Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 1 of 20 PageID #: 8116
`
`
`
`v.
`
`Plaintiff,
`
`
`AGIS SOFTWARE DEVELOPMENT LLC,
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`§
`
`§
`Case No. 2:22-cv-00263-JRG-RSP
`§
`
`JURY TRIAL DEMANDED
`§
`§
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`§
`§
`§
`§
`§
`§
`§
`
`
`PLAINTIFF AGIS SOFTWARE DEVELOPMENT LLC’S RESPONSE TO
`SAMSUNG’S MOTION FOR LEAVE TO AMEND ANSWER TO ADD CLAIM
`PRECLUSION AND KESSLER DOCTRINE AFFIRMATIVE DEFENSES (DKT. 101)
`
`
`
`SAMSUNG ELECTRONICS CO., LTD.,
`ET AL.,
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`Defendants.
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`
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`

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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 2 of 20 PageID #: 8117
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`TABLE OF CONTENTS
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`Page(s)
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`FACTUAL BACKGROUND ..............................................................................................2
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`LEGAL STANDARDS .......................................................................................................3
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`DEFENDANTS’ PROPOSED AMENDMENTS TO ADD A KESSLER
`DOCTRINE DEFENSE AND CLAIM PRECLUSION DEFENSE ARE
`FUTILE ................................................................................................................................4
`
`A.
`
`B.
`
`C.
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`Defendants’ Proposed Defenses Are Futile Because the Dismissal of
`Google I Was Not a Dismissal on the Merits ..........................................................4
`
`Defendants’ Proposed Defenses Are Futile Because AGIS’s Claims
`Under the Amended ’970 Patent Claims Have Not Been Dismissed
`Twice........................................................................................................................6
`
`Samsung’s Arguments that Any Dismissal Against Google Extends to
`Itself Are Futile Because Different Products Are Accused .....................................8
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`
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`
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`The Kessler Doctrine Does Not Apply ........................................................9
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`Claim Preclusion Does Not Apply .............................................................11
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`CONCLUSION ..................................................................................................................14
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`i
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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 3 of 20 PageID #: 8118
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`TABLE OF AUTHORITIES
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`
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`Page(s)
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`Cases
`
`Acumed LLC v. Stryker Corp.,
`525 F.3d 1319 (Fed. Cir. 2008)................................................................................................13
`
`Adaptix, Inc. v. AT&T Mobility LLC,
`No. 6:12-CV-120, 2015 WL 12696204 (E.D. Tex. May 12, 2015) ........................................14
`
`AGIS Software Dev. LLC v. Google LLC,
`No. 6:23-CV-00160-DC-DTG, Dkt. 12 (W.D. Tex. July 20, 2023) ..........................................2
`
`Aspex Eyewear, Inc. v. Marchon Eyewear, Inc.,
`672 F.3d 1335 (Fed. Cir. 2012)..................................................................................................5
`
`Duffie v. United States,
`600 F.3d 362 (5th Cir. 2010) ...................................................................................................11
`
`Estech Sys., Inc. v. Target Corp.,
`No. 2:20-CV-00123-JRG-RSP, 2021 WL 2187978 (E.D. Tex. May 28, 2021) ........................3
`
`Fresenius USA, Inc. v. Baxter Int’l, Inc.,
`721 F.3d 1330 (Fed. Cir. 2013)..................................................................................................5
`
`In re Google LLC,
`No. 2022-140-42, 2022 WL 1613192 (Fed. Cir. May 23, 2022) ...............................................2
`
`Hallco Mfg. Co. v. Foster,
`256 F.3d 1290 (Fed. Cir. 2001)..................................................................................................7
`
`Houston Pro. Towing Assoc. v. City of Houston,
`812 F.3d 443 (5th Cir. 2016) .......................................................................................11, 12, 13
`
`Kremer v. Chem. Const. Corp.,
`456 U.S. 461 (1982) ...................................................................................................................8
`
`Mars Inc. v. Nippon Conlux Kabushiki-Kaisha,
