Case 2:19-cv-04980-AB-FFM Document 113 Filed 01/23/20 Page 1 of 9 Page ID #:1693
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`Case No. 2:19-cv-04980-AB (FFMx)
`ORDER GRANTING NOMADIX’S
`MOTION FOR SUMMARY
`JUDGMENT [DKT. NO. 66]
`
`Plaintiff,
`
`NOMADIX, INC.,
`
`v.
`
`GUEST-TEK INTERACTIVE
`ENTERTAINMENT LTD.,
`
`Defendant.
`
`I. INTRODUCTION
`Before the Court is Plaintiff Nomadix’s (“Nomadix”) motion for summary
`judgment. (Dkt. No. 66.) Defendant Guest-Tek Interactive Entertainment Ltd.
`(“Guest-Tek”) has filed an opposition to Nomadix’s motion. (Dkt. No. 80.) The Court
`heard oral argument regarding Nomadix’s motion on January 17, 2020. For the
`reasons stated below, the Court GRANTS Nomadix’s motion. The Court ORDERS
`the parties to file a proposed judgment within ten (10) days of the date of issuance of
`this order.
`II. BACKGROUND
`This case arises from the alleged breach of a forum selection clause negotiated
`
`1.
`
`NOMADIX 2009
` Guest Tek v. Nomadix
`IPR2019-00253
`
`

`

`Case 2:19-cv-04980-AB-FFM Document 113 Filed 01/23/20 Page 2 of 9 Page ID #:1694
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`between the parties.
`
`In 2009, Nomadix filed suit in this district against Guest-Tek and additional
`defendants for infringement of several Nomadix patents. (SUF 1.) Guest-Tek filed
`counterclaims for declaratory judgment of non-infringement and invalidity of those
`Nomadix patents. (SUF 2.) In 2010, the parties settled that lawsuit. (SUF3.)
`
`As part of that settlement, Nomadix and Guest-Tek entered into a Confidential
`License Agreement on December 30, 2010 (the “License Agreement”). (SUF 4.) The
`License Agreement grants Guest-Tek a limited, non-exclusive license under several
`Nomadix patents in exchange for ongoing quarterly royalty payments. (SUF 5.)
`
`Section 8.4 of the License Agreement states as follows:
`8.4 Choice Of Law. This Agreement shall be governed by, construed
`and enforced in accordance with the laws of the State of California,
`without application of that state’s choice-of-law law. All other rules of
`contract interpretation under California law shall apply to the
`interpretation of this Agreement. (SUF 6.)
`
`Section 8.10 of the License Agreement states as follows:
`8.10 Forum Selection. Subject to clauses 7.1 and 7.2, all disputes
`arising out of or in connection with this Agreement shall be brought in
`the United States District Court for the Central District of California
`(“District Court”) and the Parties each consent to the personal
`jurisdiction of that court. The Parties each waive all objections to venue
`and all forum non conveniens objections with respect to such District
`Court and the Parties shall not contest the personal jurisdiction of such
`District Court or that venue is proper in such District Court. To the
`extent that any dispute arising out of this Agreement may not be
`brought in the District Court, such dispute shall be brought in a
`California Superior Court in Los Angeles County or Orange County
`(“Superior Court”) and the Parties each consent to the personal
`jurisdiction of such Superior Court. The Parties each waive all
`objections and all forum non conveniens objections with respect to such
`Superior Court and the Parties shall not contest the jurisdiction of such
`Superior Court or that venue is proper in such Superior Court, except
`that any Party may make any objection favoring litigation in the District
`Court. The Parties agree that the prevailing Party in such District Court
`or Superior Court action will be entitled to reimbursement by the losing
`2.
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`NOMADIX 2009
` Guest Tek v. Nomadix
`IPR2019-00253
`
`

