Apple: Eastern District of Texas preferred over Western -- Ericsson: with pleasure IF you make a binding commitment to it -- Apple (deafening silence)

Apple has a serious problem with Ericsson having made all the right venue-related decisions so far: the ITC for potential U.S. import bans; the Eastern District of Texas for FRAND issues (where Ericsson won a landmark case against HTC); and the Western District of Texas for damages (companion complaints to import ban requests). Ericsson is also enforcing its rights in four other countries, with preliminary injunction requests pending in Brazil and the Netherlands. In Germany, Ericsson hedged its bets by filing cases with the three leading regional courts for patent cases. Munich and Mannheim are safe choices for plaintiffs, and Ericsson was so lucky as to have both of its cases assigned to Judge Dr. Daniel Voss ("Voß" in German), who is widely regarded as the plaintiff-friendliest of the three judges presiding over patent-specialized divisions (called "civil chambers") of the Dusseldorf Regional Court. Judge Dr. Voss is basically Dusseldorf's answer to the Munich and Mannheim judges.

Now Apple is jockeying for a better position. Part of that effort is a PTAB IPR campaign piggybacking on Samsung's 2021 challenges to many Ericsson patents, taking aim at patents Ericsson hasn't even asserted against Apple. And very surprisingly, almost shockingly, Apple proposed to have the whole dispute resolved by means of a rate-setting decision in the Eastern District of Texas, a venue Apple dreads so much that it even closed its stores there (Apple Stonebriar in Fisco, TX, and Apple Willow Bend in Plano, TX) after the Supreme Court's TC Heartland decision that made it a lot easier to get patent infringement cases moved out of a district unless the defendant has a permanent business presence there (as opposed to merely selling products or offering services nationwide).

Oh well, it now looks like Apple still doesn't really love the Eastern District of Texas...

A week ago, Apple filed a request for an early case management conference in the Eastern District and accused Ericsson of trying to undermine that court's jurisdictions through cases filed elsewhere (including overseas enforcement actions). The next day, Ericsson's counsel contacted Apple's counsel (PDF on Scribd), describing that "characterization [as] both misleading and ironic" as Ericsson "would have preferred to file its patent cases in the Eastern District of Texas, but [Ericsson's] filing in the Western District was necessitated by Apple’s highly publicized closing of all its retail stores in the Eastern District." And then Ericsson made Apple the following proposal:

"Nonetheless, Ericsson is willing to dismiss its Western District suits and refile in the Eastern District if Apple is willing to stipulate to venue in the Eastern District for this dispute and waive any objection under TC Heartland."

In other words: Ericsson is fine with either the Eastern (preferred) or Western District of Texas, but will move its case form the Western to the Eastern District provided that Apple promises not to request a venue transfer to the Northern District of California.

Apple can always bring such a request in the Western District of Texas as well, but it has a strong presence there with many thousands of employees, making a denial of a transfer motion pretty much a given.

The only thing Ericsson didn't want to do was to give Apple an opportunity to avoid Texas altogether.

Apple declined. While there's plenty of rhetoric in a reply (PDF on Scribd) Apple's counsel sent four days later, Apple simply isn't willing to make a binding commitment to the Eastern District of Texas. All that Apple really appears to love about the Eastern District is that it's a gateway to California because of TC Heartland.

On Monday, Ericsson filed its opposition to Apple's request for an early case management and, on that occasion, demonstrated to Chief Judge Gilstrap in the Eastern District of Texas that Apple doesn't truly want to litigate there if it can avoid it. Here's Ericsson's opposition filing, to which the documents I previously linked to serve as exhibits (this post continues below the document):

22-01-24 Ericsson Oppositio... by Florian Mueller

Ericsson's position on an early case management conference is that Apple should firstly specify the issues to be addressed and try to resolve them with Ericsson through meet-and-confer. Only if any issues remained, they could be raised with the court, and the court may not even consider a hearing necessary to resolve any motions resulting from procedural disagreements.

That Ericsson filing also mentions Apple's PTAB IPR campaign (the first five filings, and I've discovered two more that came after Ericsson's opposition brief).

