Case 6:21-cv-01101-ADA Document 55 Filed 09/02/22 Page 1 of 9
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`AIRE TECHNOLOGY LTD.,
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`Plaintiff
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`Civil Action No. 6:21-cv-01101-ADA
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`v.
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`APPLE INC.,
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`Defendant.
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`APPLE INC.’S OPPOSED MOTION TO STAY PROCEEDING
`PENDING MANDAMUS REVIEW
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`Defendant Apple, Inc. (“Apple”) respectfully moves the Court for a stay of all proceedings
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`in this Court pending the resolution of Apple’s Petition for Writ of Mandamus to the Court of
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`Appeals for the Federal Circuit, filed September 1, 2022 (the “Petition”). A copy of the Petition
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`(without Exhibits) is attached here as Exhibit A.
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`I.
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` INTRODUCTION
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`The Discovery and Scheduling Order (the “Order”), DE 54, violates Fifth and Federal
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`Circuit precedent instructing district courts to give top priority to transfer motions and to address
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`them at the outset of litigation, before addressing any substantive portion of the case. The Order
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`postpones the transfer decision until after fact discovery, the deadline to add parties, the final
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`contention deadline, the pleading amendment deadline, two rounds of compulsory claim/prior art
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`combination narrowing, and the commencement of pretrial disclosure exchanges. This sua sponte
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`schedule amendment violates the Federal Circuit’s command that trial courts may not frustrate 28
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`U.S.C. § 1404 (a)’s purpose by forcing the parties here “to expend resources litigating substantive
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`matters in an inconvenient venue while a motion to transfer lingers unnecessarily on the docket.”
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`In re Google Inc., No. 2015-138, 2015 WL 5294800, at *1 (Fed. Cir. 2015). The Federal Circuit
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`has made clear that a district court’s significant delay in ruling on a transfer motion merits
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`mandamus relief.
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`Apple respectfully submits that the Petition raises at least a “substantial case on the
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`merits,” which weighs in favor of a stay. Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897
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`F.2d 511, 513 (Fed. Cir. 1990). All other traditional factors also weigh in favor of a stay at this
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`time. Thus, a short and immediate stay of litigation during mandamus review is warranted. See id.;
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`Team Worldwide Corp. v. Wal-Mart Stores, Inc., No. 2:17-CV-00235-JRG, 2018 WL 2722051, at
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`*2 (E.D. Tex. June 6, 2018) (applying the traditional stay factors in the mandamus context).
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`II.
`District courts possess an inherent power to manage their own docket, including the power
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`APPLICABLE LAW
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`to stay proceedings. Clinton v. Jones, 520 U.S. 681, 706 (1997). District courts traditionally look
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`to four factors in determining whether a stay is appropriate when an order is subject to appellate
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`review: “(1) whether the stay applicant has made a strong showing that he is likely to succeed on
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`the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether the
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`issuance of the stay will substantially injure the other parties interested in the proceeding; and (4)
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`where the public interest lies.” Nken v. Holder, 556 U.S. 418, 434 (2009); see also Team
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`Worldwide, 2018 WL 2722051, at *2.
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`Even where a district court does not agree that the appeal is “likely to succeed on the
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`merits,” the Federal Circuit has held that this factor is relaxed “‘where [the] movant . . . can
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`nonetheless demonstrate a substantial case on the merits,’ provided the other factors militate in
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`movant’s favor.” Standard Havens, 897 F.2d at 513; see, e.g., In re Deutsche Bank Tr. Co.
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`Americas, 605 F.3d 1373, 1377 (Fed. Cir. 2010) (Federal Circuit granted stay pending resolution
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`of mandamus proceeding). Similarly, the Fifth Circuit holds that although each part of the test
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`must be met, a “movant need not always show a ‘probability’ of success on the merits; instead,
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`the movant need only present a substantial case on the merits when a serious legal question is
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`involved and show that the balance of equities weighs heavily in favor of granting the stay.” Ruiz
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`v. Estelle, 650 F.2d 555, 565 (5th Cir. 1981); see also Campaign for S. Equality v. Bryant, 773
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`F.3d 55, 57 (5th Cir. 2014) (same).
