Ixi Mobile (R&D) Ltd. et al v. Apple, Inc.

Northern District of California, cand-4:2015-cv-03755

LETTER addressed to Judge Richard J. Sullivan from Thomas S. Biemer, Esquire dated August 12, 2015 re: Requesting Reconsideration of the Order entered August 7, 2015. Document filed by IXI IP,LLC, IXI Mobile (R&D) Ltd.

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DIRECT DIAL NUMBER: Thomas S. Biemer (215) 575-7025 tbiemer@dilworthlaw.com August 12, 2015 Via Email: SullivanNYSDChambers@nysd.uscourts.gov The Honorable Richard J. Sullivan Thurgood Marshall United States Courthouse 40 Foley Square New York, NY 10007 Re: IXI Mobile (R&D) Ltd., et al. v. Samsung Elec. Co., et al., No. 14-cv-4355(RJS) IXI Mobile (R&D) Ltd., et al. v. Blackberry Ltd., et al., No. 14-cv-4428(RJS) IXI Mobile (R&D) Ltd. et al. v. Apple Inc., No. 14-cv-7954(RJS) Dear Judge Sullivan: We represent Plaintiffs IXI Mobile (R&D) Ltd. and IXI IP, LLC ("IXI") and write with respect to the Court's August 7th Order, which transferred the above-referenced cases to the Northern District of California. IXI respectfully requests that the Court reconsider that decision and retain jurisdiction over these actions for claim construction purposes and order a conditional transfer for Apple only. IXI respectfully requests a telephone conference with the Court to further discuss this matter. IXI commenced these actions against the Samsung and BlackBerry defendants in June 2014. A significant factor in IXI's decision to file in this district is the fact that Samsung is a New York corporation. Indeed, neither Samsung nor Blackberry (Canadian and Delaware companies) made any attempt to transfer their cases on their own volition. Rather, they only did so after months of litigation and after Apple raised the issue. See Case No. 14-cv-4355 at Dkt. No. 44; Case No. 14-cv-4428 at Dkt. No. 47. IXI did not bring suit against Apple until October 2014 – four months after it filed suit against Samsung and BlackBerry. Because IXI sought to enforce the same patents against Apple, it was judicially efficient to bring the third action in the New York forum. As explained below, transferring all three cases at this stage of the litigation causes severe prejudice to IXI and is contrary to the Second Circuit's strong deference to the plaintiff's choice of forum. 1500 Market Street · Suite 3500E · Philadelphia, PA 19102-2101 · 215-575-7000 · fax 215-575-7200 Cherry Hill NJ · Harrisburg, PA · Red Bank. NJ · Washington, DC · Wilmington, DE · New York, NY To: The Honorable Richard J. Sullivan Date: August 12, 2015 Page 2 I. IXI is Prejudiced by the Transfer Order in the Middle of Claim Construction As recently noted by the Federal Circuit in the case cited to by Apple in its July 24th letter, delays in deciding transfer motions "have the ability to frustrate 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.'" In re Google Inc., No. 2015-138, Dkt. No. 16 (Fed. Cir. July 16, 2015) (quotation omitted); see also PersonalWeb Techs., LLC v. NEC Corp. of Am., Inc., No. 11-cv-655, 2013 WL 9600333, *24 (E.D. Tex. Mar. 21, 2013) ("Motions to transfer can often disrupt and stall litigation, increasing costs and adding years to the time of final resolution of the dispute."). That is exactly what happened here. Due to the delay in granting transfer, the parties have substantially completed claim construction pursuant to New York procedures. Transfer at this stage creates additional work and unfairly prejudices IXI by giving Defendants advanced notice of IXI's claim construction arguments. Pursuant to the Southern District of New York's Local Patent Rules, the parties began the claim construction process this past May. The New York Patent Rules, however, differ from those of California. For example, the California Rules require disclosure of: 1) supporting intrinsic evidence; 2) supporting extrinsic evidence, including by identifying any supporting expert testimony and a description of the substance of the proposed testimony; and 3) the ten (10) most significant claim terms, including whether each such term is claim or case dispositive. The California Rules further contemplate Claim Construction Discovery (Rule 4-4), including specifically permitting depositions of expert witnesses. Although IXI repeatedly requested this information, Defendants refused to provide it, arguing that such disclosures were not required by the New York Patent Rules. By transferring at such a late juncture, IXI was denied the many disclosure protections contained in