Columbia v. Seirus - Motion To Stay

Case 3:15-cv-00064-HZ Document 176 Filed 08/01/17 Page 1 of 15
JASMINE C. HITES, OSB # 104056

Troutman Sanders LLP
100 SW Main Street, Suite 1000
Portland, OR 97204
Telephone: (503) 290-2344; Facsimile: (503) 290-2405
jasmine.hites@troutmansanders.com
MATTHEW D. MURPHEY, CSB #194111 (admitted pro hac vice)

5 Park Plaza, Suite 1400
Irvine, CA 92614
Telephone: (949) 622-2756; Facsimile: (949) 769-2090
Email: matt.murphey@troutmansanders.com
Attorneys for Defendant Seirus Innovative Accessories, Inc.
UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
COLUMBIA SPORTSWEAR NORTH No. 3:15-cv-00064-HZ

AMERICA, INC., an Oregon corporation,
SEIRUS MOTION FOR STAY OR, IN
PLAINTIFF, THE ALTERNATIVE, TO CONTINUE
THE TRIAL DATE PENDING ORDER ON
v. RENEWED MOTION TO DISMISS OR
TRANSFER FOR IMPROPER VENUE
SEIRUS INNOVATIVE ACCESSORIES,
INC., a Utah corporation, [EXPEDITED HEARING REQUESTED]
DEFENDANT.
Request for Oral Argument
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TABLE OF CONTENTS
Page
LR 7-1 CERTIFICATION ............................................................................................................. 1
MOTION........................................................................................................................................ 1
I. BACKGROUND ................................................................................................... 2
II. LEGAL STANDARD ............................................................................................ 3
III. ARGUMENT ......................................................................................................... 5
A) Motion to Stay............................................................................................ 5
B) Motion to Continue .................................................................................... 9
IV. CONCLUSION ...................................................................................................... 9
i
TABLE OF AUTHORITIES
Page(s)
CASES
Adidas Am., Inc. v. Skechers USA, Inc.,

No. 3:16-cv-1400-SI, 2017 U.S. Dist. LEXIS 89749 (D. Or. June 12, 2017) ....... 4, 7, 8
Apple, Inc. v. Samsung Elecs. Co.,

No. 11-CV-01846-LHK (N.D. Cal.) .............................................................................. 6
Apple Inc. v. Samsung Elecs. Co.,

Nos. 2014-1335, 2015-1029, 2017 U.S. App. LEXIS 2140 (Fed. Cir. Feb. 7,
2017) .............................................................................................................................. 6
Barringer v. Clackamas Cty.,

No. 3:09-CV-00068-AC, 2012 U.S. Dist. LEXIS 62116 (D. Or. May 3, 2012) ....... 4, 5
Drink Tanks Corp. v. Growlerwerks, Inc.,

No. 3:16-cv-410-SI, 2016 U.S. Dist. LEXIS 91964 (D. Or. July 15, 2016) ..... 3, 4, 6, 7
Drink Tanks Corp. v. GrowlerWerks, Inc.,

No. 3:16-cv-410-SI, 2017 U.S. Dist. LEXIS 93621 (D. Or. June 19, 2017)
(Drink Tanks II) ................................................................................................. passim
Ethicon, Inc. v. Quigg,

849 F.2d 1422 (Fed. Cir. 1988) ...................................................................................... 3
Fresenius USA, Inc. v. Baxter Int'l, Inc.,

721 F.3d 1330 (Fed. Cir. 2013) ...................................................................................... 7
Nordock, Inc. v. Sys., Inc.,

No. 11-C-118 (E.D. Wis.) .............................................................................................. 6
Nordock, Inc. v. Sys., Inc.,

Nos. 2014-1762, 2014-1795, 2017 U.S. App. LEXIS 4732 (Fed. Cir. Mar. 17,
2017) .............................................................................................................................. 6
Samsung Elecs. Co. v. Apple Inc.,

137 S. Ct. 429 (2016) ..................................................................................................... 2
TC Heartland LLC v. Kraft Foods Grp. Brands LLC,

137 S. Ct. 1514 (2017) ........................................................................................... 1, 3, 9
ii
Page(s)
CASES
Whatley v. Nike, Inc.,

