Case 2:21-cv-00072-JRG-RSP Document 142 Filed 09/03/21 Page 1 of 7 PageID #: 3347
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`AGIS SOFTWARE DEVELOPMENT
`LLC,
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` Plaintiff,
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`v.
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`T-MOBILE USA, INC. and T-MOBILE
`US, INC.,
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` Defendants.
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`REPORT AND RECOMMENDATION
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`Case No. 2:21-cv-00072-JRG-RSP
` LEAD CASE
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`Before the Court is Defendant Uber Technologies, Inc.’s (“Uber”) Motion to Dismiss
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`(“Uber’s MTD”). Dkt. No. 24. Uber’s Motion requests the Court dismiss it from the above-
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`captioned matter for improper venue, ineligible subject matter, and inadequate pleading. Id. at 11.
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`The Court presently addresses Uber’s MTD solely with respect to the defense of improper venue.
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`I.
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`BACKGROUND
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`On March 3, 2021, AGIS filed its complaint against Defendants T-Mobile USA, Inc. and
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`T-Mobile US, Inc. Dkt. No. 1. On April 16, 2021, the Court consolidated similar actions against
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`Lyft, Uber, and WhatsApp with the above-captioned matter as the lead case. Dkt. No. 14.
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`II.
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`LEGAL STANDARDS
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`A. Venue
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`In matters unique to patent law, Federal Circuit law rather than regional circuit law applies.
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`In re Cray Inc., 871 F.3d 1355, 1360 (Fed. Cir. 2017) (citing Midwest Indus., Inc. v. Karavan
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`Trailers, Inc., 175 F.3d 1356, 1359 (Fed. Cir. 1999)). 28 U.S.C. § 1400(b) is unique to patent law
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`and “constitute[s] ‘the exclusive provision controlling venue in patent infringement proceedings’
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`. . . .” Id. (citing TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514, 1518
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`(2017) (quoting Stonite Prods. Co. v. Melvin Lloyd Co., 315 U.S. 561, 563 (1942))).
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`Venue is proper for patent infringement suits “where the defendant resides, or where the
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`defendant has committed acts of infringement and has a regular and established place of business.”
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`28 U.S.C. § 1400(b). For § 1400(b) venue by residence, a domestic corporation resides only in its
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`state of incorporation. TC Heartland LLC, 137 S.Ct. at 1520. For § 1400(b) venue by a regular and
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`established place of business, “(1) there must be a physical place in the district; (2) it must be a
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`regular and established place of business; and (3) it must be the place of the defendant.” In re Cray
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`Inc., 871 F.3d at 1360. “Where a complaint alleges infringement, the allegations ‘satisfy the ‘acts
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`of infringement’ requirement of § 1400(b) ‘[a]lthough the[] allegations may be contested.’” Seven
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`Networks, LLC v. Google LLC, 315 F. Supp. 3d 933, 942 (E.D. Tex. 2017) (quoting Symbology
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`Innovations, LLC v. Lego Sys., Inc., 282 F.Supp.3d 916, 928 (E.D. Va. 2017)).
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`A “place of business” does not require “real property ownership or a leasehold interest in
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`real property” and “leased shelf space or rack space can serve as a ‘place’ under the statute.” In re
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`Google LLC, 949 F.3d 1338, 1343–44 (Fed. Cir. 2020). A “place of business” generally requires
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`an employee or agent of the defendant to conduct business at that place. Id. at 1344. The “agent or
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`employee” need not be “a human agent” and the Court left open the question of whether a machine
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`may be an agent. Id. at 1347.
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`The Federal Circuit has held that a place of business is “of the defendant,” if it is established
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`or ratified by the defendant. Id. at 1363. A place may be “of the defendant” even if the defendant
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`does not own or lease the place if the defendant exercises other attributes of possession or control
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`over the place and “the statute could be satisfied by any physical place that the defendant could
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`‘possess[] or control.’” In re Google, 949 F.3d at 1343. This requirement is satisfied if the
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`defendant “actually engage[s]” in business from the physical location in the District. Intellectual
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`Ventures II LLC v. FedEx Corp., No. 2:16-cv-980-JRG, 2017 WL 5630023, at *7 (E.D. Tex. Nov.
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`22, 2017).
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`A party may move to dismiss an action for “improper venue.” Fed. R. Civ. P. 12(b)(3).
