Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 1 of 25 PageID #: 1354
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`C.A. No. 16-453 (RGA)
`
`C.A. No. 16-454 (RGA)
`
`C.A. No. 16-455 (RGA)
`
`)))))))))
`
`))))))))) )))))))))))
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`ACTIVISION BLIZZARD, INC.,
`
`Defendant.
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`ELECTRONIC ARTS INC.,
`
`Defendant.
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`TAKE-TWO INTERACTIVE SOFTWARE,
`INC., ROCKSTAR GAMES, INC. and
`2K SPORTS, INC.,
`
`Defendants.
`
`PLAINTIFF ACCELERATION BAY LLC’S ANSWERING BRIEF
`IN OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS,
`STAY OR TRANSFER TO THE NORTHERN DISTRICT OF CALIFORNIA
`
`

`

`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 2 of 25 PageID #: 1355
`
`Philip A. Rovner (#3215)
`Jonathan A. Choa (#5319)
`POTTER ANDERSON & CORROON LLP
`Hercules Plaza
`P.O. Box 951
`Wilmington, DE 19899
`(302) 984-6000
`provner@potteranderson.com
`jchoa@potteranderson.com
`
`Attorneys for Plaintiff Acceleration Bay LLC
`
`OF COUNSEL:
`
`Paul J. Andre
`Lisa Kobialka
`James R. Hannah
`KRAMER LEVIN NAFTALIS
`& FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`(650) 752-1700
`
`Aaron M. Frankel
`KRAMER LEVIN NAFTALIS
`& FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
`(212) 715-9100
`
`Dated: July 25, 2016
`1229839
`
`

`

`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 3 of 25 PageID #: 1356
`
`TABLE OF CONTENTS
`
`C.
`
`D.
`
`B.
`
`I. Nature and Stage of Proceedings............................................................................................. 1
`II. Summary of the Argument ...................................................................................................... 2
`III. Statement of Facts ................................................................................................................... 4
`A.
`The Parties Are All Delaware Corporations ........................................................... 4
`B.
`Acceleration Bay Filed its Patent Infringement Claims Against Defendants in
`2015, and the Court Has Invested Substantial Resources in Presiding Over Those
`Actions .................................................................................................................... 5
`Acceleration Bay’s 2016 Delaware Actions Are Continuations of the 2015
`Delaware Actions.................................................................................................... 6
`Defendants’ DJ Actions Assert the Same Non-Infringement Defenses They Have
`Asserted in This Court Since 2015 ......................................................................... 7
`IV. ARGUMENT........................................................................................................................... 8
`A.
`Defendants’ Motion to Dismiss or Stay these Actions Should Be Denied............. 8
`1.
`Acceleration Bay Filed its Patent Infringement Claims Against Defendants
`in This District More Than One Year Before Defendants Filed Their DJ
`Actions in the Northern District of California ............................................ 8
`Defendants Filed the DJ Actions In Naked Anticipation of Litigation, to
`Forum Shop and Frustrate Acceleration Bay’s Choice of Venue and to
`Delay Resolution of Acceleration Bay’s Claims ...................................... 10
`Acceleration Bay’s Near Simultaneous Filing of the 2016 Delaware
`Actions Weighs Against Defendants’ First-to-File Claim........................ 12
`These Actions Should Not Be Transferred to the Northern District of California13
`1.
`Delaware is Home to All of the Parties .................................................... 14
`2.
`Acceleration Bay Chose Delaware As the Forum to Prosecute its Claims
`Against Defendants and Defendants Acquiesced to That Choice ............ 15
`Judicial Economy, Court Congestion, the Interest of Justice, and Other
`Practical Considerations Favor this Court Continuing to Preside Over
`Acceleration Bay’s Infringement Claims.................................................. 16
`The Year of Litigation in this District Renders Moot the Location of
`Witnesses and Documents ........................................................................ 18
`The Remaining Transfer Factors Are Neutral .......................................... 20
`5.
`V. Conclusion............................................................................................................................. 20
`
`2.
`
`3.
`
`3.
`
`4.
`
`i
`
`

