Case 1:21-cv-01035-MN Document 33 Filed 11/15/21 Page 1 of 10 PageID #: 1470
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`ROKU, INC.,
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`ALMONDNET, INC. and
`INTENT IQ, LLC,
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`v.
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`Plaintiff,
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`C.A. No. 21-1035-MN
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`Defendants.
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`MEMORANDUM OPINION
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`Michael J. Flynn, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, DE; Wasif H. Qureshi,
`Leisa Talbert Peschel, JACKSON WALKER LLP, Houston, TX; Blake T. Dietrich, JACKSON WALKER
`LLP, Dallas, TX – Attorneys for Plaintiff.
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`Brian E. Farnan. Michael J. Farnan, FARNAN LLP, Wilmington, DE; Reza Mirzaie, Marc A.
`Fenster, Paul A. Kroeger, C. Jay Chung, RUSS AUGUST & KABAT, Los Angeles, CA – Attorneys
`for Defendants.
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`November 15, 2021
`Wilmington, Delaware
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`Case 1:21-cv-01035-MN Document 33 Filed 11/15/21 Page 2 of 10 PageID #: 1471
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`NOREIKA, U.S. DISTRICT JUDGE:
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`Before the Court is the motion (D.I. 13) of Defendants AlmondNet, Inc. and Intent IQ,
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`LLC (collectively, “Defendants”) to dismiss this case or to transfer it to the Western District of
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`Texas pursuant to 28 U.S.C. § 1404(a). For the reasons set forth below, the Court DENIES
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`Defendants’ motion.
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`I.
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`BACKGROUND
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`Plaintiff Roku, Inc. (“Plaintiff”) is a corporation organized and existing under the laws of
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`Delaware, with its principal place of business in California. (D.I. 1). Defendants AlmondNet, Inc.
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`and Intent IQ, LLC are a corporation and limited liability corporation, respectively, organized and
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`existing under the laws of Delaware, with their principal place of business in New York. (Id.). At
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`4:45 p.m. on July 15, 2021, Plaintiff brought this declaratory judgment action against Defendants,
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`asking the Court to find that Plaintiff does not infringe any valid and enforceable claim of nine
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`United States Patents1 (collectively, “the Patents-in-Suit”). (D.I. 1). For about 14 months prior to
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`that date, beginning May 2020, the parties had attempted to negotiate a licensing agreement related
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`to the Patents-in-Suit. (D.I. 16 ¶¶ 4–5). On July 15, 2021, i.e., the day this action was filed, Gil
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`Fuchsberg, a Roku executive, told Roy Shkedi, the CEO of AlmondNet and Chairman of Intent
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`IQ, that Roku did not intend to renew the Non-Disclosure Agreement which had enabled the parties
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`to freely negotiate. (Id. ¶ 6). Shkedi then told Fuchsberg that he “would have no choice but to
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`protect [Defendants’] property rights and pursue a lawsuit against Roku in Texas, and informed
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`him that he will notice the filed lawsuit that very same day.” (Id.).
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`The parties filed lawsuits against each other. At 4:45 p.m. on July 15, 2021, Roku filed the
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`present action against AlmondNet and Intent IQ in this District. (D.I. 19, Ex. B). Roughly six
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`1
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`The Patents-in-Suit are United States Patent Nos. 8,677,398, 10,715,878, 7,822,639,
`8,244,586, 10,026,100, 10,628,857, 8,566,164, 8,595,069, and 10,321,198.
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`1
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`Case 1:21-cv-01035-MN Document 33 Filed 11/15/21 Page 3 of 10 PageID #: 1472
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`hours later, AlmondNet and Intent IQ filed an action in the Western District of Texas against Roku,
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`alleging infringement of the Patents-in-Suit. (Id., Ex. B, Ex. C). Roughly one month later,
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`AlmondNet filed another suit against Roku in the Western District of Texas, alleging infringement
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`of three patents not at issue in the present dispute. (W.D. Tex. No. 21-876-ADA). Two weeks
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`later, Defendants initiated four additional actions in the Western District of Texas, all of which
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`alleged infringement of the Patents-in-Suit. The defendants in those cases are Samsung (W.D.
