On Semiconductor Corporation et al v. Power Integrations Incorporated

MOTION to Dismiss for Lack of Jurisdiction & Improper Venue or, in the Alternative, MOTION to Change Venue/Transfer Case to Northern Dist. of California

D. Ariz.December 29, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Michael R. Headley (Admitted pro hac vice) headley@fr.com Dalia B. Kothari (State Bar No. 032797) kothari@fr.com Fish & Richardson P.C. 500 Arguello Street, Ste. 500 Redwood City, California 94063 Telephone: (650) 839-5070 Facsimile: (650) 839-5071 Attorneys for Defendant Power Integrations, Inc. UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA ON Semiconductor Corporation; and Semiconductor Components Industries, LLC, Plaintiffs v. Power Integrations, Inc., Defendant. Case No. 2:16-cv-02720-SPL POWER INTEGRATIONS’ MOTION TO DISMISS FOR IMPROPER VENUE AND LACK OF PERSONAL JURISDICTION, OR IN THE ALTERNATIVE TO TRANSFER VENUE Oral Argument Requested Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 1 of 18 TABLE OF CONTENTS Page i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES ...............................................................1 I. INTRODUCTION .............................................................................................................1 II. PLAINTIFFS’ COMPLAINT SHOULD BE DISMISSED BECAUSE THIS DISTRICT IS AN IMPROPER VENUE .................................................................3 III. PLAINTIFFS’ COMPLAINT DOES NOT ESTABLISH PERSONAL JURISDICTION OVER POWER INTEGRATIONS .......................................................5 IV. THIS CASE SHOULD BE TRANSFERRED TO CALIFORNIA .................................11 V. CONCLUSION ................................................................................................................13 Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 2 of 18 TABLE OF AUTHORITIES Page(s) ii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Cases Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174 (9th Cir. 2004) ...................................................................................... 6, 7, 11 Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012 (Fed. Cir. 2009)........................................................................................... 7, 9 Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324 (Fed. Cir. 2008)...................................................................................... passim Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994)......................................................................................... 11, 12 Digi-Tel Holdings, Inc. v. Proteq Telecomms. (PTE), Ltd., 89 F.3d 519 (8th Cir. 1996) .................................................................................................... 9 Echard v. Townsend Farms Inc., 992 F. Supp. 2d 958 (D. Ariz. 2014) ...................................................................................... 8 Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222 (1957) ............................................................................................................ 4, 5 George Kessel Int’l Inc. v. Classic Wholesales, Inc., No. CV-07-323-PHX-SMM, 2007 WL 3208297 (D. Ariz. Oct. 30, 2007) ............................ 5 Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) ................................................................................................................ 7 Hendricks v. StarKist Co., No. 13-CV-729 YGR, 2014 WL 1245880 (N.D. Cal. Mar. 25, 2014) ................................. 12 Jones v. GNC Franchising, Inc., 211 F.3d 495 (9th Cir. 2000) .......................................................................................... 11, 12 Joslyn Mfg. Co. v. Amerace Corp., 729 F. Supp. 1219 (N.D. Ill. 1990) ......................................................................................... 4 Kewlmetal Inc. v. Bike Builders Bible, Inc., No. 2:15-CV-01008 JWS, 2015 WL 8758065 (D. Ariz. Dec. 15, 2015) ........................... 6, 7 Power Integrations, Inc. v. Fairchild Semiconductor Int’l, 711 F.3d 1348 (Fed. Cir. 2013)............................................................................................... 3 Power Integrations, Inc. v. Fairchild Semiconductor Int’l, 725 F. Supp. 2d 474 (D. Del. 2010) ........................................................................................ 2 Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 3 of 18 TABLE OF AUTHORITIES (cont’d.) Page(s) iii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355 (Fed. Cir. 1998)............................................................................................... 9 Stonite Prods Co. v. Melvin Lloyd Co., 315 U.S. 561 (1942) ................................................................................................................ 3 VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990)........................................................................................... 4, 5 Williams v. Lakeview Co., 13 P.3d 280 (Arizona Supreme Court 2009) .......................................................................... 8 Statutes 28 U.S.C. § 1391(c) .................................................................................................................. 4, 5 28 U.S.C. § 1400 ........................................................................................................................... 3 28 U.S.C. § 1400(b) .............................................................................................................. 3, 4, 5 28 U.S.C. § 1404(a) .................................................................................................................... 11 Other Authorities 13 Charles Alan Wright, Arthur R. Miller, Edward H. Cooper & Richard D. Freer, Federal Practice and Procedure § 3523.1 (2d ed. Supp.2008) ...................................... 6 Fed. R. Civ. P. 12(b)(2)..................................................................................................... 