Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 1 of 19 PageID #: 9835
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` IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
`
`
`Plaintiff,
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`Defendant.
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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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`MAXELL, LTD.’S OPPOSITION TO APPLE INC.’S MOTION TO STAY PENDING
`DETERMINATION OF INTER PARTES REVIEW OF THE PATENTS-IN-SUIT
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 2 of 19 PageID #: 9836
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`Table of Contents
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`I. Legal Standard ....................................................................................................................... 2
`II.
`Analysis ............................................................................................................................... 2
`A.
`The Prejudice Factor Weighs Slightly Against Stay ................................................... 2
`B.
`The Stage of the Proceedings Weighs Strongly Against Stay..................................... 5
`1. Discovery is Largely Complete and Trial Has Been Set ............................................. 5
`2. Apple Unreasonably Delayed the Filing of its IPRs .................................................... 8
`C.
`Speculative Simplification of the Case Weighs Strongly Against Stay ..................... 9
`D.
`Apple’s Motion Should Be Denied With Prejudice ................................................... 12
`III. Conclusion ........................................................................................................................ 13
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 3 of 19 PageID #: 9837
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`TABLE OF AUTHORITIES
`
`
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`Page(s)
`
`Cases
`
`Chrimar Sys., Inc. v. Adtran, Inc.,
`No. 6:15-cv-618-JRG-JDL, 2016 WL 4080802 (E.D. Tex. Aug. 1, 2016) .............................10
`
`Danco, Inc. v. Lavelle Indus., Inc.,
`No. 5:16-cv-48-CMC, 2017 WL 1732024 (E.D. Tex. Jan. 25, 2017) .................................3, 10
`
`Fall Line Patents, LLC v. Am. Airlines Grp.,
`No. 6:17-cv-00202-RWS, 2018 WL 4169251 (E.D. Tex. May 21, 2018) ............................2, 9
`
`NFC Tech. LLC v. HTC Am., Inc.,
`No. 2:13-cv-1058, 2015 WL 1069111 (E.D. Tex. Mar. 11, 2015) ....................................3, 6, 7
`
`Peloton Interactive, Inc. v. Flywheel Sports, Inc.,
`No. 2:18-cv-00390-RWS-RSP, 2019 WL 3826051 (E.D. Tex. Aug. 14, 2019) .............4, 7, 11
`
`Realtime Data LLC v. Actian Corp.,
`No. 6:15-cv-463-RWS-JDL, 2016 WL 3277259 (E.D. Tex. June 14, 2016) ......................4, 10
`
`Saint Lawrence Commc’ns LLC v. ZTE Corp.,
`No. 2:15-cv-349-JRG, 2017 WL 3396399 (E.D. Tex. Jan. 17, 2017) .....................................11
`
`SAS Institute, Inc. v. Iancu,
`138 S. Ct. 1348 (2018) ...............................................................................................................7
`
`Stragent, LLC v. BMW of N. Am., LLC,
`No. 6:16-cv-446-RWS-KNM, 2017 WL 2839260 (E.D. Tex. Apr. 20, 2017) ..........................5
`
`Tessera Advanced Techs., Inc. v. Samsung Elecs. Co.,
`No. 2:17-cv-00671-JRG, 2018 WL 3472700 (E.D. Tex. July 19, 2018)...................................9
`
`TracBeam, L.L.C. v. T-Mobile US, Inc.,
`No. 6:14-cv-678, 2016 WL 9225574 (E.D. Tex. Mar. 29, 2016) ..............................................4
`
`Trover Grp., v. Dedicated Micros USA,
`No. 2:13-cv-1047-WCB, 2015 WL 1069179 (E.D. Tex. Mar. 11, 2015) ............................2, 10
`
`Uniloc 2017 LLC v. Samsung Elecs. Am., Inc., No. 2:19-cv-00259, 2020 WL
`1433960 (E.D. Tex. Mar. 24, 2020) ...........................................................................................5
`
`Statutes
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`35 U.S.C. § 314(b)(1) ......................................................................................................................3
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 4 of 19 PageID #: 9838
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`35 U.S.C. §315(b) ............................................................................................................................3
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`Other Authorities
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`37 C.F.R. § 42.107(b) ......................................................................................................................3
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`Gen. Plastic Indus. Co., v. Canon Kabushiki Kaisha,
`IPR2016-01357, Paper 19 (PTAB Sept. 6, 2017) ....................................................................11
`
`NHK Spring Co., v. Intri-Plex Techs., Inc.,
`IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) ....................................................................11
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`Sand Revolution II, LLC v. Continental Intermodal Group – Trucking LLC,
`IPR2019-01393, Paper 12 (PTAB Feb. 5, 2020) .....................................................................11
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`iii
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 5 of 19 PageID #: 9839
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`Apple’s goal throughout this litigation has been to avoid a fair trial by any means possible.
