Case 6:22-cv-00031-ADA Document 130 Filed 09/06/23 Page 1 of 11
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`IN THE UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`FLYPSI, INC. (D/B/A FLYP),
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`Plaintiff,
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`v.
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`GOOGLE LLC,
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`Defendant.
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`Civil Action No. 6:22-cv-31-ADA
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`FLYP’S RESPONSE IN OPPOSITION TO GOOGLE’S MOTION TO STAY
`PENDING INTER PARTES REVIEW
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`Case 6:22-cv-00031-ADA Document 130 Filed 09/06/23 Page 2 of 11
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`I.
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`INTRODUCTION
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`Flyp opposes Google’s Motion to Stay Pending Inter Partes Review. Dkt. 127 (“Motion”).
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`Google attempts to characterize the PTAB’s decision to institute review of the U.S. Patent No.
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`9,667,770, U.S. Patent No. 10,051,105, U.S. Patent No. 10,334,094, U.S. Patent No. 11,012,554,
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`and U.S. Patent No. 11,226,793 (“Asserted Patents”) as a foregone conclusion that they will be
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`invalidated. Not so.
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`Moreover, staying this case would unduly prejudice Flyp, which has invested significant
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`time and resources into this litigation, including responding to Google’s motions, preparing
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`infringement analysis and contentions, analyzing Google’s invalidity analysis, preparing claim
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`construction briefing, completing in fact discovery, and drafting expert reports. A stay would also
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`depart from the Federal Circuit’s policy in favor of expeditious resolutions of cases, prejudicing
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`Flyp’s recognized interest in the timely enforcement of its patent rights. Accordingly, Flyp requests
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`that the Court deny the Motion in its entirety.
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`II.
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`BACKGROUND
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`On January 10, 2022—nearly 18 months ago—Flyp commenced this patent-infringement
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`suit against Google, asserting 29 claims1 across the five Asserted Patents. Dkt. 1. Google was
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`served days later on January 12, 2022. See Dkt. 12.
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`Since then, the parties have engaged in significant motion practice and discovery, including
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`both discovery related Google’s transfer motion and fact discovery, which opened on October 13,
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`2022 per the Court’s original scheduling order. See Dkt. 40 and OGP, Section VI. The Court
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`issued a claim construction order on December 8, 2022 (Dkt. 78).
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`1 As ordered by the Court (Dkt. 112), the parties met-and-conferred in July to discuss a significant narrowing
`of asserted claims and prior art references. As a result of that conference, Flyp currently asserted 20 claims
`across all five Asserted Patents.
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`Case 6:22-cv-00031-ADA Document 130 Filed 09/06/23 Page 3 of 11
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`Google filed its IPRs challenging the validity of the Asserted Patents on January 10, 2023—
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`a full year after Flyp filed this suit and only two days before the statutory deadline under 35 U.S.C.
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`§ 315(b). Google’s eleventh-hour filings came after this Court had already expended significant
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`resources in the case to decide Google’s Motion to Transfer and issue its claim construction order,
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`and came after the parties had already been engaging in discovery for months.
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`Because Google delayed to the last minute to file its IPR petition, this case has progressed
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`significantly since then. The Court has scheduled trial to begin on February 19, 2024 (Dkt. 112).
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`Fact discovery closed on August 22, 2023. Dkt. 112. During discovery the parties collectively
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`took 20 depositions, responded to multiple sets of interrogatories and requests for production, and
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`spent weeks reviewing source code, and produced tens of thousands of pages of responsive
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`documents.
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`Like Google’s prior attempt to delay this case, its current attempt to delay these proceedings
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`after so much time and effort has been expended in equally misplaced. Google sought a stay of
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`these proceedings pending mandamus review (Dkt. 86), which the Court denied on March 30,
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`2023. On August 18, 2023—four days before the close of fact discovery—Google again sought a
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`stay by filing its Motion to Stay Pending Inter Partes Review (Dkt. 127). Flyp opposes the
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`requested stay.2
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`III. LEGAL STANDARD
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`A decision whether to stay a case is within the sound discretion of the Court. See Clinton
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`v. Jones, 520 U.S. 681, 706 (1997); see also Multimedia Content Mgmt. LLC v. Dish Network LLC,
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`2 This opposition brief is being filed on or before September 1, 2023, pursuant to the 14-day deadline in
`Local Rule 7(d)(2). Should the Court deem this opposition to instead be governed by the 7-day deadline
`of the same rule, then respectfully Flyp moves for a 7-day extension of its deadline up to and including
`September 1. Good cause exists for the extension given Flyp’s good faith belief that the 14-day deadline
`applied and because the extension will cause no prejudice to Google.
