Case 6:20-cv-00810-ADA Document 52 Filed 02/18/21 Page 1 of 10
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`Case No. 6:20-cv-00810-ADA
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`JURY TRIAL DEMANDED
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`PLAINTIFF’S OPPOSITION TO DEFENDANTS’ MOTION TO STAY PENDING
`RESOLUTION OF THE MOTION TO TRANSFER VENUE
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`I.
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`INTRODUCTION
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`In their motion to stay pending resolution of the motion to transfer (ECF No. 49, “Motion
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`to Stay”), Defendants ByteDance Ltd., ByteDance Inc., TikTok Inc., and TikTok Pte. Ltd.
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`(hereafter collectively “Defendants”) ask the Court to suspend its Scheduling Order (ECF No.
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`41) until Defendants’ motion to transfer (ECF Nos. 24, 47, “Motion to Transfer”) is decided.
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`But the Scheduling Order—based on the Court’s Standing Order Governing Procedures, Version
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`3.2 (“OGP”),1 and the Court’s Standing Order Regarding Venue and Jurisdictional Discovery
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`Limits for Patent Cases dated November 19, 20202
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`—already specifically accommodates such
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`1
`https://www.txwd.uscourts.gov/wp-
`content/uploads/Standing%20Orders/Waco/Albright/Sample%20Order%20Governing%20Proceedings%
`20-%20Patent%20Cases110520.pdf
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` https://www.txwd.uscourts.gov/wp-
`content/uploads/Standing%20Orders/Waco/Albright/Standing%20Order%20Regarding%20Venue%20An
`d%20Jurisdictional%20Discovery%20Limits%20For%20Patent%20Cases%20111920.pdf
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` 2
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`10TALES, INC.,
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`TIKTOK INC., TIKTOK PTE. LTD.,
`BYTEDANCE LTD., and BYTEDANCE
`INC.,
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`v.
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`Plaintiff,
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`Defendants.
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`Case 6:20-cv-00810-ADA Document 52 Filed 02/18/21 Page 2 of 10
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`jurisdictional motions. Defendants neither dispute that the Courts’ Standing Order gives “top
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`priority” to Defendants’ Motion to Transfer, nor do they raise any argument that their Motion to
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`Transfer is in any way unique such that departure from the Court’s standing practice is
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`warranted. Instead, Defendants’ Motion to Stay is a tactical ploy in an attempt to delay these
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`proceedings to see if its February 9, 2021, inter partes review (“IPR”) petition—filed two days
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`before its Motion to Stay—can get traction at the U.S. Patent and Trademark Office to give it
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`further arguments for delay. In short, Defendants’ Motion to Stay asks the Court to substitute
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`Defendants’ discretion for managing this case for the Court’s.
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`Defendants quote the Federal Circuit’s Order in In re SK Hynix to suggest that this court
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`must stay the case until it has ruled on Defendants’ Motion to Transfer. See Motion to Stay at 1,
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`4, 5 (quoting In re SK Hynix, No. 2021-113, 2021 WL 321071, at *2 (Fed. Cir. Feb. 1, 2021)).
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`That is not the law. Instead, the decision to stay this case rests with the Court’s discretion, and
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`Defendants’ Motion to Stay falls well short of demonstrating any inequity that would result from
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`letting this case proceed. Defendants’ Motion to Stay should be denied, and this case should
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`continue pursuant to the Scheduling Order.
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`II.
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`FACTUAL BACKGROUND
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`10Tales filed its original Complaint against Defendant TikTok Inc. on September 2,
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`2020. See ECF No. 1. On September 15, 2020, TikTok Inc. filed an unopposed motion to
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`extend the time to respond to 10Tales’ Complaint by forty-five (45) days such that TikTok Inc.’s
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`response would be due on November 9, 2020. See ECF No. 10. The Court granted TikTok
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`Inc.’s motion. On November 5, 2020, TikTok Inc. sought additional time to respond to the
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`Complaint. See ECF No. 20. On November 19, 2020—seventy-six (76) days after being served
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`with the Complaint—Defendant TikTok Inc. filed its Motion to Transfer. See ECF No. 24.
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`Case 6:20-cv-00810-ADA Document 52 Filed 02/18/21 Page 3 of 10
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`On December 10, 2020, 10Tales filed its First Amended Complaint (“Amended
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`Complaint”) for Patent Infringement as a matter of course. See ECF No. 28. The Amended
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`Complaint added additional parties that work together with TikTok Inc. to market, sell, and
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`distribute the “TikTok” application in the United States. See, e.g., Amended Complaint, ¶¶ 14-
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`21. On December 14, 2020, in accordance with the deadline set forth in the OGP, 10Tales
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`served its preliminary infringement contentions on TikTok Inc.
