Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 1 of 15 PageID #: 14757
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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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` Plaintiff,
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`v.
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`HUAWEI DEVICE USA INC., et al.,
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` Defendants.
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`AGIS SOFTWARE DEVELOPMENT LLC,
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` Plaintiff,
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`v.
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`APPLE INC.,
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` Defendant.
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`§
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`Civil Action No. 2:17-CV-513-JRG
`(LEAD CASE)
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`Civil Action No. 2:17-CV-516-JRG
`(CONSOLIDATED CASE)
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`DEFENDANT APPLE INC.’S MOTION FOR SUMMARY JUDGMENT OF NO
`INFRIGNEMENT AND NO DAMAGES FOR FOREIGN USES
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 2 of 15 PageID #: 14758
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`TABLE OF CONTENTS
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`Pages
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`INTRODUCTION ...............................................................................................................1
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`STATEMENT OF UNDISPUTED MATERIAL FACTS ..................................................2
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`I.
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`II.
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`III.
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`LEGAL STANDARDS .......................................................................................................4
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`IV.
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`STATEMENT OF THE ISSUE TO BE DECIDED BY THE COURT ..............................5
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`V.
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`ARGUMENT .......................................................................................................................5
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`A.
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`Devices Used Outside The United States Cannot Infringe The Method
`Claims Because Not All Of The Required Steps Are Performed In The
`United States. ...........................................................................................................6
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`1.
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`A “Second Device” Would Perform Certain Steps Of The Claimed
`Methods Outside The United States. ...........................................................6
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`2.
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`The Accused Apps Use Servers Outside The United States. .......................6
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`B.
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`Devices Sold and Used Outside The United States Cannot Infringe The
`System Claims Because The Control And Beneficial Use of the Claimed
`System Is Obtained Where The Devices Are Used. ................................................7
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`VI.
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`CONCLUSION ....................................................................................................................9
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 3 of 15 PageID #: 14759
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`Cases
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`TABLE OF AUTHORITIES
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`Pages
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`Anderson v. Liberty Lobby, Inc.,
`477 U.S. 242 (1986) ............................................................................................................ 4
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`Celotex Corp. v. Catrett,
`477 U.S. 317 (1986) ............................................................................................................ 4
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`Little v. Liquid Air Corp.,
`37 F.3d 1069 (5th Cir. 1994) .............................................................................................. 4
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`NTP, Inc. v. Research In Motion, Ltd.,
`418 F.3d 1282 (Fed. Cir. 2005)....................................................................................... 1, 5
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`Statutes
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`35 U.S.C. § 271(a) .......................................................................................................................... 5
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`Rules
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`Fed. R. Civ. P. 56(a) ....................................................................................................................... 4
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`ii
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 4 of 15 PageID #: 14760
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`TABLE OF EXHIBITS
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`Exhibit Number
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`Description
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`Ex. 1
`Ex. 2
`Ex. 3
`Ex. 4
`Ex. 5
`Ex. 6
`Ex. 7
`Ex. 8
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`Ratliff Damages Report
`Ratliff Dep. Tr.
`Navin Suparna Dep. Tr.
`McAlexander Infringement Report
`U.S. Patent No. US 9,749,829
`Attachment E to McAlexander Infringement Report
`McAlexander Dep. Tr.
`Paul C Clark Declaration
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 5 of 15 PageID #: 14761
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`I.
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`to
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`INTRODUCTION
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`Plaintiff AGIS Software Development LLC (“AGIS”) improperly asserts that it is entitled
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` in damages based solely on foreign uses of Defendant Apple Inc.’s accused
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`devices. In particular, AGIS’s damages expert argues—in two conclusory paragraphs—that
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` AGIS’s assertion is contrary to long-standing
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`law.
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`To establish infringement of a method claim, a patentee must prove the performance of
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`each step of the claimed method in the United States. NTP, Inc. v. Research In Motion, Ltd., 418
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`F.3d 1282, 1318 (Fed. Cir. 2005) (abrogated on other unrelated grounds). The method claims of
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`the ’829 patent each include steps that are allegedly performed by a user operating a mobile
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`device—e.g., an iPhone or iPad. For AGIS’s claims of infringement and damages based on foreign
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`uses, the devices required to perform these steps would be located outside the United States.
