Case 2:19-cv-00118-JRG Document 61 Filed 01/07/20 Page 1 of 8 PageID #: 1092
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`QUEST NETTECH CORPORATION,
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`v.
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`APPLE INC.,
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`Plaintiff,
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`Defendant.
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`C.A. No. 2:19-cv-00118-JRG
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`JURY TRIAL DEMANDED
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`APPLE INC.’S REPLY
`TO QUEST NETTECH CORPORATION’S RESPONSE IN OPPOSITION
`TO APPLE INC.’S MOTION
`FOR LEAVE TO SUPPLEMENT ITS INVALIDITY CONTENTIONS
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`Case 2:19-cv-00118-JRG Document 61 Filed 01/07/20 Page 2 of 8 PageID #: 1093
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`INTRODUCTION
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`The Court should grant Apple leave to supplement its invalidity contentions to add a single
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`reference: U.S. Patent No. 5,590,038, issued on December 31, 1995 to Satyan G. Pitroda
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`(“Pitroda”). NetTech’s Response in Opposition (Dkt. 60) fails to rebut Apple’s showing of good
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`cause to supplement its invalidity contentions. NetTech’s brief misunderstands or ignores the
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`reasons given in Apple’s opening brief regarding diligence, and it attempts to raise arguments that
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`are irrelevant to the questions of importance and prejudice.
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`ARGUMENT
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`All four of the relevant factors weigh in favor of permitting Apple to supplement its
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`invalidity contentions: First, Apple diligently pursued its prior art search, despite NetTech’s
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`assertions of claims that it later dropped and vague infringement allegations, both of which greatly
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`inflated the scope of the prior art search and thereby needlessly diverted time and resources that
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`delayed the discovery of Pitroda. Moreover, contrary to NetTech’s incorrect allegation of a five
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`week delay, Apple disclosed Pitroda within days of discovering its significance. Second, Pitroda
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`is important because it anticipates or renders obvious all of the asserted claims, and thus could end
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`this case. Third, no prejudice would result from adding Pitroda. Contrary to its complaint of
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`hypothetical, unspecified prejudice to its “claim construction positions,” NetTech has not
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`identified any new terms or constructions that it would change in light of Pitroda, even though
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`claim construction discovery is still open and it has had (and still has) ample time to do so. And
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`fourth, NetTech identifies no reason that supplementation would require a continuance at this
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`stage, prior to claim construction briefing and long before the Markman hearing.
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`A. Apple Diligently Located Pitroda and Diligently Delivered It to NetTech.
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`Contrary to NetTech’s protests, Apple offered a detailed account of its diligence in locating
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`and disclosing Pitroda. As Apple’s motion showed, its efforts to locate and identify prior art were
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`1
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`Case 2:19-cv-00118-JRG Document 61 Filed 01/07/20 Page 3 of 8 PageID #: 1094
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`hampered by a confluence of three factors, two of which stemmed from NetTech’s own actions
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`and a third that was beyond the control of either party.
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`First, NetTech’s infringement contentions asserted multiple claims against Apple, which
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`NetTech later withdrew, but not until after the deadline for Apple’s invalidity contentions. Mot. 2;
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`Mot. Exs. 4-6. Those claims raised limitations that are non-cumulative of the other claims, and so
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`required additional—and ultimately unnecessary—prior art searching. Mot. at 4-6. Notably,
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`NetTech failed to dispute any of the foregoing facts.
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`Second, NetTech’s vague infringement contentions failed to serve one of their intended
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`and important purposes: fairly disclosing the scope of the allegations against Apple products and,
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`with it, the prior art search needed to address the claims. See Mot. 4-5; O2 Micro Intern. Ltd. v.
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`Monolithic Power Sys., Inc., 467 F.3d 1355, 1365-66 (Fed. Cir. 2006). Apple alerted NetTech that
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`its deficient contentions “prejudice[d] Apple’s ability to prepare its invalidity contentions” shortly
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`after receiving them. Mot. Ex. 3 at 5. But because NetTech did not—and still has not—remedied
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`those deficiencies, Apple had to conduct a broader prior art search than would have been necessary
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`had NetTech more clearly disclosed how it intended to read the asserted claims.1 This District has
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`acknowledged that similar circumstances necessitated a “detailed prior art search” that
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`“consume[d] months.” Optis Wireless Tech., LLC v. Huawei Techs. Co. Ltd., No. 2:17-CV-123,
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`1 NetTech suggests that its contentions could not have influenced Apple’s prior art search because Apple began
`searching before receiving them. Resp. 4-5. This argument does not follow. Litigants may, and frequently do, begin
`prior art searching before receiving the infringement contentions. But that does not diminish the important function
`proper infringement contentions serve by helping to narrow and make the review and presentation of the results of
`that search more efficient—a function that was thwarted by NetTech’s deficient contentions in this case. Similarly,
`NetTech attempts to excuse its deficient contentions by alleging that Apple has not previously escalated the
`deficiencies to this Court’s attention, ignoring that any delay is the result of NetTech’s inaction, not Apple’s: Apple
`made its source code available for inspection beginning on September 12, 2019 but NetTech did not review the code
`until November 7. Ex. 10 (source code log). And regardless, NetTech cannot deny that Apple has repeatedly
`challenged the sufficiency of its contentions—and specifically noted that those deficiencies “prejudice Apple’s ability
`to prepare its invalidity contentions”—beginning shortly after NetTech first delivered them. Mot. Ex. 3 at 5; see also
`Mot. 2; Mot. Exs. 4-5. NetTech’s failure to comply with this court’s rules should not serve as a basis to deny Apple’s
`motion to supplement.