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`Applying this standard, other district courts in Texas have granted stays of proceedings in
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`patent cases pending the Federal Circuit’s resolution of a petition for writ of mandamus. See, e.g.,
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`Order for Stay, Raytheon Co. v. Cray, Inc., No. 2:15-CV-01554-JRG (E.D. Tex. July 18, 2017),
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`ECF No. 315; Queens Univ. at Kingston v. Samsung Elecs. Co., No. 2:14-cv-43-JRG-RSP, 2015
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`WL 10936048 (E.D. Tex. Aug. 28, 2015).
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`III. ARGUMENT
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`A.
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`Apple has presented a substantial case on the merits of its appeal.
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`A stay is appropriate where the movant can “demonstrate a substantial case on the
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`merits,” provided the other factors militate in the movant’s favor. Standard Havens, 897 F.2d at
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`513; see also Ruiz, 650 F.2d at 565 (“If a movant were required in every case to establish that the
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`appeal would probably be successful, the Rule would not require as it does a prior presentation
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`to the district judge whose order is being appealed.”) That standard is satisfied here.
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`Both the Federal Circuit and Fifth Circuit have held that a request for transfer is a threshold
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`matter that a district court must address at the outset of litigation. E.g., In re EMC Corp., 501 F.
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`App’x 973, 976 (Fed. Cir. 2013) (non-precedential) (noting the “the importance of addressing
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`motions to transfer at the outset of litigation”); In re Nintendo Co., 544 F. App’x 934, 941 (Fed.
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`Cir. 2013) (“[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.”); In re Horseshoe Ent., 337 F.3d 429, 433 (5th
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`Cir. 2003) (stating that disposition of transfer motion “should have taken a top priority” in the
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`litigation). The transfer statute is designed “to protect litigants, witnesses, and the public against
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`unnecessary inconvenience and expense.” Cont’l Grain Co. v. Barge FBL-585, 364 U.S. 19, 27
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`(1960). But that goal is “thwarted” when defendants must participate in protracted litigation before
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`transfer is resolved. EMC, 501 F. App’x at 976; see also In re Apple, 979 F.3d 1332, 1339 (Fed.
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`Cir. 2020) (faulting district court for “barrel[ing] ahead on the merits in significant respects,”
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`including overseeing discovery disputes and claim construction, before issuing a transfer decision).
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`Indeed, the Federal Circuit has repeatedly endorsed the Third Circuit’s precedent holding that “it
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`is not proper to postpone consideration of the application for transfer under § 1404(a) until
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`discovery on the merits is completed, since it is irrelevant to the determination of the preliminary
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`question of transfer.” McDonnell Douglas Corp. v. Polin, 429 F.2d 30, 30-31 (3d Cir. 1970)
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`(vacating order that required all merits discovery to be completed before district court would
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`resolve transfer motion).1
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`When district courts fail to afford that priority to transfer motions, the Federal Circuit has
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`used its mandamus authority to ensure that those courts do not “frustrate 28 U.S.C. § 1404(a)’s
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`intent” by forcing litigants “to expend resources litigating substantive matters in an inconvenient
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`venue while a motion to transfer lingers unnecessarily on the docket.” Google, 2015 WL 5294800,
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`at *1; see also In re SK hynix Inc., 835 F. App’x 600, 600-01 (Fed. Cir. 2021) (non-
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`precedential); In re TracFone Wireless, Inc., 848 F. App’x 899, 901 (Fed. Cir. 2021) (non-
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`precedential); cf. In re Netflix, Inc., No. 2021-190, 2021 WL 4944826, at *1 (Fed. Cir. Oct. 25,
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`2021) (“Delays in resolving transfer motions, coupled with ongoing discovery, claim construction,
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`1 See Apple, 979 F.3d at 1337; Google, 2015 WL 5294800, at *1; Nintendo, 544 F. App’x at 941;
`EMC, 501 F. App’x at 975 n.1; In re Fusion-IO, Inc., 489 F. App’x 465, 466 (Fed. Cir. 2012) (non-
`precedential).
