Case 2:17-cv-00514-JRG Document 49 Filed 03/07/18 Page 1 of 11 PageID #: 2547
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`AGIS SOFTWARE DEVELOPMENT, LLC,
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`Plaintiff,
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`PLAINTIFF AGIS SOFTWARE DEVELOPMENT, LLC’S SUR-REPLY IN
`OPPOSITION TO DEFENDANT HTC CORPORATION’S MOTION TO DISMISS
`PURSUANT TO FED. R. CIV. P. 12(B)(2), OR, IN THE ALTERNATIVE,
`TRANSFER VENUE PURSUANT TO 28 U.S.C. § 1404(A)
`TO THE NORTHERN DISTRICT OF CALIFORNIA (DKT. 29)
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`Case No. 2:17-cv-514-JRG
`(Lead Case)
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`JURY TRIAL DEMANDED
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`v.
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`HTC CORPORATION,
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`Defendant.
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`Case 2:17-cv-00514-JRG Document 49 Filed 03/07/18 Page 2 of 11 PageID #: 2548
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`I.
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`HTC’S MOTION TO DISMISS OR TRANSFER SHOULD BE DENIED
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`AGIS Software Development, LLC (“AGIS”) has demonstrated that this Court’s exercise
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`of personal jurisdiction over HTC Corporation (“HTC”) is both proper and fair based on HTC’s
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`conduct placing the infringing products into the stream of commerce with an expectation that
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`they would be sold in Texas. Additionally, HTC has failed to show that transfer to the Northern
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`District of California (“NDCal”) is clearly more convenient and warranted in the interests of
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`justice.
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`II.
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`PERSONAL JURISDICTION OVER HTC IS PROPER AND FAIR
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`AGIS has established a prima facie case of personal jurisdiction over HTC, and HTC has
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`failed to rebut it. Dkt. 40 at 11-17. HTC admits that (1) it manufactures products containing the
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`accused devices abroad; (2) it supplies the accused devices to its subsidiary, HTC America with
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`knowledge that HTC America imports, markets, and sells the accused devices to third party
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`distributors and carriers in the United States; and (3) HTC’s intent and purpose is to serve the
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`United States Market. Dkt 29-2 ¶ 2; Dkt. 29 at 5, 12, 13; Dkt. 40-10 at 30, 146. HTC has not
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`and cannot dispute that its distribution network is ongoing and continuous, and results in its
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`products being distributed and sold nationwide, including in Texas. Thus, HTC cannot deny that
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`it “knew, or reasonably could have foreseen, that a termination point of the channel was [the
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`forum state].” Beverly Hills Fan, 21 F.3d at 1564. Indeed, HTC’s United States’ website
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`identifies numerous stores in Texas that sell HTC products, including at least twenty-five (25)
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`stores in this District. See Ex. 10, HTC Corporation Store Locator. In view of these
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`uncontroverted facts, a prima facie case of purposeful entry into the Texas stream of commerce
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`is established as “the defendant’s products were sold into a nationwide distribution network and
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`[] the products were available in Texas.” IDQ Operating, Inc. v. Aerospace Commc’ns Holdings
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`Case 2:17-cv-00514-JRG Document 49 Filed 03/07/18 Page 3 of 11 PageID #: 2549
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`Co., No. 6:15-CV-781, 2016 WL 5349488, at *4 (E.D. Tex. Jun. 10, 2016), report and
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`recommendation adopted sub nom. Armor All/STP Prod. Co. v. Aerospace Commc’ns Holdings
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`Co., Ltd., No. 6:15-CV-781, 2016 WL 5338715 (E.D. Tex. Sept. 3, 2016) (Gilstrap, J.). This
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`Court has jurisdiction over HTC because HTC places the accused products into the stream of
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`commerce through a distribution channel it established with its wholly-owned subsidiary, with
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`the knowledge and expectation that, through HTC’s distribution, the accused products would be
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`sold nationwide, including Texas. See IDQ Operating, 2016 WL 5349488, at *4 (jurisdiction
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`proper over defendants when “the defendant’s products were sold into a nationwide distribution
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`network and [] the products were available in Texas); MHL Tek, LLC v. Nissan Motor Co., No.
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`2:07-cv-289 (TJW), 2008 WL 910012 (E.D. Tex. Apr. 2, 2008) (jurisdiction over foreign
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`defendant proper where defendant placed products into established distribution channel and it
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`knew the likely destination of its products because defendant sold its products to an entity in the
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`chain knowing that entity would distribute vehicles throughout the United States, including
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`Texas); Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994)
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`(jurisdiction proper over defendant who, as a result of selling its products through a distribution
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`channel developed by defendant, knew or should have reasonably foreseen that the termination
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`point of the channel was the forum state).1
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`Accordingly, HTC’s motion to dismiss for lack of personal jurisdiction should be
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`denied.2
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`1 Guidance or control over the entities at the end of the distribution channel is not required for this Court to have
`personal jurisdiction over HTC. IDQ Operating, 2016 WL 5349488, at *4.
