JOHN J. YIM & ASSOCIATES, LLC
`
`Tysons Corner
`7600 Leesburg Pike .
`East Building, Suite 470
`Falls Church, VA 22043
`
`Tel. 703.749.0500
`Fax. 202.379.1723
`
`John J. Yim“
`
`Managing Eartner
`E-MAIL: jyim@yimassociates.com
`
`*Adniitted in CA, DC, MD, VA &
`United States Patent and Trademark Office
`
`January 17, 2014
`
`Christopher V. Goodpastor
`WATTS GUERRA LLP
`
`811 Barton Springs Road, Suite 725
`Austin, Texas 78704
`
`Re: Inter Partes Review of e-Watch Patents
`US. Patent No. 7,365,871 and No. 7,643,168
`SETTLEMENT PURPOSES ONLY'
`
`Dear Counsel:
`
`We are attorneys for Iron Dome LLC, a subsidiary of Roned LLC
`(wwwrozrnedcom).
`
`'
`
`This letter addresses the invalidity of the patents asserted by e—Watch against
`Apple, Sainsung, and other electronics manufacturers in civil actions recently filed in the
`U.S. District Court for the Eastern District of Texas. Attached are fully prepared, but not
`yet filed, petitions for Inter Parres Review (IPR) against each asserted patent.
`
`Although the validity of the asserted patents is questioned, we wish to acquire
`retroactive and fully transferable licenses to the asserted patents. After reviewing and
`considering the merits of the enclosed draft IPR petitions, please contact me so that we
`can resolve this matter. Also enclosed is a recent ruling in W.D. Texas to stay litigation
`pending the outcome of an interparres review. On page 4 of the ruling, the court
`concludes:
`
`In sum, once the PTAB has determined a challenger is likely to succeed in
`invalidating all asserted claims of the patent—in—suit and has instituted inter partes
`review, staying the case to await the P’I‘AB’S final decision is the referable route.
`
`1
`
`-
`
`E-Watch, Inc
`Exhibit 2008
`Petitioner - Iron Dome LLC
`Patent Owner - E-Watch Inc
`
`|PR2014-00439
`
`

`

`- We are aware of the IPR petition that was recently filed against another of
`_
`e—Watch’s patent, U.S. Patent No. 6,970,183. With the understanding that you are fully
`acquainted with the new IPR proceedings, we request a rapid resolution of this dispute.
`Please contact us no later than two weeks of receipt of this letter. We enclose a license
`agreement for your review.
`
`
`
`John J. Yim
`
`Enclosures
`
`

`

`Patent License Agreement
`
`This patent license agreement (‘Agreement’) is dated
`and is among:
`-
`
`(‘Effective Date”)
`
`IRON DOME LLC, a Virginia limited liability company;
`and
`
`E—WATCH, INC., a Nevada corporation, and E~WATCH CORR, a Texas corporation.
`
`e—Watch, Inc. is the owner of U.S. Patent No. 7,365,871 issued on April 29, 2008 and
`No. 7,643,168 issued on January 5, 2010 (collectively ‘Asserted Patents”). The Asserted
`Patents are currently the patents—in—suit in civil actions brought by e-Watch, Inc. and e-Watch
`Corp. against Apple, Inc. and various other electronics manufacturers. Iron Dome LLC wishes
`to acquire transferable licenses to the Asserted Patents.
`
`The Parties wish to resolve their patent dispute and avoid the attendant risks, fees,
`costs, and expenses that are associated with litigation and other patent~re1ated proceedings.
`Therefore, the Parties agree as follows:
`
`1.
`
`Definitions
`
`‘E—Watch’ means e—Watch, Inc, e—Watch Corp, the exclusive licensee to the
`(a)
`Assorted Patents, and all of their Affiliates.
`
`(b) ‘Iron Dome’ means Iron Dome LLC and all of its Affiliates, including Roned
`LLC (a Virginia limited liability company).
`
`
`(0) ‘Party’ means E—Watch or Iron Dome. “Parties” means both E—Watch and Iron
`
`Dome.
`
`(d) ‘Third Party’ means any party that is neither E—Watch nor Iron Dome.
`
`(6) ‘Affiliate’ means any present or future entity, corporation, company, association,
`partnership, joint venture, organization or other entity that directly or indirectly controls, is
`controlled by, or is under common control with a given entity. For purposes of this definition,
`‘control’ means (i) in the case of a corporation, the direct or indirect ownership of 50% or
`more of the shares of stock entitled to vote for the election of directors (or of persons
`performing similar functions); or (ii) in the case of any other type of legal entity, the direct or
`indirect ownership of 50% or more of the equity interests, or status as a general partner in any
`partnership or joint venture, or any other arrangement whereby a party controls or has the
`right to control the Board of Directors or equivalent governing body of a corporation or other
`entity.
`
`(t) ‘ nfringement Actions’ means those legal actions that E—Watch has brought
`asserting infringement of the Asserted Patents against various defendants in any forum,
`including any actions brought in the U.S. International Trade Commission, and including the
`
`

