Source: https://docs.justia.com/cases/federal/district-courts/arizona/azdce/2:2011cv01948/646610/29
Timestamp: 2017-05-22 21:40:21
Document Index: 180614258

Matched Legal Cases: ['art 9', 'art 26', 'art 9', 'art 26', '§ 1404', '§ 1404']

ORDER granting in part and denying in part 9 Defendant's Motion to Dismiss or Transfer Venue and granting in part 26 Plaintiff's Motion for Leave to File a Sur-Reply for CSR Technology Incorporated v. Bandspeed Incorporated :: Justia Dockets & Filings Log In
CSR Technology Incorporated v. Bandspeed Incorporated
ORDER granting in part and denying in part 9 Defendant's Motion to Dismiss or Transfer Venue and granting in part 26 Plaintiff's Motion for Leave to File a Sur-Reply. The Clerk is instructed to transfer this case to the Honorable Lee Yeakel in the Western District of Texas. Signed by Judge G Murray Snow on 4/5/12.(LSP)
CSR Technology, Inc.,
Bandspeed, Inc.,
No. CV-11-1948-PHX-GMS
Pending before the Court are Defendant Bandspeed Inc.’s (“Bandspeed”) Motion to
Dismiss or Transfer Venue (Doc. 9) and Plaintiff CSR Technology, Inc.’(“CSR”) Motion for
Leave to File a Surreply (Doc. 26). For the reasons stated below Plaintiff’s motion to file a
surreply is granted in part, and Defendant’s motion is granted in part and denied in part. The
case will be transferred to the Western District of Texas.1
On August 7, 2009, Bandspeed, which sells products designed to identify and avoid
wireless network interference, filed a complaint in the Western District of Texas (the
“Western District Litigation”) alleging that multiple companies had infringed upon two of
Both parties have requested oral argument. The requests are denied because the
parties have thoroughly discussed the law and the evidence, and oral argument will not aid
the Court’s decision. See Lake at Las Vegas Investors Group, Inc. v. Pac. Malibu Dev., 933
F.2d 724, 729 (9th Cir. 1991).
its patents. CSR, which supplies Bluetooth chips that are used in the devices at issue in the
Western District Litigation, moved to intervene on December 9, 2009, and was granted leave
to do so on March 5, 2010. On June 30, 2010, Bandspeed filed a suit in the Eastern District
of Texas (the “Eastern District Litigation”) asserting that another set of defendants had
infringed upon the same patents. The defendants in the Eastern District litigation moved to
transfer venue to the Western District of Texas, and the case was transferred on August 15,
2011. In both of the Texas cases, Bandpseed alleged that the companies infringed upon the
same two patents—U.S. Patent Nos. 7,027,418 and 7,570,614 (“the ’418 patent” and “the
’614 patent”). These patents concern Bandspeed’s technology for optimizing the performance
of “frequency hopping” techniques used in Bluetooth technology.2
On August 1, 2011, CSR acquired Zoran Corporation, which owned U.S. Patent No.
6,792,247 (“the ’247 patent”). Zoran assigned the ’247 patent to CSR on October 4, 2011.
On October 5, 2011, CSR filed this lawsuit against Bandspeed, alleging that it had sold
products that infringe upon the ’247 patent in Arizona and elsewhere. (Doc. 1). The ’247
patent, titled “Co-Located Frequency-Agile System and Method” is also a system for
optimizing frequency hopping techniques used in Bluetooth technology.
Defendant has filed a motion to dismiss for lack of personal jurisdiction or improper
venue, or alternately to transfer venue to the Western District of Texas. (Doc. 9). In its reply,
Defendant raised two issues not discussed in the motion, and Plaintiff has moved to file a
surreply. (Doc. 26)
“Frequency hopping” describes a technique by which radio signals are sent via
rapidly changing frequencies in order to avoid interference. The technique was originally
developed and patented by the actress Hedy Lamarr and the avant-garde composer George
Antheil as patent number 2,292,387 in 1942 as a means of providing the Allied war effort
with a means of evading Nazi efforts to jam communications. See generally Richard Rhodes,
Woman in the World (Doubleday 2011). Neither Ms. Lamarr, Mr. Antheil, nor their estates
are parties to this litigation.
