Case 2:17-cv-00513-JRG Document 128 Filed 04/23/18 Page 1 of 9 PageID #: 5313
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`Plaintiff,
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`AGIS SOFTWARE DEVELOPMENT LLC,
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`v.
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`HUAWEI DEVICE USA INC., HUAWEI
`DEVICE CO., LTD. AND HUAWEI
`DEVICE (DONGGUAN) CO., LTD.,
`HTC CORPORATION,
`LG ELECTRONICS INC.,
`APPLE INC.,
`ZTE CORPORATION, ZTE (USA), INC.,
`AND ZTE (TX), INC.,
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`Defendants.
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`Civil Action No. 2:17-CV-513-JRG
`(Lead Case)
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`Civil Action No. 2:17-CV-514-JRG
`Civil Action No. 2:17-CV-515-JRG
`Civil Action No. 2:17-CV-516-JRG
`Civil Action No. 2:17-CV-517-JRG
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`HUAWEI’S AND LGEKR’S REPLY IN SUPPORT OF THEIR MOTION TO STAY
`PENDING RESOLUTION OF HUAWEI’S MOTION TO TRANSFER (DKT. NO. 36)
`AND LGEKR’S MOTION TO DISMISS OR TRANSFER (DKT. NO. 46)
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`Case 2:17-cv-00513-JRG Document 128 Filed 04/23/18 Page 2 of 9 PageID #: 5314
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`I.
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` INTRODUCTION
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`AGIS’s opposition is based on a fundamental mischaracterization of Huawei’s and
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`LGEKR’s Motion To Stay as seeking only a stay of discovery rather than a stay of the litigation.
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`In focusing exclusively on discovery issues, AGIS ignores the substantial resources required to
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`prepare for the looming claim construction deadlines, and the risk that this work would need to
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`be redone if transfer is granted. This possibility alone weighs heavily in favor of a stay.
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`AGIS’s opposition also ignores that a stay is likely to last only a few months, not years,
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`as the transfer motions are fully briefed and ripe for this Court’s decision. Where AGIS does
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`address the points in the Motion, its arguments fall flat. AGIS has presented no evidence that it
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`will be prejudiced by a stay beyond the mere procedural effect of a delay in litigation (which,
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`again, is expected to last only months). Nor could it. AGIS does not practice the invention or
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`compete with Defendants, so a stay poses no particular harm to its business. And its behavior to
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`date, in waiting to file suit and declining to pursue a preliminary injunction, suggests there is no
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`particular urgency in enforcing its patents at trial. For these reasons, the Court should stay the
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`litigations until the transfer motions are resolved.
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`II.
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`ARGUMENT
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`A.
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`AGIS Mischaracterizes The Motion To Stay.
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`AGIS mischaracterizes the relief sought in Huawei’s and LGEKR’s Motion. In its
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`Response, AGIS asserts repeatedly that the Motion seeks only to stay discovery, and focuses its
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`arguments exclusively on discovery issues. But the Motion does not merely seek to stay
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`discovery deadlines—it seeks to stay the litigation. See Dkt. No. 102 & 102-2.
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`Having mischaracterized the Motion as a motion to stay discovery, AGIS then contends
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`that the Court may institute a stay only upon a showing of “good cause.” Dkt. No. 122 at 3-4.
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`1
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`Case 2:17-cv-00513-JRG Document 128 Filed 04/23/18 Page 3 of 9 PageID #: 5315
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`But the cases AGIS cites in support (Retractable, Griffin, and Moser) do not indicate that “good
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`cause” is the appropriate standard for the instant Motion, which seeks to stay the litigation
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`pending a determination on transfer. See id. at 3. While Retractable and Griffin apply the “good
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`cause” standard, they both address motions to stay discovery pursuant to Federal Rule of Civil
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`Procedure 26(c)(1), not motions to stay a litigation pending resolution of a transfer motion.
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`Moser does address a motion to stay a litigation pending transfer, but notably, does not employ
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`AGIS’s proposed “good cause” standard. Rather, Moser applies the same three-factor test from
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`Huawei’s and LGEKR’s Motion. See Moser v. Navistar Int’l Corp., No. 4:17-cv-00598, 2018
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`WL 1169189, at *2 (E.D. Tex. Mar. 6, 2018) (“In determining whether to grant a stay . . . the
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`Court considers: ‘(1) the potential prejudice to Plaintiffs from a brief stay; (2) the hardship to
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`[the defendant] if the stay is denied; and (3) the judicial efficiency in avoiding duplicative
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`litigation if the [MDL] Panel grants [the defendant’s] motion.’”). While the case law
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`demonstrates that the Court should evaluate the stay according to the three factors in Moser, even
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`under a “good cause” standard, a stay is appropriate for the reasons in the Motion and below.
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`B.
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`AGIS Never Contests That A Stay Would Serve Judicial Efficiency And
`Reduce Hardship In View Of Upcoming Claim Construction Deadlines.
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`The imminent claim construction deadlines provide the strongest support for a stay.
