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Rovi Guides, Inc. v. Comcast Corp.

United States District Court, S.D. New York

October 27, 2017

ROVI GUIDES, INC., et al., Plaintiffs,
v.
COMCAST CORPORATION, et al., Defendants.

          OPINION AND ORDER

          J. PAUL OETKEN, DISTRICT JUDGE.

         This is a patent infringement action brought by Plaintiff Rovi Guides Inc., and its subsidiaries (collectively, “Rovi”) against Comcast Corporation and its subsidiaries (collectively, “Comcast”). Currently pending before the Court are (1) Rovi's motion to strike Comcast's invalidity contentions under 35 U.S.C. § 101; and (2) Comcast's motion to stay this case pending completion of inter partes review (“IPR”) proceedings instituted by the Patent Trial and Appeal Board (“PTAB”).

         On October 13, 2017, the Court held a conference with the parties, including oral argument on the motion for a stay. For the reasons that follow, Rovi's motion to strike Comcast's § 101 invalidity contentions is denied, and Comcast's motion to stay this case is granted.

         I. Motion to Strike Comcast's § 101 Invalidity Contentions

         The Court begins with Rovi's motion to strike Comcast's disclosure of invalidity contentions under 35 U.S.C. § 101. Rovi argues that the disclosure was untimely and failed to comply with Local Patent Rule 7.

         Comcast initially disclosed its “contentions of invalidity” in this case in August 2016―when the case was pending in the Eastern District of Texas. The pertinent local patent rule in that district (P.R. 3-3) required the disclosure of contentions of invalidity under 35 U.S.C. §§ 102, 103, and 112, but not of those based on unpatentable subject matter under § 101. See, e.g., Biscotti Inc. v. Microsoft Corp., No. 13 Civ. 1015, 2017 WL 2267283, at *2 (E.D. Tex. May 24, 2017). Comcast nevertheless stated in its August 2016 disclosure: “Bases for contentions of invalidity not called for under P.R. 3-3 . . . including, but not limited to, Defendants' contentions that the asserted claims of the Asserted Patents are invalid as unpatentable subject matter pursuant to 35 U.S.C. § 101, are not addressed herein and are expressly reserved.” (Dkt. No. 325-1 at 3 n.3.)

         On December 1, 2016, the case was transferred from the Eastern District of Texas to this Court. (Dkt. No. 183.) The case then became subject to the Local Patent Rules of this Court, which do require the disclosure of invalidity contentions based on § 101. See SDNY Local Patent Rule 7 (“Invalidity Contentions must identify each item of prior art that the party contends allegedly anticipates or renders obvious each asserted claim, and any other grounds of invalidity, including any under 35 U.S.C. § 101 or § 112, or unenforceability of any of the asserted claims.”). The parties proceeded on an aggressive discovery schedule set by the Court in February 2017. (Dkt. No. 199.) At the time of the Court's scheduling order, the parties represented that they had already exchanged initial infringement contentions and invalidity contentions. (See Id. at 1.) The Court did not set any deadline for supplementation of those contentions, and the parties proceeded to supplement their infringement and invalidity contentions multiple times over the course of discovery. However, it was only in its last supplemental invalidity contention―disclosed on August 17, 2017, one day before the close of fact discovery―that Comcast first asserted in an invalidity contention in this Court that Rovi's patents are ineligible for patent protection under § 101. (See Dkt. No. 323 at 1‒2.) Rovi argues that this was too late and that those contentions should be stricken.

         Having reviewed the parties' submissions (Dkt. Nos. 323, 325, & 328), the Court is not persuaded that the harsh remedy of striking invalidity contentions is warranted under the circumstances. First, Rovi was put on notice early in the case that Comcast was asserting that the patents are invalid under § 101. In addition to asserting § 101 unpatentability in its Answer to the Complaint (in denials as well as an affirmative defense), Comcast expressly reserved its § 101 contention in its August 2016 invalidity disclosure in the Eastern District of Texas. Comcast also served an interrogatory regarding § 101 validity while the case was in that court. (Dkt. No. 325-2 at 5.) While it is true that this Court's local patent rules, unlike those of the Eastern District of Texas, require § 101 contentions to be included in invalidity contentions, it is also true that (1) Comcast had already functionally met this requirement with its earlier disclosure, and (2) the rules allow for supplementation of those contentions―which the parties took advantage of―and Comcast ultimately supplemented its § 101 contention within the discovery deadline.

         Second, Rovi has suffered no prejudice from the timing of Comcast's disclosures. This is so because Rovi has been on notice of Comcast's § 101 contention throughout the case, as just discussed. Moreover, because the lack of patentable subject matter under § 101 is purely a legal question, see Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1373 (Fed. Cir. 2016), there is no basis for concluding that Rovi was negatively affected in this case by Comcast's failure to make its § 101 disclosure in this Court earlier in discovery. Rovi provided a 97-page interrogatory response regarding § 101 validity on the last day of discovery (Dkt. No. 325-4), and the deadlines to exchange expert reports gives them sufficient time to address these issues.

         Accordingly, Rovi's motion to strike Comcast's § 101 invalidity contentions is denied.

         II. Motion to Stay Pending IPR Proceedings

         Of the eight original patents, only five remain at issue in this case:[1] U.S. Patent Nos. 7, 996, 864 (the “‘864 Patent”); 8, 433, 696 (the “‘696 Patent”); 8, 713, 595 (the “‘595 Patent”); 8, 122, 034 (the “‘034 Patent”); and 9, 172, 987 (the “‘987 Patent”).

         From November 2016 through March 2017, Comcast filed 45 IPR petitions[2] with the PTAB challenging Rovi's claims, including the 51 claims still asserted in the five remaining patents.[3] (Dkt. No. 337 at 2 & n.1.) Based on these IPR petitions, the PTAB found a “reasonable likelihood” that four of the five patents at issue in this case would ultimately be invalidated. Thus, between May and September of 2017, the PTAB instituted IPR proceedings as to those four patents.[4] (Dkt. No. 337 at 2 n.2.)

         On September 15, 2017, Comcast moved to stay this case pending the outcome of ...


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