Case 2:22-cv-00828-CDS-BNW Document 31 Filed 08/04/22 Page 1 of 15
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`Joseph R. Ganley (5643)
`Piers R. Tueller (14633)
`HUTCHISON & STEFFEN, PLLC
`Peccole Professional Park
`10080 West Alta Drive, Suite 200
`Las Vegas, Nevada 89145
`Telephone: (702) 385-2500
`Facsimile: (702) 385-2086
`jganley@hutchlegal.com
`ptueller@hutchlegal.com
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`Edward R. Nelson III (Admitted Pro Hac Vice)
`Christopher G. Granaghan (Admitted Pro Hac Vice)
`John P. Murphy (Admitted Pro Hac Vice)
`Carder W. Brooks (Admitted Pro Hac Vice)
`NELSON BUMGARDNER CONROY PC
`3131 West 7th Street, Suite 300
`Fort Worth, TX 76107
`Telephone: (817) 377-9111
`ed@nelbum.com
`chris@nelbum.com
`murphy@nelbum.com
`carder@nelbum.com
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`Attorneys for Defendant R2 Solutions LLC
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`UNITED STATES DISTRICT COURT
`DISTRICT OF NEVADA
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`Case No. 2:22-cv-00828-CDS-BNW
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`ALLEGIANT TRAVEL COMPANY,
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`Plaintiff,
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`v.
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`R2 SOLUTIONS LLC,
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`Defendant.
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`DEFENDANT R2 SOLUTIONS LLC’S
`REPLY IN SUPPORT OF ITS MOTION
`TO DISMISS PLAINTIFF ALLEGIANT
`TRAVEL COMPANY’S ORIGINAL
`COMPLAINT UNDER FRCP 12(b)(1)
`AND 12(b)(2)
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`REPLY IN SUPPORT OF MOTION TO DISMISS
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`CASE NO: 2:22-CV-00828-CDS-BNW
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`Case 2:22-cv-00828-CDS-BNW Document 31 Filed 08/04/22 Page 2 of 15
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`TABLE OF CONTENTS
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`INTRODUCTION ........................................................................................................................................ 1
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`ARGUMENT ................................................................................................................................................ 2
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`I. ALLEGIANT’S COMPLAINT IS A BREACH OF THE PARTIES’ AGREEMENT. .................. 2
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`II. ALLEGIANT HAS FAILED TO ESTABLISH SUBJECT-MATTER JURISDICTION. .............. 4
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`A.
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`B.
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`Information Subject to a Confidentiality Agreement Cannot Be Used to Support
`Jurisdiction. ................................................................................................................................. 4
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`No Case or Controversy Exists Based on the Parties’ Pre-Agreement Discussions. ................. 5
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`C.
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` No Case or Controversy Exists Even When Considering Information Post-Agreement
`Communications. ........................................................................................................................ 7
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`III. THE COURT SHOULD EXERCISE ITS DISCRETION TO DISMISS THIS CASE.. .............. 8
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`IV. THERE IS NO PERSONAL JURISDICTION OVER R2 IN NEVADA. .................................... 9
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`CONCLUSION ........................................................................................................................................... 10
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`REPLY IN SUPPORT OF MOTION TO DISMISS
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`CASE NO: 2:22-CV-00828-CDS-BNW
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`Case 2:22-cv-00828-CDS-BNW Document 31 Filed 08/04/22 Page 3 of 15
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`TABLE OF AUTHORITIES
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`Cases
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`3M Co. v. Avery Dennison Corp.,
` 673 F.3d 1372 (Fed. Cir. 2012) ......................................................................................................... 4, 6, 8
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`Activevideo Networks, Inc. v. Trans Video Elecs. Ltd.,
` 975 F. Supp. 2d 1083 (N.D. Cal. 2013) ................................................................................................ 3, 6
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`Arrowhead Indus. Water v. Ecolochem, Inc.,
