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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

WALL CORPORATION, Plaintiff, v. BONDDESK GROUP, L.L.C., AND BONDDESK TRADING, L.L.C., Defendants.

) ) ) ) ) C.A. No. 07-844-GMS ) ) ) ) )

PLAINTIFF'S RESPONSE TO DEFENDANTS' MOTION TO STAY PENDING THEIR REQUEST FOR INTER PARTES REEXAMINATION John W. Shaw (No. 3362) Karen E. Keller (No. 4489) YOUNG CONAWAY STARGATT & TAYLOR, LLP The Brandywine Building 1000 West Street, 17th Floor Wilmington, Delaware 19801 (302) 571-6600 [email protected] [email protected] OF COUNSEL: Michael W. Shore, Esquire Alfonso Garcia Chan, Esquire Patrick Traister, Esquire SHORE CHAN BRAGALONE LLP 325 North Saint Paul Street Suite 4450 Dallas, Texas 75201 (214) 593-9110

Dated: June 20, 2008

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TABLE OF CONTENTS I. II. III. IV. NATURE AND STAGE OF PROCEEDINGS. ................................................................. 1 SUMMARY OF ARGUMENT .......................................................................................... 1 STATEMENT OF FACTS ................................................................................................. 2 ARGUMENT AND AUTHORITIES ................................................................................. 2 A. B. BONDDESK'S MOTION TO STAY IS PREMATURE . ................................................... 2 STAY FOR REEXAMINATION WILL UNDULY PREJUDICE WALL CORP. AND CREATE A TACTICAL ADVANTAGE FOR BONDDESK . ........................................................... 3 1. A Stay Will Delay This Case For 4 to 7 Years . ................................................ 4 2. Delaying Discovery and Trial Will Prejudice Wall Corp. and Create a Tactical Advantage for BondDesk . ................................................................... 6 3. BondDesk Has Not Demonstrated Hardship in Continuing Litigation . ........... 7 C. IT IS NOT AT ALL CLEAR WHETHER A REEXAMINATION WILL SIMPLIFY THE ISSUES ................................................................................................................................. 8 DEFENDANTS' REFUSAL TO BEGIN DISCOVERY WEIGHS AGAINST A STAY . ......... 10

D. V.

CONCLUSION ................................................................................................................ 11

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TABLE OF AUTHORITIES CASES: Applied Materials, Inc. v. Negevtech, Inc., No. C-04-03656 SI, 2005 WL 1656894 (N.D. Cal. July 14, 2005) ............................................................................................................. 3 Cognex Corp. v. National Instruments Corp., No. 00-442-JJF, 2001 WL 34368283 (D. Del. June 29, 2001) ............................................................................................................ 3, 6 Comcast Cable Commc'ns Corp., L.L.C. v. Finisar Corp., No. C-06-04206 WHA, 2007 WL 1052883 (N.D. Cal. April 5, 2007) ............................................................................................ 3 Cooper Techs. Co. v. Thomas & Betts Corp., No. 2:06-CV-242, 2008 WL 906315 (E.D. Tex. March 31, 2008) ............................................................................................................... 7, 9, 10 In Re Cronym, 890 F.2d 1158 (Fed. Cir. 1989) ........................................................................... 10 eSoft, Inc. v. Blue Coat Systems, Inc., 505 F. Supp. 2d 784 (D. Colo. 2007) ................................ 7 Genoa Color Techs., Ltd. v. Samsung Elecs. Am., Inc., No. 6233 (PKC), 2008 WL 754681 (S.D.N.Y. March 12, 2008) .............................................................................................. 7, 8, 11 Gladish v. Tyco Toys, Inc., No. S-92-1666WBS/JFM, 1993 WL 65509 (E.D. Cal. Sept. 15, 1993) .......................................................................................................... 6 Gold v. Johns-Manville Sales Corp., 723 F.2d 1068 (3rd Cir. 1983) ............................................ 8 Network Appliance Inc. v. Sun Microsystems Inc., No. C-07-06053 EDL, 2008 WL 2168917 (N.D. Cal. May 23, 2008) ........................................................... 5, 6, 7, 8, 11 Saint-Gobain Performance Plastics Corp. v. Advanced Flexible Composites, Inc., 436 F. Supp. 2d 252 (D. Mass. 2006) ......................................................................................... 3 Telemac Corp. v. Teledigital, Inc., 450 F. Supp. 2d 1107 (N.D. Cal. 2006) ........................... 7, 11 Texas MP3 Techs., Ltd. v. Samsung Electronics Co., Ltd., No. 2:07-CV-52, 2007 WL 3219372 (E.D. Tex. Oct. 30, 2007) ........................................................................ 6, 8 Voith Paper GMBH & Co. KG v. Johnsonfoils, Inc., No. 07-226-JJF, 2008 WL 874311 (D. Del. March 31, 2008) ............................................................................................................. 8 Xerox Corp. v. 3Com Corp., 69 F. Supp. 2d 404 (W.D.N.Y. 1999).............................................. 3

