Case 4:18-cv-06185-HSG Document 47 Filed 03/12/19 Page 1 of 21
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`Sarah G. Hartman (Cal. Bar No. 281751)
`shartman@brownrudnick.com
`Peter Lambrianakos (pro hac vice)
`plambrianakos@brownrudnick.com
`Vincent J. Rubino, III (pro hac vice)
`vrubino@brownrudnick.com
`Brown Rudnick LLP
`7 Times Square
`New York, NY 10036
`Telephone:
`(212) 209-4800
`Facsimile:
`(212) 209-4801
`
`Arjun Sivakumar (Cal. Bar No. 297787)
`asivakumar@brownrudnick.com
`Brown Rudnick LLP
`2211 Michelson Drive, Seventh Floor
`Irvine, California 92612
`Telephone: (949) 752-7100
`Facsimile: (949) 252-1514
`
`
`Attorneys for Defendant
`AGIS SOFTWARE DEVELOPMENT LLC
`
`
`
`
`
`ZTE (USA) INC.,
`
`v.
`
`
`
`Plaintiff,
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`OAKLAND DIVISION
`
`
` Case No. 18-cv-06185-HSG
`
`REPLY IN SUPPORT OF MOTION TO
`DISMISS SECOND AMENDED
`COMPLAINT
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`
`
`
`Hearing Date:
`Time:
`Trial Date:
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`
`AGIS SOFTWARE DEVELOPMENT LLC, et
`al.
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`Defendant.
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`
`
`May 9, 2019
`2:00 p.m. PST
`None set
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`REPLY IN SUPPORT OF MOTION TO DISMISS SAC, CASE NO. 18-cv-06185-HSG
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`Case 4:18-cv-06185-HSG Document 47 Filed 03/12/19 Page 2 of 21
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`TABLE OF CONTENTS
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`Page
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`PRELIMINARY STATEMENT ............................................................................................. 1
`ZTE’S FAILURE TO ESTABLISH JURISDICTION MANDATES DISMISSAL .............. 1
`A.
`ZTE Fails to Meet its Burden to Establish that Imputation is Warranted .................... 1
`B.
`General Jurisdiction Is Not Proper Over AGIS Software ............................................ 8
`C.
`Specific Jurisdiction Is Not Proper Over AGIS Software ........................................... 9
`1.
`Agis Software’s Contacts With California Are Insufficient ............................ 9
`2.
`AGIS, Inc.’s Contacts Cannot Be Considered, And Are Insufficient ............ 12
`Exercising Jurisdiction over AGIS Software Would Not Be Fair or Reasonable ..... 14
`D.
`JURISDICTIONAL DISCOVERY IS NOT WARRANTED ............................................... 14
`CONCLUSION ...................................................................................................................... 15
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`I.
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`Case 4:18-cv-06185-HSG Document 47 Filed 03/12/19 Page 3 of 21
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`
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`TABLE OF AUTHORITIES
`
`
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`Page(s)
`
`Cases
`
`3D Sys., Inc. v. Aarotech Labs., Inc.,
`160 F.3d 1373 (Fed. Cir. 1998)................................................................................................3, 6, 7
`
`Adobe Sys. Inc. v. Tejas Research, LLC,
`No. C–14–0868 EMC, 2014 WL 4651654 (N.D. Cal. Sept. 17, 2014) ...................................10, 11
`
`AGIS Software Dev. LLC v. Apple, Inc.,
`No. 2:17-CV-00516-JRG, 2018 WL 2721826 (E.D. Tex. June 6, 2018) ................................1, 2, 6
`
`Alien Tech Corp. v. Intermec, Inc.,
`No. 3:06–cv–51., 2007 WL 63989 (D.N.D. Jan. 4, 2007) ...............................................................7
`
`Allphin v. Peter K. Fitness,
`LLC, Case No. 13–cv–01338–BLF, 2014 WL 6997653 (N.D. Cal. Dec. 11, 2014).......................5
`
`Am. GNC Corp. v. GoPro, Inc.,
`Case No. 18-cv-00968-BAS-BLM, 2018 WL 6074395 (S.D. Cal. Nov. 6, 2018) ..........................2
`
`Am. Wave Machines, Inc. v. Surf Lagoons, Inc.,
`No. 13–cv–3204–CAB (NLS)., 2014 WL 10475281 (S.D. Cal. Nov. 12, 2014) ............................7
`
`AU Optronics Corp. Am. v. Vista Peak Ventures, LLC,
`Case No. 18-cv-04638-HSG, 2019 WL 690282 (N.D. Cal. Feb. 19, 2019)
