Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 1 of 17 PageID #: 1393
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`ACCELERATION BAY LLC,
`
`
`
`
`
`ACTIVISION BLIZZARD, INC.
`
`Defendant.
`
`
`
`ACCELERATION BAY LLC,
`
`
`
`
`
`ELECTRONIC ARTS INC.,
`
`Defendant.
`
`
`
`ACCELERATION BAY LLC,
`
`
`
`
`
`TAKE-TWO INTERACTIVE SOFTWARE,
`INC., ROCKSTAR GAMES, INC. and
`2K SPORTS, INC.,
`
`
`
`
`
`
`
`C.A. No. 16-453 (RGA)
`
`
`
`
`
`
`
`C.A. No. 16-454 (RGA)
`
`
`
`
`
`
`
`C.A. No. 16-455 (RGA)
`
`
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Plaintiff,
`
`Plaintiff,
`
`
`
`v.
`
`
`
`v.
`
`Plaintiff,
`
`
`
`v.
`
`
`
`Defendants.
`
`DEFENDANTS’ REPLY BRIEF IN SUPPORT OF THEIR MOTION TO DISMISS,
`STAY, OR TRANSFER VENUE TO THE UNITED STATES DISTRICT COURT FOR
`THE NORTHERN DISTRICT OF CALIFORNIA
`
`
`
`
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 2 of 17 PageID #: 1394
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Stephen J. Kraftschik (#5623)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@mnat.com
`skraftschik@mnat.com
`
`Attorneys for Defendants
`
`
`
`
`
`
`OF COUNSEL:
`
`Michael A. Tomasulo
`Gino Cheng
`David K. Lin
`WINSTON & STRAWN LLP
`333 South Grand Avenue, 38th Floor
`Los Angeles, CA 90071
`(213) 615-1700
`
`David P. Enzminger
`WINSTON & STRAWN LLP
`275 Middlefield Road, Suite 205
`Menlo Park, CA 94025
`(650) 858-6500
`
`Daniel K. Webb
`Kathleen B. Barry
`WINSTON & STRAWN LLP
`35 West Wacker Drive
`Chicago, IL 60601
`(312) 558-5600
`
`August 4, 2016
`
`
`
`
`
`
`
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 3 of 17 PageID #: 1395
`
`
`
`TABLE OF CONTENTS
`
`Page
`
`TABLE OF AUTHORITIES .......................................................................................................... ii
`
`I.
`
`II.
`
`III.
`
`IV.
`
`V.
`
`VI.
`
`Introduction ..........................................................................................................................1
`
`The California Actions Are First-Filed—The California Court Was The First
`Court To Acquire Subject Matter Jurisdiction .....................................................................1
`
`The Later Delaware Actions Do Not “Relate Back” To The Dismissed Actions ...............2
`
`Acceleration Bay Never Explains Why Or How The California Actions Fall
`Within The Anticipatory Filing Exception Of The First-Filed Rule ...................................5
`
`There Was No Forum Shopping—California Is Everyone’s “Home Turf” ........................6
`
`The Court Should Focus On The Forums’ Current Comparative Convenience .................6
`
`VII. The Northern District Of California Is The Most Convenient Forum .................................7
`
`VIII.
`
`Judicial Economy Does Not Favor Keeping The Actions In Delaware ..............................9
`
`IX.
