Court Opinion

ID: 2741205
Source: CourtListenerOpinion
Date Created: 2014-10-09 16:01:24.019521+00
Date Added: 2024-06-11T09:54:53.474973
License: Public Domain

Case: 14-147         Document: 22          Page: 1       Filed: 10/09/2014

                 NOTE: This order is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                       ______________________

  IN RE GOOGLE INC., SAMSUNG ELECTRONICS
  CO., LTD., SAMSUNG ELECTRONICS AMERICA,
   INC., AND SAMSUNG TELECOMMUNICATIONS
                  AMERICA, LLC,
                     Petitioners.
               ______________________

                              2014-147
                       ______________________

    On Petition for Writ of Mandamus to the United
States District Court for the Eastern District of Texas in
Nos. 2:13-cv-00894-JRG and 2:13-cv-00900-JRG, Judge J.
Rodney Gilstrap.
    ---------------------------------------------------------------------------
  IN RE HTC CORPORATION AND HTC AMERICA,
                                   INC.,
                               Petitioners.
                       ______________________

                              2014-148
                       ______________________

    On Petition for Writ of Mandamus to the United
States District Court for the Eastern District of Texas in
No. 2:13-cv-00895-JRG, Judge J. Rodney Gilstrap.
    ---------------------------------------------------------------------------
   IN RE ASUSTEK COMPUTER, INC. AND ASUS
          COMPUTER INTERNATIONAL, INC.,
                               Petitioners.
Case: 14-147         Document: 22          Page: 2       Filed: 10/09/2014

2                                                       IN RE GOOGLE INC.

                       ______________________

                              2014-149
                       ______________________

    On Petition for Writ of Mandamus to the United
States District Court for the Eastern District of Texas in
No. 2:13-cv-00894-JRG, Judge J. Rodney Gilstrap.
    ---------------------------------------------------------------------------
IN RE LG ELECTRONICS, INC., LG ELECTRONICS
U.S.A., INC. AND LG ELECTRONICS MOBILECOMM
                              U.S.A., INC.,
                               Petitioners.
                       ______________________

                              2014-150
                       ______________________

    On Petition for Writ of Mandamus to the United
States District Court for the Eastern District of Texas in
No. 2:13-cv-00898-JRG, Judge J. Rodney Gilstrap.
    ---------------------------------------------------------------------------
  IN RE ZTE CORPORATION AND ZTE (USA) INC.,
                               Petitioners.
                       ______________________

                              2014-151
                       ______________________

    On Petition for Writ of Mandamus to the United
States District Court for the Eastern District of Texas in
No. 2:13-cv-00901-JRG, Judge J. Rodney Gilstrap.
                 ______________________

                           ON PETITION
                       ______________________
 Before O’MALLEY, WALLACH, and HUGHES, Circuit Judges.
Case: 14-147   Document: 22     Page: 3   Filed: 10/09/2014

 IN RE GOOGLE INC.                                      3

O’MALLEY, Circuit Judge.
                       ORDER
    These petitions for a writ of mandamus from orders of
the United States District Court for the Eastern District
of Texas denying motions for a stay of proceedings or,
alternatively, transfer of venue put forth similar argu-
ments that require us to determine how these related
cases should proceed.
                      BACKGROUND
     These petitions arise out of five complaints filed by
Rockstar Consortium US LP and Mobilestar Technologies,
LLC (“Respondents”), in the Eastern District of Texas
naming as defendants Samsung Electronics Co., Ltd. et
al. (“Samsung”), ASUS Computer International, Inc. et al.
(“ASUS”), ZTE Corporation et al., HTC Corporation et al.,
and LG Electronics, Inc. et al. (along with Google, Inc.
(“Google”) referred to collectively as “Petitioners”).
    With the exception of ASUS, which was not accused of
infringing U.S. Patent No. 6,333,973 (the “’973 patent”),
the complaints assert infringement of seven patents: U.S.
Patent Nos. 5,838,551 (the “’551 patent”); the ’973 patent;
6,128,298; 6,037,937 (the “’937 patent”); 6,463,131 (the
“’131 patent”); 6,765,591 (the “’591 patent”); and
6,937,572. Except for the ’551 patent, the patents are
largely directed to software functionalities implemented
on a general-purpose computing device.
    Though Google was not initially named as a party in
any of these actions, it supplied each defendant with
operating system software (“Android”) used in the accused
devices and all six complaints alleged infringement based
on certain “mobile communication devices having a ver-
sion (or an adaption thereof) of Android operating sys-
tem.” See, e.g., Complaint at 5, Rockstar Consortium US
LP v. Samsung Elecs. Co., Ltd., No. 2:13-cv-00900 (E.D.
Tex. Oct. 31, 2013), ECF No. 1.
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4                                          IN RE GOOGLE INC.