3, 11, 13 Fed. R. Civ. P. 12(b)(3)........................................................................................................... 3, 13 Fed. R. Civ. P. 408 ........................................................................................................................ 9 Local Rule 5.5(h) ........................................................................................................................ 14 Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 4 of 18 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION This case belongs in the Northern District of California because it is just another front in the long-standing dispute between Power Integrations and Plaintiffs’ predecessors-in-interest, System General and Fairchild. Plaintiffs’ anticipatory filing, which ignores over a decade of litigation history in the Northern District of California over the same technology and even several of the same patents, improperly combines two separate and distinct cases, neither of which belongs in this Court. The first case (counts one through six of the complaint), which alleges infringement of Plaintiffs’ patents by Power Integrations, should be dismissed for lack of venue or transferred to the Northern District of California where these parties are already engaged in litigation. The second case (counts seven through nine), alleges non-infringement of Power Integrations’ patents and seeks declaratory judgment relief from ON Semiconductor’s ongoing infringement. Not only are similar claims pending in the Northern District of California, but this Court lacks jurisdiction to preside over the declaratory judgment causes of action. These parties and their predecessors have a long history of litigation over the same patents and technology raised in Plaintiffs’ complaint. Plaintiffs currently face liability in the Northern District of California for a judgment of $139,800,000, awarded after ten years of litigation against their Fairchild and System General subsidiaries for infringing the very same U.S. Patent No. 6,212,079 (“the ’079 patent”) for which Plaintiffs now seek declaratory judgment of non-infringement here. Plaintiffs also face a potential treble damages award in the Northern District of California in view of the conduct of their Fairchild and System General subsidiaries (collectively, “Fairchild”) in infringing Power Integrations’ ’079 patent for more than a decade, as a jury in that District already found Fairchild’s infringement to be willful. And because Plaintiffs’ Fairchild subsidiary has continued to expand its infringement of Power Integrations’ ’079 patent despite the prior finding of willful infringement, the parties also have another lawsuit pending in the Northern District of California to address that continued infringement. In that case, Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 5 of 18 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 before District Judge Chesney, Fairchild recently counter-claimed to accuse Power Integrations of infringing several patents on the basis of the same products that Plaintiffs have referenced in their complaint in the instant case. In another, separately filed litigation before District Judge Freeman, Plaintiffs face liability in Northern California for their own infringement of the ’079 patent as well as 5 additional patents owned by Power Integrations.1 All of that California litigation relates to the same technology and products Plaintiffs have attempted to put at issue here. Separate and apart from the pending and overlapping California litigations, Plaintiffs’ Fairchild subsidiary was also found to infringe U.S. Patent No. 6,249,876 (“the ’876 patent”), and Fairchild has also been accused of infringing U.S. Patent No. 8,115,457 (“the ’457 patent”) - the two additional patents for which Plaintiffs, not coincidentally, seek a declaratory judgment of non-infringement in this Court. Indeed, Fairchild is subject to two separate verdicts of infringement of the ’876 patent and a finding of willful infringement in the District of Delaware in prior litigations filed in 2004 and 2008 between the parties. In particular, the Delaware Court found that “Fairchild was engaged in the wholesale copying of Power Integrations’ patented technology” and, particular to the ’876 patent at issue here, that there was “strong evidence of copying.” Power Integrations, Inc. v. Fairchild Semiconductor Int’l, 725 F. Supp. 2d 474, 479 (D. Del. 2010). Fairchild appealed the first of the Delaware verdicts to the Federal Circuit and that court found, as to the ’876 patent, that “Fairchild competed with Power Integrations by reverse engineering and copying of Power Integrations’ products” and that “Fairchild fostered a corporate culture of copying, which was not 1 ON Semiconductor has moved to transfer that California case to this District. (See Ex. A_ (N.D. Cal. CA No. 3:16-CV-6371-BLF, Dkt. No. 18).) ON’s arguments in that case suggest that the declaratory judgment claims here constitute a “first filed” action; Power Integrations disagrees. As explained herein, the Court lacks jurisdiction over the allegedly “first filed” claims here; therefore, the claims in this case should be dismissed, and they do not provide a proper basis to find this case the first filed matter. In addition, Power Integrations contends that this case meets the anticipatory action exception to the first-to-file line of authority, given the express allegations of threats of litigation underlying the supposed subject matter jurisdiction for Plaintiffs’ declaratory judgment allegations. Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 6 of 18 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 limited to the ’876 Patent.” Power Integrations, Inc. v. Fairchild Semiconductor Int’l, 711 F.3d 1348, 1369 (Fed. Cir. 2013). Thus, the present declaratory judgment complaint is, in reality, about Plaintiffs’ attempting to gain some perceived strategic advantage or bargaining leverage in the long- running dispute between its Fairchild subsidiaries and Power Integrations. It is not about any legitimate concern, at the time of the filing of this complaint - two years after the exchange allegedly justifying this Court’s exercise of declaratory judgment jurisdiction - about Plaintiffs’ own activities.2 For all of these reasons and the additional reasons set forth below, Power Integrations moves the Court to dismiss Plaintiffs’ complaint pursuant Fed. R. Civ. P. 12(b)(3) for improper venue and to dismiss the declaratory judgment causes of action pursuant to Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction, or, in the alternative, to transfer the entire action to the Northern District of California. II. PLAINTIFFS’ COMPLAINT SHOULD BE DISMISSED BECAUSE THIS DISTRICT IS AN IMPROPER VENUE Plaintiffs’ complaint fails to meet the Federal venue requirements, and the Court should dismiss this action under Fed. R. Civ. P. 12(b)(3). The Supreme Court has held that 28 U.S.C. § 1400 is the “exclusive provision controlling venue in patent infringement proceedings.” Stonite Prods Co. v. Melvin Lloyd Co., 315 U.S. 561 (1942). Under Section 1400(b), patent infringement actions “may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular established place of business.” 28 U.S.C. § 1400(b). “The Supreme Court in 1942 and again in 1957 took a restrictive view of venue in patent infringement cases, holding in effect that the meaning of the terms used in § 2 As further evidence for Plaintiffs’ strategic motivations, rather than any actual belief that Arizona is the appropriate forum to resolve these disputes, Plaintiffs’ recently filed yet another lawsuit against Power Integrations, this time in the Eastern District of Texas, asserting patents it acquired in its merger with Fairchild/System General plus one additional patent also acquired in a separate corporate transaction. (Ex. B (E.D. Tex. CA No. 2:16-cv- 01451-JRG-RSP, Dkt. No. 1).) Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 7 of 18 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1400(b) was not to be altered or supplemented by other provisions found in the venue statutes,” and thus venue was only proper where a corporation is deemed to reside. VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1577 (Fed. Cir. 1990); see also Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 229 (1957)) (“We hold that 28 U.S.C. § 1400(b) is the sole and exclusive provision controlling venue in patent infringement actions, and that it is not to be supplemented by the provisions of 28 U.S.C. § 1391(c)”). As explained by the Supreme Court: “We think it is clear that s 1391(c) is a general corporation venue statute, whereas s 1400(b) is a special venue statute applicable, specifically, to all defendants in a particular type of actions, i.e., patent infringement actions.” Fourco, 353 U.S. at 229. But according to the Federal Circuit, Fourco was implicitly overruled when Section 1391(c) was modified by Congress - in fact, the Federal Circuit has since held, directly contrary to the Supreme Court’s ruling Fourco, that § 1391(c) does, in fact, modify the provisions of § 1400(b). See VE Holding Corp., 917 F.2d at 1583. In particular, the Federal Circuit has held that Congress’s 1988 amendments to § 1391(c) modify § 1400(b) such that “venue in a patent infringement case includes any district where there would be personal jurisdiction over the corporate defendant at the time the action is commenced.” Id. The Federal Circuit, however, may be wrong. As explained in the Petition For a Writ Of Certiorari in the case of TC Heartland, LLC v. Kraft Foods Group Brands LLC (attached as Exhibit C), because the language of § 1391(c) is silent as to any effect on § 1400(b) - as is the legislative history behind the amendment of § 1391(c) - there was no such intent to overrule Fourco and modify the requirements for proper venue in patent cases. See Ex. C at 4 (citing Doelcher Prods., Inc. v. Hydrofoil Int’l, Inc., 735 F. Supp. 666, 668 (D. Md. 1989)); see also Joslyn Mfg. Co. v. Amerace Corp., 729 F. Supp. 1219, 1223 (N.D. Ill. 1990) (“Because the congressional history shows no clear intent to change settled law, we conclude that the 1988 amendment of § 1391(c) had no effect on the exclusivity of § 1400(b)”). On December 14, 2016, the Supreme Court granted Certiorari Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 8 of 18 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 in the TC Heartland case and thus may confirm that its ruling in Fourco was not implicitly overruled by Congress’s 1988 amendments to § 1391(c). (See Ex. D (December 14, 2016 Supreme Court Order List).) “As written, section 1400(b) dictates that venue is proper when either of two tests is satisfied: (1) the defendant resides in the judicial district, or (2) the defendant has committed acts of infringement and has a regular and established place of business in the judicial district.” VE Holding Corp., 917 F.2d at 1577-78. And “for defendants that are corporations, ‘resides’ mean[s] the state of incorporation only.” Id. Because Power Integrations is incorporated in Delaware (Amended Complaint at ¶ 3), it does not “reside” in Arizona for purposes of § 1400(b). Further, Power Integrations has no corporate offices in Arizona and does not employ anyone in Arizona. (Balakrishnan Decl. ¶ 3.) Thus, although Power Integrations is alleged to have sold infringing products in Arizona, it does not have “a regular established place of business” in Arizona as required by § 1400(b). Accordingly, neither of the provisions of § 1400(b), as written in the statute, are satisfied in this case to the extent “the terms used in § 1400(b) [are] not to be altered or supplemented by other provisions found in the venue statutes.” See Fourco, 353 U.S. at 229. Moreover, as explained in detail below, this Court lacks personal jurisdiction over Power Integrations in connection with Plaintiffs’ declaratory judgment causes of action. Thus, even if the Supreme Court were to confirm the Federal Circuit’s ruling in VE Holding Corp., and expressly overrule its own holding in Fourco, venue is nevertheless improper for the declaratory judgment claims because this Court lacks personal jurisdiction. See VE Holding Corp., 917 F.2d at 1583. III. PLAINTIFFS’ COMPLAINT DOES NOT ESTABLISH PERSONAL JURISDICTION OVER POWER INTEGRATIONS “Plaintiffs bear the burden of proving the necessary jurisdictional facts, including the existence of sufficient minimum contacts.” George Kessel Int’l Inc. v. Classic Wholesales, Inc., No. CV-07-323-PHX-SMM, 2007 WL 3208297, at *4 (D. Ariz. Oct. Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 9 of 18 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30, 2007) (citing Rio Properties, Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002)). There are two bases to find personal jurisdiction: general and specific. “The broader of the two, general personal jurisdiction, ‘requires that the defendant have ‘continuous and systematic’ contacts with the forum state and confers personal jurisdiction even when the cause of action has no relationship with those contacts.’” Kewlmetal Inc. v. Bike Builders Bible, Inc., No. 2:15-CV-01008 JWS, 2015 WL 8758065, at *2 (D. Ariz. Dec. 15, 2015) (quoting Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1200 (Fed. Cir. 2003)). “Specific jurisdiction, on the other hand, must be based on activities that arise out of or relate to the cause of action, and can exist even if the defendant’s contacts are not continuous and systematic.” Id. Personal jurisdiction should be decided on a claim-by-claim basis and if a particular claim could not have been brought on its own, the Court must look to determine whether there is pendent personal jurisdiction. See Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324, 1339-40 (Fed. Cir. 2008); see also 13 Charles Alan Wright, Arthur R. Miller, Edward H. Cooper & Richard D. Freer, Federal Practice and Procedure § 3523.1, at n. 21 (2d ed. Supp.2008) (“Pendent personal jurisdiction permits a court to entertain a claim against a defendant over whom it lacks personal jurisdiction, but only if that claim arises from a common nucleus of operative fact with a claim in the same suit for which the court does have personal jurisdiction over the defendant.”). Under the doctrine of pendent personal jurisdiction, “a court may assert pendent personal jurisdiction over a defendant with respect to a claim for which there is no independent basis of personal jurisdiction so long as it arises out of a common nucleus of operative facts with a claim in the same suit over which the court does have personal jurisdiction.” Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1180-81 (9th Cir. 2004). Here, Plaintiffs’ declaratory judgment causes of action lack an independent basis to find personal jurisdiction and also lack “a common nucleus of operative facts” with Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 10 of 18 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 any claim for which the Court does have personal jurisdiction. Plaintiffs’ declaratory judgment causes of action (counts seven through nine) thus should be dismissed. See id. Plaintiffs first allege that Power Integrations is subject to general jurisdiction in Arizona. (See Amended Complaint at ¶ 6.) This argument has no legal support. Power Integrations has no corporate offices in Arizona and does not employ anyone in Arizona. (Balakrishnan Decl. ¶ 3.) Given the absence of any allegation of systematic contacts, such as a place of business in the state, there is no basis to find general jurisdiction. See Kewlmetal, 2015 WL 8758065, at *2 (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984)). In Helicopteros, the Supreme Court rejected the plaintiff’s assertion of personal jurisdiction in Texas where the defendant did not have a place of business in Texas and had never been licensed to do business in the state. 466 U.S. at 416. Similar to the allegations here related to Avnet and Power Integrations’ business connection with Avnet, the Court in Helicopteros reached its conclusion despite the fact that the defendant “sen[t] its chief executive officer to Houston for a contract- negotiation session; accept[ed] into its New York bank account checks drawn on a Houston bank; purchas[ed] helicopters, equipment, and training services from Bell Helicopter for substantial sums; and sen[t] personnel to Bell's facilities in Fort Worth for training.” Id. The contacts alleged here - sales and customer meetings - are insufficient to establish general personal jurisdiction. See Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1018 (Fed. Cir. 2009) (holding “repeated purchases and visits by personnel over a number of years” is insufficient to establish general jurisdiction). Plaintiffs’ complaint also fails to establish a specific jurisdictional basis for this court to entertain Plaintiffs’ declaratory judgment claims. The Federal Circuit and the Ninth Circuit consistently use a three-part test to determine specific jurisdiction, asking whether “(1) the defendant purposefully directed its activities at residents of the forum, (2) the claim arises out of or relates to those activities, and (3) assertion of personal jurisdiction is reasonable and fair.” Avocent Huntsville Corp. v. Aten Intern. Co, Ltd., Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 11 of 18 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 552 F.3d 1324, 1332 (Fed. Cir. 2008); Echard v. Townsend Farms Inc., 992 F. Supp. 2d 958, 960 (D. Ariz. 2014) (same). In the context of declaratory judgment claims against patentees, “[t]he relevant inquiry for specific personal jurisdiction purposes then becomes to what extent has the defendant patentee purposefully directed such enforcement activities at residents of the forum, and the extent to which the declaratory