Google Inc. v. Rockstar Consortium US LP et al

Filing 56

STATEMENT OF RECENT DECISION pursuant to Civil Local Rule 7-3.d filed byMobileStar Technologies LLC, Rockstar Consortium US LP. (Attachments: # 1 Exhibit A - Order Denying Motion to Consolidate Cases, # 2 Exhibit B - Order Denying Motion to Transfer, # 3 Exhibit C - Order Granting Motion to Stay)(Related document(s) 20 ) (Budwin, Joshua) (Filed on 4/17/2014)

Exhibit B

Case 2:14-cv-00061-JRG Document 38 Filed 04/16/14 Page 1 of 12 PageID #: 799

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
CONTENTGUARD HOLDINGS, INC.,
Plaintiff,
v.
GOOGLE, INC.
Defendant.

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§ Civil Action No. 2:14-cv-00061-JRG
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MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Google’s Motion to Transfer Venue (Dkt. No. 15), wherein
Google moves this Court to transfer the above-styled action to the United States District Court for
the Northern District of California pursuant to 28 U.S.C. § 1404(a). Having considered the
parties’ written submissions, the Court DENIES Google’s motion.
Plaintiff ContentGuard Holdings, Inc. (“ContentGuard”) filed this case against Google on
February 5, 2014, alleging that Google infringed, both directly and indirectly, United States Patent
Nos. 6,963,859 (“the ’859 patent”), 7,523,072 (“the ’072 patent”), 7,774,280 (“the ’280 patent”),
8,001,053 (“the ’053 patent”), 7,269,576 (“the ’576 patent”), 8,370,956 (“the ’956 patent”),
8,393,007 (“the ’007 patent”), 7,225,160 (“the ’160 patent”), and 8,583,556 (“the ’556 patent”)
(collectively, the “patents in suit”). The Court incorporates by reference the relevant background
of this case as set forth in detail in the Court’s previous order issued on April 15, 2014. (See Dkt.
No. 37 at 2-3.)

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I.

Applicable Law

Section 1404(a) provides that “[f]or the convenience of parties and witnesses, in the
interest of justice, a district court may transfer any civil action to any other district or division
where it might have been brought.” 28 U.S.C. § 1404(a). The first inquiry when analyzing a
case’s eligibility for § 1404(a) transfer is “whether the judicial district to which transfer is sought
would have been a district in which the claim could have been filed.” In re Volkswagen AG, 371
F.3d 201, 203 (5th Cir. 2004) (“In re Volkswagen I”).
Once that threshold is met, courts analyze both public and private factors relating to the
convenience of parties and witnesses as well as the interests of particular venues in hearing the
case. See Humble Oil & Ref. Co. v. Bell Marine Serv., Inc., 321 F.2d 53, 56 (5th Cir. 1963); In re
Nintendo Co., Ltd., 589 F.3d 1194, 1198 (Fed. Cir. 2009). The private factors are: (1) the relative
ease of access to sources of proof; (2) the availability of compulsory process to secure the
attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical
problems that make trial of a case easy, expeditious, and inexpensive. In re Volkswagen I, 371
F.3d at 203.

The public factors are (1) the administrative difficulties flowing from court

congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity
of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems
of conflict of laws or in the application of foreign law. In re Volkswagen I, 371 F.3d at 203.
These factors are to be decided based on “the situation which existed when suit was instituted.”
Hoffman v. Blaski, 363 U.S. 335, 343 (1960). Though the private and public factors apply to most
transfer cases, “they are not necessarily exhaustive or exclusive,” and no single factor is
dispositive. In re Volkswagen of Am., Inc., 545 F.3d 304, 314-15 (5th Cir. 2008) (“In re
Volkswagen II”).

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While a plaintiff’s choice of venue is not an express factor in this analysis, the appropriate
deference afforded to the plaintiff’s choice is reflected in a defendant’s elevated burden of proof.
Id. at 315. In order to support its claim for a transfer under § 1404(a), the defendant must
demonstrate that the transferee venue is “clearly more convenient” than the venue chosen by the
plaintiff. Id. Absent such a showing, however, the plaintiff’s choice is to be respected. Id.
II.

