Case 6:21-cv-00916-ADA Document 109 Filed 11/16/22 Page 1 of 14
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
`
`RFCyber CORP.,
`
`v.
`
`APPLE INC.,
`
`Plaintiff,
`
`Case No. 6:21-cv-00916-ADA
`
`JURY TRIAL DEMANDED
`
`Defendant.
`
`APPLE INC.’S OPPOSED MOTION TO STAY PENDING TRANSFER
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`Case 6:21-cv-00916-ADA Document 109 Filed 11/16/22 Page 2 of 14
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`TABLE OF CONTENTS
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`Page
`
`I.
`
`II.
`
`III.
`
`INTRODUCTION ............................................................................................................. 1
`
`BACKGROUND ............................................................................................................... 2
`
`THE CASE SHOULD BE STAYED PENDING RESOLUTION OF APPLE’S
`MOTION TO TRANSFER ................................................................................................ 3
`
`A.
`
`B.
`
`The Court Has Inherent Authority to Issue a Stay to Ensure that a Motion
`to Transfer Venue is Given Top Priority ............................................................... 3
`
`All Relevant Factors Favor a Stay Pending a Decision on Transfer ...................... 6
`
`1.
`
`2.
`
`3.
`
`Factor One: A Stay Will Not Prejudice RFCyber ...................................... 6
`
`Factor Two: Apple Will Suffer Hardship Absent a Stay ........................... 7
`
`Factor Three: A Stay Will Conserve Judicial Resources ........................... 8
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`IV.
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`CONCLUSION .................................................................................................................. 8
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`Case 6:21-cv-00916-ADA Document 109 Filed 11/16/22 Page 3 of 14
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`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Aire Tech. Ltd., v. Apple Inc.,
`Case No. 6:21-cv-01101-ADA, ECF No. 71 (W.D. Tex. Nov. 8, 2022) ...............................1, 5
`
`In re Apple Inc.,
`979 F.3d 1332 (2020) .............................................................................................................4, 7
`
`In re Apple Inc.,
`No. 2022-162, --- F.4th ---, 2022 WL 16753325 (Fed. Cir. Nov. 8, 2022) ..................... passim
`
`In re Apple Inc.,
`No. 2022-163, 2022 WL 16754376 (Fed. Cir. Nov. 8, 2022) ...................................................4
`
`In re Apple Inc.,
`No. 2022-164, 2022 WL 16754153 (Fed. Cir. Nov. 8, 2022) ...............................................4, 5
`
`B & D Produce Sales, LLC v. Packman1, Inc.,
`Case No. SA-16-CV-99-XR, 2016 WL 4435275 (W.D. Tex. Aug. 19, 2016) ..........................6
`
`In re EMC Corp.,
`501 F. App’x 973 (Fed. Cir. 2013) ........................................................................................4, 7
`
`In re Google Inc.,
`No. 2015-138, 2015 WL 5294800 (Fed. Cir. July 16, 2015) .................................................4, 7
`
`In re Horseshoe Entm’t,
`337 F.3d 429 (5th Cir. 2003) .................................................................................................4, 7
`
`Jawbone Innovations, LLC v. Apple Inc.,
`Case No. 6:21-cv-00984, ECF No. 108 (W.D. Tex. Nov. 8, 2022) ...........................................5
`
`Landis v. N. Am. Co.,
`299 U.S. 248 (1936) ...................................................................................................................3
`
`McDonnell Douglas Corp. v. Polin,
`429 F.2d 30 (3d Cir. 1970).........................................................................................................8
`
`In re Morgan Stanley,
`417 F. App’x 947 (Fed. Cir. 2011) ............................................................................................6
`
`Nitek, Inc. v. Lite-On Tech. Corp.,
`21-cv-00794-ADA, ECF No. 56 (W.D. Tex. Aug. 25, 2022) ...................................................6
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`Case 6:21-cv-00916-ADA Document 109 Filed 11/16/22 Page 4 of 14
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`In re Radmax, Ltd.,
`720 F.3d 285 (5th Cir. 2013) .................................................................................................1, 5
`
`SanDisk Corp. v. Phison Elecs. Corp.,
`538 F. Supp. 2d 1060 (W.D. Wisc. 2008)..................................................................................6
`
`Scramoge Tech. Ltd. v. Apple Inc.,
`Case No. 6:21-cv-01071-ADA, ECF No. 68 (W.D. Tex. Nov. 8, 2022) ...............................1, 5
`
`Sensor Elec. Tech., Inc. v. Lite-On Tech. Corp.,