`

`Patent License Agreement
`
`following in the U.S. District Court for the Eastern District of Texas on or about December 9,
`2013:
`
`(1) 2: l3-CV-Ol 061
`(2) 2: 13-cv-01062
`(3) 2: 13 -cv—01063
`(4) 2: 13 —cv-01064
`(5) 2: 13 -cv-01071
`(6)
`2: 13 ~cv~01073
`77(7) 2:13-cv-01074
`(8)
`2: 13 -cv-01075
`(9) 2:13 ~cV—01076
`(10) 2: 1 3-cv-01077
`(1 1) 2: 1 3ncv—01078
`
`E~Watch, Inc. V. Apple, Inc.
`E-Watch, Inc. V. Samsung Telecommunications America, LLC
`E—Watch, Inc. V. HTC Corporation
`E—Watch, Inc. V. LG Electronics, Inc.
`E—Wateh, Inc. V. ZTE Corporation
`E—Watch, Inc. V. Sony Corporation
`E—Watch, Inc. v. Sharp Corporation
`E-Watch, Inc. V. Nokia Corporation
`E—Watch, Inc. v. Huawei Technologies USA, Inc.
`E-Watch, Inc. V. Kyocera Communications, Inc.
`E—Watch, Inc. V. BlackBerry Corporation
`
`Grant. of Patent Licenses: E-Watch grants to Iron "Dome eight (8) separate
`2.
`retroactive, royalty—free, non—exclusive licenses for the Asserted Patents (each a ‘Transferable
`License”), as well as for any and all United States patents now and in the future owned,
`controlled, assigned, or licensed to E-Watch that are necessary for making, having made,
`using, importing, selling, and offering for sale a mobile communication device that is covered
`by the claims of the Asserted Patents.
`'
`
`3.
`
`Transferability of Patent Licenses
`
`(2!) Transferabflity: Iron Dome is permitted to separately transfer each of the eight
`Transferable Licenses to eight separate Third Parties and its Affiliates. For avoidance of
`doubt, this is intended to mean that the first Transferable License is transferable to one Third
`Party and its Affiliates, the second Transferable License is transferable to another Third Party
`and its Affiliates, and the third Transferable License is transferable to yet another Third Party
`and its Affiliates, and so on. E-Watch understands that Iron Dome may transfer these
`Transferable Licenses to defendants in the Infiingemen‘t Actions.
`
`(b) Notification: Iron Dome shall notify E—Watch of any transfer of a Transferable
`License in writing (including the identity of the Third Party transferee) Within five business
`days after such transfer.
`
`(c) Release: Upon the transfer of a Transferable License to a Third Party who is a
`defendant in any of the Infringement Actions, E~Watch shall release such Third Party from:
`
`(i) all past and present claims, allegations, damages, obligations, liabilities or
`expenses of any kind or nature relating to the subject matter of the relevant Infringement
`Action;
`
`(ii) all claims that were or could have been asserted in the relevant
`Infringement Action, and
`
`