No. CV 98-963-AS, 2000 U.S. Dist. LEXIS 5815 (D. Or. Feb. 8, 2000) ..................... 4
STATUTES
28 U.S.C. 1400(b) ............................................................................................................. 3
OTHER AUTHORITIES
Fed. R. Civ. P. 12(b)(3) ....................................................................................................... 2
Fed. R. Civ. P. 16............................................................................................................. 1, 9
Fed. R. Civ. P. 16(b)(4) ....................................................................................................... 4
Local Rule 16-3 ............................................................................................................... 4, 5
iii
LR 7-1 CERTIFICATION
Counsel for Defendant Seirus Innovative Accessories, Inc. (Seirus) made a good
faith effort with counsel for Plaintiff Columbia Sportswear North America, Inc.
(Columbia) to resolve the issues presented in this Motion, including Seirus request for
an expedited hearing and/or ruling. The parties met and conferred via telephonic
conference on July 31, 2017, after Seirus notified Columbia of its intent to file this
Motion and the relief sought via email on July 27, 2017. The parties were unable to
resolve the issues presented in the Motion.
MOTION
Pursuant to the Courts inherent authority to manage its docket and trial as
reflected in Fed. R. Civ. P. 16, Seirus moves this Court for a stay, or, in the alternative a
continuance of the trial date (currently set for September 19, 2017), and amendment of
the scheduling order [Dkt. Nos. 40, 47, 48, 160, 161]. The U.S. Patent and Trademark
Offices Patent Trial and Appeal Board recently issued an order that instituted trial on
two Petitions for Inter Partes Review of three claims of the two utility patents at issue in
this action, and this action should be stayed pending the outcome of those proceedings.
In addition, still pending before the Court are two important legal issues that must
be decided before trial, or even finalization of the issues to be tried, can proceed. First,
the Court is still considering Seirus renewed motion to dismiss or transfer, arising out of
the U.S. Supreme Courts recent decision in TC Heartland LLC, which resulted in a shift

Page 1 SEIRUS MOTION FOR STAY OR, IN THE 100 SW Main Street, Suite 1000
ALTERNATIVE, TO CONTINUE THE TRIAL DATE Portland, Oregon 97204
Telephone: 503.290.2400
PENDING ORDER ON RENEWED MOTION TO DISMISS
OR TRANSFER FOR IMPROPER VENUE
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in the law applicable to venue in patent cases and renders venue in this Court improper.
Additionally before the Court is the issue of the design patent damages, including what
constitutes an article of manufacture. See, e.g., [Dkt. Nos. 144-146, 151]; see also
Samsung Elecs. Co. v. Apple Inc., 137 S. Ct. 429 (2016) (changing the measure of design
patent damages).
Seirus requests an expedited hearing and/or ruling on this Motion and expedited
briefing schedule.
I. BACKGROUND
Trial on the utility patents and damages for the design patent at issue in this case
was scheduled for April 11, 2017. [Dkt. No. 40]. That date was subsequently changed to
September 19, 2017. [Dkt. No. 144]. There have been at least three developments in this
case since the Court first set the new September trial date that remain unresolved as of the
date of this filing.
On July 26, 2017, the United States Patent and Trademark Offices (PTO)
Patent Trial and Appeal Board (PTAB) instituted trial on Third Party Ventex Co., Ltds
(Ventex) two Petitions for Inter Partes Review (IPR) of U.S. Patent Nos. 8,453,270
(270 Patent) and 8,424,119 (119 Patent) on all challenged claims. See [Dkt. No.
175]. In issuing its orders instituting the IPR, the PTAB found that the information
presented in the Petition establishes a reasonable likelihood that Petitioner will prevail in