`
`Conclusion .........................................................................................................................10
`
`
`
`
`
`i
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 4 of 17 PageID #: 1396
`
`
`
`Cases
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Adobe Sys. Inc. v. Bargain Software Shop, LLC,
`No. 14-cv-3721-EMC, 2014 WL 6982515 (N.D. Cal. Dec. 8, 2014) ....................................4, 5
`
`Alps South, LLC v. Ohio Willow Wood Co.,
`787 F.3d 1379 (Fed. Cir. 2015)..................................................................................................3
`
`ASUSTeK Computer Inc. v. AFTG-TG LLC,
`No. 5:CV 11-0192, 2011 WL 6845791 (N.D. Cal. Dec. 29, 2011) ...........................................4
`
`Audatex N. Am., Inc. v. Mitchell Int’l, Inc.,
`No. 12-CV-139-GMS, 2013 WL 3293611 (D. Del. June 28, 2013)..........................................9
`
`Barnes & Noble, Inc.,
`823 F. Supp. 2d 980, 987 (N.D. Cal. 2011 ................................................................................4
`
`Cellectis S.A. v. Precision Biosciences, Inc.,
`881 F. Supp. 2d 609 (D. Del. 2012) ...........................................................................................6
`
`Diablo Techs., Inc. v. Netlist, Inc.,
`No. 13-cv-3901, 2013 WL 5609321 (N.D. Cal. Oct. 11, 2013) ................................................6
`
`E.E.O.C. v. Univ. of Penn.,
`850 F.2d 969 (3d Cir. 1988).......................................................................................................1
`
`Electronics for Imaging, Inc. v. Coyle,
`394 F.3d 1341 (Fed. Cir. 2005)..................................................................................................6
`
`Enzo APA & Son, Inc. v. Geapag A.G.,
`134 F.3d 1090 (Fed. Cir. 1998)..................................................................................................3
`
`Finjan, Inc. v. Sophos Inc.,
`No. 14-cv-01197, 2014 WL 2854490 (N.D. Cal. June 20, 2014) ..........................................7, 9
`
`Genentech, Inc. v. Eli Lilly & Co.,
`998 F.2d 931 (Fed. Cir. 1993)....................................................................................................6
`
`Hilton v. Apple, Inc.,
`No. C-13-2167, 2013 WL 5487317 (N.D. Cal. 2013) ...............................................................4
`
`Linex Techs., Inc. v. Hewlett-Packard Co.,
`No. 11-400-GMS, 2013 WL 105323 (D. Del. Jan. 7, 2013) .....................................................7
`
`ii
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 5 of 17 PageID #: 1397
`
`
`
`Mentor H/S, Inc. v. Med. Device Alliance, Inc.,
`240 F.3d 1016 (Fed. Cir. 2001)..................................................................................................2
`
`Schering Corp. v. Amgen Inc.,
`969 F. Supp. 258 (D. Del. 1997) ............................................................................................3, 4
`
`Semcon Tech, LLC v. Intel Corp.,
`No. 12-531-RGA, 2013 WL 126421 (D. Del. Jan. 8, 2013) ......................................................9
`
`Signal Tech, LLC v. Analog Devices, Inc.,
`No. 11-1073-RGA, 2012 WL 1134723 (D. Del. April 3, 2012)................................................8
`
`Smith v. McIver,
`22 U.S. 532 (1824) .....................................................................................................................1
`
`Software Rights Archive, LLC v. Facebook, Inc.,
`2013 WL 5225522 (N.D. Cal. Sept. 17, 2013) ..........................................................................5
`
`In re Telebrands Corp.,
`No. 2016-106, 2016 WL 3033331 (Fed. Cir. Feb. 24, 2016) ....................................................5
`
`Vygon v. RyMed Techs., Inc.,
`No. 08-172-GMS, 2009 WL 856469 (D. Del. March 31, 2009) ...............................................6
`
`Wacoh Co. v. Kionix Inc.,
`845 F.Supp.2d 597 (D. Del. 2012) .........................................................................................8, 9
`
`Wallerstein v. Dole Fresh Vegetables, Inc.,
`967 F. Supp. 2d 1289 (N.D. Cal. 2013) .................................................................................1, 4
`
`Other Authorities
`
`F.R.C.P. 15(c) ..................................................................................................................................3
`
`F.R.C.P. 21 .......................................................................................................................................3
`
`
`
`
`
`
`
`
`iii
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 6 of 17 PageID #: 1398
`
`
`
`I.
