United States District Court, E.D. Texas, Tyler Division
W. SCHROEDER III UNITED STATES DISTRICT JUDGE
Apple Inc. (“Apple”) filed a Motion to Stay
(Docket No. 518) on February 28, 2017. On September 29, 2017,
the Court denied the motion with memorandum order to follow
and ordered Plaintiff VirnetX Inc. (“VirnetX”)
and Apple to meet and confer on a trial date for this case.
Docket No. 527. The Court now issues this memorandum
opinion detailing the reasons for its ruling.
case has both a lengthy and complex procedural history. On
August 11, 2010, VirnetX filed Case No. 6:10-cv-417 against
Apple alleging infringement of U.S. Patent Nos. 6, 502, 135
(“the '135 Patent”), 7, 418, 504 (“the
'504 Patent”), 7, 490, 151 (“the '151
Patent”) and 7, 921, 211 (“the '211
Patent”) (collectively, “the asserted
patents”). Case No. 6:10-cv-417 (“417
action”), Docket No. 1. On November 6, 2012, a jury
found that Apple's accused VPN On Demand and FaceTime
features infringed the asserted patents and that the asserted
patents were not invalid. 417 action, Docket No. 790. On the
same day, VirnetX filed Case No. 6:12-cv-855. Docket No. 1.
417 action, Apple and VirnetX both filed post-trial motions,
which the Court ruled on. 417 action, Docket No. 851. The
matter was appealed, and the Federal Circuit
affirmed-in-part, reversed-in-part and remanded for further
proceedings. 417 action, Docket No. 853; see VirnetX,
Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1313-14 (Fed.
Federal Circuit affirmed the jury's finding of
infringement of VPN On Demand and affirmed the Court's
denial of Apple's motion for judgment as a matter of law
on invalidity. Id. The Federal Circuit vacated the
infringement finding for FaceTime based upon a change in
claim construction, holding that the term “secure
communication link” requires both “security and
anonymity, ” and vacated damages for VPN On Demand and
FaceTime because it found that the jury relied on a flawed
damages model. Id. at 1314.
receipt of the Federal Circuit's mandate, the Court
solicited the parties' proposals on how to proceed. 417
action, Docket No. 855. The parties submitted a status report
in which VirnetX proposed the Court consolidate the remaining
issues in the 417 action with the upcoming trial in the 855
action. Docket No. 864 at 4. Apple opposed the consolidation.
See 417 action, Docket No. 873 at 45:20-46:6. After
a status conference on March 10, 2015, the Court consolidated
the 855 and 417 actions, designating the 855 action as the
lead case with a revised schedule. Docket No. 220. After
extensive motion practice (see Docket Nos. 315,
317-323, 326; see also Docket Nos. 362, 468), the
case was tried to a jury, and the jury returned a verdict
finding infringement of the '135, '151, '504 and
both Apple and VirnetX filed post-trial motions (Docket Nos.
462, 463). On July 29, 2016, the Court granted Apple's
Motion for a New Trial Based Upon the Consolidation of Cause
Nos. 6:10-cv-417 and 6:12-cv-855. Docket No. 500. The Court
reasoned that the consolidation and repeated discussion of
the complex procedural history and previous jury verdict in
front of the jury resulted in an unfair trial. Docket No. 500
at 14. In its Order, the Court explained that “Cause
No. 6:10-cv-417 will be retried with jury selection to begin
on September 26, 2016, unless the parties agree otherwise on
an alternative date, and immediately followed by a second
trial on the issue of willfulness. Cause No. 6:12-cv-855 will
be retried after Cause No. 6:10-cv-417.” Id.
another round of extensive motion practice (see,
e.g., 417 action, Docket Nos. 930- 931, 937, 944-945),
the 417 action was again tried to a jury. The jury returned a
verdict finding that FaceTime infringed the '211 and
'504 patents and awarded approximately $302 million in
damages for the collective infringement of the VPN On Demand
and FaceTime features in the accused Apple products. 417
action, Docket No. 1025. After the September trial, both
parties submitted post-trial motions (see Docket
Nos. 1018-1019, 1047, 1062-1063).
the post-trial motions were pending, on February 9, 2017, the
Court requested that the parties meet and confer about the
timing of the 855 trial and propose a schedule. The parties
each filed a response (Docket Nos. 519, 520), and Apple
simultaneously filed this motion to stay (Docket No. 518).
The Court held a telephonic hearing regarding the
parties' responses, during which VirnetX requested that a
schedule for this case not be entered until the post-trial
motions from the 417 retrial had been ruled upon. Docket No.
521 at 6:5-11. The Court took no further action on the
remaining 855 retrial until September 29, 2017, when the
Court issued its memorandum opinion and order on the
post-trial motions and issued final judgment in the 417
action. 417 action, Docket Nos. 1079, 1082. At that point,
the Court denied Apple's motion to stay the 855 action
explaining that this memorandum opinion would follow. Docket
district court has the inherent power to control its own
docket. Landis v. N. Am. Co., 299 U.S. 248, 254
(1936). The party seeking a stay bears the burden of showing
that the stay is appropriate. Landis, 299 U.S. at
254-55. This inherent power includes “the authority to
order a stay pending conclusion of a PTO
reexamination.” Ethicon, Inc. v. Quigg, 849
F.2d 1422, 1426- 27 (Fed. Cir. 1988). In deciding whether to
stay litigation pending PTO proceedings, courts typically
consider: (1) whether the stay will unduly prejudice the
nonmoving party, (2) whether the proceedings before the court
have reached an advanced stage, including whether discovery
is complete and a trial date has been set and (3) whether the
stay will likely result in simplifying the case before the
court. NFC Tech. LLC v. HTC Am., Inc., No.
2:13-CV-1058-WCB, 2015 WL 1069111, at *2 (E.D. Tex. Mar. 11,
2015) (Bryson, J.) (citing Lennon Image Techs., LLC v.
Macy's Retail Holdings, Inc., No. 2:13-cv-235, 2014
WL 4652117, at *2 (E.D. Tex. Sept. 17, 2014);
Market-Alerts Pty. Ltd. v. Bloomberg Fin. L.P., 922
F.Supp.2d 486, 489 (D. Del. 2013); Soverain Software LLC
v. Amazon.com, Inc., 356 F.Supp.2d 660, 662 (E.D. Tex.
factors are not exclusive, and, ultimately, deciding whether
to stay proceedings “calls for the exercise of
judgment, which must weigh competing interests and maintain
an even balance.” Landis, 299 U.S. at 254-55;
see also TruePosition, Inc. v. Polaris Wireless,
Inc., No. 12-646, 2013 WL 5701529, at *2 (D. Del. Oct.
21, 2013) (citing SoftView ...