`(Gilliam, Jr., J.) ..............................................................................................................9, 10, 11, 13
`
`Avocent Huntsville Corp. v. Aten Int’l Co., Ltd.,
`552 F3d 1324 (Fed. Cir. 2008).....................................................................................10, 12, 13, 14
`
`Bayer Healthcare LLC v. Nektar Therapeutics,
`Case No. 17-CV-05055-LHK, 2018 WL 1258202 (N.D. Cal. Mar. 12, 2018) .............................13
`
`Boschetto v. Hansing,
`539 F.3d 1011 (9th Cir. 2008) .................................................................................................12, 15
`
`Campbell Pet Co. v. Miale,
`542 F.3d 879 (Fed. Cir. 2008)........................................................................................................13
`
`Celgard, LLC v. SK Innovation Co.,
`792 F.3d 1373 (Fed. Cir. 2015)....................................................................................................3, 6
`
`In re Conseco Ins. Co. Annuity Mktg. & Sales Practices Litig.,
`No. C-05-04725 RMW., 2008 WL 4544441 (N.D. Cal. Sept. 30, 2008) .......................................5
`
`Corcoran v. CVS Health Corp.,
`169 F. Supp. 3d 970, 983-84 (N.D. Cal. 2016) ................................................................................4
`3
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`Case 4:18-cv-06185-HSG Document 47 Filed 03/12/19 Page 4 of 21
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`Coremetrics, Inc. v. Atomic Park.com, LLC,
`370 F. Supp. 2d 1013 (N.D. Cal. 2005) ...........................................................................................9
`
`Daimler AG v. Bauman,
`134 S. Ct. 746 (2014) ...................................................................................................................8, 9
`
`Dainippon Screen Mfg. Co. v. CFMT, Inc.,
`142 F.3d 1266 (Fed. Cir. 1998)....................................................................................................6, 7
`
`Elecs. for Imaging, Inc. v. RAH Color Techs. LLC,
`Case No. 18-cv-01612-WHO, 2018 WL 5304838 (N.D. Cal. Oct. 24, 2018) .........................10, 11
`
`Farmers Ins. Exch. v. Portage La Prairie Mut. Ins. Co.,
`907 F.2d 911 (9th Cir. 1990) .........................................................................................................14
`
`Gallagher v. U.S.,
`Case No. 17-cv-00586-MEJ, 2017 WL 4390172 (N.D. Cal. Oct. 3, 2017) ...................................11
`
`Google Inc. v. Rockstar Consortium U.S. LP,
`No. C 13–5933 CW, 2014 WL 1571807 (N.D. Cal. Apr. 17, 2014) ...............................................7
`
`Gordon v. APM Terminals N. Am., Inc.,
`No. 17-CV-03970-MEJ, 2017 WL 3838092 (N.D. Cal. Sept. 1, 2017) ......................................3, 4
`
`Jack Henry & Assocs., Inc. v. Plano Encryption Techs. LLC,
`910 F.3d 1199 (Fed. Cir. 2018)......................................................................................................11
`
`Juniper Networks, Inc. v. SSL Servs., LLC,
`No. C 08–5758 SBA., 2009 WL 3837266 (N.D. Cal. Nov. 16, 2009) ....................................10, 11
`
`Kellman v. Whole Foods Mkt., Inc.,
`313 F. Supp. 3d 1031, 1047 (N.D. Cal. 2018) .................................................................................5
`
`Klayman v. Deluca,
`Case No. 5:14–CV–03190–EJD, 2015 WL 427907 (N.D. Cal. Jan. 30, 2015) .............................11
`
`Kyocera Int'l, Inc. v. Semcon IP, Inc.,
`Case No.: 3:18-CV-1575-CAB-MDD, 2018 WL 5112056 (S.D. Cal. Oct. 19,
`2018) ........................................................................................................................................10, 11
`
`Langenberg v. Sofair,
`No. 03-CV-8339 KMK., 2006 WL 2628348 (S.D.N.Y. Sept. 11, 2006) ........................................3
`
`Life360, Inc. v. Advanced Ground Info. Sys., Inc.,
`No. 15–cv–00151–BLF, 2015 WL 5612008 (N.D. Cal. Sept. 21, 2015) . Dkt. 19-2 ............8, 9, 13
`
`NXP Semiconductors USA, Inc. v. Brevets,
`No. C 14–1225 SI, 2014 WL 4621017 (N.D. Cal. Sept. 15, 2014) ...........................................7, 15
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`Case 4:18-cv-06185-HSG Document 47 Filed 03/12/19 Page 5 of 21
