Case 2:21-cv-00072-JRG-RSP Document 114 Filed 08/09/21 Page 1 of 17 PageID #: 2828
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`
`AGIS SOFTWARE DEVELOPMENT LLC,
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`Plaintiff,
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`v.
`
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`T-MOBILE, USA, INC., AND T-MOBILE
`US, INC.,
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`Defendants
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`CIVIL ACTION NO. 2:21-cv-00072-JRG
`
`LEAD CASE
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`
`
`
`
`
`
`
`SMITH MICRO SOFTWARE, INC.’S AND SMITH MICRO SOFTWARE, LLC’S
`MOTION TO INTERVENE, AND MOTION TO STAY PROCEEDINGS AS TO ITS
`ACCUSED TECHNOLOGY PENDING ADJUDICATION OF THEIR PENDING
`DECLARATORY JUDGMENT ACTION AGAINST AGIS SOFTWARE
`DEVELOPMENT LLC
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`
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`1
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`Case 2:21-cv-00072-JRG-RSP Document 114 Filed 08/09/21 Page 2 of 17 PageID #: 2829
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`I.
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`INTRODUCTION
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`This Motion is by brought by the companies that supply defendants T-Mobile USA, Inc.
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`and T-Mobile US, Inc. (collectively, “T-Mobile”) with the technology (“Smith Micro
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`Technology” or “Technology”) that is included in two of T-Mobile’s products accused of
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`infringing Plaintiff’s patents – FamilyWhere and FamilyMode (the “Accused Products”).
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`Proposed Intervenors Smith Micro Software, Inc. and Smith Micro Software, LLC
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`(collectively “Smith Micro”) prefer to have the issue of whether their Technology infringes any
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`valid claim of any of Plaintiff’s patents in a single case, rather than be burdened with a
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`succession of piecemeal infringement cases, and prefer that their Technology not be burdened
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`with the significant cloud that Plaintiff’s allegations of infringement create.
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`To this end, Smith Micro has filed a declaratory judgment action (the “DJ Action”)
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`against AGIS Software Development LLC (“AGIS”) in the Northern District of California.
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`Smith Micro Software, Inc. and Smith Micro Software, LLC v. AGIS Software, No. 5:21cv3677
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`(N.D. Cal. filed May 17, 2021).1
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`The case law has consistently held that a declaratory judgment action by the supplier of
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`the accused technology should take precedence over an infringement action against one of the
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`supplier’s customers. That is indisputably the situation here.
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`This Court should grant Smith Micro’s motion to intervene. and should then exercise its
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`discretion to stay proceedings on those claims relating to the Accused Products in favor of those
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`issues proceeding in the DJ Action which is the most appropriate vehicle for resolving AGIS’s
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`1 A copy of Smith Micro’s as-filed complaint in the DJ Action is attached as Exhibit A (“DJ Complaint”). That
`complaint also points out in detail why the Northern District of California is the most convenient and appropriate
`venue regarding a patent infringement action as to the Accused Products. See DJ Complaint, ¶¶ 1 to 8. It also
`points out that plaintiff AGIS Software has almost no presence in the State of Texas (other than being a Texas
`limited liability company and bringing patent infringement actions there. The main people behind the Texas LLC
`façade are all located in Florida, and they have significant contacts in the state of California, such that litigating in
`California will not be inconvenient for them. See DJ Complaint, ¶¶ 9 to 14, 21 to 46.
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`2
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`Case 2:21-cv-00072-JRG-RSP Document 114 Filed 08/09/21 Page 3 of 17 PageID #: 2830
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`infringement allegations against the Smith Micro Technology and all of Smith Micro’s current
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`and future customers.
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`A stay will also serve the interests of judicial efficiency by promoting the resolution of
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`AGIS’s claims against the Smith Micro Technology and all of its customers in a single forum.
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`Such a stay will not prejudice AGIS, as AGIS has a number of other cases pending, and this case
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`and the other consolidated cases asserted by AGIS are in the early stages of prosecution –
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`motions to dismiss are pending, neither fact nor expert discovery is complete, claims have not
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`been construed, and no trial date has been set.
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`II.