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`Similarly, infringement of a system claim occurs where the system, as a whole, is put into
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`service—i.e., the place where control of the system is exercised and beneficial use of the system
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`is obtained. NTP, 418 F.3d at 1317. AGIS’s experts concede that
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` Accordingly,
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`1 The accused devices include Apple’s iPhones, iPads, iPod Touch, and Apple Watch products that
`include the Apple Maps, Find My iPhone, Find My Friends, and iMessage applications (the
`“Accused Apps”). See Dkt. No. 32 [Am. Compl.] at 4-5.
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` All emphasis is added unless otherwise stated.
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` 2
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 6 of 15 PageID #: 14762
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`for accused devices that are used to invoke the Accused Apps outside the United States, the control
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`and beneficial use of the system occurs outside the United States.
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`There can thus be no infringement—and, accordingly, no damages—attributable to foreign
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`uses of Apple’s accused devices.
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`II.
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`STATEMENT OF UNDISPUTED MATERIAL FACTS
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`AGIS argues that it is entitled to
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` in damages for the alleged infringement of
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`the ’829 patent for foreign uses of the accused devices.
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` AGIS argues that it
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`can claim damages based on foreign uses because the Accused Apps operate,
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`disputed that the Accused Apps also operate using mobile devices—e.g., iPhones and iPads—and
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`But it cannot be (and is not) credibly
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` located outside the United States. See
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`AGIS asserts nine claims of the ’829 patent that collectively depend from four independent
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`claims.
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` Claims 1 and 35 (and their dependents) are method claims
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`directed to methods performed by “one or more server devices” or a “second device,” respectively.
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`Ex. 5 [U.S. Patent No. 8,749,829 (“’829 patent”)], claims 1 and 35. Claims 34 and 68 (and their
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`dependents) are system claims directed to “one or more server devices programmed to perform
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`operations” and a “second device programmed to perform operations,” respectively. Ex. 5 [’829
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`patent], claims 34 and 68. AGIS’s damages expert, Mr. Ratliff, states:
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`2
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`Each claim directed to “one or more server devices” requires steps or operations that are
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`performed by a “second device”—i.e., a mobile device operated by a user. For example, the
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`method of claim 1 requires a second device to perform steps relating to accepting requests, sending
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`messages, and performing actions based on receiving messages.3 The system of claim 34 requires
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`the second device to perform similar operations.4
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`Each claim that is directed to a “second device” (claims 35 and 68) similarly requires
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`operations that are performed by the second device—again, a mobile device operated by a user.
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`For example, the method of claim 35 requires the second device to perform steps relating to
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`receiving and sending data, presenting information on a display, and identifying user interactions
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`3 Claim 1 of the ’829 patent requires the second device to perform at least the following steps:
`“the first message is sent by the second device”; “the second device is configured to present, via a
`display of the second device, a georeferenced map based on the georeferenced map data and a
`symbol corresponding to the first device”; “the second device is configured to use the server-
`provided georeferenced map data and the second location information to reposition the symbol on
`the georeferenced map at a second position corresponding to the second updated location of the
`first device”; and “the third messages is sent by the second device.” Ex. 5 [’829 patent], claim 1.
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` Claim 34 of the ’829 patent requires the second device to perform at least the following
`operations: “the first message is sent by the second device”; “the second device is configured to
`present, via a display of the second device, a georeferenced map based on the georeferenced map
`data and a symbol corresponding to the first device, wherein the symbol is positioned on the
`georeferenced map at a first position corresponding to the first updated location of the first device,
`and wherein the georeferenced map data relate positions on the georeferenced map to spatial
`coordinates”; “the second device is configured to use the server-provided georeferenced map data
`and the second location information to reposition the symbol on the georeferenced map at a second
`position corresponding to the second updated location of the first device”; and “the third message
`is sent by the second device.” Ex. 5 [’829 patent], claim 34.
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`3
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 8 of 15 PageID #: 14764
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`with the device.5 The system of claim 68 requires the second device to perform the same
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`operations.6
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`III. LEGAL STANDARDS
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`A movant is entitled to summary judgment if “there is no genuine dispute as to any material
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`fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Celotex
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`Corp. v. Catrett, 477 U.S. 317, 322 (1986). A dispute of fact is “genuine” only if evidence
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`presented “is such that a reasonable jury could return a verdict for the nonmoving
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`party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “[T]he party moving for
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`summary judgment must ‘demonstrate the absence of a genuine issue of material fact,’ but need
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`not negate the elements of the nonmovant’s case.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075
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`(5th Cir. 1994) (quoting Celotex, 477 U.S. at 323).