`

`Patent License Agreement
`
`(iii) all claims' based on or arising out of the alleged infringement of the
`.
`Asserted Patents.
`
`((1) Dismissal: After E-Watch receives written confirmation by a Third Party that they
`are the transferee of a Transferable License, E—Watch shall dismiss its Infringement Action
`against such Third Party Within six (6) business days.
`
`(e) Covenant Not-To-Sue: E-Watch will not assert any claim, or commence or join
`in any legal, administrative or other proceeding under the Asserted Patents against Iron Dome
`oruany Third Party transferees, or any of its customers, suppliers, importers, manufacturers, or
`distributors.
`
`(f) Non-Assertion Runs with Patents: E—Watch will impose this covenant not-to—sue
`on any Third Party to whom E—Watch may assign the Asserted Patents.
`
`(e) Single Transfer Only: Each of the Transferable Licenses is transferable only
`once. Once Iron Dome transfers a Transferable License to a Third Party, that Third Party may
`not subsequently transfer the Transferable License to another Third Party. Iron Dome will
`-
`inform of and impose this single—transfer limitation upon any Third Party transferee.
`
`4.
`
`Enforcement
`
`(a) Any Third Party who is a transferee of the Transferable License shall have
`standing and the right to enforce this Agreement (including the provisions for Release and
`Dismissal set forth in Sections 3(c) and (d) of this Agreement) against E-Watch, Without
`requiring the joining of Iron Dome.
`
`(b) E—Watch will not delay its duties of Release and Dismissal set forth above in
`Sections 3(c) and (d) of this Agreement. E—Watch will be responsible for all expenses
`(including attorney fees) incurred by Iron Dome and/or Third Parties relating to the
`enforcement of this Agreement due to any such delay.
`
`Admission of Patent Validity: Iron Dome admits that the Assorted Patents are valid
`5.
`and enforceable, and as such, will not challenge or participate in any challenge to the validity
`and enforceability of the Asserted Patents in any kind of legal proceeding.
`
`Confidentiality: The Parties shall treat this Agreement as confidential and shall not
`6.
`disclose the existence, contents, terms, or conditions of this Agreement to any Third Party
`without the prior written consent of the other Party, except as necessary in the following
`conditions:
`
`(a) as required by any court or other governmental body;
`
`(b) as otherwise required by law;
`
`

`

`Patent License Agreement
`
`(0) as otherwise may be required by applicable securities and other law and
`regulation, including the regulations of the US. Securities and Exchange Commission;
`
`((1) to legal counsel, accountants, and other financial advisors of the Parties, subject to
`obligations of confidentiality;
`
`(e) to the extent necessary for the enforcement of this Agreement or rights under this
`Agreement;
`
`(t) to banks, investors, and other financing sources, subject to a non—disclosure
`agreement respecting confidentiality customary to the corresponding prospective transaction;
`
`(g) in connection with an actual or prospective merger, acquisition, or other
`transaction with a Third Party, subject to a nondisclosure agreement respecting
`confidentiality customary to such prospective transaction;
`
`(h) to prospective transferees of the Transferable Licenses, including those defendants
`in the Infringement Actions.
`
`Ownership: E-Watch represents that it is the sole owner of the Asserted Patents and
`7.
`has the right to grant the licenses and covenants in this Agreement related thereto.
`
`Representations: Each Party represents to the other Party, as of the Effective Date,
`8.
`as follows:
`
`(a) that it has all requisite corporate power and authority to enter into this Agreement
`and to perform its obligations hereunder and to grant the licenses, releases, promises,
`covenants, and other rights contained herein;
`
`(b) that all acts required to be taken by it to authorize the execution and delivery and
`performance of this Agreement, and the consummation of the transactions contemplated
`herein have been duly and properly taken, and no other corporate proceedings on its part are
`necessary to authorize such execution, delivery, and performance;
`
`(c) that this Agreement has been duly executed and delivered by it and constitutes a
`legal, valid, and binding obligation of it, enforceable against it in accordance with its terms.
`
`Entire Agreement: This Agreement sets forth all the rights and obligations between
`9.
`the Parties.
`
`Severability: If any provision of this Agreement or the application of any such
`10.
`provision to any person or circumstance is declared judicially or by arbitration to be invalid,
`unenforceable, or void, such decision will not invalidate or void the remainder of this
`Agreement. And this Agreement is to be deemed amended by modifying such provision to the
`extent necessary to render it valid, legal, and enforceable while preserving as much as
`
`