` 846 F.2d 731 (Fed. Cir. 1988). .................................................................................................................. 9
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`BPI Energy, Inc. v. IEC (Montgomery), LLC,
` 2007 U.S. Dist. LEXIS 84220 (S.D. Ill. Nov. 13, 2007)........................................................................... 5
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`Bridgelux, Inc. v. Cree, Inc.,
` 2007 U.S. Dist. LEXIS 53137 (N.D. Cal. July 9, 2007). .......................................................................... 8
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`Cepheid v. Roche Molecular Sys., Inc.,
` 2013 U.S. Dist. LEXIS 7446 (N.D. Cal. Jan. 17, 2013) ................................................................... 3, 6, 8
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`EMC Corp. v. Norand Corp.,
` 89 F.3d 807 (Fed. Cir. 1996) ..................................................................................................................... 9
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`Green Keepers, Inc. v. Softspikes, Inc.,
` 1999 U.S. Dist. LEXIS 7728 (E.D. Pa. May 18, 1999). ....................................................................... 6, 7
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`Google, Inc. v. Traffic Info. LLC,
` 2010 U.S. Dist. LEXIS 27017 (D. Or. Feb. 2, 2010). ............................................................................... 3
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`Hewlett-Packard Co. v. Acceleron LLC,
` 587 F.3d 1358 (Fed. Cir. 2009). ................................................................................................................ 6
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`Innovative Therapies, Inc. v. Kinetic Concepts, Inc.,
` 599 F.3d 1377 (Fed. Cir. 2010) ......................................................................................................... 6, 7, 8
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`Prasco, LLC v. Medicis Pharm. Corp.,
` 537 F.3d 1329 (Fed. Cir. 2008) ......................................................................................................... 6, 7, 8
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`R2 Solutions LLC v. Allegiant Travel Company,
` Case No. 4:22-cv-0053 (E.D. Tex. June 28, 2022) ................................................................................... 4
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`REPLY IN SUPPORT OF MOTION TO DISMISS
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`CASE NO: 2:22-CV-00828-CDS-BNW
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`Case 2:22-cv-00828-CDS-BNW Document 31 Filed 08/04/22 Page 4 of 15
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`Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc.,
` 148 F.3d 1355 (Fed. Cir. 1998) ............................................................................................................... 10
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`SanDisk Corp. v. STMicroelectronics, Inc.,
` 480 F.3d 1372 (Fed. Cir. 2007) ............................................................................................................. 4, 8
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`TriQuint Semiconductor, Inc. v. Avago Techs. Ltd.,
` 2010 U.S. Dist. LEXIS 89690 (D. Ariz. Aug. 2, 2010) ............................................................................ 5
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`Wooster Brush Co. v. Bercom Int’l, LLC,
` 2008 U.S. Dist. LEXIS 29971 (N.D. Ohio Apr. 11, 2008). ...................................................................... 8
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`Wright Med. Tech., Inc. v. Osteonics Corp.,
` 914 F. Supp. 1524 (W.D. Tenn. 1995). ..................................................................................................... 8
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`Rules, Regulations and Statutes
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`Fed. R. Civ. P.12(f) ....................................................................................................................................... 5
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`REPLY IN SUPPORT OF MOTION TO DISMISS
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`Case 2:22-cv-00828-CDS-BNW Document 31 Filed 08/04/22 Page 5 of 15
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`R2 Solutions LLC (“R2”) files this reply (hereinafter, “Reply”) to Allegiant Travel Company’s
`(“Allegiant”) Points and Authorities in Opposition to R2’s Motion to Dismiss (ECF 29) (“Response”).
`INTRODUCTION
`Allegiant’s Response fails to show that the Court has subject-matter jurisdiction over this case or
`personal jurisdiction over R2. In a transparent attempt to inflame the Court, Allegiant turns to bellicose
`language and name-calling. Vitriol is a poor disguise, however, and the overtly aggressive tone of
`Allegiant’s Response fails to mask factually incorrect and legally flawed positions. The facts of this case
`and relevant case law require dismissal.