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`Page 2
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`Case 6:22-cv-00031-ADA Document 130 Filed 09/06/23 Page 4 of 11
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`No. 6:18-CV-00207-ADA, 2019 WL 11706231, at *1 (W.D. Tex. May 30, 2019). “[T]here is no
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`per se rule that patent cases should be stayed pending PTO proceedings, because such a rule would
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`invite parties to unilaterally derail litigation.” Realtime Data, LLC v. Rackspace US, Inc., No. 6:16-
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`CV-00961 RWS-JDL, 2017 WL 772654, at *2 (E.D. Tex. Feb. 27, 2017) (quotation and citation
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`omitted).
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`This Court typically considers three factors when determining whether to grant a stay
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`pending inter partes review of a patent in suit: “(1) whether the stay will unduly prejudice the
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`nonmoving party, (2) whether the proceedings before the court have reached an advanced stage,
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`including whether discovery is complete and a trial date has been set, and (3) whether the stay will
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`likely result in simplifying the case before the court.” Dish Network, 2019 WL 11706231, at *1
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`(quoting NFC Tech. LLC v. HTC Am., Inc., No. 2:13-cv-1058, 2015 WL 1069111, at *2 (E.D. Tex.
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`Mar. 11, 2015)). “The party seeking a stay bears the burden of showing that a stay is appropriate.”
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`MiMedx Grp., Inc. v. Tissue Transplant Tech., Ltd., No. SA-14-CA-719, 2015 WL 11573771, at
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`*2 (W.D. Tex. Jan. 5, 2015).
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`Each of the three factors weighs against a stay here.
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`IV. ARGUMENT
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`A.
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`The Proposed Stay Will Cause Flyp Undue Prejudice
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`A stay at this stage of the proceeding would unduly prejudice Flyp. The proposed stay
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`would be highly prejudicial to Flyp because of Flyp’s undeniable interest in the timely enforcement
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`of its patent rights. Id. (“A patent holder has ‘an interest in the timely enforcement of its patent
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`right.’”). Indeed, “[t]he Federal Circuit has long held that ‘[r]ecognition must be given to the
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`strong public policy favoring expeditious resolution of litigation.’” CloudofChange, LLC v.
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`Lightspeed POS Inc., No. 6:21-CV-01102-ADA, 2023 WL 3467787, at *3 (W.D. Tex. May 15,
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`2023) (quoting Kahn v. GMC, 889 F.2d 1078, 1080 (Fed. Cir. 1989)).
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`Google suggests that the Court need not consider undue prejudice because Flyp “has not
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`sought a preliminary injunction to date.” Dkt. 127, at 6. This argument falls flat. Setting aside the
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`fact that Flyp does seek injunctive relief, this Court has recognized “that ‘[a] patent holder has an
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`interest in the timely enforcement of its patent right,’ even when the patent holder has only sought
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`monetary relief.” USC IP P'ship, L.P. v. Facebook, Inc., No. 6-20-CV-00555-ADA, 2021 WL
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`6201200, at *2 (W.D. Tex. Aug. 5, 2021) (quoting MiMedx, 2015 WL 11573771, at *2). The
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`interference with the right to timely enforcement is enough to find undue prejudice. See id. In
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`addition, the mere fact that Flyp has not sought a preliminary injunction does not undercut its need
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`for final injunctive relief. As the Federal Circuit has acknowledged, “there could be a variety of
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`reasons that a patentee does not move for a preliminary injunction.” VirtualAgility Inc. v.
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`Salesforce.com, Inc., 759 F.3d 1307, 1319 (Fed. Cir. 2014). That Flyp concentrated its efforts and
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`resources on litigating this case to its final resolution rather than obtaining temporary relief does
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`not lessen Flyp’s need for the permanent monetary and injunctive relief it seeks.