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`STATEMENT OF ISSUES TO BE DECIDED
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`Pursuant to Local Rule 7(a)(1), Smith Micro identifies the following two issues:
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`(1) whether Smith Micro should be allowed to intervene in this case for all purposes; and
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`(2) whether a stay of this action should issue as to the Accused Products.
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`III.
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`STATEMENT OF FACTS
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`Smith Micro is a leading global provider of highly scalable mobile applications and
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`value-added solutions for mobile and cable operators. Smith Micro provides location tracking
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`and parental control technology to its customers, enabling subscribers to locate and share their
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`whereabouts with family members and enabling parents to control their children’s use of the
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`internet by setting screen time and managing digital content. DJ Complaint, ¶ 8.
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`On March 3, 2021, AGIS filed this patent infringement action against Smith Micro’s
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`customer, T-Mobile, alleging that the Accused Products infringe various patents AGIS purports
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`to own.2 Dkt. No. 1 ¶¶ 24, 46, 67, 98, 120 and 147.
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`2 U.S. Patent Nos. 7,031,728 (“the ’728 patent”), 7,630,724 (“the ’724 patent”), 9,408,055 (“the ’055 patent”),
`9,445,251 (“the ’251 patent”), 9,467,838 (“the ’838 patent”), and 9,749,829 (“the ’829 patent”) (collectively, the
`“Patents-in-Suit”).
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`3
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`While Smith Micro does not believe that its Technology infringes any valid claim of the
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`Patents-in-Suit, AGIS’s allegations against the Accused Products place Smith Micro’s
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`Technology squarely at issue. Accordingly, in an effort to protect its business and its customers
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`(including but not limited to T-Mobile) and potential customers who use or will use Smith
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`Micro’s Technology, Smith Micro recently filed the DJ Action which alleges that the Patents-in-
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`Suit are not infringed, directly or indirectly, by the Smith Micro Technology that is used in the
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`Accused Products. See DJ Complaint, passim.
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`The case in this Court is still in its early stages. Each of the defendants has filed separate
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`motions to dismiss, transfer and/or stay the case, including T-Mobile’s motion to dismiss.3 The
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`PreTrial Conference is not until February 7, 2022, and jury selection not until March 7, 2022.
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`The parties have not yet submitted any claim construction briefing, and the Court has not yet
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`issued any claim construction order, and neither fact nor expert discovery has been completed.
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`IV.
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`SMITH MICRO SHOULD BE PERMITTED TO INTERVENE
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`Smith Micro moves to intervene in this action as of right or by permission. AGIS’s
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`claims against T-Mobile implicate Smith Micro’s Technology. Intervention will allow Smith
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`Micro to appear as a party in its own right to safeguard its interests in its Technology and to
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`protect current and future customers from AGIS’s meritless claims. See Fed. R. Civ. P. 24(a)(2)
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`(“On timely motion, the court must permit anyone to intervene who . . . claims an interest
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`relating to the property or transaction that is the subject of the action, and is so situated that
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`disposing of the action may as a practical matter impair or impede the movant’s ability to protect
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`its interest, unless existing parties adequately represent that interest.”); Fed. R. Civ. P. 24(b)(1)
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`3 Currently pending are the following motions: 1) Motion to Dismiss by Uber Technologies Inc. d/b/a Uber. (Dkt.
`No. 24); 2) Motion to Dismiss for Improper Venue by Lyft, Inc. (Dkt. No. 30); 3) Motion to Dismiss for Improper
`Venue by WhatsApp, Inc. (Dkt. No. 34); and 4) Motion to Dismiss by T-Mobile US, Inc., T-Mobile USA, Inc. (Dkt.
`No. 46). No hearing date has yet been set on any of these motions.
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`4
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`(“On timely motion, the court may permit anyone to intervene who . . . has a claim or defense
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`that shares with the main action a common question of law or fact.”).
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`A.
