Sprint Communications Company L.P. v. Cox Communications, Inc. et al

Filing 58

MEMORANDUM AND ORDER. IT IS THEREFORE ORDERED BY THE COURT that Defendant Cox Communications Inc.'s Motion to Dismiss under Rule 12(b)(2) and 12(b)(3) for Lack of Personal Jurisdiction and Improper Venue (Doc. 31) is denied.IT IS FURTHER ORDERE D that the Defendants' Motion to Transfer (Doc. 33) is granted. The Clerk is directed to transfer this case to the United States District Court for the District of Delaware. IT IS FURTHER ORDERED that Defendant Cox Communications, Inc. and Cox Communications Kansas, LLC's motions to dismiss the original complaint (Docs. 18 and 20) are denied as moot. Signed by District Judge Julie A. Robinson on 9/14/2012. (pp)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
SPRINT COMMUNICATIONS, L.P.,

)
)
Plaintiff,
)
)
v.
)
)
COX COMMUNICATIONS, INC.,
)
COX COMMUNICATIONS KANSAS, )
LLC, COX KANSAS TELCOM, LLC, )
and, COXCOM, LLC.,
)
)
Defendants.
)
___________________________________ )

Case No. 11-2683-JAR-KMH

MEMORANDUM AND ORDER
Before the Court is Defendant Cox Communications Inc.’s (“CCI”) Motion to Dismiss
under Rule 12(b)(2) and 12(b)(3) for Lack of Personal Jurisdiction and Improper Venue (Doc.
31) and Defendants CCI, Cox Communications Kansas, LLC, Cox Kansas Telcom, LLC, and
CoxCom, LLC’s Motion to Transfer (Doc. 33). The Court granted Sprint’s request to conduct
jurisdictional discovery and the Court held an evidentiary hearing on August 9, 2012. The Court
has considered the briefs, as well as the evidence submitted with the briefs and at the evidentiary
hearing, and is prepared to rule. As described more fully below, the Court finds CCI is not
subject to personal jurisdiction, but rather than grant the motion to dismiss, the Court grants
Defendants’ motion to transfer this case to the United States District Court for the District of
Delaware.
I.

Background
Plaintiff Sprint Communications Company L.P. (“Sprint”) is a telecommunications

company incorporated in Delaware with its principal place of business in Overland Park, Kansas.
Among its patent portfolio is a series of patents relating to voice-over-packet (“VoP”)

telecommunications technology. Sprint alleges in the Amended Complaint that Defendants
made, used, offered to sell, and/or sold (and continue to make, use, offer to sell, and/or sell)
broadband and/or packet-based telephony products and services that infringe Sprint’s Asserted
Patents without Sprint’s permission.
On April 16, 2012, Defendants filed a declaratory judgment action for noninfringement
in the United States District Court for the District of Delaware, along with several other Cox
entities not named in this suit. Sprint notified this Court that on July 9, 2012, it filed a motion to
sever and transfer the declaratory judgment action from Delaware to this Court (Doc. 45). CCI
contends that it is not amenable to suit in the District of Kansas and that any adjudication of
patent infringement by the Cox companies must include CCI and therefore should be
consolidated in one action in the District of Delaware, where all of the Cox entities, including
CCI and the Cox subsidiaries not named in this action, are subject to suit.
It is uncontroverted that CCI is incorporated in Delaware and maintains its principal
place of business in Atlanta, Georgia. All Defendants are incorporated in Delaware. CCI is a
subsidiary of Cox Enterprises, Inc. and acts as a holding company, providing certain corporate
services to the Cox subsidiaries in the communications industry. Cox Enterprises, Inc. is not a
party to this action. CCI in turn owns Co-Defendant CoxCom but does not directly own or
finance Co-Defendants Cox Kansas Telcom or Cox Communications Kansas. CCI is not
registered to do business in Kansas and it does not maintain an office here. CCI is a separate
legal entity from the other Defendants. CCI concedes that it hosts the cox.com website and that
it owns all copyrights, trade and service marks, and patents for its affiliates. CCI also admits that
it provides a marketing platform and administrative infrastructure to Cox Kansas Telcom and

2

Cox Communications Kansas, providing “back office functions” for all of its subsidiaries.
Sprint’s Jurisdictional Evidence
Sprint alleges the following jurisdictional facts in the Amended Complaint to support its
contention that CCI is subject to specific jurisdiction: (1) CCI makes, uses, or offers for sale
infringing products and/or services in Kansas, including the “Cox Digital Telephone,” Cox’s
“SIP Trunking” service, and “other related telephony services”; (2) CCI receives revenues from
the sale of telephony services in Kansas, including those services offered for sale by the Cox
subsidiaries; (3) CCI is the registered owner of the “cox.com” domain, which hosts Cox websites
that advertise, market, sell, and offer to sell the allegedly infringing products or services in
Kansas; (4) one of the Kansas subsidiaries’ websites includes a copyright notice identifying CCI
as the owner of the copyrighted website; (5) current or former employees of CCI participated in
the design, development, funding, testing, and use of Cox’s nationwide telephone network; (6)
CCI directs, controls, and issues Cox’s nationwide telephony tariffing, including tariffs
submitted by CCI and the Kansas subsidiaries to Kansas regulatory authorities; (7) CCI instructs
users of its telephony services in Kansas on how to use the network in an infringing manner; (8)
and CCI leads, manages, and controls the marketing and advertising efforts of the allegedly
infringing products to Kansas residents.
Sprint has also submitted evidence on the briefs to support this Court’s jurisdiction.
First, Sprint submits the declaration of Bruce McLeod, who is the Executive Director of Service
and Enterprise Architecture for CCI.1 His declaration was filed in support of a successful motion
to transfer filed by CCI in a different patent infringement case in the Eastern District of
1
The Court agrees with Sprint that the McLeod Declaration was properly submitted as an exhibit attached to
Sprint’s brief, and the Court considers it in deciding this motion.

3

Virginia.2 Like this case, Bear Creek alleged claims of patent infringement related to VoP
enabling technologies. Cox moved to transfer to the Northern District of Georgia, citing its ties
to Atlanta, Georgia and both sides’ lack of ties to the Eastern District of Virginia. McLeod
declared in support of that motion:
The Cox telephony system was designed and is managed on the
national level. In each region of operation, Cox offers its
telephony service to customers through local affiliates that operate
in each local market Cox serves. Similar to a hub and spoke
system, Cox operates as the hub in Atlanta, Georgia, connecting to
all of its local affiliates, which are the spokes. All of the research,
design, and development work to implement Cox’s telephony
system have been handled at the hub level in Atlanta, Georgia, not
at the local level (such as Virginia). The local affiliates (the
spokes) merely provide local marketing, sales, installation and
repair work in each local market.3
McLeod also asserts that “Cox’s Digital Telephone service was developed and designed by Cox
employees located at Cox’s headquarters in Atlanta, Georgia”4 and that “Cox coordinates the
nationwide sale, marketing, and financial operations of the Cox Digital Telephone service at its
business offices in Atlanta, Georgia.”5
Sprint alleges that CCI’s website advertises and markets products and services to Kansas
residents, allowing them to purchase products and services that include the Cox Digital
Telephone.6 The Cox Customer Service Agreement, available through the cox.com website,

2

The Court takes judicial notice of the docket sheet and filings in Bear Creek Techs., Inc. v. Cox Commc’ns,
Inc., Case. No. 111-00879-CMH (E.D. Va.).
3

Doc. 38, Ex. A-1 ¶ 5.