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showing the unpatentability of claims 1, 2, 7, and 17 of the 270 Patent and claims 1, 2,
8, 15, 16, and 20 of the 119 Patent. [Dkt. No. 175, Exh. A, p. 3, Exh. B, p. 3.]
On June 14, 2017, Seirus filed a renewed motion to dismiss or transfer this action
for improper venue. When Seirus first moved to dismiss this case pursuant Fed. R. Civ.
P. 12(b)(3) [Dkt. Nos. 15, 16], this Court applied then-binding Federal Circuit precedent
and held that the District of Oregon was an appropriate venue because Seirus was subject
to the personal jurisdiction of this Court. [Dkt. No. 33]. The Supreme Court since held
that personal jurisdiction is not the appropriate analysis for determining proper venue in
patent actions under 28 U.S.C. 1400(b), overturning 27 years of contrary Federal
Circuit precedent. TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514,
1517 (2017). As a result, Seirus renewed its motion to dismiss this case for improper
venue or transfer it to the Southern District of California [Dkt. Nos. 15, 163]. Seirus
motion has now been fully briefed by the parties and is pending determination by the
Court. See [Dkt. Nos. 167, 169, 170, 171, 173, 174].
Moreover, after issuing an order on February 13, 2017 requesting briefing from
the parties on the issue, the Court is currently considering the test that should be applied
to determine appropriate damages in claims for infringement of design patents (among
other issues related to the test). See [Dkt. Nos. 144-146, 150-152, 154-157]. Both parties

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anticipate that at least some discovery needs to be completed in order to provide evidence
in support of each respective partys claim and defense.
II. LEGAL STANDARD
Courts have inherent power to manage their dockets and stay proceedings,
including the authority to order a stay pending a PTO [proceeding]. Ethicon, Inc. v.
Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (citations omitted); Drink Tanks Corp. v.
Growlerwerks, Inc., No. 3:16-cv-410-SI, 2016 U.S. Dist. LEXIS 91964, at *4 (D. Or.
July 15, 2016) (A courts power to stay proceedings is incidental to the power inherent
in every court to control the disposition of the causes on its docket with economy of time
and effort for itself, for counsel, and for litigants.) (quoting Landis v. N. Am. Co., 299
U.S. 248, 254 (1936)) (Drink Tanks I).
This Court has recognized that there is a liberal policy in favor of granting
motions to stay proceedings pending the outcome of PTO IPR proceedings. Drink
Tanks Corp. v. GrowlerWerks, Inc., No. 3:16-cv-410-SI, 2017 U.S. Dist. LEXIS 93621,
at *5 (D. Or. June 19, 2017) (quotation omitted) (Drink Tanks II); Adidas Am., Inc. v.
Skechers USA, Inc., No. 3:16-cv-1400-SI, 2017 U.S. Dist. LEXIS 89749, at *5 (D. Or.
June 12, 2017); Drink Tanks I, 2016 U.S. Dist. LEXIS 91964, at *4-5; see also Werre v.
Battenfeld Techs., Inc., Civil No. 03-1471-AA, 2004 U.S. Dist. LEXIS 23250 (D. Or.
Nov. 9, 2004) (same liberal policy for stays in the context of PTO Reexamination);
Whatley v. Nike, Inc., No. CV 98-963-AS, 2000 U.S. Dist. LEXIS 5815, at *6 (D. Or.
Telephone: 503.290.2400
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Feb. 8, 2000) (same). And, one of the goals of IPR proceedings is to minimize
duplicative efforts by increasing coordination between district court litigation and inter
partes review. Drink Tanks II, 2016 U.S. Dist. LEXIS 91964, at *2.
Motions to stay generally consider three factors: 1) the phase of litigation; 2)
whether a stay will simplify the issues in question and trial of the case; and 3) whether a
stay would unduly prejudice or present a clear tactical disadvantage to the non-moving
party. See Drink Tanks II, 2017 U.S. Dist. LEXIS 93621, at *4-5 (citations omitted).
The totality of the circumstances, however, governs the evaluation. Id.
Motions to amend the scheduling order must demonstrate good cause. Fed. R.
Civ. P. 16(b)(4); Barringer v. Clackamas Cty., No. 3:09-CV-00068-AC, 2012 U.S. Dist.
LEXIS 62116, at *3-4 (D. Or. May 3, 2012). Local Rule 16-3 requires movant to: 1)
show good cause why the deadlines should be modified; 2) show effective prior use of
time; 3) recommend a new date for the deadline in question; and, 4) show the impact of
the proposed extension on other existing deadlines, settings, or schedules. LR 16-3;
Barringer, 2012 U.S. Dist. LEXIS 62116, at *3-4.
III. ARGUMENT
The Court now has at least three sound reasons to stay or continue the current trial:
1) the institution of IPR proceedings against all of the asserted claims of both the 270
and 119 Patents; 2) the pending motion to dismiss or transfer for improper venue; and 3)
the pending determination of the standard applicable to design patent damages.