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`Smith Micro Should Be Permitted to Intervene as of Right
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`Intervention as of right under Rule 24(a)(2) is appropriate “when the petitioner: (1)
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`makes a timely application; (2) has an interest relating to the subject matter of the action; (3) that
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`would potentially be impaired by the disposition of the action; and (4) is not adequately
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`represented by the existing parties to the action.” Texas v. United States, 805 F.3d 653, 657 (5th
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`Cir. 2015) (quoting New Orleans Pub. Serv., Inc. v. United Gas Pipe Line Co., 732 F.2d 452,
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`463 (5th Cir. 1984) (en banc)). “The rule is to be liberally construed, with doubts resolved in
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`favor of the proposed intervenor.” Uniloc 2017 LLC v. Verizon Communications Inc., No. 2:18-
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`CV-00513-JRG, 2019 WL 1773118 at *1 (E.D. Tex. April 23, 2019) (internal quotation marks
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`omitted). Intervention in patent cases is reviewed under regional circuit law. Id. As such, Fifth
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`Circuit law controls. Stauffer v. Brooks Brothers, Inc., 619 F.3d 1321, 1328 (Fed. Cir. 2010)
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`(“We review the district court’s denial of intervention under Rule 24 under regional circuit law. .
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`.”). Each of these factors supports Smith Micro’s right to intervene in this action.
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`1.
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`Smith Micro’s Motion to Intervene is Not Untimely
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`Smith Micro’s motion is not untimely because it seeks to intervene at an early stage of
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`the litigation and no party to the suit will suffer prejudice should Smith Micro intervene.4
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`Timeliness is determined from all circumstances in a case, including the time elapsed between
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`notice of the intervenor’s interest in the case and the filing of the motion to intervene, the extent
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`of prejudice to existing parties as a result of the proposed intervention, the extent of prejudice to
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`4 Counsel for Smith Micro has met and conferred with counsel for T-Mobile and counsel for AGIS regarding this
`motion. T-Mobile does not oppose this Motion. AGIS does oppose.
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`5
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`the moving party if leave to intervene is denied and the existence of unusual circumstances
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`militating either for or against a determination that the motion is timely. Edwards v. City of
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`Houston, 78 F.3d 983, 1000 (5th Cir.1996) (en banc) (citing Stallworth v. Monsanto Co., 558
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`F.2d 257 (5th Cir. 1977). “A motion to intervene may still be timely even if all the factors do not
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`weigh in favor of a finding of timeliness.” John Doe No. 1 v. Glickman, 256 F.3d 371, 375 (5th
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`Cir. 2001).
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`First, the case is still in its early stage, with motions to dismiss still pending, and jury
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`selection not until March 2022.. See DE 10; TiVo Inc. v. AT&T, Inc., No. 2:09-CV-259, 2010
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`U.S. Dist. LEXIS 146363, at *18 (E.D. Tex. Mar. 31, 2010) (a motion to intervene was timely
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`where nearly five months elapsed between filing of complaint and motion to intervene);
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`Edwards, 78 F.3d at 1001 (“[M]ost of [the Fifth Circuit’s] case law rejecting petitions for
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`intervention as untimely concern motions filed after judgment was entered in the litigation”). As
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`a result, Smith Micro’s intervention will not delay the case.
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`Second, no party to the lawsuit will suffer prejudice if Smith Micro intervenes. See
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`Sierra Club, 18 F.3d at 1205 (“The requirement of timeliness is not a tool of retribution to punish
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`the tardy would-be intervenor, but rather a guard against prejudicing the original parties by the
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`failure to apply sooner.”). Smith Micro does not seek to add a new substantive issues to the case
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`– the same patents will still be asserted against the same products.
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`Finally, Smith Micro is unaware of any unusual circumstances militating against a
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`determination that the motion is timely. Thus, the circumstances of this case militate in favor of
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`a finding of timeliness.
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`2.
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`Smith Micro Has a Significant Interest in This Lawsuit
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`Smith Micro has a “direct, substantial, legally protectable interest in the proceedings.”
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`6
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`Texas, 805 F.3d at 657 (quoting Edwards, 78 F.3d at 1004) (internal quotation marks omitted);
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`see also Sierra Club, 18 F.3d at 1207 (“[T]he ‘interest’ test is primarily a practical guide to
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`disposing of lawsuits by involving as many apparently concerned persons as is compatible with
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`efficiency and due process.” (quoting Ceres Gulf v. Cooper, 957 F.2d 1199, 1203 n.10 (5th Cir.
