Case 6:22-cv-00634-ADA-DTG Document 34 Filed 12/23/22 Page 1 of 12
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`CLOUDOFCHANGE, LLC,
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`Plaintiff,
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`Civil Action No. 6:22-CV-00634-ADA-DTG
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`JURY TRIAL DEMANDED
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`v.
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`CLOVER NETWORK, INC.,
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`Defendant.
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`CLOVER NETWORK, LLC’S OPPOSED MOTION FOR PROTECTIVE ORDER
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`Case 6:22-cv-00634-ADA-DTG Document 34 Filed 12/23/22 Page 2 of 12
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`I.
`Defendant Clover Network, LLC (“Clover”)1 moves for a protective order precluding
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`INTRODUCTION
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`Plaintiff CloudofChange, LLC from seeking venue discovery, including but not limited to two
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`recently-noticed depositions, related to Clover products that were not accused or otherwise
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`identified by Plaintiff until after Clover’s Motion to Transfer was filed. Plaintiff thus accused the
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`new products only after Clover adduced overwhelming evidence showing that the originally
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`accused Clover products and this case have no connection with the Western District of Texas. See
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`Dkt. 18 (Motion to Transfer); see also Ex. 1-A and 1-B (Deposition Notices).
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`After conducting a thorough investigation of the Accused Products identified in the original
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`Complaint and Plaintiff’s Preliminary Infringement Contentions, Clover determined that all of
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`those products were researched, designed, and developed at Clover’s headquarters in Sunnyvale,
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`California. Clover therefore moved to transfer this case to the Northern District of California
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`pursuant to 28 U.S.C. § 1404(a). See id. Over a month later, Plaintiff amended its Complaint and
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`Preliminary Infringement Contentions to identify Clover Sport, a product developed and designed
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`in Austin Texas, as an additional accused product. See Dkt. 24 (Amended Complaint); Ex. 1-C
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`(12/12/22 Amended Infringement Contentions). But Plaintiff does nothing more than identify
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`Clover Sport in those amendments—it does not allege or otherwise state how the new accused
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`product supposedly infringes the Asserted Patents. The timing of the addition of Clover Sport as
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`an accused product, the absence of new factual allegations in the Amended Complaint or details
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`regarding Clover Sport in the amended contentions, and Plaintiff’s recent barrage of discovery
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`focused on Clover Sport reflect a clear strategy “designed to defeat transfer to a more convenient
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`1 Clover Network, Inc. converted to Clover Network, LLC in 2021, before Plaintiff filed this
`lawsuit.
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`Case 6:22-cv-00634-ADA-DTG Document 34 Filed 12/23/22 Page 3 of 12
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`venue.” In re Amazon.com, Inc., No. 22-157, 2022 WL 17688072, at *4 (Fed. Cir. Dec. 15, 2022)
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`(emphasis added) (citation omitted); see also Phoji, Inc. v. Atlassian, Inc., 6:21-CV-00888-ADA,
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`2022 WL 2392876, at *3 (W.D. Tex. July 1, 2022) (affording little to no weight to forum contacts
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`tied only to a product accused after a motion to transfer was filed).
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`Plaintiff should not be permitted to conduct a fishing expedition into a previously
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`un-accused product in an attempt to manipulate the evidence on the convenience of this forum.
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`Clover therefore seeks a protective order limiting the scope of transfer discovery to the Clover
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`products that were accused at the time Clover moved to transfer.
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`A.
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`The Original Accused Clover Products
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`II.
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`BACKGROUND
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`Plaintiff filed this lawsuit on June 17, 2022 after filing similar suits against two other
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`entities2 for allegedly infringing the same three patents at issue in this case (“Asserted Patents”),3
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`which are generally directed to a web-based POS-building system. Dkt. 1 at ¶¶ 2, 14. The original
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`Complaint identifies four Clover point-of-sale products as the accused products—the (1) Clover
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`Station Solo, (2) Clover Station Duo, (3) Clover Mini, and (4) Clover Dashboard (collectively,
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`“Original Accused Products”). Id. at ¶ 8. Notably absent in the Complaint are factual allegations
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`that, if true, would show that the Original Accused Products or Plaintiff’s infringement claims
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`have any particular connection to this District relevant to 28 U.S.C. §1404(a) convenience issues.
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`See id.
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`2 See CloudofChange, LLC v. NCR Corp., 6:19-cv-00513-ADA (filed Aug. 30, 2019) (“NCR
`Action”); CloudofChange, LLC v. Lightspeed POS Inc., 6:21-cv-01102-ADA (filed Oct. 22, 2021).
