Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 1 of 17 PageID #: 5282
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`
`
`
`Case No. 2:17-cv-00513-JRG
`(Lead Case)
`
`JURY TRIAL DEMANDED
`
`
`
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
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`AGIS SOFTWARE DEVELOPMENT, LLC
`
` Plaintiff,
`
`
`
`v.
`
`HUAWEI DEVICE USA INC., HUAWEI
`DEVICE CO., LTD., AND HUAWEI
`DEVICE (DONGGUAN) CO., LTD.
`
`
`Defendants.
`
`
`
`
`
`PLAINTIFF AGIS SOFTWARE DEVELOPMENT, LLC’S RESPONSE IN
`OPPOSITION TO DEFENDANTS HUAWEI DEVICE USA INC.,
`HUAWEI DEVICE CO., LTD. AND HUAWEI DEVICE (DONGGUAN) CO., LTD.’S
`AND LG ELECTRONICS INC.’S MOTION TO STAY (DKT. 102) PENDING
`RESOLUTION OF HUAWEI’S MOTION TO TRANSFER (DKT. 36)
`AND LGEKR’S MOTION TO DISMISS OR TRANSFER (DKT. 46)
`
`
`
`
`
`
`

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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 2 of 17 PageID #: 5283
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`TABLE OF CONTENTS
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`Page No(s).
`
`INTRODUCTION .............................................................................................................. 1
`
`BACKGROUND ................................................................................................................ 1
`
`LEGAL STANDARD ......................................................................................................... 3
`
`
`
`
`I.
`
`II.
`
`III.
`
`IV. ARGUMENT ...................................................................................................................... 4
`
`A.
`
`B.
`
`C.
`
`D.
`
`AGIS Will Suffer Significant Prejudice If A Stay Is Granted ................................ 4
`
`Defendants Will Not Suffer Any Hardship or Inequity If A Stay Is
`Denied ..................................................................................................................... 6
`
`A Stay Will Not Avoid Duplicative Litigations ..................................................... 8
`
`The Breadth of Discovery and the Strength of Defendants’ Motions to
`Transfer and Dismiss Weigh Against A Stay ......................................................... 9
`
`CONCLUSION ................................................................................................................. 11
`
`i
`
`V.
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`

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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 3 of 17 PageID #: 5284
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Alacritech, Inc. v. CenturyLink, Inc.,
`No. 2:16-CV-00693, 2017 WL 4231459 (E.D. Tex. Sept. 22, 2017) ........................................5
`
`Areizaga v. ADW Corporation,
`No. 3:14-cv-2899-B, 2016 WL 3536859 (N.D. Tex. June 28, 2016) ......................................10
`
`Ariba, Inc. v. Emptoris, Inc.,
`No. 9:07-CV-90, 2007 WL 3132606 (E.D. Tex. Oct. 23, 2007) ...............................................5
`
`Campbell v. U.S.,
`No. 5:05-CV-179, Dkt. 24 (E.D. Tex. Feb. 7, 2006) ...............................................................10
`
`Cellular Commc'ns Equip. LLC v. HTC Corp.,
`No. 6:13-CV-507, 2015 WL 11118110 (E.D. Tex. Mar. 27, 2015) ..........................................8
`
`Clear With Computers, LLC v. Mercedes-Benz USA, LLC,
`No. 6:12-CV-677-LED, 2013 WL 12164641 (E.D. Tex. Sept. 26, 2013) ...............................10
`
`Clinton v. Jones,
`520 U.S. 681 (1997) ...................................................................................................................4
`
`Coyle v. Hornell Brewing Co.,
`No. 08-2797, 2009 WL 1652399 (D.N.J. June 9, 2009) ..........................................................10
`
`Cummins-Allison Corp. v. SBM Co.,
`No. 9:07-CV-196, 2008 WL 11348281 (E.D. Tex. May 21, 2008) ......................................5, 7
`
`Edward D. Ioli Trust v. Avigilon Corp.,
`No. 2:10-cv-605, Dkt. 279 (E.D. Tex. Nov. 16, 2012) ..............................................................7
`
`Griffin v. Am. Zurich Ins. Co.,
`No. 3:14-CV-2470, 2015 WL 11019132 (N.D. Tex. Mar. 18, 2015) ....................................3, 4
`
`Kaneka Corp. v. JBS Hair, Inc.,
`No. 3:10-CV-1430-P, 2011 WL 13167931 (N.D. Tex. Mar. 30, 2011) ....................................6
`
`Lennon Image Techs., LLC, v. Macy’s Retail Hldgs., Inc.,
`No. 2:13-cv-00235, 2014 WL 4652117 (E.D. Tex. Sept. 18, 2014)..........................................3
`
`Moreno v. Marvin Windows, Inc.,
`No. 07-CA-091, 2007 WL 2060760 (W.D. Tex. July 17, 2007) ...............................................7
`
`
`
`i
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`

