Case 3:14-cv-00757-REP-DJN Document 53 Filed 01/26/15 Page 1 of 34 PageID# 2551
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`RICHMOND DIVISION
`
`
`CIVIL ACTION NO. 3:14-cv-00757-REP
`
`
`
`
`
`
`Plaintiffs,
`
`SAMSUNG ELECTRONICS CO., LTD., and
`SAMSUNG ELECTRONICS AMERICA,
`INC.,
`
`
`
`v.
`
`NVIDIA CORPORATION, VELOCITY
`MICRO, INC. D/B/A VELOCITY MICRO,
`AND VELOCITY HOLDINGS, LLC
`
`
`
`Defendants.
`
`
`
`SAMSUNG’S OPPOSITION TO DEFENDANTS’ MOTION TO
`TRANSFER, SEVER, AND STAY
`
`
`
`
`

`

`Case 3:14-cv-00757-REP-DJN Document 53 Filed 01/26/15 Page 2 of 34 PageID# 2552
`
`TABLE OF CONTENTS
`
`
`Page
`
`
`
`I.
`II.
`
`III.
`
`IV.
`
`
`
`
`
`
`2.
`
`B.
`
`INTRODUCTION ............................................................................................................. 1
`FACTUAL BACKGROUND ............................................................................................ 5
`A.
`The Litigation Backstory ....................................................................................... 5
`B.
`The Parties: Samsung, NVIDIA, and Velocity ...................................................... 6
`C.
`The Causes of Action: Patent Infringement and False Advertising ....................... 8
`ARGUMENT ..................................................................................................................... 9
`A.
`Claims Against Velocity Should Not be Severed or Stayed .................................. 9
`1.
`Claims Against Velocity are Not Peripheral, and All Claims
`Should be Tried Together........................................................................... 9
`Adjudication of Claims Against NVIDIA Will Not Resolve the
`Claims Against Velocity ........................................................................... 11
`Transfer is Not Warranted Under § 1404(a) ........................................... 12
`3.
`The Jurisdictional and Convenience Factors in § 1404(a) Weigh in Favor
`of Retaining Venue .............................................................................................. 13
`1.
`Jurisdiction is Proper in EDVA, Not in NDCA ........................................ 13
`2.
`Convenience Factors Weigh in Favor of Retaining Venue in This
`District ..................................................................................................... 15
`a.
`Samsung’s Choice of Forum is Entitled to Substantial
`Weight .......................................................................................... 15
`Convenience of the Parties and Witnesses Counsels
`Against Transfer........................................................................... 19
`The Interests of Justice Weigh in Favor of Resolving This
`Matter in Virginia ........................................................................ 22
`CONCLUSION ................................................................................................................ 26
`
`b.
`
`c.
`
`-i-
`
`

`

`Case 3:14-cv-00757-REP-DJN Document 53 Filed 01/26/15 Page 3 of 34 PageID# 2553
`
`TABLE OF AUTHORITIES
`
`
`Page(s)
`
`CASES
`
`Acterna, L.L.C. v. Adtech, Inc.,
`129 F. Supp. 2d 936 (E.D. Va. 2001) ......................................................................................17
`
`Am. Commercial Lines, LLC v. Ne. Mar. Inst., Inc.,
`588 F. Supp. 2d 935 (S.D. In. 2008) ........................................................................................23
`
`Amini Innovation Corp. v. JS Imports, Inc.,
`497 F. Supp. 2d 1093 (C.D. Cal. 2007) ...................................................................................15
`
`Arnold v. E. Air Lines, Inc.,
`681 F.2d 186 (4th Cir. 1982) on reh’g, 712 F.2d 899 (4th Cir. 1983) ...............................13, 25
`
`Bluestone Innovations, LLC v. LG Electronics, Inc.,
`940 F. Supp. 2d 310 (E.D. Va. 2013) ......................................................................................24
`
`Brown Mfg. Corp. v. Alpha Lawn & Garden Equip., Inc.,
`219 F. Supp. 2d 705 (E.D. Va. 2002) ......................................................................................10
`
`Byerson v. Equifax Info. Servs., LLC,
`467 F. Supp. 2d 627 (E.D. Va. 2006) ......................................................................................19
