Miscellaneous Docket No. ___________

United States Court of Appeals
for the Federal Circuit
IN RE NEWEGG INC.,
Petitioner.
On Petition for a Writ of Mandamus to the United States District Court for the
Eastern District of Texas in Case No. 2:11-cv-00248, Judge Rodney Gilstrap
PETITION FOR WRIT OF MANDAMUS
Kent. E. Baldauf, Jr.
Daniel H. Brean
THE WEBB LAW FIRM
One Gateway Center
420 Fort Duquesne Blvd., Suite 1200
Pittsburgh, PA 15222
Telephone: (412) 471-8815
Mark. A. Lemley
DURIE TANGRI LLP
217 Leidesdorff Street
San Francisco, CA 94111
Telephone: (415) 362-6666
Edward R. Reines
WEIL GOTSHAL & MANGES LLP
201 Redwood Shores Parkway
Redwood Shores, CA 94065
Telephone: (650) 802-3000
Counsel for Newegg Inc.
July 6, 2015

 UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
In re Newegg, 2015-_______
CERTIFICATE OF INTEREST FOR NEWEGG INC.
Counsel for Newegg Inc. hereby certifies the following:
1.

The full name of every party or amicus represented by me is:
Newegg Inc.

2.
The name of the real party in interest (if the party named in the caption is not
the real party in interest) represented by me is:
Not applicable.
3.
All parent corporations and any publicly held companies that own 10 percent
or more of the stock of the party or amicus curiae represented by me are:
No publicly held company owns ten percent or more stock in
Newegg Inc.
4.
The names of all law firms and the partners or associates that appeared for
the party or amicus now represented by me in the trial court or agency or are
expected to appear in this court are:
Kent E. Baldauf, Jr., The Webb Law Firm
James J. Bosco, Jr., The Webb Law Firm
Daniel H. Brean, The Webb Law Firm
Anthony W. Brooks, The Webb Law Firm
Bryan P. Clark, The Webb Law Firm
Herbert A Yarbrough, III, Yarbrough Wilcox, PLLC
Debra Elaine Gunter, Findlay Craft, PC
Edward R. Reines, Weil Gotshal & Manges, LLP
Alan D. Albright, Bracewell & Guiliani LLP
Mark A. Lemley, Durie Tangri LLP
Edward R. Reines, Weil Gotshal & Manges LLP
Dated: July 6, 2015

/s/ Daniel H. Brean
Daniel H. Brean
Counsel for Newegg Inc.

i

 TABLE OF CONTENTS
CERTIFICATE OF INTEREST FOR NEWEGG INC. ..................................... i 
TABLE OF CONTENTS ....................................................................................... ii 
TABLE OF AUTHORITIES ................................................................................ iii 
RELIEF SOUGHT...................................................................................................1 
ISSUE PRESENTED ...............................................................................................1 
PRELIMINARY STATEMENT ............................................................................1 
STATEMENT OF RELEVANT FACTS ..............................................................3 
I.

THE PARTIES .....................................................................................................3 

II.

THE DISTRICT COURT PROCEEDINGS ..............................................................4 

III.

THE ’730 PATENT AND TQP’S INFRINGEMENT CONTENTIONS........................8 

IV. THE INTUIT SUMMARY JUDGMENT DECISIONS .............................................11 
LEGAL STANDARDS ..........................................................................................13 
REASONS WHY THE WRIT SHOULD ISSUE ...............................................14 
I.

NEWEGG HAS NO OTHER ADEQUATE MEANS TO OBTAIN RELIEF ..................14 

II.  NEWEGG IS CLEARLY AND INDISPUTABLY ENTITLED TO JUDGMENT OF NONINFRINGEMENT ...............................................................................................19
III.

ISSUANCE OF THE WRIT IS APPROPRIATE ......................................................25 

CONCLUSION.......................................................................................................27 
CERTIFICATE OF SERVICE ............................................................................28 

ii

 TABLE OF AUTHORITIES

CASES
Acumed LLC v. Stryker Corp.,
525 F.3d 1319 (Fed. Cir. 2008) ............................................................................22
Cassidian Comms., Inc. v. microDATA GIS, Inc.,
No. 2:12-cv-00162-JRG (E.D. Tex.) ....................................................................17
Cheney v. United States Dist. Court for the Dist. of Columbia,
542 U.S. 367 (2004) ...................................................................................... 13, 14
Chudasama v. Mazda Motor Corp.,
123 F.3d 1353 (11th Cir. 1997) ............................................................................25
Church of Scientology v. United States Dep’t of Army,
611 F.2d 738 (9th Cir. 1979) ................................................................................24
Colo. River Water Conservation Dist. v. United States,
424 U.S. 800 (1976) .............................................................................................24
Elkay Mfg. Co. v. Ebco Mfg. Co.,
192 F.3d 973 (Fed. Cir. 1999) ........................................................................ 13, 20
Google Inc. v. Beneficial Innovations, Inc.,
No. 2:11-cv-00229-JRG (E.D. Tex.) ....................................................................17
Hampton v. Nicholson,
175 Fed. Appx. 334 (Fed. Cir. 2006) ...................................................................13
Hitachi Consumer Elecs. Co. v. Top Victory Elecs. (Taiwan) Co.,
No. 2:10-cv-260-JRG (E.D. Tex.) ........................................................................17
In re Apple Inc.,
456 Fed. Appx. 907 (Fed. Cir. 2012) ...................................................................15
In re EMC Corp.,
501 Fed. Appx. 973 (Fed. Cir. 2013) ...................................................................15

