Cortex MCP, Inc. v. Visa, Inc.

Case No.: 5:23-cv-05720-EJD
ORDER GRANTING MOTION TO EXTEND STAY
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United States District Court
Northern District of California
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
CORTEX MCP, INC.,
Plaintiff,
v.
VISA, INC.,
Defendant.
Case No. 5:23-cv-05720-EJD
ORDER GRANTING MOTION TO
EXTEND STAY
Re: Dkt. No. 129
Plaintiff, Cortex, MCP (“Cortex”), initiated the present action against Defendant, Visa, Inc.
(“Visa”), alleging infringement of U.S. Patent Nos. 9,251,531 (“’531 Patent”), 9,954,854 (“’854
Patent”), 10,749,859 (“’859 Patent”), and 11,329,973 (“’973 Patent”) (collectively, “Patents-in-
Suit”). Am. Compl., ECF No. 25.
The Court previously stayed this case pending inter partes review proceedings (“IPRs”);
and Visa now moves to extend this stay pending the Federal Circuit’s review of the Patent Trial
and Appeal Board’s (“PTAB”) Final Written Decisions. Mot., ECF No. 129. Cortex filed an
opposition, and Visa filed a reply. Opp’n, ECF No. 131; Reply, ECF No. 132.
Upon careful review of the relevant documents, the Court finds this matter suitable for
decision without oral argument pursuant to Local Rule 7-1(b). For the following reasons, the
Court GRANTS Visa’s motion to extend the stay.
I. BACKGROUND
Cortex originally filed this action on January 26, 2023, in the Western District of Texas.
See Order Granting Mot. to Stay (“Prior Order”), ECF No. 108 (summarizing procedural
background). Following contentious motions practice, the district court transferred this action to
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Case No.: 5:23-cv-05720-EJD
ORDER GRANTING MOTION TO EXTEND STAY
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the Northern District of California on November 3, 2023. Id. Visa subsequently filed a motion to
dismiss with this Court, as well as five IPR petitions with the U.S. Patent and Trademark Office
(“USPTO”) challenging all claims of the Patents-in-Suit. Id. While its motion to dismiss was
pending, Visa also filed a motion to stay pending resolution of the IPRs. Id. The Court granted
Visa’s request on July 22, 2024. Id.
In July 2025, the PTAB issued four Final Written Decisions as to each of the Patents-in-
Suit, resulting in mixed outcomes. Joint Status Report, ECF No. 127. Following reexamination
proceedings and unsuccessful requests for Director review, all four Final Written Decisions are
now subject to appeal before the Federal Circuit.
II. LEGAL STANDARD
“Courts have inherent power to manage their dockets and stay proceedings, including the
authority to order a stay pending conclusion of a PTO reexamination.” Microsoft Corp. v. Tivo
Inc., No. 10-CV-00240-LHK, 2011 WL 1748428, at *3 (N.D. Cal. May 6, 2011) (internal
quotation marks omitted) (quoting Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426–27 (Fed. Cir.
1988)). Courts “examine three factors when determining whether to stay a patent infringement
case pending review or reexamination of the patents: (1) whether discovery is complete and
whether a trial date has been set; (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 nonmoving party.” PersonalWeb Techs., LLC v. Apple Inc., 69 F. Supp. 3d 1022, 1025 (N.D.
Cal. 2014) (citations and quotations omitted). “Those same factors govern the question whether to
extend the stay, after the PTAB has issued its decision in an IPR proceeding, pending a request for
rehearing before the PTAB or an appeal to the Federal Circuit.” IOENGINE, LLC v. PayPal
Holdings, Inc., No. CV 18-452-WCB, 2019 WL 3943058, at *2 (D. Del. Aug. 21, 2019).
III. DISCUSSION
Upon consideration of the three relevant factors, the Court finds an extended stay
appropriate in this case.
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ORDER GRANTING MOTION TO EXTEND STAY
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A. Stage of the Litigation
When considering the stage of the litigation, courts “examine the posture and
circumstances” of the case, including whether: (1) “parties have engaged in costly expert
discovery and dispositive motion practice”; (2) “the court has issued its claim construction order”;
and (3) “the court has set a trial date.” PersonalWeb, 69 F. Supp. 3d at 1025–26.
The stage of this litigation remains as it did when the Court entered this stay. Though the
parties had engaged in some discovery and claim construction briefing, a motion to dismiss
remained pending, the claim construction hearing was months away, and there were no dates set
for the close of fact or expert discovery, dispositive motions briefing, or trial. For the reasons
stated in the Court’s Prior Order, the early stage of this litigation continues to favor a stay.
B. Simplification of the Case
When considering the simplification of the case, the relevant question here is whether the
pending appeals could materially affect the claims at issue such that proceeding now may risk
duplicative or wasted effort. See, e.g., Cellwitch Inc. v. Tile, Inc., No. 19-CV-01315-JSW, 2021
WL 9145413, at *2 (N.D. Cal. Oct. 8, 2021) (“A continued stay is justified while the IPR process
is ongoing if ‘IPR petitions and appeals from the PTAB decisions . . . could both simplify the
issues in an obvious way—the PTAB or the Federal Circuit could invalidate claims that would
otherwise be at issue in this action.’”) (quoting Realtime Data LLC v. Silver Peak Sys., Inc., No.
17-CV-02373-PJH, 2018 WL 3744223, at *2 (N.D. Cal. Aug. 7, 2018)); Lam Rsch. Corp. v.
Flamm, No. 15-CV-01277-BLF, 2016 WL 4180412, at *2 (N.D. Cal. Aug. 8, 2016).
