Transcription
Case: 1:06-cv-00253-SL Doc #: 238 Filed: 12/11/13 1 of 17. PageID #: 6289UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF OHIOEASTERN DIVISION01 COMMUNIQUE LABORATORY, INC.,Plaintiff,CASE NO. 1:06-CV-0253vs.CITRIX SYSTEMS, INC., andCITRIX ONLINE, LLCJUDGE LIOIDefendants.PLAINTIFF’S REPLY IN SUPPORT OF MOTION TO REOPEN THE CASE ANDTO LIFT THE STAY
Case: 1:06-cv-00253-SL Doc #: 238 Filed: 12/11/13 2 of 17. PageID #: 6290TABLE OF CONTENTSI.There Is No “Condition Precedent” To Lifting The Stay . 1II.Circumstances Have Changed Substantially And Equity Demands That The Stay BeLifted . 3III.Each Of Citrix’s Predictions Regarding The Reexamination Has Been Proved To BeWrong . 5IV.V.VI.A.Citrix Was Wrong In Predicting That The Claims Would Be Invalidated In TheReexamination . 5B.Citrix Was Wrong In Predicting That The Reexamination Would Be CompletedWithin Two Years . 6The “Simplification” Imagined By Citrix Is Illusory . 6A.The Reexamination Will Not Resolve All Validity Issues . 6B.The Federal Circuit Opinion In The LogMeIn Appeal Will Have No Bearing OnThis Case . 7No “Parade Of Horribles” Awaits The Reopening Of This Case, Despite Citrix’ Claims . 8A.There Is No Need For Additional Claim Construction . 8B.Minimal Additional Work For Pending Motions Is Needed. 9C.No Extensive Additional Discovery Is Needed . 10Conclusion . 122
Case: 1:06-cv-00253-SL Doc #: 238 Filed: 12/11/13 3 of 17. PageID #: 6291TABLE OF AUTHORITIESCASES01 Communique Lab., Inc. v. LogMeIn, Inc.,2013 U.S. Dist. LEXIS 89969 (E.D. Va. June 25, 2013) . 601 Communique Laboratory, Inc. v. LogMeIn, Inc.,687 F. 3d 1292 (Fed. Cir. 2012). 9Bowers v. Baystate Technologies, Inc.,320 F.3d 1317 (Fed. Cir. 2003). 10Engel Indus., Inc. v. Lockformer Co.,166 F.3d 1379 (Fed. Cir. 1999). 9Laukus v. Rio Brands, Inc.,2011 U.S. Dist. LEXIS 51001 (N.D. Ohio May 12, 2011). 12Ohio Envtl. Council v. U.S. District Court,565 F.2d 393 (6th Cir. 1977) . 2Panduit Corp. v. Hellermanntyton Corp.,2005 U.S. Dist. LEXIS 5627 (N.D. Ill. Feb. 9, 2005) . 4STATUTES35 U.S.C. § 315(b) . 435 U.S.C. § 316(a)(11) . 435 U.S.C. §§ 314(a) . 4OTHER AUTHORITIESBrief of Appellant and Brief of Appellee, 01 Communique Laboratory, Inc. v.LogMeIn, Inc.,No. 13-1479 (Fed. Cir. July 25 and October 7, 2011) . 7Motion For A Determination Concerning The Use Of Deposition Testimony, 01Communique Laboratory, Inc. v. Bomgar Corp., Case No. 1:12-cv-00003(E.D. Va., April 13, 2012), ECF 97 . 11Order, 01 Communique Laboratory, Inc. v. Bomgar Corp., Case No. 1:12-cv00003 (E.D. Va. April 24, 2012), ECF 135 . 11Orders Granting Pro Hac Vice Admission, 01 Communique Laboratory, Inc. v.Bomgar Corp.,Case No. 1:12-cv-00003 (E.D. Va., February 23 and March 2, 2012), ECF 24,34. 10Rader, Randall R. \Addressing the Elephant: The Potential Effects of the PatentCases Pilot Program and Leahy-Smith America Invents Act.\ AMERICANUNIVERSITY LAW REVIEW 62, no.4 (2013): 1105-1112 . 3Sterne & Strang, Federal Circuit Standard of Review for Inter PartesPatentability Challenges, USPTO Post-Grant Patent Trials 2013 (PractisingLaw Institute) . 53
Case: 1:06-cv-00253-SL Doc #: 238 Filed: 12/11/13 4 of 17. PageID #: 6292Plaintiff, 01 Communique Laboratory, Inc. (“01”), respectfully submits this Reply to theOpposition of Defendants Citrix Systems, Inc. and Citrix Online, LLC (together, “Citrix”) to01’s Motion to Reopen the Case and to Lift the Stay. ECF 237.Despite repeated decisions from the Patent Office rejecting its invalidity assertions, Citrixhangs its opposition on the thin hope that it might yet prevail on further appeal of itsunsuccessful reexamination attempt, grossly underrepresenting to this Court the amount of timethat may remain before a Reexamination Certificate will issue. This Court is not constrainedfrom lifting the stay by Judge Aldrich’s prior Order, and indeed is required to reconsider thechanged circumstances of the case in deciding whether to continue the stay. The stay already hasachieved the desired result of obtaining “the expert view of the PTO” sought by Judge Aldrich –the PTO has made it clear that Citrix’ invalidity arguments are unavailing. The continuing harmto 01 being caused by the stay requires that it now be lifted.01 respectfully requests that this Court lift the stay and set this case for trial. 01 wouldappreciate the opportunity to address these issues in oral argument, if the Court believesargument would be helpful.I.There Is No “Condition Precedent” To Lifting The StayCitrix incorrectly states that completion of the reexamination is “the condition set forreopening the case.” ECF 237, p. 5. Judge Aldrich’s Order makes it clear that the “condition”for reopening the case is a “written motion by any of the parties,” not the final decision afterappeal to the Supreme Court of the reexamination effort. ECF 224. Prior to filing the presentmotion, 01 had filed both a motion (ECF 230) and several letters (ECF 222, 225 and 234)informing the Court of developments in the reexamination warranting lifting of the stay. Citrix