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`Beyond Apple’s attempts to subvert the case through abuse of the discovery process, this is at least
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`the fourth time Apple has explicitly sought to avoid or delay trial, every time on undeserving
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`grounds. Apple began with a superficial motion to dismiss. It continued with a motion to transfer
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`based on a non-disclosure agreement that had nothing to do with this case (after an earlier-filed
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`version of the motion that had even less). Apple’s third attempt to avoid trial was to seek relief
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`from the Federal Circuit by way of two petitions for mandamus.
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`Apple understands what a fair trial means for it—liability for willful infringement of valid
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`patents, and severe damages for having knowingly, willfully infringed Maxell’s patents since
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`2013. This latest attempt at avoiding trial is particularly egregious because Apple relies, in part,
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`on the delays caused by its own discovery misconduct.
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`But a stay is not appropriate. Apple waited until the last minute to complete its IPR
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`filings—waiting even until fact discovery was almost closed. And it will be another nearly six
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`months before it is known whether all the IPRs will even be instituted. Whether the IPRs may have
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`any impact on this case at all is completely speculative at this point. Still, in its never-ending search
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`for a way to avoid a fair trial, Apple wants to bring everything to a screeching halt anyway. But
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`Courts in this District do not typically grant stays based on speculation and Apple offers no basis
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`for departing from the Court’s established practice. Indeed, Apple essentially concedes a stay is
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`inappropriate at this time, declaring its intent to file a renewed motion if the IPRs are instituted—
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`an admission that this motion should be denied.
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`The parties, and the Court, have worked hard to get to the end of fact of discovery. Only a
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`limited number of issues remain to be addressed. It is time now to move forward on the merits of
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`the case, toward resolution—and towards a fair trial.
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`1
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 6 of 19 PageID #: 9840
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`I.
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`Legal Standard
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`District courts typically consider three factors when determining whether to grant a stay
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`pending inter partes review of patents-in-suit: (1) whether the stay will unduly prejudice the
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`nonmoving party, (2) whether the proceedings before the court have reached an advanced stage,
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`including whether discovery is complete and a trial date has been set, and (3) whether the stay
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`will likely result in simplifying the case before the court.” Fall Line Patents, LLC v. Am. Airlines
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`Grp., No. 6:17-cv-00202-RWS, 2018 WL 4169251, at *1 (E.D. Tex. May 21, 2018) (internal
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`citations omitted).
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`II.
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`Analysis
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`As shown below, each factor weighs against Apple’s requested stay.
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`A.
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`The Prejudice Factor Weighs Against Stay
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`Maxell is not a patent assertion entity and Apple’s attempts to paint Maxell as such are
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`improper. Maxell has also not admitted that it does not practice any of the Patents-in-Suit, but
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`rather stated that it has not evaluated its own products to make such determination.1 But most
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`importantly, Maxell disagrees that it will “not be prejudiced at all by a stay.” Mot. at 3. Monetary
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`damages, particularly money damages delayed by years if Apple’s request for stay is granted, are
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`not sufficient to adequately compensate Maxell for the harm Apple has created for years now.
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`Moreover, Maxell licenses its patent portfolio to competitors of Apple and has a financial interest
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`in their sales, which are necessarily impacted by an unlicensed competitor. See D.I. 66 at 22.
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`Patentees like Maxell have an interest in timely vindication of their patent rights. Courts
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`have recognized that this consideration is entitled weight. See, e.g., Trover Grp., v. Dedicated
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`Micros USA, No. 2:13-cv-1047-WCB, 2015 WL 1069179, at *2 (E.D. Tex. Mar. 11, 2015); see
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`1 The cited argument from Maxell’s Opposition to Apple’s Motion to Transfer does not state otherwise. D.I. 66 at
`22. Maxell was responding to an argument made by Apple, not admitting that Apple’s argument was correct.