Analysis

The Court will examine each of the applicable private and public factors listed above,
addressing the parties’ specific arguments where applicable.
A. This Action Could Have Been Brought in Northern District of California
The parties do not dispute that this action could have been brought in Northern District of
California. Thus, the threshold requirement for a § 1404(a) transfer has been satisfied.
B. Private Interest Factors
i. Relative Ease of Access to Sources of Proof
Despite technological advances in transportation of electronic documents, physical
accessibility to sources of proof continues to be a private interest factor to be considered. See
Volkswagen II, 545 F.3d at 316. In this case, Plaintiff ContentGuard is a Texas corporation
maintaining its principal place of business in Plano, Texas. Defendant Google is a Delaware
corporation with its principal place of business in Mountain View, California.
The parties have identified relevant evidence and witnesses physically located within or
near both the Eastern District of Texas (“EDTX”) and the Northern District of California
(“NDCA”). ContentGuard itself is headquartered in Plano, Texas, well within the boundaries of
EDTX. Its home office houses hard-copy documents, electronic servers, as well as key personnel
such as Vice President of Licensing and General Manager James Baker, Senior Research

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Engineers Mai Vu and Michael Raley, and Engineer Jeremy Tan. (Richardson Decl. ¶¶ 4-5.)
Ms. Vu is also the named inventor of two of the patents in suit. (Lelutiu Decl. Ex. 20, Vu Decl. ¶
4.)

Additionally, Mr. Scott Richardson – ContentGuard’s Vice President of Product

Development, and Chief Product Officer for ContentGuard’s parent company, Pendrell
Corporation – spends forty percent of his time in ContentGuard’s Plano Office managing the
development of new products. (Richardson Decl. ¶¶ 2, 5.) Mr. Eddie Chen and Ms. Mai Vu,
named inventors of the ’280 and ’053 patents, Mr. Guillermo Lao and Mr. Thanh Ta, named
inventors of the ’280 patent, Mr. Peter Priolli and Mr. Mark Stefik, named inventors of the ’859,
’072, ’160, ’576, ’956 and ’007 patents, declare that “all of [their] documents relating to
conception, development and reduction to practice” of those patents are “in the possession of
ContentGuard and located in Plano, Texas.” (Lelutiu Decl. Ex. 13, Chen Decl. ¶ 6; Ex. 16, Lao
Decl. ¶ 6; Ex. 17, Pirolli Decl. ¶ 6; Ex. 18, Stefik Decl. ¶ 6; Ex. 19, Ta Decl. ¶ 6; Ex. 20, Vu Decl.
¶ 5.) Ms. Vu resides in EDTX, and another inventor, Mr. Edward Lambert, splits his time
between Farmers Branch, Texas and Mercer Island, Washington. (Lelutiu Decl. Exs. 15, 20.)
On the other hand, Google is based in Mountain View, California, where material
decisions relating to the “development, engineering and marketing” of the accused Google Play
apps occurred. (Dubey Decl. ¶¶ 3, 4, 6.) The majority of Google employees involved in the
development and management of Google Play are located in the Northern District of California,
including Mr. Ficus Kirkpatrick, Software Engineer for the Google Play team, Nicolas Catania,
Staff Software Engineer on the Google Play team, and Debajit Ghosh, Principal Engineer on the
Google Play team. (Dubey Decl. ¶ 6.) Three named inventors reside in NDCA, and five reside
near or south of Los Angeles in California. (Lelutiu Decl. Exs. 13-14, 16-19; Dkt. No. 15-8.)
Google argues that this Court should discount the significance of ContentGuard’s presence

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in EDTX, because ContentGuard moved its headquarters to Texas from El Segundo, California in
August 2013, about four months before filing the Amazon Action and six months before filing the
instant case, “suggesting an effort to justify venue” in this Court. The Court disagrees. Google
relies on In re Zimmer Holdings, Inc., where the Federal Circuit noted that the plaintiff’s presence
in Texas appeared to be “recent, ephemeral and an artifact of litigation.” In re Zimmer Holdings,
Inc., 609 F.3d 1378, 1381 (Fed. Cir. 2010). There, to support its purported presence in Texas, the
In re Zimmer plaintiff transported copies of its patent prosecution files from Michigan to its Texas
office space, which it shared with another of its trial counsel’s clients, while all of the plaintiff’s
research, development and patent prosecution work took place in Michigan. See id. Finding
such circumstance convenient only for the plaintiff’s litigation counsel, the Federal Circuit held
that the plaintiff had no presence in Texas that should be given weight in the transfer analysis.
See id.

