Case 5:19-cv-00036-RWS Document 98 Filed 10/10/19 Page 1 of 11 PageID #: 4362
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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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`vs.
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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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`JURY TRIAL DEMANDED
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`APPLE INC.’S OPPOSED MOTION TO STAY PENDING DECISION ON ITS MOTION
`TO TRANSFER VENUE PURSUANT TO 28 U.S.C. § 1404(a)
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`Case 5:19-cv-00036-RWS Document 98 Filed 10/10/19 Page 2 of 11 PageID #: 4363
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`TABLE OF CONTENTS
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`I.
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`II.
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`INTRODUCTION ............................................................................................................. 1
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`BACKGROUND ............................................................................................................... 1
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`III.
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`LEGAL STANDARD ........................................................................................................ 2
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`IV.
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`THIS COURT SHOULD STAY ALL PROCEEDINGS PENDING
`RESOLUTION OF APPLE’S MOTION TO TRANSFER ............................................... 4
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`A.
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`B.
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`C.
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`A Stay Will Not Prejudice or Disadvantage Maxell Because it is
`Undisputed that Maxell Does Not Practice the Asserted Patents or
`Otherwise Compete with Apple ............................................................................. 4
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`A Stay Will Simplify the Issues ............................................................................. 5
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`The Stage of the Case Favors a Stay ...................................................................... 6
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`V.
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`CONCLUSION .................................................................................................................. 7
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`Case 5:19-cv-00036-RWS Document 98 Filed 10/10/19 Page 3 of 11 PageID #: 4364
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`Defendant Apple Inc. (“Apple”) respectfully moves this Court to stay all proceedings
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`pending resolution of Apple’s Amended Motion to Transfer Venue to the Northern District of
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`California Under 28 U.S.C. §1404 (ECF No. 57, “Motion to Transfer”).
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`I.
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`INTRODUCTION
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`This case should be stayed pending resolution of Apple’s Motion to Transfer because the
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`case law supports staying proceedings pending disposition of a transfer motion and all of the
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`relevant factors weigh in favor of the requested stay. First, Plaintiff Maxell, Ltd (“Maxell”) does
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`not practice the asserted patents or compete with Apple and thus will not suffer prejudice or any
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`tactical disadvantage by the requested stay. Second, a stay will simplify the issues and promote
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`judicial economy because staying the proceedings briefly while the Court decides the proper venue
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`for this case will avoid the Court and parties expending resources on proceedings that may will
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`have to redone in the Northern District of California. Third, this case is in the early stages, which
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`further favors the requested stay.
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`Accordingly, Apple respectfully requests that the Court stay all proceedings pending
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`resolution of Apple’s Motion to Transfer.
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`II.
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`BACKGROUND
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`On August 9, 2019, Apple filed its Motion to Transfer. As demonstrated in the briefing
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`and at the September 17, 2019 hearing, the case should be transferred to the Northern District of
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`California for two independent reasons.
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`1
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`Case 5:19-cv-00036-RWS Document 98 Filed 10/10/19 Page 4 of 11 PageID #: 4365
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`Second, even if the Court nonetheless considers the factors under In Re Volkswagen AG,
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`371 F.3d 201, 203 (5th Cir. 2004), the private and public interest factors all either support transfer
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`or are neutral. As Apple explained in its Motion, “[t]his case has no connection to the Eastern
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`District of Texas.” ECF No. 57 at 1. All current and former Apple employees knowledgeable
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`about the accused functionalities and other issues in this case and relevant Apple documents and
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`source code are located in the Northern District of California. ECF No. 57 at 2-3, 9-10.
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` And the Northern District of California has a strong local interest in hearing this
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`dispute involving technology designed and developed in that district by engineers who reside in
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`that district.
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`Briefing was complete on Apple’s Motion to Transfer on September 6, 2019 (ECF No. 76
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`Sur-reply to Amended Motion to Transfer), and the Court heard the motion on September 17, 2019
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`(ECF No. 80).
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`III. LEGAL STANDARD
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`It is well-settled that “the district court has the inherent power to control its own docket,
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`including the power to stay proceedings.” Soverain Software LLC v. Amazon.com, Inc., 356 F.
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`Case 5:19-cv-00036-RWS Document 98 Filed 10/10/19 Page 5 of 11 PageID #: 4366
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`Supp. 2d 660, 662 (E.D. Tex. 2005) (citing Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)); see
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`also id. (“[T]he power to stay proceedings is incidental to the power inherent in every court to
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`control the disposition of the causes on its docket with economy of time and effort for itself, for
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`counsel, and for litigants.”). Determining whether to issue a discretionary stay “calls for the
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`exercise of judgment, which must weigh competing interests and maintain an even balance.”
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`Soverain, 356 F. Supp. 2d. at 662 (quoting Landis, 299 U.S. at 254-55).
