American Patents LLC v. Mediatek, Inc. et al

Western District of Texas, txwd-6:2018-cv-00339

REPLY to Response to Motion, filed by Lenovo (Shanghai) Electronics Technology Co. Ltd., Lenovo Group Ltd., re 82 Opposed MOTION to Sever AND STAY PURSUANT TO THE CUSTOMER-SUIT EXCEPTION DOCTRINE filed by Defendant Lenovo (Shanghai) Electronics Technology Co. Ltd., Defendant Lenovo Group Ltd.

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6 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS WACO DIVISION AMERICAN PATENTS LLC, Plaintiff, v. CIVIL ACTION NO. 6:18-CV-339-ADA MEDIATEK INC., MEDIATEK USA INC., BROADCOM PTE. LTD., BROADCOM CORPORATION, LENOVO (SHANGHAI) ELECTRONICS TECHNOLOGY CO. LTD., LENOVO GROUP, LTD., NXP SEMICONDUCTORS N.V., NXP B.V., NXP USA, INC., QUALCOMM INCORPORATED and QUALCOMM TECHNOLOGIES, INC., Defendants. REPLY IN SUPPORT OF SPECIALLY APPEARING DEFENDANTS LENOVO (SHANGHAI) ELECTRONICS TECHNOLOGY CO., LTD. AND LENOVO GROUP LTD.'S MOTION TO SEVER AND STAY PURSUANT TO THE CUSTOMER-SUIT EXCEPTION DOCTRINE 6 TABLE OF CONTENTS Page I. INTRODUCTION ...............................................................................................................1 II. LENOVO IS WILLING TO BE BOUND ...........................................................................2 III. WHETHER THE LENOVO DEFENDANTS COMMIT ACTS OF INFRINGEMENT IN THE U.S. (THEY DO NOT) IS IMMATERIAL ............................4 IV. THE LENOVO DEFENDANTS DO NOT PARTICIPATE IN THE DESIGN OR MANUFACTURE OF THE ACCUSED CHIPSETS, MAKING THEM AKIN TO "MERE RESELLERS.".................................................................................................5 V. THE REMAINDER OF PLAINTIFF'S OPPOSITION IS A RED HERRING ..................7 A. Whether the Claims Against Qualcomm, MediaTek, and the Lenovo Defendants Are Brought in a Single Action Is Immaterial ......................................7 B. Plaintiff's Attempt to Introduce the NVIDIA Chipset Is Improper .........................8 C. Plaintiff's Claim Construction Argument Does Not Apply Because Qualcomm's and MediaTek's Chipsets Are Alleged to Directly Infringe ..............9 VI. CONCLUSION ..................................................................................................................10 -i- 6 TABLE OF AUTHORITIES Page(s) Cases Atwater Partners of Texas LLC v. AT&T, Inc. No. 2:10-CV-175-TJW, 2011 WL 1004880 (E.D. Tex. Mar. 18, 2011) ...................................9 Belfer Cosmetics, LLC v. Nordstrom, Inc. No. H-15-683, 2016 WL 8792318 (S.D. Tex. Feb. 26, 2016) ...............................................4, 7 Cellular Communs. Equip., LLC. v. Apple Inc. No. 6:14-CV-251, 2016 WL 6884648 (E.D. Tex. Aug. 26, 2016) ........................................5, 7 Collab. Agreements, LLC v. Adobe Sys. No. 14-cv-356-LY, 2015 WL 10818739 (W.D. Tex. Aug. 21, 2015) .................................7, 10 DSS Tech. Management, Inc. v. Intel Corp. No. 6:15-cv-130, 2015 WL 12806514 (E.D. Tex. Nov. 12, 2015) ............................................5 Global Equity Management (SA) Pty. Ltd. v. Ericsson, Inc. No. 2:16-cv-618-RWS, 2017 WL 365398 (E.D. Tex. Jan. 25, 2017) .......................................6 In re Google Inc. 588 Fed. Appx. 988 (Fed. Cir. 2014) .....................................................................................2, 6 Info. Prot. & Authentication of Texas LLC v. Symantec Corp. No. 2:08-cv-484, 2009 WL 6553976 (E.D. Tex. Oct. 5, 2009) .................................................7 Innovative Automation, LLC v. Audio Video and Video Labs, Inc. No. 6:11-cv-234-LED-JDL, 2012 WL 10816848 (E.D. Tex. May 30, 2012) .....................9, 10 Katz v. Lear Siegler, Inc. 909 F.2d 1459 (Fed. Cir. 1990)..................................................................................................3 Leviton Mfg. Co., Inc. v. Interline Brands, Inc. No. 3:05-cv-123-J-33MCR, 2006 WL 2523137 (M.D. Fl. Aug. 30, 2006) ..............................4 Med. Components, Inc. v. Osiris Med., Inc. 226 F. Supp. 3d 753 (W.D. Tex. 2016)......................................................................................8 Microsoft Corp. v. Commonwealth Scientific Indus. Research Org. No. 6:06-cv-549, 2007 WL 4376104 (E.D. Tex. Dec. 13, 