Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 1 of 28 PageID #: 9648
`
`IN THE UNITED STATES DISTRICT COURT FOR
`THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`CASE NO. 2:17-cv-514-JRG
`(Lead Case)
`
`JURY TRIAL DEMANDED
`
`CASE NO. 2:17-CV-515-JRG
`(Member Case)
`
`JURY TRIAL DEMANDED
`
`§§§§§§§§§
`
`§§§§§§§§§
`
`AGIS SOFTWARE DEVELOPMENT, LLC
`
`Plaintiff,
`
`v.
`
`HTC CORPORATION, et al.
`
`Defendant.
`AGIS SOFTWARE DEVELOPMENT, LLC
`
`Plaintiff,
`
`v.
`
`LG ELECTRONICS INC.
`
`Defendant.
`
`DEFENDANT LG ELECTRONICS INC.’S MOTION FOR SUMMARY JUDGMENT OF
`NON-INFRINGMENT
`
`

`

`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 2 of 28 PageID #: 9649
`
`TABLE OF CONTENTS
`
`Page
`
`INTRODUCTION .................................................................................................................1
`
`STATEMENT OF ISSUES TO BE DECIDED BY THE COURT ......................................1
`
`STATEMENT OF UNDISPUTED MATERIAL FACTS ....................................................1
`
`LEGAL STANDARD ............................................................................................................6
`A.
`Summary Judgment ...................................................................................................6
`B.
`Direct Infringement ....................................................................................................6
`C.
`Indirect Infringement .................................................................................................7
`
`I.
`
`II.
`
`III.
`
`IV.
`
`V.
`
`2.
`
`3.
`
`4.
`
`5.
`
`ARGUMENT .........................................................................................................................8
`A.
`LGEKR Has Not Directly Infringed the Patents-in-Suit Because LGEKR
`Has Not Committed Any Acts of Infringement Within the United States
`Under 35 U.S.C. § 271(a) ..........................................................................................8
`1.
`LGEKR Does Not Make Any Patented Invention Within the
`United States ..................................................................................................8
`LGEKR Does Not Use Any Patented Invention Within the United
`States ..............................................................................................................8
`LGEKR Does Not Sell Any Patented Invention Within the United
`States ..............................................................................................................9
`LGEKR Does Not Offer to Sell Any Patented Invention Within the
`United States ..................................................................................................12
`LGEKR Does Not Import Any Accused Devices Into the United
`States ..............................................................................................................13
`LGEKR Has Not Indirectly Infringed the Patents-in-Suit .........................................13
`1.
`LGEKR Did Not Have the Requisite Knowledge to Induce
`Infringement ...................................................................................................16
`LGEKR Does Not Encourage End Users of Accused Devices to
`Use the Accused Applications .......................................................................18
`Android OS Updates Are Not a Basis for Indirect Infringement...................19
`LGEKR Has Not Contributorily Infringed the Patents-in-Suit ......................20
`
`B.
`
`2.
`
`3.
`4.
`
`VI.