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`
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`Paramount Pictures Corp. v. Nissim Corp.,
`Nos. 2:14–cv–04624–ODW(ASx), 2:14–cv–04626–ODW(ASx), 2:14–cv–04628–
`ODW(ASx)., 2014 WL 5528455 (C.D. Cal. Nov. 3, 2014) ....................................................10, 14
`
`Pebble Beach Co. v. Caddy,
`453 F.3d 1151 (9th Cir. 2006) .......................................................................................................14
`
`Radio Systems Corp. v. Accession, Inc.,
`638 F.3d 785 (Fed. Cir. 2011)......................................................................................10, 11, 12, 13
`
`Ranza v. Nike,
`793 F.3d 1059 (9th Cir. 2015) .....................................................................................................4, 5
`
`Republic of Kazakhstan v. Ketebaev,
`Case No. 17-CV-00246-LHK, 2018 WL 2763308 (N.D. Cal. June 8, 2018) ..................................8
`
`RxHeat, LLC v. Thermapure, Inc.,
`No. 4:10CV2402 JCH., 2011 WL 998158 (E.D. Mo. Mar. 17, 2011) ............................................7
`
`Sec. & Exch. Comm'n v. Jammin Java Corp.,
`Case No. 2:15-cv-08921-SVW-MRW, 2016 WL 6595133 (C.D. Cal. July 18,
`2016) ............................................................................................................................................2, 3
`
`Skurkis v. Montelongo,
`Case No.: 16-cv-0972 YGR, 2016 WL 4719271 (N.D. Cal. Sept. 9, 2016)..................................15
`
`Stewart v. Screen Gems-EMI Music, Inc.,
`81 F. Supp. 3d 938, 954 (N.D. Cal. 2015) ...............................................................................3, 4, 5
`
`Taormina v. Thrifty Car Rental,
`No. 16-CV-3255 (VEC), 2016 WL 7392214 (S.D.N.Y. Dec. 21, 2016).....................................2, 3
`
`Williams v. Yamaha Motor Co.,
`851 F.3d 1015 (9th Cir. 2017) .........................................................................................................4
`
`Wistron Corp. v. Phillip M. Adams & Assocs. LLC,
`No. C-10-4458, 2011 WL 1654466, at *6 n.8 (N.D. Cal. Apr. 28, 2011 .......................................7
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`Case 4:18-cv-06185-HSG Document 47 Filed 03/12/19 Page 6 of 21
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`PRELIMINARY STATEMENT1
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`ZTE (USA) Inc. (“ZTE”) cannot meet its burden to establish personal jurisdiction over AGIS
`
`
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`I.
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`
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`Software Development LLC (“AGIS Software”), a Texas corporation with a principal place of
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`business in Texas and no relevant ties to California. ZTE does not, because it cannot, dispute that
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`AGIS Software’s ties are insufficient to justify the exercise of personal jurisdiction. Rather, in a
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`desperate effort to save its case, ZTE introduces, for the first time in its Opposition, a never-before-
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`asserted theory of jurisdiction —namely, that personal jurisdiction is proper over AGIS Software
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`based on the purported contacts of its sister entity and non-party, AGIS, Inc. But ZTE’s Second
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`Amended Complaint (“SAC”) contains no allegation that could support an imputation theory of
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`jurisdiction, and even if ZTE’s new information could be considered, ZTE cannot show that
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`imputation is warranted. Nonetheless, ZTE has failed to show that any of AGIS, Inc.’s purported
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`contacts justify the exercise of personal jurisdiction in this action. Accordingly, AGIS Software’s
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`Motion to Dismiss should be granted, without leave to amend.