`58 F.3d 616 (Fed. Cir. 1995)..............................................................................................11, 12
`
`Meza v. Gen. Battery Corp.,
`908 F.2d 1262 (5th Cir. 1990) .................................................................................................11
`
`MGA, Inc. v. Gen. Motors Corp.,
`827 F.2d 729 (Fed. Cir. 1987)..............................................................................................9, 10
`
`i
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`

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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 4 of 20 PageID #: 8119
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`Pactiv Corp. v. Dow Chem. Co.,
`449 F.3d 1227 (Fed. Cir. 2006)..................................................................................................7
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`Papst Licensing GmbH & Co. v. Samsung Elecs. Co.,
`Case No. 6:18-cv-00388-RWS, Dkt. 399 (E.D. Tex., March 12, 2020) ............................1, 3, 8
`
`In re PersonalWeb Techs. LLC,
`961 F.3d 1365 (Fed. Cir. 2020)..............................................................................................6, 7
`
`Realtime Adaptive Streaming LLC v. Netflix, Inc.,
`No. CV 19-6359-GW-JCx, 2020 WL 7889048 (C.D. Cal. Nov. 23, 2020),
`aff’d, 41 F.4th 1372 (Fed. Cir. 2022) .........................................................................................7
`
`Rubber Tire Wheel Co. v. Goodyear Tire & Rubber Co.,
`232 U.S. 413 (1914) .................................................................................................................10
`
`Senju Pharm. Co. v. Apotex Inc.
`746 F.3d 1344 (Fed. Cir. 2014)............................................................................................5, 14
`
`SimpleAir, Inc. v. Google LLC,
`884 F.3d 1160 (Fed. Cir. 2018)................................................................................9, 10, 11, 12
`
`SpeedTrack, Inc. v. Off. Depot, Inc.,
`791 F.3d 1317 (Fed. Cir. 2015)..................................................................................................9
`
`Stambler v. Amazon.com, Inc.,
`No. 2:09-CV-310, 2010 WL 11530984 (E.D. Tex. Apr. 21, 2010) .........................................10
`
`Stripling v. Jordan Prod. Co.,
`234 F.3d 863 (5th Cir. 2000) .....................................................................................................3
`
`Target Training Int’l, Ltd. v. Extended Disc N. Am., Inc.,
`645 Fed. App’x. 1018 (Fed. Cir. 2016) .................................................................................4, 5
`
`Wimm v. Jack Eckerd Corp.,
`3 F.3d 137 (5th Cir. 1993) .........................................................................................................3
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`Other Authorities
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`Fed. R. Civ. P. 15(a) ........................................................................................................................3
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`Fed. R. Civ. P. 16(b) ........................................................................................................................3
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`Fed. R. Civ. P. 41(a)(1)(B) ..........................................................................................................5, 6
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`Restatement (Second) of Judgments (1982) ..................................................................................11
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`ii
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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 5 of 20 PageID #: 8120
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`Defendants’ Motion should be denied because the proposed claim preclusion and Kessler
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`doctrine affirmative defenses are futile. Defendants premise their Motion on the dismissals in
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`Google I and Google II but ignore one critical fact—Google and AGIS jointly moved and
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`stipulated to dismissal in Google I only as to AGIS’s causes of action under pre-reexamination, of
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`original asserted claims of the ’970 Patent which Google contended had been extinguished as a
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`result of the reexamination, rendering AGIS’s Google I infringement claims moot. Indeed, the
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`Google I Dismissal Order explicitly states:
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`The Parties agree that this stipulation and motion to dismiss concern the asserted
`claims of the ’970 Patent that issued on July 3, 2012. This dismissal does not cover
`the reexamination-amended claims of the ’970 Patent that issued on December
`9, 2021 and that are not asserted in this action.
