Case 2:17-cv-00513-JRG Document 82 Filed 01/12/18 Page 1 of 11 PageID #: 5007
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`AGIS SOFTWARE DEVELOPMENT, LLC,
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`Plaintiff,
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`v.
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`HUAWEI DEVICE USA INC., ET AL.,
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`Defendants.
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`§
`§
`§
`§
`§
`§
`§
`§
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`§
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`§
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`PLAINTIFF AGIS SOFTWARE DEVELOPMENT, LLC’S SUR-REPLY IN
`OPPOSITION TO DEFENDANT LG ELECTRONICS, INC.’S MOTION (DKT. 46) TO
`DISMISS FOR LACK OF PERSONAL JURISDICTION OR, IN THE ALTERNATIVE,
`TO TRANSFER VENUE TO THE NORTHERN DISTRICT OF CALIFORNIA
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`
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`Case No. 2:17-CV-0513-JRG
`(LEAD CASE)
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`JURY TRIAL DEMANDED
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`Case No. 2:17-CV-0515-JRG
`(CONSOLIDATED CASE)
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`JURY TRIAL DEMANDED
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`AGIS SOFTWARE DEVELOPMENT, LLC,
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`Plaintiff,
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`v.
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`LG ELECTRONICS INC.,
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`Defendant.
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`Case 2:17-cv-00513-JRG Document 82 Filed 01/12/18 Page 2 of 11 PageID #: 5008
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`I.
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`INTRODUCTION
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`LG Electronics, Inc. (“LGEKR”) has an established national distribution channel through
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`which it supplies the Accused Products to customers in Texas: LGEKR supplies the Accused
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`Products to its subsidiary, LG Electronics MobileComm U.S.A., Inc. (“LGEMU”) which is a
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`domestic distributor headquartered in California. Through LGEMU, LGEKR’s products are
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`distributed to the local retailers throughout Texas and the country. Dkt. 46-1, at ¶¶ 4, 5. LGEKR
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`does not deny that it has continually distributed the Accused Products through this distribution
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`network. LGEKR also does not deny that it knows, intends, and expects that this national
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`distribution network will ship and sell its products in Texas, and throughout the nation.
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`LGEKR has also failed to show that the case should be transferred to the Northern
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`District of California. In its Reply, LGEKR admits that its own documents are located in Korea.
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`LGEKR also improperly disregards both AGIS’s contacts to this District and the convenience of
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`this District for AGIS’s own witnesses. LGEKR relies heavily on non-party Google’s presence
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`in the Northern District of California, but LGEKR does not indicate that any Google evidence, to
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`the extent it is necessary for this case, is inaccessible in a convenient location in or near this
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`District. Because LGEKR has not shown that transfer to the Northern District of California is
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`clearly more convenient or in the interest of justice, LGEKR’s motion should be denied.
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`II.
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`PERSONAL JURISDICTION OVER LGEKR IS PROPER
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`AGIS has made a prima facie showing that LGEKR is subject to the stream of commerce
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`personal jurisdiction in this District, and LGEKR presents no sufficient facts to show otherwise.
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`Further, LGEKR failed to show that the exercise of jurisdiction would be unreasonable, i.e.
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`offend “traditional notions of fair play and substantial justice.” Breckenridge Pharm., Inc. v.
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`Metabolite Labs., Inc., 444 F.3d 1356, 1362 n.3 (Fed. Cir. 2006).