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`II.
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`
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`ZTE’S FAILURE TO ESTABLISH JURISDICTION MANDATES DISMISSAL2
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`ZTE’s new theory, asserted for the first time in Opposition, that jurisdiction is proper over
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`AGIS Software based on the purported contacts of its sister entity and non-party, AGIS, Inc., fails.
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`A.
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`ZTE Fails to Meet its Burden to Establish that Imputation Is Warranted
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`1 Exhibits 3-6, 8, 10, 14, and 34 and the un-redacted versions of the Response and Declaration,
`Dkts. 42-4, 42-6--42-14, contain information designated “RESTRICTED-ATTORNEYS’ EYES
`ONLY” pursuant to the Protective Order in another action, and are currently the subject of ZTE’s
`pending Administrative Motion to Withdraw Documents (Dkt. 44), to which AGIS Software agreed
`in part (Dkt. 46). Both parties agree that this material should be withdrawn and not relied upon in
`evaluating this Motion, and as such, AGIS Software does not reference it in this Reply. AGIS
`Software further reserves its rights with respect to additional designated information referenced
`and/or relied on in documents publicly-filed by ZTE, as further set forth in Dkt. 46.
`2 In its brief, ZTE defines AGIS Software and AGIS, Inc. collectively as “AGIS” (Dkt. 43 at 1),
`conflating the arguments and activities relevant to each, despite their critical differences. However,
`the only asserted contacts of AGIS Software are out-of-state enforcement activities and the ancillary
`discovery activities, which were alleged in the SAC and discussed in the Motion. Dkt. 39 at ¶¶ 8-
` 10, 12-13; Dkt. 41-1 at ¶ 21-22; Dkt. 41-2 at ¶ 4-6, 8. All other purported contacts relied on by
`ZTE are those of AGIS, Inc. See Dkt. 43-3, 43-12, 43-13, 43-14, 43-30; Dkt. 43-1 at ¶¶ 3, 12-14,
`30_ (relating to the purported activities of AGIS, Inc.); Life360, Inc. v. Advanced Ground Info. Sys.,
`Inc., No. 15-cv-00151-BLF, 2015 WL 5612008, at *3-4 (N.D. Cal. Sept. 21, 2015) (“Life360-Cal”).
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`Case 4:18-cv-06185-HSG Document 47 Filed 03/12/19 Page 7 of 21
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`ZTE’s SAC does not include a single allegation supporting an imputation theory of personal
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`jurisdiction. Dkt. 39. The SAC does not allege a single fact regarding the relationship between
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`AGIS, Inc. and AGIS Software (beyond that they are sister entities), nor any fact showing that
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`AGIS, Inc. has any contacts with California (or the details of those contacts). Id. The SAC only
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`references AGIS, Inc. five times, and none relate to imputation or any purported connection between
`AGIS, Inc. and California.3 Instead, the SAC alleges that personal jurisdiction is proper over AGIS
`Software based on the alleged activities of AGIS Software. Dkt. 39 ¶ 7; id. at 1 (defining AGIS
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`Software as “AGIS”); see also id. ¶¶ 8-10, 13-15 (alleging conduct of AGIS Software only).
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`While a court may consider affidavits and other materials outside the pleadings submitted in
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`support of a plaintiff’s theory of jurisdiction, it “cannot consider new facts asserted in the
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`[plaintiff’s] oppositions to the motions.” Sec. & Exch. Comm'n v. Jammin Java Corp., 2016 WL
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`6595133, at *12 (C.D. Cal. July 18, 2016); see also Taormina v. Thrifty Car Rental, 2016 WL
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`7392214, at *4 (S.D.N.Y. Dec. 21, 2016) (in evaluating personal jurisdiction, “[plaintiff] cannot
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`supplement his Complaint with facts asserted for the first time in his memorandum of law”). Here,
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`AGIS Software informed ZTE on October 26, 2018 via email that ZTE lacked personal jurisdiction
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`over the AGIS entities. Dkt 41-2. Attached to the email was the recent decision in Kyocera Int'l, Inc.
