Uniloc USA, Inc. et al v. NATIONAL INSTRUMENTS CORP. et al

Filing 95

REPLY to Response to Motion re 60 MOTION to Dismiss for Improper Venue Pursuant to Rule 12(B)(3), FRCP MOTION to Dismiss for Improper Venue Pursuant to Rule 12(B)(3), FRCP filed by Symantec Corp.. (Attachments: # 1 Declaration of Mark Flagel, # 2 Exhibit J, # 3 Exhibit K, # 4 Exhibit L, # 5 Exhibit M, # 6 Exhibit N, # 7 Exhibit O, # 8 Exhibit P, # 9 Exhibit Q, # 10 Exhibit R, # 11 Exhibit S, # 12 Exhibit T)(Jones, Michael)

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Uniloc USA, Inc. et al v. NATIONAL INSTRUMENTS CORP. et al Doc. 95 Att. 6 Exhibit N Dockets.Justia.com Case 8:10-cv-01483-DOC -MLG Document 18-1 #:109 1 2 3 4 5 6 7 Filed 11/22/10 Page 1 of 10 Page ID LATHAM & WATKINS LLP Mark A. Flagel (Bar No. 110635) Yury Kapgan (Bar No. 218366) Dale Chang (Bar No. 248657) 355 South Grand Avenue Los Angeles, California 90071-1560 Telephone: (213) 485-1234 Facsimile: (213) 891-8763 mark.flagel@lw.com yury.kapgan@lw.com dale.chang@lw.com LATHAM & WATKINS LLP Dean G. Dunlavey (Bar No. 115530) 8 650 Town Center Drive, 20th Floor Costa Mesa, CA 92626-1925 9 Telephone: (714) 540-1235 Facsimile: (714) 755-8290 10 dean.dunlavey@lw.com 11 Attorneys for Plaintiffs Symantec Corporation and 12 XtreamLok, Pty 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTO R N E Y S AT LAW LOS A N G E L E S UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION SYMANTEC CORPORATION and XTREAMLOK, PTY, Plaintiffs, v. UNILOC USA, INC., UNILOC (SINGAPORE) PRIVATE LIMITED and UNILOC CORPORATION PTY LIMITED, Defendants. CASE NO. SACV10-01483 DOC (MLGx) MEMORANDUM IN SUPPORT OF SYMANTEC AND XTREAMLOK'S MOTION TO ENJOIN UNILOC FROM PROCEEDING WITH DUPLICATIVE ACTION AS AGAINST SYMANTEC, AND TO REQUIRE UNILOC TO DISMISS SYMANTEC AS A DEFENDANT FROM THAT ACTION Hearing Date: Time: Place: Judge: AND RELATED COUNTERCLAIMS December 20, 2010 8:30 AM Courtroom 9D Hon. David O. Carter MEMORANDUM IN SUPPORT OF MOTION TO ENJOIN UNILOC FROM PROCEEDING WITH DUPLICATIVE ACTION AS AGAINST SYMANTEC Case 8:10-cv-01483-DOC -MLG Document 18-1 #:110 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTO R N E Y S AT LAW LOS A N G E L E S Filed 11/22/10 Page 2 of 10 Page ID I. INTRODUCTION Symantec Corporation ("Symantec") respectfully seeks an Order to enjoin defendants and counterclaimants (collectively, "Uniloc") from pursuing patent infringement claims against Symantec in Texas, which are identical to the infringement claims being litigated in this forum. Uniloc first sued Symantec and its indirect subsidiary XtreamLok in this Court in May 2008, for infringement of the same patent at issue in this case (U.S. Patent No. 5,490,216 ­ the "'216 patent"). An existing patent license agreement between Uniloc and XtreamLok specified that this Court would have exclusive jurisdiction over any patent disputes. As part of that litigation, Uniloc stipulated, and this Court Ordered, that this Court would retain jurisdiction over Uniloc's infringement claims against Symantec after completion of an arbitration between the parties. After the arbitration concluded, however, Uniloc unilaterally dismissed the action, and then reasserted the same patent infringement claim against Symantec as one of a dozen defendants in the Eastern District of Texas. In response to Uniloc's tactics, Symantec and XtreamLok commenced this action in this forum, and Uniloc filed counterclaims for infringement of the '216 patent. At the beginning of November, just before filing its counterclaims in this action, Uniloc appeared to recognize the absurdity of its forum shopping and the binding nature of the prior agreements and this Court's Order, and in response to requests from Symantec's counsel, Uniloc's counsel confirmed Uniloc's agreement that it would dismiss Symantec from the Texas lawsuit and proceed only in this forum. Shortly after reaching that agreement, however, Uniloc's counsel indicated that Uniloc was repudiating it and would not dismiss Symantec from the Texas action. As a