4

Id. ¶ 6.

5

Id. ¶ 11.

6

Doc. 38, Ex. A-5.

4

identifies the parties to the agreement as the customer and “Cox,” which it defines as “Cox
Communications and any Cox affiliate authorized to provide you with our services.”
Sprint has submitted three white papers regarding Cox’s transition to a VoP architecture
and its network configurations issued by “Cox Communications.”7 They highlight Cox’s
centralized operations.
Plaintiff submitted evidence on the briefs and at the hearing that CCI owns equipment in
Kansas that is used in Cox’s telecommunications system. This evidence consists of Sedgwick
County-created tax records.8 These records show that CCI pays personal property and real estate
taxes in Kansas for Cox business property.9 The personal property tax statements are signed by
CCI’s tax manager in the “Owner” signature block.
Sprint also submits evidence that “Cox Communications” has employees in Kansas,
including executives,10 that it posts jobs on its website to be performed in Kansas,11 and that CCI
has applied to the Kansas Corporation Commission for tariffs.12
CCI’s Jurisdictional Evidence
At the August 13th hearing, Robin Sangston, Esq., the Vice President and Chief
Compliance Officer for CCI in Atlanta, Georgia, testified about the issues related to the motion
to dismiss, including Cox’s corporate organization and CCI’s contacts with the State of Kansas.

7

Doc. 38, Ex. A-2.

8

Doc. 38, Ex. A-3.

9

Hrg. Pl. Ex. I, J; Doc. 38, Ex. A-4.

10

Doc. 38, Ex. A-7.

11

Doc. 38, Ex. A-8.

12

Doc. 38, Ex. A-9.

5

Sangston testified that the Cox family consists of seventy separate franchises with
CoxCom as the operating business. Cox made a deliberate decision to form “drop down
subsidiaries” to hold the telecommunications licenses so that the parent corporations are not
engaged in the day-to-day operation of cable business.
Cox Communications Kansas manages the network and has a shared services agreement
with Cox Kansas Telcom to provide cable services. Accordingly, Sangston testified that CCI
conducts no business in Kansas, either directly or through a d/b/a. CCI neither owns nor
operates any telecommunications or cable systems. Sangston also testified that a certificate of
public convenience and necessity is required in each state to authorize a provider to sell
telephone services to the public. Typically, a franchise applies to the Secretary of State’s office
and must show that the entity is financially, technically, and managerially capable of providing
that service. Sangston testified that Cox’s certificate in Kansas was granted largely to have
phone offering competitive to Southwestern Bell and Sprint. Kansas requires that Cox submit
tariffs that lay out prices and terms of sale; they are filed under the name “Cox Communications
Kansas, LLC.” Kansas Telcom has interconnection agreements with Sprint and Southwestern
Bell to permit the traffic of Cox customers to ride over their networks.
Sangston testified that Cox Communications Kansas owns the equipment and property
used in Kansas and that it employs all 400 of the Kansas employees. Sangston
addressed the Personal Property and Asset Detail Listing that Sprint relied on in its motion,
showing that CCI is the owner of certain equipment used to provide digital telephone services.
She spoke to an individual in CCI’s tax department, who explained that it received this document
from Sedgwick County and that the indication on that form that CCI owns the property is

6

incorrect; she attributes the error to the fact that the taxing authority receives checks from CCI.
Sangston testified that Cox Communications Kansas actually owns this property, based on CCI’s
internal documents and ledgers. CCI submitted Exhibit 2 at the hearing, which is the general
ledger for Cox Communications Kansas, showing that it is the corporate entity responsible for
paying taxes on equipment. Sangston maintains that CCI owns no personal property in Kansas.
Sangston responded to Sprint’s evidence that Sedgwick County considers CCI to be the
owner of certain real property in the County. She testified that the tax statement submitted by
Sprint pertains to an office building in Wichita, Kansas that CoxCom acquired in 2000. She
testified that the owner’s name on this statement is incorrect. Exhibit 4 produced by CCI at the
hearing is the warranty deed supporting this testimony and the title records confirm that Cox
Communications Kansas currently owns the property.
Sangston further testified that CCI conducts all “back office” functions for the Cox Com
subsidiaries, including issuing tax checks. CCI issues the checks and the funds are then charged
back to the applicable subsidiary. The charge is reflected on the financial statements of the
subsidiary. She testified that no income from the Kansas subsidiaries flows up to CCI. She
explained that it would be too cumbersome to have twenty-four different financial statements, so
Cox rolls up the local market revenues for purposes of preparing the financial statements, but
then they are charged back. She stated that the revenues actually do “hit” Cox Com, but only for
purposes of preparing the consolidated “look” for reporting purposes. CCI submitted the
consolidated Kansas corporate income tax return for Cox Enterprises, Inc. and its subsidiaries.13
Sangston explained that the parent company completes a consolidated return and then each

13

Hrg. Def. Ex. 6.

7

separate entity charges back the tax. The return for 2010 shows no reportable income and no
corporate income tax owed for CCI in Kansas in 2010.
Cox Communications Kansas employs about 400 individuals and has a completely
separate management team from CCI; it pays its own employees.
With respect to telephony equipment, Sangston testified that CCI provides a
“consultative and supply line service.” She explained that the local markets must purchase and
pay for their own equipment, relying on a consultative role provided by CCI. She explained that
certain purchases may allow for a volume discount, in which case CCI may buy in volume and
allow the subsidiaries to purchase from that inventory.
CCI provides technical and engineering support to the subsidiaries. Like McLeod,
Sangston characterized the relationship between CCI and the local affiliates as a “hub and
spoke” system with respect to the design and architecture of the telephone system. Local teams
of technicians are the spokes that draw support from the hub in Atlanta. Cox Communications
Kansas employs a regional Vice President of Field Operations, who along with a 100-person
team, is responsible for installing, maintaining, and servicing equipment in the region. There is a
regional operations center (the “ROC”) in Oklahoma that is able to determine network problems
on a regional scale and notify the Vice President of Field Operations and his team. CCI also has
a network operations center (the “NOC”), consisting of CCI employees in Atlanta, that provides
service if there is a network problem that exceeds a regional scope. The NOC “looks out” on the
Cox network and notifies local teams about network problems such as congestion, or hacking
issues that local technicians would not be able to identify as readily.
Sangston testified about the marketing structure between the Cox entities. She testified

8

about local marketing efforts that are required based on the different competitors in the various
local markets. These efforts include customer care centers, retail solution stores, call center
phone numbers, door to door sales, and e-commerce marketing strategies. The marketing team
in Kansas is supported by a corporate marketing and sales department in Atlanta that devises
national campaigns available to the local markets.
The cox.com website is owned by CCI. CCI also helps with the development of cox.com
templates and sets up the home page for the cox.com site. The cox.com site is managed by CCI
employees, but the local markets each have their own webmaster that supplies sales and
marketing content for the local page. Kansas customers may purchase Cox digital telephone
services through the cox.com website by navigating to the local webpage. The Kansas webpage
is directed to Kansas residents and there are separate webpages for each of the particular cities in
Kansas that offer Cox services. Each local page allows customers to buy, modify an existing
account, or create a new account. Purchase information is housed in a Kansas database and the
order is fulfilled by local Kansas employees. Kansas customers’ bills are generated by a central
invoicing process by CCI, but payments are made to the local Kansas affiliate.
II.

