Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 1 of 16
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`AUSTIN DIVISION
`
`
`
`IDENTITY SECURITY LLC,
`
`
`Plaintiff,
`
`
`v.
`
`APPLE INC.,
`
`
`Defendant.
`
`
`
`
`Civil Action No. 1:22-cv-00058-LY
`
`
`
`JURY TRIAL DEMANDED
`
`
`
`
`
`
`
`DEFENDANT APPLE INC.’S MOTION TO STAY PENDING
` EX PARTE REEXAMINATIONS
`
`
`
`
`i
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`

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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 2 of 16
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`TABLE OF CONTENTS
`
`
`
`I.
`
`II.
`
`INTRODUCTION ...............................................................................................................1
`
`BACKGROUND .................................................................................................................2
`
`III.
`
`LEGAL STANDARD ..........................................................................................................3
`
`IV.
`
`ARGUMENT .......................................................................................................................4
`
`A.
`
`B.
`
`C.
`
`A Stay Will Not Unduly Prejudice Plaintiff Because Of The Non-
`Competitive Relationship Between The Parties. .....................................................4
`
`The Early Stage Of This Litigation Strongly Favors Granting A Stay. ...................5
`
`A Stay Will Undoubtedly Simplify The Issues Before The Court. .........................7
`
`CONCLUSION ..................................................................................................................10
`
`
`
`V.
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`ii
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`

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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 3 of 16
`
`Cases
`
`TABLE OF AUTHORITIES
`
`AGIS Software Dev. LLC v. Google LLC,
`No. 2:19-CV-00359-JRG, 2021 WL 465424 (E.D. Tex. Feb. 9, 2021) ............................. 9
`
`Antor Media Corp. v. Nokia, Inc.,
`No. 2:05CV186, 2006 WL 7121721 (E.D. Tex. Sept. 27, 2006) ..................................... 11
`
`ASCII Corp. v. STD Entm’t USA, Inc.,
`844 F.Supp. 1378 (N.D. Cal. 1994) .................................................................................... 4
`
`Crossroads Sys., Inc. v. Dot Hill Sys. Corp.,
`No. 1-13-cv-00800, 2015 WL 3773014 (W.D. Tex. Jun. 15, 2015)............................... 5, 6
`
`EchoStar Techs. Corp. v. TiVo, Inc.,
`No. 5:05 CV 81 DF, 2006 WL 2501494 (E.D. Tex. July 14, 2006) ................................. 10
`
`Fresenius USA, Inc. v. Baxter Int’l, Inc.,
`721 F.3d 1330 (Fed. Cir. 2013)......................................................................................... 10
`
`Golden Rule Fasteners, Inc. v. Neverleak Co., L.P.,
`No. 3:17-CV-249-MPM-JMV, 2019 WL 384003 (N.D. Miss. Jan. 30, 2019)................... 4
`
`Gould v. Control Laser Corp.,
`705 F.2d 1340 (Fed. Cir. 1983)..................................................................................... 3, 10
`
`Kirsch Research and Development, LLC v. IKO Industries, Inc.,
`6:20-cv-00317-ADA, 2021 WL 4555610 (W.D. Tex. Oct. 4, 2021) ................................. 4
`
`Krippelz v. Ford Motor Co.,
`667 F.3d 1261 (Fed. Cir. 2012)......................................................................................... 13
`
`NFC Tech. LLC v. HTC Am., Inc.,
`No. 2:13-CV-1058-WCB, 2015 WL 1069111 (E.D. Tex. Mar. 11, 2015) ......... 5, 8, 10, 12
`
`Norman IP Holdings, LLC v. TPLink Techs., Co.,
`No. 6:13-CV-384-JDL, 2014 WL 5035718 (E.D. Tex. Oct. 8, 2014) ................................ 6
`
`O2 Micro Int’l Ltd. v. Beyond Innovation Tech. Co.,
`521 F.3d 1351 (Fed. Cir. 2008)......................................................................................... 13
`
`QPSX Devs. 5 Pty Ltd. v. Ciena Corp.,
`No. 2:07-CV-118-CE, 2009 WL 8590964 (E.D. Tex. Aug. 27, 2009)............................... 9
`
`Quartz Auto Techs. v. Lyft, Inc.,
`No. 1:20-CV-719-LY, D.I. 125 (W.D. Tex. June 24, 2022) ..................................... 6, 9, 10
`
`Ramot at Tel Aviv Univ. Ltd. v. Cisco Sys., Inc.,