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`and other proceedings, frustrate the purpose of § 1404(a).”) (denying mandamus because
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`magistrate had ruled on venue motion after petition was filed).
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`The Order is directly contrary to the foregoing precedent. While it defers the Markman
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`hearing and claim-construction order “until the Court resolves the transfer motion,” DE 54 at 5,
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`the scheduling order here guarantees that the Court and parties will undertake many other
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`important substantive steps in this case before the Court determines whether the Western District
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`is the venue where trial will ultimately take place. Most notably, the order ensures that this Court
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`will oversee all of fact discovery, including resolving any discovery disputes pursuant to its own
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`procedures for resolving discovery disputes. See, OGP Version 4.1 at 3-5. But the Federal Circuit
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`has specifically identified these steps as ones that should await a transfer decision. See Apple, 979
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`F.3d at 1338 (faulting district court for holding “a discovery hearing and issu[ing] a corresponding
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`discovery order”); SK hynix, 835 F. App’x at 600-01 (staying “all discovery” until transfer was
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`resolved and faulting district court for “order[ing] the parties to engage in extensive discovery”);
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`Google, 2015 WL 5294800, at *1 (faulting district court for “proceeding through to the close of
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`fact discovery” and conducting “a hearing related to several discovery disputes”).
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`In addition, the Order ensures that the parties must complete multiple other substantive
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`steps here in the Western District of Texas before this Court will consider whether this case should
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`be transferred to the Northern District of California. In particular, the parties must comply with
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`deadlines to: add parties; serve final infringement and invalidity contentions under this Court’s
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`Standing Orders; amend pleadings; narrow the asserted claims and prior art according to this
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`Court’s Standing Orders (any disputes over which this Court will resolve); and exchange
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`preliminary exhibit and witness lists for trial. All of this will take place before the parties are even
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`permitted to resume briefing on Apple’s transfer motion. In short, the Order guarantees that the
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`parties will expend significant resources and the case will substantially progress on the merits, all
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`in a forum that ultimately may not preside over the case.
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`Furthermore, this substantive progress will take significant time. Apple filed its motion to
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`transfer in April 2022. Under this Court’s scheduling order, that motion will not be fully briefed
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`until a full year later, when Aire files a sur-reply in April 2023. See DE 54 at 6 (setting sur-reply
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`deadline for 36 weeks after originally scheduled Markman hearing in August 2022). That is a
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`significantly longer delay than the type the Federal Circuit has previously found to be unacceptable
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`in the transfer context and to warrant mandamus relief. See Google, 2015 WL 5294800, at *1
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`(delay of 8 months from filing of motion); TracFone, 848 F. App’x at 900 (same); SK hynix, 835
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`F. App’x at 600-01 (same); cf. Horseshoe Ent., 337 F.3d at 433 (Fifth Circuit faulting district court
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`for “wait[ing] some 13 months” to rule on transfer).
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`B.
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`The remaining factors militate in Apple’s favor.
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`This Court next must consider whether the other three factors “militate in [the] movant’s
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`favor.” Standard Havens, 897 F.2d at 513. Those factors are: (1) whether the movant will suffer
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`irreparable harm absent a stay; (2) whether the non-movant will suffer injury if the stay is granted;
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`and (3) whether a stay serves the public interest. Nken, 556 U.S. at 434. Here, each weighs in
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`favor of granting a stay.
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`Apple will be “irreparably injured absent a stay.” Id. at 426. Absent a stay, this case will
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`proceed to substantive issues within days and for the next eight months. But if Apple prevails on
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`its mandamus petition, and this Court is ordered to consider Apple’s transfer motion now, this
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`Court will have erred in addressing substantive issues. And the parties will have been forced to
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`spend time and resources litigating in an inconvenient venue that ultimately might not try this case.
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`See TracFone Wireless, 848 F. App’x at 900. These harms could not be remedied after the fact.
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`Once this Court proceeds to substantive review of this case, the “prejudice suffered cannot be put
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`back in[to] the bottle.” In re Volkswagen of Am., Inc., 545 F.3d 304, 319 (5th Cir. 2008) (en banc).
