Global Equity Management (SA) Pty. Ltd. v. Alibaba Group Holding, Ltd. et al

Filing 44

MEMORANDUM OPINION AND ORDER. Signed by Magistrate Judge Roy S. Payne on 3/24/2017. (nkl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
GLOBAL EQUITY MANAGEMENT (SA)
PTY. LTD.,

ALIBABA.COM, INC.;

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§
§ Case No. 2:15-CV-01702-RWS-RSP
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§
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ALIBABA GROUP HOLDING LIMITED,
NIMBUS DEVELOPMENT INC.;

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§ Case No. 2:16-CV-01074-RWS-RSP
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v.

ALIBABA.COM HONG KONG LTD.;

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§ Case No. 2:16-CV-00095-RWS-RSP
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EBAY INC.

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§ Case No. 2:16-CV-00098-RWS-RSP
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MEMORANDUM OPINION AND ORDER

Before the Court are the Alibaba, Nimbus, and eBay defendants’ motions to dismiss, or
alternatively, to transfer the patent infringement actions filed by Plaintiff Global Equity
Management (SA) Pty. Ltd. (“GEMSA”) to the Northern District of California. 1 The Court held a
hearing on March 13, 2017. For the following reasons, defendants’ motions are GRANTED.

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See motions filed by Alibaba.com, Inc. and Alibaba.com Singapore E-Commerce Private
Limited (“Alibaba Singapore”), Case No. 2:15-cv-01702, Dkt. No. 16 (“Alibaba.com Br.”); see
also id. Dkt. No. 34; Nimbus Development Inc. (“Nimbus”), Case No. 2:16-cv-01074, Dkt. No.
12 (“Nimbus Br.”); Alibaba Group Holding Limited (“Alibaba Holding”), Case No. 2:16-cv01074, Dkt. No. 24 (“Alibaba Holding Br.”); Alibaba.com Hong Kong Ltd. (“Alibaba Hong
Kong”), Case No. 2:16-cv-00095, Dkt. No. 150 (“Alibaba Hong Kong Br.”); and eBay Inc.
(“eBay”), Case No. 2:16-00098, Dkt. No. 10 (“eBay Br.”).
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BACKGROUND
The defendants seeking transfer all have principal places of business in Northern California
or overseas. Alibaba.com and Nimbus are Delaware corporations with their principal place of
business in San Mateo, California. Lee Decl. ¶ 3 (Case No. 2:15-cv-01702, Dkt. No. 16-1); Lee
Decl. ¶ 2 (Case No. 2:16-cv-01074, Dkt. No. 12-1). Alibaba Singapore is incorporated in and has
its principal place of business in Singapore. Id. ¶ 11. Alibaba Hong Kong is a Hong Kong
corporation with a principal place of business in Hong Kong. Ho Decl. ¶ 3 (Case No. 2:16-cv-95,
Dkt. No. 150-1). Alibaba Holding is incorporated in the Cayman Islands and has a principal place
of business in Hangzhou, China. Ho Decl. ¶ 4 (Case No. 2:16-cv-01074, Dkt. No. 24-1). eBay is
a Delaware with a principal place of business in San Jose, California. Whyte Decl. ¶ 5 (Case No.
2:16-cv-00098, Dkt. No. 10-1).
GEMSA is an Australian corporation with its principal place of business in Warradale,
South Australia. See Case No. 2:16-cv-00098, Dkt. No. 7 ¶ 1. Beginning on October 30, 2015,
GEMSA filed 37 patent infringement actions in this district in consecutive phases. Much of the
procedural history in these cases has been described in a previous Order. See Case No. 2:16-cv00098, Dkt. No. 107. Briefly, because GEMSA’s infringement allegations for many defendants
relied on the defendants’ alleged activity with Amazon Web Services, Inc.’s (“Amazon”) web
server, Amazon filed a declaratory judgment action seeking a judgment of noninfringement or
invalidity in the Eastern District of Virginia. GEMSA thereafter filed an action against Amazon in
this district, prompting Amazon to seek transfer to the Eastern District of Virginia under the firstto-file rule, and prompting Amazon’s customers to seek a stay pending resolution of the
declaratory judgment action. Both Amazon’s motion to transfer and the customer defendants’
motions to stay were granted. See, e.g., Case No. 2:16-cv-00098, Dkt. Nos. 107, 248.