`

`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 4 of 17 PageID #: 5285
`
`Moser v. Navistar Int'l Corp.,
`No. 4:17-cv-00598, 2018 WL 1169189 (E.D. Tex. Mar. 6, 2018) ............................................4
`
`Realtime Data LLC v. Actian Corp.,
`No. 6:15-CV-463, 2016 WL 9340796 (E.D. Tex. Nov. 29, 2016) ............................................5
`
`Realtime Data, LLC v. Rackspace US, Inc.,
`No. 6:16-cv-00961, 2017 WL 772654 (E.D. Tex. Feb. 28, 2017) .............................................3
`
`Retractable Techs., Inc. v. Becton Dickinson & Co.,
`No. 2:08-cv-16, 2011 WL 13134434 (E.D. Tex. Mar. 15, 2011) ....................................3, 4, 10
`
`Saint Lawrence Commc'ns LLC v. ZTE Corp.,
`No. 2:15-cv-349, 2017 WL 3396399 (E.D. Tex. Jan. 17, 2017) (Gilstrap, J.) ..........................6
`
`Soverain Software LLC v. Amazon, Inc.,
`356 F. Supp. 2d 660 (E.D. Tex. 2005) .......................................................................................3
`
`Stanissis v. Dyncorp. Intern. LLC,
`No. 3:14-CV-2736-D, 2014 WL 7183942 (N.D. Tex. Dec. 17, 2014) ......................................7
`
`Thurmond v. Compaq Computer Corp.,
`No. 1:99-CV-0711, 2000 WL 33795090 (E.D. Tex. Mar. 1, 2000) ........................................10
`
`Von Drake v. National Broadcasting Co.,
`No. 3:04-cv-652, 2004 WL 1144142 (N.D. Tex. May 20, 2004) ..............................................7
`
`In re: ZTE (USA) Inc.,
`Case No. 18-113, Dkt. 2 (Fed. Cir. Nov. 30, 2017) .............................................................1, 10
`
`Statutes
`
`28 U.S.C. § 1400(b) .......................................................................................................................10
`
`Other Authorities
`
`Fed. R. Civ. P. 12(b)(6)..............................................................................................................8, 10
`
`Local Patent Rule 4-1.......................................................................................................................3
`
`Local Rule 3.4 ..................................................................................................................................7
`
`Local Rule CV-26(a)....................................................................................................................3, 4
`
`
`
`
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`ii
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`

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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 5 of 17 PageID #: 5286
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`
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`Plaintiff AGIS Software Development, LLC (“AGIS”), by and through its undersigned
`
`counsel, hereby submits this response in opposition to Huawei Device USA Inc., Huawei Device
`
`Co., Ltd., and Huawei Device (Dongguan) Co., Ltd.’s (collectively, “Huawei”) and LG
`
`Electronics Inc.’s (“LGEKR”) motion to stay (Dkt. 102) pending resolution of Huawei’s motion
`
`to transfer (Dkt. 36) and LGEKR’s motion to dismiss or transfer (Dkt. 46).1
`
`I.
`
`
`
`INTRODUCTION
`
`Defendants are not entitled to a stay merely because they filed motions to transfer and
`
`dismiss. A stay pending motions to transfer or dismiss is an extreme remedy, is not automatic,
`
`and is the exception rather than the rule. Defendants failed to meet their burden to establish good
`
`cause for the stay to be granted as none of the factors relevant to the good cause analysis weigh
`
`in favor of a stay. Rather, AGIS will suffer significant prejudice if the stay is granted because,
`
`among other things, AGIS is entitled to timely enforcement of its patent rights and a stay will
`
`delay AGIS’ day in court while Defendants continue to infringe on AGIS’ patents causing AGIS
`
`substantial harm. Moreover, In re: ZTE (USA) Inc., Case No. 18-113, Dkt. 2 (Fed. Cir. Nov. 30,
`
`2017) which is pending before the Federal Circuit, will have no effect on Huawei’s, LGEKR’s,
`
`or HTC’s motions to dismiss and transfer because the question before the Federal Circuit relates
`
`to venue pursuant to 1400(b), which is not the basis of Huawei’s, LGEKR’s, or HTC’s motions.
`
`Thus, the Court should deny Defendants motion to stay.
`
`II.
`
`
`
`BACKGROUND
`
`Approximately nine months ago, AGIS filed patent infringement cases against
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`manufacturers and suppliers of electronic devices, each of which have been consolidated into
`
`1 On March 28, 2018, ZTE (TX), Inc. and ZTE (USA), Inc. (collectively, “ZTE”), defendants in AGIS Software
`Development LLC v. ZTE Corporation, No. 2:17-cv-517 (E.D. Tex. June 21, 2017) (Consolidated), filed a notice of
`joinder seeking to join in Huawei’s and LGEKR’s motion to stay. Dkt. 107. On April 12, 2018, HTC, defendant in
`AGIS Software Development LLC v. HTC Corporation, No. 2:17-cv-514 (E.D. Tex. June 21, 2017) (Consolidated),
`filed a notice of joinder seeking to join in Huawei’s and LGEKR’s motion to stay. Dkt. 120. Huawei, LGEKR,
`ZTE, and HTC are collectively referred to herein as “Defendants.”
`
`
`
`
`