Telephone: 503.290.2400
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A) Motion to Stay
1. Stage of Litigation
Trial is still approximately two months away and important litigation tasks remain,
including the submission of witness and exhibit lists and other pre-trial filings. This
Court has found that incomplete litigation tasks weigh in favor of granting a stay. Drink
Tanks II, 2017 U.S. Dist. LEXIS 93621, at *14-16 (granting stay despite the close of fact
discovery one month prior).
While courts generally consider whether a trial date has been set, this is not
dispositive. Id. at *14-16 (granting stay despite trial date being set and despite the
likelihood that resolution of the IPR proceeding would occur after that scheduled trial
date). Further, in addition to the existence of the IPR proceedings, the totality of the
circumstances weigh in favor of a stay, given the outstanding issues of improper venue
and design patent damages. In addition to the need for a ruling from the Court in order to
provide clarity and certainty to the parties in advance of trial, the Courts determination
may be aided by forthcoming sister court analysis. See, e.g., [Dkt. Nos. 170, 171, 173,
174]; Apple Inc. v. Samsung Elecs. Co., Nos. 2014-1335, 2015-1029, 2017 U.S. App.
LEXIS 2140 (Fed. Cir. Feb. 7, 2017) (District Court docket available at Apple, Inc. v.
Samsung Elecs. Co., No. 11-CV-01846-LHK (N.D. Cal.))1; Nordock, Inc. v. Sys., Inc.,
1
On July 28, 2017 the Northern District of California ordered briefing by the parties on,
inter alia, (1) What is the test for identifying the article of manufacture for purposes of
Telephone: 503.290.2400
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Nos. 2014-1762, 2014-1795, 2017 U.S. App. LEXIS 4732 (Fed. Cir. Mar. 17, 2017)
(District Court docket available at Nordock, Inc. v. Sys., Inc., No. 11-C-118 (E.D. Wis.)).
2. Simplification of Issues
The PTAB has instituted review of the identified claims in the asserted utility
patents. This was a critical issue for this Court in deciding whether to stay litigation in
the Drink Tanks cases, cited above, because of the implications those proceedings would
have on the asserted patents. See Drink Tanks I, 2016 U.S. Dist. LEXIS 91964, at *9-13
(denying motion without prejudice, in-part because of the uncertainty regarding
institution of IPR); Drink Tanks II, 2017 U.S. Dist. LEXIS 93621, at *12-14 (finding that
institution of IPR changed the second factor to favor the movant). Indeed, this Court has
noted that 81 percent of final written IPR decisions result in invalidation of at least some
of the challenged claims and, in close to half of all cases, invalidation of all challenged
claims occurs. Adidas, 2017 U.S. Dist. LEXIS 89749, at *10. And even in denying
without prejudice the motion to stay in Drink Tanks I, the Court noted that proceeding
with litigation will result in the Court wasting resources and the parties unnecessarily
expending funds addressing invalid claims. . . . Therefore, a stay could help conserve
289?; (2) Is the identification of an article of manufacture a factual question, a legal

question, or a mixed question of law and fact? What issues should be decided by a jury?
What issues should be decided by the Court?; (3) Who bears the burden of proof to
identify the relevant article of manufacture for purposes of 289?; (4) Who bears the
burden of proof to demonstrate total profits on an article of manufacture for purposes of
289? . . . Apple Inc. v. Samsung Elecs. Co., Ltd., No. 11-CV-01846-LHK, 2017 U.S.
Dist. LEXIS 119149, at *104-05 (N.D. Cal. July 28, 2017).
Telephone: 503.290.2400
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resources, as well as give the Court the benefit of the PTOs expert opinion. 2016 U.S.
Dist. LEXIS 91964, at *10. The Court then granted the renewed motion to stay in Drink
Tanks II, 2017 U.S. Dist. LEXIS 93621, at *16.
Here, the same result should be reached, and the Court should avail itself of the
expertise of the PTO in examining the validity of the asserted patents. A stay of this case
would have the added benefit of allowing more time for development of further law
regarding the complicated issues of patent venue and design patent damages also before
the Court. Further, stay of the present case will result in conservation of both public and
private resources. See Fresenius USA, Inc. v. Baxter Int'l, Inc., 721 F.3d 1330, 1340
(Fed. Cir. 2013) ([I]n general, when a claim is cancelled, the patentee loses any cause of
action based on that claim, and any pending litigation in which the claims are asserted
becomes moot.). Thus, staying the case pending resolution of the IPR will simplify the
case by either removing many, if not all, of the claims at issue or providing valuable
insight from the PTOs expertise in evaluating patents. See Drink Tanks II, 2017 U.S.
Dist. LEXIS 93621, at *5 (whatever outcome occurs, there is the potential for the
simplification of issues for trial, either by reducing the number of claims at issue,
confirming the validity of the surviving claims, or narrowing the scope of a modified
claim) (citation omitted).