`
`Introduction
`
`Acceleration Bay does not dispute that the Northern District of California is the most
`
`convenient forum for these disputes. Instead, Acceleration Bay’s sole argument for keeping
`
`these cases in Delaware is that Acceleration Bay filed prior suits in Delaware when it did not
`
`own the asserted Boeing patents. In effect, Acceleration Bay wants credit for filing cases that it
`
`never should have filed. And, it wants additional credit for maintaining and aggressively
`
`litigating those cases, even after receiving notice that the Video Game Companies intended to
`
`move to dismiss. Acceleration Bay cannot rely on cases where this Court never acquired subject
`
`matter jurisdiction to irrevocably tie these disputes to an inconvenient forum. Allowing
`
`Acceleration Bay to use the Dismissed Actions to irrevocably venue the Delaware Actions here
`
`and make an end-run around the first-filed California Actions would create a perverse
`
`incentive—encouraging purported patentees to reserve a forum by bringing suit before securing
`
`sufficient patent rights and then re-filing upon their acquisition.
`
`II.
`
`The California Actions Are First-Filed—The California Court Was The First Court
`To Acquire Subject Matter Jurisdiction
`
`Acceleration Bay’s “first-filed” arguments fail as a legal matter. The first-to-file rule
`
`applies only where two courts have “concurrent jurisdiction” and provides that “[i]n all cases of
`
`concurrent jurisdiction, the Court which first has possession of the subject must decide it.”
`
`Smith v. McIver, 22 U.S. 532, 535 (1824). The Third Circuit follows this rule as well: “[I]n all
`
`cases of federal concurrent jurisdiction, the court which first has possession of the subject must
`
`decide it.” E.E.O.C. v. Univ. of Penn., 850 F.2d 969, 971 (3d Cir. 1988). “Actions that were
`
`previously filed and voluntarily dismissed are no longer pending and are therefore moot for the
`
`purposes of the first-to-file rule.” Wallerstein v. Dole Fresh Vegetables, Inc., 967 F. Supp. 2d
`
`1289, 1293-94 (N.D. Cal. 2013). Because the Dismissed Actions are no longer pending, there is
`
`1
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 7 of 17 PageID #: 1399
`
`
`
`no concurrent jurisdiction. And because this Court never acquired subject matter jurisdiction
`
`over the Dismissed Actions, the California Court—and not this Court—is the first court to
`
`acquire jurisdiction over these disputes and is thus the proper forum.
`
`Acceleration Bay argues that the Video Game Companies “mistake ‘jurisdiction’ with
`
`‘standing’” and that this Court “obtained subject matter jurisdiction first when Acceleration Bay
`
`filed its Complaints in 2015, notwithstanding any purported defects in prudential standing.” This
`
`is an incorrect statement of law. Both as to constitutional and prudential standing, “the issue of
`
`whether an exclusive licensee has sufficient rights in a patent to bring suit in its own name is
`
`jurisdictional.” Mentor H/S, Inc. v. Med. Device Alliance, Inc., 240 F.3d 1016, 1018 (Fed. Cir.
`
`2001) (emphasis added) (prudential standing requirement is jurisdictional) (citing Indep.
`
`Wireless Tel. Co. v. Radio Corp. of Am., 269 U.S. 459, 468 (1926) (“The presence of the owner
`
`of the patent as a party is indispensable . . . to give jurisdiction under the patent laws . . . .”).
`
`Because Acceleration Bay did not own the patents when it filed the Dismissed Actions, this
`
`Court never acquired jurisdiction over them.
`
`Lastly, the Dismissed Actions cannot be considered first-filed because the party and the
`
`subject matter are different. The subject matter of those disputes was patents owned by Boeing
`
`and the proper plaintiff in the Dismissed Actions was Boeing, not Acceleration Bay.
`
`III. The Later Delaware Actions Do Not “Relate Back” To The Dismissed Actions
`
`Acceleration Bay’s principal argument that the Delaware Actions are first-filed is that
`
`they “continue and relate back” to the Dismissed Actions and were only necessary “to cure a
`
`purported defect in prudential standing.” This is incorrect. Acceleration Bay never “cured”
`
`prudential standing. The only way for Acceleration Bay to have “cured” standing was to join
`
`Boeing, as provided by this Court’s June 3 Order. It declined to do so. Instead, it executed a
`
`new agreement—purportedly to obtain ownership of the Boeing patents—and dismissed the
`
`2
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 8 of 17 PageID #: 1400
`
`
`
`actions it filed when it did not own those patents. The Federal Circuit has clearly and repeatedly
`
`held that while a plaintiff can cure a prudential standing defect by adding a party under Rule 21
`
`of the Federal Rules of Civil Procedure, it cannot do so by entering a new agreement: “nunc pro
`
`tunc assignments are not sufficient to confer retroactive standing . . . parties should possess rights
`
`before seeking to have them vindicated in court.” Enzo APA & Son, Inc. v. Geapag A.G., 134
`
`F.3d 1090, 1093 (Fed. Cir. 1998); see also Alps South, LLC v. Ohio Willow Wood Co., 787 F.3d
`
`1379, 1384 (Fed. Cir. 2015) (plaintiff cannot “cure a standing defect” with new agreement).
