IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION FUNDAMENTAL INNOVATION SYSTEMS INTERNATIONAL LLC, Plaintiff, vs. LG ELECTRONICS, INC., et al. Defendants. Case No. 2:16-CV-01425-JRG-RSP LEAD CASE FUNDAMENTAL INNOVATION SYSTEMS INTERNATIONAL LLC, Plaintiff, vs. HUAWEI INVESTMENT & HOLDING CO., LTD. et al., Defendants. Case No. 2:16-CV-01424-JRG-RSP PLAINTIFF’S OPPOSITION TO THE LG DEFENDANTS’ MOTION TO STAY PENDING RESOLUTION OF DEFENDANTS’ OBJECTIONS TO THE COURT’S JANUARY 3, 2018 MEMORANDUM AND OPINION REGARDING DEFENDANTS’ MOTION TO TRANSFER VENUE (DKT. 104) Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 1 of 18 PageID #: 3123 i TABLE OF CONTENTS Page I. INTRODUCTION ...............................................................................................................1 II. FACTUAL BACKGROUND ..............................................................................................2 III. ARGUMENT .......................................................................................................................2 A. LG Fails to Raise, Let Alone Establish, a “Clear Case of Hardship or Inequity” ..................................................................................................................3 B. Pursuant to the Local Rules, Cases Are Not Stayed Pending Resolution of Defendants’ Attempts to Transfer Venue ................................................................5 C. The Factors This Court Considers Each Weigh Against A Stay .............................6 D. LG Cites No Eastern District of Texas Case Granting a Stay Pending an Objection to a Denial of Transfer ............................................................................8 IV. CONCLUSION ..................................................................................................................11 Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 2 of 18 PageID #: 3124 ii TABLE OF AUTHORITIES Page Cases Advanced Mktg. Sys., LLC v. CVS Pharmacy, Inc., No. 6:15-cv-134, Dkt. 61 (E.D. Tex. Sept. 3, 2015) .................................................................. 5 Allergan Inc. v. Sandoz Inc., No. 2:12-cv-207, 2013 WL 1222347 (E.D. Tex. Mar. 25, 2013) .............................................. 8 Ambato Media, LLC v. Clarion Co., Ltd., No. 2:09-cv-242, 2012 WL 194172 (E.D. Tex. Jan. 23, 2012) ................................................. 6 Black Hills Media, LLC v. Samsung Elecs. Co., Ltd., No. 2:13-cv-379, Dkt. 63 (E.D. Tex. Mar. 17, 2014) .............................................................. 11 Brite Smart Corp. v. Google, Inc., 2:14-cv-760, Dkt. 151 (E.D. Tex. July 16, 2015) .................................................................... 10 Coastal (Berm.) Ltd. v. E.W. Saybolt & Co., 761 F.2d 198 (5th Cir. 1985) ..................................................................................................... 2 DSS Tech. Mgmt., Inc. v. Apple Inc., No. 6:13-cv-919, Dkt. 83 (E.D. Tex. Oct. 28, 2014) ................................................................. 9 EchoStar Techs. Corp. v. TiVo, Inc., No. 5:05-cv-81, 2006 WL 2501494 (E.D. Tex. July 14, 2006) ................................................. 9 Emanuel v. SPX Corp., No. 6:09-cv-220, Dkt. 20 (E.D. Tex. July 2, 2009) ................................................................... 5 GATX Aircraft Corp. v. M/V Courtney Leigh, 768 F.2d 711 (5th Cir. 1985) ..................................................................................................... 3 GHJ Holdings, LLC v. Plasticade Prods. Corp., No. 5:10-cv-220, Dkt. 53 (E.D. Tex. Sept. 7, 2011) .................................................................. 5 In re EMC Corp., 501 F. App’x 973 (Fed. Cir. 2013) ............................................................................................ 9 In re Fusion-IO, Inc., 489 F. App’x 465 (Fed. Cir. 2012) ............................................................................................ 8 In re Google Inc., No. 2015-138, 2015 WL 5294800 (Fed. Cir. 2015) .................................................................. 9 In re Horseshoe Entm’t, 337 F.3d 429 (5th Cir. 2003) ..................................................................................................... 