`2
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 7 of 19 PageID #: 9841
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`also Danco, Inc. v. Lavelle Indus., Inc., No. 5:16-cv-48-CMC, 2017 WL 1732024, at *2 (E.D. Tex.
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`Jan. 25, 2017). Indeed, this is the same position the Court took in the case Apple cited in its brief.
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`Mot. at 3-4 (citing NFC Tech. LLC v. HTC Am., Inc., No. 2:13-cv-1058, 2015 WL 1069111, at *2
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`(E.D. Tex. Mar. 11, 2015)). NFC did not find there was no prejudice because the parties were not
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`competitors, as Apple represents. Mot. at 3-4. Rather, the Court held that a “delay in the vindication
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`of patent rights … is present in every case in which a patentee resists a stay, and it is therefore not
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`sufficient, standing alone, to defeat a stay motion.” NFC, 2015 WL 1069111, at *2. Even in NFC,
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`where the plaintiff did not dispute that monetary relief was sufficient compensation for its injury,
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`the Court held that the factor “cuts slightly against a stay.” Id. at *3.
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`Here the factor cuts strongly against a stay. Maxell does contest whether monetary
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`damages alone are sufficient, as set forth above. Moreover, Maxell’s prejudice is amplified
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`because Apple waited until the second to last possible day to file the final of its IPR petitions.2
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`Even the earliest of Apple’s IPR petitions were filed in late December, with Apple waiting three
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`additional months before moving for a stay in view of its pending IPRs.3
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`Despite its arguments to the contrary, Apple does not propose a short stay that will cause
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`minimal delay, as a short stay would not be in line with Apple’s attempts to avoid a fair trial. In
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`actuality, any stay based on the filing of the IPRs would in turn create an extreme delay of the case
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`due to a loss of the currently scheduled trial date. For example, a decision on institution for the last
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`of the IPRs (for the asserted ’493 Patent) is not expected until September 25, 2020, only a month
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`before the scheduled trial date.4 Mot. at 2; 35 U.S.C. § 314(b)(1); 37 C.F.R. § 42.107(b). Assuming
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`2 Apple was served with the Complaint in this case on March 18, 2019. D.I. 19. Apple filed its IPR petition for the
`asserted ’493 Patent on March 17, 2020—one day before the statutory year deadline. Mot. at 2; 35 U.S.C. §315(b).
`3 Apple clearly knew as of December 20, 2019 it would file IPRs on all of the patents-in-suit, yet trickled out its
`filings over the next three months. See Ex. A, IPR2020-00204, Paper 1, at 46 (PTAB December 20, 2019).
`4 Because Apple requests a stay pending resolution of all filed IPRs, it is appropriate to use Apple’s last-filed IPR to
`provide an expected timeline to resolution.
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`3
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`institution, the PTAB would not provide its final written decision until late September 2021—
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`almost a full year after the trial would have concluded. Indeed, even the earliest of final written
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`decisions, if the earliest-filed IPR is instituted, would not issue until eight months after the
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`currently scheduled trial. And that is in the absence of any appeal.5 In 2019, the median time to
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`disposition for Federal Circuit appeals from the USPTO was 15.0 months. Ex. B (Median Time to
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`Disposition in Cases Terminated After Hearing or Submission).6 If any appeal were taken for any
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`IPR decision, and this case is stayed pending final resolution of the IPRs, this case would not likely
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`resume until December 2022. Apple will have successfully avoided a fair trial for two years beyond
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`the currently scheduled trial date.
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`Where a party waited until the final days to file IPRs and/or the stay would significantly
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`delay resolution of the case, the Court has found the factor to weigh against a stay. See, e.g.,
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`TracBeam, L.L.C. v. T-Mobile US, Inc., No. 6:14-cv-678, 2016 WL 9225574, at *1 (E.D. Tex.
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`Mar. 29, 2016); Peloton Interactive, Inc. v. Flywheel Sports, Inc., No. 2:18-cv-00390-RWS-RSP,
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`2019 WL 3826051, at *4 (E.D. Tex. Aug. 14, 2019); Realtime Data LLC v. Actian Corp., No.
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`6:15-cv-463-RWS-JDL, 2016 WL 3277259, at *2 (E.D. Tex. June 14, 2016).