For Judge Gilstrap it's now easy to see what Apple really wants: it wants no enforcement action to take place (which is unrealistic since a FRAND determination is only appropriate for SEPs, but Ericsson is also entitled to royalties on its non-SEPs), and at least not in the Eastern or Western District of Texas. When Ericsson's FRAND action in the Eastern District became known a few months ago, I already wrote that "[i]f Apple wants to go west, it will want to go much further west, i.e., to the Northern District of California, its home district." (emphasis in original)

In addition to the Eastern-Western-Northern thing, Apple and Ericsson also disagree sharply on how to treat the two competing FRAND actions in the Eastern District of Texas. In December, Apple moved to dismiss Ericsson's FRAND case and instead brought its own, which besides four FRAND claims also contains three declaratory-judgment claims against the following Ericsson 5G standard-essential patents (at a time when Ericsson wasn't even suing Apple over patents as a license agreement was still in force for about another month):

Declaratory Judgment Patents

1. U.S. Patent No. 10,374,768 on "efficient SRS resource indication methods"

2. U.S. Patent No. 10,644,724 on "shift values for quasi-cyclic LDPC codes

3. U.S. Patent No. 11,039,312 on "handling of multiple authentication procedures in 5G"

Last week, Ericsson filed its opposition to Apple's motion to dismiss Ericsson's FRAND case (this post continues below the document):

22-01-19 Ericsson Oppositio... by Florian Mueller

Ericsson points to the fact that Apple's FRAND claims pretty much mirror Ericsson's, so Apple itself doesn't really seem to believe that those types of claims weren't justiciable. Also, Ericsson says the license agreement that was in force at the time of filing the complaint did not preclude Ericsson from bringing a FRAND action regarding a future license agreement.

Apple has already replied in support of its motion to dismiss, but that filing is sealed for now. (It also took me a while to find some of last week's filings, probably for the same reason.)

Not only does Ericsson defend its own FRAND case against Apple's motion to dismiss, but it is requesting the dismissal of Apple's FRAND claims or, in the alternative, the consolidation of those claims into Ericsson's case (this post continues below the document):

22-01-19 Ericsson Motion to... by Florian Mueller

Note that this motion to dismiss relates to Apple's FRAND claims, not to the three patent-specific declaratory-judgment claims listed above.

Ericsson argues that Apple's FRAND claims should have been brought as counterclaims to Ericsson's FRAND claims, i.e., they were compulsory counterclaims. The worst-case scenario for Apple would be that its decision to bring a separate complaint--instead of counterclaiming in a pending one, regardless of whether Apple moved to dismiss it--waived those claims. But Ericsson doesn't rely on that theory alone. As a fallback (and that may be the more realistic outcome), Ericsson proposed to sever those FRAND claims from the patent-specific declaratory-judgment claims and to consolidate them into Ericsson's earlier filed Texas FRAND case.

Given that the parties will ultimately have to work out the terms of a cross-license, it wouldn't make sense to have two parallel complaints. And they seem to agree on that, too: it's just that the most extreme position either party can take is that its own complaint should survive while the other should fall. But my guess is we'll see a single FRAND case in the Eastern District of Texas that will involve both parties' FRAND claims.

For the near term I expect to find out about more infringement countersuits by Apple such as the one in Mannheim, but the most interesting question will be whether Ericsson can land a "lucky punch" with its preliminary-injunction requests in Brazil and the Netherlands.

Yesterday, an Ericsson financial report gave an indication as to how much (or how little, if you will) Apple paid Ericsson under the expired license agreement.

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Serial assertions of the same patent claims in the Western District of Texas against multiple defendants: judicial economy weighs against venue transfer

Once upon a time, there was a federal judicial district to the east of Dallas that every defendant to a patent infringement case sought to leave. Today, that district still exists, and remains pretty important. But the number one hotspot is the Western District of Texas (specifically, its Waco division).

Judge Alan Albright is his lawsuits' keeper, at least when we're talking about patent cases. Not only does he take a long time to rule on venue transfer motions but from time to time he denies venue transfers even though the arguments made by plaintiffs against a transfer are outrageous, such as in a case in which a shell company was set up just to game the system. Unsurprisingly, the exit route from the Western District of Texas quite often passes through the DC-based Federal Circuit.

The Federal Circuit made an interesting--not spectacular, but definitely instructive--decision (PDF) that practicioners should keep in mind. There's a case in which a Canadian company named NCS Multistage is suing a Norwegian company named TCO in the Western District of Texas. The defendant would have preferred to litigate in the Southern District of Texas. But the Federal Circuit found that Judge Albright had not clearly abused his discretion.

The standard of review in a mandamus matter (somewhat similar to an interlocutory appeal) is that there must be a "clear and indisputable" right to relief, which in a venue transfer case means (if there is no clear error) a clear abuse of discretion. Judge Albright placed some emphasis on judicial economy because the plaintiff is suing another defendant in the same court over the same patent claims. However, judicial efficiency is a valid factor. What the district court has to do is just to balance convenience (for the parties and, especially, witnesses) against judicial economy. Only if that balance isn't struck is there a clear abuse of discretion and a basis for a writ of mandamus.