`First, Allegiant failed to adequately dispute that the Complaint is based on R2’s Confidential
`Information. For instance, Allegiant does not dispute that its Complaint details the licensing discussions
`between the parties, which are defined by the Agreement as Confidential Information. See ECF 1; see
`also ECF 28 (Mot.) at 1, 7; ECF 1.4, ¶ 2. Allegiant relies on these discussions to show that the Court has
`subject-matter jurisdiction, in violation of the Agreement. See ECF 29 (Resp.) at 8-12, 19-24.
`Second, Allegiant failed to establish that this Court has subject-matter jurisdiction. Allegiant
`ignores Federal Circuit case law that plainly supports that allegations included in a complaint in violation
`of confidentiality obligations should be excluded from the Court’s jurisdictional analysis. Allegiant’s
`burden is to establish jurisdiction based on pre-Agreement communications alone, and it has failed to do
`so. In fact, Allegiant admits that it only considered a case or controversy to have arisen after the parties
`participated in confidential Discussions
`. See ECF 29 (Resp.) at 19
`(asserting that only “[a]t that point” after
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`did “Allegiant reasonably conclude[] that R2’s intent was to secure a licensing deal or enforce
`its patent rights through litigation, leaving Allegiant with no recourse for its claim of noninfringement”);
`see also Ex. A to Resp., Declaration of Laura Overton, ¶ 7. Nevertheless, the Court lacks jurisdiction
`even if the Court considers post-Agreement communications. Allegiant’s arguments otherwise ignore
`nearly half of the relevant factors used to determine whether a court has subject-matter jurisdiction over a
`declaratory judgment action.
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`REPLY IN SUPPORT OF MOTION TO DISMISS
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`Case 2:22-cv-00828-CDS-BNW Document 31 Filed 08/04/22 Page 6 of 15
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`I.
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`Third, Allegiant failed to show why the Court should exercise its discretion to entertain this
`declaratory-judgment action. As set forth in R2’s Motion, Allegiant’s conduct is an extraordinary
`violation of the Agreement. Allegiant has not disputed that its Complaint relies on confidential
`discussions between the parties or that it sought to manufacture a “case or controversy.” See ECF 1; see
`also ECF 28 (Mot.) at 11-13. These facts strongly favor discretionary dismissal.
`Fourth, Allegiant failed to establish that the Court has personal jurisdiction over R2. Allegiant has
`not shown that R2 has sufficient minimum contacts based on the pre-Agreement communications, and it
`further failed to rebut R2’s argument that the Court’s exercise of jurisdiction over R2 would offend
`traditional notions of fair play and substantial justice.
`ARGUMENT
`ALLEGIANT’S COMPLAINT IS A BREACH OF THE PARTIES’ AGREEMENT.
`Despite Allegiant’s rhetoric, Allegiant has tacitly admitted to its most obvious breach of the
`Agreement—nowhere in its Response does Allegiant contest that it describes and relies on confidential
`licensing discussions between the parties to establish subject-matter jurisdiction. See ECF 1; see also
`ECF 28 (Mot.) at 1, 7; ECF 29 (Resp.) at 20 (citing to paragraphs 28-31 of the Complaint to support
`jurisdictional allegations), 8-12 (repeating, without citation, factual allegations found in these paragraphs
`of the Complaint). The Agreement between the parties defines these discussions as “Confidential
`Information.” ECF 1.4, ¶ 2 (“‘Confidential Information’ means any information of a confidential nature
`provided by either Party . . . including but not limited to, the Discussions . . . .”). Allegiant agreed that it
`would not “use or disclose any Confidential Information . . . for any reason including . . . as a basis for a
`declaratory judgment action.” Id., ¶ 3. But that is precisely what Allegiant has done—its Complaint and
`Response rely extensively on these Discussions to demonstrate that the Court has subject-matter and
`personal jurisdiction. See ECF 29 (Resp.) at 8-12; 19-24; ECF 1, ¶¶ 12, 28-32, 37-39.