`
`Indeed, Acceleration Bay appears to have been aware of this well settled law: after it
`
`negotiated a new agreement with Boeing, it requested dismissal of the Dismissed Actions before
`
`filing new actions. Recognizing that it would be futile, Acceleration Bay did not attempt to file
`
`supplemental or amended pleadings.
`
`The doctrine of “relating back” refers to F.R.C.P. 15(c) and identifies circumstances
`
`where an amended pleading relates back to an original pleading. The inapplicability of this
`
`doctrine is affirmed by the very cases Acceleration Bay relies on to argue that the Dismissed
`
`Actions are first-filed. For instance, in Schering, the necessary party did join and the case was
`
`not dismissed. Schering Corp. v. Amgen Inc., 969 F. Supp. 258 (D. Del. 1997). Accordingly, the
`
`issue that Schering addressed was whether, once the prudential standing defect had been cured in
`
`the same case, the amended complaint “related back” to the original complaint’s filing date for
`
`the purpose of conferring first-filed status against an intervening case. In contrast, Acceleration
`
`Bay did not amend its complaints to add Boeing, which was the only way for it to have
`
`maintained the Dismissed Actions. Its failure to do so renders Schering inapposite. The
`
`3
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 9 of 17 PageID #: 1401
`
`
`
`Dismissed Actions were formally closed, and, therefore, there is no complaint to which the
`
`Delaware Actions “relate back.”1
`
`Similarly misplaced is Acceleration Bay’s reliance on Adobe Sys. Inc. v. Bargain
`
`Software Shop, LLC, No. 14-cv-3721-EMC, 2014 WL 6982515 (N.D. Cal. Dec. 8, 2014). There,
`
`although a defendant was dismissed from that case for misjoinder, the plaintiff had standing, and
`
`its case against the other defendant was allowed to proceed. Here, in contrast, the Dismissed
`
`Actions were completely dismissed because Acceleration Bay lacked standing, leaving nothing
`
`pending in the Dismissed Actions. Because the original case in Adobe Systems was still pending,
`
`Judge Alsup could request sua sponte judicial referral of the later case and Judge Chen could
`
`formally relate it to that original case. See No. 3:14-cv-03721-EMC, D.I. 23 & 28 (N.D. Cal.
`
`2014) (Exs. 25 and 26). In this case, no such formal judicial relation is possible because this
`
`Court never had jurisdiction over the Dismissed Actions and those cases are closed. Moreover,
`
`the Adobe court cabined its ruling to the “unique procedural facts” of that dispute.2 Id. at *2.
`
`Acceleration Bay fails to mention other, more apposite, decisions from that district that
`
`support the Video Game Companies’ position, holding that dismissed actions do not count for
`
`purposes of determining the first-filed case. In Wallerstein, the court rejected the argument that
`
`a voluntarily dismissed case was first-filed. As the court explained, the dismissed case was “no
`
`1 Acceleration Bay inappropriately relies on other cases involving amended complaints. (Opp’n
`Br. at 9.) Barnes & Noble, Inc., 823 F. Supp. 2d 980, 987 (N.D. Cal. 2011) and Hilton v. Apple,
`Inc., No. C-13-2167, 2013 WL 5487317 (N.D. Cal. 2013) are distinguishable because they deal
`with relation back to a pleading, i.e., amending an existing pleading, in an existing, ongoing case.