`v. Semcon IP, Inc.,4 in which this Court dismissed a complaint under similar circumstances for lack
`of personal jurisdiction. Dkt. 41-3. Thereafter, ZTE twice amended its complaint,5 but never added
`the new facts and theories it now asserts, even though it has been in possession of much of the
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`3 See Dkt. 39 ¶ 3 (alleging that AGIS, Inc. is a Florida corporation with a principal place of business
`in Florida); id. ¶ 9 (referencing AGIS, Inc. in the name of a litigation that took place in Florida and
`involved patents other than the Patents-in-Suit); id. ¶ 11 (alleging that AGIS, Inc. is the sister
`company of AGIS Software, and referencing again the litigation involving AGIS, Inc. that took
`place in Florida); id. ¶ 32 (alleging that ZTE amended its initial complaint to remove AGIS, Inc.
`and AGIS Holdings as defendants).
`4 Case No.: 3:18-CV-1575-CAB-MDD, 2018 WL 5112056 (S.D. Cal. Oct. 19, 2018)
`5 ZTE’s assertion that it amended the complaint twice “[t]o simplify matters for judicial efficiency”
`(Dkt. 43 at 7) is misleading. ZTE first amended its complaint to remove AGIS, Inc. and AGIS
`Holdings, Inc. as defendants after those entities repeatedly objected and threated sanctions against
`ZTE’s counsel for filing litigation against them that lacked any basis for subject matter jurisdiction.
`Dkt. 39 at 32; Dkt. 43-25 at 2; Dkt. 18. ZTE amended its complaint a second time after AGIS
`Software’s counsel notified ZTE that it had improperly joined IPR petitions involving the Patents-
`in-Suit while simultaneously challenging their validity in this action. See Dkt. 39 at ¶ 32.
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`Case 4:18-cv-06185-HSG Document 47 Filed 03/12/19 Page 8 of 21
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`information on which it now relies. See Dkt. 25. Instead, ZTE waited until the filing of its
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`Opposition to assert an entirely new theory of jurisdiction with new factual allegations, which is
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`inconsistent with its theory asserted in the SAC.
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`Accordingly, the Court should disregard ZTE’s new “facts” and inconsistent imputation
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`theory, and focus on the contacts expressly alleged in the SAC —those of AGIS Software. See, e.g.,
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`Am. GNC Corp. v. GoPro, Inc., 2018 WL 6074395, at *10 n.8 (S.D. Cal. Nov. 6, 2018) (declining
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`to consider alter ego or agency theory of jurisdiction where complaint did not allege personal
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`jurisdiction based on alter ego theory, or that that defendant’s subsidiaries act as its agents, and
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`focusing instead on theory “expressly” alleged in the complaint); Sec. & Exch. Comm'n , 2016 WL
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`6595133, at *12 (“Many of the facts to which the [plaintiff] cites are not actually alleged in the
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`Complaint and therefore cannot be relied upon in the present motion.”); Taormina, 2016 WL
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`7392214, at *4; Langenberg v. Sofair, 2006 WL 2628348, at *4 (S.D.N.Y. Sept. 11, 2006) (prima
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`facie showing of jurisdiction could not be made through facts asserted for the first time in a
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`memorandum of law); see also Gordon v. APM Terminals N. Am., Inc., 2017 WL 3838092, at *4
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`(N.D. Cal. Sept. 1, 2017) (plaintiff asserted alter ego theory in its opposition brief but “the
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`Complaint contain[ed] no allegations of alter ego theory or facts that explain the relationship
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`between [the two entities],” and while “at best” the plaintiff alleged an “affiliation” with the other
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`entity, “[the plaintiff] provide[d] no details as to how exactly the two entities are affiliated”).
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`Even if ZTE’s newly asserted purported facts were considered, ZTE has failed to meet its
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`burden to show that imputing the purported contacts of AGIS, Inc. to AGIS Software is warranted.
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`Dkt. 43 at 8-11. Despite ZTE’s assertions to the contrary (see, e.g., Dkt. 43 at 9), the law is well-
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`settled that “the corporate entity should be recognized and upheld, unless specific, unusual
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`circumstances call for an exception. . . .” 3D Sys., Inc. v. Aarotech Labs., Inc., 160 F.3d 1373, 1380
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`(Fed. Cir. 1998) (declining to find alter ego relationship or impute activities of one to the other).
