IN THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF TEXAS

WACO DIVISION

WSOU INVESTMENTS, LLC d/b/a 

BRAZOS LICENSING AND

DEVELOPMENT, 

Plaintiff,

v.

ZTE CORPORATION, ZTE (USA) 

INC., AND ZTE (TX), INC. 

Defendants.

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CIVIL ACTION NO. 6:20-cv-487-ADA

CIVIL ACTION NO. 6:20-cv-488-ADA

CIVIL ACTION NO. 6:20-cv-489-ADA

CIVIL ACTION NO. 6:20-cv-490-ADA

CIVIL ACTION NO. 6:20-cv-491-ADA

CIVIL ACTION NO. 6:20-cv-492-ADA

CIVIL ACTION NO. 6:20-cv-493-ADA

CIVIL ACTION NO. 6:20-cv-494-ADA

CIVIL ACTION NO. 6:20-cv-495-ADA

CIVIL ACTION NO. 6:20-cv-496-ADA

CIVIL ACTION NO. 6:20-cv-497-ADA

JURY TRIAL DEMANDED

RESPONSE TO ZTE CORPORATION’S 

“SUPPLEMENTAL BRIEF ON TRANSFER UNDER § 1404(a)” 

Case 6:20-cv-00492-ADA Document 116 Filed 09/23/21 Page 1 of 7
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A. The NDTX Action should be dismissed without prejudice or stayed. 

The judicial inefficiency ZTE USA deliberately manufactured by filing the NDTX Action 

should be resolved by allowing the NDTX Action to be dismissed without prejudice under the 

first-to-file rule. Under the Fifth Circuit’s1 first-to-file rule, when two related cases are pending 

in two district courts, the court with the later-filed action may refuse to hear the case if the 

issues raised by both cases “substantially overlap.” Gateway Mortgage Group, L.L.C. v. 

Lehman Bros. Holdings, Inc., 694 Fed. Appx. 225, 227 (5th Cir. 2017).

WSOU has filed a motion to dismiss (or stay) the NDTX Action without prejudice pending 

resolution of this first-filed case. Ex. A.2 The NDTX should dismiss the NDTX Action without 

prejudice. Gateway Mortgage Group, L.L.C., 694 Fed. Appx. at 227 (affirming the district 

court’s dismissal without prejudice of substantially overlapping declaratory judgment action, 

noting that the plaintiff “may return to the Southern District of Texas if its claims are not fully 

resolved in the Southern District of New York.”).

B. This Court should not apply an exception to the first-to-file rule.

ZTE urges this Court to find an exception to the first-to-file rule, arguing it is “unjust or 

inefficient to continue” this first-filed case because: (1) this case and the NDTX Action 

“substantially involve the same issues and parties;” (2) “transfer is efficient because the parallel 

litigation in the NDTX will not be dismissed;” and (3) it is “unjust to continue these cases in the 

WDTX without indispensable party ZTE USA.” Id. at 3-4. These arguments fail.

First, the undisputed fact that this first-filed case and the NDTX Action “substantially 

involve the same issues and parties” is the reason to apply the first-to-file rule, not a reason to find

an exception. See Gateway Mortgage Group, L.L.C., 694 Fed. Appx. at 227. Second, it is untrue

(and pure speculation) that the second-filed NDTX Action will not be dismissed. Because the 

first-to-file rule applies, the NDTX Action should be dismissed without prejudice or stayed. Id. 

1 Applying the doctrine is a matter of Fifth Circuit law. See Hydro-Quebec v. A123 Sys., 

Inc., 3:11-CV-1217-B, 2012 WL 13026630, at *3 (N.D. Tex. Mar. 16, 2012).

2 Exhibits are being file only in the -487 case.

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Third, ZTE USA is not indispensable and it is not unjust to continue without ZTE 

USA. This is simply a repackaging of the failed “indispensable party” argument untimely 

raised in ZTE’s motion to reconsider. It was already rejected and should be rejected again for 

the following reasons: 

a. ZTE waived its indispensable party argument. 

First, ZTE waived its “indispensable party” argument. At the hearing on ZTE’s motion 

to reconsider, this Court stated that the “reason we had this hearing is it’s clear to us that ZTE 

never . . . raised the issue of indispensability for any of the parties before,” and “question [the] 

fairness of why we should permit that now.” Ex. B at 22. In response, ZTE admitted that it 

was aware of the argument before ZTE USA was dismissed. Id. (“we had a placeholder for 

that argument.”). The evidence ZTE relied on to argue indispensability (excerpts from 

WSOU’s preliminary infringement contentions) was available to ZTE when it filed, briefed, 

and argued its §1404(a) motions. Id. at 4, 8. Dismissal of ZTE USA did not create a new 

circumstance justifying ZTE’s belated indispensability argument. Id. at 22. Nor does ZTE 

USA’s filing of the NDTX Action. ZTE’s “indispensable party” argument was untimely when 

ZTE filed its motion to reconsider, and it is untimely now. 

b. ZTE USA is not a required or “indispensable” party. 

