Case 1:16-cv-00681-RGA Document 61 Filed 10/26/17 Page 1 of 15 PageID #: 2966
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`NICHIA CORPORATION,
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`Plaintiff,
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`v.
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`TCL MULTIMEDIA TECHNOLOGY
`HOLDINGS LIMITED and TTE
`TECHNOLOGY, INC.,
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`Defendants.
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`Case Action No. 16-681-RGA
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`DEFENDANTS’ REPLY BRIEF IN SUPPORT OF MOTION TO STAY PENDING
`INTER PARTES REVIEW OF THE PATENTS-IN-SUIT
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`CONNOLLY GALLAGHER LLP
`Arthur G. Connolly, III (#2667)
`Ryan P. Newell (#4744)
`Mary I. Akhimien (#5448)
`The Brandywine Building
`1000 West Street, Suite 1400
`Wilmington, DE 19801
`(302) 757-7300
`aconnolly@connollygallagher.com
`rnewell@connollygallagher.com
`makhimien@connollygallagher.com
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`OF COUNSEL:
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`QUINN EMANUEL URQUHART & SULLIVAN LLP
`Raymond N. Nimrod
`James M. Glass
`51 Madison Ave., 22nd Floor
`New York, New York 10010
`(212) 849-7000
`raynimrod@quinnemanuel.com
`jimglass@quinnemanuel.com
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`Attorneys for TCL Multimedia Technology
`Holdings Limited and TTE Technology, Inc.
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`NICHIA EX2008
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`Case 1:16-cv-00681-RGA Document 61 Filed 10/26/17 Page 6 of 15 PageID #: 2971
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`2.
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`Plaintiff Does Not Allege It Will Suffer Any Competitive Harm
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`Plaintiff fails to dispute that the parties are not direct competitors in the same market, nor
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`alleges that monetary harm is an insufficient remedy. Rather, Plaintiff agrees that TCL and
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`Nichia are not direct competitors. Opp. at 20. That should end the inquiry. See Alerts Pty. Ltd.
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`v. Bloomberg Finance, L.P., et al., 922 F. Supp. 2d 486, 494-95 (D. Del. Feb. 5, 2013). Instead,
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`Plaintiff argues that, because TCL is a “downstream entity,” a stay could prejudice Plaintiff’s
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`ability to prosecute this case because “third-party discovery” could be lost or destroyed. Opp. at
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`20. This argument appears manufactured for purposes of resisting Defendants’ motion to stay,
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`and is not supported by Plaintiff’s actions in the case so far, or the facts at issue.
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`Indeed, Plaintiff fails to identify any third-party, or type of evidence, that may be
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`compromised. Plaintiff vaguely refers to Defendants’ licensing defense as requiring third party
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`discovery, but this too is irrelevant. First, Plaintiff has not yet served any subpoenas on any third
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`parties in this case, despite discovery being open for a number of months. Second, Defendants’
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`licensing defense is based on licenses to the patents-in-suit, which are owned, and have always
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`been owned, by Plaintiff. Therefore, the most relevant documents to Defendants’ licensing
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`defense would be the licenses themselves, which should be in the possession of Plaintiff, and not
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`subject to any third-party loss or destruction.
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`Indeed, Plaintiff cannot articulate any concrete prejudice that it would suffer on account
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`of a stay because every patent at issue in this case will have expired before November 1, 2017.
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`Even if Defendants are found liable, they will, at most, be responsible for past money damages.
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`There is no ongoing harm, and there is no possibility for any injunctive relief. Therefore,
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`“monetary damages will be sufficient to compensate [Nichia] for any infringement” and can
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`easily be calculated regardless of any delay attributable to the stay. See Virtual Agility Inc. v.
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`Salesforce, Inc., 759 F.3d 1307, 1318 (Fed. Cir. 2014). A stay in this action will likely either
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`NICHIA EX2008
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`Case 1:16-cv-00681-RGA Document 61 Filed 10/26/17 Page 7 of 15 PageID #: 2972
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`narrow or eliminate the pool of patents in dispute. That will make any calculation of damages
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`easier and simpler should there be any finding of infringement.
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`Plaintiff then appears to suggest that time itself would somehow decrease the value of its
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`patents during a stay, but again offers no evidence to support this claim. Indeed, Plaintiff ignores
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`a clear line of cases finding this argument unavailing. See Message Notification Techs. LLC v.
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`Microsoft Corp., C.A. No. 13-1881-GMS, D.I. 38, n.4 (D. Del. Feb. 24, 2015).
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`3.
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`Defendants Diligently Filed the IPRs and Stay Motion
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`Plaintiff also makes the spurious suggestion that it was somehow prejudiced by
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`Defendants’ “delay” in filing an IPR petition. Opp. at 18-19. However, the IPR petitions were
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`filed timely, and the motion to stay was made promptly thereafter. Defendants filed the IPR
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`petitions on August 25, 2017, within the one-year period permitted by statute. A few weeks
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`later, Defendants filed their motion to stay. See D.I. 51.