`
`CONCLUSION ......................................................................................................................20
`
`i
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`

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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 3 of 28 PageID #: 9650
`
`TABLE OF AUTHORITIES
`
`Cases
`
`
`
`Page(s)
`
`Anderson v. Liberty Lobby, Inc.,
`477 U.S. 242 (1986) ...................................................................................................................6
`
`Bristol-Meyers Squibb Co. v. Matrix Labs. Ltd.,
`No. 12CIV5846 (PAE), 2015 WL 2257705 (S.D.N.Y. May 13, 2015) ............................11, 12
`
`Celotex Corp. v. Catrett,
`477 U.S. 317 (1986) ...................................................................................................................6
`
`Chalumeau Power Sys. LLC v. Alcatel–Lucent,
`No. 11-1175-RGA, 2012 WL 6968938 (D. Del. July 18, 2012) .............................................17
`
`Cleveland Clinic Found. v. True Health Diagnostics LLC,
`859 F.3d 1352 (Fed. Cir. 2017)................................................................................................20
`
`Commil USA, LLC v. Cisco Sys., Inc.,
`135 S. Ct. 1920 (2015) .............................................................................................7, 16, 17, 21
`
`Crawford v. Formosa Plastics Corp., La.,
`234 F.3d 899 (5th Cir. 2000) .....................................................................................................6
`
`Cybiotronics, Ltd. v. Golden Source Elecs. Ltd.,
`130 F. Supp. 2d 1152 (C.D. Cal. 2001) .............................................................................14, 15
`
`DermaFocus LLC v. Ulthera, Inc.,
`201 F. Supp. 3d 465 (D. Del. 2016) .........................................................................................17
`
`Diesel Props. S.R.L. v. Greystone Bus, Credit II LLC,
`No. 07 Civ. 9580(HB), 2009 WL 89115 (S.D.N.Y. Jan. 14, 2009).........................................17
`
`DSU Med. Corp. v. JMS Co.,
`471 F.3d 1293 (Fed Cir. 2006) (en banc).............................................................................7, 16
`
`Global-Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. 754 (2011) ...................................................................................................................7
`
`Halo Elecs., Inc. v. Pulse Elecs., Inc.,
`831 F. 3d 1369 (Fed. Cir. 2016)...............................................................................................10
`
`IRIS Corp. v. Japan Airlines Corp.,
`769 F.3d 1359 (Fed. Cir. 2014)..................................................................................................8
`
`-ii-
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`

`

`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 4 of 28 PageID #: 9651
`
`Manville Sales Corp. v. Paramount Sys., Inc.,
`917 F.2d 544 (Fed. Cir. 1990)..................................................................................................16
`
`MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp.,
`420 F.3d 1369 (Fed. Cir. 2005)............................................................................................7, 11
`
`Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd.,
`545 U.S. 913 (2005) .................................................................................................................16
`
`Microsoft Corp. v. AT&T Corp.,
`550 U.S. 437 (2007) ...................................................................................................................6
`
`NTP, Inc. v. Research in Motion, Ltd.,
`418 F.3d 1282 (Fed. Cir. 2005)..............................................................................................8, 9
`
`Ricoh Co. v. Quanta Computer Inc.,
`550 F.3d 1325 (Fed. Cir. 2008)..................................................................................................7
`
`Rotec Indus., Inc. v. Mitsubishi Corp.,
`215 F.3d 1246 (Fed. Cir. 2000)................................................................................................12
`
`Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc.,
`617 F.3d 1296 (Fed. Cir. 2010)..........................................................................................12, 13
`
`Vita-Mix Corp. v. Basic Holding, Inc.,
`581 F.3d 1317 (Fed. Cir. 2009)................................................................................................19
`
`Water Techs. Corp. v. Calco, Ltd.,
`850 F.2d 660 (Fed. Cir. 1988)....................................................................................................7
`
`Wing Shing Prods. (BVI), Ltd. v. Simatelex Manufactory Co.,
`479 F. Supp. 2d 388 (S.D.N.Y. 2007)................................................................................10, 15
`
`Ziptronix, Inc. v. Omnivision Techs., Inc.,
`71 F. Supp. 3d 1090 (N.D. Cal. 2014) .....................................................................................13
`
`Statutes and Rules
`
`U.S.C.
`§ 271...........................................................................................................................................8
`§ 271(a) ............................................................................................................................ passim
`§ 271(b) ..............................................................................................................................1, 2, 7
`§ 271(c) ................................................................................................................................1, 20
`
`Fed. R. Civ. P. 56(c) ........................................................................................................................6
`
`-iii-
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`

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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 5 of 28 PageID #: 9652
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`Other Authorities
`
`Black’s Law Dictionary 884 (10th ed. 2014) .................................................................................11
`
`Webster’s Third New International Dictionary 2523 (1993) ..........................................................8
`
`-iv-
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`

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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 6 of 28 PageID #: 9653
`
`I.