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`Tex. No. 21-891-ADA), Facebook (W.D. Tex. No. 21-896-ADA), Microsoft (W.D. Tex. No. 21-
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`897-ADA), and Amazon (W.D. Tex. No. 21-898-ADA).
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`AlmondNet and Intent IQ now move to dismiss the present action or transfer it to the
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`Western District of Texas. (D.I. 13). Defendants assert that Plaintiff’s first-in-time suit should
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`not be given priority over its later-filed action, and that the balance of public and private factors
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`weigh in favor of transferring the present action to the Western District of Texas. (D.I. 14).
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`Plaintiff opposes Defendants’ motion, contending that the first-to-file rule should lead this Court
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`to refuse to transfer the case, that this case could not have originally been brought in the Western
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`District of Texas, and even if it could have, the balance of private and public interests do not weigh
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`in favor of a transfer. (D.I. 19).
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`II.
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`LEGAL STANDARD
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`“A plaintiff, as the injured party, generally ha[s] been ‘accorded [the] privilege of bringing
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`an action where he chooses.’” Helicos Biosciences Corp. v. Illumina, Inc., 858 F. Supp. 2d 367,
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`371 (D. Del. 2012) (quoting Norwood v. Kirkpatrick, 349 U.S. 29, 31 (1955)). Plaintiff’s choice
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`of location in bringing the action “should not be lightly disturbed.” Jumara v. State Farm Ins. Co.,
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`55 F.3d 873, 879 (3d Cir. 1995).
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`District courts have the authority to transfer venue “[f]or the convenience of parties and
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`witnesses, in the interest of justice, . . . to any other district or division where it might have been
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`2
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`Case 1:21-cv-01035-MN Document 33 Filed 11/15/21 Page 4 of 10 PageID #: 1473
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`brought.” 28 U.S.C. § 1404(a). The Third Circuit has made clear that, to find that an action “might
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`have been brought” in a district, “venue must have been proper in the transferee district and the
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`transferee court must have had power to command jurisdiction over all of the defendants.” Shutte
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`v. Armco Steel Corp., 431 F.2d 22, 24 (3d Cir. 1970).
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`If a court finds that an action “might have been brought” in the proposed transferee district,
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`the court must then consider whether transfer is appropriate. To these ends, the Third Circuit has
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`recognized that:
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`courts have not limited their consideration to the three enumerated
`factors in § 1404(a) (convenience of parties, convenience of
`witnesses, or interests of justice), and, indeed, commentators have
`called on the courts to “consider all relevant factors to determine
`whether on balance the litigation would more conveniently proceed
`and the interests of justice be better served by transfer to a different
`forum.”
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`Jumara, 55 F.3d at 879 (citation omitted). The Jumara court went on to describe twelve “private
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`and public interests protected by the language of § 1404(a).” Id. The private interests include:
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`plaintiff’s forum preference as manifested in the original choice; the
`defendant’s preference; whether the claim arose elsewhere; the
`convenience of the parties as indicated by their relative physical and
`financial condition; the convenience of the witnesses – but only to
`the extent that the witnesses may actually be unavailable for trial in
`one of the fora; and the location of books and records (similarly
`limited to the extent that the files could not be produced in the
`alternative forum).
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`Id. (citations omitted). The public interests include:
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`the enforceability of the judgment; practical considerations that
`could make the trial easy, expeditious, or inexpensive; the relative
`administrative difficulty in the two fora resulting from court
`congestion; the local interest in deciding local controversies at
`home; the public policies of the fora; and the familiarity of the trial
`judge with the applicable state law in diversity cases.
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`3
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`Case 1:21-cv-01035-MN Document 33 Filed 11/15/21 Page 5 of 10 PageID #: 1474
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`Id. at 879-80. The party seeking transfer bears the burden “to establish that a balancing of proper
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`interests weigh[s] in favor of transfer.” Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir.
