Case 5:19-cv-00036-RWS Document 37 Filed 06/13/19 Page 1 of 9 PageID #: 412
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
`
`MAXELL, LTD.,
`
`
`
`Plaintiff,
`
`
`
`
`
`vs.
`
`APPLE INC.,
`
`
`
`
`
`Defendant.
`
` Civil Action No. 5:19-cv-00036-RWS
`
`
`JURY TRIAL DEMANDED
`
`DEFENDANT APPLE INC.’S REPLY IN SUPPORT OF ITS MOTION FOR PARTIAL
`DISMISSAL OF PLAINTIFF’S COMPLAINT FOR FAILURE TO STATE A CLAIM
`
`
`
`
`
`
`
`
`
`
`

`

`Case 5:19-cv-00036-RWS Document 37 Filed 06/13/19 Page 2 of 9 PageID #: 413
`
`TABLE OF AUTHORITIES
`
`Pages
`
`I.
`
`II.
`
`INTRODUCTION .............................................................................................................. 1
`
`ARGUMENT ...................................................................................................................... 1
`
`A.
`
`B.
`
`C.
`
`Maxell’s Broad Citations to Apple’s Website Do Not Plausibly Show
`Apple’s Specific Intent to Induce Infringement ...................................................... 1
`
`Maxell Cannot Supplement Its Insufficient Allegations of Pre-Suit
`Knowledge of the ’586 Patent Through Briefing ................................................... 3
`
`Maxell Cannot Supplement Its Insufficient Allegations of Pre-Suit
`Knowledge of Infringement Through Briefing ....................................................... 4
`
`III.
`
`CONCLUSION ................................................................................................................... 5
`
`
`
`
`
`

`

`Case 5:19-cv-00036-RWS Document 37 Filed 06/13/19 Page 3 of 9 PageID #: 414
`
`
`
`I.
`
`INTRODUCTION
`
`Maxell does not credibly dispute that its Complaint fails to sufficiently allege facts to
`
`support its claims of pre-suit indirect and willful infringement. Instead, Maxell devotes much of
`
`its Opposition to trying to supplement its Complaint with new allegations and explanations.
`
`However, because it is black-letter law that consideration of a motion to dismiss under Rule
`
`12(b)(6) is limited to the pleadings, Maxell cannot rely on these post hoc supplements to save it
`
`now, and the Court should dismiss Maxell’s pre-suit indirect and willful infringement claims.1
`
`II.
`
`ARGUMENT
`
`A. Maxell’s Broad Citations to Apple’s Website Do Not Plausibly Show Apple’s
`Specific Intent to Induce Infringement
`
`Maxell’s generic references to Apple’s website do not show that Apple specifically
`
`intended to induce its customers to infringe any Maxell patent, particularly given that Maxell
`
`asserts 10 patents related to technologies ranging from navigation to power management. It is not
`
`enough, as Maxell argues, to have identified a high-level functionality associated with each
`
`asserted patent and a link to a webpage vaguely relating to that functionality. Opp. at 5.
`
`Even a cursory review of the Complaint belies Maxell’s characterizations of its citations
`
`as “exact” and “tailored” to each patent. Opp. at 4-5. For example, in its boilerplate alleging
`
`specific intent for each Asserted Patent, Maxell alleges that Apple instructs customers through
`
`“user guides” available at https://support.apple.com/en_US/manuals. Complaint at ¶¶ 27, 41, 56,
`
`
`1 Maxell attempts to reserve a right to amend the Complaint with one paragraph in its response
`(see Opp. at 13), but has not meaningfully demonstrated why it should be permitted to do so.
`Maxell could have pleaded all of the allegations it now offers in its response but chose not to.
`And Maxell could have sought leave to amend but chose not to. Allowing Maxell to benefit
`from this strategic withholding of alleged facts will unduly delay the case and cause prejudice to
`Apple. See GSS Props., Inc. v. Kendale Shopping Center, Inc., 119 F.R.D. 379 (M.D.N.C. 1988)
`(“Parties have an obligation to introduce, at the earliest stage of the litigation as possible, the
`matters upon which they want to rely in supporting their claim or defense”) (citing 6 C. Wright
`& A. Miller, Federal Practice and Procedure, § 1488 at 444 (1971)).
`
`
`
`