`
`See Ex. P, Order Dismissing ’970 Patent from Google I, n.1 (emphasis added). In seeking dismissal
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`of the pre-reexamination original asserted claims of the ’970 Patent, Google conceded that the
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`reexamination-amended claims contained substantiative, material differences from their original
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`form, and therefore, the Google I dismissal cannot support a defense of claim preclusion as to the
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`reexamination-amended claims of the ’970 Patent. Defendants fail to identify any legal authority
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`that supports their novel theory that the Google I dismissal operates as a judgment on the merits,
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`and therefore, cannot apply the Google II voluntary dismissal defensively against AGIS.
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`Defendants further fail to articulate any legally supportable theory under which a dismissal
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`against Google could operate as a judgment in favor of Samsung. Defendants’ claim preclusion
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`and Kessler doctrine arguments all ignore that the Accused Products in this action are different
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`those accused in the Google actions, instead relying on overlap between accused functionality of
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`FMD with respect to some (but not all) limitations. Accordingly, Defendants’ Motion should be
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`denied.
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`

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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 6 of 20 PageID #: 8121
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`
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`FACTUAL BACKGROUND
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`In 2019, AGIS filed a complaint against Google in the Eastern District of Texas (“EDTX”)
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`asserting, among other claims, the ’970 Patent against Google devices incorporating FMD. See
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`AGIS Software Dev. LLC v. Google LLC, EDTX, No. 2:19-CV-00361-JRG (“Google I”). While
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`Google I was pending, Google requested ex parte reexamination of the ’970 Patent in May 2020,
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`which resulted in the amendment of all of the asserted claims of the ’970 Patent. After the ex parte
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`reexamination proceedings concluded, Google filed a Rule 12(b)(1) motion to dismiss AGIS’s
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`claims for infringement of the ’970 Patent for lack of subject matter jurisdiction, alleging AGIS
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`had substantively amended the patent’s asserted claims to avoid prior art, Mot. at 12, n.3, thereby
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`extinguishing AGIS’s infringement claims under the original patent claims and rendering the
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`litigation moot. Before the EDTX court resolved that motion, the Federal Circuit ordered the case
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`transferred to the Northern District of California (“NDCA”), and Google refiled its Rule 12(b)(1)
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`motion to dismiss for lack of subject matter jurisdiction. See In re Google LLC, No. 2022-140-42,
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`2022 WL 1613192, at *1 (Fed. Cir. May 23, 2022). Thereafter, Google and AGIS jointly moved
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`and stipulated to the dismissal of the ’970 Patent, expressly agreeing that:
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`This order of dismissal concerns the asserted claims of the ’970 Patent that issued
`on July 3, 2012. This dismissal does not cover the reexamination-amended claims
`of the ’970 Patent that issued on December 9, 2021 and that are not asserted in
`this action.
`
`See Ex. P, Order Dismissing ’970 Patent from Google I, n.1 (emphasis added).
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`In March 2023, AGIS filed a separate action against Google in the Western District of
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`Texas (“WDTX”), asserting the amended claims of the ’970 Patent against Google devices
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`incorporating FMD. AGIS voluntarily dismissed the WDTX case without prejudice on July 20,
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`2023. See AGIS Software Dev. LLC v. Google LLC, No. 6:23-CV-00160-DC-DTG, Dkt. 12 (W.D.
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`Tex. July 20, 2023).
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`2
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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 7 of 20 PageID #: 8122
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`
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`LEGAL STANDARDS
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`“After a Docket Control Order has been entered, Fed. R. Civ. P. 16(b) governs the decision
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`whether to permit a post-deadline amendment,” which may only be modified for good cause and
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`with the judge’s consent. Estech Sys., Inc. v. Target Corp., No. 2:20-CV-00123-JRG-RSP, 2021
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`WL 2187978, at *2 (E.D. Tex. May 28, 2021) (denying leave). “Courts should consider (1) the
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`explanation for the party’s failure to [timely move for leave to amend]; (2) the importance of the
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`[amendment]; (3) potential prejudice in allowing the [amendment]; and (4) the availability of a
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`continuance to cure such prejudice.” Id. (internal citations and quotations omitted).