`They do not deal with relation back to cases that have been closed—indeed, voluntarily
`dismissed by Acceleration Bay (Opp’n Br. at 2)—and no longer exist.
`2 Adobe Sys. is further distinguishable because (1) Adobe’s delay in re-filing stemmed from its
`continued efforts to engage in informal settlement negotiations with accused infringer and (2)
`Adobe did not voluntarily request the Court to dismiss its case against the accused infringer. In
`contrast, Acceleration Bay was not entertaining—and cannot point to—any ongoing negotiations
`to justify its late filing and its request to the District of Delaware to dismiss its own cases (Mot.
`at 3.) places the current situation closer to Wallerstein and OpenLRC.com than to Adobe Sys.
`
`4
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 10 of 17 PageID #: 1402
`
`
`
`longer pending” and thus irrelevant for purposes of the first-filed rule. 967 F. Supp. 2d at 1293-
`
`94; see also ASUSTeK Computer Inc. v. AFTG-TG LLC, No. 5:CV 11-0192, 2011 WL 6845791
`
`(N.D. Cal. Dec. 29, 2011) (declining to dismiss or transfer case to Wyoming when prior
`
`Wyoming actions were no longer pending in that district).
`
`IV. Acceleration Bay Never Explains Why Or How The California Actions Fall Within
`The Anticipatory Filing Exception Of The First-Filed Rule
`
`Acceleration Bay has not pointed to any facts explaining what and how there was a “race
`
`to the courthouse.” (Opp’n Br. at 2, 13.) Nor could it, as there are none. Acceleration Bay
`
`received the Video Game Companies’ Motion to Dismiss on March 1, 2016. No. 15-228,
`
`D.I. 100. It had more than three months to execute a new deal with Boeing and bring new suits
`
`before the Video Game Companies filed the California Actions. Moreover, Acceleration Bay
`
`was under no obligation to file suits by any specific date. This Court’s June 17 date for
`
`Acceleration Bay to join Boeing did not impose any obligation on Acceleration Bay for filing
`
`new suits at all, much less set a deadline for them.3 The circumstances do not give rise to a “race
`
`to the courthouse” or a usurpation of a plaintiff’s choice of forum. Accordingly, even if this
`
`Court were to consider the exceptions to the first-to-file rule—which inquiry should be deferred
`
`to the court of the first-filed suit (see In re Telebrands Corp., No. 2016-106, --- F.3d ----, 2016
`
`WL 3033331, at *2 (Fed. Cir. Feb. 24, 2016) and Cellectis S.A. v. Precision Biosciences, Inc.,
`
`881 F. Supp. 2d 609, 612 (D. Del. 2012))—none of the recognized exceptions apply here.
`
`
`3 In addition, the status of the pending and instituted IPRs suggest that Acceleration Bay may
`have wanted to wait for resolution of the IPRs before filing new actions. Acceleration Bay has
`filed six motions to amend the claims to potentially replace any canceled claims, indicating that
`an infringement suit on the current claims is likely premature. See Software Rights Archive, LLC
`v. Facebook, Inc., 2013 WL 5225522, at *5 (N.D. Cal. Sept. 17, 2013) (“[T]he IPR could
`encourage settlement or lead to amendments to the claims, which could create intervening rights
`and limit potential damages.”).
`
`5
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 11 of 17 PageID #: 1403
`
`
`
`Lastly, any alleged anticipatory nature of the California Actions is “merely one factor in
`
`the analysis.” Elecs. for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1345, 1347-48 (Fed. Cir. 2005)
`
`(holding that the district court abused its discretion in dismissing a declaratory judgment action
`
`“by focusing on the anticipatory nature of the suit”). Here, this factor is not sufficient to
`
`overcome the indisputable fact that California is a far more convenient forum for these cases
`
`than Delaware. See also Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931, 938 (Fed. Cir. 1993)
`
`(reversing dismissal premised solely on the fact that the declaratory judgment action was
`
`designed to anticipate a later-filed complaint in another forum); Diablo Techs., Inc. v. Netlist,
`
`Inc., No. 13-cv-3901, 2013 WL 5609321, at *4-5 (N.D. Cal. Oct. 11, 2013) (most parties based
`
`in California; anticipatory nature of suit did not outweigh other factors).
