Case 6:23-cv-00319-ADA Document 53 Filed 03/08/24 Page 1 of 12
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`PROXENSE, LLC,
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`Plaintiff,
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`v.
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`MICROSOFT CORPORATION,
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`Defendant.
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`Case No. 6:23-cv-00319-ADA
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`JURY TRIAL DEMANDED
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`MICROSOFT’S OPPOSED MOTION TO STAY
`PENDING RESOLUTION OF MICROSOFT’S MOTION TO TRANSFER
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`1
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`MICROSOFT 1024
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`Case 6:23-cv-00319-ADA Document 53 Filed 03/08/24 Page 2 of 12
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`I.
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`II.
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`III.
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`TABLE OF CONTENTS
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`Page
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`Introduction ......................................................................................................................... 1
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`Factual Background ............................................................................................................ 1
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`This Case Should be Stayed Pending the Transfer Decision .............................................. 2
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`A.
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`B.
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`The Resolution of Microsoft’s Motion to Transfer Should Take “Top Priority” ... 2
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`All Relevant Factors Favor a Stay Pending a Decision on Transfer ....................... 4
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`1.
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`2.
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`3.
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`A Stay Will Not Prejudice Proxense ........................................................... 4
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`Microsoft Will Suffer Undue Hardship Absent a Stay ............................... 5
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`A Stay Will Conserve Judicial Resources .................................................. 6
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`IV.
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`Conclusion .......................................................................................................................... 6
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`Case 6:23-cv-00319-ADA Document 53 Filed 03/08/24 Page 3 of 12
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`TABLE OF AUTHORITIES
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`
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`Page(s)
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`Cases
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`Aire Tech. Ltd., v. Apple Inc.,
`No. 6:21-cv-01101-ADA (W.D. Tex. Nov. 8, 2022), Dkt. 71 ...................................................3
`
`In re Apple Inc.,
`979 F.3d 1332 (Fed. Cir. 2020)..........................................................................................2, 3, 6
`
`In re Apple Inc.,
`No. 2023-120, 2023 WL 2359699 (Fed. Cir. Mar. 6, 2023) ......................................................2
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`In re Apple, Inc.,
`52 F.4th 1360 (Fed. Cir. 2022) ..............................................................................................2, 3
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`Cont’l Grain Co. v. The Barge FBL-585,
`364 U.S. 19 (1960) .....................................................................................................................3
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`Crossroads Sys., Inc. v. Dot Hill Sys. Corp.,
`No. A-13-CA-1025-SS, 2015 WL 3773014 (W.D. Tex. June 16, 2015) ..................................4
`
`In re EMC Corp.,
`501 F. App’x 973 (Fed. Cir. 2013) ............................................................................................6
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`In re Google Inc.,
`No. 2015-138, 2015 WL 5294800 (Fed. Cir. 2015) ..............................................................3, 6
`
`In re Google LLC,
`58 F.4th 1379 (Fed. Cir. 2023) ..................................................................................................4
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`Kirsch Rsch. & Dev., LLC v. Tarco Specialty Prods., Inc.,
`No. 6:20-CV-00318-ADA, 2021 WL 4555804 (W.D. Tex. Oct. 4, 2021) ................................4
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`KOSS Corp. v. Plantronics, Inc.,
`No. 6:20-cv-00663-ADA (W.D. Tex. Apr. 8, 2021) .................................................................3
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`In re Morgan Stanley,
`417 F. App’x 947 (Fed. Cir. 2011) ............................................................................................4
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`NewFlux v. Best Buy Co.,
`No. 6:20-cv-00732-ADA (W.D. Tex. Apr. 13, 2021) ...............................................................3
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`NFC Tech. LLC v. HTC Am., Inc.,
`No. 2:13-CV-1058-WCB, 2015 WL 1069111 (E.D. Tex. Mar. 11, 2015) ................................5
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`Red Rock Analytics, LLC v. Apple Inc. et al.,
`No. 6:21-cv-00346-ADA (W.D. Tex. June 13, 2022), Dkt. 130 ...............................................3
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`Scramoge Tech. Ltd. v. Apple Inc.,
`No. 6:21-cv-01071-ADA (W.D. Tex. Nov. 8, 2022), Dkt. 68 ...................................................3
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`In re SK hynix Inc.,
` 835 F. App'x 600, 600-01 (Fed. Cir. 2021) ...............................................................................3
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`In re TikTok, Inc.,
