Case 2:17-cv-00513-JRG Document 133 Filed 04/30/18 Page 1 of 9 PageID #: 5337
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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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.,
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`Defendants.
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`Plaintiff,
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`Case No. 2:17-cv-00513-JRG
`(Lead Case)
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`JURY TRIAL DEMANDED
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`PLAINTIFF AGIS SOFTWARE DEVELOPMENT, LLC’S SUR-REPLY IN
`SUPPORT OF ITS 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 133 Filed 04/30/18 Page 2 of 9 PageID #: 5338
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`Plaintiff AGIS Software Development, LLC (“AGIS”), by and through its undersigned
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`counsel, hereby submits this sur-reply in support of its opposition to Huawei Device USA Inc.,
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`Huawei Device Co., Ltd., and Huawei Device (Dongguan) Co., Ltd.’s (collectively, “Huawei”)
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`and LG Electronics Inc.’s (“LGEKR,” and together with Huawei, “Defendants”) motion to stay
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`(Dkt. 102) pending resolution of Huawei’s motion to transfer (Dkt. 36) and LGEKR’s motion to
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`dismiss or transfer (Dkt. 46).1
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`I.
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`A STAY IS NOT WARRANTED
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`Defendants are not entitled to a stay merely because their motions to transfer or dismiss
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`are pending. Stanissis v. Dyncorp. Inter. LLC, No. 3:14-cv-2736, 2014 WL 7183942, at *1
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`(N.D. Tex. Dec. 17, 2014). Defendants have failed to meet their burden to demonstrate that a
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`stay pending their motions is warranted. Defendants’ Reply argues: (1) AGIS’s reliance on the
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`“good cause” standard is misguided because Defendants are seeking a stay of the entire
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`litigation, not just a stay of discovery (Dkt. 128 at 1-2); (2) the “imminent” claim construction
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`deadlines provide the “strongest” support for a stay because the parties’ efforts might need to be
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`duplicated if the cases are transferred (id. at 2-3); and (3) a stay of discovery is “likely to be
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`short,” and therefore will not unduly prejudice AGIS (id. at 4-5). All of these arguments are
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`fundamentally flawed, and none support granting a stay pending resolution of the motions to
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`transfer or dismiss.
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`A. None of the Factors Considered In Determining Whether to Stay Discovery or
`Stay the Entire Litigation Warrant a Stay
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`Defendants do not contest that they bear the burden to establish why a stay should be
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`granted. Dkt. 128 at 1-2; see also Clinton v. Jones, 520 U.S. 681, 708 (1997); Retractable
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`Techs., Inc. v. Becton Dickinson & Co., No. 2:08-cv-16, 2011 WL 13134434, at *2 (E.D. Tex.
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`1 Although HTC Corporation, ZTE (TX), Inc., and ZTE (USA), Inc. joined in Huawei’s and LGEKR’s Motion
`(Dkts. 107, 120), they did not submit a reply.
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`Case 2:17-cv-00513-JRG Document 133 Filed 04/30/18 Page 3 of 9 PageID #: 5339
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`Mar. 15, 2011). Rather, Defendants argue that they are not required to demonstrate “good
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`cause” for the stay, a standard they claim is only required when seeking to stay discovery,
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`because Defendants are seeking to stay the entire litigation. Dkt. 128 at 1-2. This argument is
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`nonsensical—requesting a stay of discovery will by its nature affect all deadlines in the
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`litigation. Moreover, courts examine numerous factors on a case-by-case basis in determining
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`whether to exercise their discretion to grant a stay of discovery and/or a stay of the litigation.
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`See Moser v. Navistar Int'l Corp., No. 4:17-cv-00598, 2018 WL 1169189, at *2 (E.D. Tex. Mar.
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`6, 2018); Retractable Techs., 2011 WL 13134434, at *2; Griffin, 2015 WL 11019132, at *3. In
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`its opposition, AGIS analyzed each of the factors this Court may consider in granting a stay for
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`discovery or for an entire litigation (Dkt. 122 at 4-11) and showed that none of the factors
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`support a stay. Defendants’ Reply does not alter this conclusion.