`
`V.
`
`There Was No Forum Shopping—California Is Everyone’s “Home Turf”
`
`Acceleration Bay’s allegation that the Video Game Companies are engaged in “forum
`
`shopping” is legally unsupportable because the Northern District of California is the “home turf”
`
`for Acceleration Bay and two of the Video Game Companies, and four of five have significant
`
`operations in California. That District is plainly the most convenient forum, not only for the
`
`Video Game Companies but also for Acceleration Bay, its California CEO, and its California
`
`lawyers. It is well-settled law that filing on the “home turf” of multiple parties is not forum
`
`shopping. See, e.g., Vygon v. RyMed Techs., Inc., No. 08-172-GMS, 2009 WL 856469, at *2
`
`(D. Del. March 31, 2009) (finding no evidence of forum shopping where plaintiff had
`
`“established connections”—including “corporate offices, books, documents”—in the district
`
`where it filed its declaratory judgment action and dismissing later-filed Delaware suit).
`
`VI.
`
`The Court Should Focus On The Forums’ Current Comparative Convenience
`
`Acceleration Bay’s argument that the Video Game Companies somehow cannot move to
`
`transfer to California because they “acquiesced” to litigating the Dismissed Actions in Delaware
`
`6
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 12 of 17 PageID #: 1404
`
`
`
`is both erroneous and irrelevant. (Opp’n Br. at 3, 12, 13.) The Video Game Companies did not
`
`do so and Acceleration Bay cites no law stating that proceeding in prior, dismissed actions
`
`waives the venue transfer analysis in a later case, especially when the first court lacked subject
`
`matter jurisdiction. Previous litigation in a forum is not one of the private or public interest
`
`factors in the transfer analysis. In a similar case litigated by Acceleration Bay’s counsel, the
`
`court rejected the same argument, pointing out that it “fails to address the current comparative
`
`convenience.” Finjan, Inc. v. Sophos Inc., 2014 WL 2854490, at *4 (N.D. Cal. June 20, 2014).
`
`VII. The Northern District Of California Is The Most Convenient Forum
`
`Separate and apart from any first-filing considerations, these cases should be litigated in
`
`California. Acceleration Bay’s arguments to the contrary ring hollow.
`
`Practical Considerations. As a practical consideration, where Acceleration Bay,
`
`Activision, EA, and 2K Sports each keeps its principal place of business in the Northern District
`
`of California, litigating there will eliminate cross-country travel for their employees and prove
`
`less expensive than litigating in Delaware, where none of the parties have employees or maintain
`
`offices or records. See, e.g., Linex Techs., Inc. v. Hewlett-Packard Co., No. 11-400-GMS, 2013
`
`WL 105323, at *6 (D. Del. Jan. 7, 2013) (“[t]he public interest factor at issue here, however,
`
`calls for the court to examine practical considerations rather than ones of form, and there is little
`
`reason to believe a California-based firm actually reduces its costs of litigating in this district
`
`merely by incorporating in Delaware.”). The Video Game Companies’ in-house counsel have
`
`traveled to attend two hearings, something that would be much easier in California.
`
`The Convenience Of The Parties and Witnesses. Acceleration Bay does not allege
`
`inconvenience in litigating in California or dispute that the Northern District of California would
`
`be more convenient for the parties, their witnesses, the inventors, and other third-party witnesses
`
`7
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 13 of 17 PageID #: 1405
`
`
`
`identified by the Video Game Companies.4 See Wacoh Co. v. Kionix Inc., 845 F. Supp. 2d 597,
`
`602 (D. Del. 2012) (citing Teleconference Sys. v. Procter & Gamble Pharm., Inc., 676 F. Supp.
`
`2d 321, 332 (D. Del. 2009) (“The fact that plaintiff has not identified a single material witness
`
`who resides in Delaware rather than California is telling and weighs in favor of transfer.”).
