Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 1 of 13 PageID #: 1056
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`QUEST NETTECH CORPORATION,
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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. 2:19-cv-00118-JRG
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`§
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`§
`JURY TRIAL DEMANDED
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`§
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`§
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`§
`§
`§
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`§
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`PLAINTIFF QUEST NETTECH CORPORATION’S RESPONSE
`IN OPPOSITION TO APPLE INC.’S MOTION FOR
`LEAVE TO SUPPLEMENT ITS INVALIDITY CONTENTIONS (DKT. 58)
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`Defendant.
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`v.
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`APPLE INC.,
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`Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 2 of 13 PageID #: 1057
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`I.
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`II.
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`III.
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`IV.
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`TABLE OF CONTENTS
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`Page(s)
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`INTRODUCTION ...........................................................................................................1
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`BACKGROUND .............................................................................................................2
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`LEGAL STANDARD .....................................................................................................3
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`ARGUMENT ..................................................................................................................3
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`A.
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`B.
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`C.
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`Apple’s Explanation for its Delay Shows a Lack of Diligence That Is
`Insufficient to Meet the First Factor .....................................................................4
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`Apple Has Not Shown That Pitroda Is Important To its Position in This
`Case .....................................................................................................................6
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`NetTech Will be Unfairly Prejudiced by Apple’s Supplementation of the
`Pitroda Reference and Will Result in Delays in This Case ....................................7
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`V.
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`CONCLUSION ...............................................................................................................8
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`i
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`Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 3 of 13 PageID #: 1058
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`TABLE OF AUTHORITIES
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`Page(s)
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`Cases
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`Blue Calypso v. Groupon, Inc.,
`No. 6:12-cv-486-JRG (E.D. Tex. Aug. 6, 2015) ..................................................................... 6
`
`Innovative Display Technologies v. Acer Inc.,
`No. 2:13-cv-522-JRG, 2014 WL 4230037 (E.D. Tex. Jun. 19, 2014) ..................................... 3
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`MacroSolve, Inc. v. Antenna Software, Inc.,
`No. 6:11-cv-287-MHS-JDL, 2012 WL 3833079 (E.D. Tex. July 23, 2013) ....................... 6, 7
`
`Nanology Alpha LLC v. WITec Wissenshaftliche Instrumente und Technologie
`GmbH, No. 6:16-cv-00445-RWS (E.D. Tex. May 22, 2018) .................................................. 5
`
`O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc.,
`467 F.3d 1355 (Fed. Cir. 2006) .............................................................................................. 3
`
`S & W Enters., L.L.C. v. Southtrust Bank of Ala., NA,
`315 F.3d 533 (5th Cir. 2003) ................................................................................................. 3
`
`Seven Networks, LLC v. Google, LLC,
`No. 2:17-cv-442-JRG (E.D. Tex. June 8, 2018) ..................................................................... 8
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`Other Authorities
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`Fed. R. Civ. P. 16(b) ................................................................................................................... 3
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`Patent Rule 3-6(b) ....................................................................................................................... 3
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`ii
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`Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 4 of 13 PageID #: 1059
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`Plaintiff Quest NetTech Corporation (“NetTech” or “Plaintiff”) respectfully submits this
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`Response in Opposition to Apple Inc.’s (“Apple” or “Defendant”) Motion for Leave to
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`Supplement Its Invalidity Contentions (Dkt. 58).
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`I.
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`INTRODUCTION
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`Apple does not have good cause to supplement its invalidity contentions because it did
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`not act diligently in discovering U.S. Patent No. 5,590,038 (the “Pitroda patent”) and has not
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`shown that the Pitroda patent is important to its invalidity case. Having no valid excuse for
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`failing to locate the Pitroda patent, Apple resorts to blaming NetTech’s infringement contentions
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`even though Apple has never challenged the sufficiency of the contentions in this Court. The
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`supposedly deficient contentions did not prevent Apple from locating dozens of other prior art
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`references, several of which Apple contends anticipate all of the asserted claims. Given that this
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`case involves only one asserted patent and Apple was given an extra month to complete its
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`contentions, Apple did not act diligently by locating the Pitroda patent until three months after
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`the deadline for invalidity contentions.
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`Apple fails to show that supplementing its invalidity contentions with the Pitroda patent
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`would be important because the Pitroda patent would be merely cumulative of the five
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`purportedly anticipating references already included in its invalidity contentions. Apple also
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`refuses to commit to litigating invalidity under the Pitroda patent in this Court rather than the
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`Patent Office. Apple cannot argue that the Pitroda patent is so important to this case that it must
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`be excused for missing its deadline by three months, if it intends to file a petition for inter partes
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`review based on the Pitroda patent, and seeks to stay this case in favor of that proceeding.
