Case 5:19-cv-00036-RWS Document 628 Filed 02/12/21 Page 1 of 12 PageID #: 32020
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`MAXELL, LTD.,
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`v.
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`APPLE INC.,
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
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`Case No. 5:19-cv-00036-RWS
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`Plaintiff,
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`Defendant.
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`LEAD CASE
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`JURY TRIAL DEMANDED
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`MAXELL, LTD.’S OPPOSED MOTION TO SEVER NON-SELECTED PATENTS
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`Case 5:19-cv-00036-RWS Document 628 Filed 02/12/21 Page 2 of 12 PageID #: 32021
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`Maxell’s Complaint in this matter asserts that Apple directly infringes at least ten of
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`Maxell’s patents, and that Apple has done so knowingly and willfully. Maxell has worked
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`throughout this case—in discovery, claim construction, expert discovery, and pretrial—to prove
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`its claims. As a result, Maxell is prepared to prove Apple’s infringement of all ten patents and
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`establish the appropriate royalty Apple owes Maxell as a result of that infringement.
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`When Maxell filed its case, it was prepared to narrow the asserted claims to a number
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`that would be manageable for adjudication at a jury trial. Maxell voluntarily entered into a
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`focusing order at the outset of the case that cemented such intention. But whereas Maxell was
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`willing to limit asserted claims, it did not anticipate having to completely withdraw patents in the
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`absence of a judgment.
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`Under normal circumstances, a jury could hear a ten patent case over a ten-day trial.
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`Maxell is prepared—even now—to present the full case over the ten asserted patents to the jury
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`in the time allotted. But Maxell also understands that circumstances today are anything but
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`normal. The additional precautions and procedures necessitated by the COVID-19 Pandemic will
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`reduce the time available for presentation of evidence during the trial day. As a result, the Court
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`has ordered that Maxell can take only six of its initial ten patents to trial.
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`Maxell has no quarrel with the Court’s directive. But the question remains what to do
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`with the four non-selected patents that will not be heard by the jury at this trial. Apple should not
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`be allowed to gain a strategic advantage as to those patents simply because the pandemic has
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`prevented them from being addressed simultaneously with the others. Dismissing the patents
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`without prejudice would give Apple this improper advantage, and is not appropriate here. There
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`are only two options for how to handle these four patents: 1) sever them from the present case
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`such that they may be addressed at a later trial in a separate case; or 2) bifurcate the present case
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`Case 5:19-cv-00036-RWS Document 628 Filed 02/12/21 Page 3 of 12 PageID #: 32022
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`as to the selected and non-selected patents such that the Court can decide how to address matters
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`post-trial. As set forth herein, severance presents the optimal solution in terms of balancing the
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`Court’s schedule, efficiency, and Maxell’s interest in the timely enforcement of its rights in both
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`the selected and non-selected patents.
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`There is no good reason for Apple to oppose Maxell’s request for severance, and there is
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`certainly no good reason for it to demand dismissal. The only basis for Apple opposing this
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`motion would be in an attempt to delay Maxell’s vindication of its patent rights or as part of its
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`ongoing, albeit unsuccessful strategy to transfer this case out of the Eastern District of Texas. At
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`worst, denial of this motion could undo years of litigation and force almost half of this lawsuit to
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`be redone in its entirety before a different court, in a different district, under different rules.
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`I.
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`Background
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`Apple has committed widespread infringement of Maxell’s “smartphone” patent
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`portfolio, which consists of more than 5,300 patents that cover a wide swath of technology
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`present in today’s smartphones, tablets, smart watches, and laptops, including for example,
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`cameras, displays, navigation, video streaming, picture and video storage, telecommunications,
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`security, and battery-saving technology. After years of failed negotiations, Maxell was left with
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`no choice but to address Apple’s continued infringement through litigation. In an attempt to
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`capture and curtail the sweeping nature of Apple’s infringement, Maxell filed this initial suit
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`asserting infringement of ten of its patents.
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`On March 15, 2019, Maxell filed the Complaint governing this Action. D.I. 1. In its
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`Complaint, Maxell set forth ten counts of infringement for ten separate patents. Id. On June 12,
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`2019, Maxell served its Patent Rule 3-1 and 3-2 Disclosure of Asserted Claims and Infringement
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`Contentions. Ex. A, Excerpt of Maxell Infringement Contentions. Such contentions set forth 90
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`asserted claims across the ten asserted patents. Id. at 2.