Similarly, in In re Microsoft Corp., the Federal Circuit discounted the plaintiff’s

purported presence in EDTX as being made “in anticipation of litigation and for the likely purpose
of making that forum appear convenient,” where the plaintiff company maintained an office in
EDTX with no employees and was operated instead from the United Kingdom. See In re
Microsoft Corp., 630 F.3d 1361, 1362, 1363-64 (Fed. Cir. 2011).

In this case, however,

ContentGuard’s presence in Texas, though fairly recent, appears to have been made out of
legitimate business considerations and has not been shown to be “an artifact of litigation.” See In
re Zimmer Holdings, Inc., 609 F.3d at 1381. The un-contradicted declaration of Mr. Scott
Richardson, Vice President of Product Development of ContentGuard, demonstrates that
ContentGuard moved from California to Texas for three primary reasons: (1) doing business in
Plano, Texas costs less; (2) North Texas is home to “a corridor of telecommunication companies
and companies that manufacture telecommunications and digital technologies, making it a good

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place to develop relationships with customers”; and (3) due to the presence of these
telecommunications companies and manufacturers, ContentGuard considers this area suitable for
finding new talents. (Richardson Decl. ¶ 6.) Unlike the In re Zimmer and the In re Microsoft
plaintiffs who hired no employees in Texas, ContentGuard’s home office in Plano, Texas houses
key business personnel such as Vice President of Licensing, and research and development
personnel such as Senior Research Engineers. In addition, even before the move, ContentGuard
has been cooperating with Plano-based software developers to design and write codes for new
applications. (Richardson Decl. ¶ 12.) Therefore, ContentGuard’s presence in EDTX is much
more extensive than those contemplated by the Federal Circuit in In re Zimmer and In re
Microsoft. The Court is not persuaded that the timing of ContentGuard’s move from California to
Texas alone demonstrates an improper motive to manipulate venue. ContentGuard’s presence in
Texas is entitled to proper weight in the Court’s venue analysis.
In sum, the parties have identified relevant evidence and witnesses located in or near both
EDTX and NDCA. That said, the Federal Circuit has noted that “[i]n patent infringement cases,
the bulk of the relevant evidence usually comes from the accused infringer.” In re Genentech,
566 F.3d at 1345.

It, however, has also cautioned district courts against evaluating the

significance of the identified evidence in venue analysis, instead instructing the courts to focus on
the “relevance and materiality” of the information. See id. at 1343-44 (“Requiring a [party] to
show that a potential witness has more than relevant and material information [for purpose of
venue analysis]…is unnecessary …It was not necessary for the district court to evaluate the
significance of the identified witnesses’ testimony.”). To the extent the parties identify any
evidence and witnesses that are both “relevant and material” to this litigation, this Court is
obligated to consider them. Here, weighing Google’s primary operation in NDCA and eight

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inventors’ residence in California, against ContentGuard’s headquarters and key personnel
(including one inventor) in EDTX as well as the relevant documents housed in ContentGuard’s
EDTX home office relating to “conception, development and reduction” of eight out of the nine
asserted patents, this Court finds that the ease of access to sources of proof weighs slightly in favor
of transfer.
ii. Availability of Compulsory Process
The second private interest factor instructs the Court to consider the availability of
compulsory process to secure the attendance of witnesses, particularly non-party witnesses whose
attendance may need to be secured by a court order. See In re Volkswagen II, 545 F.3d at 316.
Third-party subpoena is governed by Fed. R. Civ. P. 45, which, as recently amended in 2013,
provides the presiding court with nationwide subpoena power to order third-party witnesses to
attend deposition, so long as the deposition is to take place within 100 miles of the witness’s
residence or regular place of business. Fed. R. Civ. P. 45(a)(2), 45(c)(1)(A); see VirtualAgility,
Inc. v. Salesforce.com, Inc., 2:13-CV-00011-JRG, 2014 WL 459719, at *4 (E.D. Tex. Jan. 31,
2014).
Here, both Google and ContentGuard have purportedly identified third-party witnesses
located in NDCA and EDTX respectively, albeit both have done so in conclusory fashion.
Without identifying specific witnesses or evidence, Google alleges that it will need to subpoena
documents and testimony from third party Adobe Systems Inc. (“Adobe”), which is headquartered
in NDCA, because Google Play Books “uses technology provided by Adobe.” (Dubey Decl. ¶
10.)