`
`INTRODUCTION
`
`Defendant LG Electronics Inc. (“LGEKR”) moves for summary judgment of non-
`
`infringement because LGEKR has not committed any acts capable of constituting infringement
`
`under 35 U.S.C. § 271(a), (b), or (c).1 LGEKR therefore respectfully requests that the Court
`
`enter summary judgment of no direct or indirect infringement.
`
`II.
`
`STATEMENT OF ISSUES TO BE DECIDED BY THE COURT
`
`Whether LGEKR is entitled to summary judgment as to U.S. Patent Nos. 8,213,970,
`
`9,408,055, 9,445,251, and 9,467,838, where LGEKR has not committed any acts of infringement
`
`under 35 U.S.C. § 271(a), (b), or (c).
`
`III.
`
`STATEMENT OF UNDISPUTED MATERIAL FACTS
`
`1.
`
`AGIS filed its Complaint in this action against LGEKR on June 21, 2017. (Case
`
`No. 2:17-cv-515, D.I. 1.)
`
`2.
`
`AGIS alleges that LGEKR infringes one or more claims of U.S. Patent Nos.
`
`8,213,970 (the “’970 Patent”); 9,408,055 (the “’055 Patent”); 9,445,251 (the “’251 Patent”); and
`
`9,467, 838 (the “’838 Patent”) (collectively, the “Patents-in-Suit”), which cover systems or
`
`methods related to location tracking. Ex. 1, AGIS’s 12/19/2018 Infringement Contentions
`
`Cover, at 3.2
`
`3.
`
`AGIS has contended that one or more claims of the Patents-in-Suit are infringed
`
`by LG-branded products manufactured, used, or sold during and after 2011, including certain
`
`phones and tablets, that (1) utilize certain versions of the Android mobile operating system;
`
`(2) have installed the following Android-based applications and/or software: Android Device
`
`1 While nowhere in its Complaint does AGIS cite to 35. U.S.C. § 271(c) as a basis for its
`infringement allegations, LGEKR addresses contributory infringement in this Motion because
`AGIS’s infringement contentions include allegations of contributory infringement. Compare
`D.I. 1 with Ex. 1, AGIS’s 12/19/2018 Infringement Contentions Cover, at 19.
`2 Unless otherwise stated, exhibits are attached to the Declaration of Bonnie Phan, filed herewith.
`
`-1-
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`

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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 7 of 28 PageID #: 9654
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`Manager, Find My Phone, Find My Device, Google Latitude, Google Plus, Google Hangouts,
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`Google Maps, Google Assistant, Google Search, Google Messages, Android Messenger, Google
`
`Allo, Google Duo, Gmail, and Google Chrome (the “Accused Applications”); and/or
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`(3) participate in any networks and/or services related to the execution and/or use of the Android
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`mobile operating system versions and Android-based applications and/or software described
`
`above.3 Ex. 2, December 19, 2018 AGIS Infringement Contentions Exhibit A (970) (Amended
`
`Final), at A-2 to A-3; Ex. 3, November 28, 2017 AGIS Infringement Contentions Exhibit B
`
`(055), at B-2; Ex. 4, November 28, 2017 AGIS Infringement Contentions Exhibit C (251), at C-
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`2; Ex. 5, November 28, 2017 AGIS Infringement Contentions Exhibit D (838), at D-2.
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`4.
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`AGIS’s Complaint alleges direct infringement of the asserted claims of the
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`Patents-in-Suit in violation of 35 U.S.C. § 271(a) and indirect infringement of the asserted claims
`
`of the Patents-in-Suit in violation of 35 U.S.C. § 271(b). (D.I. 1, ¶¶ 18-21, 27-29, 40-42, 53-55.)
`
`5.
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`LGEKR is a South Korean corporation with its principal place of business in
`
`Seoul, Korea. (Declaration of Juseong Ryu (“Ryu Decl.”), filed herewith, ¶ 3.)
`
`6.
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`LGEKR designs, engineers, and manufactures the Accused Devices outside the
`
`United States, mostly in South Korea. (Ryu Decl. ¶ 3.)