2007) ............................................10 Mirror Worlds Techs., LLC v. Dell Inc. No. 6:13-cv-941, 2014 WL 11268268 (E.D. Tex. Sept. 29, 2014)............................................6 -ii- 6 In re Nintendo 756 F.3d 1363 (Fed. Cir. 2014)....................................................................................1, 6, 7, 10 Opticurrent, LLC v. Power Integrations, Inc. No. 2:16-CV-325-JRG, 2016 WL 9275395 (E.D. Tex. Oct. 19, 2016) ...............1, 3, 4, 5, 7, 10 Shifferaw v. Emson USA No. 2:09-cv-54-TJW-CE, 2010 WL 1064380 (E.D. Tex. Mar. 18, 2010) ................................3 Spread Spectrum Screening LLC v. Eastman Kodak Co. 657 F.3d 1349 (Fed. Cir. 2011)..................................................................................................3 St. Lawrence Comm's v. Apple Inc. No. 2:16-cv-82-JRG, 2017 WL 3712912 (E.D. Tex. July 12, 2017).........................................7 Telebrands Corp. v. National Exp., Inc. No. 12-6671 (FSH), 2014 WL 4930897 (D.N.J. Oct. 2, 2014) .................................................4 Ultra Prods., Inc. v. Best Buy Co., Inc. No. 09-1095 (MLC), 2009 WL 2843888 (D.N.J. Sept. 1, 2009) ...............................................4 Vantage Point Tech., Inc. v. Amazon.com, Inc. No. 2:13-cv-909-JRG, 2015 WL 123593 (E.D. Tex. Jan. 6, 2015) ...........................................7 Other Authorities Fed. R. Civ. Proc. 12(b)(7) ..............................................................................................................9 Fed. R. Civ. Proc. 15(a) ...................................................................................................................8 Fed. R. Civ. Proc. 19 ........................................................................................................................9 Fed. R. Civ. Proc. 19(a)(1)(B)(ii) ....................................................................................................9 -iii- 6 I. INTRODUCTION Plaintiff's opposition misrepresents the law, engages in baseless speculation and, most egregiously, misleads the Court. Plaintiff says the Lenovo Defendants are not willing to be bound by rulings against Qualcomm and MediaTek, but this is false. In fact, the Lenovo Defendants have been, for weeks, meeting and conferring with Plaintiff regarding a stipulation to be bound. They offered to draft a proposed stipulation, but Plaintiff volunteered to do so in the first instance. Then, on the eve of the opposition deadline, Plaintiff reneged with little explanation, and never sent a proposal. The Lenovo Defendants are willing to be bound by the Court's rulings against Qualcomm and MediaTek as to invalidity, Markman, and technical infringement, i.e., whether the respective accused chipsets read on the asserted claims. This would result in significant savings of judicial resources. Plaintiff says the Lenovo Defendants must remain in the case because only they may have committed acts of infringement in the U.S. This is supremely ironic, given Plaintiff chose to sue Chinese entities operating over 7,000 miles away, rather than the U.S. entity that actually imports and sells the accused products in the U.S. Regardless, in another Texas case in which the plaintiff made the very same argument, severance and stay was granted. Opticurrent, LLC v. Power Integrations, Inc., No. 2:16-CV-325-JRG, 2016 WL 9275395 (E.D. Tex. Oct. 19, 2016). Plaintiff also says the Lenovo Defendants may participate in the design and manufacture of Qualcomm's and MediaTek's accused chipsets. But this is purely speculative, has no foundation, and is in fact false. (See Decl. of Todd Madderom, ¶ 3.) Finally, Plaintiff espouses a myopic view of the customer-suit exception that limits the doctrine to its purported origins as an exception to the "first-to-file" rule. Today, the doctrine is far broader, and flexibly applied. E.g., Opticurrent, 2016 WL 9275395, at *4 ("In Nintendo [In re Nintendo, 756 F.3d 1363, 1365 (Fed. Cir. 2014)], the Federal Circuit extended the customer-suit -1- 6 exception to cases in which the plaintiff sues the manufacturer and a customer, and the defendants seek a severance of the plaintiff's claims against the customer.") (emphasis added); In re Google Inc., 588 Fed. Appx. 988, 991 (Fed. Cir. 2014) (calling for a "flexible approach"). Plaintiff's fixation on whether this is a "textbook" case (it is) does not change the fact that only one outcome would be judicially economical, correct, and equitable—the granting of the Lenovo Defendants' motion. II. LENOVO IS WILLING TO BE BOUND Plaintiff says that "Lenovo has not agreed to be bound by any decision adverse to the chip manufacturers, whether involving claim construction, infringement, invalidity, or otherwise." This is false and disingenuous. Weeks ago, Plaintiff approached the Lenovo Defendants regarding a stipulation. Two days later, the Lenovo Defendants informed Plaintiff in a meet and confer that they were willing to consider a stipulation. (Supp. Dec. of Lai Yip, ¶ 3, Ex. A.) In that same conference, Plaintiff volunteered to prepare a proposed stipulation. Id. Then Plaintiff went silent. The Lenovo Defendants followed up twice, with no response. Id. Finally, the day before its opposition was due, Plaintiff reneged, saying a stipulation no longer "makes sense." (Id.) The next morning, Plaintiff again acknowledged the Lenovo Defendants' willingness to stipulate, saying it too was still willing to "explore a potential stipulation." (Id.) Yet hours later, Plaintiff filed its opposition, telling the Court that "Lenovo has not agreed to be bound." This is nothing less than an attempt to mislead the Court. The Lenovo Defendants are still willing to be bound by rulings that would result in significant cost and resource savings to this Court and the parties. As the Lenovo Defendants told Plaintiff weeks ago, they are willing to stipulate to being bound by this Court's rulings against Qualcomm and MediaTek as to invalidity, Markman, and technical infringement. Such a willingness to be bound "weighs heavily towards a finding that adjudication of the claims against -2- 6 [the manufacturer] would likely dispose of the rest of the case" against the customer, because of the savings in judicial resources. Shifferaw v. Emson USA, No. 2:09-cv-54-TJW-CE, 2010 WL 1064380, at *3 (E.D. Tex. Mar. 18, 2010). The Court and parties would avoid discovery, motion practice, and other burdensome litigation with respect to all or nearly all technical aspects of the case as to two defendants. Plaintiff acknowledges none of this, and even misrepresents to the Court the Lenovo Defendants' stance on this issue.1 Importantly, however, even if the Lenovo Defendants refused to be bound, granting severance and stay would still be appropriate. In Katz v. Lear Siegler, Inc., 909 F.2d 1459 (Fed. Cir. 1990), the Federal Circuit affirmed the lower court's decision staying the case against the customers, even though "[plaintiff] points out that neither of the [customer] defendants. . . has agreed to be bound by the result in [the proceedings against the manufacturers]." Id. at 1464. That is because "[a]lthough there may be additional issues involving the [customers], their prosecution will be advanced if [plaintiff] is successful on the major premises being litigated [against the manufacturers], and may well be mooted if he is unsuccessful." Id.; see Spread Spectrum 1 The Lenovo Defendants would not stipulate to being bound by an infringement ruling as to ultimate liability because, as Plaintiff acknowledges, such a finding "requires an act of infringement to be committed in the U.S." The Lenovo Defendants are Chinese entities that do not commit any acts in the U.S. as to the accused products at all, let alone as to infringement. (See Dkt. 44, et seq.) That they would not stipulate to infringement liability does not counsel against a stay, because stipulating to technical infringement is more than enough to achieve judicial economy. Moreover, whether they infringe "in the U.S." is an inquiry independent of Qualcomm and MediaTek, such that any stipulation to be bound would make no sense anyway. The Lenovo Defendants also would not stipulate to being bound by a damages ruling, but this is not required. To the extent Plaintiff recovers any monetary damages against co-defendants Qualcomm or MediaTek, this would exhaust Plaintiff's recovery against the Lenovo Defendants. See Dkt. 82, p. 8. Even if Plaintiff could recover further damages from the Lenovo Defendants, a stipulation