`

`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 4 of 25 PageID #: 1357
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Federal Cases
`
`Adobe Sys. Inc., v. Bargain Software Shop, LLC,
`No. 14-CV-3721-EMC, 2014 WL 6982515 (N.D. Cal. Dec. 8, 2014)......................................9
`
`Alltrade, Inc. v. Uniwald Prods., Inc.,
`946 F.2d 622 ............................................................................................................................11
`
`Audatex N. Am., Inc. v. Mitchell Int'l, Inc.,
`No. 12-CV-139 (GMS), 2013 WL 3293611 (D. Del. June 28, 2013) ...............................15, 17
`
`Aurora Corp. of Am. v. Fellows, Inc.,
`No. CV 07-8306-GHK, 2008 WL 709198 (C.D. Cal. Feb. 27, 2008).....................................13
`
`Barnes & Noble, Inc. v. LSI Corp.,
`823 F.Supp.2d 980 (N.D. Cal. 2011) .........................................................................................9
`
`Cisco Sys., Inc. v. TiVo, Inc.,
`No. C 12-02766 RS, 2012 WL 3279532 (N.D. Cal. Aug. 10, 2012).................................17, 19
`
`E.E.O.C. v. Univ. of Penn.,
`850 F.2d 969 (3d Cir. 1988).................................................................................................9, 12
`
`Elecs. for Imaging, Inc. v. Coyle,
`394 F.3d 1341 (Fed. Cir. 2005)..........................................................................................10, 12
`
`Good Tech. Corp. v. MobileIron, Inc.,
`No. CV 14-1308-LPS-CJB, 2015 WL 1458091 (D. Del. Mar. 27, 2015) .........................16, 18
`
`Hilton v. Apple, Inc.,
`No. C-13-2167 EMC, 2013 WL 5487317 (N.D. Cal. Oct. 1, 2013)..........................................9
`
`Inherent.com v. Martindale-Hubbell,
`420 F.Supp.2d 1093 (N.D. Cal. 2006) .....................................................................................14
`
`Intellectual Ventures I LLC v. Altera Corp.,
`842 F. Supp. 2d 744 (D. Del. 2012).........................................................................................15
`
`Nordson Corp. v. Speedline Techs., Inc.,
`No. C-00-2769 PJH, 2000 U.S. Dist. LEXIS 15240 (N.D. Cal. Oct. 10, 2000)......................13
`
`Ontel Prods., Inc. v. Project Strategies Corp.,
`899 F. Supp. 1144 (S.D.N.Y. 1995).........................................................................................13
`
`ii
`
`

`

`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 5 of 25 PageID #: 1358
`
`Open LCR.com, Inc. v. Rates Tech., Inc.,
`112 F. Supp. 2d 1223 (D. Colo. 2000).....................................................................................10
`
`Regents of the Univ. of California v. Eli Lilly & Co.,
`119 F.3d 1559 (Fed. Cir. 1997)................................................................................................17
`
`Schering Corp. v. Amgen Inc.,
`969 F. Supp. 258 (D. Del. 1997)...................................................................................... passim
`
`Semcon Tech., LLC v. Intel Corp.,
`No. 12-531-RGA, 2013 WL 126421 (D. Del. Jan. 8, 2013)....................................................18
`
`Serco Servs. Co. v. Kelley Co.,
`51 F.3d 1037 (Fed. Cir. 1995)..................................................................................................13
`
`In re Telebrands Corp.,
`No. 2016-106, 2016 WL 3033331 (Fed. Cir. Feb. 24, 2016) ..................................................10
`
`Thomas & Betts Corp., v. Hayes,
`222 F.Supp.2d 994 (W.D. Tenn. 2002)....................................................................................11
`
`Time Warner Cable, Inc. v. GPNE Corp.,
`497 F. Supp. 2d 584 (D. Del. 2007)...................................................................................10, 12
`
`Trustco Bank v. Automated Transactions LLC,
`933 F. Supp. 2d 668 (D. Del. 2013).............................................................................14, 15, 20
`
`Xoxide, Inc. v. Ford Motor Co.,
`448 F.Supp.2d 1188 (C.D. Cal. 2006) .....................................................................................11
`
`State Cases
`
`In re Citigroup Inc. S'holder Derivative Litig.,
`964 A.2d 106 (Del. Ch. 2009)..................................................................................................12
`
`Federal Statutes
`
`28 U.S.C. § 1404(a) .......................................................................................................................14
`
`iii
`
`