Personal jurisdiction in patent cases is decided under Federal Circuit law, rather than
that of the regional circuit in which the case arose. Akro Corp. v. Luker, 45 F.3d 1541, 1543
(Fed. Cir. 1995). A court may assert general jurisdiction over a defendant whose contacts
with the forum state are “continuous and systematic,” regardless of whether those contacts
form the basis of the complaint. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.
408, 415 (1984). A court lacking general jurisdiction may nevertheless exercise personal
jurisdiction over a party if it has “specific jurisdiction” over a party that “deliberately has
engaged in significant activities within a state or has created continuing obligations between
himself and residents of the forum.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475–76
(1985) (internal quotations omitted).
Under Federal Circuit law, a district court can exercise specific jurisdiction over a
party that would be subject to the jurisdiction of a court of general jurisdiction in the forum
state. Red Wing Shoe Co., Inc. v. Hockerson-Halberstadt, 148 F.3d 1355, 1358 (Fed. Cir.
1998). The Arizona long-arm statute permits state courts to exercise personal jurisdiction “to
the maximum extent permitted by this state and the Constitution of the United States.” ARIZ.
R. CIV. P. 4.2. This court therefore has personal jurisdiction over Defendants if the
maintenance of this suit “does not offend traditional notions of fair play and substantial
justice” embodied in the Due Process Clause.3 Although the burden is on the plaintiff to show
that jurisdiction is proper, in the absence of an evidentiary hearing pleadings are construed
in the plaintiff’s favor and the plaintiff “need only to make a prima facie showing that
The Federal Circuit has held that since patent cases arise under federal law, rather
than state law, the Due Process Clause at issue is the Due Process Clause of the Fifth, rather
than the Fourteenth, Amendment. Nevertheless, it has described the difference as “purely
academic because this court, though professing reliance on the Fifth Amendment, applies the
Fourteenth Amendment state-contacts test of International Shoe.” Red Wing Shoe, 148 F.3d
at 1358 n.*.
defendants are subject to personal jurisdiction.” Electronics for Imaging Inc. v. Coyle, 340
F.3d 1344, 1349 (Fed. Cir. 2003).
In determining whether exercising specific jurisdiction over an out-of-state defendant
comports with due process in a patent case, a court evaluates whether “(1) the defendant
purposefully directed its activities at residents of the forum state, (2) the claim arises out of
or relates to the defendant’s activities in the forum state, and (3) assertion of personal
jurisdiction is reasonable and fair.” Electronics for Imaging, 340 F.3d at 1350. A defendant
does not purposefully direct its activity towards the forum state by creating a web page that
may be accessed when it has “conducted no commercial activity over the Internet in [the
forum].” Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 419 (9th Cir. 1997). On the other
hand, shipping a product to a state qualifies as purposeful direction under the law of the
Federal Circuit, and if that product is the alleged infringing product, the first two prongs of
the specific jurisdiction test are met. See Silent Drive, Inc. v. Strong Industries, Inc., 326 F.3d
1194, 1205 (Fed. Cir. 2003) (“Personal jurisdiction over out-of-state defendant existed with
respect to a trademark infringement claim when the defendant’s products that allegedly
infringed plaintiff’s trademark had been shipped to forum state from out of state.”)
(discussing Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1391 (8th Cir.
1991)). Even if the first two prongs are met, a court cannot exercise personal jurisdiction if
the out-of-state defendant presents a “compelling case that the presence of some other
considerations would render jurisdiction unreasonable.” Burger King, 471 U.S. at 477.
Venue is proper in a patent case “in the judicial district where the defendant resides,
or where the defendant has committed acts of infringement and has a regular and established
place of business.” 28 U.S.C. § 1404(b) (emphasis added). Despite the statute’s requirement
that a defendant have a regular and established place of business, the Federal Circuit has held
that when a defendant is a corporation, personal jurisdiction alone is adequate to support
venue. (“Venue in a patent action against a corporate defendant exists whenever there is
personal jurisdiction.”) Trintec Indus., Inc. v. Pedre Promotional Prods. Inc., 395 F.3d 1275,
1280 (Fed. Cir. 2005). In patent cases where a defendant moves to dismiss both on the
grounds of personal jurisdiction and venue, therefore, “no separate venue inquiry is
necessary.” Id.