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`Case 2:17-cv-00513-JRG Document 82 Filed 01/12/18 Page 3 of 11 PageID #: 5009
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`LGEKR admits that it designs, engineers, sources components, and manufactures the
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`Accused Products. Dkt. 46-1, at ¶ 4. LGEKR admits that it supplies the Accused Products to its
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`domestic subsidiary, LGEMU. Dkt. 46-1, at ¶ 5. LGEKR further admits that LGEMU imports
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`and sells the Accused Products to “national mobile device carriers, retailers, and distributors
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`who, in turn, sell those products to end users throughout the country.” Dkt. 46-1, at ¶ 5
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`(emphasis added). LGEKR does not deny that this national distribution network has been
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`ongoing and continuous. Nowhere has LGEKR stated that the intermediaries in its distribution
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`network sell LGEKR’s Accused Products throughout the country except for Texas. Nor has
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`LGEKR denied that it intends and expects its Accused Products to end up in Texas through its
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`network. Thus, LGEKR has not, and cannot, deny that it “knew, or reasonably could have
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`foreseen, that a termination point of the channel was [the forum state].” Beverly Hills Fan, 21
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`F.3d at 1564. In view of these uncontroverted facts, a prima facie case of purposeful entry into
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`the Texas stream of commerce is established as “the defendant’s products were sold into a
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`nationwide distribution network and [] the products were available in Texas.” IDQ Operating,
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`Inc. v. Aerospace Commc’ns Holdings Co., No. 6:15-CV-781, 2016 WL 5349488, at *4 (E.D.
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`Tex. Jun. 10, 2016), report and recommendation adopted sub nom. Armor All/STP Prod. Co. v.
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`Aerospace Commc’ns Holdings Co., Ltd, No. 6:15-CV-781, 2016 WL 5338715 (E.D. Tex. Sept.
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`23, 2016) (Gilstrap, J.).
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`LGEKR argues that it “does not manufacture, use, test, advertise, market, sell, offer to
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`sell, trade, import, package, or distribute any products” in the United States, and that it “has no
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`distribution agreements or business contracts” with entities in Texas. Reply at 3. However, none
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`of these “contacts” alter the outcome of the stream of commerce analysis in this case. Rather,
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`personal jurisdiction under the stream of commerce theory is proper because, as LGEKR admits,
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`Case 2:17-cv-00513-JRG Document 82 Filed 01/12/18 Page 4 of 11 PageID #: 5010
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`it continuously sells its products, including the accused devices, to LGEMU, with the expectation
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`that LGEMU will distribute those products nationwide (Dkt. 46-1, at ¶¶ 4-6; Dkt. 46, at 6)
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`including in Texas. See Dkt. 46, at 7. This is sufficient to establish a prima facie case of
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`purposeful entry into the Texas stream of commerce by LGEKR and LGEKR presents no facts
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`that rebut AGIS’s prima facie showing of minimum contacts.
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`LGEKR’s attempt to distinguish the cases cited in AGIS’s opposition fail. First, LGEKR
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`attempts to distinguish IDQ Operating, 2016 WL 5349488, stating “the defendant deliberately
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`sold its products directly to a national retailer with a sales outlet in Texas and admittedly knew
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`that its products would reach customers there.” Reply at 4. Next, LGEKR attempts to
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`distinguish ATEN Int'l Co. v. Emine Tech. Co., 261 F.R.D. 112, 119 (E.D. Tex. 2009), stating
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`“the foreign defendant itself provided its products to a U.S. retailer with sales outlets in Texas.”
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`Reply at 4. LGEKR argues that “finding personal jurisdiction here would be a step further” than
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`these cases because LGEMU, not LGEKR, “provides the Accused Devices directly to the
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`retailers it selects.” Reply at 4. LGEKR’s argument is incorrect because the relevant inquiry
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`considered by the Court in IDQ and ATEN was not whether the defendant provided the products
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`directly to the retailers in Texas, but whether the defendant, like LGEKR here, “placed its
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`products into the stream of commerce with knowledge and an intention that they be sold in
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`Texas.” IDQ Operating, 2016 WL 5349488 at *4; ATEN Int'l Co., 261 F.R.D. at 120.
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`Next, LGEKR attempts to distinguish MHL Tek, LLC v. Nissan Motor Co., No. 2:07-CV-
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`289 (TJW), 2008 WL 910012, at *1 (E.D. Tex. Apr. 2, 2008), stating “MHL Tek is of no help to
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`AGIS” because the “Court in MHL Tek did not decide whether BMW AG - the international
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`entity - would be subject to personal jurisdiction in Texas, which would be the parallel inquiry to
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`this matter.” Reply at 5. However, The Court in MHL did not consider the location of BMWMC
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`Case 2:17-cv-00513-JRG Document 82 Filed 01/12/18 Page 5 of 11 PageID #: 5011
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`in its stream of commerce analysis, and the physical location where BMWMC first placed
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`products destined for the U.S. into the stream of commerce had no bearing on the analysis. The
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`Court only considered whether BMWMC 1) placed its products in the stream of commerce via
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`an established distribution channel, 2) knew the likely destination of its products, and 3) sold its
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`products to an intermediary knowing that a second intermediary would distribute the products
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`throughout the U.S., including Texas. MHL Tek, 2008 WL 910012, at *1. LGEKR, by its own
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`admissions, satisfies all three of this Court’s considerations in MHL and, therefore, “should
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`reasonably anticipate being haled into court in Texas.” Id.
