Case 2:12-cv-02829-JPM-tmp Document 40-1 Filed 02/08/13 Page 1 of 5 PageID 452
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`IN THE UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF TENNESSEE
`WESTERN DIVISION
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`Civil Action No. 2:12-cv-2829 JPM
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`B.E. Technology, L.L.C.,
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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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`MICROSOFT CORPORATION’S MEMORANDUM IN SUPPORT OF
`MOTION TO STAY PROCEEDINGS PENDING RESOLUTION OF
`MICROSOFT’S MOTION TO TRANSFER
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`On January 18, 2013, Microsoft filed a Motion to Transfer Venue to the Western District
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`of Washington, or in the Alternative, to the Northern District of California. D.I. 32. Microsoft
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`respectfully requests that the Court stay all other proceedings in this case pending resolution of
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`Microsoft’s transfer request.
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`A stay of proceedings is consistent with the Federal Circuit’s recent instructions in In re
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`Fusion-IO, Inc., No. 12-139, 2012 WL 6634939 (Fed. Cir. Dec. 21, 2012) and In re EMC Corp,
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`Misc. No. 142, 2013 WL 324154 (Fed. Cir. Jan. 29, 2013). These cases highlight “the
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`importance of addressing motions to transfer at the outset of litigation,” as well as the
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`appropriateness of a stay of proceedings until resolution of such motions. In re EMC, 2013 WL
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`324154 at *2; In re Fusion-IO, 2012 WL 6634939 at *1.
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`I.
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`PROCEDURAL BACKGROUND
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`On September 21, 2012, B.E. Technology LLC (“B.E.”) filed its Complaint in this
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`matter. The complaint alleges infringement of U.S. Patent Nos. 6,628,314 and 6,771,290, but
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`Case 2:12-cv-02829-JPM-tmp Document 40-1 Filed 02/08/13 Page 2 of 5 PageID 453
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`fails to specifically identify what Microsoft products and features B.E. was accusing.1 B.E.’s
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`Patent Local Rule 3.1 Infringement Contentions were served on January 7, 2013. On January 18,
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`2013, Microsoft moved to transfer venue to the Western District of Washington, or in the
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`alternative, to the Northern District of California. D.I. 31.
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`Substantive discovery will soon commence in this litigation. Microsoft’s Initial Non-
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`infringement Contentions and corresponding PLR 3.4 production are due on February 19, 2013.
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`Microsoft’s Initial Invalidity Contentions are due in April.
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`II. LEGAL STANDARD
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`“A district court has the inherent power to stay its proceedings.” Esperson v. Trugreen
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`LP, No. 10–2130, 2010 WL 2640520, *2 (W.D. Tenn. June 29, 2010). When considering a
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`motion to stay, “the district court should consider three factors: (1) potential prejudice to the non-
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`moving party; (2) hardship and inequality to the moving party if the action is not stayed; and
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`(3) the judicial resources that would be saved by the stay.” Id. (citing In re Beverly Hills Fire
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`Litig., 695 F.2d 207, 216 (6th Cir.1982)).
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`Although this circuit has not specifically addressed whether litigation should be stayed
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`pending the outcome of a motion to transfer, the Third, Fifth, and Federal Circuits have all held
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`that district courts should rule on timely-filed transfer motions before allowing parties to
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`commence discovery. See, e.g., In re Fusion-IO, 2012 WL 6634939 at *1; In re: Horseshoe
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`Entertainment, 337 F.3d 429 (5th Cir. 2003) (“Horseshoe filed its motion to transfer timely and
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`before it filed its answer and in our view disposition of that motion should have taken top
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`11 B.E. did not identify any product allegedly used by Microsoft to infringe the ’314 patent. B.E
`accused Microsoft of selling “tablet computer products” and “Microsoft Xbox 360 Consoles,”
`but provided no explanation as to how Microsoft allegedly infringes “inventions related to the
`display of targeted advertisements based on demographic information over a network.” See D.I.
`1; D.I. 34-1 at 1.