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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 6 of 17 PageID #: 5287
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`AGIS Software Development LLC v. Huawei Device USA, Inc., et al., No. 2:17-cv-513 (E.D.
`
`Tex. June 21, 2017) (Lead) (the “Consolidated Cases”).2 On October 5, 2017, Huawei filed an
`
`Answer to AGIS’s amended complaint. No. 2:17-cv- 513, Dkt. 29. Huawei then filed a motion
`
`to transfer venue to the Northern District of California. No. 2:17-cv-513, Dkt. 36. LGEKR filed
`
`a motion to dismiss for lack of personal jurisdiction, or in the alternative, to transfer venue to the
`
`Northern District of California. No. 2:17-cv-513, Dkt. 46. Both Huawei’s and LGEKR’s
`
`motions were fully briefed by early January 2018. ZTE (TX) Inc.’s and ZTE (USA) Inc.’s
`
`motion to dismiss for improper venue, or in the alternative, to transfer venue (No. 2:17-cv-517,
`
`Dkt. 38) was fully briefed by early March 2018. HTC filed a motion to dismiss for lack of
`
`personal jurisdiction, or in the alternative, to transfer venue (No. 2:17-cv-514, Dkt. 29) which
`
`was also fully briefed by early March 2018. Huawei, LGEKR, ZTE, and HTC now seek to stay
`
`discovery pending decisions on their respective motions. Apple, Inc., a defendant in one of the
`
`other Consolidated Cases, has not joined in the motion to stay.
`
`
`
`To date, AGIS has expended significant time, resources, and expense engaging in
`
`discovery with Defendants. AGIS has served its infringement contentions, initial disclosures,
`
`and first set of interrogatories. The parties have also begun document discovery, collectively
`
`producing over 135,000 pages of documents, and are in the process of collecting and reviewing
`
`additional documents for production. AGIS has also issued notices of 30(b)(6) depositions to
`
`Defendants and are in the process of scheduling those depositions. One day after this motion is
`
`fully briefed, the parties will have also exchanged proposed claim terms in compliance with
`
`
`2 The Consolidated Cases are: AGIS Software Development LLC v. Huawei Device USA, Inc., et al., No. 2:17-cv-
`513 (E.D. Tex. June 21, 2017) (Lead); AGIS Software Development LLC v. Apple, Inc., No. 2:17-cv-516 (E.D. Tex.
`June 21, 2017) (Consolidated); AGIS Software Development LLC v. HTC Corporation, No. 2:17-cv-514 (E.D. Tex.
`June 20, 2017) (Consolidated); AGIS Software Development LLC v. LG Electronics, Inc., No. 2:17-cv-515 (E.D.
`Tex. June 21, 2017) (Consolidated); and AGIS Software Development LLC v. ZTE Corporation, No. 2:17-cv-517
`(E.D. Tex. June 21, 2017) (Consolidated). These cases have been consolidated for all pretrial issues except venue.
`Dkt. 90.
`
`
`
`2
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`