Telephone: 503.290.2400
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3. Undue Prejudice or Clear Tactical Disadvantage
Mere delay in trying the case pending a determination on the IPR does not
establish prejudice. As the Court found in Drink Tanks II:
Such delay inherent in the reexamination does not constitute, by itself,

undue prejudice. Milwaukee Elec. Tool Corp. v. Hilti, Inc., 138 F. Supp.
3d 1032, 1039 (E.D. Wis. Oct. 2, 2015) (quotation marks omitted); accord
Universal Elecs., 943 F. Supp. 2d at 1033 (Mere delay in the litigation
does not establish undue prejudice.); see also Sorensen v. Black & Decker
Corp., 2007 WL 2696590, *4 (S.D. Cal. Sept. 10, 2007) (Protracted delay
is always a risk inherent in granting a stay, yet courts continue to stay
actions pending reexamination. The general prejudice of having to wait for
resolution is not a persuasive reason to deny the motion for stay.)
Drink Tanks II, 2017 U.S. Dist. LEXIS 93621, at *4.
Columbia cannot show any prejudice or disadvantage from a stay or continuance.
Columbia has never requested a preliminary injunction or other equitable relief from this
Court (nor the Western District of Washington) based on its claims of infringement.
Thus, there is no urgency or threatened irreparable harm to Columbia by continuation of
the status quo by a stay or continuance of the trial date.
In contrast, Seirus will be unduly prejudiced by proceeding to trial because the
asserted utility patents are not likely to survive IPR. See Adidas, 2017 U.S. Dist. LEXIS
89749, at *10 (noting that IPR proceedings typically result in invalidation of patent
claims); see also Drink Tanks II, 2017 U.S. Dist. LEXIS 93621, at *10 (finding the factor
neutral because while the resolution of the patentees claim would be delayed, delay itself
is not unduly prejudicial and the institution of an IPR could mean that the plaintiff was
Telephone: 503.290.2400
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enforcing invalid patent claims). Further, the totality of the circumstances including
the pending legal issues before the Court and the attendant uncertainty given the potential
of those determinations to greatly alter the case mitigate towards the grant of a stay.
B) Motion to Continue
Good cause exists to continue the trial date for all of the reasons above, including
allowing the Court sufficient time to rule on the issues before it.
Further, a continuance will have a negligible effect on the resolution of this matter,
as Columbia has not demonstrated any prejudice it believes it will suffer if the trial is
continued. While the parties recently prepared and submitted the Proposed Pretrial Order
[Dkt. No. 172], the first wave of Court Filings is not due for two weeks. See [Dkt. No.
160-161].
IV. CONCLUSION
In light of the institution of IPR proceedings on both of the asserted utility patents,
judicial and private resources will be saved by the stay of this case pending resolution of
those proceedings. Further, in view of TC Heartland, this Court can no longer hear this
case and is obligated to dismiss or transfer it. Should it ultimately deny Seirus renewed
motion, the Court must also make a determination of the applicable standard for assessing
design patent damages in advance of the parties preparation for trial. Therefore, while
prepared to proceed to trial on the current schedule if necessary, Seirus requests that the
Court stay this case, or, in the alternative, continue the trial for as long as the Court

Telephone: 503.290.2400
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deems appropriate for it to resolve the pending issues outlined herein and amend the Rule
16 scheduling order accordingly. [Dkt. No. 163].
DATED: August 1, 2017 Respectfully submitted,
TROUTMAN SANDERS LLP
s/ Matthew D. Murphey
JASMINE C. HITES, OSB # 104056
100 SW Main Street, Suite 1000
Portland, OR 97204
Telephone: (503) 290-2344
Facsimile: (503) 290-2405
jasmine.hites@troutmansanders.com
MATTHEW D. MURPHEY (admitted pro hac vice)

5 Park Plaza, Suite 1400
Irvine, CA 92614
Telephone: (949) 662-2700
Facsimile: (949) 622-2739
Email: matt.murphey@troutmansanders.com
Attorneys for Defendant Seirus Innovative

Accessories, Inc.