`

`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 6 of 25 PageID #: 1359
`
`I.
`
`NATURE AND STAGE OF PROCEEDINGS
`
`Plaintiff Acceleration Bay LLC filed suits in this District against the Defendants in
`
`March and April 2015 (the “2015 Delaware Actions”), alleging that Defendants’ video games
`
`infringe Acceleration Bay’s patents. Discovery began in December 2015, and the parties
`
`exchanged initial disclosures, core technical discovery, primary document productions,
`
`preliminary infringement claim charts, invalidity contentions and claim construction disclosures.
`
`Acceleration Bay took two depositions of Defendants and had four more depositions scheduled
`
`that Defendants cancelled. The Delaware Court and Special Master Allen Terrell expended
`
`considerable resources on the 2015 Delaware Actions, holding multiple hearings and issuing
`
`orders on a variety of substantive and procedural issues.
`
`The parties, this Court and Special Master Allen Terrell expended all of these resources
`
`because Defendants agreed that this patent dispute should be litigated in Delaware. When the
`
`Court held that Acceleration Bay lacked prudential standing to pursue its claims against
`
`Defendants without joining The Boeing Company, the assignor of the asserted patents, the Court
`
`gave Acceleration Bay until June 17, 2016 to cure prudential standing. C.A. No. 15-228-RGA,
`
`D.I. 149.1 Before the June 17 deadline, and while the 2015 Delaware Actions were still pending,
`
`Defendants, on June 16, 2016, filed declaratory judgment actions in the Northern District of
`
`California (the “DJ Actions”), seeking declaratory judgment of non-infringement of the exact
`
`same patents at issue in 2015 Delaware Actions and asserting the exact same non-infringement
`
`defenses they asserted in the 2015 Delaware Actions.
`
`1 Unless indicated otherwise, docket citations herein are to Acceleration Bay LLC v. Activision
`Blizzard Inc., C.A. No. 15-228-RGA, filed March 11, 2015 and Acceleration Bay LLC v.
`Activision Blizzard Inc., C.A. No. 16-453-RGA, filed June 17, 2016. The parties filed
`substantially similar pleadings in the related actions involving the other Defendants:
`Acceleration Bay LLC v. Electronic Arts Inc., C.A. No. 15-282-RGA, filed March 30, 2015;
`Acceleration Bay LLC v. Electronic Arts Inc., C.A. No. 16-454-RGA, filed June 17, 2016;
`Acceleration Bay LLC v. Take-Two Interactive Software, Inc., C.A. No. 15-311-RGA, filed April
`13, 2015; and Acceleration Bay LLC v. Take-Two Interactive Software, Inc., C.A. No. 16-455-
`RGA, filed June 17, 2016.
`
`1
`
`