`

`Case 2:19-cv-04980-AB-FFM Document 113 Filed 01/23/20 Page 3 of 9 Page ID #:1695
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`Party for any and all legal fees and costs incurred by the prevailing
`Party in preparing for and conducting such action. (SUF 7.)
`
`Section 2.10 of the License Agreement states as follows:
`2.10 Covenant Not To Challenge Licensed Patents. Each Guest-Tek
`entity withdraws any allegations that any of the Licensed Patents, the
`Bandwidth Management Patents, and U.S. Patent No. 6,788,110 is
`invalid or unenforceable. Each Guest-Tek Entity agrees that it will not,
`during the time period between the Effective Date and the date that the
`License Agreement expires or is otherwise terminated, challenge the
`validity or enforceability, or seek a declaration of noninfringement, of
`any of the Licensed Patents, Bandwidth Management Patents, and U.S.
`Patent No. 6,788,110, whether before a court, before the U.S. Patent
`and Trademark Office, or in any other manner . . . . The Guest-Tek
`Entities shall not be bound to the provisions of this clause 2.10 in the
`event that Nomadix later asserts any of the Licensed Patents, the
`Bandwidth Management Patents, or U.S. Patent No. 6,788,110 against
`any Guest-Tek Entity. (Dkt. No. 72-1 at 11.)
`
`Nomadix filed suit on October 28, 2016 against Guest-Tek in this Court for
`breach of the License Agreement. (SUF 8.) On September 5, 2018, Guest-Tek
`petitioned the U.S. Patent Trial and Appeal Board (“PTAB”) for inter partes review
`of the ‘899 patent, challenging the validity of claims of that patent and naming
`Nomadix as the Patent Owner. On September 7, 2018, Guest-Tek petitioned the
`PTAB for inter partes review of the ‘266 patent, challenging the validity of claims of
`that patent and naming Nomadix as the Patent Owner. On November 12, 2018,
`Guest-Tek petitioned the PTAB for inter partes review of Nomadix’s U.S. Patent No.
`7,953,857 (the “‘857 patent”), challenging the validity of claims of that patent and
`naming Nomadix as the Patent Owner. Also on November 12, 2018, Guest-Tek
`petitioned the PTAB for inter partes review of Nomadix’s U.S. Patent No. 8,626,922
`(the “‘922 patent”), challenging the validity of claims of that patent and naming
`Nomadix as the Patent Owner. On June 18, 2019, Guest-Tek petitioned the PTAB for
`inter partes review of Nomadix’s U.S. Patent No. 8,606,917 (the “‘917 patent”),
`
`3.
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`NOMADIX 2009
` Guest Tek v. Nomadix
`IPR2019-00253
`
`

`

`Case 2:19-cv-04980-AB-FFM Document 113 Filed 01/23/20 Page 4 of 9 Page ID #:1696
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`challenging the validity of claims of that patent and naming Nomadix as the Patent
`Owner. The ‘266, ‘899, ‘857, ‘922, and ‘917 patents are all Licensed Patents under
`the License Agreement. (SUF 9–14.)
`Guest-Tek contends that the cancellation of claims Guest-Tek sought or seeks
`in cases IPR 2018-01660, IPR2018-01668, IPR 2019-00211, and IRP2019-00253
`would give Guest-Tek a defense to Nomadix’s claim against Guest-Tek for breach of
`Guest-Tek’s royalty obligations under the License Agreement. (SUF 15.)
`Nomadix brings it present motion for summary judgment, arguing that Guest-
`Tek’s PTAB filings breach the License Agreement’s forum selection clause.
`
`III. LEGAL STANDARD
`A motion for summary judgment must be granted when “the pleadings, the
`discovery and disclosure materials on file, and any affidavits show that there is no
`genuine issue as to any material fact and that the movant is entitled to judgment as a
`matter of law.” Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
`247–48 (1986). The moving party bears the initial burden of identifying the elements
`of the claim or defense and evidence that it believes demonstrates the absence of an
`issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the
`nonmoving party will have the burden of proof at trial, the movant can prevail merely
`by pointing out that there is an absence of evidence to support the nonmoving party’s
`case. Id. The nonmoving party then “must set forth specific facts showing that there is
`a genuine issue for trial.” Anderson, 477 U.S. at 248.
`“Where the record taken as a whole could not lead a rational trier of fact to find
`for the nonmoving party, there is no ‘genuine issue for trial.’” Matsushita Elec. Indus.
`Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The Court must draw all
`reasonable inferences in the nonmoving party’s favor. In re Oracle Corp. Sec. Litig.,
`627 F.3d 376, 387 (9th Cir. 2010) (citing Anderson, 477 U.S. at 255). Nevertheless,
`inferences are not drawn out of thin air, and it is the nonmoving party’s obligation to
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`4.
`
`NOMADIX 2009
` Guest Tek v. Nomadix
`IPR2019-00253
`
`