Telephone: 503.290.2400
32056319

Columbia v. Seirus - Motion To Stay

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Case 3:15-cv-00064-HZ Document 176 Filed 08/01/17 Page 1 of 15

JASMINE C. HITES, OSB # 104056

MATTHEW D. MURPHEY, CSB #194111 (admitted pro hac vice)

Attorneys for Defendant Seirus Innovative Accessories, Inc.

UNITED STATES DISTRICT COURT

COLUMBIA SPORTSWEAR NORTH No. 3:15-cv-00064-HZ

LR 7-1 CERTIFICATION ............................................................................................................. 1

Adidas Am., Inc. v. Skechers USA, Inc.,

Apple, Inc. v. Samsung Elecs. Co.,

Apple Inc. v. Samsung Elecs. Co.,

Barringer v. Clackamas Cty.,

Drink Tanks Corp. v. Growlerwerks, Inc.,

Drink Tanks Corp. v. GrowlerWerks, Inc.,

Ethicon, Inc. v. Quigg,

Fresenius USA, Inc. v. Baxter Int'l, Inc.,

Nordock, Inc. v. Sys., Inc.,

Nordock, Inc. v. Sys., Inc.,

Samsung Elecs. Co. v. Apple Inc.,

TC Heartland LLC v. Kraft Foods Grp. Brands LLC,

Whatley v. Nike, Inc.,

28 U.S.C. 1400(b) ............................................................................................................. 3

Fed. R. Civ. P. 12(b)(3) ....................................................................................................... 2

Fed. R. Civ. P. 16............................................................................................................. 1, 9

Fed. R. Civ. P. 16(b)(4) ....................................................................................................... 4

Local Rule 16-3 ............................................................................................................... 4, 5

resolve the issues presented in the Motion.

Troutman Sanders LLP

date of this filing.

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patent actions under 28 U.S.C. 1400(b), overturning 27 years of contrary Federal

to determine appropriate damages in claims for infringement of design patents (among

Troutman Sanders LLP

in support of each respective partys claim and defense.

II. LEGAL STANDARD

U.S. 248, 254 (1936)) (Drink Tanks I).

Motions to stay generally consider three factors: 1) the phase of litigation; 2)

The totality of the circumstances, however, governs the evaluation. Id.

the proposed extension on other existing deadlines, settings, or schedules. LR 16-3;

Barringer, 2012 U.S. Dist. LEXIS 62116, at *3-4.

the pending determination of the standard applicable to design patent damages.

discovery one month prior).

(denying motion without prejudice, in-part because of the uncertainty regarding

289?; (2) Is the identification of an article of manufacture a factual question, a legal

Tanks II, 2017 U.S. Dist. LEXIS 93621, at *16.

claim) (citation omitted).

Troutman Sanders LLP

3. Undue Prejudice or Clear Tactical Disadvantage

establish prejudice. As the Court found in Drink Tanks II:

Such delay inherent in the reexamination does not constitute, by itself,

Drink Tanks II, 2017 U.S. Dist. LEXIS 93621, at *4.

Columbia cannot show any prejudice or disadvantage from a stay or continuance.

Thus, there is no urgency or threatened irreparable harm to Columbia by continuation of

the status quo by a stay or continuance of the trial date.

In contrast, Seirus will be unduly prejudiced by proceeding to trial because the

Troutman Sanders LLP

16 scheduling order accordingly. [Dkt. No. 163].

DATED: August 1, 2017 Respectfully submitted,

TROUTMAN SANDERS LLP

MATTHEW D. MURPHEY (admitted pro hac vice)

Attorneys for Defendant Seirus Innovative

Troutman Sanders LLP

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