`

`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 7 of 25 PageID #: 1360
`
`On June 17, 2016, the day after Defendants filed the DJ Actions, Acceleration Bay
`
`informed the Court that it cured prudential standing by entering into an Amended Patent
`
`Purchase Agreement with Boeing. C.A. No. 15-228-RGA, D.I. 152. Rather than join Boeing to
`
`the 2015 Delaware Actions, on that same day, within the cure period afforded by the Court and
`
`while the 2015 Delaware Actions were still pending, Acceleration Bay filed the instant actions
`
`against Defendants (the “2016 Delaware Actions”), making substantially the same infringement
`
`allegations asserted in the 2015 Delaware Actions. Acceleration Bay also requested that the
`
`2015 Delaware Actions be dismissed without prejudice. Id. On June 20, 2016, the Court granted
`
`Acceleration Bay’s request, and dismissed without prejudice the 2015 Delaware Actions. Id.,
`
`D.I. 153.
`
`On July 15, 2016, Acceleration Bay moved the Northern District of California to dismiss
`
`the DJ Actions under the first-to-file rule or, in the alternative, to transfer those actions to this
`
`Court.
`
`II.
`
`SUMMARY OF THE ARGUMENT
`
`Defendants’ motion should be denied, and the Court should continue to preside over
`
`Acceleration Bay’s patent infringement claims. Defendants’ motion ignores nearly a year and
`
`half of litigation history before this Court, literally relegating those cases to a footnote in their
`
`brief. D.I. 7 at 8, n. 8.
`
`The first-to-file rule compels that Acceleration Bay’s infringement claims should proceed
`
`here, not in the Northern District of California. Defendants’ DJ Actions are based on the same
`
`patent infringement issues Acceleration Bay raised in early 2015 before this Court. Moreover,
`
`Defendants filed their DJ Actions in anticipation of imminent litigation (without acknowledging
`
`that litigation was actually still pending). Their race to the courthouse is plain forum shopping
`
`and should not deprive patent owner Acceleration Bay of its choice of venue. Thus, there is no
`
`basis to dismiss or stay these actions in favor of the later-filed DJ Actions.
`
`Transfer of these cases is also unwarranted. Each and every party to this action (and
`
`many of the relevant third-party entities) are Delaware entities. Given this Court’s extensive
`
`2
`
`

`

`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 8 of 25 PageID #: 1361
`
`investment in presiding over these actions and familiarity with Acceleration Bay’s patents, the
`
`technology at issue and the discovery issues the parties raised, and given the advanced stage of
`
`these proceedings, transfer to the Northern District of California would create a staggering waste
`
`of judicial resources and delay in these proceedings. Any concerns Defendants had regarding the
`
`convenience of proceeding before this Court should have been raised in early 2015, when these
`
`cases were filed. Rather than moving to transfer then, Defendants aggressively litigated before
`
`this Court and took full advantage of this venue, filing multiple motions to dismiss and discovery
`
`motions, and asserting the same defense of non-infringement it now raises in the DJ Actions.
`
`There is no reason now to transfer these disputes to the Northern District of California
`
`and deprive Acceleration Bay of its choice of forum. These cases have a national scope, with
`
`products sold and developed all around the country (and in various foreign locations as well).
`
`While Defendants argue that some of the relevant documents and witnesses are located in the
`
`Northern District of California, that is no longer relevant to the venue analysis, because the
`
`parties already made their primary document productions. The parties have also already taken or
`
`scheduled depositions of many of the witnesses, accommodating their convenience by
`
`scheduling the depositions in locations close to their places of residence, rather than within this
`
`District. Thus, there would be no actual efficiency gained in moving the cases to the Northern
`
`District of California. Even if there were some convenience to certain witnesses, it would be
`
`dwarfed by the substantial expense and waste of resources that would follow from restarting
`
`these proceedings before a new court.
`
`Rather than trying to remedy any bona fide convenience issues—which are only less
`
`relevant today than when the 2015 Delaware Actions were filed—the true purpose of
`
`Defendants’ motion is to forum shop and restart the case in a new court, unfamiliar with
`
`Acceleration Bay’s patents and without a schedule in place, further delaying the prosecution of
`
`Acceleration Bay’s claims. Such gamesmanship should not be countenanced, and Defendants’
`
`motion should be denied so that Acceleration Bay’s claims against Defendants can be resolved
`
`without further delay.
`
`3
`
`