Likewise, without providing details, ContentGuard asserts that evidence from certain

alleged third-party direct infringers, such as Samsung and Huawei, will be relevant to its indirect
infringement claims against Google. Both Samsung and Huawei maintain U.S. headquarters

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within EDTX. (Lelutiu Decl. Exs. 4, 7.) The Court, however, finds it difficult to evaluate the
need for compulsory process as to these alleged third parties, since neither side has identified
specific witnesses or their relevance to the instant case.

While the Court is mindful that

third-party witnesses might exist in both NDCA and EDTX, it declines to give substantial weight
to either side’s conclusory assertion of the need to subpoena such unidentified witnesses. See In
re Apple Inc., 743 F.3d 1377, 1378-79 (Fed. Cir. 2014) (holding that the district court did not abuse
discretion in denying a motion to transfer venue based on, among other things, its inability to
evaluate the convenience of witnesses because of the defendant’s “vague assertions and unknown
relevance and location of potential sources.”)
The parties further dispute the need for compulsory process as to the named inventors in
this case. Nine out of the ten identified named inventors are non-parties, and only Ms. Vu is
currently employed by party ContentGuard. As noted above, three of the non-party inventors
reside in NDCA. Five reside near or south of the Los Angeles area in California, and one splits
his time between Texas and the State of Washington. It is undisputed that both this Court and
NDCA may subpoena all non-party inventors to attend deposition, as long as the deposition is to
take place within 100 miles of the witness’s residence or regular place of business. See Fed. R.
Civ. P. 45(a)(2), 45(c)(1)(A). The non-party inventors’ testimony therefore may be secured at
least through such deposition.
On the other hand, while NDCA has the so called “absolute subpoena power” – the
subpoena power for both deposition and trial – over the three non-party inventors living within that
district, neither this Court nor NDCA clearly has the power to command the remaining inventors to
attend trial.1 See Fed. R. Civ. P. 45(c). In other words, the compulsory process available at

1

For example, under Rule 45(c)(1)(B)(ii), for NDCA to subpoena any of the California inventors outside NDCA to

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NDCA only works to secure the attendance of three non-party inventors. Seven out of the nine
non-party inventors, however, have declared their willingness to voluntarily appear in person at
trial “if [the case] is held in Texas.” (See Lelutiu Decl., Exs. 13-19 (emphasis added).) These
seven inventors have not expressed similar willingness to voluntarily appear at trial should the
case be tried in NDCA. As such, despite the availability of compulsory process at NDCA for the
three inventors residing there, transferring the case to NDCA may actually result in a lesser
attendance of these non-party witnesses.2 Accordingly, the availability of compulsory process is
effectively neutral in this situation.
iii. Cost of Attendance for Willing Witnesses
The third private interest factor is the cost of attendance for willing witnesses. “The
convenience of the witnesses is probably the single most important factor in a transfer analysis.”
In re Genentech, Inc., 556 F.3d at 1342. “When the distance between an existing venue for trial
of a matter and a proposed venue under § 1404(a) is more than 100 miles, the factor of
inconvenience to witnesses increases in direct relationship to the additional distance to be
travelled.” Id. at 1343 (citing In re Volkswagen II, 545 F.3d at 317).
Here, Google is headquartered in the Northern District of California, and has identified
three employees who are expected to provide testimony in this case. (Dubey Decl. ¶ 6.) On the
other hand, ContentGuard is headquartered within EDTX, which houses its corporate
representative and one of the named inventors, Ms. Mai Vu, among other personnel. Therefore,
regardless of whether the case is kept in this Court or transferred to NDCA, one party would have
to send certain employees to a court far away from its headquarter, while the other side gets to
attend trial, or for this Court to subpoena the inventor who splits his time between Texas and Washington to attend
trial, the requesting party must demonstrate that such attendance “would not incur substantial expense.”
2
The three inventors residing in NDCA (Stefik, Pirolli and Merkle) do not cover all nine of the asserted patents, while
the seven inventors who have declared their willingness to attend trial before this Court do cover every asserted patent.
(See Dkt. No. 15 at 13; Lelutiu Decl., Exs. 13-19.)