`
`7.
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`LG Electronics MobileComm U.S.A., Inc. (“LGEMU”) was a wholly-owned
`
`subsidiary of LG Electronics USA, Inc. (“LGEUS”), which is a wholly-owned subsidiary of
`
`3 Hereinafter, the Android-based applications and/or software with the accused functionality will
`be referred to as “Accused Applications,” and the LG-branded mobile devices with Accused
`Applications that AGIS accuses of infringement will be referred to as “Accused Devices.”
`
`-2-
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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 8 of 28 PageID #: 9655
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`LGEKR. (Ryu Decl. ¶ 4.) As of August 1, 2018, LGEMU was merged into LGEUS. (Ryu
`
`Decl. ¶ 4.)
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`8.
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`LGEUS is solely responsible for importing, offering for sale, and selling the
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`Accused Devices in the United States. (Ryu Decl. ¶ 5.) Prior to its merger with LGEUS,
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`LGEMU was solely responsible for importing, offering for sale, and selling the Accused Devices
`
`in the United States. (Id.)
`
`9.
`
`Before August 1, 2018, LGEMU acquired the Accused Devices from LGEKR and
`
`imported them into the United States for sale to national phone carriers, retailers, and
`
`distributors, who in turn sell those devices to end users throughout the United States. (Ryu Decl.
`
`¶ 6.) LGEMU was the only entity authorized by LGEKR to offer to sell or sell LG-branded
`
`mobile devices in the United States. (Id.) Since August 1, 2018, LGEUS acquires the Accused
`
`Devices from LGEKR and imports them into the United States for sale to national phone
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`carriers, retailers, and distributors, who in turn sell those devices to end users throughout the
`
`United States. (Id.) LGEUS is the only entity authorized by LGEKR to offer to sell or sell LG-
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`branded mobile devices in the United States. (Id.)
`
`10.
`
`Before August 1, 2018, LGEMU purchased the Accused Devices from LGEKR
`
`outside the States. (Ryu Decl. ¶ 8.) Since August 1, 2018, LGEUS purchases the Accused
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`Devices from LGEKR outside the United States. 4 (Id.)
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`11.
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`4 References to “LGEMU” should hereinafter be understood to mean LGEMU prior to August 1,
`2018 and to mean LGEUS since August 1, 2018.
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`-3-
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`

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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 9 of 28 PageID #: 9656
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`ownership or title to the Accused Devices at any point within the United States. (Id.)
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`12.
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`LGEKR does not sell or offer for sale the Accused Devices in the United States.
`
`LGEKR does not have any
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`(Ryu Decl. ¶ 7.)
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`13.
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`The Android operating system (“OS”) and Accused Applications are developed
`
`and supplied by non-party Google LLC (“Google”). (Ryu Decl. ¶ 2.)
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`14.
`
`LGEKR obtains the Android OS and certain Android OS applications from
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`Google. (Ryu Decl. ¶¶ 2-3.)
`
`15.
`
`LGEKR installs Android OS and certain of the Accused Applications it obtains
`
`from Google (the Google Mobile Services, or “GMS”, applications) on the Accused Devices
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`outside the United States in Korea.5 (Ryu Decl. ¶¶ 2-3.)
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`16.
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`Google develops and provides software updates for the Android OS and GMS
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`applications. (Declaration of Yasser Nafei (“Nafei Decl.”), filed herewith, ¶ 3.)
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`17.
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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 10 of 28 PageID #: 9657
`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 10 of 28 PageID #: 9657
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`18.
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`-5-
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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 11 of 28 PageID #: 9658
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`22.
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`A late-2018 article mentions a new LG “Software Update Center” in Seoul, South
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`Korea. (Id., ¶ 8.)
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`IV.
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`LEGAL STANDARD
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`A.