`

`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 9 of 25 PageID #: 1362
`
`III.
`
`STATEMENT OF FACTS
`
`A.
`
`The Parties Are All Delaware Corporations
`
`Acceleration Bay is an incubator for next generation businesses, in particular for
`
`companies that focus on delivering information and content in real-time. D.I. 1 (Complaint) at
`
`¶ 3. Acceleration Bay invests in companies that further the dissemination of technological
`
`advancement. Id. Acceleration Bay also collaborates with inventors and research institutions to
`
`analyze and identify important technological problems, generate new solutions to these
`
`problems, and bring those solutions to market through its partnerships with existing companies
`
`and startups. Id. at ¶ 4. Acceleration Bay is a Delaware limited liability corporation, with its
`
`principal place of business at 370 Bridge Parkway, Redwood City, California. Id. at ¶ 2.
`
`Defendants are video game publishers, whose games infringe Acceleration Bay’s
`
`patents. See, e.g., id. at ¶ 6. Activision Blizzard, Inc. is a Delaware corporation with a principal
`
`place of business at 3100 Ocean Park Boulevard, Santa Monica, California (in the Central
`
`District of California). Id. at ¶ 5. Activision Blizzard’s accused Destiny product was developed
`
`by third-party Bungie, a Delaware corporation with its headquarters in Bellevue, Washington
`
`(in the Western District of Washington). D.I. 7 at 4. Electronic Arts Inc. is a Delaware
`
`corporation with a principal place of business at 209 Redwood Shores Parkway, Redwood City,
`
`California (in the Northern District of California). C.A. No. 16-454, D.I. 1 at ¶ 5. Take-Two
`
`Interactive Software, Inc. and its subsidiary Rockstar Games, Inc. (together with subsidiary 2K
`
`Sports, Inc., referred to herein as “Take-Two”) are Delaware corporations with their principal
`
`place of business at 622 Broadway in New York, New York (in the Southern District of New
`
`York). C.A. No. 16-455, D.I. 1 at ¶ 5. 2K Sports, Inc. is a Delaware corporation with its
`
`principal place of business at 10 Hamilton Landing in Novato, California (in the Northern
`
`District of California). Id. at ¶ 7.
`
`Defendants’ fifteen accused products are sold across the United States, including in
`
`Delaware. D.I. 1 at ¶ 6. Defendants allege that the accused products were variously developed
`
`in at least eight different locations: Bellevue, Washington; British Columbia, Canada;
`
`4
`
`

`

`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 10 of 25 PageID #: 1363
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`Bucharest, Romania; the Central District of California; Edinburgh, Scotland; New York, New
`
`York; the Northern District of California; and Orlando, Florida. D.I. 7 at 4-5. Various accused
`
`products also use Demonware technology, which was developed in Ireland. Declaration of Lisa
`
`Kobialka In Support Of Acceleration Bay’s Opposition to Defendants’ Motion to Dismiss
`
`(“Kobialka Decl.”), Ex. 1.
`
`B.
`
`Acceleration Bay Filed its Patent Infringement Claims Against Defendants in
`2015, and the Court Has Invested Substantial Resources in Presiding Over
`Those Actions
`Acceleration Bay filed the 2015 Delaware Actions against Activision Blizzard,
`
`Electronic Arts and Take Two respectively on March 11, March 30 and April 13, 2015, alleging
`
`that the Defendants infringe multiple patents. Kobialka Decl., ¶ 3. The three 2015 Delaware
`
`Actions were consolidated for discovery, claim construction and pre-trial activities. Id.
`
`Defendants asserted the same non-infringement defense in the 2015 Delaware Actions that they
`
`are now asserting in the DJ Actions. Compare, e.g., D.I. 7-1, Ex. 1 (DJ Complaint) at ¶¶ 17-63
`
`with C.A. No. 15-228-RGA, D.I. 21 (Answer) at 15-17.
`
`Discovery was well underway in the 2015 Delaware Actions when the Court dismissed
`
`them on Acceleration Bay’s request. Discovery began in December 2015, and the parties
`
`engaged in extensive document and interrogatory discovery. Kobialka Decl. at ¶ 4.
`
`Acceleration Bay served 30(b)(6) deposition notices on Defendants on January 5, 2016, and
`
`after twice moving to compel depositions, took two depositions of Activision Blizzard and was
`
`scheduled to take four additional depositions of Defendants. Id., at ¶ 5. The parties collectively
`
`served 18 third-party subpoenas and served and responded to 434 requests for production and
`
`42 interrogatories. Id., at ¶ 6. The parties and subpoenaed third parties produced over 118,000
`
`pages of documents and held over two dozen days of source code review under this Court’s
`
`protective order. Id., at ¶ 7. Acceleration Bay served initial infringement claim charts on
`
`March 2, 2016, and Defendants served invalidity contentions on May 6, 2016. C.A. No. 15-
`
`228-RGA, D.I. 103, 134.
`
`The Court and Special Master Terrell invested significant resources in presiding over the
`
`5
`
`