the California Patent Rules. IXI did not receive binding disclosures as to Defendants' supporting intrinsic or extrinsic evidence, nor did IXI receive a summary of the opinions of Defendants' supporting claim construction expert. IXI was further deprived of a meaningful deposition of Defendants' expert before the filing of its Opening Claim Construction Brief, as Defendants refused to even provide their expert's identity until after its filing. Without any of these important disclosures, IXI filed its claim construction brief on July 8th, and the Defendants deposed IXI's expert on July 28th. Meanwhile, the Defendants, with full knowledge of IXI's arguments and expert's opinions, were scheduled to file their responsive claim construction brief on August 7th; however, the Court ordered transfer on that same day. If the case had been transferred to California at an earlier stage, Defendants would have had only two weeks to respond to IXI's brief. See California Patent Rule 4-5. Instead, the Defendants already have had a month to respond to IXI's brief (under New York Patent Rules), and now, the transfer order has in effect granted Defendants an indefinite extension until the California Court orders completion of the briefing. This additional time severely prejudices IXI by giving Defendants a vastly disproportionate amount of time to consider IXI's arguments, scrutinize IXI's expert's testimony, and refine their rebuttal arguments. In addition, IXI's claim construction brief is largely supported by New York case law. At a minimum, transfer will require IXI to redraft 1500 Market Street · Suite 3500E · Philadelphia, PA 19102-2101 · 215-575-7000 · fax 215-575-7200 Cherry Hill NJ · Harrisburg, PA · Red Bank. NJ · Washington, DC · Wilmington, DE · New York, NY To: The Honorable Richard J. Sullivan Date: August 12, 2015 Page 3 portions of its brief to include California law.1 At worst, the California Court will consider IXI's brief as currently drafted, while the Defendants will have ample time to include California law. II. A Conditional Transfer for the Apple Case Alleviates the Injustice Given the passage of time and the manifest injustice that will occur, IXI respectfully submits that the Court should implement a conditional transfer. Specifically, under the present circumstances, the Court should: 1) complete the claim construction process for all three Defendants under the New York Patent Rules, 2) then transfer the Apple case to California, and 3) retain jurisdiction over the Samsung and BlackBerry matters. Due to the inherent prejudice created by transferring the case in the middle of claim construction, it is most equitable for all parties if the Court finishes claim construction in New York. After claim construction is complete, Samsung and BlackBerry should remain in New York because New York is the more convenient forum as to these parties. By keeping the case in New York until claim construction is complete, the Court does not run the risk of creating inconsistent claim constructions between districts. IXI's request is supported by precedent from other districts working in conjunction with other district courts, including the Northern District of California. See, e.g., PersonalWeb Techs., 2013 WL 9600333 at *24 (explaining that a conditional transfer after the completion of claim construction was "the most efficient way to manage the transfer of serially filed patent cases"); ACQIS LLC v. EMC Corp., 67 F. Supp. 3d 769, 779 (E.D. Tex. 2014) ("[T]o avoid duplicative work by multiple courts, the Court will retain this case until its claim construction opinion."); Affinity Labs of Texas v. Samsung Elecs. Co., 968 F. Supp. 2d 85, 860 (E.D. Tex. 2013) ("It was concluded that transfer of the case after this court completed the Markman hearing. . . would be the best allocation of judicial resources."); Norman IP Holdings, LLC v. Lexmark Int'l, Inc., No. 11-cv-495, 2012 WL 3307942, *4 (E.D. Tex. Aug. 10, 2012) ("[I]n the event that transfer is appropriate, the Court shall retain the case through the Markman phase of the proceedings."). In fact, the Chief Justice of the Northern District of California agreed with the Chief Justice of the Eastern District of Texas that the best allocation of judicial resources was for the Eastern District of Texas to construe the claims for all related actions prior to transferring the cases to the Northern District of California under similar circumstances. PersonalWeb Techs., 2013 WL 9600333 at *24. While Apple may have presented sufficient