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`Case 5:19-cv-00036-RWS Document 628 Filed 02/12/21 Page 4 of 12 PageID #: 32023
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`Early in the case, Maxell and Apple agreed to focus patent claims and prior art to reduce
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`costs. See D.I. 36. Accordingly, the Court entered an Order Focusing Patent Claims and Prior Art
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`to Reduce Costs on July 2, 2019 (hereinafter, “Focusing Order”). D.I. 44. That Order required
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`Maxell to narrow its assertions of infringement in this case to no more than five asserted claims
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`per patent and no more than a total of 20 claims. Id. at ¶ 3. There was no requirement for Maxell
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`to limit the number of patents asserted. See id. On March 17, 2020, Maxell complied with the
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`Order by serving its Final Election of Asserted Claims. See Ex. B, Maxell Final Election.
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`Maxell’s Final Election maintained asserted claims across all ten originally asserted patents.
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`After being reset twice, this case is now headed to trial on March 22, 2021. D.I. 593. It is
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`expected, however, that taking the necessary precautions to ensure the health and safety of all
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`those involved in the conduct of an in-person trial during the Covid-19 Pandemic—and
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`completing that trial within the days available, as limited by the Good Friday Holiday—will limit
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`the time that Maxell and Apple have to present evidence from what was initially anticipated.
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`Given such expectation, the Court requested the parties further meet and confer to narrow the
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`issues to be heard at trial. The parties were unable to reach agreement on the appropriate
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`narrowing and ultimately submitted competing proposals to the Court. D.I. 603. With respect to
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`the number of asserted claims and patents, Maxell proposed dropping two of the ten asserted
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`patents and narrowing its asserted claims to no more than twelve. Id. at 2. Apple’s proposal
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`required, in relevant part, that Maxell dismiss four of the ten patents from the case. Id. at 4.
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`On January 27, 2021, the Court issued its Order on the narrowing proposals. D.I. 619. In
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`relevant part, the Order required that “Maxell shall narrow its case to no more than six patents
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`and 10 asserted claims.” Id. at 1. The Order did not mention, let alone require, dismissal of any
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`patents, nor did it otherwise address how the Court will handle the non-selected patents. See id.
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`Case 5:19-cv-00036-RWS Document 628 Filed 02/12/21 Page 5 of 12 PageID #: 32024
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`Maxell has now identified to Apple the six patents that it intends to present at trial. Ex. C, Maxell
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`Identification of Narrowed Patents and Asserted Claims. The four patents that Maxell has not
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`selected are U.S. Patent Nos. 6,408,193, 10,084,991, 6,928,306, and 10,212,586 (hereinafter, the
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`“Non-Selected Patents”). Id.
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`II.
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`Legal Standard
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`A district court has the inherent power to control its own docket. Landis v. N. Am. Co.,
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`299 U.S. 248, 254–55 (1936) (citations omitted). This includes the broad authority to sever
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`claims. Texas Instruments v. Linear Techs. Corp., No. 2:01-CV-004-DF, 2002 WL 34438843, at
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`*2 (E.D. Tex. Jan. 15, 2002) (citing Rice v. Sunrise Express, Inc., 209 F.3d 1008, 1016 (7th Cir.
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`2000)). Rule 21 of the Federal Rules of Civil Procedure permits the Court to sever claims in the
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`interest of justice and to prevent delay or prejudice. See id., at *2 (citing Applewhite v. Reichold
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`Chemicals. Inc., 67 F.3d 571, 574 (5th Cir. 1995)). A district court may order severance “in the
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`interest of avoiding prejudice and delay, ensuring judicial economy, or safe-guarding principles
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`of fundamental fairness.” In re EMC Corp., 667 F.3d 1351 at 1360 (Fed. Cir. 2012). Courts
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`regularly invoke Rule 21, even absent findings of improper joinder, to sever claims where there
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`are “sufficient other reasons for ordering a severance.” Saint Lawrence Commc’ns LLC v. Apple
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`Inc., 2:16-CV-82-JRG, 2017 WL 3712912, at *1 (E.D. Tex. July 12, 2017). While the Court also
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`has the authority to bifurcate cases pursuant to Rule 42(b), courts should not employ bifurcation
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`where it would result in unnecessary delays or prejudice. Laitram Corp. v. Hewlett-Packard Co.,
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`791 F.Supp. 113, 115 (E.D. La. 1992) (citations omitted).
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`III. Argument
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`When the Parties met and conferred regarding a potential framework to narrow the issues
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`for trial, Maxell proposed a framework wherein it would drop two patents without prejudice and
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`present the remaining eight patents at trial. Although Maxell’s proposal had the disadvantage of
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`Case 5:19-cv-00036-RWS Document 628 Filed 02/12/21 Page 6 of 12 PageID #: 32025
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`having to withdraw two patents, Maxell deemed the drawback to be outweighed by the benefits
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`of efficiency and expediency that would have been afforded by addressing the remaining eight
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`patents in a single trial. Apple, however, would not agree to Maxell’s proposal, and instead
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`insisted that Maxell drop four patents. Apple’s proposal has shifted the scales. The benefits of a
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`speedy judgment on only six of Maxell’s patents no longer outweighs the detriment to Maxell of
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`withdrawing the others. Maxell thus no longer agrees to voluntarily withdraw its allegations of
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`infringement with respect to the Non-Selected Patents. It was Apple’s choice not to address eight
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`patents at one trial. The consequence of that choice is that the four Non-Selected Patents must
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`now be addressed separately.
