Case 2:21-cv-00072-JRG Document 34 Filed 04/27/21 Page 1 of 11 PageID #: 520
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`
`AGIS SOFTWARE DEVELOPMENT LLC,
`
`
`v.
`
`
`T-MOBILE USA, INC., and T-MOBILE US,
`INC.,
`
`
`AGIS SOFTWARE DEVELOPMENT LLC,
`
`
`v.
`
`
`LYFT, INC.
`
`
`AGIS SOFTWARE DEVELOPMENT LLC,
`
`Plaintiff,
`
`
`v.
`
`
`UBER TECHNOLOGIES, INC. d/b/a UBER.
`
`
`AGIS SOFTWARE DEVELOPMENT LLC,
`
`
`
`v.
`
`
`WHATSAPP, INC.,
`
`
`Case No. 2:21-CV-00072-JRG-RSP
`(Lead Case)
`
`Case No. 2:21-CV-00024-JRG-RSP
`(Member Case)
`
`Case No. 2:21-CV-00026-JRG-RSP
`(Member Case)
`
`Case No. 2:21-CV-00029-JRG-RSP
`(Member Case)
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`DEFENDANT WHATSAPP’S MOTION TO DISMISS FOR IMPROPER VENUE
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`Case 2:21-cv-00072-JRG Document 34 Filed 04/27/21 Page 2 of 11 PageID #: 521
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`TABLE OF CONTENTS
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`I.
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`II.
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`INTRODUCTION ...............................................................................................................1
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`STATEMENT OF ISSUES TO BE DECIDED ..................................................................2
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`III.
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`FACTUAL BACKGROUND ..............................................................................................2
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`A.
`B.
`C.
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`Plaintiff AGIS Software ...........................................................................................2
`Defendant WhatsApp ...............................................................................................2
`Procedural History ...................................................................................................3
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`IV.
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`V.
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`LEGAL STANDARD ..........................................................................................................4
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`ARGUMENT .......................................................................................................................4
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`A. WhatsApp Does Not Reside in this District ............................................................4
`B. WhatsApp Does Not Have A “Regular and Established Place of Business”
`In This District .........................................................................................................5
`1.
`The Like Way Data Center is not located in this District ............................5
`2.
`Plaintiff’s other allegations cannot establish venue .....................................7
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`VI.
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`CONCLUSION ....................................................................................................................7
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`
`i
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`Case 2:21-cv-00072-JRG Document 34 Filed 04/27/21 Page 3 of 11 PageID #: 522
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`
`TABLE OF AUTHORITIES
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`CASES
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`
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`Page(s)
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`Advanced Ground Info. Sys., Inc. v. Life360, Inc.,
`No. 9:14-cv-80651-DMM, Dkt. 32 (S.D. Fla. July 11, 2014) ...................................................2
`
`In re Cray Inc.,
`871 F.3d 1355 (Fed. Cir. 2017)..............................................................................................4, 5
`
`Life360, Inc. v. Advanced Ground Information Systems, Inc.,
`No. 5:15-cv-00151-BLF, Dkt. 19 (N.D. Cal. Mar. 18, 2015) ....................................................2
`
`Personal Audio, LLC v. Google, Inc.,
`280 F. Supp. 3d 922 (E.D. Tex. 2017) .......................................................................................6
`
`Sanofi-Aventis v. Synthon Holding BV,
`No. 1:07-cv-00086, 2008 WL 819295 (M.D.N.C. Mar. 20, 2008)............................................7
`
`TC Heartland LLC v. Kraft Foods Group Brands LLC,
`137 S.Ct. 1514 (2017) ................................................................................................................4
`
`ZTE (USA) Inc. v. AGIS Software Development, LLC,
`No. 4:18-cv-06185-HSG, Dkt. 30 (N.D. Cal. Jan. 11, 2019) ................................................2, 3
`
`STATUTES
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`28 U.S.C. § 1400(b) .............................................................................................................1, 2, 4, 7
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`28 U.S.C. § 1406(a) .........................................................................................................................4
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`RULES
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`Fed. R. Civ. P. 12(b)(3)....................................................................................................................1
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`Local Rule CV-5(a)(3) .....................................................................................................................9
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`
`ii
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`Case 2:21-cv-00072-JRG Document 34 Filed 04/27/21 Page 4 of 11 PageID #: 523
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`Defendant WhatsApp LLC1 (“WhatsApp” or “Defendant”) respectfully moves the Court
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`to dismiss this action for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3).2
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`I.