9 Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 3 of 18 PageID #: 3125 iii In re Nintendo Co., Ltd., 544 F. App’x 934 (Fed. Cir. 2013) .......................................................................................... 10 Kron Med. Corp. v. Groth, 119 F.R.D. 636 (M.D.N.C. 1988) .......................................................................................... 6, 7 Landis v. N. Am. Co., 299 U.S. 248 (1936) ............................................................................................................... 2, 3 Lockyer v. Mirant Corp., 398 F.3d 1098 (9th Cir. 2005) ................................................................................................... 4 McKenna v. CDC Software, Inc., No. 08-cv-110, 2008 WL 1782656 (D. Col. Apr. 17, 2008) ..................................................... 6 Nat’l Oilwell Varco, L.P. v. Auto-Dril, Inc., No. 5:09-cv-85, 2010 WL 8923337 (E.D. Tex. Jan. 5, 2010) ................................................... 3 Ohio Willow Wood Co. v. Thermo-Ply, Inc., No. 9:07-cv-274, 2008 WL 8793604 (E.D. Tex. Mar. 26, 2008) .............................................. 3 Secure Axcess, LLC v. Nintendo of Am. Inc., No. 2:13-cv-32, Dkt. 133 (E.D. Tex. Feb. 10, 2014) ............................................................... 10 Smartflash LLC, v. Apple, Inc., No. 6:13-cv-447, 2014 WL 3366661 (E.D. Tex. Jul. 8, 2014) ................................................. 11 Software Rights Archive, LLC v. Google Inc., No. 2:07-cv-511, Dkt. 288 (E.D. Tex. May 26, 2010) .............................................................. 5 Solid State Storage Sols., Inc. v. STEC, Inc., No. 2:11-cv-391, Dkt. 292 (E.D. Tex. Jan. 3, 2013) ............................................................... 10 Soverain Software LLC v. Amazon.com, Inc., 356 F. Supp. 2d 660 (E.D. Tex. 2005) ........................................................................... 3, 6, 7, 9 Spa Syspatronic, AG v. Verifone, Inc., No. 2:07-cv-416, 2008 WL 1886020 (E.D. Tex. Apr. 25, 2008) ............................................ 11 Srong ex rel. Tidewater, Inc. v. Taylor, No. 11-392, 2013 WL 818893 (E.D. La. Mar. 5, 2013) ............................................................ 3 SSL Servs., LLC v. Citrix Sys., Inc., No. 2:08-cv-158, 2012 WL 909318 (E.D. Tex. Mar. 16, 2012) ................................................ 6 Uniloc USA, Inc. v. Google, Inc., No. 2:16-cv-566, Dkt. 33 (E.D. Tex. Dec. 29, 2016) ................................................................ 5 Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 4 of 18 PageID #: 3126 iv VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307 (Fed. Cir. 2014) ............................................................................................... 11 Statutory Authorities 28 U.S.C. § 1404(a) ........................................................................................................................ 1 Rules and Regulations Fed. R. Civ. P. 1 .............................................................................................................................. 7 Local Rule 26(a) ..................................................................................................................... 1, 5, 6 Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 5 of 18 PageID #: 3127 1 Plaintiff Fundamental Innovation Systems International LLC (“FISI”) submits this response in opposition to LG’s motion to stay the proceedings pending resolution of its objections to the Court’s denial of LG’s motion to transfer (Dkt. 114), and respectfully shows as follows: I. INTRODUCTION LG fails to satisfy its heavy burden to justify staying these proceedings. Indeed, LG’s own actions demonstrate that a stay is not appropriate, as LG delayed nearly six months before filing its initial motion to transfer under § 1404(a), did not request a stay at that time, and then delayed another seven months, filing the instant motion only after the motion to change venue was denied. If LG’s true motivation was concern for the Court’s “allocation of its resources,” rather than delay, LG would have filed its motions promptly. Moreover, LG has not claimed, much less established, a “clear case of hardship or inequity” in continuing, nor explained how a stay would simplify this litigation; instead, it points to the “significant efforts” involved in discovery and claim construction (both of which are already well underway) while the