Google Inc. v. Rockstar Consortium US LP et al

Filing 78

REPLY (re 67 MOTION to Transfer Case or, in the Alternative to Stay ) filed byMobileStar Technologies LLC, Rockstar Consortium US LP. (Attachments: # 1 Declaration (Supplemental) of Joshua Budwin, # 2 Exhibit 36, # 3 Exhibit 37, # 4 Exhibit 38, # 5 Exhibit 39, # 6 Exhibit 40, # 7 Exhibit 41, # 8 Exhibit 42, # 9 Exhibit 43, # 10 Declaration (Supplemental) of Donald Powers, # 11 Declaration (Supplemental) of John Veschi)(Budwin, Joshua) (Filed on 5/30/2014)

HIGHLIGHTING ADDED

EXHIBIT 36

Case 2:13-cv-00900-JRG Document 66 Filed 04/25/14 Page 1 of 9 PageID #: 3995

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION

ROCKSTAR CONSORTIUM US LP AND
MOBILESTAR TECHNOLOGIES, LLC
Plaintiffs,
v.
SAMSUNG ELECTRONICS CO., LTD.,
SAMSUNG ELECTRONICS AMERICA, INC.,
SAMSUNG TELECOMMUNICATIONS
AMERICA, LLC, GOOGLE INC.,
Defendants.

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Civil Action No. 13-cv-0900-JRG
JURY TRIAL DEMANDED

DEFENDANTS’ REPLY IN SUPPORT OF MOTION TO TRANSFER TO THE
NORTHERN DISTRICT OF CALIFORNIA OR, IN THE ALTERNATIVE, TO STAY

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TABLE OF CONTENTS
Page
INTRODUCTION ...........................................................................................................................1
ARGUMENT ...................................................................................................................................1
I.

The Court Should Transfer This Case to the Northern District of California .....................1
A.
B.

The Private Interest Factors Strongly Favor Transfer..............................................2

C.
II.

Rockstar Has No Meaningful Connection to This Forum .......................................1

The Public Interest Factors Also Favor Transfer or Are Neutral.............................4

In the Alternative, the Court Should Stay This Case ...........................................................4
A.

The Google Action Will Resolve Major Issues in Dispute......................................4

B.

The Customer-Suit Exception Applies to Google’s Customers ..............................5

Conclusion .......................................................................................................................................5

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INTRODUCTION
Rockstar’s patents in this action will be tested and, if necessary, tried to a jury in Google
Inc. v. Rockstar Consortium US LP, No. 13-5933 (N.D. Cal.) (the “Google Action”). The Court
in the Google Action has already ruled that (1) the Google Action was the first-filed action
between Rockstar and Google; (2) all of Rockstar’s actions in this District are “customer suits”
that should be stayed or transferred to the venue of the manufacturer, Google; (3) the § 1404
venue factors favor hearing this dispute in the Northern District of California; and (4) the Google
Action should proceed in that Court. Despite this ruling, Rockstar has not withdrawn its
opposition to Defendants’ motion to transfer, and now evidently seeks wasteful, duplicative
litigation in both this Court and the Northern District. Rockstar’s arguments against transfer
cannot withstand scrutiny, and the Northern District already considered and rejected them. This
Court should prevent wasteful and overlapping parallel actions by transferring this case to the
Northern District of California or, in the alternative, staying it until that action is resolved.
ARGUMENT
I.

The Court Should Transfer This Case to the Northern District of California
A.

Rockstar Has No Meaningful Connection to This Forum

Rockstar claims “meaningful, longstanding connections” to this District (Opp. at 6-7), but
cannot dispute that it created MobileStar only one day before filing this action (Dkt. 52-9), in
circumstances the Northern District found “strongly suggest that Rockstar formed MobileStar as
a sham entity” that was “created solely for litigation purposes.” (894 Dkt. 71-1 at 9 and 17.)
Rockstar’s brief does not address or even mention MobileStar’s creation, and Rockstar no longer
trumpets MobileStar’s “separate” corporate form as anchoring this case in this District.
(Declaration of Kristin Madigan (“Madigan Decl.”) Exs. 1 at 6-9; 2 at 2-5.) Instead, Rockstar
focuses on its small office of five people in Plano, Texas. (Opp. at 6-7.) But this office is

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irrelevant for at least three reasons. First, it only opened in December 2012, just ten months
before Rockstar filed this suit. (Dkt. 61-7 ¶ 20.) To avoid just this kind of manipulation, “the
recent opening of an office” by a plaintiff cannot affect the venue analysis. In re Toyota Motor
Corp., — F.3d —, 2014 WL 1316595, at *2 (Fed. Cir. Apr. 3, 2014). Second, despite Rockstar’s
contrary claim (Dkt. 1 ¶¶ 1-2), “Rockstar’s ‘nerve center,’ or the place where its ‘officers direct,
control, and coordinate the corporation’s activities,’” is not here but in Ottawa, Canada. (894
Dkt. 71-1 at 3.) Third, even if the Plano office were important to Rockstar (and it is not), it
cannot be important to this litigation or even part of it, because it is conflicted from participation.
One of its three attorneys is Alfi Guindi, now Senior IP Counsel at Rockstar but a former
attorney at Samsung. (Madigan Decl. Ex. 3.) Rockstar has confirmed that Mr. Guindi “will not
be involved now or in the future in the litigation.” (Id. Ex. 4.) The two other attorneys in
Rockstar’s tiny Plano office are similarly conflicted. Texas Disc. Rule 1.09(b) & Preamble.
B.

