Case 2:21-cv-00072-JRG-RSP Document 139 Filed 08/30/21 Page 1 of 8 PageID #: 3335
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`
`AGIS SOFTWARE DEVELOPMENT LLC,
`
`Plaintiff,
`
`CIVIL ACTION NO. 2:21-cv-00072-JRG
`
`v.
`
`
`T-MOBILE, USA, INC., AND T-MOBILE
`US, INC.,
`
`LEAD CASE
`
`
`
`Defendants
`
`SMITH MICRO SOFTWARE, INC.’S AND SMITH MICRO SOFTWARE, LLC’S
`REPLY IN SUPPORT OF 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
`
`
`
`
`
`
`
`
`LA #4818-0090-3417 v1
`
`1
`
`

`

`Case 2:21-cv-00072-JRG-RSP Document 139 Filed 08/30/21 Page 2 of 8 PageID #: 3336
`
`I.
`
`INTRODUCTION
`
`AGIS’s opposition to Smith Micro’s motion to stay lacks merit because both the
`
`customer-suit exception and the more traditional three-factor test support a grant of a stay.1 The
`
`accused FamilyWhere/FamilyMode products are quite dissimilar from the other T-Mobile
`
`accused product – T-Mobile Fleet Management Solutions.2 Severing them is bright-line easy
`
`and efficient, and is wholly consistent with, and promotes the goals of, the customer suit
`
`exception to the first-filed rule in favor of the DJ Action in the Northern District of California
`
`between the real-parties-in-interest as to the Family products, AGIS and Smith Micro..
`
`II.
`
`THE POTENTIAL FOR ADVANCEMENT OF MAJOR ISSUES IS SUFFICIENT
`FOR A STAY, AND NEED NOT ADDRESS ALL ACCUSED PRODUCTS
`
`AGIS argues that the customer-suit exception is inapplicable because the DJ Action
`
`“would not resolve all issues with regard to the T-Mobile [products].” Opp’n at 9. AGIS’s
`
`argument misstates the law. There is no requirement that all issues as to all accused products be
`
`resolved. Here, the customer-suit exception applies because litigation by Smith Micro in the DJ
`
`Action would resolve all issues as to the Family products, and at a minimum would advance
`
`major issues in the case against Smith Micro’s customer T-Mobile, and that is all that is required
`
`to grant a stay.
`
`At its core, the customer-suit exception recognizes the benefits to judicial economy in
`
`avoiding duplicative and vexatious litigation. Patent owners will sometimes view multiple
`
`customer suits as strategically beneficial as opposed to a single case against the real-party-in-
`
`
`1 Smith Micro will only address its motion to stay given that AGIS does not oppose its request to intervene.
`
` 2
`
` For example, compare the screenshots in the Complaint of the “Family” products (on pages 7-11, 17-22, 29-34, 40-
`45, 56-62, 67-70, and 78-83) to the screenshots in the Complaint of the “Fleet” product (on pages 13, 47, 71 and 84).
`As shown in these screenshots and as alleged in the Complaint, the Family products are designed for personal use
`and “enable family member devices to form location sharing groups,” whereas the Fleet product “allows users to
`view the location of any tracked user or vehicle (e.g. with a GPS tracking system) every second or every fifteen
`seconds.” Id., ¶¶ 18, 21.
`
`LA #4818-0090-3417 v1
`
`2
`
`