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`The threat of those harms confirms that a stay is warranted. See SK hynix, 835 F. App’x at 601
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`(partially
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`granting mandamus
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`relief,
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`including
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`a
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`stay
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`of
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`“all
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`proceedings
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`concerning . . . substantive issues” until the resolution of a transfer motion, as the petitioner had
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`“no alternative means by which to obtain” such relief).
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`Unlike the costs imposed on Apple, any injury caused to Aire by a short stay of this case
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`could be adequately compensated through ordinary damages principles. The delay is expected to
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`be short; the Federal Circuit has recently resolved similar mandamus petitions within two weeks.
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`See, e.g., TracFone, 848 F. App’x at 899 (mandamus granted six days after petition was filed);
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`SK hynix Inc., 835 F. App’x at 600-01 (mandamus granted ten days after petition was filed). Such
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`a stay would not affect Aire’s claims or potential relief in any way because Aire does not produce
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`or sell any products and it does not compete with Apple. See Cellular Commc’ns Equip., LLC v.
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`Samsung Elecs. Co., No. 6:14-CV-759, 2015 WL 11143485, at *2 (E.D. Tex. Dec. 16, 2015)
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`(“When a patentee seeks exclusively monetary damages, as opposed to a preliminary injunction
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`or other relief, ‘mere delay in collecting those damages does not constitute undue prejudice.’”)
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`(quoting Crossroads Sys., Inc. v. Dot Hill Sys. Corp., No. 13-CA-1025, 2015 WL 3773014, at *2
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`(W.D. Tex. June 16, 2015)).
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`Finally, there is “a general public policy of preserving judicial resources from the risk of
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`reversal.” Weingarten Realty Invs. v. Miller, 661 F.3d 904, 913 (5th Cir. 2011). Such a policy
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`favors staying district court proceedings where, as here, an important question is presented on
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`appeal, the district court’s order could be overturned, and the movant has presented a substantial
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`case on the merits.
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`IV. CONCLUSION
`For the foregoing reasons, this Court should grant the motion to stay pending resolution
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`of the Petition and order an immediate stay of all deadlines, activities, and proceedings in this
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`case.
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`Case 6:21-cv-01101-ADA Document 55 Filed 09/02/22 Page 9 of 9
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`Respectfully submitted,
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`/s/ J. Stephen Ravel
`J. Stephen Ravel
`Texas State Bar No. 16584975
`KELLY HART & HALLMAN LLP
`303 Colorado, Suite 2000
`Austin, Texas 78701
`Tel: (512) 495-6429
`Email: steve.ravel@kellyhart.com
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`Attorneys for Defendant Apple Inc.
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`Dated: September 2, 2022
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`James R. Batchelder (pro hac vice)
`Andrew N. Thomases (admitted in W.D. Tex.)
`Andrew T. Radsch (pro hac vice)
`Daniel W. Richards (pro hac vice)
`ROPES & GRAY LLP
`1900 University Avenue, 6th Floor
`East Palo Alto, CA 94303
`Tel: (650) 617-4000
`Fax: (650) 617-4090
`Email: James.batchelder@ropesgray.com
`Email: Andrew.thomases@ropesgray.com
`Email: Andrew.radsch@ropesgray.com
`Email: Daniel.richards@ropesgray.com
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`Cassandra B. Roth (pro hac vice)
`ROPES & GRAY LLP
`1211 Avenue of the Americas
`New York, NY 10036-8704
`Tel: (212) 596-9000
`Fax: (212) 596-9090
`Email: Cassandra.roth@ropesgray.com
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`CERTIFICATE OF CONFERENCE
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`The undersigned certifies counsel have conferred. Plaintiff opposes the relief sought.
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`Accordingly, the Motion is presented to the Court for resolution.
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`/s/ J. Stephen Ravel
`J. Stephen Ravel
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`CERTIFICATE OF SERVICE
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`I hereby certify that all counsel of record are being served with a copy of the foregoing
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`document via the Court’s CM/ECF system on September 2, 2022.
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`/s/ J. Stephen Ravel
`J. Stephen Ravel
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