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`2
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`Case 2:19-cv-00118-JRG Document 61 Filed 01/07/20 Page 4 of 8 PageID #: 1095
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`slip op. at 2 (E.D. Tex. Jan 26, 2018), ECF No. 119. Accordingly, this court has found diligence
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`where relevant art was not discovered (even until after a Markman hearing) because of such
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`circumstances. Mot. 4-5; Alt v. Medtronic, Inc., No. 2:04-CV-370, 2006 WL 278868, at *2-4 (E.D.
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`Tex. Feb. 1, 2006).
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`Third, Pitroda itself obscured its relevance to the dispute at hand by using nonstandard
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`terms for well-known components. Mot. 2-3, 5. For example, Pitroda coined the term “universal
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`electronic transaction card” but never uses the better-known terms “smart card,” integrated circuit
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`card,” “IC card,” “payment card,” “contactless card,” or “chip card.” See Mot. Ex. 8 (Pitroda); see
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`also, e.g., Dkt. 6-1 (’137 Patent) at 2:5-6. NetTech misunderstands this point. Apple does not
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`argue that “Pitroda was not discoverable” because of idiosyncratic language. See Resp. 5. Rather,
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`Pitroda’s nonstandard language delayed examination of Pitroda for some time after Apple first
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`received it. Mot. 2-3, 5.
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`For these reasons, the caselaw NetTech cites is easily distinguishable or simply inapposite.
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`For example, in Blue Calypso, Inc. v. Groupon, Inc., the court held only that a defendant must
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`offer some explanation for a multiple-month delay in alerting opposing counsel that it intended to
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`rely on a patent already known to both parties. No. 6:12-cv-486-JRG, slip op. at 2 (E.D. Tex. Aug.
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`6, 2015), ECF No. 317, reproduced at ECF No. 60-3. Similarly, in Nanology Alpha LLC v. Witec
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`Wisenschaftliche Instrumente Und Technologie GMBH, the defendant delayed until a month after
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`submitting its expert report before disclosing its intent to rely on a reference. No. 6:16-cv-445-
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`RWS at 5, ECF No. 112, reproduced at ECF No. 60-2. None of those facts are present here.
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`NetTech does not dispute that Apple had not previously known about Pitroda. When it did
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`discover the reference, not only did Apple alert opposing counsel to the reference within days of
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`realizing its significance, it did so while offering a detailed explanation of the reasons for the delay
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`3
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`Case 2:19-cv-00118-JRG Document 61 Filed 01/07/20 Page 5 of 8 PageID #: 1096
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`(the same three reiterated above) and disclosed its intention to rely on the reference months before
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`the Markman hearing and the fact (let alone expert) discovery cut-off.2 Mot. 2-3, 5.
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`Because Apple exercised diligence throughout the search that uncovered Pitroda, and
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`promptly disclosed Pitroda to NetTech, this factor strongly supports granting leave to supplement.
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`B. The Pitroda Reference Is Important to Apple’s Invalidity Case.
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`As set forth in Apple’s claim chart, the Pitroda reference is important because it can
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`drastically simplify this case by ending it. NetTech does not dispute this.
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`NetTech instead asserts, in conclusory fashion, that Pitroda is cumulative of Apple’s five
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`other primary references, but NetTech has provided no support or explanation for that assertion.