Case: 1:06-cv-00253-SL Doc #: 238 Filed: 12/11/13 5 of 17. PageID #: 6293claims that 01’s arguments in its prior motion were “rejected” by the Court, but in fact the Courthas never issued an order on 01’s prior motion. ECF 230.This Court always has the discretion to lift a stay in a case before it, and, where thecircumstances under which a stay was granted change, may abuse that discretion by refusing tolift the stay. See Ohio Envtl. Council v. U.S. District Court, 565 F.2d 393, 398 (6th Cir. 1977).Certainly, Judge Aldrich never contemplated the current six-year delay when she issued herOrder staying the case – much less the additional two years that are likely to pass before aReexamination Certificate will issue. Far from finding that an eight to nine year stay would notbe overly prejudicial to 01, as Citrix asserts in its Opposition, Judge Aldrich’s Order issuedfollowing the parties’ joint presentation of existing statistics showing a median pendency ofreexaminations of twenty-nine months.1Nor did Judge Aldrich approve a potential eight to nine year delay of this case when shedenied 01’s 2009 request to lift the stay based on new pendency statistics compiled by theInstitute for Progress study. Order of August 7, 2009, ECF 224. Rather, Judge Aldrich’s rulingwas based on the then-current facts: at that early stage of the reexamination, the majority of theclaims in reexamination stood rejected by the examiner. The facts are now substantiallydifferent: the examiners in the reexamination proceeding and those of the Patent Trial andAppeal Board (“PTAB”) have confirmed the validity of the claims.Indeed, when 01 referenced the Institute for Progress study results that pointed to a likelyeight to nine year delay, Citrix represented to the Court that the study was faulty and that actualpendency was 32. 5 months. Exhibit G, April 9, 2009Goldstone Letter (the correspondence1The parties disagreed about how the median pendency figure should be interpreted, with Citrixestimating that the reexamination would take less than twenty-nine months inclusive of time forappeal. See, e.g., ECF 176, p. 8-9.2
Case: 1:06-cv-00253-SL Doc #: 238 Filed: 12/11/13 6 of 17. PageID #: 6294leading up to Judge Aldrich’s 2009 Order is not part of the Court’s docket). Citrix then allegedthat the difference between this new estimate and its prior estimate of 29 months was “[s]uch asmall change in median pendency [that] hardly justifies lifting the stay.” Id. Of course both ofCitrix “estimates” already have proven to be grossly inaccurate.The Court’s Order of August 7, 2009, does not set forth Judge Aldrich’s assessment ofthe pendency statistics and there is no basis for Citrix’ assertion that Judge Aldrich would havefound justified an eight to nine year delay of this case, particularly in view of Citrix’unsuccessful reexamination.II.Circumstances Have Changed Substantially And Equity Demands That The Stay BeLifted01 has a fundamental right to a determination of this case without undue delay. See OhioEnvtl. Council, 565 F.2d at 396. Citrix can no longer justify the delay imposed by what hasbecome an indeterminate stay.Citrix’ Brief cites several older cases that describe Congress’ intent “to provide arelatively quick and inexpensive resolution” via the reexamination procedure. See, e.g. ECF 237,pp. 7-8 These earlier expressions of Congressional intent are outdated, and they are nowcontradicted by Congress’ recent elimination of the inter partes reexamination procedureemployed by Citrix. In the years since the stay Order issued, Congress has recognized that theinter partes reexamination procedure did not meet its goals, and it repealed the inter partesreexamination statute, substituting the new inter partes review procedure, in the America InventsAct (“AIA”). See Exhibit H, Rader, Randall R. Addressing the Elephant: The Potential Effectsof the Patent Cases Pilot Program and Leahy-Smith America Invents Act. AMERICANUNIVERSITY LAW REVIEW 62, no.4 (2013): 1105-1112, 1109-1110 (“Congress responded tocriticisms that the previous inter partes reexamination procedures devolved into a slow litigation3