`3 The Asserted Patents are United States Patent Nos. 9,400,640 (“’640 Patent”); 10,083,012 (“’012
`Patent”); and 11,226,793 (“’793 Patent”) (“Asserted Patents”).
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`Case 6:22-cv-00634-ADA-DTG Document 34 Filed 12/23/22 Page 4 of 12
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`On September 30, 2022, Plaintiff served Preliminary Infringement Contentions (“PICs”)
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`addressing only the four Original Accused Products Ex. 1-C. Plaintiff’s PICs admittedly rely on
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`“publicly available information” and detail material from Clover’s website, blog entries, and
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`webinars concerning the Original Accused Products. Id. Though information pertaining to Clover
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`Sport was also “publicly available,” Clover Sport was not identified in Plaintiff’s PICs. See id.
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`B.
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`Clover’s Venue Investigation and Motion to Transfer4
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`Because Plaintiff “fail[ed] to allege a single fact in support of” venue in this District, Clover
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`sought an extension to respond to Plaintiff’s Complaint so that it had sufficient time to investigate
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`venue. See Dkt. 8 (Clover’s 7/11/22 Opposed Motion for Extension of Time to Respond to the
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`Complaint). But Plaintiff would only agree to such an extension if Clover bartered away its right
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`to seek transfer under 28 U.S.C. § 1404(a), which Clover was unwilling to do. Id. at 2. Thus,
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`Clover filed an opposed motion for an extension, and this Court granted Clover an additional thirty
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`days to respond to the Complaint. See July 12, 2022 Text Order.
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`After filing a Rule 12 motion in response to the Complaint, Clover continued its venue
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`investigation and confirmed that the development and design of all of the Original Accused
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`Products was based at its Sunnyvale, California headquarters, and no Clover personnel in Texas
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`worked on any accused feature of those products. Clover therefore moved to transfer this case to
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`the Northern District of California under 28 U.S.C. § 1404(a) on October 28, 2022. Dkt. 18. Clover
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`supported its Motion with ample evidence, including the following declarations of senior-level
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`Clover personnel based at Clover’s Sunnyvale, California headquarters, demonstrating that the
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`4 In the interim, Clover also filed a Motion to Dismiss the Original Complaint that has been fully
`briefed. Dkt. 9; Dkt. 11; Dkt. 12. Notably, Plaintiff did not amend its Complaint in response to that
`Motion; it amended its Complaint only after Clover filed its Motion to Transfer.
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`Case 6:22-cv-00634-ADA-DTG Document 34 Filed 12/23/22 Page 5 of 12
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`witness with relevant knowledge and sources of proof related to the Original Accused Products
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`are in NDCA rather than this District:
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`1. Clover’s Sr. Vice President, Product and Design, Ellen Linardi;
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`2. Clover’s Sr. Vice President, Head of Engineering, Vinayak Kagalkar; and
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`3. Clover’s Sr. Director of Software Engineering, Hunter Novak.
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`Specifically, these declarations establish that “Clover researched, designed, developed, and
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`launched the Accused Products exclusively at its Sunnyvale headquarters, where most of that work
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`continues to take place today” and no witnesses, evidence, or other activities relevant to the transfer
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`analysis are in this District. Dkt. 18 at 2.
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`C.
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`The Post-Transfer Motion Amendments Accusing Clover Sport For The First Time
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`Faced with the overwhelming evidence relating to the Original Accused Products
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`supporting Clover’s transfer motion, Plaintiff amended both its Complaint and PICs to identify
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`“(v) Clover Sport (formerly Bypass)”5 as an accused product for the first time. Dkt. 24, ¶ 7; see
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`also id. at ¶ 8.
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`Unlike the Original Accused Products, Clover Sport was and continues to be designed and
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`developed in Austin, Texas—a fact that makes clear the purpose of Plaintiff’s amendments. See
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`Ex. 2 (Declaration of Kevin Albert). And Plaintiff made no attempt to disguise the fact that
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`accusing Clover Sport was a strategy designed to support venue in this District because it even
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`supplemented its venue allegations in the Amended Complaint to include allegations regarding the
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`“Clover Sport business unit” in Austin. Dkt. 24 at ¶¶ 17-18.6 However, aside from accusing Clover
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`5 The Amended Complaint also adds “(vi) Clover Web Dashboard, Clover Dashboard, and other
`back office–type applications or software that operate with one or more of these products” as an
`accused product, but Web Dashboard was referenced in the original Complaint. Dkt. 24 at ¶ 7.
