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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`Case No. 2:22-cv-00486-JRG (Lead Case)
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`JURY TRIAL DEMANDED
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`Case No. 2:22-cv-00496-JRG (Member
`Case)
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`JURY TRIAL DEMANDED
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`BMW’S REPLY IN SUPPORT OF ITS MOTION TO STAY PENDING RESOLUTION
`OF INTER PARTES REVIEW OF THE CHALLENGED PATENTS
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`NORTHSTAR SYSTEMS LLC,
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`Plaintiff,
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`v.
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`VOLKSWAGEN AG,
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`Defendant.
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`NORTHSTAR SYSTEMS LLC,
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`Plaintiff,
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`v.
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`BAYERISCHE MOTOREN WERKE AG,
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`Defendant.
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`Case 2:22-cv-00486-JRG Document 68 Filed 09/01/23 Page 2 of 8 PageID #: 844
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`I.
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`INTRODUCTION – BMW HAS BEEN DILIGENT AND A STAY IS
`APPROPRIATE GIVEN NORTHSTAR’S FAILURE TO STATE A CLAIM
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`NorthStar, in opposition, does not argue that BMW’s motion fails to show diligence under
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`the e-Watch standard set by this Court that “the Court must accord some weight to the timing of
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`[defendant’s] initial motion to stay.” e-Watch v. Apple, Inc., No. 2:13-cv-1061-JRG-RSP, 2015
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`WL 12915668, at *3 (E.D. Tex. Mar. 25, 2015). Rather, NorthStar argues that this motion is early
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`as “none of the IPRs have been instituted by the PTAB.” Op. at 5. NorthStar’s argument misses
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`the mark because BMW’s early IPRs and early motion show the diligence that this Court has found
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`significant in other motions to stay. Here, NorthStar cannot deny that every IPR institution decision
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`will occur well before the Markman hearing in this case. Indeed, the majority of the institution
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`decisions will occur far in advance of the exchange of claim terms here. Accordingly, due to
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`BMW’s exceptionally quick IPR filings, BMW is in the exact position the defendant of e-Watch
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`was in before institution of the IPRs, and the e-Watch case is entirely on point, that BMW has been
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`diligent—and that needless litigation expense during IPRs should be avoided.
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`NorthStar also ignores the mitigating factors here: NorthStar’s patent suit lacks substance.
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`For instance, NorthStar filed the Complaint without meeting the minimum pleading standards. See
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`Dkt. 26. And yet, without providing sufficient pleading or notice, NorthStar accuses nearly every
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`BMW vehicle in existence of infringing its broad, software-based method claims. See Case No.
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`22-cv-496, Dkt. 1. ¶¶ 13-15. Accordingly, NorthStar has no intention to sincerely pursue a case,
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`but rather seeks to extract a payday from BMW by pursuing vague, undefined claims. This case
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`undoubtedly should be dismissed. See Dkt. 26; Dkt. 66. But, if not, then this case should be stayed
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`due to BMW’s diligence and NorthStar’s refusal to amend its complaint.
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`NorthStar’s opposition arguments for the stay factors also fail. First, NorthStar erroneously
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`argues the IPRs will not simplify this case because, NorthStar postulates, that all IPRs must be
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`1
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`Case 2:22-cv-00486-JRG Document 68 Filed 09/01/23 Page 3 of 8 PageID #: 845
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`instituted in order to simplify a case. NorthStar is facially incorrect as patent owner statements in
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`IPRs remain a part of the prosecution history and regularly affect litigation. Second, NorthStar
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`also incorrectly argues that the state of the present case is advanced. However, as addressed above
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`and due to BMW’s quick IPR filings, even NorthStar cannot deny that discovery and claim
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`construction are incomplete here—and will not be complete by the time of any of the IPR
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`institution decisions. The parties are at the initial contention and pleading stage, and the most
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`efficient path to avoiding significant costs borne by the parties and this Court, is to stay this case.
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`Finally, NorthStar argues that it will somehow be prejudiced by a stay. None of the cases NorthStar
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`relies on address the facts here, where a non-practicing entity, like NorthStar, accused nearly every
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`product of an actual, productive company, without properly pleading a claim upon which relief
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`can be granted. Here, NorthStar attempts to weigh down parties and the Court alike with its
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`meritless claims. Rather than allow discovery to proceed based on NorthStar’s insufficient
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`pleadings, the obvious path forward is to minimize the waste of resources.
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`II.
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`ARGUMENT – BMW CONTINUES TO SHOW DILIGENCE AND ALL
`FACTORS WARRANT GRANTING THE STAY
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`NorthStar does not find fault with the e-Watch precedent, but rather, erroneously claims
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`BMW’s position here is not aligned with the e-Watch facts. NorthStar’s argument does not stand
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`up to any level of scrutiny. The Court afforded weight to the e-Watch defendant filing an early
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`motion to stay pending IPRs before institution. e-Watch, 2015 WL 12915668 at *3.1 Similar to the
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`e-Watch defendant, BMW promptly filed this motion to stay, showing diligence. Id.
