Personalized Media Communications, LLC v. Google LLC

REDACTION to {{62}} SEALED MOTION NETFLIX'S CORRECTED MOTION TO DISMISS OR, IN THE ALTERNATIVE, TRANSFER FOR IMPROPER VENUE by Netflix, Inc.

Eastern District of Texas, txed-2:2019-cv-00090

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3 PageID #: 1693 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS MARSHALL DIVISION PERSONALIZED MEDIA COMMUNICATIONS, LLC, Case No. 2:19-cv-00090-JRG Plaintiff, LEAD CASE v. GOOGLE LLC, Defendant. PERSONALIZED MEDIA COMMUNICATIONS, LLC, Plaintiff, Case No. 2:19-cv-00091-JRG v. MEMBER CASE NETFLIX, INC., Defendant. NETFLIX'S CORRECTED MOTION TO DISMISS OR, IN THE ALTERNATIVE, TRANSFER FOR IMPROPER VENUE 3 PageID #: 1694 TABLE OF CONTENTS Page I. Introduction ........................................................................................................................ 1 II. Key Facts ........................................................................................................................... 1 III. Legal Authority .................................................................................................................. 3 A. Motion to Dismiss or Transfer For Improper Venue ............................................. 3 B. Motion to Transfer for Inconvenient Venue .......................................................... 4 IV. Argument ........................................................................................................................... 5 A. The Court Should Dismiss or Transfer This Case for Improper Venue ................ 5 a. Netflix Does Not "Reside" in the Eastern District of Texas ...................... 5 b. Netflix Has Not Committed an Act of Infringement in This District ........ 6 c. Netflix Has No "Regular and Established Place of Business" in This District ............................................................................................... 6 i. The Open Connect Servers Are Not Netflix's "Places of Business ......................................................................................... 6 d. The Servers Are Not "Regular and Established" Places of Business of Netflix .................................................................................................... 9 e. Equipment Should Not Constitute a "Place" Under the Venue Statute ...................................................................................................... 10 f. If Not Dismissed, This Action Should Be Transferred to Northern California ................................................................................................. 12 B. The Court Should Transfer for Inconvenient Venue ........................................... 12 a. This Case Could Have Been Brought in Northern California ................ 12 b. The Private Interest Factors Favor Transfer ............................................ 12 i. Northern California Offers Better Access to Proof...................... 12 ii. Northern California Is More Convenient for Potential Witnesses ..................................................................................... 13 iii. Northern California Has More Relevant Absolute Subpoena Power ........................................................................................... 14 iv. Judicial Economy Is Neutral ........................................................ 14 c. The Public Interest Factors Favor Transfer ............................................. 15 i. The Northern District of California Has a Greater Interest in This Case.................................................................................. 15 ii. The Remaining Public Interest Factors Are Neutral .................... 16 V. Conclusion ....................................................................................................................... 16 NETFLIX'S CORRECTED MOTION TO DISMISS OR TRANSFER FOR IMPROPER VENUE – Page i 3 PageID #: 1695 TABLE OF AUTHORITIES Page(s) Cases Adaptix, Inc. v. HTC Corp., 937 F. Supp. 2d 867 (E.D. Tex. 2013) .................................................................................5, 12 Aten Int'l Co. v. Emine Tech. Co., 261 F.R.D. 112 (E.D. Tex. 2009)...............................................................................................5 In re BigCommerce, Inc., 890 F.3d 978 (Fed. Cir. 2018)....................................................................................................8 BMC Software, Inc. v. Cherwell Software, LLC, No. 1:17-cv-1074 (E.D. Va. Dec. 21, 2017), Dkt. No. 55 .........................................................4 Centre One v. Vonage Holdings Corp., No. 6:08CV467, 2010 WL 3257642 (E.D. Tex. Aug. 17, 2010) .............................................12 In re Cordis Corp., 769 F.2d 733 (Fed. Cir. 1985)..................................................................................................11 In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017)........................................................................................ passim CUPP Cybersecurity, LLC v. Symantec Corp., C.A. No. 3:18-CV-01554, 2019 WL 1070869 (N.D. Tex. Jan. 16, 2019).................................4 Dep't of Homeland Sec. v. MacLean, 135 S. Ct. 913 (2015) ...............................................................................................................11 Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222 (1957) ...................................................................................................................4 In re Genentech, Inc., 566 F.3d 1338 (Fed. Cir. 2009)............................................................................................5, 14 GeoTag, Inc. v. Starbucks Corp., No. 2:10-cv-572, 2013 WL 890484 (E.D. Tex. Jan. 14, 2013) ...............................................15 In re Google LLC, No. 2018-152, 2018 WL 5536478 (Fed. Cir. Oct. 29, 2018).....................................................4 Herman v. Cataphora, Inc., 730 F.3d 460 (5th Cir. 2013) ...................................................................................................12 