`

`Patent License Agreement
`
`possible its intent or, if such modification is not possible, by replacing it with another
`provision that is legal and enforceable and that achieves similar objectives.
`
`Choice of Law & Venue: The laws of the state of New York, without reference to its
`11.
`conflict of laws principles, will govern this Agreement. The exclusive venue for any action
`brought by E—Watch against Iron Dome regarding the construction, validity, enforceability,
`performance, or otherwise regarding a challenge to this Agreement will be the state courts of
`the Commonwealth of Virginia sitting in Fairfax County. Otherwise, the exclusive venue for
`any actions among the Parties and Third Party transferees of the Transferable Licenses under
`this Agreement willb’e the US. District Court for the Eastern District of Texas and wherever
`other venue to which any of the Infringement Actions may be transferred.
`
`Notice: All notices relating to this Agreement shall be given in writing and will be
`12.
`delivered through one or more of the following means: (1) iii-person, (2) by certified mail
`with prepaid postage and return receipt, (3) by facsimile, or (4) by a commercial overnight
`courier that guarantees next day delivery and provides a receipt. Notices are to be addressed
`as follows:
`
`If to Iron Dome:
`
`If to E—Watch:
`
`Steven Yu, M.D.
`Roned LLC
`
`PO Box 10034
`
`Gaithersburg, MD 20898
`
`The Parties sign this Agreement on the Effective Date given above:
`
`e—Watch, Inc.
`
`By:
`
`Name:
`
`Title:
`
`e-Watch Corp.
`
`
`By:
`
`_
`_
`Name:
`
`
`Title:
`
`Iron Dome LLC
`
`
`
`By:
`
`Name: Steven Yu
`
`Title: Managing Member
`
`

`

`
`
`Case 1:12-cv-00468—SS Document 159 Filed 1126/13 Page 1 of 5
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`AUSTIN DIVISION
`
`CLICK-TO-CALL TECHNOLOGIES LP,
`Plaintiff,
`
`20 7
`'3 “0" 25 PM l2: 1. l
`CLERK us ,. ,1 r. ,
`_
`,
`n 1;
`WESTERN militia 6i gscfgfis
`BK........
`IlExU‘tY
`
`“M
`
`4,5-
`
`Case No. A-lZ-CA-468—SS
`
`ORACLE CORPORATION; ORACLE OTC
`
`SUBSIDIARY LLC; DELL INC.; CARNIVAL
`
`CRUISE LINES; THE HARTFORD FINANCIAL
`SERVICES GROUP, INC.; BMO HARRIS BANK
`N.A.; ALLSTATE INSURANCE COMPANY;
`ESURANCE INSURANCE SERVICE,
`INC.;
`
`HSBC FINANCE CORPORATION; and MACY’S
`
`INC.,
`
`Defendants.
`
`ORDER
`
`BE IT REMEMBERED onthis day the Court reviewed the file in the above-styled cause, and
`
`specifically Defendants’-Motion for Summary Judgment of Non~Infringement [#139], Plaintiff’s
`
`Sealed Response [#151], Defendants’ Reply [#152], and Plaintiff’s Opposed Motion for Leave to
`
`File Bur—Reply [#154]; Defendants’ Motion to Re-Urge Stay [#143], Plaintiff’s Response [#150],
`
`and Defendants” Reply [#156];-and Defend ants’ Motion to Stay Pending Inter Parfes Review [#1 53],
`
`Plaintiff’s Response [#157], and Defendants” Reply [#158]. Having reviewed the documents, the
`
`governing law, and the file as a whole, the Court now enters the following opinion and orders.
`
`Background
`
`Plaintiff Click-to—Call Technologies LP brought this patent
`
`infringement suit against
`
`Defendant Oracle Corporation and numerous Oracle customers, claiming Oracle infringes United
`
`

