Case 4:16-cv-01730-YGR Document 49 Filed 05/09/16 Page 1 of 8
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`
`
`
`
`(SBN 230038)
`(SBN 255820)
`
`
`Christopher D. Banys
`Jennifer L. Gilbert
`BANYS, P.C.
`1032 Elwell Court, Suite 100
`Palo Alto, CA 94303
`Tel: (650) 308-8505
`Fax: (650) 353-2202
`cdb@banyspc.com
`jlg@banyspc.com
`
`Bradley W. Caldwell (pro hac vice)
`bcaldwell@caldwellcc.com
`Jason D. Cassady (pro hac vice)
`jcassady@caldwellcc.com
`John Austin Curry (pro hac vice)
`acurry@caldwellcc.com
`Warren J. McCarty, III (pro hac vice)
`wmccarty@caldwellcc.com
`CALDWELL CASSADY & CURRY
`2101 Cedar Springs Rd., Suite 1000
`Dallas, TX 75201
`Telephone: (214) 888-4848
`Facsimile: (214) 888-4849
`
`
`Attorneys for Plaintiff,
`Windy City Innovations, LLC
`
`
`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`Case No. 4:16-cv-01730-YGR
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`PLAINTIFF WINDY CITY INNOVATIONS,
`LLC’S RESPONSE TO FACEBOOK, INC.’S
`ADMINISTRATIVE MOTION REGARDING
`THE IDENTIFICATION OF ASSERTED
`CLAIMS
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`Windy City Innovations, LLC,
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`Plaintiff,
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`v.
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`Facebook, Inc.,
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`Defendant.
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`WINDY CITY’S RESPONSE TO FACEBOOK INC.’S
`ADMIN. MOTION RE ASSERTED CLAIMS
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`CASE NO. 4:16-CV-01730
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`Case 4:16-cv-01730-YGR Document 49 Filed 05/09/16 Page 2 of 8
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`Facebook asks this Court to force Windy City to reduce the scope of infringement allegations in
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`this action so that Facebook can better prepare its inter partes review (“IPR”) petition. The Court should
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`decline to do so. No law necessitates, much less encourages, court intervention of this kind—
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`intervention designed to benefit one party in an administrative proceeding to the detriment of the other
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`party in a district court litigation. Forcing Windy City to narrow its case at this stage—months before
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`the case management conference, before P.R. 3-1 disclosures, before any discovery has occurred, and
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`before Markman proceedings have even begun—subverts the local patent rules of this District and
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`foments the violation of Windy City’s due process rights. Facebook’s desire for a tactical advantage in
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`any impending IPR petition does not justify such prejudice to Windy City.
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`Furthermore, by improperly filing its Motion as “administrative” under Civ. L.R. 7-11, Facebook
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`asks the Court to make a snap decision on a substantive dispute in Facebook’s favor, just in time to
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`simplify Facebook’s IPR petition. But “[a] motion for administrative relief is not the appropriate vehicle
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`for resolution of the substantive arguments raised by the parties.” Avago Techs. Fiber IP (Singapore)
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`PTE. Ltd. v. IPtronics, Inc., No. C 10-CV-02863 EJD (PSG), 2013 U.S. Dist. LEXIS 1055 (N.D. Cal.
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`Jan. 2, 2013). Facebook’s Motion should be denied.
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`It Would Be Improper to Impose Early Claim Limits to Assist Facebook’s IPRs.
`While the Court may supervise and streamline patent litigation, “it does not follow that a federal
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`I.
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`court should use its case management authority for the purpose of narrowing claims that may be
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`contested in an entirely separate proceeding.” Univ. of Va. Patent Found. v. Gen. Elec. Co., No. 3:14-
`CV-51, 2015 WL 6958073, at *3 (W.D. Va. Nov. 10, 2015). Post-grant review is an alternative to
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`district court litigation, and Facebook points to nothing in the America Invents Act to suggest legislative
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`intent to impose a burden on plaintiffs—or courts—to ease a defendant’s IPR workload. Indeed, “[t]he
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`argument that meaningful IPR is impossible without court-ordered claims reduction ignores the purpose
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`and structure of the procedure.” Id. Moreover, requiring Windy City to significantly narrow its
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`infringement allegations at this infant stage to assist Facebook’s IPRs would mint a new and perverse
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`policy, one which forces patentees to forego asserting the vast majority of its claims, not because those
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`claims are not infringed, but solely to decrease a defendant’s costs of petitioning for IPR—all without
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`any reciprocal concession by a defendant. Such a rule would create an unnecessary, unfair windfall for
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`WINDY CITY’S RESPONSE TO FACEBOOK INC.’S
`ADMIN. MOTION RE ASSERTED CLAIMS
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`CASE NO. 4:16-CV-01730
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`Case 4:16-cv-01730-YGR Document 49 Filed 05/09/16 Page 3 of 8
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`defendants in patent actions, as IPRs do not limit the number of prior art references a petitioner may
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`assert, allowing a defendant to bury patent owners in invalidity theories at the patent office, while the
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`patent owner is forced to forego constitutionally protected property rights in the name of costs and
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`efficiencies. In VirnetX v. Apple, Judge Davis, recognizing the unfair effects of this asymmetry, refused
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`Apple’s request to narrow claims and declined to enter the district’s own model order until after IPRs
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`were to be decided, observing that defendants can obtain a tactical advantage by forcing a plaintiff to cut
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`down its case without a comparable concession from defendants. See Ex. A, VirnetX Inc. v. Apple Inc.,
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`Case No. 6-12-cv-00855 (E.D. Tex. Aug. 4, 2014).
