Modavox, Inc. v. AOL LLC et al

Filing 101

OPINION: re: granting 84 MOTION to Sever Claims of Patent Infringement Pursuant to Rule 21 of the Federal Rules of Civil Procedure and to Transfer Pursuant to Rule 13 of the Southern District of New York Rules for the Division of Business Among District Judges. filed by AOL Advertising Inc., AOL Inc., Time Warner, Inc. For the reasons set forth in this Order, Defendants' motion to sever is granted, and the Patent Claims are transferred to the Honorable Colleen McMahon. (Signed by Judge Robert W. Sweet on 6/20/2012) (pl)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

- - - - -x
AUGME TECHNOLOGIES, INC.,
Plaintiff,

09 Civ. 4299

- against

OPINION

AOL INC., TIME WARNER INC., PLATFORM-A,
INC., and AOL ADVERTISING INC.,
Defendants.

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A P PEA RAN C E S:

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nOCU~lENT

ELECfRONICALLY FILED

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for the Plaintiff
GOODWIN PROCTER LLP

620 Eighth Avenue

New York, NY 10018

By: Mark J. Abate, Esq.

Calvin E. Wingfield, Jr., Esq.
901 New York Avenue, N.W.

Washington, DC 20001

By: Scott L. Robertson, Esq.

Jenni
A. Albert, Esq.
53 State Street

Boston, MA 02109

By: Michael G. Strapp, Esq.

for Defendants
ORRICK, HERRINGTON & SUTCLIFFE LLP

51 West 52nd Street

New York, NY 10019

By: Paul R. Gupta, Esq.

PILLSBURY WINTHROP SHAW PITTMAN LLP

725 South Figueroa Street, Suite 2800

Los Angeles, CA 90017

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I
d

Sweet, D.J.

There are currently two motions pending before the
Court.

Defendants AOL Inc.

("AOL

tI

Advertising") and Time Warner Inc.
(collectively, the "Defendants

tl

),

AOL Advertising Inc.

("Time Warner

tl

("AOL

)

have filed a motion to (1)

)

sever the claims brought by Plaintiff Augme Technologies
( "Augme,

II

or

"pIa

leging patent infringement

against Defendants (the "Patent Claims ll )

from Plaintiff's claims

for trademark infringement, unfair competition and

se

designation of origin against AOL and AOL Advertising (the
"Trademark Claims ll ) , pursuant to Fed. R. Civ. P. 21, and (2)
transfer the Patent
13(a) and (d)

aims to Judge McMahon pursuant to Rule

the Southern District of New York Standing

Order Governing Rules for the Division of Business Among
Dist

t Judges.

Defendants have also moved to dismiss

Plaintiff's Patent Claims for
which reI

lure to state a claim upon

f can be granted pursuant to Fed. R. Civ. P. 12(c).

Based on the

s and conclusions set forth below, Defendants'

motion to sever the Patent Claims is granted.

Prior and Related Proceedings

On August 9, 2007, Plaintiff fil
1

suit against AOL's

predecessor AOL LLC and Tacoda LLC ("Tacoda") in the Southern
District of New York (the "Tacoda Action"), and the case was
assigned to the Honorable Colleen McMahon.
Inc. v. Tacoda

See Augme

Inc., 07 Civ. 7088 (S.D.N.Y.).

On September 10, 2008, Plaintiff filed this action
alleging trademark infringement against AOL LLC, in the Uni
States District Court for the Central District of California.
Plaintiff subsequent

amended its complaint to assert patent

infringement allegations against Time Warner and AOL Advertising
(formerly Platform-A Inc.).

Plaintiff is a

aware corporation

with its principal place of business in New York.
claims ownership of two
Patent.

patents~the

Plaintiff

'691 Patent and the '636

aintiff contends that AOL and Platform-A engaged in

trademark

ngement in connection with AOL's and Platform-A's

use of "the Boombox" designation, which is confusingly similar
to Plaintiff's "Boombox Radio" and "Boombox Trademarks./I
Plaintiff also contends that Defendants make, use, sell, of
for sale and/or induce others to use in this judicial district,
and elsewhere throughout the United States, products and
services which infringe upon and embody
of Plaintiff.

2

patented inventions

On March 21 2009 1 Defendants moved to transfer this
Central

action to this Court.

California

strict

granted that motion on April 141 2009 1 stating that
"transferring this action would greatly serve judici
by avoiding duplicative proceedings
expenses

I

I

economy

reducing unnecessary

and promoting consistent interpretation of patents and

consistent judgments.

1I

On May 11 2009 1 the case was transferred

to this Court and was referred to Judge McMahon as possibly
related to the Tacoda Action.

On May III 2009

1

Judge McMahon

declined the case as not related and returned the case to the
wheel for assignment.

The case was thereupon assigned to this

Court.

On July 28

1

2009 1 Defendants moved to sever the

trademark and patent infringement claims.
January 19

1

In an order dated

2010, the Court declined to sever the Patent Claims,

but instead stayed the Patent Claims pending resolution of the
Tacoda Action pending before Judge McMahon.

The Court

thereafter endorsed a recommendation from the parties that they
submit a new proposed scheduling order dealing with the
Trademark Claims only

ter mediation

completed.