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`B. Upcoming Claim Construction Deadlines Do Not Support A Stay
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`Defendants’ argument that the “strongest support” for the stay is the need to avoid
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`duplication of claim construction (Dkt. 128 at 2-3) is unpersuasive.2 This argument presupposes
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`the occurrence of several future events that have not yet occurred, and which may never occur.
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`Specifically, Defendants assume that: (1) they have met their burden to show that the Northern
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`District of California (“NDCal”) is a clearly more convenient district than this District and that
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`this Court will grant their motion to transfer; (2) a transfer will occur after the completion of
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`claim construction; (3) NDCal will require the parties to duplicate all claim construction efforts
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`2 Defendants Reply does not contest that they will not suffer undue harm by conducting discovery in this District
`even if the case is ultimately transferred. Dkt. 128 at 2-3; 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.) (explaining that the scope of NDCal’s local patent rules
`governing discovery are nearly identical to this District’s local patent rules); Moreno v. Marvin Windows, Inc., No.
`07-cv-91, 2007 WL 2060760, at *1 (W.D. Tex. July 17, 2007) (explaining that the parties will need to engage in
`discovery on the exact same patents, allegations, and claims of infringement regardless of where the case is
`pending).
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`2
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`Case 2:17-cv-00513-JRG Document 133 Filed 04/30/18 Page 4 of 9 PageID #: 5340
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`completed in this District; and (4) NDCal will require a second claim construction hearing,
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`wasting this Court’s claim construction efforts.3
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`It is undisputed that the Court has not determined that Defendants demonstrated that
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`NDCal is a clearly more convenient forum than this District and that it has not granted
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`Defendants’ motions to transfer. Even assuming arguendo that this case is transferred, it does
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`not render useless claim construction efforts rendered in this District. While NDCal is not bound
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`by a claim construction ruling issued by this Court, NDCal recognizes the “importance of
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`uniformity of claim construction” and considers a claim construction ruling from a transferor
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`court “as a thoughtful and thorough analysis of the parties’ arguments involving the same patent
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`and the same claim.” Visto Corp. v. Sproqit Techs., Inc., 445 F. Supp. 2d 1104, 1108–09 (N.D.
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`Cal. 2006). Indeed, courts in NDCal have adopted claim construction orders rendered by other
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`jurisdictions, including this District, to arrive at the same construction. Id. at 1108 (granting
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`deference to claim construction order issued this District.); Comcast Cable Commc'ns Corp.,
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`LLC v. Finisar Corp., No. 06-cv-04206, 2007 WL 1052821, at *3 (N.D. Cal. Apr. 6, 2007)
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`(adopting claim construction order rendered by this District); see also Finisar Corp. v. DirecTV
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`Grp., Inc., 523 F.3d 1323, 1329 (Fed. Cir. 2008) (relying on claim construction order from
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`NDCal).
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`Moreover, impending claim construction deadlines are not a reason to grant a stay. See,
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`e.g., Cummins-Allison Corp. v. SBM Co., No. 9:07-cv-196, 2008 WL 11348281, at *2 (E.D. Tex.
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`May 21, 2008) (denying stay prior to completion of claim construction).
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`Defendants’ argument that a stay may result in judicial efficiency even though Apple
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`Inc., a defendant in one of the consolidated cases, did not join the motion to stay because the
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`3 This argument directly contradicts Defendants’ argument that any stay is “likely to be short” (addressed infra) as it
`assumes the Court will not render a decision on the motions until after the Markman hearing, which is scheduled for
`August 31, 2018.
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`3
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`Case 2:17-cv-00513-JRG Document 133 Filed 04/30/18 Page 5 of 9 PageID #: 5341
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`court might stay the Apple case sua sponte (Dkt. 128 at 3) is again based on the occurrence of an
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`unknown, future event. Indeed, courts in this District have declined to grant a stay sought by
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`only some of the consolidated defendants because such a stay would “not result in judicial
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`economy and would only complicate litigation.” Cellular Comm’cs 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).
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`C. A Stay Will Prejudice AGIS
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`Defendants do not contest that AGIS is entitled to timely enforcement of its patent rights.