`
`Cognitronics Imaging Sys., Inc. v. Recognition Research Inc.,
`83 F. Supp. 2d 689 (E.D. Va. 2000) ........................................................................................23
`
`CollegeSource, Inc. v. AcademyOne, Inc.,
`653 F.3d 1066 (9th Cir. 2011) .................................................................................................14
`
`Collins v. Straight, Inc.,
`748 F.2d 916 (4th Cir. 1984) .........................................................................................4, 13, 15
`
`Corry v. CFM Majestic Inc.,
`16 F. Supp. 2d 660 (E.D. Va. 1998) ....................................................................................9, 10
`
`DietGoal Innovations LLC v. Wegmans Food Markets, Inc.,
`No. 2:13CV154, 2014 WL 2561222 (E.D. Va. June 6, 2014) ...........................................13, 25
`
`E. Scientific Mktg., Inc. v. Tekna-Seal, Inc.,
`696 F. Supp. 173 (E.D. Va. 1988) ...........................................................................................16
`
`Focht v. Sol Melia S.A.,
`No. C-10-0906 EMC, 2012 WL 162564 (N.D. Cal. Jan. 19, 2012) ........................................14
`
`Fujitsu Media Devices Ltd. v. Samsung Electro-Mechanics Co.,
`No. 3:01-cv-00782-REP ..........................................................................................................18
`
`
`
`-ii-
`
`

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`Case 3:14-cv-00757-REP-DJN Document 53 Filed 01/26/15 Page 4 of 34 PageID# 2554
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`Gebr. Brasseler GmbH & Co. KG v. Abrasive Tech., Inc.,
`No. 1:08CV1246GBL/TCB, 2009 WL 874513 (E.D. Va. Mar. 27, 2009) .............................17
`
`Gemalto S.A. v. HTC Corp.,
`No. 6:10CV561 LED-JDL, 2011 WL 5838212 (E.D. Tex. Nov. 18, 2011) ............................18
`
`GTE Wireless, Inc. v. Qualcomm, Inc.,
`71 F. Supp. 2d 517 (E.D. Va. 1999) ........................................................................................17
`
`Heinz Kettler GMBH & Co. v. Indian Indus., Inc.,
`575 F. Supp. 2d 728 (E.D. Va. 2008) ........................................................................................9
`
`Heinz Kettler GMBH & Co. v. Razor USA, LLC,
`750 F. Supp. 2d 660 (E.D. Va. 2010) ....................................................................13, 15, 24, 26
`
`Hitachi, Ltd. v. Samsung Display Devices Co.,
`No. 1:97-cv-01988-REP ..........................................................................................................18
`
`Hoffman v. Blaski,
`363 U.S. 335 (1960) .................................................................................................................13
`
`Hunter Eng’g Co. v. ACCU Indus., Inc.,
`245 F. Supp. 2d 761 (E.D. Va. 2002) ......................................................................................16
`
`In re Genentech, Inc.,
`566 F.3d 1338 (Fed. Cir. 2009)................................................................................................19
`
`Jaffé v. LSI Corp.,
`874 F. Supp. 2d 499 (E.D. Va. 2012) ......................................................................................13
`
`James v. Experian Info. Solutions, Inc.,
`No. 3:12-CV-902, 2014 WL 29041 (E.D. Va. Jan. 2, 2014) ...................................................20
`
`Koh v. MicroTek Int’l, Inc.,
`250 F. Supp. 2d 627 (E.D. Va. 2003) ..................................................................................9, 22
`
`Landis v. N. Am. Co.,
`299 U.S. 248 (1936) ...................................................................................................................9
`
`LG Electronics Inc. v. Advanced Creative Computer Corp.,
`131 F. Supp. 2d 804 (E.D. Va. 2001) ................................................................................10, 13
`
`Lugus IP v. Volvo Car Corp,
`No. 3:11-cv-811-HEH, 2012 WL 1715983 (E.D. Va. May 15, 2012) ....................................10
`
`
`
`-iii-
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`

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`Case 3:14-cv-00757-REP-DJN Document 53 Filed 01/26/15 Page 5 of 34 PageID# 2555
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`Lycos, Inc. v. TiVo, Inc.,