grounds for a finding that California is a more convenient forum, the evidence relied upon by the Opinion and Order for Samsung and BlackBerry falls short of the standard for transfer. In this regard, the Court's Order placed emphasis on witness location. The Opinion and Order relied upon Samsung's representation that unnamed, employee witnesses from Google "likely" reside in the Northern District of California, and placed emphasis on potential witnesses from Broadcom to justify transfer for BlackBerry. However, those Broadcom employees are not even located in the Northern District of California. In sum, Samsung and BlackBerry's evidence largely relies upon hypothetical individuals or individuals who are not located within the transferee district. In any event, it is the movants' 1 While Defendants have agreed not to oppose IXI's request to re-file its Brief utilizing cases from the Northern District of California, there is no guaranty the California Court will allow it. 1500 Market Street · Suite 3500E · Philadelphia, PA 19102-2101 · 215-575-7000 · fax 215-575-7200 Cherry Hill NJ · Harrisburg, PA · Red Bank. NJ · Washington, DC · Wilmington, DE · New York, NY To: The Honorable Richard J. Sullivan Date: August 12, 2015 Page 4 burden to provide evidence that the subject witnesses are unwilling to attend trial absent a transfer. See, e.g., In re Barnes & Noble, Inc., 743 F.3d 1381, 1382-83 (Fed. Cir. 2014) (finding no error in the district court's imposing the burden on the defendant-movant to show that third- party witnesses would be unable or unwilling to travel); Kiss My Face Corp. v. Bunting, No. 02- cv-2645, 2003 WL 22244587, at *4 (S.D.N.Y. Sept. 30, 2003) (finding convenience factor did not weigh in favor of transfer where defendant "proffered no evidence that potential party or non-party witnesses would be unwilling to travel") (emphasis added). Neither Samsung nor BlackBerry provided any such evidence. Finally, the affidavit evidence provided by IXI with respect to the important inventor witnesses neutralizes this factor with respect to the Samsung and BlackBerry cases.3 A conditional transfer of the Apple case is consistent with the Second Circuit's precedent, which affords the plaintiff strong deference in its choice of forum. See, e.g., Ford Motor Co. v. Ryan, 182 F.2d 329, 330 (2d Cir. 1950) ("[U]nless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed.") (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)). IXI attempted to file its cases in one district to satisfy judicial economy. Specifically, because Plaintiffs are Israel and New York companies and because Defendant Samsung is a New York corporation, New York seemed to be a mutually convenient venue for the parties. When IXI filed suit against Apple four months later, New York seemed like the obvious choice of forum. Although Apple has now demonstrated that it has significant ties to California, IXI should not be prejudiced by delay, waste of resources in claim construction, and a total loss of its choice of forum as to all three parties. Conditional transfer is most warranted where, as here, claim construction is halfway complete and one defendant is a New York company. In short, allowing a California company to provide a vehicle for other properly named defendants to delay and transfer their own civil actions out of New York would not only be a manifest injustice to IXI, but would also create troubling precedent, rendering a plaintiff's choice of forum meaningless. A conditional transfer for Apple only, prevents this scenario. Given the significant, intervening pretrial events to date, including claim construction briefing, IXI respectfully requests that the Court reconsider its transfer decision to avoid a manifest injustice. IXI believes that the Court should resolve claim construction in the present forum, before transferring the Apple case to California. Respectfully, /s/ Thomas S. Biemer Thomas S. Biemer cc: all counsel via ECF 3 It should also be noted that one of the California-based inventors (Hans Reisgies) is no longer relevant as IXI dismissed the claims related to the patent for which Mr. Reisgies was the sole inventor. As a result, only two California-based inventors remain and one of them (Amit Haller) submitted a declaration stating his intent to appear in New York if called for trial. 1500 Market Street · Suite 3500E · Philadelphia, PA 19102-2101 · 215-575-7000 · fax 215-575-7200 Cherry Hill NJ · Harrisburg, PA · Red Bank. NJ · Washington, DC · Wilmington, DE · New York, NY