result, Symantec has been forced to file a motion in Texas that it be dismissed from that action. That motion is now pending before the Texas court. It is unclear when that motion will be ruled upon. 1 MEMORANDUM IN SUPPORT OF MOTION TO ENJOIN UNILOC FROM PROCEEDING WITH DUPLICATIVE ACTION AS AGAINST SYMANTEC Case 8:10-cv-01483-DOC -MLG Document 18-1 #:111 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTO R N E Y S AT LAW LOS A N G E L E S Filed 11/22/10 Page 3 of 10 Page ID The Uniloc/Symantec/XtreamLok dispute regarding infringement of the '216 patent should proceed in one forum ­ this forum. This is where the parties are located; this is where the parties agreed to litigate the dispute; this is the forum that the parties stipulated ­ and this Court ordered ­ would have jurisdiction over this dispute; and this is one of the two forums in which Uniloc's infringement claims against Symantec are currently pending. In light of the parties' prior agreements, stipulation, and this Court's Order, this Court should enjoin Uniloc from pursuing the duplicative action in Texas as against Symantec, and order Uniloc to dismiss Symantec from that action so that the parties can resolve their disputes in one action, in the forum that Uniloc originally chose and to whose jurisdiction it stipulated. II. BACKGROUND A. Uniloc and Symantec Have Already Litigated the Patent-In-Suit in this Court XtreamLok licensed the '216 patent from Uniloc in September 2002. The license agreement specified that courts in the Central District of California had exclusive jurisdiction over any dispute: "The parties consent to the exclusive jurisdiction and venue of the federal and state courts located in Orange County, California in any action arising out of or relating to this Agreement. The parties waive any other venue to which either party might be entitled by domicile or otherwise." Ex. A, p. 4 (emphasis added).1 In May 2008, Uniloc filed an action in this Court against XtreamLok and its customer, Symantec. Uniloc alleged that Symantec and XtreamLok were infringing the '216 patent. Uniloc also asserted claims for unfair competition and 1 All exhibits are attached to the Declaration of Mark A. Flagel ("Flagel Decl."), being filed contemporaneously with this motion. 2 MEMORANDUM IN SUPPORT OF MOTION TO ENJOIN UNILOC FROM PROCEEDING WITH DUPLICATIVE ACTION AS AGAINST SYMANTEC Case 8:10-cv-01483-DOC -MLG Document 18-1 #:112 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTO R N E Y S AT LAW LOS A N G E L E S Filed 11/22/10 Page 4 of 10 Page ID breach of contract. The case was assigned to the Honorable David O. Carter, Civil Action No. CV-08-03574. Ex. B. Specifically, Uniloc alleged that XtreamLok had failed to pay certain royalties owed under their license agreement, based on revenue that XtreamLok had received from Symantec. Uniloc alleged that XtreamLok breached the agreement, that the agreement was terminated, and that XtreamLok's technology infringed its patent. It also alleged that Symantec was liable for infringement as a result of licensing XtreamLok's technology and thereafter (in May 2005) indirectly acquiring XtreamLok. Id. Symantec and XtreamLok maintained ­ as they do today ­ that they do not infringe the patent and that the XtreamLok technology does not practice the purported inventions claimed in the patent. B. The Parties Stipulated that this Court Would Retain Jurisdiction to Decide Uniloc's Claim for Patent Infringement In October 2008, the parties agreed to arbitrate the breach of contract claim, and to stay the remaining claims pending resolution of that arbitration. Specifically, they stipulated that "once the arbitration of that [breach of contract] claim is concluded, this matter may be re-activated so that this Court may address any remaining claims for Patent Infringement and Unfair Competition." Ex. C (emphasis added). The parties further stipulated that "once the arbitration is concluded, this Court may determine what, if any, impact the decision in the arbitration has on the other claims raised