American Patents LLC v. Mediatek, Inc. et al

Western District of Texas, txwd-6:2018-cv-00339

REPLY to 102 Sealed Document by American Patents LLC.

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IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS WACO DIVISION AMERICAN PATENTS LLC, Plaintiff, v. CIVIL ACTION NO. 6:18-CV-339 MEDIATEK INC., ET AL., JURY TRIAL DEMANDED Defendants. AMERICAN PATENTS' REPLY TO LENOVO'S SUPPLEMENTAL RESPONSE ON PERSONAL JURISDICTION (DKT. 102) I. Introduction. The Lenovo Defendants' (collectively, "Lenovo") supplemental response on personal jurisdiction fails for multiple reasons, all of which American Patents is prepared to address at the upcoming motions hearing. But American Patents submits this short reply to address a single, purely legal issue: the burden of proof when deciding a personal jurisdiction motion after limited jurisdictional discovery, but without an evidentiary hearing. Following the initial briefing on Lenovo's motion to dismiss, the Court found good cause to allow "limited discovery into the issues concerning jurisdiction." The Court permitted American Patents to take a single deposition of a Lenovo corporate representative on a limited set of topics, and provided a schedule for supplemental briefs from each side. The parties' supplemental briefing reveals that, even after this deposition, multiple jurisdictional facts remain in material dispute. No other discovery has been conducted, nor has any evidentiary hearing been held to resolve these factual disputes. The parties' supplemental briefs apply different burdens of proof. American Patents' brief evaluated the record under the traditional prima facie standard. That standard requires that the plaintiff's uncontroverted allegations and evidence must be accepted as true, and resolves any factual conflicts created by the defendant's evidence in the plaintiff's favor. American Patents' brief explained that the prima facie standard applies whenever the Court decides a personal jurisdiction motion without an evidentiary hearing—even after jurisdictional discovery. Lenovo's supplemental response, however, argues that the prima facie standard no longer applies to this case. Lenovo cites two district court cases that ultimately rely on the Federal Circuit's 2001 decision in Pieczenik. Under that precedent, Lenovo claims, if any jurisdictional discovery takes place, a higher burden of proof must apply—even if an evidentiary hearing has not been held. That higher burden is preponderance of the evidence, without necessarily resolving factual conflicts in plaintiff's favor (as under the prima facie standard). The rest of Lenovo's response then rests on a single premise: under this higher preponderance standard, American Patents did not establish personal jurisdiction over Lenovo. 1 But the premise of Lenovo's supplemental response is false. In its 2015 Celgard decision, the Federal Circuit held that where, as here, the parties conducted jurisdictional discovery, the jurisdictional facts are in dispute, and no evidentiary hearing has been held, the traditional prima facie burden still applies. In so holding, Celgard explicitly distinguished the Pieczenik case on which Lenovo mistakenly relies. Because Lenovo does not—and cannot—dispute that American Patents has made a prima facie showing of personal jurisdiction (on three separate grounds, no less), the Court should deny the motion to dismiss. II. Where jurisdictional facts are disputed and no evidentiary hearing has been held, a prima facie burden applies—even after jurisdictional discovery has been conducted. Lenovo argues that jurisdictional discovery alone—even absent an evidentiary hearing— automatically elevates a plaintiff's burden from prima facie to a preponderance of the evidence. Dkt. 102 at 1-2. Lenovo relies on two district court cases, OnAsset Intelligence, Inc. v. 7PSolutions, LLC, No. 3:12-cv-3709, 2013 WL 12125993, at *1 (N.D. Tex. Aug. 21, 2013), and Grant St. Grp., Inc. v. D&TVentures, LLC, No. 10-1095, 2012 WL 13694, at *2 (W.D. Pa. Jan. 4, 2012). Both of those cases, in turn, rely on the Federal Circuit's decision in Pieczenik v. Dyax Corp., 265 F.3d 1329 (Fed. Cir. 2001).1 But Pieczenik never stood for such a broad point. There, the parties conducted "unrestricted discovery on the issue of jurisdiction," after which they "advised the district court that no evidentiary hearing was necessary with respect to the issue of personal jurisdiction 1 There is no dispute that Federal Circuit law applies to this patent case, despite Lenovo's suggestion to the contrary. See Dkt. 102 at 2. The more important point is that Fifth Circuit and Federal Circuit law are entirely consistent on this issue. That is unsurprising given how well- established it is in this context that factual disputes are resolved under the prima facie standard, unless an evidentiary hearing has been held. 2 because the jurisdictional facts were undisputed." Id. at 1334, 1336. Under those specific circumstances, the Federal Circuit applied a preponderance burden. Id. at 1336.2 Here, in contrast, American Patents has taken