Case 5:19-cv-00036-RWS Document 120 Filed 11/08/19 Page 1 of 8 PageID #: 5295
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
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`Plaintiff,
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`Case No. 5:19-cv-00036-RWS
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`JURY TRIAL DEMANDED
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`MAXELL, LTD.,
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`v.
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`APPLE INC.,
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`Defendant.
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`MAXELL, LTD.’S SURREPLY IN OPPOSITION TO APPLE INC.’S
`MOTION TO STAY PENDING DECISION ON ITS
`MOTION TO TRANSFER VENUE PURSUANT TO 28 U.S.C. § 1404(a)
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`Case 5:19-cv-00036-RWS Document 120 Filed 11/08/19 Page 2 of 8 PageID #: 5296
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`If Apple genuinely wanted this case to progress on the merits, it would permit the case to
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`actively continue while the Court considers Apple’s motion to transfer. The work currently being
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`done by the parties is inevitable regardless of where the case is ultimately tried. Indeed, since
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`Apple filed its motion to transfer, discovery has moved forward. Apple, despite long touting the
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`number of pages of documents produced and files of source code made available for inspection,
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`has only in recent weeks produced significant non-public, non-duplicative documents that provide
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`insight into the proprietary design and operation of the accused functionalities. The parties have
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`also made progress on claim construction, completing the narrowing of terms to be construed,
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`exchanging proposed constructions, and conducting expert discovery. All efforts that will ensure
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`the orderly progression of the case whether it is transferred or not. At this point, the only thing that
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`would render the ongoing work between the parties wasteful would be to grant Apple’s motion
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`and put an unnecessary and unsupported stop to the case.
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`Apple’s only challenge to the fact that the current work is inevitable is that there are
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`“crucial differences” in the Local Rules between the Eastern District of Texas and the Northern
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`District of California. But Apple fails to provide any example of a difference that would render
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`unnecessary the current work being performed. Apple is only citing to differences in the rules as a
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`pretext to further delay the case. Indeed, the parties are working through document production,
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`written discovery, and claim construction of already-identified terms—the substance of which
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`would be the same here as in California notwithstanding any differences in the local rules.
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` Apple argues it will suffer prejudice and unnecessary expense from having to litigate in
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`an allegedly inconvenient venue. Yet, Apple itself litigated the case in this district for months
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`before filing its motion to transfer. Moreover, Apple benefits just as much as Maxell from having
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`discovery and claim construction move forward. For example, and contrary to Apple’s allegations
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`otherwise, Maxell’s extensive source code review and supplemental infringement contentions help
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`Case 5:19-cv-00036-RWS Document 120 Filed 11/08/19 Page 3 of 8 PageID #: 5297
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`to narrow the case for all parties as it moves forward.
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`I.
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`ARGUMENT
`A.
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`Apple Does Not Cite to Any Case Law that Supports its Motion
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`Apple’s continued reliance on In re Fusion-IO is unfounded. There, the Federal Circuit
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`merely provided guidance in dicta to the district court to resolve transfer motions expeditiously
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`and did not compel the district court to grant a stay, as Apple claims. In any event, Apple’s reading
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`of In re Fusion-IO ignores the relevant procedural posture of the case. The Federal Circuit denied
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`Fusion-IO, Inc.’s petition for writ of mandamus on December 21, 2012. 489 F. Appx. 465 (Fed.
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`Cir. 2012). Back in the district court, Fusion-IO, Inc. filed its renewed motion to transfer and
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`motion to stay on December 26, 2012. Solid State Storage Solutions, Inc. v. Stec, Inc., No. 2:11-
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`cv-391-JRG-RSP (E.D. Tex.), D.I. 282 and 283. Notably, the Markman hearing was set for two
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`weeks later on January 9, 2013. D.I. 187. Thus, there was a high risk that the court would conduct
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`the claim construction hearing and render a substantive decision on claim construction prior to
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`resolving the pending motion to transfer. The Federal Circuit’s comments in In re Fusion-IO
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`regarding the timing of motions to stay and motions to transfer venue do not compel or urge this
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`Court to order a stay in this case. There is no reason to believe that this Court will render new
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`decisions on the merits of this action before a decision on Apple’s motion to transfer.