The Court may transfer a case “to any other district or division where it might have
been brought” when such transfer serves “the convenience of parties and witnesses” and is
“in the interest of justice.” 28 U.S.C. § 1404(a). Even in patent cases, transfer motions are
governed by “the law of the regional circuit in which [a district court] sits.” Winner Intern.
Royalty Corp. v. Wang, 202 F.3d 1340, 1352 (Fed. Cir. 2000). The district court considers
multiple factors in determining whether to transfer, and ultimately decides whether transfer
is proper based on an “individualized, case-by-case consideration of convenience and
fairness.” Jones v. GNC Francising, Inc., 211 F.3d 495, 498 (9th Cir. 2000). Defendant has
the burden of showing that the action should be transferred, and “must make a strong
showing of inconvenience to warrant upsetting [Plaintiff’s] choice of forum.” Decker Coal
Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986); see N. Acceptance
Trust v. Gray, 423 F.2d 653, 654 (9th Cir. 1970) (stating that “substantial weight” should be
given to the plaintiff’s choice of forum); Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)
(stating that “the plaintiff’s choice of forum should rarely be disturbed”).
Plaintiff does not contend that Defendant is subject to general jurisdiction in Arizona,
so personal jurisdiction will only lie if the Arizona state courts could exercise specific
jurisdiction over Defendant. Defendant claims that the device it sold in Arizona in 2008, a
starter kit identified as AMAP3100AG-VC-NFR, is not the same device as AMAP3100AG-
VC, the device at issue, while Plaintiff notes that the only difference is the suffix “NFR,”
which Defendant concedes stands for “Not for Resale.” (Doc. 10 ¶ 7). Although Defendant’s
current website does not offer products directly for sale, Plaintiffs have offered a printout of
a previous version of the website, which Defendant does not dispute, advertising the 3100AG
access point and featuring a “buy now” link, suggesting that customers could purchase the
access point directly over the internet in 2008. (Doc 18-1, Ex. 2). Defendant acknowledges
that the product was sold in Arizona; construing the pleadings and affidavits in Plaintiff’s
favor, the product was one of the devices at issue and was sold directly through the
Defendant’s website to an Arizona purchaser..
Such a sale provides minimum contacts adequate to support personal jurisdiction. In
Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1565 (Fed. Cir. 1994), the
Federal Circuit found personal jurisdiction to be proper when “defendants purposefully
shipped the accused fan into [the forum state] through an established distribution channel.”
See also Systemation, Inc. v. Engel Indus., Inc., 194 F.3d 1331 (table), 199 WL 129640, at
*4 (Fed. Cir. 1999) (“We hold the district court properly asserted personal jurisdiction over
Engel based on its sale of an allegedly infringing machine to Ritchie in Massachusetts.”).
It is true that the Ninth Circuit, in the non-patent context, has found that a single sale
over the internet does not give rise to personal jurisdiction. In Boschetto v. Hansing, 539 F.3d
1011, 1017 (9th Cir. 2008), the Ninth Circuit found that an individual who sold a car through
the E-bay online auction site was not subject to personal jurisdiction in California, where the
purchaser resided. The court emphasized that the sale was a “one-shot affair,” and overtly
distinguished cases in which a supplier sells items through its own website. Id. In those cases,
it wrote, “the nature of the website has jurisdictional significance because the website allows
the defendant to maintain some ongoing contact with the forum state (as well as every other
state that can access the site).” Id. at 1018.
District courts within the Ninth Circuit have found that isolated sales of accused
products do not give rise to personal jurisdiction, but have always emphasized that such
products were not purchased directly through an interactive website. In Hayden v. Shin-Etsu
Handotai America, Inc., 80 F. Supp. 2d 119, 1122 (D. Or. 1999), the Oregon district court
found that a single sale was not adequate to support personal jurisdiction “[i]n the absence
of a distribution channel, a local sales force, or local advertising.” The decision noted that
the vendor’s “website, which has never generated any orders, including any from Oregon,
is not a sufficient contact upon which to base personal jurisdiction.” 80 F. Supp. 2d at 1123.