`85 F.4th 352 (5th Cir. 2023) ......................................................................................................2
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`In re TracFone Wireless, Inc.,
`848 F. App’x 899 (Fed. Cir. 2021) ............................................................................................3
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`Transmatic, Inc. v. Gulton Indus., Inc.,
`180 F.3d 1343 (Fed. Cir. 1999)..................................................................................................5
`
`Underwater Devices Inc. v. Morrison-Knudsen Co., Inc.,
`717 F.2d 1380 (Fed. Cir. 1983), overruled on other grounds by
`In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007) .......................................................5
`
`In re Volkswagen of Am., Inc.,
`545 F.3d 304 (5th Cir. 2008) (en banc) .....................................................................................6
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`XR Commc’ns LLC v. Apple Inc.,
`No. 6:21-cv-00620-ADA (W.D. Tex. Nov. 8, 2022), Dkt. 83 ...................................................4
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`Yeti Coolers, LLC v. Home Depot U.S.A., Inc.,
`No. 1:17-CV-342-RP, 2018 WL 2122868 (W.D. Tex. Jan. 8, 2018) ........................................4
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`Statutes
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`28 U.S.C. § 1404(a) .................................................................................................................2, 3, 6
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`I.
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`INTRODUCTION
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`Defendant Microsoft Corporation (“Microsoft”) moves to stay all case activity pending
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`resolution of its Motion to Transfer to the Western District of Washington (“WDWA”). As the
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`Fifth and Federal Circuits have emphasized, resolving a pending motion to transfer should take
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`“top priority,” ahead of addressing underlying substantive issues. Venue discovery has been
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`closed since October 30, 2023, and Microsoft’s Motion to Transfer was fully briefed six weeks
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`before the Court cancelled the Markman hearing. A stay is necessary as substantive deadlines
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`would be quickly approaching, including final infringement and invalidity contentions, if
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`discovery opens. These efforts should be postponed until the Court has ruled on Microsoft’s
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`Motion to Transfer Venue.
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`All relevant factors favor a stay. First, Plaintiff Proxense, LLC (“Proxense”) will not be
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`prejudiced by a stay, as it does not make any products and is not seeking injunctive relief. Dkt 1.
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`Second, Microsoft will be harmed without a stay, as it will need to invest significant resources to
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`litigate in an inconvenient venue having almost no relevant witnesses or evidence. Finally, without
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`a stay, judicial resources will be wasted if this case is later transferred to WDWA, which is clearly
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`the more convenient venue, as the relevant witnesses and documents are firmly anchored there.
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`Moreover, as embodied in the Court’s exemplary schedule for patent cases, resolving all claim
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`construction disputes before fact discovery opens is a more efficient and streamlined process. See
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`Ex. 1 (OGP 4.4) at 13-17 (Exemplary Schedule). Thus, further proceedings should be stayed
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`pending a decision on transfer.
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`II.
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`FACTUAL BACKGROUND
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`Proxense filed this suit in the Western District of Texas (“WDTX”) on May 2, 2023. Dkt.
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`1 (Complaint). Microsoft filed its Motion to Dismiss for Failure to State a Claim on July 10, 2023,
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`Dkt. 21, and timely filed a motion to transfer on October 10, 2023, Dkt. 29. The ten-week venue
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`discovery period closed on October 30, 2023, with neither party seeking additional venue
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`discovery, and Microsoft’s Motion to Transfer was fully briefed by November 27, 2023. See Dkt.
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`40.
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`This Court ordered the January 19, 2024 Markman hearing cancelled (Dkt. 50). In the
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`wake of the cancelled Markman hearing, on January 25, 2024, the parties agreed to “stay the
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`opening of fact discovery . . . until the Court rules on Microsoft’s Motion to Transfer.” See Ex. 2.
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`The parties also agreed to reconvene in two weeks (i.e., around February 8) if the issue was not
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`mooted and the parties remained at an impasse. See Ex. 3. That date came and went, and the
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`opening of fact discovery remained stayed for approximately one month. On February 23,
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`Proxense contacted Microsoft to approach this Court to open discovery.
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`The parties met and conferred on March 7, 2024, to discuss Proxense’s position on this
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`motion for a stay. Proxense’s counsel stated that it opposes.