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`Moreover, the existence of a parent-subsidiary or mere sister-sister entity relationship “is not
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`sufficient to establish personal jurisdiction over the parent on the basis of the subsidiaries’ minimum
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`contacts with the forum.” Stewart v. Screen Gems-EMI Music, Inc., 81 F. Supp. 3d 938, 954 (N.D.
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`Cal. 2015) (citing Doe v. Unocal Corp., 248 F.3d 915, 925 (9th Cir. 2001)) (emph. added).
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`Case 4:18-cv-06185-HSG Document 47 Filed 03/12/19 Page 9 of 21
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`The actions of a third party may be imputed to a defendant under the alter ego exception.
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`Celgard, LLC v. SK Innovation Co., 792 F.3d 1373, 1379 (Fed. Cir. 2015); accord Stewart, 81 F.
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`Supp. 3d at 954 (recognizing that contacts may be imputed where an “alter ego relationship exists
`among sister companies that are alter egos of each other and operate as part of a single enterprise”).6
`To establish jurisdiction under an alter ego theory, “a plaintiff must make out a prima facie showing:
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`(1) that there is such unity of interest and ownership that the separate personalities of the two
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`corporations no longer exist and; (2) if the acts are treated as those of only one of the corporations,
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`an inequitable result will follow.” Stewart, 81 F. Supp. 3d at 960. This theory envisions “pervasive
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`control” over the affiliate entity, “such as when a parent corporation dictates every facet of the
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`subsidiary’s business—from broad policy decisions to routine matters of day-to-day operations.
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`Ranza v. Nike, 793 F.3d 1059, 1073 (9th Cir. 2015). In evaluating whether a “unity of interest”
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`exists, courts may consider the commingling of funds and other assets of the entities, the holding out
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`by one entity that it is liable for the debts of the other, the use of one entity as a mere shell or conduit
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`for the affairs of the other, inadequate capitalization, disregard of corporate formalities and lack of
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`segregation of corporate records. Id. “Total ownership and shared management personnel are alone
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`insufficient to establish the requisite level of control.” Ranza, 793 F.3d at 1073.
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`ZTE fails to allege facts sufficient to make out a prima facie case that AGIS, Inc. and AGIS
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`Software are alter egos. See generally Dkt. 39 (lacking a single allegation relating to the elements
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`required to establish a prima facie case, including whether a sufficient unity of interest exists, and
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`whether failure to attribute the acts to both entities would lead to an inequitable result); see also
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`supra Section II; Stewart, 81 F. Supp. 3d at 954 (“After Iqbal and Twombly, . . . a complaint must
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`allege the elements of alter ego along with facts that support each element.”); Williams v. Yamaha
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`Motor Co., 851 F.3d 1015, 1022 (9th Cir. 2017) (affirming dismissal for lack of personal jurisdiction
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`6 Contacts may also be imputed under the agency theory, which requires the plaintiff to show that
`the defendant exercises control over the activities of the third-party. Celgard, 792 F.3d at 1379
`(citing Daimler, 134 S. Ct. at 759 n.13). ZTE does not rely on this theory or assert any facts to show
`that AGIS Software exercises control over the activities of AGIS, Inc. sufficient to establish an
`agency relationship. The agency theory is inapplicable. See id. (declining to find agency
`relationship where plaintiff “failed to point to any evidence on the record establishing that the
`dealers were operating [] as [] agents”).
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`4
`REPLY IN SUPPORT OF MOTION TO DISMISS SAC, CASE NO. 18-cv-06185-HSG
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`Case 4:18-cv-06185-HSG Document 47 Filed 03/12/19 Page 10 of 21
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`because plaintiff “fail[ed] . . . to plead facts sufficient to make out a prima facie case that [the two
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`entities] are ‘alter egos’”); Corcoran v. CVS Health Corp., 169 F. Supp. 3d 970, 983-84 (N.D. Cal.
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`2016) (same); Gordon, 2017 WL 3838092, at *4.