`

`Case 5:19-cv-00036-RWS Document 37 Filed 06/13/19 Page 4 of 9 PageID #: 415
`
`
`
`69, 86, 99, 112, 129, 142, 157. These paragraphs, however, reference the main Apple web page
`
`for its manuals, which contains links to 1,178 instruction manuals (one for every Apple product,
`
`accused or not) and encompasses (unsurprisingly) tens of thousands of pages of materials.
`
`The same allegations also reference links to webpages that broadly describe accused
`
`applications, but these too are hardly “tailored.” For example, Maxell describes the claimed
`
`functionality of the ’317 patent as “displaying positions of a destination and a present place, and a
`
`relation of said direction and a direction from said present place to said destination” and “changing
`
`the display according to a change of said direction of said portable terminal orientation for walking
`
`navigation.” Complaint at ¶ 20 (internal quotations omitted). But in attempting to allege specific
`
`intent, Maxell cites the “Maps” landing page (id. at ¶¶ 27), which describes all of the functionality
`
`offered by Maps, including, e.g., spoken directions, 3D views, destination suggestions, and lane
`
`guidance. See https://www.apple.com/ios/maps/. Maxell never identifies any statements on this
`
`webpage that purport to induce customers to infringe or even relate to the claimed functionality of
`
`the ’317 patent at all. Indeed, this webpage only provides feature descriptions; it neither directs
`
`nor instruct users to do anything. Apple is left to guess what Maxell’s theory of specific intent is,
`
`because, just as in Stragent, LLC v. BMW of N. Am., LLC, Maxell has failed “to allege how the
`
`instructions direct customers to use those products in an infringing manner.” No. 6:16-cv-446-
`
`RWS-KNM, 2017 U.S. Dist. LEXIS 156084, at *25 (E.D. Tex. Mar. 3, 2017).
`
`Maxell’s failure to distinguish Core Wireless Licensing S.A.R.L. v. Apple Inc., No. 6:14-
`
`cv-JRG-JDL, 2015 U.S. Dist. LEXIS 107354 (E.D. Tex. Jul. 15, 2015) is telling. Maxell argues
`
`that unlike its Complaint, the Core Wireless complaint failed to “identify even which functions”
`
`were at issue. Opp. at 7. But Maxell’s citations to high-level landing pages for accused
`
`applications that discuss myriad features for those applications and to all Apple manuals fare no
`
`2
`
`

`

`Case 5:19-cv-00036-RWS Document 37 Filed 06/13/19 Page 5 of 9 PageID #: 416
`
`
`
`better. It is insufficient to broadly allege that there is a website that may or may not contain some
`
`encouragement or instruction that is relevant to an Asserted Patent. See Cevallos v. Silva, 541 Fed.
`
`Appx. 390, 392 (5th Cir. 2013) (non-precedential) (dismissing claim if allegations only allow the
`
`court to infer “the mere possibility of misconduct”) (citing Ashcroft v. Iqbal, 556 U.S. 662, 679
`
`(2009)).
`
`Unable to save its inducement allegations, Maxell tries to supplement them with unpled
`
`and irrelevant allegations. Maxell now argues that it has shown Apple’s specific intent by alleging
`
`that Apple directly infringes—e.g., a screenshot of the Find My Friends app as purported evidence
`
`of infringement of the ’317 patent. Opp. at 5-6 (citing Complaint at ¶ 24). But Maxell cannot
`
`explain, nor does it allege in its Complaint, how these direct infringement allegations demonstrate
`
`Apple’s specific intent to induce infringement by third parties.2
`
`B. Maxell Cannot Supplement Its Insufficient Allegations of Pre-Suit
`Knowledge of the ’586 Patent Through Briefing
`
`Maxell’s Opposition confirms that it could not have provided actual notice of the ’586
`
`patent on October 9, 2018, as alleged in the Complaint, because the patent did not even exist on
`
`that date. However, Maxell tries another post hoc “fix” by offering new allegations in its
`
`Opposition. Indeed, Maxell now alleges, inconsistently and for the first time, that in addition to
`
`telling Apple on October 19, 20183 about the application that led to the ’586 Patent, it also told
`
`Apple that the PTO had allowed the application, but that Maxell was still making edits to correct
`
`“typographical errors.” Opp. at 7-8. These new “allegations” are irrelevant because they are not
`
`
`2 Maxell does not even allege that Find My Friends is evidence of induced infringement. See
`Complaint at ¶ 27 (citing Manuals and Maps landing page, but nothing related to Find My
`Friends).
`3 The Opposition and Complaint are inconsistent. The Complaint alleges that Apple was on
`notice of the ’586 Patent since October 9, 2018, but the Opposition claims that Maxell told Apple
`about the application on October 19, 2018. Compare Complaint at ¶ 145 and Opp. at 7-8.
`
`3
`
`