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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 7 of 17 PageID #: 5288
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`Local Patent Rule 4-1. Additional relevant upcoming deadlines are listed below, with the
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`Markman hearing and trial to occur in approximately five months and eleven months,
`
`respectively.
`
`• Joint Claim Construction Statement:
`• Claim Construction Discovery Deadline:
`• Markman Hearing:
`
`
`
`• Fact Discovery Deadline:
`
`
`• Expert Discovery Deadline:
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`
`
`
`
`• Trial:
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`
`
`
`
`
`
`
`
`June 8, 2018
`July 6, 2018
`August 31, 2018
`October 15, 2018
`December 3, 2018
`March 4, 2019
`
`See Dkt. 115.
`
`III. LEGAL STANDARD
`
`
`
`A “district court has the inherent power to control its own docket.” Soverain Software
`
`LLC v. Amazon, Inc., 356 F. Supp. 2d 660, 662 (E.D. Tex. 2005). Management of a court’s
`
`docket requires the “exercise of judgment, which must weigh competing interests and maintain
`
`an even balance” and is determined on a case-by-case basis. Realtime Data, LLC v. Rackspace
`
`US, Inc., No. 6:16-cv-00961, 2017 WL 772654, at *2 (E.D. Tex. Feb. 28, 2017); Lennon Image
`
`Techs., LLC, v. Macy’s Retail Hldgs., Inc., No. 2:13-cv-00235, 2014 WL 4652117, at *2 (E.D.
`
`Tex. Sept. 18, 2014). An order staying discovery is the “exception rather than the rule.” Griffin
`
`v. Am. Zurich Ins. Co., No. 3:14-CV-2470, 2015 WL 11019132, at *3 (N.D. Tex. Mar. 18, 2015).
`
`
`
`A court may stay discovery pending a motion to dismiss or transfer only upon a showing
`
`of “good cause” to excuse the movant from compliance with the mandatory discovery
`
`obligations set forth in Local Rule CV-26(a). See Retractable Techs., Inc. v. Becton Dickinson &
`
`Co., No. 2:08-cv-16, 2011 WL 13134434, at *2 (E.D. Tex. Mar. 15, 2011); Griffin v. Am. Zurich
`
`Ins. Co., No. 3:14-CV-2470-P, 2015 WL 11019132, at *3 (N.D. Tex. Mar. 18, 2015). In
`
`determining whether there is good cause, a court considers numerous factors, including (1) the
`
`
`
`3
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`

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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 8 of 17 PageID #: 5289
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`potential prejudice to the nonmoving party from a stay; (2) the hardship and inequity to the
`
`moving party if the action is not stayed; (3) the judicial resources that would be saved by
`
`avoiding duplicative litigation; (4) the breadth of discovery sought and the burden of responding
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`to such discovery; and (5) the strength of the dispositive motion filed by the party seeking a stay.
`
`See Moser v. Navistar Int'l Corp., No. 4:17-cv-00598, 2018 WL 1169189, at *2 (E.D. Tex.
`
`Mar. 6, 2018); Retractable Techs., 2011 WL 13134434, at *2; Griffin, 2015 WL 11019132, at
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`*3. The movant bears the burden to establish why a stay should be granted. Clinton v. Jones,
`
`520 U.S. 681, 708 (1997); Retractable Techs., 2011 WL 13134434, at *2.
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`IV. ARGUMENT
`
`The Defendants’ Motion to Stay should be denied because Defendants have not shown
`
`“good cause” for the Court to excuse them from their mandatory discovery obligations of Local
`
`Rule CV-26(a). See Retractable Techs., 2011 WL 13134434, at *2 (denying motion to stay for
`
`defendant’s failure to demonstrate good cause); see also L.R. CV-26(a) (“[A] party is not
`
`excused from responding to discovery because there are pending motions to dismiss, to remand,
`
`or to change venue”) (emphasis added). Indeed, none of the factors relevant to the good cause
`
`analysis support their motion.
`
`A.
`
`AGIS Will Suffer Significant Prejudice If A Stay Is Granted
`
`
`
`AGIS will suffer significant prejudice if a stay is granted, and Defendants failed to show
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`otherwise. Defendants attempt to improperly place the burden on AGIS to show that AGIS will
`
`be prejudiced by a stay (Dkt. 120 at 6), but it is Defendants’ burden, not AGIS’s to come forward
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`with evidence as to why AGIS will not be prejudiced. See Griffin, 2015 WL 11019132, at *3.
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`Nonetheless, AGIS will suffer significant prejudice if the stay is granted for numerous reasons.
`
`Defendants have infringed on AGIS’s patents for years causing AGIS harm. Once AGIS
`
`initiated lawsuits against Defendants, AGIS became entitled to timely enforcement of its patent
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`
`
`4
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`