in the Complaint," and that "this court will retain jurisdiction to decide Uniloc's claims for Patent Infringement and Unfair Competition to the extent that either party contends any claims or issues remain in accordance with applicable law." Id. (emphasis added). C. This Court Retained Jurisdiction over Uniloc's Claim for Patent Infringement This Court ordered a stay pending the outcome of the arbitration. The Court specifically ordered that it "shall retain jurisdiction over Uniloc's Patent 3 MEMORANDUM IN SUPPORT OF MOTION TO ENJOIN UNILOC FROM PROCEEDING WITH DUPLICATIVE ACTION AS AGAINST SYMANTEC Case 8:10-cv-01483-DOC -MLG Document 18-1 #:113 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTO R N E Y S AT LAW LOS A N G E L E S Filed 11/22/10 Page 5 of 10 Page ID Infringement and Unfair Competition Claims, and shall re-activate the matter upon application of the parties upon completion of the arbitration to allow the continuation of the action as to any claims and issues which either party may contend remain to be resolved in accordance with applicable law." Ex. D (emphasis added). D. The Arbitration Did Not Address or Resolve the Dispute as to Whether XtreamLok or Symantec Infringed the '216 Patent; That Issue was Reserved for this Court The parties stipulated that the arbitration would not cover or address the issue of whether the XtreamLok technology practiced the '216 patent. The parties agreed that question was reserved exclusively for this Court. Instead, the arbitration addressed a single narrow issue: Assuming (without deciding) that the accused XtreamLok technology was covered by the '216 patent, had XtreamLok breached the 2002 license agreement? If yes, then the issue of whether XtreamLok and Symantec in fact practiced any valid claim of the '216 patent would be presented to this Court for adjudication. If no, then XtreamLok would remain licensed to the patent (and Symantec, as XtreamLok's customer, would be protected from liability by the patent exhaustion doctrine). In September 2009, the arbitrator issued her ruling. She concluded that, if one assumed the XtreamLok technology practiced the patent, then XtreamLok had underpaid royalties and that would terminate the license agreement. The arbitrator also quantified the amount she calculated as the underpayment, assuming XtreamLok practiced the patent. XtreamLok elected to pay that dollar amount to Uniloc, subject to the express reservation by XtreamLok of the right to seek return of the money if, as XtreamLok and Symantec have always contended, the XtreamLok technology is not covered by the '216 patent. Ex. E. 4 MEMORANDUM IN SUPPORT OF MOTION TO ENJOIN UNILOC FROM PROCEEDING WITH DUPLICATIVE ACTION AS AGAINST SYMANTEC Case 8:10-cv-01483-DOC -MLG Document 18-1 #:114 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Filed 11/22/10 Page 6 of 10 Page ID E. Uniloc Subsequently Reincorporated in Texas and Proceeded to Engage in Forum Shopping On November 30, 2009, rather than return to this Court to have the infringement issue resolved, Uniloc unilaterally dismissed its lawsuit. Although its headquarters are located, and its principals reside, in the Central District of California, and Uniloc USA, Inc. had been incorporated in Rhode Island (where it had sued Microsoft on the same patent), the company apparently incorporated in Texas recently as well. Thereafter, in September 2010, Uniloc sued Symantec as one of twelve unrelated defendants in the Eastern District of Texas for infringement of the '216 patent, Civil Action No. 6:10-CV-472.2 Ex. F. In this manner, Uniloc has engaged in blatant and improper forum shopping. F. Uniloc Agreed, in Writing, to Dismiss Symantec from the Texas Action and Proceed in this Court On October 1, 2010, as a result of Uniloc's actions, Symantec and XtreamLok filed this action to finish what Uniloc started, seeking a declaration of non-infringement and invalidity as to the '216 patent. In addition, because XtreamLok does not and has never practiced the '216 patent, and because the patent is