`No. 2:19-CV-00225-JRG, 2021 WL 121154 (E.D. Tex. Jan. 13, 2021) ............................ 8
`
`
`
`iii
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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 4 of 16
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`Ravgen, Inc. v. Natera, Inc., et al.,
`No. 1:20-CV-692-LY, D.I. 247 (W.D. Tex. May 31, 2022) ............................................... 6
`
`Target Training Int’l, Ltd. v. Extended Disc Int’l, Ltd.,
`No. CV H-11-2531, 2012 WL 12894748 (S.D. Tex. Mar. 26, 2012) ............................... 11
`
`TC Tech. LLC v. T-Mobile USA, Inc.,
`No. 6:20-CV-00899, 2021 WL 8083373 (W.D. Tex. Dec. 7, 2021) ......................... passim
`
`Statutes
`
`35 U.S.C. § 315(e)(2) ...................................................................................................................... 7
`
`Other Authorities
`
`H.R. Rep. No. 107-120, at 3 (2001) ................................................................................................ 3
`
`MPEP § 2209(E) ............................................................................................................................. 3
`
`MPEP § 2258(I)(G)....................................................................................................................... 10
`
`Regulations
`
`37 C.F.R. 1.530(j) ........................................................................................................................... 9
`
`
`
`
`
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`iv
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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 5 of 16
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`I.
`
`INTRODUCTION
`
`The Patent Office has recently cast doubt on the validity of nine of the twelve asserted
`
`claims across all four Asserted Patents1 in this case, finding that Defendant Apple Inc. (“Apple”)
`
`has raised multiple substantial new questions of patentability in ex parte reexaminations (“EPRs”).
`
`Moreover, Apple has filed additional EPRs, primarily based on the same prior art as the granted
`
`EPRs, addressing the other three recently asserted dependent claims. Accordingly, Apple
`
`respectfully requests that the Court stay the litigation pending final resolution of the EPR
`
`proceedings.
`
`Specifically, the following EPR requests (collectively, the “Co-Pending EPRs”) are
`
`currently pending before the Patent Office. The Co-Pending EPRs cover all twelve claims that
`
`Plaintiff asserted in its March 17, 2023 Amended Complaint (D.I. 91).2
`
`EPR Control
`No.
`90/015,186
`(Exhibit 1) 3
`90/015,187
`(Exhibit 2)
`90/015,188
`(Exhibit 3)
`90/015,189
`(Exhibit 4)
`90/015,222
`(Exhibit 5)
`90/015,223
`(Exhibit 6)
`
`Asserted
`Patent
`7,493,497
`
`Date of Filing
`
`Jan. 6, 2023
`
`Claims Under
`Reexamination
`1–3, 12, and 13
`
`8,020,008
`
`Jan. 6, 2023
`
`1, 2, 4, 6, and 7
`
`8,489,895
`
`Jan. 6, 2023
`
`9,507,948
`
`Jan. 6, 2023
`
`1–4, 6, 7, 9–13,
`and 15–16
`1
`
`7,493,497
`
`April 21, 2023
`
`4
`
`8,020,008
`
`April 21, 2023
`
`3, and 9
`
`Status
`
`Reexam Granted on
`April 3, 2023
`Reexam Granted on
`April 3, 2023
`Reexam Granted on
`April 3, 2023
`Reexam Granted on
`April 3, 2023
`Reexam Request Filed
`April 21, 2023
`Reexam Request Filed
`April 21, 2023
`
`
`1 The four “Asserted Patents” or “Patents-in-Suit” are U.S. Patent Nos. 7,493,497 (the “’497
`patent”), 8,020,008 (the “’008 patent”), 8,489,895 (the “’895 patent”), and 9,507,948 (the “’948
`patent”).
`
` 2
`
` In its Preliminary Infringement Contentions, Plaintiff asserted only four claims, each of which is
`subject to the already granted EPRs: claim 1 of the ’497 Patent; claim 1 of the ’008 Patent; claim
`5 of the ’895 Patent; and claim 1 of the ’948 Patent. Ex. 7. On March, 17, 2023, two months after
`Apple filed its initial EPRs, Plaintiff filed an Amended Complaint asserting eight new claims,
`which include three dependent claims that were not covered by Apple’s initial EPRs (’497 patent
`claim 4 and ’008 patent claims 3 and 9). D.I. 91. Apple’s granted EPRs already cover the four
`originally asserted claims and five of the eight newly asserted claims, and Apple has filed
`additional EPR requests that cover the remaining three newly asserted claims. Exs. 1, 2, 3, 4, 5,
`6.