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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 9 of 17 PageID #: 5290
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`rights, which includes proceeding with discovery as set forth in the Docket Control Order and
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`this District’s Local Rules of Practice for Patent Cases. See Realtime Data LLC v. Actian Corp.,
`
`No. 6:15-CV-463, 2016 WL 9340796, at *3 (E.D. Tex. Nov. 29, 2016); Ariba, Inc. v. Emptoris,
`
`Inc., No. 9:07-CV-90, 2007 WL 3132606, at *2 (E.D. Tex. Oct. 23, 2007). Granting
`
`Defendants’ request to stay discovery will unnecessarily delay discovery, permitting Defendants’
`
`infringement to continue unabated while simultaneously delaying AGIS’s day in court to address
`
`these infringements. Cummins-Allison Corp. v. SBM Co., No. 9:07-CV-196, 2008 WL
`
`11348281, at *2 (E.D. Tex. May 21, 2008) (explaining that granting a stay would permit any
`
`infringing activity to continue for an uncertain length of time causing plaintiff additional
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`damages).
`
`
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`In accordance with the Local Rules and the Docket Control Order, AGIS has expended
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`significant resources prosecuting these actions, including engaging in substantial discovery, such
`
`as reviewing and producing its documents, reviewing Defendants’ productions, beginning the
`
`process of scheduling 30(b)(6) depositions of Defendants, and serving infringement contentions,
`
`initial disclosures, and interrogatories. The parties will also spend significant time drafting and
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`negotiating preliminary claim terms for construction in the upcoming weeks as they are due to be
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`exchanged shortly after briefing of this motion is complete. The Court has held a case
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`management conference, set aside a date for a Markman hearing (August 31, 2018), and set trial
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`for March 4, 2019. The well-developed posture of the cases weighs against a stay. Cummins-
`
`Allison Corp., 2008 WL 11348281, at *2 (denying stay where parties exchanged infringement
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`contentions, invalidity contentions, and preliminary proposed claim construction, and the court
`
`set aside dates for a Markman hearing and trial); Alacritech, Inc. v. CenturyLink, Inc., No. 2:16-
`
`CV-00693, 2017 WL 4231459, at *2 (E.D. Tex. Sept. 22, 2017) (denying stay because a stay
`
`
`
`5
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`

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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 10 of 17 PageID #: 5291
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`would “clearly affect the parties’ ability to prepare for trial” which was less than a year away).3
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`
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`Defendants provide no support for their argument that because AGIS seeks permanent
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`injunctive relief against Defendants rather than a preliminary injunction AGIS would not be
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`prejudiced by a stay. Dkt. 102 at 6. Rather, the fact that AGIS seeks a permanent injunction to
`
`prevent Defendants from continuing to infringe on AGIS’s patents (See No. 2:17-cv-513, Dkt. 20
`
`¶¶ 25, 38, 51, 64; No. 2:17-cv-515, Dkt. 1 ¶¶ 23, 36, 49, 62; No. 2:17-cv-517, Dkt. 32 ¶¶ 30, 43,
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`56, 69, 82; No. 2:17-cv-514, Dkt. 1 ¶¶ 23, 36, 49, 62) “add[s] to any prejudice resulting from a
`
`stay.” Saint Lawrence Commc'ns LLC v. ZTE Corp., No. 2:15-cv-349, 2017 WL 3396399, at *2
`
`(E.D. Tex. Jan. 17, 2017) (Gilstrap, J.).
`
`B.
`
`Defendants Will Not Suffer Any Hardship or Inequity If A Stay Is Denied
`
`Defendants have not articulated a cognizable prejudice, hardship, or inequity that they
`
`would suffer if the stay was denied. Defendants “need to show some level of undue burden that
`
`results from the nature of the case. Ordinary discovery deadlines, without more, does not [sic]
`
`give rise to an undue burden.” Kaneka Corp. v. JBS Hair, Inc., No. 3:10-CV-1430-P, 2011 WL
`
`13167931, at *1 (N.D. Tex. Mar. 30, 2011). The typical costs associated with discovery and
`
`defending a suit do not constitute harm or prejudice to Defendants.
`
`Defendants’ argument that, if a stay is not granted and the cases are subsequently
`
`transferred, Defendants will incur hardship because they will be engaging in duplicative
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`discovery efforts in the transferee venue (Dkt. 120 at 7) is misguided. As an initial matter, this
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`argument assumes that Defendants’ met their burden to show that the Northern District of
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`California is a clearly more convenient district than this District—they did not. But even
`
`
`3 That AGIS, Huawei, and LGEKR mutually agreed to modify the docket control order to align it with the deadlines
`in co-pending, related litigations (Dkt. 87, Joint Motion to Amend Docket Control Order) demonstrates only that the
`parties are interested in efficient management of the cases, not, as Defendants argue, that AGIS has no interest in a
`timely resolution of its claims.
`
`
`
`6
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`