Likewise, the Central District of California has found that “a single sale of the allegedly
infringing product worth merely $8,800” does not provide minimum contacts sufficient to
support personal jurisdiction. New Tech Stainless Steel Prods. Co. Ltd. v. Sun Mfg. Corp.,
CV-04-1182 (RGK), 2004 WL 1773416, at *3 (Jul. 20, 2004). Again, however, the court
emphasized that the defendant’s website did not allow parties to place orders, and that a
“defendant that ‘conducts business’ over the Internet with the residents of the forum will
usually be found subject to that forum’s jurisdiction.” Id. (quoting Zippo Mfg. Co. v. Zippo
Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D.Pa. 1997)).
Here, the accused product was sold directly to an Arizona consumer through the
Defendant’s interactive website. Such a sale is distinguishable from those in cases where the
defendant hosts a purely passive website and fortuitously sells a product in the forum state.
It is further distinguished from cases where online sales of unrelated products have been
found inadequate to support personal jurisdiction. See, e.g., Hockerson-Halberstadt, Inc. v.
Propet USA, Inc., 62 Fed. Appx. 322, 338 (Fed. Cir. 2003) (sale of non-infringing items
through website does not give rise to personal jurisdiction). Since the consumer was able to
purchase the product directly from Defendant by visiting Defendant’s website and clicking
on the “buy now” link, the internet and whichever carrier Defendant used to ship the product
served as a distribution network, and the transaction provided the minimum contacts
necessary to satisfy the first two prongs of the test for specific jurisdiction.
In its reply, Defendant argues additionally that because Plaintiff did not acquire Zoran
until 2010, exercising personal jurisdiction over Defendant based on a 2008 sale would
violate Due Process. The Court need not consider this argument, because “[i]ssues raised for
the first time in the reply brief are waived.” Bazuaye v. I.N.S., 79 F.3d 118, 120 (9th Cir.
Additionally, Defendant claims that a December 23, 2011 order by the District Court
in the Western District of Texas required Plaintiff to bring the present action as a
counterclaim. (Doc. 23 at 1–2). Since this order was issued after Defendant filed its original
motion, the argument will be considered, but Plaintiff’s counterargument in its sur-reply will
also be considered. In this regard, Plaintiff’s motion for leave to file a sur-reply is granted.
The Court has read Judge Yeakel’s order, which required CSR to answer Bandspeed’s
amended complaint in the Western Texas litigation by January 23, 2012, and required the
answer to “contain all defenses and counterclaims known to any such party regarding any
issue in either original case and implead any chip manufacturer or supplier not now a party
to this case against whom any party desires to assert a claim.” (Doc. 24-1, Ex. A at 5).
Defendant makes no effort to explain why a claim regarding different patents would be a
counterclaim “regarding any issue in either original case,” and in fact omits this language
when it quotes the order. The order in the Texas litigation does not bear on the personal
jurisdiction inquiry.
Since Plaintiff has shown that Defendant purposefully directed its activity towards
Arizona, and that the suit arises out of that directed activity, the burden shifts to Defendant
to show that exercising personal jurisdiction is “reasonable and fair.” Electronics for
Imaging, 340 F.3d at 1350. In determining whether exercising jurisdiction is reasonable and
fair, a court considers “(1) the burden on the defendant, (2) the interests of the forum state,
(3) the plaintiff’s interest in obtaining relief, (4) the interstate judicial system’s interest in
obtaining the most efficient resolution of controversies, and (5) the shared interest of the
several states in furthering substantive social policies.” Id. at 1350.4
These factors may weigh generally against litigation in Arizona, but not so heavily as
to constitute a violation of Due Process. Defendant is based in Austin, Texas, and while
traveling to Phoenix would create some burden, the burden of traveling from a nearby state
is not unreasonable. Arizona has an interest in enforcing patent laws in its geographic
boundaries, and Plaintiff, which has an office here, has an interest in obtaining relief in
Defendant’s reliance on the alternative factors articulated in the Ninth Circuit in the
non-patent case Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482 (9th Cir. 1993) is
misplaced. In patent cases, the law of the Federal Circuit, not the regional circuit in which
the events that gave rise to the incident took place, governs. Akro, 45 F.3d at 1543.