`
` All exhibits are attached to the accompanying declaration of Michael Wueste.
`
`1
`
` 3
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`
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`

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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 6 of 16
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`All three factors considered by this Court favor a stay. First, there is no undue prejudice
`
`to Plaintiff, because Plaintiff is a non-practicing entity that admittedly does not practice the
`
`Asserted Patents and does not compete with Apple. Second, the case is still in its early stages:
`
`fact discovery opened only three months ago and does not close for over five months; opening
`
`expert reports are not due for seven months; and trial is over 17 months away in September 2024.
`
`Third, and most importantly, the EPR proceedings will greatly simplify the issues in this case
`
`because they are highly likely to result in cancellation of at least some (if not all) asserted claims.
`
`Indeed, courts have recognized that 80% of EPRs result in cancellation or amendment of at least
`
`one challenged claim. See infra p. 9.
`
`II.
`
`BACKGROUND
`
`Plaintiff filed this case on May 3, 2021 in this District’s Waco Division. D.I. 1. Pursuant
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`to the Waco Division’s standing order governing patent cases, discovery was stayed until after the
`
`Markman hearing. D.I. 31 at 2. Plaintiff served Preliminary Infringement Contentions on July 23,
`
`2021, asserting four total claims across the Patents-in-Suit: claim 1 of the ’497 Patent; claim 1 of
`
`the ’008 Patent; claim 5 of the ’895 Patent; and claim 1 of the ’948 Patent. Ex. 7. The parties
`
`completed claim construction briefing on terms selected from those four asserted claims on
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`December 17, 2021. On January 20, 2022, the Waco Court granted Apple’s Motion to Transfer
`
`the case to the Austin Division (D.I. 55), whereafter the case was again stayed pursuant to this
`
`Court’s order. D.I. 57. The Court held a Markman hearing addressing the terms selected from the
`
`four originally asserted claims on March 9, 2022 (D.I. 65) and issued a Markman Order on
`
`November 2, 2022. D.I. 77.
`
`On January 6, 2023, with the benefit of the Court’s Markman Order, Apple filed EPR
`
`requests covering claims 1-3, 12, and 13 of the ’497 patent; claims 1, 2, 4, 6, and 7 of the ’008
`
`patent; claims 1–4, 6, 7, 9–13, and 15–16 of the ’895 patent; and claim 1 of the ’948 patent (which
`
`included all four then-asserted claims of the Patents-in-Suit). Exs. 1–4.
`
`On March 17, 2023, two months after Apple filed its EPR requests, and over four months
`
`after the Court issued its Markman Order, Plaintiff filed an Amended Complaint asserting eight
`
`
`
`2
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`

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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 7 of 16
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`new claims in addition to the four originally asserted claims. D.I. 91. Three of Plaintiff’s newly
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`asserted claims—claim 4 of the ’497 patent and claims 3 and 9 of the ’008 patent—were not
`
`covered by Apple’s January 6, 2023 EPR requests. Exs. 1 and 2.
`
`On April 3, 2023, the Patent Office granted each of Apple’s January 6, 2023 EPR requests,
`
`finding that Apple had raised substantial new questions of patentability for all challenged claims—
`
`claims 1-3, 12, and 13 of the ’497 patent; claims 1, 2, 4, 6, and 7 of the ’008 patent; claims 1–4, 6,
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`7, 9–13, and 15–16 of the ’895 patent; and claim 1 of the ’948 patent. Exs. 1–4.
`
`On April 21, 2023, Apple filed additional EPR requests that cover the three newly asserted
`
`dependent claims that were not included in Apple’s first set of EPRs—i.e., claim 4 of the ’497
`
`patent and claims 3 and 9 of the ’008 patent. Exs. 5 and 6. The Patent Office will determine
`
`whether those EPR requests raise substantial new questions of patentability by July 21, 2023. See
`
`MPEP § 2209(E) (“Decision on a request for reexamination submitted under 35 U.S.C. 302 must
`
`be made no later than 3 months from its filing.”). As such, all asserted claims across all Patents-
`
`in-Suit are currently undergoing reexamination by the Patent Office.