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`III. THIS CASE SHOULD BE STAYED PENDING THE TRANSFER DECISION
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`A.
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`The Resolution of Microsoft’s Motion to Transfer Should Take “Top Priority”
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`Appellate courts’ precedent and this District’s standard practice require this case to be
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`stayed pending Microsoft’s transfer motion. “[O]nce a party files a transfer motion, disposing of
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`that motion should unquestionably take top priority.” In re Apple Inc., 979 F.3d 1332, 1337 (Fed.
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`Cir. 2020) (making clear that transfer should be handled before other substantive tasks, including
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`Markman); In re TikTok, Inc., 85 F.4th 352, 362 (5th Cir. 2023) (“[D]isposition of a [§ 1404(a)]
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`motion should [take] a top priority in the handling of a case.” (quoting In re Horseshoe Ent., 337
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`F.3d 429, 433 (5th Cir. 2003))). Thus, a district court should “timely decide the transfer motion
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`before proceeding to further substantive matters.” In re Apple Inc., No. 2023-120, 2023 WL
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`2359699, at *2 (Fed. Cir. Mar. 6, 2023) (granting petition for mandamus); In re Apple, Inc., 52
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`F.4th 1360, 1363 (Fed. Cir. 2022) (directing the district court to “postpone fact discovery and other
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`substantive proceedings until after consideration of Apple’s motion for transfer”); In re TracFone
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`Wireless, Inc., 848 F. App’x 899, 900–01 (Fed. Cir. 2021) (similar); In re SK hynix Inc., 835 F.
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`App’x 600, 600–01 (Fed. Cir. 2021) (similar).
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`Indeed, this District’s well-established practice is to stay proceedings pending resolution
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`of a transfer motion. See, e.g., Text Order Granting Motion to Stay Case, KOSS Corp. v.
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`Plantronics, Inc., No. 6:20-cv-00663-ADA (W.D. Tex. Apr. 8, 2021); Text Order Granting Motion
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`to Stay Case, NewFlux v. Best Buy Co., No. 6:20-cv-00732-ADA (W.D. Tex. Apr. 13, 2021);
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`Order Staying Case, Red Rock Analytics, LLC v. Apple Inc. et al., No. 6:21-cv-00346-ADA (W.D.
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`Tex. June 13, 2022), Dkt. 130. After all, the fundamental purpose of the transfer statute—“to
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`protect litigants, witnesses and the public against unnecessary inconvenience and expense”—is
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`“thwarted” if protracted litigation occurs in an inconvenient venue before transfer is resolved.
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`Cont’l Grain Co. v. The Barge FBL-585, 364 U.S. 19, 27 (1960); Apple, 52 F.4th at 1361; see also
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`In re Google Inc., No. 2015-138, 2015 WL 5294800, at *1–2 (Fed. Cir. 2015) (explaining that
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`lengthy delays in deciding transfer motions can “frustrate 28 U.S.C. § 1404(a)’s intent” when “a
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`motion to transfer lingers unnecessarily on the docket” (internal citation omitted)).
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`The Federal Circuit recently held that courts should “postpone fact discovery and other
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`substantive proceedings until after consideration of [Defendant’s] motion for transfer[,]”
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`explaining that “precedent entitles parties to have their venue motions prioritized” and that
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`“decision of a transfer motion must proceed expeditiously as the first order of business[.]” Apple,
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`52 F.4th at 1362–63; In re Apple Inc., No. 2022-163, 2022 WL 16754376, at *1 (Fed. Cir. Nov. 8,
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`2022); In re Apple Inc., No. 2022-164, 2022 WL 16754153, at *1 (Fed. Cir. Nov. 8, 2022). Orders
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`subsequently issued in several underlying cases, staying all deadlines. See Aire Tech. Ltd., v. Apple
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`Inc., No. 6:21-cv-01101-ADA (W.D. Tex. Nov. 8, 2022), Dkt. 71; Scramoge Tech. Ltd. v. Apple
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`Inc., No. 6:21-cv-01071-ADA (W.D. Tex. Nov. 8, 2022), Dkt. 68; XR Commc’ns LLC v. Apple
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`Inc., No. 6:21-cv-00620-ADA (W.D. Tex. Nov. 8, 2022), Dkt. 83. The same principles apply here,
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`namely that all proceedings, including fact discovery, should be “postpone[d] . . . until after
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`consideration of [Microsoft’s] motion for transfer.” See Apple, 52 F.4th at 1362–63.