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`The timing of when Maxell brought the instant lawsuit against Apple does not demonstrate
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`that Maxell would not be prejudiced by a stay. Rather it shows the opposite, that Maxell would be
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`prejudiced. Maxell began licensing negotiations with Apple regarding its patents (including
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`several Asserted Patents) in 2013. Those discussions continued in some form or another until it
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`was completely clear that Apple would continue to infringe unless ordered to pay. At that point,
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`5 Apple has shown it cannot accept this Court’s orders, having already sought mandamus relief from the Federal
`Circuit. There is no doubt Apple would seek relief from the Federal Circuit for any order it does not like from the
`PTAB as well.
`6 Available at http://www.cafc.uscourts.gov/sites/default/files/the-
`court/statistics/06_Med_Disp_Time_MERITS_table_Final.pdf.
`4
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 9 of 19 PageID #: 9843
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`Maxell filed this lawsuit. See, e.g., D.I. 1 (Complaint) ¶ 5. During that time, Maxell was also taking
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`substantive steps to enforce its patent rights against others, including through the filing of over 10
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`lawsuits regarding the same asserted patents, patents from the same families, and/or patents from
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`Maxell’s smartphone portfolio. Maxell even took one case to trial. It can hardly be inferred that
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`Maxell has just sat idly on its patent rights.
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`B.
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`The Stage of the Proceedings Weighs Strongly Against Stay
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`This factor includes two sub-factors: “(1) whether discovery is complete and whether a
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`trial date has been set; and (2) whether the movant has unreasonably delayed filing its IPR petition
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`and motion to stay.” Stragent, LLC v. BMW of N. Am., LLC, No. 6:16-cv-446-RWS-KNM, 2017
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`WL 2839260, at *2 (E.D. Tex. Apr. 20, 2017) (citing SSL Servs., LLC v. Cisco Sys., Inc., No. 2:15-
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`cv-433-JRG-RSP, 2016 WL 3523871, at *1 (E.D. Tex. June 28, 2016)).
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`1.
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`Discovery is Largely Complete and Trial Has Been Set
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`The instant case is not in its infancy. Far from it, fact discovery closed one week after
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`Apple filed its motion, with the exception of depositions delayed just three weeks due to COVID-
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`19. The Court and the parties have invested significant time and effort into this case. The Court
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`has issued a Markman order. Moreover, jury selection and trial are scheduled to begin on October
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`26, 2020. Courts have found this factor to weigh against stay even when the motion for stay is
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`made much earlier in the case. See, e.g., Uniloc 2017 LLC v. Samsung Elecs. Am., Inc., No. 2:19-
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`cv-00259, 2020 WL 1433960, at *5 (E.D. Tex. Mar. 24, 2020) (holding that the factor leaned
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`slightly against a stay even when months in fact discovery remained).
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`Nevertheless, Apple argues that, though the fact discovery deadline has passed, depositions
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`(postposed only due to COVID-19 concerns) remain to be taken and that there are “a number of
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`pending discovery requests and disputes.” Mot. at 4. Such argument offers, perhaps, additional
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`insight into why Apple has been delaying discovery throughout the pendency of this case. By
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 10 of 19 PageID #: 9844
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`pushing off productions and responses to Maxell’s requests until the end of the fact discovery
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`period, and consequently drawing out the pendency of Maxell’s motions to compel past the end of
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`the period, Apple has been able to create for itself this argument in favor of a stay. Apple also
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`delayed when its witnesses would be available for deposition, scheduling the vast majority of them
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`for just the last three weeks of discovery despite having been served a 30(b)(6) notice for
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`deposition last October. Apple should not be permitted to manipulate the schedule in this way.7
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`The fact discovery period is over. That a relatively discrete set of discovery issues remain to be
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`addressed does not negate that the case is at an advanced stage or somehow weigh in favor of a
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`stay.
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`Apple’s primary argument, however, appears to be that, because trial is seven months
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`away, “the bulk of the expenses that the parties would incur . . . are still in the future,” and thus
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`that this factor favors a stay. Mot. at 4 (citing NFC, 2015 WL 1069111, at *3). There are substantial
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`flaws in this argument, and particularly in Apple’s characterization of the facts. The first problem
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`is that Apple asserts this factor “strongly favors a stay” when the Court in NFC found that the state
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`of the litigation (there, a month remaining in fact discovery and pre-Markman hearing) was
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`“neutral, or, at most, cuts slightly against the issuance of a stay.” NFC, 2015 WL 1069111, at *4
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`(emphasis added). How Apple relies on a decision finding this factor to be neutral/slightly cutting
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`against stay and applies it to the instant case, which is further along, to say the factor “strongly
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`favors granting a stay” is a mystery.