`
`III. LEGAL STANDARD
`
`Congress created the reexamination process to “settle validity disputes more quickly and
`
`less expensively than litigation” and to allow “courts to refer patent validity questions to an agency
`
`with expertise in both the patent law and technology.” H.R. Rep. No. 107-120, at 3 (2001). A
`
`reexamination “eliminate[s]” the need to try infringement and validity issues for a cancelled claim,
`
`and “provid[es] the district court with the expert view” of the Patent Office even where a claim
`
`survives. Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir. 1983). Thus, courts in
`
`this circuit have found that “[t]here is a ‘liberal policy in favor of granting motions to stay
`
`proceedings pending the outcome of USPTO reexamination or reissuance proceedings.’” Golden
`
`Rule Fasteners, Inc. v. Neverleak Co., L.P., No. 3:17-CV-249-MPM-JMV, 2019 WL 384003, at
`
`*2 (N.D. Miss. Jan. 30, 2019) (quoting ASCII Corp. v. STD Entm’t USA, Inc., 844 F.Supp. 1378,
`
`1381 (N.D. Cal. 1994)).
`
`
`
`3
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`

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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 8 of 16
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`The decision to grant a stay for purposes of reexamination is within the district court’s
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`discretion. TC Tech. LLC v. T-Mobile USA, Inc., No. 6:20-CV-00899, 2021 WL 8083373, at *1
`
`(W.D. Tex. Dec. 7, 2021). This District considers three factors in determining whether to grant a
`
`stay: “(1) whether the stay will unduly prejudice the nonmoving party, (2) whether the proceedings
`
`before the court have reached an advanced stage, including whether discovery is complete and a
`
`trial date has been set, and (3) whether the stay will likely result in simplifying the case before the
`
`court.” TC Tech., 2021 WL 8083373 at *2 (quoting Kirsch Research and Development, LLC v.
`
`IKO Industries, Inc., 6:20-cv-00317-ADA, 2021 WL 4555610, at *1 (W.D. Tex. Oct. 4, 2021)).
`
`A stay is “particularly warranted when the outcome of a PTO proceeding is likely to assist the
`
`court in determining patent validity or eliminate the need to try infringement issues.” TC Tech.,
`
`2021 WL 8083373 at *1 (quoting NFC Tech. LLC v. HTC Am., Inc., No. 2:13-CV-1058-WCB,
`
`2015 WL 1069111, at *1 (E.D. Tex. Mar. 11, 2015)).
`
`IV. ARGUMENT
`
`All three factors considered by this District favor staying the case.
`
`A.
`
`A Stay Will Not Unduly Prejudice Plaintiff Because Of The Non-Competitive
`Relationship Between The Parties.
`
`Under the first factor, courts consider “whether the stay will unduly prejudice the
`
`nonmoving party.” TC Tech., 2021 WL 8083373 at *2. Although a stay will inherently delay this
`
`litigation, “mere delay in collecting damages ‘does not constitute undue prejudice.’” Crossroads
`
`Sys., Inc. v. Dot Hill Sys. Corp., No. 1-13-cv-00800, 2015 WL 3773014, at *2 (W.D. Tex. Jun. 15,
`
`2015); see also TC Tech., 2021 WL 8083373 at *2 (finding that a patent owner’s “interest in the
`
`timely enforcement of its patent rights” alone is “insufficient to defeat a motion to stay” because
`
`“that interest is present in every case where patent owner resists a stay.”).
`
`Plaintiff cannot show undue prejudice in this case. Plaintiff admits that it does not practice
`
`any of the Patents-in-Suit or make or sell any products, and therefore does not compete with Apple.
`
`See D.I. 99 Ex. 23 (Identity’s Response to Apple’s Interrogatory No. 11). Instead, Plaintiff exists
`
`only to engage in litigation and (allegedly) patent licensing. See id. Moreover, Plaintiff can only
`
`
`
`4
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`

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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 9 of 16
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`seek monetary damages for past infringement, as all of the Patents-in-Suit have expired. Exs. 2–
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`5. Thus, to the extent Plaintiff ultimately prevails in this litigation, it can be wholly compensated
`
`with monetary damages. Crossroads Sys, 2015 WL 3773014, at *2; Quartz Auto Techs. v. Lyft,
`
`Inc., No. 1:20-CV-719-LY, D.I. 125 at 3 (W.D. Tex. June 24, 2022) (finding plaintiff’s “ability to
`
`recover monetary damages” would be unaffected by a stay). Indeed, this Court has regularly found
`
`no undue prejudice to similarly situated parties in granting motions to stay pending reexamination.