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`The Federal Circuit has held that “the sale of a product of a manufacturer . . . is not
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`simply an isolated occurrence, but arises from the efforts of the [defendant] to serve, directly or
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`indirectly, the market for its product . . ., it is not unreasonable to subject [the defendant] to
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`suit.” Beverly Hills Fan, 21 F.3d at 1566 (citing World-Wide Volkswagen Corp. v. Woodson,
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`444 U.S. 286, 297-98 (1980)) (emphasis added); see also MHL Tek, 2008 WL 910012, at *1
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`(finding jurisdiction reasonable over the defendant based on almost identical admissions). This
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`case is not a “compelling case” that would support a finding that the exercise of jurisdiction over
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`LGEKR would be unreasonable. See Beverly Hills Fan, 21 F.3d at 1568 (citing Burger King,
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`471 U.S. at 477).
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`III. THE NORTHERN DISTRICT OF CALIFORNIA IS NOT CLEARLY MORE
`CONVENIENT
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`LGEKR’s Reply does not demonstrate that the Northern District of California is clearly
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`more convenient or that transfer would serve the interests of justice.
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`Case 2:17-cv-00513-JRG Document 82 Filed 01/12/18 Page 6 of 11 PageID #: 5012
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`A.
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`Convenience of the Parties and Witnesses and Costs of Attendance for
`Willing Witnesses Weigh Against Transfer
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`First, this District is more convenient than the Northern District of California for all
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`AGIS and AGIS Inc. witnesses. Dkt. 68 at 18-21. For example, the Northern District of
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`California is significantly more inconvenient for both Mr. Beyer and Mr. Blackwell (Dkt. 68 at
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`20) who would be required to travel an additional 1620 miles and 1054 miles, respectively, if this
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`action was transferred. See Dkt. 68-2 at ¶ 2. LGEKR also ignores that this District is convenient
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`for Mr. Rice; he is beyond the subpoena power of the Northern District of California, but he has
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`agreed to travel to this District if called to testify (Dkt 68-1 ¶ 20).1 This District is also more
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`convenient for AGIS’s technical expert. Dkt. 68-2 ¶ 5.
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`LGEKR does not dispute that the Eastern District of Texas is more convenient than the
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`Northern District of California for Mr. Armstrong or Mr. Sietsema. Instead, LGEKR claims that
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`Mr. Armstrong’s and Mr. Sietsema’s knowledge is “tethered to the irrelevant LifeRing and
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`Assist products” which are “irrelevant to this case” Reply at 9. However, the LifeRing products
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`are relevant to this case and AGIS identified these products in its Amended Complaint. AGIS
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`Software Development LLC v. LG Electronics, Inc., Case No. 2:17-CV-0515-JRG, Complaint,
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`Dkt. 1 at ¶ 12 (E.D. Tex. June 21, 2017). AGIS also identified AGIS Inc.’s development
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`documents, including source code, in its 3-2 disclosures. LGEKR cannot credibly contend that
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`the products of licensee AGIS Inc. are not relevant in this dispute. Instead, LGEKR focuses on
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`Patent Local Rule 3-1(f) which requires a party to identify “its own apparatus. . .” P.R. 3-1(f).
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`LGEKR twists this rule in a way that contravenes AGIS’s pleadings and contentions. AGIS Inc.
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`1 LGEKR’s reliance on Groupchatter, LLC v. Itron, Inc., 2016 WL 2758480, at *4 (E.D. Tex. May 12, 2016) is
`inapposite because, in that case, the court determined that the willingness of witnesses to travel to Texas was entitled
`to little weight because those witnesses were located in the transferee district.