`

`Case 2:21-cv-00072-JRG-RSP Document 139 Filed 08/30/21 Page 3 of 8 PageID #: 3337
`
`interest. Therefore, the courts have recognized the significant benefits in staying the first-filed
`
`customer case in favor of the second-filed manufacturer case. In the simplest case, a court may
`
`(and should) stay a customer case in favor of the manufacturer case when the allegations are
`
`identical as to the accused products (which is the situation with respect to the accused Family
`
`products). Moreover, judicial economy will still be advanced even if the manufacturer’s DJ
`
`Action might not resolve all issues in the customer case, as the Federal Circuit has expressly held
`
`in a finding that is on point here:
`
`“Although there may be additional issues involving the defendants in [the
`
`customer] action, their prosecution will be advanced if [the patent-
`
`plaintiff] is successful on the major premises being litigated in [the
`
`manufacturer litigation], and may well be mooted if [the patent-plaintiff] is
`
`unsuccessful.”
`
`In re Nintendo of Am., Inc., 756 F.3d 1363, 1366 (Fed. Cir. 2014) (quoting Katz v. Lear Siegler,
`
`Inc., 909 F.2d 1459, 1464 (Fed. Cir. 1990) (reversing E.D.Tex. denial of the Motion).
`
`In such cases, the convenience of first resolving the common issues in the suit against the
`
`manufacturer weighs in favor of a stay. Spread Spectrum Screening LLC v. Eastman Kodak Co.,
`
`657 F.3d 1349, 1358 (Fed. Cir. 2011) (“[T]he manufacturer’s case need only have the potential
`
`to resolve the ‘major issues’ concerning the claims against the customer – not every issue – in
`
`order to justify a stay of the customer suits.”) (quoting Katz, 909 F.2d at 1464).
`
`These factors are particularly relevant here in that Smith Micro’s technology is used by
`
`other companies, so allowing Smith Micro to resolve all issues in a single DJ action, rather than
`
`face piecemeal litigation and an ongoing cloud over its technology, strongly favors the stay.
`
`LA #4818-0090-3417 v1
`
`3
`
`

`

`Case 2:21-cv-00072-JRG-RSP Document 139 Filed 08/30/21 Page 4 of 8 PageID #: 3338
`
`Here, a finding of non-infringement or invalidity of the Asserted Patents in the DJ Action
`
`would moot this case as to T-Mobile’s Family products. See, e.g., Mendenhall v. Barber-Greene
`
`Co., 26 F.3d 1573, 1578 (Fed. Cir. 1994). In addition, even if there were additional issues
`
`presented in this case against T-Mobile that might not be resolved in the DJ Action, there is a
`
`very high likelihood that any additional issues presented in the manufacturer case would be
`
`advanced in this action.3
`
`AGIS argues that T-Mobile would still “be required to relitigate a number of issues with
`
`regard to the Fleet Management Solutions.” Opp’n at 9. However, the Fleet product is not based
`
`upon technology supplied by Smith Micro and would not be part of the Family products severed
`
`and stayed under the customer-suit exception. Moreover, because the Family and Fleet products
`
`are quite dissimilar as discussed above, the Fleet product would need to be adjudicated
`
`separately since Smith Micro is not the supplier of the technology used in the Fleet product.
`
`Therefore, resolving the DJ Action will simplify the overall issues of infringement
`
`relating to the accused Smith Micro technology in this action by either mooting the litigation in
`
`this Court against T-Mobile for its Family products, or advancing issues relating to invalidity and
`
`infringement in the DJ Action.
`
`AGIS incorrectly contends that there would be “piecemeal resolution of the issues” if this
`
`case is stayed since “this case has been consolidated with three other actions which involve the
`
`same Asserted Patents.” Opp’n at 9. However, the three other actions do not involve products
`
`based upon Smith Micro technology. Thus, this argument by AGIS actually supports carving the
`
`
`3 To the extent that AGIS would rely on “intent based” issues in opposing the Stay, that reliance does not withstand
`scrutiny. As this Court has previously held, “[u]nder Seagate, ‘a willfulness claim asserted in the original
`complaint must necessarily be grounded exclusively in the accused infringers’ pre-filing conduct.’” Opticurrent,
`LLC v. Power Integrations, Inc., 2016 WL 9275395 at *2 (E.D. Tex., Oct. 19, 2016, J. Gilstrap). AGIS’s Complaint
`alleges only that “Defendants have had knowledge of the [asserted patent] at least as of the filing of the Complaint.”
`[Complaint ¶ 39]. See also, Complaint ¶¶ 60, 91, 113, 140 and 164. Therefore, any argument against the stay based
`upon “intent-based” issues does not pass muster.
`
`LA #4818-0090-3417 v1
`
`4
`
`