iii

 In re Federal Computer Corp., Misc. Dkt. No. 307,
1991 U.S. App. LEXIS 31719 (Fed. Cir. June 19, 1991) ....................................26
In re Google Inc.,
588 Fed. Appx. 988 (Fed. Cir. 2014) ...................................................................24
In re Monroe Communications Corp.,
840 F.2d 942 (D.C. Cir. 1988) .............................................................................26
In re Nintendo Co.,
544 Fed. Appx. 934 (Fed. Cir. 2013) ...................................................................15
In re Princo Corp.,
478 F.3d 1345 (Fed. Cir. 2007) ............................................................................21
In re School Asbestos Litigation,
977 F.2d 764 (3d Cir. 1992) .................................................................................25
In re TS Tech United States Corp.,
551 F.3d 1315 (Fed. Cir. 2008) ................................................................ 13, 14, 21
Jackson v. Shinseki,
338 Fed. Appx. 898 (Fed. Cir. 2009) ...................................................................14
La Buy v. Howes Leather Co.,
352 U.S. 249 (1957) .............................................................................................26
Reese v. Verizon Cal., Inc.,
498 Fed. Appx. 980 (Fed. Cir. 2012) ............................................................ 22, 23
Ribaudo v. Nicholson,
20 Vet. App. 552 (2007) .......................................................................................14
SimpleAir, Inc. v. Google Inc.,
Nos. 2:13-cv-00587-JRG and 2:11-cv-00416-JRG (E.D. Tex.) ................... 17, 18
Soverain Software LLC v. Victoria’s Secret Direct Brand Mgmt., LLC,
778 F.3d 1311 (Fed. Cir. 2015) ............................................................................23
State Farm Mut. Auto. Ins. Co. v. LogistiCare Solutions, LLC,
751 F.3d 684 (5th Cir. 2014) ................................................................................23

iv

 TQP Development, LLC v. 1-800-Flowers et al.,
No. 2:11-cv-00248-JRG (E.D. Tex.) ......................................................................7
TQP Development, LLC v. American Eagle Outfitters, Inc.,
No. 2:14-cv-00565-JRG (E.D. Tex.) ......................................................................8
TQP Development, LLC v. Intuit, Inc.,
No. 2:12-cv-00180-WCB (E.D. Tex) ........................................................ 5, 11, 23
Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc.,
617 F.3d 1296 (Fed. Cir. 2010) ..................................................................... 22, 23
United States v. Newman,
456 F.2d 668 (3d Cir. 1972) .................................................................................25
Wi-Lan Inc. v. HTC Corp.,
No. 2:11-cv-00068-JRG (E.D. Tex.) ....................................................................17
Will v. Calvert Fire Ins. Co.,
437 U.S. 655 (1978) ...................................................................................... 14, 21

STATUTES
28 U.S.C. § 1651(a) .......................................................................................... 13, 25

RULES
Federal Rule of Civil Procedure 50(a) .......................................................................4
Federal Rule of Civil Procedure 50(b) .......................................................................4

OTHER AUTHORITIES
Christian E. Mammen, Technical Detail in Senate PATENT Act
Could Have Major Impact in Eastern District of Texas Patent Litigation,
PatentlyO, available at: http://patentlyo.com/patent/2015/06/technical-districtlitigation.html (June 11, 2015) .................................................................................16

v

 RELIEF SOUGHT
Newegg Inc. (“Newegg”) respectfully petitions for a writ of mandamus
directing the United States District Court for the Eastern District of Texas to enter
judgment that Newegg does not infringe U.S. Patent No. 5,412,730 (“the ’730
Patent”) as a matter of law.
ISSUE PRESENTED
Whether the district court’s 20-month failure to resolve Newegg’s motion
for judgment as a matter of law has prejudicially deprived Newegg of relief to
which Newegg is indisputably entitled, warranting a writ of mandamus to enter
judgment in favor of Newegg.
PRELIMINARY STATEMENT
This Petition involves a case tried in November 2013 that still has not
reached any appealable judgment.

Although the jury found infringement and

awarded $2.3 million in damages to TQP Development, LLC (“TQP”), it is beyond
any reasonable debate that Newegg does not infringe the asserted claims, and
Newegg sought appropriate post-trial relief on that basis. In the absence of a
judgment, however, Newegg has been unduly burdened with an untenable $2.3
million liability on its books for 20 months and counting, which prejudices
Newegg’s ability to make business decisions regarding that considerable sum.

1

 Newegg has respectfully encouraged the district court to decide Newegg’s
motion for judgment as a matter of law no fewer than four times, and has
communicated the prejudice caused by the delay. It is now approaching two years
after trial and no action has been taken by the district court on Newegg’s motion.
This is several times longer than the time it has taken most other patent cases, tried
before the same judge and around the same time, to reach final judgments. With
no appealable judgment, and none ostensibly forthcoming, Newegg has no realistic
recourse aside from seeking a writ of mandamus.
Newegg’s right to a judgment of non-infringement in this instance is truly
indisputable and warrants the exceptional relief of mandamus. The asserted claims
require data to be encrypted and transmitted one block at a time, but Newegg’s
system undisputedly encrypts and transmits many blocks of data en masse.
Although being well outside the literal requirements of the claims like this is not
always sufficient, it is completely dispositive in this case because TQP was barred
by prosecution history estoppel from arguing any doctrine-of-equivalents theory.
No reasonable jury could have found infringement under these circumstances.
Moreover, in a closely related case brought by TQP asserting the same
patent and the same claims against Intuit, Inc., Judge Bryson of this Court (sitting
by designation) granted Intuit summary judgment of non-infringement on the same
grounds Newegg argued.