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`On December 23, 2020, TikTok Inc. moved for a 30-day extension to respond to
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`10Tales’ Amended Complaint such that TikTok Inc.’s response would not be due until January
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`27, 2021. See ECF No. 35. Notably, despite the fact that the Court had not yet ruled on TikTok
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`Inc.’s Motion to Transfer, TikTok Inc. did not file any motion with the Court requesting that the
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`Court stay all deadlines—including the deadline for TikTok Inc. to respond to the Amended
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`Complaint—prior to its December 23 motion for an extension of time, or even at any time during
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`the following forty days.
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`Instead, TikTok Inc. waited for nearly three months from the date that TikTok Inc. filed
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`its Motion to Transfer before filing the instant Motion to Stay on February 11, 2021, requesting
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`that the Court stay all dates pending resolution of the motion that TikTok Inc. filed on November
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`19, 2020. Significantly, Defendants do not cite to anything in this case that has changed since
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`November 19, 2020, when Defendant TikTok Inc. filed its Motion to Transfer. The Court is
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`already giving top priority to Defendants’ Motion to Transfer, and the parties are already nearly
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`half-way through the six months allotted for jurisdictional discovery. See ECF No. 41.
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`Accordingly, given Defendants’ undue delay, gamesmanship, and failure to provide any
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`reason that the facts of this case differ from any other case where a defendant files a motion to
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`transfer in a patent case, this Court should deny Defendants’ Motion to Stay.
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`III. LEGAL STANDARD
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`“Whether to stay a case falls within the Court’s inherent discretiona[ry] authority.”
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`Neodron, Ltd. v. Dell Techs., Inc., No. 1:19-CV-819-ADA, 2019 WL 9633629, at *1 (W.D. Tex.
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`Dec. 16, 2019) (citing In re Ramu Corp., 903 F.2d 312, 318 (5th Cir. 1990) (“The stay of a
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`pending matter is ordinarily within the trial court’s wide discretion to control the course of
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`litigation, which includes authority to control the scope and pace of discovery.”)); Clinton v.
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`Jones, 520 U.S. 681, 706 (1997) (exercising “judicial discretion” upon a motion to stay).
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`Determining whether to issue a stay “calls for the exercise of judgment, which must weigh
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`competing interests and maintain an even balance.” Neodron, 2019 WL 9633629, at *1 (quoting
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`Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936)).
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`Importantly, the proponent has the burden to “make out a clear case of hardship or
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`inequity in being required to go forward, if there is even a fair possibility that the stay for which
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`he prays will work damage to someone else.” Id. (quoting Landis, 299 U.S. at 255). In
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`determining whether a stay is proper, a district court should consider, among other factors: (1)
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`the potential prejudice to the nonmoving party; (2) the hardship and inequity to the moving party
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`if the action is not stayed; and (3) judicial resources. Yeti Coolers, LLC v. Home Depot U.S.A.,
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`Inc., No. 1:17-CV-342-RP, 2018 WL 2122868, at *1 (W.D. Tex. Jan. 8, 2018).
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`IV. ARGUMENT
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`A. Defendants Have Not Shown That They Would Suffer Hardship or Inequity If
`This Case Goes Forward
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`Defendants are obligated to demonstrate that they would suffer clear harm or inequity if a
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`stay is not granted. Defendants’ arguments fall well short of carrying their burden in this regard.
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`Each of the three factors the Court should consider in deciding Defendants’ Motion to Stay
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`weighs against staying this case. The Court should deny the Motion to Stay.
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`1. A Stay Will Prejudice 10Tales’ Right to Protect Its Patent and Obtain
`Expeditious Resolution of Its Claims
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`Defendants’ tactic here is transparent. They want to stack delay by first suspending this
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`Court’s Scheduling Order, on the hope that the case will be transferred to the Northern District of
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`California, where the case will then reset. It will then seek a stay there pending resolution of its
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`recently-filed IPR, and then—should the PTAB institute trial—pending resolution of an
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`inevitable appeal to the Federal Circuit. All-in, if Defendants’ strategy is successful, they will
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`delay 10Tales’ right to protect its patent rights in district court for over 3 years—well into 2024.
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`Such a delay would permit Defendants to free ride on 10Tales’ patent rights for an additional
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`15% of 10Tales’ entire patent term. If successful, Defendants’ tactic would be highly prejudicial
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`to 10Tales.
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`Defendants brazenly argue that a stay would result in “little or no prejudice to” 10Tales.
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`Motion to Stay at 1. But as this Court recognized in Neodron, a stay would be prejudicial to
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`10Tales’ interest in obtaining an expeditious resolution of its case. See Neodron, 2019 WL
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`9633629, at *1-2. The first factor weighs heavily against Defendants’ requested stay.