Arizona. The judicial system’s interest in obtaining an efficient resolution weighs strongly
in favor of litigating in Texas, since parties are currently engaged in related patent litigation
there. The shared interest of the several states is a neutral factor. In sum only one factor
weighs strongly in favor of litigating the case in Texas, and considered as a whole these
factors do not suggest that this case presents “the rare situation in which the plaintiff’s
interest and the state’s interest in adjudicating the dispute in the forum are so attenuated that
they are clearly outweighed by the burden of subjecting the defendant to litigation within the
forum.” Beverly Hills Fan Co. v. Royal Sovereign Corp. 21 F.3d 1558, 1568 (1994) (citing
Burger King, 471 U.S. at 477).
Construing the pleadings and affidavits in favor of Plaintiff, it has met its prima facie
burden of showing that this court may exercise personal jurisdiction over Defendant
sufficient to defeat a motion under Rule 12(b)(2) at this stage.
Since the court has personal jurisdiction over Defendant, the case may not be
dismissed for improper venue under Rule 12(b)(3). See Trintec Indus., Inc. v. Pedre
Promotional Prods. Inc., 395 F.3d 1275, 1280 (Fed. Cir. 2005). (“Venue in a patent action
against a corporate defendant exists whenever there is personal jurisdiction.”).
Neither party disputes that the action might have been brought in Texas, and Plaintiff
provides documentation that Defendant sold the accused items in California, suggesting that
it might have been brought there as well. (Doc. 18, Ex. 16–18). The Ninth Circuit has
adopted the following non-exclusive list of factors for courts to consider when ruling on a
motion to transfer: “(1) the location where the relevant agreements were negotiated and
executed, (2) the state that is most familiar with the governing law, (3) the plaintiff’s choice
of forum, (4) the respective parties’ contacts with the forum, (5) the contacts relating to the
plaintiff’s cause of action in the chosen forum, (6) the differences in the costs of litigation
in the two forums, (7) the availability of compulsory process to compel attendance of
unwilling non-party witnesses, and (8) the ease of access to sources of proof.” Jones, 211
F.3d at 498. The first factor is not relevant to the case at hand, since the parties did not
negotiate any agreements. The second factor is neutral, since any court hearing the case will
be relying on federal patent law. The third factor weighs in favor of keeping the case in
Arizona, where Plaintiff filed the case. The fourth factor weighs slightly in favor of transfer.
Defendant’s sole contact with Arizona was selling one device over the internet to a purchaser
here, and while Plaintiff has an office in Phoenix, it is one of eight it maintains in the U.S.
in addition to others “worldwide.” (Doc. 18 at 3). The fifth factor is neutral—while
Defendant sold one item in Phoenix, Plaintiff concedes that it offered the items for sale in
stores in California, and Defendant presumably sold its products elsewhere as well. (Doc. 18,
Ex. 16–18). The three factors related to inconvenience weigh slightly in favor of transfer, but
not decisively so, because “modern transportation and communication have made it much
less burdensome for a party sued to defend itself outside its home state.” Patent Rights
Protection Grp., LLC v. Video Gaming Techs., Inc., 603 F.3d 1364, 1370 (Fed. Cir. 2010)
(internal quotations omitted). On the whole, these eight factors are essentially neutral.
Nevertheless, the Jones factors are not exclusive, and do not include judicial economy,
a factor that both parties discuss at length. In cases where “several highly technical factual
issues are presented and the other relevant factors are in equipose, the interest of judicial
economy may favor transfer to a court that has become familiar with the issues.” Regents of
the University of California v. Eli Lilly & Co., 119 F.3d 1559, 1565 (Fed. Cir. 1997). This
district has previously transferred patent cases to districts where the parties are engaged in
ongoing patent litigation, even when the dispute “does involve different patents from those
at issue” in the other case, so long as the cases “involve the same parties, the same
technology, and competing products in the same relevant markets.” Advanced Semiconductor
Materials v. Applied Materials, Inc., 30 USPQ2d 1553, 1554 (D. Ariz. 1993). The
intellectual properties at issue in the related cases need not be identical for judicial economy
to merit a transfer—another district court has transferred a trademark case to a district where
the parties were involved in ongoing patent litigation. See Smiths Indus. Medical Sys., Inc.
v. Ballard Medical Prods., Inc., 728 F. Supp. 6, 7 (D.D.C. 1989).
