NETWORK SYSTEM TECHNOLOGIES, LLC v. ONEPLUS TECHNOLOGY (SHENZHEN) CO., LTD.

CourtDistrict Court, E.D. Texas
DecidedNovember 14, 2023
Docket2:23-cv-00520
StatusUnknown

This text of NETWORK SYSTEM TECHNOLOGIES, LLC v. ONEPLUS TECHNOLOGY (SHENZHEN) CO., LTD. (NETWORK SYSTEM TECHNOLOGIES, LLC v. ONEPLUS TECHNOLOGY (SHENZHEN) CO., LTD.) is published on Counsel Stack Legal Research, covering District Court, E.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
NETWORK SYSTEM TECHNOLOGIES, LLC v. ONEPLUS TECHNOLOGY (SHENZHEN) CO., LTD., (E.D. Tex. 2023).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

NETWORK SYSTEM TECHNOLOGIES, LLC, § § Plaintiff, § § v. § CIVIL CASE NO. 2:22-CV-00481-JRG

§ SAMSUNG ELECTRONICS CO., LTD, § SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG AUSTIN SEMICONDUCTOR, § LLC, SAMSUNG SEMICONDUCTOR, INC., § and ONEPLUS TECHNOLOGY (SHENZHEN) § CO., LTD, § § Defendants. §

MEMORANDUM OPINION AND ORDER Before the Court is Defendant OnePlus Technology (Shenzhen) Co., Ltd.’s (“OnePlus”) Motion to Sever and Stay (“OnePlus’s Motion”) (Dkt. No. 41) and Defendants Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung Austin Semiconductor, LLC, and Samsung Semiconductor, Inc.’s (collectively, “Samsung”) Motion to Sever and Stay (“Samsung’s Motion”). (Dkt. No. 47.) In OnePlus’s Motion, OnePlus contends that all of Plaintiff Network System Technologies’ (“NST”) claims against it should be severed and stayed based on the customer-suit exception and traditional stay factors, until the resolution of NST’s lawsuit against OnePlus’s supplier, Qualcomm.1 (Dkt. No. 41 at 1.) Having considered OnePlus’s Motion and related briefing, the Court finds that OnePlus’s Motion should be and hereby is GRANTED. In Samsung’s Motion, Samsung contends that NST’s claims against it based on Qualcomm chips (the “Samsung Snapdragon Device Claims”) should be severed and stayed based on the customer- suit exception and traditional stay factors, until the resolution of NST’s lawsuit against Qualcomm.

1 NST v. Qualcomm Inc. et al., No. 1:22-cv-1331-DAE (W.D. Tex.). (Dkt. No. 47 at 1.) Having considered Samsung’s Motion and related briefing, the Court finds that Samsung’s Motion should be and hereby is DENIED. I. BACKGROUND On December 19, 2022, NST filed the instant action in this Court (“NST I”) against Samsung, OnePlus, and Lenovo Group Ltd. (“Lenovo”),2 alleging the infringement of six patents.3

(Dkt. No. 1.) The same day, NST filed a second action in this Court, Case No. 2:22-CV-00482 (“NST II”), against Texas Instruments Incorporated (“TI”), Ford Motor Company (“Ford”), Volkswagen AG (“Volkswagen”), and Audi AG (“Audi”). (NST II, Dkt. No. 1.) NST II was reassigned from this Court to Judge Schroeder.4 (See NST II, Dkt. No. 3.) TI makes the accused systems on a chip (“SoCs”) which are purchased and installed into downstream products by Ford. (NST II, Dkt. No. 96 at 3.) A third NST case was filed in the Western District of Texas against Qualcomm, Inc. and Qualcomm Technologies, Inc. (collectively, “Qualcomm”): NST v. Qualcomm Inc. et al., No. 1:22-cv-1331 (W.D. Tex.) (“NST III” or “the Qualcomm Case”).5 On May 10, 2023, OnePlus filed its Motion to Sever and Stay all claims against it in this

case based on the customer-suit exception and traditional stay factors. (Dkt. No. 41.) Shortly after, on May 17, Samsung filed its Motion to Sever and Stay Qualcomm-Based Claims against it on the same grounds. (Dkt. No. 47.) NST opposes both Motions. (Dkt. Nos. 48, 51.) Importantly, NST’s claims against Samsung involve three categories of Samsung Accused Products: 1) Samsung’s integrated circuits (“ICs”), such as its own Samsung “Exynos” SoCs, that incorporate, implement, utilize, include, or otherwise comprise one or more