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`Google’s reliance on Virtual Agility for this factor is misplaced. There, the Federal Circuit
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`found that the prejudice factor did weigh in favor of a stay, despite the fact the patentee had not
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`sought an injunction. See id. at 1320. Under the facts in Virtual Agility, the Federal Circuit found
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`the undue prejudice factor only slightly favored a stay in part because “there is no evidence in this
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`record that the two companies ever competed for the same customer or contract.” See id. at 1318.
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`Here, it is uncontroverted in the record that Google and Flyp are direct competitors, competing for
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`the same customers.
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` The fact
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`that Google and Flyp are competitors also distinguishes the current situation from Crossroads Sys.,
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`Inc. v. Dot Hill Sys. Corp., where the patentee had “fail[ed] to substantiate [that the parties were
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`competitors] in any meaningful way.” No. A-13-CA-1025-SS, 2015 WL 3773014, at *3 (W.D.
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`Tex. June 16, 2015). Instead, under the facts here, where Flyp and Google are direct competitors
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`and Flyp is being forced to compete for customers against its own inventions, a proposed stay is
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`“especially burdensome.” See MiMedx, 2015 WL 11573771, at *2.
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`Moreover, Google has made clear that it expects appeals from the IPR decisions and
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`requests that the stay include the resolution of any such appeals. See Dkt. 127, at 8 (seeking a stay
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`“until the IPRs and any resulting appeals are finally resolved.”). This Court has found that
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`potential appeal time “could result in a significant delay” that would cause undue prejudice to the
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`plaintiff. CloudofChange, 2023 WL 3467787, at *2; see also Dish Network, 2019 WL 11706231,
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`at *1; USC IP, 2021 WL 6201200, at *2. Sidelining Flyp’s infringement claims for an indefinite
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`period, including the potential added time for any party’s appeal of the PTAB’s final written
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`decisions, would prejudicially delay the resolution of Flyp’s claims.
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`Accordingly, this factor weighs heavily against a stay.
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`B.
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`The Current Litigation is in an Advanced Stage of the Proceeding
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`Google admits that “the case is not in early stages.” Dkt. 127, at 6. But Google’s admission
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`falls short of describing the actual progress of this case. Due to Google’s taking nearly a full year
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`to file its IPR petitions, this case is now in its advanced stages where Markman proceedings and
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`fact discovery have already concluded.
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`As a result, a stay is inappropriate because the Court and the parties have expended
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`significant resources throughout this litigation. See CloudofChange, 2023 WL 3467787, at *3 (“If
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`‘the court has expended significant resources, then courts have found that this factor weighs against
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`a stay.’”) (quoting CANVS Corp. v. U.S., 118 Fed. Cl. 587, 595-96 (2014)). Here, the Court has
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`issued its claim construction order (Dkt. 78). In addition, fact discovery has concluded (Dkt. 112),
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`and the parties expended significant resources during discovery. Finally, trial has been set for
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`February 19, 2024. Dkt. 112. These are significant milestones that show an advanced stage of
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`proceedings and weigh against a stay. See CloudofChange, 2023 WL 3467787, at *3 (“Here, the
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`Court has issued a claim construction order, and fact discovery opened on September 22, 2022.
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`The trial has been set for September 20, 2023. Because the Court and the parties have expended
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`significant resources in this case, the Court finds this factor weighs against a stay.” (citations to
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`docket omitted)). A stay in the case at this stage of the proceeding is similarly inappropriate.
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`Google argues that the advanced stage of the case can be disregarded because “a stay
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`would save . . . significant resources.” This argument attempts to skip to the third factor and
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`ignores the question determinative of this second factor: “whether the proceedings before the
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`court have reached an advanced stage, including whether discovery is complete and a trial date
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`has been set.” Dish Network, 2019 WL 11706231, at *1. Here, fact discovery is complete and
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`a trial date has been set. And the advanced stage of this case directly results from Google’s
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`delay in filing its IPRs until the last possible moment.
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`Accordingly, the second factor weighs heavily against a stay.
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`C.
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`Simplification of Issues
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`Google proclaims that its IPRs are likely to eliminate the need for trial or at least narrow
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`the case significantly. See Dkt. 127, at 3–6. Google’s assumptions are conclusory and
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`unsubstantiated. IPR institutions are not a forgone conclusions and are not final.
