`Case 2:17-cv-04263-JVS-JCG Document 31 Filed 10/02/17 Page 1 of 11 Page ID #:595
`
`Jacqueline K. S. Lee
`JONES DAY
`1755 Embarcadero Road
`Palo Alto, CA 94303
`Telephone: 650.739.3939
`Facsimile: 650.739.3900
`jkslee@jonesday.com
`
`Blaney Harper
`JONES DAY
`51 Louisiana Avenue, N.W.
`Washington, DC 20001-2113
`Telephone: 202.879.3939
`Facsimile: 202.626.1700
`bharper@jonesday.com
`Attorneys for Defendant Cree, Inc.
`UNITED STATES DISTRICT COURT
`FOR THE CENTRAL DISTRICT OF CALIFORNIA
`Case No. 2:17-cv-04263-JVS-JCG
`Document Security Systems, Inc.,
`DEFENDANT CREE, INC.’S
`Plaintiff,
`REPLY BRIEF IN SUPPORT OF
`MOTION TO TRANSFER
`VENUE PURSUANT TO 28
`U.S.C. § 1404(A)
`Judge: Hon. James V. Selna
`Hearing Date: October 16, 2017
`Time: 1:30 p.m.
`Courtroom: 10C
`
`
`v.
`Cree, Inc.,
`
`Defendant.
`
`REPLY BRIEF IN SUPPORT OF MOTION TO TRANSFER VENUE
`
`PURSUANT TO 28 U.S.C. § 1404(A)
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`Case No. 2:17-cv-04263-JVS-JCG
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`Case 2:17-cv-04263-JVS-JCG Document 31 Filed 10/02/17 Page 2 of 11 Page ID #:596
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`I.
`
`INTRODUCTION
`Plaintiff’s Brief in Opposition falls short of rebutting Cree’s showing that
`Plaintiff’s choice of forum should be entitled to little, if any, deference under the
`circumstances of this case. It is further clear that analysis of the Jones factors
`strongly favors transfer. In the present circumstances, this action should be
`moved to the Middle District of North Carolina.
`In support of its motion, Cree explained that Plaintiff twice brought suit
`outside its home forum to a venue where it had no substantial connection. The
`present suit in California is not only outside Plaintiff’s home forum of New
`York, but also is entirely across the country from where Cree is located in North
`Carolina and from where the vast majority of evidence concerning the
`infringement counts is located. On these facts, Plaintiff’s choice of forum is not
`entitled to deference because the operative facts have not occurred within the
`forum and the forum has no interest in the parties or the subject matter.
`Additionally, particularly in patent infringement cases, courts have given less
`weight to the plaintiff’s chosen forum and instead focused on the ‘center of
`gravity of the accused activity’ when ruling on motions to transfer. Cree
`maintains that appropriate consideration of the convenience of the parties,
`convenience of the witnesses, location of the evidence, and the interests of
`justice all strongly favor transfer under the analysis of the Jones factors.
`In its brief opposing transfer, Plaintiff DSS contends that it is entitled to
`deference in its choice of forum. This argument is untenable in light of the fact
`that DSS resides in New York and has no substantial contacts with California.
`Additionally, Plaintiff argues that Cree’s advanced research facility in this
`district conducted research and development relating to the accused products.
`This argument is misplaced. The vast majority of records concerning the
`structure of the accused products and their sales are located in North Carolina.
`
`REPLY BRIEF IN SUPPORT OF MOTION TO TRANSFER VENUE
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`Case 2:17-cv-04263-JVS-JCG Document 31 Filed 10/02/17 Page 3 of 11 Page ID #:597
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`The mere fact that some discoverable information may exist in California, even
`if true, does not change the fact that the vast majority of the relevant evidence is
`located far away from this District. Plaintiff makes several other subsidiary
`arguments which are contradicted by the facts here or are wholly unsupported,
`and in any event, fail to rebut Cree’s showing of convenience.
`II. ARGUMENT
`A.
`Plaintiff’s choice of venue is not entitled to deference in this case
`Relying on two cases, iPowerUp and Broadcom, DSS contends that
`“DSS’s choice of forum is entitled deference and weighs against transfer.”