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`The mere fact that two references are both alleged to invalidate a claim does not necessarily render
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`them cumulative of one another. For example, they may invalidate the claim in different ways
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`depending upon the plaintiff’s interpretation of the claim as understood from its infringement
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`contentions.3 And the cases, including the lone case cited by NetTech, are fully consistent with
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`that non-controversial fact. For example, in MacroSolve, Inc. v. Antenna Software, Inc., the
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`defendant only “vaguely assert[ed] one reference relates to limitations in [one claim] without any
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`explanation as to what the relationship is or how it applies to particular limitations within the
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`claim.” 2013 WL 3833079, at *2 (E.D. Tex. July 23, 2013). By contrast, here Apple specifically
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`and in great detail explained in a 42-page claim chart how Pitroda anticipates or renders obvious
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`each limitation of each asserted claim. Mot. Ex. 1. And as this Court has repeatedly recognized,
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`“[p]rior art references potentially rendering a patent invalid are important” and support granting
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`leave to supplement, even where a plaintiff contends that the references are cumulative of other
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`2 NetTech mistakenly asserts that Apple “inexplicably” delayed “five weeks” in bringing Pitroda to NetTech’s
`attention. Resp. 6. But as Apple has consistently explained, Pitroda was examined later than other references due to
`its nonstandard terminology. Mot. 2-3, 5. Once Apple examined Pitroda, it alerted NetTech promptly. Id.
`3 Contrary to NetTech’s assertion that Apple has asserted hundreds of references, Apple charted only five primary
`references in its original invalidity contentions. See Ex. 8 at pg. 10, Table 1 (listing invalidity claim charts).
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`4
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`Case 2:19-cv-00118-JRG Document 61 Filed 01/07/20 Page 6 of 8 PageID #: 1097
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`prior art. Alcatel USA Res., Inc. v. Microsoft Corp., 6:06-CV-500, 2008 WL 11348444, at *2 (E.D.
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`Tex. Oct. 3, 2008). Thus, this factor weighs in favor of granting leave to supplement. Mot. 5-6.
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`Separately, NetTech argues that Pitroda is not important to this case because Apple has not
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`committed to foregoing filing an inter partes review (“IPR”) petition based on the reference.
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`Resp. 7. This novel argument is unsupported by any case-law. Regardless, it also lacks merit: that
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`a reference may be asserted in a parallel validity proceeding does not diminish its relevance; if
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`anything, the PTAB’s institution of an IPR based on a reference would further affirm its
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`relevance—and thus importance—to the party’s invalidity defense. Tellingly, NetTech has not
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`agreed to litigate the validity of Pitroda in an IPR and stay this case pending that IPR.
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`C. NetTech Will Not Be Prejudiced by Apple’s Supplement, and No Continuance or
`Other Delay is Required.
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`NetTech argues that allowing supplementation would prevent it from addressing Pitroda in
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`its claim constructions. Resp. 7-8. But NetTech identifies no revised constructions nor additional
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`terms needing construction in light of Pitroda. Id. Moreover, NetTech had weeks after receiving
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`Pitroda to formulate its construction of the terms already proposed, but even now—nearly a month
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`later—identifies no claim construction position that would change in light of Pitroda. Id.
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`Regardless, even if a change were warranted, plenty of time remains in the schedule for NetTech
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`to make it prior to the Markman hearing. Mot. 6-7; see also Alt, 2006 WL 278868, at *5 (allowing
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`addition of eight references even after Markman). Accordingly, NetTech’s sole alleged prejudice,
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`that “[a] significant continuance, including a resubmission of the parties’ claim construction
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`pleadings, may be necessary” is without support. Rather, granting Apple’s motion would not
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`impact the schedule due to the relatively early stage of this case. See Mot. 7.
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`For the foregoing reasons, Apple respectfully requests the Court to grant its Motion for
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`CONCLUSION
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`Leave to Supplement its Invalidity Contentions.
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`5
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`Case 2:19-cv-00118-JRG Document 61 Filed 01/07/20 Page 7 of 8 PageID #: 1098
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`Dated: January 7, 2020
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`Respectfully Submitted
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`/s/ Travis Jensen
`Claudia Wilson Frost – Lead Counsel
`State Bar No. 21671300
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`609 Main Street, 40th Floor
`Houston, TX 77002
`Telephone: 713.658.6400
`Facsimile: 713.658.6401
`cfrost@orrick.com
`
`Travis Jensen
`CA Bar No. 259925
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`1000 Marsh Road
`Menlo Park, CA 94025
`Telephone: 650.614.7400
`Facsimile: 650.614.7401
`tjensen@orrick.com
`
`Tyler S. Miller
`NY State Bar No. 5122262
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`51 West 52nd Street
`New York, NY 10019
`Telephone: 212.506.5338
`Facsimile: 212.506.5151
`tmiller@orrick.com
`
`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
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`ATTORNEYS FOR DEFENDANT APPLE INC.
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`Case 2:19-cv-00118-JRG Document 61 Filed 01/07/20 Page 8 of 8 PageID #: 1099
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that on January 7, 2020, all counsel of record who are deemed to
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`have consented to electronic service are being served with a copy of this document through the
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`Court’s CM/ECF system under Local Rule CV-5(a)(3). Any other counsel of record will be served
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`by a facsimile transmission or first-class mail.
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`/s/ Travis Jensen
`Travis Jensen
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`7
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