The mandamus petition in this Canadian-Norwegian case was denied "particularly in light of the fact that several potential witnesses are located outside of the proposed transferee venue, including some in the Western District of Texas, and the fact that the only party headquartered in the proposed transferee venue elected to litigate this case in the Western District of Texas."

Look at it this way: it's often a lot easier to complain about something being suboptimal than to propose a clearly superior alternative. Here, it's easy to see that a company headquartered in the Southern District of Texas would probably assert its patents in its home court if it didn't expect a better outcome in the Western District. That was a tactical choice, but not illegitimately tactical. While some witnesses are based in the Southern District, some others are in the Western District. And the plaintiff had previously sued someone else in the latter over the same patent claims. So Judge Albright had sufficient discretion to deny the venue transfer motion in the Federal Circuit's opinion.

The lesson is that serial assertions of the same patent claims in the Western District may work. If the patentee firstly sues a defendant who can't realistically win a venue fight (because it has a strong presence in that district, and the alleged infringement(s) likely had to do with the defendants' activities there, especially R&D), it then has a judicial-economy argument when suing others in the same district. That argument isn't singlehandedly dispositive, but as the failure of TCO's mandamus petition shows, the hurdle is very high as the standard of review is extremely deferential.

It may be easier for state lawmakers to flee from Texas only to derail a vote than for defendants to W.D. Tex. patent cases.

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Avanci, Nokia win transfer of Continental's FRAND/antitrust case from San Jose to Dallas

The Avanci patent pool firm and its co-defendants--most notably, Nokia--never wanted Judge Lucy H. Koh of the United States District Court for the Northern District of California, famous for (among other high-profile cases) FTC v. Qualcomm, to adjudicate Continental Automotive Systems' FRAND/antitrust complaint. The first challenge they brought related to intra-district assignment. The N.D. of Cal. has multiple divisions, the two most important ones of which are San Jose (Judge Koh's location) and San Francisco. Avanci and Nokia (as well as some other, less significant defendants) asked for the case to be handled in San Francisco rather than San Jose, but that request was declined, and subsequently the case was assigned to Judge Koh.

The difference between San Jose and San Francisco is a one-hour drive under perfect conditions, though it's taken me up to four hours.

The defendants brought a motion to transfer venue in the summer--which has just been granted. They argued that the Northern District of Texas, where some Avanci U.S. entities are based, was the more convenient forum. In late August, Continental filed a very thoroughly-researched opposition brief. I thought it was great, and didn't expect a venue change. My predictions have a very high hit rate, but there were two weaknesses here that Judge Koh identified and one of which I couldn't have seen at the time while the other wasn't easy to spot:

• After that opposition brief that appeared strong, Continental filed its initial witness disclosures, and various players whose location would have favored the Northern District of California didn't appear on that list. Judge Koh did the only right thing to do, which was to ignore in the convenience context any witnesses Conti didn't even have on its list anymore. For example, Conti had pointed to the location of Apple witnesses, but ultimately named none.

• What has been a structural problem all along (especially in the antisuit context) is Conti's extremely compex corporate structure. In an amicus curiae brief recently filed with the Ninth Circuit in FTC v. Qualcomm, Conti explained how Michigan-based Continental Automotive Systems relates to the German group parent, and it's like a great-great-grandchild. When arguing its close connection to the Northern District of California, Conti discussed some operations there, but those are different corporate entities. Once again, the question is whether Conti's decision to have only Continental Automotive Systems (and not some other Conti entities as well, starting with the German group parent) sue Avanci and some Avanci members was a good one. It unnecessarily complicates any antisuit motion, and now it has also adversely impacted the opposition to Avanci and Nokia's venue transfer motion.

All things considered, Judge Koh found that the Northern District of Texas was the more convenient forum, especially for non-party witnesses (whose logistics are more relevant in this context than those of party witnesses, and where counsel is based doesn't matter). Also, the interest of a given district in resolving a case is generally highest where the alleged actions occurred, and that's Avanci's location in this case. Conti had pointed to Silicon Valley's stroing interest in SEP licenses for IoT businsses, and named various companies, but that was too thin for Judge Koh's taste. She might have afforded that argument some weight, but it would have had to be underpinned with some hard evidence, given that the issue is a global one as Conti itself had written at some point.