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`However, a court’s discretion under Rule 16(b) is limited by Rule 15(a), which states that
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`leave to amend must be “freely given when justice so requires.” Id. (citing Fed. R. Civ. P. 15(a);
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`see also Stripling v. Jordan Prod. Co., 234 F.3d 863, 872 (5th Cir. 2000)). “In deciding whether
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`to grant leave to file an amended pleading, the district court may consider such factors as undue
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`delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies
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`by amendments previously allowed, undue prejudice to the opposing party, and futility of
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`amendment.” Id. (quoting Wimm v. Jack Eckerd Corp., 3 F.3d 137, 139 (5th Cir. 1993)). An
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`amendment that fails to plead sufficient facts upon which relief can be granted is futile. See Papst
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`Licensing GmbH & Co. v. Samsung Elecs. Co., Case No. 6:18-cv-00388-RWS, Dkt. 399 at 10
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`(E.D. Tex., March 12, 2020) (“Samsung has failed to plead facts sufficient to plausibly allege that
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`collateral estoppel applied to Papst’s reexamination arguments and therefore that Papst’s
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`statements/omissions are misrepresentations. Papst’s supplemental pleading fails to state a claim
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`upon which relief can be granted.”)
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`3
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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 8 of 20 PageID #: 8123
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` DEFENDANTS’ PROPOSED AMENDMENTS TO ADD A KESSLER
`DOCTRINE DEFENSE AND CLAIM PRECLUSION DEFENSE ARE
`FUTILE
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`Defendants’ Motion should be denied because the proposed amendment fails to plead
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`legally viable defenses under the Kessler doctrine or claim preclusion, rendering the proposed
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`amendments futile. First, the amended ’970 Patent claims dismissed in Google I are materially
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`substantively different than those which were the basis of AGIS’s infringement claims in Google
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`I, as Google itself admitted. The infringement claims in Google I were extinguished with the
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`amendment of the ’970 Patent claims and dismissed by the parties as moot. Second, Defendants’
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`Kessler doctrine and claim preclusion defenses are futile because the preclusive effect of Google
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`I was limited by the parties. Finally, Defendants’ arguments regarding the applicability of Google
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`dismissals to itself lack merit and are futile.
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`A.
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`Defendants’ Proposed Defenses Are Futile Because the Dismissal of
`Google I Was Not a Dismissal on the Merits
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`Neither the Kessler doctrine nor claim preclusion can be applicable because AGIS’s
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`dismissal of Google I was based on the mootness of its cause of action based on the original claims
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`of the ’970 Patent and did not concern the amended claims now at issue.
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`A dismissal for mootness of infringement claims based on patent claims which have been
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`substantively amended in reexamination does not operate as a final judgment on the merits. Target
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`Training Int’l, Ltd. v. Extended Disc N. Am., Inc., 645 Fed. App’x. 1018, 1025-26 (Fed. Cir. 2016)
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`(“A dismissal for lack of jurisdiction is not a dismissal on the merits. Rather, the Supreme Court
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`has specifically rejected deciding the merits of a case where the court lacks jurisdiction because
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`jurisdiction is a threshold question, and ’[w]ithout jurisdiction the court cannot proceed at all in
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`any cause. . . . In addition, we have held that, in patent cases, res judicata does not apply to bar the
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`assertion of new claims acquired during the pendency of a litigation that could have been, but were
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`4
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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 9 of 20 PageID #: 8124
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`not, litigated or adjudicated in the action.”) That is exactly what happened in Google I. Google
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`itself argued that “AGIS amended those claims in parallel EPR proceedings to add several new
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`features found nowhere in the original claims,” rendering the original ’970 Patent claim
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`allegations ‘extinguished’.” See Ex. M at 1 (EDTX); Ex. N at 2 (NDCA) (emphasis added) (citing
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`Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1340 (Fed. Cir. 2013)). Because the
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`amendments to the ’970 Patent extinguished AGIS’s original cause of action against Google (as
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`Google itself argued), and in so doing extinguished the Court’s jurisdiction over those claims, the
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`dismissal of Google I was not a dismissal on the merits under Target Training. As such, the
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`voluntary dismissal without prejudice of Google II cannot have preclusive effect under Fed. R.
