Pleadings Issues

Judge Gilstrap Issues Venue-Based Dismissal Based on Recent Federal Circuit Precedent

Decision Granting Dismissal of Complaint for Improper Venue, Uniloc USA, Inc. et al. v. Nutanix, Inc., Case No. 2:17-cv-00174, E.D. Tex. (December 6, 2017) (Judge Rodney Gilstrap)

On the heels of the Federal Circuit’s reversal of the Court’s decision in Cray (reported here), on Wednesday, Judge Gilstrap dismissed a different patent suit for improper venue even where Defendant’s employees lived and worked in the Eastern District of Texas.  The decision confirms that for purposes of venue, an employee’s residence, by itself, does not constitute the employer’s residence too.  Instead, courts must look at several factors beyond the mere location of employees when assessing corporate “place of business.” READ MORE

Fleeing the Swarm

Order Adopting in Part Report and Recommendation, Granting in Part and Denying in Part Motion to Dismiss Counterclaims, Denying Motion for Default Judgment, and Denying Motion to Voluntarily Dismiss Claims, LHF Productions, Inc. v. Kabala, et al., No. 2:16-cv-02028-JAD-NDK (D. Nev. October 23, 2017) (Judge Jennifer A. Dorsey).

In copyright litigation, “swarm joinder” refers to the act of joining multiple John/Jane Doe defendants from a BitTorrent “swarm” in a single legal action utilizing a single filing fee.  The so-called “swarm” is a group of users in a peer-to-peer file-sharing network that anonymously download and upload the same copyrighted file during a given period.  Because the defendants are initially unidentified, the plaintiff typically files an ex parte motion for expedited third-party discovery from Internet service providers (ISPs) for the names and addresses of persons associated with specified IP addresses.  Once the plaintiff has that information, the plaintiff typically amends the complaint to substantially narrow the list of defendants down to the people positively identified during discovery.  While such swarm joinder cases have significantly increased in popularity nationwide—with some plaintiffs filing against thousands of defendants in a single action on a single filing fee—there is no consensus on their propriety under the Federal Rules.  Currently, the D.C. Circuit is the only Court of Appeals to have explicitly ruled on the issue, and in AF Holdings, LLC v. Does 1-1058, 752 F.3d 990, 998 (D.C. Cir. 2014) it concluded that swarm joinder does not satisfy FRCP 20(a)(2).  At least twelve District Courts have agreed with the position of the D.C. Circuit, at least five District Courts outside the D.C. Circuit have disagreed (permitting swarm joinder), and eighteen others have taken a “middle ground” in which the District Court may exercise discretion to manage its docket and sever defendants even if swarm joinder might technically be permissible. READ MORE

Details Matter: Two Courts’ Approaches to Personal Jurisdiction and Venue

Report & Recommendation to Deny Motion to Dismiss or Transfer, MyMail, Ltd. v. Yahoo!, Inc., E.D. Tex. (August 17, 2017) (Magistrate Judge Roy Payne)

Order Granting Motion to Dismiss, The Proctor & Gamble Company v. Ranir, LLC, S.D. Ohio (August 17, 2017) (Judge Timothy Black)

As we’ve been reporting, patent venue case law continues to develop on multiple fronts in the aftermath of the Supreme Court’s decision in TC Heartland.  In a pair of decisions discussed below, two jurisdictions—the Eastern District of Texas and the Southern District of Ohio—took contrasting approaches to how a defendant’s response to personal jurisdiction allegations affected the defendant’s ability to challenge venue. READ MORE

Determination on Indirect Infringement Requires Factual Record, Warranting Denial of Motion to Dismiss

Order Denying Motion to Dismiss, The Regents of the University of California v. Boston Scientific Corporation, Case No. 16-cv-06266-YGR (Judge Yvonne Gonzalez Rogers)

Ever since the abolition of form complaints in patent cases (see our previous reporting here, here, and here), patent defendants have been incentivized to file motions to dismiss, and many have succeeded. But as Judge Gonzalez Rogers’ recent Order in this case reminds us, even after Twombly and Iqbal, Rule 12(b)(6) still offers a relatively lenient pleading standard and, in many cases, requires development of a factual record before dismissal can be considered.  READ MORE