`Case No. 21-cv-00322-ADA, ECF No. 65 (W.D. Tex. Aug. 25, 2022) ....................................6
`
`In re SK Hynix Inc.,
`835 F. App’x 600 (Fed. Cir. 2021) ............................................................................................4
`
`Sonrai Memory Ltd. v. Oracle Corp.,
`Case No. 6:21-cv-00116-ADA, Text Order (W.D. Tex. Jan. 02, 2022) ....................................5
`
`In re TracFone Wireless, Inc.,
`848 F. App’x 899 (Fed. Cir. 2021) ............................................................................................4
`
`XR Commc’ns LLC v. Apple Inc.,
`Case No. 6:21-cv-00620-ADA, ECF No. 83 (W.D. Tex. Nov. 8, 2022) ...............................1, 5
`
`Yeti Coolers, LLC v. Home Depot U.S.A., Inc.,
`Case No. 1:17-cv-342, 2018 WL 2122868 (W.D. Tex. Jan. 8, 2018) .......................................6
`
`Statutes
`
`28 U.S.C. 1404(a) ........................................................................................................................4, 8
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`Case 6:21-cv-00916-ADA Document 109 Filed 11/16/22 Page 5 of 14
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`I.
`
`INTRODUCTION
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`Apple respectfully moves to stay all case activity pending a decision on Apple’s pending
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`Motion to Transfer to the Austin Division of the Western District of Texas (ECF No. 93). Both
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`the Federal Circuit and the Fifth Circuit have instructed district courts to prioritize transfer
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`motions and to address transfer before addressing other substantive issues. Indeed, the Federal
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`Circuit recently reinforced this directive in granting three mandamus petitions involving
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`unresolved motions to transfer before this Court and “directed [the Court] to postpone fact
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`discovery and other substantive proceedings until after consideration of Apple’s motion for
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`transfer.” In re Apple Inc., No. 2022-162, --- F.4th ---, 2022 WL 16753325, at *3 (Fed. Cir.
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`Nov. 8, 2022). This Court has subsequently stayed those cases pending resolution of those
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`motions to transfer. See Aire Tech. Ltd., v. Apple Inc., Case No. 6:21-cv-01101-ADA, ECF No.
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`71 (W.D. Tex. Nov. 8, 2022); Scramoge Tech. Ltd. v. Apple Inc., Case No. 6:21-cv-01071-ADA,
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`ECF No. 68 (W.D. Tex. Nov. 8, 2022); XR Commc’ns LLC v. Apple Inc., Case No. 6:21-cv-
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`00620-ADA, ECF No. 83 (W.D. Tex. Nov. 8, 2022).
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`The present case, in which the motion to transfer has been fully briefed since October 7
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`and all venue discovery has long been completed, is indistinguishable from these three recently
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`stayed litigations. And precedent dictates that these principles apply equally to intra-district
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`transfer. See In re Radmax, Ltd., 720 F.3d 285, 288 (5th Cir. 2013) (noting that 1404(a)
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`“appl[ies] as much to transfers between divisions of the same district as to transfers from one
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`district to another.”). Despite this overwhelming precedent, RFCyber is unwilling to agree to
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`stay this case to allow for resolution of the pending transfer motion. Instead, RFCyber insists on
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`continuing to expend resources of the parties and this Court on completing fact discovery and
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`serving opening experts reports, due on January 17 and 24, 2023, respectively. In light of the
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`appellate mandate to make transfer a “top priority” and the prejudice associated with proceeding
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`so far into merits discovery without resolution of the motion to transfer, any further proceedings
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`should be stayed pending a decision on transfer.
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`II.