Case: 1:06-cv-00253-SL Doc #: 238 Filed: 12/11/13 7 of 17. PageID #: 6295supplement rather than an efficient litigation alternative.”). The pendency of Citrix’reexamination is evidence of the futility of Congress’ earlier intent. Notably, the new interpartes review procedure has a statutorily mandated one-year time period for completion with amaximum extension of six months.2 35 U.S.C. § 316(a)(11).Citrix cites only Panduit Corp. v. Hellermanntyton Corp., 2005 U.S. Dist. LEXIS 5627(N.D. Ill. Feb. 9, 2005) to support its argument that the PTAB’s affirmance of the patentability ofthe claims at issue does not present substantial new circumstances that require lifting the stay.Panduit, however, contains no explanation of the court’s refusal to lift the stay after issuance ofthe Right to Appeal Notice. Further, that court did not stay a related breach of settlementagreement claim and, in connection with that claim, construed the patent undergoingreexamination to determine that the redesigned product did not infringe . Id. Panduit does notsupport a refusal to lift the stay in this case.Citrix also does not dispute that, under current Local Rules and case law, the stay wouldnever have been granted. “In any case, whatever the justification for a brief stay in the context ofapparent imminent administrative action which would potentially moot the entirecontroversy the current stay is clearly not justified on that basis.” Ohio Envtl. Council, 565F.2d at 398 (citation omitted). The passage of time has discredited the speculation upon whichthe stay originally was based. The case should be reopened and the stay should be lifted.2Other AIA changes, such as a heightening of the burden to initiate proceedings and a one yeartime limit to file for inter partes review after service of a complaint for infringement, would haveprevented Citrix from invoking the new procedure, had it been available at the time. 35 U.S.C.§§ 314(a), 315(b).4
Case: 1:06-cv-00253-SL Doc #: 238 Filed: 12/11/13 8 of 17. PageID #: 6296III.Each Of Citrix’s Predictions Regarding The Reexamination Has Been Proved To BeWrongA. Citrix Was Wrong In Predicting That The Claims Would Be Invalidated InThe ReexaminationWhen it originally sought the stay, and in its filings since then, Citrix repeatedlyreassured the Court that 01’s claims were certain to be held unpatentable or, at a minimum,substantially amended during the reexamination. [See, e.g., ECF 231, p. 12] Citrix was wrong.All of the asserted claims have emerged from the “expert review” of the examiners and thePTAB unscathed. [See ECF 215, p. 3] The reexamination was before a panel of threeexperienced examiner, and the PTAB appeal proceedings were heard before three PTAB judges.Along with the original examiner, seven experts at the PTO have now confirmed thepatentability of the claims.Citrix clings to a claimed 26% chance of reversing that “expert view” on appeal byextrapolation from two years’ worth of limited data. But Citrix’ extrapolation from that dataitself is in error. None of the cases on which Citrix relies involve a third party requestor, likeCitrix, that has overcome the concerted affirmance of claims by both the PTAB judges and theexaminers. As set forth in the first sentence of the article cited by Citrix, it is very unlikely thatthe Federal Circuit will reverse the PTAB. See Sterne & Strang, Federal Circuit Standard ofReview for Inter Partes Patentability Challenges, in USPTO Post-Grant Patent Trials 2013(Practising Law Institute) at 501. ECF 237-1, p. 4/43. As explained in that article, the likelihoodof affirmance is related to the limited scope of Federal Circuit review. Id.The likelihood of affirmance in this case is made all the more strong by the failure ofthose same invalidity arguments before the jury in 01 Communique Lab., Inc. v. LogMeIn, Inc.,2013 U.S. Dist. LEXIS 89969 (E.D. Va. June 25, 2013).5
