficient to state a
plausible claim for relief, even though the defendants dispute this characterization. Turning to indirect
infringement and willful infringement, the court finds that MNT's Amended Complaints have adequately alleged
facts to support a plausible inference of the additional elements necessary to make out those claims (i.e.,
knowledge, intent, objective reckless, etc.).
The court notes that the Amended Complaints and the briefing for the instant motions was completed prior
to the U.S. Supreme Court's decision in Limelight Networks, Inc. v. Akamai Technologies, Inc., which held that
some single entity must practice each of the claimed elements in order to find infringement. 134 S. Ct. 2111, 211718 (2014). In other words, there must be a direct infringer. In the court's view, the allegations in the Amended
Complaints against Microsoft and Unify are written so as to not run afoul of this holding. But it appears several of
MNT's statements rested on the assumption that "divided infringement" was a viable route to liability. (See, e.g.,
C.A. 13-1881-GMS, D.I. 11 ("The accused systems/products/services contain hardware and software components
that are especially designed to be used in conjunction with other devices or systems that may not be provided by
[defendant].").) Microsoft and Unify will have the opportunity to test MNT's allegations through summary
judgment, but only after MNT is allowed discovery. See Watson v. Abington Twp., 478 F.3d 144, 150 (3d Cir.
2007) ("[I]n considering a 12(b)(6) motion, we do not inquire whether the plaintiffs will ultimately prevail, only
whether they are entitled to offer evidence to support their claims." (quoting Langford v. City of At/. City,
235 F.3d 845, 847 (3d Cir. 2000))).
Unify alone also challenges MNT's standing to bring suit, arguing that MNT is not the owner of the '786
Patent. The court rejects this contention. MNT provides a plain statement in its Amended Complaint: "[MNT] is
the owner of the 786 patent with all substantive rights in and to that patent .... " (C.A. 13-1883-GMS, D.I. 23,
iJ 7.) This is all that is required according to Form 18. The court denies Microsoft's and Unify's Motions to
The decision to stay an action lies within the sound discretion of the trial court. Ethicon, Inc. v. Quigg,
849 F.2d 1422, 1426-27 (Fed. Cir. 1988); Cost Bros. Inc. v. Travelers Indemnity Co., 760 F.2d 58, 60 (3d Cir.
1985); First Am. Title Ins. Co. v. MacLaren, L.L.C., No. 10-363-GMS, 2012 WL 769601, at *4 (D. Del. Mar. 9,
2012). In the patent litigation arena, this power includes "the authority to order a stay pending conclusion of a PTO
[review]." Ethicon, 849 F.2d at 1426-27. Central to the rationale providing for such discretion is that of the
"court's inherent power to conserve judicial resources by controlling its own docket." Cost Bros. Inc., 760 F.2d at


