Rockstar Consortium US LP et al v. Pantech Co Ltd et al, No. 2:2013cv00899 - Document 32 (E.D. Tex. 2014)
Court Description: MEMORANDUM OPINION AND ORDER. Signed by Judge Rodney Gilstrap on 8/1/2014. (ch, )
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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION ROCKSTAR CONSORTIUM US LP, AND MOBILESTAR TECHOLOGIES, LLC, Plaintiff, v. PANTECH CO., LTD. and PANTECH WIRELESS, INC., Defendants. § § § § § § § § § § § § § CASE NO. 2:13-CV-00894-JRG LEAD CASE CASE NO. 2:13-CV-00899-JRG MEMBER CASE MEMORANDUM OPINION AND ORDER Before the Court is Defendants Pantech Co., Ltd. s and Pantech Wireless, Inc. s (collectively, Pantech ) Motion to Transfer (Dkt. No. 27), filed April 8, 2014. For the reasons set forth below, the Court finds that the motion should be DENIED. I. BACKGROUND AND PROCEDURAL HISTORY Plaintiffs Rockstar Consortium US LP, Inc. and Mobilestar Technologies, LLC are entities arising out of the demise of Nortel, a Canadian telecommunications company with a substantial patent portfolio. When Nortel confronted bankruptcy in 2011, it held an auction for its patents. Five major technology companies Apple, Blackberry, Ericsson, Microsoft, and Sony pooled their resources into Rockstar Bidco LP for the purpose of purchasing the Nortel patent portfolio at auction (Dkt. No. 28-43). Rockstar Bidco LP then transferred the patents in suit here to the Rockstar Consortium US LP, a Delaware limited partnership with its headquarters in Plano, Texas and one of the plaintiffs in this case. Id. Rockstar Consortium US 1 LP subsequently created a wholly-owned subsidiary, MobileStar Technologies, LLC, to which it assigned five of the seven patents-in-suit. Id. Meanwhile, Rockstar Consortium Inc. was formed as a vehicle to hire certain of Nortel s former employees. Id. Rockstar Consortium US LP contracts with Rockstar Consortium, Inc. for intellectual-property-support services. Id. Rockstar Consortium US LP, Inc. and MobileStar Technologies, LLC (hereinafter, collectively, Rockstar ) filed this suit against Pantech on October 31, 2013, alleging that Pantech infringes seven of Rockstar s patents, accusing certain mobile phones using a version of Google, Inc. s ( Google ) Android operating system (Dkt. No. 1). On the same day, Rockstar separately sued six other mobile phone manufacturers, again accusing Android-based phones. On December 23, 2013, Google filed an action for declaratory relief in the United States Court for the Northern District of California (NDCA), seeking a judgment that the Android operating system does not infringe the patents at issue in this case. Google Inc. v. Rockstar Consortium U.S. LP, No. C-13-5933-CW (Dkt. No. 1). On July 1, 2014, this Court denied a motion in a related case to stay the case pending resolution of the Google case or to transfer that case to the NDCA (Case No. 2:13-CV-00894-JRG, Dkt. No. 122). In this motion, Pantech asks the Court to stay the case pending resolution of the NDCA suit. In the alternative, Pantech asks the Court to transfer this case to the NDCA. II. LEGAL STANDARDS The district court has the inherent power to control its own docket, including the power to stay proceedings. Soverain Software LLC v. Amazon.com, Inc., 356 F. Supp. 2d 660, 662 (E.D. Tex. 2005). In deciding whether to stay litigation, courts typically consider (1) whether a stay will unduly prejudice or present a clear tactical disadvantage to the nonmoving party; (2) 2 whether a stay will simplify the issues in question and trial of the case; and (3) whether discovery is complete and whether a trial date has been set. Id. When cases between the same parties present the same issues for resolution, the general rule favors the first-filed action. Micron Tech., Inc. v. Mosaid Techs., Inc., 518 F.3d 897, 904 (Fed. Cir. 2008). However, trial courts have discretion to make exceptions to this general rule in the interest of justice or expediency . . . . These exceptions are not rare. Id. In particular, litigation against or brought by the manufacturer of infringing goods takes precedence over a suit by the patent owner against customers of the manufacturer. Spread Spectrum Screening LLC v. Eastman Kodak Co., 657 F.3d 1349, 1357 (Fed. Cir. 2011) (quoting Katz v. Lear Siegler, Inc., 909 f.2d 1459, 1464 (Fed. Cir. 1990)). 