`

`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 11 of 25 PageID #: 1364
`
`2015 Delaware Actions, holding six hearings on a wide variety of topics, as shown in the table
`
`below, and issuing over ten substantive orders concerning a variety of issues, including the
`
`protective order, discovery disputes, infringement contentions, scheduling, case management
`
`and standing, as shown in the tables below. Kobialka Decl. at ¶ 8. Defendants fully availed
`
`themselves of the resources of this Court, instituting or jointly requesting four of the hearings
`
`and various discovery and procedural motions.
`
`Hearings Held In the 2015 Delaware Actions
`
`Date:
`10/13/2015
`
`Held By:
`The Court
`
`1/13/2016
`
`The Court
`
`2/12/2016
`
`The Court
`
`3/16/2016
`
`4/14/2016
`
`Special Master Allen
`Terrell, Esq.
`Special Master Allen
`Terrell, Esq.
`
`5/2/2016
`
`The Court
`
`Topics:
`Scheduling Conference: scheduling issues and
`discovery disputes relating to source code
`production
`Discovery Dispute Hearing: concerning
`Defendants’ failure to produce core technical
`documents
`Discovery Dispute Hearing: concerning
`depositions, infringement contentions, source
`code, third party discovery and production of
`financial documents
`Discovery Dispute Hearing: concerning Take
`Two’s source code
`Discovery Dispute Hearing: concerning
`infringement claim charts, depositions,
`interrogatory responses, testing data and
`additional accused products
`Hearing on Defendants’ motion to dismiss for
`lack of standing
`
`C.
`
`Acceleration Bay’s 2016 Delaware Actions Are Continuations of the 2015
`Delaware Actions
`The 2016 Delaware Actions are continuations of the 2015 Delaware Actions and were
`
`filed while those 2015-filed actions were still pending. On June 3, 2016, the Court found that
`
`Acceleration Bay lacked prudential standing to maintain its claims against Defendants without
`
`joining Boeing, and gave Acceleration Bay until June 17, 2016 to cure prudential standing. C.A.
`
`No. 15-228-RGA, D.I. 149. On June 17, 2016, during the period to cure standing and before
`
`6
`
`

`

`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 12 of 25 PageID #: 1365
`
`Defendants served Acceleration Bay with the complaints for the DJ Actions, Acceleration Bay
`
`informed Judge Andrews that, rather than join Boeing as a party, Acceleration Bay cured
`
`prudential standing by entering into an amended patent purchase agreement with Boeing. Id.,
`
`D.I. 152. Acceleration Bay requested dismissal without prejudice of the 2015 Delaware Actions,
`
`and refiled its claims against Defendants that same day. D.I. 1. On June 20, 2016, the Court
`
`granted Acceleration Bay’s request, and dismissed the 2015 Delaware Actions without prejudice
`
`in favor of the already-pending 2016 Delaware Actions. C.A. No. 15-228-RGA, D.I. 153. Thus,
`
`Acceleration Bay’s patent infringement claims against Defendants have been pending
`
`continuously before the Court since early 2015.
`
`D.
`
`Defendants’ DJ Actions Assert the Same Non-Infringement Defenses They
`Have Asserted in This Court Since 2015
`On June 16, 2016, while the 2015 Delaware Actions were still pending, while Defendants
`
`were actively asserting the defense of non-infringement before this Court, before the deadline for
`
`Acceleration Bay to cure prudential standing and before the dismissal without prejudice of the
`
`2015 Delaware Actions, Defendants filed the DJ Actions in the Northern District of California.
`
`D.I. 7-1, Ex. 1 (Complaint). By Defendants’ own admission, the DJ Actions seek “declaratory
`
`judgment of non-infringement of patents that Acceleration [Bay] has asserted against
`
`[Defendants] in district court proceedings before the United States District Court for the District
`
`of Delaware.” Id. at ¶ 1. The DJ Actions do not raise any claims or defenses not already at issue
`
`in the 2015 Delaware Actions. See id.
`
`Acceleration Bay moved the Northern District of California to dismiss the DJ Actions
`
`under the first-to-file rule or, in the alternative, to transfer the DJ Actions to this Court inter alia
`
`to conserve judicial resources, because all of the parties are Delaware corporations and
`
`Acceleration Bay selected Delaware as the forum in which to pursue its patent infringement
`
`claims.
`
`7
`
`