Judge Bryson’s ruling applied to Intuit’s accused

2

 systems that were identical to Newegg’s, was based on testimony from the Newegg
trial, and was made under a claim construction slightly broader (and thus more
favorable to TQP) than the one given in Newegg’s case. Although Newegg was
already entitled to judgment of non-infringement prior to Judge Bryson’s ruling,
the force of collateral estoppel from the ruling further vindicates Newegg’s
positions. This is not to mention the principles of comity that strongly encourage
deference by Judge Gilstrap to Judge Bryson’s prior ruling on the exact same issue.
Given the clarity and simplicity of the merits issues that conclusively
establish that Newegg does not infringe, and especially in light of Judge Bryson’s
decisions, 20 months is far, far too long to wait for a judgment to expunge the $2.3
million of liability that the jury unduly found. Newegg respectfully urges this
Court to issue a writ of mandamus and grant Newegg the relief to which it is
entitled. Newegg cannot achieve this relief through the ordinary appellate process
due to the district court’s excessive and unreasonable delay.
STATEMENT OF RELEVANT FACTS
I.

THE PARTIES
Newegg is a specialty retailer of computers, computer parts, and electronics

that conducts most of its business through its website, www.newegg.com.
TQP is a shell corporation formed for the purpose of owning and monetizing
the ’730 Patent through actual and threatened litigation.

3

 II.

THE DISTRICT COURT PROCEEDINGS
TQP sued Newegg for infringement in May 2011. A0004. TQP accused

aspects of Newegg’s website systems that allow for secure, encrypted
communications of sensitive data (e.g., credit card numbers).
A six-day trial was held November 18-26, 2013. A0032-33. Before the case
was submitted to the jury, Newegg moved for judgment as a matter of law
(“JMOL”) of non-infringement under Rule 50(a), but the district court denied
Newegg’s motion and submitted the issue to the jury. A0032-33.
The jury found that Newegg infringed claims 1, 6, 8, and 9 of the ’730
Patent, and awarded TQP damages in the amount of $2.3 million. A0001-03.
Newegg then added, as it must, the $2.3 million verdict to the liabilities on its
corporate books.
After the district court failed to enter judgment on the verdict for three
months, on February 17, 2014, Newegg proceeded to file a renewed motion
seeking, inter alia, JMOL of non-infringement under Rule 50(b). A0058-60. As
explained further below, Newegg’s motion demonstrated that infringement could
not possibly lie where the claims require that “a new key value . . . is used” to
encrypt new blocks of data only after the previously encrypted blocks “have been
sent” from the transmitter to the receiver (A0180), and where Newegg’s accused
system undisputedly uses new key values before transmission of the previously

4

 encrypted blocks has occurred. A0069-74 (explaining that TQP’s infringement
theory requires each block of data to be encrypted and transmitted before the next
block of data is encrypted, while Newegg’s system encrypts many blocks of data at
a time and transmits them en masse).

Particularly where TQP’s own expert

unambiguously agreed that Newegg’s system worked in the opposite manner of the
claims, and where TQP was barred from advancing any equivalents theory of
infringement, no reasonable fact finder could have reached the verdict that this jury
did. Id.
After briefing was completed on the JMOL motion, in April 2014 Newegg
submitted a request for an oral hearing, suggesting that a hearing could assist “the
Court in resolving the numerous issues presented in the motions.” A0153. The
district court took no action.
Two months later, in June 2014, Judge Bryson of this Court, sitting by
designation in the Eastern District of Texas, issued a ruling in the related case,
TQP Development, LLC v. Intuit, Inc., No. 2:12-cv-00180-WCB (“the Intuit
Case”). That ruling granted summary judgment of non-infringement to Intuit of
the same patent, based on the same claim requirement, applied to identical accused
systems as were involved in the Newegg case. A0233-39; A0233 n.3. Judge
Bryson even relied on TQP’s expert’s testimony in Newegg’s trial as proof that
Intuit’s accused system could not infringe as a matter of law. A0233-36.

5

 Newegg immediately brought Judge Bryson’s decision to the attention of the
district court as being “dispositive of Newegg’s post-trial motions.” A0142-46.
The district court still took no action on Newegg’s motion.
A month later, in July 2014, Judge Bryson denied TQP’s motion to
reconsider the summary judgment ruling. A0240. Newegg again immediately
brought this decision to the attention of the district court, explaining how it
“warrants entry of [JMOL] or non-infringement.” A0149-50. The district court
still took no action on Newegg’s JMOL motion.
After no action was taken by the district court on Newegg’s motion for
another four months, Newegg submitted a renewed request for oral argument in
November 2014. A0156-57. This time, Newegg not only reiterated that such
argument might be helpful to the district court to resolve the post-trial motions, but
informed the district court of the substantial harm resulting from the sizable $2.3
million verdict that remained on Newegg’s books for the entire year that had then
passed since the trial. Id.
As Newegg explained, the uncertainty caused by the continued delay in
bringing the case to judgment seriously hinders Newegg’s ability to make business
decisions with respect to the $2.3 million liability. A $2.3 million contingent
liability is equivalent to dozens of full-time salaries and employment opportunities
lost, and represents many substantial business opportunities that Newegg cannot

6

 take. For instance, that sum in 2015 alone would have allowed Newegg to expand
its work force, conduct research and development, acquire a small business, build
or lease an additional warehouse, offer more free shipping and lower prices to its
customers, or take any number of other measures to enhance Newegg’s business in
the highly competitive online retail market.
Further, Newegg explained to the district court that “with TQP being a
patent assertion entity and not an operating company, delay of judgment increases
the likelihood that TQP will disperse its funds and assets, which may prevent
Newegg from recovering fees or costs from TQP in the event that Newegg
ultimately prevails in this case.” A0156-57 (citing examples of having been in
similar situations in the past, including Newegg’s inability to collect costs in the
amount of $28,304.80 from Kelora Systems, LLC due to Kelora’s bankruptcy
filing). Indeed, the ownership and management of TQP and its patent may have
already changed.1 Still, the district court took no action.