`6 Although not the subject of this Motion, transfer remains appropriate to the NDCA even after
`the addition of Clover Sport to this case.
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`Case 6:22-cv-00634-ADA-DTG Document 34 Filed 12/23/22 Page 6 of 12
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`Sport and attempting to bolster its venue allegations, Plaintiff did not amend the allegations
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`supporting its claims to address Clover Sport in the Amended Complaint. See id. In fact, Plaintiff’s
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`Amended Complaint contains no allegations pertaining to how Clover Sport works or why that
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`product purportedly infringes the Asserted Patents. See id. Plaintiff’s Amended Preliminary
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`Infringement Contentions (“Amended PICs”) likewise do nothing more than identify Clover Sport
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`by adding it to the list of Accused Products, Ex. 1-D (Amended PICs), and they do not come close
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`to identifying how Clover Sport allegedly infringes. See id.
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`Though Plaintiff’s Amended PICs claim that Plaintiff amended now because it only
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`recently learned of “Clover Sport in discovery,” that claim is belied by citations throughout the
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`Amended PICs to publicly-available information related to Clover Sport—the same information
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`that was available to Plaintiff since the inception of this litigation. Id. at 1.
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`D.
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`Discovery Targeting The Clover Product Accused After Clover Moved to Transfer
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`The same day Plaintiff served the Amended Complaint and Amended PICs, it also served
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`second sets of venue discovery that include requests focused on Clover Sport. Ex. 1-E (Plaintiff’s
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`Second Set of Requests for Production of Documents) and 1-F (Plaintiff’s Second Set of
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`Interrogatories). Plaintiff then noticed the 30(b)(1) depositions of Adam Deane and Stephen
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`Harker for December 28, 2022 “for the purpose of venue and jurisdictional discovery.” See Exs.
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`1-A and 1-B.
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`Neither Stephen Harker nor Adam Deane work on any Original Accused Product; rather
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`they are both Senior Managers of Software Engineering for the Clover Sport product in Austin.
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`See Ex. 2 at ¶ 4; see also Dkt. 18 (explaining that no Clover personnel who work on any accused
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`feature of the Original Accused Products are based in WDTX). Thus, the purpose of the
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`depositions of Mr. Harker and Mr. Deane seems either to establish that Clover Sport is developed
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`Case 6:22-cv-00634-ADA-DTG Document 34 Filed 12/23/22 Page 7 of 12
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`in Austin (which Mr. Albert’s declaration states) or to obtain merits discovery on how Clover Sport
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`operates.
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`Clover now seeks a protective order to preclude the noticed depositions of Mr. Harker and
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`Mr. Deane and other discovery related to Clover Sport. As set forth below, that evidence is unduly
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`burdensome and disproportionate to the venue issues at stake given this Court’s duty to guard
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`against efforts to manipulate venue.
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`III.
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`LAW AND ARGUMENT
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`A.
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`This Court Has Discretion To Grant A Protective Order Precluding Discovery
`Related To Clover Sport.
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`This Court has broad discretion to quash discovery and issue a protective order where, as
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`here, (1) a party seeks information not relevant or disproportionate to the “issues at stake”; (2) the
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`“burden or expense of the proposed discovery outweighs its likely benefit”; or (4) the discovery
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`subjects “a person to undue burden.” Fed. R. Civ. P. 26(b)(1) and (c)(1)(D); see Wiwa v. Royal
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`Dutch Petroleum Co., 392 F.3d 812, 818 (5th Cir. 2004); Landry v. Air Line Pilots Ass’n Intern.
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`AFL-CIO, 901 F.2d 404, 435-36 (5th Cir. 1990). To determine whether a protective order is
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`warranted, the Fifth Circuit has explained that courts should consider “(1) the relevance of the
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`information requested; (2) the need of the party for the documents [or discovery]; (3) the breadth
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`of the [discovery] request; (4) the time period covered by the request; (5) the particularity with
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`which the party describes the requested documents; and (5) “the burden imposed.” Wiwa, 392 F.3d
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`at 818. If discovery is irrelevant, unnecessary, or disproportionate to the issues in dispute, the
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`discovery is necessarily “unduly expensive and burdensome” and should be quashed. Landry, 901
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`F.2d at 435-36.
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`B.
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`Because This Court Must “Guard Against Manipulative Measures Designed To
`Defeat Transfer,” Evidence Relating to Clover Sport Should Not Be Considered To
`Assess §1404(a) Convenience.