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`Civ. P. 41(a)(1)(B) against Google, much less Samsung.
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`Defendants’ reliance on Senju Pharm. Co. v. Apotex Inc. 746 F.3d 1344 (Fed. Cir. 2014)
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`and Aspex Eyewear, Inc. v. Marchon Eyewear, Inc., 672 F.3d 1335 (Fed. Cir. 2012) is misplaced,
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`as the Federal Circuit expressly distinguished those decisions from situations where claims
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`amended during a reexamination were materially different such that they rendered a cause of action
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`based on the original claims moot. The Federal Circuit explained that:
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`As a preliminary matter, the panel in Senju explicitly declined to
`opine on whether “a reexamination could ever result in the issuance
`of new patent claims that were so materially different from the
`original patent claims as to create a new cause of action.” More
`importantly, by contrast to Senju, the district court here never
`reached a judgment on the merits. Instead, the court dismissed TTI's
`claims as moot, and a dismissal for mootness is a dismissal for lack
`of jurisdiction.
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`Target Training Int’l, 645 Fed. App’x at 1025 (citations omitted).
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`The facts here largely mirror Target Training. AGIS dismissed claims based on the original
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`‘970 claims against Google because they were moot, as Google itself argued. Indeed, Defendants
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`themselves concede that AGIS added at least three new elements to claims 2 and 10 of the ‘970
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`5
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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 10 of 20 PageID #: 8125
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`patent, in addition to incorporating the limitations of other independent claims. Motion at 3.
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`Defendants’ arguments that amendments to the ’970 claims were somehow not “material changes”
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`are both legally unsupportable, and inconsistent with both Defendants’ and Google’s own
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`arguments.1
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`Accordingly, Defendants’ prior concessions regarding material changes render their
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`proposed defenses futile and there is no controlling authority to support the proposed defense.
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`B.
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`Defendants’ Proposed Defenses Are Futile Because AGIS’s Claims
`Under the Amended ’970 Patent Claims Have Not Been Dismissed
`Twice
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`The dismissal of Google I was not a dismissal on the merits of AGIS’s claims for
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`infringement under the amended ’970 Patent claims because those claims were explicitly excluded
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`from that dismissal. The order dismissing Google I explicitly noted: “The Parties agree that this
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`stipulation and motion to dismiss concern the asserted claims of the ’970 Patent that issued on July
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`3, 2012. This dismissal does not cover the reexamination-amended claims of the ’970 Patent
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`that issued on December 9, 2021 and that are not asserted in this action.” Ex. P, Order
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`Dismissing ’970 Patent from Google I, n.1 (emphasis added). Thus, the amended claims of the
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`’970 Patent have only been subject to a single dismissal which does not implicate Fed. R. Civ. P.
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`41(a)(1)(B). Therefore, neither the Kessler doctrine, nor claim preclusion, can be applicable.
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`The Federal Circuit has held that parties to a voluntary with-prejudice dismissal stipulation
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`can limit the preclusive effect of a dismissal so long as the limitations are clear. See In re
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`PersonalWeb Techs. LLC, 961 F.3d 1365, 1379 (Fed. Cir. 2020). In PersonalWeb, the Federal
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`Circuit applied Kessler explicitly noting that “there was no contingency attached to the with-
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`1 Defendants also put much stock in the fact that they have retained the same counsel as Google
`and argue that “Google adequately represented Samsung’s interests in the prior actions.” Motion
`at 14.