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RULES AND STATUTES: 35 U.S.C. § 102 ........................................................................................................................ 9, 10 OTHERS: Bibliographic Data for Reexamination No. 95/000,049, U.S. Patent and Trademark Office, June 13, 2008 ............................................................................................................................. 4 Bibliographic Data for Reexamination No. 95/000,062, U.S. Patent and Trademark Office, June 13, 2008 ............................................................................................................................. 4 Charles L. Fefferman, available at http://www.math.wm.edu/~klsmit/fefferman.pdf ................... 7 Inter Partes Reexamination Filing Data, U.S. Patent & Trademark Office, March 31, 2008 .. 4, 8 Inter Partes Reexamination Filing Data, U.S. Patent & Trademark Office, September 30, 2007 ................................................................................................................... 8 Manual of Patent Examining Procedure § 2616 ........................................................................... 10 Manual of Patent Examining Procedure § 2673.02 ........................................................................ 9 Reexamining Inter Partes Reexam, Institute for Progress, 2008, available at http://www.iammagazine.com/blog/IAMBlogInterPartesReexamWhitepaper.pdf ............................................. 5 Request for Inter Partes Reexamination .................................................................................. 9, 10 U.S. District Courts--Median Time Intervals from Filing to Trial of Civil Cases in Which Trials Were Completed, by District, During 12-Month Period Ending September 30, 2007, available at http://www.uscourts.gov/judbus2007/appendices/C10Sep07.pdf ......................................... 5

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I. NATURE AND STAGE OF PROCEEDINGS This case concerns Defendants BondDesk Group, L.L.C.'s and BondDesk Trading, L.L.C's (collectively "BondDesk") infringement of Plaintiff Wall Corporation's ("Wall Corp.") U.S. Patent No. 7,231,363 ("`363 Patent"), entitled "Method and System for Rebrokering Order in a Trading System." All parties have answered in this case and await the Court's scheduling order to begin discovery. II. SUMMARY OF ARGUMENT BondDesk's request for a stay is premature. To date, BondDesk has only requested that the U.S. Patent and Trademark Office ("PTO") reexamine the `363 Patent--the PTO has not granted the request. BondDesk's motion is merely a delay tactic to take advantage of the backlog of inter partes reexaminations pending in PTO. Even if the PTO granted the request, BondDesk understates both the expected length of an inter partes reexamination and the harm a stay will inflict upon Wall Corp. At the same time, BondDesk overstates the probability that the reexamination will simplify the issues for this case. In actuality, the reexamination will likely take at least four years to complete, not including time for appeals. Meanwhile, Wall Corp. will be unduly prejudiced by the deterioration of the evidentiary record and the delay in obtaining a recovery. These factors weigh heavily against BondDesk's request for a stay. The Court should deny BondDesk's motion and allow this case to proceed.

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III. STATEMENT OF FACTS Plaintiff Wall Corp. filed this patent infringement suit against BondDesk on December 26, 2007.1 Subsequently, the parties engaged in several rounds of settlement negotiations.2 The last formal settlement negotiation occurred on April 11, 2008.3 That same day, BondDesk filed its Answer and Counterclaims.4 On April 16, 2008, Wall Corp. proposed a discovery plan, protective order, and date for a discovery conference.5 BondDesk, however, refused to meet for the Rule 26(f) discovery

conference. BondDesk argued that the conference was premature, but provided no alternative dates.6 On May 27, 2008, in the interest of expediting a resolution of this case, Wall Corp. provided advanced copies of requests for production and requests for admissions to BondDesk.7 On June 3, 2008, BondDesk filed its Request for Inter Partes Reexamination, and soon thereafter, its motion to stay the case. The PTO has not ruled on BondDesk's request. IV. ARGUMENT AND AUTHORITIES A. BONDDESK'S MOTION TO STAY IS PREMATURE.