1

SEC filings show that TQP tried to sell itself and the ’730 Patent to Marathon
Patent Group, Inc. in May 2013, only months before the trial between TQP and
Newegg,
but
that
the
deal
never
consummated.
See
http://www.sec.gov/Archives/edgar/data/1507605/000152153613000697/q110121
3_10q-marathon.htm (last visited June 15, 2015). Newegg would not be privy to
subsequent sales efforts with non-public companies, but PACER records show that
five months after the Newegg trial, TQP filed several more lawsuits asserting the
’730 Patent, suddenly represented by entirely different counsel. Compare TQP
Development, LLC v. 1-800-Flowers et al., No. 2:11-cv-00248-JRG, ECF No. 1
(May 6, 2011 complaint filed by Spangler Law PC; Russ August & Kabat; and Ni
Law Firm, PLLC against Newegg) with, e.g., TQP Development, LLC v. American
7

 It has now been 20 months since Newegg went to trial against TQP. That is
nearly two years of unnecessary and unduly burdensome business uncertainty with
respect to a substantial $2.3 million liability that the district court should have
extinguished long ago.
III.

THE ’730 PATENT AND TQP’S INFRINGEMENT CONTENTIONS
The ’730 Patent is generally directed to a method for encrypting,

transmitting, and decrypting data in “blocks.” ’730 Patent, at Abstract, Fig. 1, &
3:5-40 (A0039-40, A0045). The patent has only a single independent claim—
claim 1. As TQP’s expert explained at trial, the method of claim 1 includes the use
of a first and second sequence of “key values.” A0381-88. These key values are
used to encrypt (i.e., scramble) a block of data at the transmitter and are used to
decrypt (i.e., unscramble) the block of data at the receiver. Id. Each key value in
the first sequence that is used to encrypt a block at the transmitter must be identical
to the key value in the second sequence that is used to decrypt that same block at
the receiver or the encrypted data will not be decrypted correctly. Id.
Claim 1 requires “a new one of said key values in said first and said second
sequences [to be] produced each time a predetermined number of said blocks are
transmitted over said link.” ’730 Patent, at Claim 1 (A0050). The district court
construed this language to mean “a new key value in the first and second sequence
Eagle Outfitters, Inc., No. 2:14-cv-00565-JRG, ECF No. 1 (April 30, 2014
complaint filed by Austin Hansley PLLC).
8

 is used each time a predetermined number of blocks have been sent from the
transmitter over the communications link.” A0180 (emphasis added).

In other

words, a new key value cannot be “used” for encryption of new blocks of data at
the transmitter until the previously encrypted blocks “have been sent” by the
transmitter. TQP never objected to this construction. Further, TQP was barred by
prosecution history estoppel from asserting an equivalents theory as to this claim
requirement, and only accused Newegg of literal infringement. A0262.
At trial, TQP contended that each byte of data was a “block,” and that the
“predetermined number of blocks” that must be sent from the transmitter to trigger
the switch to a new key value was one (1). A0454-55, at 12:24-13:5; A0465, at
23:2-6. Thus, viewing TQP’s contentions in light of the claim construction, the ’730
patent would require a new key value to be used at the transmitter for encrypting the
next byte only after the prior byte was encrypted and transmitted over the link. Put
another way, for TQP to have shown this claim requirement was met, a byte of data
must be encrypted and sent over the communication link before the next byte is
encrypted.
TQP not only failed to prove that Newegg’s system met this requirement, it
conceded precisely the opposite—that Newegg’s system does not change to a new
key value after transmitting each byte. Specifically, TQP’s expert admitted, using

9

 the following demonstrative (A0139), that the one-byte “block” in Newegg’s system
is not transmitted before the next key value is used on the next block:

Q.

A.
Q.
A.
Q.

A.

[I]n this animation—you show that we’ve got one block, the
green block, and two blocks—the second block, the blue block—
block, they’ve been encrypted already, correct?
As is shown here, yes.
And they’ve each been encrypted using a different key value,
correct?
Block 1 was encrypted with a different key value than Block 2,
yes.
So Block 2, the blue block, is being encrypted using a new key
value before Block 1 has been transmitted across the
communication link, correct?
That’s correct.

A0572, at 130:11-23 (emphasis added); see also A0496-97, at 54:22-55:5 (TQP’s
expert admitting that multiple bytes are transmitted “all at one time” in Newegg’s
accused system).

TQP’s expert thus openly acknowledged that, in Newegg’s
10

 system, the new key value is used to encrypt a second byte (the blue block above)
before the previously encrypted byte (the green block above) has been sent over the
communication link.
IV.

THE INTUIT SUMMARY JUDGMENT DECISIONS
As a threshold matter, it is undisputed that the accused systems in the Intuit

Case were “identical to the system at issue in Newegg.” A0233 n.3.
Although TQP never attempted to challenge the “have been sent” claim
construction in the case against Newegg, it did in the Intuit Case when trying to
survive summary judgment. But Judge Bryson correctly reaffirmed the critical
temporal limitations regarding the key values utilized for encrypting the blocks and
the transmission of the encrypted blocks.

Judge Bryson construed the claim

language as follows:
For both the first and second sequences, at the transmitter and at the
receiver respectively, a new key value is produced each time a
predetermined number of blocks are transmitted over the link. The
term ‘produced’ as used in that sentence, means ‘generated’ or
‘supplied.’ The phrase ‘are transmitted’ means ‘are being transmitted’
or ‘have been transmitted.’
A0231-32; see also A0214-15.
This construction diverges from that in Newegg’s case in two respects, both
of which arguably make the construction more favorable to TQP. First, Judge
Bryson held that “produced” means “generated or supplied,” as opposed to “used.”
Second, Judge Bryson also replaced the “have been sent” language of Newegg’s
11

 construction with “are being transmitted,” which he stated “does not necessarily
mean that the transmission of the blocks must have been completed before the new
key value is produced. The events could be occurring simultaneously or in close
succession, with the transmission onto the communication link occurring after the
new key value is produced.” A0219.
Despite having broadened the construction in these two respects, Judge
Bryson found that summary judgment of non-infringement was proper. Relying on
the same testimony and demonstrative from the Newegg trial cited above, Judge
Bryson explained that “TQP has shown only that key values in the accused systems
change for each new block that enters the transmitter, not each time a single block
is placed on the communication link by the transmitter.” A0233-39. Additionally,
“TQP’s evidence does not show that key-value changes are tied to the number of
blocks that are being transmitted at any particular moment, i.e., that the key value
is changed each time the number of blocks in the transmitter reaches the
predetermined number one.”