`
`See, e.g., TC Tech., 2021 WL 8083373 at *2 (finding no undue prejudice where plaintiff is a
`
`“patent assertion entity only seeking monetary relief on a patent that expired”); Ravgen, Inc. v.
`
`Natera, Inc., et al., No. 1:20-CV-692-LY, D.I. 247 at 3 (W.D. Tex. May 31, 2022) (finding no
`
`undue prejudice in granting stay where “[p]laintiff does not seek lost profits or preliminary-
`
`injunctive relief”).
`
`Accordingly, the undue-prejudice factor strongly favors granting a stay.
`
`B.
`
`The Early Stage Of This Litigation Strongly Favors Granting A Stay.
`
`The second factor is whether the proceedings “have reached an advanced stage.” TC Tech.,
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`2021 WL 8083373 at *2. Courts more often grant stays when “there remains a significant amount
`
`of work ahead for the parties and the court,” and particularly consider “whether discovery is
`
`complete and whether a trial date has been set.” Norman IP Holdings, LLC v. TPLink Techs., Co.,
`
`No. 6:13-CV-384-JDL, 2014 WL 5035718, at *3 (E.D. Tex. Oct. 8, 2014).
`
`Although this case was filed in May 2021, it is still undoubtedly in its early stages. Because
`
`Plaintiff filed its original complaint in a clearly inconvenient venue (D.I. 55), fact discovery only
`
`opened on January 20, 2023, following two stays—per the Waco Division’s standing order
`
`governing patent cases (D.I. 31) and then this Court’s practice (D.I. 82). As such, fact discovery
`
`opened only three months ago and does not close for over five months, on October 6, 2023. D.I.
`
`No. 82 at 1. Expert discovery has not even begun and will not close for over nine months, on
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`February 2, 2024. Id. And while a trial date has been set, trial will not begin until September 30,
`
`2024, over 17 months away. Id.
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`
`
`5
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`

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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 10 of 16
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`Moreover, the bulk of the work has yet to be done. Since the opening of fact discovery,
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`the parties have served only one set of interrogatories per party, three sets of requests for
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`production (one by Apple, two by Plaintiff), and one request for admission (by Plaintiff). And as
`
`of this filing, the bulk of document production and depositions must still be completed.4
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`Critically, Plaintiff substantially reversed the case’s progression by filing an Amended
`
`Complaint on March 17, asserting eight new claims. D.I. 91. Plaintiff’s strategic and belated
`
`disclosure of newly asserted claims—tripling the number of asserted claims—has introduced
`
`significantly more work that must be completed in this case, including with regards to claim
`
`construction. None of Plaintiff’s newly asserted claims were addressed during the first round of
`
`claim construction. After Plaintiff filed its Amended Complaint, Apple promptly moved for
`
`further claim construction of disputed terms recited in Plaintiff’s newly asserted claims. See D.I.
`
`99. Should the Court grant Apple’s motion for further claim construction, the parties will now
`
`have to engage in an additional exchange of terms and constructions, complete claim construction
`
`briefing, conduct a hearing, and await the Court’s ruling. Id. As described in Apple’s request for
`
`additional claim construction, resolution of the parties’ dispute regarding the scope of the newly
`
`asserted claims is necessary before Apple prepares its Final Invalidity Contentions on July 10,
`
`2023 and during expert discovery.5 Id. Therefore, Apple has also moved to stay the case,
`
`consistent with this Court’s guidance, until that process is completed. Id.6; see also D.I. 63 at 16:3-
`
`6 (“The way it then works in my court is the stay that I have imposed is still in effect after we
`
`
`4 Plaintiff has thus far noticed two depositions of Apple’s witnesses. Apple has not noticed any
`depositions of Plaintiff’s witnesses. And neither party has served a 30(b)(6) deposition notice.
`
` 5
`
` The Scheduling Order sets the deadline for Plaintiff’s Final Infringement Contentions and
`Apple’s Final Invalidity Contentions on May 5, 2023 and June 19, 2023, respectively. D.I. 82.