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`Moreover, the decision in NFC was rendered after the IPRs related to that case were
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`7 Apple also recently flipped positions on the feasibility of remote depositions in this case. Although Apple proposed
`to the Court that the remaining depositions should be conducted remotely using video-conference technology, Apple
`now asserts that remote depositions are not an adequate option for the technical witnesses and that further extension
`of the date for depositions is necessary. This is no doubt in part to further support its argument that a stay of the case
`is appropriate—furthering Apple’s goal of avoiding a fair trial.
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 11 of 19 PageID #: 9845
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`instituted. There was thus a belief in that case that some simplification would result. Here, no
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`such expectation exists. This is particularly true given the decision in NFC was rendered in 2015.
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`In 2018, SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018) (hereinafter “SAS”) held that the
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`PTAB was precluded from instituting IPRs for only a portion of the patent claims. Pre-SAS
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`institution decisions were generally considered to be a fairly strong indicator that the IPRs would
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`simplify issues. See Peloton, 2019 WL 3826051, at *2 (“[A]ny institution decision occurring after
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`SAS provides a weaker inference that the PTAB will determine that all challenged claims are
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`unpatentable.” (emphasis added)).
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`Institution decisions have not been issued. They are not even expected on all the IPRs until
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`September 2020. At that point, the parties will already have exchanged pretrial disclosures and
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`attended the hearing on dispositive motions. In other words, by the time there will be any indication
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`from the PTAB on whether some simplification may be expected, the parties will have already
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`made significant expenditures on pre-trial preparation. Indeed, the Court in NFC directly
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`acknowledged this dichotomy:
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`While the PTAB’s decision to institute inter partes review ordinarily means that
`there is a substantial likelihood of simplification of the district court litigation, that
`likelihood is far more speculative before the PTAB decides whether to institute
`inter partes review. For that reason, the grant of inter partes review has been
`treated as a highly significant factor in the courts’ determination of whether to stay
`cases pending PTAB review. Thus, it is important to the Court’s decision that in
`this case the PTAB has acted on two of the defendants’ three petitions for inter
`partes review and in doing so has instituted inter partes review proceedings on most
`of the claim at issue in this case.
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`NFC, 2015 WL 1069111 at *4 (emphasis added).
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`
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`Moreover, the parties have in fact expended substantial resources in the work done on the
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`case thus far. The suggestion that the parties have yet to incur the bulk of their expenses ignores
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`all the work to date. Maxell, at least, has incurred significant costs in (1) briefing and arguing the
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`many motions Apple has filed; (2) preparing and providing witnesses for deposition, including
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`many who traveled from Japan for their depositions; (3) working through Apple’s piece-meal
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`production of documents and source code, including several rounds of review and re-review of
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`code; (4) seeking the Court’s help in enforcing the discovery rules when Apple ignored them,
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`which included not only briefing and argument, but massive efforts related to identifying (over
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`and over again) the general and specific discovery deficiencies in letters and during numerous meet
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`and confer meetings and telephonic conferences; (5) briefing and arguing the claim construction
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`positions, including also the costs associated with the expert declarations and depositions; and (6)
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`working with experts on the expert reports, which includes the substantial costs related to the
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`experts’ fees and their travel to review source code and other materials. Perhaps Apple has not
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`done as much as Maxell on this case, or perhaps Apple has found some way to do this without
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`incurring such considerable expenses, but Maxell takes great issue with Apple’s statement that the
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`parties have yet to incur the bulk of their expenses.
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`Given the foregoing, the fact that pre-trial preparations still remain does not in any way
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`counsel in favor of a stay.
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`2.
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`Apple Unreasonably Delayed the Filing of its IPRs
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`While Apple filed its IPRs within the statutory time limits, filing a petition on the second
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`to last possible day cannot constitute “diligent” behavior or negate a concern for unreasonable
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`delay. Indeed, if merely filing an IPR within the statutory deadline were enough to avoid a claim
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`of unreasonable delay, this sub-factor would be rendered completely superfluous.