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`Case 2:17-cv-00513-JRG Document 82 Filed 01/12/18 Page 7 of 11 PageID #: 5013
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`is not a party to this case, and AGIS was not required to identify any AGIS Inc. products in its
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`P.R. 3-1(f) disclosure.
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`Second, LGEKR does not dispute that the majority of its own witnesses are located in
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`Korea. Dkt. 77 at 8. LGEKR does not identify any of its own witnesses who are located in the
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`Northern District of California. In its reply, LGEKR relies on two LGEMR employees who
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`purportedly have knowledge regarding “certification to ensure that the Accused Devices adhere
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`to the Android OS compatibility requirements and quality assurance.” Reply at 8. However,
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`LGEKR does not explain how compatibility requirements or quality assurance relate to AGIS’s
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`allegations of infringement. Meanwhile, LGEKR maintains that “employees with knowledge
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`related to the Accused Devices are located outside the United States and primarily in South
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`Korea.” Reply at 8. Accordingly, because LGEKR’s only relevant witnesses will likely come
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`from outside the Northern District of California, transfer is not clearly more convenient. See
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`MHL Tek, LLC v. Nissan Motor Co., 2009 WL 440627, at *4 (E.D. Tex. Feb. 23, 2009)
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`Third, LGEKR’s focus on Google is misplaced. Google is not a party to this case. Even
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`if AGIS were to seek source code evidence from Google, as set forth below, LGEKR has not
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`explained why testimony from Google witnesses in the Northern District of California would be
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`necessary. Moreover, Google does not sell the Accused Products or the software implicated in
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`the Accused Products. Rather, the Accused Products are sold in sales channels through third-
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`party carriers, such as Verizon and AT&T, who include information on their websites that
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`describe and provide technical support for the accused functionalities. Declaration of Vincent
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`Rubino (“Rubino Decl.”), Exs. 10, 11. The location of the third-party carriers in or closer to this
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`District weigh against transfer as set forth in AGIS’s response. Dkt. 68 at 21-22.
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`Case 2:17-cv-00513-JRG Document 82 Filed 01/12/18 Page 8 of 11 PageID #: 5014
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`B.
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`The Location of the Documentary Evidence Does Not Justify Transfer
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`LGEKR admits that all of its relevant documents are “primarily located in South Korea.”
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`Moreover, LGEKR does not indicate whether its own documents are inaccessible from the
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`Eastern District of Texas. Regarding AGIS’s documents, LGEKR’s assertion that “any evidence
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`at [AGIS’s Marshall office] was clearly moved [to the Eastern District of Texas] in anticipation
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`of litigation and is irrelevant to transfer,” (Dkt. 77 at 10) is incorrect. As AGIS explained in its
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`response, an AGIS Inc. software developer, Mr. Armstrong, lives and works in this District
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`under the direct supervision of Mr. Blackwell. Dkt. 68 at 5. Mr. Armstrong is in possession of
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`AGIS Inc.’s documents relating to the practice and licensing of the Patents-in-Suit.2 Contrary to
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`LGEKR’s bald assertions, Mr. Armstrong has had access to AGIS Inc.’s documents for many
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`years and his decision to reside in this District was unrelated to this lawsuit. Dkt. 68-1 ¶¶ 15-16.
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`LGEKR’s argument that Google’s documents, including source code, are “accessible”
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`from the Northern District of California (Dkt. 46 at 8) is insufficient because LGEKR has not set
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`forth any evidence indicating that any Google documents would be inaccessible from Google
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`locations in or closer to the Eastern District of Texas. Aloft Media, 2008 WL 819956, at *4.
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`Accordingly, LGEKR’s reliance on Google does not necessitate transfer.
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`Because AGIS’s proof will come from records maintained in offices in this District, as
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`well as from its consultant and technical expert located in this District, and because LGEKR does
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`not contend that its documents are inaccessible from this District, this factor weighs against
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`transfer.
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`2 LGEKR cites to Mr. Beyer’s declaration from a prior case involving different parties and different patents, yet his
`declaration merely states that documents existed in Florida. Mr. Beyer did not state that documentary evidence was
`not located in Texas. Dkt. 77 at 10.