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`Plaintiff also inappropriately implies that Defendants have somehow acted in bad faith by
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`delaying the filing of their IPR papers. Opp. at 4-5, 18-20. The facts refute this suggestion. In
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`December 2016, Defendants told this Court that it had made no decision about whether to file an
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`IPR petition.1 Defendants rightfully considered the merits and costs of filing an IPR petition,
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`within the time allowed by statute. See 35 U.S.C. § 315(b); see also Opp. at 18-19. Moreover, it
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`made absolute sense for Defendants to wait until after the PTAB’s decision regarding the Vizio
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`IPRs to determine if it should file its own IPRs. The PTAB’s rules specifically contemplate that
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`parties will wait until after an IPR institution decision to join a previously filed IPR. 37 C.F.R. §
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`42.122(b). Defendants simply acted within statutory deadlines and caused no prejudice to
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`1 D.I. 19 at 14:12-18 (“[The Court:] Is this the kind of case where there is likely to be IPRs
`on these four patents? MR. GLASS: The decision has not been made, your honor. THE
`COURT: But I take it would be fair to say without trying to penetrate too deeply into your
`strategy, that its’ [sic] under active consideration? MR. GLASS: Of course.”).
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`NICHIA EX2008
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`Case 1:16-cv-00681-RGA Document 61 Filed 10/26/17 Page 8 of 15 PageID #: 2973
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`Plaintiff. Plaintiff has not shown that the timing of Defendants’ petitions suggests an unfair
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`tactical advantage or dilatory motive.
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`B.
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`A Stay Would Simplify the Litigation
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`1.
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`Plaintiff’s Own Statistics Confirm a Stay is Likely to Simplify the Case
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`Plaintiff does not dispute that a stay pending resolution of Defendants’ IPR petitions
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`would likely simplify the issues in this case. In fact, Plaintiff’s own statistics confirm that the
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`PTAB will likely invalidate several of its asserted claims. For instance, applying Plaintiff’s
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`statistic that 70% of all petitions are instituted, it is statistically probable that the PTAB will
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`institute at least three of Defendants’ four IPRs. Opp. at 13. Plaintiff further concedes that all
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`challenged claims are invalidated in 65% of instituted IPRs, meaning that the PTAB’s
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`determination will likely streamline of Plaintiff’s assertion of multiple patents-on-suit. Id. Thus,
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`even according to Plaintiff, the PTAB’s determinations are likely to result in significant
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`simplification of discovery, motion practice, and trial in this action.
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`Plaintiff attempts to discount these statistics by suggesting that they can not “reliably
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`predict” what will happen in a particular case. Opp. at 13. This is deceptive reasoning: the
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`statistics do not need to “reliably predict” the future in order to guide present action. They only
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`indicate what will probably happen. Here, it is highly likely that a stay would save resources on
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`all sides by narrowing the claims at issue in this case, as Plaintiff’s own logic dictates.
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`2.
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`The Court Should Grant a Stay Now Before the Court and Parties Expend
`Additional Resources
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`The fact that Defendants seek a stay before institution does not, contrary to Plaintiff’s
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`argument, weigh against a stay. Opp. at 1. It is not uncommon for courts in this District to grant
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`stays pending an institution decision due to the likelihood of case simplification. See, e.g., Neste
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`Oil OYJ v. Dynamic Fuels, LLC, 2013 WL 3353984, at *4 (D. Del. July 2, 2013); Princeton
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`NICHIA EX2008
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`Case 1:16-cv-00681-RGA Document 61 Filed 10/26/17 Page 14 of 15 PageID #: 2979
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`DATED: October 26, 2017
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`/s/ Arthur G. Connolly, III
`CONNOLLY GALLAGHER LLP
`Arthur G. Connolly, III (#2667)
`Ryan P. Newell (#4744)
`Mary I. Akhimien (#5448)
`The Brandywine Building
`1000 West Street, Suite 1400
`Wilmington, DE 19801
`(302) 757-7300
`aconnolly@connollygallagher.com
`rnewell@connollygallagher.com
`makhimien@connollygallagher.com
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`OF COUNSEL:
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`QUINN EMANUEL URQUHART & SULLIVAN LLP
`Raymond N. Nimrod
`James M Glass
`51 Madison Ave., 22nd Floor
`New York, New York 10010
`(212) 849-7000
`raynimrod@quinnemanuel.com
`jimglass@quinnemanuel.com
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`Attorneys for TCL Multimedia Technology
`Holdings Limited and TTE Technology, Inc.
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`11
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`NICHIA EX2008
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`Case 1:16-cv-00681-RGA Document 61 Filed 10/26/17 Page 15 of 15 PageID #: 2980
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`CERTIFICATE OF SERVICE
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`I hereby certify that on October 26, 2017, copies of the foregoing were caused to be
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`served upon the following in the manner indicated:
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`VIA ELECTRONIC E-MAIL
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`Jack B. Blumenfeld
`Brian P. Egan
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
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`David E. Cole
`Kenneth A. Gallo
`PAUL, WEISS, RIFKUND, WHARTON & GARRISON LLP
`2001 K Street, NW
`Washington, DC 20006-1047
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`Catherine Nyarady
`Daniel J. Klein
`PAUL, WEISS, RIFKUND, WHARTON & GARRISON LLP
`1285 Avenue of the Americas
`New York, NY 10019
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`VIA ELECTRONIC E-MAIL
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`VIA ELECTRONIC E-MAIL
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`/s/Arthur G. Connolly, III
`Arthur G. Connolly, III (#2667)
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`NICHIA EX2008
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