Case: 1:06-cv-00253-SL Doc #: 238 Filed: 12/11/13 9 of 17. PageID #: 6297B. Citrix Was Wrong In Predicting That The Reexamination Would BeCompleted Within Two YearsIn obtaining the present stay, Citrix argued that the inter partes reexamination would takeless than twenty-nine months, including appeal. [ECF 176, p. 8-9] Citrix was wrong. Thereexamination is nearing its six-year anniversary. Beyond that, the process may yet require atleast two more years before a Reexamination Certificate issues, presuming that the FederalCircuit confirms the patentability of all claims (the most expeditious and likely outcome). If theFederal Circuit takes the overwhelmingly likely course of affirming the decisions of the PTABand examiners, Citrix will still have an opportunity to apply for rehearing and petition for a writof certiorari to the Supreme Court, steps that history suggests it is unlikely to pass up.Following denial of the application and petition, the case must be remanded back to the examinerfor issuance of the Reexamination Certificate, a step that may take several additional months.All of these steps could add from months to years to Citrix’ current estimate.IV.The “Simplification” Imagined By Citrix Is IllusoryCitrix is wrong in its claim that the potential for issues in this litigation to be furthersimplified by the Federal Circuit in the appeal of the PTAB’s decision or the unrelated appeal inthe LogMeIn case justifies maintaining the stay.A. The Reexamination Will Not Resolve All Validity IssuesCitrix points out in its Opposition that it is free to assert the prior art already discreditedin the reexamination if the stay is lifted before the Reexamination Certificate issues. However,Citrix’ threat to make this case as expensive and time-consuming as possible both for 01 and forthis Court – regardless of the merits of its defense – cannot be equitable grounds for maintainingthe stay. Citrix’ threat also should be weighed against the Court’s existing tools for streamlining6
Case: 1:06-cv-00253-SL Doc #: 238 Filed: 12/11/13 10 of 17. PageID #: 6298the litigation, including utilizing the expert view of the PTO to grant 01’s motions for summaryjudgment of validity.In any event, reexamination estoppel applies only to prior art patents and printedpublications that were raised or could have been raised in the reexamination. For that reason,Citrix will undoubtedly assert that it has new arguments supporting invalidity that are not subjectto the estoppel irrespective of the outcome of the reexamination, even though Citrix’ ability toassert new prior art was statutorily foreclosed prior to the stay. 35 U.S.C. § 282(c). Citrix hasalready intimated that it has arguments stemming from the reexamination proceedings that itplans to raise, suggesting that the reexamination has created more issues than it will ever resolve.The new issues will have to be decided regardless of when the stay is lifted. If Citrix weresincerely interested in simplifying issues, it would agree to waive all invalidity arguments –regardless of whether they are subject to estoppel.B. The Federal Circuit Opinion In The LogMeIn Appeal Will Have No BearingOn This CaseCitrix’ assertion that the Court should wait for the second appeal in the unrelatedLogMeIn case to be decided is ironic, given that the LogMeIn case was filed after the Right ofAppeal Notice issued in the reexamination and has already seen a jury trial, while this case, filedfour years earlier in 2006, remains in limbo. The self-serving claim by Citrix that a decision inthe LogMeIn appeal will resolve issues of infringement with respect to the Citrix system has nomerit and is not supported by Citrix with any evidence or explanation. LogMeIn’s noninfringement arguments at trial were based upon the implementation details of its system that itclaimed were covered by its own patent. See Brief of Appellant at 49-51 and Brief of Appellee at68-69, 01 Communique Laboratory, Inc. v. LogMeIn, Inc., No. 13-1479 (Fed. Cir. July 25 andOctober 7, 2011). While the two separate implementations of 01’s patented technology by Citrix7
Case: 1:06-cv-00253-SL Doc #: 238 Filed: 12/11/13 11 of 17. PageID #: 6299and LogMeIn can both be infringing, it is unlikely that Citrix will be willing to admit that it isutilizing, and therefore infringing, the LogMeIn patent.Citrix’ further assertion that the LogMeIn appeal will determine issues related toinequitable conduct is incorrect. Although LogMeIn preserved its right to appeal the fi
LogMeIn, Inc., No. 13-1479 (Fed. Cir. July 25 and October 7, 2011) . 7 Motion For A Determination Concerning The Use Of Deposition Testimony, 01 Communique