Court considers its objections. But the parties’ claim construction positions (already set forth in the parties’ joint statement) have nothing to do with LG’s transfer arguments, and LG ignores that the same discovery and claim construction is necessary regardless of venue (and so will not simplify issues). LG does not even address Local Rule 26(a), which provides that, absent Court order to the contrary, discovery shall proceed despite a party’s attempts to transfer venue. Here, the Court has denied LG’s transfer motion, so there is even less of a reason to grant a stay. Finally, staying this litigation will unduly prejudice FISI, who has a legal “interest in the timely enforcement of its patent rights,” by disrupting FISI’s ongoing discovery efforts and Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 6 of 18 PageID #: 3128 2 preparation for the upcoming Markman hearing, and undermining FISI’s right to secure a just and speedy determination. LG’s motion to stay is a strategic attempt to derail this litigation. II. FACTUAL BACKGROUND FISI filed suit against LG on December 16, 2016. LG waited nearly six months, until June 9, 2017, to file a motion to transfer venue, asking the Court to transfer the case to the District of New Jersey. (Dkt. 48). While that motion was pending, LG never sought a stay. The Court held a hearing on LG’s Motion to Transfer on December 18, 2017. (Dkt. 98). The Court denied LG’s motion in an order dated December 28, 2017. (Dkt. 104). On January 17, 2018, LG filed objections and the instant motion to stay “pending resolution of LG’s Objections” to the Court’s order denying transfer. (Dkt. 114 at 1). During the preceding 13 months, the parties engaged in extensive discovery, including the exchange of initial disclosures, infringement contentions, invalidity contentions, document productions, and interrogatories. The parties have already completed claim construction discovery. FISI has also substantially completed its document production and served a privilege log. The LG Defendants must substantially complete their document production and serve privilege logs by February 7, 2018. The Markman hearing is scheduled for March 21, 2018. Fact discovery closes April 11, 2018 and expert discovery closes May 25, 2018. Jury selection is set for September 10, 2018. (Dkt. 96). III. ARGUMENT In the Fifth Circuit, a moving party bears a “heavy burden” to obtain a stay: “Where a discretionary stay is proposed, something close to genuine necessity should be the mother of its invocation.” Coastal (Berm.) Ltd. v. E.W. Saybolt & Co., 761 F.2d 198, 203 n.6 (5th Cir. 1985). Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 7 of 18 PageID #: 3129 3 According to the Supreme Court, “the suppliant for a stay must make out a clear case of hardship or inequity in being required to go forward, if there is even a fair possibility that the stay for which he prays will work damage to someone else.” Landis v. N. Am. Co., 299 U.S. 248, 255 (1936); see also GATX Aircraft Corp. v. M/V Courtney Leigh, 768 F.2d 711, 716 (5th Cir. 1985) (citing Landis in affirming district court’s denial of stay); Ohio Willow Wood Co. v. Thermo-Ply, Inc., No. 9:07-cv-274, 2008 WL 8793604, *1 (E.D. Tex. Mar. 26, 2008) (quoting Landis in denying motion to stay). In deciding a motion to stay, this Court typically considers the following factors: (1) the potential undue prejudice or clear tactical disadvantage to the non-movant that the stay would cause; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether discovery is complete and whether a trial date has been set. See, e.g., Nat’l Oilwell Varco, L.P. v. Auto-Dril, Inc., No. 5:09-cv-85, 2010 WL 8923337, at *1 (E.D. Tex. Jan. 5, 2010); Soverain Software LLC v. Amazon.com, Inc., 356 F. Supp. 2d 660, 662 (E.D. Tex. 2005); see also Srong ex rel. Tidewater, Inc. v. Taylor, No. 11-392, 2013 WL 818893, at *2 (E.D. La. Mar. 5, 2013). Because LG has failed to meet its heavy burden to clearly show undue hardship or inequity and the traditional factors each weigh against a stay, the Court should deny LG’s motion. A. LG Fails to Raise, Let Alone Establish, a “Clear Case of Hardship or Inequity” LG never even argues, let alone establishes, a clear case of hardship or inequity absent a stay. See Landis, 299 U.S. at 255 (movant for a stay “must make out a clear case of hardship or inequity in being required