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`Although Apple argues, relying on In re Google Inc., that it is currently expending
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`resources litigating in an allegedly inconvenient venue (Reply at 2), the work the parties are
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`currently doing on the case—discovery and claim construction—will have to be done regardless
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`of location and are not impacted by the location of the case. Apple is not expending any
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`unnecessary expenses absent a stay; Apple is merely completing necessary work that would occur
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`whether the case is litigated here or in California. Apple’s document production and written
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`discovery do not require Apple to travel to East Texas since the discovery has been conducted via
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`electronic and telephonic means. Similarly, the duties related to claim construction have not
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`required Apple to travel to any place it would not otherwise have had to travel (e.g., all related
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`travel have been to the experts’ locations for depositions, travel that would have taken place
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`regardless of venue).
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`Staying the inevitable discovery during the pendency of a non-dispositive motion only
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`serves to delay the resolution of this case. Such a delay will severely prejudice Maxell, not Apple.
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`Apple’s contentions of undue hardship and duplicative litigation tasks lack merit. See Evolutionary
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`Intelligence LLC v. Facebook, Inc., No. 6:12-cv-784, 2013 WL 12144118, at *2 (E.D. Tex. Feb.
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`27, 2013) (denying motion to stay pending motion to transfer in part because “Defendants have
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`not identified any hardship or inequity that would result if these actions are not stayed”).
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`B. Maxell Will Be Prejudiced by a Stay
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`Apple’s assertion that Maxell will not suffer any prejudice from a stay continues to ignore
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`this Court’s precedent that acknowledges non-practicing entities are prejudiced by a stay. Realtime
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`Data LLC v. Actian Corporation, No. 6:15-cv-463, 2016 WL 3277259, at *2 (E.D. Tex. June 14,
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`2016) (stating that plaintiff, a non-practicing entity, would be prejudiced by a stay because plaintiff
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`“has an interest in the timely enforcement of its patent rights.”); Rembrandt Wireless Techs., LP
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`v. Samsung Elecs. Co., 2015 WL 627887, at *2 (E.D. Tex. Jan. 29, 2015) (“The mere fact that
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`[plaintiff] is not currently practicing the patents does not mean that, as a matter of law, it is not
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`prejudiced”). Contrary to Apple’s argument, a stay would prejudice Maxell even though Maxell
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`does not itself practice the asserted patents by delaying the ultimate resolution of this case.
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`Moreover, Apple’s alleged surprise that Maxell’s licensees would be prejudiced by a stay
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`is contrived. Maxell’s discovery responses, the exact same discovery responses Apple refers to in
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`its Reply, include this specific argument about harm to Maxell’s licensees. See Ex. A at 15-16
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`(Excerpt of July 29, 2019 Interrogatory Response) (“Maxell’s licensees, the users of the
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`technology of the Asserted Patents, compete for market share with Apple....Apple’s use of the
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`technology of the Asserted Patents without a license threatens and erodes the market share of
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`Maxell’s licensees and encourages third parties to also improperly use the technology of the
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`Asserted Patents without a license. This in turn has a direct and substantial impact on Maxell as a
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`licensor, including loss of commercial negotiating power, increased legal fees and time in
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`negotiating with such third parties, and damaged relationships with Maxell’s licensees who paid
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`for the competitive advantage ….”). Apple can hardly claim surprise when Maxell included this
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`argument in both the initial and supplemental interrogatory responses (served July 29 and October
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`9, 2019, respectively).
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`C.
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`A Stay Will Not Simplify the Issues
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`Apple relies on the differences in Local Rules between this district and NDCA to support
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`its request for a stay. Reply at 4-5. However, the only difference between the local rules that Apple
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`has identified is that NDCA’s Local Rules also require damages contentions. Such contentions
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`would have no impact on claim construction and little, if any, impact on discovery (and in
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`particular, on document production). In short, Apple has not identified any differences in the local
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`rules that would require discovery or claim construction efforts be duplicated or redone if the case
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`is transferred to NDCA. See Cummins-Allison Corp. v. SBM Co., Ltd., No. 9:07-cv-196, 2008 WL
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`11348281, at *2 (E.D. Tex. May 21, 2008) citing Imax Corp. v. In-Three, Inc., 385 F.Supp.2d
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`1030, 1033 (C.D. Cal. 2005) (stating that if the stay will not reduce the number of issues, then a
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`stay would not preserve many resources).