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`Facebook does not deny that it seeks a tactical advantage and cost savings for its IPR petitions.
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`See Ex. B. Yet even if it were not seeking these advantages, Facebook’s request is still improper and
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`premature. Because mandatory claim narrowing deprives Windy City of substantive rights, it raises due
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`process concerns. Although the Federal Circuit in In re Katz determined that requiring a patentee to
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`limit asserted claims in a patent infringement lawsuit did not per se violate due process, the Court
`nevertheless noted that “a claim selection order could come too early in the discovery process,” which
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`would deny “the plaintiff the opportunity to determine whether particular claims might raise separate
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`issues of infringement or invalidity in light of the defendants' accused products and proposed defenses.”
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`In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1313, n. 9 (Fed. Cir. 2011)
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`(emphasis added). Here, no discovery has occurred, infringement contentions are not yet due, invalidity
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`contentions are not yet due, and claim construction is well in the future. Based on the concerns
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`recognized in Katz, courts around the country routinely deny premature requests for claim narrowing.1
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`1 See, e.g., Elec. Power Group, LLC v. Alstom, S.A., et al., Case No. 12-cv-06365-JGB (C.D. Cal. Aug.
`28, 2014) (Dkt. No. 152) (not requiring plaintiff to reduce claims until ten days after the close of fact
`discovery); Fleming v. Cobra Electronics Corp., Case No. 1:12-CV-392-BLW, 2013 WL 1760273, at
`*3 (D. Idaho Apr. 24, 2013) (“Katz’s concern about employing the process too early applies here—
`discovery has just begun, and it would be unfair to require Fleming to choose representative claims at
`this stage of the litigation.”); Avocent Redmond Corp. v. Rose Elecs., Inc., No. C06–1711-RSL, 2012
`WL 4903270, *1-2 (W.D. Wash. May 29, 2012) (“Katz neither approves of nor authorizes the exclusion
`of viable causes of action based on nothing more than efficiency concerns.”); Fractus, S.A. v. Samsung
`Electronics Co., Ltd., Civ. No. 6:09-cv-203, slip op. at 2-3 (E.D. Tex. Mar. 8, 2010) (Dkt. No. 332)
`(“The Court has not construed the claims and discovery may proceed for several more months. The risk
`of prejudice to Plaintiff is not adequately offset by increases in efficiency and manageability.”).
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`WINDY CITY’S RESPONSE TO FACEBOOK INC.’S
`ADMIN. MOTION RE ASSERTED CLAIMS
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`Case 4:16-cv-01730-YGR Document 49 Filed 05/09/16 Page 4 of 8
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`Indeed, the single case-narrowing order Facebook attached to its Motion, Rambus v. LSI, completely
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`undermines Facebook’s position. The court-ordered narrowing in Rambus happened after the CMC,
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`after review of the asserted patents by the USPTO Board of Patent Appeals and Interferences, after
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`service of infringement and invalidity contentions, and after claim construction in that case. Rambus v.
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`LSI, No. 10-cv-05446 (N.D. Cal. Dec. 28, 2012).2 Because a defendant’s (anticipated) IPR petition does
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`not justify a limit on the number of patent claims asserted in a patent infringement case in federal district
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`court, Facebook’s motion should be denied.
`II.
`Facebook Does Not Actually Seek to Narrow This Case.