     On December 23, 2013, Google filed a complaint in the
Northern District of California, stating that “Rockstar’s
litigation campaign has placed a cloud on Google’s An-
droid platform” and “threatened Google’s business and
relationships with its customers and partners, as well as
its sales of Nexus-branded Android devices[.]” Complaint
at 2, Google Inc. v. Rockstar Consortium US LP, No. 4:13-
cv-05933 (“California Action”) (N.D. Cal. Dec. 23, 2013),
ECF No. 1.
    Google’s complaint sought a declaration that “any ver-
sion of Google’s Android platform” and its own devices,
the Nexus 5, Nexus 7, and Nexus 10, “do not infringe” the
seven patents. Id. at 6, 13. In response to the complaint,
Respondents counterclaimed, seeking a judgment that
Google’s Nexus line of products infringed all seven of the
patents at issue in the Texas actions. Google answered
those charges by alleging that all seven patents were
invalid and unenforceable.
    Shortly thereafter, Respondents amended their com-
plaint against Samsung in the Eastern District of Texas
to include Google as a defendant. As amended, Respond-
ents’ complaint alleged that Samsung infringed all seven
patents and that Google infringed the ’937, ’131, and ’591
patents.
     Respondents also moved to transfer or dismiss the
California action. On April 17, 2014, the Northern Dis-
trict of California denied that motion, finding that “[t]he
vast majority of the claims brought in the [Texas] actions
appear to be targeted specifically at Android features,”
“the determination of the infringement issues here would
likely be dispositive of the other cases,” and the Northern
District of California would be more convenient to try the
matter. California Action, slip op. at 22 n.10, 24, 28 (N.D.
Cal. Apr. 17, 2014).
    Citing the Northern District of California’s decision,
Petitioners asked the Eastern District of Texas to stay
Case: 14-147     Document: 22      Page: 5    Filed: 10/09/2014

 IN RE GOOGLE INC.                                           5

proceedings or transfer the actions to California, arguing
that proceeding with Respondents’ infringement actions
would result in wasteful and duplicative litigation. The
Eastern District of Texas disagreed with Petitioners and
denied their motions. 1 These petitions followed.
                         DISCUSSION
     The Supreme Court has repeatedly observed that un-
der the doctrine of comity, when cases involving substan-
tially overlapping issues are pending before two federal
district courts, there is a strong preference to avoid dupli-
cative litigation. Colo. River Water Conservation Dist. v.
United States, 424 U.S. 800, 817 (1976); Kerotest Mfg. Co.
v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183 (1952).
That rule reflects an elementary principle of “wise judicial
administration.” Id.
    Those principles apply with full force here. Respond-
ents themselves have asserted that the proceedings
involve substantially the same controversy. See Motion to
Dismiss at 19, California Action, (N.D. Cal. Jan. 23,
2014), ECF No. 20 (“Entertaining duplicative suits here
‘would serve no purpose of judicial administration and
would risk inconsistent rulings . . . .’”); id. at 17 (“Google’s
complaint . . . is effectively duplicative of the first-filed
Texas Actions.”).
    Given these facts, it is clear that there was no need to
proceed with the five Texas actions because the one
California action may suffice. Such circumstances pre-
sent a classic case for a stay: The only potential results of
adjudicating these cases in parallel fashion would be the
Texas and California courts agree on the major issues of

    1  On the same day the Eastern District of Texas de-
nied Google and Samsung’s motion, it allowed Respond-
ents to amend their complaint to allege infringement of
all seven patents against Google.
Case: 14-147    Document: 22     Page: 6   Filed: 10/09/2014

6                                          IN RE GOOGLE INC.

the litigation, thus producing wasteful and unnecessary
litigation, or the courts disagree, thus producing conflict-
ing decisions. Cf. Merial Ltd. v. Cipla Ltd., 681 F.3d
1283, 1299 (Fed. Cir. 2012) (The purpose of the rule is to
“avoid conflicting decisions and promote judicial efficien-
cy.”).
    In concluding otherwise, the Eastern District of Texas
relied heavily on each defendant mobile phone manufac-
turer’s ability to modify and customize the Android plat-
form to its own particular purpose. In fact, however,
Respondents provided nearly identical infringement
contentions to all defendants that rely almost exclusively
on the underlying functionalities provided in the base
Android source code provided by Google. Thus, the record
strongly suggests there will be substantial similarity
involving the infringement and invalidity issues in all the
suits.
     This significant overlap undermines the district
court’s main premise in rejecting a stay—that each de-
fendant mobile phone manufacturer’s ability to modify
and customize the Android platform to its own particular
purposes “place[d] these suits far outside the usual ‘cus-
tomer-suit exception.’” See, e.g., Rockstar Consortium US
LP v. ASUSTeK Computer, Inc., No. 2:13-cv-894, slip op.
at 9 (E.D. Tex. Jul. 28, 2014); see also Respondents’ Oppo-
sition to Google and Samsung’s Petition at 16-17 (arguing
that a stay was not warranted because the manufacturers
should not be considered “mere resellers” of Google). 2