What's more important now than the basis on which Judge Koh exercised her discretion is what this means for the wider dispute:

• Texas is in the Fifth Circuit, and SEP antitrust law there isn't favorable, but that's irrelevant to the extent that Conti makes arguments under contract law.

• The Fifth Circuit isn't bad for Conti with respect to a possibly renewed motion for an antisuit injunction. I believe the Munich appeals court will overturn Nokia's German anti-antisuit injunction in a few hours, so Conti will then be free to try again. Generally, the Fifth, Seventh and Ninth Circuits--and some also say the First Circuit--are considered to be the most permissive circuits in the antisuit context. The Ninth would be preferable over the Fifth, but again, the Fifth isn't considered exceedingly restrictive.

• The bigger problem Conti faces with respect to an antisuit motion is that it will take some time before the new court is up to speed on the case and in a position to adjudge that kind of motion.

• While the Ninth Circuit's decision in FTC v. Qualcomm (the hearing will be held in February) isn't formally binding on a court in the Fifth Circuit, there will be some persuasive impact.

• Judge Koh didn't stay anything, so it's possible that even in Dallas a trial could take place in (late) 2021 (Judge Koh had scheduled it for October 2021).

• Nokia, which is suing Daimler over 10 SEPs in Germany, pretended to be constructive, though the only two outcomes of mediation by the International Chamber of Commerce as Daimler's surrender (which wouldn't help Conti and other suppliers) or simply no deal. But the European Commission won't launch formal investigations into Nokia's refusal to license component makers (though those components come with all the same hardware as phones, which Nokia does license, apart from a screen) in the meantime. And the Mannheim court postponed this week's trial to March, making it a possibility that the Munich I Regional Court will enter an injunction against Daimler before the Mannheim court might have taken a more favorable position on component-level licensing. So there have recently been setbacks for Conti on three fronts where it could have inched closer to an exhaustive component-level license: its EU antitrust complaint; its U.S. contract and antitrust case; and Mannheim (though that case was obviously brought by Nokia, it represented an opportunity for Conti).

• Here's what I would advise Conti to do in light of the current landscape and recent--not final but nevertheless hurtful--blows: Conti either has to push far harder and smarter (they have great lawyers in Germany, but the problems they face are 100% political, 0% legal) for getting Nokia investigated by the European Commission's Directorate-General for Competition (DG COMP) or if they don't want or don't know how to do that (Nokia certainly does play the game holistically, but Daimler and Conti are employing 19th-century methods against an agile, clever, no-holds-barred rival in the 21st century), they should bring a Dusseldorf lawsuit against Nokia as Huawei did. At this point they might even still get a Dusseldorf case merged for case management purposes (though technically retaining a separate case number) with Huawei's case.

Finally, here's Judge Koh's order, which is the end of the California road for this case:

19-12-11 Order Granting Ava... by Florian Mueller on Scribd

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Continental seeks to keep Avanci case in San Jose, says it "will have immediate and lasting effects on the whole IoT industry [...] around the world"

In a few hours the Munich I Regional Court will finally hear oral argument regarding Nokia's motion for an anti-antisuit-injunction injunction ("AAII") against automotive industry supplier Continental. In the post I just linked to, I stated the correct weekday (Thursday) but missed the correct date by one day (meanwhile fixed).

In the antisuit context, I've previously expressed some disappointment that Continental didn't make it structurally easier for Judge Koh (such as by choosing the ideal plaintiffs and movants from that large corporate group) to grant the U.S. antisuit motion. The motion and the related reply brief made some valid points, but also contained nonsensical parts. And, quite frankly, I don't understand why they didn't counter Nokia's denial of functional identity of the parties by pointing to Nokia's own argument in the German AAII case, where Nokia essentially tells the court that Continental AG, the Germany-based group parent, controls all Continental entities at any rate--in which case functional identity (between the parties in Continental v. Avanci et al. in San Jose and the German Nokia v. Daimler--as well as recently-filed Sharp v. Daimler--cases) becomes a matter of merely applying the logic of the U.S. customer suit exception here.

But I must give Continental's U.S. lawyers credit for now having filed the strongest and most thoroughly researched opposition brief to a venue transfer motion that I've seen in almost a decade of watching these kinds of cases. It's roughly three times as fact-rich as the average opposition brief of this kind that I've seen in high-profile cases. While Continental's filings in the antisuit context contain passages that attempt to substitute words for facts, the opposition brief to Avanci's motion to transfer the case out of Judge Lucy H. Koh's court in San Jose (Northern District of California) and to the Northern District of Texas excels with a record density of relevant facts (this post continues below the document):

19-08-28 Continental Opposi... by Florian Mueller on Scribd

If I didn't agree with Continental that "[t]his case will profoundly impact an entire global industry—the Internet of Things, including automotive connectivity," I wouldn't have taken an interest in it in the first place. As Continental's opposition brief notes, the IoT industry is estimated to reach $11 trillion by 2025, and Avanci has made it clear all along that the patent pool firm "seeks to license the entire Internet of Things."

