Case 2:22-cv-00134-JRG-RSP Document 45 Filed 08/12/22 Page 1 of 6 PageID #: 731
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`Case No.: 2:22-cv-00134-JRG-RSP
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`JURY TRIAL DEMANDED
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`ADVANCED MICRO DEVICES, INC., ET
`AL.,
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`TCL INDUSTRIES HOLDINGS CO., LTD.;
`ET AL.,
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`Plaintiffs,
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`v.
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`Defendants.
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`PLAINTIFFS’ REPLY IN SUPPORT OF OPPOSED MOTION FOR DISCRETIONARY
`STAY OF REMAINDER OF ACTION PENDING FINAL DETERMINATION BY THE
`INTERNATIONAL TRADE COMMISSION OF INVESTIGATION NO. 337-TA-1318
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`Plaintiffs Advanced Micro Devices, Inc. and ATI Technologies ULC (collectively,
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`“AMD” or “Plaintiffs”) respectfully submit this reply in support of its motion to stay this action
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`against Realtek Semiconductor Corp. (“Realtek”) pending a final determination of Investigation
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`No. 337-TA-1318 (“the ITC Investigation”).
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`The Court having granted TCL’s motion to stay this action, judicial economy and
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`fundamental fairness would best be served by granting AMD’s stay motion. The TCL stay relates
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`to the same ITC Investigation as the stay sought by AMD; TCL and Realtek are co-defendants in
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`this district court proceeding where there is close to, if not, 100% overlap between the asserted
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`patents, claim construction, and validity in the TCL and Realtek district court proceedings. That
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`is because AMD’s infringement allegations against TCL are based on the use of Realtek chips and
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`products in TCL televisions. Moreover, both TCL and Realtek are co-respondents in a parallel
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`ITC proceeding that overlaps 100% with four of the five patents in this proceeding.
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`1
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`Case 2:22-cv-00134-JRG-RSP Document 45 Filed 08/12/22 Page 2 of 6 PageID #: 732
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`By not opposing TCL’s motion to stay while at the same time opposing AMD’s motion to
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`stay, it is Realtek—not AMD—that seeks to “litigate the same claims twice.” Opp. at 2, 6. This
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`Court, were it to deny AMD’s Motion, would then be obliged to re-adjudicate the identical Realtek
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`and TCL district court cases sequentially: TCL has already stated that it refuses “to be bound by
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`the adjudication of the E.D. Tex. litigation with respect to Realtek or the adjudication of the ITC
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`case.” Ex. A (email from TCL counsel). Realtek, in arguing against a stay for the AMD litigation,
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`mischaracterizes the ITC’s procedural schedule, draws false analogies between ITC and PTO
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`proceedings, demands a one-way stipulation in which AMD (and only AMD) is bound to any
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`adverse ITC determinations, and makes unsupported allegations against AMD’s counsel.
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`I.
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`THE SCHEDULES ARE NOT STAGGERED AS REALTEK CLAIMS
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`Realtek mischaracterizes the procedural schedules in the ITC and district court cases as
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`“staggered.” They are not. All but one of the “deadlines” identified by Realtek in its Opposition—
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`from the claim construction deadlines beginning on August 15, 2022, through the Initial
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`Determination by the Administrative Law Judge (“ALJ”) on July 7, 2023—relate only to the ITC
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`ALJ. The ALJ’s determinations are not binding unless adopted by the Commission. The
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`recommendations of an ALJ and the findings of an Article III judge are not legally equivalent.
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`Only the ITC’s November 7, 2023 final determination will be appealable to the Court of Appeals
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`for the Federal Circuit (“CAFC”). By January 2024, the CAFC may well be reviewing the
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`Commission’s claim constructions of the same terms that this Court will, almost simultaneously,
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`be construing and using to instruct the Realtek jury if it fails to stay this action.
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`Consequently, the same concerns for judicial economy that led Congress to provide for a
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`mandatory stay under 28 U.S.C. § 1659 apply to AMD’s request for a discretionary stay, given the
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`timing and the identity of the parties, patents, and subject matter in the ITC and district court cases.