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`In its Opposition, ZTE argues that AGIS Software “has no independent identity from AGIS,
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`Inc.,” relying on (1) a statement by Mr. Beyer that AGIS Software and AGIS, Inc. “work closely
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`with one another”; (2) that Mr. Beyer is a named inventor of the Patents-in-Suit, and CEO of both
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`entities; (3) that there are three other common officers; (4) that, at one time, Mr. Sietsema oversaw
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`licensing activities of AGIS, Inc. and its related entities; (5) that AGIS, Inc. licenses the Patents-in-
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`Suit from AGIS Software; and (6) that AGIS, Inc. and AGIS Software hired the same legal counsel.
`Dkt. 43 at 8-11.7 Even if true, these fact do not come close to establishing the requisite “pervasive
`control” and “unity of interest” necessary to establish an alter ego relationship, or to showing that a
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`fraud or injustice would result of the entities are not treated as one. See, e.g., Ranza, 793 F.3d at
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`1074 (affirming rejection of alter ego theory of personal jurisdiction even though parent exercised
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`control over its subsidiary's budget, established general human-resources policies for its subsidiary,
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`was involved in some of its subsidiary's hiring decisions, operated unified information-tracking
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`systems that all of its subsidiaries used, ensured that its branded products were marketed consistently
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`throughout the world, and required some subsidiary-company employees to report to parent-
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`company employees); Kellman v. Whole Foods Mkt., Inc., 313 F. Supp. 3d 1031, 1047 (N.D. Cal.
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`7 With respect to licensing, as ZTE admits, AGIS, Inc. assigned the rights in and to the Patents-in-
`Suit to AGIS Software in June 2017 (Dkt. 43 at 6), and AGIS, Inc. has held only a non-exclusive
`license to the Patents-in-Suit since that time. This is not the type of license arrangement that would
`suggest an alter ego relationship or support a finding of personal jurisdiction over AGIS Software.
`See, e.g., NXP Semiconductors USA, Inc. v. Brevets, 2014 WL 4621017, at *12 (N.D. Cal. Sept. 15,
`2014); RxHeat, LLC v. Thermapure, Inc., 2011 WL 998158, at *4 n.3 (E.D. Mo. Mar. 17, 2011).
`ZTE’s outdated exhibits and misleading conclusions (see Dkt. 43 at 10; 43-3); do not show
`otherwise. Additionally, ZTE argues that the common officers wear the same “hats” in both entities,
`citing to AGIS Software’s Initial Disclosures that merely state the job titles of the officers. Dkt. 43
`at 10; Dkt. 43-21. This evidence does not support ZTE’s conclusion because, “in the absence of
`evidence of actual control, courts generally presume that directors can and do ‘change hats’ to
`represent each corporation separately, despite their overlapping obligations as officers or directors
`for more than one entity.” Stewart, 81 F. Supp. 3d at 954; see also Allphin v. Peter K. Fitness, LLC,
`2014 WL 6997653, at *5 (N.D. Cal. Dec. 11, 2014) (“Courts generally presume that the directors
`are wearing their subsidiary hats and not their parent hats when acting for the subsidiary.”).
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`5
`REPLY IN SUPPORT OF MOTION TO DISMISS SAC, CASE NO. 18-cv-06185-HSG
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`Case 4:18-cv-06185-HSG Document 47 Filed 03/12/19 Page 11 of 21
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`2018) (finding no alter ego relationship, even if allegations were credited, that the parent shares
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`office space, employees, and corporate control with its subsidiaries, sets policies for its subsidiaries,
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`and indemnifies its subsidiaries, as “[a] parent corporation may be directly involved in financing and
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`macro-management of its subsidiaries . . . without exposing itself to a charge that each subsidiary is
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`merely its alter ego.’”); In re Conseco Ins. Co. Annuity Mktg. & Sales Practices Litig., 2008 WL
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`4544441, at *5 (N.D. Cal. Sept. 30, 2008) (sharing of offices, officers and directors between parent
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`and subsidiary or parent’s setting of general policies for subsidiary does not establish that they are
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`alter egos); see also 3D Sys., 160 F.3d at 1380 (rejecting plaintiff’s effort to impute activities of one
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`defendant to two other defendants under alter-ego theory). Thus, ZTE has failed to establish that
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`AGIS, Inc. and AGIS Software are alter egos. See, e.g., Celgard, 792 F.3d at 1379 (“[Plaintiff]] has
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`not alleged facts sufficient to base jurisdiction on the acts of an alter ego.”).
