Case 2:17-cv-00513-JRG Document 335 Filed 01/30/19 Page 1 of 13 PageID #: 20384
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`
`
`
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`
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`AGIS SOFTWARE DEVELOPMENT LLC,
`
` 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,
`
` 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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`
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`
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`Civil Action No. 2:17-CV-516-JRG
`(CONSOLIDATED CASE)
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`APPLE’S MOTION TO STAY PENDING INTER PARTES REVIEW
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`Case 2:17-cv-00513-JRG Document 335 Filed 01/30/19 Page 2 of 13 PageID #: 20385
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`
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`I.
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`II.
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`TABLE OF CONTENTS
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`Pages
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`INTRODUCTION ...............................................................................................................1
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`FACTUAL BACKGROUND ..............................................................................................1
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`A.
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`B.
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`Procedural Posture ...................................................................................................1
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`The PTAB Has Already Ruled In Apple’s Favor On Priority Issues. .....................3
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`III.
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`ARGUMENT .......................................................................................................................4
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`A.
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`The IPRs Will Likely Simplify The Issues In Question And The Trial Of
`This Case. .................................................................................................................4
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`1.
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`2.
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`3.
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`IPR Will Likely Reduce The Number Of Claims At Issue In This
`Case. .............................................................................................................4
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`The PTAB’s IPR Of The ’838 Patent Will Likely Foreclose
`Infringement Claims Based On The ’838 Patent Even If No Claim
`Is Found Invalid. ..........................................................................................5
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`The PTAB’s IPR Of The ’838 Patent Will Likely Foreclose
`AGIS’s Infringement Claims Based On The ’829 And ’251
`Patents. .........................................................................................................5
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`A Stay Will Not Unduly Prejudice Or Tactically Disadvantage AGIS. ..................7
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`The Stage Of The Litigation Favors A Stay. ...........................................................7
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`B.
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`C.
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`IV.
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`CONCLUSION ....................................................................................................................8
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`i
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`Case 2:17-cv-00513-JRG Document 335 Filed 01/30/19 Page 3 of 13 PageID #: 20386
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`
`
`Cases
`
`TABLE OF AUTHORITIES
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`Pages
`
`Ethicon, Inc. v. Quigg,
`849 F.3d 1422 (Fed. Cir. 1987)........................................................................................... 4
`
`Image Processing Techs., LLC v. Samsung Elecs. Co.,
`No. 2:16-CV-505-JRG, 2017 WL 7051628 (E.D. Tex. Oct. 25, 2017). ............................. 5
`
`Landis v. N. Am. Co.,
`299 U.S. 248 (1936). ........................................................................................................... 4
`
`NFC Tech. LLC v. HTC Am., Inc.,
`No. 2:13-CV-1058-WCB, 2015 WL 1069111 (E.D. Tex. Mar. 11, 2015) ......................... 7
`
`Soverain Software LLC v. Amazon.com, Inc.,
`356 F.Supp.2d 660, 662 (E.D. Tex. 2005) .......................................................................... 4
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`Uniloc USA, Inc. v. Samsung Elecs. Am., Inc.,
`No. 2:16-CV-638-JRG, 2017 WL 9885168 (E.D. Tex. June 13, 2017) ............................. 6
`
`VirtualAgility Inc. v. Salesforce.com, Inc.,
`759 F.3d 1307 (Fed. Cir. 2014)........................................................................................... 7
`
`Statutes
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`37 C.F.R § 42.100(c)....................................................................................................................... 2
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`37 C.F.R § 42.122(e)....................................................................................................................... 2
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`ii
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`Case 2:17-cv-00513-JRG Document 335 Filed 01/30/19 Page 4 of 13 PageID #: 20387
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`I.
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`INTRODUCTION
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`The Patent Trial and Appeal Board (“PTAB”) has instituted inter partes review (“IPR”) of
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`every asserted claim of three of the five patents at issue in this case, and it will issue an institution
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`decision concerning all of the asserted claims of one other asserted patent before trial. Crucially,
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`IPR proceedings that have already been instituted will likely fully foreclose AGIS’s infringement
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`claims on all of the patents at issue in this case. Because the outcome of the IPRs may ultimately
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`obviate the need for trial of any issue, Apple respectfully requests that this case be stayed until the
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`PTAB issues final written decisions in the currently-pending IPR proceedings concerning the
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`asserted patents.