only a single deposition of an unprepared witness, without the benefit of any written discovery. And more important, there are significant disputes concerning the jurisdictional facts, disputes that cannot be resolved against American Patents without an evidentiary hearing.3 So even standing alone, Pieczenik would not support raising the burden here to a preponderance of the evidence. Pieczenik does not, however, stand alone; the Federal Circuit has since limited its reach expressly. In Celgard, the Federal Circuit addressed a situation where the parties had taken wide- ranging jurisdictional discovery: "[Plaintiff] deposed [Defendant's] 30(b)(6) witness, subpoenaed numerous third parties, and obtained discovery from EV distributor Kia Motors of America. . . and CE manufacturers Dell and Apple." Celgard, LLC v. SK Innovation Co., Ltd., 792 F.3d 1373, 1376 (Fed. Cir. 2015). Despite this discovery, "the parties d[id] not agree on the jurisdictional facts." Id. at 1378. The district court nonetheless granted the defendant's motion to dismiss without conducting an evidentiary hearing. Id. at 1376-77. On appeal, the parties disagreed about whether a prima facie or preponderance of the evidence burden applied—and the Federal Circuit embraced the traditional lower burden: In this case, jurisdictional discovery was conducted and the district court did not conduct a jurisdictional hearing, but we see no indication that the parties agreed 2 Nor is it even clear that Pieczenik was applying Federal Circuit law to this issue, as courts have previously recognized. See Dram Techs. LLC v. Am. II Grp., Inc., No. 2:10-cv-45-TJW, 2011 WL 4591902, at *2 n.1 (E.D. Tex. Sept. 30, 2011) ("Although Pieczenik was determining personal jurisdiction for a patent infringement lawsuit, it was also performing its analysis under a unique New York long-arm statute. . . . Indeed, when announcing the preponderance of the evidence standard, the court in Pieczenik cited Second Circuit law." (internal cites omitted)), quoted in Marin v. Michelin N. Am., Inc., SA-16-CA-0497-FB, 2017 WL 5505323, at *2 (W.D. Tex. Sept. 26, 2017). 3 As an example, the parties dispute whether Lenovo Group and/or Lenovo (Shanghai) manufacture the accused products overseas or ship them to the United States. Compare Dkt. 96 at 3-10 with Dkt. 102 at 3-8. 3 that the jurisdictional facts were not in dispute. Because the parties do not agree on the jurisdictional facts, the exception in Pieczenik does not apply. As such, Celgard must make a prima facie showing of jurisdiction. Id. at 1378 (emph. added). As in Celgard, the parties here do not agree on the jurisdictional facts and no evidentiary hearing has been held. So Celgard controls, and the Pieczenik "exception" does not apply. Later Federal Circuit case law confirms that the Celgard rule applies to this case: "[A] plaintiff need only make a prima facie showing of personal jurisdiction where, as here, the parties conducted jurisdictional discovery, the jurisdictional facts are in dispute, and the district court determined personal jurisdiction without an evidentiary hearing." Polar Electro Oy v. Suunto Oy, 829 F.3d 1343, 1347–48 (Fed. Cir. 2016) (citing Celgard and overturning district court's grant of motion to dismiss for lack of personal jurisdiction). And to the extent that they conflict with Celgard, the district court cases Lenovo cites are not good law. See also RegenLab USA LLC v. Estar Techs. Ltd., 335 F. Supp. 3d 526, 536 (S.D.N.Y. 2018) (recognizing Celgard / Pieczenik distinction and applying prima facie burden after limited jurisdictional discovery). American Patents thus needed only to make a prima facie showing of personal jurisdiction over the Lenovo Defendants. It has done so. See, e.g., Dkt. 96 at 3-10 (stream of commerce theory), 10-16 (agency theory), 16-17 (nationwide contacts). Crucially, Lenovo's supplemental response does not dispute that American Patents has made a prima facie showing of jurisdiction. (Nor could it, given the ample allegations and evidence that readily meet the prima facie standard.) Because Lenovo does not, and cannot, dispute that American Patents has made a prima facie showing of jurisdiction, Lenovo's motion to dismiss should be denied. Dated: May 8, 2019 Respectfully submitted, /s/ Michael D. Ellis Matthew J. Antonelli (admission pending) Texas Bar No. 24068432 matt@ahtlawfirm.com Zachariah S. Harrington (admission pending) Texas Bar No. 24057886 4 zac@ahtlawfirm.com Larry D. Thompson, Jr. (admission pending) Texas Bar No. 24051428 larry@ahtlawfirm.com Christopher Ryan Pinckney (admission pending) Texas Bar No. 24067819 ryan@ahtlawfirm.com Michael D. Ellis Texas Bar No. 24081586 michael@ahtlawfirm.com ANTONELLI, HARRINGTON & THOMPSON LLP 4306 Yoakum Blvd., Ste. 450 Houston, TX 77006 (713) 581-3000 Stafford Davis State Bar No. 24054605 sdavis@stafforddavisfirm.com Catherine Bartles Texas Bar No. 24104849 cbartles@stafforddavisfirm.com THE STAFFORD DAVIS FIRM The People's Petroleum Building 102 North College Avenue, 13th Floor Tyler, Texas 75702 (903) 593-7000 (903) 705-7369 fax Attorneys for American Patents LLC 5