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`INTRODUCTION
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`Venue in this District is improper for this action. WhatsApp neither resides in this judicial
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`district, nor maintains a regular and established place of business in this District, as required by 28
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`U.S.C. § 1400(b). WhatsApp is not incorporated in Texas. Neither WhatsApp nor its parent
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`company Facebook, Inc. (“Facebook”) own, lease, or rent any property, facilities, or equipment in
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`this District. There are no WhatsApp or Facebook employees who work at any facility located in
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`this District, and no WhatsApp or Facebook servers within this District. Neither WhatsApp nor
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`Facebook conducts any business from a regular and established place in this District.
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`In its complaint, Plaintiff alleges venue through a data center owned by Facebook. But this
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`data center is located in Tarrant County, Texas, which is part of the Northern District of Texas and
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`not part of this judicial district. Plaintiff further alleges that Facebook pays taxes to Denton
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`County. But the identified taxes go to the Northwest Independent School District, and Facebook’s
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`payment of taxes to the school district is based on the data center’s location in Tarrant County
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`(again, in the Northern District of Texas and not this judicial district). That the Northwest
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`Independent School District designates Denton County to collect its property taxes is irrelevant to
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`the location of WhatsApp for the purposes of analyzing venue in this action.
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`Accordingly, venue in this District is improper for this action and the case should be
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`dismissed.
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`1 WhatsApp, Inc. is incorrectly named in the complaint.
`2 WhatsApp is concurrently filing a Complaint for Declaratory Judgment against AGIS Software
`Development LLC in the Northern District of California.
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`1
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`II.
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`STATEMENT OF ISSUES TO BE DECIDED
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`Issue No. 1: Has AGIS Software Development LLC met its burden of establishing that
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`venue is proper in this District under 28 U.S.C. § 1400(b) when WhatsApp is a Delaware
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`corporation that does not reside, and has no regular and established place of business, in the Eastern
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`District of Texas?
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`III.
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`FACTUAL BACKGROUND
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`A.
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`Plaintiff AGIS Software
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`Advanced Ground Information Systems, Inc. (“AGIS, Inc.”) was founded in 2004 to
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`develop location-based communication software. Advanced Ground Info. Sys., Inc. v. Life360,
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`Inc., No. 9:14-cv-80651-DMM, Dkt. 32 at 2 (S.D. Fla. July 11, 2014) (“Life360-Florida”).
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`Incorporated in the state of Florida, its principal place of business is in Jupiter, Florida, where it
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`has been located for more than a decade. Life360, Inc. v. Advanced Ground Information Systems,
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`Inc., No. 5:15-cv-00151-BLF, Dkt. 19 at 2 (N.D. Cal. Mar. 18, 2015). Its Chief Executive Officer
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`and the named inventor of the Patents-in-Suit, Malcolm Beyer, also resides in Florida. Id.; see
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`also ZTE (USA) Inc. v. AGIS Software Development, LLC, No. 4:18-cv-06185-HSG, Dkt. 30 at 4
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`(N.D. Cal. Jan. 11, 2019) (“ZTE-California”).
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`In 2017, AGIS, Inc underwent a corporate restructuring, forming AGIS Holdings, Inc.