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`Facebook ignored this case for months. Now, as the deadline to file IPRs nears, it demands that
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`Windy City unilaterally hobble its own case to ease Facebook’s IPR burden. Rather than reject
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`Facebook’s preposterous proposal outright, Windy City offered a reasonable and routine compromise: to
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`negotiate a mutual claim and prior art narrowing proposal that tracked the various model orders on the
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`topic. (McCarty Decl ¶ 2); see also Exs. C, D. Facebook declined that offer, demanding instead that
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`Windy City first elect and identify forty claims before Facebook’s IPR deadline. See Ex. B.3 After
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`Facebook filed its Motion, Windy City again contacted counsel for Facebook and offered another
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`mutual case-narrowing proposal, this time even suggesting a modification to the model order to align the
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`claim narrowing deadline with the P.R. 3-1 deadline—a unilateral concession on Windy City’s part. See
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`Ex. E. Facebook again refused, indicating that no deal was to be had unless Facebook obtained the
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`windfall benefit of Windy City removing 95% of claims from the district court case and identifying to
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`2 Further, to the extent Facebook argues that this case should be treated differently based on the number
`of patent claims at issue, this concern is assuaged by Windy City’s numerous offers to narrow the case
`pursuant to the model orders for narrowing claims. And even absent that agreement, Facebook should
`not be rewarded with a windfall benefit merely because the United States Patent and Trademark Office
`saw fit to grant Windy City the patent claims asserted in this action.
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` 3
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` Facebook’s “offer[] to make its source code available for review by Windy City’s counsel and
`approved experts” is specious. Facebook and its counsel demanded that Windy City negotiate a
`protective order, fly experts across the country to various locations to review thousands of lines of
`source code, and analyze that source code in order to drop 95% of the claims in this case (without any
`mutual narrowing on the part of Facebook), all in a matter of days. That Windy City refused this
`unworkable proposal does not reflect a lack of preparation. Windy City, obviously, could not agree to
`incur exorbitant last-minute expenses all to give short shrift to its infringement investigation—the very
`heart of this case—simply to provide a unilateral benefit to Facebook.
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`WINDY CITY’S RESPONSE TO FACEBOOK INC.’S
`ADMIN. MOTION RE ASSERTED CLAIMS
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`Case 4:16-cv-01730-YGR Document 49 Filed 05/09/16 Page 5 of 8
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`Facebook the remaining 5% in a few days, with no mutual narrowing of prior art by Facebook. Id. In
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`other words, contrary to the rhetoric of Facebook’s motion, it is Facebook who is unwilling to streamline
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`this case.
`III. The Court Should Not Deviate from the Local Patent Rules of This District.
`Local Patent Rule 3-1 provides a deadline for plaintiffs to disclose “each claim of each patent in
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`suit that is allegedly infringed.” In this case, that deadline is July 21, 2016. See Dkt. 33. The Court
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`should not rewrite the local rules simply to accommodate Facebook’s IPR petition by moving that
`deadline forward by more than two months and imposing an arbitrary forty claim cap on asserted
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`claims, particularly where Facebook can cite to no case supporting this extraordinary relief.
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`Moreover, Facebook’s contention that Windy City “has refused to identify” claims is a red-
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`herring. There are established procedures under the Local Rules for when and how to identify asserted
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`claims, procedures that exist to minimize gamesmanship and provide a fair framework to the case.
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`Windy City is merely abiding by those procedures.
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`Facebook’s criticism of Windy City’s complaint does not provide a justification for deviating
`from these procedures. First, the alleged pleading deficiency is addressed in Facebook’s pending
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`12(b)(6) motion and bears no relationship to the local patent rules or Facebook’s IPRs, or the propriety
`of early stage, mandatory claim reductions. Second, although Facebook implies that the complaint’s
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`alleged deficiencies provide cause for claim reductions, it offers no legal authority supporting the
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`premise that Windy City was required to articulate specific infringed claims in its complaint, much less
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`any authority tying an alleged pleading deficiency to Court intervention for the purpose of assisting
`IPRs.4 Third, Facebook’s complaints about a lack of notice are also simply untrue. Although not
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`required to do so, Windy City outlined numerous claim limitations that are met by Facebook’s accused
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`products in its complaint. See, e.g., Dkt. 1 at ¶ 23. In this way, Windy City does identify claims.5
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`4 Indeed, in light of the need for further case investigation, many complaints do not “identify” asserted
`claims when a case is filed. Presumably because of this unremarkable reality, the same counsel
`defending Facebook has filed numerous patent infringement claims, on behalf of Facebook and others,
`which also do not “identify” particular claims in the complaint. See, e.g., Ex. F (Facebook asserting ten
`patents comprising 350 claims, with no claim identification); Ex. G.
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` 5
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` Likewise, Windy City’s complaint articulates specific accused products. See Dkt. 1 at ¶ 16
`(Identifying Facebook.com’s private group, chat, and messages features, as well as Facebook’s APIs and
`WINDY CITY’S RESPONSE TO FACEBOOK INC.’S
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`CASE NO. 4:16-CV-01730
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`ADMIN. MOTION RE ASSERTED CLAIMS
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`Case 4:16-cv-01730-YGR Document 49 Filed 05/09/16 Page 6 of 8
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`Facebook has presented no legitimate justification to depart from this Court’s established
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`procedures governing patent matters. Accordingly, the Local Patent Rules, and corresponding deadlines
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`for identifying asserted claims, should govern in this case.