`Plaintiff’s Brief in Opposition, ECF No. 30 at 4. However, both cases relied on
`by DSS are inapposite because they involve a plaintiff residing in this District.
`In iPowerUp, the court noted that “Defendant has not presented evidence
`to show that the connection [between the alleged infringement and this District]
`is ‘insignificant.’ Moreover, Plaintiff resides in this District.” iPowerUp, Inc.
`v. Ascent Solar Techs., Inc., No. LA CV16-01006-JAK (AFMx), 2016 WL
`6953453, at *2 (C.D. Cal. May 27, 2016) (emphasis added). As explained in
`Cree’s motion, ECF No. 27 at 8-10, lack of Plaintiff’s residence in a district
`significantly undercuts any deference concerning Plaintiff’s choice of forum.
`Plaintiff DSS does not reside in this District. See, e.g., First Amended
`Complaint, ECF No. 17, ¶¶1-2 (“Document Security Systems, Inc. is a publicly-
`traded New York corporation. . . . DSS is pursuing both licensing and
`commercialization of this technology acquisition, and is establishing those
`activities within its Plano location.”).1 This lack of residence factually
`distinguishes the present case from iPowerUp.
`
`
`1 In further contrast to iPowerUp, Cree has presented ample evidence that the
`connection of the alleged infringement to this District is insignificant. See e.g.,
`Cree’s Motion to Transfer, ECF No. 27, Demos Decl. ¶ 5 (“[a]ctivity in [Goleta,
`
`REPLY BRIEF IN SUPPORT OF MOTION TO TRANSFER VENUE
`Case No. 2:17-cv-04263-JVS-JCG
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`Case 2:17-cv-04263-JVS-JCG Document 31 Filed 10/02/17 Page 4 of 11 Page ID #:598
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`Likewise in Broadcom, the plaintiff was “a California corporation with its
`principal place of business in Irvine, California.” Broadcom Corp. v. Sony
`Corp., No. SACV 16-1052 JVS (JCGx), D.E. 60-1 at 3 (C.D. Cal. Sept. 12,
`2016). The court noted:
`“Broadcom has presented evidence establishing substantial contacts
`with the Central District relating to its claims for patent infringement.
`This includes, most importantly, declaration testimony from
`Broadcom human resources personnel establishing that (1) Broadcom
`maintains its principal place of business in Irvine, California, and that
`(2) Broadcom makes ultimate business and legal decisions regarding
`domestic patent prosecution at its Irvine offices.”
`Id. at 7. Again, in contrast with Broadcom and iPowerUp, DSS has no
`contacts with this district whatsoever, let alone “maintain[ing] a principal place
`of business” or “mak[ing] ultimate business and legal decisions.”
`DSS also cites Broadcom for the proposition that “of all the transfer
`factors, the plaintiff’s choice of forum carries the most weight.” Plaintiff’s Brief
`in Opposition, ECF No. 30 at 4. However, in Broadcom the court quotes
`approvingly from Saleh that “[t]he relative convenience to the witnesses is often
`recognized as the most important factor to be considered in ruling on a motion
`under § 1404(a).” Broadcom, D.E. 60-1 at 5 (quoting Saleh v. Titan Corp., 361
`F. Supp. 2d 1152, 1160 (S.D. Cal. 2005)). DSS mischaracterizes the
`applicability of both iPowerUp and Broadcom to the facts of the present matter.
`DSS is not a resident of California, has chosen twice to avoid its resident state,
`and its choice of forum now is not entitled to deference.
`
`
`California] facility is not responsible for the manufacturing or selling of specific
`products such as the accused products”).
`REPLY BRIEF IN SUPPORT OF MOTION TO TRANSFER VENUE
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`Case 2:17-cv-04263-JVS-JCG Document 31 Filed 10/02/17 Page 5 of 11 Page ID #:599
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`B.
`
`Location of Cree’s R&D facility in this District is not relevant to
`the venue transfer analysis
`DSS argues that “Cree has a research and development facility in this
`District, where research and development relating to the accused products is or
`has been conducted.” Plaintiff’s Brief in Opposition, ECF No. 30 at 6. DSS’
`argument is misplaced because the relevant issue for the court now is the
`convenience of the parties, not whether venue is appropriate.