Id.

Judge Bryson summarized his analysis as

follows:
[i]n the patented method, a new key value is produced each time a
predetermined number of data blocks are transmitted, whereas in the
accused systems a new key value is produced each time the
transmitter receives a predetermined number of data blocks (one, in
the case of the defendants’ systems) from the data source.
A0237. Judge Bryson later denied TQP’s motion for reconsideration. A0246-49.

12

 LEGAL STANDARDS
28 U.S.C. § 1651(a) gives this Court the authority to “issue all writs
necessary or appropriate in aid of [its] jurisdictions and agreeable to the usages and
principles of law.”

The Federal Circuit has adopted a three-pronged test for

granting a writ of mandamus:
(1) the party seeking issuance of the writ must have no other adequate
means to attain the relief he desires; (2) the petitioner must satisfy the
burden of showing that his right to issuance of the writ is “clear and
indisputable”; and (3) the issuing court, in the exercise of its
discretion, must be satisfied that the writ is appropriate under the
circumstances.
Hampton v. Nicholson, 175 Fed. Appx. 334, 335 (Fed. Cir. 2006) (citing Cheney v.
United States Dist. Court for the Dist. of Columbia, 542 U.S. 367, 380-81 (2004)).
It was TQP’s burden at trial to prove that Newegg’s website systems met all
the claim requirements. The failure to establish that the accused system meets all
limitations of the claim requires entry of judgment of non-infringement as a matter
of law. Elkay Mfg. Co. v. Ebco Mfg. Co., 192 F.3d 973, 980-981 (Fed. Cir. 1999).
For substantive issues of patent law raised in this Petition, Federal Circuit law,
not the law of the Fifth Circuit, governs. In re TS Tech United States Corp., 551
F.3d 1315, 1319 (Fed. Cir. 2008).

13

 REASONS WHY THE WRIT SHOULD ISSUE
I.

NEWEGG HAS NO OTHER ADEQUATE MEANS TO OBTAIN RELIEF
“[W]here a district court persistently and without reason refuses to

adjudicate a case properly before it, the court of appeals may issue the writ [of
mandamus].” Will v. Calvert Fire Ins. Co., 437 U.S. 655, 661-662 (1978). Put
another way, delay may “give rise to a right to mandamus [if] the delay is
equivalent to an arbitrary refusal to act.” Jackson v. Shinseki, 338 Fed. Appx. 898,
901-902 (Fed. Cir. 2009) (citing Ribaudo v. Nicholson, 20 Vet. App. 552, 555
(2007)). The 20-month delay of judgment in this case, which is several times
longer than the time to judgment for similar cases tried at similar times before the
same judge, and in the face of Newegg’s repeated efforts to move the case along to
judgment, is tantamount to an arbitrary refusal to act that warrants issuance of a
writ of mandamus.
Although litigants ordinarily must wait for a final judgment to seek relief
from this Court on appeal, “the ‘no other means’ requirement is not intended to
ensure that [a petitioner] exhaust every possible avenue of relief at the district court
before seeking mandamus relief. . . . Rather, the purpose . . . is to ‘ensure that the
writ will not be used as a substitute for the regular appeals process.’” TS Tech, 551
F.3d at 1322 (quoting Cheney, 542 U.S. at 380-81). Here, Newegg seeks not to
substitute this Petition for the ordinary appeal process, but to obtain relief to which

14

 it is entitled at a meaningful and reasonable time in the face of excessive and
prejudicial delay of judgment.
A petition for a writ of mandamus may be granted based in part on delay,
where the delay causes prejudice that cannot be redressed by following the
ordinary appellate course. For example, if the failure of a district court to promptly
stay or transfer a case effectively precludes meaningful relief (because the parties
are forced to litigate in an improper forum or on a case that should be stayed), such
a circumstance favors the issuance of a writ of mandamus. See, e.g., In re Apple
Inc., 456 Fed. Appx. 907, 908 (Fed. Cir. 2012) (suggesting that mandamus is
appropriate remedy for 15-month delay in acting on motion to transfer, but denying
petition because “Apple failed to employ any strategy to pressure the district court
to act, such as seeking mandamus to direct the district court to rule on the
motion”); In re Nintendo Co., 544 Fed. Appx. 934, 941 (Fed. Cir. 2013) (citing In
re EMC Corp., 501 Fed. Appx. 973, 975-976 (Fed. Cir. 2013) (encouraging district
courts to decide motions to transfer early so that defendants need not “partake in
years of litigation prior to a determination on a transfer motion”)). Yet the Eastern
District of Texas “has gained a reputation for deferring rulings on venue transfer

15

 motions until the case is substantially advanced,” making such delay-based
prejudices common and uniquely affecting defendants.2
Likewise, here the failure of the district court to act on Newegg’s JMOL
motion has caused two serious prejudices to Newegg: (1) 20 months of carrying an
unjustifiable and uncertain $2.3 million liability on its books, which substantially
hinders Newegg’s ability to make business decisions with respect to that
considerable sum; and (2) the ever-increasing specter of shell company TQP
dissolving its corporate entity or filing for bankruptcy and leaving Newegg unable
to recover fees and obtain other relief from TQP to which Newegg believes it is
entitled. This is not to mention that Newegg will, absent further action by the
courts, continue to be unjustly labeled an infringer in the public record, damaging
Newegg’s reputation.
The failure of the district court to act while Newegg’s prejudice compounds
cannot be remedied by awaiting the ordinary course of a final judgment and
appeal. Nor can Newegg effectively do anything before the district court to avoid
further delay. Indeed, Newegg attempted to encourage prompt resolution of this
case in the district court no fewer than four times—twice requesting an oral
2