invalid in any event, XtreamLok seeks the return of the award that it paid to Uniloc pursuant to the arbitration. As noted above, XtreamLok has expressly conditioned that payment on the assumption that the patent was valid and infringed. Uniloc failed to respond to the Complaint in this action in a timely manner. Thereafter, Symantec offered Uniloc an extension to file its response, and reiterated a prior request that Uniloc agree to dismiss Symantec from the Texas The plaintiffs in the Texas action are two of the three Uniloc entities which are 27 defendants / counterclaim plaintiffs in this action: Uniloc USA, Inc. and Uniloc (Singapore) Private Limited. 28 ATTO R N E Y S AT LAW LOS A N G E L E S 2 5 MEMORANDUM IN SUPPORT OF MOTION TO ENJOIN UNILOC FROM PROCEEDING WITH DUPLICATIVE ACTION AS AGAINST SYMANTEC Case 8:10-cv-01483-DOC -MLG Document 18-1 #:115 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTO R N E Y S AT LAW LOS A N G E L E S Filed 11/22/10 Page 7 of 10 Page ID action. On November 1, 2010, Uniloc accepted the extension, and confirmed in writing that it would dismiss Symantec from the Texas action. See Flagel Decl., ¶¶ 9-10 & Ex. G. On November 5, 2010, however, Uniloc reneged on its agreement. Counsel for Uniloc informed counsel for Symantec that, even though Uniloc intended to file an Answer and Counterclaims in this Court, Uniloc had changed its mind about voluntarily dismissing Symantec from the Texas action and would not do so. See Flagel Decl., ¶ 11. That same day, Uniloc filed an Answer in this action. Dkt. No. 13. Three days later, it filed counterclaims against Symantec and XtreamLok in this action, claiming infringement of the '216 patent. Dkt. No. 15. III. ARGUMENT Uniloc has repeatedly recognized and agreed that its dispute with Symantec belongs in this Court. Yet it now apparently intends to disregard its own agreements and this Court's Order to pursue its claims against Symantec in the Eastern District of Texas. That should not be permitted. Uniloc previously sued Symantec and XtreamLok for infringement of the '216 patent in this Court. The 2002 Uniloc / XtreamLok license agreement provides that the courts in Orange County, California have "exclusive jurisdiction" over "any action arising out of or relating to" the agreement, and the parties "waive any other venue to which either party might be entitled." Ex. A, p. 4. Choice of forum clauses are, of course, routinely enforced, and "[p]atent infringement disputes do arise from license agreements." Texas Instruments Inc. v. Tessera, Inc., 231 F.3d 1325, 1331 (Fed. Cir. 2000) (requiring patent infringement claim to be brought in California, based on choice of forum clause in patent license agreement that specified "any litigation between the parties relating to this Agreement shall take place in California," and noting that the clause "in the present case, as in any patent license agreement, necessarily covers disputes concerning patent issues"). 6 MEMORANDUM IN SUPPORT OF MOTION TO ENJOIN UNILOC FROM PROCEEDING WITH DUPLICATIVE ACTION AS AGAINST SYMANTEC Case 8:10-cv-01483-DOC -MLG Document 18-1 #:116 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTO R N E Y S AT LAW LOS A N G E L E S Filed 11/22/10 Page 8 of 10 Page ID Furthermore, after suing Symantec and XtreamLok in this Court, Uniloc entered into a Stipulation that its infringement claim against Symantec would be decided in this Court after completion of an arbitration to adjudicate Uniloc's breach of contract claim. Ex. C. Stipulations are binding and enforceable agreements. See Morrison v. Zangpo, No. C-08-1945, 2008 U.S. Dist. LEXIS 82999, at *7-8 (N.D. Cal. Sept. 30, 2008) (a stipulation is a binding, enforceable agreement between parties to a dispute); Hamilton v. Willms, No. 02-CV-6583, 2007 U.S. Dist. LEXIS 67486, at *25-26 (E.D. Cal. Aug. 30, 2007) (same); Common Cause v. Jones, 213 F. Supp. 2d 1110, 1112 (C.D. Cal. 2002) ("Stipulations voluntarily entered by the parties are binding") (quoting FDIC v. St. Paul Fire & Marine Ins. Co., 942 