Case 5:19-cv-00036-RWS Document 114 Filed 11/01/19 Page 1 of 8 PageID #: 5083
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
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`MAXELL, LTD.,
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`Plaintiff
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`Civil Action NO. 5:19-cv-00036-RWS
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`v.
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`APPLE INC.,
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`Defendant.
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`JURY TRIAL DEMANDED
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`APPLE INC.’S REPLY IN FURTHER SUPPORT OF ITS
`OPPOSED MOTION TO STAY PENDING DECISION ON ITS MOTION TO
`TRANSFER VENUE PURSUANT TO 28 U.S.C. § 1404(A)
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
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`MAXELL, LTD.,
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`
`
`Plaintiff
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`Civil Action NO. 5:19-cv-00036-RWS
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`v.
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`APPLE INC.,
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`
`
`Defendant.
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`JURY TRIAL DEMANDED
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`
`
`APPLE INC.’S REPLY IN FURTHER SUPPORT OF ITS
`OPPOSED MOTION TO STAY PENDING DECISION ON ITS MOTION TO
`TRANSFER VENUE PURSUANT TO 28 U.S.C. § 1404(A)
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`
`
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`
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`Case 5:19-cv-00036-RWS Document 114 Filed 11/01/19 Page 2 of 8 PageID #: 5084
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`I.
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`INTRODUCTION
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`With no sound basis to oppose a stay, Maxell’s opposition—predictably—turns to
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`inflated rhetoric and ad hominem attacks. Tellingly, Maxell’s brief lacks any evidence of Apple’s
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`alleged efforts to “stonewall” discovery and of Apple’s “insincerity” in discussing business
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`prospects.
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` Instead, Maxell is the one that has made resolving the
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`merits of the parties’ dispute more expensive by trying to litigate in this District,
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`, and by conjuring unnecessary discovery disputes.
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`Maxell’s vexatious strategy is plain: force Apple to expend resources litigating in an
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`inconvenient venue, see, e.g., Omni MedSci, Inc. v. Apple Inc., No. 2:18-cv-00134-RWS, Dkt.
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`No. 279, at *8 (E.D. Tex. Aug. 14, 2019) (finding NDCA more convenient for Apple),
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` The inherent
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`prejudice to Apple in litigating in an inconvenient venue outweighs Maxell’s speculative
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`concerns of a short delay (one that is of its own making). Thus, a stay should be granted.
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`II.
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`ARGUMENT
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`A.
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`The Case Law Supports That All Proceedings in This Case Should Be Stayed
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`Maxell’s two-and-a-half pages of argument attempting to distinguish Apple’s cited
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`caselaw belies its claim that Apple cites no case law to support its arguments and is otherwise
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`unavailing. Dkt. No. 107 at 3-5. In re Fusion-IO stands for more than the notion that “pending
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`motions to transfer should be promptly resolved.” Id. at 4. The Federal Circuit also recognized
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`the inherent inefficiency to litigate while a transfer motion is pending and directed the “district
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`court to act on [the transfer motion] before proceeding to any motion on the merits of the action.”
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`Case 5:19-cv-00036-RWS Document 114 Filed 11/01/19 Page 3 of 8 PageID #: 5085
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`In re Fusion-IO, Inc., 489 F. App’x 465, 466 (Fed. Cir. 2012); see also In re Nintendo Co., Ltd.,
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`544 F. App’x 934, 941 (Fed. Cir. 2013) (“a trial court must first address whether it is a proper
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`and convenient venue before addressing any substantive portion of the case”). Maxell’s straw-
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`man argument—that there is no blanket rule requiring every case to be stayed pending a transfer
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`motion—mischaracterizes Apple’s argument and ignores that Apple cites cases staying all
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`proceedings pending a decision on transfer. Maxell has no answer to those cases.