to go forward”); Lockyer v. Mirant Corp., 398 F.3d 1098, 1112 (9th Cir. 2005) (“[B]eing required to defend a suit, without more, does not constitute a ‘clear case of Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 8 of 18 PageID #: 3130 4 hardship or inequity’ within the meaning of Landis.”). Rather, LG’s argument for staying the case relies on its belief that a stay will “allow[] the Court to focus on deciding LG’s objections”; and that absent a stay, the parties will “spend significant effort preparing for claim construction, engaging in fact discovery, and preparing for expert discovery.” (Dkt. 114 at 6-7). Both arguments lack merit. With respect to LG’s first argument, the Court can certainly handle LG’s objections without staying the entire proceeding. This is particularly true since the objections to the Court’s denial of LG’s transfer motion will be ruled on by Judge Gilstrap, whereas the forthcoming Markman hearing and any discovery issues will be overseen by Magistrate Judge Payne. In another case before this Court, Fundamental Innovation Systems International LLC v. Samsung Electronics Co., Ltd., No. 2:17-cv-145 (E.D. Tex.), Magistrate Judge Payne just issued his Markman Order. Many claim terms at issue in the Samsung case are similarly at issue here. Staying the case would burden the Court and reduce judicial efficiency by pushing the LG Markman hearing back to an uncertain future date, thereby setting aside Magistrate Judge Payne’s current familiarity with the issues. With respect to LG’s second argument, LG will need to prepare for claim construction, engage in fact discovery, and prepare for expert discovery regardless of the venue. It would be inefficient to put these activities on hold while the Court considers LG’s objections to the Court’s denial of transfer. Even if the Court were to reverse the denial of transfer, LG’s efforts will not have been wasted as they would need to be undertaken regardless of the assigned venue.1 1 FISI believes that Magistrate Judge Payne’s Order was correct and LG’s Objections are plainly insufficient, as we discuss in our Response to LG’s Objections, filed contemporaneously with this Opposition. Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 9 of 18 PageID #: 3131 5 Any additional “effort” required of LG (there is no more here than any other patent case) is entirely of its own making. LG delayed filing its initial motion to transfer for nearly six months. It delayed filing a motion to stay for more than one year and ultimately filed only after its motion to change venue was denied. If extra “effort” is required of LG, it has only itself to blame. B. Pursuant to the Local Rules, Cases Are Not Stayed Pending Resolution of Defendants’ Attempts to Transfer Venue Local Rule 26(a) specifically states that “[a]bsent court order to the contrary, a party is not excused from responding to discovery because there are pending motions to dismiss, to remand, or to change venue.” L.R. 26(a). Accordingly, courts in this District routinely deny motions to stay discovery until resolution of pending motions to transfer venue. See, e.g., GHJ Holdings, LLC v. Plasticade Prods. Corp., No. 5:10-cv-220, Dkt. 53 (E.D. Tex. Sept. 7, 2011) (Folsom, J.) (denying emergency motion for temporary stay of discovery until after resolution of pending motions to dismiss and to transfer); Emanuel v. SPX Corp., No. 6:09-cv-220, Dkt. 20 (E.D. Tex. July 2, 2009) (Davis, J.) (denying request to stay discovery pending the Court’s ruling on defendant’s motion to transfer venue); Software Rights Archive, LLC v. Google Inc., No. 2:07-cv-511, Dkt. 288 (E.D. Tex. May 26, 2010) (Everingham, M.J.) (denying motion to stay discovery until a resolution of defendants’ motion to transfer venue); Uniloc USA, Inc. v. Google, Inc., No. 2:16-cv-566, Dkt. 33, at 2 (E.D. Tex. Dec. 29, 2016) (Gilstrap, J.) (denying motion to stay pending a motion to dismiss and explaining: “The costs associated with adhering to routine discovery obligations do not uniformly impose an undue burden on the parties”); see also Advanced Mktg. Sys., LLC v. CVS Pharmacy, Inc., No. 6:15-cv-134, Dkt. 61, at 1 n.1 (E.D. Tex. Sept. 3, 2015) (Mitchell, M.J.) (“A stay is not justified merely because a party desires to save money.”). Courts in other districts similarly are reluctant to stay discovery until resolution Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 