to be bound is still not required. See Opticurrent, 2016 WL 9275395, at *5 (granting stay without stipulation to be bound as to damages rulings against manufacturer, finding that "should [plaintiff] succeed in its case against [the manufacturer], the Court will permit it to conduct discovery. . . to determine whether or not the claims against [the customer] are necessary to permit recovery of 'damages for the full scope of infringement'"). -3- 6 Screening LLC v. Eastman Kodak Co., 657 F.3d 1349, 1358 (Fed. Cir. 2011) (noting that in Katz, the Federal Circuit acknowledged an agreement to be bound is not required). Numerous cases have granted a motion to sever and stay without an agreement by the customer to be bound. See, e.g., Opticurrent, 2016 WL 9275395, at *1; Belfer Cosmetics, LLC v. Nordstrom, Inc., No. H-15- 683, 2016 WL 8792318, at *6 (S.D. Tex. Feb. 26, 2016); Telebrands Corp. v. National Exp., Inc., No. 12-6671 (FSH), 2014 WL 4930897, at *4-*5 (D.N.J. Oct. 2, 2014); Leviton Mfg. Co., Inc. v. Interline Brands, Inc., No. 3:05-cv-123-J-33MCR, 2006 WL 2523137, at *3 (M.D. Fl. Aug. 30, 2006); Ultra Prods., Inc. v. Best Buy Co., Inc., No. 09-1095 (MLC), 2009 WL 2843888, at *7 (D.N.J. Sept. 1, 2009).2 III. WHETHER THE LENOVO DEFENDANTS COMMIT ACTS OF INFRINGEMENT IN THE U.S. (THEY DO NOT) IS IMMATERIAL Plaintiff explains that it "might be unable to recover damages from MediaTek or Qualcomm to the extent that their infringing [manufacturing] activity occurred abroad." It thus sued the Lenovo Defendants, because they purportedly sell the accused products in the U.S. As a threshold matter, the Lenovo Defendants do not manufacture the accused products, import them to the U.S., sell them here, or commit any other "act of infringement" in the U.S. (See Dkt. 44, et seq.) If Plaintiff wanted any chance of showing "an act of infringement [] committed in the U.S.," it should not have sued the two Chinese entities to circumvent TC Heartland. But even if the Lenovo Defendants sell any accused product in the U.S. (they do not), and are the only defendants who do so, this is insufficient to deny a stay. In Opticurrent, a Texas case, the plaintiff also argued that "it is possible that [manufacturer] manufactures some of the Accused Products outside the 2 The Lenovo Defendants' willingness to stipulate to be bound constitutes no waiver whatsoever as to jurisdiction or any other issue presented in their motion to dismiss (Dkt. 44, et seq.). They reserve all rights. And of course, if the Court finds that it indeed lacks jurisdiction and grants the motion to dismiss (as it should), then the issue of severance and stay is moot. -4- 6 United States and that [customer] imports those products. . . [rendering the customer] a necessary party for Plaintiff to be able to recover damages for the full scope of infringement." 2016 WL 9275395, at *5. The district court rejected this argument, finding that "[w]hether or not the claims against [manufacturer] are completely dispositive of the claims against [customer], a finding that [manufacturer] infringes is a prerequisite to recovery from [customer]." Id. "Therefore, [manufacturer] is the 'true defendant' in the present suit and the burdens of trial should not be unnecessarily imposed upon its customer." Id.3 IV. THE LENOVO DEFENDANTS DO NOT PARTICIPATE IN THE DESIGN OR MANUFACTURE OF THE ACCUSED CHIPSETS, MAKING THEM AKIN TO "MERE RESELLERS." Plaintiff suggests that the Lenovo Defendants may participate in the design, development, testing, or manufacture of Qualcomm's and MediaTek's accused chipsets. (Opp., pp. 12-13.) They do not. (Madderom Decl., ¶ 3.)4 Moreover, the Lenovo Defendants' alleged incorporation of those chipsets into the accused tablets "does not change the fact that they do not modify or alter the patented technology at issue." See Cellular Communs. Equip., LLC. v. Apple Inc., No. 6:14- CV-251, 2016 WL 6884648, at *2 (E.D. Tex. Aug. 26, 2016) (granting severance and stay). Because the Lenovo Defendants merely incorporate the accused chipsets into the end product, they 3 The DSS Technology case is inapposite. There, the customer did not agree to be bound by any infringement rulings. DSS Tech. Management, Inc. v. Intel Corp., No. 6:15-cv-130, 2015 WL 12806514, at *3 (E.D. Tex. Nov. 12, 2015) ("Instead, [customer] only agreed that it would be estopped from arguing those chips do not infringe in any subsequent litigation [that is filed]."). Also, the customer in DSS Technology only agreed, as to invalidity, to be bound "'regarding the specific prior art or combinations of prior art actually presented to the jury for the determination of patent validity.'" Id. at *3. By contrast, the Lenovo Defendants would stipulate to being bound as to technical infringement and invalidity, as well as Markman. 