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`Case 8:19-cv-01150-DOC-KES Document 69 Filed 11/23/20 Page 1 of 7 Page ID #:1265
`
`
`
`Matthew G. Berkowitz (SBN 310426)
`matthew.berkowitz@shearman.com
`Yue (Joy) Wang (SBN 300594)
`joy.wang@shearman.com
`SHEARMAN & STERLING LLP
`1460 El Camino Real, 2nd Floor
`Menlo Park, CA 94025
`Telephone: 650.838.3600
`Fax: 650.838.3699
`
`L. Kieran Kieckhefer (SBN 251978)
`kieran.kieckhefer@shearman.com
`SHEARMAN & STERLING LLP
`535 Mission Street, 25th Floor
`San Francisco, CA 94105
`Telephone: 415.616.1100
`Fax: 415.616.1199
`
`Attorneys for Defendant NetSuite Inc.
`
`
`UNILOC 2017 LLC,
`Plaintiff,
`v.
`
`INFOR, INC.,
`
`
`NETSUITE INC.,
`
`
`SQUARE ENIX, INC.,
`SQUARE ENIX LLC,
`SQUARE ENIX CO., LTD., and
`SQUARE ENIX HOLDINGS CO., LTD,
`
`
`UBISOFT, INC.,
`
`
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`SOUTHERN DIVISION
` Case No. 8:19-cv-01150-DOC-KES
`(Consolidated)
`
`REPLY IN SUPPORT OF
`NETSUITE’S MOTION TO
`DISMISS FIRST AMENDED
`COMPLAINT
`Judge:
`Date Filed:
`Hearing Date:
`Time:
`Location:
`
`Hon. David O. Carter
`June 10, 2019
`December 7, 2020
`8:30 AM
`Ronald Reagan Federal
`Bldg., Courtroom 9D
`
`Defendants.
`
`
`REPLY ISO NETSUITE’S MOT.
`TO DISMISS 1ST AM. COMPL.
`
`
`
`
`CASE NO. 8:19-cv-01150-DOC-KES
`(Consolidated)
`
`

`

`Case 8:19-cv-01150-DOC-KES Document 69 Filed 11/23/20 Page 2 of 7 Page ID #:1266
`
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`I.
`
`INTRODUCTION
`Judge Schroeder and Judge Stearns have already undertaken thorough
`analyses construing the term “application program.” Uniloc’s opposition makes
`clear that it is pursuing this case as if these prior cases before Judge Schroeder and
`Judge Stearns never happened, dismissing their claim construction rulings as mere
`“interlocutory order[s]” that are not preclusive (in the case before Judge Schroeder,
`because Uniloc quickly settled). Uniloc wants this Court to expend the time and
`resources to “perform its own construction” anew (while, in the same breath,
`telling the Court in the 26(f) report that implementing Northern District-type claim
`construction procedures would “drag the claim construction process out over six
`months, and simply retrace the path already trod by other districts…”). D.I. 68 at
`11. Uniloc’s litigation approach is an abuse of the judicial process and should be
`stopped.
`Uniloc has asserted the ’293 and ’578 patents approximately 50 times across
`at least seven different district courts. Whether for reasons of estoppel, comity, or
`judicial efficiency, Uniloc should not get a completely fresh redo each time it loses
`a case-dispositive issue decided by another Federal Judge. Litigation, including—
`in particular—post-pleading contentions and fact discovery, is expensive and
`burdensome for both the Court and the parties. Accordingly, this Court should
`adopt the same construction of “application program” as Judge Schroeder and
`Judge Stearns and dismiss Uniloc’s First Amended Complaint (-1151 case, D.I. 26,
`“FAC”) with prejudice before anyone wastes further resources re-litigating the
`same issues. This approach will serve the interests of justice and judicial
`efficiency, and will further serve as a model for the other district courts around the
`country still adjudicating Uniloc’s claims on these same two patents.
`
`
`
`
`REPLY ISO NETSUITE’S MOT.
`TO DISMISS 1ST AM. COMPL.
`
`1
`
`
`CASE NO. 8:19-CV-01150-DOC-KES
`(CONSOLIDATED)
`
`