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`6
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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 11 of 20 PageID #: 8126
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`prejudice dismissal to which PersonalWeb stipulated,” that “PersonalWeb abandoned its claims
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`against Amazon without reservation, explicit or implicit,” and concluded “[t]he judgment in that
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`case therefore stands as an adjudication that Amazon was not liable for the acts of infringement
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`alleged by PersonalWeb.” Id. at 1378. In so concluding, the Federal Circuit explained that:
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`To the extent that a plaintiff wishes to settle an infringement action while preserving
`its rights to sue the same or other parties in the future, it can do so by framing the
`dismissal agreement to preserve any such rights that the defendant is willing to
`agree to. Settling parties will remain free to limit the preclusive effect of a
`dismissal; they simply have to fashion their agreement in a way that makes clear
`any limitations to which they wish to agree as to the downstream effect of the
`dismissal.
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`Id. at 1379 (citing Hallco Mfg. Co. v. Foster, 256 F.3d 1290, 1295 (Fed. Cir. 2001); Pactiv Corp.
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`v. Dow Chem. Co., 449 F.3d 1227, 1231 (Fed. Cir. 2006)) (emphasis added).
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`
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`Here, Google and AGIS limited the preclusive effect of dismissal in Google I. The
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`dismissal order clearly and explicitly states:
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`The Parties agree that this stipulation and motion to dismiss concern the asserted
`claims of the ’970 Patent that issued on July 3, 2012. This dismissal does not cover
`the reexamination-amended claims of the ’970 Patent that issued on December
`9, 2021 and that are not asserted in this action.
`
`See Ex. P, Order Dismissing ’970 Patent from Google I, n.1 (emphasis added).
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`The decision Realtime Adaptive Streaming LLC v. Netflix, Inc. is inapplicable because the
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`plaintiff in that case had dismissed “identical infringement claims” for the same four patents. Mot.
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`at 12 (citing No. CV 19-6359-GW-JCx, 2020 WL 7889048, at *2 (C.D. Cal. Nov. 23, 2020), aff’d,
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`41 F.4th 1372 (Fed. Cir. 2022). Unlike Realtime, however, the reexamination-amended claims of
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`the ’970 Patent were never asserted in Google I, as reflected in the parties’ stipulated agreement
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`and court order. Accordingly, Defendants’ proposed defenses are futile.
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`7
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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 12 of 20 PageID #: 8127
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`C.
`
`Samsung’s Arguments that Any Dismissal Against Google Extends to
`Itself Are Futile Because Different Products Are Accused
`
`Finally, AGIS’s claims against Samsung cannot be precluded based on dismissal of an
`
`action against Google because the Accused Products in this case are Samsung devices, whereas
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`Google devices were accused in the prior Google cases. Even if AGIS’s second dismissal operated
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`as an adjudication on the merits with respect to Google (it doesn’t), that has no preclusive effect
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`on AGIS’s claims against Samsung. Samsung’s argument to extend any preclusion against Google
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`amounts to an unsupported request that this Court create a novel expansion of the Kessler doctrine,
`
`or the doctrine of claim preclusion.
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`But both doctrines fundamentally require commonality between accused products in
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`different cases (either as to a customer of a seller for the Kessler doctrine, or as to the same cause
`
`of action where parties are in privity for claim preclusion), in keeping with the requirement that a
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`party has a full and fair opportunity to litigate its claims. See Kremer v. Chem. Const. Corp., 456
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`U.S. 461, 481 n.22 (1982) (“While our previous expressions of the requirement of a full and fair
`
`opportunity to litigate have been in the context of collateral estoppel or issue preclusion, it is clear
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`from what follows that invocation of res judicata or claim preclusion is subject to the same
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`limitation.”) That is manifestly not the case here. AGIS’s infringement claims against Samsung
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`are based on the sale, offers to sell, use, manufacture, and import of Samsung devices, rely on
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`Samsung hardware components for numerous limitations, and seek damages based on Samsung’s
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`acts of infringement. These contrast with AGIS’s infringement claims against Google, which were
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`based on Google devices, and Google’s acts of infringement. The fact that FMD software satisfies
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`certain claim limitations in AGIS’s allegations against Samsung do not somehow render these
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`cases identical. Notably, AGIS could not have sought damages from Google for direct or indirect
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`infringement by Samsung.