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`The Patent Act defines infringement as the making, using, offering to sell, or selling of any
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`patented invention, within the United States, or importing into the United States of any patented
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`5 Claim 35 of the ’829 patent requires the second device to perform at least the following steps:
`“receiving . . . a request to join a group”; “sending . . . an indication of acceptance of the request”;
`“sending a first message . . .”; “receiving . . . a response to the first message”; “receiving . . .
`georeferenced map data”; “presenting, via a display of the second device, a georeferenced map
`based on the georeferenced map data”; “receiving second location information . . . , and using the
`server-provided georeferenced map data and the second location information to reposition the
`symbol on the georeferenced map at a second position”; and “identifying user interaction with the
`display . . .” Ex. 5 [’829 patent], claim 35.
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` Claim 68 of the ’829 patent requires the second device to be “programmed to perform” at least
`the following operations: “receiving . . . a request to join a group”; “sending . . . an indication of
`acceptance of the request”; “sending a first message . . .”; “receiving . . . a response to the first
`message”; “receiving . . . georeferenced map data”; “presenting, via a display of the second device,
`a georeferenced map based on the georeferenced map data”; “receiving second location
`information . . . , and using the server-provided georeferenced map data and the second location
`information to reposition the symbol on the georeferenced map at a second position”; and
`“identifying user interaction with the display . . .” Ex. 5 [’829 patent], claim 68.
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 9 of 15 PageID #: 14765
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`invention during the term of the patent. 35 U.S.C. § 271(a). But the “territorial reach of section
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`271 is limited.” NTP, 418 F.3d at 1313. “Section 271(a) is only actionable against patent
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`infringement that occurs within the United States.” Id.
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`“Because a process is nothing more than the sequence of actions of which it is comprised,
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`the use of a process necessarily involves doing or performing each of the steps recited.” NTP, 418
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`F.3d at 1318. “[A] process cannot be used ‘within’ the United States as required by section 271(a)
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`unless each of the steps is performed within this country.” Id.
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`“The use of a claimed system under section 271(a) is the place at which the system as a
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`whole is put into service, i.e., the place where control of the system is exercised and beneficial
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`use of the system obtained.” NTP, 418 F.3d at 1317.
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`IV.
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`STATEMENT OF THE ISSUE TO BE DECIDED BY THE COURT
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`1.
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`Is AGIS entitled to recover damages for foreign sales based on alleged uses of the
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`claimed systems and methods that occur outside the United States?
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`V.
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`ARGUMENT
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`There is no dispute that under AGIS’s infringement theories, all of the asserted method and
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`system claims of the ’829 patent require user devices and servers to perform (or be capable of
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`performing) many of the claimed steps and operations. See
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` To the extent the devices and servers that are required to perform any steps of the claimed
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`methods are located outside the United States, or to the extent the control or beneficial use of the
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`Accused Apps on these devices is exercised or obtained outside the United States, those accused
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`devices cannot infringe and therefore no damages can be awarded. Accordingly, Apple’s motion
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`for summary judgment of no infringement and no damages based on foreign uses should be
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`granted.
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 10 of 15 PageID #: 14766
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`A.
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`Devices Used Outside The United States Cannot Infringe The Method Claims
`Because Not All Of The Required Steps Are Performed In The United States.
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`Foreign use of the Accused Apps cannot infringe the asserted method claims of the ’829
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`patent for at least the following reasons.
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`1.
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`A “Second Device” Would Perform Certain Steps Of The Claimed
`Methods Outside The United States.
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`First, under AGIS’s infringement contentions, several steps of the claimed methods would
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`be performed by user devices outside the United States. As explained above, the method claims
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`of the ’829 patent require the claimed “second device” to perform several steps of the claimed
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`methods. In particular, the second device must perform steps relating to: accepting requests,
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`sending messages, and performing actions based on receiving messages (claim 1); and receiving
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`and sending data, presenting information on a display, and identifying user interactions with the
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`device (claim 35). See supra. Under AGIS’s infringement contentions, the alleged “second
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`device” is a mobile device—e.g., an iPhone or iPad—operated by a user at the user’s location.
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` Thus, where the basis for the alleged infringement is a foreign use, the
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`method claims cannot be infringed because the steps allegedly performed by the device occur
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`outside the United States.
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`2.
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`The Accused Apps Use Servers Outside The United States.