4 At the March 14, 2019 meet and confer, in response to Plaintiff's inquiry as to whether Qualcomm and MediaTek were the Lenovo Defendants' only supplier of accused chipsets, the Lenovo Defendants said that is almost certainly the case, but just needed to confirm. (Supp. Yip ¶ 4.) In the opposition, Plaintiff acts as if none of this meet and confer had taken place. -5- 6 are akin to "mere resellers." But even if not, a stay is still proper. See Global Equity Management (SA) Pty. Ltd. v. Ericsson, Inc., No. 2:16-cv-618-RWS, 2017 WL 365398, at *10 (E.D. Tex. Jan. 25, 2017) (applying customer-suit exception despite patentee's argument that the customers were not "mere resellers"); Google, 588 Fed. Appx. at 988 (same). In Google, the Federal Circuit reversed the district court's decision to deny the motion for stay, noting the patentee provided "nearly identical infringement contentions to all defendants that rel[ied] almost exclusively on the underlying functionalities provided in the base Android source code." 588 Fed. Appx. at 990. Consequently, "the record strongly suggests there will be substantial similarity involving the infringement and invalidity issues" in the proceedings against the different defendants. Id. Similarly here, Plaintiff asserts a single set of infringement allegations for all defendants, which relies exclusively on technical aspects of the accused chipsets. Although Plaintiff conveys Mirror Worlds as a case hinging on the "mere reseller" issue, that is incorrect. Rather, the court there found the plaintiff "accuses the [customers] of infringement [of method claims] beyond their mere purchase of the Windows operating system from Microsoft." Mirror Worlds Techs., LLC v. Dell Inc., No. 6:13-cv-941, 2014 WL 11268268, at *2-*3 (E.D. Tex. Sept. 29, 2014). In other words, a technical infringement finding against the manufacturer would not dispose of same against the customer. Here, by contrast, Plaintiff asserts only apparatus claims directed to an "integrated circuit," and only Qualcomm and MediaTek manufacture the accused integrated circuits. Thus, a finding that Qualcomm and MediaTek's chipsets do not read on the asserted claims necessarily means the Lenovo Defendants' accused products do not read on those claims either, and vice versa. See Nintendo, 756 F. 3d at 1366 ("Since [manufacturer's] liability is predicate to recovery from any of the defendants, the case against Nintendo must proceed first, in any forum.") (emphasis added). -6- 6 V. THE REMAINDER OF PLAINTIFF'S OPPOSITION IS A RED HERRING A. Whether the Claims Against Qualcomm, MediaTek, and the Lenovo Defendants Are Brought in a Single Action Is Immaterial Plaintiff argues the motion should be denied because its "claims against Lenovo and against MediaTek/Qualcomm are pending in this same action." (Opp., p. 5 (emphasis omitted).) No so. In Nintendo, the plaintiff filed a single action against the manufacturer and customers, yet the Federal Circuit found severance and stay was proper. 756 F.3d at 1364 (finding the "same general principles govern in that Nintendo is the true defendant"). Id. at 1365. Numerous courts have since granted a motion to sever and stay where the manufacturer and customer were sued in a single action. See, e.g., Collab. Agreements, LLC v. Adobe Sys., No. 14-cv-356-LY, 2015 WL 10818739, at *1 (W.D. Tex. Aug. 21, 2015); Opticurrent, 2016 WL 9275395, at *1; Cellular Comm's, 2016 WL 6884648, at *1; St. Lawrence Comm's v. Apple Inc., No. 2:16-cv-82-JRG, 2017 WL 3712912, at *1 (E.D. Tex. July 12, 2017); Belfer, 2016 WL 8792318, at *1. Information Protection, a 2009 district court case that Plaintiff relies on, was decided before Nintendo. The district court there relied on an outdated