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`BACKGROUND
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`RFCyber asserts that Apple’s products that include Apple Pay, Apple Wallet, or Apple
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`Cash (iPhone, iPad, Watch, and Mac) infringe the asserted patents because, under RFCyber’s
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`theory, these features enable secure contactless payment with a mobile device, including
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`emulating a payment card and completing a transaction, typically via near-field communication
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`(“NFC”). See ECF No. 18 at ¶ 14; see also id. at ¶ 15 (“Apple has distributed variants of Apple
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`Pay that have included functionality to emulate a payment card and settle a transaction via NFC
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`and/or MST at least since October 2014.”).
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`On April 18, 2022, and based on Apple’s investigation and understanding that the
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`payment related aspects of Apple Pay, Apple Wallet, and Apple Cash were primarily designed,
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`developed, and serviced by California-based Apple employees, Apple moved to transfer this case
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`to the Northern District of California. See ECF No. 41. During subsequent discovery disputes
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`related to Apple’s transfer motion, RFCyber claimed for the first time that non-payment aspects
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`of Apple Pay, Apple Wallet, Apple Cash, Passkit, and related hardware and software, such as
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`driver’s license functionality, were within the scope of its infringement contentions. See ECF
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`No. 93 at 2-3. As a result, on June 16, 2022, Apple notified RFCyber that, given RFCyber’s new
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`position about the purported scope of its contentions that for the first time made certain
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`employees in Austin relevant, Apple was willing to litigate this case in the Austin Division. Id.
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`RFCyber refused to stipulate to transfer to the Austin Division. Id. On June 22, 2022, fact
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`discovery opened for all purposes. ECF No. 29 at 2.
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`On August 10, 2022, Apple withdrew its motion to transfer to the Northern District of
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`California and, on August 16, 2022, Apple moved to transfer this case to the Austin Division of
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`Case 6:21-cv-00916-ADA Document 109 Filed 11/16/22 Page 7 of 14
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`the Western District of Texas. ECF Nos. 90, 92-93. Less than two weeks later on August 29,
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`2022, the Court’s clerk informed the parties via email that the Markman hearing was being
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`scheduled for September 20, 2022. Ex. 1 (Markman Email Chain). Shortly thereafter, Apple
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`informed the Court’s law clerk that Apple had a pending motion to transfer and, pursuant to the
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`Court’s OGP, respectfully requested a stay of the September 20, 2022 Markman hearing until
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`resolution of Apple’s transfer motion. Id. On September 7, 2022, the Court issued an Order
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`accelerating the Markman by a week to September 13, 2022. ECF No. 97.
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`On September 13, 2022, the Court convened the Markman hearing. ECF No. 99. At the
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`beginning of that hearing, counsel for Apple noted that Apple had a motion to transfer pending
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`and requested that the Court postpone the Markman hearing until after resolution of that Motion.
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`Ex. 2 (Markman Tr.) at 3:2-12. The Court indicated it was not aware of the pending Motion and
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`suggested that the hearing should be adjourned so that the transfer motion could be decided
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`before claim construction. Id. at 3:13-17. Counsel for Apple agreed and noted that briefing
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`could be completed within four weeks. Id. at 3:18-23. RFCyber objected to postponing the
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`hearing. The Court then indicated that because the motion was one for intra-district transfer, that
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`the Court would move forward with the claim construction hearing. Id. at 3:24-6:7. Later that
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`day, the Court issued its Claim Construction Order. ECF No. 100.
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`III.
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`THE CASE SHOULD BE STAYED PENDING RESOLUTION OF APPLE’S
`MOTION TO TRANSFER
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`A.
`
`The Court Has Inherent Authority to Issue a Stay to Ensure that a Motion to
`Transfer Venue is Given Top Priority
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`“[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.”). Landis v. N. Am. Co., 299 U.S. 248, 254–55 (1936). Both the
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`Federal Circuit and the Fifth Circuit have instructed district courts to prioritize transfer motions
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`and to address transfer before addressing other substantive issues. Indeed, in In re Apple, the
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`Federal Circuit made clear that transfer should be handled before other substantive tasks –
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`including Markman: “Although district courts have discretion as to how to handle their dockets,
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`once a party files a transfer motion, disposing of that motion should unquestionably take top
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`priority.” In re Apple Inc., 979 F.3d 1332, 1337 (2020); In re Horseshoe Entm’t, 337 F.3d 429,
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`433 (5th Cir. 2003) (“[I]n our view disposition of that [transfer] motion should have taken a top
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`priority in handling of this case by the . . . District Court.”); In re TracFone Wireless, Inc., 848 F.