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`1992) (internal quotation marks omitted)). Smith Micro’s interest stems from its position as the
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`supplier to T-Mobile of the Technology included in the Accused Products as well as the risk that
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`the existence of AGIS’s allegations could negatively affect Smith Micro’s future sales of the its
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`Technology to others.
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`First, courts have long recognized that manufacturers of accused products have a
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`substantial interest in patent litigation against their customers. See Honeywell Int’l Inc. v.
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`Audiovox Commc’ns Corp., No. 04-1337-KAJ, 2005 WL 2465898, at *4 (D. Del. May 18, 2005)
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`(“[Intervenor] has a sufficient interest in the litigation; indeed, as a manufacturer of the product
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`component which is at the heart of these cases, it has a compelling interest.”). C.f. Kahn v. Gen.
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`Motors Corp., 889 F.2d 1078, 1081 (Fed. Cir. 1989) (explaining the “customer suit exception”
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`exists because a manufacturer has a “presumed greater interest in defending its actions against
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`charges of patent infringement”).
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`Second, Smith Micro has an interest in protecting ongoing sales of the Technology in the
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`Accused Products and products that in the future may be based on the same or similar
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`technology. See, e.g., Team Worldwide Corp. v. Wal-Mart Stores, Inc., No. 2:17-cv-00235-JRG,
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`2017 WL 6059303, at *4 (E.D. Tex. Dec. 7, 2017) (finding an intervening manufacturer had an
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`interest in “the ongoing sale and distribution of their products [which] is put at risk by [the
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`Plaintiff’s] allegations of infringement.”); Intellectual Ventures I LLC v. AT&T Mobility LLC,
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`No. 12-193-LPS, et al., 2014 WL 4445953, at *2 (D. Del. Sept. 8, 2014) (finding that an
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`7
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`intervening manufacturer had an “interest in products which Intervenors manufacture for
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`Defendants, an interest put at risk by the litigation as Plaintiffs accuse these products of
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`infringement.”); U.S. Ethernet Innovations, LLC v. Acer, Inc., No. 6:09-cv-448-JDL, 2010 WL
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`11488729, at *2 (E.D. Tex. May 10, 2010) (“a manufacturer such as [the Intervenor] faces the
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`loss of its customer base and reputation as a result of patent infringement allegations.”).
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`Accordingly, Smith Micro’s significant interest in the issues in this case warrants
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`intervention as of right.
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`3. Disposition of this Action May Impair Smith Micro’s Ability to Protect Its
`Interests as to Other Customers
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`If Smith Micro cannot intervene in this action, disposition of this action may impair
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`Smith Micro’s ability to protect and defend its interests.
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`First, absent intervention, Smith Micro will be at least hindered and potentially
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`prejudiced in its ability to protect its interest in prospective sales of the Accused Products and
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`products based on the same or similar Technology. See Indus. Tech. Research Inst. v. LG Elecs.,
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`Inc., Case No. 3:13-cv2016-GPC-WVG, 2014 U.S. Dist. LEXIS 148865, at *11 (S.D. Cal. Oct.
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`15, 2014) (finding that “[the intervening manufacturer] may be unable to sell [the accused
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`product] to U.S. customers if Plaintiff were to succeed in this litigation,” which may “adversely
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`impair [intervenor’s] significantly protectable interest”). Although an adverse judgment would
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`not have preclusive effect, it could undermine the confidence that other Smith Micro customers
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`have in the Accused Products and more generally in Smith Micro products. See Team
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`Worldwide at *5 (“[A]dverse rulings could impact each proposed intervenor’s relationships with
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`other retail customers.”).
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`Second, Smith Micro seeks to intervene, and also to stay this case in favor of the DJ
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`Action, to protect itself from the threat of a series of piecemeal litigation against its customers,
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`8
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`Case 2:21-cv-00072-JRG-RSP Document 114 Filed 08/09/21 Page 9 of 17 PageID #: 2836
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`and the possibility of inconsistent judgments in future lawsuits against other customers. Should
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`AGIS bring similar claims against Smith Micro’s other customers in the future, any findings in
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`the instant action may not have preclusive effect. Intervention provides Smith Micro with the
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`opportunity to definitively litigate the allegations against the Accused Products to defend its
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`interests from the “repetitious litigation of what is essentially the same dispute.” Hacienda
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`Records, L.P. v. Ramos, 718 F.App’x 223, 228 (5th Cir. 2018) (quoting Restatement (Second) of
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`Judgments § 27, cmt. C. (1982)) (internal quotation marks omitted).