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`Summary Judgment
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`
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`Summary judgment is appropriate when there is no genuine issue as to any material fact
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`and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). “A genuine
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`issue of material fact exists ‘if the evidence is such that a reasonable jury could return a verdict
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`for the non-moving party.’” Crawford v. Formosa Plastics Corp., La., 234 F.3d 899, 902 (5th
`
`Cir. 2000) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A party moving
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`for summary judgment can satisfy its initial burden of establishing its right to judgment by
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`showing that “there is an absence of evidence to support the nonmoving party’s case.” Celotex
`
`Corp. v. Catrett, 477 U.S. 317, 323-25 (1986).
`
`B.
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`Direct Infringement
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`Direct infringement only occurs when someone “makes, uses, offers to sell, or sells any
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`patented invention, within the United States or imports into the United States any patented
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`invention . . . .” 35 U.S.C. § 271(a) (emphases added). “It is the general rule under United
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`States patent law that no infringement occurs when a patented product is made and sold in
`
`another country. . . . The presumption that United States law governs domestically but does not
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`rule the world applies with particular force in patent law.” Microsoft Corp. v. AT&T Corp., 550
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`U.S. 437, 441, 454-55 (2007). Direct infringement liability is “limited to infringing activities
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`-6-
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`

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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 12 of 28 PageID #: 9659
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`that occur within the United States.” MEMC Elec. Materials, Inc. v. Mitsubishi Materials
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`Silicon Corp., 420 F.3d 1369, 1375 (Fed. Cir. 2005) (“MEMC”).
`
`C.
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`Indirect Infringement
`
`Indirect infringement may occur when someone “actively induces infringement of a
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`patent . . . .” See 35 U.S.C. § 271(b). The phrase “actively induce[]” in section 271(b) means
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`intent and taking affirmative steps to bring about a desire result are required. See Global-Tech
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`Appliances, Inc. v. SEB S.A., 563 U.S. 754, 760 (2011) (“Global-Tech”). The Supreme Court
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`has held that “induced infringement under § 271(b) requires knowledge that the induced acts
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`constitute patent infringement.” Id. at 766. Here, “deliberate indifference to a known risk that a
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`patent exists” is not sufficient to show induced infringement. Id. Instead, a patentee must show
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`that the accused infringer both knew of the patent in question and knew that the induced acts
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`constitute infringement. Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1925 (2015)
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`(“Commil”) (citing Global-Tech, 563 U.S. at 765-66). In Commil, the Supreme Court clarified
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`that Global-Tech requires more than knowing acts might infringe depending on whether the
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`accused infringer correctly reads the claims of the patent at issue differently from the patentee.
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`See id. at 1928. This standard “requires proof the defendant knew the acts were infringing” and
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`“reject[s] any lesser mental state as the standard.” Id. (emphasis added). The phrase “actively
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`induce[] infringement” in section 271(b) thus requires an intent to bring about infringement. Id.
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`“To establish liability under section 271(b), a patent holder must prove that once the
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`defendants knew of the patent, they ‘actively and knowingly aid[ed] and abett[ed] another’s
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`direct infringement.’” DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1305 (Fed Cir. 2006) (en
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`banc) (citing Water Techs. Corp. v. Calco, Ltd., 850 F.2d 660, 668 (Fed. Cir. 1988)). A “finding
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`-7-
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`

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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 13 of 28 PageID #: 9660
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`of inducement requires a threshold finding of direct infringement.” Ricoh Co. v. Quanta
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`Computer Inc., 550 F.3d 1325, 1341 (Fed. Cir. 2008).
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`V.
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`ARGUMENT
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`Regardless of whether any of the asserted claims of the Patents-in-Suit cover Accused
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`Applications or Accused Devices, AGIS cannot succeed on its claims against LGEKR as a
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`matter of law because LGEKR has not committed any acts of direct or indirect infringement
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`under 35 U.S.C. § 271.
`
`A.