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`Maxell’s narrow reading of the case law also ignores the reasons those decisions provide
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`for granting a stay. Given 28 U.S.C. § 1404(a) “protect[s] litigants, witnesses and the public
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`against unnecessary inconvenience and expense,” Apple is inherently prejudiced by
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`“expend[ing] resources litigating substantive matters in an inconvenient venue” while a motion
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`to transfer is pending. In re Google Inc., No. 2015-138, 2015 WL 5294800, at *1 (Fed. Cir. July
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`16, 2015). Preserving judicial economy further warrants deciding a transfer motion before any
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`decisions on the merits. In re Nintendo, 544 F. App’x at 941 (“Judicial economy requires that [a]
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`district court should not burden itself with the merits of the action until it is decided [whether] a
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`transfer should be effected.”). Apple appreciates that the Court will decide its motion to transfer
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`promptly, but also understands the Court is busy and has limited resources. Apple’s prejudice
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`and preserving judicial economy, balanced against no prejudice to Maxell, warrant a stay.
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`B.
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`A Stay Will Not Unduly Prejudice or Disadvantage Maxell
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`Maxell cannot dispute that it does not practice any of the asserted patents and would not
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`suffer undue prejudice from a short stay under the prevailing case law in this District.1 Seeking
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`1
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`Case 5:19-cv-00036-RWS Document 114 Filed 11/01/19 Page 4 of 8 PageID #: 5086
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`to invent prejudice attributable to a stay,
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`And Maxell’s
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`speculative claims does not warrant denial of a stay. Ericsson Inc. v. TCL Commc’n Tech.
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`Holdings, Ltd., No. 2:15-CV-00011-RSP, 2016 WL 1162162, at *2 (E.D. Tex. Mar. 23, 2016)
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`(this factor is neutral “[a]bsent a showing of any specific prejudice”); Sierra Club v. Fed.
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`Emergency Mgmt. Agency, No. CIV. H-07-0608, 2008 WL 2414333, at *7 (S.D. Tex. June 11,
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`2008) (motion to stay should not be denied based on “a party’s speculative concerns”).
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`Maxell’s reliance on Realtime Data LLC v. Actian Coporation, No. 6:15-CV-463-RWS-
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`JDL, 2016 WL 3277259 (E.D. Tex. June 14, 2016) is misplaced. Maxell acknowledges that this
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`Court will promptly resolve the pending motion to transfer and any stay would be short. Dkt. No.
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`107 at 4. Thus, the “substantial delay” that extended “well beyond the scheduled trial date” that
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`motivated the court in Realtime to deny a stay is just not a concern here. No. 6:15-CV-463-RWS-
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`3
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`Case 5:19-cv-00036-RWS Document 114 Filed 11/01/19 Page 5 of 8 PageID #: 5087
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`JDL, 2016 WL 3277259, at *2; see also Realtime Data, LLC v. Rackspace US, Inc., No. 6:16-
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`CV-00961-RWS-JDL, 2017 WL 772654, at *4 (E.D. Tex. Feb. 28, 2017) (finding that “concerns
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`such as timely enforcement of patent rights are generally too generic . . . to defeat a stay
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`motion”). And any delay to Maxell’s enforcement of its patents would result from
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` See Microlinc, LLC v.
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`Intel Corp., No. 2:07-CV-488TJW, 2010 WL 3766655, at *2 (E.D. Tex. Sept. 20, 2010) (no
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`prejudice where patentee’s own conduct warranted stay).
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`Finally, Maxell argues that the Court should deny a stay because Apple has refused to
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`participate in discovery. Dkt. No. 107 at 6. Maxell’s rhetoric is just that—the facts demonstrate
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`the opposite. Apple has produced more than 1,000,000 pages of documents and made available
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`more than 1,200,000 source code files. These efforts have not slowed since Apple filed its
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`motion to stay three weeks ago—despite the completeness of its local rule productions, Apple
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`has produced nearly 200,000 additional pages of documents and 200,000 additional source code
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`files in response to Maxell’s requests, despite the disproportionality of those requests. Yet, more
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`than two months after Apple first made its source code available, Maxell has seemingly only
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`reviewed the code for the purpose of manufacturing discovery disputes.
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` Maxell unsurprisingly
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`failed to produce meaningful P.R. 3-1(g) contentions that specify its infringement theories
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`relating to source code. It is Maxell, not Apple, that has failed to meet its discovery obligations.
