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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`LYFT, INC.,
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`Plaintiff,
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`v.
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`AGIS SOFTWARE DEVELOPMENT LLC,
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`Defendant.
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`Case No. 21-cv-04653-BLF
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`ORDER GRANTING MOTION TO
`DISMISS FOR LACK OF PERSONAL
`JURISDICTION WITH LEAVE TO
`AMEND; GRANTING
`JURISDICTIONAL DISCOVERY
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`[Re: ECF No. 32]
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`Before the Court is Defendant AGIS Software Development LLC’s (“AGIS Software”)
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`Motion to Dismiss Plaintiff Lyft, Inc.’s (“Lyft”) Complaint for lack of personal jurisdiction under
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`Rule 12(b)(2) in this patent declaratory judgment action. Lyft alleges that this Court has personal
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`jurisdiction over AGIS Software based on (1) its patent enforcement and licensing activities directed
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`at California companies and (2) its status as an alter ego of other entities for which it serves as a
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`patent holding company. AGIS Software argues that Lyft has not alleged sufficient facts to support
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`either of its theories of personal jurisdiction. See Motion, ECF No. 32; Reply, ECF No. 44. Lyft
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`opposes, or in the alternative seeks jurisdictional discovery. See Opposition, ECF No. 41.
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`Based on the below reasoning, the Court hereby GRANTS AGIS Software’s motion WITH
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`LEAVE TO AMEND. Further, the Court GRANTS Lyft’s request for jurisdictional discovery.
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`I. BACKGROUND
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`Lyft is a Delaware limited liability corporation with its principal place of business in
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`California that provides rideshare services through its software applications. See Complaint,
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`ECF No. 1 ¶¶ 1, 4; id., Ex. A ¶ 11. AGIS Software is a Texas limited liability company with its
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`principal place of business in Texas. See id. ¶ 2. Lyft alleges that AGIS Software is an “agent and
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`alter ego” of Advanced Ground Information Systems, Inc. (“AGIS, Inc.”), a Florida corporation
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`United States District Court
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`Case 5:21-cv-04653-BLF Document 61 Filed 01/28/22 Page 2 of 10
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`with its principal place of business in Florida. See id. Lyft further alleges that the sole member of
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`AGIS Software is AGIS Holdings, Inc. (“AGIS Holdings”), a Florida corporation with its principal
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`place of business at the same Florida location as AGIS, Inc. See id.
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`On January 29, 2021, AGIS Software filed a patent infringement action against Lyft in the
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`Eastern District of Texas regarding U.S. Patent Nos. 7,031,728 (“’728 Patent”); 7,630,724 (“’724
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`Patent”); 8,213,970 (“’970 Patent”); 10,299,100 (“’100 Patent”); and 10,341,838 (“’838 Patent”)
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`(collectively, the “Patents-in-Suit”) based on “the Lyft and Lyft Driver applications and the related
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`services and/or servers for the applications.” See id. ¶ 4. The Patents-in-Suit generally pertain to
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`mobile applications. The case was consolidated with AGIS Software’s cases against T-Mobile US,
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`Inc., T-Mobile USA, Inc. (collectively, “T-Mobile”), Uber Technologies, Inc. (“Uber”), and
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`WhatsApp, Inc. (“WhatsApp”) before Judge Gilstrap. On January 19, 2022, Judge Gilstrap
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`dismissed Lyft from the case for improper venue. See AGIS Software Dev. LLC v. T-Mobile USA,
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`Inc., No. 2:21-cv-00072-JRG-RSP, ECF No. 212 (E.D. Tex. Jan. 19, 2022). AGIS Software’s
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`claims against T-Mobile and WhatsApp in the Eastern District of Texas have been dismissed. See
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`id., ECF Nos. 169, 220. Further, AGIS Software’s case against Uber has been stayed pending
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`dismissal following settlement. See id., ECF No. 355.