BondDesk has requested a stay of this case before the PTO has even determined whether it will reexamine the `363 Patent. A stay is premature until the PTO reviews BondDesk's request and determines that there is a substantial new question of patentability. Without the Plaintiff's Original Complaint (D.I. 1). Ex. A, Declaration of Michael Shore ("Shore Decl."), at ¶6. 3 Ex. A, Shore Decl., at ¶6. 4 Defendants' Answer and Counterclaims (D.I. 7). 5 Ex. B, Letter of April 16, 2008. 6 Ex. C, Letter of April 17, 2008. 7 Ex. D, Letter of May 27, 2008 (Wall Corp. expressly stated that responses to the discovery requests would not be due until thirty days after discovery began).
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PTO's decision, there is no way to know what claims, if any, the PTO will reexamine or the basis of such reexamination. Premature motions to stay filed before the PTO has granted a reexamination request are routinely denied.8 Also, the PTO will probably take about three months to decide whether to accept the reexamination,9 during which time substantial discovery can be conducted. In accordance with the authority rejecting premature motions to stay, the Court should deny BondDesk's Motion. B. STAY FOR REEXAMINATION WILL UNDULY PREJUDICE WALL CORP. AND CREATE A TACTICAL ADVANTAGE FOR BONDDESK.

There is no requirement that the Court stay these proceedings for BondDesk's ungranted reexamination request. "If litigation were stayed every time a claim in suit undergoes reexamination, federal infringement actions would be dogged by fits and starts. Federal court calendars should not be hijacked in this manner. From a case management perspective, the possible benefits must be weighed in each instance against the possible drawbacks."10 Accordingly, BondDesk bears a heavy burden of demonstrating that the benefits of the stay outweigh the prejudice Wall Corp. will suffer. The standard for evaluating a request for a stay is whether: 1) a stay will unduly prejudice or present a clear tactical disadvantage to the non-moving party; 2) whether a stay will simplify the issues raised by the parties; and 3) whether discovery is complete and a trial date has been set.11 As detailed below, BondDesk has not

Applied Materials, Inc. v, Negevtech, Inc., No. C 04-03656 SI, 2005 WL 1656894, at *2 (N.D. Cal. July 14, 2005); see also Xerox Corp. v. 3Com Corp., 69 F. Supp. 2d 404, 405 (W.D.N.Y. 1999); see also Saint-Gobain Performance Plastics Corp. v. Advanced Flexible Composites, Inc., 436 F. Supp. 2d 252, 253 (D. Mass. 2006). 9 Saint-Gobain Performance Plastics Corp., 436 F. Supp. 2d at 253. 10 Comcast Cable Commc'ns Corp., L.L.C. v. Finisar Corp., No. C 06-04206 WHA, 2007 WL 1052883, at *1 (N.D. Cal. April 5, 2007). 11 Cognex Corp. v. National Instruments Corp., No. 00-442-JJF, 2001 WL 34368283, at *1 (D. Del. June 29, 2001). 3
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demonstrated that a stay is appropriate in light of the severe prejudice it would inflict upon Wall Corp. 1. A Stay Will Delay This Case 4 to 7 Years.

Even if the PTO grants BondDesk's request, staying the case for inter partes reexamination will delay this case for years and severely prejudice Wall Corp. According to PTO statistics, the average pendency of the inter partes reexamination having issued certificates is 31.4 months.12 Those statistics, however, grossly underrepresent the expected pendency of this reexamination because they are based on only the seventeen inter partes reexaminations that have been completed since 1999.13 Since 1999, 390 requests for inter partes reexaminations have been filed, and most of these were filed in the last two years.14 Therefore, due to this recent spike of inter partes reexamination filings, this reexamination will likely take longer than 31.4 months. A brief review of the inter partes reexaminations currently pending supports this expected increase. For example, Reexamination No. 95/000,062 has been pending for 42

months15 and Reexamination No. 95/000,0049 has been pending for 46 months.16 The fact that the `363 Patent is subject to litigation will not expedite the reexamination since 52% of the patent in inter partes reexamination are also subject to litigation.17 Thus, if granted, this inter partes reexamination is likely to take nearly four years.