`Allegiant repeatedly asserts that it did not breach the Agreement because the identity of R2’s
`patents is a matter of public record. Allegiant mischaracterizes R2’s position. The identity of R2’s patents
`is, indeed, a matter of public record. But the selection of which patents to chart and discuss with
`Allegiant is not. Such is Confidential Information under the parties’ Agreement, and Allegiant cannot
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`rely onit as a basis for its declaratory-judgment action. The Agreement defines Confidential Information
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`as “the Discussions and that whichrelates to ... patents, evidence ofpatent use, [and] ... claim
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`charts.” ECF 1.4 at § 2 (emphasis added). Allegiant does not dispute that it relied on the patents R2
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`selected, charted, and provided to Allegiant to determine which patents to challenge.!
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`Allegiant asserts, hypothetically, that it “could have selected any of the patents from the R2
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`portfolio to assert in a complaint for declaratory judgment,” that it “could determine [whichpatents to
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`challenge] on its own” without the parties’ Discussions, and that “[a]ny companyis free to research
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`another party’s patents and assess whether they apply or do not applyto their products.”* ECF 29 (Resp.)
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`at 13, 16. But what Allegiant “could have” done is irrelevant. What Allegiant actually did is learn this
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`Confidential Information from R2 anduseit as a basis for a declaratory judgmentaction.’ Toreiterate,
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`Allegiant does not dispute that it on/y challenged the exact patents that R2 chose to discuss withit.
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`Allegiant also (again) misrepresents Mr. Wooley’s communications with Allegiant to argue that
`R2 waived confidentiality over the identity ofthe patents that R2 believed applied to Allegiant.a
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`PO ECF 29 (Resp.) at 13 (emphasis removed). As discussed in R2’s Motion,
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`NS 2 25 (401) 0012. Allepian’sinsinvavionha
`ee
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`! Allegiant disclaims reliance on the contents of R2’s claim charts asthe basis for this case (ECF 29
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`(Resp.) at 15), but then contradicts itself by expressly relying on the contents in its Response. In its
`ity
`of its patents confidential, Allegiant asserts that
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` ECF 29 (Resp.) at 13. This disclosure of
`and
`reliance on the contents of R2’s claim charts1s
`yet another breach of the Agreement.
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`? Allegiant’s reliance on Google, Inc. v. Traffic Info. LLC here is misplaced. There wasno confidentiality
`agreementin place in that case. No. CV09-642-HU, 2010 U.S. Dist. LEXIS 27017 *7-8 (D. Or. Feb.2,
`2010).
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`3 Even if Allegiant determined on its own whichpatents to challenge without relying on R2’s
`Confidential Information, there still would be no subject-matter jurisdiction, as application of the relevant
`factors weighs heavily against finding a case or controversy. See Activevideo Networks, Inc. v. Trans
`Video Elecs. Ltd., 975 F. Supp. 2d 1083, 1087-88 (N.D. Cal. 2013) (citing Cepheid v. Roche Molecular
`Sys., Inc., No. C-12-4411 EMC, 2013 U.S. Dist. LEXIS 7446, at *18-20 (N.D. Cal. Jan. 17, 2013)).
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`REPLY IN SUPPORT OF MOTION TO DISMISS
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`Case 2:22-cv-00828-CDS-BNW Document 31 Filed 08/04/22 Page 8 of 15
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`in the Agreement that material be expressly designated as confidential to be considered Confidential
`Information.4 Indeed, as discussed above, the Agreement defines the parties’ “Discussions” as
`Confidential Information, and there can be no dispute that R2 disclosed the identities of the patents it
`believed applied to Allegiant in those Discussions.
`Lastly, Allegiant implies that R2 has somehow conceded that its Complaint does not rely on
`Confidential Information because it did not immediately accuse Allegiant of breaching the Agreement.