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`4.
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`T-Mobile Cannot Adequately Represent Smith Micro’s Interests
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`T-Mobile cannot adequately represent Smith Micro’s interests because T-Mobile is not as
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`“well-situated to understand and defend [Smith Micro’s] Technology” as is Smith Micro.
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`Intellectual Ventures at *2. In the Fifth Circuit, in order to satisfy the “inadequate
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`representation” requirement of Rule 24(a)(2), Smith Micro must merely demonstrate that its
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`interests “may be” inadequately represented by the existing parties. Texas at 661. Although
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`Smith Micro bears the burden to establish inadequate representation, that burden is minimal. Id.
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`First, Smith Micro has substantial knowledge regarding the Technology in the Accused
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`Products, much more so than T-Mobile. Honeywell, 2005 WL 2465898 at *4 (Intervenor “is
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`uniquely situated to understand and defend its own product.”). As a result, Smith Micro is better
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`suited to defend the Accused Products than is T-Mobile.
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`Second, although T-Mobile is defending against AGIS’s allegations regarding the
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`Accused Products and the interests of T-Mobile and Smith Micro are clearly aligned, Smith
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`Micro’s strategy to protect the Accused Products from a finding of infringement could differ
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`from T-Mobile’s. T-Mobile’s defense of the infringement claims may not protect the entirety of
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`Smith Micro’s interests. See Heaton v. Monogram Credit Card Bank, 297 F.3d 416, 425 (5th
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`Cir. 2002) (“That the [intervenor]’s interests and [the Defendant]’s may diverge in the future,
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`even though, at this moment, they appear to share common ground, is enough to meet the
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`[intervenor]’s burden on this issue.”).
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`Because Smith Micro satisfies the Fifth Circuit’s four-part test for interventions of right
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`under Rule 24(a), the Court should grant Smith Micro’s Motion as a matter of right. See
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`Edwards, 78 F.3d at 1000.
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`B.
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`In the Alternative, the Court Should Grant Smith Micro’s Request for
`Permissive Intervention
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`In the alternative, Smith Micro should be permissively allowed to intervene under Rule
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`24(b)(1), which requires that Smith Micro’s claims share a common question of law or fact with
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`this action and that its motion is timely and will not prejudice plaintiff. In fact, intervention by
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`Smith Micro could benefit plaintiff in that discovery of a party is less restrictive than discovery
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`of a third party.
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`Permissive intervention presents a lower bar than intervention as a matter of right, and
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`does not require that the intervenor even “have a direct personal or pecuniary interest in the
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`subject of the litigation.” Newby v. Enron Corp., 443 F.3d 416, 423 (5th Cir. 2006) (quoting Sec.
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`and Exch. Comm’n v. U.S. Realty & Imp. Co., 310 U.S. 434, 459 (1940)). In exercising its
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`discretion, this Court should consider whether “intervention will unduly delay or prejudice the
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`adjudication of the original parties’ rights.” Fed. R. Civ. P. 24(b)(3). Smith Micro meets these
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`requirements for permissive intervention.
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`In these circumstances, granting permissive intervention where intervenor shared
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`common questions of law and fact and similar defenses as named defendant is well supported by
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`case law. U.S. Ethernet at *2;. See Reid v. General Motors Corp., 240 F.R.D. 257, 260 (E.D.
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`Tex. 2006) (intervenor’s claims and defenses share common questions of law and fact with the
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`action by Plaintiffs against Defendants).
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`For the above reasons, Smith Micro respectfully requests that it be allowed to intervene
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`in this matter for all purposes.
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`Smith Micro next requests a Stay of this action in favor of the DJ Action.
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`V.