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`Maxell’s failures to comply with Local Rules will necessitate delays with or without a stay. Any
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`speculative harm resulting from Maxell’s own misconduct does not warrant denial of a stay.
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`C.
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`A Stay Will Simplify the Issues
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`Maxell’s claim that a stay will not simplify the issues ignores crucial differences in Local
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`Case 5:19-cv-00036-RWS Document 114 Filed 11/01/19 Page 6 of 8 PageID #: 5088
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`Rules between this district and NDCA. See Dkt. No. 107 at 7-8. As Maxell acknowledges, the
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`parties are currently engaged in claim construction. Some of those efforts may need to be
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`duplicated before a California court both to educate that court about the relevant technologies
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`and to address differences in Local Rules. See, e.g., NDCA Patent Rule 3-8 (requiring damages
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`contentions before Markman hearing). Maxell’s argument based on the similarities of local
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`patent rules also ignores other issues in dispute.
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`D.
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`The Stage of the Case Favors a Stay
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`“Generally, the relevant time to measure the stage of litigation” is when the motion to
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`stay is filed. VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1317 (Fed. Cir. 2014).
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`While Apple has already produced a significant amount of discovery, the stage of the case still
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`favors a stay because significant work remains. In contrast to the cases cited by Maxell, the
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`parties are not close to preparing for trial, which is set for a year from now. Moreover, fact
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`discovery does not even close for another five months. Thus, there can be no debate that the bulk
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`of “expenses that the parties would incur in pretrial work and trial preparation are still in the
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`future.” NFC Tech. LLC v. HTC Am., Inc., No. 2:13-CV-1058-WCB, 2015 WL 1069111, at *3
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`(E.D. Tex. Mar. 11, 2015). These remaining tasks include technology tutorial, claim construction
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`briefing and hearing, depositions of individual and corporate fact witnesses, expert discovery,
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`pretrial work, and trial itself. The stage of the case, therefore, warrants a stay.
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`III. CONCLUSION
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`Therefore, Apple respectfully requests that the Court stay all proceedings pending
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`resolution of Apple’s Motion to Transfer.
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`5
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`Case 5:19-cv-00036-RWS Document 114 Filed 11/01/19 Page 7 of 8 PageID #: 5089
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`October 30, 2019
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`/s/ Luann L. Simmons
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`
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`Luann L. Simmons (Pro Hac Vice)
`lsimmons@omm.com
`O’MELVENY & MYERS LLP
`Two Embarcadero Center
`28th Floor
`San Francisco, CA 94111
`Telephone: 415-984-8700
`Facsimile: 415-984-8701
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`Xin-Yi Zhou (Pro Hac Vice)
`vzhou@omm.com
`Anthony G. Beasley (TX #24093882)
`tbeasley@omm.com
`O’MELVENY & MYERS LLP
`400 S. Hope Street
`Los Angeles, CA 90071
`Telephone: 213-430-6000
`Facsimile: 213-430-6407
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`Laura Bayne Gore (Pro Hac Vice)
`lbayne@omm.com
`O’MELVENY & MYERS LLP
`Times Square Tower, 7 Times Square
`New York, NY 10036
`Telephone: 212-326-2000
`Facsimile: 212-326-2061
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`Melissa R. Smith (TX #24001351)
`melissa@gilliamsmithlaw.com
`GILLIAM & SMITH, LLP
`303 South Washington Avenue
`Marshall, Texas 75670
`Telephone: (903) 934-8450
`Facsimile: (903) 934-9257
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`Attorneys for Defendant Apple Inc.
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`Case 5:19-cv-00036-RWS Document 114 Filed 11/01/19 Page 8 of 8 PageID #: 5090
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that all counsel of record who are deemed to have
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`consented to electronic service are being served with a copy of this document via the Court's
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`CM/ECF system per Local Rule CV-5(a)(3) on October 30, 2019.
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`/s/ Melissa R. Smith
`Melissa R. Smith
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`7
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