Case 5:19-cv-00036-RWS Document 647 Filed 03/08/21 Page 1 of 9 PageID #: 33095
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
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`Plaintiff,
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`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 SUR-REPLY IN OPPOSITION TO APPLE INC.’S
`MOTION TO STAY PENDING PROCEEDINGS AT THE PATENT OFFICE OR, IN
`THE ALTERNATIVE TO CONTINUE TRIAL DUE TO THE COVID-19 PANDEMIC
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`Case 5:19-cv-00036-RWS Document 647 Filed 03/08/21 Page 2 of 9 PageID #: 33096
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`I.
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`There Is No Policy Favoring Stays Prior To Issuance Of Any Office Actions in
`Pending EPRs..................................................................................................................... 1
`Apple Has Not Rebutted Maxell’s Arguments And Evidence Showing
`A.
`That Prejudice And The Stage of Proceedings Weigh Against Stay. .................... 1
`Apple Has Not Established That Simplification Is Anything But
`Speculative ............................................................................................................. 3
`Apple’s Reply Raises No New Bases To Support A Continuance .................................... 4
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`B.
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`II.
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`ii
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`Case 5:19-cv-00036-RWS Document 647 Filed 03/08/21 Page 3 of 9 PageID #: 33097
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`Apple’s Reply is a plea for the Court to depart from the typical conduct of Courts in this
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`District. Apple asks the Court to stay the case based on speculation that the PTO may simplify
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`some issues at some point down the road. But absent unique circumstances, Courts in this District
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`do not grant stays based on speculation. Certainly here, where Apple’s EPR requests were not filed
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`until after trial was scheduled to take place, the Court should not make an exception to its general
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`practice. At this point, Apple’s requests have not even been granted for each asserted patent, let
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`alone resulted in decisions rejecting any asserted claims.
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`Apple also should not be given the chance to reassert its motion for stay at a later date due
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`to a continuance. Here, too, courts have been evaluating whether to hold trials during the COVID-
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`19 pandemic and deciding that the benefits of proceeding outweigh the risks. The time to delay
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`trial has passed. It is now time to focus on what the parties and the Court can do to ensure a safe
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`and efficient process for those involved.
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`I.
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`There Is No Policy Favoring Stays Prior To Issuance Of Any Office Actions in
`Pending EPRs.
`A.
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`Apple Has Not Rebutted Maxell’s Arguments And Evidence Showing That
`Prejudice And The Stage of Proceedings Weigh Against Stay.
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`The Court has already held that Maxell will be prejudiced from a stay. Apple has not shown
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`otherwise. Whether the resulting delay is as long as the EPRs are before the PTO (roughly two
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`years) or one that lasts through appeals (roughly three years),1 the conclusion is the same: it is a
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`lengthy delay that is unreasonable for a case that is on trial’s doorstep. See, e.g., D.I. 298 at 3.
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`Nevertheless, Apple asserts that considering the delay from an appeal is improper. Apple
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`is wrong here, too. Indeed, this Court explicitly considered appeals when evaluating the prejudice
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`factor in connection with Apple’s first motion to stay pending IPRs: “the time allowed for the IPR
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`1 See Opp. at 6 (providing details regarding estimated time of proceedings).
`1
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`Case 5:19-cv-00036-RWS Document 647 Filed 03/08/21 Page 4 of 9 PageID #: 33098
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`decision as well as a potential appeal could cause a lengthy delay that would significantly
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`prejudice Maxell.” D.I. 298 at 3 (emphasis added). Apple’s assertion that Judge Bryson “squarely
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`rejected” that the time for appeals should be considered is overreaching. The cited footnote from
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`Judge Bryson states merely: “It will not necessarily be warranted for the Court to continue the stay
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`through any appellate proceedings …. That is an issue that can be revisited after the PTAB renders
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`its decision.” CyWee Grp. Ltd. v. Samsung Elecs. Co., No. 2:17-cv-00140, 2019 WL 11023976, at
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`*10 n.5 (E.D. Tex. Feb. 14, 2019).
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`Apple also still has not shown that the stage of proceedings favors a stay. Saying trial is
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`“the most burdensome” task for at least the sixth time does not make the argument any more
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`convincing than when the Court first rejected it. And, contrary to Apple’s assertion, Maxell has
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`disputed the argument—repeatedly. In fact, given that members of Maxell’s trial team are already
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`in Texarkana preparing for the forthcoming pretrial conference and trial, Apple’s argument is
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`weaker than ever. Maxell has already made significant trial-related outlays for hotel and workspace
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`in Texarkana twice now. Any savings that may come from pushing this trial a third time would be
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`insufficient to counter the outlays that have already been made (or the attendant cancellation fees).
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`Apple also still has not sufficiently explained its delay in filing the requests for EPR. Apple
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`asserts that it decided to pursue the EPRs after receiving denials of its IPR petitions (Reply at 4),
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`but offers no explanation for why it took up to almost eight months to do so, particularly where no
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`previously unknown art was raised.2 It is likely because the true explanation is the obvious one—
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`Apple filed the EPRs as a last ditch effort to once again delay trial. Regardless, it has already been
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`held that Apple’s delay in filing IPRs weighed against a stay, so Apple’s even later filing of EPRs
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`surely cannot flip this factor to favor one.
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`2 The IPR for the ’438 Patent was denied institution on June 19, 2020. Ex. D. The request for EPR for the ’438
`Patent was filed February 12, 2021. Opp. at 3.
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`2
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`Case 5:19-cv-00036-RWS Document 647 Filed 03/08/21 Page 5 of 9 PageID #: 33099
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`B.