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`On June 16, 2021, while AGIS Software’s Eastern District of Texas action against Lyft was
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`still pending, Lyft filed the present action for declaratory judgment of noninfringement of the same
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`patents asserted against it in the Texas case. See Complaint, ECF No. 1. On September 27, 2021,
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`AGIS Software moved to dismiss this action under Rule 12(b)(2) for lack of personal jurisdiction.
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`See ECF No. 32.
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`In its Motion, AGIS Software argues that the only contacts Lyft alleges it has with California
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`are several enforcement actions against California companies in the Eastern District of Texas, which
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`are insufficient for a showing of general or specific jurisdiction. See Motion, ECF No. 32 at 6–13.
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`Further, AGIS Software argues that Lyft has failed to meet its burden for showing that AGIS
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`Software is an alter ego of AGIS, Inc. and AGIS Holdings. See id. at 13–15. Additionally, AGIS
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`Software argues that the case should be dismissed under the first-to-file rule based on the Eastern
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`District of Texas action. See id. at 15–18. Lyft opposes, arguing that (1) AGIS Software’s licensing
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`Case 5:21-cv-04653-BLF Document 61 Filed 01/28/22 Page 3 of 10
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`negotiations with California companies are sufficient for a showing of specific jurisdiction; (2)
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`AGIS Software should not be able to avoid AGIS, Inc’s contacts with California based on corporate
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`structure; and (3) dismissal based on the first-to-file rule is not appropriate. See Opposition, ECF
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`No. 41 at 9–17. Alternatively, Lyft seeks jurisdictional discovery consisting of five interrogatories
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`and one four-hour Rule 30(b)(6) deposition. See id. at 17–18.
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`On October 5, 2021, AGIS Software moved to transfer this action to the Eastern District of
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`Texas. See ECF No. 34 at 5–9. The Court will rule on the motion to transfer in a separate order.
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`The Court held a hearing on the motions to dismiss and transfer on January 27, 2022.
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`II. LEGAL STANDARD
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`Federal Circuit law governs the personal jurisdiction analysis in a declaratory judgment
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`action for patent non-infringement. See Breckenridge Pharm., Inc. v. Metabolite Labs., Inc.,
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`444 F.3d 1356, 1361 (Fed. Cir. 2006). Courts engage in a two-step inquiry to analyze personal
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`jurisdiction: (1) whether the state’s long-arm statute extends to a defendant; and (2) whether the
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`assertion of personal jurisdiction violates due process. Deprenyl Animal Health, Inc. v. Univ. of
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`Toronto Innovations Found., 297 F.3d 1343, 1348–49 (Fed. Cir. 2002). “[B]ecause California’s
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`long-arm statute is coextensive with the limits of due process, the two inquiries collapse into a single
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`inquiry: whether jurisdiction comports with due process.” Dainippon Screen Mfg. Co. v. CFMT,
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`Inc., 142 F.3d 1266, 1270 (Fed. Cir. 1998). When the “determination of personal jurisdiction is
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`based on affidavits and other written materials, and no jurisdictional hearing is conducted,” the party
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`asserting jurisdiction bears only a prima facie burden. Celgard, LLC v. SK Innovation Co., 792 F.3d
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`1373, 1378 (Fed. Cir. 2015).
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` “Depending on their nature and number, a defendant’s contacts with a forum can provide
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`a court with general jurisdiction or specific jurisdiction.” Synthes (U.S.A.) v. G.M. Dos Reis Jr. Ind.
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`Com de Equip. Medico, 563 F.3d 1285, 1297 (Fed. Cir. 2009). General jurisdiction exists when a
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`defendant maintains “continuous and systematic” contacts with the forum even when the cause of
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`action has no relation to those contacts. LSI Indus. Inc. v. Hubbell Lighting, Inc., 232 F.3d 1369,
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`1375 (Fed. Cir. 2000) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408,
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`414–16 (1984)).
