I/P Engine, Inc. v. AOL, Inc. et al

Filing 1098

REPLY to Response to Motion re 1092 MOTION to Stay of Requirement that Defendants Provide Revenue Information and Calculations of Ongoing Royalty Payments filed by AOL Inc., Gannett Company, Inc., Google Inc., IAC Search & Media, Inc., Target Corporation. (Noona, Stephen)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA
NORFOLK DIVISION

I/P ENGINE, INC.
Plaintiff,
Civil Action No. 2:11-cv-512

v.
AOL, INC., et al.,
Defendants.

GOOGLE'S REPLY IN SUPPORT OF DEFENDANTS’ MOTION FOR STAY OF
REQUIREMENT THAT DEFENDANTS PROVIDE REVENUE INFORMATION AND
CALCULATIONS OF ONGOING ROYALTY PAYMENTS
Defendants ask the Court to exercise its broad discretion to stay the reporting obligations in
its August 14, 2013 Order concerning damage payments that the parties already agreed do not need
to be made while the appeals concerning such payments are pending. I/P Engine fails to rebut the
appropriateness of Defendants' reasonable request, which will cause no prejudice to Plaintiff.1
In their motion, Defendants cited applicable law concerning stays of accountings. Fed. R.
Civ. P. 62(a)(2); Beaver Cloth Cutting Machines, Inc. v. H. Maimin Co., 37 F.R.D. 47, 50-51
(S.D.N.Y. 1964) (granting stay of accounting proceedings upon posting of $5000 bond by the
defendant); Schlegel Mfg. Co. v. King Aluminum Corp., 381 F. Supp. 649, 656 (S.D. Ohio 1974)
1

I/P Engine’s accusation that Defendants are seeking to "avoid their obligations to pay for
[their] infringement" (D.N. 1095, 4) is specious. The parties already have agreed to stay
enforcement of Defendants' payment obligations pending the resolution of the related appeals.
(D.N. 932, 1085, 1096 & 1097.)

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aff'd and remanded sub nom. Schlegel Mfg. Co. v. U.S.M. Corp., 525 F.2d 775 (6th Cir. 1975)
(granting stay of accounting pending appeal); Wright & Miller, Fed. Prac. & Proc. Civ. § 2902 (3d
ed.) (“Stay of an accounting in a patent-infringement case, upon an appropriate bond, would be
consistent with the statutory scheme to avoid a useless waste of time and money.”). This law
provides a clear, reasonable basis for staying accounting requirements pending appeals. Plaintiff
does not address or even acknowledge any of this relevant law.
Instead, I/P Engine relies on irrelevant cases about entirely different situations, such as
ePlus, Inc. v. Lawson Software, Inc., 946 F. Supp. 2d 503 (E.D. Va. 2013), where the defendant
sought to stay an injunction of the making, using, or selling of infringing products and services,
and coercive portions of a resulting contempt order, and In re Mahurkar Patent Litig., 831 F. Supp.
1354 (N.D. Ill. 1993), concerning an injunction of the sale of infringing products. These decisions
have no bearing on Defendants’ requested relief.
Moreover, I/P Engine's own assertions reveal that its demand for certified revenue and
damages information has no other purpose than harassment. I/P Engine says it is in “peril” of
being uninformed of damages amounts. But Plaintiff admits that the "results of the calculations
appear in Defendants' Confidential Opening Brief in their appeal." (D.N. 1095, 3.) Plaintiff also
admits “that there is minimal risk that Google - the party satisfying the entire judgment against
Defendants - will become insolvent prior to the resolution of the pending appeals, and therefore
does not request that Defendants post a supersedeas bond.” (Id., 4 n.3.) There is no “peril.”
Further, contrary to I/P Engine's unsupported assertion that Defendants' applicable revenue
base "can easily be determined," the certification of revenue and damage calculations places a
heavy burden on Defendants. It is an expensive and time-consuming process. (Kuethe Dec., D.N.
939.) Likewise, while Google does report its overall financials to the U.S. Securities and