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`The Federal Circuit and this Court have held in numerous cases that all proceedings should
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`be stayed pending disposition of a transfer motion. For example, in In re Fusion-IO, the Federal
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`Circuit explained that in the context of a venue transfer motion, it “fully expect[ed]” the moving
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`defendant to file “a motion to stay proceedings pending disposition of the transfer motion” and the
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`district court “to act on those motions before proceeding to any motion on the merits of the action.”
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`489 F. App’x 465, 466 (Fed. Cir. 2012) (emphasis added); see also id. (citing In re Horseshoe
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`Entm’t, 337 F.3d 429, 433 (5th Cir. 2003) for the proposition that disposition of a motion to transfer
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`“should have taken a top priority in the handling of this case”); In re Google Inc., 2015 WL
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`5294800, at *1 (Fed. Cir. July 16, 2015) (granting mandamus and directing district court to rule
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`on defendant’s motion to transfer within 30 days and to stay all proceedings pending completion
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`of transfer matter); In re Nintendo Co., 544 F. App’x 934, 941 (Fed. Cir. 2013) (noting that “a trial
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`court must first address whether it is a proper and convenient venue before addressing any
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`substantive portion of the case”); In re EMC Corp., 501 F. App’x 973, 975 (Fed. Cir. 2013)
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`(discussing “importance of addressing motions to transfer at the outset of litigation”). Likewise,
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`in Nexus Display Technologies, LLC v. Dell, Inc., this Court noted that a venue transfer movant
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`“could have requested a stay of any of the previous deadlines – or discovery, for that matter –
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`pending a ruling on its [transfer] motion.” 2015 WL 5043069, at *5 (E.D. Tex. Aug. 25, 2015).
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`Case 5:19-cv-00036-RWS Document 98 Filed 10/10/19 Page 6 of 11 PageID #: 4367
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`In deciding whether to stay litigation, this Court considers three factors: “(1) whether a stay
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`will unduly prejudice or present a clear tactical disadvantage to the nonmoving party, (2) whether
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`a stay will simplify the issues in question and trial of the case; and (3) whether discovery is
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`complete and whether a trial date has been set.” Soverain, 356 F. Supp. 2d. at 662 (citing Xerox
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`Corp. v. 3Com Corp., 69 F. Supp. 2d 404, 406 (W.D.N.Y. 1999)).
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`IV.
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`THIS COURT SHOULD STAY ALL PROCEEDINGS PENDING RESOLUTION
`OF APPLE’S MOTION TO TRANSFER
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`All of the Soverain factors weigh in favor of an immediate stay of all proceedings.
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`A.
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`A Stay Will Not Prejudice or Disadvantage Maxell Because it is Undisputed
`that Maxell Does Not Practice the Asserted Patents or Otherwise Compete
`with Apple
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`The first factor favors a stay because the requested stay will not prejudice, much less unduly
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`prejudice, or tactically disadvantage Maxell. First, Maxell will not be prejudiced because it is
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`undisputed that Maxell does not make products that practice the asserted patents and Maxell and
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`Apple are not competitors. Courts in the district recognize that a plaintiff that does not practice
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`the asserted patents or otherwise compete with the defendant will not suffer prejudice from a stay.
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`See, e.g., Black Hills Media, LLC v. Samsung Elecs. Co. et al., Case No. 2:13-cv-379-JRG, Doc.
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`63 at 2 (E.D. Tex. Mar. 17, 2014) (Gilstrap, J.) (rejecting plaintiff’s prejudice argument in part
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`because plaintiff did not compete with defendants); Microlinc, LLC v. Intel Corp., Civil Action
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`No. 2:07-CV-488 TJW, 2010 WL 3766655, at *2 (E.D. Tex. Sept. 20, 2010) (“[S]ince [the
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`patentee] does not manufacture or sell any products, or otherwise practice the patent, there is no
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`risk of customer losses or of injury to market share during a stay.”). Maxell conceded in its June
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`12, 2019 Infringement Contentions that it does not offer any products that “practice the claimed
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`inventions of the patents-in-suit.” ECF No. 57-16, Ex. N at 35. A modest delay, therefore, will
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`not unduly prejudice Maxell.
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`Case 5:19-cv-00036-RWS Document 98 Filed 10/10/19 Page 7 of 11 PageID #: 4368
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`Second, the duration of the requested stay and timing of Apple’s motion also favor stay.
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`Because Apple requests only a brief stay for the limited purpose of determining if ND Cal is a
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`more convenient venue, Maxell’s “right to expedient enforcement of its patent rights” will not be
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`affected. Microlinc at *2. And this case is still in its early stages – the parties have not started
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`claim construction or dispositive motion briefing, the Court has not held a claim construction or
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`dispositive motion hearing, no fact depositions have been taken, and expert discovery has not
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`started. The timing of Apple’s motion, therefore, also favors a stay.
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`Third, the requested stay would not tactically disadvantage Maxell. To the contrary, the
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`requested stay would merely hold the status quo until proper venue has been determined.