12

Ex. E, Inter Partes Reexamination Filing Data, U.S. Patent & Trademark Office, March 31, 2008 ("March 31, 2008 Filing Data"). 13 Id. 14 Id. 15 Ex. F, Bibliographic Data for Reexamination No. 95/000,062, U.S. Patent and Trademark Office, June 13, 2008. 16 Ex. G, Bibliographic Data for Reexamination No. 95/000,049, U.S. Patent and Trademark Office, June 13, 2008. 17 Ex. E, March 31, 2008 Filing Data. 4
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Further, an appeal of any reexamination decision could add two or more years to the stay. At least one court has noted that it already takes up to five years from the filing of an inter partes reexamination to complete an appeal to the Board of Patent Appeals and Interferences ("BPAI"), and those reexams pre-date the spike in inter partes filings.18 An appeal to the BPAI would result in a total reexam period of up to eight years.19 It is impossible to know how much time an appeal to the Federal Circuit would add because no inter partes reexam has ever received an appealable final decision of the BPAI.20 Because either party may appeal an inter partes

reexamination decision, it is likely that BondDesk would appeal a decision confirming the `363 Patent's claims--further increasing the delay of this case.21 Even if there is no appeal, the reexamination process is still likely to take much longer than the litigation. Time to trial in this Court is approximately 28 months from filing.22 Wall Corp. filed its complaint six months ago and has already proposed a trial date of November 30, 2009 to BondDesk.23 If the stay is denied, the litigation may be over two years before the PTO completes the first stage of reexamination. If a stay is granted, a trial in this case may not occur

Network Appliance Inc. v. Sun Microsystems Inc., No. C-07-06053 EDL, 2008 WL 2168917, at *5-6 (N.D. Cal. May 23, 2008) (denying stay for inter partes reexamination and allowing discovery to go forward where no office actions had issued). 19 Ex. I, at 5, Reexamining Inter Partes Reexam, Institute for Progress, 2008, available at http://www.iam-magazine.com/blog/IAMBlogInterPartesReexamWhitepaper.pdf. 20 Ex. I, at 4. 21 Ex. I, at 4 (one-quarter of all inter partes reexamination decisions are appealed). 22 Ex. J, U.S. District Courts--Median Time Intervals from Filing to Trial of Civil Cases in Which Trials were Completed, by District, During 12-Month Period Ending September 30, 2007, available at http://www.uscourts.gov/judbus2007/appendices/C10Sep07.pdf. 23 Ex. B, Letter of April 16, 2008, at 8. 5
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for nearly seven years. Where litigation is likely to be completed before the reexamination, the litigation should not be stayed.24 2. Delaying Discovery and Trial Will Prejudice Wall Corp. and Create a Tactical Advantage for BondDesk.

If litigation is stayed in deference to BondDesk's request for reexamination, a four or five year delay in discovery will severely prejudice Wall Corp. With such an extended delay, documents will be lost, witnesses' memories will fade, and witnesses may become unavailable.25 A delay in commencing discovery will prejudice Wall Corp. and creates an overwhelming tactical advantage for BondDesk.26 Wall Corp. bears the burden of proving infringement, and it will suffer the most from the deterioration of the evidentiary record on the accused products. Such prejudice to Wall Corp. is exactly what BondDesk seeks. Additionally, a delay of trial in this case will prejudice Wall Corp. by making it wait to collect infringement damages. BondDesk claims that a delay in collecting damages will not harm Wall Corp. But, if BondDesk is successful with its ploy to delay this case, it may be six years until this Court renders a decision. Wall Corp. will not receive any royalty payments for BondDesk's infringement during this period. There are no guarantees that BondDesk will even be solvent six years from now or that the technology at issue will still be in use. It is

commonplace to find examples of firms in the financial service industry, like BondDesk, that

