Case 6:13-cv-00448-MHS-KNM Document 149 Filed 05/15/14 Page 1 of 8 PageID #: 3052
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`SMARTFLASH LLC, et al.,
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`DEFENDANTS’ MOTION TO STAY LITIGATION PENDING
`“COVERED BUSINESS METHOD” REVIEW OF U.S. PATENT NOS.
`7,334,720; 7,942,317; 8,033,458; 8,061,598; 8,118,221; AND 8,336,772
`BY THE UNITED STATES PATENT & TRADEMARK OFFICE
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`01980.00003/5877850.21
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`Case No. 6:13-CV-00448-MHS-KNM
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`JURY TRIAL DEMANDED
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`v.
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`SAMSUNG ELECTRONICS CO.,
`LTD., et al.,
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`Plaintiffs,
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`Defendants.
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`

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`Case 6:13-cv-00448-MHS-KNM Document 149 Filed 05/15/14 Page 2 of 8 PageID #: 3053
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`On May 29, 2013, Smartflash filed both the instant action against Defendants Samsung,1
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`HTC,2 and Game Circus LLC, and a parallel suit (Case No. 6:13-cv-00447-MHS-KNM (E.D.
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`Tex.)) against Apple Inc., Robot Entertainment, Inc., KingsIsle Entertainment, Incorporated, and
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`Game Circus LLC. Both suits allege infringement of the same patent claims of the same six
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`patents.3
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`Between March 28, 2014 and April 3, 2014, Apple filed twelve petitions for “Covered
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`Business Method Review”—two petitions for each of the six patents-in-suit—asking the U.S.
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`Patent Trial and Appeal Board (“PTAB”) to invalidate the challenged claims (including every
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`claim asserted in this litigation) under 35 U.S.C. §§ 102 and/or 103. In these CBM petitions,
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`Apple asserts that it is more likely than not that at least one—and indeed all—of the claims at
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`issue in both the -447 case and the instant case will be declared unpatentable.
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`On April 3, 2014, based on these twelve CBM petitions, the -447 Defendants filed a
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`motion to stay the -447 case. (-447 Case, Dkt. 128.) In view of the -447 Defendants’ motion to
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`stay litigation involving the same asserted patent claims at issue here, Defendants Samsung,
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`HTC, and Game Circus LLC respectfully move to stay all proceedings in the present case until
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`the PTAB has completed its CBM review of the asserted patents. Specifically, should the Court
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`determine that there is good cause to stay the -447 case pending resolution of that CBM
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`review, Defendants respectfully request that the Court stay this action as well. In the
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`alternative, should the Court determine that a limited stay until early October 2014, when the
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`1 Samsung refers to the three Samsung entities named as defendants in this case:
`Samsung Electronics Co., Ltd., Samsung Electronics America,
`Inc., and Samsung
`Telecommunications America, LLC.
`2 HTC refers to the three HTC entities named as defendants in this case: HTC
`Corporation, HTC America, Inc., and Exedea, Inc.
`3 The patents-in-suit for both actions are U.S. Patent Nos. 7,334,720; 7,942,317;
`8,033,458; 8,061,598; 8,118,221; and 8,336,772.
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`01980.00003/5877850.21
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`Case 6:13-cv-00448-MHS-KNM Document 149 Filed 05/15/14 Page 3 of 8 PageID #: 3054
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`PTAB will issue its decision regarding the institution of the requested CBM reviews, is
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`appropriate in the -447 case, Defendants request that the Court stay this action until October
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`2014 as well.
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`I.
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`IF THE COURT DETERMINES A STAY IS WARRANTED IN THE -447 CASE,
`THEN ALL LITIGATION PROCEEDINGS SHOULD BE STAYED
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`Although Defendants in this case believe that judicial economy counsels in favor of
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`staying both the -447 case and the present case pending resolution of Apple’s CBM petitions, the
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`question Defendants raise here is far narrower: namely, if the Court decides that a stay of
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`the -447 case is appropriate, should the Court also stay the present action? Judicial equities and
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`efficiencies, as well as applicable case law, all suggest it should. Because all of the patents at
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`issue in this case—and all of the patent claims at issue—are subject to Apple’s petitions for
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`CBM review, staying both cases maximizes the overall judicial economy. In fact, recognizing
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`that judicial economy is best served by staying all related actions, courts have stayed co-pending
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`litigation even where (unlike here) the co-pending defendants never requested a stay. See, e.g.,
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`Market-Alerts Pty. Ltd. v. Bloomberg Finance LP, 922 F. Supp. 2d 486, 496 (D. Del. 2013)
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`(staying all co-pending cases sua sponte “as an exercise of its discretion and in the interests of
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`judicial and litigant economy”).