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`(“AGIS Holdings”) and plaintiff AGIS Software Development, LLC (“AGIS Software” or
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`“Plaintiff”). ZTE-California, Dkt. 43-21, 43-7, ¶ 7. AGIS, Inc. and AGIS Software became
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`subsidiaries of AGIS Holdings, and the Patents-in-Suit were assigned to AGIS Software. Id.
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`B.
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`Defendant WhatsApp
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`Defendant WhatsApp is the developer of a free, secure, reliable messaging service that
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`allows users to send text messages and voice messages, make voice and video calls, and share
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`photos and other content. WhatsApp and its parent Facebook are incorporated in Delaware with
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`2
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`their principal place of business in Menlo Park, California, which is located in the Northern District
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`of California. Davis Decl.,3 ¶ 3.
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`Neither WhatsApp nor Facebook has a regular and established place of business in the
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`Eastern District of Texas. There are no Facebook or WhatsApp employees who work at any
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`facility located in the Eastern District of Texas, and no Facebook or WhatsApp servers within the
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`Eastern District of Texas. Id., ¶ 6. Neither Facebook nor WhatsApp maintains, operates, or leases
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`any offices, facilities, equipment or other physical locations or property in the Eastern District of
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`Texas. Id., ¶ 6.
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`Facebook has a data center located in Fort Worth, Texas for its servers (“Like Way Data
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`Center”). Id., ¶ 1, 5. But the Like Way Data Center is located in Tarrant County, which is in the
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`Northern District of Texas. Id., ¶ 5. Facebook also leases a warehouse that contains parts and
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`equipment for the Like Way Data Center. Id., ¶ 6. But this warehouse is located at 13550 Park
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`Vista Boulevard, Fort Worth, Texas 76177, also in Tarrant County in the Northern District of
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`Texas. Id., ¶ 6.
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`C.
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`Procedural History
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`On January 29, 2021, AGIS filed this patent infringement lawsuit against WhatsApp in the
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`Eastern District of Texas. Dkt. 1. The complaint alleges venue is proper over WhatsApp in this
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`judicial district because “WhatsApp maintains a regular and established place of business this
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`Judicial District.” Dkt. 1, ¶ 5. AGIS relies on Like Way Data Center for venue. Dkt. 1, ¶ 5. AGIS
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`also relies on Denton County tax records that show Facebook, via its subsidiary, pays taxes for the
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`property located on Like Way. Id. As discussed below, neither of these allegations establish
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`proper venue in this District. Finally, AGIS relies on an allegation on “information and belief”
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`3 Declaration of Bradley Davis in Support of WhatsApp’s Motion to Dismiss (“Davis Decl.”).
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`3
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`Case 2:21-cv-00072-JRG Document 34 Filed 04/27/21 Page 7 of 11 PageID #: 526
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`that WhatsApp has a “hub” for employees in Plano and Allen, Texas, in this District. Dkt. 1, ¶ 6.
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`It is unclear what Plano and Allen “hubs” AGIS refers to in its complaint, but as explained below,
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`this allegation is unsupported and untrue.
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`IV.
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`LEGAL STANDARD
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`Venue is proper only where (1) the defendant resides, or (2) where the defendant has
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`committed acts of infringement4 and has a regular and established place of business. 28 U.S.C. §
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`1400(b). For the first prong, a domestic corporation resides only in its state of incorporation. TC
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`Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514, 1520 (2017). To satisfy the
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`second prong, “(1) there must be a physical place in the district; (2) it must be a regular and
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`established place of business; and (3) it must be the place of the defendant.” In re Cray Inc., 871
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`F.3d 1355, 1360 (Fed. Cir. 2017). “If any statutory requirement is not satisfied, venue is improper
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`under § 1400(b).” Id. Where venue is improper, a court may dismiss the case. 28 U.S.C. §
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`1406(a).
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`V.