`

`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 13 of 25 PageID #: 1366
`
`IV.
`
`ARGUMENT
`
`A.
`
`Defendants’ Motion to Dismiss or Stay these Actions Should Be Denied
`
`1.
`
`Acceleration Bay Filed its Patent Infringement Claims Against
`Defendants in This District More Than One Year Before Defendants
`Filed Their DJ Actions in the Northern District of California.
`The fundamental flaw in Defendants’ motion to dismiss or stay the 2016 Delaware
`
`Actions is that it presumes that the DJ Actions are the first-filed cases. They are not. Defendants
`
`filed their DJ Actions well over one year after Acceleration Bay filed its infringement claims in
`
`this District, and Acceleration Bay’s claims have been pending without interruption before the
`
`Court since early 2015. The DJ Actions seek resolution of the same infringement allegations at
`
`issue in these actions. Indeed, on the day Defendants filed the DJ Actions, the 2015 Delaware
`
`Actions were still pending and Defendants were pursuing the exact same defense of non-
`
`infringement in Delaware that was the subject of their DJ Actions.
`
`That Acceleration Bay refiled its claims to cure a purported defect in prudential standing
`
`does not change the fact that they were first filed more than one year before the DJ Actions. See
`
`Schering Corp. v. Amgen Inc., 969 F. Supp. 258, 266-68 (D. Del. 1997). In Schering Corp., after
`
`patent holder Schering filed suit in this District, accused infringer Amgen filed a declaratory
`
`judgment action of non-infringement in the Central District of California and moved to dismiss
`
`the Delaware complaint for lack of prudential standing. Id. at 262. Schering filed an amended
`
`complaint which cured prudential standing by joining the allegedly necessary party. Id. Judge
`
`Schwartz found that the Delaware amended complaint was effectively first filed, even though it
`was filed after the California complaint, because the Court acquired subject matter jurisdiction
`at the time the original complaint was filed regardless of any then-existing defects in prudential
`standing. Id. at 266 (“this Court . . . acquired subject matter jurisdiction on . . . the date Schering
`
`filed its original complaint.”).
`
`In reaching this conclusion, Judge Schwartz specifically rejected the argument
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`Defendants now raise here, i.e., that the purported defect in prudential standing of the 2015
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`complaints renders them irrelevant to the first-to-file analysis because the Court supposedly
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`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 14 of 25 PageID #: 1367
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`never had jurisdiction over them. Id. at 266-67. Instead, Judge Schwartz found that the first-to-
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`file analysis is based on subject matter jurisdiction, created by filing suit with constitutional
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`standing, in contrast to prudential standing, which is “not mandated by Article III,” and therefore
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`not necessary to create jurisdiction. Id. at 267 (“When Schering filed suit . . . this Court acquired
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`subject matter jurisdiction . . . [patent owner’s] presence was unnecessary to infuse this Court
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`with subject matter jurisdiction.”); see also E.E.O.C. v. Univ. of Penn., 850 F.2d 969, 971 (3d
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`Cir. 1988) (“In all cases of federal concurrent jurisdiction, the court which first has possession of
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`the subject must decide it.”)(internal quotation and citations omitted).
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`The Northern District of California takes the same view in crediting a refiled action with
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`the filing date of its predecessor case. See Adobe Sys. Inc., v. Bargain Software Shop, LLC, No.
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`14-CV-3721-EMC, 2014 WL 6982515 (N.D. Cal. Dec. 8, 2014). In Adobe, that court found that
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`where a first-filed action was dismissed without prejudice on a procedural ground (in that case,
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`due to misjoinder of a party) and then promptly refiled, the refiled case was deemed to have been
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`first filed, even though it was filed after an intervening declaratory judgment action. Id. at *2
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`(“On the unique procedural facts of this dispute—the nature of the Colorado Internet dismissal,