`

`Case 8:19-cv-01150-DOC-KES Document 69 Filed 11/23/20 Page 3 of 7 Page ID #:1267
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`II. ARGUMENT
`A. Uniloc Should Not Be Allowed to Burden NetSuite With Discovery
`in View of a Dispositive Claim Construction Issue Already Decided
`Against It By Two Other Federal Judges
`Uniloc argues that NetSuite’s motion is a “thinly-veiled” summary judgment
`motion because it depends on a claim construction issue. D.I. 62 (“Opp.”) at 1.
`This is wrong. The point is that, under Iqbal and Twombly, a plaintiff must state a
`“plausible” claim for relief, meaning it must do more than offer threadbare recitals
`naming a product and providing a conclusory statement that it infringes.
`Medsquire LLC v. Spring Med. Sys., Inc., No. 11-cv-04504-JHN-PLA, 2011 WL
`4101093, at *3 (C.D. Cal. Aug. 31, 2011). Here, Uniloc does neither, and fails to
`put NetSuite on notice of how any of its products could possibly infringe.
`In fact, Uniloc does not even specify a NetSuite product in the FAC. In
`connection with the ’578 patent, Uniloc refers to “cloud software” (FAC at ¶ 7)
`and “Netsuite products” generally (id. at ¶ 10). It does even less for the ’293
`patent. See id. at ¶¶ 17-25. Nor does Uniloc state a “plausible” claim for how such
`alleged “cloud software” or “products” infringe under Judge Schroeder’s and
`Judge Stearns’ constructions of “application programs,” which should at least be
`highly-persuasive, if not collaterally estop Uniloc from advocating a different
`position. See D.I. 62-1, ¶ 8 (“The parties to the Eastern District of Texas action
`[before Judge Schroeder] later reached a settlement and agreed to dismiss the
`action”); e.Dig. Corp. v. Futurewei Techs., Inc., 772 F.3d 723, 725 (Fed. Cir. 2014)
`(affirming California district court’s application of collateral estoppel to claim
`construction, even though the case was settled post-construction); Int’l Gamco, Inc.
`v. Multimedia Games Inc., 732 F. Supp. 2d 1082, 1091 (S.D. Cal. 2010) (citing
`Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 (9th Cir. 2006)
`(under Ninth Circuit law, a court approved settlement is a final judgment on the
`merits for purposes of collateral estoppel); Neev v. Alcon Labs, Inc., No. 15-00336,
`
`REPLY ISO NETSUITE’S MOT.
`TO DISMISS 1ST AM. COMPL.
`
`2
`
`
`CASE NO. 8:19-CV-01150-DOC-KES
`(CONSOLIDATED)
`
`

`

`Case 8:19-cv-01150-DOC-KES Document 69 Filed 11/23/20 Page 4 of 7 Page ID #:1268
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`-01551, 01538-JVS, 2016 WL 9051170, at *12-13 (C.D. Cal. Dec. 22, 2016)
`(collateral estoppel is discretionary in the interests of judicial efficiency and
`uniformity but can apply after a settlement).
`Beyond the considerations of fairness and judicial efficiency, the Federal
`Circuit has stressed the importance of claim construction uniformity across district
`courts. Finsar Corp. DirecTV Grp., Inc., 523 F.3d 1323, 1329 (Fed. Cir. 2008)
`(“Given ‘the importance of uniformity in the treatment of a given patent,’ [citation to
`Markman] this court would be remiss to overlook another district court’s
`construction of the same claim terms in the same patent as part of this separate
`appeal. In the interest of uniformity and correctness, this court consults the claim
`analysis of different district courts on the identical terms in the context of the same
`patent.”); see also Sears Petroleum & Transp. Corp. v. Archer Daniels Midland Co.,
`No. CIVA 503CV-1120 DEP, 2007 WL 2156251 at *8 (N.D.N.Y. July 24, 2007)
`(holding that “considerable deference should be given” to prior claim constructions
`unless the parties make new arguments not considered by the prior court).
`Uniloc’s Opposition does not raise any arguments about construction of the
`term “application program” that were not already raised before Judges Schroeder
`and Stearns. For example, Uniloc relies on a declaration from Dr. Shamos opining
`that “application programs” may execute within the browser window. Opp. at 5-7.
`But, this is the same opinion that Uniloc submitted in support of its motion to
`reconsider to Judge Schroeder,1 who found it irrelevant to the construction of
`“application programs” in denying such motion. See D.I. 62-6 at 14.2 Specifically,
`Judge Schroeder ruled that Uniloc made limiting statements during prosecution of
`the related ’466 patent, and that this prosecution history was equally relevant to
`
`
`1 See also Uniloc USA, Inc. v. ADP, LLC, No. 2:16-cv-00741, D.I. 344 & 344-1
`(E.D. Tex. Nov. 5, 2019) (Uniloc’s motion to reconsider and declaration of Dr.
`Michael Shamos submitted therewith).
`2 Judge Schroeder ruled that the Shamos declaration was untimely but then still
`held that the discussion in paragraphs 72 and 73 of the declaration (repeated on
`page 6 of Uniloc’s opposition brief) were irrelevant as related to the user interface
`and not the construction of “application program.” D.I. 62-6 at 14.
`REPLY ISO NETSUITE’S MOT.
`3
`CASE NO. 8:19-CV-01150-DOC-KES
`TO DISMISS 1ST AM. COMPL.
`
`(CONSOLIDATED)
`
`