`
`Acceleration Bay argues that this factor does not matter because witnesses can be
`
`“accommodated” with local depositions. This misses the point: trial in this venue will require
`
`many of the Video Game Companies’ most important personnel (witnesses and decision-makers)
`
`to travel across the country, whereas all of them have operating offices in the Northern District
`
`of California. In addition, potential witnesses, including from Sony in San Mateo, California,
`
`would be outside of the subpoena power of this Court but within the subpoena power of the
`
`proposed transferee court. Sony personnel may play an important role at trial.
`
`Finally, although Acceleration Bay seeks to discount the inconvenience to party
`
`witnesses, but ignores the realities recognized by this Court in that party witnesses may become
`
`ex-employees over the course of the litigation. See, e.g., Wacoh, 845 F. Supp. 2d at 602-03
`
`(reasoning that “it is possible, if not probable, that some employees will become ex-employees
`
`[and] would not be subject to this Court’s subpoena power, but would likely not move out-of-
`
`state. . . .”); see also Signal Tech, LLC v. Analog Devices, Inc., No. 11-1073-RGA, 2012 WL
`
`1134723, at *3 (D. Del. April 3, 2012) (same).
`
`Plaintiff’s Forum Preference. Acceleration Bay overlooks the fact that its choice of
`
`forum is weakened since it has no offices and full-time employees in Delaware (see, e.g., Wacoh,
`
`845 F. Supp. 2d at 601; Semcon Tech, LLC v. Intel Corp., 2013 WL 126421 (D. Del. Jan. 8,
`
`2013)). Even Audatex N. Am., Inc. v. Mitchell Int’l, Inc., twice cited by Acceleration Bay,
`
`
`4 Acceleration Bay never equates the state of incorporation with convenience.
`
`8
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 14 of 17 PageID #: 1406
`
`
`
`recognized that “because Audatex chose to litigate in the forum where it is incorporated, rather
`
`than the forum where its principal place of business is located, its choice is entitled to less
`
`deference than it would typically receive.” 2013 WL 3293611, at *3 (D. Del. June 28, 2013).
`
`Ultimately, the Audatex court granted the motion despite both parties’ incorporation in Delaware,
`
`as their principal places of business were both located in the proposed transferee forum.
`
`Location of Books and Records. Acceleration Bay’s argument that the previous year of
`
`litigation renders this factor moot erroneously neglects to account for the fact that there are there
`
`are other witnesses to be deposed and non-core-technical documents discovery remains. Further,
`
`the Audatex court weighed this factor in favor of the Video Game Companies, recognizing that
`
`despite modern technological advances, “‘the bulk of the relevant evidence’ in such cases does
`
`come from the accused infringer.” 2013 WL 3293611, at *6.
`
`Court Congestion. 187 patent cases were assigned to this Court (Judge Andrews) in 2015
`
`compared to the 10 patent cases that were assigned to Judge Seeborg in the corresponding
`
`period. See Ex. 27 (DocketNavigator statistics). As Acceleration Bay’s counsel argued in
`
`another case, “this factor weighs against transfer” because “the District of Delaware is overly
`
`burdened with patent cases and has the highest weighted caseload per judge in the country. . . .”
`
`Finjan, No. 14-cv-01197, D.I. 27 at 15-16 (N.D. Cal.) (Ex. 28). That argument is still true today.
`
`VIII. Judicial Economy Does Not Favor Keeping The Actions In Delaware
`
`Acceleration Bay’s judicial economy arguments that accuse the Video Game Companies
`
`of delaying prosecution of the claims, creating “a staggering waste,” or “squandering” resources
`
`to “restart” these cases are unfounded. To the extent any duplication of effort or waste is
`
`suffered, it should be ascribed to Acceleration Bay’s lack of pre-suit diligence. As discussed at
`
`length in the pending Motion for Fees (No. 15-228, D.I. 157), it was Boeing—and not
`
`Acceleration Bay—that produced the purported Patent Purchase Agreement on January 15, 2016.