`

`Case 2:21-cv-00072-JRG-RSP Document 139 Filed 08/30/21 Page 5 of 8 PageID #: 3339
`
`Family products out from this case, and allowing issues as to Smith Micro’s technology to
`
`proceed as between the real parties in interest (AGIS and Smith Micro), regardless of how that
`
`technology is implemented by a particular customers.
`
`Finally, AGIS misplaces reliance on Rembrandt Wireless Technologies, LP v. Apple Inc.,
`
`No. 2:19-CV-00025-JRG, 2019 WL 6344471, at *3 (E.D. Tex. Nov. 27, 2019), for the
`
`proposition that a customer suit exception does not apply unless the manufacture is the “sole
`
`source.” Opp’n. at 10. The Rembrandt decision is easily distinguishable because in that case the
`
`“customer,” Apple, was itself a manufacturer of some of the accused products, and “also
`
`contribute[d] to the development of the Accused Products.” Rembrandt at *4. Here, the
`
`customer-suit exception applies full force because T-Mobile did not develop or contribute to the
`
`development of the technology in the Family products.
`
`Therefore, all of these factors favor staying this litigation as to the Family products under
`
`the customer-suit exception pending resolution of the DJ Action.
`
`III. ALTERNATIVELY AND IN ADDITION, THE COURT SHOULD GRANT THE
`REQUESTED STAY UNDER THE TRADITIONAL TEST
`
`Although AGIS claims it will be prejudiced by a stay, its arguments are unfounded. T-
`
`Mobile will not get “two bites at the apple” because resolving the DJ Action will either entirely
`
`moot the issues in this Court as to the Family products thus simplifying the case and any future
`
`case against any Smith Micro customers based upon its accused technology, or advance the
`
`issues relating to invalidity and infringement in the DJ Action. Thus, staying the case as to the
`
`Family products and allowing the DJ Action to proceed would relieve the burdens of litigation
`
`from T-Mobile as to the Family products that are based upon Smith Micro technology.
`
`Moreover, AGIS will benefit from being able to resolve all issues related to Smith Micro
`
`in one case, as opposed to having to file other cases against other Smith Micro customers now or
`
`LA #4818-0090-3417 v1
`
`5
`
`

`

`Case 2:21-cv-00072-JRG-RSP Document 139 Filed 08/30/21 Page 6 of 8 PageID #: 3340
`
`in the future.
`
`AGIS argues that issues in the case will not be simplified by a stay for the same reasons it
`
`argued the customer-suit exception does not apply (that it would still need to litigate issues with
`
`respect to the Fleet product). For all of the reasons above, AGIS’ arguments are without merit.
`
`The last factor of the traditional test requires determining the stage of the litigation.
`
`Although the fact discovery deadline is in a couple of months and a jury selection date has, this
`
`action remains at the early stages since pretrial issues for many of the other consolidated
`
`defendants are still pending, no depositions have yet been take, and the parties have not had
`
`claim construction and the parties have yet to file opening claim construction briefing (due
`
`9/7/21). Id. Moreover, things that have transpired in this case will transport to the ND Cal case.
`
`Because all three of the traditional stay factors favor staying the case against T-Mobile
`
`for the FamilyWhere and FamilyMode products, AGIS’ opposition should fail and this motion
`
`should be granted.
`
`IV. CONCLUSION
`
`Smith Micro respectfully requests that the Court grant Smith Micro’s motion to
`
`intervene, and that it sever and stay the claims against T-Mobile as to the FamilyWare and
`
`FamilyMode accused products until conclusion of Smith Micro’s DJ Action.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`LA #4818-0090-3417 v1
`
`6
`
`

`

`Case 2:21-cv-00072-JRG-RSP Document 139 Filed 08/30/21 Page 7 of 8 PageID #: 3341
`
`Dated: August 30, 2021
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
`
`
`
`/s/ Melissa R. Smith
`Robert W. Dickerson, Jr. (PHV)
`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
`
`Melissa R. Smith
`State Bar No. 24001351
`GILLAM & SMITH, LLP
`303 South Washington Avenue
`Marshall, Texas 75670
`Telephone: (903) 934-8450
`Facsimile: (903) 934-9257
`Email: melissa@gillamsmithlaw.com
`
`Attorneys for Proposed Intervenor Smith Micro
`Software, Inc.
`
`
`LA #4818-0090-3417 v1
`
`7
`
`

`

`Case 2:21-cv-00072-JRG-RSP Document 139 Filed 08/30/21 Page 8 of 8 PageID #: 3342
`
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on August 30, 2021, true and correct copies of the foregoing were
`
`served upon all parties via the Court’s ECF delivery system per Local Rule CV-5(a)(3).
`
`
`
`
`
`/s/ Melissa R. Smith
`
`
`
`
`LA #4818-0090-3417 v1
`
`8
`
`