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`App’x 899, 900–01 (Fed. Cir. 2021) (citing In re Horseshoe Ent., 337 F.3d at 433); In re SK
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`Hynix Inc., 835 F. App’x 600, 600–01 (Fed. Cir. 2021); In re Google Inc., No. 2015-138, 2015
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`WL 5294800, at *1–2 (Fed. Cir. July 16, 2015); see also In re EMC Corp., 501 F. App’x 973,
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`975–76 (Fed. Cir. 2013) (“Congress’ intent to prevent the waste of time, energy and money and
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`to protect litigants, witnesses and the public against unnecessary inconvenience and expense . . .
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`may be thwarted where, as here, defendants must partake in years of litigation prior to a
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`determination on a transfer motion.” (internal quotation marks and citation omitted)).1
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`The Federal Circuit recently reinforced this directive in granting three mandamus
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`petitions filed by Apple involving motions to transfer before this Court. See In re Apple Inc.,
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`No. 2022-162, --- F.4th ---, 2022 WL 16753325 (Fed. Cir. Nov. 8, 2022); In re Apple Inc., No.
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`2022-163, 2022 WL 16754376 (Fed. Cir. Nov. 8, 2022); In re Apple Inc., No. 2022-164, 2022
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`1 The Federal Circuit has recognized the importance of staying cases during the pendency of
`transfer motions as a means of upholding 28 U.S.C. 1404(a)’s intent to “prevent the waste ‘of
`time, energy, and money’ and ‘to protect litigants, witnesses and the public against unnecessary
`inconvenience and expense [. . . ] when defendants are forced to expend resources litigating
`substantive matters in an inconvenient venue while a motion to transfer lingers unnecessarily on
`the docket.” In re Google Inc., No. 2015-138, 2015 WL 5294800, at *1-2 (Fed. Cir. 2015)
`(internal citation omitted) (granting writ of mandamus and ordering a magistrate judge in the
`Eastern District of Texas to stay proceedings pending final resolution of a transfer motion filed
`8 months prior and issue a decision on transfer within 30 days).
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`WL 16754153 (Fed. Cir. Nov. 8, 2022). In each of these cases, Apple had pending a fully
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`briefed motion to transfer yet was ordered to proceed to fact discovery without resolution of its
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`motion. See id. The Federal Circuit found that “precedent entitles parties to have their venue
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`motions prioritized,” that a “decision of a transfer motion must proceed expeditiously as the first
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`order of business and that venue discovery must proceed immediately to enable such a prompt
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`decision of the transfer motion.” In re Apple Inc., --- F.4th ---, 2022 WL 16753325, at *2. The
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`Federal Circuit then instructed the Court to “postpone fact discovery and other substantive
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`proceedings until after consideration of Apple’s motion for transfer.” Id. at *3. Following these
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`orders, the Court then proceeded to issue orders in each of the three underlying cases staying all
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`deadlines, including fact discovery, pending resolution of the motions to transfer. See Aire Tech.
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`Ltd., v. Apple Inc., Case No. 6:21-cv-01101-ADA, ECF No. 71 (W.D. Tex. Nov. 8, 2022);
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`Scramoge Tech. Ltd. v. Apple Inc., Case No. 6:21-cv-01071-ADA, ECF No. 68 (W.D. Tex. Nov.
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`8, 2022); XR Commc’ns LLC v. Apple Inc., Case No. 6:21-cv-00620-ADA, ECF No. 83 (W.D.
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`Tex. Nov. 8, 2022). Similarly, in Jawbone Innovations, LLC v. Apple Inc., the Court sua sponte
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`issued a stay order pending resolution of the pending transfer motion. See Jawbone Innovations,
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`LLC v. Apple Inc., Case No. 6:21-cv-00984, ECF No. 108 (W.D. Tex. Nov. 8, 2022).