`This is a red herring. Regardless of when R2 informed Allegiant that it had breached the agreement, the
`fact remains that Allegiant filed a declaratory judgment action using the parties’ Discussions despite
`explicitly agreeing not to do so. The damage was done the moment Allegiant filed its Complaint. Indeed,
`Allegiant’s Complaint (and R2’s Confidential Information disclosed therein) was already disclosed on
`publicly-available databases by the time R2 was made aware of this lawsuit. See R2 Solutions LLC v.
`Allegiant Travel Company, Case No. 4:22-cv-00537, ECF 1 at ¶ 26 (E.D. Tex. June 28, 2022). Any delay
`is therefore immaterial and does not excuse Allegiant’s conduct.
`ALLEGIANT HAS FAILED TO ESTABLISH SUBJECT-MATTER JURISDICTION.5
`II.
`A. Information Subject to a Confidentiality Agreement Cannot Be Used to Support
`Jurisdiction.
`Despite Allegiant’s claims that “R2 has not cited to any precedent” (ECF 29 at 15 (emphasis in
`original)) to support its position, Federal Circuit case law plainly endorses the notion that information
`subject to a confidentiality agreement should be excluded from the Court’s jurisdictional analysis.
`Allegiant attacks SanDisk’s statement that a patentee can “avoid the risk of a declaratory judgment
`action” by seeking “a suitable confidentiality agreement” as dicta, but Allegiant ignores 3M’s recognition
`of this same principle. See ECF 29 at 15 (quoting SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d
`1372, 1375 n.1 (Fed. Cir. 2007)); 3M Co. v. Avery Dennison Corp., 673 F.3d 1372, 1377-78 (Fed. Cir.
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`4 Notably, however,
`ECF 26.3 (Ex. C to R2’s Motion to Dismiss), at 4.
`5 Allegiant contests R2’s making both factual and facial challenges to jurisdiction. See ECF 29 (Resp.) at
`8, n. 9. Allegiant has failed to offer any case law demonstrating that R2 is not entitled to raise both
`factual and facial challenges in its Motion. Under either a factual or a facial challenge, the Court lacks
`jurisdiction.
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`. See
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`Case 2:22-cv-00828-CDS-BNW Document 31 Filed 08/04/22 Page 9 of 15
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`2012) (remanding to the district court to determine whether “conversations were subject to a
`confidentiality agreement precluding their use as a basis to support a declaratory judgment action” and
`finding that “the content of and confidentiality of the discussions” was “central to the jurisdictional
`analysis”). Tellingly, Allegiant offers no authority to the contrary.
`Allegiant’s argument that the Agreement is not “suitable” to avoid a declaratory judgment action
`because it does not “explicitly preclude[] filing for declaratory judgment” is nonsensical. ECF 29 (Resp.)
`at 15. The plain language of the Agreement prohibits Allegiant from using any “Confidential
`Information” exchanged under the Agreement “for any reason including . . . as a basis for a declaratory
`judgment action.” ECF 1.4 at ¶ 3 (emphasis added). The Court should thus exclude any information
`subject to the Agreement in its jurisdictional analysis.6
`B. No Case or Controversy Exists Based on the Parties’ Pre-Agreement Discussions.
`No case or controversy exists between the parties based on the parties’ pre-Agreement
`discussions. Allegiant itself admits that it did not consider there to be a case or controversy until the
`parties’ post-Agreement discussions. According to Allegiant, it was not
` “Allegiant reasonably concluded that R2’s intent was to secure a
`licensing deal or enforce its patent rights through litigation, leaving Allegiant with no recourse for its
`claim of noninfringement.” ECF 29 (Resp.) at 19. That Allegiant only “reasonably concluded” that
`litigation may be forthcoming after the parties’ confidential Discussions proves that no case or
`controversy existed based on pre-Agreement correspondence.