`

`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 11 of 17 PageID #: 5292
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`assuming arguendo that the cases are transferred, Defendants’ argument still fails. Discovery
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`efforts conducted in this District will not be a waste of efforts and resources because regardless
`
`of where the case is pending, the parties will need to engage in discovery on the exact same
`
`patents, allegations, and claims of infringement. Moreno v. Marvin Windows, Inc., No. 07-CA-
`
`091, 2007 WL 2060760, at *1 (W.D. Tex. July 17, 2007). Moreover, the Northern District of
`
`California’s local patent rules are “nearly identical” to this District’s local patent rules making it
`
`unlikely that the discovery conducted in this District would be a waste of time if the cases are
`
`ultimately transferred. See Edward D. Ioli Trust v. Avigilon Corp., No. 2:10-cv-605, Dkt. 279 at
`
`3 (E.D. Tex. Nov. 16, 2012) (Gilstrap, J.) (The scope of the Northern District of California’s
`
`Patent Local Rule 3.4 governing document discovery “is nearly identical to this District’s P.R. 3-
`
`4(a) and was the source from which this District’s P.R. 3-4(a) was originally crafted”). Thus,
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`contrary to Defendants’ contention, the discovery conducted in this District prior to transfer will
`
`reduce the time, effort, and resources the parties will need to expend on discovery if the case is
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`transferred.4
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`Finally, LGEKR’s argument that proceeding with discovery would cause hardship to
`
`LGEKR in light of its motion to dismiss for lack of personal jurisdiction because it could be
`
`dismissed from the lawsuit (Dkt. 102 at 8) is unavailing. It is axiomatic that a party is not
`
`entitled to a stay of discovery merely because a motion to dismiss is pending. Stanissis v.
`
`Dyncorp. Intern. LLC, No. 3:14-CV-2736-D, 2014 WL 7183942, at *1 (N.D. Tex. Dec. 17,
`
`2014) (“[A] stay is not, however, automatically granted whenever a motion to dismiss is
`
`pending.”); Von Drake v. National Broadcasting Co., No. 3:04-cv-652, 2004 WL 1144142 at *1
`
`(N.D. Tex. May 20, 2004) (“the issuance of [a] stay is by no means automatic”); Glazer’s
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`4 That the claim construction hearing has not yet occurred is entitled to little weight in the stay analysis as this
`District declines to stay discovery regardless of whether claim construction has occurred. See, e.g., Cummins-
`Allison Corp., 2008 WL 11348281, at *2.
`
`
`
`7
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`