Personal Jurisdiction
A.

Standard

Because this is a patent infringement suit, the Court must apply the law of the Federal
Circuit in deciding the jurisdictional issue.14 Plaintiff may demonstrate personal jurisdiction
over an out-of-state defendant if “the relevant state’s long-arm statute permits the assertion of

14
See Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324, 1328 (Fed. Cir. 2008); Nuance Commcn’s,
Inc. v. Abbyy Software House, 626 F.3d 1222, 1230 (Fed. Cir. 2010).

9

jurisdiction without violating federal due process.”15 The Kansas long-arm statute is construed
liberally so as to allow jurisdiction to the full extent permitted by due process, therefore the
Court proceeds directly to the constitutional analysis.16 For the court’s exercise of jurisdiction to
comport with due process, the defendant must have “minimum contacts” with the State of
Kansas, “such that having to defend a lawsuit there would not ‘offend traditional notions of fair
play and substantial justice.’”17 “Minimum contacts” can be established in one of two ways,
either generally or specifically for lawsuits based on the forum-related activities:
General jurisdiction is based on an out-of-state defendant’s
“continuous and systematic” contacts with the forum state, and
does not require that the claim be related to those contacts.
Specific jurisdiction, on the other hand, is premised on something
of a quid pro quo: in exchange for “benefitting” from some
purposive conduct directed at the forum state, a party is deemed to
consent to the exercise of jurisdiction for claims related to those
contacts.18
Here, Sprint did not assert in its response brief that this Court has general jurisdiction; instead it
argued that the Court has specific jurisdiction over CCI. At the hearing, Sprint argued that
general jurisdiction is “alive and kicking,” because certain evidence discovered since briefing
calls into question CCI’s jurisdictional contentions at the time the motion to dismiss was filed.
B.

Discussion

CCI argues in its motion to dismiss that Sprint is unable to establish it is subject to

15

Nuance Commcn’s, Inc., 626 F.3d at 1230.

16

Fed. Rural Elec. Ins. Corp. v. Kootenai Elec. Coop., 17 F.3d 1302, 1305 (10th Cir. 1994) (citing Volt
Delta Res., Inc. v. Devine, 740 P.2d 1089, 1092 (Kan. 1987)).
17

Dudnikov v. Chalk & Vermillion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008) (quoting Int’l Shoe
Co. v. Washington, 326 U.S. 310, 316 (1945)).
18

Id. at 1078.

10

personal jurisdiction in Kansas. CCI urges it is merely the grandparent corporation to Cox
Communications Kansas and Cox Kansas Telcom, performing only administrative and support
functions to those affiliates in Kansas. It further argues that none of the Kansas activities cited
by Sprint arise out of or relate to the patent infringement claims in this case—Sprint is unable to
show that CCI’s activities in Kansas are related to making, using, selling, or offering for sale the
allegedly infringing VoP products or services. Sprint argues that CCI purposefully directed its
activities at residents of Kansas through the cox.com website, its interaction with the Kansas
subsidiaries, and by activities such as paying taxes in Kansas, sending invoices to Kansas
customers, and maintaining the Cox Digital Telephone network.
General jurisdiction exists over a nonresident defendant whose contacts with the state are
“continuous and systematic.”19 General jurisdiction is conferred by these activities even when
the cause of action has no relationship with those contacts.”20 With respect to specific
jurisdiction, the Federal Circuit applies the following test to determine if specific jurisdiction
exists: (1) whether the defendant purposefully directed activities at residents of the forum; (2)
whether the claim arises out of or relates to those activities; and (3) whether assertion of personal
jurisdiction is reasonable and fair.21 One way a defendant can be subject to specific jurisdiction
is “by sending its goods rather than its agents . . . where the defendant can be said to have
targeted the forum; as a general rule, it is not enough that the defendant might have predicted

19

Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984).

20

Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1200 (Fed. Cir. 2003).

21

E.g., Avocent Huntsville Corp., 552 F.3d at 1332; Nuance Commcn’s, Inc., 626 F.3d at 1231.

11

that its good will reach the forum State.”22 Under this “stream of commerce theory,” the Court
must determine whether the defendant “has followed a course of conduct directed at the society
or economy existing within the given sovereign, so that the sovereign has the power to subject
the defendant to judgment concerning that conduct.”23
While Sprint resurrected general jurisdiction at the hearing, it spent little time developing
an argument about how CCI is subject to general jurisdiction either at the hearing or in its
posthearing brief. The Court will briefly address general jurisdiction in conjunction with its
minimum contacts analysis. Since the Court allowed jurisdictional discovery and conducted an
evidentiary hearing, Sprint bears the burden of proving personal jurisdiction exists by a
preponderance of the evidence.24
1.

CCI’s Contacts with Kansas

Sprint points to several activities it contends CCI purposefully directed at residents of
Kansas, including collecting revenue, hosting the Cox website, designing and marketing the Cox
network, owning property, paying taxes, and filing corporate and regulatory filings on behalf of
the Cox subsidiaries in Kansas. CCI contends that it is not licensed to do business in Kansas and
it does not sell or offer to sell any allegedly infringing product; such activity is performed by the
Kansas subsidiaries. CCI insists that it is a separate legal entity and that its support of the other
named defendants amounts to nothing more than administrative, technical, and legal functions.
Sprint responds that CCI exerts control over the subsidiaries and collects revenue on their behalf.

22

J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2788 (2011).

23

Id. at 2789.

24
See Pieczenik v. Dyax Corp., 265 F.3d 1329, 1334 (Fed. Cir. 2001); Wempe v. Sunrise Med. HHG, Inc.,
61 F. Supp. 2d 1165, 1167 (D. Kan. 1999).

12

The Court conducted a hearing on this motion primarily because CCI’s role in Cox’s corporate
organization and degree of control over the Kansas subsidiaries appeared to be in dispute based
on the allegations in the Amended Complaint and the evidence submitted on the briefs. The
Court resolves these conflicts as described more fully below and finds that Sprint is unable to
show by a preponderance of the evidence that CCI has sufficient contacts with Kansas under
either a general or specific jurisdictional inquiry.
a.