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`Apples further argues that Maxell’s willful infringement claims implicate
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`Case 5:19-cv-00036-RWS Document 120 Filed 11/08/19 Page 6 of 8 PageID #: 5300
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` Accordingly, this Court does not need to
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`apply any out-of-state law, and no issues will be simplified by a stay.
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`D.
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`The Stage of the Case Weighs Against a Stay
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`Despite Apple’s claims (Reply at 5), Maxell’s opposition cited to cases where this Court
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`denied motions to stay based on the stage of the case factor in nearly identical circumstances as
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`those here. In Cummins-Allison Corp. v. SBM Co., Ltd., the Court denied a motion to stay based
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`on the stage of the case where the Markman hearing was four months away and trial was one year
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`away. No. 9:07-cv-196, 2008 WL 11348281, at *2 (E.D. Tex. May 21, 2008). In denying the stay,
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`the Court noted that “the Rules of Practice for Patent Cases in the Eastern District of Texas, as
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`well as this court’s Scheduling Order, require the parties to prepare for discovery early in the
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`litigation.” Id. Similarly, in Alacritech, Inc. v. CenturyLink, Inc., the Court denied the motion to
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`stay based on the stage of the case factor when trial was nine months away. No. 2:16-cv-00693,
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`2017 WL 4231459, at *2 (E.D. Tex. Sept. 22, 2017) (denying stay based on the stage of case
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`because a stay would “clearly affect the parties’ ability to prepare for trial”). As Maxell has
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`established, and Apple agrees, the parties have already engaged in “a significant amount of
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`discovery.” Reply at 5. Thus, the well-developed posture of the case weighs against a stay.
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`II.
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`CONCLUSION
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`For the reasons set forth above and in Maxell’s opposition brief, Maxell respectfully
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`requests that the Court deny Apple’s Motion to Stay all proceedings pending resolution of Apple’s
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`motion to transfer.
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`Dated: November 6, 2019
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`By:
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`/s/ Jamie B. Beaber
`Geoff Culbertson
`Kelly Tidwell
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`Case 5:19-cv-00036-RWS Document 120 Filed 11/08/19 Page 7 of 8 PageID #: 5301
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`Patton, Tidwell & Culbertson, LLP
`2800 Texas Boulevard (75503)
`Post Office Box 5398
`Texarkana, TX 75505-5398
`Telephone: (903) 792-7080
`Facsimile: (903) 792-8233
`gpc@texarkanalaw.com
`kbt@texarkanalaw.com
`
`Jamie B. Beaber
`Alan M. Grimaldi
`Kfir B. Levy
`James A. Fussell, III
`Baldine B. Paul
`Tiffany A. Miller
`Saqib J. Siddiqui
`Bryan C. Nese
`William J. Barrow
`Alison T. Gelsleichter
`Clark S. Bakewell
`MAYER BROWN LLP
`1999 K Street, NW
`Washington, DC 20006
`Telephone: (202) 263-3000
`Facsimile: (202) 263-3300
`jbeaber@mayerbrown.com
`agrimaldi@mayerbrown.com
`klevy@mayerbrown.com
`jfussell@mayerbrown.com
`bpaul@mayerbrown.com
`tmiller@mayerbrown.com
`ssiddiqui@mayerbrown.com
`bnese@mayerbrown.com
`wbarrow@mayerbrown.com
`agelsleichter@mayerbrown.com
`cbakewell@mayerbrown.com
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`Robert G. Pluta
`Amanda Streff Bonner
`MAYER BROWN LLP
`71 S. Wacker Drive
`Chicago, IL 60606
`(312) 782-0600
`rpluta@mayerbrown.com
`asbonner@mayerbrown.com
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`Counsel for Plaintiff Maxell, Ltd.
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`Case 5:19-cv-00036-RWS Document 120 Filed 11/08/19 Page 8 of 8 PageID #: 5302
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that all counsel of record who are deemed to have consented to
`electronic service are being served this 6th day of November, 2019, with a copy of this document
`via the Court’s electronic CM/ECF system.
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`/s/ Jamie B. Beaber
`Jamie B. Beaber
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`CERTIFICATE OF AUTHORIZATION TO FILE UNDER SEAL
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`The undersigned certifies that the foregoing document is authorized to be filed under seal
`pursuant to the Protective Order entered in this case.
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`/s/ Jamie B. Beaber
`Jamie B. Beaber
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