Google Inc. v. Rockstar Consortium US LP et al

Filing 106

ORDER by Judge Claudia Wilken DENYING 66 MOTION FOR INTERLOCUTORY APPEAL. (ndr, COURT STAFF) (Filed on 8/20/2014)

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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 GOOGLE INC., 5 6 7 8 9 United States District Court For the Northern District of California 10 11 No. C 13-5933 CW Plaintiff, ORDER DENYING MOTION FOR INTERLOCUTORY APPEAL v. ROCKSTAR CONSORTIUM U.S. LP, MOBILESTAR TECHNOLOGIES, LLC, (Docket No. 66) Defendants. ________________________________/ In this patent infringement case, Defendants Rockstar 12 Consortium U.S. LP (Rockstar) and MobileStar Technologies, LLC 13 14 (MobileStar) previously moved to dismiss for lack of personal 15 jurisdiction or, in the alternative, to transfer to the Eastern 16 District of Texas. 17 Defendants now seek to certify the Court’s Order for interlocutory 18 review by the Federal Circuit. 19 20 The Court denied Defendants’ motion. Plaintiff Google, Inc. opposes. Having considered the papers, the Court DENIES the motion. BACKGROUND 21 The Court’s prior order denying Defendants’ motion to dismiss 22 23 or, in the alternative, to transfer lays out the underlying 24 factual background in great detail, and so the Court provides only 25 the procedural history relevant to the present motion. 26 27 28 On January 23, 2014, Defendants moved to dismiss this action for lack of personal jurisdiction and improper venue and to 1 decline jurisdiction under the Declaratory Judgment Act. 2 No. 20. 3 denied Defendants’ motion, holding it had specific jurisdiction 4 because, “with conflicts in the allegations and evidence resolved 5 in [Google’s] favor, Google has shown that it is likely that 6 The Court held a hearing on March 13, 2014. Docket The Court Defendants have created continuing obligations with a forum 7 resident to marshal the asserted patents such that it would not be 8 9 unreasonable to require Defendants to submit to the burdens of United States District Court For the Northern District of California 10 litigation in this forum.” 11 Court further found that there was no reason to decline 12 declaratory judgment jurisdiction or transfer the case to the 13 Eastern District of Texas because the § 1404 convenience factors 14 Docket No. 58 (Order) at 19-20. either favored this forum or were neutral. The See, generally, Order 15 at 20-28. 16 Defendants now move for certification of the Court’s Order 17 18 19 20 21 22 23 24 25 26 for interlocutory review under 28 U.S.C. § 1292(b). Specifically, they seek to certify the following question: Whether Rockstar US LP, a Delaware limited partnership resident in the Eastern District of Texas is subject to personal jurisdiction in the Northern District of California, due to its alleged “continuing obligations” to Apple, one of its five limited partners, without (a) piercing the corporate veil or establishing that Rockstar is the “alter ego” of Apple; or (b) proving that any “continuing obligation” Rockstar is alleged to owe Apple (or another forum resident) relates to enforcing the patents-in-suit in the Northern District of California, not other forums. Docket No. 66 at 6. 27 28 2 LEGAL STANDARDS 1 2 Under 28 U.S.C. § 1292(b), the Court may certify an otherwise 3 non-final order if: (1) it involves a controlling question of law, 4 (2) as to which there is substantial ground for difference of 5 opinion, and (3) an immediate appeal may “materially advance the 6 ultimate termination of the litigation.” The party seeking 7 interlocutory review bears the burden of showing that all of these 8 9 United States District Court For the Northern District of California 10 11 factors are met. Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010). Certification under § 1292(b) “is a departure from the normal 12 rule that only final judgments are appealable, and therefore must 13 be construed narrowly.” 14 Mendez v. R+L Carriers, Inc., 2013 WL 1004293, at *1 (N.D. Cal.) (quoting James v. Price Stern Sloan, 15 Inc., 283 F.3d 1064, 1068 n.6 (9th Cir. 2002)). The moving party 16 bears the burden of establishing “exceptional circumstances 17 18 justify[ing] a departure from the basic policy of postponing 19 appellate review until after the entry of a final judgment.” 20 Coopers & Lybrand v. Livesay, 437 U.S. 463, 475 (1978). 21 district court has discretion to determine whether an 22 interlocutory appeal would advance or delay the resolution of the 23 litigation. The See Swint v. Chambers Cnty. Comm'n, 514 U.S. 35, 47 24 (1995). 25 26 27 28 DISCUSSION Defendants argue that the Court’s Order involves a controlling question of jurisdictional law as to which there is a 3 1 substantial ground of difference of opinion. As described 2 previously, Defendants argue that the Court erred in finding them 3 subject to personal jurisdiction in this district due to their 4 continuing obligations to Apple, even though the Court did not 5 (1) pierce the corporate veil between Rockstar and Apple, such as 6 by finding that Rockstar is the alter ego of Apple, and (2) find 7 that the continuing obligation relates to enforcement of the 8 9 United States District Court For the Northern District of California 10 patents-in-suit in this forum. Federal Circuit precedent is clear on both points. As 11 explained in this Court’s order, Defendants misunderstand both 12 Google’s theory of jurisdiction as well as Federal Circuit 13 precedent. 