Message Notification Technologies LLC v. Microsoft Corp., et al., C.A. Nos. 13-1881-GMS, 13-1883-GMS...

8/9/2019 Message Notification Technologies LLC v. Microsoft Corp., et al., C.A. Nos. 13-1881-GMS, 13-1883-GMS (D. Del. Fe…

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

MESSAGE NOTIFICATION

TECHNOLOGIES LLC,

Plaintiff,

v

MICROSOFT CORPORATION,

Defendant.

MESSAGE NOTIFICATION

TECHNOLOGIES LLC,

v

UNIFY INC.,

Defendant.

OR ER

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.) n 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

1

Microsoft withdrew its initial motion in light o 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);

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;

IT IS

HEREBY ORDERED THAT:

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.

13

1883-GMS, D.I. 25) are DENIED;

3

2

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. o

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

o

2





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

Leahy

Smith 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 a t 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 plaintif f 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

PT

AB 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 benefi t from the

PTAB s

point

of

view and have a fuller record

4



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.

5,944,786.

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.

5

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