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`Case 5:21-cv-04653-BLF Document 61 Filed 01/28/22 Page 4 of 10
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`III. DISCUSSION
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`A. General Jurisdiction
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`Lyft does not allege that the Court has general jurisdiction over AGIS Software. See
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`Complaint, ECF No. 1 ¶¶ 6–21; Opposition, ECF No. 35.
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`B.
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`Specific Jurisdiction
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`AGIS Software argues that Lyft has not alleged sufficient facts to show that this Court has
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`specific jurisdiction over AGIS Software. The three factors for assessing whether the exercise of
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`specific personal jurisdiction comports with due process are: “1) whether the defendant
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`‘purposefully directed’ its activities at residents of the forum; 2) whether the claim ‘arises out of or
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`relates to’ the defendant’s activities in the forum; 3) whether the exercise of jurisdiction is
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`‘reasonable and fair.’” Deprenyl Animal Health, 297 F.3d at 1351 (citations omitted). As to the
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`third factor (also called the “fair play and substantial justice” prong), the burden of proof is on the
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`defendant to “present a compelling case that the presence of some other considerations would render
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`jurisdiction unreasonable.” Breckenridge Pharm., 444 F.3d at 1362–63. The “minimum contacts”
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`analysis focuses on “the relationship among the defendant, the forum, and the litigation.” Walden
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`v. Fiore, 571 U.S. 277, 284 (2014) (citation omitted). “[T]he relationship must arise out of contacts
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`that the ‘defendant himself’ creates with the forum State.” Id. (emphasis in original; citation
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`omitted). The “plaintiff cannot be the only link between the defendant and the forum. Rather, it is
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`the defendant’s conduct that must form the necessary connection with the forum State.” Id. at 285.
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`In support of specific jurisdiction, Lyft alleges that AGIS Software has brought patent suits
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`in the Eastern District of Texas against companies with principal places of business or operations in
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`California, including Apple, ZTE, WhatsApp, Google, and Uber. See Complaint, ECF No. 1
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`¶¶ 8–12; Opposition, ECF No. 41 at 10–11. AGIS Software argues that these contacts are not
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`enough, since the Federal Circuit has held that patent enforcement actions outside the forum state
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`do not give rise to personal jurisdiction in the forum. See Motion, ECF No. 32 at 10–12 (citing
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`Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324, 1339 (Fed. Cir. 2008)). In response, Lyft
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`argues that based on the recent Trimble case, AGIS Software’s patent licensing and negotiating
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`activities with California companies are sufficient to show specific jurisdiction. See Opposition,
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`ECF No. 41 at 9–12 (citing Trimble Inc. v. PerDiemCo LLC, 997 F.3d 1147 (9th Cir. 2021)). On
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`reply, AGIS Software argues that since its negotiations were related to infringement actions outside
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`of the Northern District of California, such negotiations are insufficient for a showing of personal
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`jurisdiction. See Reply, ECF No. 44 at 6.1
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`The Court agrees with AGIS Software. While Trimble appears to have created a path for
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`plaintiffs to show personal jurisdiction over defendants based on their patent enforcement-related
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`communications with forum residents, Lyft has not alleged enough facts to indicate that this case
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`involves a situation similar to the one in Trimble. Trimble involved a very specific set of facts—the
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`defendant engaged in prolonged negotiations with the California company plaintiff, communicating
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`“via letter, email, or telephone at least twenty-two times,” in which the defendant “amplified its
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`threats of infringement as the communications continued, asserting more patents and accusing more
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`of Trimble[‘s] . . . products of infringement.” Trimble, 997 F.3d at 1157. Accordingly, the Federal
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`Circuit found that the defendant’s “attempts to extract a license in this case are much more akin to
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`‘an arms-length negotiation in anticipation of a long-term continuing business relationship,’ over
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`which a district court may exercise jurisdiction.” Id. (quoting Red Wing Shoe Co., Inc. v. Hockerson-
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`Halberstadt, Inc., 148 F.3d 1355, 1361 (Fed. Cir. 1998)).