Christian E. Mammen, Technical Detail in Senate PATENT Act Could Have
Major Impact in Eastern District of Texas Patent Litigation, PatentlyO (June 11,
2015),
available
at
http://patentlyo.com/patent/2015/06/technical-districtlitigation.html (“According to Lex Machina, there were 33 cases in the Eastern
District of Texas between January 1, 2010 and May 1, 2015 in which a venue
transfer motion was pending for over a year before being ruled on . . . .”).
16

 hearing and twice submitting controlling dispositive supplemental authority—but
can only do so much at the district court level to move things along. Newegg has
been patient but firm, and filed the present Petition only as a last resort when no
action from the district court appeared to be forthcoming 20 months after trial.
Newegg’s post-trial appealable judgment has already been delayed up to
four times longer than other patent cases that went through trial around the same
time as Newegg (November 2013) before the same judge. See, e.g., Hitachi
Consumer Elecs. Co. v. Top Victory Elecs. (Taiwan) Co., No. 2:10-cv-260-JRG
(5 months from April 2013 trial to appealable judgment); Wi-Lan Inc. v. HTC
Corp., No. 2:11-cv-00068-JRG (5.5 months from October 2013 trial to appealable
judgment); Cassidian Comms., Inc. v. microDATA GIS, Inc., No. 2:12-cv-00162JRG (7.5 months from December 2013 trial to appealable judgment); Google Inc.
v. Beneficial Innovations, Inc., No. 2:11-cv-00229-JRG (7 months from January
2014 trial to appealable judgment). Even considering the time from the close of
post-trial briefing to judgment, the delay in Newegg’s case is still excessive—
while Newegg has been waiting 15 months since briefing closed on its JMOL
motion, the cases cited in the preceding sentence received judgments only two to
five months after post-trial briefing closed.3

3

All told, data pulled from Lex

One case after Newegg’s that was bifurcated into two separate trials (January
2014 and March 2014) still reached final judgment in less than half the time that
Newegg’s has taken. See SimpleAir, Inc. v. Google Inc., Nos. 2:13-cv-00587-JRG
17

 Machina shows that Newegg’s case has been pending longer than 98.8% of cases
filed before the same judge. Newegg’s case has taken far, far too long to reach an
appealable final judgment.
Further evidencing the unreasonableness of the delay in Newegg’s case is
the most recent Civil Justice Reform Act (“CJRA”) Report for Judge Gilstrap,
which indicates that as of September 30, 2014, Judge Gilstrap had only a single
civil case pending for more than three years, and that he had no motions pending
for more than six months. A0850-51; A0805. The CJRA Report further indicates
that Judge Gilstrap had no bench trials submitted over six months and no
bankruptcy or social security appeals pending more than six months. A0852-54;
A0805. For a docket that, while very busy, seems remarkably efficient based on
the CJRA Report, it is especially surprising and disappointing to Newegg that its
motion has yet to be resolved.4

and 2:11-cv-00416-JRG (9 months from second trial to December 2014 judgment).
And despite the multiple rounds of post-trial briefing, that case only took 5 months
from the close of briefing to reach final judgment. Id.
4
Curiously, although TQP’s case against Newegg (filed May 6, 2011) had been
pending for more than three years, and although Newegg’s JMOL motion (filed
February 17, 2014) had been pending more than six months at that time, neither the
case nor the motion were listed in Judge Gilstrap’s September 2014 CJRA Report.
See A0842-43 (explaining that a case is deemed “pending” as of the date it was
originally filed, and that a motion is deemed “pending” 30 days after it is filed).
18

 II.

NEWEGG IS CLEARLY AND INDISPUTABLY ENTITLED TO JUDGMENT OF
NON-INFRINGEMENT
No reasonable jury could possibly have found that Newegg’s system—

which uses a new key value to encrypt each block of data before any transmission
of the data occurs—meets the claim requirement that each key value is “used”
when the previous encrypted block “ha[s] been sent” from the transmitter. A0180.
TQP’s own expert at trial admitted, with reference to the demonstrative above, that
in Newegg’s system “Block 2, the blue block, is being encrypted using a new key
value before Block 1 has been transmitted across the communication link.”
A0572, at 130:11-23 (emphasis added); see also A0496-97, at 54:22-55:5. This
alone avoids infringement, especially where TQP advanced only a theory of literal
infringement for this claim requirement.
At trial, TQP’s expert’s unpersuasive response was that this order-of-steps
requirement of the claim refers to actions occurring exclusively at the receiver, and
not at the transmitter. See, e.g., A0565-66. But by the plain text of the claim, the
“have been sent” requirement must apply to both the first sequence in the transmitter
and the second sequence in the receiver: “a new one of said key values in said first
and said second sequences being produced each time a predetermined number of
said blocks are transmitted over said link.” ’730 Patent, at Claim 1 (A0050). Claim
1 expressly defines the “first sequence” of key values as a sequence of key values on
the transmitter side. Id. (“generating a first sequence of pseudo-random key values
19

 based on said seed value at said transmitter”). Only the second sequence is at the
receiver side. Thus, the new key values are undeniably required to be used at both
the transmitter and the receiver after a predetermined number of blocks have been
sent over the communication link. Indeed, Judge Bryson expressly rejected TQP’s
argument to the contrary, holding that “the key values that are generated at the
transmitter and the key values that are generated at the receiver are both produced
each time the predetermined number of blocks is transmitted over the
communication link.” A0206 (emphasis added) (explaining that “the plain language
of the limitation refers to both the first sequence of pseudo-random key values
(which is associated with the transmitter) and the second sequence of pseudorandom key values (which is associated with the receiver)”).
Because the parties agree that Newegg’s system does not change key values
at the transmitter based on the transmission of blocks,5 and because the claim
requirements exclude such a system, Newegg is entitled to JMOL of noninfringement. Elkay, 192 F.3d at 980-981 (reversing denial of JMOL where the
claims required “a single feed tube/probe with a single flow path for both liquid
5