10 of 18 PageID #: 3132 6 of pending motions to transfer venue. See, e.g., Kron Med. Corp. v. Groth, 119 F.R.D. 636 (M.D.N.C. 1988); McKenna v. CDC Software, Inc., No. 08-cv-110, 2008 WL 1782656 (D. Col. Apr. 17, 2008). Despite the clear language of Local Rule 26(a) and the long list of cases denying stays pending resolution of motions to transfer, LG fails to even acknowledge that the default rule in this District requires discovery to proceed, even when a party is seeking to transfer venue. See L.R. 26(a). LG’s attempt to stay this case-after its transfer motion has already been denied-is simply an effort to unjustifiably delay resolution of this case. Because this Court has already determined that venue in this District is proper, LG cannot justify staying this litigation. Its motion to stay should be denied. C. The Factors This Court Considers Each Weigh Against A Stay 1. A Stay Will Severely Prejudice FISI A stay of this action will unduly prejudice FISI, a “patentee, who has an interest in the timely enforcement of its patent rights.” Ambato Media, LLC v. Clarion Co., Ltd., No. 2:09-cv- 242, 2012 WL 194172, at *1 (E.D. Tex. Jan. 23, 2012). LG argues that staying the case will not unduly prejudice FISI, because “FISI and LG are not in competition.” (Dkt. 114 at 5). That FISI may not be harmed in the competitive marketplace for smartphone sales is, of course, not the sole inquiry. LG ignores this Court’s precedent that recognizes the risk of undue prejudice to patent holders. See Soverain, 356 F. Supp. 2d at 662 (finding that a stay “would unduly prejudice [Plaintiff]’s ability to protect its property rights in the patents at issue”); SSL Servs., LLC v. Citrix Sys., Inc., No. 2:08-cv-158, 2012 WL 909318, at *2 (E.D. Tex. Mar. 16, 2012) (same). Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 11 of 18 PageID #: 3133 7 The Eastern District “places great importance on going to trial on the date set in the scheduling order unless extraordinary circumstances arise.” Soverain, 356 F. Supp. 2d at 663. A stay of this action will disrupt FISI’s discovery efforts and undermine FISI’s ability to “secure the just, speedy, and inexpensive determination” of its action as required by Federal Rule of Civil Procedure 1. Moreover, courts recognize that staying discovery duplicates costs because counsel must reacquaint themselves with the case once the stay is lifted, matters of importance may be mislaid or avenues unexplored, and a case becomes more of a management problem to the Court when it leaves the normal trial track. See, e.g., Kron Medical, 119 F.R.D. at 638. LG also ignores the fact that this case has been consolidated with FISI’s co-pending case against Huawei, with a consolidated Markman hearing scheduled for March 21, 2018. If the Court were to stay the LG case, the Huawei case will proceed, which would result in the need to schedule a separate LG Markman hearing once the stay is lifted. This would further prejudice FISI by adding to its litigation costs and distracting from its case against Huawei. It would also burden the Court with an unnecessary second Markman hearing. In sum, a stay would unduly prejudice FISI. 2. A Stay Will Not Simplify Issues A stay pending determination of the transfer motion will not simplify any issues in the litigation. Whether the case ultimately proceeds in New Jersey or Texas, FISI will develop its infringement and damages case, while LG will presumably attempt to develop its noninfringement and invalidity positions. Because a transfer will not resolve any issues pending in the litigation, this factor strongly favors denying LG’s motion. Indeed, this factor is especially strong here, where FISI has already substantially completed its document production, leaving LG Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 12 of 18 PageID #: 3134 8 free to continue developing its case during the stay. Meanwhile, LG has yet to substantially complete its production, leaving FISI without relevant documents. 