Case 2:17-cv-00513-JRG Document 270 Filed 01/08/19 Page 1 of 13 PageID #: 17930
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`AGIS SOFTWARE DEVELOPMENT LLC,
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`Plaintiff,
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`Case No. 2:17-CV-0513-JRG
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`(LEAD CASE)
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`§
`JURY TRIAL DEMANDED
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`§
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`v.
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`HUAWEI DEVICE USA INC. ET AL.,
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`Defendants.
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`Defendant.
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`PLAINTIFF AGIS SOFTWARE DEVELOPMENT LLC’S RESPONSE IN
`OPPOSITION TO APPLE INC.’S SEALED MOTION FOR SUMMARY JUDGMENT
`OF NO INFRINGEMENT AND NO DAMAGES FOR FOREIGN USES (DKT. 230)
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`Case No. 2:17-CV-0516-JRG
`(CONSOLIDATED CASE)
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`JURY TRIAL DEMANDED
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`APPLE, INC.,
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`Case 2:17-cv-00513-JRG Document 270 Filed 01/08/19 Page 2 of 13 PageID #: 17931
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`I.
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`II.
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`III.
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`IV.
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`V.
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`TABLE OF CONTENTS
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`Page(s)
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`INTRODUCTION .............................................................................................................. 1
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`RESPONSE TO STATEMENT OF ISSUES ..................................................................... 1
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`RESPONSE TO STATEMENT OF UNDISPUTED FACTS ............................................ 1
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`LEGAL STANDARDS ...................................................................................................... 3
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`ARGUMENT ...................................................................................................................... 3
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`A.
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`B.
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`AGIS Has Established that the Infringing Use Occurs in the United
`States ....................................................................................................................... 4
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`AGIS Has Established that Control and Beneficial Use Occurs in the
`United States ........................................................................................................... 5
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`VI.
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`CONCLUSION ................................................................................................................... 7
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`Case 2:17-cv-00513-JRG Document 270 Filed 01/08/19 Page 3 of 13 PageID #: 17932
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`TABLE OF AUTHORITIES
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`Page(s)
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`Cases
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`Centillion Data Sys. v. Qwest Commc’ns Int’l, Inc.,
`631 F.3d 1279 (Fed. Cir. 2011)..................................................................................................6
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`Decca Ltd. v. United States,
`210 Ct. Cl. 546, 544 F.2d 1070, 191 U.S.P.Q. 439 (1976) ........................................................6
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`Freedom Wireless, Inc. v. Boston Commc’ns Grp., Inc.,
`198 F. Supp. 2d 11 (D. Mass. 2002) ..........................................................................................6
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`Medgraph, Inc. v. Medtronic, Inc.,
`843 F.3d 942, 120 U.S.P.Q.2d 1007 (Fed. Cir. 2016) ...............................................................3
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`Morrison v. National Australia Bank Ltd.,
`561 U.S. 247, 130 S. Ct. 2869, 177 L. Ed. 2d 535 (2010) .........................................................7
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`NTP, Inc. v. Research In Motion Ltd.,
`418 F.3d 1282 (Fed. Cir. 2005)..........................................................................................3, 6, 7
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`Renhcol Inc. v. Don Best Sports,
`548 F. Supp. 2d 356 (E.D. Tex. 2008) .......................................................................................3
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`WesternGeco LLC v. ION Geophysical Corp.,
`138 S. Ct. 2129, 201 L. Ed. 2d 584, 86 USLW 4525 (June 22, 2018) ..................................3, 7
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`Case 2:17-cv-00513-JRG Document 270 Filed 01/08/19 Page 4 of 13 PageID #: 17933
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`Plaintiff AGIS Software Development LLC (“AGIS”) hereby submits its Response in
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`Opposition to Defendant Apple Inc.’s (“Apple”) Sealed Motion for Summary Judgment of No
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`Infringement and No Damages for Foreign Uses (Dkt. 230). AGIS respectfully submits that each
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`of Apple’s arguments lacks merit and Apple’s motion should be denied.