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`To the extent RFCyber attempts to distinguish this case because Apple is seeking intra-
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`district versus inter-district transfer, Apple is not aware of any reason or precedent suggesting
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`that the need to prioritize transfer motions should not apply equally to intra-district transfer. See
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`In re Radmax, Ltd., 720 F.3d 285, 288 (5th Cir. 2013) (noting that 1404(a) “appl[ies] as much to
`
`transfers between divisions of the same district as to transfers from one district to another.”). In
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`fact, on multiple occasions, this Court has stayed cases pending resolution of intra-district
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`transfer motions. See, e.g., Sonrai Memory Ltd. v. Oracle Corp., Case No. 6:21-cv-00116-ADA,
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`Text Order (W.D. Tex. Jan. 02, 2022); Sensor Elec. Tech., Inc. v. Lite-On Tech. Corp., Case No.
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`21-cv-00322-ADA, ECF No. 65 (W.D. Tex. Aug. 25, 2022); Nitek, Inc. v. Lite-On Tech. Corp.,
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`21-cv-00794-ADA, ECF No. 56 (W.D. Tex. Aug. 25, 2022).
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`B.
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`All Relevant Factors Favor a Stay Pending a Decision on Transfer
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`In this District, courts typically consider three factors in determining whether a stay is
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`warranted: (1) any potential prejudice to the non-moving party; (2) the hardship and inequity to
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`the moving party if the action is not stayed; and (3) the judicial resources saved by avoiding
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`duplicative litigation. Yeti Coolers, LLC v. Home Depot U.S.A., Inc., Case No. 1:17-cv-342,
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`2018 WL 2122868, at *1 (W.D. Tex. Jan. 8, 2018); B & D Produce Sales, LLC v. Packman1,
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`Inc., Case No. SA-16-CV-99-XR, 2016 WL 4435275, at *1 (W.D. Tex. Aug. 19, 2016). Here,
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`all three factors favor a stay.
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`1.
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`Factor One: A Stay Will Not Prejudice RFCyber
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`RFCyber will not suffer any prejudice as a result of a stay pending a decision on transfer.
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`However, RFCyber will undoubtedly claim that even a short stay will cause prejudice by
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`delaying recovery of the damages RFCyber is seeking. But this argument lacks merit for three
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`simple reasons. First, a delay in recovering money damages cannot, of itself, constitute
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`sufficient prejudice to deny a stay because a plaintiff will always face that possibility when a stay
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`is ordered. SanDisk Corp. v. Phison Elecs. Corp., 538 F. Supp. 2d 1060, 1067 (W.D. Wisc.
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`2008) (“[p]laintiff’s only real ‘injury’ is that it will have to wait for any money damages, which
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`is always the case when a stay is imposed.”). Second, RFCyber “does not make or sell any
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`product that practices the claimed invention [and i]t therefore is not in need of a quick resolution
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`of this case because its position in the market is threatened.” In re Morgan Stanley, 417 F.
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`App’x 947, 950 (Fed. Cir. 2011). Third, Apple is seeking a stay of a limited duration so that
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`transfer issues are decided before other substantive issues are addressed and further fact and
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`expert discovery is undertaken. See In re Apple Inc., --- F.4th ---, 2022 WL 16753325, at *2–3
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`(“decision of a transfer motion must proceed expeditiously as the first order of business … the
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`district court is directed to postpone fact discovery and other substantive proceedings until after
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`consideration of Apple's motion for transfer.”). Therefore, this factor strongly favors a stay.
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`2.
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`Factor Two: Apple Will Suffer Hardship Absent a Stay
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`The Federal Circuit and Fifth Circuit agree that deciding transfer should be the Court’s
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`top priority in handling the case. In re Apple Inc., --- F.4th ---, 2022 WL 16753325, at *2–3
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`(“decision of a transfer motion must proceed expeditiously as the first order of business”); In re
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`Apple Inc., 979 F.3d at 1337; In re EMC Corp., 501 F. App’x at 975-76; Horseshoe Entm’t, 337
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`F.3d at 433. Moving forward now with the close of fact discovery and opening of expert
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`discovery—both two months away—will risk the very same “waste of time, energy and money”
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`the Federal Circuit cautioned against in EMC and In re Apple. In re Apple Inc., 979 F.3d at
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`1337; EMC Corp., 501 F. App’x at 975-76.