3. Discovery Is Proceeding Toward a September 10, 2018 Trial Date Furthermore, this case is far from its infancy. The parties have exchanged initial disclosures, infringement contentions, invalidity contentions, and document productions, filed a joint claim construction statement, and completed claim construction discovery. FISI has already substantially completed its document production and served a privilege log. The deadline for all parties to substantially complete document production is February 7, 2018. The parties are presently preparing for the March 21, 2018 Markman hearing. Fact discovery closes shortly thereafter, on April 11, 2018. The Court has set the pretrial conference for August 15, 2018, with jury selection to commence on September 10, 2018. (Dkt. 96). In view of the advanced stage of the case, including a Markman hearing in less than two months and trial in less than nine months, the Court should deny the LG Defendants’ request for a stay. See Allergan Inc. v. Sandoz Inc., No. 2:12-cv-207, 2013 WL 1222347, at *2 (E.D. Tex. Mar. 25, 2013) (Court denied a stay considering that a Markman hearing and jury selection were set within a year). D. LG Cites No Eastern District of Texas Case Granting a Stay Pending an Objection to a Denial of Transfer LG has not cited any case where any Court has stayed a patent case pending resolution of an objection to an order denying a motion to change venue. The cases cited by LG are easily distinguishable and counsel against staying this case. In particular, LG cited In re Fusion-IO, Inc., 489 F. App’x 465, 466 (Fed. Cir. 2012), for the proposition that a moving party should “promptly request transfer . . . along with a motion to stay proceedings.” That case involved denial of a petition for writ of mandamus, and is, therefore, not even on point. Moreover, the Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 13 of 18 PageID #: 3135 9 fact is that LG did not promptly move to stay along with its motion to transfer. Rather, LG waited almost six months before moving to transfer and then waited another seven months before moving to stay. LG’s citation to DSS Technology Management, Inc. v. Apple Inc., No. 6:13-cv-919, Dkt. 83 (E.D. Tex. Oct. 28, 2014), is inapposite for the same reason. In that case the Defendant moved to stay at the same time that it filed its motion to transfer, not seven months later when it filed objections to a denial of a motion to transfer. Furthermore, the Court in DSS stayed the case shortly before granting a motion to transfer, not after having already denied a motion to transfer. LG’s suggestion that the circumstances are similar strains credibility. The other cases cited by LG likewise do not support a stay: EchoStar Techs. Corp. v. TiVo, Inc., No. 5:05- cv-81, 2006 WL 2501494, at *1 (E.D. Tex. July 14, 2006) Stay granted pending reexamination, which promised to simplify issues if claims were invalidated. Here, discovery and claim construction efforts are needed regardless of venue. Soverain Software LLC v. Amazon.com, Inc., 356 F. Supp. 2d 660, 662 (E.D. Tex. 2005) Stay denied pending reexamination, where Amazon, like the LG Defendants, waited a year before seeking a stay. This Court held that a stay would unduly prejudice Soverain’s ability to protect its property rights in the patents at issue. See id. at 662. “Given the resources that the parties and the Court have already invested in this case, staying the case . . . would be inefficient and inappropriate.” Id. at 663. “Firm trial settings resolve cases and reduce litigation costs.” Id. In re EMC Corp., 501 F. App’x 973, 975 (Fed. Cir. 2013) Denied petition for writ of mandamus seeking to transfer case. Denied motion for stay pending writ’s resolution. In re Horseshoe Entm’t, 337 F.3d 429, 433 (5th Cir. 2003) No motion to stay at issue. In re Google Inc., No. 2015-138, 2015 WL 5294800, at *1 (Fed. Cir. 2015) Granted writ of mandamus where Google promptly filed motion to transfer (within 3 Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 14 of 18 PageID #: 3136 10 months of filing of complaint) and - having not received a ruling within 8 months - filed a petition for mandamus. Federal Circuit ordered District Court to grant a stay pending the District Court’s resolution of the transfer motion. Here, LG waited six months to file its venue motion and seven more months to seek a stay. Moreover, the Court has already denied the LG Defendants’ motion to change venue. In re Nintendo Co., Ltd., 544 F. App’x 934, 941 (Fed. Cir. 2013) Granted writ of mandamus where the District Court declined to sever but did not address defendants’ motion to transfer. Endorsed precedent supporting stays for “a customer or retailer in light of the notion that the