`
`LGEKR Has Not Directly Infringed the Patents-in-Suit Because LGEKR
`Has Not Committed Any Acts of Infringement Within the United States
`Under 35 U.S.C. § 271(a)
`
`LGEKR has not directly infringed the Patents-in-Suit because LGEKR has not made,
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`used, sold, or offered to sell any invention purportedly patented by the Patents-in-Suit within the
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`United States or imported any such invention into the United States.
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`1.
`
`LGEKR Does Not Make Any Patented Invention Within the United
`States
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`LGEKR does not make any invention purportedly covered by the Patents-in-Suit within
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`the United States. The indisputable evidence shows that LGEKR designs, engineers, tests, and
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`manufactures the Accused Devices outside the United States, mostly in South Korea. (Ryu
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`Decl., ¶ 3.) As all such acts are extraterritorial, they cannot constitute acts of infringement by
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`LGEKR within the meaning of § 271(a).
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`2.
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`LGEKR Does Not Use Any Patented Invention Within the United
`States
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`LGEKR also does not “use” any device covered by the Patents-in-Suit. “The ordinary
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`meaning of ‘use’ is to ‘put into action or service.’” NTP, Inc. v. Research in Motion, Ltd., 418
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`F.3d 1282, 1317 (Fed. Cir. 2005) (quoting Webster’s Third New International Dictionary 2523
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`(1993)), abrogated on other grounds as explained in IRIS Corp. v. Japan Airlines Corp., 769
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`-8-
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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 14 of 28 PageID #: 9661
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`F.3d 1359, 1361 n.1 (Fed. Cir. 2014)). For a claimed system, the place of infringement is “the
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`place at which the system as a whole is put into service, i.e., the place where control of the
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`system is exercised and beneficial use of the system is obtained.” Id. For a claimed method, use
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`is infringing under § 271(a) only if each of the steps is performed within the United States. Id. at
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`1318.
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`There is no evidence that LGEKR uses any of the Accused Devices within the United
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`States. This lack of evidence is not surprising. LGEKR is a South Korean corporation with its
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`principal place of business in Seoul, South Korea. (Ryu Decl. ¶ 3.) Its activities, including
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`installing the Android OS and GMS applications on Accused Devices, take place in South Korea.
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`(Id.) Likewise, to the extent LGEKR does any testing of the Accused Devices, it does its testing
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`outside the United States. (Id.) Any alleged testing or use in the United States is done by
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`LGEMU (now LGEUS) and is not attributable to LGEKR.6 See id., ¶¶ 3, 5;
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`. LGEKR neither puts the Accused Devices into service nor performs
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`the steps of the Accused Applications within the United States.
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`The indisputable evidence shows that LGEKR does not make, use, sell, or offer for sale
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`the Accused Devices (or any other products) in the United States because its activities are
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`outside the United States, primarily in Korea. (Ryu Decl. ¶¶ 3-7.)
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`3.
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`LGEKR Does Not Sell Any Patented Invention Within the United
`States
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`LGEKR does not sell any LG Accused Devices in the United States and, thus, cannot be
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`found to infringe § 271(a) based on sales.
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`6 AGIS has not alleged and cannot demonstrate that LGEUS is (or LGEMU was) the alter ego or
`agent of LGEKR with respect to any testing or use activities. LGEKR does not supervise or
`control LGEUS’s (or previously LGEMU’s) daily operations. (513 D.I. 180, Ex. W (Ryu Decl.),
`¶ 14.)
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`-9-
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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 15 of 28 PageID #: 9662
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`The “ordinary meaning of a sale includes the concept of a transfer of title or property.”
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`NTP, 418 F. 3d at 1319. “Article 2 of the Uniform Commercial Code, which is recognized as a
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`persuasive authority on the sale of goods, provides that ‘[a] “sale” consists in the passing of title
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`from the seller to the buyer for a price.’” Halo Elecs., Inc. v. Pulse Elecs., Inc., 831 F. 3d 1369,
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`1378 (Fed. Cir. 2016). The “location of actual or anticipated performance under a ‘contract for
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`sale’ remains pertinent to the transfer of title or property from a seller to a buyer.” Id. Where
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`“substantial activities of the sales transactions at issue, in addition to manufacturing and delivery,
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`occurred outside the United States,” certain activities related to the sales transactions that took
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`place in the United States, such as pricing and contracting negotiations, are not sufficient to
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`constitute a sale within the United States. Id.