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`II.
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`FACTUAL BACKGROUND
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`A.
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`Procedural Posture
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`AGIS asserts infringement of five U.S. Patents in this case: U.S. Pat. No. 8,213,970 (the
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`“’970 patent”); U.S. Pat. No. 9,467,838 (the “’838 patent”); U.S. Pat. No. 9,445,251 (the “’251
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`patent”); U.S. Pat No. 9,408,055 (the “’055 patent”); and U.S. Pat. No. 9,749,829 (the “’829
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`patent”) (collectively, the “asserted patents”). (See Dkt. No. 32 (AGIS’s First Amended
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`Complaint) ¶¶ 17-81.) The ’838, ’251, ’055, and ’829 patents share a common specification, and
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`are directed to similar systems and methods of sharing location information and communications
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`among a group of participants in a communications network. See, e.g., ’838 pat. cl. 1; ’251 pat.
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`cl. 1; ’055 pat. cl. 1; and ’829 pat. cl. 1.
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`Fact discovery in this case closed on October 26, 2018. Expert discovery closed on
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`December 7, 2018. Summary judgment briefing was completed on January 22. The pre-trial
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`conference is set for February 21, 2019, and trial is scheduled to begin on March 4, 2019. (See
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`Dkt. No. 220; Ex. 1 (Order Resetting Pretrial Conference).)
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`Case 2:17-cv-00513-JRG Document 335 Filed 01/30/19 Page 5 of 13 PageID #: 20388
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`Apple and non-party Google LLC have filed IPR petitions concerning each of the asserted
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`patents. The PTAB has instituted IPR of the ’970 patent,1 the ’055 patent,2 and the ’838 patent,3
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`finding a reasonable likelihood that all of the asserted claims of those patents will be found
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`unpatentable.4 The PTAB is required by statute to issue final written decisions in each IPR no
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`later than December 7, 2019 (absent a very rare extension by the Board of up to six months for
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`good cause). See 37 C.F.R § 42.100(c). In addition to these instituted IPRs, another Petition for
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`IPR remains pending against the ’829 patent,5 and an institution decision is due before the start of
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`trial in this case.
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`A summary of the IPRs that have been instituted concerning the asserted patents, and
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`proceeding in which an institution decision is forthcoming, is included below:
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`AGIS Patent
`’970 Patent
`’838 Patent
`’055 Patent
`’829 Patent
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`Status
`Proceeding
`IPR2018-01079 Granted
`IPR2018-00819 Granted
`IPR2018-01080 Granted
`IPR2018-01471
`Institution Decision Due 2/28/2019
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`
`
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`1 See Ex. 2 Google LLC v. AGIS Software Development, LLC, IPR2018-01079, Paper No. 9 (Nov.
`20, 2018) (Institution of Inter Partes Review). Apple has moved to join this IPR pursuant to 37
`C.F.R § 42.122(e). See Apple, Inc. v. AGIS Holdings, Inc., IPR2019-00411, Paper No. 3 (Dec. 7,
`2018) (Motion for Joinder).
`2 See Ex. 3 Google LLC v. AGIS Software Development, LLC, IPR2018-01080, Paper No. 9 (Dec.
`4, 2018 (Institution of Inter Partes Review). Apple has moved to join this IPR pursuant to 37
`C.F.R § 42.122(e). See Apple, Inc. v. AGIS Holdings, Inc., IPR2019-00432, Paper No. 3 (Dec. 13,
`2018) (Motion for Joinder).
`3 See Ex. 4 Apple Inc. v. AGIS Software Development, LLC, IPR2018-00819, Paper No. 9 (Nov.
`7, 2018) (Institution of Inter Partes Review).