The Private Interest Factors Strongly Favor Transfer

In their motion to transfer, Google and Samsung explained in detail why the private
interest factors favor the Northern District. (Mot. at 7-15.) Rockstar’s response assembles
cherry-picked facts, often in a conflicting manner. For example, in its latest attempt to argue
there are relevant documents in this District, Rockstar now directs the Court toward “documents
from Rockstar equity owners BlackBerry and Ericsson, who reside in the Dallas area” (Opp. at
9), but only one page later argues that “Rockstar equity owners and Nortel bidders will be
irrelevant” to this action. (Opp. at 10.) And Rockstar seeks to avoid transfer using documents in
its conflicted Plano office (id. at 9 n.1), but neglects to mention that it moved those documents
there itself, ten months before filing its complaint, an action this Court should “closely
scrutinize” to determine “whether any venue manipulation exists.” InMotion Imagery Techs.,
LLC v. Imation Corp., 2013 U.S. Dist. LEXIS 41830, at *7-8 n.1 (E.D. Tex. Mar. 25, 2013).

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Most importantly, however, Rockstar entirely ignores its majority equity owner, Apple, which
resides in the Northern District of California. (Dkt. 52-5.) As the Northern District has
recognized, there is a “direct link between Apple’s unique business interests, separate and apart
from mere profitmaking, and Defendants’ actions against Google and its customers.” (894 Dkt.
71-1 at 18.) As Defendants have already explained, Rockstar will likely argue that Google’s bids
for the Nortel portfolio show value of the patents-in-suit; to combat this argument, Defendants
must obtain discovery from Apple showing its motivations and reasoning behind its own bids as
well as the creation of Rockstar itself. (Mot. at 12.) Rockstar says nothing against this point,
except to note that other equity owners may be equally relevant. (Opp. at 10.) This argument
ignores Rockstar’s telling focus on Android, ignores Apple’s status as its majority owner, and
ignores the Northern District’s finding of a “direct link” between them. (894 Dkt. 71-1 at 18.)
Defendants showed that dozens of prior artists for the asserted patents reside in the
Northern District. (Dkt. 52 at 11 n.3.) In response, Rockstar identifies two non-party witnesses
in this District, and relies primarily on affidavits from potential witnesses, residing in Canada,
who aver that trial here would be convenient for them. (Dkt. Nos. 61-2 ¶¶ 6-7; 61-6 ¶¶ 6-7; 61-8
¶¶ 6-7.) The Court should ignore these dubious declarations, which provide no rationale for their
statements that this Court would be more convenient than the Northern District—where
Rockstar’s witnesses carefully do not say that they would be unwilling to attend trial. Rockstar
identifies a few former Nortel employees and a single former Samsung employee (Opp. at 11),
but none are in this District and none have strong connections to the action. Availability of
compulsory process and cost of attendance of trial thus strongly favor transfer. (Mot. at 11-13.)
Finally, this Court should transfer this action to avoid the “existence of duplicative suits
involving the same or similar issues” and “practical difficulties” presented here. Ctr. One v.
Vonage Holdings Corp., 2009 WL 2461003, at *22 (E.D. Tex. Aug. 10, 2009). Rockstar itself

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stressed this point in its opposition brief (Opp. at 13-14) and before the Northern District
(Madigan Decl. Ex. 1 at 4-5, 19). Now that the Google Action will proceed, Rockstar cannot
suddenly demand two sets of actions supervised by two courts in two districts.
C.

The Public Interest Factors Also Favor Transfer or Are Neutral

As the Northern District of California has already found, that Court “has the greater
interest in this litigation because the claims here will ‘call into question the work and reputation
of several individuals residing in or conducting business in this community.’” (894 Dkt. 71-1 at
27 (citing In re Hoffman-La Roche, 587 F.3d 1333, 1336 (Fed. Cir. 2009)).) This District has
much less interest: although Rockstar claims “to have substantial ties to Texas, their
headquarters appear to be in Canada.” (Id.) Rejecting the arguments Rockstar makes here, the
Northern District found the remaining public interest factors “are either neutral or favor Google”
because both “cases are in early stages,” much evidence is in California, and each “forum is
familiar with patent law, and both have similar court congestion and time to trial.” (Id. at 28.)
II.

In the Alternative, the Court Should Stay This Case
Should the Court decline to transfer venue to the Northern District of California, the

Court should stay this action pending final resolution of the Google Action. Rockstar argues that
it is not subject to personal jurisdiction in the Northern District (Opp. at 6), but the Northern
District itself has already resolved that issue, against Rockstar. (894 Dkt. 71-1 at 19-20.)
Rockstar’s remaining objections to a stay are similarly meritless.
A.