`

`Case 8:19-cv-01150-DOC-KES Document 69 Filed 11/23/20 Page 5 of 7 Page ID #:1269
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`construction of “application programs” in both the ’293 and the ’578 patents. D.I.
`54-4 at 14, 20. On Uniloc’s motion to reconsider, Judge Schroeder found that the
`passage of the ’578 patent specification quoted by Dr. Shamos “describes only the
`user interface” and that “[n]either the disclosure [of the ’578 patent] nor Dr.
`Shamos’s declaration explain where the application is launched after URL is
`requested.” See id.; see also D.I. 54-4 at 14, 20. Uniloc also relied on the same
`argument and opinion of Dr. Shamos in support of its construction of “application
`program” before Judge Stearns, who also rejected it. Compare Uniloc 2017 v.
`Paychex, Inc., No. 19-cv-11272-RGS, 2020 WL 2329474, at *4 (D. Mass. May 11,
`2020) with Uniloc 2017 v. Paychex, Inc., No. 19-cv-11272-RGS, D.I. 26 at 6-8 &
`D.I. 26-1, ¶¶ 71-74 (D. Mass. Jan. 23, 2020) (Uniloc’s opening claim construction
`brief and declaration of Dr. Michael Shamos submitted therewith).3
`Contrary to Uniloc’s argument, the Federal Circuit’s Nalco decision does not
`require this Court to ignore collateral estoppel, judicial efficiency and fairness
`considerations and deny NetSuite’s motion. In Nalco, the Defendants’
`implausibility argument depended upon a disputed factual finding that had never
`previously been resolved by another Federal Judge. Nalco Co. v. Chem-Mod, LLC,
`883 F.3d 1337, 1350 (Fed. Cir. 2018) (“The only argument Defendants make
`regarding the implausibility of [plaintiff’s infringement theory] is that the
`thermolabile bromine precursor could not survive the extreme heat of the
`combustion areas of the furnace without decomposing . . . . Defendants have not
`explained why we should—or could—make such a finding at this stage in light of
`Nalco’s explicit pleadings to the contrary.”). Here, even putting aside Judge
`Schroeder’s and Judge Stearns’ prior constructions, the construction of
`“application programs” turns entirely on a legal issue—whether the prosecution
`history of the ’466 patent is relevant to the Asserted Patents here—and therefore
`falls into the category of cases resolvable at the pleading stage. See also D.I. 54 at
`
`
`3 Uniloc submitted an excerpt of this declaration with its Opposition. See D.I. 62-7.
`REPLY ISO NETSUITE’S MOT.
`4
`CASE NO. 8:19-CV-01150-DOC-KES
`TO DISMISS 1ST AM. COMPL.
`
`(CONSOLIDATED)
`
`