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`Knowing that it is extremely weak on this factor, Apple attempts to gain ground by arguing
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`that it moved quickly after Maxell made its preliminary election of asserted claims. Apple,
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`however, could have filed its IPRs long before this preliminary election. In June 2019, Maxell
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`identified 90 asserted claims, averaging just 9 per patent. Apple prepared its invalidity contentions
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`in this case in August 2019 based on Maxell’s then-asserted claims. Apple could just as easily
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 13 of 19 PageID #: 9847
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`prepared IPRs directed to each claim as well. Instead, Apple waited. In fact, Apple waited up to
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`nine months after receiving Maxell’s infringement contentions to file its IPRs. And when it finally
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`did file, Apple did not narrow its IPRs challenge to Maxell’s preliminary elected claims, but rather
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`filed on 86 of the 90 originally asserted claims. Miller Declaration ¶ 4. This alone shows the flaw
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`in Apple’s argument.
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`Apple’s delay has been deemed more than long enough to weigh against a stay. See, e.g.,
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`Tessera Advanced Techs., Inc. v. Samsung Elecs. Co., No. 2:17-cv-00671-JRG, 2018 WL
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`3472700, at *3 (E.D. Tex. July 19, 2018) (“Samsung waited nine months from the initiation of
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`these proceedings and five months after service of infringement contentions to move for a stay.
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`Samsung’s actions here, in conjunction with Samsung’s Motion to Stay Proceedings Pending
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`Arbitration … appear to be yet another attempt to draw out these proceedings. Accordingly… the
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`Court finds that this factor weighs strongly against a stay.”). Moreover, Apple offers no
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`explanation for why it filed six of its ten IPRs in December 2019 but delayed the filing of its final
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`IPR (on the ’493 Patent) by an additional three months, during which time discovery progressed
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`almost to completion. Again, Apple’s actions reveal its true motivation—to avoid a fair trial.
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`C.
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`Speculative Simplification of the Case Weighs Strongly Against Stay
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`Apple filed its IPRs on the Asserted Patents between December 2019 and March 2020
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`(between ten and twelve months after Maxell filed its Complaint). The PTAB has yet to render
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`any institution decisions. Institution decisions for even the first-filed IPRs are not expected until
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`late June 2020 at the earliest. “[T]his Court traditionally denies motions to stay when the PTAB
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`has yet to institute post-grant proceedings.” Fall Line Patents, 2018 WL 4169251, at *1 (E.D. Tex.
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`May 21, 2018) (“This Court’s survey of cases from the Eastern District of Texas shows that when
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`the PTAB has not yet acted on a petition for inter partes review, the courts have uniformly denied
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`motions for a stay.” (quoting Trover Grp., 2015 WL 1069179, at *6)). Specifically, courts have
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 14 of 19 PageID #: 9848
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`recognized that, before the PTAB has granted any petitions, any assertion that the PTAB will
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`invalidate claims—and therefore simplify issues—is purely speculative. See, e.g., Realtime Data,
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`2016 WL 3277259, at *2; Danco, 2017 WL 1732024, at *2; Chrimar Sys., Inc. v. Adtran, Inc., No.
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`6:15-cv-618-JRG-JDL, 2016 WL 4080802, at *3 (E.D. Tex. Aug. 1, 2016).
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`Apple’s attempt to minimize the speculative nature of its request by pointing to cases from
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`different districts and general statistics is unavailing. That other districts, whose cases move
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`slower, may be willing to grant stays pre-institution does not demand that the Eastern District of
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`Texas depart from its established practice. Moreover, statistics that 2/3 of petitions in a particular
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`field may be granted, or even that 72% of Apple’s petitions may be granted, do little to combat the
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`speculative nature here. See, e.g., Trover Grp., 2015 WL 1069179, at *4 (stating it would be
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`speculative for the Court to extrapolate from statistics and conclude institution is likely because
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`“the overall statistics for the number of petitions that are reviewed and the number of claims that
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`are invalidated are not especially enlightening as to the likely disposition of any particular patents
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`or claims, since the likelihood of invalidation depends entirely on the particulars of the patents and
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`claims in dispute.”). Even applying Apple’s numbers, it is statistically probable that three patents
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`will not be subject to an IPR and will have no resultant simplification. Moreover, in practice, IPRs
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`against Maxell’s patents have been much less successful than the average. Looking to past IPRs
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`filed against Maxell patents, of the 15 that made it to the institution stage (meaning received some
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`institution decision from the PTAB), nine (60%) were denied institution—including four of the
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`same patents on which Apple filed IPRs. Ex. C (Lex Machina Overview of PTAB Trials filed
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`against Maxell patents). Utilizing that statistic, more than half of the Asserted Patents would be
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`unlikely to have any simplification. Simply put, there is no “fair inference” here that issues will be
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`simplified at all, much less enough to warrant a stay of this case.