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`“Once a defendant raises a 12(b)(3) motion to dismiss for improper venue, the burden of sustaining
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`venue lies with the plaintiff.” ATEN Int'l Co. v. Emine Tech. Co., 261 F.R.D. 112, 120–21 (E.D.
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`Tex. 2009) (citing Laserdynamics Inc. v. Acer Am. Corp., 209 F.R.D. 388, 390 (S.D.Tex. 2002).
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`A plaintiff may carry its burden by presenting facts, taken as true, that establish venue. Id.
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`The Court “must accept as true all allegations in the complaint and resolve all conflicts in favor of
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`the plaintiff.” Mayfield v. Sallyport Glob. Holdings, Inc., No. 6:13-CV-459, 2014 WL 978685, at
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`*1 (E.D. Tex. Mar. 5, 2014) (citing Ambraco, Inc. v. Bossclip, B.V., 570 F.3d 233, 237–38 (5th
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`Cir. 2009)).
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`“[V]enue facts are to be examined as of the date the suit is filed.” Personal Audio, LLC v.
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`Google, Inc., 280 F. Supp. 3d 922, 924 (E.D. Tex. 2017). The Federal Circuit has emphasized that
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`“each case depends on its own facts” and “no one fact is controlling.” In re Cray, Inc., 871 F.3d at
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`1362, 1366. If venue is improper, the Court must dismiss it, “or if it be in the interest of justice,
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`transfer such case to any district or division in which it could have been brought.” 28 U.S.C. §
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`1406(a).
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`III. ANALYSIS
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`Uber argues that venue is improper for U.S. Patent No. 10,341,838 (the “’838 Patent”).
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`Dkt. No. 24 at 13–14. Uber asserts that “AGIS generically asserts that Uber has ‘committed acts
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`of direct and indirect infringement’ in this District . . . . [b]ut this allegation . . . falls far short for
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`the asserted claim of the ’838 Patent (claim 1), which is limited to a method to be performed ‘by
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`one or more servers.’” Id. Uber contends that to establish venue for the ’838 Patent, AGIS must
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`allege that somewhere in this District Uber operates a server according to the claimed method of
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`the ’838 Patent. Id. at 14. Uber asserts that AGIS does not allege such facts “nor can it. In fact,
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`Uber has no servers in this District or Texas for that matter.” Id. (citing Dkt. No. 24-2 at ¶ 2).
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`AGIS responds that Uber’s MTD is based on the incorrect legal standard. Dkt. No. 43 at 7.
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`AGIS argues that the Court has previously found that “not all of the alleged infringing activity
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`needs to have occurred in the District so long as some act of infringement took place there” and
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`“the acts of infringement required to support venue need not be acts of direct infringement alone.”
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`Id.
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`AGIS asserts that Uber had disclosed that it engages in a “classic hybrid cloud approach”
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`which “utilizes co-located data centers located in the United States and multiple third-party cloud
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`computing services.” Id. at 14 (citing Dkt. Nos. 43-2, 43-3). AGIS contends that Uber’s S-1 filings
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`with the SEC disclose a “massive network” consisting of “tens of millions of Drivers, consumers,
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`restaurants, shippers, carriers, and dockless e-bikes and e-scooters, as well as underlying data,
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`technology, and shared infrastructure” and that it “collect[s], use[s], and process[es] a variety of
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`personal data, such as email addresses, mobile phone numbers, profile photos, location
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`information” and relies on “third-party service providers to host or otherwise process some of our
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`data and that of platform users.” Id. (citing Dkt. No. 43-4).
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`AGIS argues that the court in Seven Networks rejected the argument that direct
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`infringement of a method claim by a defendant alone and entirely within the District was required
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`to show commission of an act of infringement under the venue statute. Id. at 15 (citing Seven
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`Networks, 315 F. Supp. 3d at 943). AGIS asserts the court held there that “the acts of infringement
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`required to support venue in a patent infringement action need not be acts of direct infringement,
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`and venue does lie if the defendant only induced the infringement or contributed to the
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`infringement in the forum.” Id. (citing Seven Networks, 315 F. Supp. 3d at 943).
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`Uber replies that asserted claim 1 of the ’838 Patent recites method steps “to be performed
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`by one or more servers,” the burden to establish proper venue is on AGIS, and AGIS points to
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`Uber’s alleged use of “co-located data centers located in the United States and multiple third-party
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`cloud computing services,” without tying any of those services to the accused technology or
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`establishing that any of those services are present in this District. Dkt. No. 51 at 6–7. Uber argues
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`that both the asserted method claim and unasserted system claim require that one or more servers
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`perform all of the claimed steps of operations, and accordingly none of those limitations could be
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`practiced in this District as none of the accused servers is present in this District. Id. at 7. Uber
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`further argues that because Uber is the only alleged direct infringer of the ’838 Patent and Uber
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`does not infringe in this District, venue cannot be supported through allegations of indirect
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`infringement. Id.