There simply is no judicial district in the world where you'd find a higher concentration of today's and tomorrow's leading IoT companies than the Northern District of California, and within that district, San Jose is, at most, a few miles away from the center of gravity.

Besides the strictly legal relevance of the particular relevance of a case to the local economy in a federal judicial district, Continental's efforts to portray this case as a pivotal one for Silicon Valley are presumably also meant to persuade Judge Koh that this case is worth her time despite being one of the busiest federal judges.

Technically, it's about the district. Practically, it's about the judge. If someone, in an alternative universe, offered Avanci a deal under which the case would stay in San Jose but another judge would take over, but Avanci would have to withdraw its transfer motion in exchange, I guess they'd do so any day of the week.

Continental notes that "[t]his Court is extremely familiar with the legal issues in this lawsuit because it recently decided FTC v. Qualcomm, Inc., No. 17-cv-00220-LHK, another case involving FRAND, SEP, and related antitrust issues." That is, quite obviously, the reason for which Avanci's first transfer motion, prior to the one that is pending now, tried to at least move the case up north to San Francisco--before it had even been formally assigned to Judge Koh.

Among the other relevant cases that Continental lists are some that Judge Koh presided over, with her decision on the smallest salable patent-practicing unit in GPNE Corp. v. Apple being particularly interesting. There were some SEP issues in Apple v. Samsung, but Judge Koh left them to the jury, while in GPNE she made a key decision--specific to the facts in that case, but based on an approach that can be applied here as well.

Continental is right that "the Northern District of Texas has had few, if any, cases involving FRAND, SEP, or related antitrust issues." That's true because if patent holders sue in Texas, they generally prefer to do so in the Eastern District.

Continental has a very good story to tell about its own presence in the Northern District of California. Its Intelligent Transportation Systems (ITS) segment offers "Key as a Service" ("KaaS"):

"Using KaaS, a person can use her phone to lock, unlock, start, stop, and operate the vehicle in other ways. [...] In other words, this technology enables keyless entry and use of a vehicle. [...] The user's phone communicates with a Remote Cloud Key ('RCK') device typically installed in the vehicle, which also provides information about the vehicle to the phone, such as speed, fuel levels, and location. [...] KaaS also utilizes devices (e.g., ACCM and CSM modules) that rely on 3G connectivity. [...] ITS has 44 engineers working on KaaS, all located in San Jose."

ITS, which also depends on connectivity for its "fleet management" service and "telematics platform", is less than eight miles from the San Jose federal courthouse on North 1st Street--the courthouse is between South 1st Street and 2nd Street.

Continental's lawyers have done the most thorough research imaginable on travel by Avanci representatives to the Northern District of California for licensing talks as well as speeches at conferences. Continental criticizes Avanci's motion for its failure to reference one of the Ninth Circuit's Jones factors considered in evaluating transfer motions: "the respective parties' contacts with the forum." That's where any business meetings or presentations at conferences become relevant--and, unsurprisingly, Avanci and its members travel there all the time. They also choose or are forced to litigate there quite frequently. And they have various offices in the area, though Avanci's motion denied that the activities of those offices are too relevant to this FRAND/antitrust case.

Continental stresses that the plaintiff's choice of forum generally deserves some deference, and even more so in an antitrust case. Also, while Avanci argues that Continental's claim under California's Unfair Competition Law won't survive the upcoming motion to dismiss the complaint, at least for now there is such a claim and no one could reasonably claim that a judge in Texas should have to make a decision based on California UCL.

Avanci could have tried to move for a transfer to another district in California (just like they wanted to move it over to a different city with in the Northern District). But where could they go? The Eastern District (Sacramento) doesn't matter for tech cases. The Central District (L.A.) does get a significant number of technology cases, and there some carmakers have operations in or around Torrance, but presumably not the ones that are directly or indirectly involved with Continental v. Avanci. Relatively speaking, the Southern District of California would apparently have been the only alternative in the Golden State, but then Avanci would have had to place the emphasis on Qualcomm, which is a key Avanci member and certainly has a strong interest in this case, though Nokia is more relevant. Continental actually mentions the fact that Qualcomm witnesses can be compelled to testify in San Jose, but not in Dallas.