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`1970). Courts have “broad discretion to determine, on an individualized, case-by-case basis,
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`whether convenience and fairness considerations weigh in favor of transfer.” Jumara, 55 F.3d at
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`883. However, “unless the balance of convenience of the parties is strongly in favor of [the]
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`defendant, the plaintiff’s choice of forum should prevail.” Shutte, 431 F.2d at 25.
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`When there are parallel actions in different districts, courts must also consider the first-to-
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`file rule in deciding a motion to transfer. In patent actions, Federal Circuit law controls application
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`of the first-to-file rule. Elecs. for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1345–46 (Fed. Cir. 2005).
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`Federal Circuit law counsels that the forum of “[t]he first-filed action is preferred, even if it is
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`declaratory, unless considerations of judicial and litigant economy, and the just and effective
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`disposition of disputes, require otherwise.” Serco Services Co., L.P. v. Kelley Co., Inc., 51 F.3d
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`1037 (Fed. Cir. 1995) (internal quotation marks and citations omitted). Among the reasons to
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`decline to apply the first-to-file rule are “the convenience and availability of witnesses, or absence
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`of jurisdiction over all necessary or desirable parties, or the possibility of consolidation with related
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`litigation, or considerations relating to the real party in interest.” Genentech, Inc. v. Eli Lilly &
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`Co., 998 F.2d 931, 938 (Fed. Cir. 1993), abrogated on other grounds by Wilton v. Seven Falls Co.,
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`515 U.S. 277, 288 (1995). There must “be sound reason that would make it unjust or inefficient
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`to continue the first-filed action” and transfer the case. Id. at 938.
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`III. DISCUSSION
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`A.
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`1404(a) First Step: Appropriate Venue
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`Section 1404(a) permits a district court to “transfer any civil action to any other district or
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`division where it might have been brought or to any district or division to which all parties have
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`consented.” Plaintiff does not consent to transfer to the Western District of Texas. Therefore, the
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`Case 1:21-cv-01035-MN Document 33 Filed 11/15/21 Page 6 of 10 PageID #: 1475
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`Court must address the threshold inquiry under § 1404(a) – whether this action “might have been
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`brought” in the Western District of Texas.
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`To find that an action “might have been brought” in a district, “venue must have been
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`proper in the transferee district and the transferee court must have had power to command
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`jurisdiction over all of the defendants.” Shutte v. Armco Steel Corp., 431 F.2d 22, 24 (3d Cir.
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`1970) (emphasis added). Defendants argue that each of these requirements is satisfied. First,
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`Defendants argue that because “a substantial part of the events . . . giving rise to the claim
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`occurred” in the Western District of Texas, and because Plaintiff maintains an office there, venue
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`is appropriate in the District. (D.I. 22 at 4–5). Defendants also argue that the personal jurisdiction
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`requirement is satisfied because they filed six enforcement actions in that District and consent to
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`jurisdiction in that District. (Id. at 5).
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`Here, the Court finds that transfer would be inappropriate because the Western District
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`lacked personal jurisdiction over Defendants when Plaintiff filed the present action. Defendants’
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`primary argument for the existence of personal jurisdiction is that its later-filed enforcement
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`actions in the Western District permit the District to exercise jurisdiction over them. But this
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`argument ignores the text of § 1404(a) and the Supreme Court’s analysis of that statute in Hoffman
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`v. Blaski, 363 U.S. 335 (1960). In Hoffman, the Court held that § 1404(a)’s dictate that transfer
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`be limited to districts “where it might have been brought” allows a court to transfer cases only to
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`those venues that would have been appropriate at the time the plaintiff brought its initial action.