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`Case 2:17-cv-00513-JRG Document 82 Filed 01/12/18 Page 9 of 11 PageID #: 5015
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`C.
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`Judicial Economy and the District’s Localized Interest in this Dispute Weigh
`Against Transfer
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`The related AGIS Texas Cases, which involve the same Patents-in-Suit and underlying
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`technology, weighs against transfer because granting transfer would duplicate the proceedings.
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`RPost Holdings, Inc. v. StrongMail Sys., Inc., 2013 WL 4495119, at *5 (E.D. Tex. Aug. 19,
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`2013) (Gilstrap, J.). This is precisely the type of “wastefulness of time, energy and money that
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`§ 1404(a) was designed to prevent.” In re Volkswagen of Am., Inc., 566 F.3d 1349, 1351 (Fed.
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`Cir. 2009).
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`D.
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`Compulsory Process Weighs Against Transfer
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`LGEKR has failed to identify any witness that is unwilling to testify and for which
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`compulsory process is not available in this Court. Dkt. 46 at 21-22; Dkt. 77 at 10. Thus, the
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`factor concerning compulsory process does not favor transfer. Intellectual Ventures II v. FedEx
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`Corp., 2017 WL 3836127, at *3 (E.D. Tex. Apr. 18, 2017) (finding compulsory process factor to
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`be neutral where defendants did “not identify a single non-party witness unwilling to attend trial
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`in the Eastern District of Texas). Furthermore, because both parties have identified potential
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`witnesses across the country and globe, over which neither district has absolute subpoena power,
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`this factor does not favor transfer. See RPPost Holdings, Inc. v. StrongMail Sys., Inc., 2013 WL
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`4495119, at *3 (E.D. Tex. Aug. 19, 2013).
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`IV. CONCLUSION
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`For the foregoing reasons, AGIS respectfully requests that the Court deny LGEKR’s
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`Motion to Dismiss or Transfer.
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`Case 2:17-cv-00513-JRG Document 82 Filed 01/12/18 Page 10 of 11 PageID #: 5016
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`Dated: January 12, 2018
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`Respectfully submitted,
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`BROWN RUDNICK LLP
`
`/s/ Vincent J. Rubino, III
`
`Alfred R. Fabricant
`NY Bar No. 2219392
`Email: afabricant@brownrudnick.com
`Peter Lambrianakos
`NY Bar No. 2894392
`Email: plambrianakos@brownrudnick.com
`Vincent J. Rubino, III
`NY Bar No. 4557435
`Email: vrubino@brownrudnick.com
`Joseph Mercadante
`NY Bar No. 4784930
`Email: jmercadante@brownrudnick.com
`Alessandra C. Messing
`NY Bar No. 5040019
`Email: amessing@brownrudnick.com
`John A. Rubino
`NY Bar No. 5020797
`Email: jrubino@brownrudnick.com
`Enrique W. Iturralde
`NY Bar No. 5526280
`Email: eiturralde@brownrudnick.com
`BROWN RUDNICK LLP
`7 Times Square
`New York, NY 10036
`Telephone: 212-209-4800
`Facsimile: 212-209-4801
`
`Samuel F. Baxter
`Texas State Bar No. 01938000
`sbaxter@mckoolsmith.com
`Jennifer L. Truelove
`Texas State Bar No. 24012906
`jtruelove@mckoolsmith.com
`MCKOOL SMITH, P.C.
`104 E. Houston Street, Suite 300
`Marshall, Texas 75670
`Telephone: (903) 923-9000
`Facsimile: (903) 923-9099
`
`ATTORNEYS FOR PLAINTIFF AGIS
`SOFTWARE DEVELOPMENT LLC
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`9
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`Case 2:17-cv-00513-JRG Document 82 Filed 01/12/18 Page 11 of 11 PageID #: 5017
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that, on January 12, 2018, all counsel of record who are
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`deemed to have consented to electronic service are being served with a copy of this document via
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`the Court’s CM/ECF system per Local Rule CV-5(a)(3).
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` /s/ Vincent J. Rubino, III
` Vincent J. Rubino, III
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