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 15 of 19 PageID #: 9849
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`Moreover, the advanced stage of this litigation as compared to Apple’s IPRs actually makes
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`it less likely that the IPRs will be instituted. Under similar facts—where there is a co-pending
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`District Court action that (1) involves the same, or substantially the same prior art, and (2) will be
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`complete well before a Final Written Decision is expected to issue in the IPR—the PTAB has
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`denied institution. See, e.g., NHK Spring Co., v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8
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`(PTAB Sept. 12, 2018); Sand Revolution II, LLC v. Cont’l Intermodal Group – Trucking LLC,
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`IPR2019-01393, Paper 12 (PTAB Feb. 5, 2020); see also Gen. Plastic Indus. Co., v. Canon
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`Kabushiki Kaisha, IPR2016-01357, Paper 19 at 16-17 (PTAB Sept. 6, 2017) (noting that one of
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`the purposes of IPRs is to be an “effective and efficient alternative” to litigation). Given the
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`PTAB’s demonstrated willingness to deny institutions in cases such as this one, there is no basis
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`on which to assume the IPRs will be instituted. Without a basis for such assumption, there is also
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`no basis for Apple’s argument of likely simplification.
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`Furthermore, Apple’s IPR petitions address neither the 35 U.S.C. § 112 issues,8 nor the
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`invalidity arguments under § 101 that Apple has raised in this case. Courts in this District have
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`held that where a defendant’s invalidity theories exceed the scope of a pending IPR (like here),
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`such IPRs will have a “negligible impact on potentially streamlining the case.” Saint Lawrence
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`Commc’ns LLC v. ZTE Corp., No. 2:15-cv-349-JRG, 2017 WL 3396399, at *2 (E.D. Tex. Jan. 17,
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`2017); see also, e.g., Peloton, 2019 WL 3826051, at *3.
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`Apple also does not address the fact that a stay, particularly one that goes until December
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`2022, would actually introduce new issues into the case. Between now and December 2022, it is
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`certain that Apple will release new products (e.g., new iPhones, iPads, Apple Watches, and
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`Macbooks), as well as new operating systems for existing accused products. Given the likelihood
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`8 Given Apple’s recent motion seeking to compel Maxell provide support for enablement and written description for
`all asserted claim elements, Apple clearly still intends to raise these issues in this case. D.I. 224.
`11
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`Case 5:19-cv-00036-RWS Document 267 Filed 04/07/20 Page 16 of 19 PageID #: 9850
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`that such new systems and products will continue to infringe the Asserted Patents in similar ways
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`as the current accused systems and products, they will need to be added to the case once the stay
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`is lifted.9 The addition of new operating systems and products would require that fact discovery
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`be reopened, that Apple collect and produce new documents and source code relating to the new
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`systems, products and implicated components, and that Apple update all discovery responses to
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`address such products. And this does not even address the possibility that Apple introduces new
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`infringing features into its devices. Given that Apple was still providing this material and
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`information in March 2020 for products and operating systems it introduced in September 2019,
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`it is clear that this is no small task. Indeed, Apple itself admits that “[d]iscovery in this case has
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`already been and is expected to continue to be complex and expensive.” Mot. at 8. Thus, while
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`there is a slim, speculative chance that a stay would streamline some invalidity issues, there is a
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`greater likelihood—almost a certainty—that a stay will multiply the proceedings as they relate to
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`discovery and infringement.
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`D.
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`Apple’s Motion Should Be Denied With Prejudice
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`Recognizing that Courts in this District do not typically grant a stay before institution of
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`an IPR, Apple requests the Court deny the Motion without prejudice with leave to renew upon the
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`PTAB’s issuance of institution decisions. Maxell opposes this request. For all its discussion of
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`increasing efficiency for the parties and the Court, Apple’s insistence on re-litigating issues
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`accomplishes just the opposite. The PTAB is not likely