In re Hoffman-La Roche Inc., 587 F.3d 1333 (Fed. Cir. 2009)................................................................................................15 NETFLIX'S CORRECTED MOTION TO DISMISS OR TRANSFER FOR IMPROPER VENUE – Page ii 3 PageID #: 1696 TABLE OF AUTHORITIES Page(s) Cases Innovative Global Sys. LLC v. OnStar, LLC, No. 6:10-CV-574-LED-JDL, 2012 WL 12930885 (E.D. Tex. Feb. 14, 2012)........................14 Klausner Techs., Inc. v. Interactive Intelligence Grp., Inc., No. 6:11-cv-578-LED, 2012 WL 13012618 (E.D. Tex. Sept. 26, 2012) ................................14 Moran v. Smith, No. 5:15-cv-1121-DAE, 2016 WL 4033268 (W.D. Tex. July 27, 2016) ................................12 In re Nintendo Co., 589 F.3d 1194 (Fed. Cir. 2009)............................................................................................5, 13 Optimum Power Solutions LLC v. Apple, Inc., 794 F. Supp. 2d 696 (E.D. Tex. 2011) .....................................................................................16 PersonalWeb Techs., LLC v. NEC Corp. of Am., Inc., No. 6:11–CV–655, 2013 WL 9600333 (E.D. Tex. Mar. 21, 2013) .........................................13 Personalweb Techs., LLC v. Yahoo! Inc., No. 6:12–CV–658, 2014 WL 1689046 (E.D. Tex. Feb. 12, 2014)..........................................15 Power Paragon, Inc. v. Precision Tech. USA, Inc., 605 F. Supp. 2d 722 (E.D. Va. 2008) ......................................................................................11 Realtime Data LLC v. Teradata Operations, Inc., No. 6:15-CV-470-RWS-JDL, 2016 WL 235183 (E.D. Tex. Jan. 20, 2016) ...........................12 Rimkus Consulting Grp., Inc. v. Balentine, 693 F. Supp. 2d 681 (S.D. Tex. 2010) .....................................................................................11 Schnell v. Peter Eckrich & Sons, Inc., 365 U.S. 260 (1961) ...................................................................................................................8 SEVEN Networks, LLC v. Google LLC, 315 F. Supp. 3d 933 (E.D. Tex. 2018) ............................................................................. passim TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514 (2017) ............................................................................................................3, 4 In re TS Tech USA Corp., 551 F.3d 1315 (Fed. Cir. 2008)..................................................................................................5 U.S. Ethernet Innovations, LLC v. Samsung Elecs. Co., No. 6:12-CV-398 MHS-JDL, 2013 WL 1363613 (E.D. Tex. Apr. 2, 2013) ...........................14 NETFLIX'S CORRECTED MOTION TO DISMISS OR TRANSFER FOR IMPROPER VENUE – Page iii 3 PageID #: 1697 TABLE OF AUTHORITIES Page(s) Cases In re Verizon Bus. Network Servs., Inc., 635 F.3d 559 (Fed. Cir. 2011)..................................................................................................14 In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008) ...............................................................................................5, 13 In re ZTE (USA) Inc., 890 F.3d 1008 (Fed. Cir. 2018)..................................................................................................4 Statutes 28 U.S.C. § 1391(b)(2) ............................................................................................................10, 11 28 U.S.C. § 1400(b) ............................................................................................................... passim 28 U.S.C. § 1404(a) ............................................................................................................... passim 28 U.S.C. § 1406(a) .......................................................................................................................12 NETFLIX'S CORRECTED MOTION TO DISMISS OR TRANSFER FOR IMPROPER VENUE – Page iv 3 PageID #: 1698 I. Introduction This case does not belong in this district. Netflix, Inc. ("Netflix") is a Delaware corporation with a principal place of business in Los Gatos, California. Netflix has no offices or data centers in this district. Netflix neither owns nor leases any property in this district. For this reason, Plaintiff Personalized Media Communications, LLC ("PMC") rests its venue allegations entirely on certain computer equipment located in this district. PMC draws support from this Court's finding in SEVEN Networks that, where servers operating in this district were both owned and physically controlled by a defendant, they could qualify as the defendant's "place of business" under § 1400(b).1 However, the servers used to serve Netflix content are neither owned nor physically controlled by Netflix. To the contrary, the internet service providers ("ISPs") who use them. Netflix does not own, lease, or possess the property where those servers are located, the shelves they sit on, or the servers themselves. As a result, under the approach this Court took in SEVEN Networks, the Open Connect Appliances that form the exclusive basis for PMC's venue allegations do not qualify as a place of business of Netflix. To hold otherwise would vitiate the line between physical and logical control that this Court articulated in SEVEN Networks, directly conflict with the Federal Circuit's holding in In re Cray,2 and vastly expand the scope of § 1400(b). The Court should, therefore, dismiss this case for improper venue or, in the alternative, transfer it to the Northern District of California. II. Key Facts Netflix is incorporated in Delaware and has its principal place of business in Northern California. Dkt. No. 1 at ¶ 2. Netflix neither owns nor leases real estate in this district and does not hold itself out as having offices in this district. Declaration of Quynh Nguyen ("Nguyen Decl.") ¶ 3. Netflix only has three employees who reside in this District. Id. ¶ 19. Those employees work out of their homes, but Netflix does not pay any portion of their rent, require them to live in 1 SEVEN Networks, LLC v. Google LLC, 315 F. Supp. 3d 933, 966-67 (E.D. Tex. 2018). 2 871 F.3d 1355 (Fed. Cir. 2017). NETFLIX'S COR