`IV.
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`Facebook is Using Civil Local Rule 7-11 For an Improper Purpose.
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`Facebook has abused the local rules by filing its instant Motion as an Administrative Motion
`under Civ. L.R. 7-11. Facebook even agrees. When asked if it would oppose a request to enter a
`structured narrowing order, Facebook claimed it is “improper” to request entry of a narrowing
`proposal in an administrative motion. See Ex. E. Yet that is precisely what Facebook seeks in its own
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`Motion. Facebook cannot have it both ways.
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` Proper administrative motions include “matters such as motions to exceed otherwise applicable
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`page limitations or motions to file documents under seal.” Civ. L.R. 7–11. By waiting until the
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`eleventh hour to consider filing an IPR, Facebook found itself time-crunched, and no longer could afford
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`to follow the proper channel—i.e., a motion under Civ. L.R. 7-2—for resolution of this substantive
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`dispute. But Facebook’s neglect does not transform a substantive dispute into a “miscellaneous
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`administrative matter.”6 A request of this magnitude requires full briefing and consideration by the
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`Court, full review of the complaint and the patents, and a full understanding of the law on the topic.
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`Besides being procedurally improper, it would also be inequitable for the Court to remove 95%
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`of Windy City’s claims in this case, without any reciprocal narrowing of prior art (and to do so months
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`before a single deadline in this case), based only on a few hastily drafted pages submitted over three
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`business days. Indeed, it seems Facebook had not even read the entirety of Windy City’s complaint
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`when it filed its Motion. For example, Facebook argues that the complaint “included broad allegations
`of . . . willful infringement reciting boilerplate language without any supporting facts.” Mot. at 2-3. But
`Windy City has not even alleged willfulness in this case. See generally Dkt. 1.
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`For the foregoing reasons, Windy City requests that Facebook’s Motion be denied.
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`servers); id. at ¶ 18 (Identifying the “Facebook app” and the “Facebook Messenger app,” as well as
`Facebook’s APIs and servers).
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` 6
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` To make matters worse, Facebook failed to comply with subsection (a) of the rule, as it never indicated
`any intent to seek substantive relief via an “administrative” motion under Rule 7-11
`WINDY CITY’S RESPONSE TO FACEBOOK INC.’S
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`CASE NO. 4:16-CV-01730
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`ADMIN. MOTION RE ASSERTED CLAIMS
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`Case 4:16-cv-01730-YGR Document 49 Filed 05/09/16 Page 7 of 8
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`Respectfully submitted,
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`/s/ Warren J. McCarty, III
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`Warren J. McCarty, III (pro hac vice)
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`(SBN 230038)
`(SBN 255820)
`
`BANYS, P.C.
`Christopher D. Banys
`Jennifer L. Gilbert
`BANYS, P.C.
`1032 Elwell Court, Suite 100
`Palo Alto, CA 94303
`Tel: (650) 308-8505
`Fax: (650) 353-2202
`cdb@banyspc.com
`jlg@banyspc.com
`
`Bradley W. Caldwell (pro hac vice)
`bcaldwell@caldwellcc.com
`Jason D. Cassady (pro hac vice)
`jcassady@caldwellcc.com
`John Austin Curry (pro hac vice)
`acurry@caldwellcc.com
`Warren J. McCarty, III (pro hac vice)
`wmccarty@caldwellcc.com
`CALDWELL CASSADY & CURRY
`2101 Cedar Springs Rd., Suite 1000
`Dallas, TX 75201
`Telephone: (214) 888-4848
`Facsimile: (214) 888-4849
`
`Attorneys for Plaintiff,
`Windy City Innovations, LLC
`
`
`
`Dated: May 9, 2016
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`WINDY CITY’S RESPONSE TO FACEBOOK INC.’S
`ADMIN. MOTION RE ASSERTED CLAIMS
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`Case 4:16-cv-01730-YGR Document 49 Filed 05/09/16 Page 8 of 8
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`CERTIFICATE OF SERVICE
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`I, hereby certify on this 9th day of May, 2016, that a copy of the foregoing was filed
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`electronically through the Court’s CM/ECF system and automatically served upon all counsel of record
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` /s/ Warren J. McCarty, III
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`Warren J. McCarty, III (pro hac vice)
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`Attorney for Plaintiff
`Windy City Innovations, LLC
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`at the time of filing.
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`Dated: May 9, 2016
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`CERTIFICATE OF SERVICE
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`CASE NO. 4:16-CV-01729
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