Cognex Corp., 2001 WL 34368283, at *2 ("Thus, given the current time tables for action in the PTO, the Court believes that the trial in this case will likely be completed prior to any action by the PTO."). 25 Gladish v. Tyco Toys, Inc., No. S-92-1666WBS/JFM, 1993 WL 65509 (E.D. Cal. Sept. 15, 1993) (finding stay would unduly prejudice non-movant because witnesses may become unavailable, their memories may fade, and evidence may be lost while PTO reexamination takes place); see also Network Appliance Inc., 2008 WL 2168917, at *5 ("lapse of time during [inter partes] reexamination could result in the loss of evidence over time"). 26 Tex. MP3 Techs., Ltd. v. Samsung Elecs. Co., Ltd., No. 2:07-CV-52, 2007 WL 3219372, at *1 (E.D. Tex. Oct. 30, 2007). 6
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have vanished, leaving their creditors holding the bag. A stay will prejudice Wall Corp. by preventing it from recovering the royalties to which it is entitled.27 Furthermore, a stay will effectively prevent an inventor of the `363 Patent, Dr. Charles Fefferman,28 a Fields Medal-winning mathematician, and the other owners of Wall Corp., from enforcing the patent against other infringers for most of the patent's term. Co-inventors Dr. Fefferman, a Fields Medal-winning mathematician, and Dr. Webster Hughes filed the application for this patent in 2000. A five to seven year stay will result in nearly half the patent's term expiring before enforcement begins. At that point, the `363 Patent's inventors will have already waited fifteen years to benefit from the fruits of their labor. Based on the prejudice suffered by plaintiffs as a result of an extended delay, motions to stay for an inter partes reexamination are frequently denied.29 Congress intended reexaminations to be expedient and referred to when practical.30 A five-year delay in commencing discovery and seven-year delay in resolving this case will be neither expedient nor practical.31 Thus, BondDesk's motion to stay for the inter partes reexamination should be denied. 3. BondDesk Has Not Demonstrated Hardship In Continuing Litigation.

"It is well settled that before a stay may be issued, the petitioner must demonstrate `a clear case of hardship or inequity,' if there is `even a fair possibility' that the stay would work

Telemac Corp. v. Teledigital, Inc., 450 F. Supp. 2d 1107, 1111 (N.D. Cal. 2006). Ex. K, Charles L. Fefferman, available at http://www.math.wm.edu/~klsmit/fefferman.pdf. 29 Network Appliance Inc., 2008 WL 2168917, at *5-6; see also Cooper Techs. Co. v. Thomas & Betts Corp., No. 2:06-CV-242, 2008 WL 906315, at *2 (E.D. Tex. March 31, 2008); see also Genoa Color Techs., Ltd. v. Samsung Elecs. Am., Inc., No. 6233 (PKC), 2008 WL 754681, at *1 (S.D.N.Y. March 12, 2008). 30 eSoft, Inc. v. Blue Coat Systems, Inc., 505 F. Supp. 2d 784, 787 (D. Col. 2007). 31 See Network Appliance Inc., 2008 WL 2168917, at *5.
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damage on another party."32 As shown above, there is a high probability that Wall Corp. will suffer irreparable harm from a stay.33 Further, BondDesk has failed to demonstrate what

hardship it would have to endure if this case is allowed to proceed. It is unlikely that BondDesk could present a clear case of hardship. Indeed, the dual track of litigation and reexamination is not a hardship.34 C. IT IS NOT AT ALL CLEAR WHETHER A REEXAMINATION WILL SIMPLIFY THE ISSUES.

BondDesk's arguments that reexamination will simplify issues for this case are wrong. The PTO statistics that BondDesk trumpets in support of a stay are dubious. BondDesk's claim that 82% of inter partes reexaminations result in cancellation of all claims is based on only eleven reexamination certificates.35 These eleven reexaminations are statistically insignificant given the 390 inter partes reexamination requests filed with the PTO.36 Such unreliable statistics provide no basis for a prediction that the reexamination will "very likely" eliminate the need for trial.37 Furthermore, these statistics do not account for the results of appeals of the PTO's decisions, adding to their unreliability. In reality, BondDesk has no idea what the PTO will decide.38 The PTO has not even issued a formal office action specifying the basis of the reexamination. Without knowing the