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`Dismissal with prejudice is improper. Indeed, the Court’s Narrowing Order cannot be
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`interpreted as requiring dismissal with prejudice of the patents that Maxell would not select to
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`take to trial. “A court should not render judgment with respect to claims ‘reference[d] in the
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`complaint’ but not raised in the pretrial statement or litigated at trial; a ‘reference in the
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`complaint is not sufficient to support a judgment.’” Alcon Research Ltd. v. Barr Labs., Inc., 745
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`F.3d 1180 at 1193 (Fed. Cir. 2014) (quoting 800 Adept, Inc. v. Murex Sec., Ltd., 539 F.3d 1354,
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`1367-68 (Fed. Cir. 2008)); see also, Personalized Media Comm’ns, LLC v. Google LLC, C.A.
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`No. 2:19-cv-00090-JRG, D.I. 476 (E.D. Tex., Jan. 26, 2021) (denying motion to correct Final
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`Judgment to include dismissal with prejudice of patent infringement claims that were raised in
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`the complaint, but dropped prior to trial).
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`As set forth below, dismissal without prejudice is also not inappropriate. Maxell has not
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`voluntarily withdrawn its claims as to the Non-Selected Patents. This case does not otherwise fall
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`within the grounds for dismissal set forth in Rules 12 and 41 of the Federal Rules of Civil
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`Procedure, including lack of subject matter jurisdiction, personal jurisdiction, improper venue,
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`Case 5:19-cv-00036-RWS Document 628 Filed 02/12/21 Page 7 of 12 PageID #: 32026
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`failure to state a claim upon which relief can be granted, insufficient process, ripeness, and lack
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`of prosecution. And, as set forth below, dismissal would provide Apple an unfair, inefficient, and
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`prejudicial strategic advantage.
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`Severance provides the optimal solution for how to address the Non-Selected Patents in
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`terms of judicial and party economy, avoiding delay, and to safe-guard principles of fundamental
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`fairness. In re EMC Corp., 667 F.3d at 1360.
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`A.
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`Severance Is In the Interest of Judicial and Party Economy
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`The case is in its advanced stages. Fact discovery and expert discovery are both complete,
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`the Court has resolved the parties’ discovery disputes, the Court has ruled on summary judgment,
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`and the Court has issued its order on claim construction. All the patents are ready to go to trial.
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`Severance maintains this readiness. But if the Non-Selected Patents were dismissed without
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`prejudice, and Maxell left with no option but to re-file a new lawsuit, this work would be lost.
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`With a new lawsuit, Maxell would be forced to start virtually from scratch. And, as explained
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`below, it would be forced to do so in a new court, in a different District, under different rules.
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`See infra, Section III.C. This Court is already deeply familiar with the parties and patents at issue
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`in this litigation and this Court should see the patents through to final judgment. Any other result
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`is inefficient not only for the parties, but also for the court systems and judges involved.
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`B.
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`Severance Is In the Interest of Avoiding Prejudice and Delay
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`Maxell has an interest in the timely vindication of its patent rights. This interest is even
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`more pronounced now that trial has already been twice rescheduled due to the COVID-19
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`Pandemic. Severance presents the best option for Maxell’s rights in both the selected and Non-
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`Selected Patents to be timely enforced.
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`Severing the patents from this case will allow the Court the opportunity to issue a final
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`judgment in the present litigation on the patents Maxell has selected for trial. See, e.g., Oyster
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`Case 5:19-cv-00036-RWS Document 628 Filed 02/12/21 Page 8 of 12 PageID #: 32027
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`Optics, LLC v. Alcatel-Lucent USA Inc., C.A. No. 2:16-cv-01302-JRG, D.I. 845 (E.D. Tex., Nov.
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`1, 2018) (granting motion to sever claims not resolved by summary judgment order in part to
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`“allow[] the Court the opportunity to issue a final judgment in the current litigations and afford[]
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`the parties the opportunity to seek appellate review.”). Bifurcation, on the other hand, would
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`prevent final judgment from issuing until the Non-Selected Patents have received their day in
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`Court. Without a final judgment, any recovery that might be obtained by Maxell would be
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`delayed. Given that the Non-Selected Patents differ in subject matter, infringement, and
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`invalidity theories, from the selected patents, there is no reason to hold up judgment, and the
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`parties’ ability to seek appellate review thereof, based on the later adjudication of those patents.