`

`Case 5:19-cv-00036-RWS Document 37 Filed 06/13/19 Page 6 of 9 PageID #: 417
`
`
`
`in the Complaint. See Martin v. Morgan Drive Away, Inc., 665 F.2d 598, 602 n.l (5th Cir. 1982)
`
`(holding that the trial court “could not look beyond the face of the pleadings” on a motion to
`
`dismiss under Rule 12(b)(6)).
`
`Even if they were in the Complaint, Maxell still fails to plausibly allege Apple’s pre-suit
`
`knowledge of the ’586 patent. As this Court held in Diamond Grading v. Techs. v. Am. Gem Soc’y,
`
`even when claim scope does not change between an alleged pre-issuance date (here, October 9,
`
`2018) and the issue date (here, February 19, 2019), the scope of such claims “is not foreseeable ex
`
`ante.” No. 2:14-cv-1161-RWS-RSP, 2016 U.S. Dist. LEXIS 105697, at *5-6 (E.D. Tex. Mar. 30,
`
`2016). For example, notwithstanding Maxell’s alleged representations about the prosecution status
`
`in October 2018, it could have continued to amend the then-pending claims, making it impossible
`
`for Apple to foresee the claims’ scope. See id.
`
`Apple is not—as Maxell argues—proposing a “bright line rule” that forbids pre-suit
`
`knowledge of a yet-to-be-issued patent in all circumstances. Rather, Apple submits that Maxell’s
`
`notice allegation in its Complaint—“Apple has been on notice” as of a pre-issuance date and
`
`nothing else—is implausible on its face. This case is not like Copa Italia S.P.A. v. Puritan Med.
`
`Prods. Co. LLC, where the plaintiff alleged not only a notice date, but “other facts,” such as that
`
`the defendant had reviewed the relevant patent application and the parties were “competitors in
`
`what is a specialized market.” 1:18-cv-00218-JDL, 2018 U.S. Dist. LEXIS 191927, at *9 (D. Me.
`
`Nov. 9, 2018). Maxell’s Complaint alleges no such “other facts” that would plausibly support an
`
`inference Apple knew of the yet-to-be-issued ’586 patent in October 2018. Accordingly, Maxell’s
`
`pre-suit indirect and willful infringement claims for the ’586 Patent are insufficiently pleaded.
`
`C. Maxell Cannot Supplement Its Insufficient Allegations of Pre-Suit
`Knowledge of Infringement Through Briefing
`
`Maxell again tries to save its Complaint through its Opposition by offering new allegations
`
`4
`
`

`

`Case 5:19-cv-00036-RWS Document 37 Filed 06/13/19 Page 7 of 9 PageID #: 418
`
`
`
`of Apple’s pre-suit knowledge of infringement. Indeed, Maxell now alleges that, “in many
`
`instances,” it identified “how certain Apple products infringed [its] patents through detailed
`
`explanations (including claim charts).” Opp. at 10-11. There is no such allegation in the
`
`Complaint for any patent. Maxell also now “alleges” for the first time that it provided a
`
`“presentation” regarding the ’317, ’999, ’498, and ’493 patents on June 25, 2013. Id. at 11. Even
`
`if this vague allegation was in its Complaint (it was not), it is still insufficient because Maxell does
`
`not allege this “presentation” included any information about Apple’s alleged infringement for any
`
`product accused in this case.
`
`Deere & Co. v. AGCO Corp. is therefore still the most analogous case. No. 18-827-CFC,
`
`2019 U.S. Dist. LEXIS 25885 (D. Del. Feb. 19, 2019). And that the Maxell and Apple negotiations
`
`allegedly “involved Apple and its products directly” does not avoid Deere. Opp. at 13. Indeed,
`
`like Deere, Maxell fails to plausibly allege, or allege at all—in the Complaint—what happened at
`
`any meetings or in any communications, what products were allegedly discussed, or how any
`
`infringement allegations were allegedly communicated. The only plausible inference that can be
`
`drawn from the vague references to “numerous meetings and interactions” included in the
`
`Complaint is that Apple was told of the existence of at least some of the Asserted Patents. This is
`
`exactly what was found insufficient in Deere. See 2019 U.S. Dist. LEXIS 25885, at *15-16 (noting
`
`that the pleadings did not allege that a pre-suit notice letter stated or explained how the accused
`
`products infringed). Because Maxell failed to plead Apple’s pre-suit knowledge of infringement,
`
`its claims for pre-suit indirect and willful infringement should be dismissed.
`
`III. CONCLUSION
`
`For the foregoing reasons, Apple respectfully requests the Court grant Apple’s motion.
`
`5
`
`

`

`Case 5:19-cv-00036-RWS Document 37 Filed 06/13/19 Page 8 of 9 PageID #: 419
`
`
`
`June 13, 2019
`
`
`/s/ Melissa R. Smith
`
`
`
`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
`
`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
`
`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
`
`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
`
`Attorneys for Defendant Apple Inc.
`
`6
`
`
`
`
`
`

`

`Case 5:19-cv-00036-RWS Document 37 Filed 06/13/19 Page 9 of 9 PageID #: 420
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that all counsel of record who are deemed to have
`
`consented to electronic service are being served with a copy of this document via the Court's
`
`CM/ECF system per Local Rule CV-5(a)(3) on June 13, 2019.
`
`
`
`
`
`
`
`
`
` /s/ Melissa R. Smith
` Melissa R. Smith
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`7
`
`