`4 See Ex. 5 (Plaintiff AGIS Software Development, LLC’s Final Election of Asserted Claims to
`Defendant Apple Inc.) at 10; Ex. 2; Ex. 3; Ex. 4.
`5 Apple Inc. v. AGIS Software Development, LLC, IPR2018-00819 (filed Jul. 31, 2018) (seeking
`IPR of every asserted claim of the ’829 patent).
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`2
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`Case 2:17-cv-00513-JRG Document 335 Filed 01/30/19 Page 6 of 13 PageID #: 20389
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`B.
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`The PTAB Has Already Ruled In Apple’s Favor On Priority Issues.
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`Among the issues the PTAB has already ruled on are the priority dates of the ’838, ’251,
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`and ’055 patents. On the record before it at the institution stage, the PTAB held that AGIS had
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`not met its burden to show that earlier applications in AGIS’s priority chain provide written
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`description support for the claims of the ’838 patent. (See Ex. 4 at 18.) As a consequence, the
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`PTAB held that AGIS had not established that the ’838 patent is entitled to rely upon a priority
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`date earlier than October 31, 2014—almost a decade later than what AGIS contends is the priority
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`date in this litigation. (See id. at 19; Ex. 5 (AGIS Amended Infringement Contentions (served
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`November 12, 2018)) at 10.) Similarly, in a decision regarding the ’251 patent (which issued from
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`a continuation-in-part of the ’838 patent application), the PTAB held that the ’251 patent was not
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`entitled to a priority date earlier than the October 31, 2014 filing date of the ’838 patent, because
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`earlier applications in the priority chain lacked support for the “second georeferenced map”
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`limitations of the ’838 and ’251 patents. (See Ex. 6 at 20-26.) Likewise, in a decision regarding
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`the ’055 patent (which also issued from a continuation-in-part of the ’838 patent application), the
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`PTAB held that the ’055 patent was not entitled to a priority date earlier than the October 31, 2014
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`filing date of the ’838 patent, because earlier applications in the priority chain lacked support for
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`certain limitations of the ’055 patent. (See Ex. 7 at 17-23.)
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`In this case, Apple contends that—consistent with the PTAB’s ruling—the proper priority
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`date of the ʼ838, ʼ251, and ʼ055 patents is October 31, 2014. (See Ex. 8 at 7-8 (Apple Amended
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`Invalidity Contentions (April 16, 2018).) Apple asserts that the same priority date applies for the
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`’829 patent. (Id.)
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`3
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`III. ARGUMENT
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`A district court has the inherent power to control its own docket, including the power to
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`stay proceedings. See Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). This inherent power
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`includes “the authority to order a stay pending conclusion of a PTO reexamination.” Ethicon, Inc.
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`v. Quigg, 849 F.3d 1422, 1436-27 (Fed. Cir. 1987). In deciding whether to grant a stay, courts
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`typically consider three factors: (1) whether a stay will unduly prejudice or present a clear tactical
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`disadvantage to the nonmoving party; (2) whether a stay will simplify issues in question and trial
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`of the case; and (3) whether discovery is complete and whether a trial date has been set. Soverain
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`Software LLC v. Amazon.com, Inc., 356 F.Supp.2d 660, 662 (E.D. Tex. 2005) (internal citations
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`omitted). Each of the three stay factors weighs in favor of staying this case.
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`A.
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`The IPRs Will Likely Simplify The Issues In Question And The Trial Of This
`Case.
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`The IPRs will likely simplify the issues for trial in this case in several ways.
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`1.
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`IPR Will Likely Reduce The Number Of Claims At Issue In This Case.