`However, the parties have agreed to move those respective deadlines to May 19, 2023 and July 10,
`2023. The parties did not submit a filing to the Court reflecting those new deadlines per the Court’s
`instruction at the January 19, 2023 scheduling conference. Ex. 9 (Jan. 19, 2023 Hr’g Transcript),
`at 22:3-10.
`
` 6
`
` If the Court grants this motion to stay, the Court does not need to resolve Apple’s motion for
`further claim construction (D.I. 99), as the claim construction disputes concerning Plaintiff’s newly
`asserted claims can be resolved with an appropriate scheduling order post-stay, if any of those
`claims survive reexamination.
`
`
`
`6
`
`

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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 11 of 16
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`conclude the Markman hearing, and we will get out a Markman order as quickly as we can get out
`
`a Markman order.”).
`
`As such, the stage of this litigation, with the bulk of discovery and litigation activities still
`
`yet to be completed, favors a stay. See, e.g., TC Tech., 2021 WL 8083373 at *3 (finding the stage
`
`of litigation favored a stay where the case had been stayed for several months and fact and expert
`
`discovery had not been completed); NFC Tech. LLC, 2015 WL 1069111, at *3 (“[T]he bulk of the
`
`expenses that the parties would incur in pretrial work and trial preparation are still in the future.
`
`Thus, denying a stay because of the progress of the case to this point would impose significant
`
`expenses on the parties.”); Ramot at Tel Aviv Univ. Ltd. v. Cisco Sys., Inc., No. 2:19-CV-00225-
`
`JRG, 2021 WL 121154, at *2 (E.D. Tex. Jan. 13, 2021) (finding that “there remain significant
`
`resources yet to be expended by the parties” “with discovery complete, pretrial briefing submitted,
`
`and jury selection impending”); AGIS Software Dev. LLC v. Google LLC, No. 2:19-CV-00359-
`
`JRG, 2021 WL 465424, at *3 (E.D. Tex. Feb. 9, 2021) (same); Quartz, No. 1:20-CV-719-LY, D.I.
`
`125 at 3 (finding that “staying the case pending reexamination may reduce the amount of discovery
`
`required”).
`
`Accordingly, the stage-of-the-litigation factor strongly favors granting a stay.
`
`C.
`
`A Stay Will Undoubtedly Simplify The Issues Before The Court.
`
`The “final and most important factor in determining whether to grant a stay is whether the
`
`reexamination proceeding[s] will result in simplification of issues before the Court.” TC Tech.,
`
`2021 WL 8083373 at *3. Here, the six Co-Pending EPRs are guaranteed to simplify the patent
`
`validity disputes in this case. In particular, although EPR proceedings do not automatically have
`
`the same statutory estoppel effect as inter partes review (“IPR”) proceedings,7 Apple will stipulate
`
`that—if the Court grants a stay pending final resolution of the Co-Pending EPRs—Apple will not
`
`rely on any prior art references at trial that were raised in the Co-Pending EPRs. That stipulation
`
`ensures that the grounds addressed in the Co-Pending EPRs will not be relitigated in district court,
`
`
`7 See 35 U.S.C. § 315(e)(2) (statutory estoppel for IPRs).
`
`
`
`7
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`

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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 12 of 16
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`distinguishing this case from those in which defendants would not agree to be “bound by the results
`
`of the reexamination.” See, e.g., QPSX Devs. 5 Pty Ltd. v. Ciena Corp., No. 2:07-CV-118-CE,
`
`2009 WL 8590964, at *2 (E.D. Tex. Aug. 27, 2009).
`
`Even apart from Apple’s proposed stipulation, granting a stay in this case until final
`
`resolution of the Co-Pending EPRs would streamline this litigation in at least two ways: (1) at least
`
`some (if not all) of the asserted claims are likely to be cancelled, reducing the number of issues
`
`before this Court; and (2) review by the Patent Office will provide valuable guidance regarding
`
`the scope of the claims.
`
`First, at least some of Plaintiff’s asserted claims are likely to be cancelled in the Co-
`
`Pending EPRs. Cancellation of claims justifies a stay, because it would “eliminate the need for
`
`trial entirely.” TC Tech., 2021 WL 8083373, at *2–3; see also Gould, 705 F.2d at 1342; Fresenius
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`USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1340 (Fed. Cir. 2013) (“[I]n general, when a claim
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`is cancelled, the patentee loses any cause of action based on that claim . . . .”). It is not necessary
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`for all claims to be likely invalid to warrant a stay. See, e.g., Quartz, No. 1:20-CV-719-LY, D.I.