3

l

if unsuccessful

I

was

Until the Court entered a Pret
12[ 2011 requesting that

al Order on December

parties report for a pretrial

conference for the purpose of discussing settlement[ exploring
contemplated motions, stipulating facts, arranging a plan and
schedule for all discovery, resolving anticipated discovery
issues and setting a

date[ no discovery or any other

further activity took
aims.

Patent

ace in this case with respect to the

with respect to the Trademark Claims, according

to Plaintiff, the mediation contemplated by the

occurred

on June 8, 2012 and was unsuccessful.

The instant action is one of three cases involving
PI

iff and Defendant AOL.

As noted above, the Tacoda Action

is pending in the Southern District
McMahon.

New York before Judge

Additionally[ Judge McMahon has also accepted a case

entitled Augme Technologies [ Ing. v. Gannett Co.[ Inc.,
LucidMedia Netwo:J:"'ks, Inc. and AOL Inc.[ which was transferred to
the Southern Dist
Virginia.

See

ct of New York from the Eastern District of
Technol

AOL Inc.[ 11 Civ. 5193

es

Inc. v. Gannett Co.

Inc. &

(S.D.N.Y.).

On May 25[ 2012, Defendants filed both their motion to
sever the Patent Claims and motion to dismiss the Patent CI
4

The motions were heard and marked fully submitted on June 13.

The Applicable Standard

Fed. R. Civ. P. 21 permits a court to usever any claim
against a party."

Fed. R. Civ. P. 21.

UThe decision whether to

grant a severance motion is committed to the sound discretion of
the trial court."

State of N.Y. v. Hendrickson Bros., Inc., 840

F.2d 1065{ 1082 (2d Cir. 1988) i accord Wausau Bus. Inc. Co. v.
Turner Constr. Co., 204 F.R.D. 248, 250 (S.D.N.Y. 2001).
UCourts may order a Rule 21 severance when it will serve the
ends of justice and further the prompt and efficient disposition
of litigation."
F.R.D. 252, 254

T.S.I. 27, inc. v. Berman Enters. Inc., 115
(S.D.N.Y. 1987) ; see also

Ether Prods. Liab. Lit
2007)

., 247 F.R.D. 420, 427

(S.D.N.Y.

(USevering the claims of the non-State plaintiffs is

warranted due to principles of judicial efficiency and
fundamental

rness: it facilitates the settlement of the

claims by non-State plaintiffs, serves judicial economy, and
avoids prejudicing the defendants who properly removed the
claims of the non-State plaintiffs.

H

).

U[A] court considering a

severance motion should weigh the following factors in making
its determination:

(1) whether the claims arise out
5

the same

transaction or occurrencei

(2) whether the claims present some

common questions of law or facti
claims or judi

(3) whether settlement of the

al economy would be facilitated;

(4) whether

prejudice would be avoided if severance were granted; and (5)
whether different witnesses
for the separate claims."

documentary proof are required
In re Merrill

~~~~~~~---~--~~~~~------

Research Reports Sec. Litig., 214 F.R.D. 152, 155 56 (S.D.N.Y.
2003).

"Severance requires the presence

condit

"

only one of these

Cestone v. General Cigar Holdings, Inc., No.

00CIV3686RCCDF, 2002 WL 424654, at *2 (S.D.N.Y. Mar. 18, 2002)
(citing Lewis v. Triborough Bridge and Tunnel Auth., No. 97 Civ.
0607(PKL), 2000 WL 423517, at *2

(S.D.N.Y. Apr. 19, 2000).

Defendants' Motion To Sever The Patent Claims Is Granted

Defendants
Trademark Claims.
severance.

to sever the Patent Claims from the

Here, all five factors weigh in favor of

The Patent Claims are not alleged to arise out of

the same transaction or occurrence as
the Patent Claims

Trademark CI

, and

distinct and unrelated quest

of

fact and law compared to those presented by the Trademark
Claims.

Additional

is just beginning,

,while discovery as to the Patent Claims
scovery as to
6

Trademark Claims has

The interests of judicial economy are served by
severance, as Plaintiff's Patent Claims relate to the same

s
McMahon.

asserted in the cases already pending be
Severance of the claims will avoid the poss

inconsistent rulings on the patents at issue.

Judge
lity of

Severance is

warranted because Plaintiff's Patent Claims and

so

Claims

will require the presentation of different witnesses and proof
at trial.

The Defendants have cited no

ty

their

motion to transfer an action previously ass

to another

judge in the same district.

13(d) of the

However,

Rules for the Division of Business Among
judge assigned to a case has reason to

st

lieve that case should

be transferred, the assigned judge shall re
the judge who would receive the trans
decision on the patent cases

ct Judges, if a

r.

the question to
Judge McMahon's

r may be dispositive on

certain of the issues in this act

In the interests of

judicial economy, Judge McMahon has most graciously accepted the
transfer of the Patent Cl
Trademark Claims
determine at any time
accept a re trans

which have been severed from the

s action.

If Judge McMahon should

the transfer is inappropriate, I will
at any stage of the proceedings.
7

Conclusion

For the reasons set forth above, Defendants' motion to
sever is granted, and the Patent Claims are transferred to the
Honorable Colleen McMahon.

It is so ordered.

New York, NY
June z..t:?, 2012

8