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`I.
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`INTRODUCTION
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`AGIS properly asserts that it is entitled to damages based on foreign uses of Apple
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`accused devices. Apple asserts that because the devices are located outside the U.S., there is no
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`infringing use. However, Apple fails to acknowledge that its servers are located within the
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`United States and, therefore, constitute infringing use. As a result, there is infringement of U.S.
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`Patent No. 9,749,829 (the “’829 patent”).
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`II.
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`RESPONSE TO STATEMENT OF ISSUES
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`Apple has failed to show that AGIS cannot meet its evidentiary burden to prove that
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`AGIS is entitled to recover for foreign sales because Apple does not show that AGIS has failed
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`to present evidence sufficient to demonstrate that the use of accused devices outside of the
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`United States use the claimed systems and methods by Apple servers within the United States.
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`III. RESPONSE TO STATEMENT OF UNDISPUTED FACTS
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`AGIS disputes
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`1 AGIS
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`disputes Apple’s statement that AGIS claims damages based on foreign uses because the
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`Accused Apps operate, in part, using Apple servers located inside the United States when, in
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`fact,
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`1 References to Exs. A-H refer to exhibits to the Declaration of Alfred R. Fabricant attached hereto.
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` AGIS disputes Apple’s
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`Case 2:17-cv-00513-JRG Document 270 Filed 01/08/19 Page 5 of 13 PageID #: 17934
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`statement that the Accused Apps operate on servers located outside the United States. Apple
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`cites to the
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`AGIS does not dispute that the presently-asserted claims against Apple include claims 2,
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`8, 10, 14, 30, 34, 42, 50, and 68 which collectively depend from four independent claims.
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`AGIS disputes that the method of claim 1 requires a second device to “perform steps
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`relating to accepting requests” and “performing actions based on receiving messages” where the
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`claim 1 states that “the second device is configured” to perform, but does not require that any
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`other device perform any claimed steps not initiated by the server. Ex. E, U.S. Patent No.
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`9,749,829 at 15:15-16, 15:29-30.
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`AGIS disputes that each claim allegedly directed to a second device (claims 35 and 68)
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`require a mobile device operated by a user. See Ex. D,
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`2
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`Case 2:17-cv-00513-JRG Document 270 Filed 01/08/19 Page 6 of 13 PageID #: 17935
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`IV.
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`LEGAL STANDARDS
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`Summary judgment on the issue of non-infringement is proper only when there are no
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`genuine issues of material fact—no reasonable factfinder could determine that the accused
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`product meets every claim limitation or its equivalent. Medgraph, Inc. v. Medtronic, Inc., 843
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`F.3d 942, 949, 120 U.S.P.Q.2d 1007 (Fed. Cir. 2016).
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`“To determine whether a system is being ‘used’ within the United States, “[c]ourts
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`analyze the invention as a whole to determine where the ‘claimed system as a whole . . . is put
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`into service,’ and do not focus on the situs of use of each claimed element within the claimed
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`invention.” Renhcol Inc. v. Don Best Sports, 548 F. Supp. 2d 356, 361 (E.D. Tex. 2008)
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`(quoting NTP, Inc. v. Research In Motion Ltd., 418 F.3d 1282, 1317 (Fed. Cir. 2005). “The use
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`of a claimed system under section 271(a) is the place at which 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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`obtained.” NTP, 418 F.3d at 1317. Where the relevant conduct to the statute’s focus occurs in
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`the United States, then the case involves a permissible domestic application of the statute, “even
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`if other conduct occurred abroad.” WesternGeco LLC v. ION Geophysical Corp., 138 S. Ct.
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`2129, 2137, 201 L. Ed. 2d 584, 86 USLW 4525 (June 22, 2018) (where the court held that patent
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`infringement is the focus of the statute for general damages remedy for patent infringement).
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`V.