Gold v. Johns-Manville Sales Corp., 723 F.2d 1068, 1075-1076 (3rd Cir. 1983); see also Voith Paper GMBH & Co. KG v. Johnsonfoils, Inc. No. 07-226-JJF, 2008 WL 874311, at *2 (D. Del. March 31, 2008) (denying stay for reexamination where movant failed to show a clear case of hardship or inequity). 33 See supra pp. 3-7. 34 Genoa Color Techs., Ltd,. 2008 WL 754681, at *1. 35 Ex. H, Inter Partes Reexamination Filing Data, U.S. Patent & Trademark Office, September 30, 2007. 36 Ex. E, March 31, 2008 Filing Data. 37 Network Appliance Inc., 2008 WL 2168917, at *3. 38 Texas MP3 Techs., Ltd., 2007 WL 3219372, at *2; Cooper Techs. Co., 2008 WL 906315, at *1. 8
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PTO's reasoning, BondDesk is merely speculating on whether the reexamination will have any impact of the present district court action, and if so, to what degree. All the claims could just as easily be confirmed as cancelled.39 If all or some of the claims are confirmed, the inter partes reexamination will not have simplified the case and a stay will only have served BondDesk's interest in delay. In fact, at least some, if not all, the claims of the `363 Patent are very likely to survive BondDesk's reexamination attempt. The PTO is required to determine validity on a claim-byclaim basis.40 Wall Corp. is currently asserting at least fourteen distinct claims of the `363 Patent against BondDesk. Thus, the likelihood that the PTO would invalidate all fourteen asserted claims of the `363 Patent is more remote than BondDesk suggests. The weaknesses in BondDesk's reexamination request further reduce the probability of invalidating all the asserted claims. To make its case, BondDesk has found it necessary to cite thirteen references in eleven separate combinations,41 meaning that none individually is invalidating. Several of these references cannot qualify as competent prior art under 35 U.S.C. § 102 and cannot be used to invalidate the `363 Patent.42 U.S patents are prior art as of their earliest filing date--the priority date.43 Two of the patents cited by BondDesk, U.S. Patent Nos. 7,222,089 and 7,333,952, are not prior art because their priority dates are after the priority date of the `363 Patent, December 29, 1999.44 Additionally, BondDesk attempts to assert an

39
40

Cooper Techs. Co., 2008 WL 906315, at *1. See Manual of Patent Examining Procedure § 2673.02 41 See Ex. L, Request for Inter Partes Reexamination, at 1-2, v-vi ("Reexam Request"). 42 See 35 U.S.C. §102. 43 35 U.S.C. §102(e). 44 See Ex. L, Reexam Request, at 1, 35 (U.S. Patent No. 7,222,089, priority date of Sept. 11, 2000 and U.S. Patent No. 7,333,952, priority date of June 23, 2000). 9
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unpublished reference against the `363 Patent, 45 but a reference must be published to qualify as prior art.46 The BondExchange Manual was never published and is not prior art to the `363 Patent.47 BondDesk's alleged prior art evidence includes references other than prior art patents or printed publications, which are incompetent as prior art in inter partes reexamination.48 Therefore, the PTO simply does not have the authority to consider BondDesk's evidence in determining the patentability of the `363 Patent's claims.49 BondDesk is grasping at straws to convince the PTO to reexamine the `363 Patent in hopes of delaying this case. The fact that BondDesk's reexamination request is a 900-page, disorganized submission also means that it will take much longer than normal for an examiner to plow through it. This is likely what BondDesk intended--delay. It is speculative whether BondDesk's reexamination request will simplify the issues in this case.50 This uncertainty weighs against a stay.51 Thus, this factor should not outweigh the obvious prejudice the lengthy stay would cause Wall Corp.52 D. DEFENDANTS' REFUSAL TO BEGIN DISCOVERY WEIGHS AGAINST A STAY.