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`In contrast to the detailed allegations in Trimble, Lyft can only generally allege licensing
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`negotiations between AGIS Software and California companies. See Complaint, ECF No. 1 ¶¶ 7–11
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`(“AGIS Software has entered into agreements relating to the Patents-in-Suit with companies in this
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`District[.]”); Opposition, ECF No. 41 at 9–11 (“Discovery will show that those communications,
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`negotiations, and entering of settlement agreements with Apple and WhatsApp (both headquartered
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`in this District) and likely ongoing negotiations concerning licensing its patents with Google and
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`Uber in pending lawsuits, are also based in this District.”). Accordingly, the Court finds that Lyft
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`has failed to meet its burden of showing that AGIS Software purposefully directed its activities at
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`1 The parties also raise arguments about the fair play and substantial justice element of specific
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`jurisdiction. Since the Court does not reach this element in its analysis, the Court omits these
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`arguments from its summary of the briefing.
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`Case 5:21-cv-04653-BLF Document 61 Filed 01/28/22 Page 6 of 10
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`residents of the forum based on Trimble.
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`AGIS Software also challenges whether, under Federal Circuit precedent like Avocent and
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`Radio Systems, a defendant’s negotiations with a resident of one forum after filing a patent
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`infringement action against the resident in another forum are sufficient for specific jurisdiction in
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`the first forum. See Avocent, 552 F.3d at 1339; Radio Sys. Corp. v. Accession, Inc., 638 F.3d 785,
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`792 (Fed. Cir. 2011). The Court notes that Trimble is a recent case that came after Avocent and
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`Radio Systems, so this may be a novel question. The Court does not need to resolve this question
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`now, since it is unclear based on the Complaint that the alleged negotiations took place after the
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`filing of AGIS Software’s Eastern District of Texas patent suits. Since the Court grants Lyft leave
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`to amend as outlined below, the Court will defer ruling on this question until it has Lyft’s amended
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`pleading before it.
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`Because Lyft has not met its burden to satisfy the purposeful direction prong, the Court does
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`not reach the second or third prongs of the test for specific jurisdiction.
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`* * *
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`Based on the above reasoning, Lyft has failed to meet its burden for showing that this Court
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`has specific jurisdiction over AGIS Software.
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`C.
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`Single-Enterprise Liability
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`AGIS Software argues that Lyft has also failed to meet its burden for showing that AGIS,
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`Inc.’s contacts with California should be imputed to AGIS Software. See Motion, ECF No. 32 at
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`13–15. For purposes of specific personal jurisdiction, the contacts of a third-party may be imputed
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`to the defendant under an alter ego theory. See Celgard, 792 F.3d at 1379. However, “the corporate
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`form is not to be lightly cast aside” and “the corporate entity should be recognized and upheld,
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`unless specific, unusual circumstances call for an exception.” 3D Sys., Inc. v. Aarotech Labs., Inc.,
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`160 F.3d 1373, 1380 (Fed. Cir. 1998). Courts have found alter ego between entities where (1) “there
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`is a unity of interest and ownership such that separate personalities of the two entities no longer
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`exist”; and (2) “failure to disregard their separate identities would result in fraud or injustice.” See
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`Ranza v. Nike, Inc., 793 F.3d 1059, 1073 (9th Cir. 2015) (quotations and alterations omitted).2
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`Lyft alleges that AGIS Software is an alter ego of AGIS Holdings and AGIS, Inc., the latter
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`of which has various contacts with California related to its LifeRing product. See Complaint,
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`ECF No. 1 ¶¶ 14–21. Lyft alleges that AGIS Holdings registered AGIS Software in Texas on
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`June 1, 2017—20 days before AGIS Software began its first patent litigation campaign in the
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`Eastern District of Texas. See id. ¶ 12. Further, in AGIS Software’s complaint in the Eastern District
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`of Texas action against Lyft, which is attached to the Complaint, AGIS Software alleges that it
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`licenses its patent portfolio to AGIS, Inc. See Complaint, ECF No. 1, Ex. A ¶ 22. AGIS Software
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`argues that allegations of (1) AGIS, Inc’s non-exclusive license to the Patents-in-Suit and
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`(2) common officers are not enough for a showing of alter ego. See Motion, ECF No. 32 at 14–15.