manufacturer is the ‘true defendant.’” Here, the Court has already denied the LG Defendants’ motion to change venue. And the LG Defendants are neither customers nor retailers. They are manufacturers, the “true defendant[s].” Secure Axcess, LLC v. Nintendo of Am. Inc., No. 2:13-cv-32, Dkt. 133, at 1-2 (E.D. Tex. Feb. 10, 2014) Involved motion to sever retailers who claimed to be only peripherally involved in the case. Emergency stay granted prior to ruling on motion to sever and transfer. Here, the LG Defendants are the “true defendant” manufacturers and the Court has already denied the LG Defendants’ motion to change venue. Solid State Storage Sols., Inc. v. STEC, Inc., No. 2:11-cv-391, Dkt. 292 (E.D. Tex. Jan. 3, 2013) Federal Circuit had denied a petition for writ of mandamus, but directed defendant Fusion-IO to “promptly” renew its motion to transfer and seek a stay and expected the District Court to prioritize the motions. This Court stayed the action as to Fusion-IO only. Here, the LG Defendants did not “promptly” request transfer or to stay the proceedings. Brite Smart Corp. v. Google, Inc., No. 2:14-cv- 760, Dkt. 151 (E.D. Tex. July 16, 2015) Federal Circuit had granted mandamus where Google promptly filed motion to transfer (within 3 months of filing of complaint) and - Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 15 of 18 PageID #: 3137 11 having not received a ruling within 8 months - filed a petition for writ of mandamus. Federal Circuit ordered District Court to grant a stay pending the District Court’s resolution of the motion, and the District Court complied. Here, LG waited six months to file its venue motion and seven more months to seek a stay. Moreover, the Court has already denied the LG Defendants’ motion to change venue. Black Hills Media, LLC v. Samsung Elecs. Co., Ltd., No. 2:13-cv-379, Dkt. 63, at 2 (E.D. Tex. Mar. 17, 2014) Stay granted in light of ITC proceedings involving overlapping patents and same technology. Spa Syspatronic, AG v. Verifone, Inc., No. 2:07-cv-416, 2008 WL 1886020, at *2 (E.D. Tex. Apr. 25, 2008) Stay granted pending reexamination, noting plaintiff “will suffer some prejudice” but the hardship is balanced by many other factors, including Verifone’s diligence in seeking a stay and the early stage of the case. Here, LG was not diligent in seeking a stay, and the case is not in its infancy. Smartflash LLC, v. Apple, Inc., No. 6:13-cv- 447, 2014 WL 3366661, at *4 (E.D. Tex. Jul. 8, 2014) Stay denied, though without prejudice to renewing the motion after the PTO’s institution decision on Covered Business Method review. Apple never renewed its motion. Notably, this Court explained that Smartflash, though not a competitor of Apple, had a “recognized interest in timely enforcement of its patent rights.” VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1318 (Fed. Cir. 2014) Granted stay pending Covered Business Method review. IV. CONCLUSION For the foregoing reasons, LG’s motion to stay should be denied. Dated: January 31, 2018 /s/ S. Calvin Capshaw S. Calvin Capshaw State Bar No. 03783900 ccapshaw@capshawlaw.com CAPSHAW DERIEUX LLP 114 East Commerce Avenue Gladewater, Texas 75647 Tel: (903) 236-9800 Fax: (903) 236-8787 Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 16 of 18 PageID #: 3138 12 Edward J. DeFranco (pro hac vice) eddefranco@quinnemanuel.com Brian P. Biddinger (admitted in this District) NY Bar No. 4479382 brianbiddinger@quinnemanuel.com Joseph Milowic III (pro hac vice) josephmilowic@quinnemanuel.com QUINN EMANUEL URQUHART & SULLIVAN LLP 51 Madison Avenue, 22nd Floor New York, NY 10010 Tel. (212) 849-7000 Fax (212) 849-7100 Kevin P.B. Johnson (pro hac vice) QUINN EMANUEL URQUHART & SULLIVAN LLP 555 Twin Dolphin Drive, 5th Floor Redwood Shores, CA 94065 Tel. (650) 801-5000 Fax (650) 801-5100 kevinjohnson@quinnemanuel.com Attorneys for Plaintiff Fundamental Innovation Systems International LLC Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 17 of 18 PageID #: 3139 13 CERTIFICATE OF SERVICE The undersigned hereby certifies that all counsel of record who are deemed to have consented to electronic service are being served with a copy of this document via the Court’s CM/ECF system per Local Rule CV-5(a)(3) on January 31, 2018. /s/ S. Calvin Capshaw S. Calvin Capshaw Case 2:16-cv-01425-JRG-RSP Document 117 Filed 01/31/18 Page 18 of 18 PageID #: 3140