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`As explained above, the PTAB has already instituted IPRs on every asserted claim of three
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`of the five asserted patents (the ’838, ’829, and ’055 patents). An institution decision concerning
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`a petition for IPR of all of the asserted claims of a fourth patent (the ’829 patent) will issue before
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`trial. If the PTAB invalidates asserted claims, the case will be simplified because those claims
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`will no longer be at issue. See Image Processing Techs., LLC v. Samsung Elecs. Co., No. 2:16-
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`CV-505-JRG, 2017 WL 7051628, at *1 (E.D. Tex. Oct. 25, 2017). In most cases, the PTAB
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`ultimately invalidates every claim on which IPR is instituted. (See Ex. 13 at 10 (PTAB Trial
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`4
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`Case 2:17-cv-00513-JRG Document 335 Filed 01/30/19 Page 8 of 13 PageID #: 20391
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`Statistics, December 2018)). Thus, it is likely that the currently pending IPRs will remove 19
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`asserted claims from this case. (See Ex. 5 (AGIS Final Election of Asserted Claims).)
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`2.
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`The PTAB’s IPR Of The ’838 Patent Will Likely Foreclose
`Infringement Claims Based On The ’838 Patent Even If No Claim Is
`Found Invalid.
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`Even if the PTAB does not invalidate any claim of the ’838 patent, the PTAB’s final written
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`decision regarding the ’838 patent will likely foreclose AGIS’s infringement claims based on that
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`patent. In its decision to institute IPR of the ’838 patent, the PTAB ruled that the priority date for
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`that patent is not in 2004 (as AGIS contends in this case), but rather October 31, 2014. (See Ex. 4
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`at 18-19.)
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` When the PTAB makes final its
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`decision that the ’838 patent may not rely on a priority date earlier than October 31, 2014, then all
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`of the accused products would be prior art to the ’838 patent. Accordingly, the ’838 patent could
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`not be asserted against those products, and that patent would necessarily no longer be at issue in
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`this case (even if the claims are not found invalid based on the instituted grounds).
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`3.
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`The PTAB’s IPR Of The ’838 Patent Will Likely Foreclose AGIS’s
`Infringement Claims Based On The ’829 And ’251 Patents.
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`The PTAB’s priority date decision regarding the ’838 patent will likely result in a final
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`written decision that forecloses AGIS’s infringement claims related to the ’829 and ’251 patents
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`as well. In its Petition for IPR of ’838 patent, Apple argued that, before the application leading to
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`the ’838 patent was filed on October 31, 2014, the priority chain of the ’838 patent lacked written
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`description support for two limitations of the issued ’838 patent claims (requesting and receiving
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`georeferenced map data from a server, and features related to joining devices to groups). Those
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`two limitations are also limitations of every independent claim of the ’829 and ’251 patents, and
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`5
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`Case 2:17-cv-00513-JRG Document 335 Filed 01/30/19 Page 9 of 13 PageID #: 20392
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`each of the ’829 and ’251 patents claims priority to the application that led to the ’838 patent.6
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`Thus, if the PTAB’s final written decision confirms that the ’838 patent is entitled to a priority
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`date no earlier than October 31, 2014, based on a lack of earlier written description support for
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`those two limitations, then the ’251 and ’829 patents are likewise not entitled to an earlier priority
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`date. Indeed, the PTAB has already ruled (in a decision denying institution for other reasons) that
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`the ʼ251 patent is not entitled to rely on a filing date before October 31, 2014. (See Ex. 6 at 20-
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`25.) Accordingly, the accused Apple products would be prior art to the ʼ251 and ʼ829 patents as
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`well, and those patents could likewise no longer be asserted in this litigation.
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`In summary, IPRs are already instituted that could result in the invalidation of every
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`asserted claim of three of the five patents, and an IPR petition that is currently pending could result
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`in institution of an IPRs of every asserted claim of another patent. But even if no claim is
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`invalidated by any of these IPRs, this case will be significantly simpler if the PTAB merely issues
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`a final written decision affirming its institution decision that the ’838 patent is entitled to a priority
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`date no earlier than October 2014, because then AGIS will no longer have a cognizable claim of
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`infringement of the ’838, ’829, or ’251 patents by any accused product. See Uniloc USA, Inc. v.
