Case 5:19-cv-00036-RWS Document 587 Filed 11/17/20 Page 1 of 6 PageID #: 31166
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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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`v.
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`APPLE INC,
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`Defendant.
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`CIVIL ACTION NO. 5:19-CV-00036-RWS
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`ORDER
`Before the Court is Apple’s Renewed Motion to Stay Pending Determination of Inter
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`Partes Review of the Patents-in-Suit (Docket No. 481). For the reasons set forth below, Apple’s
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`motion is DENIED.
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`I.
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`Background
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`Maxell filed its initial complaint on March 15, 2019, alleging that Apple’s products
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`infringed ten patents.1 Docket No. 11. Jury selection and trial were set to begin on December 7,
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`2020, but the Court has continued the trial to a date to be set soon. Docket No. 502. Apple has
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`petitioned the Patent Trial and Appeal Board (“PTAB”) for inter partes review (“IPR”) of all
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`asserted claims of the 10 patents-in-suit. Docket No. 481 at 3. Apple filed petitions for the ’438,
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`’991, ’794 and ’586 patents on December 19, 2019; for the ’193 and ’306 patents on December
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`20, 2019; for the ’317, ’999 and ’498 patents on January 13, 2020; and for the ’493 patent on
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`March 17, 2020. Docket No. 481-1 ¶¶ 21–31. The PTAB granted Apple’s petitions for the ’794,
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`’306, ’991 and ’586 patents and denied the other six. Docket No. 481 at 3; Docket No. 533.
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`1 U.S. Patent Nos. 6,748,317; 6,580,999; 8,339,493; 7,116,438; 6,408,193; 10,084,991; 6,928,306; 6,329,794;
`10,212,586; and 6,430,498.
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`Case 5:19-cv-00036-RWS Document 587 Filed 11/17/20 Page 2 of 6 PageID #: 31167
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`Apple previously moved to stay the case pending the outcome of its IPR petitions before
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`the PTAB had issued institution decisions for all 10 patents-in-suit, which the Court denied as
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`premature. Docket Nos. 298, 239. Now that the PTAB has instituted IPR on four of the patents,
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`Apple asks the Court to stay the case pending the outcome of the pending IPR proceedings. Docket
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`No 481.
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`II.
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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 a patent 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 will
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`likely result in simplifying the case before the court.” Fall Line Patents, LLC v. Am. Airlines Grp.,
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`No. 6:17-cv-00202-RWS, 2018 WL 4169251, at *1 (E.D. Tex. May 21, 2018); NFC Techs. LLC
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`v. HTC Am., Inc., Case No. 2:13-cv-1058-WCB, 2015 WL 1069111, at *2 (E.D. Tex. Mar. 11,
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`2015).
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`III.
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`Analysis
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`Apple argues that the case should be stayed pending resolution of the IPRs, asserting that
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`all three factors weigh in favor of a stay. Docket No. 481 at 5. Maxell responds that Apple’s
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`motion is based upon speculation and seeks to further delay Maxell’s vindication of its patent
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`rights. Docket No. 504 at 5. Maxell contends that all three factors weigh against a stay. Id. The
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`Court will discuss each factor in turn.
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`1. Undue Prejudice
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`Apple renews its argument that Maxell will not suffer undue prejudice or tactical
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`disadvantage because Maxell does not practice the patents-in-suit and can be fully compensated
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`for any alleged harm through monetary damages. Docket No. 481 at 12–13. In opposition, Maxell
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`asserts that the stay would significantly delay vindication of its patent rights and that Apple
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`“unreasonably delayed” in filing its IPR petitions. Docket No. 504 at 6–7.
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`The Court has previously recognized that “[t]he mere fact that Maxell is not currently
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`practicing the patents does not mean that, as a matter of law, it is not prejudiced by a substantial
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`delay of an imminent trial date.” Docket No. 298 at 3 (citing Rembrandt Wireless Techs., LP v.
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`Samsung Elecs. Co., No. 2:13-cv-213-JRG-RSP, 2015 WL 627887, at *2 (E.D. Tex. Jan. 29,
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`2015)). In the previous order denying Apple’s motion to stay, the Court found that the prejudice
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`factor, at that time, cut slightly against a stay. Id. The parties present no new information that
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`would disturb that finding. Now, as before, the prejudice factor cuts slightly against a stay.
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`2. Stage of the Proceedings
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`Apple argues that the stage of the proceedings favors a stay because, while this case is at a
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`very late stage in the proceedings, the most burdensome work—the trial—remains. Docket No.
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`481 at 9. In response, Maxell asserts that expert discovery is complete, all briefing in connection
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`with the parties’ dispositive and Daubert motions is finished, and that Apple’s unreasonable delay
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`in filing the IPRs continues to weigh against the Court granting a stay at this stage. Docket No.
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`504 at 8–10.
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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, Case No. 6:16-cv-446-RWS-KNM,
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`2017 WL 2839260, at *2 (E.D. Tex. Apr. 20, 2017). Maxell initiated this action more than a year
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`ago, and the jury trial for this matter is forthcoming. Docket No. 545. The parties have completed
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`all discovery and briefing on the numerous dispositive and Daubert motions, and the Court has
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`issued rulings on the motions. When the Court previously denied Apple’s motion to stay, it found
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`that the stage of the case weighed against a stay because “[t]he case is not in its infancy and is far
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`enough along that a stay would interfere with ongoing proceedings.” Docket No. 298 at 4 (citing
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`Uniloc 2017 LLC v. Samsung Elec. Am., Inc., NO. 2:19-cv-00259-JRG-RSP, 2020 WL 143360, at
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`*5 (E.D. Tex. Mar. 24, 2020); NFC Techs. LLC v. HTC Am., Inc., Case No. 2:13-cv-1058-WCB,
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`2015 WL 1069111, at *4 (E.D. Tex. Mar. 11, 2015)). That analysis remains sound here. Indeed,
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`the fact that proceedings have advanced even further since the Court’s order and both the parties
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`and the Court have expended significant resources in the progress of this case weighs more heavily
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`against a stay than before.