`
`9
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 15 of 17 PageID #: 1407
`
`
`
`On February 12, 2016, the Video Game Companies advised both the Court and Acceleration Bay
`
`that Acceleration Bay did not own the patents and that the Video Game Companies would
`
`promptly be moving to dismiss. On May 2, Acceleration Bay opposed the Video Game
`
`Companies’ Motion to Stay. Nearly all of the “investment” that has supposedly occurred in this
`
`case occurred after Acceleration Bay was on formal notice that it did not own the Boeing patents
`
`and much of it, including all of the depositions, occurred after Acceleration Bay opposed the
`
`Video Game Companies’ Motion for a Stay.
`
`Acceleration Bay should not be allowed to leverage the costs it improperly imposed on
`
`the Court and the parties previously to its advantage here, especially in light of its having
`
`vigorously opposed the Video Game Companies’ previous motion to stay discovery. Moreover,
`
`before dismissing the cases in June, the Court had very little involvement in the substance of the
`
`cases. After discovery opened, it issued a scheduling order and ruled on a protective order
`
`dispute and two discovery disputes before sua sponte appointing a Special Master—which the
`
`parties were obligated to pay for—to oversee discovery disputes. The Delaware Court’s most
`
`significant ruling was to find that Boeing was the owner of the Asserted Boeing Patents and
`
`dismiss the cases. Any modest investment made by this Court could easily be made up by Judge
`
`Seeborg, who has far fewer active patent cases on his docket (26 compared to this Court’s 190).
`
`See Ex. 27 (DocketNavigator statistics). And although Acceleration Bay makes much of the fact
`
`that the parties engaged in discovery in the Dismissed Actions, the parties can avoid duplicative
`
`discovery whether the case proceeds in California or Delaware, so judicial economy is at best a
`
`neutral consideration. The balance of convenience dramatically favors California.
`
`IX. Conclusion
`
`For the foregoing reasons, the Video Game Companies respectfully request that these
`
`cases be dismissed or transferred to the Northern District of California.
`
`10
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 16 of 17 PageID #: 1408
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`
`
`/s/ Stephen J. Kraftschik
`_____________________________________
`Jack B. Blumenfeld (#1014)
`Stephen J. Kraftschik (#5623)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@mnat.com
`skraftschik@mnat.com
`
`Attorneys for Defendants
`
`
`
`
`
`
`
`
`
`OF COUNSEL:
`
`Michael A. Tomasulo
`Gino Cheng
`David K. Lin
`WINSTON & STRAWN LLP
`333 South Grand Avenue, 38th Floor
`Los Angeles, CA 90071
`(213) 615-1700
`
`David P. Enzminger
`WINSTON & STRAWN LLP
`275 Middlefield Road, Suite 205
`Menlo Park, CA 94025
`(650) 858-6500
`
`Daniel K. Webb
`Kathleen B. Barry
`WINSTON & STRAWN LLP
`35 West Wacker Drive
`Chicago, IL 60601
`(312) 558-5600
`
`August 4, 2016
`
`
`
`11
`
`

`

`Case 1:16-cv-00453-RGA Document 11 Filed 08/04/16 Page 17 of 17 PageID #: 1409
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on August 4, 2016, I caused the foregoing to be electronically filed
`
`with the Clerk of the Court using CM/ECF, which will send notification of such filing to all
`
`registered participants.
`
`
`
`I further certify that I caused copies of the foregoing document to be served on
`
`August 4, 2016, upon the following in the manner indicated:
`
`Philip A. Rovner, Esquire
`Jonathan A. Choa, Esquire
`POTTER ANDERSON & CORROON LLP
`1313 North Market Street, 6th Floor
`Wilmington, DE 19801
`Attorneys for Plaintiff
`
`Paul J. Andre, Esquire
`Lisa Kobialka, Esquire
`James R. Hannah, Esquire
`KRAMER LEVIN NAFTALIS & FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`Attorneys for Plaintiff
`
`Aaron M. Frankel, Esquire
`KRAMER LEVIN NAFTALIS & FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
`Attorneys for Plaintiff
`
`
`VIA ELECTRONIC MAIL
`
`VIA ELECTRONIC MAIL
`
`VIA ELECTRONIC MAIL
`
`
`
`/s/ Stephen J. Kraftschik
`Stephen J. Kraftschik (#5623)
`
`
`
`
`
`