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`THE COURT SHOULD STAY AGIS’S CLAIMS AGAINST SMITH MICRO’S
`CUSTOMER T-MOBILE
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`A.
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`The Court Should Stay Claims Against T-Mobile Regarding the Accused
`Products Under the Customer-Suit Exception to the First-Filed Rule
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`While courts generally favor first-filed actions, “[w]hen a patent owner files an
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`infringement suit against a manufacturer’s customer and the manufacturer then files an action of
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`noninfringement or patent invalidity, the suit by the manufacturer generally take[s] precedence.”
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`In re Nintendo of Am., Inc., 756 F.3d 1363, 1365 (Fed. Cir. 2014). This doctrine, called the
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`customer-suit exception, “‘is based on the manufacturer’s presumed greater interest in defending
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`its actions against charges of patent infringement; and to guard against possibility of abuse.’”
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`Spread Spectrum Screening LLC v. Eastman Kodak Co., 657 F.3d 1349, 1357 (Fed. Cir. 2011)
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`(quoting Kahn v. General Motors Corp., 889 F.2d 1078, 1081 (Fed. Cir. 1989)). The rule is
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`designed “to avoid, if possible, imposing the burdens of trial on the customer, for it is the
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`manufacturer who is generally the ‘true defendant’ in the dispute,” and to assist in a “just,
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`convenient, efficient, and less expensive determination.” Nintendo at 1365.
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`In determining whether to apply the customer-suit rule, courts look to whether the
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`litigation against the manufacturer will “resolve the ‘major issues’ concerning the claims against
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`the customer.” Spread Spectrum Screening, 657 F.3d at 1358 (quoting Katz v. Lear Siegler, Inc.,
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`909 F.2d 1459, 1464 (Fed. Cir. 1990)). In making this determination, the Court should not apply
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`“a ‘mechanical solution’ or ‘precise rule,”’ but instead should take “a flexible approach,
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`including staying proceedings if the other suit is so closely related that substantial savings of
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`litigation resources can be expected.” In re Google Inc., 588 F. App’x 988, 991 (Fed. Cir. 2014)
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`Case 2:21-cv-00072-JRG-RSP Document 114 Filed 08/09/21 Page 12 of 17 PageID #: 2839
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`(“Rockstar”) (quoting Colo. River Water Cons. Dist. v. United States, 424 U.S. 800, 817 (1976),
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`Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183 (1952)).
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`This is just such a case. Smith Micro is the manufacturer and T-Mobile is the customer,
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`as Smith Micro provides the Technology that is used in the Accused Products. Smith Micro is
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`thus the “true defendant” against AGIS’s claims regarding the Accused Products. Nintendo at
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`1365. Staying this action would eliminate a needless duplication of effort that will cause only
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`judicial inefficiency. Unless this Court stays as to the Accused Products two courts in two
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`jurisdictions will hear and determine identical claims of infringement of the same patents by the
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`same Technology – a classic waste of judicial resource
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`In the Rockstar cases, the Federal Circuit mandated a much broader stay on nearly
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`identical facts. In Rockstar, as here, the plaintiff filed numerous lawsuits asserting identical
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`patents against various Android smartphone makers. 588 F. App’x at 989. There, as here, the
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`plaintiff’s infringement allegations focused on the devices’ use of Google’s software code. Id.
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`There, as here, Google subsequently filed declaratory judgment claims on the same patents. Id.
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`And there, as here, “‘the determination of the infringement issues [in Google’s declaratory
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`action] would likely be dispositive of the other cases.’” Id. (quoting Google Inc. v. Rockstar
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`Consortium US LP, No. 13-5933, 2014 WL 1571807, at *9 (N.D. Cal. Apr. 17, 2014)). In that
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`strikingly similar situation, the Court of Appeals found that:
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`Given these facts, it is clear that there was no need to proceed with the five Texas
`actions because the one California action may suffice. Such circumstances
`present a classic case for a stay: The only potential results of adjudicating these
`cases in parallel fashion would be the Texas and California courts agree on the
`major issues of the litigation, thus producing wasteful and unnecessary litigation,
`or the courts disagree, thus producing conflicting decisions.