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`ARGUMENT
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`A. WhatsApp Does Not Reside in this District
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`In TC Heartland, the Supreme Court held that under the patent venue statute § 1400(b), a
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`defendant “resides” only in its state of incorporation. 137 S.Ct. at 1517; see also 28 U.S.C. §
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`1400(b). WhatsApp does not reside in this District because it is incorporated in Delaware, not
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`Texas. Davis Decl., ¶ 3. As a matter of law, there is no basis for venue in this District under the
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`first prong of the patent venue statute.
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`4 WhatsApp also denies that it has committed any acts of infringement in this District or elsewhere.
`But given that it neither resides nor has a regular and established place of business in this District,
`the Court need not reach this issue.
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`4
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`B. WhatsApp Does Not Have A “Regular and Established Place of Business” In
`This District
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`In In re Cray, the Federal Circuit held that there are three requirements to satisfy the second
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`prong under the patent venue statute: “(1) there must be a physical place in the district; (2) it must
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`be a regular and established place of business; and (3) it must be the place of the defendant.” 871
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`F.3d at 1360. As a threshold matter, WhatsApp does not have a physical location in this District.
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`Davis Decl., ¶ 4. WhatsApp does not own, lease, or rent any property, facilities, or equipment that
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`could constitute a physical location in this District. Id., ¶ 6. Nor does WhatsApp have any
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`employees that work from physical location that would constitute a place of business in this
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`District. Id., ¶ 6.
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`1.
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`The Like Way Data Center is not located in this District
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`AGIS alleges that “[t]he Like Way data center is a physical location of WhatsApp in this
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`District.” Dkt. 1, ¶ 5. This is incorrect. The data center at 4500 Like Way, Fort Worth, Texas
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`76177 is located wholly within in Tarrant County in the Northern District of Texas. Davis Decl.,
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`¶ 5. In particular, Tarrant County public records show deeds affiliated with the tract of the land
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`on which the Like Way Data Center is located. See Exs. A-C, Tarrant County Official Records
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`Search, https://tarrant.tx.publicsearch.us/. The deeds filed on June 12, 2015, December 22, 2015,
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`and April 22, 2016 collectively show the tract of land of the Like Way Data Center is located solely
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`in Tarrant County. Id. Additionally, on April 18, 2017, Todd A. Bridges, a Registered
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`Professional Land Surveyor in the State of Texas certified that the land plat he surveyed accurately
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`represents the land on which the Like Way Data Center is located. Ex. D. The land plat was
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`officially recorded with Tarrant County on May 22, 2017 with Instrument Number D217113414,
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`showing the Like Way Data Center is located solely within Tarrant County. Id. Further, the
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`Tarrant Appraisal District includes the Like Way Data Center as a property located in Tarrant
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`5
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`County, not Denton County. See Ex. E, Tarrant Appraisal District Property Search,
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`https://www.tad.org/property/14401610/. Thus, the Like Way Data Center is located wholly in
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`Tarrant County, which is in the Northern District of Texas.