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`B.
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`A Stay Will Simplify the Issues
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`The second factor also favors a stay. With respect to simplification of issues, the Federal
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`Circuit’s directive to resolve venue motions before merits issues ensures that neither the Court nor
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`the parties spend resources in proceedings that may not proceed in that district. See In re EMC
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`Corp., 501 Fed. App’x 973, 976 (Fed. Cir. 2013) (unpublished) (noting the potential waste of time,
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`energy, and money when “defendants must partake in [extended] litigation prior to a determination
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`on a transfer motion”). Fifth Circuit precedent is in accord. See, e.g., Landry v. Air Line Pilots
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`Ass’n Int’l AFL-CIO, 901 F.2d 404, 436 (5th Cir. 1990) (affirming stay of discovery while “trial
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`court sought to resolve an issue that might preclude the need for the discovery altogether thus
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`saving time and expense”).
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` This consideration is particularly applicable here, where, if a stay is not
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`entered, the parties will soon be required to expend significant resources in preparing claim
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`construction briefing.
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`Case 5:19-cv-00036-RWS Document 98 Filed 10/10/19 Page 8 of 11 PageID #: 4369
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`A modest stay will also preserve valuable judicial resources by allowing the Court to focus
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`on deciding the pending venue issue raised in Apple’s Motion to Transfer, which should take
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`priority over other submissions in this case. See also Nintendo, 544 Fed. App’x at 941 (noting
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`“the principle that a trial court must first address whether it is a proper and convenient venue before
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`addressing any substantive portion of the case”); Fusion-IO, 489 Fed. App’x at 466 (indicating it
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`expected the district court to act on venue transfer motion “before proceeding to any motion on
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`the merits of the action”).
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`C.
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`The Stage of the Case Favors a Stay
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`The third factor strongly favors stay because, as noted above, this case is still in its early
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`stages, though it is rapidly approaching key case deadlines. While fact discovery has begun, no
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`depositions have taken place, and the fact discovery deadline is still almost six months away. ECF
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`No. 46 at 4 (fact discovery deadline set for March 31, 2020). Expert discovery has not yet even
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`begun and will not close for another seven and a half months. Id. (opening expert reports due
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`April 7, 2020; expert discovery deadline set for May 26, 2020). The parties have not filed claim
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`construction briefing, and the claim construction hearing is not scheduled until January 8, 2020.
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`Id. at 6-7 (opening claim construction brief due November 18, 2019). And the scheduled trial date
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`is over a year from now. Id. at 1 (trial date set for October 26, 2020).
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`Courts routinely grant stays in cases much further along than this case to prevent a further
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`waste of the Court’s and the parties’ resources. See, e.g., NFC Tech., 2015 WL 1069111 at *3-4
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`(granting stay where the discovery deadline was only a month away and trial was scheduled in six
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`months); Emtel, Inc. v. Lipidlabs, Inc., No. 4:07-cv-1798, 2013 WL 1707678, at *6 (S.D. Tex.
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`Apr. 19, 2013) (granting a stay pending resolution of reexamination after court conducted a
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`Markman hearing); Destination Maternity Corp. v. Target Corp., 12 F.Supp.3d 762, 770 (E.D. Pa.
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`Mar. 24, 2014) (even though “the parties have already conducted a significant amount of
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`discovery,” this factor weighs in favor of a stay “if there remains a significant amount of work
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`ahead for the parties and the court, even when the parties and/or the court have already devoted
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`substantial resources to the litigation”). Accordingly, this factor weighs in favor of a stay.
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`V.
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`CONCLUSION
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`The Federal Circuit and this Court have recognized that proceedings should be stayed
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`pending disposition of a transfer motion – the same result is warranted here. Moreover, all of the
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`Sovereign factors support the requested stay. Apple, therefore, respectfully requests that the Court
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`stay all proceedings pending resolution of Apple’s Motion to Transfer.
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`October 7, 2019
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`/s/ Luann L. Simmons
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`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
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`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
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`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
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`Case 5:19-cv-00036-RWS Document 98 Filed 10/10/19 Page 10 of 11 PageID #: 4371
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`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
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`Attorneys for Defendant Apple Inc.
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`Case 5:19-cv-00036-RWS Document 98 Filed 10/10/19 Page 11 of 11 PageID #: 4372
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that all counsel of record who are deemed to have
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`consented to electronic service are being served with a copy of this document via the Court's
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`CM/ECF system per Local Rule CV-5(a)(3) on October 7, 2019.
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`/s/ Melissa R. Smith
`Melissa R. Smith
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`CERTIFICATE OF CONFERENCE
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`On October 4, 2019, pursuant to Local Rule CV-7(h), counsel for Defendants met and
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`conferred with counsel for Plaintiff, and counsel for Plaintiff indicated that Plaintiff is opposed to
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`the relief sought by this Motion.
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`/s/ Melissa R. Smith
`Melissa R. Smith
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