Newegg’s technical expert, Dr. Stubblebine, confirmed non-infringement by
examining the same demonstrative slide prepared by Dr. Jaeger shown above.
A0625, at 32:17-25 (“The Court’s construction says that new key value in the first
and second sequence is used each time a predetermined number of blocks have been
sent from the transmitter over the communication link. And what Dr. Jaeger was
accusing as that predetermined number is one block. And so one block has got to be
sent before you use the next key to encrypt the next block, and that’s not what’s
going on.”).
20

 and air,” “[t]here is no dispute that the WaterGuard devices use separate feed tubes
for water and air”).
This is not “a matter committed to the district court’s discretion,” such as a
routine decision to stay a case, where it is problematic to suggest that that the right
to relief one way or the other is “clear and indisputable.” Will, 437 U.S. at 665-66
(affirming district court’s discretion to stay case in light of parallel state court
proceedings). Rather, this is a situation where a ruling denying Newegg judgment
as a matter of law would constitute “a clear abuse of discretion or usurpation of
judicial power.” E.g., TS Tech, 551 F.3d at 1318, 1321 (ordering district court to
transfer case because “denying transfer from a venue with no meaningful ties to the
case” was a “patently erroneous result”); cf. In re Princo Corp., 478 F.3d 1345,
1355 (Fed. Cir. 2007) (ordering district court to issue stay because statute clearly
required continued stay until ITC proceeding was “final”). The law is clear, the
claim requirements are clear, and the facts are clear and undisputed. Newegg does
not infringe as a matter of law.
Even under Judge Bryson’s somewhat more generous claim construction
than the one adopted in this case without TQP’s objection, Newegg’s system still
does not meet the claim requirements. As Judge Bryson explained when denying
TQP’s request for reconsideration, the claims require more than “each block
get[ting] a new key value”—they require “a new key value [to be] produced ‘each

21

 time’ a single block is being transmitted or a single block has been transmitted.”
A0249. If Intuit’s system (which is admittedly identical to Newegg’s, A0233 n.3)
avoids infringement for this reason based on the same testimony from TQP’s
expert in Newegg’s trial, and based on a broader claim construction, Newegg’s
system cannot infringe under the “have been sent” construction given to the jury.
That claim requirement is simply not met by either system, regardless of which
construction is applied.
Further, although Newegg was entitled to JMOL based on its own trial
record and construction alone, once Judge Bryson entered summary judgment in
favor of Intuit, Newegg’s right to JMOL then had the additional force of collateral
estoppel.

See Transocean Offshore Deepwater Drilling, Inc. v. Maersk

Contractors USA, Inc., 617 F.3d 1296, 1312 (Fed. Cir. 2010) (applying Fifth
Circuit law and finding noninfringement based on collateral estoppel where the
accused technology in the second case was materially identical to the
“noninfringing design” in the first case); Reese v. Verizon Cal., Inc., 498 Fed.
Appx. 980, 982 (Fed. Cir. 2012) (“[C]ollateral estoppel in a patent case prevents a
plaintiff who previously litigated a claim that certain technology infringed its
patent (and lost) from taking ‘another bite at the apple’ by again asserting that the
same technology infringes the same patent.”) (citing Transocean, 617 F.3d at
1312); cf. Acumed LLC v. Stryker Corp., 525 F.3d 1319, 1324 (Fed. Cir. 2008)

22

 (explaining that claim preclusion applies where “the accused device in the action
before the court is ‘essentially the same’ as the accused device in a prior action
between the parties that was resolved by a judgment on the merits”).
The law of the regional circuit applies to matters like collateral estoppel,
which are not unique to patent law. Soverain Software LLC v. Victoria’s Secret
Direct Brand Mgmt., LLC, 778 F.3d 1311, 1314 (Fed. Cir. 2015). The Fifth
Circuit applies collateral estoppel when the following four conditions are met:
First, the issue under consideration in a subsequent action must be
identical to the issue litigated in a prior action. Second, the issue must
have been fully and vigorously litigated in the prior action. Third, the
issue must have been necessary to support the judgment in the prior
case. Fourth, there must be no special circumstance that would render
preclusion inappropriate or unfair.
Id. at 1315 (quoting State Farm Mut. Auto. Ins. Co. v. LogistiCare Solutions, LLC,
751 F.3d 684, 689 (5th Cir. 2014)). Here, the issue in both the Intuit and Newegg
cases is whether the exact same accused systems meet the same claim requirement,
which plainly satisfies the first prong. Transocean, 617 F.3d at 1317; Reese, 498
Fed. Appx. at 982. The second prong is likewise satisfied because the parties
extensively litigated the issue in the Intuit Case in three distinct rounds of
briefing—Intuit’s original summary judgment motion, Intuit’s renewed summary
judgment motion, and TQP’s motion for reconsideration—with the briefs relying
on considerable amounts of evidence and detailed argument.
A0200-50.