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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 12 of 17 PageID #: 5293
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`Wholesale Drug Co., 2008 WL 2930482, at *1 (“In fact, such a stay is the exception rather than
`
`the rule.”). Indeed, “[h]ad the Federal Rules contemplated that a motion to dismiss under Fed. R.
`
`Civ. P. 12(b)(6) would stay discovery, the Rules would contain a provision to that effect.”
`
`Glazer’s Wholesale Drug Co., 2008 WL 2930482, at *1. The mere fact that LGEKR filed a
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`motion to dismiss does not constitute good cause to justify a stay.5
`
`C.
`
`A Stay Will Not Avoid Duplicative Litigations
`
`
`
`Judicial resources will not be saved and case management efficiencies will be destroyed
`
`if the litigation is stayed. The Docket Control Order, which was agreed to by all of the parties in
`
`the Consolidated Cases after protracted negotiations, sets a common pretrial schedule in each of
`
`the Consolidated Cases. Under the Docket Control Order, the five Consolidated Cases share the
`
`same dates for exchange of contentions, fact discovery, claim construction, Markman hearing,
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`and dispositive motions. Unlike the Huawei, LGEKR, ZTE, and HTC Defendants, Apple did not
`
`move to stay discovery, nor did it join in the instant motion, and so regardless of the outcome of
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`the instant motion, the Apple case will proceed with discovery as set forth in the Docket Control
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`Order. Staying the Huawei, LGEKR, ZTE, and HTC actions will therefore increase the burden
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`on this Court and AGIS by requiring duplicative proceedings—one for the Huawei, LGEKR,
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`ZTE, and HTC actions and another for Apple. See Cellular Commc'ns Equip. LLC v. HTC Corp.,
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`No. 6:13-CV-507, 2015 WL 11118110, at *9 (E.D. Tex. Mar. 27, 2015) (denying a stay sought
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`by only some of the consolidated defendants in part because such a stay would “not result in
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`judicial economy and would only complicate litigation”).
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`5 To the extent that HTC adopts this argument as it relates to HTC’s motion to dismiss for lack of personal
`jurisdiction, it fails for the same reasons.
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`8
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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 13 of 17 PageID #: 5294
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`D.
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`The Breadth of Discovery and the Strength of Defendants’ Motions to
`Transfer and Dismiss Weigh Against A Stay
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`Defendants have failed to demonstrate that the breadth of discovery sought by AGIS is
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`unreasonable and that responding to such discovery requests is unduly burdensome. Aside from
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`boilerplate objections to written discovery, Defendants have not argued in their motion or in any
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`correspondence or communication with AGIS that the scope of discovery sought by AGIS is
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`unduly burdensome. Indeed, AGIS specifically tailored the scope of discovery to the claims it
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`asserted against Defendants and such discovery requests are proportional to the needs of the
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`case.
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`
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`Additionally, as is set forth in the parties’ extensive briefings, the applicable law requires
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`Defendants’ motions to dismiss and transfer be denied. First, the motions to transfer submitted
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`by Defendants should be dismissed because Defendants failed to meet their burden to show that
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`the proposed transferee forum is a clearly more convenient forum or is warranted in the interests
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`of justice. See No. 2:17-cv-513, Dkt. 56 at 8-15, Dkt. 68 at 17-30, Dkt. 81 at 1-5, Dkt. 82 at 4-8;
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`No. 2:17-cv-517, Dkt. 46 at 20-27, Dkt. 52 at 6-9; No. 2:17-cv-514, Dkt. 40 at 18-30, Dkt. 49 at
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`2-7. Second, this District has jurisdiction over LGEKR and HTC because both LGEKR and
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`HTC knowingly placed the infringing products into the stream of commerce with the expectation
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`that the products will be sold in Texas. See No. 2:17-cv-513, Dkt. 68 at 11-17, Dkt. 82 at 1-4;
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`No. 2:17-cv-514, Dkt. 40 at 11-17, Dkt. 49 at 1-2. And third, venue is proper as to ZTE (TX),
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`Inc. and ZTE (USA), Inc. because ZTE (TX), Inc. resides in this District and ZTE (USA), Inc.
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`committed acts of infringement in this District and the automobile dealerships in this District are
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`regular and established places of business of ZTE (USA), Inc. See No. 2:17-cv-517, Dkt. 46 at
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`12-16, Dkt. at 52 at 1-6. Defendants’ belief that they will prevail on their motions to dismiss and
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`
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`9
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`