`Allegiant argues that after R2 sent an opening letter and a follow-up email to Allegiant offering to
`discuss a license to R2’s portfolio, Allegiant could “could have selected any of the patents from the R2
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`6 Allegiant argues that the Court may not strike material under FRCP 12(f) just because such material
`violates an NDA. See ECF 29 at 12, n. 12. The cases Allegiant cites actually support the opposite
`conclusion. See TriQuint Semiconductor, Inc. v. Avago Techs. Ltd., 2010 U.S. Dist. LEXIS 89690, at *14
`(D. Ariz. Aug. 2, 2010) (declining to strike material because such material was found to “not be barred
`by NDA”); BPI Energy, Inc. v. IEC (Montgomery), LLC, No. 07-186-DRH, 2007 U.S. Dist. LEXIS
`84220, at *5 (S.D. Ill. Nov. 13, 2007) (recognizing that confidential information may not be “accepted as
`evidence in relation to a dispositive motion or at trial,” and only declining to strike material because “the
`confidentiality agreement cannot afford blanket protection to fraudulent inducement and breach of
`fiduciary duty”).
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`Case 2:22-cv-00828-CDS-BNW Document 31 Filed 08/04/22 Page 10 of 15
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`portfolio to assert in a complaint for declaratory judgment.” ECF 29 (Resp.) at 16. But the Federal Circuit
`has made clear that to find a case or controversy, “more is required than a communication from a patent
`owner to another party, merely identifying its patent and the other party’s product line.” 3M, 673 F.3d at
`1378-79 (citing Hewlett-Packard Co. v. Acceleron LLC, 587 F.3d 1358, 1362 (Fed. Cir. 2009). Allegiant
`asks the Court to find jurisdiction based on even less: three communications from R2 to Allegiant that did
`not identify patents or Allegiant’s product lines. At bottom, Allegiant’s position is that any time a patent
`owner who has previously enforced its patents reaches out to another party to discuss licensing,
`declaratory judgment jurisdiction automatically attaches on all patents held by the patent owner. This is
`simply not the law. See id.; see also Innovative Therapies, Inc. v. Kinetic Concepts, Inc., 599 F.3d 1377,
`1382 (Fed. Cir. 2010) (finding that litigation against other parties is only a single factor in the analysis
`and is not dispositive in finding whether a case or controversy exists); Prasco, LLC v. Medicis Pharm.
`Corp., 537 F.3d 1329, 1341 (Fed. Cir. 2008) (same). Activevideo Networks, Inc. v. Trans Video Elecs.
`Ltd., 975 F. Supp. 2d 1083, 1087-88 (N.D. Cal. 2013) (citing Cepheid v. Roche Molecular Sys., Inc., No.
`C-12-4411 EMC, 2013 U.S. Dist. LEXIS 7446, at *18-20 (N.D. Cal. Jan. 17, 2013)).
`Allegiant cites to a single, non-binding case for its argument that jurisdiction exists based only on
`pre-Agreement communications. See ECF 29 (Resp.) at 17 (citing Green Keepers, Inc. v. Softspikes, Inc.,
`No. 92-2255, 1999 U.S. Dist. LEXIS 7728 (E.D. Pa. May 18, 1999)). That case, however, is starkly
`different than this one. In Green Keepers, which was decided under the prior “reasonable apprehension of
`suit standard,” the district court found that jurisdiction existed based on actual threats of litigation. The
`vice president of Softspikes, the patent owner, “advised customers of Green Keepers [the plaintiff], and
`other individuals in [the industry] that Softspikes had instituted patent litigation in Canada, that Green
`Keepers had violated Softspikes’ patents, and that Softspikes was either suing Green Keepers for patent
`infringement or intended to initiate patent litigation against Green Keepers in the United States.” 1999
`U.S. Dist. LEXIS 7728, at *4. The district court found that this was sufficient to demonstrate a case or
`controversy, especially when the parties were already litigating in Canada, and Softspikes failed to
`dispute an article stating that Softspikes had sued Green Keepers. Id. at *7. In contrast, the Green
`Keepers court found that a discussion between the president of Softspikes and the president of Green
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`REPLY IN SUPPORT OF MOTION TO DISMISS
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`Case 2:22-cv-00828-CDS-BNW Document 31 Filed 08/04/22 Page 11 of 15
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`Keepers—in which the Softspikes president stated that “Softspikes has patents covering alternative cleats
`and that Softspikes would be investigating whether it would . . . initiate patent infringement actions
`against ‘these knock-off-cleats’”—was insufficient to create a case or controversy. Id. at *4, *6-7.