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`Here, Apple is suffering continued prejudice given it has been subject to extensive,
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`ongoing fact discovery and opening expert reports are less than two months away. Indeed, if this
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`case is transferred to the Austin Division, that court has its own procedures for patent cases that
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`can differ significantly from those employed by this Court. In addition, given there has been no
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`Markman Order issued in this case reflecting the Court’s analysis, the transferee court may wish
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`to conduct its own claim construction analysis, thus causing additional burden and expense. All
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`of these types of activity have been identified by the appellate courts as things that should not
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`proceed pending a decision on transfer. In re Apple Inc., --- F.4th ---, 2022 WL 16753325
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`(“direct[ing] [the Court] to postpone fact discovery and other substantive proceedings until after
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`consideration on Apple’s motion for transfer.”); see also In re EMC Corp., 501 F. App’x at 975–
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`76; In re Google Inc., 2015 WL 5294800, at *1-2.
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`3.
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`Factor Three: A Stay Will Conserve Judicial Resources
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`A stay pending a decision on transfer will also conserve judicial resources as it minimizes
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`the risk of duplicative proceedings in two different courts. See In re Apple Inc., --- F.4th ---,
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`2022 WL 16753325, at *2 (“Moreover, an undue delay for a motion under § 1404(a), as other
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`district courts have found, may unnecessarily require the expenditure of judicial resources in
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`both the transferor and transferee courts.”). “Judicial economy requires that another district
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`court should not burden itself with the merits of the action until it is decided that a transfer
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`should be effected and such consideration additionally requires that the court which ultimately
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`decides the merits of the action should also decide the various questions which arise during the
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`pendency of the suit instead of considering it in two courts.” Id. quoting McDonnell Douglas
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`Corp. v. Polin, 429 F.2d 30, 30 (3d Cir. 1970). A stay will also avoid a situation where the
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`parties proceed under this Court’s Order Governing Proceedings only to have different rules and
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`procedures apply in the transferee forum.
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`IV.
`
`CONCLUSION
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`For the foregoing reasons, the Court should stay the case until a decision on transfer is
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`rendered.
`
`Dated: November 16, 2022
`
`Respectfully submitted,
`
`/s/ John M. Guaragna
`John M. Guaragna (Bar No. 24043308)
`Zachary Loney (Bar No. 24092714)
`DLA PIPER LLP (US)
`401 Congress Avenue, Suite 2500
`Austin, TX 78701
`Telephone: (512) 457-7000
`Facsimile: (512) 457-7001
`john.guaragna@us.dlapiper.com
`zachary.loney@us.dlapiper.com
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`Case 6:21-cv-00916-ADA Document 109 Filed 11/16/22 Page 13 of 14
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`Sean C. Cunningham (pro hac vice)
`Erin P. Gibson (pro hac vice)
`Peter Maggiore (pro hac vice)
`DLA PIPER LLP (US)
`401 B Street, Suite 1700
`San Diego, CA 92101
`Telephone: (619) 699-2700
`Facsimile: (619) 699-2701
`sean.cunningham@us.dlapiper.com
`erin.gibson@us.dlapiper.com
`peter.maggiore@us.dlapiper.com
`
`Stephanie Lim (pro hac vice)
`DLA PIPER LLP (US)
`444 West Lake Street, Suite 900
`Chicago, IL 60606
`Telephone: (312) 368-4000
`Facsimile: (312) 630-7408
`stephanie.lim@us.dlapiper.com
`Attorneys for Defendant Apple Inc.
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`CERTIFICATE OF CONFERENCE
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`Pursuant to Local Rule CV-7(i), counsel for Apple has conferred with counsel for
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`RFCyber in a good-faith effort to resolve the matter presented herein. Counsel for RFCyber
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`opposes the instant Motion.
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`/s/ John M. Guaragna
`John M. Guaragna
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`Case 6:21-cv-00916-ADA Document 109 Filed 11/16/22 Page 14 of 14
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that on this 16th day of November, 2022, all counsel of record
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`who are deemed to have consented to electronic service are being served with a copy of this
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`document through the Court’s CM/ECF system under Local Rule CV-5(a)(3). Any other counsel
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`of record will be served by a facsimile transmission and/or first-class mail.
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`/s/ John M. Guaragna
`John M. Guaragna
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`WEST\300619026.7
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`10
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`