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`The second sub-factor, too, continues to weigh against granting a discretionary stay. In its
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`previous order, the Court held that Apple’s delay in filing its IPRs2 weighed against a stay and
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`noted that Apple had not sufficiently explained its delay in filing the petitions:
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`Apple notes that it filed the petitions within four months of Maxell’s preliminary
`claim election but does not explain how the narrowed claims assisted in its
`preparation of the petitions. Realtime Data v. Actian Corporation, Case No. 6:15-
`cv-463-RWS-JDL, 2016 WL 9340796, at *2 (E.D. Tex. Nov. 29, 2016); Parthenon
`Unified Memory Architecture LLC v. HTC Corps. & HTC Am., Inc., No. 2:14-cv-
`00690, 2016 WL 3365855, at *2 (E.D. Tex. June 17, 2016); see also e-Watch, Inc.
`v. Mobotix Corp., Case No. SA-12-CA-492-FB, 2013 WL 12091167, at *6 (W.D.
`Tex. May 21, 2013) (finding that waiting for infringement contentions did not
`justify delay in filing IPRs where defendant sought IPR on more claims than those
`asserted). Apple does not address, let alone deny, the fact that its petitions are not
`limited to the elected claims and instead challenge 86 of the 90 originally asserted
`claims. Moreover, even if Apple’s initial petitions were to be considered timely,
`Apple has not explained the three-month delay between its initial and final IPR
`filings.
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`2 Apple filed its first wave of petitions nine months after Maxell filed suit and six months after Maxell served its initial
`infringement contentions. Apple filed its last petition, however, nearly a year after the action was filed, one day short
`of the one-year deadline, and nine months after receiving Maxell’s initial infringement contentions. Docket No. 298
`at 4–5.
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`Docket No. 298 at 4. Apple’s renewed motion fares no better in providing a sufficient explanation
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`for its delay and instead simply claims that it was diligent in filing its IPRs, contrary to the Court’s
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`earlier ruling. Docket No. 481 at 11–12. Combined, the stage of the case and Apple’s delayed
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`filing weigh heavily against a stay.
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`3. Simplification of Issues
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`The final factor—whether the stay is likely to simplify the issues at trial—is the most
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`important factor bearing on whether to grant a stay. Uniloc 2017, 2020 WL 1433960, at *5. Apple
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`contends that a stay is warranted, as the IPRs “have already meaningfully simplified this case, and
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`they will continue to do so,” as the PTAB is likely to invalidate the eight instituted claims. Docket
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`No. 481 at 5. Apple argues that, even though only a portion of the total asserted claims have been
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`instituted, a stay is still warranted because even partial simplification of this case will streamline
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`its scope and resolution. Id. at 9 (citing Image Processing Techs., LLC v. Samsung Electronics
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`Co., Ltd., No. 2:16-cv-505-JRG, Docket No. 306 at 2–3 (E.D. Tex. Oct. 25, 2017)). Maxell
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`responds that the possibility of meaningful simplification is extremely narrow, as the claims
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`instituted by the PTAB do not fully dispose of the issues related to those claims in this litigation,
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`and Apple’s confidence that all of the instituted claims will be invalidated is based on mere
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`speculation. Docket No. 504 at 11–14.
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`Here, only eight of the 20 asserted claims are currently under review by the PTAB. The
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`scope of the IPR proceedings for the instituted patents does not cover the entirety of Apple’s
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`invalidity theories in this case, as evidenced by Apple’s motion for summary judgment of subject
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`matter ineligibility under § 101 for the ’306 and ’794 patents. See Docket No. 360 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) (denying stay where only one of five asserted patents were instituted—amounting to six of
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`38 asserted claims—and the defendant’s invalidity contentions exceeded the limited scope of the
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`IPR). Apple has argued to the PTAB that the issues and prior art between the IPRs and this
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`litigation are not overlapping. Docket No. 504 at 13. Lastly, Apple’s contention that the PTAB is
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`“likely” to cancel “at least eight of the 20 elected claims” is based on assumptions and statistics
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`that the Court is reluctant to rely upon. See Trover Grp., Inc. v. Dedicated Micros USA, No. 2:13-
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`cv-1047-WCB, 2015 WL 1069179, at *4 (E.D. Tex. Mar. 11, 2015).
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`Despite Apple’s arguments to the contrary, invalidation of all eight instituted claims would
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`not meaningfully simplify this case where Apple’s invalidity contentions stretch beyond the scope
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`of the IPR proceedings and the majority of the asserted claims would remain to be resolved. On
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`balance, this factor cuts slightly against a stay or, at best, is neutral.
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`IV.
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`Conclusion
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`Apple’s renewed motion to stay (Docket No. 481) is DENIED.
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`Page 6 of 6
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`.
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`____________________________________
`ROBERT W. SCHROEDER III
`UNITED STATES DISTRICT JUDGE
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`So ORDERED and SIGNED this 17th day of November, 2020.
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