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`AGIS also alleges that “WhatsApp pays taxes in the District to Denton County for its Like
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`Way data center.” Dkt. 1, ¶ 5. Again, this is incorrect. WhatsApp pays taxes that go to the
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`Northwest Independent School District (“NISD”) for the Like Way Data Center in the Northern
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`District of Texas. Davis Decl., ¶ 7. These taxes are merely collected by Denton County as the
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`designated tax collector of the NISD. Id., ¶ 8. The Tarrant Appraisal District shows that the Like
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`Way Data Center falls within the jurisdiction of the NISD. See Ex. E, Tarrant Appraisal District
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`Property Search, https://www.tad.org/property/14401610/. NISD encompasses Tarrant County,
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`Wise County, and Denton County, and all property owners located in NISD pay property taxes
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`that NISD collects. The Denton County Tax Assessor/Collector handles all of the NISD tax
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`collections. See Ex. F, Tax Information, https://www.nisdtxbond.org/tax-info (“The Denton
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`County Tax Assessor/Collector, who handles all of NISD tax collections, issued amended tax
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`statements at that time to reflect the adjusted M&O rate.”); see also Ex. G, Denton County Tax
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`Assessor
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`to Issue Amended Tax Statements, https://www.nisdtx.org/news/what_s_new/
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`tax_assessor_to_issue_amended_tax_statements. Any taxes paid to Denton County reflect the
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`taxes collected on behalf of NISD for the property located in Tarrant County. These taxes were
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`not, and are not, paid for any property located in Denton County—real or personal. To establish
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`venue, AGIS needs to show WhatsApp paid taxes for real property located in the Eastern District
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`of Texas. Taxes paid in the Eastern District of Texas for any reason other than for real property
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`located there is legally insufficient to establish venue. See Personal Audio, LLC v. Google, Inc.,
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`280 F. Supp. 3d 922, 932-33 (E.D. Tex. 2017) (holding that paying taxes on personal property in
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`6
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`Case 2:21-cv-00072-JRG Document 34 Filed 04/27/21 Page 10 of 11 PageID #: 529
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`the Eastern District of Texas does not establish a “regular and established place of business” there
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`because the test is real property located in the district); see also Sanofi-Aventis v. Synthon Holding
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`BV, No. 1:07-cv-00086, 2008 WL 819295, at *3-5 (M.D.N.C. Mar. 20, 2008) (holding that paying
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`property tax on furniture was insufficient to establish venue in the judicial district). Thus, the taxes
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`paid to Denton County for the NISD are insufficient to show a “regular and established place of
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`business” in the Eastern District of Texas when the real property itself is located in the Northern
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`District of Texas.
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`2.
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`Plaintiff’s other allegations cannot establish venue
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`AGIS Software further alleges that WhatsApp has physical addresses at two locations in
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`Austin, Texas. Dkt. 1, ¶ 6. These locations are physically located within Travis County in the
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`Western District of Texas, not the Eastern District of Texas. AGIS also alleges “on information
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`and belief” that “WhatsApp has a hub for employees physically located and working in the District,
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`such as in Plano, Texas and Allen, Texas.” Dkt. 1, ¶ 6. AGIS provides no basis for this allegation.
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`Regardless, WhatsApp does not have a “hub for employees” in Plano or Allen, nor anywhere else
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`in the Eastern District of Texas. Davis Decl., ¶ 9.
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`Venue over WhatsApp is improper in this district under Section 1400(b), and AGIS cannot
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`allege any facts that establish otherwise.
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`VI. CONCLUSION
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`For the foregoing reasons, WhatsApp respectfully requests that the Court dismiss this case
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`for improper venue.
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`7
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`Case 2:21-cv-00072-JRG Document 34 Filed 04/27/21 Page 11 of 11 PageID #: 530
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`Date: April 27, 2021
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`Respectfully submitted,
`
`
`
`
`
`
`
`/s/ Michael E. Jones
`Michael E. Jones
`SBN: 10929400
`Patrick C. Clutter
`SBN: 24036374
`POTTER MINTON, PC
`110 North College, Suite 500
`Tyler, Texas 75702
`Tel: 903-597-8311
`Fax: 903-593-0846
`mikejones@potterminton.com
`patrickclutter@potterminton.com
`
`Lisa K. Nguyen
`Richard G. Frenkel
`Clara Wang (pro hac vice to be filed)
`LATHAM & WATKINS LLP
`140 Scott Drive
`Menlo Park, CA 94025-1008
`Tel: (650) 328-4600 / Fax: (650) 463-2600
`lisa.nguyen@lw.com
`rick.frenkel@lw.com
`clara.wang@lw.com
`
`Tiffany Weston (pro hac vice to be filed)
`LATHAM & WATKINS LLP
`555 Eleventh Street, NW
`Suite 1000
`Washington, DC 20004
`Tel: (202) 637-2200 / Fax: (202) 637-2201
`tiffany.weston@lw.com
`
`Attorneys for Defendant WhatsApp, LLC
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`8
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