Second, ZTE USA is not indispensable. The core public infringement evidence 

referenced in WSOU’s infringement contentions comes from ZTE Corporation, not ZTE 

USA. The manuals cited in the infringement contentions are marked as “ZTE Corporation.”

See Ex. I. And regardless, it is “well settled that joint tortfeasors are not considered ‘required’

or indispensable parties under Rule 19.” Akoloutheo, LLC v. Sys. Soft Techs., Inc., No. 4:20-

cv-985, 2021 WL 1947343, at *2 (E.D. Tex. May 14, 2021) (cleaned up) (denying Rule 

12(b)(7) motion to dismiss for alleged failure to join a required party under Rule 19); see also 

In re Rolls Royce Corp., 775 F.3d 671, 683 (5th Cir. 2014) (requiring district court to sever 

and transfer a joint tortfeasor). In Akoloutheo, Judge Mazzant recognized that even if a subsidiary 

of the defendant acted as the “primary participant” in acts giving rise to the litigation, the

Case 6:20-cv-00492-ADA Document 116 Filed 09/23/21 Page 3 of 7
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subsidiary was not a required party. Id. A parent company “may be liable for patent 

infringement . . . regardless of [its subsidiary’s] downstream role.” Abbvie Inc. & Abbvie 

Biotechnology LTD v. Alvotech HF, 2021 WL 3737733, at *10 (N.D. Ill. Aug. 23, 2021)

(citing Akoloutheo). 

c. It is not unfair to continue this case without ZTE USA.

Even if ZTE USA is indispensable (and it is not), it is not unfair to continue this case. 

Under Rule 19(b), if a person who is “required to be joined if feasible” cannot be joined, the court 

considers the following factors to determine if the case should continue: (1) the extent to which a 

judgment rendered in the person’s absence might prejudice that person; (2) the extent to which any 

prejudice could be lessened or avoided through various tools at the court’s disposal; (3) whether a 

judgment rendered in the person’s absence would be adequate; and (4) whether the plaintiff would 

have an adequate remedy if the action were dismissed for nonjoinder. Fed. R. Civ. P. 19(b)

(emphasis added).

3

 

Factors 1 and 3 strongly favor keeping this case in WDTX. ZTE USA is not prejudiced by 

its actions willfully removing itself from this case. Rather, any interest it has in the outcome of this 

first-filed case is still being vigorously defended by its parent, ZTE Corporation, represented by 

the same counsel that represents ZTE USA. And once this case is resolved, res judicata and the 

Kessler doctrine (in the event of a finding of non-infringement) will prevent the need to relitigate 

issues resolved by this Court. See Brain Life, LLC v. Elekta Inc., 746 F.3d 1045, 1056 (Fed. Cir. 

2014). Moreover, ZTE USA “may return to the [Northern] District of Texas” in the unlikely event 

that “its claims are not fully resolved.” Gateway Mortgage Group, 694 Fed. Appx. at 227. 

Factor 2 also favors keeping this case in the WDTX because this Court has plenty of 

tools, if even needed, to mitigate any possible prejudice to ZTE Corporation’s downstream 

customer ZTE USA.

3 Because ZTE’s supplemental brief is simply a repackaging of its failed motion to reconsider, 

these factors were already addressed at the hearing on ZTE’s motion to reconsider. See Ex. B at 

12-14. 

Case 6:20-cv-00492-ADA Document 116 Filed 09/23/21 Page 4 of 7
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Factor 4 strongly favors keeping this case because the NDTX Action is not an adequate 

remedy for WSOU. WSOU will be severely prejudiced if this case is not allowed to proceed.

This Court routinely denies motions to stay pending PTAB proceedings because it believes in 

the Seventh Amendment and recognizes the harm such stays cause to the non-moving party. 

See Kerr Mach. Co. v. Vulcan Indus. Holdings, LLC, 6-20-CV-00200-ADA, 2021 WL 

1298932, at *3 (W.D. Tex. Apr. 7, 2021) (denying a motion to stay pending PGR and 

recognizing the motion as a “delay tactic.”). The same principles apply here. ZTE has done 

all it can to delay this litigation4 to give its IPRs a chance at institution. As shown below, 

ZTE’s real motive in filing the NDTX Action is to create further delay for the same purpose. 

And if this case is transferred, ZTE will almost certainly move to stay the NDTX Action 

pending IPR. ZTE USA has no genuine desire to litigate its claims in the NDTX.

In its March 24, 2021 IPR petition, ZTE argued delays of this case would favor 

institution and promised the PTAB there would be delays.5 ZTE has done everything in its 

power to deliver its promised delays. And it has carefully coordinated its attempts to delay this 

case with its communications to the Board.6 In its zeal to convince the Board this case would not 

proceed, ZTE has sometimes been less than candid with the Board.7

4 As examples, ZTE repeatedly urged this Court to delay the Markman hearing or stay the 

entire case, delayed venue discovery, and has refused to participate meaningfully in fact discovery. 

When this Court denied ZTE Corporations motion to dismiss, ZTE created further delay by filing 

its meritless motion for reconsideration. When that failed, ZTE USA filed the NDTX Action and 

sought further delay with this briefing. 