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`AGIS argues that it has sufficiently pleaded direct and indirect infringement with respect
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`to the ’838 Patent and is not required to set forth in detail its infringement theories at this stage.
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`Dkt. No. 69 at 5 (citing Dkt. No. 43 at 17 (citing Seven Networks, 315 F. Supp. 3d at 942–43)).
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`AGIS requests, alternatively, that the Court permit it to conduct venue discovery prior to a
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`determination of Uber’s MTD. Id. at 6. AGIS contends that venue discovery would provide
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`additional evidence regarding Uber’s servers, networks, and physical locations in this District. Id.
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`AGIS has the burden to establish proper venue. In re ZTE (USA) Inc., 890 F.3d 1008, 1013
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`(Fed. Cir. 2018) (“upon motion by the Defendant challenging venue in a patent case, the Plaintiff
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`bears the burden of establishing proper venue.”). “[AGIS’s] allegations in the complaint are taken
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`as true unless controverted by affidavits, declarations, or other evidence.” Soverain IP, LLC v.
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`AT&T, Inc., 2017 WL 5126158, at *2 (E.D. Tex. Oct. 31, 2017). Uber has presented affidavit
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`evidence that Uber does not operate any servers in this District. Dkt. No. 24-2 at ¶ 2.
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`AGIS has presented evidence that Uber engages in a “classic hybrid cloud approach” which
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`“utilizes co-located data centers located in the United States and multiple third-party cloud
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`computing services.” Dkt. No. 43 at 14 (citing Dkt. Nos. 43-2, 43-3). AGIS has also presented
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`evidence of Uber’s “massive network” consisting of “tens of millions of Drivers, consumers,
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`restaurants, shippers, carriers, and dockless e-bikes and e-scooters, as well as underlying data,
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`technology, and shared infrastructure” and that it “collect[s], use[s], and process[es] a variety of
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`personal data, such as email addresses, mobile phone numbers, profile photos, location
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`information” and reliance on “third-party service providers to host or otherwise process some of
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`our data and that of platform users.” Id. (citing Dkt. No. 43-4). AGIS follows these assertions with
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`the statement “[a]ccordingly, the physical infrastructure used by Defendant appears to be much
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`broader than just the “servers,” as submitted by Mr. Rapipong and Defendant.”
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`The Court notes that although Uber challenges venue with respect to the ’838 Patent, Uber
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`has not alleged improper venue with respect to other patents at issue in this matter. With respect
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`to the question of servers themselves, AGIS has pleaded that “Uber has manufactured, used,
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`marketed, distributed, sold, offered for sale, and exported from and imported into the United States
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`products and software that infringe the Patents-in-Suit . . . and the related services and/or servers
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`for the applications . . . .” Case No. 2:21-cv-00026-JRG-RSP, Dkt. No. 1 at 11. The Court finds
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`such pleading sufficient for a motion to dismiss. Accordingly, Uber’s MTD should be denied with
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`respect to the defense of improper venue.
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`IV. CONCLUSION
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`IT IS RECOMMENDED that Uber’s MTD (Dkt. No. 24) be denied-in-part with respect
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`to the request to dismiss the ’838 Patent from suit for improper venue.
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`A party’s failure to file written objections
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`to
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`the findings, conclusions, and
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`recommendations contained in this report within 14 days bars that party from de novo review by
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`the District Judge of those findings, conclusions, and recommendations and, except on grounds of
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`plain error, from appellate review of unobjected-to factual findings and legal conclusions accepted
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`and adopted by the district court. Fed. R. Civ. P. 72(b)(2); see Douglass v. United Servs. Auto.
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`Ass’n, 79 F.3d 1415, 1430 (5th Cir. 1996) (en banc). Any objection to this Report and
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`Recommendation must be filed in ECF under the event “Objection to Report and
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`Recommendations [cv, respoth]” or it may not be considered by the District Judge.
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`7
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`____________________________________
`ROY S. PAYNE
`UNITED STATES MAGISTRATE JUDGE
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`SIGNED this 3rd day of January, 2012.
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`SIGNED this 3rd day of September, 2021.
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