`499 F. Supp. 2d 685 (E.D. Va. 2007) ......................................................................................17
`
`Macronix Int’l Co. v. Spansion Inc.,
`No. 3:13CV679, 2014 WL 934521 (E.D. Va. Mar. 10, 2014) ..........................................16, 22
`
`Mavrix Photo, Inc. v. Brand Techs., Inc.,
`647 F.3d 1218 (9th Cir. 2011) .................................................................................................14
`
`Mullins v. Equifax Info. Servs., LLC,
`No. CIV.A. 3:05CV888, 2006 WL 1214024 (E.D. Va. Apr. 28, 2006) ......................16, 22, 25
`
`Natural Wellness Centers of Am., Inc. v. Golden Health Products, Inc.,
`No. C 12-05586 CW, 2013 WL 245594 (N.D. Cal. Jan. 22, 2013) .........................................14
`
`NVIDIA Corp. v. Samsung Electronics, Inc.,
`No. 1:14-cv-01127-LPS (D. Del. 2014).....................................................................................5
`
`Plymouth Tube Co. v. O’Donnell,
`No. 95-CV277, 1995 U.S. Dist. LEXIS 8912 (N.D. Ill. Jun. 27, 1995) ..................................23
`
`Quinton Instrument Co. v. Datascope Corp.,
`No. 3:96-cv-160, 1996 U.S. Dist. LEXIS 22740 (E.D. Va. June 3, 1996) ........................16, 25
`
`Rockstar Consortium US LP v. Samsung Electronics Co.,
`No. 2:13-CV-00894-JRG, 2014 WL 2965880 (E.D. Tex. July 1, 2014) .................................18
`
`Samsung Am., v. Vine Enters.,
`No. 1:99-cv-01151-CMH .........................................................................................................18
`
`Samsung Electronics Co. v. Rambus, Inc.,
`386 F. Supp. 2d 708 (E.D. Va. 2005) .............................................................................. passim
`
`Samsung Electronics v. Ricoh Corp.,
`No. 1:94-cv-01267 ...................................................................................................................18
`
`Semiconductor Energy Lab Co. v. Samsung Electronics Co.,
`No. 1:00-cv-01525-TSE ...........................................................................................................18
`
`Shared Memory Graphics LLC v. Apple Inc.,
`No. 5:09CV5128 BSM, 2010 WL 5151612 (W.D. Ark. May 27, 2010) ................................18
`
`Taltwell, LLC v. Zonet USA Corp.,
`No. CIV.A. 3:07CV543, 2007 WL 4562874 (E.D. Va. Dec. 20, 2007) ..................................22
`
`
`
`-iv-
`
`

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`Case 3:14-cv-00757-REP-DJN Document 53 Filed 01/26/15 Page 6 of 34 PageID# 2556
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`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`Triangle Software LLC v. Garmin Int’l, Inc.,
`No. 1:10-cv-1457, 2011 WL 10618731 (E.D. Va. June 20, 2011) ........................11, 15, 21, 24
`
`Trs. of Columbia Univ. in City of New York v. Symantec Corp.,
`No. 3:13-CV-808, 2014 WL 1329417 (E.D. Va. Apr. 2, 2014) ..............................................19
`
`USA Labs., Inc v. Bio-Engineered Supplements & Nutrition, Inc.,
`No. 1:09cv47, 2009 WL 1227867 (E.D. Va. May 4, 2009).....................................................15
`
`Virginia Innovation Scis., Inc. v. Samsung Electronics Co.,
`928 F. Supp. 2d 863 (E.D. Va. 2013) ......................................................................................18
`
`WIAV Solutions LLC v. Motorola, Inc.,
`No. CIV. 3:09CV447, 2009 WL 3414612 (E.D. Va. Oct. 20, 2009) ......................................21
`
`STATUTES
`
`28 U.S.C. § 1404(a) .............................................................................................................9, 12, 13
`
`35 U.S.C. § 286 ................................................................................................................................2
`
`Virginia Code § 18.2-216 ..............................................................................................................22
`
`Virginia Code § 59.1-68.3 .............................................................................................................22
`
`
`
`-v-
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`

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`Case 3:14-cv-00757-REP-DJN Document 53 Filed 01/26/15 Page 7 of 34 PageID# 2557
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`
`I.
`
`INTRODUCTION
`
`This District Is The Proper Forum: Samsung filed suit in the Eastern District of
`
`Virginia because both NVIDIA and Velocity are subject to jurisdiction in this District. This case
`
`should not be transferred because there is no evidence, and defendants have not alleged, that
`
`Velocity is subject to jurisdiction in the Northern District of California or anywhere other than
`
`this District. And far from being a mere reseller or distributor of NVIDIA products, Velocity is a
`
`systems designer and manufacturer that partners with NVIDIA to bring infringing products to
`
`market. In that partnership, Velocity does more than merely integrate NVIDIA’s infringing
`
`processors—Velocity builds “specially-designed, custom-built, award-winning products” that are
`
`complete systems that independently infringe Samsung’s patents. Samsung’s suit alleges
`
`infringement of eight patents that generally claim technology related to computers and
`
`microprocessors. All eight patents are asserted against Velocity, and six of the patents are
`
`asserted against NVIDIA. One representative infringement allegation for the ’724 Patent asserts
`
`that NVIDIA and Velocity each supply components necessary to infringe. Velocity provides an
`
`LCD panel, an external video port, and a digital cable, while NVIDIA supplies a digital
`
`transmitter, a video controller, and a monitor power sensor. Velocity then assembles these
`
`components into a complete, infringing system. The claims against Velocity are central to the
`
`case and were brought in this District because this is the only known forum where these claims
`
`against Velocity and NVIDIA can be asserted together.
`
`Velocity Needs to be Part of This Suit: Two of the patents are asserted only against
`
`Velocity for acts of infringement occurring only in this District. Transferring the case to
`
`California without Velocity would deprive Samsung of its right to relief on those patents.
`
`Samsung similarly deserves redress for the patents infringed by both NVIDIA and Velocity. For
`
`1
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`

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`many of those claims, Samsung needs discovery from Velocity in this District to prove
`
`NVIDIA’s infringement, and vice versa. Defendants attempt to discount Velocity’s importance
`
`by arguing that Velocity sold few, if any, infringing products. But defendants’ carefully-worded
`
`statements do not support the point they hope to make. Velocity narrowly avers that it never sold
`
`the particular laptop computer with the specific hybrid hard drive identified by Samsung as
`
`infringing Samsung’s ’054 Patent. Velocity does not, however, say that it never sold any
`
`accused computers with hybrid hard drives. Discovery is expected to reveal that Velocity sold
`
`many accused computers with hybrid hard drives, even if it did not sell the particular model
`
`currently advertised for sale on Velocity’s website. Velocity’s further argument that it sold less
`
`than $20,000 worth of computer cases that infringe Samsung’s ’854 Patent last year says nothing
`
`about how many of those cases, or similarly infringing cases, it sold over the six year damages
`
`period. See 35 U.S.C. § 286.
`
`This Case Involves Virginia Law: Defendants’ motion focuses almost exclusively on
`
`the patent infringement claims and essentially ignores Samsung’s independent false advertising
`
`claim—a Virginia state law claim that should be adjudicated by a court familiar with Virginia
`
`law. The interest of justice is best served when a court most familiar with the law to be applied
`
`is able to oversee the case. NVIDIA’s unqualified claim that it makes the “the world’s fastest
`
`processor” is false and misleading, and Samsung is entitled to pursue relief on this claim. Not
`
`only has NVIDIA misappropriated Samsung’s technology to build its infringing processors,
`
`NVIDIA also falsely advertises its processors to claim a competitive advantage that damages
`
`Samsung in the marketplace. And although defendants threatened to move to dismiss the false
`
`advertising claim, they did not, apparently conceding that this claim must be addressed on the
`
`merits. The false advertising claim is an important part of this action, and it should be
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`2
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`adjudicated by a court more familiar with Virginia state law and with the topically related
`
`infringement claims.
`
`Convenience Favors This District: Consideration of the relevant convenience factors
`
`reveals that there are many more connections to this District than to the Northern District of
`
`California. All documents and witnesses related to Velocity are in this District and—needless to
`
`say—Samsung finds it much more convenient to litigate in this District, mere hours from co-
`
`plaintiff Samsung Electronics America’s New Jersey headquarters. If the case remains in the
`
`Eastern District of Virginia, Samsung will have its witnesses testify in person at trial and will
`
`also bring party representatives to this District for depositions. Additionally, many of the third-
`
`party witnesses, including nine of the attorneys that prosecuted the asserted patents, are in the
`
`Eastern District of Virginia or adjacent Washington, D.C. Defendants’ self-serving selection of
`
`alleged prior art with California-based inventors is irrelevant, as are the location of regional
`
`offices of potential third parties ARM and TSMC (Taiwan Semiconductor Manufacturing
`
`Company). Offices of foreign corporations with no known relevant documents in the proposed
`
`district do not factor into the venue analysis. The only legitimately relevant third-party witnesses
`
`identified so far by either party are the two inventors in California and the nine prosecuting
`
`attorneys in the Eastern District of Virginia or Washington, D.C.
`
`NVIDIA Overstates the Convenience of California: From beginning to end,
`
`NVIDIA’s motion vehemently argues that California is the only place for this litigation. But
`
`NVIDIA fails to mention that it filed suit in an analogous case against Samsung and Qualcomm
`
`several months ago in the District of Delaware and, at that time, also filed a complaint against
`
`Samsung and Qualcomm in the International Trade Commission (“ITC”) in Washington,
`
`D.C. When NVIDIA had its choice of forum against Samsung and Qualcomm, it elected to seek
`
`3
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`

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`relief in Delaware and Washington, D.C., not in California. The fact that NVIDIA’s documents,
`
`witnesses, and inventors were located almost exclusively in California apparently did not weigh
`
`in favor of NVIDIA litigating in California. The additional fact that two of the defendants in that
`
`case (one of the Samsung defendants and Qualcomm) were based in California did not override
`
`NVIDIA’s unstated reasons for filing suit in Delaware and a complaint at the ITC in
`
`Washington, D.C. This motion is fundamentally not about convenience, but rather is part of
`
`NVIDIA’s continuing effort to get to judgment first in its litigation campaign against Samsung.
`
`Effectively banking on a transfer or an ability to create at least some delay in this Court,
`
`NVIDIA boasts, “[a]mong all these cases [between Samsung and NVIDIA], we still expect that
`
`the first to be decided will be our suit against Samsung in the ITC. And we look forward to
`
`that.” Declaration of Vision Winter In Support of Opposition to Motion to Transfer, Sever, And
`
`Stay (“Winter Decl.”) Ex. 1, 12/23/14 NVIDIA Website Posting.
`
`Balancing All Factors, This Case Belongs in EDVA: Under Fourth Circuit law,
`
`“unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should
`
`rarely be disturbed.” Collins v. Straight, Inc., 748 F.2d 916, 921 (4th Cir. 1984) (emphasis
`
`added). Defendants fall far short of meeting this high burden. Defendants rely on empty rhetoric
`
`and accuse Samsung of forum shopping, but the facts demonstrate that defendants are attempting
`
`to move the case across the country—away from the milieu of Velocity’s infringing
`
`technology—to gain a tactical advantage. Defendants’ motion should be denied for at least five
`
`reasons:
`
`• First, Samsung’s claims against Velocity must be adjudicated in Virginia because
`
`there is no evidence or argument that Velocity is subject to jurisdiction in
`
`California.
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`4
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`

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`• Second, Samsung will be denied its right to pursue direct infringement claims on
`
`three of eight asserted patents if the case is moved to California without Velocity.
`
`• Third, in the interest of justice and judicial economy, Samsung’s false advertising
`
`claim should be adjudicated in Virginia, in the same action.
`
`• Fourth, the convenience factors weigh in favor of retaining venue in this District
`
`because many non-party witnesses and substantial evidence are located in or near
`
`this District.
`
`• Fifth, the claims against Velocity should not be severed because concurrent
`
`actions would create a risk of inconsistent rulings and waste judicial resources.
`
`II.
`
`FACTUAL BACKGROUND
`
`A.
`
`The Litigation Backstory
`
`
`
`On September 4, 2014, NVIDIA filed its first suit against Samsung and Qualcomm in the
`
`District of Delaware, alleging infringement of seven patents. In addition to other claims,
`
`NVIDIA included Samsung in the suit because “Samsung purchases and uses Qualcomm’s
`
`infringing processors and GPUs.” NVIDIA Corp. v. Samsung Electronics, Inc., No. 1:14-cv-
`
`01127-LPS (D. Del. 2014), Dkt. No. 1 at 9. NVIDIA contemporaneously filed a complaint in the
`
`ITC in Washington, D.C., alleging infringement of the same seven patents. The “Target Date”
`
`for the completion of the ITC Investigation is February 10, 2016. Winter Decl., Ex. 2, ITC. Inv.
`
`No. 932, Procedural Schedule at 5. NVIDIA’s complaints ask the ITC to block shipments of
`
`Samsung Galaxy mobile phones and tablets and also ask the Delaware Court to award damages.
`
`Id., Ex. 3, 9/4/14 NVIDIA Website Posting.
`
`
`
`Samsung filed this lawsuit on November 4, 2014 against NVIDIA (alleging infringement
`
`of six patents) and Velocity (alleging infringement of eight patents, six of them overlapping,) and
`
`5
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`

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`also asserting Virginia false advertising claims against NVIDIA. Velocity’s infringement of the
`
`first five patents (’158, ’938, ’602, ’902, and ’675 Patents) stems, in part, from the operation of
`
`the infringing NVIDIA GPUs in its computer systems. Velocity’s liability for the sixth patent
`
`(the ’724 Patent) is premised on Velocity’s design and manufacture of a computer with an LCD
`
`display and various display ports that includes an NVIDIA display controller. The remaining
`
`two patents are asserted exclusively against Velocity and relate to an improved computer booting
`
`system (the ’054 Patent) and a grounded computer case with flexible contacts (the ’854 Patent).
`
`Samsung also filed a complaint against NVIDIA and certain NVIDIA system builders in the
`
`International Trade Commission on November 21, 2014 asserting patents not at issue in this
`
`case.
`
`
`
`NVIDIA’s answer to the complaint in this action is due on January 26, 2015, over ten
`
`weeks after service of the original complaint. And despite the speed of the Eastern District of
`
`Virginia docket, or perhaps banking on the impact of the delays it has already achieved and its
`
`requested transfer to the Northern District of California, NVIDIA confidently and publicly
`
`proclaims that its case against Samsung will be the first case decided. See Winter Decl., Ex. 1,
`
`12/23/14 NVIDIA Website Posting.
`
`B.
`
`The Parties: Samsung, NVIDIA, and Velocity
`
`
`
`Samsung Electronics Corporation is based in Korea, and Samsung Electronics America is
`
`based in Ridgefield Park, New Jersey. Samsung is one of the world’s leading electronics
`
`companies and sells products all over the world, including in this District. Samsung has various
`
`offices and wholly and partially owned subsidiaries in cities across the United States, including a
`
`Samsung Electronics America office in Herndon, Virginia.
`
`
`
`NVIDIA primarily sells processors and GPUs that are incorporated into a diverse array of
`
`products such as computers, tablets, and cars. NVIDIA designs, develops, manufactures, and
`
`6
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`

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`sells the accused processors, GPUs, graphics cards, and tablet computers worldwide, including in
`
`this District. NVIDIA’s infringing processors and GPUs are not stand-alone devices and have
`
`little value apart from their use in computer systems. And certain asserted patents and claims are
`
`only infringed when NVIDIA’s products are incorporated into a computer system, such as a
`
`Velocity computer product.
`
`
`
`Velocity designs and manufactures custom, high-performance computers and is located
`
`exclusively in this District. Dkt. No. 49-1 (“Copeland Decl.”) ¶¶ 1-3; Winter Decl., Ex. 4,
`
`Velocity Website. Velocity proudly claims that its “specially-designed, custom-built, award-
`
`winning products,” including the accused products, are “[a]ssembled by our expert engineers in
`
`Richmond, VA.” Winter Decl., Exs. 4 & 5, Velocity Websites (highlighting added). Far from
`
`being a simple reseller of computer products that include NVIDIA components, Velocity designs
`
`its products around the infringing NVIDIA products. Velocity is a “global launch partner” for
`
`NVIDIA’s accused graphics cards, and Velocity advertises those cards as “best-in-class,” “a
`
`must have,” and as providing “a new level of mobile gaming performance.” Id., Ex. 6, 6/5/06
`
`Velocity Press Release; Ex. 7, 5/25/10 Velocity Press Release; Ex. 8, 5/23/13 Velocity Press
`
`Release; Ex. 9, 2/18/14 Velocity Press Release. Velocity’s high-performance computer systems
`
`are specially designed to support graphics-intensive applications including gaming, graphic
`
`design, and home theater. Id., Ex. 4, Velocity Website. Velocity heavily advertises its use of
`
`NVIDIA graphics components: “As the premier builder of ultra-performance gaming computers,
`
`we are proud to work with NVIDIA to bring this amazing technology to market.” Id., Ex. 10,
`
`Velocity Website. Velocity’s founder, Randy Copeland, attributes much of its success to
`
`NVIDIA’s graphics products, calling the partnership, “one of the many reasons why Velocity
`
`7
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`Case 3:14-cv-00757-REP-DJN Document 53 Filed 01/26/15 Page 14 of 34 PageID# 2564
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`Micro is able to offer premium products to meet the needs of all of its customers.” Id., Ex. 11,
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`4/16/04 Velocity Press Release.
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`C.
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`The Causes of Action: Patent Infringement and False Advertising
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`The first eight causes of action are for patent infringement. The eight asserted patents
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`cover microprocessor and computer technology and can be conveniently divided into five
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`general categories:
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`1) Microprocessor Circuit Patents (’158, ’938, and ’602): NVIDIA processors and GPUs
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`infringe these patents, as do Velocity computer systems that incorporate those processors and
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`GPUs.
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`2) Process of Manufacture Patents (’902 and ’675): NVIDIA processors and GPUs made
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`using Samsung’s patented processes infringe these patents. Velocity computers that incorporate
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`those processors and GPUs also infringe these patents.
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`3) Display Adapter Computer System Patent (’724): NVIDIA GPUs alone do not directly
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`infringe; only certain computers with NVIDIA GPUs directly infringe this patent. When
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`Velocity combines NVIDIA’s graphics processors with other hardware components, such as the
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`LCD panel, video port, and the digital cable, the resulting system detects whether the external
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`monitor is powered-on and connected. See Dkt. No. 1-8 at col. 10:29-53. Of the six major
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`elements of the claimed computer system, NVIDIA provides three (the “digital transmitter,”
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`“video controller,” and “monitor power sensor”) and Velocity provides three (the “LCD panel,”
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`“external video port,” and “digital cable”). See Dkt. No. 30 (“Am. Complaint”) ¶¶ 2622, 2629,
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`2640, 2650, 2656, 2660-62.
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`4) Booting System Patent (’054) − Velocity computers with specific booting systems
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`infringe this patent. NVIDIA’s products are not accused of infringement.
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`Case 3:14-cv-00757-REP-DJN Document 53 Filed 01/26/15 Page 15 of 34 PageID# 2565
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`5) Computer Case Patent (’854) − Velocity computers (or computer cases) with specific
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`flexible contacts that provide improved grounding infringe this patent. NVIDIA’s products are
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`not accused of infringing this patent.
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`Samsung’s false advertising cause of action stems from NVIDIA’s public claim that the
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`NVIDIA Tegra K1 is the “world’s fastest mobile processor.” Winter Decl., Ex. 12 at SAMS-
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`NVD-0002111, NVIDIA Shield Advertising. NVIDIA’s claim is unqualified, unsubstantiated,
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`and is demonstrably false. NVIDIA’s bold claim, far surpassing hyperbole or puffery, is
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`designed to influence consumers to do business with NVIDIA instead of Samsung.
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`III. ARGUMENT
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`A.
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`Claims Against Velocity Should Not be Severed or Stayed
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`Severance is only appropriate if defendants can show: (1) claims against Velocity are
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`peripheral to the remaining claims; (2) adjudication of NVIDIA’s claims are dispositive of
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`claims against Velocity; and (3) transfer of the claims against NVIDIA is warranted under 28
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`U.S.C. § 1404(a). See Koh v. MicroTek Int’l, Inc., 250 F. Supp. 2d 627, 631-32 (E.D. Va. 2003);
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`Corry v. CFM Majestic Inc., 16 F. Supp. 2d 660, 665 (E.D. Va. 1998). Because defendants fail
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`to satisfy each of these elements, their request for severance must be denied. A stay is not
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`warranted either. Defendants did not allege, and cannot show, a “clear case of hardship or
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`inequity in being required to go forward,” and they cannot prove that their hardship overrides
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`any damage to Samsung. Heinz Kettler GMBH & Co. v. Indian Indus., Inc., 575 F. Supp. 2d
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`728, 730 (E.D. Va. 2008) (quoting Landis v. N. Am. Co., 299 U.S. 248, 255 (1936)).
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`1.
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`Claims Against Velocity are Not Peripheral, and All Claims Should be
`Tried Together
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`Velocity designs and builds specialty computers that, in addition to integrating NVIDIA’s
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`infringing processors, are complete systems that independently infringe Samsung’s patents.
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`Case 3:14-cv-00757-REP-DJN Document 53 Filed 01/26/15 Page 16 of 34 PageID# 2566
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`Claims are peripheral if they are “tangential to the case” and if the party requesting severance is
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`only “secondarily involved.” Lugus IP v. Volvo Car Corp, No. 3:11-cv-811-HEH, 2012 WL
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`1715983, at *8 (E.D. Va. May 15, 2012). Velocity’s infringing conduct ranges from selling
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`computers that it designed around NVIDIA GPUs to assembling computers that infringe the
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`Display Adapter Computer System Patent (’724) to independently infringing the Booting System
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`Patent (’054) and the Computer Case Patent (’854). The claims for these patents are the very
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`antitheses of peripheral—they are central because, without Velocity, Samsung would be denied
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`relief as to these patents. Velocity is indisputably an appropriate party in this case, and
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`defendants cannot allege that Velocity “neither adds nor detracts from the underlying patent
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`infringement claim.” Id. at *9.
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`In each cited case where peripheral claims were severed, the severed party simply sold or
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`distributed the allegedly infringing product. Id. at *8 (severed party’s role was “restricted solely
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`to the sale of vehicles”); Brown Mfg. Corp. v. Alpha Lawn & Garden Equip., Inc., 219 F. Supp.
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`2d 705, 710 (E.D. Va. 2002) (Court referred to the severed parties as “a few downstream
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`Virginia merchants . . . selling the [accused] products”); LG Electronics Inc. v. Advanced
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`Creative Computer Corp., 131 F. Supp. 2d 804, 816-17 (E.D. Va. 2001) (severed party was a
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`reseller of the accused products); Corry, 16 F. Supp. 2d at 665-66 (severed party was a
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`distributor). Such is not the case here. Velocity does not merely sell or distribute NVIDIA
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`pr