`

`Case 2:19-cv-04980-AB-FFM Document 113 Filed 01/23/20 Page 5 of 9 Page ID #:1697
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`produce a factual predicate from which the inference may be drawn. Richards v. Nielsen
`Freight Lines, 602 F. Supp. 1224, 1244–45 (E.D. Cal. 1985), aff’d, 810 F.2d 898.
`“[M]ere disagreement or the bald assertion that a genuine issue of material fact exists”
`does not preclude summary judgment.” Harper v. Wallingford, 877 F.2d 728, 731 (9th
`Cir. 1989).
`IV. DISCUSSION
`1. Guest-Tek’s PTAB petitions breach the forum selection clause
`“The ‘enforcement of valid forum-selection clauses, bargained for by the
`
`parties, protects their legitimate expectations and furthers vital interests of the justice
`system.’” Atl. Marine Constr. Co. v. U.S. Dist. Court for W. Dist. of Tex., 571 U.S. 49,
`63 (2013) (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 33 (1988)
`(Kennedy, J., concurring). Where the language of a contract is clear and explicit, it
`governs. Cal. Civ. Code. § 1638.
`
`The Forum Selection Clause negotiated between the parties applies to “all
`disputes arising out of or in connection with” the License Agreement. (Dkt. No. 72-1
`at 11.) Forum selection clauses covering disputes “in connection with” a particular
`agreement “apply to any disputes that reference the agreement or have some ‘logical
`or causal connection’ to the agreement.” Yei A. Sun v. Advanced China Healthcare,
`Inc., 901 F.3d 1081, 1086 (9th Cir. 2018) (quoting John Wyeth & Bro. Ltd. v. CIGNA
`Int’l Corp., 119 F.3d 1070, 1074 (3d Cir. 1997)). Here, Guest-Tek’s PTAB filings
`have some logical or causal connection to the License Agreement. In particular, if
`Guest-Tek successfully invalidates the patents at issue in the PTAB proceedings, that
`would arguably give Guest-Tek a defense to Nomadix’s claim for breach of Guest-
`Tek’s royalty obligations under the License Agreement. See also Dodocase VR, Inc. v.
`MerchSource, LLC, 767 F. App’x. 930, 934–35 (Fed. Cir. 2019) (concluding that inter
`partes review petitions constitute a dispute that arises out of or under a license
`agreement); see also Texas Instruments Inc. v. Tessera, Inc., 231 F.3d 1325, 1331
`(Fed. Cir. 2000) (concluding that International Trade Commission proceedings
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`5.
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`NOMADIX 2009
` Guest Tek v. Nomadix
`IPR2019-00253
`
`

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`Case 2:19-cv-04980-AB-FFM Document 113 Filed 01/23/20 Page 6 of 9 Page ID #:1698
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`initiated after execution of a license agreement arose from, under, out of or in
`connection with the license agreement.). Because the forum selection clause
`unambiguously required such a dispute to be filed in the Central District of California,
`and Guest-Tek filed that dispute with the PTAB, Guest-Tek has breached the forum
`selection clause.
`None of Guest-Tek’s arguments in opposition to this conclusion are availing.
`First, Guest-Tek argues that the more relevant provision of the License Agreement is
`the No-Challenge Provision, Section 2.10. Section 2.10 prohibits Guest-Tek from
`“challeng[ing] the validity or enforceability [of certain Nomadix patents], whether
`before a court, before the U.S. Patent and Trademark Office, or in any other manner.”
`See supra at 3. Section 2.10 also provides that Guest-Tek “shall not be bound to the
`provisions of this clause 2.10 in the event that Nomadix later asserts any of the
`[Licensed Patents]” against Guest-Tek. Id. According to Guest-Tek’s reasoning, if the
`forum selection clause prohibited Guest-Tek from filing inter partes review petitions
`with the PTAB, there would be no reason for the No-Challenge Provision to allow
`challenges “before the U.S. Patent and Trademark Office” in some circumstances.
`However, as Nomadix succinctly argues, the No-Challenge Provision addresses which
`issues can be contested in a dispute, regardless of where the dispute is brought. The
`forum selection clause, by contrast, address where disputes arising out of or in
`connection with the License Agreement can be brought. (See Dkt. No. 83 at 3–4.)
`Because the No-Challenge Provision does not grant Guest-Tek the right to bring
`claims in a forum outside of the Central District of California, the two provisions are
`not in tension.1
`Second, Guest-Tek argues that because inter partes review proceedings are
`agency proceedings, Yei A. Sun is inapposite. However, Yei A. Sun provides a
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`1 Because the Court concludes that Section 2.10 is not in tension with the forum
`selection clause, Guest-Tek’s evidence concerning prior drafts of that section is
`unavailing.
`6.
`
`NOMADIX 2009
` Guest Tek v. Nomadix
`IPR2019-00253
`
`