Continental doesn't want to take its chances, so while they are, for good reason, confident of being able to defeat Avanci's motion, they'd at least like to be allowed to conduct venue discovery before the transfer motion would be granted. Again, I predict that the motion will be denied (and most likely without a hearing, much less discovery), but it's better to be safe than sorry.

In the absence of compelling reasons for transferring the case from San Jose to Dallas, Avanci's only realistic chance of effectively wresting this case out of Judge Koh's hands is to gain decisive leverage over Continental through enforceable German patent injunctions. That strategy might work given the sad situation in Germany, where injunctions come down too often (typically even over invalid patents) and judges used to be totally unreceptive to FRAND arguments until they saw the European Commission taking action against Samsung and Motorola and the Court of Justice of the EU's Huawei v. ZTE opinion practically overruled the German Orange-Book-Standard doctrine or at least its utterly unreasonable application at the time. Post-Huawei, even German courts have become slightly more moderate with respect to SEP issues, but it's still an exceedingly patentee-friendly jurisdiction where judges tend to feel that a patent over which you can't obtain an injunction isn't really a patent. If Continental can't secure a U.S. antisuit injunction against Nokia (and, if necessary, also against Sharp in the next step), it's more likely than not that Nokia or some other Avanci member would gain so much leverage in Germany (over Continental customer Daimler) that Continental might ultimately be forced to drop its San Jose case, and the IoT industry would be the poorer for it.

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Avanci, Nokia trying to escape Judge Koh's jurisdiction over Continental case: motion to transfer venue from San Jose to Dallas

In soccer terminlogy, Nokia's "Munich Maneuver" may be the Goal of the Century, subject to whether or not the anti-antisuit-injunction injunction ("AAII") is lifted. As of now, it appears Daimler supplier Continental, which argues that is hasn't been properly served yet, still hasn't filed an objection to the preliminary injunction. An objection would lead to a hearing. But presumably Continental wants to stay consistent with its views on service (I can't offer any opinion on that procedural part).

Service (of process) is also an issue affecting Continental's U.S. FRAND/antitrust case against Avanci, Nokia, and others. The defendants (mostly, but not exclusively, the Avanci licensing firm, Nokia, and some privateers holding former Nokia patents) have asked Judge Koh to postpone the upcoming case management conference because "[d]efendant Sharp Corporation has not yet appeared in this case."

At the same time, Avanci-Nokia are trying to get the entire case transferred out of Judge Lucy H. Koh's court in the Northern District of California by way of a motion filed on Wednesday Pacific Time (this post continues below the document):

19-07-31 Avanci Et Al. Moti... by Florian Mueller on Scribd

The motivation for this is not in the above motion, which instead states all sorts of largely or entirely pretextual reasons for the desired transfer from the Northern District of California (in this case, San Jose) to the Northern District of Texas (which practically means Dallas). The real reasons for this are Judge Koh and her case law. Forget about the rest, which is irrelevant for such a high-stakes dispute involving in no small part organizations from overseas.

Qualcomm, which just missed estimates and is anxiously awaiting the Ninth Circuit's decision on its motion to stay the enforcement of the FTC's antitrust remedies, is an Avanci member. But even if it weren't, the key findings in the Qualcomm case regarding component-level licensing and the smallest salable patent-practicing unit (SSPPU), and the conclusions Judge Koh had previously reached in GPNE Corp. v. Apple with respect to the SSPPU, would have Avanci, Nokia and the rest of the group concerned to an undiminished degree.

In the Northern District of Texas, those questions haven't been resolved. But it's a different circuit, and that's why I'm sure Avanci and Nokia wouldn't even want to go to another West Coast district because once the Ninth Circuit affirms any parts of Judge Koh's ruling, the other districts in the circuit would follow suit. If Avanci and Nokia got their way, they'd be in the Fifth Circuit, and they could at least make an argument based on Judge Rodney Gilstrap's HTC v. Ericsson decision in a neighbor district within the same circuit, the notoriously patentee-friendly Eastern District of Texas. While a decision by another district in the same circuit isn't binding, proximity may yet give this one slightly more weight than Judge Koh's very well-reasoned holdings in FTC v. Qualcomm. By contrast, Judge Gilstrap has often made extremely patentee-friendly decisions, as have other judges in his district, and the related reputation of the Eastern District of Texas limits the persuasive impact of any of its case laws in other circuits. Also, Judge Koh is a rockstar judge who was in the process of being appointed to the Ninth Circuit and on Hillary Clinton's list for the Supreme Court. But... she's in the Ninth Circuit, and all Texas districts (and some others) are in the Fifth.