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`ARGUMENT
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`Apple seeks summary judgment that there is no infringement and no damages based on
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`foreign uses of Apple’s accused devices. Apple’s argument fails because Apple improperly
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`restricts the claimed systems and methods to the first and second devices in the claims and reads
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`out the Apple servers located within the United States. Apple has failed to establish there are no
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`genuine issues of material fact which precludes summary judgment.
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`3
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`Case 2:17-cv-00513-JRG Document 270 Filed 01/08/19 Page 7 of 13 PageID #: 17936
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`A.
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`AGIS Has Established that the Infringing Use Occurs in the United
`States
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`Apple fails to establish that it is entitled to summary judgment of no infringement and no
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`damages based on devices used or sold outside the United States. Apple’s argument is
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`predicated on the assumption that the only accused devices are “Apple’s iPhones, iPads, iPod
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`Touch, and Apple Watch products that include the Apple Maps, Find My iPhone, Find My
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`Friends, and iMessage applications.” Dkt. 230 at n. 1. Apple’s arguments assume that the
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`infringing devices are restricted to the “first device” and “second device” and, therefore, any
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`steps performed by these devices outside the United States are not infringing. However, the
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`Accused Products include not only the devices such as iPhones, iPads, iPod Touch, and Apple
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`Watch products, but iOS, WatchOS, and “Apple Servers including but not limited to iMessage
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`servers, iCloud servers, Apple Maps servers, and FaceTime servers.” Ex. F, Plaintiff’s Amended
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`Disclosure of Asserted Claims and Infringement Contentions, dated September 21, 2018, at 4-7;
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`Ex. D at E-a1.
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`Apple mischaracterizes AGIS’s contentions that the accused devices are restricted to the
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`first and second devices. See Dkt. 230 at 6.
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`Case 2:17-cv-00513-JRG Document 270 Filed 01/08/19 Page 8 of 13 PageID #: 17937
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` AGIS has
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`alleged that these servers perform the steps within the United States, even when interacting with
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`iOS devices that had been sold outside the United States. Therefore, Apple’s allegations that the
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`steps are allegedly performed by devices outside the United States are without merit.
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`Apple also asserts, for the first time, that its servers are located outside the United States
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`by stating that “map tiles are provided to user devices by third-party Akamai servers—not Apple
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`servers—that are located geographically closest to the requesting device.” Dkt. 230 at 7.
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`B.
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`AGIS Has Established that Control and Beneficial Use Occurs in
`the United States
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`Apple also argues that the foreign use of the Accused Apps cannot infringe the asserted
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`system claims of the ’829 patent because “control of the systems invoked by the Accused apps is
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`Case 2:17-cv-00513-JRG Document 270 Filed 01/08/19 Page 9 of 13 PageID #: 17938
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`exercised, and beneficial use of those systems is obtained, by the user at the user’s location—for
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`foreign uses, outside the United States.” Dkt. 230 at 8. In Decca Ltd. v. United States, the Court
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`held that the extraterritoriality of receivers on ships or aircrafts that are programmed to receive
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`and measure the time differences in arrival of signals and interpret these differences does not
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`“have any necessary connection with the location of the Omega system for purposes of the
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`United States Patent Laws. It is located in the United States.” 210 Ct. Cl. 546, 544 F.2d 1070,
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`1074, 191 U.S.P.Q. 439 (1976) (“The system would be worth little if it did not operate
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`worldwide, at least as an ultimate goal, so that, a receiver once installed, the ship or plane can
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`use it to navigate anywhere. Of its very nature the system cannot be confined to one country, but
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`we do not think it is without any territoriality merely because it operates in more than one
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`country, and at sea.”); Cf. Freedom Wireless, Inc. v. Boston Commc’ns Grp., Inc., 198 F. Supp.
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`2d 11, 15-18 (D. Mass. 2002) (where court found that use did not lie where the database was not
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`the system’s control point, as the purpose of the database was for billing purposes). Like
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`Decca’s Omega system, Apple’s servers are located in the United States and they cannot be said
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`to have no territoriality merely because they operate in countries other than the United States.