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`In a last ditch effort to show that imputation is warranted, ZTE argues that AGIS Software is
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`a “sham” entity that was created “purportedly to avoid jurisdiction.” Dkt. 43 at 8-10. ZTE provides
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`no support for this conclusion, except to state that AGIS Software filed actions to enforce the
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`Patents-in-Suit in Texas after AGIS, Inc. assigned the rights in those patents to AGIS Software. Id.
`This is insufficient. Moreover, Judge Gilstrap of the EDTX has already twice rejected the same
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`argument in the context of transfer motions. See AGIS Software Dev. LLC v. Apple, Inc., 2018 WL
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`2721826, at *3 (E.D. Tex. June 6, 2018) (rejecting argument that AGIS Software is a “sham” entity
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`and ephemeral because the party making the affirmative assertion failed to present concrete evidence
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`that the business is actually a sham and has no real operations); see also AGIS Software Dev. LLC v.
`HTC Corp., 2018 WL 4680557, at *10 (E.D. Tex. Sept. 28, 2018).8 Both of these decisions were
`left undisturbed by the Federal Circuit on petitions for writs of mandamus. In re LG Elecs. Inc., No.
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`2019-107 (Fed. Cir., 24 Jan. 2019); In re Apple, Inc. No. 2018-151 (Fed. Cir. 16 Oct. 2018).
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`8 ZTE asserts misleading statements throughout its Opposition in an attempt to bolster its argument.
`For example, ZTE states: “It turns out…that ‘discovered evidence [called] into question AGIS’s
`candor in the positions it put forward’ in its opposition to the EDTX matters and HTC’s motion to
`dismiss.” Dkt. 43 at 6. However, ZTE’s cites to rhetoric from the motion filed by AGIS Software’s
`opponent, which the Court in Texas denied and rejected as truth, long before ZTE filed its brief.
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`6
`REPLY IN SUPPORT OF MOTION TO DISMISS SAC, CASE NO. 18-cv-06185-HSG
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`Case 4:18-cv-06185-HSG Document 47 Filed 03/12/19 Page 12 of 21
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`The authority relied on by ZTE (Dkt. 43 at 9-10) is inapposite. In Dainippon Screen Mfg. Co.
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`v. CFMT, Inc., 142 F.3d 1266 (Fed. Cir. 1998), the court determined that it was “fair and
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`reasonable” to exercise jurisdiction over a parent and subsidiary where the parent had engaged in a
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`deliberate scheme to insulate itself from jurisdiction by creating a sham subsidiary in another state,
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`transferring its patents to the holding company, arranging for an exclusive license back to itself by
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`virtue of its complete control over the holding company, and then continuing to “operate[] under the
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`patent” and engage in other jurisdictionally sufficient activities in the forum. Id. at 1271. As to the
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`“contacts” component of the test, the court determined that the subsidiary had sufficient contacts
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`with the forum without having to impute the contacts of the parent because, among other things, the
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`subsidiary had entered into an exclusive license with the parent, which maintained sales agents in the
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`forum specifically to make, use, and sell products covered by the relevant patent nationwide, and
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`derived substantial licensing revenues from the parent’s forum-based sales. Id. & n.3 (noting that
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`“the parent-subsidiary relationship in this case is legally proper,” and that “[the plaintiff] does not
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`seek here to pierce the corporate veil”). Thus, Dainippon did not address the alter ego issue.
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`Similarly, in Google Inc. v. Rockstar Consortium U.S. LP, 2014 WL 1571807 (N.D. Cal. Apr. 17,
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`2014), specific jurisdiction was proper over a parent and a subsidiary because the defendants failed
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`to rebut evidence that the subsidiary was created solely to manipulate jurisdiction over the parent,
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`and because the defendants “created continuing obligations with a forum resident to marshal the
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`asserted patents such that it would not be unreasonable to require [them] to submit to the burdens of
`litigation in this forum.” Id. at * 8; accord NXP, 2014 WL 4621017, at *12.9
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`Here, in contrast, AGIS Software has not enga