This action involves multiple related patents, mixed PTAB outcomes, and cross-appeals
filed by both sides. As of now, the parties are actively litigating the patentability of every asserted
claim before the Federal Circuit. The Circuit may overturn all or part of the four PTAB decisions,
in which case the parties and the Court may have unnecessarily exerted time and resources on
discovery, motions practice, and trial—only for the Circuit’s decision to render that work
duplicative or moot. See MemoryWeb, LLC v. Apple, Inc., No. 21-cv-09839-VC, 2023 WL
8006852, at *1 (N.D. Cal. Nov. 16, 2023) (denying motion to lift stay because “appeals to the
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Federal Circuit are still pending”); Cellwitch, 2021 WL 9145413, at *4 (same). Cortex’s only
response is that whether the Federal Circuit would in fact overturn the PTAB’s decisions is
speculative. But as Visa highlights, whether the ultimate outcome of appellate review can be
predicted with absolute certainty is not relevant to the question of whether the proceedings could
materially affect the claims or issues to be litigated. See Cellwitch, 2021 WL 9145413, at *2.
C. Undue Prejudice
“With respect to the third factor, [t]his district applies a four sub-factor analysis
considering: (i) the timing of the reexamination request; (ii) the timing of the request for stay; (iii)
the status of reexamination proceedings; and (iv) the relationship of the parties.” Palo Alto
Networks, Inc. v. Packet Intel. LLC, No. 19-CV-02471-WHO, 2020 WL 5760475, at *2 (N.D. Cal.
Sept. 28, 2020) (quotation marks omitted) (quoting Contour IP Holding, LLC v. GoPro, Inc., No.
17-CV-04738-WHO, 2018 WL 6574188, at *6 (N.D. Cal. Dec. 12, 2018)). “Courts have
repeatedly found no undue prejudice unless the patentee makes a specific showing of prejudice
beyond the delay necessarily inherent in any stay.” Id. (quotation marks omitted) (quoting
Neodron, Ltd. v. Lenovo Grp., Ltd., No. 19-CV-05644-SI, 2020 WL 5074308, at *2 (N.D. Cal.
Aug. 27, 2020)).
Some facts from the Court’s Prior Order remain true today—Visa filed its IPR petitions
against all asserted claims of the Patents-in-Suit within the one-year statutory time limit under 35
U.S.C. § 315(b); and the parties are still not direct competitors because Cortex is a non-practicing
entity, which alleviates “the risk of prejudice [being] higher to the non-moving party than it would
be otherwise.” Asetek Holdings, Inc. v. Cooler Master Co., No. 13-CV-00457-JST, 2014 WL
1350813, at *5 (N.D. Cal. Apr. 3, 2014) (citing Interwoven, Inc. v. Vertical Computer Sys.,
Inc., No. C 10-04645 RS, 2012 WL 761692, at *3 (N.D. Cal. Mar. 8, 2012) (“The parties’ status
as direct competitors also weighs against a stay because it increases the likelihood of undue
prejudice.”)).
The two remaining factors that implicate new facts are the timing of Visa’s request to
extend the stay and the status of reexamination proceedings. The Court finds both factors favor an
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Case No.: 5:23-cv-05720-EJD
ORDER GRANTING MOTION TO EXTEND STAY
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extended stay. After the PTAB issued Final Written Decisions, the parties agreed the stay should
remain in place at least pending the parties’ decisions whether to appeal. See ECF No. 122. In
both the August and November 2025 Joint Status Reports, Visa informed the Court that it intended
to seek an extension of the stay pending resolution of anticipated Federal Circuit appeals. See
ECF Nos. 122, 127. Visa subsequently filed its Notice of Appeal for the ’854 Patent on
September 23, 2025; Cortex filed its Notices of Appeal for the remaining three patents on
December 12, 2025; and Visa filed its cross-appeals on December 23, 2025. Visa then submitted
this motion on January 6, 2025, pursuant to Court order. Under these circumstances, the timing of
Visa’s request for an extended stay has caused no undue prejudice to Cortex and the active status
of the Federal Circuit proceedings favors extending the stay. In response, Cortex only advances
the general proposition that the status of the appeals weighs against a stay because there is no way
to know when the Federal Circuit will render its decision, and an indefinite extension of the stay
would impair its ability to enforce its patent rights; but the general interest in timely enforcement,
standing alone, does not constitute undue prejudice sufficient to defeat a stay. Neodron, 2020 WL
5074308, at *2 (“Courts have repeatedly found no undue prejudice unless the patentee makes a
specific showing of prejudice beyond the delay necessarily inherent in any stay.”) (quoting
PersonalWeb, 69 F.Supp.3d at 1029); see also Asetek Holdings, 2014 WL 1350813, at *4 (“Delay
alone does not usually constitute undue prejudice. . . .”); see also IOENGINE, 2019 WL 3943058,
at *5–6, *10–13 (“However, that factor [interest in the prompt enforcement of its patent rights] is
present in every case in which a patentee resists a stay, and it is therefore insufficient, standing
alone, to defeat a stay motion.”).
IV. CONCLUSION
Based on the foregoing, the Court GRANTS Visa’s motion to extend the stay pending
appellate review of the Final Written Decisions. This case is hereby STAYED until the Federal
Circuit issues its rulings as to all four Final Written Decisions.
The parties are further ORDERED to file a joint status report within one week of the date
of the Federal Circuit’s final decision.
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Case No.: 5:23-cv-05720-EJD
ORDER GRANTING MOTION TO EXTEND STAY
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United States District Court
Northern District of California
IT IS SO ORDERED.
Dated: February 19, 2026
EDWARD J. DAVILA
United States District Judge
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