Case 2:17-cv-00514-JRG Document 260 Filed 03/04/19 Page 1 of 7 PageID #: 21094
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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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`HTC CORPORATION,
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`Defendant.
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`CASE NO. 2:17-CV-0514-JRG
`(LEAD CASE)
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`JURY TRIAL DEMANDED
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`DEFENDANT HTC CORPORATION’S REPLY IN SUPPORT OF ITS MOTION FOR
`SUMMARY JUDGMENT OF NO PRE-SUIT INDIRECT INFRINGEMENT
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`Case 2:17-cv-00514-JRG Document 260 Filed 03/04/19 Page 2 of 7 PageID #: 21095
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` conceding in its Opposition that it cannot establish pre-suit indirect infringement
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`because HTC Corp. had no pre-suit knowledge of the asserted patents, AGIS claims that it can
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`nevertheless pursue pre-suit damages all the same.
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`. But
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`AGIS’s lack of a viable pre-suit indirect infringement theory precludes it from seeking pre-suit
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`damages unless it can prove direct infringement. AGIS’s arguments to the contrary are without
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`merit, and this Court should enter judgment foreclosing AGIS from advancing an indirect
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`infringement claim on pre-suit sales.
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`I.
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`AGIS CLAIMS TO BE DROPPING ITS INDIRECT INFRINGEMENT CLAIM
`ON PRE-SUIT SALES, BUT IT IS ACTUALLY PLANNING TO CONTINUE
`THAT CLAIM UNDER A DIFFERENT NAME.
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`HTC Corp. urges the Court to grant the Motion (Dkt. No. 109) and enter summary
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`judgment of no pre-suit indirect infringement. While at first blush AGIS appears to be dropping
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`its pre-suit indirect infringement claim, AGIS really is not. AGIS repeatedly asserts that even
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`without a pre-suit indirect infringement theory, it is nevertheless entitled to seek “the full scope
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`of damages,” i.e., both pre-suit and post-suit damages, based on HTC Corp.’s alleged post-suit
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`acts. (Dkt. No. 182, p. 3 (“As AGIS explained in response to HTC’s letter, AGIS is entitled to
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`the full scope of its damages at least based on HTC’s post-complaint acts.”) (“Opposition”).)
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`This is simply a pre-suit indirect infringement claim by another name, while omitting any
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`evidence of actual pre-suit culpability. The Court should not permit AGIS’s shell game, and
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`HTC Corp. respectfully requests that the Court grant summary judgment against AGIS on pre-
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`suit indirect infringement, no matter how AGIS may try to label it.1
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`1 While AGIS initially states that it is entitled to all pre-suit damages because it will still proceed
`with both a post-suit indirect infringement case and a direct infringement case (see Opposition at
`pp. 1–2), it is clear from statements later in the Opposition that AGIS thinks it is entitled to all
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`Case 2:17-cv-00514-JRG Document 260 Filed 03/04/19 Page 3 of 7 PageID #: 21096
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`The motivations behind AGIS’s indirect infringement shell game are rooted in several
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`key facts about its damages case.
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` Hence, AGIS can only hope for a significant payday if it can keep pre-suit damages
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`as a viable remedy.
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`Several facts about AGIS’s infringement case further illuminate the purpose of AGIS’s
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`shell game. First, as HTC Corp. presented in its Motion for Summary Judgment of No Direct
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`Infringement and No Indirect Infringement of U.S. Patent 8,213,970 (Dkt. No. 120), AGIS’s
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`direct infringement case against HTC Corp. is fatally flawed because the software that AGIS
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`accuses of practicing the ’970 patent’s claims—the only claims issued before 2016— is never
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`actually installed on the smartphones that HTC Corp. allegedly makes, uses, sells, offers to sell,
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`or imports. (Id. at 8–12.)4 It is the end user’s choice to download that software application after
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`pre-suit damages based on solely its post-suit induced infringement claim (see id. at p. 3 (“AGIS
`is entitled to the full scope of its damages at least based on HTC’s post-complaint acts.”).
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`4 While AGIS purported to present evidence to the contrary in its opposition (Dkt. No. 199),
`HTC Corp. demonstrates in its concurrently filed reply to that opposition that none of the
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`Case 2:17-cv-00514-JRG Document 260 Filed 03/04/19 Page 4 of 7 PageID #: 21097
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`purchasing the phone, if the user so chooses. Hence, the totality of HTC Corp.’s potential
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`liability before 2016 is its alleged inducement of end users to install and use the accused software
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`applications on their smartphones. Second, as demonstrated by AGIS’s total acquiescence on the
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`point in the Opposition, AGIS has no possibility of showing that HTC Corp. knew of the patents
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`prior to this lawsuit. Hence, pre-suit indirect infringement is a legal impossibility. Therefore,
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`while AGIS needs to keep pre-suit damages in this case in order to obtain any significant payout,
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`the facts and the law preclude AGIS from legitimately doing so.