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`Though neither the merits of Plaintiff’s infringement claims relating to Clover Sport nor
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`the merits of Clover’s Motion to Transfer are before this Court at this point, the scope of the limited
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`transfer discovery that is permissible hinges on the transfer analysis that this Court will soon
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`conduct to decide Clover’s Motion to Transfer. Thus, whether transfer discovery related to Clover
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`Sport is relevant, overbroad, and unduly burdensome depends on the extent to which this Court
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`will consider evidence regarding Clover Sport to assess the §1404(a) convenience issues.
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`This Court and the Federal Circuit have repeatedly held that venue is determined “at the
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`date of filing” and when a motion to transfer is filed. In fact, just last week the Federal Circuit
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`refused to consider “the propriety of venue as to … late-added [post-motion-to-transfer-added]
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`parties” because “venue is determined at the date of filing.” In re Amazon, 2022 WL 176688072,
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`at *3; In re NetScout Sys., Inc., No. 2021-173, 2021 WL 4771756, at *5 (Fed. Cir. Oct. 13, 2021);
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`Hoover Grp., Inc. v. Custom Metalcraft, Inc., 84 F.3d 1408, 1409 (Fed. Cir. 1996); Phoji, 2022
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`WL 2392876, at *3 (Albright, J.); Nitride Semiconductors Co. v. Lite-On Tech. Corp., No. W-21-
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`CV-183-ADA, 2022 WL 358164, at *2 (W.D. Tex. Feb. 7, 2022) (Albright, J.). Accordingly,
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`Clover’s Motion to Transfer demonstrated that the Original Accused Products identified in
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`Plaintiff’s Complaint and PICs were all designed and developed in the NDCA. Plaintiff added
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`Clover Sport as an Accused Product only after the “date of filing” and only after Clover Sport
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`filed its Motion to Transfer. For this reason alone, Plaintiff’s pursuit of discovery associated only
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`with allegations advanced after the “date of filing” is improper because that discovery is overbroad
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`and unduly burdensome given the transfer analysis this Court ultimately will conduct.
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`Moreover, “[t]o the extent that post-motion events may ever be considered in a section
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`1404(a) analysis, [courts] must guard against manipulative measures designed to defeat transfer
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`to a more convenient venue.” In re Amazon, 2022 WL 176688072, at *3 (emphasis added) (citation
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`omitted). In Phoji, a case with materially similar facts, the defendant moved to transfer based on
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`the pleadings and infringement contentions as of the time the motion was filed—and, as this Court
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`ultimately ruled, that motion to transfer established that the witness, evidence, and local interest
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`factors “heavily favor[ed]” or “favor[ed] transfer.” Phoji, 2022 WL 2392876, at *3. But the
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`plaintiff then amended its infringement contentions, like here, to accuse a new product “with roots
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`in Austin.” Id. at *3. Doubtful that the new product was “properly accused,” this Court was
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`“sympathetic” to the defendants’ position that the plaintiff accused the new product “to manipulate
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`the § 1404(a) analysis.” Id. Thus, the Court found that any witnesses associated with the newly
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`accused product did not support transfer, even if credited, “the number of witnesses in the NDCA
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`far outweigh[ed]” those in Austin. Id.
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`The Federal Circuit in In re Amazon elevated Phoji’s “sympathetic” treatment of the
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`apparent venue manipulation to a requirement that courts “guard against” such tactics. In re
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`Amazon, 2022 WL 17688072, at *3. Emphasizing that venue is “determined at the date of filing,”
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`the Court added that, even if post-motion events are relevant, post-motion pleading amendments
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`often constitute “an impermissible attempt at venue manipulation” and are highly “suspect.” Id.
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`Thus, the Court declined to consider the plaintiff’s post-filing, post-motion amendments because
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`they appeared designed to manipulate venue rather than engage with § 1404(a)’s promise of venue
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`in a more convenient forum. The Federal Circuit had done the same in earlier cases. See In re
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`NetScout, 2021 WL 4771756, at *5 (disregarding plaintiff’s filing of additional actions in this
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`District post-transfer due to the apparent venue manipulation).
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`Similarly here, it was not until after Clover moved to transfer this case to NDCA that
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`Plaintiff attempted to change the factual landscape relevant to the convenience of parties and
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`witnesses by amending its Complaint and PICs to accuse “technology with roots in Austin”
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`(Clover Sport) for the first time. Phoji, 2022 WL 2392876 at *3 (W.D. Tex. July 1, 2022). In other
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`words, Plaintiff accused Clover Sport (1) after Clover sought transfer; (2) after Clover sought a
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`stay; and (3) after Clover (over Plaintiff’s objection) expended time and resources to investigate
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`venue based on the facts and claims as then pleaded. And when Clover amended its pleading, it
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`accused Clover Sport with only the barest of factual pleadings.