CCI’s Interaction with its Subsidiaries

The Court begins its analysis with the well-settled proposition that a “holding or parent
company has a separate corporate existence from its subsidiary and is thus treated separately in
the absence of circumstances justifying the disregard of the corporate entity.”25 Sprint does not
rely on an alter ego theory for subjecting CCI to jurisdiction,26 but instead argues that CCI
controls the actions of its subsidiaries, including those in Kansas, by taking part in the design,
development, funding and testing of Cox’s nationwide phone network and by managing and
directing the marketing and advertising for Cox’s telephony products and services. CCI
contends that it is a mere holding company and does not sell or use any of the products and
services at issue in the patent claims—those are sold exclusively through the Kansas
subsidiaries.
Sprint cites Dainippon Screen Manufacturing Co. v. CFMT, Inc., for the proposition that
a patent holding company cannot be insulated from suit when it engages in activities sufficient to

25

Quarles v. Fuqua Indus., Inc., 504 F.2d 1358, 1362 (10th Cir. 1974).

26

See Cotracom Commodity Trading AG v. Seaboard Corp., 94 F. Supp. 2d 1189, 1195 (D. Kan. 2000)
(evaluating whether the defendant is subject to jurisdiction under an alter ego theory).

13

create personal jurisdiction.27 In Dainippon, agents of the holding company issued threats of
infringement, licensed another defendant to make, use, and sell products covered by the patent at
issue, and maintained sales agents in the forum state to fulfill that purpose.28 In addition, the
holding company derived substantial revenues and attempted to negotiate a sublicense with the
plaintiff.29 With respect to the parent-subsidiary relationship, the court explained:
Stripped to its essentials, CFM contends that a parent company can
incorporate a holding company in another state, transfer its patents
to the holding company, arrange to have those patents licensed
back to itself by virtue of its complete control over the holding
company, and threaten its competitors with infringement without
fear of being a declaratory judgment defendant, save perhaps in the
state of incorporation of the holding company. This argument
qualifies for one of our “chutzpah” awards. While a patent holding
subsidiary is a legitimate creature and may provide certain
business advantages, it cannot fairly be used to insulate patent
owners from defending declaratory judgment actions in those fora
where its parent company operates under the patent and engages in
activities sufficient to create personal jurisdiction and declaratory
judgment jurisdiction. After considering all of the relevant factors,
we conclude that the court erred in holding that it lacked personal
jurisdiction over defendant CFMT.30
Unlike the organizational structure in Dainippon, CCI appears to be a grandparent corporation to
the Kansas subsidiaries and a parent corporation to CoxCom. It is not merely a patent holding
company, but also provides administrative, technical, and legal support to its indirect

27

142 F.3d 1266, 1271 (Fed. Cir. 1998).

28

Id. at 1271.

29

Id.

30

Id. (citations and footnotes omitted).

14

subsidiaries.31 There is no evidence in this case that CCI maintains any employees in Kansas, or
that it collects any revenue from Kansas residents.
Merely providing legal representation and administrative services to a subsidiary will not
subject a parent company to personal jurisdiction.32 Yet Sprint contends that CCI wields much
more control than that over the Kansas subsidiaries. The cases that consider the degree of
control necessary for a parent corporation to be subject to jurisdiction based on the actions of its
subsidiaries require “substantial control and direction of the subsidiary.”33 In addition to support
services, Sprint points to the McLeod declaration, which suggests CCI also controls the research,
design, and development work to implement Cox’s telephony system and that the affiliates
merely provide local marketing, sales, installation and repair work in each local market.34
McLeod also asserts that “Cox’s Digital Telephone service was developed and designed by Cox
employees located at Cox’s headquarters in Atlanta, Georgia”35 and that “Cox coordinates the

31

It is also dissimilar to the defendants’ relationship in WesternGeco L.L.C. v. Ion Geophysical Corp., 776
F. Supp. 2d 342 (S.D. Tex. 2011), which involved a collaborative relationship between sister companies and the
nonresident defendant’s sale, advertisement, and shipment of products to forum residents. Id. at 355, 358–59.
32

See, e.g., Am. Med. Sys., Inc. v. Biolitec, Inc., 604 F. Supp. 2d 325, 330 (D. Mass. 2009) (finding common
employees insufficient to establish minimum contacts and declining to pierce the corporate veil because evidence
established a traditional parent-subsidiary relationship); Ergo Licensing, LLC v. Cardinal Health, Inc., No. 08-259P-S, 2009 WL 2021926, at *5 & n.3 (D. Maine July 13, 2009) (stating in patent case that merely providing legal
representation and support functions to a subsidiary does not confer jurisdiction); Hill-Rom Servs., Inc. v. Verses
Tech., Inc., Nos. 1:03CV1227, 1:04CV1116, 2006 WL 1540851, at *8 (M.D.N.C. June 2, 2006) (distinguishing
Dainippon on the basis that the parent company did not control the subsidiaries’ activities nor did it oversee the
manufacturing and distribution of an allegedly infringing product); cf. QR Spex, Inc. v. Motorola, Inc., 507 F. Supp.
2d 650, 663 (E.D. Tex. 2007) (declining to find personal jurisdiction for parent company in patent case under alter
ego theory, despite the fact that it provided oversight and marketing, owned 100% of the subsidiary’s stock, and
shared common officers).
33

Ablulimir v. U-Haul Co. of Kan., No. 11-4014-EFM, 2011 WL 2746094, at *3 (D. Kan. July 13, 2011);
Hill-Rom Servs., Inc., 2006 WL 1540851, at *7; see also Dainippon, 142 F.3d at 1271 (finding jurisdiction where
holding company exerted control over its parent).
34

Doc. 38, Ex. A-1 ¶ 5.

35

Id. ¶ 6.

15

nationwide sale, marketing, and financial operations of the Cox Digital Telephone service.” CCI
downplays the significance of these contributions, citing Sangston’s testimony that the hub and
spoke organization merely refers to the design and architecture of the telephone system. The
national support that CCI provides to its local affiliates amounts to network support, rather than
any direct contact with the local fora. Other than these back office functions, CCI contends it
has no presence in Kansas—it owns no property or equipment, and does not maintain an office
or any employees there.
The Court agrees with CCI that its relationship with the Kansas subsidiaries is
insufficient to establish purposefully directed activity. Sangston, who is the Vice President and
Chief Compliance Officer for CCI, testified at length about Cox’s corporate structure. Her
testimony established that CCI conducts no business directly in Kansas and that it merely
provides “back office functions” for the local CoxCom subsidiaries. She discussed Cox’s history
and structure and how it made a deliberate decision to form “drop down subsidiaries” to hold the
telecommunications licenses in each state so that the parent corporations would not be engaged
in the day-to-day operation of cable business.
Sprint points to CCI’s activities of setting strategy, providing budget targets, “guiding
local marketing and sales teams,” providing network support, and purchasing equipment. But
the Court finds that Sangston’s testimony, and the exhibits admitted through her testimony,
establish that this control is insufficient to establish substantial control and direction.
While Sangston’s testimony and the advertising exhibits demonstrate that some national
marketing campaigns are made available to the local affiliates, the majority of marketing is
conducted at the local level. Sangston testified that Cox Communications Kansas has its own