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`See, e.g., Laitram, 791 F.Supp. at 115 (holding that bifurcation should not be employed where it
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`would result in unnecessary delays or prejudice).
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`As noted in the previous section, severance will also enable the new litigation to pick up
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`where this one leaves off—in the pre-trial stages, with a knowledgeable Court and all pretrial
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`matters largely addressed. That means Maxell may be able to proceed to trial as soon as the
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`Court is able to place the trial on its schedule.1 Dismissal, in contrast, could require that the
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`parties snake through the entire litigation process and timeline, inevitably delaying by years
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`Maxell’s ability to take these patents to trial.
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`C.
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`Severance Safe-Guards the Principles of Fundamental Fairness
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`In addition to the fairness in not requiring Maxell to re-litigate claims, severance also
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`maintains Maxell’s choice of venue. At the time Maxell filed this case against Apple, venue in
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`the Eastern District of Texas was appropriate. Indeed, Apple’s attempt to transfer venue to the
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`Northern District of California was denied by this Court and upheld by the Federal Circuit. See
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`1 To the extent that Apple asserts that continued litigation regarding the non-selected patents should be
`stayed pending resolution of IPR or EPR proceedings, the appropriate place to address such assertion is in
`the new case.
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`Case 5:19-cv-00036-RWS Document 628 Filed 02/12/21 Page 9 of 12 PageID #: 32028
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`D.I. 171; In re Apple Inc., Case No. 2020-115, Document No. 39 (Fed. Cir. April 22, 2020).
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`Since the time Maxell filed its Complaint, Apple closed its retail stores previously located in the
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`Eastern District of Texas. D.I. 57 at 3. Due to such closure, it is no longer clear that Maxell could
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`successfully establish venue in this District against Apple with a new case. Given that Maxell’s
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`claims do not fall within the bases for dismissal set forth in Federal Rules of Civil Procedure 12
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`and 41, it is clear that any demand by Apple for dismissal of the non-selected patents would
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`simply be in an attempt to delay adjudication of Maxell’s rights or deprive Maxell of its chosen,
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`appropriate, and upheld venue for these patents. Apple should not be permitted to leverage the
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`pandemic to finally achieve the transfer it has failed to obtain earlier in the case.
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`IV. Conclusion
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`The Court has required Maxell to limit its trial presentation to six of its ten asserted
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`patents. The narrowing is not a result of failed claims or an inability to prove infringement or
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`damages. It is purely a matter of streamlining for a trial to be held under circumstances required
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`by the COVID-19 Pandemic. Given that Maxell does not voluntarily agree to dismiss its
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`infringement allegations regarding the four Non-Selected Patents, the question remains how best
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`to address such allegations. As set forth above, severance of the patents from this case presents
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`the best option in terms of ensuring judicial and party economy, avoiding prejudice and delay,
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`and safeguarding the principles of fundamental fairness. Maxell thus respectfully requests that
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`the Non-Selected Patents be severed from this litigation.
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`Dated: February 12, 2021
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`/s/ Jamie B. Beaber
`Geoff Culbertson
`Kelly Tidwell
`Patton, Tidwell & Culbertson, LLP
`2800 Texas Boulevard (75503)
`Post Office Box 5398
`Texarkana, TX 75505-5398
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`By:
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`Case 5:19-cv-00036-RWS Document 628 Filed 02/12/21 Page 10 of 12 PageID #: 32029
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`Telephone: (903) 792-7080
`Facsimile: (903) 792-8233
`gpc@texarkanalaw.com
`kbt@texarkanalaw.com
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`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 628 Filed 02/12/21 Page 11 of 12 PageID #: 32030
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`CERTIFICATE OF CONFERENCE
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`I hereby certify that Plaintiff Maxell, Ltd. has complied with the requirements of Local
`Rule CV-7(h) governing this case. Specifically, counsel for the parties discussed Maxell’s
`request for severance via email and on a teleconference held February 2, 2021. Apple indicated
`that it opposes Maxell’s Motion.
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`/s/ Jamie B. Beaber
`Jamie B. Beaber
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`/s/ Geoff Culbertson
`Geoff Culbertson
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`Case 5:19-cv-00036-RWS Document 628 Filed 02/12/21 Page 12 of 12 PageID #: 32031
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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 12th day of February 2021, with a copy of this document
`via the Court’s CM/ECF system per Local Rule CV-5(a)(3).
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`/s/ Jamie B. Beaber
`Jamie B. Beaber
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