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`Absent a stay, both the parties and the Court will be forced to expend resources on claim
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`construction, and the parties risk duplicating these efforts if the cases are transferred. AGIS
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`never rebuts these claim construction arguments. AGIS even acknowledges in its Response that
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`in order to identify proposed terms on April 27, exchange proposed constructions on May 18,
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`and submit the Joint Claim Construction Statement on June 8, the parties will need to “spend
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`significant time drafting and negotiating preliminary claim terms for construction.” Dkt. No. 122
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`at 5. AGIS never disagrees that this work potentially would need to be redone post-transfer, due
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`Case 2:17-cv-00513-JRG Document 128 Filed 04/23/18 Page 4 of 9 PageID #: 5316
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`to different local rules or practices of the transferee court. See Dkt. No. 102 at 7. Nor does
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`AGIS disagree that transfer to the Northern District of California could necessitate a second
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`claim construction hearing and waste this Court’s claim construction efforts. See id. at 7-8.
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`AGIS bypasses these claim construction issues, and instead, argues that a stay would not
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`serve judicial efficiency because the Apple case would continue to proceed on the current
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`schedule. See Dkt. No. 122 at 7. However, though Apple did not file a formal joinder, it does
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`not oppose Huawei’s and LGEKR’s motion to stay. See Dkt. No. 102-1 at ¶ 2. Moreover,
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`should the Court determine that a stay of all consolidated actions would serve judicial efficiency,
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`it has the power to stay the Apple action sua sponte. See Market-Alerts Pty. Ltd. v. Bloomberg
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`Fin. L.P., 922 F. Supp. 2d 486, 497 n.15 (D. Del. 2013); Safe Storage LLC v. Dell Inc., No. 12-
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`01624, D.I. 36, at *2, n.1 & 4 (D. Del. Jan. 22, 2015) (staying coordinated actions pending inter
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`partes review even though four defendants did not join in the stay motion).
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`Finally, while AGIS claims that the posture of the case weighs against a stay, “there is
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`more work ahead of the parties and the Court than behind the parties and the Court,” especially
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`regarding claim construction and discovery.1 See Tierravision, Inc. v. Google, Inc., No. 11-cv-
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`2170, 2012 WL 559993, at *1-3 (S.D. Cal. Feb. 21, 2012) (stage of case favored stay where
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`parties had completed infringement and invalidity contentions and some claim construction-
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`related discovery, but claim construction briefing had not yet begun); Docusign Inc. v. RPost
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`Commc’ns Ltd., No. 13-cv-735, 2014 WL 2178234, at *1-2 (W.D. Wash. May 23, 2014) (stage
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`of case favored stay where parties had exchanged some written discovery, trial date was six
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`months away, no depositions had been conducted, and discovery was far from complete).
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`1 On the same day Huawei and LGEKR filed the instant Motion, Apple filed petitions for inter partes review of the
`four patents asserted against each of the defendants in the consolidated litigations. See IPR2018-00817, IPR2018-
`00818, IPR2018-00819, IPR2018-00821 (filed Mar. 22, 2018).
`3
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`Case 2:17-cv-00513-JRG Document 128 Filed 04/23/18 Page 5 of 9 PageID #: 5317
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`C.
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`AGIS Fails To Identify Any Specific Undue Prejudice From A Stay Likely
`To Last Only Months.
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`Notably, AGIS never acknowledges that the requested stay is likely to be short. The
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`motions to dismiss or transfer have been fully briefed since January 12, 2018, and likely will be
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`resolved in the next few months. Dkt. Nos. 81 & 82. AGIS’s arguments, therefore, are flawed
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`because they claim a generalized prejudice, and never specifically explain how a modest delay of
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`only a few months would impose an undue prejudice. Indeed, the three cases cited by AGIS on
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`this point (Realtime Data, Ariba, and Cummins-Allison) each involved motions to stay pending
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`proceedings in the Patent Office, which were expected to delay the litigations for two to three
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`years, not months. See Dkt. No. 122 at 5. By contrast, where a stay is “likely to last two to three
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`months,” other courts have found no prejudice to the plaintiff. See, e.g., Genetic Techs. Ltd. v.
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`Agilent Techs., Inc., No. 12-cv-01616, 2012 WL 2906571, at *3 (N.D. Cal. July 16, 2012).
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`Ultimately, AGIS’s claims of prejudice boil down to a single point—that AGIS has
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`invested in this litigation and will be prejudiced by a delay in enforcing its patent rights. See
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`Dkt. No. 122 at 4-6. But, as explained in Huawei’s and LGEKR’s Motion, this factor is present
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`in any opposed request for a stay and is “not sufficient, standing alone, to defeat a stay motion.”
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`See Alacritech, Inc. v. CenturyLink, Inc., No. 2:16-cv-00693, 2017 WL 4231459, at *2 (E.D.
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`Tex. Sept. 22, 2017) (finding no prejudice where “Alacritech has not presented evidence it would
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`be prejudiced beyond the procedural effect of the delay.”); see also NFC Tech. LLC v. HTC Am.,
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`Inc., No. 2:13-cv-1058, 2015 WL 1069111, at *2 (E.D. Tex. Mar. 11, 2015).