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`Plaintiff’s post-filing, post-motion amendment targeting Clover Sport implicates the same
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`“venue manipulation” tactics at issue in Phoji (products accused post-motion), In re Amazon
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`(defendants added post-motion), and In re NetScout (similar lawsuits filed post-motion). These
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`facts give rise to more than simply “some suggestion” that Clover Sport was accused “primarily
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`to affect the transfer analysis.” VoIP-Pal.com, Inc. v. Meta Platforms, Inc., 6:20-CV-00267-ADA,
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`2022 WL 3021522, at *1 (W.D. Tex. July 28, 2022). Because the post-motion pleading amendment
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`appears designed to manipulate venue, venue discovery relating Clover Sport need not and should
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`not be considered when analyzing the § 1404(a) factors.
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`C.
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`Because Clover Sport Should Not Be Considered In The Court’s § 1404(a) Analysis,
`A Protective Order Precluding Transfer Discovery On Clover Sport Is Warranted.
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`The depositions and discovery relating to Clover Sport that Plaintiff is seeking are well
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`outside of the limited scope of transfer discovery that is permissible at this point in the case. The
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`scope of transfer discovery is necessarily limited to matters fairly tailored to the public and private
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`interest factors considered in a § 1404(a) analysis. Because evidence relating to Clover Sport
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`should not be considered to decide Clover’s pending Motion to Transfer, information relating to
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`Clover Sport will not lead to the discovery of admissible evidence regarding the Original Accused
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`Products and is disproportionate and unduly burdensome. See Landry, 901 F.2d at 435-36 (5th Cir.
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`1990).
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`The burden that transfer discovery related to Clover Sport would impose on Clover cannot
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`be overstated. Plaintiff’s Complaint offered little more than threadbare venue allegations. As a
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`result, Clover was left with little more than the references to the Original Accused Products in the
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`Complaint and PICs to undertake its own venue investigation. And based on its thorough internal
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`venue investigation relating to the Original Accused Products, Clover determined that an
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`overwhelming majority of the sources of proof and witnesses with knowledge of the Original
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`Accused Products were in NDCA and then moved to transfer. Since Clover’s Motion to Transfer
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`was filed, Clover has responded to Plaintiff’s first set of transfer discovery by providing
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`information and records related to the Original Accused Products. Absent a protective order
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`preventing discovery on Clover Sport, Clover will be forced to incur substantial expense and
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`burden imposed by conducting a second internal venue investigation, amending its transfer
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`discovery responses, and possibly supplementing the pending Motion to Transfer—all on matters
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`that, under binding precedent, should not be afforded any weight in the ultimate transfer analysis.
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`A protective order precluding discovery regarding Clover Sport is therefore necessary.
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`IV.
`For the reasons above, Clover respectfully moves the Court to grant this Motion and enter
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`CONCLUSION
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`a Protective Order precluding discovery relating to Clover Sport, including but not limited to the
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`depositions of Mr. Deane and Mr. Harker.
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`December 23 , 2022
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`Respectfully Submitted,
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`/s/ J. Stephen Ravel
`J. Stephen Ravel (Texas Bar No. 16584975)
`Kelly Ransom (Texas Bar No. 24109427)
`KELLY HART & HALLMAN LLP
`303 Colorado, Suite 2000
`Austin, Texas 78701
`Tel: (512) 495-6429
`steve.ravel@kellyhart.com
`kelly.ransom@kellyhart.com
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`Case 6:22-cv-00634-ADA-DTG Document 34 Filed 12/23/22 Page 12 of 12
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`Caitlyn Hubbard (Texas Bar No. 24097853)
`KELLY HART & HALLMAN LLP
`201 Main Street, Suite 2500
`Fort Worth, Texas 76102
`Tel: (817) 332-2500
`caitlyn.hubbard@kellyhart.com
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`Attorneys for Clover Network, LLC
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`CERTIFICATE OF CONFERENCE
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`Counsel for Defendant conferred with counsel for Plaintiff who confirmed that Plaintiff is
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`opposed to this Motion.
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`/s/ Kelly Ransom
`Kelly Ransom
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`CERTIFICATE OF SERVICE
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`Pursuant to the Federal Rules of Civil Procedure, I hereby certify that the foregoing was
`filed with the Court and served via the Court’s ECF E-Filing Service System on all counsel of
`record on December 23, 2022.
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`/s/ Caitlyn E. Hubbard
`Caitlyn E. Hubbard
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