16

marketing and sales team and that the marketing strategy differs among the Cox subsidiaries by
locale based on the competitors in each market. To the extent CCI is responsible for some
national advertising campaigns, it is an insufficient minimum contact with the State of Kansas,36
especially where, as here, CCI receives no Kansas revenue associated with this advertising. And
Sangston’s testimony that CCI sets strategy and provides budget targets for the subsidiaries is
consistent with her testimony that CCI merely provides back office functions, which the Court
finds falls short of substantial control and direction.
Sangston’s testimony about purchasing equipment made clear that CCI purchases
equipment only under circumstances where a volume discount would be applied, allowing the
subsidiaries to purchase their equipment from CCI instead of directly from the manufacturer.
These purchases are charged back to the subsidiaries, so they are not purchased for use by CCI.
And CCI’s network support is not sufficient to establish substantial control. Sangston testified
that CCI employees maintain the NOC in order to provide support in situations that are national
in scope. Otherwise, support is provided at the local or regional level. In short, the Court cannot
find by a preponderance of the evidence that CCI exerts such substantial control over the Kansas
subsidiaries that it should be subject to jurisdiction based on the subsidiaries’ activities in
Kansas.37
b.

Website

Sprint relies on CCI’s interactive website to establish purposeful direction, as well as

36

See Aero Prods. Int’l v. Intex Corp., No. 02-2590, 2002 WL 31109386, at *7 (N.D. Ill. Sept. 20, 2002).

37

Sprint’s reliance on Payless Shoesource, Inc. v. Genfoot Inc. is misplaced. The defendants in Payless did
not have an organizational relationship like the defendants in this case; it evaluated the defendant’s product sales to
its distributor under a traditional stream of commerce theory. No. 02-4160-JAR, 2004 WL 2182184, at *4 (D. Kan.
Sept. 21, 2004).

17

continuous and systematic contacts with Kansas. Because CCI hosts the local subsidiaries’
interactive websites, Sprint argues that it directly targets each of the local markets in which those
subsidiaries operate. CCI admittedly owns and hosts the cox.com website, where the Kansas
Defendants sell telephony products and services to Kansas customers. The screen shots of these
web pages demonstrate that they are unmistakably interactive and transaction-oriented. Kansas
customers can shop online for Cox digital telephone services on this website, which includes a
CCI copyright mark at the bottom of each web page. Kansas customers can also pay their bills
online. But the issue in this case is not whether the Kansas web pages located on the cox.com
site are interactive. Instead, the issue is whether the interactivity of those web pages may be
attributed to CCI for jurisdictional purposes. Sprint argues that CCI owns and controls the
website and therefore directly sells or offers to sell telephone services in Kansas by publishing
Kansas-specific content on its interactive website. CCI argues that the local subsidiaries are
exclusively responsible for local web page content and that all Internet purchases are directed
toward those local subsidiaries; CCI’s activities are akin to those of an Internet Service Provider
(“ISP”).
Some courts have adopted a sliding scale approach in deciding whether a defendant’s
internet activities support the exercise of personal jurisdiction.38 The sliding scale approach
requires the Court to consider the website’s level of interactivity in determining whether
personal jurisdiction lies.39 The Federal Circuit has acknowledged that some courts find the use

38

See Rainy Day Books, Inc. v. Rainy Day Books & Café, LLC. 186 F. Supp. 2d 1158, 1163 (D. Kan. 2002)
(citing Soma Med. Int'l v. Standard Chartered Bank, 196 F.3d 1292, 1296–97 (10th Cir.1999)).
39

Soma Med., 196 F.3d at 1296 (quoting Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119,
1123–24 (W.D. Pa.1997)).

18

of a “highly interactive, transaction-oriented website (as opposed to an ‘essentially passive’
website) by itself may support long-arm jurisdiction wherever the site is available to potential
customers for the purpose of doing business.”40 But neither the Federal Circuit nor the Tenth
Circuit have adopted this approach.41 The Tenth Circuit has held that “maintenance of a web site
does not in and of itself subject the owner or operator to personal jurisdiction, even for actions
relating to the site, simply because it can be accessed by residents of the forum state.”42 Acting
as an ISP and merely providing bandwidth to a party transacting business with the forum state, is
insufficient to establish purposeful availment.43 In the context of specific jurisdiction, there must
be an indication that the defendant “deliberately directed its message at an audience in the forum
state and intended harm to the plaintiff occurring primarily or particularly in the forum state.”44
For internet activity to establish general jurisdiction, there must be evidence that “‘the defendant
has actually and deliberately used its website to conduct commercial transactions on a sustained
basis with a substantial number of residents of the forum.’”45
CCI established at the hearing that Cox Communications Kansas, and not CCI, is
licensed to sell telephone services in Kansas. Sprint points to Sangston’s testimony about how a
Kansas consumer navigates through the cox.com website—in order to reach the Kansas web

40

Trintec Indus., Inc. v. Pedre Promotional Prods., Inc., 395 F.3d 1275, 1281 (Fed. Cir. 2005) (contrasting
this approach with the approach taken by some courts requiring “something more” beyond an interactive website).
41

See Trintec Indus., Inc., 395 F.3d at 1281; Shrader v. Biddinger, 633 F.3d 1235, 1242 n.5 (10th Cir.

2011).
42

Shrader, 633 F.3d at 1241.

43

ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 714–15 (4th Cir. 2002).

44

Shrader, 633 F.3d at 1241.

45

Id. at 1243 (quoting Smith v. Basin Park Hotel, Inc., 178 F. Supp. 2d 1224, 1235 (N.D. Okla. 2001)).

19

page, the consumer selects “Kansas” from the national map on the cox.com site and then clicks
through to the products or services sought after. Sprint contends that, in this way, CCI targets
Kansas residents by directing those consumers to the Kansas web pages, thereby “doing business
in Kansas.” But the Court finds this to be a tenuous assertion. Sangston’s testimony does not
support Sprint’s contention that CCI provides anything more than a platform, or template, upon
which the Kansas subsidiaries conduct business with Kansas residents. Only Cox
Communications Kansas is licensed to sell telephone services in Kansas and Sangston
established at the hearing that all requests for service are handled by the Kansas employees.
Indeed, Sangston testified that the cox.com website “is sort of, as I said, the template through
which you access to the local information to make your purchasing decisions.”46
Moreover, the bill payment process on the cox.com site supports Sangston’s testimony
that CCI itself does not interact with Kansas residents through the cox.com website. Sangston
testified that although CCI generates invoices for all customers, the payments are made to the
Kansas affiliates. Again, this testimony supports CCI’s characterization that CCI merely
provides back office functions to its indirect subsidiaries, including administrative activities such
as generating bills through its database.
Sprint argued in its initial brief that CCI is a party to the service agreement available on
the cox.com website for Kansas customers. Sprint refers to the definition of “Cox,” referenced
in the first paragraph of the agreement: “Cox Communications and any Cox affiliate authorized
to provide you with our services.” Sangston testified, however, that Cox Communications is a
d/b/a/ for CoxCom. CCI conducts no business and has no d/b/a/. The Court finds that this

46

Doc. 55, Hrg. Tr. at 85:21–24.