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`Apple Has Not Established That Simplification Is Anything But Speculative
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`While Maxell does not dispute that Courts in this District routinely hold that the most
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`important factor is whether a stay is likely to simplify the issues for trial, it is equally true that
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`Courts in this District routinely deny stays where such simplification is purely speculative, as here.
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`As clear from Maxell’s Opposition, the typical practice in this District is to deny motions
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`to stay pending EPR proceedings prior to the First Office Actions due to the speculative nature of
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`simplification. Opp. at 10-11. Apple attempts to override this line of cases by pointing to one
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`outlier decision. However, Maxell has already provided additional detail distinguishing that case
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`(which included issued Office Actions on some asserted claims) and explaining what led to its
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`atypical disposition. Id. Apple cannot show similar circumstances here. Accordingly, there is no
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`reason for the Court to depart from its usual practice.
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` Despite the case law, Apple would like the Court to equate decisions granting institution
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`of IPRs with ones granting EPRs. But they are not the same. For an IPR to be instituted, it must
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`be shown that “there is a reasonable likelihood that the petitioner would prevail with respect to at
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`least 1 of the claims challenged in the petition.” 35 U.S.C. § 314(a). For EPRs, the threshold is
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`lower. It need only be shown that the request raises “a substantial new question of patentability,”
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`which means “there is a substantial likelihood that a reasonable examiner would consider the prior
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`art patent or printed publication important in deciding whether or not the claim is patentable.” 35
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`U.S.C. § 303(a); MPEP § 2242. Given that over 90% of all EPR requests are granted, this is clearly
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`not a particularly high hurdle. See Mot. at Ex. 5. In fact, all claims subject to EPR are only
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`cancelled 14% of the time, which further confirms that initiation of an EPR proceeding is not a
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`clear signal of invalidity. Id.
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`Apple attempts to fight back against these facts by asserting that the PTO “has devoted
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`more than 150 pages analyzing the serious validity problems with Maxell’s patents.” Reply at 1.
`3
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`Case 5:19-cv-00036-RWS Document 647 Filed 03/08/21 Page 6 of 9 PageID #: 33100
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`While page count is hardly indicative of substantive analysis, Maxell has reviewed the PTO
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`decisions and admittedly cannot determine how Apple arrived at this page count figure.
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`Regardless, the number of relevant pages is undeniably inflated. The orders granting EPR
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`institution range from 11 to 22 pages each; however, much of that is dedicated to clerical cover
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`pages and background information addressing related proceedings, priority, prosecution history,
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`and governing statutes. See, e.g., Reply at Exs. 2-6. All told, only roughly 26 pages3 actually
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`constitute discussion of the alleged prior art.
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`II.
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`Apple’s Reply Raises No New Bases To Support A Continuance
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`In its Reply, Apple simply rehashes the statistics and alleged risks that were already
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`presented in its initial Motion. The Court, however, is no doubt aware of the situation in its
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`surrounding areas. And also aware that other courts in Texas have elected to proceed with trials
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`under similar circumstances. They have not done so oblivious to the risks. Instead, they have
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`weighed the risks against the precautions and the prejudice from indefinite delays and held that
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`moving forward with trials is the best course. Further, as of March 10 restrictions on businesses’
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`capacity, etc., in Texas will be lifted.
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`Rather than rely on a continuance as the only defense against COVID-19, Apple should
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`focus on the precautions that can be put in place to help ensure the safety of those involved. Apple’s
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`brief is devoid of any such discussions, aside from saying precautions are not enough. Elsewhere,
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`however, Apple has acknowledged that precautions can address safety issues. Specifically, in the
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`Joint Pretrial Order, Apple has requested that the Court allow trial testimony to be presented via
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`remote live testimony (a request to which Maxell agrees). D.I. 637 at 38. Instead of turning a blind
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`eye to the availability of precautionary measures, Apple should determine what such measures it
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`3 On March 4, after Apple filed its Reply, the PTO granted the EPR for the ’438 patent. Maxell includes this grant in
`its calculation here. The First Office Action on this EPR is not expected until June 4, 2021.
`4
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`Case 5:19-cv-00036-RWS Document 647 Filed 03/08/21 Page 7 of 9 PageID #: 33101
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`may request to protect the participants.
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`Apple also continues to characterize its request as being for a “limited” or “brief”
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`continuance. But absent from Apple’s Reply is any commitment from Apple that it will not use
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`this as an opportunity to again move for a stay based on the EPRs. Apple ignores this, of course,
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`because that is exactly Apple’s plan. That Apple does not seek a short continuance is also clear
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`from Apple’s recent opposition to Maxell’s motion for severance. There, Apple has forecast that
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`it will oppose any attempt by the Court to reset this case for a trial in the near term “because
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`Apple’s lead counsel is set for other trials in the coming months, including a May trial for Apple
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`against Maxell in the ITC, as well as matters before Chief Judge Gilstrap.” D.I. 635 at 5.
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`This case is ready to proceed to trial. Juror questionnaires have gone out, trial-related
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`motions have been decided, an in-person pretrial conference has been set, and Maxell’s team has
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`largely arrived in Texarkana. Apple’s attempts to stop this trial based on speculation and
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`addressable risk should be denied.
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`Dated: March 8, 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
`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
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`By:
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`5
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`Case 5:19-cv-00036-RWS Document 647 Filed 03/08/21 Page 8 of 9 PageID #: 33102
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`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 647 Filed 03/08/21 Page 9 of 9 PageID #: 33103
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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 8th day of March, 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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