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`The Supreme Court explained that § 1404(a)’s “phrase ‘where it might have been brought’
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`can[not] be interpreted to mean . . . ‘where it may now be rebrought . . . .” Id. at 342–43. The
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`Court went on to explain that “we do not see how the conduct of a defendant after suit has been
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`instituted can add to the forums where it might have been brought. In the normal meaning of
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`Case 1:21-cv-01035-MN Document 33 Filed 11/15/21 Page 7 of 10 PageID #: 1476
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`words this language of Section 1404(a) directs the attention of the judge who is considering a
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`transfer to the situation which existed when suit was instituted.” Id. at 343–44. See also Tlapanco
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`v. Elges, No. 15-CV-2852 (AJN), 2017 WL 4329789, at *4 (S.D.N.Y. Sept. 14, 2017) (explaining
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`that Hoffman held that “absent the consent of all parties, the transferee district must be one where
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`the plaintiff would have had ‘a right to bring [the] action[ ]’ at the time the action was
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`commenced.”).
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`All of Defendants’ actions in the Western District of Texas arose after the present action
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`was filed. Even assuming the correctness of Defendants’ assertion that its enforcement actions in
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`the Western District of Texas permit that District to exercise personal jurisdiction over them, that
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`jurisdiction would have arisen only after Roku filed this action. Therefore, these later-filed actions
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`cannot support an argument that the Western District of Texas could have exercised jurisdiction
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`over AlmondNet and Intent IQ when Roku filed this declaratory action. For the very same reason,
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`Defendants’ argument that they now consent to jurisdiction in the Western District of Texas does
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`not confer jurisdiction at the time Roku filed the present action.
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`Because the Court finds that personal jurisdiction would have been lacking in the Western
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`District of Texas when Plaintiff filed this instant action, Defendants’ transfer motion must be
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`DENIED.
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`B.
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`First-to-File
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`As transfer has been deemed inappropriate, the Court will now consider whether to dismiss
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`this action in light of the later-filed infringement suit.
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`Where there are parallel proceedings in two federal courts, the first-to-file rule generally
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`expresses a preference for the court with the first-filed action to hear the case. “Although district
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`courts can . . . dispense with the first-to-file rule, there must ‘be sound reason that would make it
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`unjust or inefficient to continue the first-filed action.’” Communications Test Design, Inc. v.
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`6
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`Case 1:21-cv-01035-MN Document 33 Filed 11/15/21 Page 8 of 10 PageID #: 1477
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`Contec, LLC, 952 F.3d 1356, 1362 (Fed. Cir. 2020) (quoting Genentech, Inc. v. Eli Lilly and Co.,
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`998 F.2d 931, 938 (Fed. Cir. 1993)). The burden is on the party seeking to establish a compelling
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`circumstances exception to the first-to-file rule. In re Nitro Fluids L.L.C., 978 F.3d 1308, 1311
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`(Fed. Cir. 2020). In this case, the Court finds that Defendants have not met their burden of
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`demonstrating sound reasons that would justify departing from the first-filed rule.
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`Defendants contend that Plaintiff’s suit was anticipatory, and therefore should not be
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`treated as the first-filed suit. A court may consider whether a party filed suit to preempt another’s
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`infringement suit when ruling on the dismissal or transfer of a declaratory action. Elecs. for
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`Imaging, Inc. v. Coyle, 394 F.3d 1341, 1347 (Fed. Cir. 2005). A suit is “anticipatory for the
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`purposes of being an exception to the first-to-file rule if the plaintiff in the first-filed action filed
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`suit on receipt of specific, concrete indications that a suit by the defendant was imminent.”
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`Woodbolt Distribution, LLC v. Natural Alternatives Intern., Inc. No. 11-1266-GMS, 2013 WL
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`247041, at *4 (D. Del. Jan. 23, 2013) (citation omitted). Here, when the parties decided to
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`terminate licensing negotiations, Roy Shkedi, the CEO of Defendant AlmondNet and Chairman of
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`Defendant Intent IQ, told Gil Fuchsberg, an executive with Plaintiff Roku, that AlmondNet and
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`Intent IQ would be filing an infringement action against Roku in Texas “that very same day.”
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`(D.I. 16 ¶ 6).