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`Second, under AGIS’s infringement contentions,
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` In particular, the methods of claims 1 and 35
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`include limitations that require a “server” to “send[] . . . georeferenced map data” to a second
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 11 of 15 PageID #: 14767
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`device (Ex. 5 [’829 patent] at 15:14-15 (claim 1)), or that require a second device to receive, “from
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`a second server, georeferenced map data” (Ex. 5 [’829 patent] at 21:24 (claim 35)).
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`outside the United States cannot satisfy each step of the methods recited in claims 1 and 35 of the
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` For this additional reason, devices used
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`’829 patent (and their dependents).
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`B.
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`Devices Sold and Used Outside The United States Cannot Infringe The
`System Claims Because The Control And Beneficial Use of the Claimed
`System Is Obtained Where The Devices Are Used.
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`Foreign use of the Accused Apps cannot infringe the asserted system claims of the ’829
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`patent because control of the systems invoked by the Accused apps is exercised, and beneficial use
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`7 To be clear,
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`to this motion.
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`7
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` But that distinction is not relevant
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 12 of 15 PageID #: 14768
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`of those systems is obtained, by the user at the user’s location—for foreign uses, outside the United
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`States.
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`AGIS asserts that
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`that
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` AGIS further asserts
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`But AGIS ignores that control of the system invoked by using the Accused Apps is
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`exercised by the user at the user’s location. In other words, if a user using the Accused Apps is
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`located outside the United States, control of the system invoked by the Accused Apps is exercised
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`outside the United States.
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`Similarly, the “beneficial use” of the system that provides the functionality for the Accused
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`Apps is obtained by the user at the user’s location. In other words, if a user using the Accused
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`Apps is located outside the United States, the user obtains beneficial use of the system outside the
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`United States.
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 13 of 15 PageID #: 14769
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`Thus, there can be no dispute that the use of the Accused Apps on devices located outside
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`the United States cannot infringe the asserted system claims of the ’829 patent. Accordingly,
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`AGIS is not entitled to claim damages based on any such non-infringing foreign uses.
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`VI. CONCLUSION
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`For the foregoing reasons, Apple respectfully requests that this Court grant Apple’s motion
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`for summary judgment of no infringement and no damages based on devices used or sold outside
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`the United States.
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 14 of 15 PageID #: 14770
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`Dated: December 14, 2018
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`By: Respectfully submitted:
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`/s/ Melissa R. Smith
`Melissa Richards Smith
`State Bar No. 24001351
`GILLAM & SMITH, LLP
`303 South Washington Ave.
`Marshall, TX 75670
`Tel: (903) 934-8450
`Fax: (903) 934-9257
`melissa@gillamsmithlaw.com
`
`John M. Desmarais
`Paul A. Bondor
`Michael P. Stadnick
`Ameet A. Modi
`Cosmin Maier
`Kerri-Ann Limbeek
`Brian Matty
`Tom BenGera
`Kathryn Bi
`Francesco Silletta
`DESMARAIS LLP
`230 Park Avenue
`New York, NY 10169
`Telephone: (212) 351-3400
`Facsimile: (212) 351-3401
`Email: jdesmarais@desmaraisllp.com
`Email: pbondor@desmaraisllp.com
`Email: mstadnick@desmaraisllp.com
`Email: amodi@desmaraisllp.com
`Email: cmaier@desmaraisllp.com
`Email: klimbeek@desmaraisllp.com
`Email: bmatty@desmaraisllp.com
`Email: tbengera@desmaraisllp.com
`Email: kbi@desmaraisllp.com
`Email: fsilletta@desmaraisllp.com
`
`ATTORNEYS FOR DEFENDANT
`APPLE INC.
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`Case 2:17-cv-00513-JRG Document 241 Filed 12/18/18 Page 15 of 15 PageID #: 14771
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that the foregoing document was filed electronically in
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`compliance with Local Rule CV-5(a). Plaintiff’s counsel of record were served with a true and
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`correct copy of the foregoing document by electronic mail on December 14, 2018.
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`/s/ Melissa R. Smith
`Melissa R. Smith
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`CERTIFICATE OF CONFERENCE
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`I hereby certify that counsel for Apple conferred with counsel for AGIS regarding the
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`foregoing motion. Counsel for AGIS indicated that they are opposed to the relief sought in this
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`motion.
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`/s/ Melissa R. Smith
`Melissa R. Smith
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`11
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