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`Dkt. 128 at 4. Nor do Defendants contest that a stay will delay AGIS’s timely enforcement of its
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`patent rights and that a delay will prejudice AGIS. Id. Rather, Defendants argue that a “short”
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`stay would not impose a prejudice on AGIS other than a delay. Dkt. 128 at 4. This argument is
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`fundamentally flawed.
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`First, Defendants’ argument improperly assumes that a stay will be “short.” But the
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`timing on a decision for the motions to transfer is unknown.
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`Second, Defendants argue that a delay of the enforcement of AGIS’s patent rights is not a
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`valid prejudice if the stay is short. But a stay of any length of time prejudices AGIS’s right to a
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`just and speedy resolution of its claims, delaying AGIS’s day in court to prosecute its claims
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`while permitting Defendants’ infringement to continue unabated causing significant harm to
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`AGIS. Cummins-Allison Corp. v. SBM Co., No. 9:07-cv-196, 2008 WL 11348281, at *2 (E.D.
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`Tex. May 21, 2008).4 That Defendants have been infringing AGIS’s patents for years prior to
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`AGIS initiating this lawsuit is irrelevant to whether a stay will prejudice AGIS’s right to a
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`4 While the fact that a stay will delay a litigation alone may not be sufficient to defeat a motion to stay, AGIS has
`shown it will suffer additional prejudices (well-developed posture of the case and seeking a permanent injunction) if
`a stay is granted (Section I.C infra), and has shown that the other factors considered in granting a stay—the hardship
`to Defendants if the action is not stayed; the judicial resources that would be saved by avoiding duplicative
`litigation; the breadth of discovery sought and the burden of responding to such discovery; and the strength of the
`dispositive motion filed by Defendants—weigh against a stay (Dkt. 122 at 4-11).
`4
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`Case 2:17-cv-00513-JRG Document 133 Filed 04/30/18 Page 6 of 9 PageID #: 5342
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`speedy resolution of its claims. See, e.g., SCA Hygiene Prod. Aktiebolag v. First Quality Baby
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`Prod., LLC, 137 S.Ct. 954, 967 (2017) (“Laches cannot be interposed as a defense against
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`damages where the infringement occurred within” six years prior to initiating the suit).
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`Third, Defendants’ argument improperly concludes that AGIS will not suffer any
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`prejudice other than a delay. AGIS has already expended significant resources prosecuting its
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`claims against Defendants, including engaging in substantial discovery and drafting and
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`negotiating preliminary claim terms for construction. Dkt. 122 at 5. A stay at this stage of the
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`litigation will unnecessarily disrupt the case schedule and adversely “affect the parties’ ability to
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`prepare for trial,” particularly if the Court ultimately denies Defendants’ motions to transfer. See
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`Alacritech, Inc. v. CenturyLink, Inc., No. 2:16-cv-00693, 2017 WL 4231459, at *2 (E.D. Tex.
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`Sept. 22, 2017). Moreover, this Court recently explained that seeking a permanent injunction—
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`as AGIS has done here—“add[s] to any prejudice resulting from a stay.” Saint Lawrence
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`Commc’ns LLC v. ZTE Corp., No. 2:15-cv-349, 2017 WL 3396399, at *2 (E.D. Tex. Jan. 17,
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`2017) (Gilstrap, J.).
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`II.
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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 pending resolution of Huawei’s motion to transfer and LGEKR’s motion to
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`dismiss or transfer.
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`Dated: April 30, 2018
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`BROWN RUDNICK LLP
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`
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` /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
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`5
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`Case 2:17-cv-00513-JRG Document 133 Filed 04/30/18 Page 7 of 9 PageID #: 5343
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`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
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`Case 2:17-cv-00513-JRG Document 133 Filed 04/30/18 Page 8 of 9 PageID #: 5344
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`
`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
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`ATTORNEYS FOR PLAINTIFF AGIS
`SOFTWARE DEVELOPMENT, LLC
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`Case 2:17-cv-00513-JRG Document 133 Filed 04/30/18 Page 9 of 9 PageID #: 5345
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that, on April 30, 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).
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`/s/ Alfred R. Fabricant
` Alfred R. Fabricant
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