See generally

Because Judge Bryson’s entry of summary judgment was based
23

 entirely on his conclusion that the “a new one of said key values . . . being
produced each time” claim requirement was not met by Intuit’s accused system,
the third prong is also satisfied. A0239. And regarding the fourth prong, there are
no special circumstances or equitable reasons not to apply the doctrine to preclude
TQP from relitigating the same issue a second time—TQP had every opportunity
to fully and fairly make its case, and it simply lost. Because Judge Bryson’s ruling
collaterally estops TQP from continuing to contend that Newegg infringes, it is
impossible for any judgment to be entered against Newegg by the district court,
and judgment should be entered in Newegg’s favor accordingly.
Finally, as this Court has recognized, principles of comity strongly
encourage deference to prior decisions from district courts on identical issues, as is
involved here. See In re Google Inc., 588 Fed. Appx. 988, 990 (Fed. Cir. 2014)
(“Under the doctrine of comity, when cases involving substantially overlapping
issues are pending before two federal district courts, there is a strong preference to
avoid duplicative litigation.”) (citing Colo. River Water Conservation Dist. v.
United States, 424 U.S. 800, 817 (1976)). It would waste scarce judicial resources
for Judge Gilstrap to conduct an entirely fresh adjudication of the very same issues
that Judge Bryson already conclusively resolved. See Church of Scientology v.
United States Dep’t of Army, 611 F.2d 738, 750 (9th Cir. 1979) (“The purpose of
the comity principle is of paramount importance. The doctrine is designed to avoid

24

 placing an unnecessary burden on the federal judiciary, and to avoid the
embarrassment of conflicting judgments.”). Judge Bryson’s summary judgment
ruling should be viewed as the final word from the district courts on whether the
accused system infringes TQP’s patent.
III.

ISSUANCE OF THE WRIT IS APPROPRIATE
The All Writs Act broadly gives this Court the authority to “issue all writs

necessary or appropriate in aid of [its] jurisdictions and agreeable to the usages and
principles of law.” 28 U.S.C. § 1651(a). Excessive delay of judgment as in this
case should be remedied via a writ of mandamus because such delay leaves
litigants no other avenue for relief outside of a writ. Cf. In re School Asbestos
Litigation, 977 F.2d 764, 792 (3d Cir. 1992) (holding that “a writ of mandamus is a
proper remedy when a district judge arbitrarily refuses to rule on a summary
judgment motion”); Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1367 (11th
Cir. 1997) (“When a litigant’s rights are materially prejudiced by the district
court’s mismanagement of a case, [the Courts of Appeals] must redress the abuse
of discretion.”); United States v. Newman, 456 F.2d 668, 671 (3d Cir. 1972) (“It is
in the interest of justice that a decision on the propriety of a trial be reached as
soon after it has ended as is possible, and that decision be not deferred until the
trial’s story has taken on the uncertainty and dimness of things long past.”). And
unreasonable delay of judgment especially counsels in favor of a writ of

25

 mandamus where, as here, the issues requiring judicial resolution are simple and
straightforward. See In re Federal Computer Corp., Misc. Dkt. No. 307, 1991
U.S. App. LEXIS 31719, at *3-4 (Fed. Cir. June 19, 1991) (explaining that “the
Board has a number of options to move this matter forward” and “although the
delay has been only four months, the matter appears so simple that the delay is
becoming unreasonable”) (citing In re Monroe Communications Corp., 840 F.2d
942, 945 (D.C. Cir. 1988) (holding that “[d]elay is measured by a ‘rule of
reason’”)).
Newegg’s petition does not depend on any finding of bad intent on the part
of the district court in failing to resolve Newegg’s JMOL motion, or even on a
conclusion that the district court has actively decided not to rule on Newegg’s
JMOL motion. Newegg makes no such assertions. When unreasonable delay of
judgment, by whatever cause, leads to undue prejudice and substantial harm that
cannot be remedied by ordinary means, and where a party is clearly entitled to
judgment, extraordinary writs can and should be issued to remedy the situation. As
the maxim goes: “justice delayed is justice denied.” This Court has a duty to act,
under these exceptional circumstances, to remedy such failures by district courts to
properly administer justice. See La Buy v. Howes Leather Co., 352 U.S. 249, 259260 (1957) (“We believe that supervisory control of the District Courts by the
Courts of Appeals is necessary to proper judicial administration in the federal

26

 system.”). This petition for a writ of mandamus, reluctantly filed and sought,
warrants such exceptional relief and intervention by this Court.
CONCLUSION
For the foregoing reasons, Newegg respectfully requests that this Court issue
a writ of mandamus directing the district court to enter JMOL of non-infringement.

Respectfully submitted,

Dated: July 6, 2015

/s/ Daniel H. Brean
Kent. E. Baldauf, Jr.
Daniel H. Brean
THE WEBB LAW FIRM
One Gateway Center
420 Fort Duquesne Blvd., Suite 1200
Pittsburgh, PA 15222
Telephone: (412) 471-8815
Mark. A. Lemley
DURIE TANGRI LLP
217 Leidesdorff Street
San Francisco, CA 94111
Telephone: (415) 362-6666
Edward R. Reines
WEIL GOTSHAL & MANGES LLP
201 Redwood Shores Parkway
Redwood Shores, CA 94065
Telephone: (650) 802-3000
Counsel for Appellant Newegg Inc.

27

 CERTIFICATE OF SERVICE
This is to certify that on July 6, 2015, the foregoing PETITION FOR
WRIT OF MANDAMUS was electronically filed with the Court. A copy has
been served on counsel for Respondent TQP Development, LLC via Federal
Express upon the following:
Marc Aaron Fenster
Adam S. Hoffman
RUSS AUGUST & KABAT
12424 Wilshire Boulevard
Suite 1200
Los Angeles, CA 90025
Tel: (310) 826-7474
Fax: (310) 826-6691
mafenster@raklaw.com
ahoffman@raklaw.com
A copy has also been served on the date above via Federal Express on:
The Honorable Rodney Gilstrap
U.S. District Court
Sam B. Hall, Jr. Federal Building
and United States Courthouse
100 East Houston Street
Marshall, Texas 75670
Tel: (903) 935-3868
Fax: (903) 935-2295
An original and four hard copies and a PDF copy on disk, along with the required
filing fee, of this Petition have been hand-delivered to the U.S. Court of Appeals
for the Federal Circuit on the date indicated above.
/s/ Daniel H. Brean
Daniel H. Brean
Counsel for Newegg Inc.

28