`The relevant Jones factors here are convenience of the parties,
`convenience of the witnesses, and location of the evidence. The proffered
`venues are evaluated on these bases. To analyze the Jones factors, the question
`is not whether the parties have some evidence, or witnesses, in this District.
`Rather, the question is where are there significantly more relevant witnesses and
`evidence, such that the convenience of the parties will be enhanced. As
`explained in Cree’s motion, ECF No. 27 at 10-13, the answer to this question is
`unquestionably North Carolina.
`In particular, a substantial amount of Cree’s manufacturing facilities are
`located in North Carolina. ECF No. 28, Demos Decl. ¶5. Cree’s corporate
`records concerning the structure and sales of the accused products are located in
`North Carolina. Id. ¶7. All Cree witnesses identified so far are located in North
`Carolina. Id. ¶8. Further, Cree’s advanced research facility (the SBTC) is not
`responsible for the production, manufacture, sale, or marketing of any product.
`Id. ¶5. Cree is not presently aware of any relevant evidence located in the SBTC
`facility. Id. ¶9. Significantly more evidence and witnesses concerning the
`infringement allegations are located in North Carolina.
`DSS highlights Cree’s Application Note for XLamp XB-D as
`“confirm[ing] that it tested bulbs incorporating the accused XB-D LED
`components at the SBTC.” Plaintiff’s Brief in Opposition, ECF No. 30 at 6. As
`
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`Case 2:17-cv-04263-JVS-JCG Document 31 Filed 10/02/17 Page 6 of 11 Page ID #:600
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`an initial matter, this case is not about bulbs – none of the claims-at-issue recite
`light bulbs. More importantly, the material language in the document DSS cites
`for its testing allegation is located at footnote 18 on page 12, which reads, in its
`entirety: “Testing was performed at Cree’s Santa Barbara Technology Center.”
`ECF 30-3 at 12, n.18. The testing referred to here concerns measurements taken
`to show that the bulb met “ENERGY Star performance metrics for a 75-W
`equivalent lamp.” Id. at 12. Whether light bulbs meet the ENERGY Star
`performance metrics has, at most, de minimis relevance to the questions of
`infringement of claims regarding LEDs, and other issues likely to be contested in
`this case. The Application Note cited by DSS simply does not support DSS’
`allegation (Plaintiff’s Brief in Opposition, ECF No. 30 at 7) that “technology
`incorporated into the accused products was designed and developed in its Goleta
`research and development facility.”
`Furthermore, if a particular test conducted at the SBTC was relevant to the
`case, it does not outweigh all other evidence located in North Carolina. Even for
`Application Note DSS cites, the very next footnote refers to North Carolina,
`citing “[t]esting [] performed in a type C goniometer at Cree’s Durham
`Technology Center.” Id. at 13, n.19. And the cover page of this Application
`Note gives a contact information as “Cree, Inc. 4600 Silicon Drive Durham, NC
`27703 USA Tel: +1. 919. 313. 5300.” Id. at 1. These are the only mailing
`addresses and phone numbers listed in the document, making it clear that any
`customer with questions about this product is instructed to contact Cree at their
`North Carolina facility. As Cree has explained (Cree’s Motion to Dismiss, ECF
`No. 27 at 12-13), the material evidence for these infringement allegations is
`located in North Carolina.
`
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`Case 2:17-cv-04263-JVS-JCG Document 31 Filed 10/02/17 Page 7 of 11 Page ID #:601
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`C. Transfer to North Carolina will increase the convenience of the
`parties
`DSS asserts that “[t]ransferring this case to North Carolina would only
`shift the costs from Cree to DSS.” Plaintiff’s Brief in Opposition, ECF No. 30 at
`7. DSS claims that it “appears unlikely” that the witnesses identified by Cree
`will be “required to testify live at trial.” Id. at 9. DSS also asserts that it is
`“unclear why Cree would need employee witnesses to testify at trial regarding
`marketing and sales and revenue of the accused products.” Id. (internal
`quotations omitted). These arguments fly in the face of practical reality. Of
`course, Cree will require those employees with knowledge and experience of
`Cree’s sales, marketing and revenue of the accused products, as well as the
`structure of the accused devices to testify concerning the infringement and
`damages issues in this case. Those witnesses are located in North Carolina. It is
`beyond question that having those witnesses testify in North Carolina (where
`they are located), rather than California, will enhance their convenience.