5 See Ex. C at 91-92 (arguing ZTE’s motions to dismiss in this case made it “unclear 

that the court in the related district court litigation will ahere to any [future] scheduled jury 

trial date,” that if this Court granted “either of the pending improper venue motion or [ZTE’s] 

motion to stay [this case], these cases will be assigned new, later trial dates likely in a new forum,” 

that “Judge Albright is unable to maintain trials based on their originally scheduled dates,” and 

that “fact discovery does not open until after the claim construction hearing.”) (emphasis added). 6 For example, on August 16, 2021, ZTE filed a motion to reconsider, arguing for the first 

time that ZTE Corporation should be dismissed under Rule 12(b)(7) because ZTE USA was 

allegedly an indispensable party. One day later, on August 17, 2021, ZTE filed its Preliminary 

Reply with the PTAB, arguing that it remained “likely” that this case would be dismissed in its 

entirety because ZTE Corporation’s motion to reconsider was “likely to succeed.” Ex. D at 1.

7 On Friday, August 6, 2021, ZTE wrote to the Board saying that “just moments ago . . . 

Judge Albright dismissed all the respective district court cases for those matters, on the basis of 

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ZTE USA’s filing of the NDTX Action to deliberately manufacture a judicial inefficiency 

is only ZTE’s latest attempt to delay this case in hopes of swaying the opinion of the PTAB.

8 ZTE 

does not want its claims determined by a district court. It filed the NDTX Action to further its 

ongoing effort to give it IPRs a chance at institution and to deprive WSOU of a right to a trial by 

jury. Further, the NDTX Action is not more efficient. Despite some delay, this case is not in the 

early stages of litigation.9 Starting over in the NDTX Action is not in the interest of judicial 

efficiency. Rather, transfer to the NDTX would severely prejudice WSOU.

The exception to the first-to-file rule urged by ZTE relies on equity. It is well-established 

that a party who “seeks equity must do equity.” ZTE has not “done equity.” Rather, it has 

continuously sought to delay this case in hopes of depriving WSOU of its right to a trial by jury. 

All this Court needs to do to resolve the inefficiency caused by ZTE USA’s fling in the NDTX 

Action is deny ZTE’s latest belated attempt to resurrect its 1404(a) motions with new arguments

(and promptly set a new Markman hearing). With a clear signal from this Court that this case will 

not be dismissed or transferred, the NDTX will be free to stay or dismiss the NDTX Action without 

prejudice.

improper venue for all defendants.” See Ex. E at 2. About two hours later, this Court wrote to the 

parties, informing them that there was an error in the order, that ZTE Corporation would not be 

dismissed, and that a corrected order would be entered soon. Ex. F. Despite this, ZTE let days pass 

without notifying the Board that ZTE’s August 6 email was incorrect. Ex. E at 1. WSOU was 

compelled to inform the Board of the error. Id. On August 17, nearly three months after fact 

discovery opened (and two months after this Court emailed the parties on June 18, 2021 confirming 

that “fact discovery opened” on May 22, 2021, see Ex. G), ZTE represented to the Board that 

“non-venue discovery only recently began, further establish[ing] that discretionary denial is 

inappropriate here.” See Ex. D at 1, 3. 8 Immediately after filing the NDTX Action, ZTE wrote to this Court informing it of the 

NDTX Action and reminding it of ZTE’s pending motion to stay. True to form, one day after this 

Court ordered supplemental briefing, ZTE wrote to the Board again, notifying it of this briefing in 

hopes of swaying the PTAB decision regarding institution. Ex. H. 9 WSOU has already served its preliminary and final infringement contentions. ZTE has 

served its invalidity contentions. The parties have exchanged proposed claim constructions and 

filed their claim construction briefs. Further, fact discovery opened on May 24, 2021. The parties 

have made initiation disclosures, and WSOU served written discovery requests on June 2, 2021.

Case 6:20-cv-00492-ADA Document 116 Filed 09/23/21 Page 6 of 7
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Dated: September 23, 2021 Respectfully submitted,

By: /s/ Ryan Loveless

James L. Etheridge 

Texas Bar No. 24059147 

Ryan S. Loveless 

Texas Bar No. 24036997 

Etheridge Law Group, PLLC 

2600 E. Southlake Blvd., Suite 120 / 324 

Southlake, TX 76092 

Tel.: (817) 470-7249 

Fax: (817) 887-5950 

Jim@EtheridgeLaw.com 

Ryan@EtheridgeLaw.com 

Mark D. Siegmund

State Bar No. 24117055

mark@waltfairpllc.com

Law Firm of Walt, Fair PLLC.

1508 North Valley Mills Drive 

Waco, Texas 76710

Telephone: (254) 772-6400

Facsimile: (254) 772-6432

Counsel for Plaintiff WSOU Investments, LLC

CERTIFICATE OF SERVICE

A true and correct copy of the foregoing instrument was served or delivered electronically 

via the U.S. District Court [LIVE]-Document Filing System to all counsel of record September 23, 

2021.

/s/ Ryan Loveless

Ryan S. Loveless

Case 6:20-cv-00492-ADA Document 116 Filed 09/23/21 Page 7 of 7