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`B.
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`All Relevant Factors Favor a Stay Pending a Decision on Transfer
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`Courts in this District typically consider three factors to determine whether a stay is
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`warranted: (1) any potential prejudice to the non-moving party; (2) the hardship and inequity to
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`the moving party if the action is not stayed; and (3) the judicial resources saved if a stay is granted.
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`Yeti Coolers, LLC v. Home Depot U.S.A., Inc., No. 1:17-CV-342-RP, 2018 WL 2122868, at *1
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`(W.D. Tex. Jan. 8, 2018). Here, all three factors favor a stay.
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`1.
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`A Stay Will Not Prejudice Proxense
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`A stay pending resolution of Microsoft’s Motion to Transfer will not prejudice Proxense.
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`Where a party, like Proxense, “does not make or sell any product that practices the claimed
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`invention[,]” a short stay does not prejudice it. In re Morgan Stanley, 417 F. App’x 947, 950 (Fed.
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`Cir. 2011); see In re Google LLC, 58 F.4th 1379, 1383 (Fed. Cir. 2023) (noting that a non-
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`competing party “is not threatened in the market in a way that . . . might add urgency to case
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`resolution”). For such entities, a “mere delay in collecting [any alleged] damages does not
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`constitute undue prejudice.” Crossroads Sys., Inc. v. Dot Hill Sys. Corp., No. A-13-CA-1025-SS,
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`2015 WL 3773014, at *2 (W.D. Tex. June 16, 2015); Kirsch Rsch. & Dev., LLC v. Tarco Specialty
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`Prods., Inc., No. 6:20-CV-00318-ADA, 2021 WL 4555804, at *2 (W.D. Tex. Oct. 4, 2021) (“[T]he
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`weight of Plaintiff’s interest in timely enforcement is diminished here where a stay would merely
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`delay Plaintiff’s potential monetary recovery.”). Indeed, Proxense waited almost seven years to
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`file suit after sending a letter to Microsoft that allegedly “include[ed] details of Microsoft’s
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`infringing activity.” Dkt. 1 (Compl.) at ¶¶ 42-44; Ex. 10.
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`Moreover, pre-judgment interest can remedy any cognizable economic disadvantage
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`Proxense might allege. See, e.g., Underwater Devices Inc. v. Morrison-Knudsen Co., Inc., 717
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`F.2d 1380, 1389 (Fed. Cir. 1983), overruled on other grounds by In re Seagate Tech., LLC, 497
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`F.3d 1360 (Fed. Cir. 2007); see also Transmatic, Inc. v. Gulton Indus., Inc., 180 F.3d 1343, 1347–
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`48 (Fed. Cir. 1999). And although “delay in the vindication of patent rights . . . is present in every
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`case in which a patentee resists a stay,” it is “not sufficient, standing alone, to defeat a stay motion.”
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`NFC Tech. LLC v. HTC Am., Inc., No. 2:13-CV-1058-WCB, 2015 WL 1069111, at *2 (E.D. Tex.
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`Mar. 11, 2015).
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`Moreover, Proxense previously agreed to “stay the opening of fact discovery and the
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`service of initial disclosures until the Court rules on Microsoft’s Motion to Transfer” and did not
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`object to or otherwise revisit this agreed stay for almost one month. See Ex. 2. Indeed, Proxense
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`did not articulate—and still has not articulated—any prejudice that it would allegedly suffer from
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`a stay or otherwise object to staying the opening of fact discovery and the service of initial
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`disclosures. Therefore, Proxense’s own lack of urgency further demonstrates that it would not be
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`prejudiced by a stay pending the Court’s resolution of Microsoft’s Motion to Transfer.
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`2.
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`Microsoft Will Suffer Undue Hardship Absent a Stay
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`Absent a stay, this case will progress into substantial merits proceedings, which will impose
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`significant hardship on Microsoft. This Court’s exemplary schedule, specifically designed for
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`resolution of patent cases, is more efficient and streamlined than marching through fact discovery
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`and contentions when they may have to be redone given the different local patent rule
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`requirements. Cf., Ex. 4 (WDWA Local Patent Rule) at App. 1 (Schedule Under Draft Local
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`Patent Rules) with Ex. 1 (OGP 4.4) at 13-17 (Exemplary Schedule). However, Proxense is
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`requesting that the parties first engage in fact discovery without the benefit of claim construction
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`and otherwise understanding how key claim terms will be construed. Indeed, these “are not merely
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`rote, ministerial tasks”; instead, “a Markman hearing and claim construction order are two of the
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`most important and time-intensive substantive tasks a district court undertakes in a patent case.”