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`Unable to prove diligence or importance, Apple cannot establish good cause to
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`supplement its invalidity contentions. This motion should be denied.
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`Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 5 of 13 PageID #: 1060
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`II.
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`BACKGROUND
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`NetTech filed its complaint in this case on April 12, 2019. See Dkt. No. 1. NetTech
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`timely served its infringement contentions on June 27, 2019, asserting infringement of 28 claims
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`of U.S. Patent No. RE38,137 (the “’137 Patent”). Under P.R. 3-3, Apple’s invalidity contentions
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`would have been due on August 12, 2019, but Apple requested an additional month to serve its
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`contentions, and NetTech agreed to extend the deadline for invalidity contentions to September
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`12, 2019.
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`Apple’s invalidity contentions identify five patent references as anticipating all of the
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`asserted claims of the ’137 Patent. Dkt. 58-9 at 111. The contentions include charts showing how
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`each of these references purportedly anticipates every asserted claim of the ’137 Patent. Id. at 11.
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`In addition, Apple’s invalidity contentions identify approximately 18 prior art products that
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`anticipate at least one claim of the ’137 Patent. Id. at 11-20. The contentions also include nine
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`charts which map obviousness references against claimed functionality. Id. at 28. Finally, the
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`contentions identify approximately 146 patent references and 32 publications as additional
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`background references that Apple intends to rely upon to establish the state of the art and the
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`knowledge of one of ordinary skill in the art. Id. at 43-50.
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`Nearly three months after serving its infringement contentions, on December 4, 2019,
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`Apple disclosed to NetTech that it had located the Pitroda patent and requested a meet-and-
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`confer concerning its motion to supplement invalidity contentions. Apple was unable to agree
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`that the Pitroda patent would not be used in a USPTO proceeding. In other words, Apple is
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`unable to commit to litigating invalidity under Pitroda at the District Court level. The filing of
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`this motion followed on December 17, 2019.
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`1 Page references in “Dkt.” citations refer to the page numbers assigned by the ECF system.
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`2
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`Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 6 of 13 PageID #: 1061
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`III. LEGAL STANDARD
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`A party seeking to modify the Court’s Docket Control order must show “good cause.”
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`Fed. R. Civ. P. 16(b). Under Patent Rule 3-6(b), a party may supplement its invalidity
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`contentions “only by order of the Court, which shall be entered only upon a showing of good
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`cause.” P.R. 3-6(b). “Good cause,” according to the Federal Circuit, “requires a showing of
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`diligence.” O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1366 (Fed. Cir.
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`2006). “The burden is on the movant to establish diligence rather than on the opposing party to
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`establish a lack of diligence.” Id. An exercise of diligence requires both diligence in discovering
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`the prior art and diligence in promptly bringing new art to the attention of the Plaintiff and the
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`Court. Innovative Display Technologies v. Acer Inc., No. 2:13-cv-522-JRG, 2014 WL 4230037
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`at *2 (E.D. Tex. Jun. 19, 2014).
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`While a Court has broad discretion to grant untimely motions to amend pleadings, it
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`should consider four factors in ruling on such motions: (1) the explanation for the failure to meet
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`the deadline; (2) the importance of the thing that would be excluded; (3) potential prejudice in
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`allowing the thing that would be excluded; and (4) the availability of a continuance to cure such
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`prejudice. S & W Enters., L.L.C. v. Southtrust Bank of Ala., NA, 315 F.3d 533, 535 (5th Cir.
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`2003).
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`IV. ARGUMENT
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`Apple’s motion should be denied because it cannot show that it acted diligently to locate
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`the Pitroda patent and file its motion, nor can it show that adding the Pitroda patent to its
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`invalidity contentions would be important.
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`Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 7 of 13 PageID #: 1062
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`A.
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`Apple’s Explanation for its Delay Shows a Lack of Diligence That Is
`Insufficient to Meet the First Factor
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`The first factor in evaluating Apple’s motion for leave to amend invalidity contentions—
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`the length of and reason for the delay, including whether the moving party has been diligent—
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`weighs heavily against Apple.
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`Apple identifies two reasons why it failed to timely locate the Pitroda patent: NetTech’s
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`supposedly insufficient infringement contentions, and Pitroda’s “idiosyncratic terminology.”
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`Neither is sufficient to excuse its failure to comply with the Docket Control Order.
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`Apple’s argument blaming NetTech’s infringement contentions for its failure to locate
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`the Pitroda patent is not credible for several reasons. First, Apple cannot explain why the
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`infringement contentions prevented it from locating the Pitroda patent but not the one-hundred-
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`plus references Apple identifies in its contentions, including the five patents which Apple
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`identifies as anticipating references. Second, Apple does not show how NetTech’s decision to
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`drop certain claims from its infringement contentions helped Apple locate the Pitroda patent.