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Exchange Commission each quarter, those reports do not concern the detailed revenue
breakdowns necessary to calculate the damages in this case or involve the certification of the
damages calculations in this case.
Finally, Defendants are not tardy in providing revenue information and damage
calculations as Plaintiff suggests. (D.N. 1095, 1.) On August 14, 2013, the Court ordered
Defendants to make quarterly payments of ongoing royalties and, at that time, “to certify by
penalty of perjury the U.S. revenue attributable to Defendant's use of AdWords in U.S. Dollars and
the calculation of the royalty payment.” (D.N. 963, 6.) On January 28, 2014, the Court then set the
royalty rate for post-judgment royalties. (D.N. 1088.) Because January 28, 2014 is in the middle
of the first quarter of 2014, Defendants' first quarterly calculation is due April 21, 2014.2 The
parties met and conferred to try to resolve both the issue of staying payment obligations and the
reporting issue currently before the Court, but they were not able to reach an agreement as to
Defendants' reporting obligations. Accordingly, Defendants sought a stay of their reporting
obligations in advance of the April deadline. Contrary to I/P Engine's assertion, (D.N. 1095, 1),
Defendants have not failed to make any ordered reportings or granted themselves a stay, but,
rather, they have sought protection from the Court in a timely manner.
Conclusion
For the foregoing reasons, Defendants respectfully request that this Court grant their
Motion to Stay and stay any and all requirements that Defendants provide revenue information or
other financial reports concerning post-judgment royalties to Plaintiff or to participate in any
related audits until the Federal Circuit has ruled on all pending appeals. (See Appeal Nos.
2013-1307, 2013-1313 (Fed. Cir.); Appeal Nos. 2014-1233, 2014-1289 (Fed. Cir.).)
2

This represents 20 days after the end of the quarter plus one day to account for the
deadline falling on a Sunday.
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DATED: April 17, 2014

/s/ Stephen E. Noona
Stephen E. Noona
Virginia State Bar No. 25367
KAUFMAN & CANOLES, P.C.
150 West Main Street, Suite 2100
Norfolk, VA 23510
Telephone: [phone]
Facsimile: [phone]
[e-mail]
David Bilsker
David A. Perlson
QUINN EMANUEL URQUHART &
SULLIVAN, LLP
50 California Street, 22nd Floor
San Francisco, California 94111
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
Counsel for Google Inc., Target Corporation, IAC
Search & Media, Inc., and Gannett Co., Inc.
By: /s/ Stephen E. Noona
Stephen E. Noona
Virginia State Bar No. 25367
KAUFMAN & CANOLES, P.C.
150 W. Main Street, Suite 2100
Norfolk, VA 23510
Telephone: [phone]
Facsimile: [phone]
Robert L. Burns
FINNEGAN, HENDERSON, FARABOW, GARRETT &
DUNNER, LLP
Two Freedom Square
11955 Freedom Drive
Reston, VA 20190
Telephone: [phone]
Facsimile: [phone]

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Cortney S. Alexander
FINNEGAN, HENDERSON, FARABOW, GARRETT &
DUNNER, LLP
3500 SunTrust Plaza
303 Peachtree Street, NE
Atlanta, GA 94111
Telephone: [phone]
Facsimile: [phone]
Counsel for Defendant AOL, Inc.

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CERTIFICATE OF SERVICE
I hereby certify that on April 17, 2014, I will electronically file the foregoing with the Clerk
of Court using the CM/ECF system, which will send a notification of such filing (NEF) to the
following:
Jeffrey K. Sherwood
Kenneth W. Brothers
DICKSTEIN SHAPIRO LLP
1825 Eye Street NW
Washington, DC 20006
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
Donald C. Schultz
W. Ryan Snow
Steven Stancliff
CRENSHAW, WARE & MARTIN, P.L.C.
150 West Main Street, Suite 1500
Norfolk, VA 23510
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Counsel for Plaintiff, I/P Engine, Inc.

/s/ Stephen E. Noona
Stephen E. Noona
Virginia State Bar No. 25367
KAUFMAN & CANOLES, P.C.
150 West Main Street, Suite 2100
Norfolk, VA 23510
Telephone: [phone]
Facsimile: [phone]
[e-mail]

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