    2 We are also unpersuaded by Respondents’ argument
that, despite not initially naming Google as a defendant,
their actions are entitled to precedence under a first-filed
designation since their complaints in Texas were filed
before the California action, because, as the Supreme
Court noted in rejecting a similar argument in Kerotest
Case: 14-147    Document: 22     Page: 7   Filed: 10/09/2014

 IN RE GOOGLE INC.                                       7

    The way to avoid wasted resources is not through
such a “mechanical solution” or “precise rule.” Colo.
River, 424 U.S. at 817; Kerotest Mfg., 342 U.S. at 183. It
is instead through a flexible approach, including staying
proceedings if the other suit is so closely related that
substantial savings of litigation resources can be ex-
pected. Here, it is clear that staying proceedings in Texas
will likely further these objectives by mooting or at least
advancing the “major premises” being litigated in the
Texas actions. Katz v. Lear Siegler, Inc., 909 F.2d 1459,
1464 (Fed. Cir. 1990).
    Wise judicial administration must also take into con-
sideration the comparative convenience of both venues for
resolving the matter. See Futurewei Techs., Inc. v. Acacia
Research Corp., 737 F.3d 704, 708 (Fed. Cir. 2013) (“Justi-
fication for an exception may be found in ‘the convenience
and availability of witnesses, [the] absence of jurisdiction
over all necessary or desirable parties . . . .” (quoting
Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931, 938 (Fed.
Cir. 1993))).
    Here, those considerations point firmly in the direc-
tion of the Northern District of California. As that court
explained, “Google’s Android products, the target of this
infringement action, were designed and created here,”
“[m]any of the witnesses who can testify to the design and
development of the accused Android platform’s features
reside near Google’s headquarters in Mountain View,
California,” and “Defendants do not name any witnesses
in Texas essential to the suit.” California Action, slip op.
at 22-25 (N.D. Cal. Apr. 17, 2014).
   Google further filed a declaration that its records re-
garding the Android platform are predominantly based in

Manufacturing, “the equities of the situation do not
depend on this argument.” 342 U.S. at 186 n.6.
Case: 14-147    Document: 22     Page: 8   Filed: 10/09/2014

8                                          IN RE GOOGLE INC.

its headquarters in the Northern District of California.
As we noted in In re Genentech, Inc., “[i]n patent in-
fringement cases, the bulk of the relevant evidence usual-
ly comes from the accused infringer. . .[and thus] . . . the
place where the defendants’ documents are kept weighs in
favor of transfer to that location.” 566 F.3d 1338, 1345
(Fed. Cir. 2009) (citation omitted). Here the record does
not suggest otherwise.
    Respondents point out that they maintain an office in
Plano, Texas. But they do not dispute that their primary
operations are run out of Canada. Moreover, the only
prospective employee witnesses that Respondents name
from Plano work as counsel for Respondents, and are thus
entitled to little consideration in a convenience calculus.
See In re Horseshoe Entm’t, 337 F.3d 429, 434 (5th Cir.
2003); Solomon v. Cont’l Am. Life Ins. Co., 472 F.2d 1043,
1047 (3d Cir. 1973); Jack C. Keir, Inc. v. Life Office Mgmt.
Ass’n, Inc., No. 92-6163, 1993 WL 283902, at *2 (E.D. Pa.
July 27, 1993) (same for in-house counsel).
    Given the convenience of the Northern District of Cal-
ifornia and benefits of staying the Texas proceedings, it
makes no difference whether it would have been easier to
consolidate all of the actions in Texas, as suggested by the
Eastern District of Texas in its practical problems analy-
sis. That reasoning simply ignores the justifications for a
stay and cannot, in our view, sustain the obvious waste of
resources inherent in allowing both actions to proceed in
parallel fashion.
    Because the Eastern District of Texas’ orders frus-
trate the comity doctrine, requiring two federal district
courts and the parties to expend resources to resolve
substantially similar claims and issues, the district
court’s decisions to deny the petitioners’ motions for a
stay of proceedings was a clear abuse of discretion under
applicable governing standards, and, in our view, worthy
of correction by way of mandamus relief. See Cheney v.
Case: 14-147     Document: 22   Page: 9   Filed: 10/09/2014

 IN RE GOOGLE INC.                                         9

U.S. Dist. Court, 542 U.S. 367, 380-81 (2004) (when a
petitioner has no alternative way of seeking the relief
requested a court may grant mandamus in its discretion
when it concludes that the district court “clearly abuses
its discretion.”).
      Accordingly,
      IT IS ORDERED THAT:
    The petitions for a writ of mandamus are granted to
the extent that the orders denying the motions to stay are
vacated, and the Eastern District of Texas is ordered to
stay proceedings pending the outcome of the declaratory
judgment action in the Northern District of California.

                                  FOR THE COURT

                                   /s/ Daniel E. O’Toole
                                   Daniel E. O’Toole
                                   Clerk of Court

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