The Google Action Will Resolve Major Issues in Dispute

As the Northern District already found, the Google Action will resolve major issues in
this case. (Id. at 26.) Rockstar only briefly argues otherwise, and those arguments fall flat.
Rockstar first contends that “Samsung has not agreed to be bound” by resolution of the Google
action, but that is irrelevant if the Google Action itself would resolve major issues here, which

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the Northern District has already found. (Opp. at 5; 894 Dkt. 71-1 at 26.) Rockstar also suggests
that “individualized questions of damages” might remain (Opp. at 6), but this is always true in
every customer suit; if damages issues were sufficient to avoid consolidating duplicative
litigation under the customer-suit exception, no litigation could ever fall under the customer-suit
exception. See Spread Spectrum Screening LLC v. Eastman Kodak Co., 657 F.3d 1349, 1358
(Fed. Cir. 2011). Finally, Rockstar briefly mentions “major, hardware-specific issues raised by
Rockstar’s infringement claims against Samsung”—but fails to describe them. (Opp. at 6.)
B.

The Customer-Suit Exception Applies to Google’s Customers

After targeting only Android OEMs and asserting infringement only by Android devices,
Rockstar now tries to run from its prior allegations, stating that “this case is not about
Android.” (Opp. at 4.) But this case is about Android: Rockstar sued only Android OEMs,
accused only Android devices (Mot. at 2), and Rockstar’s infringement contentions cite directly
to code excerpts from Google’s Android website. (Madigan Decl. Ex. 5.) As a result, the
“relationship between Google and the [Texas] defendants is one of manufacturer and customer”
and “the customer-suit exception to the first-to-file rule would apply.” (894 Dkt. 71-1 at 24.) If
the Court declines transfer, it should stay this action pending resolution of the Google Action.1
CONCLUSION
For the forgoing reasons, this Court should transfer this matter to the Northern District of
California or, in the alternative, stay this case pending the resolution of that action.
1

Rockstar claims that Spread Spectrum limits the exception to “mere resellers.” (Opp.
at 4.) But “the guiding principles in the customer suit exception cases are efficiency and judicial
economy.” Spread Spectrum, 657 F.3d at 1357 (citation omitted). Spread Spectrum clarified
that the manufacturer suit “need only have the potential to resolve the ‘major issues’ concerning
the claims against the customer—not every issue—in order to justify a stay of the customer
suits.” Id. at 1358. Courts routinely find stay appropriate where the manufacturer’s technology
is the focal point of the litigation, as in where the manufacturer “has primary and final control of
any design and manufacturing process that might infringe upon [plaintiff]’s patents.” Delphi
Corp. v. Auto. Techs. Int’l, Inc., 2008 WL 2941116, at *4 (E.D. Mich. July 25, 2008).
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Dated: April 25, 2014

Respectfully submitted,

J. Mark Mann (State Bar No. 12926150)
[e-mail]
G. Blake Thompson (State Bar No. 24042033)
[e-mail]
MANN | TINDEL | THOMPSON
300 West Main Street
Henderson, Texas 75652
[phone]
[phone] facsimile
Charles K. Verhoeven (Cal. Bar. No. 170151)
Sean Pak (Cal. Bar. No. 2190323)
quinn-samsung-e.d.tex.-13-0900
@quinnemanuel.com
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
50 California Street, 22nd Floor
San Francisco, California 94111
[phone]
[phone] facsimile
Kevin P.B. Johnson (Cal. Bar No. 177129)
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
555 Twin Dolphin Dr., 5th Floor
Redwood Shores, California 94065
[phone]
[phone] facsimile

/s/ J. Mark Mann
J. Mark Mann (State Bar No. 12926150)
[e-mail]
G. Blake Thompson (State Bar No. 24042033)
[e-mail]
MANN | TINDEL | THOMPSON
300 West Main Street
Henderson, Texas 75652
[phone]
[phone] facsimile
Charles K. Verhoeven (Cal. Bar. No. 170151)
Sean Pak (Cal. Bar No. 219032)
Amy H. Candido (Cal. Bar No. 237829)
Matthew S. Warren (Cal. Bar No. 230565)
quinn-google-e.d.tex.-13-00900
@quinnemanuel.com
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
50 California Street, 22nd Floor
San Francisco, California 94111
[phone]
[phone] facsimile
Attorneys for Defendant Google Inc.

Joseph Milowic III (NY Bar. No. 4,622,221)
QUINN EMANUEL URQUHART & SULLIVAN, LLP
51 Madison Avenue, 22nd Floor
New York, New York 10010
[phone]
[phone] facsimile
Attorneys for Defendants Samsung Electronics, Co., Ltd.,
Samsung Electronics America, Inc., and Samsung
Telecommunications America, LLC

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CERTIFICATE OF SERVICE
I hereby certify that all counsel of record have consented to electronic service and are
being served with a copy of this document via the Court’s CM/ECF system per Local Rule CV5(a)(3) on April 25, 2014.
/s/ J. Mark Mann
J. Mark Mann

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