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`125 at 3 (granting stay where only three of four asserted patents were subject to EPR). Rather,
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`courts have consistently found that a case will be significantly simplified if even one asserted claim
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`is eliminated in post-grant proceedings. NFC Tech., 2015 WL 1069111, at *7 (“[A]ny disposition
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`by the PTAB is likely to simplify the proceedings before this Court.”) (emphasis added); EchoStar
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`Techs. Corp. v. TiVo, Inc., No. 5:05 CV 81 DF, 2006 WL 2501494, at *4 (E.D. Tex. July 14, 2006)
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`(finding reexamination would simplify issues at trial if it “narrows a claim”); see also Antor Media
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`Corp. v. Nokia, Inc., No. 2:05CV186, 2006 WL 7121721, at *5 (E.D. Tex. Sept. 27, 2006) (“Claim
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`cancellations will certainly simplify the issues that need to be litigated because these claims will
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`be removed entirely from consideration in the litigation.”).
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`Because the Patent Office has already found that a substantial new question of patentability
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`exists with regards to nine of the twelve asserted claims (and will issue a decision on the other
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`three newly asserted claims by July 21, 2023), continuing to litigate this case during the Co-
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`Pending EPRs would waste party and judicial resources on disputes concerning claims that are
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`8
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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 13 of 16
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`likely to be cancelled. Target Training Int’l, Ltd. v. Extended Disc Int’l, Ltd., No. CV H-11-2531,
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`2012 WL 12894748, at *3 (S.D. Tex. Mar. 26, 2012) (“[B]y not granting a stay the Court possibly
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`will have wasted its time and the time and resources of the parties by addressing invalid claims.”).
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`Furthermore, because the Asserted Patents have expired, Plaintiff cannot amend them to avoid
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`cancellation. 37 C.F.R. 1.530(j) (“No amendment may be proposed for entry in an expired
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`patent.”); see also TC Tech., 2021 WL 8083373, at *3 (“[B]ecause the ’488 Patent expired, it
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`cannot be amended and can only be cancelled.”). This means that cancellation is even more likely.
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`Statistics published by the Patent Office show that 66% of EPRs result in at least one claim being
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`cancelled or amended; and 13.1% of EPRs result in cancellation of all challenged claims. Ex. 8
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`(EPR Statistics). In other words, there is an 80% chance that at least some of the asserted claims
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`will be cancelled. See TC Tech., 2021 WL 8083373, at *3 (“[T]he likelihood of simplification is
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`not purely hypothetical: [Defendant] notes that in 80% of ex parte reexaminations, the claims are
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`cancelled or amended. And because the ’488 Patent expired, it cannot be amended and can only
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`be cancelled.”) (citation omitted).
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`Moreover, although a substantial new question of patentability has not yet been found for
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`three of the twelve asserted claims, that is solely a result of Plaintiff’s untimely disclosure of newly
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`asserted claims. See D.I. 91. That should not weigh against a stay because Apple promptly filed
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`EPR requests covering those three newly asserted dependent claims. See NFC Tech., 2015 WL
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`1069111, at *7 (“The reason that three of the claims of the ′664 patent were not included in the
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`defendant's original petition for inter partes review of the ′664 patent is that at the time the petition
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`was filed, NFCT had not asserted those claims against HTC. When NFCT asserted those claims
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`in the litigation, HTC promptly petitioned for those claims to be added to the inter partes review
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`proceeding. The absence, at least for now, of those claims from the inter partes review is therefore
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`chargeable to NFCT, not to HTC.”).
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`Second, even if none of the Co-Pending EPRs results in cancellation of any asserted
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`claim—an unlikely scenario, to be sure—a stay will provide this Court with “the benefit of the
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`[Patent Office’s] full and focused consideration of the effect of prior art on patents being asserted
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`9
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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 14 of 16
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`in litigation.” TC Tech., 2021 WL 8083373, at *3 (quoting NFC Tech., 2015 WL 1069111, at *4).