`

`Case 1:12~cv—00468-SS Document 159 FiEed 1126113 Page 2 of 5
`
`States Patent Number 5,818,836 Cl (the ’836 Patent). 011 August 16, 2013, this Court entered a
`
`consolidated Markman Order in this case and two others involving the ’836 Patent. Following the
`
`Markman Order, Oracle moved for summary judgment on non-infringement grounds. Oracle also
`
`sought to stay all post-Markman discovery against its customers. On October 30, 2013, the United
`
`States Patent and Trademark Office, through the Patent Trial and Appeal Board (PTAB), granted
`
`Oracle’s petition and instituted inter partes review of all claims of the ’836 Patent asserted in this
`
`case. Oracle now moves to stay this case pending the outcome of the inter partes review.
`
`1.
`
`Legal Standard
`
`Analysis
`
`With the passage. of the America Invents Act, Congress replaced the former inter partes
`
`reexamination process with the interpartes review process. Abbott Labs. v. Cordis Corp. , 710 F.3d
`
`1318, 1326 (Fed. Cir. 2013). Oracle sought, and has now obtained, interpartes review of the ’836
`
`Patent. See 35 U.S.C. § 311. This Court’s inherent power to manage its docket includes “the
`
`authority to order a stay pending conclusion of a PTO reexamination.” Ethicon, Inc. v. Quigg, 849
`
`F.2d 1422, 1426—27 (Fed. Cir. 1988). “In deciding whether to stay litigation pending reexamination,
`
`courts typically consider: (1) whether a stay will unduly prejudice or present a clear tactical
`
`disadvantage to the nonmoving party, (2) whether a stay will simplify the issues in question and trial
`
`of the case, and (3) whether discovery is complete and whether atrial date has been set.” Soverain
`
`SofMare LLC 12. Amazon. com, Inc. , 356 F. Supp. 2d 660, 662 (ED. Tex. 2005).1
`
`1 Though this three-factor test originated in the inter partes reexamination context, ecuns have continued to
`apply it when considering stays pending inter partes review. E.g., Semiconductor Energy Lab. Co. v. Chimer’ Jnnolux
`Corp, No. SACV 12-21-JST (JPRx), 2012 WL 7170593, at *1 & 11.1 (CD. Cal. Dec. 19,2012).
`
`9
`
`