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`Samsung Elecs. Am., Inc., No. 2:16-CV-638-JRG, 2017 WL 9885168, at *1 (E.D. Tex. June 13,
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`2017) (IPR may simplify proceedings even if fewer than all asserted claims are cancelled). At a
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`6 Specifically, each of the independent claims of the ’829 patent and ’251 patents includes
`limitations that: (1) describe user devices requesting and receiving data (such as a georeferenced
`map) from a server, and (2) join devices to groups. (See, e.g., ’251 pat. 15:12-19 and 18:15-23
`(independent claims 1 and 24, describing requesting and receiving georeferenced map data from a
`server); ’829 pat. 15:14-15, 17:54-55, 18:40, 21:24 (independent claims 1, 34, 35, and 68,
`describing same); ’251 pat. 14:60-61, 17:62-63 (independent claims 1 and 24, describing joining
`a device to a group); ’829 pat. 14:60-15:2, 17:32-42, 18:16-27; 20:66-21:11 (independent claims
`1, 34, 35, and 68, describing same).)
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`6
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`Case 2:17-cv-00513-JRG Document 335 Filed 01/30/19 Page 10 of 13 PageID #: 20393
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`minimum, a stay pending resolution of the IPRs would minimize the risk that the PTAB and this
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`Court reach inconsistent decisions regarding the priority date of the asserted patents.
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`B.
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`A Stay Will Not Unduly Prejudice Or Tactically Disadvantage AGIS.
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`As the Federal Circuit held in the analogous context of a request for stay pending Covered
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`Business Method Review, “whether the patentee will be unduly prejudiced by a stay . . . focuses
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`on the patentee’s need for an expeditious resolution of its claim.” VirtualAgility Inc. v.
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`Salesforce.com, Inc., 759 F.3d 1307, 1318 (Fed. Cir. 2014) (emphasis in original). In that case,
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`the Federal Circuit noted that the plaintiff’s failure to seek a preliminary injunction weighed
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`against its claim that it would be unduly prejudiced by a stay. Id. at 1319.
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` Thus, if AGIS were
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`to prevail in this litigation, monetary damages would be sufficient to compensate AGIS for any
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`injury to its patent rights. See VirtualAgility, 759 F.3d at 1318-19. A stay will not diminish the
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`monetary damages to which AGIS will be entitled if it ultimately succeeds in its infringement
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`claims—it will only delay realization of those damages. Id. at 1318. Such a delay is not, on its
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`own, sufficient to defeat a stay motion. NFC Tech. LLC v. HTC Am., Inc., No. 2:13-CV-1058-
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`WCB, 2015 WL 1069111, at *2 (E.D. Tex. Mar. 11, 2015).
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`C.
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`The Stage Of The Litigation Favors A Stay.
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`Because discovery in this case is complete, granting a stay at this juncture will not create a
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`risk that evidence will be lost or witness memories will fade. On the other hand, granting a stay
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`will save the parties and the Court the time and expense of taking to trial claims that the PTAB
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`7
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`Case 2:17-cv-00513-JRG Document 335 Filed 01/30/19 Page 11 of 13 PageID #: 20394
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`will likely ultimately invalidate7—or that AGIS may no longer be able to assert, since the accused
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`products would indisputably be prior art if the PTAB’s priority-related decisions are confirmed.
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`IV. CONCLUSION
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`Because the pending IPRs could eliminate every infringement claim from this case, Apple
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`respectfully requests that this Court GRANT Apple’s Motion to Stay pending inter partes review
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`of the asserted patents.
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`7 See Ex. 13 at 10 (PTAB Trial Statistics, December 2018.
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`8
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`Case 2:17-cv-00513-JRG Document 335 Filed 01/30/19 Page 12 of 13 PageID #: 20395
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`Dated: January 25, 2019
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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
`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: kbi@desmaraisllp.com
`Email: fsilletta@desmaraisllp.com
`
`ATTORNEYS FOR DEFENDANT
`APPLE INC.
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`Case 2:17-cv-00513-JRG Document 335 Filed 01/30/19 Page 13 of 13 PageID #: 20396
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that counsel of record who are deemed to have consented
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`to electronic services are being served with a copy of this document via the Court’s CM/ECF
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`system per Local Rule CV-5(a)(3) on this the 25th day of January, 2019.
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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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