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GEMSA’s infringement allegations with respect to three entities— the Alibaba, Nimbus,
and eBay defendants—are not based on alleged activity involving Amazon’s web server. The
cases against the Alibaba, Nimbus, and eBay defendants were originally consolidated, but in light
of the Court’s transfer of the Amazon case and stay of associated Amazon customer cases, the
cases against the Alibaba, Nimbus, and eBay defendants were deconsolidated from the lead case.
See Case No. 2:16-cv-00095, Dkt. No. 247. The remaining Alibaba, Nimbus, and eBay defendants
all move to dismiss GEMSA’s actions, or, alternatively, to transfer the actions to the Northern
District of California under 28 U.S.C. § 1404(a) or § 1406(a).
DISCUSSION
The Court can transfer a case to another district where the case might have been brought
for “the convenience of parties and witnesses” and “in the interests of justice.” 28 U.S.C.
§ 1404(a). Similarly, a case filed in the “wrong division or district” may be transferred “in the
interest of justice . . . to any district or division in which it could have been brought.” 28 U.S.C.
§ 1406(a). Although certain Alibaba and Nimbus defendants contest personal jurisdiction and
venue in this district, the Court need not resolve those questions because whether to transfer a case
may be evaluated under either § 1404(a) or § 1406(a). See Nationwide Bi-Weekly Admin., Inc. v.
Belo Corp., 512 F.3d 137, 140 (5th Cir. 2007); Bentz v. Recile, 778 F.2d 1026, 1028 (5th Cir.
1985).
A party seeking transfer under § 1404(a) must show the transferee district to be “clearly
more convenient” than the transferor district. In re Volkswagen of Am., Inc., 545 F.3d 304, 315
(5th Cir. 2008) (“Volkswagen II”). The analysis turns on public and private interest factors, no one
of which is given dispositive weight. See In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004)
(“Volkswagen I”). The private factors include: (1) ease of access to evidence (“sources of proof”);

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(2) subpoena power over potential witnesses; (3) cost of attendance for willing witnesses; and (4)
other practical problems. Volkswagen II, 545 F.3d at 315. The public factors include: (1)
administrative difficulties flowing from court congestion; (2) 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. Volkswagen I, 371 F.3d at 203.
Courts consider the same or similar factors when assessing transfer under § 1406(a). See, e.g.,
Druid Grp., Inc. v. Dorfman, No. 3:05 CV 00762 M, 2006 WL 2460553, at *4 (N.D. Tex. Aug.
22, 2006).
Before assessing the relevant factors, the threshold question is whether the case could have
been brought in the transferee district. Volkswagen II, 545 F.3d at 312. Alibaba.com, Inc. and eBay
have principal places of business in San Mateo, California, and San Jose, California, respectively,
and thus both of these defendants could have been sued in the Northern District of California.
Alibaba.com Br. at 14; eBay Br. at 4. Although Alibaba Singapore, Alibaba Holding, Alibaba
Hong Kong, and Nimbus do not have a place of business in the Northern District of California,
these defendants state that they “would not contest personal jurisdiction or venue in that District
for purposes of the present case in view of the relative convenience of that forum.” Alibaba.com
Br. at 15; Alibaba Holding Br. at 15; Alibaba Hong Kong Br. at 15; Nimbus Br. at 13-14. GEMSA
does not contend that a district court in California would not have had personal jurisdiction over
any defendant nor that venue would have been improper in the Northern District of California.
Accordingly, the Court is satisfied that GEMSA’s cases against the Alibaba, Nimbus, and the eBay
defendants could have been brought in the transferee district.
Turning to the relevant factors, the Court finds that the private interest factors weigh in
favor of transfer. First, Alibaba, Nimbus, and eBay’s physical evidence and witnesses are all