Here, the efforts expended by the Western District of Texas to become familiar with
the technology at issue weighs decisively in favor of transfer. The Texas litigation has been
ongoing since August of 2009. The judge in that litigation has held a Markman hearing,
including a tutorial on the technology and the patents involved. On August 12, the judge
issued a 23-page Claim Construction Order describing the technology, patents-in-suit, and
disputed terminology in the patents. (Doc. 11, Ex. 9). Plaintiffs emphasize that the patents-in-
suit are different than those in the Texas litigation, and note that Defendant previously argued
against transfer in the Eastern District litigation, claiming at the time that “it is [Bandwith]’s
intention to assert numerous claims of patents in suit that are not called out in the Bluetooth
standard.” (Doc. 18-4, Ex. 9).
Some district courts have refused to transfer cases when the same parties were
engaged in ongoing patent litigation in other districts. In NETGEAR, Inc. v. Ruckus Wireless,
Inc., CV-10-999 (SLR), 2011 WL 3236043, at *3 (D. Del. Jul. 28, 2011), the court declined
to transfer a case to California when the patents litigated there “originated from different
companies, have different inventors, and are of different patent families from the patents-in-
suit.” The California Judge had not expended significant resources in the other NETGEAR,
cases however, because they had “been stayed pending resolution of an inter partes
reexamination proceeding initiated by plaintiff in the United States Patent Office.” Id. at *1.
Here too, transfer based solely on the fact that the technology at issue in both cases is
generally related to frequency hopping may not be merited—as noted above, frequency
hopping has been patented for seventy years, and presumably now encompasses more
variations than it did when first patented by Lamarr and Antheil. At issue, however, is not
merely the similarity of the technology, but the extensive judicial resources that have already
been expended in the Western District of Texas to ensure that claims involving that
technology are resolved promptly. Likewise, while some convenience factors in fact weigh
in favor of transfer to the Central or Southern Districts of California, Plaintiff has not
indicated that the Central District of California has yet conducted substantial research to
become familiar with the technology at issue. Like the Texas litigation, that case involves
patents that parties now claim are related, but which are not the same patents as those in the
instant case. (See Doc. 18-8, Ex. 21, indicating that the patents-in-suit in the California
litigation are U.S. Patent Nos. 6, 933, 886 and 6, 297,771). The only district in which
substantial judicial resources have been expended in pursuit of a swift resolution to related
patent cases between these two parties is the Western District of Texas. For that reason,
judicial economy merits a transfer to that district.
Because Defendant sold the accused device through its own website to a customer in
the District of Arizona, the court may exercise specific jurisdiction over it based on that
claim, and the case will not be dismissed for lack of personal jurisdiction or improper venue.
The bulk of the factors considered for transfer, however, weigh generally in favor of transfer
to the Western District of Texas. The factor of judicial economy weighs decisively in favor
of transfer. This case involves a dispute over a patent that is closely related to patents that are
currently being litigated by the same parties in the Western District of Texas. The court in
Texas has spent two years with the case, has consolidated another case with it, and has spent
considerable resources becoming familiar with the technology at issue. Although the patent
is indeed not the same as the patents in that suit, the effort that the Western District has spent
learning the underlying technology will assist it in resolving this matter, and thereby preserve
judicial resources. This case will be transferred to the Western District of Texas.
Defendant’s Motion to Dismiss or Transfer Venue (Doc. 9) is granted in part
Plaintiff’s Motion to File a Sur-Reply (Doc. 26) is granted in part.
The Clerk of Court is instructed to transfer this case to the Honorable Lee
Yeakel in the Western District of Texas.