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`Indeed, courts regularly grant a stay pending PTAB review even where such review was
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`initiated not by a defendant but by a third party. See, e.g., Traffic Information, LLC v. Huawei
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`Techs. Co., No. 2-10-cv-00145, Dkt. 223 (E.D. Tex. May 30, 2012) (granting stay pending
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`reexamination proceedings where plaintiff sued multiple defendants in multiple actions and the
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`reexamination proceedings were initiated by a defendant in a parallel litigation based on the
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`same patent claims, and also finding no undue delay or prejudice in granting a six-month stay
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`pending the non-party’s appeal before the BPAI); Luv N’ Care v. Regent Baby Products Corp.,
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`2
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`Case 6:13-cv-00448-MHS-KNM Document 149 Filed 05/15/14 Page 4 of 8 PageID #: 3055
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`No. 10-civ-9492, 2014 WL 572524, at *2 (S.D.N.Y. Feb. 13, 2014) (granting stay pending
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`reexamination proceedings initiated by third party, reasoning that “compelling both parties to
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`undergo extensive discovery on potentially meaningless patent issues would be wasteful and
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`prejudicial”); Enhanced Sec. Research, LLC v. Cisco Systems, Inc., No. 09-civ-571, 2010 WL
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`2573925 (D. Del. June 25, 2010) (granting stay pending reexamination proceedings initiated by
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`third party prior to the PTO’s decision whether to grant review).4 Thus, although co-pending
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`defendant Apple alone filed the petitions for CBM review, a stay pending the PTAB’s final
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`determination on the validity of the asserted patents is equally warranted in this case as well.
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`Should the Court determine that the relevant stay factors tip in favor of staying the -447
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`case, the same logic and rationale apply equally to the present action, which involves the same
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`patents and the same asserted claims. In fact, the logic of an across-the-board stay also applies
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`equally well to Smartflash’s latest installment of its serial litigation strategy on these patents:
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`Smartflash’s infringement lawsuit filed last week against Google Inc., Gearbox Software LLC,
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`and Bonus XP, Inc. (Case No. 6:14-cv-435-KNM (E.D. Tex.), filed May 7, 2014) (the “Google
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`action”) asserting the same six patents-in-suit as in the -447 and -448 actions. Moreover, the
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`Google Play software that Smartflash now accuses of infringement in the Google action is the
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`same software that Smartflash accuses of infringing in the -448 complaint. Smartflash’s decision
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`4 Contrary to Smartflash’s assertions in its Surreply to Apple’s Motion To Stay in
`the -447 Case (see -447 Case, Dkt. 138 at 2, n.2), should the Court grant Defendants’ Motion To
`Stay Pending CBM review, the present Defendants would stipulate to be bound to the same
`extent as Apple is under § 18(a)(1)(D) of the America Invents Act. Such agreement further
`supports the granting of stay. See, e.g., Progressive Cas. Ins. Co., v. Safeco Ins. Co., No. 1:11-
`CV-00082, 2013 U.S. Dist. LEXIS 54899, at *13 (N.D. Ohio Apr. 17, 2013) (finding that a stay
`pending CBM review would help streamline issues for trial where non-petitioner defendants
`“agreed to be estopped from asserting invalidity arguments based on 35 U.S.C. §§ 102 and 103
`on which the PTAB issues a final, written decision”); Landmark Tech., LLC v. iRobot Corp., No.
`6:13-cv-411, 2014 WL 486836, at *5 n.2 (E.D. Tex. Jan. 24, 2014) (noting that “[a] stay beyond
`the PTO’s decision may only be beneficial if all Defendants agree that they are challenging
`validity of the patents through CBM review with the PTAB and not in Court”).
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`3
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`Case 6:13-cv-00448-MHS-KNM Document 149 Filed 05/15/14 Page 5 of 8 PageID #: 3056
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`to wait an additional year before filing suit against Google eliminates any argument that staying
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`all of these related actions pending CBM review prejudices Smartflash in any way.5
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`Simultaneously staying the instant case involving the patents currently under CBM
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`review is equitable and fair, as it does not create any additional prejudice to Smartflash that the
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`Court would not have already considered in deciding to stay the -447 action. Even Smartflash
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`was unable to come up with a reason to oppose a stay in this situation. During the parties’ meet
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`and confer on the present motion, Defendants’ counsel asked Smartflash to explain why “it
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`would make sense to continue our action if the Court agrees to stay your case against Apple.”
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`Smartflash’s counsel articulated no reason other than to assert the generic claim that any stay is
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`prejudicial. (Exh. A to Holmes Decl.).6
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`5 In addition, now that Smartflash has filed suit against Google, the customer-suit
`exception likely applies in this case, as many of Smartflash’s infringement contentions hinge on
`the use of Google Play. Consequently, a stay of this case is warranted regardless of the outcome
`of the CBM petitions. See generally Katz v. Lear Siegler, Inc., 909 F.2d 1459, 1464 (Fed. Cir.
`1990) (citing Kahn v. General Motors, Inc., 889 F.2d 1078, 1082 (Fed. Cir. 1989)).