14 Order at 17 n.6. Google did not argue that Rockstar was Apple’s alter ego, nor was it required to do so in order to 15 establish jurisdiction. Rather, Google argued that Rockstar 16 entered into a relationship with Apple, exceeding the kind 17 18 existing between a company and its passive stakeholder, which 19 obliged Rockstar to marshal the patents-in-suit against Google and 20 its Android platform. 21 presented articles stating that the CEO of Rockstar, John Veschi, 22 maintains frequent contact with the intellectual property 23 To support this allegation, Google departments of its investors such as Google; the fact that Apple 24 appeared to be a majority shareholder based on the size of its 25 26 investment; Apple’s history of expressing an intention to 27 interfere with Google’s business; and the suspicious circumstances 28 of Defendants specifically suing Google’s customers, but not 4 1 Google, based on their use of the Android platform, which is 2 consistent with motivations arising from the historical Google- 3 Apple rivalry. 4 own contrary evidence, but chose not to challenge the factual 5 allegations and evidence underlying Google’s arguments. 6 Defendants had the opportunity to present their For the most part, Defendants instead maintained that there was “no reason 7 to entertain futile jurisdictional discovery.” Defendants’ Reply 8 9 to Motion to Dismiss at 12. Defendants said the same at the United States District Court For the Northern District of California 10 hearing. 11 allegations and found that Defendants indeed entered into an 12 undertaking with Apple that obliged Defendants to enforce the 13 patents-in-suit against Google, its cross-town rival, in a way 14 The Court accordingly accepted Google’s evidence and that interfered with Google’s business. 15 Defendants state that their Motion for Interlocutory Review 16 “accept[s] Google’s pleaded allegations that the Court’s factual 17 18 findings rest on as true.” Defendants’ Motion for Interlocutory 19 Review at 2. 20 challenge the Court’s factual findings. 21 asserted that Apple is Rockstar’s ‘majority shareholder,’ but that 22 assertion is incorrect.”); Defendants’ Reply to Motion for 23 Yet Defendants elsewhere attempt indirectly to See id. at 2 n.2 (“Google Interlocutory Review at 6 (“As explained in Defendants’ Motion 24 [for Interlocutory Review], Defendants do not owe any enforcement 25 26 obligation to Apple, or any other limited partner, in any forum”). 27 If Defendants now wish to challenge the Court’s decision on a 28 factual basis, then they must follow the protocol for moving for 5 1 reconsideration and explain why they did not previously present 2 certain material facts in their argument. 3 (“the moving party must specifically show reasonable diligence in 4 bringing the motion,” along with the “emergence of new material 5 facts”). 6 See Civ. L.R. 7-9(b) Otherwise, Defendants have waived those factual arguments and cannot present them now. See Ins. Corp. of Ireland, 7 Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 704 (1982) 8 9 (“the requirement of personal jurisdiction may be intentionally United States District Court For the Northern District of California 10 waived, or for various reasons a defendant may be estopped from 11 raising the issue”).1 12 13 14 The uncontroverted facts presented by Google and recognized by the Court are sufficient to find specific jurisdiction over Defendants under established Federal Circuit case law. While 15 infringement letters are “purposefully directed at the forum and 16 the declaratory judgment action ‘arises out of’ the letters,” the 17 18 Federal Circuit additionally requires, in the interests of fair 19 play and justice, that the defendant have engaged in “‘other 20 activities’ directed at the forum and related to the cause of 21 action.” 22 F.3d 1324, 1333 (2008) (emphasis omitted). 23 Avocent Huntsville Corp. v. Aten Int’l Co., Ltd., 552 “Examples of those ‘other activities’ include initiating judicial or extra-judicial 24 patent enforcement within the forum, or entering into an exclusive 25 26 1 27 28 In any event, the Court’s decision regarding jurisdiction did not depend solely on the facts that Defendants challenge now, such as the size of Apple’s stake in Rockstar. See Order at 18. 6 1 license agreement or other undertaking which imposes enforcement 2 obligations with a party residing or regularly doing business in 3 the forum.” Id. at 1334.2 4 Because Google successfully demonstrated that Defendants 5 entered into an “undertaking which imposes enforcement obligations 6 with a party residing or regularly doing business in the forum” 7 (Apple), Google did not need to prove further that Defendants 8 9 engaged in “judicial or extra-judicial patent enforcement within United States District Court For the Northern District of California 10 the forum.” 