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`In sum, AGIS knows that its best odds of establishing infringement will be on an
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`inducement theory, but that theory does not align with the period when HTC Corp. had
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`significant sales. For that reason, AGIS carefully states in its Opposition that “AGIS does not
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`intend to present a theory of pre-suit indirect infringement at trial” (Opposition at p. 1), while at
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`the same time stating that “AGIS is entitled to the full scope of its damages at least based on
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`HTC’s post-complaint acts” (id. at p. 3).
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`The Court should not countenance this game.
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`If AGIS were not playing a shell game, then this caveat that “AGIS is entitled to the full
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`scope of its damages at least based on HTC’s post-complaint acts” (id. at p. 3) would not even be
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`necessary. If recovery of pre-suit damages based on post-suit indirect infringement were actually
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`a viable theory, then AGIS would not need to make that statement at all. AGIS could simply
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`concede the Motion, as it purports to do, and pursue its legal theory in the ordinary course of
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`trial. But AGIS knows that its theory of pre-suit damages based on post-suit indirect
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`infringement has no merit. And hence it makes the caveat—not once, but four times in as many
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`evidence that AGIS points to actually shows any pre-installation of the accused software
`application.
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`Case 2:17-cv-00514-JRG Document 260 Filed 03/04/19 Page 5 of 7 PageID #: 21098
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`pages (see Opposition at pp. 1, 3, 4)—with the hope that the Court will dismiss the Motion as
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`moot without formally rejecting AGIS’s bogus legal theory. HTC Corp. again urges the Court to
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`reject AGIS’s game, grant summary judgment against AGIS, and prohibit AGIS from seeking an
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`indirect infringement claim for pre-suit damages.
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` Lastly, even if AGIS’s time-traveling inducement theory were based in law (which it is
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`not), AGIS has not mustered any evidence to actually prove it. AGIS has no evidence that even
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`a single user who purchased an accused HTC Corp. phone pre-suit downloaded the accused apps
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`post-suit, much less that HTC Corp. induced the user to do so. Not a single piece of evidence.
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`So even under AGIS’s legally deficient theory, HTC Corp. is still entitled to summary judgment
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`because AGIS has not brought forth any facts to support its theory. ACCO Brands, Inc. v. ABA
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`Locks Mfrs. Co., Ltd., 501 F.3d 1307, 1313–14 (Fed. Cir. 2007) (“ACCO must prove specific
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`instances of direct infringement or that the accused device necessarily infringes the patent in suit,
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`in order to sustain the jury verdict of induced infringement. Hypothetical instances of direct
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`infringement are insufficient to establish vicarious liability or indirect infringement.”); see also
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`Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986) (“[T]here is no issue for trial unless
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`there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that
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`party.”).
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`II.
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`CONCLUSION
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`With AGIS’s Opposition, the devil is in the details. While the Opposition appears to
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`concede the issue of indirect infringement for pre-suit sales, it actually does not. AGIS is in fact
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`using the Opposition to lay the groundwork for a legally flawed and factually unsupported end-
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`run on the Motion. HTC Corp. respectfully requests that the Court grant summary judgment
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`against AGIS and prohibit AGIS from seeking pre-suit damages on any indirect infringement
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`theory.
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`Case 2:17-cv-00514-JRG Document 260 Filed 03/04/19 Page 6 of 7 PageID #: 21099
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`Dated: February 27, 2019
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`Respectfully submitted,
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`/s/ Kyle R. Canavera
`Matthew C. Bernstein (Lead Attorney)
`CA State Bar No. 199240
`mbernstein@perkinscoie.com
`Miguel J. Bombach
`CA State Bar No. 274287
`mbombach@perkinscoie.com
`Kyle R. Canavera
`CA State Bar No. 314664
`kcanavera@perkinscoie.com
`PERKINS COIE LLP
`11452 El Camino Real, Suite 300
`San Diego, CA 92130-2080
`Tel: (858) 720-5700
`Fax: (858) 720-5799
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`Eric H. Findlay (Texas Bar No. 00789886)
`Brian Craft (Texas Bar No. 04972020)
`FINDLAY CRAFT, P.C.
`102 N. College Ave., Ste. 900
`Tyler, TX 75702
`Email: efindlay@findlaycraft.com
`Email: bcraft@findlaycraft.com
`Tel: (903) 534-1100
`Fax: (903) 534-1137
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`ATTORNEYS FOR DEFENDANT
`HTC CORPORATION
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`Case 2:17-cv-00514-JRG Document 260 Filed 03/04/19 Page 7 of 7 PageID #: 21100
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a true and correct copy of the above and foregoing
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`document has been served on February 27, 2019, to all counsel of record who are deemed to
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`have consented to electronic service via the Court’s CM/ECF system per Local Rule CV-5(a)(3).
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` /s/ Kyle R. Canavera
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`CERTIFICATE OF AUTHORIZATION TO FILE UNDER SEAL
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`This certifies, pursuant to Local Rule CV-5(a)(7), this document is authorized to be filed
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`Under Seal pursuant to a Protective Order [#119] entered April 10, 2018.
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` /s/ Kyle R. Canavera
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