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`The Patent Office’s analysis is particularly beneficial here, because the parties have not yet begun
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`briefing the pending claim construction disputes. D.I. 99. That process—as well as the Court’s
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`subsequent analysis—will necessarily be informed by the Co-Pending EPRs. For example,
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`statements that Plaintiff makes during reexamination about the meaning of the claims, including
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`statements distinguishing the claims from the prior art, may give rise to prosecution disclaimers
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`that limit the scope of the claims. See, e.g., Krippelz v. Ford Motor Co., 667 F.3d 1261, 1266–67
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`(Fed. Cir. 2012) (holding that “[a] patentee’s statements during reexamination can be considered
`
`during claim construction, in keeping with the doctrine of prosecution disclaimer” and construing
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`claim term based on those statements). That is particularly true here, because the Patent Office
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`applies the same Phillips standard as district courts in interpreting claims when reexamining
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`expired patents. MPEP § 2258(I)(G) (“In a reexamination proceeding involving claims of an
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`expired patent, claim construction pursuant to the principle set forth by the court in [Phillips]
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`should be applied since the expired claim are not subject to amendment.”). Apple’s Co-Pending
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`EPRs address the same claims—claims 3–4 of the ’497 patent and claims 2–3 of the ’008 patent—
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`that recite limitations for which the Court should resolve the parties’ disputes over claim meaning.
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`D.I. 99; O2 Micro Int’l Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351, 1362 (Fed. Cir. 2008)
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`(“[w]hen the parties present a fundamental dispute regarding the scope of a claim term, it is the
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`court’s duty to resolve it.”). As such, the Court’s own analysis of the remaining disputed claim
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`terms will be substantially informed by the Patent Office’s Phillips-based analysis of claim scope.
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`Accordingly, the issue-simplification factor strongly favors granting a stay.
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`V.
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`CONCLUSION
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`For the foregoing reasons, Apple respectfully request that the Court stay this action pending
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`the final resolution of the Co-Pending EPRs.
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`10
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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 15 of 16
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`
`
`Dated: April 21, 2023
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`
`
`By:
`
`
`
`Respectfully submitted,
`
`/s/ Melissa R. Smith
`
`Melissa R. Smith
`State Bar No. 24001351
`GILLAM & SMITH, LLP
`303 South Washington Avenue
`Marshall, Texas 75670
`Telephone: (903) 934-8450
`Facsimile: (903) 934-9257
`Email: melissa@gillamsmithlaw.com
`
`James Travis Underwood
`Texas Bar No. 24102587
`GILLAM & SMITH, LLP
`102 N. College, Suite 800
`Tyler, Texas 75702
`Telephone: (903) 934-8450
`Facsimile: (903) 934-9257
`Email: travis@gillamsmithlaw.com
`
`
`John M. Desmarais (pro hac vice)
`Cosmin Maier (pro hac vice)
`Leslie M. Spencer (pro hac vice)
`Edward Geist (pro hac vice)
`Michael Wueste (pro hac vice)
`Joze Welsh (pro hac vice)
`Amy Wann (pro hac vice)
`Eli Balsam (pro hac vice)
`Asim Zaidi (pro hac vice forthcoming)
`
`DESMARAIS LLP
`230 Park Avenue
`New York, NY 10169
`Tel: 212-351-3400
`Fax: 212-351-3401
`jdesmarais@desmaraisllp.com
`cmaier@desmaraisllp.com
`lspencer@desmaraisllp.com
`egeist@desmaraisllp.com
`mwueste@desmaraisllp.com
`jwelsh@desmaraisllp.com
`awann@desmaraisllp.com
`ebalsam@desmaraisllp.com
`azaidi@desmaraisllp.com
`
`Attorneys for Defendant Apple Inc.
`
`
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`11
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`Case 1:22-cv-00058-ADA Document 104 Filed 04/21/23 Page 16 of 16
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`CERTIFICATE OF SERVICE
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`I hereby certify that a true and correct copy of the above and foregoing document has been
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`served on April 21, 2023 to all counsel of record who are deemed to have consented to electronic
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`service via the Court’s CM/ECF system.
`
`
`
`
`
`
`/s/ Melissa R. Smith
`Melissa R. Smith
`
`
`
`
`
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`CERTIFICATE OF CONFERENCE
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`I hereby certify that Apple’s counsel conferred in good faith with opposing counsel
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`pursuant to Local Civil Rule 7(g) on April 14, 2023, and Identity Security is opposed to the relief
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`sought. Accordingly, this Motion and the relief requested herein are submitted to the court for
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`