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`Therefore, it appears that Roku may have “filed suit on receipt of specific, concrete
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`indications that a suit by the defendant was imminent.” But it does not necessarily follow that
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`Roku filed suit because it believed Defendants’ infringement suit to be imminent. Instead, it is
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`just as likely that Roku, after more than a year of unfruitful negotiation with entities who believe
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`it to be infringing their patents, resorted to the courts to declare its “rights” and “legal relations” –
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`exactly what 28 U.S.C. § 2201 is designed to do. The Court cannot conclude that Roku filed the
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`Case 1:21-cv-01035-MN Document 33 Filed 11/15/21 Page 9 of 10 PageID #: 1478
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`action in bad faith or to avoid what it perceived as an unfavorable forum. Cf. Commc’ns Test
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`Design, Inc. v. Contec LLC, 367 F. Supp. 3d 350 (E.D. Pa. 2019) (declining to apply the first-to-
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`file rule in a case where the plaintiff filed suit after inducing the defendant to believe negotiations
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`were still possible and ongoing), aff’d, 952 F.3d 1356 (Fed Cir. 2020); E.E.O.C. v. Univ. of
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`Pennsylvania, 850 F.2d 969 (3d Cir. 1988) (instructing that courts may refuse to apply the first-
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`filed rule “when the first-filing party instituted suit in one form in anticipation of the opposing
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`party’s imminent suit in another, less favorable forum.”). Based on the unique circumstances of
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`this case, the timing of this suit does not supply reasons to decline to exercise jurisdiction over the
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`present action.
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`Defendants have also failed to meet their burden of arguing that other factors should lead
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`the Court to decline jurisdiction over Plaintiff’s declaratory action. Defendants assert that the
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`“convenience and availability of witnesses” favors dismissal but have not shown that any relevant
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`witnesses would find litigating in Texas more convenient than litigating in Delaware. Although
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`Defendants point to Roku’s physical presence in the Western District of Texas (D.I. 15), Plaintiff
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`asserts that its employees in Austin, Texas do not possess knowledge relevant to the present
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`dispute. (See D.I. 19, Ex. A ¶ 6). Rather, Plaintiff states that the majority of its employees with
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`relevant knowledge are based out of its Boston, Massachusetts office. (Id. ¶¶ 6–8). The Court
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`finds Plaintiff’s assertions more credible on this front. Further, the Court notes that Defendants
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`are organized and exist under the laws of Delaware, and so are presumably not inconvenienced by
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`litigating in Delaware. See Micron Technology, Inc. v. Rambus Inc., 645 F.3d 1311, 1332 (Fed.
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`Cir. 2011) (“Given that both parties were incorporated in Delaware, they had both willingly
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`submitted to suit there, which weighs in favor of keeping the litigation in Delaware.”).
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`Defendants also argue that judicial economy favors Texas over Delaware, but the Court
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`does not find that judicial economy can justify dismissal in this case. To begin with, the Federal
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`Circuit has cautioned against allowing co-pending litigation to dominate an analysis of judicial
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`economy. See In re Google Inc., No. 2017-107, 2017 WL 977038, at *2 (Fed. Cir. Feb. 23, 2017).
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`On the record before it, the Court is concerned that finding the “judicial economy” factor
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`dispositive would permit parties to fashion an exception to the first-to-file rule. After being sued
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`in the District of Delaware, Defendants chose to file four separate infringement actions against
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`corporations in the Western District of Texas – four of whom Defendants allege to be corporations
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`organized and existing under the laws of Delaware (W.D. Tex. No. 21-896-ADA, D.I. 1 ¶ 3; W.D.
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`Tex. No. 21-898, D.I. 1 ¶¶ 3–5). The Court is not persuaded by Defendants’ argument that judicial
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`economy justifies a departure from the first-to-file rule here, as it was Defendants’ own litigation
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`strategy that brought litigation to the Western District of Texas. Therefore, the Court does not find
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`this consideration to be a sound reason to dismiss hearing the present action.
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`For the above reasons, the Court does not find it appropriate to decline to exercise
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`jurisdiction over the present action. Accordingly, Defendants’ motion to dismiss is DENIED.
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`IV. CONCLUSION
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`For the foregoing reasons, Defendants’ motion to dismiss or transfer the case is DENIED.
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`An appropriate order will follow.
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