`Unlike the patent owner in Green Keepers, R2 never threatened to sue Allegiant. Indeed, the facts
`here are far more innocuous than facts the Green Keepers court found were insufficient to support
`jurisdiction. Not only did R2 never threaten litigation, it never hinted that it was contemplating litigation
`against Allegiant (and R2’s history of licensing without litigation counsels otherwise). Allegiant has thus
`failed to show the existence of a case or controversy based on pre-Agreement communications.
`C. No Case or Controversy Exists Even When Considering Post-Agreement
`Communications.
`As explained in R2’s Motion, even if the Court considers post-Agreement communications
`between the parties, there is no case or controversy. Allegiant’s argument to the contrary focuses almost
`exclusively on vilifying R2 and emphasizing R2’s litigation against other parties. But the Federal Circuit
`has held that litigation against other parties is not dispositive. See Innovative Therapies, 599 F.3d at
`1382; Prasco, 537 F.3d at 1341. And the other factors, many of which Allegiant ignores, show that there
`is no case or controversy.
`Allegiant wholly ignores that the parties’ Agreement itself demonstrates that there is no case or
`controversy. R2 proposed and entered into the Agreement with Allegiant for express purpose of “good
`faith licensing negotiations.” ECF 1.4, ¶ 1. To that end, the parties agreed that neither would “use or
`disclose Confidential Information . . . for any reason including . . . as a basis for a declaratory judgment
`action . . . or for any purpose except to carry out the Discussions.” Id., ¶ 3. The Agreement was therefore
`intended to prevent litigation between the parties, weighing heavily against the existence of a case or
`controversy. See ECF 28 (Mot.) at 6, 9.
`The other factors reinforce the lack of jurisdiction. Allegiant does not dispute that it sought to
`manufacture jurisdiction (factor 13), that
` (factor 3),
`that
` (factor 1), that R2 and Allegiant have never litigated
`before (factor 4), that
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`REPLY IN SUPPORT OF MOTION TO DISMISS
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`CASE NO: 2:22-CV-00828-CDS-BNW
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`Case 2:22-cv-00828-CDS-BNW Document 31 Filed 08/04/22 Page 12 of 15
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` (factor 11), or that R2 has a significant licensing business (factor 8). See ECF 28 (Mot.) at 11-
`13. And despite Allegiant’s claims to the contrary,
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` ECF 26.3 (Confidential Discussions between R2 and Allegiant) at 2.
`Allegiant’s attempts to distinguish R2’s authorities are weak. While Allegiant is correct that
`Wright Medical Technology was decided under the “reasonable apprehension of suit” standard (a fact that
`R2 expressly acknowledged in its Motion), it cannot be ignored that the court in Wright held that a
`confidentiality agreement is “fatal[ly] inconsistent[]” with an assertion of case or controversy. Wright
`Med. Tech., Inc. v. Osteonics Corp., 914 F. Supp. 1524, 1531 (W.D. Tenn. 1995). This holding is
`consistent with Federal Circuit decisions recognizing the importance of NDAs in a jurisdictional analysis.
`See SanDisk, 480 F.3d 1372, 1375 n.1; 3M, 673 F.3d 1372 n.2, 1377-78. While Allegiant attempts to
`distinguish the facts of the other cases upon which R2 relies, it does not dispute the propositions for
`which R2 cited them. As R2 explained, Innovative Therapies and Prasco both held that a patent owner’s
`litigation is not dispositive of whether jurisdiction exists. See Innovative Therapies, 599 F.3d at 1382;
`Prasco, 537 F.3d at 1341. Bridgelux found subject-matter jurisdiction lacking where there was no
`indication that the patent owner “ever specifically identified” the declaratory judgment plaintiff as having
`infringed specific patents. Bridgelux, Inc. v. Cree, Inc., No. C 06-6495 PJH, 2007 U.S. Dist. LEXIS
`53137, at *24 (N.D. Cal. July 9, 2007). Wooster found no case or controversy despite the fact that the
`parties exchanged a “detailed analysis” regarding non-infringement of allowed claims on a specific
`patent. Wooster Brush Co. v. Bercom Int’l, LLC, No. 5:06CV474, 2008 U.S. Dist. LEXIS 29971, at *10
`(N.D. Ohio Apr. 11, 2008). And Cepheid found no subject-matter jurisdiction even though the defendant
`identified specific patents that it claimed were “necessary for certain of [the plaintiff’s] products” and the
`defendant imposed a response deadline that the plaintiff missed. Cepheid, 2013 U.S. Dist. LEXIS 7446 at
`*29-33. These cases confirm that Allegiant’s Complaint should be dismissed.
`III. THE COURT SHOULD EXERCISE ITS DISCRETION TO DISMISS THIS CASE.
`Regardless of whether the Court could exercise subject-matter jurisdiction, it should decline to do
`so. As thoroughly discussed herein and in R2’s Motion, Allegiant breached the Agreement. See ECF 28
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`REPLY IN SUPPORT OF MOTION TO DISMISS
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`Case 2:22-cv-00828-CDS-BNW Document 31 Filed 08/04/22 Page 13 of 15
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`(Mot.) at 13-14. Allegiant has not disputed that its Complaint and Response rely on Discussions between
`the parties, which the Agreement defines as Confidential Information. Allegiant also does not dispute that
`it attempted to manufacture a case or controversy. Allegiant further does not dispute that it refused to
`dismiss this lawsuit unless R2 gives it a covenant not to sue. The evidence thus shows that (1) Allegiant
`obtained Confidential Information under the Agreement, (2) Allegiant used Confidential Information as a
`basis for this declaratory judgment action, and (3) Allegiant is now using the action as leverage to obtain
`what amounts to a royalty-free license. This type of behavior is exactly what the Federal Circuit has
`admonished. EMC Corp. v. Norand Corp., 89 F.3d 807, 815 (Fed. Cir. 1996) (“[T]he district court could
`properly view the declaratory judgment complaint as a tactical measure filed in order to improve EMC’s
`posture in the ongoing negotiations—not a purpose that the Declaratory Judgment Act was designed to
`serve.”). It is Allegiant, not R2, that is “playing games.” ECF 29 (Resp.) at 19.
`This case is unlike Arrowhead, on which Allegiant relies. See id. at 18. In Arrowhead, the
`plaintiff was interfering with the plaintiff’s customer relationships by threatening patent infringement
`lawsuits against the plaintiff’s customers, and the patent owner sent a number of threating cease-and-
`desist letters to the plaintiff. Arrowhead Indus. Water v. Ecolochem, Inc., 846 F.2d 731, 733-34 (Fed. Cir.
`1988). The court was thus admonishing the patent owner’s “scare-the-customer-and-run tactics.” Id. at
`735. Unlike here, the parties in Arrowhead had never engaged in licensing negotiations, let alone entered
`into an agreement that limited the parties’ ability to file declaratory-judgment actions. Once again, the
`parties’ Agreement makes all the difference.
`THERE IS NO PERSONAL JURISDICTION OVER R2 IN NEVADA.
`IV.
`Finally, Allegiant has not shown that the Court has personal jurisdiction over R2. Allegiant does
`not contest that the Court does not have general jurisdiction over R2, arguing only that the “court has
`specific personal jurisdiction over R2.” ECF 29 (Resp.) at 19. Allegiant argues that “R2’s
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`communications and contracting activities” are sufficient to establish personal jurisdiction, but it fails to
`substantively respond to R2’s argument that the Court should exclude all post-Agreement
`communications from its analysis. Id. at 20. And the only pre-Agreement interactions with Allegiant that
`R2 had were general communications relating to licensing and communications negotiating the
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