28 U.S.C. section 1404(a) provides that [f]or 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. The first inquiry when analyzing a case s eligibility for 1404(a) transfer is whether the judicial district to which transfer is sought would have been a district in which the claim could have been filed. In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) (Volkswagen I). Once that threshold is met, the movant has the burden of proving that the transferee venue is clearly more convenient than the transferor venue. In re Nintendo, 589 F.3d 1194, 1200 (Fed. Cir. 2009); In re TS Tech, 551 F.3d 1315, 1319 (Fed. Cir. 2008); In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (Volkswagen II). In this regard, courts analyze both public and private factors relating to the convenience of parties and witnesses as well as the interests of particular venues in hearing the case. See Nintendo, 589 F.3d at 1198; TS Tech, 551 F.3d at 1319. The private factors include: (1) the relative ease of access to sources of proof; (2) 3 the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious, and inexpensive. Nintendo, 589 F.3d at 1198; TS Tech, 551 F.3d at 1319; Volkswagen I, 371 F.3d at 203. The public factors include: (1) the administrative difficulties flowing from court congestion; (2) the 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 or in the application of foreign law. Nintendo, 589 F.3d at 1198; TS Tech, 551 F.3d at 1319; Volkswagen I, 371 F.3d at 203. Though the private and public factors apply to most transfer cases, they are not necessarily exhaustive or exclusive, and no single factor is dispositive. Volkswagen II, 545 F.3d at 314-15. III. STAY Pantech suggests that the Court stay proceedings in this case pending resolution of the Google litigation in the Northern District of California. The Court does not expect the current California litigation to dispose of key issues in this case and the other related Rockstar litigations. See Spread Spectrum, 657 F.3d at1358. Though the patents-in-suit in the Texas litigations are the same, the suits accused products are importantly different. Though each of the accused products uses some version of Android, a product driven primarily by Google, each defendant mobile phone manufacturer modifies and customizes the Android system to its own particular purposes (Dkt. No. 28-5). It is by no means clear, then, that resolving infringement issues as to Android proper will resolve issues relating to other manufacturers various implementations of the Android system. These specialized implementations place these suits far outside of the usual customer suit exemption from the first-filed rule. See Spread Spectrum, 657 F.3d at 1358. 4 The Texas litigations also present issues relating to each phone manufacturer s devices and hardware, as the California litigation does not. One of the patents-in-suit claims only hardware (Dkt. No. 28-9). Rockstar alleges that the other patents-in-suit cover the interaction of the parties Android implementations with hardware (Dkt. No. 1). Thus, only if the patents are invalidated completely in the California court will major issues in the Texas cases be resolved. Pantech s request for a stay, then, should be denied. IV. TRANSFER To support its argument for transfer, Pantech relies on arguments set forth in other defendants transfer motions in a related case (Dkt. No. 27, at 10-12). The Court has denied that motion (Case No. 2:13-CV-00898, Dkt. No. 44). Pantech recites certain facts relating to the location of its employees in Korea and Atlanta, Georgia. Pantech argues that it will be less convenient for these employees if the case is tried in the NDCA than in the Eastern District of Texas. Pantech s barebones argument does not hold up against Rockstar s detailed analysis of the party and nonparty witnesses and evidence in this case. See id. The Court finds, having analyzed each of the private and public interest factors enumerated above, that Pantech has failed to carry its burden of proving that the NDCA is clearly a more convenient venue than this Court. V. CONCLUSION The Court finds that a stay of proceedings would not serve the interests of justice, because major issues in this case and other pending cases will likely remain even after the California litigation is resolved. The Court also finds that the Northern District of California is not clearly a more convenient venue for this case. 5 Having considered the matter carefully, the Court finds that Defendants motion (Dkt. No. 27) should be and hereby is DENIED. So Ordered and Signed on this Aug 1, 2014 6
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