20

testimony makes clear that Kansas consumers do not enter into service agreements with CCI
through the cox.com website.
It is undisputed that CCI provided its indirect subsidiaries, in Kansas and elsewhere, with
the capability to transact business with Kansas residents. But the evidence supports CCI’s
contention that CCI did not maintain the cox.com for the purpose of itself transacting business in
Kansas. Instead, it merely enabled the Kansas affiliates to sell the Cox products and services in
the Kansas market and the Kansas consumers to pay their bills to the Kansas affiliates online.47
The evidence shows that CCI was not responsible for the content of the local Kansas web pages,
nor, as discussed below, did it collect revenue from the sales made by the Kansas subsidiaries.48
The Court finds that CCI’s role as the cox.com owner was merely passive; the interactivity of the
website is attributable to the local subsidiaries’ activities. For this reason, the Court finds that
the cox.com website does not establish contacts sufficient for general or specific jurisdiction in
this case.
c.

Revenue

Sprint alleges that CCI collects revenues from the sale of digital telephone products and
services in Kansas. Sprint relies on the Federal Circuit’s decision in Nuance Communications,
Inc. v. Abbyy Software House to support its position that when a holding company receives
profits from the sale of infringing technology in the forum state, it satisfies the purposeful

47

See ALS Scan, Inc., 293 F.3d at 714–15.

48

See Trintec Indus., Inc. v. Pedre Promotional Prods., Inc., 395 F.3d 1275, 1281 (Fed. Cir. 2005)
(discussing the importance of control over the website in determining personal jurisdiction); CIVIX-DDI v. Microsoft
Corp., 52 U.S.P.Q2d 1501, 1999 U.S. Dist. LEXIS 15230, at *14 (D. Colo. Sept. 30, 1999) (finding the subsidiary,
and not the parent company, controlled or owned the web site in question and that parent must be viewed as
“separate an autonomous entity”).

21

direction prong.49 In that case, the Federal Circuit found that the defendant deliberately engaged
in significant activities in the forum state because the co-defendants were commonly owned
sister companies operating under consolidated management, the purported infringement occurred
in the forum state, an agreement existed with the sister company to provide assistance in the
allegedly infringing activity in the forum state, and 95% of the profits from the sale of allegedly
infringing products flowed to the defendant.50
CCI conceded in its initial briefs that it receives profits from the sale of the allegedly
infringing products in Kansas. But at the hearing, it produced evidence that none of this revenue
flowed up to CCI. Nuance suggests that when the overwhelming majority of profits flow to the
holding company, in addition to other deliberate activities in the forum state, it may be sufficient
to show that the defendant purposefully directed its activities there. There is no evidence in this
case that an overwhelming majority of profits flow to CCI. Instead, the consolidated tax returns
establish no taxable income to CCI from Kansas. Sprint attempts to impeach Sangston’s
testimony on this point with her deposition testimony that the subsidiaries’ revenue is rolled up
into a consolidated financial statement, but the Court does not find this testimony to be
inconsistent. When asked in her deposition if it was correct that CCI does not directly make
money on the sale of Cox Digital Telephone to Kansas residents, she testified: “Correct.”
Sangston’s testimony at her deposition and at the hearing consistently explained that all of the
subsidiaries’ revenue rolls up into a consolidated financial statement for accounting purposes so
that the ultimate parent, Cox Enterprises, can have a “consolidated look.”

49

626 F.3d 1222, 1232–33 (Fed. Cir. 2010).

50

Id. at 1232.

22

In sum, Sprint has presented no evidence upon which the Court could find by a
preponderance of the evidence that CCI collects and retains revenue from the sale of digital
telephone service in Kansas. To the extent revenue flows through CCI, it is only in the form of a
consolidated report.
d.

Property and Taxes

Sprint points to Sedgwick County tax records that indicate CCI as the owner of
equipment and land and that it is the payor of those taxes. But the evidence presented at the
hearing makes clear that this is but one more example of CCI’s back office functionality—it
issues the tax checks on behalf of the local subsidiaries and those amounts are then charged
back. Sangston’s testimony, as well as the ledgers submitted at the hearing, support this finding.
Sprint asserts in its posthearing brief that “[w]hether or not the subsidiaries are subsequently
billed for taxes paid by CCI is of no consequence.” But the Court finds that this fact is of
consequence given Cox’s organizational structure—this is one more function performed by CCI
in its role of providing technical, legal, and administrative support services. Sangston testified
that the Sedgwick County tax statement submitted by Sprint pertains to an office building in
Wichita, Kansas that CoxCom acquired in 2000, and that the owner’s name on this statement is
incorrect. Exhibit 4, the warranty deed and title records, supports Sangston’s testimony and
confirms that Cox Communications Kansas currently owns the property. The Court agrees that
the tax forms signed by a CCI employee in the “owner signature block” were prepared by the
County; the underlying documents show that the local subsidiary, not CCI, owns the property.
The Court finds that Sprint is unable to establish by a preponderance of the evidence that
CCI has contacts with Kansas sufficient to give rise to specific or general jurisdiction. To the

23

extent certain facts about Cox’s organizational structure and ownership of certain property in
Kansas was in question on the prehearing briefs, the Court finds that discovery and the
evidentiary hearing clarified that CCI does not exert substantial control and direction over its
indirect subsidiaries, does not conduct business through the cox.com website, and does not own
property or pay taxes in Kansas.51 Accordingly, CCI has not purposefully directed its activities
to residents of Kansas and does not have continuous and systematic contacts with Kansas.
2.

Arising out of or Relating to the Patent Infringement Claims

Sprint asserts direct patent infringement claims in the Amended Complaint, that “some
act of making, using, offering to sell, selling, or importing products or services by the defendant
constitutes an infringement of the presumptively valid patent named in the suit.”52 Therefore, the
patent infringement claims in this case must “arise out of and relate to the defendant’s alleged
manufacturing, using, or selling of the claimed invention” in order to establish specific
jurisdiction.53 CCI maintains that even assuming it has purposefully directed activities to the
State of Kansas, none of the ties to Kansas cited by Sprint arise out of or relate to the patent
infringement claims. Sprint points to the sales made through the cox.com website owned by CCI
and the equipment owned by CCI with which it “makes and uses” Sprint’s patents.
As described above, the evidence shows that CCI conducts no business in the State of
51

At the hearing, Sprint complained that CCI has taken inconsistent positions on some of the jurisdictional
facts and asks the Court to impose judicial estoppel on this basis. Judicial estoppel requires proof that a party
“succeeded in persuading a court to accept that party’s former position, ‘so that judicial acceptance of an
inconsistent position in a later proceeding would create the perception that either the first or the second court was
misled.’” Eastman v. Union Pac. R.R., 493 F.3d 1151, 1156 (10th Cir. 2007). CCI did not succeed in persuading
this Court to accept any former, inconsistent position it may have taken in the prehearing briefs, so this doctrine is
inapplicable under the circumstances of this case.
52

Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324, 1332 (Fed. Cir. 2008) (citing 35 U.S.C.

