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ACQIS, LLC v. Emc Corporation

United States District Court, D. Massachusetts

June 10, 2015

ACQIS, LLC, Plaintiff,
v.
EMC CORPORATION, Defendant.

MEMORANDUM AND ORDER

ALLISON D. BURROUGHS, District Judge.

I. Introduction

This patent infringement case was recently transferred to this Court from the Eastern District of Texas, where it was originally filed. Plaintiff ACQIS, LLC ("ACQIS") alleges that Defendant EMC Corporation ("EMC") has infringed claims in 11 patents owned by ACQIS.[1] Specifically, ACQIS alleges that 20 EMC computer storage products infringe 22 claims from these 11 patents.[2] The EMC products at issue in this case are modular computer systems, and the patents-in-suit each describe and claim one or more computer modules that can be removed from one console and used in another console.

Before the Court is EMC's Motion to Stay Pending Inter Partes Review ("IPR"). [Dkt. 80.][3]The United States Patent and Trademark Office ("PTO") has instituted IPRs for 2 of the 11 patents-in-suit, involving 3 of the 22 claims asserted against EMC. EMC now asks the Court to stay this case in its entirety until the PTO completes those IPRs, which is expected to happen by March 11, 2016.

As described in greater detail below, EMC argues that the requested stay is appropriate because discovery is still in its early stages and a trial date has not been set, a stay would likely simplify the issues in question and trial of the case, and it would not unduly prejudice or present a clear tactical disadvantage to ACQIS. ACQIS opposes a stay on the grounds that the parties and the Eastern District of Texas have already made substantial investments in the case, the IPR challenges are limited in scope and thus are unlikely to result in significant simplification of the issues in the case, EMC unreasonably delayed in petitioning for IPR, and a stay would unduly prejudice ACQIS. As an alternative to a stay, ACQIS proposes that the Court set a trial for summer 2016, a few months after decisions are expected to be entered in the IPRs.

After careful consideration of the parties' briefs and additional points raised at the hearing conducted on May 29, 2015, and for the reasons explained in this Memorandum and Order, EMC's motion for a stay is GRANTED, and the case is ordered to be stayed in its entirety until a decision is issued in the IPRs.

II. Procedural Background

ACQIS filed its complaint against EMC in the Eastern District of Texas on September 9, 2013 and served it on September 12, 2013.[4] ACQIS LLC v. EMC Corporation, No. 6:13-CV-00639 (E.D. Tex.). On December 6, 2013, EMC moved to transfer the action to the District of Massachusetts pursuant to 28 U.S.C. § 1404(a). On April 30, 2014, before the motion to transfer was ruled on, the case against EMC was consolidated with three related lawsuits brought by ACQIS against other defendants in the Eastern District of Texas. The lead case was the earliest filed of these four cases, ACQIS LLC v. Alcatel-Lucent USA, Inc., No. 6:13-CV-00638 (E.D. Tex.).

On September 10, 2014, Judge Leonard Davis of the Eastern District of Texas conditionally granted EMC's motion to transfer the action to the District of Massachusetts, retaining jurisdiction over EMC through the claim construction process and noting that the transfer would become effective the day that he issued his claim construction opinion. [Dkt. 44.]

On February 12, 2015, a Markman hearing was held in the Eastern District of Texas. On April 13, 2015, Judge Davis issued both a claim construction opinion [Dkt. 71] and an order transferring the case against EMC to this Court [Dkt. 72].

On April 27, 2015, EMC filed this motion to stay. ACQIS filed its opposition on May 11, 2015 [Dkt. 84], and EMC filed a reply brief on May 26, 2015 [Dkt. 88]. A hearing was conducted on May 29, 2015. EMC filed a supplemental memorandum on June 4, 2015 [Dkt. 96], and ACQIS filed a response to EMC's supplemental memorandum on June 9, 2015 [Dkt. 101].

III. Inter Partes Review

In 2012, the Leahy-Smith America Invents Act ("AIA") took effect, replacing the former inter partes reexamination process with an inter partes review process. See 35 U.S.C. §§ 311-319. IPR is an expedited procedure for challenging the validity of a patent before the PTO and its Patent Trial and Appeal Board ("PTAB"). Id. The PTO may institute an IPR only if it determines that "there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition." 35 U.S.C. § 314(a). If the PTO grants an IPR petition, the final determination in the IPR must be issued within one year from the date that the petition is granted.[5]35 U.S.C. § 316(a)(11).

Between September 4 and 10, 2014, EMC filed IPR petitions challenging claims in 3 of the 11 patents-in-suit: the RE'171 Patent, the '873 Patent, and the RE'814 Patent. In March 2015, after the Markman hearing was held but before the claim construction opinion was issued and before the action was transferred from the Eastern District of Texas to this Court, the PTO denied EMC's petition as to the RE'171 Patent, and instituted IPRs of the '873 and RE'814 Patents. The two instituted IPRs involve a total of 3 of ...


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