`Furthermore, North Carolina is even more convenient than California for
`corporate witnesses of DSS who likely reside in or about New York as DSS is
`located in Rochester, New York. Transferring this case will not simply shift
`costs, transfer will minimize those costs.
`DSS also claims that Cree’s choice of litigating other patent cases in
`Wisconsin “strongly indicates that Cree does not suffer any inconvenience in
`litigating matters at some distance from its North Carolina headquarters.” Id.
`This argument is mis-informed. First, Cree has a manufacturing facility in
`Racine, Wisconsin. Also, as a Plaintiff, Cree was required to lay venue where it
`is a proper for the defendant. Cree’s decision to bring a patent suit away from its
`home forum in Wisconsin does not indicate in any way that litigating in
`California is not inconvenient.
`
`REPLY BRIEF IN SUPPORT OF MOTION TO TRANSFER VENUE
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`Case 2:17-cv-04263-JVS-JCG Document 31 Filed 10/02/17 Page 8 of 11 Page ID #:602
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`D. Cree has identified at least one third-party for whom
`compulsory process is necessary
`In response to Cree’s identification of third party BKI as having relevant
`evidence concerning the standing issue, DSS contends that Cree’s assertions are
`“vague” and “speculative.” Plaintiff’s Brief in Opposition, ECF No. 30 at 10.
`However, DSS’ own documents have highlighted the standing issue which has
`been pled as an affirmative defense. Cree’s Answer, ECF No. 25 at 7. Third
`party discovery of BKI on this issue is certainly appropriate. DSS goes on to
`suggest that Cree’s reliance on “DSS’s (not BKI’s) Form 10-K” in identifying
`the location of BKI’s state of incorporation and a principal place of business is
`misplaced. Plaintiff’s Brief in Opposition, ECF No. 30 at 11. However, there is
`no indication that DSS’ own Form 10-K filed with the SEC is not accurate. At
`this stage of the litigation, the Form 10-K is appropriate information available to
`Cree and to the court to weigh the relative convenience of the transferor and
`transferee forums to third party witnesses. Finally, even though DSS now
`identifies a single third party inventor residing in California, DSS admits that
`Cree’s assertion “that most of the inventors of the patents-in-suit (who are non-
`parties) reside in Malaysia” “is generally true.” Id. Notwithstanding DSS’
`misguided arguments, Cree maintains that this Jones factor (the convenience of
`witnesses) is at least neutral or favors transfer.
`E. Documents and evidence are more accessible in North Carolina
`DSS asserts that “documents and evidence are just as accessible in this
`District as North Carolina.” Plaintiff’s Brief in Opposition, ECF No. 30 at 11.
`However, as discussed in Cree’s opening brief, a number of courts have rejected
`this argument. These courts explained that even in the age of electronic
`discovery, the physical location of the documents is a relevant consideration for
`venue transfer. Cree’s Motion to Transfer, ECF No. 27 at 12-13 (citing In re
`
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`Case 2:17-cv-04263-JVS-JCG Document 31 Filed 10/02/17 Page 9 of 11 Page ID #:603
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`Genentech Inc., 566 F.3d 1338, 1346 (Fed. Cir. 2009); Newthink LLC v. Lenovo
`(U.S.) Inc., No. 2:12-CV-5443-ODW JCX, 2012 WL 6062084, at *2 (C.D. Cal.
`Dec. 4, 2012); Andrews v. A.C. Roman & Assocs., 914 F. Supp. 2d 230, 239
`(N.D.N.Y. 2012)). This factor continues to weigh in favor of transfer.
`F.