`2 HTC does not argue in its reply that the exercise of jurisdiction over HTC would be unreasonable. See Dkt. 47 at
`1-2. Thus, HTC has failed to present a “compelling case” that the exercise of jurisdiction over HTC would be
`unreasonable. See Beverly Hills Fan, 21 F.3d at 1568 (citing Burger King Corp. v. Rudzewicz, 471 U.S.462, 477
`(2003).
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`2
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`Case 2:17-cv-00514-JRG Document 49 Filed 03/07/18 Page 4 of 11 PageID #: 2550
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`III. TRANSFER TO THE NORTHERN DISTRICT OF CALIFORNIA IS NOT
`WARRANTED
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`Despite making a bald statement that all factors weigh in favor of transfer, in its reply,
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`HTC ignores three factors (judicial economy, localized interest, and court congestion) that AGIS
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`has shown weigh against transfer. Compare Dkt. 40 at 27-30, with Dkt. 47 2-10. HTC’s
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`arguments regarding the other three factors fail to show that transfer is “clearly more convenient”
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`for all parties, witnesses, and in the interest of justice. See Aloft Media, 2008 WL 819956, at *3.
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`HTC’s attacks on AGIS’s ties to this District (Dkt. 47 at 10) do not discharge HTC of its burden
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`to show that the transferee district is clearly more convenient. See In re Apple, Inc., 456 Fed.
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`App’x 907 (Fed. Cir. 2012) (denying defendant’s petition for a writ of mandamus seeking a
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`transfer of venue noting that the district court did not give any weight to defendant’s arguments
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`about the plaintiff's “ephemeral connections to the [initial choice of] forum”).
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`A. Convenience of the Parties and Witnesses and Cost of Attendance for Willing
`Witnesses Weigh Against Transfer
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`The convenience factors weigh against transfer for numerous reasons. First, HTC failed
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`to identify a single party witness. Each of these “potential witnesses” live in Taiwan. Dkt. 29 at
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`21; Dkt. 47 at 9. This is insufficient. Mohamed v. Volvo Corp., 90 F. Supp. 2d 757, 775 (E.D.
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`Tex. 2000) (movant must do more than make “a general allegation that the key witnesses are
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`inconveniently located”). Rather, HTC is required to provide evidence as to the “relevance and
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`materiality” of the information these individuals might have and provide “evidence (e.g., a
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`declaration from the [employees]) indicating that travel to Marshall would constitute an
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`inordinate inconvenience or expense.” Sanger Ins. Agency, Inc. v. HUB Int’l, Ltd., No. 2:13-cv-
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`528, 2014 WL 5389936, at *2 (E.D. Tex. Mar. 2, 2014 (Gilstrap, J.). Any witness living in
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`Taiwan will be required to travel to testify, and may consider it more convenient to travel to
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`3
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`Case 2:17-cv-00514-JRG Document 49 Filed 03/07/18 Page 5 of 11 PageID #: 2551
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`Texas than to California. See MHL Tek, LLC v. Nissan Motor Co., No. 2:07-cv-289, 2009
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`WL 440627, at *4 (E.D. Tex. Feb. 23, 2009).
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`Second, HTC’s argument that NDCal is more convenient for third party witnesses, HTC
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`America, prosecuting attorney Daniel Burns, and Google, also fails. Dkt. 47 at 3-8. HTC
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`identifies two “potential witnesses” employed by HTC America (Dkt. 29 at 21; Dkt. 47 at 6);
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`however, only after AGIS argued that such a perfunctory identification is not sufficient to carry
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`HTC’s burden, HTC, for the first time in reply, sets forth the purported relevance of these
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`individuals (Dkt. 47 at 6-7). Nonetheless, these “potential witnesses” are located outside of
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`NDCal and will be required to travel to testify. See MHL Tek, 2009 WL 440627, at *4.3
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`Similarly, HTC failed to explain the relevance and materiality of Mr. Burns in its opening brief
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`and attempts to argue his relevance now in reply. Dkt. 29 at 6, 18; Dkt. 47 at 7.4 Prosecuting
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`attorneys are not relevant, especially given that no party has pled an inequitable conduct defense.