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`Apple, 979 F.3d at 1338.
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`Proxense’s position is that fact discovery should begin immediately. Moving forward now,
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`however, risks a “waste ‘of time, energy, and money’” that Section 1404(a) is intended to prevent.
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`Google, 2015 WL 5294800, at *1–2; accord In re EMC Corp., 501 F. App’x 973, 975–76 (Fed.
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`Cir. 2013); Apple, 52 F.4th at 1361–63. Such prejudice “cannot be put back in the bottle” and
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`remedied after the fact. In re Volkswagen of Am., Inc., 545 F.3d 304, 319 (5th Cir. 2008) (en
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`banc). But it can be minimized, if not completely prevented, by a short stay.
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`3.
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`A Stay Will Conserve Judicial Resources
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`Finally, a stay will conserve judicial resources by minimizing the need for duplicative
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`proceedings in the transferor and transferee courts. “‘[J]udicial economy requires that another
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`district court should not burden itself with the merits of the action until it is decided that a transfer
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`should be effected and such consideration additionally requires that the court which ultimately
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`decides the merits of the action should also decide the various questions which arise during the
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`pendency of the suit instead of considering it in two courts.’” Apple, 52 F.4th at 1362–63 (quoting
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`McDonnell Douglas Corp. v. Polin, 429 F.2d 30, 30 (3d Cir. 1970)). Where, as here, the Court
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`has not made any substantive rulings, a stay will preserve judicial resources and prevent any
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`duplicative efforts.
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`IV. CONCLUSION
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`For the foregoing reasons, Microsoft respectfully request that the Court stay all case
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`activity until it issues a decision and written opinion on Microsoft’s Motion to Transfer Venue.
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`Case 6:23-cv-00319-ADA Document 53 Filed 03/08/24 Page 11 of 12
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`Date: March 8, 2024
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`Respectfully submitted,
`/s/ Betty Chen
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`Betty Chen
`Texas Bar No. 24056720
`bchen@desmaraisllp.com
`DESMARAIS LLP
`101 California Street, Suite 3000
`San Francisco, CA 94111
`Telephone: (415) 573-1900
`Facsimile: (415) 573-1901
`Jason W. Wolff
`CA Bar No. 215819
`wolff@fr.com
`FISH & RICHARDSON P.C.
`12860 El Camino Real, Suite. 400
`San Diego, CA 92130
`Telephone: (858) 678-5070
`Facsimile: (858) 678-5099
`Benjamin C. Elacqua
`Texas Bar No. 24055443
`elacqua@fr.com
`909 Fannin Street, Suite 2100
`Houston, TX 77010
`Tel: (713) 654-5300
`Fax: (713) 652-0109
`Melissa Smith
`Texas Bar Number 24001351
`melissa@gillamsmithlaw.com
`GILLAM & SMITH, LLP
`303 South Washington Avenue
`Marshall, Texas 75670
`Telephone: (903) 934-8450
`COUNSEL FOR DEFENDANT,
`MICROSOFT CORPORATION
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`CERTIFICATE OF CONFERENCE
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`Pursuant to Local Rules CV-7(G), counsel for the parties met and conferred telephonically
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`on March 7, 2024. David Hecht and Maxim Price attended for Plaintiff. Betty Chen and Claire
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`Chang attended for Defendant. The parties discussed their positions on this motion. Plaintiff
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`indicated that it opposes this motion. The discussions ended in an impasse, leaving an open issue
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`for the Court to resolve.
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`/s/ Betty Chen
`Betty Chen
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`CERTIFICATE OF SERVICE
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`Pursuant to the Federal Rules of Civil Procedure and Local Rule CV-5, I hereby certify
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`that, on March 8, 2024, all counsel of record who have appeared in this case are being served with
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`a copy of the foregoing via the Court’s CM/ECF system.
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`/s/ Betty Chen
`Betty Chen
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