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`the conduct of the parties following that dismissal, and the fact that this Court has formally
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`related this case to the Colorado Internet action—the Court finds that this action is the ‘earlier
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`filed action’ based on the ‘dictates of sound judicial administration.’”); see also Barnes & Noble,
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`Inc. v. LSI Corp., 823 F.Supp.2d 980, 988 (N.D. Cal. 2011) (“An action is considered to have
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`been first filed, even if it was not chronologically first, if the claims relate back to an original
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`complaint that was chronologically filed first.”), citing Schering, 969 F.Supp. at 267 (“A
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`‘relation-back’ inquiry is unnecessary; the point of inquiry is the original complaint, not the
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`amended complaint.”); Hilton v. Apple, Inc., No. C-13-2167 EMC, 2013 WL 5487317, at *2-11
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`(N.D. Cal. Oct. 1, 2013) (finding a plaintiff was to first-to-file over a later-filed suit even though
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`Case 1:16-cv-00453-RGA Document 9 Filed 07/25/16 Page 15 of 25 PageID #: 1368
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`plaintiff’s complaint was dismissed for lack of standing and the second and third amended
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`complaints were filed after the later-filed complaint).2
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`Accordingly, Acceleration Bay’s 2016 Delaware Actions are deemed first filed with
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`respect to the DJ Actions because they relate back to the 2015 Delaware Actions, which were
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`still pending when Defendants filed the DJ Actions. Thus, there is no basis to dismiss or stay the
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`2016 Delaware Actions in favor of the DJ Actions.
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`2.
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`Defendants Filed the DJ Actions In Naked Anticipation of Litigation,
`to Forum Shop and Frustrate Acceleration Bay’s Choice of Venue and
`to Delay Resolution of Acceleration Bay’s Claims.
`Defendants’ motion also should be denied because Defendants filed the DJ Actions in
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`anticipation of litigation and for the improper purposes of forum shopping, in a transparent
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`attempt to frustrate Acceleration Bay’s choice of venue and delay the prosecution of
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`Acceleration Bay’s infringement claims against Defendants.3 Elecs. for Imaging, Inc. v. Coyle,
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`394 F.3d 1341, 1345, 1348 (Fed. Cir. 2005) (holding that a declaratory judgment action filed to
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`preempt another’s infringement suit should be dismissed); see also Time Warner Cable, Inc. v.
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`2 Open LCR.com, Inc. v. Rates Tech., Inc., 112 F. Supp. 2d 1223, 1230 (D. Colo. 2000), a
`Colorado case relied upon by Defendants, is inapposite and does not dictate a different
`result. OpenLCR simply found that issues that could have been raised as compulsory
`counterclaims in a second-filed suit were not barred under the first-to-file rule because that other
`case was not first-filed and was voluntarily dismissed. Id. at 1230 (“To now dismiss the Sharp
`parties from this action for failure to raise compulsory counterclaims in a lawsuit that no longer
`exists is, at best, unwarranted.”). In contrast, here, Acceleration Bay’s 2016 Delaware Actions
`continue and relate back to the same claims asserted in the first-filed 2015 Delaware Actions,
`which pended continuously before this Court.
`3 Defendants incorrectly suggest that this Court should not consider if the DJ Actions were filed
`in anticipation of litigation or for other improper purposes because such issues are to be decided
`by the court where actions were first filed. D.I. 7 at 8-9. As noted above, however, Acceleration
`Bay first filed in this Court and Defendants first presented their non-infringement defense here,
`not in the Northern District of California. Furthermore, Defendants mistake “jurisdiction” with
`“standing.” See id. (quoting In re Telebrands Corp., No. 2016-106, 2016 WL 3033331, at *2
`(Fed. Cir. Feb. 24, 2016) (“[w]here the overlap is complete or nearly complete, the usual rule is
`for the co