60-61 (citation omitted); see also Cheyney State Coll. Faculty v. Hufstedler, 703 F.2d 732, 737-38 (3d Cir. 1983)
(citing Landis v. N Am. Co., 299 U.S. 248, 254-55 (1936)).
In the inter partes review ("IPR") context-unlike for "covered business method" ("CBM") review-the
factors for the district court's consideration when faced with a stay request are not statutorily defined. See LeahySmith America Invents Act, Pub. L. No. 112-29, § 18(b), 125 Stat. 284, 331 (2011) (identifying stay factors for
district courts for CBM review). Nonetheless, the parties are in agreement that the same factors used in non-IPR
settings should govern the court's stay analysis:
(1) whether the granting of a stay would cause the non-moving party to suffer
undue prejudice from any delay or allow the moving party to gain a clear tactical
advantage over the non-moving party; (2) whether a stay will simplify the issues
for trial; and (3) whether discovery is complete and a trial date set.
Bos. Scientific Corp. v. Cordis Corp., 777 F. Supp. 2d 783, 788 (D. Del. 2011); see also First Am. Title Ins., 2012
WL 769601, at *4.
The court believes each of these factors weighs in favor of staying proceedings. First, the court can discern
no prejudice or tactical disadvantage that MNT would suffer as a result of a stay. This factor is often analyzed by
looking to several additional sub-factors: "the timing of the request for [IPR], the timing of the request for stay, the
status of the [IPR] proceedings, and the relationship of the parties." See Bonutti Skeletal Innovations, L.L.C. v.
Zimmer Holdings, Inc., No. 12-cv-1107 (GMS), 2014 WL 1369721, at *4 (D. Del. Apr. 7, 2014) (quoting Bos.
Scientific, 777 F. Supp. 2d at 789). It is true that Microsoft filed its petition seeking IPR review on the eve of its
one-year deadline. See 35 U.S.C. § 315(b) ("An inter partes review may not be instituted ifthe petition requesting
the proceeding is filed more than 1 year after the date on which the petitioner ... is served with a complaint alleging
infringement of the patent."). Although this delay would typically suggest prejudice or tactical advantage, in this
case, the court has not yet entered a schedule pursuant to Federal Rule of Civil Procedure 16. Thus, the delay in
seeking review is less likely to be prejudicial-despite having been pending over a year at this point, these cases are
truly in their infancy still. Moreover, Microsoft expediently moved to impose a stay within two weeks after filing its
petition, with Unify seeking to join the stay motion weeks later. The defendants' timing in seeking IPR and in
moving for a stay does not demonstrate any undue prejudice.
Moreover, the court does not consider the fact that the Patent Trial and Appeal Board ("PTAB") has not yet
decided to institute review of Microsoft's petition to be of great moment. Statistics show the PTAB elects to
institute review in the majority of cases, and should the PTAB deny Microsoft's petition, a brief stay would not
unduly prejudice MNT. Regardless of whether the PTAB has instituted review, courts will often impose a stay
where the facts of the case suggest it is warranted. See Neste Oil OYJv. Dynamic Fuels, LLC, No. 12-1744-GMS,
2013 WL 3353984, at *2 (D. Del. July 2, 2013); Semiconductor Energy Lab. Co. v. Chimei Innolux Corp., No.
SACV 12-21-JST (JPRx), 2012 WL 7170593, at *3 (C.D. Cal. Dec. 19, 2012) ("[I]f the [PTAB] rejects the inter
partes requests, the stay will be relatively short."). The court's view is buttressed in light of the final sub-factor: the
relationship of the parties. MNT is a non-practicing entity, without competing products, thus minimizing the risk of
harm. See Bonutti Skeletal Innovations, 2014 WL 1369721, at *4 (D. Del. Apr. 7, 2014) ("The relationship between
the parties is no impediment to a stay ... where the plaintiff is a non-practicing entity.") While it is true that
prolonged litigation may reduce the value of its patents as licensing assets, see Walker Digital, LLC v. Google, Inc.,
No. 11-318-LPS, 2014 WL 2880474, at *1 (D. Del. June 24, 2014), the court finds this concern to be overblown.
See Bonutti Skeletal Innovations, 2014 WL 1369721, at *4 ("[Plaintiffs] status as a non-practicing entity, rather
than a market participant, suggests there is little risk that it will lose sales or goodwill in the market."). Although
MNT would undoubtedly prefer a quicker resolution to a slower one, there is no suggestion that time is particularly
important, or that any prejudice suffered would be undue. See Neste Oil, 2013 WL 3353984, at *2 (D. Del. July 2,
2013) ("The mere potential for delay ... is insufficient to establish undue prejudice.").
Second, the court agrees that staying proceedings pending resolution of the PTAB's review would greatly
simplify the issues for trial. Microsoft and Unify are the only remaining defendants. Microsoft is statutorily
estopped from re-litigating issues decided by the PTAB, see 35 U.S.C. §315(e), and Unify has stipulated to be
similarly estopped. (C.A. 13-1883-GMS, D.I. 38-1.) Thus, there is no danger of duplicative litigation. Moreover,
should the PTAB invalidate any or all of the asserted claims, the issues for trial will undoubtedly be simplified. See
Softview LLC v. Apple Inc., No. 10-989-LPS, 2013 WL 4757831, at *1 (D. Del. Sept. 4, 2013). The court maintains
this view, even assuming MNT is correct that review will be denied as to at least some of the claims. See Neste Oil,
2013 WL 3353984, at *5 ("[W]hile the court recognizes that this case likely presents certain questions that simply
cannot be addressed through inter partes review, it notes that the 'issue simplification' factor does not require
complete overlap."). At a minimum, the court will benefit from the PTAB's point of view and have a fuller record


4. The above-captioned cases (C.A. 13-1881-GMS; C.A. 13-1883-GMS) are
STAYED, pending resolution of the inter partes review of U.S. Patent No.

Dated: February ]j_, 2015

available for claim construction. See Richtek Tech. Corp. v. UPI Semiconductor Corp., No. C 09-05659 WHA,
2011 WL 445509, at *3 (N.D. Cal. Feb. 3, 2011) ("Even if none of the asserted claims are cancelled or amended,
this action will be shaped by the richer prosecution history available to inform the claim construction process.").
The issue simplification factor favors imposing a stay.
Finally, the parties do not dispute that these cases are still in their relative infancies. The court has not yet
entered a schedule for either case---obviously then, discovery is not terminated and no trial date is set. The early
stage of litigation favors entering a stay.
MNT argues that Microsoft's petition for IPR was untimely, and therefore the stay should be denied.
Microsoft filed its petition on November 12, 2014, just within the one-year deadline of its service with MNT's
original complaint on November 13, 2013. (C.A. 13-1881-GMS, D.I. 4). MNT nonetheless argues that service of
the petition was not effectuated properly within the time frame. (D.I. 33 at 2-3.) Based on the evidence before it,
the court cannot say that Microsoft's petition was procedurally improper. That question is for the PTAB to decide.
The court grants Microsoft and Unify's request for a stay. Should the PTAB deny review on this or any other
ground, the court will lift the stay without undue delay.