`6 Moreover, given that Defendant Game Circus is a defendant in both the present action
`and the -447 case, should the Court grant a stay in the -447 action, basic notions of equity,
`judicial economy, and fairness dictate that Game Circus also be granted a stay in the present case
`since the same asserted patents are asserted against it in both cases.
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`01980.00003/5877850.21
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`4
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`Case 6:13-cv-00448-MHS-KNM Document 149 Filed 05/15/14 Page 6 of 8 PageID #: 3057
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`II.
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`CONCLUSION
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`Defendants respectfully request
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`that, should
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`the Court enter a stay
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`in
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`the
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`-447 case, the Court also issue a stay of the present litigation prior to claim construction.
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`Date: May 15, 2014
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`Respectfully submitted,
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`By: /s/ Melissa J. Baily, with permission by
`Michael E. Jones
`Melissa J. Baily
`CA Bar. No. 237649
`Admitted in E.D. Tex.
`melissabaily@quinnemanuel.com
`Andrew M. Holmes
`CA Bar. No. 260475
`Admitted in E.D. Tex.
`drewholmes@quinnemanuel.com
`QUINN EMANUEL URQUHART &
`SULLIVAN LLP
`50 California Street, 22nd Floor
`San Francisco, CA 94111
`Telephone: 415-875-6600
`Facsimile: 415-875-6700
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`ATTORNEYS FOR DEFENDANTS
`Samsung Electronics Co., Ltd., Samsung
`Electronics America, Inc., and Samsung
`Telecommunications America, LLC, HTC
`Corporation and HTC America, Inc.
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`Michael E. Jones
`State Bar No. 10929400
`mikejones@potterminton.com
`POTTER MINTON
`A Professional Corporation
`110 N. College, Suite 500
`Tyler, Texas 75702
`Telephone: 903-597-8311
`Facsimile: 903-593-0846
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`ATTORNEYS FOR DEFENDANTS
`Samsung Electronics Co., Ltd., Samsung
`Electronics America, Inc., and Samsung
`Telecommunications America, LLC
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`01980.00003/5877850.21
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`5
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`Case 6:13-cv-00448-MHS-KNM Document 149 Filed 05/15/14 Page 7 of 8 PageID #: 3058
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`By: /s/ John Schnurer, with permission by
`Michael E. Jones
`John P. Schnurer
`Texas State Bar No. 24072628
`jschnurer@perkinscoie.com
`PERKINS COIE LLP
`11988 El Camino Real, Suite 200
`San Diego, CA 92130-3334
`Tel: 858-720-5700
`Fax: 858-720-5799
`
`Jennifer Parker Ainsworth
`Texas State Bar No. 00784720
`jainsworth@wilsonlawfirm.com
`WILSON, ROBERTSON & CORNELIUS, P.C.
`909 ESE Loop 323, Suite 400
`Tyler, Texas 75701
`Tel: 903-509-5000
`Fax: 903-509-5092
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`ATTORNEYS FOR DEFENDANTS
`HTC Corporation, HTC America,
`Inc. and Exedea, Inc.
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`By: /s/ Thomas B. Walsh, IV, with permission
`by Michael E. Jones
`Thomas B. Walsh, IV
`walsh@fr.com
`Texas Bar No. 00785173
`Robert C. Earle
`Texas Bar No. 24002029
`earle@fr.com
`Andrew T. Gorham
`Texas Bar No. 24012715
`gorham@fr.com
`Michael A. Bittner
`Texas Bar No. 24064905
`bittner@fr.com
`FISH & RICHARDSON P.C.
`1717 Main Street, Suite 5000
`Dallas, Texas 75201
`(214) 747-5070 (Telephone)
`(214) 747-2091 (Facsimile)
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`ATTORNEYS FOR DEFENDANT
`Game Circus L.L.C.
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`01980.00003/5877850.21
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`6
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`Case 6:13-cv-00448-MHS-KNM Document 149 Filed 05/15/14 Page 8 of 8 PageID #: 3059
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that all counsel of record who are deemed to have
`consented to electronic service are being served with a copy of this document via the Court’s
`CM/ECF system per Local Rule CV-5(a)(3) on May 15, 2014.
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`/s/ Michael E. Jones
`Michael E. Jones
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`CERTIFICATE OF CONFERENCE
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`I hereby certify that on April 21, 2014, Christopher Mathews, counsel for Samsung and
`HTC, and Michael Jones, counsel for Samsung, met and conferred by telephone with Brad
`Caldwell and Claire Henry, counsel for Smartflash, and Mr. Caldwell confirmed that Smartflash
`opposes the instant motion. No agreement could be reached because Smartflash disagrees that
`this case should be stayed pending the PTO’s covered business method review of the patents-in-
`suit. Accordingly, counsel has complied with the meet-and-confer requirement pursuant to Local
`Rule CV-7(h) and the Motion is opposed by Smartflash.
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`/s/ Christopher Mathews, with permission by
`Michael E. Jones
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`01980.00003/5877850.21
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`7