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`8
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`

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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 13 of 20 PageID #: 8128
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`As explained in detail below, Samsung’s proposed amendment fails to plead facts upon
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`which relief could be granted under either doctrine.
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`
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`The Kessler Doctrine Does Not Apply
`
`“The Kessler doctrine bars a patent infringement action against a customer of a seller who
`
`has previously prevailed against the patentee because of invalidity or noninfringement of the
`
`patent.” SpeedTrack, Inc. v. Off. Depot, Inc., 791 F.3d 1317, 1323 (Fed. Cir. 2015) (citation
`
`omitted and emphasis added). The Kessler Doctrine grants “a limited trade right which is ‘the right
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`to have that which [a court has determined] it lawfully produces freely bought and sold without
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`restraint or interference. It is a right which attaches to its product—to a particular thing—as an
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`article of lawful commerce.’” MGA, Inc. v. Gen. Motors Corp., 827 F.2d 729, 734 (Fed. Cir. 1987)
`
`(emphasis added); (see also SpeedTrack at 1327 (“Allowing customers to assert a Kessler defense
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`is consistent with the Court’s goal of protecting the manufacturer’s right to sell an exonerated
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`product free from interference or restraint. . . . [I]t is a right that attaches to the noninfringing
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`product. . . .”) Preclusion under the Kessler doctrine is only intended to “bar assertion of the claims
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`at issue against essentially the same products made or sold after the judgment of noninfringement
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`in the earlier case, i.e., products that claim preclusion could not reach because of their timing.”
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`SimpleAir, Inc. v. Google LLC, 884 F.3d 1160, 1170 (Fed. Cir. 2018) (citation omitted and
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`emphasis added).
`
`Because Samsung is not Google’s customer with respect to the Accused Products, the
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`Kessler doctrine does not apply. The accused product in AGIS’s actions against Google were
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`Google devices, whereas AGIS now accuses Samsung devices. It is indisputable that Samsung is
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`not Google’s customer with respect to those devices, and numerous limitations of the asserted
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`claims read directly on Samsung hardware components. Ex. 1 [‘970 Contentions Exhibit C2] at 5-
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`7, 11-13, 34-35, 49-51, 63-65, 70 (accusing Samsung components such as memory, processors,
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`9
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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 14 of 20 PageID #: 8129
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`displays, and transmission hardware). While software that Samsung obtains from Google makes
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`up a portion of the asserted claims, this is not sufficient to invoke the Kessler doctrine. The
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`Accused Products (e.g., Samsung phones) are not “a particular thing” which Samsung acquired
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`from Google as “an article of lawful commerce.” See MGA, 827 F.2d at 734. Moreover, Kessler is
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`only intended to address products which ordinary claim preclusion cannot reach because of the
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`timing of their sale after disposition of an earlier case. See SimpleAir, 884 F.3d at 1170. In keeping
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`with that goal, the Kessler doctrine is narrowly formulated as a right that attaches to specific non-
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`infringing products. Blocking infringement allegations against Samsung devices based on
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`allegations against Google devices would be both inconsistent with these goals and would be an
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`unprecedented expansion of the Kessler doctrine.