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`While an argument that Pitroda may have become more relevant if the dropped limitations are
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`not found in Pitroda, it should nevertheless have been located and included in the invalidity
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`contentions if it truly anticipates the other 22 asserted claims of the ’137 Patent. Indeed, Apple
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`included over a hundred patents in its invalidity contentions which it does not believe anticipate
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`the ’137 Patent, but not Pitroda for reasons unknown. Third, if the infringement contentions were
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`so deficient that they interfered in any way with Apple’s prior art search, Apple would not have
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`waited three months from the date it sent its first letter—and one month after it served its
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`invalidity contentions—to follow up on its deficiency letter. Given Apple’s inaction, the more
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`likely scenario is that Apple did not rely on NetTech’s infringement contentions in formulating
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`its prior art searches because it admittedly began its search shortly after being served with the
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`Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 8 of 13 PageID #: 1063
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`Complaint in April 2019, two months before it received the infringement contentions. Dkt. 58 at
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`4. If infringement contentions were so important to Apple’s search, it would not have begun
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`searching long before receiving the infringement contentions.
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`Apple’s argument citing to “idiosyncratic terminology” is similarly unconvincing. Apple
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`cites to examples of language that it contends, without support, is idiosyncratic without
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`comparing that language to the terminology used in other prior art patents or to the search terms
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`Apple used to locate prior art. In addition, it does not show that the use of this language
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`prevented Pitroda from being located based on other search terms or techniques that Apple used.
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`Apple also does not explain how it managed to locate Pitroda after the deadline even though the
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`language in Pitroda did not become less idiosyncratic after the deadline. Apple’s explanation
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`fails to meet the requirement to show that Pitroda was not discoverable. See Ex. A, Nanology
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`Alpha LLC v. WITec Wissenshaftliche Instrumente und Technologie GmbH, No. 6:16-cv-00445-
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`RWS, Dkt. 112 (E.D. Tex. May 22, 2018) (denying the defendants’ motion for leave to
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`supplement invalidity contentions where the defendants were unable to show that the patents
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`were not discoverable at the time invalidity contentions were served).
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`Apple’s excuse for failing to discover Pitroda is less persuasive than the excuse found to
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`be insufficient in Nanology. In that case, the defendant’s motion to amend invalidity contentions
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`was denied where the defendants alleged that its expert found new prior art which only the expert
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`could locate using his professional experience and special knowledge of certain aspects of the
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`patents. Id. at 5. The Court held that though this special knowledge may have been necessary, the
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`defendants did not show that the patents were not discoverable at the time invalidity contentions
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`were served. Id. Apple’s explanation falls far short of this standard.
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`5
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`Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 9 of 13 PageID #: 1064
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`Not only did Apple fail to diligently discover Pitroda, it also failed to diligently bring
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`Pitroda to NetTech’s and the Court’s attention. Apple admits that it discovered Pitroda on
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`October 29, 2019, but inexplicably waited to bring it to NetTech’s attention until December 4,
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`five weeks later. As a result, nearly two months passed from the time Apple discovered Pitroda
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`until it filed its motion. A two-month delay weighs against a finding of diligence. See Ex. B,
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`Blue Calypso v. Groupon, Inc., No. 6:12-cv-486-JRG, Dkt. 317 at 2 (E.D. Tex. Aug. 6, 2015)
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`(denying the defendants’ motion for leave to supplement their invalidity contentions where it
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`was “unclear” to the court why the defendants delayed in “disclos[ing] the reference or seek[ing]
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`leave to amend their contentions when they knew of the patent reference two months [prior].”).
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`For these reasons, the first factor weighs strongly against a finding of good cause.
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`B.
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`Apple Has Not Shown That Pitroda Is Important To its Position in This Case
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`The second factor in evaluating a defendant’s motion for leave to amend its invalidity
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`contentions, the importance of the amendment, also weighs against Apple.
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`Apple asserts that the Pitroda patent is important prior art because it invalidates all of the
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`asserted claims and anticipates “all or almost all of the asserted claims.” Dkt. 58 at 7-8. Apple
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`also asserts that to the extent Pitroda does not anticipate any claims, it renders the claims obvious
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`alone or in combination with “just one additional secondary reference.” Id. at 8. Apple’s
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`conclusory argument that Pitroda is a critical piece of prior art falls short of the good cause
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`standard. Apple listed five anticipatory references in its infringement contentions and does not
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`explain why a sixth reference is necessary and not cumulative. Apple’s First Supplemental
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`Invalidity Contentions do not show the “distinctive value” of the Pitroda patent to demonstrate
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`its importance. See MacroSolve, Inc. v. Antenna Software, Inc., No. 6:11-cv-287-MHS-JDL,
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`2012 WL 3833079, at *4 (E.D. Tex. July 23, 2013).
