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Unwired Planet, LLC v. Square, Inc.

United States District Court, D. Nevada

October 3, 2014

UNWIRED PLANET, LLC, Plaintiff,
v.
SQUARE, INC., Defendant.

ORDER

ROBERT C. JONES, District Judge.

This case arises out of the alleged infringement of three patents concerning wireless technology. Pending before the Court are the parties' claim construction (" Markman ") briefs and a Motion to Stay (ECF No. 71). For the reasons given herein, the Court denies the motion to stay and issues the present Markman Order.

I. FACTS AND PROCEDURAL HISTORY

Plaintiff Unwired Planet, LLC owns by assignment U.S. Patent No. 7, 711, 100 (the "'100 Patent"), entitled "System and Method for Controlling Financial Transactions Over a Wireless Network, " U.S. Patent No. 7, 376, 433 (the "'433 Patent"), entitled "Subscriber Delivered Location-Based Services, " and U.S. Patent No. 8, 275, 359 (the "'359 Patent"), entitled "Wireless User Based Notification System, " (collectively, the "Patents"). (First Am. Compl. ¶¶ 14-16, ECF No. 30). Plaintiff informed Defendant Square, Inc. of its infringement of the '100 and '433 Patents on September 26, 2013 and informed Defendant of the infringement of the '359 Patent via service of the Summons and Complaint on October 23, 2013. ( See id. ¶¶ 20-21; Proof of Service, ECF No. 14, at 2).

Plaintiff sued Defendant in this Court under 35 U.S.C. § 271(a)-(c) for direct, indirect, and contributory patent infringement of the Patents via Defendant's various products and services. ( See id. ¶¶ 19, 21-22). The magistrate judge issued the Discovery Plan and Scheduling Order ("DPSO") on March 17, 2014, ordering phased discovery. ( See DPSO, ECF No. 47). Phase I discovery was limited to that necessary to file Markman briefs and participate in the initial settlement conference: initial disclosures; infringement, noninfringement, invalidity, and unenforceability contentions under the Local Patent Rules; claim construction disclosures; damages estimates; depositions of claim construction experts; a limited deposition under Rule 30(b)(6); and any future licensing agreements. ( See id. 2-6). Phase II is to include general discovery, i.e., any remaining discovery, and it is to begin immediately after the issuance of the present Markman Order and end 180 days thereafter. ( See id. 3, 7). The Markman briefs have been received and a Markman hearing held. Nine months after Plaintiff filed the action, four months into discovery, and the day before Plaintiff's Markman brief was filed, Defendant filed a petition for Covered Business Method ("CBM") review with the Patent Trial and Appeals Board ("PTAB") as to the '100 Patent and filed petitions for Inter Partes Review ("IPR") with the PTAB as to the '433 and '359 Patents. Defendant has asked the Court to stay the present case based on those filings.

II. LEGAL STANDARDS

A. Stays

Pursuant to the America Invents Act ("AIA"), a district court may issue a stay when a party has filed a petition for CBM review with the PTAB with respect to a patent claim currently in litigation before the district court. See Leahy-Smith America Invents Act § 18, Pub. L. No. 112-29, 125 Stat. 284 (2011) (§ 18 not codified). In considering whether to grant a stay, a district court is to consider: (1) whether a stay, or the denial thereof, would simplify the issues in question and streamline the trial; (2) whether discovery is complete and whether a trial date has been set; (3) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and (4) whether a stay, or the denial thereof, would reduce the burden of litigation on the parties and on the court. See id. § 18(b)(1)(A)-(D).