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`NorthStar also alleges that this Court implements a “universal practice” of denying stays
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`before IPR institutions, but courts in this District have stayed cases pending an institution decision
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`1 As noted in BMW’s Motion to Stay, the Court commending diligence in filing an initial motion
`to stay does not stand in isolation but has been noted in other cases. Solas Oled Ltd. v. Samsung
`Display Co., No. 2:19-cv-00152-JRG, 2020 WL 4040716 at *2 (E.D. Tex. Jul. 17, 2020).
`2
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`Case 2:22-cv-00486-JRG Document 68 Filed 09/01/23 Page 4 of 8 PageID #: 846
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`before. See e.g., Landmark Technology, LLC v. iRobot Corporation, No. 6:13-cv-00411, 2014 WL
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`486836 (E.D. Tex. Jan. 24, 2014). Further, a later court in this District credited the Landmark
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`analysis. Trover Group, Inc. v. Dedicated Micros USA, No. 2:13-cv-01047, 2015 WL 1069179, at
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`*6-7 (E.D. Tex. Mar. 11, 2015). Finally, each stay decision “must rest on the facts of each
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`particular case.” Landmark, 2014 WL 486836 at *1 (emphasis added).
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`BMW posits that NorthStar’s broad and unsubstantiated claims against nearly every BMW
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`vehicle, Dkt. No. 1 ¶¶ 13-15, should further factor in favor of a stay. Dkt. 26. The Court already
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`granted a motion to dismiss in this case for Defendant Volkswagen AG. Dkt. 66. But, despite
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`BMW’s motion to dismiss briefing detail NorthStar’s deficient pleadings, Dkt. 49 at 6-7, NorthStar
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`continues to refuse to amend (and accordingly, the Complaint should be dismissed without an
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`opportunity to amend). Nevertheless, this case should be stayed because NorthStar’s broad,
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`software-based patent claims do not justify discovery into nearly every BMW vehicle. Dkt. 26.
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`And, BMW was diligent in filing the IPRs and the present motion. Thus, a stay is appropriate here.
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`A.
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`A Stay Would Greatly Simplify and Resolve the Issues in this Case
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`NorthStar argues no simplification will occur due to the IPRs. This is incorrect for two
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`reasons. First, post-grant reviews simplify the district court issues, and courts recognize that a stay
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`pending USPTO review remains “the ultimate simplification of issues.” VirtualAgility Inc. v.
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`Salesforce.com, Inc., 759 F.3d 1307, 1314 (Fed. Cir. 2014) (citing Broad. Innovation, L.L.C. v.
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`Charter Commc'ns Inc., 2006 WL 1897165, at *8 (D. Colo. July 11, 2006) (noting that “a stay
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`would further the interests of judicial economy and the conservation of the parties' resources, as
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`well as that of the court” if a stay would “dispose of ... litigation entirely”)). Here, BMW’s IPRs
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`will likely lead to the ultimate simplification of issues.
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`Second, NorthStar’s statements in its patent owner’s preliminary response of one of the
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`IPRs has already simplified issues in this case, and NorthStar’s participation in the remaining IPRs
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`Case 2:22-cv-00486-JRG Document 68 Filed 09/01/23 Page 5 of 8 PageID #: 847
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`will continue to lead to simplification. Indeed, the Federal Circuit recognized that “the patent
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`owner can define claim terms and otherwise make representations about claim scope to avoid prior
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`art . . . .” Aylus Networks, Inc. v. Apple Inc., 856 F.3d 1353, 1362 (Fed. Cir. 2017). Here, for the
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`’297 Patent, NorthStar already simplified issues for claim construction by attempting to distinguish
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`its claims from prior art. Notably, NorthStar argued a specific “calculating of a placement position
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`of an OVI on the display” is not rendered obvious by a prior art reference where an icon is
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`displayed at a particular position, but instead NorthStar argued a specific “level of detail provided
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`by the ’297 specification.” Bayerische Motoren Werke AG v. NorthStar Sys. LLC, IPR2023-00890,
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`Paper No. 6, 10-11 (P.T.A.B. Aug. 18, 2023). Thus, NorthStar attempted to define the claim scope
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`of the ’297 Patent to avoid prior art by, rather than relying on the claim language, citing
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`computation methods in the ’297 specification (further simplifying the claim construction briefing
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`here). Because BMW’s IPRs already simplified the issues, and will continue to, a stay is proper.
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`B.