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`Further, the line of cases where a customer or user “controls” a system, courts have held that use
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`lies where “but for the customer’s actions, the entire system would never have been put into
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`service.” Centillion Data Sys. v. Qwest Commc’ns Int’l, Inc., 631 F.3d 1279, 1285 (Fed. Cir.
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`2011). Further, unlike the database in Freedom Wireless, Apple’s servers themselves are
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`accused devices in the ‘829 patent and perform each of the steps of numerous asserted claims.
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`The facts here also differ from NTP, where the Federal Circuit put forth the “control and
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`benefit” test, because the system at issue in NTP was a relay system located in Canada. See
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`Case 2:17-cv-00513-JRG Document 270 Filed 01/08/19 Page 10 of 13 PageID #: 17939
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`generally NTP, 418 F.3d 1282 (2005). Unlike NTP, the Apple servers are not simply relays, and
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`all infringing interactions between the iOS devices and the servers constitute infringing uses.
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`In WesternGeco, the Supreme Court held that the focus of § 284, where infringement is
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`assessed under § 271(f)(2), the domestic infringement is “the objec[t] of the statute’s solicitude”
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`in this context.” WesternGeco, 138 S. Ct. at 2138 (citing Morrison v. National Australia Bank
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`Ltd., 561 U.S. 247, 255, 130 S. Ct. 2869, 177 L. Ed. 2d 535 (2010)). Like § 271(f)(2), the focus
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`of § 271(a) is where the infringing use occurred. Here, the infringing use relevant to the
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`statutory focus in this case is domestic—the servers. As a result, the conduct relevant here was
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`clearly within the United States—where Apple’s servers are located.
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`VI. CONCLUSION
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`For the foregoing reasons, AGIS respectfully requests that this Court deny Apple’s
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`motion for summary judgment of no infringement and no damages for foreign uses.
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`Dated: January 4, 2019
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`BROWN RUDNICK LLP
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` /s/ Alfred R. Fabricant
`Alfred R. Fabricant
`NY Bar No. 2219392
`Email: afabricant@brownrudnick.com
`Lawrence C. Drucker
`NY Bar No. 2303089
`Email: ldrucker@brownrudnick.com
`Peter Lambrianakos
`NY Bar No. 2894392
`Email: plambrianakos@brownrudnick.com
`Vincent J. Rubino, III
`NY Bar No. 4557435
`Email: vrubino@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
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`Case 2:17-cv-00513-JRG Document 270 Filed 01/08/19 Page 11 of 13 PageID #: 17940
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`NY Bar No. 5020797
`Email: jrubino@brownrudnick.com
`Enrique W. Iturralde
`NY Bar No. 5526280
`Email: eiturralde@brownrudnick.com
`Daniel J. Shea, Jr.
`NY Bar No. 5430558
`Email: dshea@brownrudnick.com
`Justine Minseon Park
`NY Bar No. 5604483
`Email: apark@brownrudnick.com
`BROWN RUDNICK LLP
`7 Times Square
`New York, NY 10036
`Telephone: 212-209-4800
`Facsimile: 212-209-4801
`
`Samuel F. Baxter
`Texas Bar No. 01938000
`Email: sbaxter@mckoolsmith.com
`Jennifer L. Truelove
`Texas State Bar No. 24012906
`Email: 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 270 Filed 01/08/19 Page 12 of 13 PageID #: 17941
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`CERTIFICATE OF AUTHORIZATION TO FILE UNDER SEAL
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`The undersigned certifies that the foregoing document is authorized to be filed under seal
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`pursuant to the Protective Order entered in this case.
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`/s/ Alfred R. Fabricant
`Alfred R. Fabricant
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`Case 2:17-cv-00513-JRG Document 270 Filed 01/08/19 Page 13 of 13 PageID #: 17942
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that, on January 4, 2019, 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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