`Judicial economy does not weigh against transfer
`DSS asserts that “[j]udicial economy heavily weighs against transfer” by
`pointing to other cases it has filed in this District as a reason to keep its case
`against Cree here as well. Plaintiff’s Brief in Opposition, ECF No. 30 at 13.
`However, as explained by Cree, “a party cannot simply use a related case ‘as a
`magnet to attract other cases ... to a forum where those cases would not
`otherwise be.’” Cree’s Motion to Transfer, ECF No. 27 at 15 (citing Sentegra,
`LLC v. ASUS Comput. Int’l, No. 1:15-cv-3768-GHW, 2016 WL 3093988, at *3
`(S.D.N.Y June 1, 2016)). DSS attempts to distinguish Sentegra by claiming that
`“[i]n contrast, this case has a significant connection to this District because
`technology for the accused products was designed and/or developed here.”
`Plaintiff’s Brief in Opposition, ECF No. 30 at 14-15. The assertion by DSS that
`there is a “significant” connection to California concerning the accused products
`is hyperbole. As discussed supra, ENERGY Star testing of light bulbs does not
`show that LED technology incorporated into the accused products was designed
`and developed in Cree’s Goleta research and development facility. Sentegra
`remains directly on point – DSS should not be allowed to use other cases in this
`District to drag other defendants here, for whom other forums would me more
`convenient.2
`
`
`2 DSS also attempts to distinguish another case cited by Cree, Chrimar, stating
`that the court in Chrimar “denied [sic] the motion to transfer.” Plaintiff’s Brief
`in Opposition, ECF No. 30 at 15. DSS has it wrong. The court in Chrimar
`granted the motion to transfer. Chrimar Sys., Inc. v. Ruckus Wireless, Inc., No.
`6:15-CV-638 JRG-JDL, 2015 WL 12850551, at *1 (E.D. Tex. Dec. 9, 2015).
`REPLY BRIEF IN SUPPORT OF MOTION TO TRANSFER VENUE
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`Case 2:17-cv-04263-JVS-JCG Document 31 Filed 10/02/17 Page 10 of 11 Page ID #:604
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`G. North Carolina has a greater local interest in this case than this
`District
`DSS asserts that “North Carolina does not have a greater a local interest in
`this case than this District.” Plaintiff’s Brief in Opposition, ECF No. 30 at 15.
`DSS argues that having employees in North Carolina, or having more employees
`in North Carolina than in California should not give any weight to the “local
`interest” factor. Id. at 15-16. DSS misses the point. Cree’s argument is not
`simply that North Carolina has greater local interest in this case than California
`due to the number of employees (which it does). Rather, the nature of DSS’
`allegations, and particularly its allegation that Cree knowingly induced
`infringement, is of particular interest to North Carolina because Cree is a
`corporate citizen there. The courts of North Carolina have an interest in the
`reputation of its citizens which DSS has put at issue by its allegations.
`Therefore, North Carolina does have a greater local interest in resolving this
`controversy than this District.
`III. CONCLUSION
`This case should be transferred. Plaintiff does not dispute that this case
`could have been brought in the District Court for the Middle District of North
`Carolina. The Jones factors, on balance, heavily favor transfer. Plaintiff’s
`choice of forum should be given little deference where it brought suit outside its
`home forum (twice) against a defendant whose headquarters, majority of
`employees, most relevant document, evidence, and witnesses, are all located in
`North Carolina. Plaintiff’s attempt to leverage other pending cases in this
`District to drag Cree into an inconvenient forum should not be allowed,
`especially when the cases involve completely different products and therefore
`different infringement issues.
`
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`Case 2:17-cv-04263-JVS-JCG Document 31 Filed 10/02/17 Page 11 of 11 Page ID #:605
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`RESPECTFULLY SUBMITTED this 2nd day of October, 2017.
`
`JONES DAY
`
`By: /s/ Jacqueline K. S. Lee
`Jacqueline K. S. Lee
`1755 Embarcadero Road
`Palo Alto, CA 94303
`
`Blaney Harper
`51 Louisiana Avenue, N.W.
`Washington, DC 2001-2113
`
`Attorneys for Defendant Cree, Inc.
`
`
`
`
`
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