The Court of Appeals appears to have issued only one reported decision reviewing a district court's grant or denial of a stay under § 18. See VirtualAgility v. Salesforce.com, ___ F.3d ___, 2014 WL 3360806 (Fed. Cir. 2014). In that case, the Court of Appeals reversed a district court's denial of a stay two months after the PTAB had granted a petition to institute CBM proceedings. See id. at *1.[1] The Court of Appeals ruled that the district court erred in discounting the PTAB's determination that the petitioner was more likely than not to succeed at trial in the PTAB. See id. at *5 ("The district court erred as a matter of law to the extent that it decided to review' the PTAB's determination that the claims of the '413 patent are more likely than not invalid in the posture of a ruling on a motion to stay. Under the statutory scheme, district courts have no role in reviewing the PTAB's determinations regarding the patentability of claims that are subject to CBM proceedings."). The Court of Appeals has not issued a decision reviewing the grant or denial of a stay made before the PTAB has ruled whether to grant a petition, and it has expressly stated that "it [i]s not error for [a] district court to wait until the PTAB ma[kes] its decision to institute CBM review before it rule[s] on [a] motion [to stay]." Id. at *7. The Court of Appeals noted that some district courts, but not all, have denied § 18(b)(1) motions as premature when filed before the PTAB renders a decision whether to grant a pending CBM petition. See id. ("We express no opinion on which is the better practice. While a motion to stay could be granted even before the PTAB rules on a post-grant review petition, no doubt the case for a stay is stronger after post-grant review has been instituted.").

B. Claim Construction

The construction of terms found in patent claims is a question of law to be determined by the Court. Markman v. Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en banc), aff'd, 517 U.S. 370 (1996). "[T]he interpretation to be given a term can only be determined and confirmed with a full understanding of what the inventors actually invented and intended to envelop with the claim." Phillips v. AWH Corp., 415 F.3d 1303, 1316 (Fed. Cir. 2005) (quoting Renishaw PLC v. Marposs Societa' per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 1998)). Consequently, courts construe claims in the manner that "most naturally aligns with the patent's description of the invention." Id.

The first step in claim construction is to look to the language of the claims themselves. "It is a bedrock principle' of patent law that the claims of a patent define the invention to which the patentee is entitled the right to exclude.'" Phillips, 415 F.3d at 1312 (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1115 (Fed. Cir. 2004)). A disputed claim term should be construed in light of its "ordinary and customary meaning, " which is "the meaning that the term would have to a person of ordinary skill in the art in question at the time of the invention, i.e., as of the effective filing date of the patent application." Id. In some cases, the ordinary meaning of a disputed term to a person of skill in the art is readily apparent, and claim construction involves "little more than the application of the widely accepted meaning of commonly understood words." Id. at 1314. Moreover, a district court is not obligated to construe terms with ordinary meanings, lest trial courts be inundated with requests to parse the meaning of every word in the asserted claims. O2 Micro Int'l Ltd. v. Beyond Innovation Tech. Co., Ltd., 521 F.3d 1351, 1360 (Fed. Cir. 2008); U.S. Surgical Corp. v. Ethicon, Inc., 103 F.3d 1554, 1568 (Fed. Cir. 1997) (noting that claim construction "is not an obligatory exercise in redundancy."); see also Biotec Biologische Naturverpackungen GmbH & Co. KG v. Biocorp, Inc., 249 F.3d 1341, 1349 (Fed. Cir. 2001) (finding no error in the non-construction of the word "melting"); Mentor H/S, Inc. v. Med. Device Alliance, Inc., 244 F.3d 1365, 1380 (Fed. Cir. 2001) (finding no error in the lower court's refusal to construe "irrigating" and "frictional heat").

Claim construction may deviate from the ordinary and customary meaning of a disputed term only if: (1) "a patentee sets out a definition and acts as his own lexicographer"; or (2) "the patentee disavows the full scope of a claim term either in the specification or during prosecution." Thorner v. Sony Computer Entm't Am. LLC, 669 F.3d 1362, 1365 (Fed. Cir. 2012). Ordinary and customary meaning is not always the same as the dictionary definition. Phillips, 415 F.3d at 1321.

Properly viewed, the "ordinary meaning" of a claim term is its meaning to the ordinary artisan after reading the entire patent. Yet heavy reliance on the dictionary divorced from the intrinsic evidence risks transforming the meaning of the claim term to the artisan into the meaning of the term ...

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