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`Id. at 990 (citations omitted). Finding no justification for “the obvious waste of resources
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`inherent in allowing both actions to proceed in parallel fashion,” the Court of Appeals ordered a
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`12
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`Case 2:21-cv-00072-JRG-RSP Document 114 Filed 08/09/21 Page 13 of 17 PageID #: 2840
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`stay of the customer “proceedings pending the outcome of the declaratory judgment action” filed
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`by Google. Id. at 992.
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`Rockstar controls here. Indeed, it is “clear that staying proceedings in Texas” will save
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`litigation resources “by mooting or at least advancing the ‘major premises’ being litigated”
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`before this Court. 588 F. App’x at 991 (citing Katz, 909 F.2d at 1464 (Fed. Cir. 1990)); see In re
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`Intex Recreation Corp., No. 2018-131, 2018 WL 3089215, at *2 (Fed. Cir. June 13, 2018)
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`(“Petitioners could have filed declaratory judgment actions in their chosen districts and asked to
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`enjoin or to stay this proceeding” under the customer-suit rule) (citing Rockstar, 588 F. App’x at
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`992). Following Rockstar, this Court should stay AGIS’s claims against T-Mobile.
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`B.
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`This Court Has Discretion to Stay Claims Against Smith Micro’s Customer
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`“The district court has the inherent power to control its own docket, including the power
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`to stay proceedings.” Soverain Software LLC v. Amazon.com, Inc., 356 F. Supp. 2d 660, 662
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`(E.D. Tex. 2005) (citations omitted). Management of the Court’s docket requires “the exercise
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`of judgment, which must weigh competing interests and maintain an even balance.” Landis v. N.
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`Am. Co., 299 U.S. 248, 254--55 (1936). In striking that balance, courts typically consider three
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`factors: “(1) whether a stay will unduly prejudice or present a clear tactical disadvantage to the
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`nonmoving party, (2) whether a stay will simplify issues in question and trial of the case, and (3)
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`whether discovery is complete and whether a trial date has been set.” Soverain Software LLC,
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`356 F. Supp. 2d at 662 (citation omitted). “Essentially, courts determine whether the benefits of
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`a stay outweigh the inherent costs based on those factors.” Memsmart Semiconductor Corp. v.
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`AAC Techs. Pte. Ltd., No. 2:14-CV-1107-JRG, 2015 WL 10936046, at *1 (E.D. Tex. July 13,
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`2015) (citation omitted).
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`All of these considerations support staying AGIS’s claims against T-Mobile.
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`13
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`Case 2:21-cv-00072-JRG-RSP Document 114 Filed 08/09/21 Page 14 of 17 PageID #: 2841
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`C.
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`A Stay of the Claims Against Smith Micro’s Customer As to the Accused
`Products Will Not Unduly Prejudice AGIS or Smith Micro’s Customer T-
`Mobile
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`AGIS cannot credibly argue that a stay of its claims against T-Mobile as to the Accused
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`Products will prejudice its case or present a clear tactical advantage to Smith Micro, or clear
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`tactical disadvantage to AGIS, because the same issues relevant to this action will be heard in the
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`DJ Action, namely patent validity and infringement issues pertaining to the Patents-in-Suit. To
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`the extent AGIS has invested time as to the Accused Products in this action, that work product
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`will be equally useful in the DJ Action.
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`Also, AGIS will actually benefit from being able to resolve all issues relating to the
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`Smith Micro Technology in a single case, rather than having to file other cases against other
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`customers now or in the future. Accordingly, the parties will not be unduly prejudiced if the
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`claims against Smith Micro’s customers are stayed. See Honeywell, at *4 (holding that, while
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`the case is in its early stages, staying claims against non-manufacturer defendants “would not
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`unduly prejudice [the plaintiff]”).