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`Further, AGIS Software argues that courts have repeatedly rejected the argument that AGIS
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`Software is a “sham” entity. See id. at 15. In response, Lyft argues that in light of the Dainippon
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`case, AGIS, Inc. should not be allowed to “transfer its patents to [a] holding company, arrange to
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`have those patents licensed back to itself by virtue of its complete control over the holding company,
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`and threaten its competitors with infringement without fear of being a declaratory judgment
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`defendant.” See Opposition, ECF No. 41 at 6–9 (quoting Dainippon, 142 F.3d at 1271).
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`The Court agrees with AGIS Software. Lyft has alleged minimal facts in support of its alter
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`ego claim. Lyft has pointed to the fact that AGIS Software licensed the Patents-in-Suit to AGIS,
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`Inc., and circumstantial evidence regarding the proximity of AGIS Software’s formation and its first
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`patent infringement suits. The Court finds that these facts are not sufficient to meet Lyft’s burden
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`for showing that AGIS Software, AGIS, Inc., and AGIS Holdings had a unity of interest. The
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`Federal Circuit has made it clear that disregarding the corporate entity is for exceptional
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`2 Courts within this circuit have cited both Federal Circuit and Ninth Circuit precedent in
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`determining personal jurisdiction in patent cases. See, e.g., Wistron Corp. v. Phillip M. Adams &
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`Assocs., LLC, No. C–10–4458 EMC, 2011 WL 1654466, at *3 (N.D. Cal. Apr. 28, 2011); ZTE
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`(USA) Inc. v. AGIS Software Dev. LLC, No. 18–cv–06185–HSG, ECF No. 114, at 5 (N.D. Cal. Sep.
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`12, 2019).
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`circumstances only. See, e.g., 3D Sys., 160 F.3d at 1380. The Court finds that Lyft’s scant
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`allegations are insufficient to meet the burden of showing that such circumstances are present here.
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`See, e.g., ZTE (USA) Inc. v. AGIS Software Dev. LLC, No. 18–cv–06185–HSG, ECF No. 114, at 5
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`(N.D. Cal. Sep. 12, 2019) (“[T]he Federal Circuit has not held that the mere assignment of patents
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`to a subsidiary renders that assignee a sham entity.”)
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`Accordingly, the Court finds that Lyft has failed to meet its burden for showing that AGIS,
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`Inc. and AGIS Holdings’ contacts should be imputed to AGIS Software.
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`D. First-to-File Rule
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`AGIS Software further argues that this case should be dismissed or stayed based on the first-
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`to-file rule in light of its Eastern District of Texas case against Lyft. See Motion, ECF No. 32
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`at 15–19. Since AGIS Software’s claims against Lyft in the Eastern District of Texas have been
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`dismissed and the Eastern District of Texas case has been stayed due to AGIS Software’s settlement
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`with Uber, the Court declines to dismiss this case based on the first-to-file rule. See AGIS Software
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`Dev. LLC v. T-Mobile USA, Inc., No. 2:21-cv-00072-JRG-RSP, ECF No. 355 (E.D. Tex. Jan. 26,
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`2022).
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`E. Request for Jurisdictional Discovery
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`“A district court is vested with broad discretion to permit or deny discovery, and a decision
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`to deny discovery will not be disturbed except upon the clearest showing that the denial of discovery
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`results in actual and substantial prejudice to the complaining litigant.” Laub v. U.S. Dep’t of
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`Interior, 342 F.3d 1080, 1093 (9th Cir. 2003) (quotation marks and citation omitted). Courts require
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`a plaintiff to establish a “colorable” basis for personal jurisdiction before granting jurisdictional
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`discovery. See, e.g., Mitan v. Feeney, 497 F.Supp.2d 1113, 1119 (C.D. Cal. 2007). “This ‘colorable’
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`showing should be understood as something less than a prima facie showing, and could be equated
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`as requiring the plaintiff to come forward with ‘some evidence’ tending to establish personal
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`jurisdiction over the defendant.” Id. at 1119 (citations omitted).