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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 14 of 17 PageID #: 5295
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`transfer is not sufficient to warrant a stay. Glazer’s Wholesale Drug Co., 2008 WL 2930482, at
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`*1.
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`
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`Moreover, In re: ZTE (USA) Inc., Case No. 18-113, pending before the Federal Circuit
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`will have no effect on Huawei’s, LGEKR’s, or HTC’s motions to dismiss and transfer because
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`the question on appeal relates to venue pursuant to 28 U.S.C. § 1400(b), which is not the basis of
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`Huawei’s, LGEKR’s, or HTC’s motions. See No. 2:17-cv-513, Dkt. 36 (Huawei’s motion to
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`transfer venue), Dkt. 46 (LGEKR’s motion to dismiss for lack of personal jurisdiction or, in the
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`alternative, to transfer venue); No. 2:17-cv-514, Dkt. 29 (HTC’s motion to dismiss for lack of
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`personal jurisdiction, or in the alternative, to transfer venue); see also Clear With Computers,
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`LLC v. Mercedes-Benz USA, LLC, No. 6:12-CV-677-LED, 2013 WL 12164641, at *2 (E.D. Tex.
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`Sept. 26, 2013) (denying motion to stay because question on appeal has “no immediate effect on
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`the issues presented in the instant case.”).
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`
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`Accordingly, Defendants’ Motion to Stay pending the motions to transfer and dismiss
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`should be denied. See Campbell v. U.S., No. 5:05-cv-179, Dkt. 24 (E.D. Tex. Feb. 7, 2006)
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`(denying defendant’s motion to stay discovery because there is no basis in Federal or Local
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`Rules to stay discovery pending a ruling on a motion to dismiss); Retractable Techs., 2011 WL
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`13134434, at *2; Glazer’s Wholesale Drug Co., 2008 WL 2930482, at *2 n. 1 (denying motion
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`to stay discovery pending a Rule 12(b)(6) motion “because defendant has failed to establish
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`‘good cause’”); Areizaga v. ADW Corporation, No. 3:14-cv-2899-B, 2016 WL 3536859, at *2
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`(N.D. Tex. June 28, 2016) (no good cause shown despite filing of dispositive motion); Coyle v.
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`Hornell Brewing Co., No. 08-2797, 2009 WL 1652399, at *3 (D.N.J. June 9, 2009) (“It is well
`
`settled that the mere filing of a dispositive motion does not constitute ‘good cause’ for the
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`issuance of a discovery stay”); Thurmond v. Compaq Computer Corp., No. 1:99-CV-0711, 2000
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`
`
`10
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`

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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 15 of 17 PageID #: 5296
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`WL 33795090, at *12 (E.D. Tex. Mar. 1, 2000) (explaining that a party is required to comply
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`with discovery obligations regardless of whether motions to dismiss or transfer are pending).
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`V.
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`CONCLUSION
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`For the foregoing reasons, AGIS respectfully requests that the Court deny Defendants’
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`Motion to Stay.
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`
`
`Dated: April 13, 2018
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`
`
`
`
`
`
`
`BROWN RUDNICK LLP
`
`
`
` /s/ Alfred R. Fabricant
`Alfred R. Fabricant
`NY Bar No. 2219392
`Email: afabricant@brownrudnick.com
`Peter Lambrianakos
`NY Bar No. 2894392
`Email: plambrianakos@brownrudnick.com
`Vincent J. Rubino, III
`NY Bar No. 4557435
`Email: vrubino@brownrudnick.com
`Joseph M. Mercadante
`NY Bar No. 4784930
`Email: jmercadante@brownrudnick.com
`Alessandra C. Messing
`NY Bar No. 5040019
`Email: amessing@brownrudnick.com
`Shahar Harel
`NY Bar No. 4573192
`Email: sharel@brownrudnick.com
`John A. Rubino
`NY Bar No. 5020797
`Email: jrubino@brownrudnick.com
`Daniel J. Shea
`NY Bar No. 5430558
`Email: dshea@brownrudnick.com
`BROWN RUDNICK LLP
`7 Times Square
`New York, NY 10036
`Telephone: 212-209-4800
`Facsimile: 212-209-4801
`
`
`
`
`
`
`11
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`

`

`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 16 of 17 PageID #: 5297
`
`Samuel F. Baxter
`Texas State Bar No. 01938000
`sbaxter@mckoolsmith.com
`Jennifer L. Truelove
`Texas State Bar No. 24012906
`jtruelove@mckoolsmith.com
`McKOOL SMITH, P.C.
`104 East Houston Street, Suite 300
`Marshall, Texas 75670
`Telephone: 903-923-9000
`Facsimile: 903-923-9099
`
`ATTORNEYS FOR AGIS SOFTWARE
`DEVELOPMENT, LLC
`
`
`
`
`12
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`

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`Case 2:17-cv-00513-JRG Document 122 Filed 04/13/18 Page 17 of 17 PageID #: 5298
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`
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`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that, on April 13, 2018, all counsel of record who are
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`deemed to have consented to electronic service are being served with a copy of this document via
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`the Court’s CM/ECF system per Local Rule CV-5(a)(3).
`
`
`
`/s/ Alfred R. Fabricant
` Alfred R. Fabricant
`
`
`
`