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`As the CAFC has explained:
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`2
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`Case 2:22-cv-00134-JRG-RSP Document 45 Filed 08/12/22 Page 3 of 6 PageID #: 733
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`The legislative history explains that “use of the Commission record could expedite
`proceedings and provide useful information to the court.” The Commission record
`will be most helpful to the district court if it is a complete record of the Commission
`proceedings including all remand proceedings. Finally, interpreting § 1659 to
`permit the district court proceedings to continue while the Commission proceedings
`are on appeal would result in cumbersome on-again, off-again stays.
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`In re Princo Corp., 478 F.3d 1345, 1355 (Fed. Cir. 2007) (citation omitted).
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`It appears that Realtek’s true intention in opposing AMD’s stay motion is to preserve the
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`stayed TCL district court action as a fallback vehicle to re-litigate the AMD district court action
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`against Realtek—if AMD were to prevail—by taking advantage of TCL’s right to make all-new
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`arguments on infringement, validity, and claim construction.1 Realtek supported TCL’s motion to
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`stay the district court case pending resolution of the ITC case by not opposing it, even as Realtek
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`opposed AMD’s equivalent motion to stay. TCL, as noted above, has stated that it refuses to be
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`bound by district court findings as to Realtek when the court lifts the stay in the TCL action, and
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`Realtek has refused to confirm whether it intends to assist TCL in re-litigating issues upon a lift of
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`the stay as to TCL. See Ex. A; Ex. B. The Court should not permit Realtek to manipulate the
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`procedural schedule to the detriment of judicial economy and fairness.
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`II.
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`AN AGREEMENT TO BE BOUND BY ADVERSE LEGAL DETERMINATIONS
`IN THE ITC CASE WOULD FURTHER COMPLICATE THE LITIGATION
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`Realtek improperly urges this Court, if it were to grant a stay, to require AMD to “agree to
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`be bound by adverse determinations in a collateral administrative proceeding, where the collateral
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`proceeding was initiated by the moving party to adjudicate the merits of the same claims.” Opp.
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`1 Realtek argues that “first adjudicating AMD’s claims against Realtek” would “resolve the merits
`of AMD’s claims against TCL.” Opp. at 14. But this could only be true if TCL had agreed to be
`bound by the ITC’s rulings as to Realtek’s chips and GPUs incorporated therein, validity, and
`claim construction, which TCL refuses to do. To the extent Realtek is seeking the equivalent here
`of a customer/retailer exception, whereby the Realtek case is allowed to proceed while the TCL
`case is stayed, the Federal Circuit has found it to be highly relevant whether “the customer
`consented to . . . be bound by the manufacturer’s action.” Kahn v. Gen. Motors Corp., 889 F.2d
`1078, 1082 (Fed. Cir. 1989).
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`3
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`at 7. Realtek faults AMD for refusing to enter into such a blanket stipulation, claiming that AMD
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`“wants two bites at the apple.” Id. at 8. Yet the stipulation Realtek proposes is fundamentally
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`unfair, because it would operate as a one-way ratchet, binding AMD to any adverse ITC findings
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`without an equivalent agreement to be bound by Realtek. See Ex. B (email from Realtek counsel).
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`The agreement to be bound proposed by Realtek also makes little sense given the non-
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`preclusive nature of ITC investigations. Realtek’s argument is erroneously predicated on an
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`equivalency between PTO and ITC determinations; each of the administrative law cases on which
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`Realtek relies involved PTO IPR proceedings. But the PTO, unlike the ITC, does have authority
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`to invalidate patents. Therefore it can make sense for parties to agree to be bound by the outcome
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`of a dispositive PTO proceeding. The ITC, in contrast, does not have the authority to invalidate
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`patents and, as Realtek recognizes, its determinations have no preclusive effect.
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`Another reason that a stipulation to be bound by ITC determinations makes no sense is that
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`the dispositive issues in Commission determinations under Section 337—such as the existence of
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`a domestic industry—are often irrelevant to district court litigation. It is not uncommon for the
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`Commission to fail to reach any of the legal issues of concern to the district court (including claim
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`construction, infringement, or invalidity) and to dispose of an investigation on narrow, Section
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`337-specific legal grounds. See Beloit Corp. v. Valment Oy, 742 F.2d 1421, 1423 (Fed. Cir. 1984)
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`(authorizing the Commission to reach only some dispositive issues in Section 337 investigations).