The Avanci-Nokia motion to transfer venue doesn't make extremely strong arguments for Texas. Where they are certainly right is that there was no particular reason for NorCal (other than case law, which obviously doesn't count, and probably that Continental's lawyers hoped the case would be assigned to Judge Koh, for which there was no guarantee but which fortunately happened). A former Apple licensing executive, Boris Teksler, is still based in Silicon Valley, and he manages Conversant, one of the patent assertion entities in the case that hold former Nokia patents. Then there are some offices of various defendants in the Northern District of California, but Avanci and its co-defendants deny that those offices really are relevant to the issues in the case.

The convenience argument for the Northern District of Texas is relatively weak. To give you an example, they argue that Europe-based witnesses and experts (Nokia, Continental etc.) have a slightly shorter flight time to Dallas than to San Francisco. It's like a little less than 10 hours in one case and slightly over 10 hours in the other--something no traveler (and I've gone back and forth dozens of times) would care about. In that context, they didn't even do their research homework properly: they base their estimates on the distance from Munich to the two alternative venues, but Continental is headquartered in Hanover (far up north from Munich), where the nearest airport serving direct flights to many U.S. cities is Frankfurt (which is also the #1 airport in Germany, though Munich has become more important over time).

That reminds me of a non-fatal but stupid mistake they had in their otherwise very well-crafted opposition to Continental's U.S. motion for an antisuit injunction: they described a consumer class action against Qualcomm as an Apple case. Since the consumer case was consolidated with FTC v. Qualcomm, it was Judge Koh who made the decision (not to grant an antisuit injunction at the given time) that they cited. It doesn't make the motion weaker, but since I criticized the Continental side, and in the context of the use of Munich instead of Frankfurt as the originating airport in the latest motion, I wanted to mention this anyway.

What weighs in favor of the Avanci-Nokia venue transfer motion is that there was no absolutely pressing reason for bringing the case in San Jose, other than case law. But case law doesn't count, though it is relevant to the efficiency argument: the Northern District of Texas is less busy, and slightly faster to adjudicate cases, as the Avanci-Nokia motion argues. Obviously, if they really wanted rapid adjudication, they wouldn't slow things down with a transfer motion. And the fact that Judge Koh knows the issues at the heart of the case so well, and can cite to some of her own holdings, really does make NorCal the ideal place even from a pure efficiency point of view--just that the outcome will likely not be the one that Avanci and Nokia like.

Continental's lawyers now have some homework to do. They have to identify and explain some weaknesses in Avanci-Nokia's arguments for Dallas, and they have to explain why the Northern District of California is just as good a venue for this as North Texas--or that even if Dallas seemed preferable, it wouldn't be the better choice by a wide margin, and given what's at stake and how deep-pocketed all parties to this dispute are, some convenience factors that may be more relevant to lower-profile cases shouldn't be given too much weight.

What Nokia's flash-of-genius Munich Maneuver and Avanci-Nokia's motion to transfer venue have in common is that they are on the run from the one and only Judge Koh.

Now I just hope that Continental will do a better job on its opposition to the motion to transfer venue than in the antisuit injunction context.

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BlackBerry afraid of transfer of its trollish patent lawsuit against Facebook to Northern California

The company that used to be called Research In Motion is now named BlackBerry. It has always had the wrong kind of name at the given time: Research In Motion would be a typical name for a patent troll (second-best to "Innovations in Motion", more often than not with a demonym such as "American" placed in front) as those organizations try to position themselves as innovative, research-centric businesses with a view to jury trials when in reality they usually aren't. But it had that name when it was making those BlackBerry devices. Now that it has the name of the product, it's no longer making phones and becoming ever more of a patent troll. Admittedly, if I could go back in time, this blog here would have a different name, too: I didn't initially envision it to become so focused on smartphone patent and competition issues, whether or not they involve open-source software ("FOSS" stands for "Free and Open Source Software"). This blog may undergo a name change later this year or next.

BlackBerry has filed a patent infringement complaint against Facebook and its Instagram and WhatsApp subsidiaries (this post continues below the document):

BlackBerry v Facebook by Russell Brandom on Scribd

For the patents-in-suit, let me refer you to Ars Technica's article. I agree with Timothy B. Lee that the patents are extremely broad. In fact, they're so abstract and generic that many or even all of them might die an Alice death before the case even goes to trial.

I have an observation to share that other commentators don't seem to have focused on so far. The "jurisdiction and venue" section (paragraphs 25 to 36) is unusually long. In many other patent complaints it spans only a very few--and especially short--paragraphs. Here, it's almost epic.