conception of the customer-suit exception doctrine, "applied in the context of motions to transfer and the 'first filed' rule." Info. Prot. & Authentication of Texas LLC v. Symantec Corp., No. 2:08-cv-484, 2009 WL 6553976, at *2 (E.D. Tex. Oct. 5, 2009). Indeed, the court acknowledged that "the issues presented by Defendants' motions have not been previously resolved by this Court." Id. Nintendo, which issued in 2014, changed the landscape. See Opticurrent, 2016 WL 9275395, at *4 ("In Nintendo, the Federal Circuit extended the customer-suit exception. . . ."). In Vantage Point, another case Plaintiff relies on, the customers refused to be bound to invalidity findings, making it distinguishable from the case here. Vantage Point Tech., Inc. v. Amazon.com, Inc., No. 2:13-cv- 909-JRG, 2015 WL 123593, at *3 (E.D. Tex. Jan. 6, 2015). -7- 6 Meanwhile, Plaintiff's argument that the motion should be denied because this is "not a case where several 'customer' defendants are requesting a stay against a single manufacturer" is perplexing. This case does not have "several 'customer' defendants" to begin with—the only customer defendant Plaintiff sued was the Lenovo Defendants (why they were singled out is still unclear). Plaintiff never articulates why this distinction is material in any event. It is not. B. Plaintiff's Attempt to Introduce the NVIDIA Chipset Is Improper The only suppliers of the chipsets in the Lenovo Defendants' accused tablets are Qualcomm and MediaTek. (Dkt. 1, ¶¶ 53, 74, 92, 111; Madderom ¶ 2.) To circumvent this, Plaintiff introduces a new product in the opposition, the Lenovo ThinkVision 28, which is not a tablet, but a monitor. (Opp., Ex. 3.) Plaintiff suggests that the NVIDIA Tegra K1 chipset, which is in the ThinkVision 28 and uses an ARM Cortex-A15 processor, might infringe the asserted claims. But the ARM Cortex-A15 is nowhere in the Complaint. (See Dkt. 1.) Instead, the Complaint purports to map the asserted claims to technical documentation for other ARM processors, i.e., the Cortex-A8, A17, A57, and A72. (Dkt. 1, ¶¶ 54, 58-59, 61, 75, 79, 82, 93, 97- 98, 112, 116-17.) Meanwhile, the ThinkVision 28 monitor is, on its face, a different product from the accused tablets. In short, the Complaint fails to properly allege infringement as to the A15. See Med. Components, Inc. v. Osiris Med., Inc., 226 F. Supp. 3d 753, 760 (W.D. Tex. 2016) (abrogation of Form 18 resulted in "more stringent pleading requirements"). Plaintiff does not allege in its opposition that the A15 is materially identical or similar to the accused ARM processors. (See Opp., p. 12.) Nor would such an allegation matter, because Plaintiff cannot use the opposition brief to amend its Complaint to expand the scope of the allegations. See Fed. R. Civ. P. 15(a). Plaintiff apparently just searched online for any Lenovo product incorporating any chipset with ARM architecture not manufactured by Qualcomm or MediaTek. This bare modicum of effort cannot be the basis for denying the Lenovo Defendants' -8- 6 motion. To force the Lenovo Defendants through the entire litigation based on a single ancillary product that might be in the case would be fundamentally unfair.5 Atwater Partners, which Plaintiff relies on, does not apply. The court there was deciding whether to grant a motion to dismiss for failure to state a claim, when "the complaint actually names one example infringing product." Atwater Partners of Texas LLC v. AT&T, Inc., No. 2:10- CV-175-TJW, 2011 WL 1004880, at *3 (E.D. Tex. Mar. 18, 2011). The court found that one example was sufficient—unsurprising given this case was decided before abrogation of Form 18. Orion Energy is also inapplicable because the issue there was whether plaintiff could disclose new asserted patent claims two months before its claim construction brief was due. That is not the issue before the Court here. And in Innovative Automation, the court noted "it does not appear that [manufacturer] is the 'only source' of [the customer's] infringing services." Innovative Automation, LLC v. Audio Video and Video Labs, Inc., No. 6:11-cv-234-LED-JDL, 2012 WL 10816848, at *11 (E.D. Tex. May 30, 2012). Here, the only way a new manufacturer could supply an "infringing" chipset is if Plaintiff is permitted to pluck a new product