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`2
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`priority in the handling of this case.”) (cited with approval in In re EMC); McDonnell Douglas
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`Corp. v. Polin, 429 F.2d 30, 31 (3d Cir. 1970) (“To undertake a consideration of the merits of the
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`action is to assume, even temporarily, that there will be no transfer before the transfer issue is
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`decided.”) (cited with approval in In re EMC).
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`III. A STAY PENDING ADJUDICATION OF MICROSOFT’S MOTION TO
`TRANSFER IS APPROPRIATE
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`Microsoft respectfully requests that the Court exercise its inherent power to immediately
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`stay all proceedings in this case, including Local Patent Rule disclosures, pending disposition of
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`Microsoft’s motion to transfer.
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`B.E. has no apparent business beyond the present litigations. As such it will not suffer
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`any prejudice from a temporary stay of proceedings pending resolution of Microsoft’s transfer
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`motion. In contrast, Microsoft will have to expend significant resources – including litigation
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`costs and valuable engineering time – to comply with the impending discovery and disclosure
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`obligations set forth in the Patent Local Rules. As the Federal Circuit explained, parties should
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`not be burdened with litigating the merits of an action until motions to transfer are decided and
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`the location of the litigation finalized. In re Fusion-IO, 2012 WL 6634939, at *1 (“We fully
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`expect, however, for Fusion-IO to promptly request transfer in the lead case along with a motion
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`to stay proceedings pending disposition of the transfer motion, and for the district court to act on
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`those motions before proceeding to any motion on the merits of the action.”).
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`Lastly, a stay at the outset of this litigation will further principles of judicial economy and
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`comity. This litigation is in its early stages and substantive discovery has barely begun. If the
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`Court sets a case management schedule and proceeds to the claim construction process, there is a
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`risk that the Court will needlessly expend resources addressing issues related to discovery and
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`claim construction that another district court may decide differently. See McDonnell Douglas
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`3
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`Case 2:12-cv-02829-JPM-tmp Document 40-1 Filed 02/08/13 Page 4 of 5 PageID 455
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`Corp., 429 F.2d at 30. “Congress’ intent to prevent the waste of time, energy and money and to
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`protect litigants, witnesses and the public against unnecessary inconvenience and expense”
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`through transfer to a more convenient venue may be thwarted by engaging in substantive
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`discovery before adjudication of a transfer motion. In re EMC, 2013 WL 324154 at *2 (internal
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`quotations omitted). As such, a motion to transfer should be “a top priority in the handling of
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`this case.” Id.
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`IV. CONCLUSION
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`For the above reasons, Microsoft respectfully requests the Court stay all other
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`proceedings in this litigation including Local Patent Rule disclosures and fact discovery pending
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`resolution of Microsoft’s Motion to Transfer Venue to the Western District of Washington, or in
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`the Alternative, to the Northern District of California. D.I. 32.
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`Dated: February 8, 2013
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`Respectfully submitted,
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`s/ Leeron G. Kalay
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`Kelly C. Hunsaker (CA Bar No. 168307)
`Leeron G. Kalay (CA Bar No. 23359)
`FISH & RICHARDSON P.C.
`500 Arguello Street, Suite 500
`Redwood City, CA 94063
`Telephone: (650) 839-5070
`Email: hunsaker@fr.com
` kalay@fr.com
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`Bradley E. Trammell (TN #13980)
`Adam Baldridge (TN #023488)
`Baker, Donelson, Bearman, Caldwell &
`Berkowitz, P.C.
`165 Madison Avenue, Suite 2000
`Memphis, TN 38103
`Telephone: 901.577.2121
`Email: btrammell@bakerdonelson.com
` abaldridge@bakerdonelson.com
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`Attorneys for Defendant
`MICROSOFT CORPORATION
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`CERTIFICATE OF SERVICE
`I hereby certify that on February 8, 2013, a true and correct copy of the foregoing
`document was electronically filed with the United States District Court for the Western District
`of Tennessee, and was served on all counsel by the court’s electronic filing notification or via
`email.
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`s/ Leeron G. Kalay