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conveniently stay in its home district. The decision thus comes down to the inconvenience of
third-party witnesses.
As noted above, Google and ContentGuard have asserted the existence of unspecified
third-party witnesses in both NDCA (from Adobe) and EDTX (from Samsung and Huawei).
Beyond that, three non-party inventors reside within NDCA, five reside elsewhere in California
and one splits his time between Texas and Washington. The eight inventors residing in California
would ordinarily be inconvenienced by having to travel to Texas to attend trial. Six of them,
however, together with the inventor who splits his time between Texas and Washington, have
volunteered to travel to Texas to attend trial as well as declaring that such live appearances will not
be inconvenient. (See Lelutiu Decl., Exs. 13-19.) As such, the convenience of witnesses weighs
in favor of transfer, but only slightly. See In re Affymetrix, Inc., 913, 2010 WL 1525010, at *2
(Fed. Cir. Apr. 13, 2010) (finding no “patent error” in the district court’s finding that the
convenience of the witnesses weighed only slightly in favor of transfer, when half of the identified
third-party witnesses had already volunteered to travel to the transferor forum for trial).
iv. All Other Practical Problems
“Practical problems include those that are rationally based on judicial economy.
Particularly, the existence of duplicative suits involving the same or similar issues may create
practical difficulties that will weigh heavily in favor or against transfer.” Eolas Technologies,
Inc. v. Adobe Sys., Inc., 6:09-CV-446, 2010 WL 3835762 (E.D. Tex. Sept. 28, 2010), aff’d In re
Google, Inc., 412 Fed. Appx. 295 (Fed. Cir. 2011).
Here, as set forth in detail in the Court’s April 15, 2014 opinion, the instant case and the
co-pending Amazon Action before this Court substantially overlap as to whether the accused
Google Play apps infringe ContentGuard’s asserted patents.

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(See Dkt. No. 37 at 5-6.)

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Transferring the instant case alone to NDCA would result in two district courts making
independent decisions regarding whether the same accused technology infringes the same set of
patents. Such runs directly counter to the principles of judicial economy and comity. This factor
therefore weighs heavily against transfer.
C. Public Factors
i. The Administrative Difficulties Flowing From Court Congestion
Google asserts, and ContentGuard does not dispute, that the median time to trial for patent
cases in this Court is 2.19 years, compared to 2.72 years in NDCA. The six-month difference in
medial time, though not substantial, is not negligible. This factor therefore weighs slightly
against transfer.
ii. Local Interest in Having Localized Interests Decided at Home
The Court must consider local interest in the litigation because “[j]ury duty is a burden that
ought not to be imposed upon the people of a community which has no relation to the litigation.”
In re Volkswagen I, 371 F.3d at 206 (5th Cir. 2004). Interests that “could apply virtually to any
judicial district or division in the United States,” such as the nationwide sale of infringing
products, are disregarded in favor of particularized local interests. In re Volkswagen II, 545 F.3d
at 318.
In this case, the Northern District of California has a vested interest in the outcome of the
case because Defendant Google is headquartered in Mountain View, California. Meanwhile, this
district also has a local interest in this dispute because Plaintiff ContentGuard is a Texas
corporation based in EDTX. This factor is therefore neutral.
iii. Avoidance of Unnecessary Conflicts of Law
The Court agrees with Google that there are no conflict-of-law issues apparent in this case.

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This factor is also neutral.
iv. The Familiarity of The Forum With The Governing Law
The parties agree that both courts are equally familiar with patent law. The final public
factor is neutral.
III.

Conclusion

In sum, relative ease of access to sources of proof and convenience of witnesses both weigh
slightly in favor of transfer. Court congestion weighs slightly against transfer. Judicial economy
and considerations of comity weigh heavily against transfer. The balance of the private and
public factors demonstrates that Google has fallen short of establishing that the Northern District
of California is “a clearly more convenient forum.” In re Volkswagen II, 545 F.3d at 315.
Google having failed to do so, Plaintiff ContentGuard’s choice of venue must remain undisturbed.
Id
For the reasons stated above, the Court hereby DENIES Google’s Motion to Transfer
Venue (Dkt. No. 15).
So ORDERED and SIGNED this 16th day of April, 2014.

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DNEY GILSTRAP
ST
RODNEY GILSTRAP
UNITED STATES DISTRICT JUD
JUDGE
ITED STATES
E

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