F.2d 1032, 1038 (6th Cir. 1991)). Pursuant to the parties' stipulation, this Court entered an Order that it would retain jurisdiction to decide Uniloc's infringement claim after completion of the arbitration. Ex. D. Uniloc now wants to disavow its Stipulation and ignore this Court's Order by pursuing essentially the same lawsuit in Texas ­ a forum that has little connection to either party. Uniloc's behavior over the past six weeks has been somewhat schizophrenic. When Symantec and XtreamLok reactivated this lawsuit through their October 1, 2010 Complaint, Uniloc recognized that California was the proper forum. Uniloc agreed that it would dismiss Symantec from the action in Texas. Flagel Decl., ¶¶ 9-10 & Ex. G. Furthermore, Uniloc filed an Answer and Counterclaims for infringement of the '216 patent in this Court. Now, however, Uniloc refuses to implement its agreement to dismiss Symantec from the Texas action. See Flagel Decl., ¶ 11. Uniloc should not be permitted to "game the system" in this manner. It agreed numerous times to adjudicate its infringement claims in this Court: (1) in September 2002, when it licensed the '216 patent and specified that the courts in Orange County, California would have exclusive jurisdiction; (2) in May 2008, 7 MEMORANDUM IN SUPPORT OF MOTION TO ENJOIN UNILOC FROM PROCEEDING WITH DUPLICATIVE ACTION AS AGAINST SYMANTEC Case 8:10-cv-01483-DOC -MLG Document 18-1 #:117 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTO R N E Y S AT LAW LOS A N G E L E S Filed 11/22/10 Page 9 of 10 Page ID when it filed its patent infringement lawsuit in this Court; (3) in October 2008, when it entered into a binding Stipulation that this Court would retain jurisdiction to decide the infringement claim; and (4) again this month, when it agreed to proceed in California, filed an Answer and Counterclaims in this Court, and agreed to dismiss Symantec from the Texas action. Uniloc should be held accountable for its prior actions and agreements rather than being permitted to ignore them at its whim. See Texas Instruments, 231 F.3d at 1331; Hamilton, 2007 U.S. Dist. LEXIS 67486, at *30 ("Court opinions are not intended as mere first drafts, subject to revision and reconsideration at a litigant's pleasure.") (citation omitted); In re Marriage of Hahn, 224 Cal. App. 3d 1236 (1990) ("[I]n the usual case a party may not unilaterally avoid a valid stipulation for obvious reasons . . . . Stipulations . . . are supported by the policy of favoring compromise in order to reduce the volume of litigation.") (citations and quotations omitted). /// /// /// /// /// /// /// /// /// /// /// /// /// /// /// 8 MEMORANDUM IN SUPPORT OF MOTION TO ENJOIN UNILOC FROM PROCEEDING WITH DUPLICATIVE ACTION AS AGAINST SYMANTEC Case 8:10-cv-01483-DOC -MLG Document 18-1 #:118 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTO R N E Y S AT LAW LOS A N G E L E S Filed 11/22/10 Page 10 of 10 Page ID In short, Uniloc's filing against Symantec in the Eastern District of Texas was improper. Symantec respectfully requests that this Court enjoin Uniloc from prosecuting the Texas action as against Symantec and require Uniloc to dismiss Symantec from that action.3 Dated: November 22, 2010 LATHAM & WATKINS LLP /s/ Mark A. Flagel Attorneys for Plaintiffs SYMANTEC CORPORATION AND XTREAMLOK, PTY By As noted above, on November 5, 2010, Uniloc filed its Answer in this action, and Counterclaims three days later. Symantec's deadline to respond to the Complaint in the Texas action was November 18, 2010. Symantec was thus forced to file a motion to dismiss in Texas for improper venue under Federal Rule of Civil Procedure 12(b)(3), pointing out that the action belongs in this Court. It is unclear when that motion might be ruled upon. This Court, of course, would render that motion moot by granting the present motion and putting an end to Uniloc's shenanigans now. 9 MEMORANDUM IN SUPPORT OF MOTION TO ENJOIN UNILOC FROM PROCEEDING WITH DUPLICATIVE ACTION AS AGAINST SYMANTEC 3

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