out of thin air and deposit it in the Complaint via its opposition brief. Plaintiff should not be so permitted. C. Plaintiff's Claim Construction Argument Does Not Apply Because Qualcomm's and MediaTek's Chipsets Are Alleged to Directly Infringe Plaintiff's argument that its asserted claims may be construed to require components in addition to the integrated circuit is untenable. (Opp., pp. 13-14.) Every one of Plaintiff's asserted 5 Moreover, to the extent Plaintiff is now accusing NVIDIA chipsets, the claims against the Lenovo Defendants should be dismissed for Plaintiff's failure to join NVIDIA as a necessary party. See F.R.C.P. 12(b)(7) (providing for dismissal for failure to join a party under Rule 19); e.g., F.R.C.P. 19(a)(1)(B)(ii) (providing that a person "must be joined as a party" if that person is "so situated that disposing of the action in the person's absence may. . . leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations"); F.R.C.P. 19(a)(1)(B)(ii) (requiring joinder where otherwise "the person's ability to protect [its] interest" is impaired or impeded). -9- 6 claims begins with a preamble requiring an "integrated circuit comprising," meaning that the manufacturer is the alleged direct infringer. By contrast, in the cases Plaintiff relies on, the manufacturer is alleged merely to be an indirect infringer. For example, in Microsoft, the patentee conceded that the manufacturer, who only made the chip, could only indirectly infringe, while the customer's end product is what directly infringed. Microsoft Corp. v. Commonwealth Scientific Indus. Research Org., No. 6:06-cv-549, 2007 WL 4376104, at *2-*3 (E.D. Tex. Dec. 13, 2007) (patentee "contends that the [patent] covers a transceiver, which requires an antenna, power supply, and a chip") (emphasis added). Similarly, in Innovative Automation, the patentee "does not accuse the [manufacturer] products themselves of infringing. . . but instead argues that [they] only infringe 'when used by an end user.'" Innovative, 2012 WL 10816848, at *10. Here, Plaintiff pursues direct infringement against the manufacturers, and any self-serving suggestion that it can proceed on a different theory should be rejected. Collaborative Agreements, 2015 WL 10818739, at *2 (refusing to consider plaintiff's "exceedingly weak" theory that claims could be construed such that customer infringes but not manufacturer).6 VI. CONCLUSION The Lenovo Defendants are willing to be bound, have no involvement whatsoever in the design, development, testing, or manufacture of the accused chipsets at the heart of this dispute, and are Chinese entities operating thousands of miles away. They were dragged needlessly and gratuitously into this case. To subject them to the full scope of this litigation would be a major waste of judicial resources, and unfair. The motion to sever and stay should be granted. 6 Whether Qualcomm or MediaTek has indemnified the Lenovo Defendants is immaterial. Courts have routinely granted motions to sever and stay without any finding of indemnification. See, e.g., Nintendo, 756 F.3d at 1363; Opticurrent, 2016 WL 9275395, at *1. -10- 6 Dated: April 3, 2019 Respectfully submitted, /s/ Eric H. Findlay Eric H. Findlay Texas State Bar No. 00789886 FINDLAY CRAFT, P.C. 102 North College Avenue, Suite 900 Tyler, TX 75702 (903) 534-1100 (903) 534-1137 (Fax) efindlay@findlaycraft.com Martin Bader (Admitted Pro Hac Vice) SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 12275 El Camino Real, Suite 200 San Diego, CA 92130-4092 (858) 720-8900 (858) 509-3691 (Fax) mbader@sheppardmullin.com Lai L. Yip (Admitted Pro Hac Vice) Toni Qiu (Admitted Pro Hac Vice) SHEPPARD, MULLIN, RICHTER & HAMPTON LLP Four Embarcadero Center, 17th Floor San Francisco, CA 94111 (415) 434-9100 (415) 434-3947 (Fax) lyip@sheppardmullin.com tqiu@sheppardmullin.com Attorneys for Specially Appearing Defendants Lenovo (Shanghai) Electronics Technology Co., Ltd. and Lenovo Group Ltd. -11- 6 CERTIFICATE OF SERVICE The undersigned hereby certifies that counsel of record who are deemed to have consented to electronic services are being served with a copy of this document via the Court's CM/ECF system per Local Rule CV-5(a)(1) on this day of April 3, 2019. /s/ Eric H. Findlay Eric H. Findlay -12-