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`6
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`Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 10 of 13 PageID #: 1065
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`This situation here resembles the fact pattern in MacroSolve where this district held that
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`the defendants failed to show importance where the newly-asserted references were not shown to
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`be non-cumulative in light of the patents already asserted in the case “especially when the
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`additional references are intended to support the existing contention of obviousness.” Id. Apple
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`has similarly failed to show how the Pitroda reference is non-cumulative.
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`Furthermore, Apple cannot demonstrate that the Pitroda patent is important to this case if
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`it will not commit to litigating invalidity based on Pitroda in this case. On December 5, 2019,
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`during the parties’ meet-and-confer, NetTech asked Apple whether invalidity based on the
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`Pitroda patent would be litigated at the District Court or the Patent Office. Apple’s counsel was
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`unable to state whether Apple would be using Pitroda in an inter partes proceeding against the
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`’137 Patent. Because Apple may use Pitroda in an IPR proceeding (a strong possibility which
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`would explain why Apple was searching for prior art after the deadline for invalidity
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`contentions) and subsequently seek a stay of this case in view of the IPR, Apple has not carried
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`its burden to prove the importance of its amendment to invalidity contentions.
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`For these reasons, the second element of the good cause test weighs against granting
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`Apple’s motion.
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`C.
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`NetTech Will be Unfairly Prejudiced by Apple’s Supplementation of the
`Pitroda Reference and Will Result in Delays in This Case
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`NetTech will be unfairly prejudiced by Apple’s untimely attempt to add the Pitroda
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`reference to its invalidity contentions. During the period of Apple’s delay, the parties exchanged
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`their P.R. 4-1 and 4-2 disclosures, and the parties’ joint claim construction chart was filed on
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`December 23, 2019. These disclosures are designed under the Local Patent Rules to be made
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`with knowledge of the defendant’s invalidity and prior art positions, and NetTech will be
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`unfairly prejudiced because its claim construction positions were not formulated in view of the
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`Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 11 of 13 PageID #: 1066
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`Pitroda patent. A significant continuance, including a resubmission of the parties’ claim
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`construction pleadings, may be necessary as a result of Apple’s untimely disclosure.
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`This Court may find a lack of good cause even when there is no prejudice. As this Court
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`recently held, “[a] lack of prejudice to [the plaintiff], supposing that there was truly no prejudice,
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`is not sufficient to demonstrate good cause without more; to hold otherwise would change the
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`showing from one of good cause to one of no prejudice and absolve the movant from a failure
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`based on harm to the opposing party alone.” Ex. C, Seven Networks, LLC v. Google, LLC, No.
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`2:17-cv-442-JRG, Dkt. 198 at 2 (E.D. Tex. June 8, 2018). Here, even if the prejudice to NetTech
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`may somehow be cured, Apple’s motion should nevertheless be denied.
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`V.
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`CONCLUSION
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`For the foregoing reasons, NetTech respectfully requests that the Court deny Apple’s
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`Motion for Leave to Supplement its Invalidity Contentions (Dkt. 58).
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`Dated: December 31, 2019
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`Respectfully Submitted,
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`
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`BROWN RUDNICK LLP
`
` /s/ Alfred R. Fabricant
`Alfred R. Fabricant
`NY Bar No. 2219392
`Email: afabricant@brownrudnick.com
`Peter Lambrianakos
`NY Bar No. 2894392
`Email: plambrianakos@brownrudnick.com
`Vincent J. Rubino, III
`NY Bar No. 4557435
`Email: vrubino@brownrudnick.com
`BROWN RUDNICK LLP
`7 Times Square
`New York, NY 10036
`Telephone: (212) 209-4800
`Facsimile: (212) 209-4801
`
`Justin Kurt Truelove
`Texas Bar No. 24013653
`Email: kurt@truelovelawfirm.com
`
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`Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 12 of 13 PageID #: 1067
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`TRUELOVE LAW FIRM, PLLC
`100 West Houston
`Marshall, Texas 75670
`Telephone: (903) 938-8321
`Facsimile: (903) 215-8510
`
`ATTORNEYS FOR PLAINTIFF
`QUEST NETTECH CORPORATION
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`Case 2:19-cv-00118-JRG Document 60 Filed 12/31/19 Page 13 of 13 PageID #: 1068
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that on December 31, 2019, all counsel of record who
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`are deemed to have consented to electronic service are being served with a copy of this document
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`via 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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