A “Virtual” Home Is Not a Home: Court Sanctions Plaintiffs for “Reckless Disregard” in Deciding the Proper Forum for Their Litigation

Usually, one benefit of being a plaintiff is deciding in what forum to pursue litigation.  Generally, even a foreign-based plaintiff may pursue litigation in a U.S. forum where a defendant may be found or in which there is a substantial connection to the litigation.  There are, however, limits on a plaintiff’s choice of forum, and a recent decision in Tapgerine LLC v. 50Mango, Inc. demonstrates that pushing those limits may result in sanctions. READ MORE

Uber’s Section 101 Motion to Dismiss Defeated by “Inventive” Ordered Combination

Order Denying Defendant’s Motion to Dismiss, X One, Inc. v. Uber Technologies, Inc., Case No. 16-CV-06050-LHK (Judge Lucy H. Koh)

Uber Technologies, the transportation network giant, recently lost a motion to dismiss a two-patent infringement suit when the Court found that Plaintiff X One, Inc.’s patent claims are directed to patentable subject matter under 35 U.S.C. § 101. The Court held that the individual claim elements are conventional, but as an ordered combination provide an inventive concept sufficient to defeat a motion to dismiss. READ MORE

Did the Defendant Know? Filing a Complaint Can Sustain the Knowledge Element Required to Maintain a Claim of Induced Infringement

Order Granting Motion to Dismiss and Denying Request for Attorneys’ Fees and Sanctions, Edwin Lyda v. CBS Interactive, Inc., Case No. 16-cv-06592-JSW (Judge Jeffrey S. White)

In a helpful ruling for defendants, Judge White held in a recent order that res judicata prevented a plaintiff from filing a complaint for alleged inducement of patent infringement after a prior suit for direct infringement was dismissed with prejudice.  He held that the filing of the original complaint provided a colorable basis to allege the knowledge element of an inducement claim, and thus there was nothing to prevent the pursuit of an inducement claim in the original case. READ MORE

Section 101 Blocks Caller ID Patent

Order Granting Judgment on the Pleadings, Whitepages, Inc. v. Isaacs, et al., Case No. 16-cv-00175-RS (Judge Richard Seeborg)

Litigants continue to use Alice and its progeny to cull the ranks of patents asserted in the Northern District.  In Whitepages v. Isaacs, Judge Seeborg considered a patent that purported to bring caller ID to mobile phones and the internet.  His opinion holding the patent invalid mentions factors that are becoming familiar hallmarks of patents vulnerable to § 101 challenges: reciting longstanding business practices, invoking industry-standard technology, and requiring no more than generic use of computers. READ MORE

Motion to Dismiss Granted: What Are The Facts?

Order Granting Motion to Dismiss, Bluestone Innovations LLC v. Bulbrite Industries, Inc., Case No. 15-cv-5478 (Judge Phyllis Hamilton)

Before the recent amendment to the Federal Rules abolishing form complaints, it was rare to see parties file motions to dismiss in patent infringement cases, and even rarer to see them granted. But Judge Hamilton recently granted such a motion that defendant Bulbrite filed directed at allegations in a complaint that was not subject to those recent amendments. And now, plaintiff Bluestone must amend its complaint to add more specificity concerning its infringement allegations, notwithstanding its arguments that it provided the level of notice required to establish its claims of infringement that existed under applicable law prior to December 2015. READ MORE

Defendants in Default: Motions for Default Judgment Must Demonstrate Infringement

Order Staying Case In Part And Denying Motion For Default Judgement Without Prejudice. e. Digital Corp. v. Ivideon LLC, et al. Case No. 15-cv-00691-JST (Judge Jon S. Tigar)

In a recent opinion, Judge Jon Tigar sua sponte stayed the vast majority of a patent infringement case pending the outcome of inter partes review proceedings, and also denied a motion for default judgment that was predicated upon the Defendants’ alleged infringement of two claims not subject to the ongoing proceedings before the Patent Trial and Appeal Board (“PTAB”). The opinion underscores that plaintiffs do not get a “free pass” in proving infringement, but rather must fully establish the predicate bases of a patent claim, even where a defendant has failed to make an appearance. READ MORE