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`With regard to Google, HTC’s attempt to overcome deficiencies in its opening brief
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`regarding the identity, relevance, materiality, and purported inconvenience of Google’s witnesses
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`in its reply (Dkt. 47 at 5) falls short. In HTC’s initial motion, HTC generally references
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`“[p]rimary” or “critical” Google witnesses and provided a vague parenthetical citation to a
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`declaration in another case, without any explanation as to why such a declaration may be
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`relevant here, listing four employees and titles for three. Dkt. 40 at 6, 22. Even if such
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`identification is sufficient—it is not—HTC did not discuss, let alone set forth evidence of, the
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`relevance, materiality, or purported inconvenience of these individuals. Dkt. 40 at 6, 22. Now,
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`again relying on declarations submitted in a different case, HTC lists four additional Google
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`3 HTC’s general statement that “all of third-party HTC America’s employees with relevant information are in
`Washington” (Dkt. 47 at 7) is not sufficient for HTC to meet its burden. Sanger, 2014 WL 5389936, at *2.
`4 HTC also ignored that other prosecuting attorneys of the Patents-in-Suit are located in Florida (Dkt. 29 at 6), who,
`if called to testify, will likely find Texas more convenient than California (MHL Tek, 2009 WL 440627, at *4).
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`4
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`Case 2:17-cv-00514-JRG Document 49 Filed 03/07/18 Page 6 of 11 PageID #: 2552
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`employees not identified in its opening brief and, for the first time, states the purported relevance
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`of these individuals. Compare Dkt. 40 at 6, 22, with Dkt. 47 at 5. This is improper and should
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`be disregarded. Watson v. Astrue, 2013 WL 6662828, at *2 (E.D. Tex. Dec. 17, 2013).5
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`HTC’s argument regarding the relevance of Google generally (Dkt. 47 at 3-5) also fails.
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`HTC contends that “Google’s publicly available open-source code is not what is actually
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`relevant” to this action. Id. at 3-4. This argument is entirely ignores that AGIS’s infringement
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`contentions rely significantly on Google’s publicly available source code. Dkt. 29-33. That
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`AGIS reserved its rights to amend its infringement contentions if additional source code is made
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`available to it (id.) is standard protocol and further supports the fact that AGIS relied on
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`Google’s publicly available source code. HTC argues that Google witnesses are relevant to this
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`action because this action involves Google applications (Dkt. 47 at 3-4), but HTC ignores that its
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`own witnesses have knowledge regarding these applications. Indeed, HTC states that HTC
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`employees “interface with Google employees relating to the engineering of their smartphones”
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`and that Google provides the applications to HTC whose employees then install the applications.
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`Dkt. 29 at 5.
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`Third, HTC does not contest that this District is most convenient for third party cellular
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`carriers, Verizon, AT&T, and Sprint. Dkt. 47 at 8. Rather, HTC argues that AGIS failed to
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`provide evidence of the relevance of certain third parties, including cellular carriers. Id. at 8.
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`This burden shifting is improper. It is HTC’s burden, not AGIS’s, to come forward with
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`evidence as to why NDCal is clearly more convenient for its witnesses. Mears Techs., Inc. v.
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`Finisar Corp., 2014 WL 1652603, at *2 (E.D. Tex. Apr. 24, 2014) (Gilstrap, J.). Sanger, 2014,
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`5 Additionally, AGIS has accused functionality related to Google’s Android Operating System and Google
`employees located in Austin have knowledge regarding various products including Androids. Dkt. 40 at 7; Dkt. 40-
`2 ¶¶ 3-4. Thus, to the extent Google employees are relevant; Google’s Austin employees would likely find it more
`convenient to travel to this District rather than California.
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`5
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`Case 2:17-cv-00514-JRG Document 49 Filed 03/07/18 Page 7 of 11 PageID #: 2553
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`WL 5389936, at *2. Nonetheless, AGIS sufficiently sets forth the relevance of these cellular
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`carriers in its opposition, including consumer market value of the features enabled by the
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`Patents-in-Suit, consumer surveys, and marketing information regarding demand for particular
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`applications and features. Dkt. 40 at 26-27. HTC’s argument that, because cellular carriers were
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`not the focus of its infringement contentions, they are irrelevant (Dkt. 47 at 8) is wrong. While
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`cellular carriers may not be the focus of AGIS’s infringement contentions, they do have
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`knowledge and information relevant to numerous aspects of AGIS’s case, including damages.
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`Indeed, AT&T, Verizon, and Sprint have numerous stores in this District that sell HTC’s
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`products. Ex. 10.
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`Finally, this District is the most convenient for AGIS’s witnesses. HTC does not contest
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`that this District is the most convenient for Eric Armstrong, but rather argues that AGIS did not
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`provide an explanation as to why Mr. Armstrong is relevant. Dkt. 47 at 9. But HTC is wrong.