11 activities inside the forum is an alternative ground for 12 exercising jurisdiction, not the exclusive one. 13 Huntsville Corp., 552 F.3d at 1334 (describing two grounds for 14 Finding that the defendant engaged in enforcement See Avocent finding the exercise of jurisdiction would be fair and just: 15 “initiating judicial or extra-judicial patent enforcement within 16 17 18 19 20 21 22 23 24 25 26 27 28 2 See also Campbell Pet Co. v. Miale, 542 F.3d 879, 886 (Fed. Cir. 2008) (finding jurisdiction over a patentee who conducted extra-judicial patent enforcement by enlisting a third party in the forum to remove defendant’s products from a trade show); Genetic Implant Sys., Inc. v. Core-Vent Corp., 123 F.3d 1455, 1458 (Fed. Cir. 1997) (holding that specific jurisdiction existed over patentee because it had appointed an in-state distributor to sell a product covered by the asserted patent, which was a business relationship “analogous to a grant of a patent license” and created obligations to sue third-party infringers); Akro Corp. v. Luker, 45 F.3d 1541, 1548-49 (Fed. Cir. 1995) (because defendant had entered into an exclusive licensing agreement with one of the alleged infringer’s competitors, which meant that defendant had “obligations . . . to defend and pursue any infringement” of the patent, specific jurisdiction was proper); SRAM Corp. v. Sunrace Roots Enter. Co., Ltd., 390 F. Supp. 2d 781, 787 (N.D. Ill. 2005) (specific jurisdiction was proper where defendant had “purposefully directed its activities” at residents of the forum by marketing a product that directly competed with the alleged infringer). 7 1 the forum, or entering into an exclusive license agreement or 2 other undertaking which imposes enforcement obligations with a 3 party residing or regularly doing business in the forum”); 4 Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1020 5 (Fed. Cir. 2009) (explaining that “enforcement efforts in the 6 forum” can create specific jurisdiction, as opposed to an 7 obligation with a forum resident). Defendants’ Texas suit against 8 9 Google’s customers merely serves as supporting evidence for the United States District Court For the Northern District of California 10 inference that Defendants undertook an obligation to Apple to 11 disrupt Google’s business. 12 resident itself,3 which allegedly obliged Defendants to take 13 actions expressly aimed at causing harm to another forum resident, 14 It is the relationship to a forum that connects the case to this district. See Avocent Huntsville 15 Corp., 552 F.3d at 1331 (“The Supreme Court has also instructed 16 that personal jurisdiction may be proper because of a defendant's 17 18 19 intentional conduct in another State calculated to cause injury to the plaintiff in the forum State.”) (quoting Calder v. Jones, 465 20 21 22 23 24 25 26 27 28 3 See Breckenridge Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d 1356, 1365 (Fed. Cir. 2006) (explaining that “the plaintiff need not be the forum resident toward whom any, much less all, of the defendant's relevant activities were purposefully directed.”). 8 1 2 3 U.S. 783, 791 (1984)) (internal brackets and quotation marks omitted).4 Because case law is settled on both of Defendants’ points, 4 Defendants have not established that the Court’s order involves a 5 controlling question of law upon which there is substantial ground 6 for difference of opinion. 7 Further, immediate appeal of the order will not materially 8 9 advance the ultimate termination of the litigation. While United States District Court For the Northern District of California 10 Defendants are correct that personal jurisdiction is essential to 11 the Court’s authority, not every jurisdictional question over 12 which the parties disagree must be certified for interlocutory 13 review. 14 See Things Remembered v. Petrarca, 516 U.S. 124, 132 n.1 (1995) (Ginsburg, J., concurring). Defendants contend that review 15 will materially advance the litigation because jurisdiction is 16 case-dispositive, but this argument is unpersuasive because it can 17 18 be made any time a case-dispositive motion is denied, which is not 19 4 20 21 22 23 24 25 26 27 28 See Calder, 465 U.S. at 789 (finding jurisdiction over defendants because “their intentional, and allegedly tortious, actions were expressly aimed at California”); 4 Charles A. Wright, et al., Federal Practice and Procedure § 1067.1 (3d ed. Westlaw 2014) (“Thus, the ‘effects test’ continues to have viability, but only when the defendant's conduct both has an effect in the forum state and was directed at the forum state by the defendant”); Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1204 (Fed. Cir. 2003) (finding jurisdiction over Texas corporate defendant because its activities enforcing a Texas injunction “were all ‘expressly aimed’ at the Iowa corporate plaintiff,” and defendant “knew the activities would have the potentially devastating effects of inhibiting [the Iowa corporate plaintiff] from producing the MAXLE and its customers from buying it”) (internal brackets omitted). 9 1 in of itself extraordinary. Getz v. Boeing Co., 2009 WL 3765506, 2 at *2 (N.D. Cal.). 3 Appeal would be “burdened with a second appeal” involving issues 4 that could have been considered together. 5 regardless of the outcome of the appeal, the parties would 6 If the appeal were to fail, the Court of Id. at *2. Moreover, continue to litigate this action, albeit in a different forum, 7 without the benefit of any simplification of the issues or 8 9 narrowing of the scope of discovery. Fed. Hous. Fin. Agency v. United States District Court For the Northern District of California 10 UBS Americas, Inc. 858 F. Supp. 2d 306, 338 (S.D.N.Y. 2012). 11 Because Defendants have failed to show that an immediate appeal 12 would be likely materially to advance or narrow the proceedings at 13 hand, there is no reason to certify Defendants’ proposed question 14 for interlocutory review. 15 16 17 18 IT IS SO ORDERED. Dated: 8/20/2014 CLAUDIA WILKEN United States District Judge 19 20 21 22 23 24 25 26 27 28 10

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