`

`Case 8:19-cv-01150-DOC-KES Document 69 Filed 11/23/20 Page 6 of 7 Page ID #:1270
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`12 (collecting post-Nalco cases rejecting proposition that Nalco precludes
`resolution of claim construction issues that turn on the clear and unambiguous
`prosecution history).
`In sum, for reasons of estoppel, judicial efficiency, and uniformity, the Court
`should not give Uniloc a third chance at the same argument, while burdening
`NetSuite and the Court with months of litigation prior to full-blown claim
`construction. Rather, the Court should adopt the same construction of “application
`program” as Judges Schroeder and Stearns: “the code associated with the
`underlying program functions that is a separate application from a browser
`interface and does not execute within the browser window.”
`B. Uniloc Has Not Met the Iqbal/Twombly Standard Because It
`Failed to Put NetSuite on Notice of Any Particular Accused
`Application Program
`Uniloc argues, in the alternative, that it has sufficiently pled infringement
`under Judge Schroeder’s and Judge Stearns’ construction simply because NetSuite
`offers cloud-based software. Opp. at 13. This is inconsistent with Uniloc’s own
`pleadings as well as the import of Judge Schroeder’s and Judge Stearns’ Orders.
`First, the FAC asserts that a NetSuite “application program can be executed
`on a server within a user’s browser window.” FAC, ¶ 6. This is entirely
`inconsistent with Uniloc’s new position in its Opposition Brief that “Cloud-based
`systems do not execute in the browser window; they can be accessed thereby for
`use by a user at a client, but are executed on servers in the cloud.” Opp. at 12.
`Clearly, Uniloc recognizes, and has asserted in the FAC, that simply because an
`application executes on a server (in the cloud) does not mean that it is outside of a
`browser window.
`Second, the import of Judges Schroeder and Stearns’ constructions of
`“application program” is that it does not simply cover any application hosted on a
`server. The best example of such an application program is “Lotus Notes,” the
`
`REPLY ISO NETSUITE’S MOT.
`TO DISMISS 1ST AM. COMPL.
`
`5
`
`
`CASE NO. 8:19-CV-01150-DOC-KES
`(CONSOLIDATED)
`
`

`

`Case 8:19-cv-01150-DOC-KES Document 69 Filed 11/23/20 Page 7 of 7 Page ID #:1271
`
`once-popular email and organizational program, which the ’578 patent and its
`prosecution history identifies as an exemplary application program. D.I. 54-4 at 20
`(Judge Schroeder discussing the Lotus Notes example); D.I. 62-7 at ¶ 67; Paychex,
`2020 WL 2329474, at *4-6 (Judge Stearns also referencing the Lotus Notes
`example). The program launches and operates outside of the browser window as a
`separate application from a user’s perspective, regardless of whether the program
`code resides locally at the client or on a server. Indeed, Judge Schroeder
`specifically ruled on reconsideration that Dr. Shamos’ declaration was irrelevant to
`his construction, and in particular to the requirement that the application “does not
`execute within the browser window,” because Dr. Shamos failed to “explain where
`the application was launched.” D.I. 54-4 at 14 (emphasis in original); see also D.I.
`62-6 at 14.
`III. CONCLUSION
`There is no reason that Uniloc should have a third opportunity to argue a
`claim construction issue that it already twice lost, particularly when the
`construction precludes any arguable basis for infringement, making the entire
`matter readily resolvable by this Court based on a single legal issue. Because
`Uniloc has not plausibly alleged infringement based on Judge Schroeder’s or Judge
`Stearns’ construction of “application program(s),” and because it has already once
`amended after being put on notice of this fatal deficiency, the Court should dismiss
`this case with prejudice.
`
`Dated: November 23, 2020
`
`Respectfully submitted,
`SHEARMAN & STERLING LLP
`
`/s/ Matthew G. Berkowitz
`Matthew G. Berkowitz
`
`Attorney for Defendant NetSuite Inc.
`
`
`
`
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`REPLY ISO NETSUITE’S MOT.
`TO DISMISS 1ST AM. COMPL.
`
`6
`
`
`CASE NO. 8:19-CV-01150-DOC-KES
`(CONSOLIDATED)
`
`