§ 271(a)).
53

Id.

24

Kansas. It is not licensed to sell digital telephone service and exists only as a back office
headquarters for its indirect subsidiaries. None of these back office functions arise out of or
relate to the direct infringement claims asserted in this case. For this additional reason, the Court
finds that Sprint cannot establish that this Court has jurisdiction over CCI.
III.

Venue
In this district, the standards for deciding a motion to dismiss under Rule 12(b)(3) for

improper venue are generally the same as those for deciding a motion to dismiss under Rule
12(b)(2) for lack of personal jurisdiction.54 Because the Court finds no personal jurisdiction over
CCI, the Rule 12(b)(3) motion is moot.
IV.

Motion to Transfer
The Court now must determine whether to dismiss CCI or grant Defendants’ motion to

transfer this matter to the District of Delaware, where both personal jurisdiction and venue are
proper.55 Under 28 U.S.C. § 1404(a): “For 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 or to any district or division to which all parties have
consented.” In deciding a motion to transfer in the Tenth Circuit,56 the Court is to weigh the
following discretionary factors:
the plaintiff's choice of forum; the accessibility of witnesses and
other sources of proof, including the availability of compulsory
process to insure attendance of witnesses; the cost of making the

54

Mohr v. Margolis, Ainsworth & Kinlaw Consulting, Inc., 434 F. Supp. 2d 1051, 1057–58 (D. Kan. 2006).

55

See 28 U.S.C. § 1406; Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466–67 (1962).

56

The law of the regional circuit applies to motions to transfer under § 1404(a). See In re Link_A_Media
Devices Corp., 662 F.3d 1221, 1223 (Fed. Cir. 2011).

25

necessary proof; questions as to the enforceability of a judgment if
one is obtained; relative advantages and obstacles to a fair trial;
difficulties that may arise from congested dockets; the possibility
of the existence of questions arising in the area of conflict of laws;
the advantage of having a local court determine questions of local
law; and[ ] all other considerations of a practical nature that make
a trial easy, expeditious and economical.57
The burden of proving that the existing forum is inconvenient lies with the moving party.58
The parties do not dispute whether this action “might have been brought” in Delaware.
All parties are incorporated in Delaware and Sprint does not dispute that it could have filed this
patent infringement suit in Delaware. Instead, the Court’s inquiry turns on the convenience of
the parties, guided by the relevant factors provided by the Tenth Circuit. “Merely shifting the
inconvenience from one side to the other, however, obviously is not a permissible justification
for a change of venue.”59
A.

Plaintiff’s Choice of Forum

“‘[U]nless the balance is strongly in favor of the movant[,] the plaintiff’s choice of forum
should rarely be disturbed.’”60 Courts may give this factor less weight where the plaintiff does
not reside in the forum, or whether the facts giving rise to the actions are not related or
connected to the forum.61 The Court finds this factor weighs against transfer. Sprint resides in
Kansas and the facts giving rise to this patent lawsuit are related to Kansas—Sprint alleges that

57

Emp’rs Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1167 (10th Cir. 2010) (quoting Chrysler
Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1516 (10th Cir. 1991)).
58

Scheidt v. Klein, 956 F.2d 963, 965 (10th Cir. 1992) (citing Chrysler Credit Corp., 928 F.2d at 1515).

59

Emp’rs Mut. Cas. Co., 618 F.3d at 1167.

60

Id. (quoting Scheidt, 956 F.2d at 965).

61

Id.

26

the remaining defendants make, use, offer to sell, and sell products and services in Kansas that
infringe Sprint’s patents. The Court finds that Plaintiff’s choice of forum in Kansas should not
be disturbed unless the balance of the remaining factors is strongly in favor of transfer.
Defendants suggest that Sprint’s incorporation in Delaware should weigh in favor of
transfer. But the cases on which Defendants rely are inapposite. They deal with the significance
of a party’s state of incorporation for purposes of either a personal jurisdiction analysis,62 or
transfer motions that are denied because the moving party fails to establish inconvenience. This
latter group of cases all give weight to the plaintiff’s choice of forum—a choice that is often
based on the plaintiff’s state of incorporation.63 These cases do not support Defendants’
argument here, which is in reverse: the case should be transferred to Delaware because all parties
are incorporated there, notwithstanding Sprint’s residence in Kansas, the fact that the claims
arose in Kansas, and that Sprint’s choice of forum under such circumstances should be given
weight. Defendants’ reliance on the parties’ state of incorporation in Delaware fails to
acknowledge that the burden of proof to show inconvenience is on Defendants, not on Sprint.
However, while Sprint’s incorporation in Delaware does not negate the weight accorded its
choice of forum in Kansas, this fact will be considered below in determining whether transfer is
in the best interest of judicial economy given that Delaware is the forum where all of the Cox

62

J. McIntyre Mach., Ltd. v. Micastro, 131 S. Ct. 2780, 2787 (2011).

63

E.g., Mallinckrodt, Inc. v. E-Z-Em Inc., 670 F. Supp. 2d 349, 356–57 (D. Del. 2009) (denying transfer
motion in part because the plaintiff’s decision to bring suit in Delaware should not be disturbed and the defendants’
incorporation in Delaware makes it difficult to argue for transfer to its preferred choice of venue); Praxair, Inc. v.
ATMI, Inc., No. Civ. 03-1158-SLR, 2004 WL 883395, at * (D. Del. Apr. 20, 2004) (denying motion to transfer,
finding plaintiff’s choice of forum should be honored, especially in light of the fact that Delaware is “both parties’
‘home turf’”); Intellectual Ventures I LLC v. Checkpoint Software Techs. Ltd., 797 F. Supp. 2d 472, 481–82 (D. Del.
2011); cf. BOC Grp. v. CVC Prods., Inc., No. Civ. A. No. 87-354-CMW, 1998 WL 62593, at *1–2 (D. Del. June 6,
1988) (granting motion to transfer where the defendant established that litigating in Delaware would cause it
financial hardship despite the fact that both parties were incorporated in Delaware).

27

entities may be sued.
B.

Accessibility of Witnesses and Sources and Cost of Proof

In considering the accessibility factor, “convenience of witnesses is the most important
factor in deciding a motion under § 1404(a).”64 Ease of access to documents is not usually as
important in patent infringement cases.65 To show inconvenience for witnesses, the movant
must: “(1) identify the witnesses and their locations; (2) ‘indicate the quality or materiality of
the[ir] testimony;’ and (3) ‘show[ ] that any such witnesses were unwilling to come to trial . . . [,]
that deposition testimony would be unsatisfactory[,] or that the use of compulsory process would
be necessary.’”66
Sprint has submitted evidence of its anticipated witnesses, most of whom are located in
the Kansas City metropolitan area. It has also submitted evidence that its documents related to
the asserted patents are located in Overland Park, Kansas. Defendants argue that their
documents and witnesses are spread across the country, and point out that Sprint’s principal
inventor is deceased and that much of the evidence is housed at the Patent and Trademark Office
in Washington, D.C, or with the Cox entities. But Defendants submit no evidence about the
potential witnesses who will be required to testify in this matter, whether they are subject to
compulsory process or whether their deposition testimony will be adequate. Conclusory
assertions are insufficient.67 Neither party submitted any evidence about the cost of proof,

64

65

See Nat’l Inst. for Strategic Tech. Acquisition & Commercialization v. Nissan N.A., Inc., No. 10-1346SAC, 2011 WL 915392, at *3 (D. Kan. Mar. 15, 2011).
66

Emp’rs Mut. Cas. Co., 618 F.3d at 1169.