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`In Wing Shing Products (BVI), Ltd. v. Simatelex Manufactory Co., the defendant was a
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`Hong Kong-based manufacturer who sold the accused products to a U.S. corporation abroad,
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`who then imported the products into the United States. 479 F. Supp. 2d 388, 405 (S.D.N.Y.
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`2007). The title of the products passed to the U.S. buyer abroad, upon the manufacturer’s
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`delivery of the goods to a port in Hong Kong. Id. Under the relevant agreement between
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`manufacturer and buyer, the manufacturer had some ongoing obligations after the delivery of the
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`goods. Id. Regarding the question of “sale” under section 271(a), the court wrote: “[O]f
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`ultimate relevance is whether there was any activity by [manufacturer] in the United States that
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`could rationally be construed as performance under the contract, such that it would be
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`appropriate to deem [manufacturer’s] sale of coffeemakers to [U.S. buyer] as having occurred in
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`the United States.” Id. Finding that the performance was completed upon the delivery of the
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`goods in Hong Kong, the court concluded that the manufacturer had not engaged in any activity
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`construing performance in the United States and thus did not make any “sale” of infringing
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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 16 of 28 PageID #: 9663
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`goods within the United States. Id. The court rejected the plaintiff’s argument that ongoing
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`contractual obligations or payments made after delivery meant that performance had not been
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`completed until the goods were within the United States. Similarly, here, LGEKR manufactures
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`the Accused Devices in South Korea, and LGEMU purchases and acquires these Devices from
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`LGEKR outside of the United States. (Ryu Decl. ¶¶ 6, 8.) LGEMU imports the Devices into the
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`United States. (Ryu Decl. ¶ 6.) LGEKR thus does not engage in any activity within the United
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`States that can be construed as making a “sale” of the Devices within the United States.
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`LGEKR manufactures the Accused Devices in South Korea, and LGEMU acquires these
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`Devices
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`from LGEKR outside of the United States. (Ryu Decl. ¶¶ 3, 6,
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`8.) As LGEMU is the only entity authorized by LGEKR to offer to sell or sell LG-branded
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`mobile devices in the United States, LGEMU acquires the Accused Devices from LGEKR in
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`South Korea or elsewhere outside the United States and imports them into the United States for
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`sale to national mobile phone carriers, retailers, and distributors, who in turn sell those devices to
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`end users throughout the nation. (Ryu Decl. ¶ 6.) While AGIS may assert that LGEKR is aware
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`that LGEMU subsequently imports the Accused Devices into the United States, that is of no
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`moment. “Mere knowledge that a product sold overseas will ultimately be imported into the
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`United States is insufficient to establish liability under section 271(a).” MEMC, 420 F.3d at
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`1377.
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`AGIS may also contend that shipping notation “CIP” on packaging manifests is evidence
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`that LGEKR sells the Accused Devices in the United States. That, too, is incorrect as a matter of
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`law. “CIP” is an “Incoterm,” a “‘standardized shipping term[]’ created by the International
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`Chamber of Commerce that ‘apportion[s] the costs and liabilities of international shipping
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`between buyers and sellers.” Bristol-Meyers Squibb Co. v. Matrix Labs. Ltd., No. 12Civ5846
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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 17 of 28 PageID #: 9664
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`(PAE), 2015 WL 2257705, at *6 (S.D.N.Y. May 13, 2015) (“BMS”) (quoting Black’s Law
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`Dictionary 884 (10th ed. 2014)); Diesel Props. S.R.L. v. Greystone Bus, Credit II LLC, No. 07
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`Civ. 9580(HB), 2009 WL 89115, at *10 (S.D.N.Y. Jan. 14, 2009) (“[T]he Intcoterms define
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`terms of delivery and address the passage of risk, but do not govern the passage of title.”). Here,
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` As discussed in BMS, “[p]ursuant to the Incoterms governing CIP
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`contracts, the risk of loss transfers from the seller to the buyer when the seller delivers the goods
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`to the common carrier.” BMS, 2015 WL 2257705, at *6 (citing Incoterms 2010: ICC Rules for
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`the Use of Domestic and International Trade Items (2010), at 48–49 (Rules A4 and B4 for CIP
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`
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`contracts)).