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`That AGIS is unable to identify any specific prejudice beyond the mere fact of delay is
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`not surprising.2 No such prejudice exists. First, AGIS does not claim to practice the invention,
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`2 AGIS claims that Huawei and LGEKR have improperly shifted the burden on the prejudice factor. See Dkt. No.
`122 at 4. But AGIS conflates the notion of burden and the absence of evidence to support AGIS’s claim of
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`Case 2:17-cv-00513-JRG Document 128 Filed 04/23/18 Page 6 of 9 PageID #: 5318
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`or compete with the Defendants, so a brief stay will not impact AGIS’s business or market share.
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`See Alacritech, 2017 WL 4231459, at *2 (no prejudice where “Alacritech is not a competitor of
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`Defendants or Intervenors and does not practice the Asserted Patents.”); Microlinc, LLC v. Intel
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`Corp., No. 2:07-cv-488, 2010 WL 3766655, *2-3 (E.D. Tex. Sept. 20, 2010) (“since Microlinc
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`does not manufacture or sell any products, or otherwise practice the patent, there is no risk of
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`customer losses or of injury to market share during a stay”). Second, AGIS did not file these
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`lawsuits until years after the alleged infringement began. For example, though U.S. Patent No.
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`8,213,970 issued in 2012, and AGIS contends that the accused Find My Device app has been
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`available on Huawei and LGEKR devices since 2013, AGIS did not initiate this lawsuit until
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`2017. See VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1313-20 (Fed. Cir. 2014)
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`(claim of undue prejudice negated by patentee’s delay in bringing suit). Third, if a delay of only
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`a few months is enough to cause AGIS serious hardship, then it should have sought a preliminary
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`injunction for immediate relief on its claims. That AGIS seeks a permanent injunction, not a
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`preliminary injunction, only demonstrates that it will not be prejudiced by a brief stay. See
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`Carlson Pet Products, Inc. v. North States Indus., Inc., No. 17-cv-02529, 2018 WL 1152001, at
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`*1-6 (D. Minn. Mar. 5, 2018) (granting stay and finding plaintiff failed to “explain how eventual
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`monetary damages and a permanent injunction would be an inadequate remedy”); see also
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`VirtualAgility, 759 F.3d at 1313-20. Finally, given that the requested stay will last only a few
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`months, there is no risk that evidence or discovery could be lost.
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`III. CONCLUSION
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`Huawei and LGEKR respectfully request that the Court grant the Motion To Stay.
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`prejudice. Huawei and LGEKR have established that there is no basis for AGIS’s generalized claim of prejudice
`from a delay, and AGIS has not offered any evidence that would refute this conclusion.
`5
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`Case 2:17-cv-00513-JRG Document 128 Filed 04/23/18 Page 7 of 9 PageID #: 5319
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`Dated: April 23, 2018
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`Respectfully submitted by:
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`
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`/s/ J. Mark Mann
`J. Mark Mann
`SBN: 12926150
`mark@themannfirm.com
`G. Blake Thompson
`SBN: 24042033
`blake@themannfirm.com
`MANN TINDEL THOMPSON
`300 West Main Street
`Henderson, Texas 75652
`Tel: 903-657-8540
`
`
`Michael A. Berta
`Michael.berta@arnoldporter.com
`Marisa Armanino Williams
`Marisa.armanino@arnoldporter.com
`ARNOLD & PORTER
`KAYE SCHOLER LLP
`Three Embarcadero Center
`10th Floor
`San Francisco, CA 94111-4024
`Tel: 415-471-3277
`
`James S. Blackburn
`James.blackburn@arnoldporter.com
`Nicholas H. Lee
`Nicholas.lee@arnoldporter.com
`ARNOLD & PORTER
`KAYE SCHOLER LLP
`777 South Figueroa Street
`44th Floor
`Los Angeles, CA 90017-5844
`Tel: 213-243-4156
`
`ATTORNEYS FOR DEFENDANTS
`HUAWEI DEVICE USA INC., HUAWEI
`DEVICE CO., LTD. AND HUAWEI
`DEVICE (DONGGUAN) CO., LTD. AND
`LG ELECTRONICS INC.
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`6
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`Case 2:17-cv-00513-JRG Document 128 Filed 04/23/18 Page 8 of 9 PageID #: 5320
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`Kent E. Baldauf, Jr.
`kbaldaufjr@webblaw.com
`Bryan P. Clark
`bclark@webblaw.com
`THE WEBB LAW FIRM
`One Gateway Center
`420 Ft. Duquesne Blvd. Suite 1200
`Pittsburgh, PA 15222
`Tel: 412-471-8815
`
`ATTORNEYS FOR DEFENDANTS
`HUAWEI DEVICE USA INC., HUAWEI
`DEVICE CO., LTD. AND HUAWEI
`DEVICE (DONGGUAN) CO., LTD.
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`Case 2:17-cv-00513-JRG Document 128 Filed 04/23/18 Page 9 of 9 PageID #: 5321
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that on April 23, 2018, a true and correct copy of the
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`foregoing was served to the parties’ counsel of record via ECF pursuant to Local Rule CV-5(d).
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`/s/ J. Mark Mann
`J. Mark Mann
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`8
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