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`Despite Google’s arguments, a stay would not simplify the issues before the Court for two
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`primary reasons: first, as this Court has recognized, the mere fact that the PTAB instituted an IPR
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`on all claims does not necessarily reflect “a strong indictment of the claims’ validity.” Sonrai
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`Memory Ltd. v. LG Elecs. Inc., No. 6:21-CV-00168-ADA, 2022 WL 2307475, at *4 n.3 (W.D.
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`Tex. June 27, 2022). Here, the PTAB institution decisions merely show that the minimum standard
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`for institution—“reasonable likelihood of success”—was met. See 35 U.S.C. § 314(a). Google has
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`done no more at this stage than satisfy the statutory gatekeeping standard, and the merits of the
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`IPRs remain undecided. There is no “per se rule” that a PTAB’s institution decision stay
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`infringement claims simply because there is a possibility the asserted claims may be affected.
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`Soverain Software LLC v. Amazon.com, Inc., 356 F. Supp. 2d 660, 662 (E.D. Tex. 2005). Indeed,
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`the mere possibility of issue simplification is “not sufficiently persuasive” to warrant the stay
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`Google seeks. Id. That is especially true here were the PTAB has not yet considered core issues
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`related to the obviousness determination, such as secondary considerations. Motion, Ex. 2 at n. 3
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`(noting that at this early stage of the IPR proceedings neither party had yet raised evidence or
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`arguments regarding objective evidence of non-obviousness, a.k.a. secondary considerations of
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`non-obviousness).
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`Second, “this Court has recognized that in two out of three outcomes, an IPR Final Written
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`Decision fails to resolve the issues between the parties.” CloudofChange, 2023 WL 3467787, at
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`*4 (citing Sonrai Memory Ltd., v. LG Elecs. Inc., No. 6:21-cv-00168-ADA, 2022 WL 2307475, at
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`*4 (W.D. Tex. Jun. 27, 2022)). Indeed, “[o]nly three outcomes are relevant to simplify the issues:
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`all the asserted claims fall; all the asserted claims survive; or some of the asserted claims survive.”
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`Id. In order to simplify the issues in this case, all 20 currently asserted claims must fall. See id.
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`Google has not presented compelling evidence that any of these claims will likely fall, let alone
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`Case 6:22-cv-00031-ADA Document 130 Filed 09/06/23 Page 9 of 11
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`all of them. Without merely speculating on the PTAB’s final decision, as Google does, Flyp
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`reiterates that it is Google’s burden to show that a stay is appropriate. MiMedx, 2015 WL 11573771,
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`at *2. Google has not met its burden to demonstrate this third factor.
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`This factor weighs against a stay.
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`V.
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`CONCLUSION
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`For the foregoing reasons, Flyp respectfully requests that the Court deny Google’s Opposed
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`Motion for a Stay Pending Inter Partes Review of Flyp’s Asserted Claims.
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`Case 6:22-cv-00031-ADA Document 130 Filed 09/06/23 Page 10 of 11
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`Respectfully submitted,
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`/s/ Thomas M. Melsheimer
`Thomas M. Melsheimer
`Texas Bar No. 13922550
`tmelsheimer@winston.com
`M. Brett Johnson
`Texas Bar No. 00790975
`mbjohnson@winston.com
`Michael A. Bittner
`Texas Bar No. 24064905
`mbittner@winston.com
`WINSTON & STRAWN LLP
`2121 North Pearl Street, Suite 900
`Dallas, TX 75201
`Telephone: (214) 453-6500
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`Matthew R. McCullough
`California Bar No. 301330
`mrmccullough@winston.com
`WINSTON & STRAWN LLP
`275 Middlefield Road, Suite 205
`Menlo Park, CA 94025
`Telephone: (650) 858-6500
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`William M. Logan
`Texas Bar No. 24106214
`wlogan@winston.com
`WINSTON & STRAWN LLP
`800 Capitol Street, Suite 2400
`Houston, TX 77002
`Telephone: (713) 651-2766
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`ATTORNEYS FOR PLAINTIFF
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`DATED: August 30, 2023
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`CERTIFICATE OF SERVICE
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`I hereby certify that a sealed copy of the foregoing document was filed electronically in
`compliance with Local Rule CV-5. Thereafter, this document was served on all counsel via
`electronic mail on August 30, 2023.
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`/s/ Thomas M. Melsheimer
`Thomas M. Melsheimer
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`Page 10
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