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`This Case Is at an Early Stage and Is Extraordinarily Well-Suited for a Stay
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`NorthStar also erred in its analysis of the stage of this case. Op., 7. Discovery has still not
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`begun, and the costs of discovery borne by the Court and the parties will be avoided if a stay is
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`granted here. NorthStar served its initial infringement contentions and BMW will soon serve its
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`contentions if this case is not stayed. Dkt. 57. In contrast, NorthStar provided no explanation for
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`why it has yet to seek any discovery, illustrating NorthStar’s lack of diligence. Regardless, it is
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`still true as of today’s date, that discovery has not been served in this case, and this case remains
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`in infancy.2
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`2 NorthStar appears to blame BMW for “a strategic move” to not serve discovery pending BMW’s
`motion to dismiss. Op., 7. BMW denies any delay. As NorthStar recognizes, BMW will soon serve
`its invalidity and subject matter eligibility contentions—those contentions, spreading over five
`different patents, and 91 patent claims. Thus, BMW continues to comply with its obligations and
`prepare the voluminous contentions NorthStar’s flawed allegations demand, despite NorthStar’s
`efforts to render them as burdensome as possible (further warranting this stay).
`4
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`Case 2:22-cv-00486-JRG Document 68 Filed 09/01/23 Page 6 of 8 PageID #: 848
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`NorthStar’s remaining argument is that “initial contentions” denote a late stage in the case,
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`at least because of the associated cost. They do not. According to one study concerning patent
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`litigation against non-practicing entities, the cost of initial case management is just 5-10% of the
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`cost of discovery, motions, and claim construction.3 Thus, the remaining 90-95% of the costs could
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`be avoided if a stay is granted while the IPRs proceed. Here, the great cost of discovery,
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`particularly given the breadth and vagueness of NorthStar’s allegations, can and should be avoided
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`in view of the pending IPRs and the diligence BMW has shown.
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`C.
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`A Stay Will Not Unduly Prejudice NorthStar
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`A stay would cause no undue prejudice to NorthStar. Even if there were prejudice in
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`granting a stay (which there is not), NorthStar fails to show that such prejudice would be undue,
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`especially for a non-practicing entity like itself. Landmark, 2014 WL 486836 at *4. NorthStar will
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`still have an adequate remedy after a stay as many cases have recognized. See SynQor, Inc. v. Vicor
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`Corporation, 2015 WL 12916396, at *4 (E.D. Tex. Nov. 24, 2015). Further, NorthStar has yet to
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`serve a single discovery request or identify any witness important to its contentions, and thus
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`NorthStar cannot claim the importance of witness memory. Op. 8. Nor does NorthStar have any
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`specific complaint about its inability to license the Asserted Patents, belying NorthStar’s protests.
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`Op. 8. Thus, NorthStar’s allegation that some undefined witness may forget, especially when
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`NorthStar’s patents are already fifteen to twenty-three years old, is not based on any factual basis
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`and is further nonsensical. Thus, NorthStar will not be unduly prejudiced by a stay.
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`III. CONCLUSION: A PRE-INSTITUTION STAY IS JUSTIFIED HERE
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`For the reasons set forth above, this case should be stayed.
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`3 AIPLA, 2019 Report of the Economic Survey, available at https://ipwatchdog.com/wp-
`content/uploads/2021/08/AIPLA-Report-of-the-Economic-Survey-Relevant-Excerpts.pdf.
`5
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`Case 2:22-cv-00486-JRG Document 68 Filed 09/01/23 Page 7 of 8 PageID #: 849
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` Respectfully submitted,
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`Dated: September 1, 2023
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` /s/Lionel M. Lavenue
`Lionel M. Lavenue
`Virginia Bar No. 49,005
`lionel.lavenue@finnegan.com
`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
`1875 Explorer Street, Suite 800
`Reston, VA 20190
`Phone: (571) 203-2700
`Fax: (202) 408-4400
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`ATTORNEY FOR DEFENDANT
`BAYERISCHE MOTOREN WERKE AG
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`6
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`Case 2:22-cv-00486-JRG Document 68 Filed 09/01/23 Page 8 of 8 PageID #: 850
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`CERTIFICATE OF SERVICE
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`I hereby certify that on September 1, 2023, I electronically filed the foregoing BMW
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`Reply in Support of its Motion to Stay Pending Resolution of Inter Partes Review of the
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`Challenged Patents with the Clerk of Court using the CM/ECF system, which will send a
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`notification of electronic filing (“NEF”) to counsel of record who have appeared in this case on
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`behalf of the identified parties.
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`/s/Lionel M. Lavenue
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`Lionel M. Lavenue
`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
`1875 Explorer Street, Suite 800
`Reston, VA 20190-6023
`Phone: (571) 203-2700
`Fax: (202) 408-4400
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`ATTORNEY FOR DEFENDANT
`BAYERISCHE MOTOREN WERKE AG
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`7
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