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`Lyft seeks jurisdictional discovery consisting of five interrogatories and one four-hour Rule
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`30(b)(6) deposition “to further explore the considerations as to the connection between AGIS, Inc.
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`and AGIS . . . and its collective contacts with California, as well as explore issues as to Malcolm
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`Case 5:21-cv-04653-BLF Document 61 Filed 01/28/22 Page 9 of 10
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`
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`Beyer’s—CEO of both entities and first named inventor—involvement with both entities and the
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`Patents-in-Suit.” See Opposition, ECF No. 41 at 17–18. Lyft argues that the Court should grant it
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`leave to conduct jurisdictional discovery because it has presented more than a colorable basis for its
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`specific jurisdiction and alter ego theories. See Opposition, ECF No. 41 at 17–18. In response,
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`AGIS Software argues that (1) Lyft’s specific jurisdiction theory is fundamentally flawed because
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`the communications it alleges between AGIS Software and California companies were all conducted
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`post-suit among counsel and (2) Lyft’s alter ego theory is based on speculation and “little more than
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`a hunch.” See Reply, ECF No. 44 at 10–11 (quoting Boschetto v. Hansing, 539 F.3d 1011, 1020
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`(9th Cir. 2008)).
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`Regarding Lyft’s claim that the Court has specific jurisdiction over AGIS Software, the
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`Court finds that Lyft has established a “colorable” basis for personal jurisdiction under Trimble
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`based on AGIS Software’s patent enforcement communications with California companies. Feeney,
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`497 F.Supp.2d at 1119; see Trimble, 997 F.3d 1147. As the Court outlined above, it defers the
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`question of post-suit communications raised by AGIS Software, since it is not clear from the
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`Complaint that all the alleged communications between AGIS Software and California companies
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`took place after the filing of AGIS Software’s lawsuits. The Court GRANTS Lyft leave to pursue
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`jurisdictional discovery to seek more facts regarding these communications.
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` Regarding Lyft’s claim that AGIS Software is an alter ego of AGIS, Inc. and AGIS
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`Holdings, the Court finds that Lyft has presented sufficient facts to justify jurisdictional discovery.
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`While Lyft’s alleged facts are scant and circumstantial, they are sufficient to suggest a situation
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`similar to the one the Federal Circuit warned against in Dainippon. See Dainippon, 142 F.3d at
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`1271; see also In re Microsoft Corp., 630 F.3d 1361, 1364–65 (Fed. Cir. 2011). Accordingly, the
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`Court GRANTS Lyft leave to pursue jurisdictional discovery regarding the relationship between
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`AGIS Software, AGIS, Inc., and AGIS Holdings and their contacts with California.
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`Case 5:21-cv-04653-BLF Document 61 Filed 01/28/22 Page 10 of 10
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`IV. ORDER
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`For the foregoing reasons, IT IS HEREBY ORDERED that:
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`1.
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`2.
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`AGIS Software’s Motion to Dismiss is GRANTED WITH LEAVE TO AMEND;
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`Lyft’s request for jurisdictional discovery in the form of five interrogatories and one
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`four-hour Rule 30(b)(6) deposition is GRANTED;
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`3.
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`Lyft SHALL file an amended complaint within 14 days of the completion of
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`jurisdictional discovery; and
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`4.
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`Lyft SHALL not add any new claims or new parties to the amended complaint
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`without the leave of the Court or a stipulation with AGIS Software.
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`Dated: January 28, 2022
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`______________________________________
`BETH LABSON FREEMAN
`United States District Judge
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