Without a scintilla of doubt, the reason for BlackBerry's preemptive defense of its venue choice--the Central District of California (that's Greater L.A.), while Facebook is headquartered in the Northern District--is last year's Supreme Court recent decision in TC Heartland vs. Kraft Foods, which reinstated an earlier ruling (thereby overruling many years of Federal Circuit precedent) according to which "[a]s applied to domestic corporations, 'reside[nce]' in §1400(b) refers only to the State of incorporation" despite potentially broader definitions of "residency" in §1391. TC Heartland was viewed as a blow to the Eastern District of Texas, where patent trolls usually prefer to sue: it's easier now for defendants to get cases transferred out of that district.

BlackBerry's lawyers from Quinn Emanuel--a great firm though it has very much positionied itself as an anti-Apple firm (representing not only legitimate Android device makers but also antitrust violators and trolls against Apple) and apparently now also as an anti-Facebook firm (it already represented Yahoo against Facebook)--go to unusual lengths to justify the venue choice. Paragraph 34 of the complaint points to a 35,000 sq. ft. L.A. office as a "regular and established place of business" (though Facebook's new Northern California headquarters will have 1.75 million sq. ft.), and footnote 4 says there are at least 17 LinkedIn profiles of "people in this District that are dually employed by both Facebook and one of WhatsApp or Instagram." The complaint also points to "network effects" between Facebook's various services in order to establish as close a connection as possible between that L.A. Facebook office and the two Facebook subsidaries accused of infringement alongside their patent company.

BlackBerry also lists an Orange Country address for an in-house counsel, but it's actually a Canadian company and traditionally had most of its U.S. employees in Texas, though this may have changed.

It's all too obvious that BlackBerry doesn't want the case to be transferred to the Northern District of California. It appears to be realistic that it won't be a cakewalk to keep it in Southern California, but at least it wants to try. So it tries to satisfy the second part of §1400b:

"(b) Any civil action for patent infringement may be brought 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."

It doesn't appear that Facebook filed a declaratory judgment action in the Northern District of California before BlackBerry brought its offensive assertions. But Facebook will still try to get the case transferred to San Jose, and that's where the question of whether Instagram and WhatsApp have a "regular and established place of business" in L.A. or whether it's just Facebook (the parent company)--and whether the parent company's presence is sufficient and whether there are dually-employeed people etc.-- will come up. I'm sure that any relevant witnesses on the Facebook/Instagram/WhatsApp side will be based in Northern California.

Why is BlackBerry afraid of Northern California? Obviously, for the troll that the company increasingly is, the Eastern District of Texas would have been an obvious choice. But presumably BlackBerry didn't want to try such a long shot in light of TC Heartland. I can think of three reasons for which BlackBerry would like to stay out of the Northern District:

1. Juries in that district tend to be rather tech-savvy. They might be underwhelmed by BlackBerry's abstract patents (unless those are held invalid under Alice as a matter of law) and be more inclined to identify overlaps between those "inventions" and the prior art.

2. Relative to its economic and societal stature, Facebook has relatively few employees, but still enough that Northern California jurors may know Facebook employees.

3. Paul Grewal. The former U.S. Magistrate Judge from the Northern District of California (whose opinions were always extremely well-written, not just in my opinion but that of other litigation watchers, too) became Facebook's deputy general counsel in charge of litigation. He's also quoted in Facebook's response, according to which the social network company intends to fight back (I very much hope so: please, Facebook, don't feed the troll even if you can cheaply get rid of the case!). BlackBerry may be afraid of Mr. Grewal still having a unique relationship with some of the judges in that district.

Just one other observation. BlackBerry is seeking an injunction. RIM (as it was called at the time) faced the prospect of an injunction in 2005 when it was being sued by a patent troll named NTP, and had to cough up hundreds of millions of dollars. The following year, the Supreme Court's famous eBay v. MercExchange ruling on patent injunctions came down. Under eBay, irreparable harm is key, and whatever little of an operating business (security software) BlackBerry has left is not really in a competitive relationship with Facebook, Instagram, and WhatsApp. Also, remedies will only have to be discussed if and when BlackBerry prevails on the merits, and that's a big "if."

BlackBerry's approach to patent injunctions has changed. I remember a meeting with them between their almost-shutdown and eBay. One of their in-house counsel told me that they would only pursue an injunction in extreme situations such as an employee leaving the company and stealing some of their code. None of that is at issue now. They've simply become more of a troll themselves.

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