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`D. A Stay of the Claims Against the Customer’s Accused Products Will Simplify
`the Issues, and Avoid Piecemeal Litigation
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`A stay of the claims against Smith Micro’s customer T-Mobile in this action, in favor of
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`Smith Micro’s DJ Action, will simplify resolution of the issues in the case. This consolidated
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`case is already unwieldy with many parties and many different accused products and different
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`technology. Eliminating the Accused Products will reduce the clutter. Courts have repeatedly
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`recognized the efficiencies to be gained by staying infringement suits against a manufacturer’s
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`customers in favor of an action between the manufacturer and the patent holder. See, e.g., Wolf
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`Designs, Inc. v. Donald McEvoy, Ltd., 341 F. Supp. 2d 639, 645 (N.D. Tex. 2004) (finding a stay
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`warranted “to prevent an extravagantly wasteful and useless duplication of the time and effort of
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`14
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`Case 2:21-cv-00072-JRG-RSP Document 114 Filed 08/09/21 Page 15 of 17 PageID #: 2842
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`the federal courts by the simultaneous trial of two complex and elaborate cases involving
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`substantially the same factual issues”); Card Activation Techs. v. Pier 1 Imps., No. 09-cv-2021,
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`2009 U.S. Dist. LEXIS 83107, at *13 (N.D. Ill. Sept. 14, 2009) (finding that the outcome of the
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`manufacturer suit would “either moot or greatly simplify” the customer suit, “thus saving
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`valuable judicial and party resources”).
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`Because Smith Micro provides its Technology for the T-Mobile Accused Products, Smith
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`Micro is the only party actually in a position to defend fully against AGIS’s claims against Smith
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`Micro’s customers. Infringement can be resolved most efficiently in a single action for all
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`customers using the same or similar Technology. See Ricoh Co., Ltd. v. Aeroflex, Inc., 279 F.
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`Supp. 2d 554, 558 (D. Del. 2003) (first-filed rule did not apply because manufacturer’s latter-
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`filed declaratory judgment action would dispose of validity and infringement issues as to its
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`customers). Smith Micro’s DJ Action will allow like issues to be adjudicated once-and-for-all
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`by a single court, thereby eliminating or substantially reducing the risk of inconsistent results in
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`multiple forums for Smith Micro, its customers, and AGIS.
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`Thus, this factor thus weighs strongly in favor of the stay.
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`E.
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`Discovery is Not Complete and a Trial Date has Not Yet Been Set
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`The final factor, “whether discovery is complete and whether a trial date has been set,”
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`similarly supports a stay. Soverain Software LLC, 356 F. Supp. 2d at 662. As explained above,
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`this action remains at an early stage, with the pleadings still open subject to T-Mobile’s motion
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`to dismiss AGIS’s complaint. Dkt. No. 24, 25, 30, 34 and 46. Moreover, the Court consolidated
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`AGIS’s litigation against defendants Uber, WhatsApp and Lyft with this action for all pretrial
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`issues (Dkt. No. 14) and the parties are still in the pleading states. This factor, too, supports the
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`stay.
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`15
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`Case 2:21-cv-00072-JRG-RSP Document 114 Filed 08/09/21 Page 16 of 17 PageID #: 2843
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`VI. CONCLUSION
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`In the interest of conserving both judicial and party resources, as well as ensuring
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`consistent determination of key issues bearing on its location tracking and parental control
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`technology, Smith Micro respectfully requests that the Court grant Smith Micro’s motion to
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`intervene for all purposes, and further requests that the Court sever and stay AGIS’s claims
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`against T-Mobile as to the Accused Products.
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`Dated: August 9, 2021
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`Respectfully submitted,
`
`/s/ Robert W. Dickerson, Jr
`
`Robert W. Dickerson, Jr. (SBN 089367)
`E-mail: rdickerson@bwslaw.com
`BURKE, WILLIAMS & SORENSEN, LLP
`444 South Flower Street, Suite 2400
`Los Angeles, CA 90071-2953
`Tel: 213-236-0600
`Fax: 213-236-2700
`
`Patricia L. Peden (SBN 206440)
`E-mail: ppeden@bwslaw.com
`BURKE, WILLIAMS & SORENSEN, LLP
`1901 Harrison Street, Suite 900
`Oakland, California 94612-3501
`Tel: 510-273-8780
`
`Fax: 510-839-9104
`
`Lenny Huang (SBN 264386)
`E-mail: lhuang@bwslaw.com
`BURKE, WILLIAMS & SORENSEN, LLP
`1 California Street, Suite 3050
`San Francisco,