United States: Come On And Take A Free Ride

Last Updated: March 13 2014
Article by   Orrick

Motion to Stay Pending Inter Partes Review Conditionally Granted, Evolutionary Intelligence, LLC v. Sprint Nextel Corp., Case No. C-13-4513-RMW (J. Whyte).

The mountain is high

The valley is low

And you're confused on which way to go

So I've come here to give you a hand

And lead you into the promised land


Come on and take a free ride [free ride!]

Come on and sit here by my side

Come on and take a free ride!

The Edgar Winter Group – Free Ride – Epic Records (1972) (music and lyrics by Dan Hartman).

On October 2012, non-practicing entity Evolutionary Intelligence LLC filed nine lawsuits—in the Eastern District of Texas—alleging infringement of two patents addressed to "systems and methods for creating and manipulating information containers with dynamic registers" against a who's-who of Bay Area technology stalwarts including Apple, Facebook, Groupon, LivingSocial, and Twitter, and also against telecommunications/internet carrier Sprint Nextel.  Over the course of the summer of 2013, all were transferred to N.D. Cal where they sat, and continue to sit, unrelated before more than a half-dozen judges and magistrates.  Last fall, defendants Apple, Yelp, Twitter, and Facebook filed a series of petitions for inter partes review ("IPR") under the America Invents Act, collectively seeking review of all of the claims of the asserted patents.  Subsequently, courts granted stays in seven of the nine cases, including for defendants Foursquare, Groupon, and LivingSocial, none of whom had filed IPR petitions.  In each of the latter three cases, the court (Judges Chesney, Illston, and Orrick, respectively) granted a stay based solely on the traditional three-factor test¹  — providing these grasshoppers a free ride on the petitions of their fellow-defendant ants.  Most recently, on February 28, Judge Whyte granted a stay for a fourth non-petitioning defendant, in Evolutionary Intelligence, LLC. v. Sprint Nextel Corp., Case No. C-13-4513-RMW.  Sprint, however, did not get off quite as scot-free.

The America Invents Act encourages courts to stay patent litigation pending inter partes review by requiring speedy review petitions—up to three times as quickly as the PTO was managing under the prior law.  And, the AIA assures courts that no matter the result of IPR, the case will come back simpler than it left because win or lose, the IPR petitioner is estopped from relitigating invalidity arguments that were raised or could have been raised in the IPR.  35 U.S.C. § 315(e)(2).  This quid-pro-quo is frustrated however when parties fighting the same patent in a different lawsuit realize the benefit of the stay, yet none of the downsides of estoppel that attach to pursuing an IPR given that by its language, the statute does not preclude non-IPR filers from taking a second swing at any arguments that didn't fly with the PTO.  Should a free rider not only enjoy the savings of not filing an IPR, but also avoid estoppel?

Judge Whyte was not inclined to think so.  He predicated the grant of a stay on Sprint's willingness to agree to be estopped from raising invalidity arguments actually raised by the other defendants.  In limiting the estoppel only to arguments actually raised by the IPR participants, Judge Whyte credited Sprint's argument that it hadn't been involved in the IPR process at all.  And, he noted that the purpose of the statutory estoppel—"protect[ing] patent owners from harassment via successive petitions by the same or related parties, prevent[ing] parties from having a 'second bite at the apple,' and protect[ing] the integrity of both the USPTO and Federal Courts by assuring all issues are promptly raised and vetted" would be adequately served by preventing Sprint from relitigating arguments actually raised during IPR.

Judge Whyte is not the only judge to have predicated the grant of a stay on an agreement to be bound by some form of estoppel.  N.D. Cal Magistrate Judge Grewal considered the same question in Pi-Net Int'l, Inc. v. Focus Bus. Bank, C-12-4958 PSG (N.D. Cal.) and, granted a stay only on the condition that they would be estopped only from relitigating any invalidity argument that was actually raised in the IPR.  In e-Watch Inc. v. Mobitiz Corp., Civ. No. 12-CV-00492-FB-PMA (W.D.Tex), under analogous circumstance, the court granted a stay but explicitly left open the future preclusive effect of arguments raised by others during IPR.

So what about Sprint's fellow grasshoppers?  Groupon obtained a stay although it refused to be estopped by arguments raised by others in IPR.  The LivingSocial court also granted a stay despite Evolutionary Intelligence's argument that because LivingSocial did not join in the IPR process it therefore would not be estopped from rearguing prior art raised in those proceedings.  Finally, Foursquare received an order staying its case that did not mention estoppel at all.

Allowing non-filing defendants to take advantage of someone else's IPR filing is one way the economies of scale that can make litigation as a business model profitable—stamping out related pleadings against numerous defendants—can be reversed  against a non-practicing entity.  If you're one of a dozen or more targets in an NPE's sights, odds are good that someone is going to take advantage of IPR,  if it's available.  If someone does, you could get lucky, like Groupon, LivingSocial, and Foursquare, and catch a free ride to a second bite at the apple if the IPR fails to do the job.  But travel safely – you could lose your best art if you rely on a bad driver for the trip.


1. (1) the stage and history of the litigation, (2) whether granting the stay may simplify issues the issues and question and an eventual trial, and (3) whether a stay would unduly prejudice one party or present a clear tactical disadvantage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
16 Oct 2018, Other, Washington, DC, United States

Orrick Partner Rohit Sachdev is proud to Chair the inaugural Storage East summit put on by Infocast on October 16-17th in Washington, D.C.

16 Oct 2018, Other, Washington, DC, United States

Orrick Partner Rohit Sachdev is proud to Chair the inaugural Storage East summit put on by Infocast on October 16-17th in Washington, D.C.

17 Oct 2018, Speaking Engagement, New York, United States

Employment partner, Jill Rosenberg is participating in PLI’s Employment law Institute 2018.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions