Case 3:14-cv-00757-REP Document 74 Filed 04/03/15 Page 1 of 5 PageID# 9991
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE EASTERN DISTRICT OF VIRGINIA
`
`Richmond Division
`
`I r r i t
`
`APR-3 2015
`
`b\
`CLERK, U.S. DISTRICT COURT
`RICHMOND VA
`
`SAMSUNG ELECTRONICS CO.,
`LTD., et al. ,
`
`Plaintiffs,
`
`v.
`
`Civil Action No. 3:14CV757
`
`NVIDIA CORPORATION,
`et al.,
`
`Defendants
`
`MEMORANDUM OPINION
`
`This matter is before the Court on DEFENDANTS'
`
`MOTION TO
`
`TRANSFER VENUE PURSUANT TO 28 U.S.C. § 1404(a), SEVER, AND STAY
`
`(Docket No. 46).
`
`For the reasons stated below, this motion will
`
`be denied.
`
`BACKGROUND
`
`In
`
`this
`
`case,
`
`Plaintiffs
`
`Samsung
`
`Electronics
`
`Co.,
`
`Ltd.
`
`("SEC")
`
`and
`
`Samsung
`
`Electronics
`
`America,
`
`Inc.
`
`("SEA")
`
`(collectively,
`
`"Samsung")
`
`have brought six patent infringement
`
`claims against Defendants Velocity Micro,
`
`Inc. d/b/a Velocity
`
`Micro ("Velocity Micro") and Velocity Holdings, LLC ("Velocity
`
`Holdings")
`
`(collectively,
`
`"Velocity"),
`
`and NVIDIA Corporation
`
`("NVIDIA"),
`
`two
`
`patent
`
`infringement
`
`claims
`
`against
`
`Velocity
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE EASTERN DISTRICT OF VIRGINIA
`
`Richmond Division
`
`I r r i t
`
`APR-3 2015
`
`b\
`CLERK, U.S. DISTRICT COURT
`RICHMOND VA
`
`SAMSUNG ELECTRONICS CO.,
`LTD., et al. ,
`
`Plaintiffs,
`
`v.
`
`Civil Action No. 3:14CV757
`
`NVIDIA CORPORATION,
`et al.,
`
`Defendants
`
`MEMORANDUM OPINION
`
`This matter is before the Court on DEFENDANTS'
`
`MOTION TO
`
`TRANSFER VENUE PURSUANT TO 28 U.S.C. § 1404(a), SEVER, AND STAY
`
`(Docket No. 46).
`
`For the reasons stated below, this motion will
`
`be denied.
`
`BACKGROUND
`
`In
`
`this
`
`case,
`
`Plaintiffs
`
`Samsung
`
`Electronics
`
`Co.,
`
`Ltd.
`
`("SEC")
`
`and
`
`Samsung
`
`Electronics
`
`America,
`
`Inc.
`
`("SEA")
`
`(collectively,
`
`"Samsung")
`
`have brought six patent infringement
`
`claims against Defendants Velocity Micro,
`
`Inc. d/b/a Velocity
`
`Micro ("Velocity Micro") and Velocity Holdings, LLC ("Velocity
`
`Holdings")
`
`(collectively,
`
`"Velocity"),
`
`and NVIDIA Corporation
`
`("NVIDIA"),
`
`two
`
`patent
`
`infringement
`
`claims
`
`against
`
`Velocity
`
`
`
`Case 3:14-cv-00757-REP Document 74 Filed 04/03/15 Page 2 of 5 PageID# 9992
`
`alone,
`
`and
`
`a
`
`false
`
`advertising
`
`claim
`
`against
`
`NVIDIA
`
`under
`
`Virginia Code §§ 18.2-216 and 59.1-68.3.
`
`The Defendants contend that Samsung has included the patent
`
`infringement
`
`claims
`
`against
`
`Velocity
`
`in
`
`"an
`
`attempt
`
`to
`
`manufacture a connection" to the Eastern District of Virginia.
`
`(Defs.'
`
`Mem.
`
`at
`
`1,
`
`Docket No.
`
`47.)
`
`The Defendants move to
`
`transfer the claims against NVIDIA to the Northern District of
`
`California
`
`while
`
`severing
`
`and
`
`staying
`
`the
`
`claims
`
`against
`
`Velocity until the NVIDIA action is adjudicated.
`
`DISCUSSION
`
`When evaluating a motion to transfer venue under 28 U.S.C.
`
`§ 1404(a) , courts follow a two-step inquiry.
`
`First, the court
`
`must determine whether the civil action could have been brought
`
`in the proposed forum.
`
`See Jaffe v. LSI Corp., 874 F. Supp. 2d
`
`499, 502 (E.D. Va.
`
`2012).
`
`Second, the court should consider:
`
`"(1) the plaintiff's choice of forum;
`
`(2) the convenience of the
`
`parties;
`
`(3)
`
`access
`
`to evidence;
`
`(4)
`
`the convenience of the
`
`witnesses, including third-party witnesses; and (5) the interest
`
`of justice."
`
`Samsung Elec. Co. v. Rambus, Inc., 386 F. Supp. 2d
`
`708, 716
`
`(E.D. Va.
`
`2005).
`
`The Defendants advance persuasive
`
`evidence and arguments regarding each of these factors in their
`
`motion.
`
`When a motion to transfer venue is contingent upon severing
`
`and
`
`staying
`
`the
`
`remaining
`
`claims,
`
`defendants
`
`must
`
`first
`
`
`
`Case 3:14-cv-00757-REP Document 74 Filed 04/03/15 Page 3 of 5 PageID# 9993
`
`demonstrate
`
`that
`
`(1)
`
`the
`
`claims
`
`to
`
`be
`
`severed
`
`are
`
`only
`
`peripheral in nature, and (2) adjudication of the remaining main
`
`claims will potentially dispose of the severed claims.
`
`See Koh
`
`v. Microtek Int'l,
`
`Inc., 250 F. Supp. 2d 627,
`
`631-32 (E.D. Va.
`
`2003) .
`
`Only if these requirements are met and the transfer of
`
`the claims is otherwise warranted under section 1404 (a) can a
`
`district court grant a motion to transfer, sever, and stay.
`
`See
`
`id.
`
`Claims tend to be deemed peripheral when the defendant is
`
`simply a customer,
`
`reseller,
`
`or distributor of the infringing
`
`product.
`
`See,
`
`e.g., Koh, 250 F. Supp. 2d 627
`
`(distributor); LG
`
`Electronics
`
`Inc.
`
`v.
`
`Advance
`
`Creative
`
`Computer
`
`Corp.,
`
`131
`
`F.
`
`Supp.
`
`2d 804
`
`(E.D.
`
`Va.
`
`2001)
`
`(reseller).
`
`In evaluating the
`
`peripheral nature of the claims,
`
`however,
`
`"what matters in not
`
`whether a defendant is a customer or distributor of the alleged
`
`infringer, but rather whether the claim against this defendant
`
`is peripheral to the main dispute."
`
`Corry v. CFM Majestic Inc.,
`
`16 F. Supp. 2d 660, 665 (E.D. Va. 1998).
`
`In five of the six infringement claims lodged against both
`
`NVIDIA
`
`and
`
`Velocity,
`
`the
`
`claims
`
`against
`
`Velocity
`
`appear
`
`peripheral.
`
`Although Velocity does not stand in the role of
`
`"end consumer" because it incorporates the infringing component
`
`into
`
`its
`
`own
`
`product,
`
`Velocity
`
`remains
`
`a
`
`mere
`
`customer
`
`nonetheless
`
`because
`
`the
`
`infringement
`
`of
`
`its
`
`own
`
`product
`
`is
`
`
`
`Case 3:14-cv-00757-REP Document 74 Filed 04/03/15 Page 4 of 5 PageID# 9994
`
`entirely conditional
`
`upon
`
`a part
`
`that
`
`it
`
`has
`
`purchased
`
`and
`
`incorporated
`
`through
`
`what
`
`appear
`
`to
`
`be
`
`routine
`
`business
`
`transactions.
`
`In other words, the peripheral customers need not
`
`be end consumers so long as "the claim against [the] defendant
`
`is peripheral to the main dispute."
`
`Id.
`
`In
`
`one
`
`of
`
`the
`
`six
`
`infringement
`
`claims,
`
`however,
`
`the
`
`infringing product involves a combination of NVIDIA and Velocity
`
`components.
`
`Under the "Display Adapter Computer System Patent"
`
`(U.S. Patent No. 6,804,724, or "*724"), the allegedly infringing
`
`system
`
`results
`
`from
`
`a
`
`combination
`
`of
`
`components
`
`from
`
`both
`
`defendants.
`
`Of the six major elements of the claimed computer
`
`system, NVIDIA provides three (the "digital transmitter," "video
`
`controller," and "monitor power sensor") and Velocity provides
`
`three
`
`(the
`
`"LCD panel,"
`
`"external
`
`video
`
`port,"
`
`and "digital
`
`cable").
`
`As such,
`
`Samsung claims that "[p]roving that NVIDIA
`
`infringes the Display Adapter Computer System Patent (^724) does
`
`not resolve the issue of Velocity's infringement."
`
`(Pis.' Opp'n
`
`at 12, Docket No. 53.)
`
`The Defendants retort that Samsung refers to examples of
`
`non-Velocity laptops in its Amended Complaint (Defs.' Reply at
`
`13-14, Docket No. 55), thereby implying that Velocity is not a
`
`necessary party for Samsung to pursue direct infringement claims
`
`on the '724 Patent.
`
`Id. at 15 n.8.
`
`That may be the case, but
`
`it does not show that the claim before the Court is "peripheral"
`
`
`
`Case 3:14-cv-00757-REP Document 74 Filed 04/03/15 Page 5 of 5 PageID# 9995
`
`with respect to Velocity; it only shows that Samsung could have
`
`chosen a different venue with a different co-defendant.
`
`The record,
`
`as
`
`it now exists,
`
`shows that the
`
`A724 Patent
`
`should remain before this Court.
`
`Furthermore,
`
`the defendants
`
`have not met their burden respecting allegedly peripheral claims
`
`as
`
`defined
`
`by
`
`Koh.
`
`The
`
`Court,
`
`therefore,
`
`finds
`
`that
`
`the
`
`interests
`
`of
`
`justice
`
`and
`
`efficient
`
`adjudication
`
`warrant
`
`maintaining all claims
`
`in
`
`the
`
`Plaintiffs'
`
`original choice of
`
`venue:
`
`the Eastern District of Virginia.
`
`CONCLUSION
`
`For the foregoing reasons,
`
`DEFENDANTS'
`
`MOTION TO TRANSFER
`
`VENUE PURSUANT TO 28 U.S.C. § 1404(a),
`
`SEVER, AND STAY (Docket
`
`No. 46) will be denied.
`
`It is so ORDERED.
`
`Richmond, Virginia
`Date:
`April 3, 2015
`
`/s/
`
`fcU
`
`Robert E. Payne
`Senior United States District Judge
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