`

`Case 2:19-cv-04980-AB-FFM Document 113 Filed 01/23/20 Page 7 of 9 Page ID #:1699
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`linguistic framework for interpreting forum selection clauses covering disputes “in
`connection with” a particular agreement. See Yei A. Sun, 901 F.3d at 1086. Guest-Tek
`provides no argument as to why this framework should not govern in the context of a
`forum selection clause that applies to an agency proceeding, as opposed to litigation.
`
`Finally, Guest-Tek argues that the parties could not have intended the forum
`selection clause to apply to disputes between the parties in inter partes review
`petitions, because that procedure was not in existence at the time of contract
`formation. However, the forum selection clause unambiguously applies to “all
`disputes arising out of or in connection with this Agreement.” See supra at 2–3
`(emphasis added). There is no indication in the License Agreement that the parties
`intended to limit the forum-selection clause’s prohibition to only those fora then in
`existence.2
`
`Because the forum selection clause unambiguously prohibited Guest-Tek from
`filing inter partes review petitions in the PTAB, Guest-Tek’s filings have breached
`that clause of the License Agreement.
`2. Guest-Tek has not raised a genuine dispute with respect to equitable
`estoppel
`
`Guest-Tek argues that equitable estoppel prohibits Nomadix from prevailing on
`summary judgment because Nomadix previously represented that it would not sue
`
`
` The Court finds Guest-Tek’s reliance on Alexsam, Inc. v. Mastercard Int’l Inc., No.
`15-cv-2799, 2018 WL 7063137, at *5 (E.D.N.Y. Oct. 16, 2018) unavailing for several
`reasons. First, Alexsam applied the Second Circuit’s framework for determining the
`validity of the forum selection clause, rather than controlling Ninth Circuit precedent
`that this Court must follow in determining whether a dispute is covered by a forum
`selection clause. See Yei A. Sun, 901 F.3d at 1086. Second, Guest-Tek has not
`challenged the validity of the forum selection clause on public policy grounds as the
`parties did in Alexsam. And finally, as Nomadix notes, the Covered Business Method
`patent challenge at issue in Alexsam did not have a pre-America Invents Act
`counterpart, whereas the inter partes review proceedings at issue here did have a pre-
`America Invests Act counterpart (reexamination proceedings) that was in existence at
`the time the parties entered into the License Agreement. (See Dkt. No. 83 at 9–10).
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`7.
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`NOMADIX 2009
` Guest Tek v. Nomadix
`IPR2019-00253
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`

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`Case 2:19-cv-04980-AB-FFM Document 113 Filed 01/23/20 Page 8 of 9 Page ID #:1700
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`Guest-Tek for breach of contract. (Dkt. No. 80 at 10–11.) However, Guest-Tek has
`failed to identify any evidence in support of this alleged representation by Nomadix.
`See Harper, 877 F.2d at 731 (“[M]ere disagreement or the bald assertion that a genuine
`issue of material fact exists” does not preclude summary judgment.”). The Court
`therefore finds this argument unavailing.
`3. Guest-Tek has not shown that waiver or forfeiture are applicable
`defenses
`
`Guest-Tek also argues that Nomadix should be prohibited from asserting its
`rights under the forum selection clause because Nomadix’s eighteen-month delay
`between the first inter partes review petition and this case constitutes either a waiver
`or a forfeiture of Nomadix’s rights. (Dkt. No. 80 at 9–10.) However, with respect to
`waiver, the License Agreement expressly provides that “[n]o waiver of any breach of
`this [License Agreement] shall be binding unless in writing and signed by any Party
`waiving the breach.” (Dkt. No. 72-1 at 20.) Because Guest-Tek has failed to identify
`any evidence that Nomadix waived its right to enforce the forum selection clause in
`writing, the Court finds this argument unavailing.
`
`Second, with respect to forfeiture, Guest-Tek relies on criminal procedure
`authority delineating the differences between waiver and forfeiture of constitutional
`rights. See United States v. Olano, 507 U.S. 725, 733 (1993). However, even
`assuming that forfeiture—as defined as the failure to timely assert a right—applies to
`this action under California contract law, Guest-Tek has failed to show that Nomadix
`failed to timely assert its rights by bringing this claim outside of the statute of
`limitations. See Cal. Code. Civ. Proc. § 337(a) (the statute of limitations for a breach
`of contract claim is four years).
`
`Because Guest-Tek has failed to show that the defenses of waiver or forfeiture
`apply, the Court finds these arguments unavailing in opposition to summary judgment.
`//
`//
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`8.
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`NOMADIX 2009
` Guest Tek v. Nomadix
`IPR2019-00253
`
`

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`Case 2:19-cv-04980-AB-FFM Document 113 Filed 01/23/20 Page 9 of 9 Page ID #:1701
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`V. CONCLUSION
`For the reasons stated above, the Court GRANTS Nomadix’s motion for
`summary judgment. The parties are ORDERED to file a proposed judgment within
`ten (10) days of the date of issuance of this order.
`IT IS SO ORDERED.
`
`Dated: January 23, 2020
`
`_______________________________________
`HONORABLE ANDRÉ BIROTTE JR.
`UNITED STATES DISTRICT COURT JUDGE
`
`9.
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`NOMADIX 2009
` Guest Tek v. Nomadix
`IPR2019-00253
`
`