Inre: Google Inc. ( 2014 )


Menu:
  • 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    NOTE: This order is nonprecedential.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.
    Case: 14-147    Document: 22     Page: 4   Filed: 10/09/2014
    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
    s19