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`
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`
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`(Ryu Decl. ¶¶ 6,
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` 513 D.I. 180,
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`Ex. R (Ryu Depo.), 50:25-51:20.) Thus, it is undisputed that the sale occurred outside of the
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`U.S., because
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`
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` Based on the foregoing, there can be no genuine issue of fact that LGEKR does
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`not sell Accused Devices within the United States.
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`4.
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`LGEKR Does Not Offer to Sell Any Patented Invention Within the
`United States
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`LGEKR does not offer for sale any LG Accused Devices in the United States and, thus,
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`cannot be found to infringe § 271(a) based on an offer to sell.
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`The Federal Circuit has explained that an “offer to sell” under 35 U.S.C. § 271(a) is
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`defined “according to the norms of traditional contractual analysis.” Rotec Indus., Inc. v.
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`Mitsubishi Corp., 215 F.3d 1246, 1254-55 (Fed. Cir. 2000). “In order for an offer to sell to
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`-12-
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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 18 of 28 PageID #: 9665
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`constitute infringement, the offer must be to sell a patented invention within the United
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`States. . . . [T]he location of the contemplated sale controls whether there is an offer to sell
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`within the United States.” Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors
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`USA, Inc., 617 F.3d 1296, 1309 (Fed. Cir. 2010) (emphasis added). Where a Taiwanese
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`company manufactured products abroad and delivered them in Taiwan to its U.S. subsidiary, and
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`the sales contracts contemplated delivery and performance abroad, under Transocean, the
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`accused products were deemed offered for sale in Taiwan, not the United States. Ziptronix, Inc.
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`v. Omnivision Techs., Inc., 71 F. Supp. 3d 1090, 1096-97 (N.D. Cal. 2014).
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`The same applies here. LGEKR manufactures the Accused Devices abroad. (Ryu Decl.
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`¶ 3.) LGEMU acquires the Accused Devices abroad and imports them into the United States.
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`(Id. ¶ 6.) Because LGEMU purchases and acquires the Accused Devices from LGEKR in Korea,
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`the location of all offers to sell the Accused Devices from LGEKR to LGEMU are outside the
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`United States. (See id.,¶ 8.)
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`Lastly, LGEMU is the LG entity responsible for sales in the United States. (Id., ¶ 5.) As
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`such, LGEMU—and not LGEKR—is the only LG entity that offers the Accused Devices for sale
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`in the United States. (Id., ¶¶ 5-6.)
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`5.
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`LGEKR Does Not Import Any Accused Devices Into the United States
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`Finally, LGEKR does not import any devices purportedly covered by the Patents-in-Suit
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`into the United States. LGEKR does not trade, import, package, or distribute any products in the
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`United States. (513 D.I. 180, Ex. W (Ryu Decl.), ¶ 13). LGEMU is the only authorized entity
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`offering for sale or selling the Accused Devices in the United States. (Ryu Decl. ¶ 6.) LGEMU
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`acquires the Accused Devices from LGEKR overseas. (Id.) And LGEMU imports the Accused
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`Devices into the United States for sale to end users. (Id.)
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`Case 2:17-cv-00514-JRG Document 135 Filed 01/29/19 Page 19 of 28 PageID #: 9666
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`LGEKR does not have any ownership of or title to the
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`Accused Devices at any point within the United States. (Id.,¶ 8.) LGEMU is solely responsible
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`for importing the Accused Devices into the United States. (Id., ¶ 6.)
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`
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`LGEMU, not LGEKR, independently
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`controls and is responsible