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`2. Defendants’ Claims of “Current” and Speculative Hardship and Inequity
`Do Not Justify A Stay
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`Defendants feign “current” harm based on their argument that 10Tales’ Amended
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`Complaint does not sufficiently apprise them of 10Tales’ infringement claim. But as 10Tales set
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`forth in its recently-filed opposition to Defendants’ motion to dismiss, the Amended Complaint
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`satisfies the pleading requirements, and makes clear that Defendants’ system that carries out
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`Defendants’ recommendation engine used with the TikTok “For You” feed infringes at least
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`claim 1 of the ’030 patent. See ECF No. 51. It is unclear why Defendants are arguing “current”
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`harm to support their Motion to Stay where the proper inquiry is whether denying the motion will
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`create harm. Yeti Coolers, 2018 WL 2122868, at *1-2. Indeed, Defendants’ argument weighs
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`against staying this case where Defendants already have a separate motion seeking relief for its
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`“current” harm pending before the Court. See ECF No. 48.
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`In any event, Defendants fail to address the fact that on December 14, 2020—over two
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`months ago—10Tales served its preliminary infringement contentions, which include a 31-page
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`claim chart explaining how Defendants’ system infringes claim 1 of the ’030 patent. See
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`10Tales’ Preliminary Infringement Contentions, attached hereto as Exhibit A. Even if
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`Defendants were to prevail on its motion to dismiss—which it should not—Defendants cannot in
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`good faith argue that they have not been provided notice of 10Tales’ infringement contentions.
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`In its contentions, 10Tales provides details of Defendants’ infringement based on its inspection
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`of the operation of the TikTok “For You” feed and publically available information from
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`Defendants themselves. Several of the claim limitations are directed to software for carrying out
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`a method on the claimed system. For those limitations, 10Tales explained that it will supplement
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`its contentions to provide further details after it has had an opportunity to review Defendants’
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`source code and technical documents, which are due with Defendants’ preliminary invalidity
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`contentions on March 1, 2021. See ECF No. 41, Scheduling Order at 2 (“Defendants shall also
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`produce . . . technical documents, including software where applicable, sufficient to show the
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`operation of the accused product(s) . . . .”).
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`Defendants frame their “current” harm in the context of the Amended Complaint rather
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`than 10Tales’ preliminary infringement contentions, which cuts against the relief they seek here.
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`It is apparent that rather than suffering harm from proceeding forward, Defendants want to delay
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`so that they do not need to comply with their obligation to produce the technical details of their
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`accused system—including the source code. Any “current” harm that Defendants are suffering
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`will only be exacerbated by staying this case. Defendants’ Motion to Stay should be denied so
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`that 10Tales can review Defendants’ technical documents and supplement its infringement
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`contentions to provide Defendants the additional level of detail they complain of not having.
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`As to future harm that Defendants might suffer if this case is not stayed, Defendants
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`merely speculate as to inefficiencies that might result if the Court transfers this case.
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`Defendants’ purported “harm” is highly speculative and does not justify staying 10Tales’ case
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`while the parties complete jurisdictional discovery provided for under the Court’s Standing
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`Order.3
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` Moreover, Defendants’ own conduct contradicts their claim that they will suffer
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`“future” harm. Defendant TikTok Inc. filed its Motion to Transfer on November 19, 2020, but
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`then waited nearly three months to file its Motion to Stay pending resolution of its Motion to
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`Transfer. During that nearly three month delay, Defendants have sought affirmative relief from
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`this Court by filing a motion to dismiss the Amended Complaint asking this Court to dismiss
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`10Tales’ action with prejudice. If Defendants were truly concerned about “future” harm, TikTok
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`Inc. would have promptly filed its Motion to Stay at or about the same time it filed its Motion to
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`Transfer in November 2020, and the other Defendants would have joined in that motion soon
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`after accepting prompt service of process. Defendants failure to act diligently in seeking this
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`stay is telling.
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`As this Court noted in Neodron, a stay would be prejudicial to 10Tales’ interest in
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`obtaining an expeditious resolution of its case. See Neodron, 2019 WL 9633629, at *3.
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`Defendants have failed to carry their burden to show “a clear case of hardship or inequity in
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`being required to go forward,” and their motion should be denied. Id. at *1.
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`3 Defendants surely make no attempt to demonstrate how they would uniquely “experience hardship or
`inequity that would necessarily outweigh other considerations like [lost] judicial economy” pursuant to a
`transfer from this Court to the Northern District of California. Miller Weisbrod, LLP, et al. v. Klein
`Frank, PC, No. 3:13-CV-2695-BN, 2014 WL 2738231, at *4 (N.D. Tex. June 17, 2014).