2 Lenovo was dismissed without prejudice on April 12, 2023 (Dkt. No. 34), and that same day, NST filed a separate lawsuit against Lenovo in this Court (Case No. 2:23-CV-167-JRG) (“NST IV”). 3 U.S. Patent Nos. 7,366,818 (the “’818 Patent”), 7,373,449 (the “’449 Patent”), 7,594,052 (the “’052 Patent”), 7,769,893 (the “’9893 Patent”), 8,702,893 (the “’2893 Patent”), and 8,086,800 (the “’800 Patent”) (collectively, the “Asserted Patents”). 4 Volkswagen and Audi were dismissed without prejudice from NST II on April 5, 2023. (NST II, Dkt. No. 33.) 5 NST joined Arteris, Inc. (“Arteris”) in NST III, asserting it was proper because the Qualcomm Chips “are common to all Defendants’ infringement” since all of the Qualcomm Chips “include Arteris SoC technology.” (NST III, Dkt. No. 1, ¶¶ 17–19.) network on chip interconnects (“NoCs”) (herein, “Samsung Exynos ICs”); 2) products, devices, systems or apparatuses, whether Samsung’s or others’, incorporating, implementing, utilizing, including, or otherwise comprising such Samsung ICs (herein, “Samsung Exynos Devices”; and 3) Samsung’s products, devices, systems or apparatuses incorporating, implementing, utilizing, including, or otherwise comprising one or more non-Samsung ICs, such as Qualcomm’s “Snapdragon” SoCs, that incorporate, implement, utilize, include, or otherwise comprise one or more NoCs (herein, “Samsung Snapdragon Devices”).

(Dkt. No. 51 at 1–2, citing Dkt. No. 1, ¶ 152.) Samsung’s Motion is directed only toward a severance and stay of the Samsung Snapdragon Device Claims (the third category delineated above). Of note, OnePlus and Samsung’s Motions were filed shortly after Ford filed its own motion in NST II to sever and stay claims against it in favor of those against its supplier, TI, based on the customer-suit exception and traditional stay factors (“Ford’s Motion”) on April 17, 2023. (See NST II, Dkt. No. 38.) Ford’s Motion was granted (the “NST II Order”). (NST II, Dkt. No. 96.) Ford’s Motion is similar to the OnePlus and Samsung Motions. II. LEGAL STANDARD The trial court has broad discretion to sever and stay actions. See Anderson v. Red River Waterway Comm’n, 231 F.3d 211, 214 (5th Cir. 2000); see also Brunet v. United Gas Pipeline Co., 15 F.3d 500, 505 (5th Cir. 1994) (citing FED. R. CIV. P. 21). When a patent infringement suit is brought against a manufacturer and its customers, the action against the customers may be stayed pending resolution of the case against the manufacturer to avoid “imposing the burdens of trial on the customer, for it is the manufacturer who is generally the ‘true defendant’ in the dispute.” In re Nintendo of Am., Inc., 756 F.3d 1363, 1365–66 (Fed. Cir. 2014) (citing Codex Corp. v. Milgo Elec. Corp., 553 F.2d 735, 737–38 (1st Cir. 1977)); In re Dell Inc., 600 F. App’x 728, 730 (Fed. Cir. 2015) (finding such a stay is not mandatory). The “customer-suit exception” to the first-file rule provides that “litigation against or brought by the manufacturer of infringing goods takes precedence over a suit by the patent owner against customers of the manufacturer.” Katz v. Lear Siegler, Inc., 909 F.2d 1459, 1464 (Fed. Cir. 1990). To warrant a stay of the customer suit, the case involving the manufacturer “need only have the potential to resolve the ‘major issues’ concerning the claims against the customer—not every

issue.” Spread Spectrum Screening LLC v. Eastman Kodak Co., 657 F.3d 1349, 1358 (Fed. Cir. 2011) (citing Katz, 909 F.2d at 1464). Courts are instructed to avoid wasted resources through a “flexible approach, including staying proceedings if the other suit is so closely related that substantial savings of litigation resources can be expected.” In re Google Inc., 588 F. App’x 988, 991 (Fed. Cir. 2014). “[T]he guiding principles in the customer suit exception cases are efficiency and judicial economy.” Spread Spectrum, 657 F.3d at 1357 (citing Tegic Commc’ns Corp. v. Bd. of Regents of Univ. of Tex. Sys., 458 F.3d 1335, 1343 (Fed.

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Related

Brunet v. United Gas Pipeline Co.
15 F.3d 500 (Fifth Circuit, 1994)
Anderson v. Red River Waterway Commission
231 F.3d 211 (Fifth Circuit, 2000)
SPREAD SPECTRUM SCREENING LLC v. Eastman Kodak Co.
657 F.3d 1349 (Federal Circuit, 2011)
In Re Nintendo of America, Inc.
756 F.3d 1363 (Federal Circuit, 2014)
In re Google Inc.
588 F. App'x 988 (Federal Circuit, 2014)
In re Dell Inc.
600 F. App'x 728 (Federal Circuit, 2015)
Katz v. Lear Siegler, Inc.
909 F.2d 1459 (Federal Circuit, 1990)

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NETWORK SYSTEM TECHNOLOGIES, LLC v. ONEPLUS TECHNOLOGY (SHENZHEN) CO., LTD., Counsel Stack Legal Research, https://law.counselstack.com/opinion/network-system-technologies-llc-v-oneplus-technology-shenzhen-co-ltd-txed-2023.