67

Id.

28

although the evidence submitted by Sprint makes clear that it would be less costly for it to
litigate this matter in Kansas given how many witnesses are located here.68
The Court find these factors weigh against transfer, but notes that some of the witnesses
Sprint has identified are Sprint employees, not third-party witnesses, and that Sprint has not
established the “quality or materiality” of their anticipated testimony. The Court does not find
that this factor strongly weighs against transfer on this record.
C.

Enforceability of Judgment

As to this factor, the parties dispute whether this Court can enforce a judgment against
CCI, for the same reasons set forth in the motion to dismiss. Because the Court lacks personal
jurisdiction over CCI, it may not enforce a judgment against it. Because Delaware can enforce a
judgment against CCI, this factor weighs strongly in favor of transfer.
D.

Difficulties that May Arise from Congested Dockets

In considering this factor, “the most relevant statistics are the median time from filing to
disposition, median time from filing to trial, pending cases per judge, and average weighted
filings per judge.”69 These statistics show a less congested docket in Kansas as compared to
Delaware.70 Additionally, Sprint points out that this district has experience with the particular

68

Defendants mistakenly compare the burden of air travel for trial in this case as between the Philadelphia
airport, twenty miles from the Delaware court, and Wichita, Kansas. This matter was filed in the Kansas City,
Kansas division and Sprint has designated Kansas City as the place for trial. See Doc. 35 at 17; Doc. 26 at 22.
69

Emp’rs Mut. Cas. Co., 618 F.3d at 1169 (citations omitted).

70
Measured by weighted filings, Delaware has a substantially higher number of average weighted filings per
judge. See Adminstrative Office of the United States Courts, Federal Court Management Statistics, available at
http://www.uscourts.gov/Statistics/FederalCourtManagementStatistics/DistrictCourtsSep2011.aspx (Sept. 2011).

29

patents and underlying technology at issue in this case based on prior litigation.71 And there are
three related lawsuits pending in this district regarding the same patents and technology.72 The
undersigned denied without prejudice Sprint’s motion to consolidate this case with the other
three based on the pending motions at issue in this case that were not at issue in those cases. The
Court expects that these cases will likely be consolidated upon resolution of these motions, at
least for discovery.
The Court does not find that the existence of related cases standing alone weighs in favor
of transfer, as these cases will all be appealed to the Federal Circuit, ensuring against
inconsistent adjudications of the same patents.73 And the mere existence of a Court’s prior
experience with cases construing the same patents should not tip the balance in favor of denying
transfer.74 Finally, the statistical evidence does not evidence how quickly patent cases proceed to
trial in either district—Cox correctly notes that the Vonage case was pending for about two years
before it proceeded to trial. For all of these reasons, the Court finds that this factor is neutral.
The parties appear to agree that there are no issues here implicating conflict of laws or
facts that would make it advantageous for this Court to determine questions of local law. And
the Court is unable to find on this record any obstacle to a fair trial in either venue. So the Court

71

Sprint Comm’cns Co. v. Big River Tele. Co., Case No. 08-2046-JWL-JPO (D. Kan.); Sprint Comm’cns
Co. v. Vonage Holdings Corp., Case No. 05-2433-JWL.
72

Case Nos. 11-2684-KHV, 11-2685-RDR, and 11-2686-JTM. See Trading Techs. Int’l, Inc. v. CQG, Inc.,
No. 05 C 4811, 2005 WL 3601936, at *4 (Oct. 31, 2005) (acknowledging efficiency benefit of retaining related
cases in one venue).
73

See e.g, Pergo, Inc. v. Alloc, Inc., 262 F. Supp. 2d 122, 133 (S.D.N.Y. 2003).

74

See In re Verizon Bus. Network Servs. Inc., 635 F.3d 559, 562 (Fed. Cir. 2011) (discussing In re Vistaprint
Ltd., 628 F.3d 1342, 1347 n.3 (Fed. Cir. 2010)) (acknowledging that although a court’s extensive analysis that its
familiarity with an asserted patent pertaining to the same technology based on prior litigation warrants denial of
transfer may not be an abuse of discretion, “it does not mean that, once a patent is litigated in a particular venue the
patent owner will necessarily have a free pass to maintain all future litigation involving that patent in that venue.”).

30

proceeds to consider issues of judicial economy.
E.

Judicial Economy

Defendants argue that this case should be transferred to Delaware and consolidated with
the declaratory judgment action filed there in April 2012, on behalf of themselves and all of the
other Cox entities, including CCI, in order to avoid piecemeal litigation against the various Cox
entities.75 Defendants rely on e-mail correspondence between counsel that display Sprint’s
desire to seek relief for patent infringement by Cox entities both in the State of Kansas and
elsewhere, as well as against CCI. As such, Defendants assert that Delaware is the only forum
where all parties can be sued since they are all incorporated there.
The Court declines to make a determination about whether the additional parties named
in the Delaware action are necessary or indispensable, as that is not an inquiry properly before
the Court on this motion to transfer. But the fact that Sprint named CCI in this case suggests it
considers CCI necessary to obtain complete relief. Sprint also suggests in the e-mails attached to
the briefs that these other entities may be subject to suit given that the patent infringement claims
concern patents that are used on the entire Cox network. The Court finds that the Court’s
interest in avoiding duplicative and piecemeal litigation strongly favors transfer of this matter to
Delaware where all parties, including CCI may be sued.
In sum, the Court finds that the balance of convenience factors strongly favor
Defendants’ request for transfer of this matter to Delaware, such that Sprint’s choice of forum in
Kansas properly may be disturbed. Rather than dismiss this case against CCI based on lack of
personal jurisdiction, the Court will transfer the matter under 28 U.S.C. § 1404(a).

75

The Cox Defendants also assert patent infringement claims against Sprint in that action.

31

IT IS THEREFORE ORDERED BY THE COURT that Defendant Cox
Communications Inc.’s Motion to Dismiss under Rule 12(b)(2) and 12(b)(3) for Lack of
Personal Jurisdiction and Improper Venue (Doc. 31) is denied.
IT IS FURTHER ORDERED that and Defendants’ Motion to Transfer (Doc. 33) is
granted. The Clerk is directed to transfer this case to the United States District Court for the
District of Delaware.
IT IS FURTHER ORDERED that Defendant Cox Communications, Inc. and Cox
Communications Kansas, LLC’s motions to dismiss the original complaint (Docs. 18 and 20) are
denied as moot.
Dated: September 14, 2012
S/ Julie A. Robinson
JULIE A. ROBINSON
UNITED STATES DISTRICT JUDGE

32