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`The court’s order in Sipco, LLC, et al. v. Emerson Electric Co., et al., No. 6:15-CV-907,
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`Dkt. No. 103 (E.D. Tex. July 12, 2016), is instructive. In Sipco, the court denied the defendants’
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`emergency request for a stay even after granting their motion to transfer pending a 21-day
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`waiting period prior to transfer in the Local Rules. In doing so, the court concluded that
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`“[e]fficiency will be best served if the parties proceed with the current deadlines in this case until
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`the transferee court receives the case.” Id. at 2. Here, as in Sipco, efficiency will be best served
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`if the parties proceed pursuant to the Scheduling Order. The second factor also weighs against
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`Defendants’ requested stay.
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`3. A Stay Is Unlikely to Conserve Judicial Resources
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`Defendants also fail to demonstrate that a stay would conserve judicial resources. The
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`Court has entered a Scheduling Order, and 10Tales has already served its preliminary
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`infringement contentions. Defendants must now serve their invalidity contentions and technical
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`documents—which will be required regardless of the Court’s decision on their Motion to
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`Transfer. The parties will then proceed to the claim construction phase. Claim construction is a
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`matter of law, which again, will be required regardless of whether the case is transferred.4
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` None
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`4 In their Motion to Stay, Defendants argue that if this Court were to transfer this case to the Northern
`District of California after the parties had completed their claim construction briefing, the parties would
`have to “restart” the entire claim construction process in the Northern District of California. Defendants,
`however, offer no evidence or explanation as to why claim construction submissions in this Court could
`not comply with the local rules of the Northern District of California. In fact, this Court’s rules and the
`rules from the Northern District of California are substantially similar. For example, both this Court and
`the Northern District of California require the parties to submit a joint claim construction statement prior
`to claim construction briefing. Considering this Court’s more flexible rules regarding claim construction
`submissions, nothing prevents Defendants from formatting their claim construction submissions to also
`comply with the Local Rules of the Northern District of California if they so choose. Defendants have
`not and cannot show how doing so would run afoul in anyway of this Court’s standing orders. Moreover,
`Defendants do not accurately represent what transpired in Synkloud v. Adobe, No. 3:20-CV-7760, Dkt. 81,
`¶¶ 16-18, 21-22 (N.D. Cal. Feb. 5, 2021) after the case was transferred to the Northern District of
`California. In that case, Judge Alsup did not order the parties to “restart the claim construction process.”
`Rather, Judge Alsup merely indicated that it was his unique procedure—not the N.D. Cal.’s procedure—
`to postpone claim construction until summary judgment or trial. Even under Judge Alsup’s unique
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`of these efforts will be wasteful of judicial resources. Fact discovery is not scheduled to begin
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`until June, and trial is over a year away.
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`Defendants argue that the Northern District of California “is a much more convenient
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`forum.” Motion to Stay at 9. But Defendants make no attempt to link its purported convenience
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`to the conservation of judicial resources. The third factor also weighs against Defendants’
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`requested stay.
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`V.
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`CONCLUSION
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`For the foregoing reasons, this Court should exercise its discretion to manage its own
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`docket and proceed with the case pursuant to the Scheduling Order. The Court should deny
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`Defendants’ Motion to Stay.
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`Dated: February 18, 2021
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`Respectfully submitted,
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` /s/ William E. Davis, III
`By:
`William E. Davis, III
`Texas State Bar No. 24047416
`bdavis@bdavisfirm.com
`THE DAVIS FIRM, PC
`213 N. Fredonia Street, Suite 230
`Longview, Texas 75601
`Telephone: (903) 230-9090
`Facsimile: (903) 230-9661
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`Barry P. Golob (admitted pro hac vice)
`bgolob@cozen.com
`Thomas J. Fisher (admitted pro hac vice)
`tfisher@cozen.com
`COZEN O’CONNOR
`1200 Nineteenth Street, NW
`Washington, D.C. 20036
`Telephone: (202) 912-4800
`Facsimile: (202) 861-1905
`Attorneys for Plaintiff 10Tales Inc.
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`procedure, the parties are required to exchange claim construction proposals prior to discovery, and as
`such, any exchanges and briefing that occurred prior to the transfer served to move that case forward,
`contrary to Defendants’ characterization of that case.
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that the foregoing document was filed electronically in
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`compliance with Local Rule CV-5(A) on February 18, 2021, and was served via CM/ECF on all
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`counsel who are deemed to have consented to electronic service. Local Rule CV-5(b)(1).
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`/s/ William E. Davis, III
`William E. Davis, III
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