BondDesk's argument that the case should be stayed because discovery has not begun, has no merit. But for BondDesk's refusal, discovery would have started two months ago. Wall Corp. offered to begin discovery on April 16, 2008 and sent BondDesk a proposed schedule,

45 46

Ex. L, Reexam Request, at 68-69 35 U.S.C. §102; see In re Cronym, 890 F.2d 1158, 1160-1161 (Fed. Cir. 1989). 47 See Ex. L, Reexam Request, at 68-69; see In re Cronym, 890 F.2d at 1160-1161. 48 See Ex. L, Reexam Request, at 68-69. 49 Manual of Patent Examining Procedure § 2616. 50 Cooper Techs. Co., 2008 WL 906315, at *1-2. 51 Id. 52 Id. at *2. 10
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discovery order, and protective order.53

BondDesk flatly refused to hold a discovery

conference.54 BondDesk should not be allowed to take advantage of its refusal to submit to discovery as a basis for staying discovery.55 Other courts have held that discovery, while a reexamination is pending puts no great burden on the parties.56 Furthermore, BondDesk wrongly asserts that the parties have not expended substantial resources in this case because discovery has not begun. This case was filed nearly six months ago.57 Wall Corp. has already conducted an extensive infringement investigation of BondDesk, prepared an infringement analysis, collected documents, and sent representatives from Texas to New York twice for settlement discussions.58 Wall Corp. has invested about 600 attorney hours and $68,000 in expenses into this case.59 Even when no documents have been produced and no trial date has been set, the stage of the case only slightly favors a stay where parties have obviously expended considerable resources.60 Thus, the stage of this case should not outweigh the prejudice that a stay would cause Wall Corp. V. CONCLUSION BondDesk's motion for stay is premature because the PTO has not yet determined whether it will reexamine the `363 Patent. Even if the reexamination request is granted, Wall Corp. will be greatly prejudiced by the five-year delay that would result from any litigation stay in favor of inter partes reexamination. BondDesk has failed to demonstrate that a stay is
53 54

Ex. B, Letter of April 16, 2008. Ex. C, Letter of April 17, 2008. 55 Telemac Corp. v. Teledigital, Inc., 450 F.Supp. 2d 1107, 1111 (N.D. Cal. 2006). 56 See, e.g., Genoa Color Techs., Ltd, 2008 WL 754681, at *1. 57 Plaintiff's Original Complaint (D.I. 1). 58 Ex. A, Shore Decl., at ¶3. 59 Ex. A, Shore Decl., at ¶4, 5. 60 Network Appliance Inc., 2008 WL 2168917, at *2. 11
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necessary or that it will be harmed by continuing this action while the PTO decides whether to entertain BondDesk's request. For the foregoing reasons, Wall Corp. respectfully requests that Court deny BondDesk's motion. Dated: June 20, 2008 YOUNG CONAWAY STARGATT & TAYLOR, LLP ___/s/ Karen E. Keller______________________ John W. Shaw (No. 3362) Karen E. Keller (No. 4489) The Brandywine Building 1000 West Street, 17th Floor Wilmington, Delaware 19801 (302) 571-6600 [email protected] [email protected] OF COUNSEL: Michael W. Shore, Esquire Alfonso Garcia Chan, Esquire Patrick Traister, Esquire SHORE CHAN BRAGALONE LLP 325 North Saint Paul Street Suite 4450 Dallas, Texas 75201 (214) 593-9110

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CERTIFICATE OF SERVICE I, Karen E. Keller, Esquire, hereby certify that on June 20, 2008, a true and correct copy of the foregoing document was electronically filed with the Clerk of the Court using CM/ECF, which will send notification that such filing is available for viewing and downloading to the following counsel of record: Mary B. Graham, Esquire Morris Nichols Arsht & Tunnell LLP 1201 North Market Street PO Box 1347 Wilmington, DE 19899-1347 I further certify that on June 20, 2008, I caused a copy of the foregoing document to be served by hand delivery on the above-listed counsel of record and the following non-registered participants in the manner indicated: BY ELECTRONIC MAIL Michael A. Jacobs, Esquire [[email protected]] Rita F. Lin, Esquire [[email protected]] Morrison & Foerster LLP 425 Market Street San Francisco, CA 94105-2482

YOUNG CONAWAY STARGATT & TAYLOR, LLP /S/ KAREN E. KELLER Karen E. Keller (No. 4489) The Brandywine Building 1000 West Street, 17th Floor Wilmington, DE 19801 (302) 571-6600 [email protected]

DB02:6757161.1

066964.1001