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primarily located in within the Northern District of California or overseas. Second, to the extent
that subpoena power will be important at trial, the defendants identify at least two specific nonparty prior artists who live or work within reach of the Northern District of California’s subpoena
power. See Alibaba.com Br. at 18-19. Third, the costs to the defendants’ witnesses will be reduced
if those witnesses attend trial in California. See In re Genentech, Inc., 566 F.3d 1338, 1343 (Fed.
Cir. 2009).
For its part, GEMSA adds little to balance against the considerations highlighted by the
defendants. GEMSA is an Australian company with no connection to Texas or this District and
thus would be inconvenienced as much by a trial here as it would be by a trial in Northern
California. See Genentech, Inc., 566 F.3d at 1344. While GEMSA identifies a number of witnesses
who live in or around Houston, Texas, all of whom allegedly have knowledge of the earlier third
party products practicing the patent, see, e.g., Case No. 2:15-cv-1702, Dkt. No. 19 at 15, there is
no persuasive showing that they would be likely trial witnesses.
Similarly, GEMSA’s judicial economy arguments are not compelling. GEMSA highlights,
for example, that it filed other cases in this district, implying that practical considerations or
administrative difficulties disfavor transfer. While it is appropriate to consider co-pending cases
involving the same patent(s)-in-suit in some circumstances, see In re Barnes & Noble, Inc., 743
F.3d 1381, 1383 n.1 (Fed. Cir. 2014), the moving defendants are the only defendants whose cases
have not already been stayed or transferred.
GEMSA’s arguments regarding local interest are not sufficient to shift the balance.
GEMSA contends that “[b]ecause the patents-in-suit were developed in and prosecuted from Texas
and this suit . . . calls into question the work and reputation of individuals in or near the Eastern
District of Texas, this District has a local interest in the outcome of the case.” See, e.g., Case No.

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2:15-cv-1702, Dkt. No. 19 at 18. As other district courts have recognized, it is a generally a fiction
that patent cases give rise to local controversy or interest, particularly without record evidence
suggesting otherwise. See TriStrata Tech., Inc. v. Emulgen Labs., Inc., 537 F. Supp. 2d 635, 643
(D. Del. 2008). To the extent that local interests are implicated by GEMSA’s cases, because most
of the witnesses GEMSA identifies live or work in Texas, they are balanced by the interests of
individuals in the transferee district who work for the companies GEMSA accuses of patent
infringement. See In re Hoffmann-La Roche Inc., 587 F.3d 1333, 1336 (Fed. Cir. 2009).
GEMSA’s choice of law arguments are likewise unpersuasive. GEMSA contends that
“because Eastern-District-of-Texas law applies, this factor weighs against transfer.” See, e.g., Case
No. 2:15-cv-1702, Dkt. No. 19 at 19. Patent law of course is not unique to the Eastern District of
Texas. GEMSA also suggests that this district is more familiar with patent law than the Northern
District of California, see id., but “[p]atent claims are governed by federal law,” and as such “both
[courts are] capable of applying patent law to infringement claims,” In re TS Tech USA Corp., 551
F.3d 1315, 1320 (Fed. Cir. 2008). Finally, GEMSA contends that this Court is more familiar with
Texas state law principles, but there has been no showing that a state law claim is present in this
case.
CONCLUSION
In light of the foregoing, this Court concludes that the interests of justice are best served
by transferring GEMSA’s cases against the Alibaba, Nimbus, and eBay defendants to the United
States District Court for the Northern District of California.
Accordingly, it is ORDERED:
(1) The following motions to transfer are GRANTED:

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•

Case No. 2:15-cv-01702, Dkt. No. 34 (The previous motion pending at Dkt. No. 16
in Case No. 2:15-cv-01702 is DENIED-AS-MOOT in light of GEMSA’s third
amended complaint);

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Case No. 2:16-cv-01074, Dkt. No. 24;

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.

Case No. 2:16-cv-01074, Dkt. No. 12;

Case No. 2:16-cv-00095, Dkt. No. 150;

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Case No. 2:16-00098, Dkt. No. 10.

(2) At the conclusion of twenty days from the entry of this Order, the clerk shall TRANSFER
the following three cases to the United States District Court for the Northern District of California:
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Case No. 2:15-cv-01702;

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Case No. 2:16-00098;

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Case No. 2:16-01074.

(3) The cases to be transferred are STAYED pending transfer. The stay applies to all deadlines
and discovery obligations.
SIGNED this 3rd day of January, 2012.
SIGNED this 24th day of March, 2017.

____________________________________
ROY S. PAYNE
UNITED STATES MAGISTRATE JUDGE

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