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`Even if the Commission were to reach issues relevant to this Court such as infringement
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`and invalidity, judicial resources would only be conserved if the stay requested by AMD were
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`granted. The ITC’s “administrative determination” becomes final only after all appeals have run
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`(and appeals of the ITC determination are likely). Only if the district court action were stayed, as
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`requested by AMD, would this Court be able to take into account legal conclusions by the CAFC
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`4
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`Case 2:22-cv-00134-JRG-RSP Document 45 Filed 08/12/22 Page 5 of 6 PageID #: 735
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`with respect to claim construction and other overlapping issues from the ITC investigation. A stay
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`would allow this Court to benefit from an ITC determination that reached the patent merits given
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`that “[d]istrict courts are not free to ignore holdings of [the CAFC] that bear on cases before them.”
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`Texas Instruments Inc. v. Cypress Semiconductor Corp., 90 F.3d 1558, 1569 (Fed. Cir. 1996).
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`III. REALTEK’S CLAIM THAT AMD’S COUNSEL SEEKS A STAY FOR AN
`IMPROPER PURPOSE IS UNFOUNDED AND IMPROPER
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`Finally, in its Opposition, Realtek accuses AMD’s counsel of “an established practice of
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`litigating infringement claims in the ITC, then modifying their theories and relitigating their claims
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`in the district court.” Opp. at 1. Realtek then repeatedly attacks “Mintz” for allegedly engaging in
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`“gamesmanship” and trying to get “two bites at the infringement apple.” Id. at 1, 6. Realtek’s
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`allegations are baseless and improper.
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`It is proper for a party to proceed in district court once an ITC case has ended and a 28
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`U.S.C. § 1659 stay has been lifted. That is the purpose of the statutory scheme, as courts have
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`recognized. See Fuji Photo Film Co. v. Benun, 463 F.3d 1252, 1256 (Fed. Cir. 2006) (“[S]ection
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`1659 necessarily suggests that after a final determination by the Commission, the district court
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`may resume its consideration of the civil action”). Consequently, Realtek’s allegations of
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`improper “gamesmanship” by Mintz are meritless. Courts take a dim view of such unsupported
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`allegations of misconduct. See, e.g., Hoover Group, Inc. v. Custom Metalcraft, Inc., 66 F.3d 299,
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`305 (Fed. Cir. 1995) (“Such charges are as unprofessional as the conduct they purport to criticize;
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`they waste the court’s time and squander the client’s money. They are not viewed with favor.”).
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`IV. CONCLUSION
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`For the reasons above and in AMD’s motion, AMD respectfully requests the Court to
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`exercise its discretion in staying this action as to Realtek until the determination of the Commission
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`in 337-TA-1318 becomes final.
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`5
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`Case 2:22-cv-00134-JRG-RSP Document 45 Filed 08/12/22 Page 6 of 6 PageID #: 736
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`By: /s/ Eric H. Findlay____
`Eric H. Findlay
`State Bar No. 00789886
`Brian Craft
`State Bar No. 04972020
`FINDLAY CRAFT, P.C.
`102 N. College Ave. Suite 900
`Tyler, Texas 75702
`Tel: (903) 534-1100
`Fax: (903) 534-1137
`Email: efindlay@findlaycraft.com
`Email: bcraft@findlaycraft.com
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`Attorneys for Plaintiffs ATI Technologies
`ULC and Advanced Micro Devices, Inc.
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`Dated: August 12, 2022
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`OF COUNSEL:
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`Michael T. Renaud
`James M. Wodarski
`Michael J. McNamara
`Adam S. Rizk
`Samuel F. Davenport
`William A. Meunier
`Marguerite McConihe
`Matthew A. Karambelas
`Catherin Xu
`Nana Liu
`Tianyi Tan
`MINTZ LEVIN COHN FERRIS
` GLOVSKY AND POPEO PC
`One Financial Center
`Boston, MA 02111
`617-542-6000
`
`Jonathan J. Engler
`MINTZ LEVIN COHN FERRIS
` GLOVSKY AND POPEO PC
`555 12th Street NW, Suite 1100
`Washington, DC 20004
`202-434-7446
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a true and correct copy of the foregoing document
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`has been served on August 12, 2022 to all counsel of record who are deemed to have consented to
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`electronic service via the Court’s CM/ECF system.
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`/s/ Eric H. Findlay_______
`Eric H. Findlay
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`6
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