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`Moreover, even if FMD were the accused product in AGIS’s actions against Google (as
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`opposed to Google’s devices), this action would fall into the Rubber Tire exception to Kessler
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`because the previously accused system does not constitute the entire accused system. See Rubber
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`Tire Wheel Co. v. Goodyear Tire & Rubber Co., 232 U.S. 413,at 418 (1914) (discussing Kessler
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`and noting that “[i]f that commodity is combined with other things in the process of the
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`manufacture of a new commodity, the trade right in the original part as an article of commerce is
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`necessarily gone”); see also Stambler v. Amazon.com, Inc., No. 2:09-CV-310, 2010 WL 11530984,
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`at *4 (E.D. Tex. Apr. 21, 2010) (“the VeriSign digital certificates are part of the accused systems
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`but do not constitute the entire accused system. The Kessler doctrine is therefore inapplicable
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`because the above-captioned suit involves accused systems different from those accused in the
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`Delaware Action.”) (footnote omitted). Samsung’s Kessler arguments are also futile under this
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`basis.
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`Samsung’s defenses under the Kessler doctrine are therefore futile.
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`Claim Preclusion Does Not Apply
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`“Claim preclusion bars the litigation of claims that either have been litigated or should have
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`been raised in an earlier suit.” Duffie v. United States, 600 F.3d 362, 372 (5th Cir. 2010). The test
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`for claim preclusion has four elements: (1) the parties in the subsequent action are identical to, or
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`in privity with, the parties in the prior action; (2) the judgment in the prior case was rendered by a
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`court of competent jurisdiction; (3) there has been a final judgment on the merits; and (4) the same
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`claim or cause of action is involved in both suits. Id. To evaluate the fourth element, courts have
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`adopted the “transactional test,” which focuses on whether the two cases “are based on the same
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`nucleus of operative facts.” Houston Pro. Towing Assoc. v. City of Houston, 812 F.3d 443, 447
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`(5th Cir. 2016); see also SimpleAir, 884 F.3d at 1165 (“Our cases generally follow the Restatement
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`(Second) of Judgments (1982) (hereinafter Restatement), which defines a cause of action based on
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`the transactional facts from which it arises.”). Here, Samsung’s proposed amendment is futile
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`because (1) it is not in “privity with” Google as to the Accused Products, and (2) because AGIS’s
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`claims against Samsung are not “the same cause of action” brought against Google.
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`First, Samsung cannot show (and does not allege) it is in privity with Google with respect
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`to Samsung devices running FMD. Samsung instead relies on Google’s status as the developer of
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`FMD. But the acts of infringement alleged in this case involve, among other things, Samsung’s
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`sale of smartphones in the United States. The privity inquiry centers on “whether the relationship
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`between the parties is such that one party should enjoy the benefit, or suffer the burden, of a
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`judgment for or against another.” Mars Inc. v. Nippon Conlux Kabushiki-Kaisha, 58 F.3d 616, 619
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`(Fed. Cir. 1995); see also Meza v. Gen. Battery Corp., 908 F.2d 1262, 1266 (5th Cir. 1990) (“For
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`res judicata purposes, this court has held that privity exists in just three, narrowly-defined
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`circumstances: (1) where the non-party is the successor in interest to a party’s interest in property;
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`(2) where the non-party controlled the prior litigation; and (3) where the non-party’s interests were
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`Case 2:22-cv-00263-JRG-RSP Document 116 Filed 08/25/23 Page 16 of 20 PageID #: 8131
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`adequately represented by a party to the original suit.”). Here, Samsung and Google are not closely
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`related for purposes of Samsung’s infringing acts (i.e., sale, offer for sale, import, manufacture,
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`and use of Samsung devices), Samsung did not control Google in the prior litigation, and is not a
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`“successor in interest” to any of Google’s interests. To hold Google and Samsung in privity would
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`unfairly allow Samsung the opportunity to preclude AGIS’s claims without giving AGIS the
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`opportunity to conduct discovery against the actual party accused of infringement.
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`Samsung relies heavily on the Federal Circuit’s holding in Mars Inc. that privity can exist
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`where “there was a close and significant relationship between the parties” for purposes of
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`defensively invoked claim preclusion. Mot. at 13-14. But the holding in that case concerned a
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`wholly-owned subsidiary of a prior defendant and is inapplicable to the instant action. See Mars,
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`58 F.3d at 619. There is no such relationship between S