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`AGIS explained that Mr. Armstrong’s “relevant knowledge and anticipated testimony includes
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`[his] knowledge relating to contracts and licenses involving AGIS’s intellectual property and
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`AGIS’s software development and quality assurance which relates to, inter alia, AGIS’s
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`damages.” Dkt. 40 at 22; see also Dkt. 40-1 ¶ 16. HTC’s argument that Mr. Armstrong is
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`irrelevant because he did not testify in a different case, involving different parties and different
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`patents (Dkt. 47 at 9) is misguided. A party is under no obligation to use the same witness in
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`various cases, and not using a witness in one case does not amount to an admission that that
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`witness is not relevant in a different or subsequent litigation. HTC also does not dispute that this
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`District is the most convenient for AGIS’s technical expert, who is located in this District (Dkt.
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`47 at 9) and whose convenience is, contrary to HTC’s contention, relevant to the transfer
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`analysis. Aloft Media, 2008 WL 819956, at *5 (“[A] patent trial often revolves around the
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`6
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`Case 2:17-cv-00514-JRG Document 49 Filed 03/07/18 Page 8 of 11 PageID #: 2554
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`strength of expert testimony.”). HTC also does not contest that this District is the most
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`convenient for five additional AGIS witnesses: David Sietsema, Rebecca Clark, Malcom Beyer,
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`Jr., Sandel Blackwell, and Christopher Rice. Dkt. 47 at 9-10; see Dkt. 40 at 21-23.
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`B. Access to Sources of Proof Weighs Against Transfer
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`In reply, HTC does not contest that it can produce its documents, located in Taiwan, in
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`this District. Nor does HTC contest that this District contains relevant AGIS documents,
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`including the documents of Mr. Armstrong, and that NDCal does not contain any sources of
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`proof of AGIS. See Dkt. 40 at 26-27. Rather, HTC argues only that Google’s technical
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`documents and source code are maintained in NDCal and that the source code cannot be
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`electronically transferred. Dkt. 47 at 7-8. HTC does not argue that Google’s technical
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`documents, if relevant, cannot be produced electronically. Id.; see Aloft Media, 2008 WL
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`819956, at *4. Moreover, as discussed in AGIS’s opposition and herein, AGIS’s infringement
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`contentions rely on Google’s open source code and/or application programing interfaces, which
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`are publicly available. Dkt. 40-2 ¶ 12.
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`C. Compulsory Process Weighs Against Transfer
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`Contrary to HTC’s argument, this factor weighs against transfer because HTC is required
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`to identify witnesses that are unwilling to testify for which compulsory process is not available in
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`this Court. See BNSF Ry. Co. v. OOCL (USA), Inc., 667 F. Supp. 2d 703, 711 (N.D. Tex. 2009);
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`J2 Glob. Commc’ns, Inc. v. Protus IP Sols., Inc., No. 6:08-cv-211, 2008 WL 5378010, at *3
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`(E.D. Tex. Dec. 23, 2008). HTC’s argument that, because it does not control the witnesses it
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`cannot possibly know if they are unwilling witnesses (Dkt. 47 at 7), is disingenuous. HTC has
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`identified potential witnesses and, therefore, could have ascertained whether they would be
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`willing witnesses if called to testify at trial.
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`7
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`Case 2:17-cv-00514-JRG Document 49 Filed 03/07/18 Page 9 of 11 PageID #: 2555
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`IV. CONCLUSION
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`For the foregoing reasons, AGIS respectfully requests that the Court deny HTC’s Motion.
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`Dated: March 7, 2018
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`BROWN RUDNICK LLP
`
`
`
`/s/ Vincent J. Rubino, III
`Alfred R. Fabricant
`NY Bar No. 2219392
`Email: afabricant@brownrudnick.com
`Lawrence C. Drucker
`NY Bar No. 2303089
`Email: ldrucker@brownrudnick.com
`Peter Lambrianakos
`NY Bar No. 2894392
`Email: plambrianakos@brownrudnick.com
`Vincent J. Rubino, III
`NY Bar No. 4557435
`Email: vrubino@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 William 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
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`Case 2:17-cv-00514-JRG Document 49 Filed 03/07/18 Page 10 of 11 PageID #: 2556
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`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 East Houston Street, Suite 300
`Marshall, Texas 75670
`Telephone: 903-923-9000
`Facsimile: 903-923-9099
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`ATTORNEYS FOR PLAINTIFF, AGIS
`SOFTWARE DEVELOPMENT, LLC
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`Case 2:17-cv-00514-JRG Document 49 Filed 03/07/18 Page 11 of 11 PageID #: 2557
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that, on March 7, 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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