`

`
`
`Case 1:12—cv—00468—SS Document 159 Filed 11/26/13 Page 3 of 5
`
`II.
`
`Application
`
`Turning to the first factor, Click-to-Call argues it will be prejudiced by a stay because the
`
`inter partes review and appeal process could extend beyond the trial date in this case, and the stay
`
`could hamper Click-to~Call’s efforts to license the ’836 Patent to other parties. The Court is
`
`unpersuaded by these generic arguments. Although it is true an appeal of the PTAB’s review
`
`decision may extend past this case’s June 2015 trial date, the PTAB has already determined “there
`
`is a reasonable likelihood” Oracle will succeed on itschallenge to the ’836 Patent. 35,U.S.C.
`
`§ 314(a); Defs.’ Mot. Stay [#153-1], Ex. A (PTAB decision instituting inter parties review), at 2.
`
`Proceeding to trial could therefore prove to be extraordinarily wasteful of both the parties’ resources
`
`and the Court’s resources.it This is particularly true given the PTAB’s recent decisions in similar
`
`post-grant review cases, where it has shown it has little regard for final judgments rendered after trial
`
`to a jury, even when those verdicts have been affirmed by the Federal Circuit. Additionally, it is
`
`unclear why anyone would license a patent currently undergoing inter partes review given the
`
`PTAB’s high standard for granting review in the first instance.
`
`With regard to the second factor, a stay could certainly simplify the issues in this case—most
`
`obviously, a finding of invalidity could effectively end the case. If Oracle is unsuccessful before the
`
`PTAB, the issues in this case will still be narrowed, because Oracle will be estopped from raising
`
`the same invalidity contentions again in this Court. 35 U.S.C. § 3 15 (e)(2). The fact Click—to~Call has
`
`other cases pending in this Court, asserting other claims not subject to this inter partes review
`
`process, is irrelevant to whether this case will be simplified by a stay. Finally, although the parties
`
`2 In the interim, the Court will have no difficulty filling its dance card with the names of other, equally eager
`
`litigants.
`
`1O
`
`

`

`Case 1:12—cv—00468-SS Document 159 Filed 11/26/13 Page 4 of 5
`
`both attempt to read the tea leaves and extract a statistical likelihood of success before the PTAB,
`
`this Court need not look beyond the PTAB ’ 3 threshold statutory requirement for granting review—“a
`
`reasonable likelihood that the petitioner [will] prevail.” 35 U.S.C. § 314(a).
`
`Third, although post-Markman discovery in this case may have only recently begun, and a
`
`trial date has been set, it simply makes no sense for this Court to proceed in parallel with the PTAB.
`
`The finality of any judgment rendered by this Court will be dubious so long as the PTAB retains
`
`authority to review, and therefore invalidate, the asserted claims. This has consistently been the
`
`Court’s position with regard to stays under the new America Invents Act procedures. See, e.g.,
`
`Versata Software, Inc. v. Volusion, Inc.,No. 1:12-CV-893-SS, slip op. at 3—6 (W.D. Tex. June 20,
`
`2013) (granting motion to stay pending instituted review through PTAB ’ 3 covered business methods
`
`procedure); Nat’l Oilwell Varco, L.P. v. Omron Oilfield 6:: Marine, Inc, No. 1:12-CV-773-SS, slip
`
`op. at 2—3 (W.D. Tex. June 10, 2013) (denying motion to stay pending where PTAB had not yet
`
`granted petition to institute inter partes review).
`
`In sum, once the PTAB has determined a challenger is likely to succeed in invalidating all
`
`asserted claims of the patent-in—suit and has instituted inter partes review, staying the case to await
`
`the PTAB’S final decision is the preferable route. The Court will therefore grant the motion to stay.
`
`Conclusion
`
`Accordingly,
`
`IT IS ORDERED that Plaintiff 3 Opposed Motion for Leave to File Sur—Reply [#154]
`
`is GRANTED;
`
`IT IS FURTHER ORDERED that Defendants1 Motion to Stay Pending Inter Partes
`
`Review [#153] is GRANTED;
`
`11
`
`

`

`Case 1:12«cv~00468aSS Document 159 Filed 11126113 Page 5 of 5
`
`IT IS FURTHER ORDERED that this case is STAYED until further order of this
`
`Court;
`
`IT IS FURTHER ORDERED that Defendants’ Motion for Summary Judgment of
`
`Non-Infringement [#139] is DISMISSED WITHOUT PREJUDI CE to refiling once the stay
`
`is lifted; ,
`
`IT IS FINALLY ORDERED that Defendants’ Motion to Re-Urge Stay [#143] is
`
`DISMISSED AS MOOT.
`
`153'
`SIGNED this the gzg'day ofNovember 2013.
`
`5
`SAfi SPARKS
`UNITED STATES DISTRICT IUDGE
`
`468 mot stay 0rd ktdj‘rm
`
`12
`
`
`
`