judgment claim arises out of or relates to those activities.” Avocent Huntsville, 552 F.3d at 1332 (internal quotations and citations omitted). The Federal Circuit has made clear that “letters threatening suit for patent infringement sent to the alleged infringer by themselves do not suffice to create personal jurisdiction.” Id. at 1333 (internal quotations and citations omitted). “A patentee should not subject itself to personal jurisdiction in a forum solely by informing a party who happens to be located there of suspected infringement. . . . Thus, for the exercise of personal jurisdiction to comport with fair play and substantial justice, there must be other activities directed at the forum and related to the cause of action besides the letters threatening an infringement suit.” Id. (emphasis in original, internal quotations and citations omitted); see also Williams v. Lakeview Co., 13 P.3d 280, 284 (Arizona Supreme Court 2009) (“The failure to show any causal connection between [defendant’s] Arizona activity and their claim is fatal to the plaintiffs’ argument.”). Here, there is no credible allegation based on cited facts sufficient to find that Power Integrations has purposefully directed any actions relevant to Plaintiffs’ declaratory judgment claims to this forum. Plaintiffs have suggested that two e-mails and a phone call, all of which were communicated in connection with confidential settlement discussions that concluded nearly two years before the filing of this case, suffice to find specific personal jurisdiction over their declaratory judgment claims. (See Amended Complaint at ¶¶ 12-14.) Plaintiffs have no legal support for the notion that the e-mails or phone call in question has any bearing on jurisdiction - the Federal Circuit has addressed this issue and found that such communications do not give rise to the declaratory Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 12 of 18 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 judgment claim itself, and thus are immaterial. Avocent Huntsville, 552 F.3d at 1333. As the Federal Circuit has explained: Principles of fair play and substantial justice afford a patentee sufficient latitude to inform others of its patent rights without subjecting itself to jurisdiction in a foreign forum. A patentee should not subject itself to personal jurisdiction in a forum solely by informing a party who happens to be located there of suspected infringement. Grounding personal jurisdiction on such contacts alone would not comport with principles of fairness. Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1020 (Fed. Cir. 2009) (quoting Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1360-61 (Fed. Cir. 1998)) (emphasis added). Second, the cited communications are being misused by Plaintiffs because they are subject to a confidentiality agreement between the parties - which went beyond the basic parameters of Rule 408 regarding the admissibility of settlement discussions, and provided that anything said during the course of the parties’ efforts to resolve their disputes informally would not be used for any purpose whatsoever in connection with litigation. (Balakrishnan Decl. at ¶ 4.) Absent those confidential and protected communications, which should never have been relied upon in the first place, Plaintiffs have provided no basis whatsoever to establish specific jurisdiction over their declaratory judgment claims. Further, putting aside the parties’ agreement, the Federal Circuit has indicated that Rule 408 communications should not be used to establish jurisdiction because such a use would violate “one of the considerations enumerated by the Supreme Court for the second prong of a proper Due Process analysis.” Red Wing Shoe, 148 F.3d at 1361; see also Digi-Tel Holdings, Inc. v. Proteq Telecomms. (PTE), Ltd., 89 F.3d 519, 524 (8th Cir. 1996) (“[C]ourts have hesitated to use unsuccessful settlement discussions as ‘contacts’ for jurisdictional purposes.”). Plaintiffs’ other efforts to establish jurisdiction rely on a “stream of commerce” theory regarding Power Integrations’ products and activity related to Power Integrations’ Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 13 of 18 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 use of an Arizona based independent distributor, Avnet. (See Amended Complaint at ¶¶ 7-10, 15.) But Power Integrations’ products have no relevance to the issue of personal jurisdiction over Plaintiffs’ declaratory judgment claims. The Federal Circuit has held that the patentee’s sales of its own products - even if covered by the patents-in-suit - “do not constitute such ‘other activities’ as will support a claim of specific personal jurisdiction over a defendant patentee” in the context of a declaratory judgment claim. Avocent Huntsville, 552 F.3d at 1336 (“evidence of sales within the forum of products covered by the relevant patent(s) is insufficient to guarantee specific personal jurisdiction over the patentee”). Plaintiffs’ complaint alleges no facts to support a finding that Power Integrations purposefully directed any relevant enforcement actions to this forum, which is the relevant question. Finally, Plaintiffs’ conclusory allegation regarding specific personal jurisdiction fails given all of the facts cited by Plaintiff, even if true, do not bear on the issue of personal jurisdiction over its declaratory judgment claims. That is, Plaintiffs nakedly allege: 18. Defendant Power Integrations is also subject to specific personal jurisdiction in this judicial district for Plaintiffs’ declaratory judgment of non-infringement of Power Integrations’s U.S. Patent Nos. 6,212,079; 6,249,876; and 8,115,457 at least because of Power Integrations’s patent enforcement contacts with the jurisdiction, demonstrating that Power Integrations has purposefully availed itself of the privilege of conducting business in Arizona. (Amended Complaint at ¶ 18.) To the extent that this statement has any meaning at all, Plaintiffs’ reference to alleged “enforcement contacts” adds nothing of substance over Plaintiffs’ factual allegations related to the confidential settlement communications, which themselves are irrelevant to the issue of personal jurisdiction as noted above. At bottom, there is nothing in the complaint demonstrating that Power Integrations has specifically targeted this forum with any activity that would permit the court to find specific personal jurisdiction over the declaratory judgment claims. Further, there is no allegation in the complaint that the declaratory judgment claims share any “common Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 14 of 18 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 nucleus of operative facts” with Plaintiffs’ affirmative infringement claims, as required to find pendent personal jurisdiction. See Action Embroidery, 368 F.3d at 1180-81. Accordingly, Plaintiffs’ declaratory judgment claims should be dismissed under Rule 12(b)(2) for lack of jurisdiction, or in the alternative, transferred to the Northern District of California for the additional reasons set forth below. IV. THIS CASE SHOULD BE TRANSFERRED TO CALIFORNIA Under 28 U.S.C. § 1404(a), the district court has discretion “to adjudicate motions for transfer according to an ‘individualized, case-by-case consideration of convenience and fairness.’” Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-499 (9th Cir. 2000) (quoting Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29 (1988)). When determining whether a transfer is appropriate, courts may consider the following factors: “(1) The location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff’s choice of forum, (4) the respective parties’ contacts with the forum, (5) the contacts relating to the plaintiff’s cause of action in the chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof.” Id. The Jones factors strongly favor transferring this action. In particular, Jones factors (4) and (5), relating to the contacts between the forum and the cause of action, strongly favor transfer. As explained above, Power Integrations lacks sufficient contacts with this forum to establish venue and, additionally, Power Integrations does not believe there are sufficient contacts in this forum to establish personal jurisdiction over Plaintiffs’ declaratory judgment claims in the first instance. Even if the Court disagrees, Power Integrations’ contacts with this forum are at best de minimis, and this action is not strongly tied to this forum. In particular, the only allegations in the complaint tied to this forum relate to third party distributor sales (e.g. sales made by Avnet), and not to Power Integrations itself. As explained by the Federal Circuit, “cases have clarified that the minimum contacts must be ‘purposeful’ contacts.” Beverly Hills Fan Co. v. Royal Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 15 of 18 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sovereign Corp., 21 F.3d 1558, 1565 (Fed. Cir. 1994) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)). Unilateral actions of a third party - such as Avnet’s sales in Arizona - do not bear on the contacts that Power Integrations itself has with this forum. See id. Given that Power Integrations has no corporate offices in Arizona and does not employ anyone in Arizona (Balakrishnan Decl. ¶ 3), there should be little doubt that it lacks relevant contacts with this forum. Similarly, although Jones factor (3) looks to “the plaintiff’s choice of forum,” choice of forum should receive only minimal deference if the operative facts did not occur within the forum (as is the case here). See Hendricks v. StarKist Co., No. 13-CV- 729 YGR, 2014 WL 1245880, at *3 (N.D. Cal. Mar. 25, 2014) (“In determining the appropriate amount of deference to accord plaintiff’s choice of forum, courts must consider the extent of the parties’ contacts with the chosen forum, including contacts relating to the plaintiff’s cause of action.” (citing Pac. Car & Foundry Co. v. Pence, 403 F.2d 949, 954 (9th Cir. 1968))). In particular, as noted above, the Plaintiffs’ choice of forum is clearly strategic, designed to gain some perceived negotiating advantage in the overall dispute between the parties, rather than based on any particular interest that Arizona has in resolving this dispute, as Plaintiffs’ recent filing in the Eastern District of Texas plainly shows. In addition, the final two Jones factors (7) and (8) also favor transfer - because a fundamental basis for this suit is Plaintiffs’ allegations of infringement by Power Integrations, the relevant sources of proof (e.g., Power Integrations’ product design specifications, schematics, etc.) and the witnesses who may be compelled to testify are located where Power Integrations is located and where Plaintiffs themselves have a substantial place of business - in the Northern District of California.3 Given the parties’ long-running experience before the California Court - this complaint, in reality, being just a new front in a dispute that is now over a decade-old - 3 The first two Jones factors do not strongly weigh in either direction. There are no negotiated agreements at issue, and both Courts would have equal knowledge of Federal Patent Law. Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 16 of 18 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and given that the alleged infringement complained of here is founded in California, this case belongs there. V. CONCLUSION For all of the reasons stated herein, Power Integrations respectfully requests that the Court dismiss Plaintiffs’ complaint pursuant Fed. R. Civ. P. 12(b)(3) for improper venue and to dismiss the declaratory judgment causes of action pursuant to Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction, or in the alternative, transfer the entire action to the Northern District of California. Dated: December 29, 2016 FISH & RICHARDSON P.C. By: /s/ Michael R. Headley Michael R. Headley (Admitted pro hac vice) headley@fr.com Dalia B. Kothari (State Bar No. 032797) kothari@fr.com FISH & RICHARDSON P.C. 500 Arguello Street, Suite 500 Redwood City, California 94063 Telephone: (650) 839-5070 Facsimile: (650) 839-5071 Attorneys for POWER INTEGRATIONS, INC. Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 17 of 18 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the above and foregoing document has been served on December 29, 2016 to all counsel of record who are deemed to have consented to electronic service via the Court’s ECF system per Civil Local Rule 5.5(h). By: /s/ Michael R. Headley Michael R. Headley Case 2:16-cv-02720-SPL Document 29 Filed 12/29/16 Page 18 of 18 1 Michael R. Headley (Admitted pro hac vice) headley@fr.com Dalia B. Kothari (State Bar No. 032797) kothari@fr.com Fish & Richardson P.C. 500 Arguello Street, Ste. 500 Redwood City, California 94063 Telephone: (650) 839-5070 Facsimile: (650) 839-5071 Attorneys for Defendant Power Integrations, Inc. UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA ON Semiconductor Corporation; and Semiconductor Components Industries, LLC, Plaintiffs v. Power Integrations, Inc., Defendant. Case No. 2:16-cv-02720-SPL POWER INTEGRATIONS’ RULE 12(b) CERTIFICATION The undersigned hereby certifies, pursuant to the Court’s Preliminary Order (Dkt. No. 7), that counsel for defendant Power Integrations, Inc. (“PI”) met and conferred with counsel for plaintiffs ON Semiconductor Corporation and Semiconductor Components Industries, LLC (“ON”) prior to filing the accompanying Motion to Dismiss. Specifically, I spoke with lead counsel for ON, Roger Fulghum, both on the phone and via e-mail, to determine whether any potential amendment might cure the deficiencies in ON’s pleading as set forth in the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case 2:16-cv-02720-SPL Document 29-1 Filed 12/29/16 Page 1 of 2 2 accompanying Motion to Dismiss. The parties were unable to agree that the pleading is curable by any permissible amendment. Dated: December 29, 2016 FISH & RICHARDSON P.C. By: /s/ Michael R. Headley Michael R. Headley (Admitted pro hac vice) headley@fr.com Dalia B. Kothari (State Bar No. 032797) kothari@fr.com FISH & RICHARDSON P.C. 500 Arguello Street, Suite 500 Redwood City, California 94063 Telephone: (650) 839-5070 Facsimile: (650) 839-5071 Attorneys for POWER INTEGRATIONS, INC. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case 2:16-cv-02720-SPL Document 29-1 Filed 12/29/16 Page 2 of 2 Case 2:16-cv-02720-SPL Document 29-2 Filed 12/29/16 Page 1 of 2 Case 2:16-cv-02720-SPL Document 29-2 Filed 12/29/16 Page 2 of 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Michael R. Headley (Admitted pro hac vice) headley@fr.com Dalia B. Kothari (State Bar No. 032797) kothari@fr.com Fish & Richardson P.C. 500 Arguello Street, Suite.. 500 Redwood City, CA 94063 Telephone: (650) 839-5070 Facsimile: (650) 839-5071 Attorneys for Defendant Power Integrations, Inc. UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA ON Semiconductor Corporation; and Semiconductor Components Industries, LLC, Plaintiffs; v. Power Integrations, Inc., Defendant. Case No. 2:16-cv-02720-SPL DECLARATION OF MICHAEL R. HEADLEY IN SUPPORT OF POWER INTEGRATIONS’ MOTION TO DISMISS FOR IMPROPER VENUE AND LACK OF PERSONAL JURISDICTION, OR IN THE ALTERNATIVE TO TRANSFER VENUE I, Michael R. Headley, declare as follows: 1. I am a Principal of Fish & Richardson P.C., counsel of record in this action for Power Integrations, Inc. (“PI”). I am a member of the Bar of the State of California and admitted to practice pro hac vice in this Court. I have personal knowledge of the matters stated in this declaration and would testify truthfully to them if called upon to do so. 2. Attached as Exhibit A is a true and correct copy of ON Semiconductor’s Motion To Transfer or To Sever And Transfer In the Alternative filed in a related matter Case 2:16-cv-02720-SPL Document 29-3 Filed 12/29/16 Page 1 of 3 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 between the parties in the Northern District of California, Case No. 5:16-cv-06371-BLF, Dkt. No. 18, as filed on December 21, 2016. 3. Attached as Exhibit B is a true and correct copy of ON Semiconductor’s Complaint for Patent Infringement filed against Power Integrations in the Eastern District of Texas, Case No. 2:16-cv-01451-JRG-RSP, as filed on December 27, 2016. 4. Attached as Exhibit C is a true and correct copy of the petition for certiorari filed with the Supreme Court in the case of TC Heartland, LLC v. Kraft Foods Group Brands LLC, Dkt. No. 16-341, dated September 12, 2016. 5. Attached as Exhibit D is a true and correct copy of Supreme Court’s Order List granting certiorari in the TC Heartland case, dated December 14, 2016. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed at Redwood City, California this 29th day of December, 2016. /s/ Michael R. Headley Michael R. Headley Case 2:16-cv-02720-SPL Document 29-3 Filed 12/29/16 Page 2 of 3 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the above and foregoing document has been served on December 29, 2016 to all counsel of record who are deemed to have consented to electronic service via the Court’s ECF system per Civil Local Rule 5.5(h). /s/ Michael R. Headley Michael R. Headley Case 2:16-cv-02720-SPL Document 29-3 Filed 12/29/16 Page 3 of 3 EXHIBIT A Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 1 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CASE NO. 5:16-cv-06371-BLF DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE BAKER BOTTS L.L.P. Jon V. Swenson CA State Bar No. 0233054 1001 Page Mill Road Building One, Suite 200 Palo Alto, California 94340-1007 jon.swenson@bakerbotts.com Tel: 650-739-7514 Fax: 650-739-7614 ATTORNEY FOR DEFENDANTS: ON SEMICONDUCTOR CORP. AND SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION POWER INTEGRATIONS, INC., PLAINTIFF, Case No. 5:16-cv-06371-BLF DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE Hon. Beth Labson Freeman Date: March 16, 2017 Time: 9:00 A.M. Courtroom 3, Fifth Floor v. ON SEMICONDUCTOR CORP. AND SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC, DEFENDANTS. Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 1 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 2 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF i DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE Table of Contents Page NOTICE OF MOTION AND MOTION ........................................................................................ 1 STATEMENT OF RELIEF REQUESTED .................................................................................... 1 MEMORANDUM OF POINTS AND AUTHORITIES ................................................................ 1 A. Background Facts ................................................................................................................ 2 B. The First-To-File Rule Applies and Its Application in this Case Should not be Controversial ....................................................................................................................... 3 C. The First-To-File Rule Requires the Transfer of This Case ............................................... 4 D. None of the Exceptions to the First-to-File Rule Apply ..................................................... 5 E. The Analysis of Whether an Exception Applies Must be Conducted by the Arizona Court Following Transfer of This Action ..................................................................................... 8 F. Previous Litigation in this District Involving the ‘079 Patent Does not Prevent Application of the First-to-File Rule or Transfer .................................................................................... 9 G. PI’s Previous Challenge to Personal Jurisdiction in Arizona Does Not Prevent Transfer under the First-to-File Rule ............................................................................................... 10 H. Conclusion ........................................................................................................................ 10 Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 2 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 3 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF ii DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE TABLE OF AUTHORITIES Page(s) FEDERAL CASES Alioto v. Hoiles, No. C 04-1395 PJH, 2004 WL 2326367 (N.D. Cal. Oct. 12, 2004) ...........................................4 Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622 (9th Cir. 1991) .......................................................................................................8 AOptix Technologies v. Blue Spike LLC, Civ. No. 13-cv-1105 YGR, slip op. (N.D. Cal. Dec. 10, 2013) ................................................10 Barnes and Noble, Inc. v. LSI Corp., 823 F. Supp. 2d 980 (N.D. Cal. 2011) ................................................................................6, 7, 8 Elecs. for Imaging, Inc. v. Coyle, 394 F.3d 1341 (Fed. Cir. 2005) ...................................................................................................4 Fairchild Semiconductor Corporation et al v. Power Integrations Inc., Case No. 1:12-cv-00540-LPS ...................................................................................................10 Fujitsu Ltd. v. Nanya Tech. Corp., No. C 06-6613 CW, 2007 WL 484789 (N.D. Cal. Feb. 9, 2007) ...............................................5 Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931 (Fed. Cir. 1993), abrogated on other grounds by Wilton v. Seven Falls Co., 515 U.S. 277 (1995) ...................................................................................................4 Genentech, Inc. v. GlaxoSmithKline, LLC, Case No. 5:10-cv-04255-JF 2010 WL 4923954, at *7 (N.D. Cal. Nov. 30, 2010) ...........................................................................................................9 Hospah Coal Co. v. Chaco Energy Co., 673 F.2d 1161 (10th Cir. 1982) ...................................................................................................8 In re Genentech, 566 F.3d 1338 (Fed. Cir. 2009) ...................................................................................................7 Intel Corp. v. Wi-LAN, Inc., No. C 08-04555 JW, slip op. (N.D. Cal. June 4, 2009) ..............................................................9 Juniper Networks v. Mosaid Techs. Inc., No. C 11-6264 PJH, 2012 WL 1029572 (N.D. Cal. Mar. 26, 2012) ......................................8, 9 Micron Tech., Inc. v. Mosaid Techs., Inc., 518 F.3d 897 (Fed. Cir. 2008) .............................................................................................4, 7, 8 Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 3 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 4 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF iii DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE ON Semiconductor Corporation et al. v. Power Integrations, Inc., Case No. CV-16-02720-PHX-SPL .............................................................................................1 Pacesetter Systems, Inc. v. Medtronic, Inc., 678 F.2d 93 (9th Cir. 1982) .....................................................................................................8, 9 SAP America, Inc. v. Purple Leaf, LLC, No. C 11-4601 PJH, 2012 WL 49239 (N.D. Cal. Jan. 9, 2012) ..................................................9 Sensus USA Inc. v. Badger Meter Inc., 16-CV-03376-LHK, 2016 WL 5390300 (N.D. Cal. Sep. 27, 2016) .......................................6, 8 Serco Services Co., L.P. v. Kelley Co., Inc., 51 F.3d 1037 (Fed. Cir. 1995) .....................................................................................................7 Tiber Labs., LLC v. Cypress Pharmaceuticals, Inc., 2007 WL 3216625 (N.D. Ga., May 11, 2007) ............................................................................8 TPM Holdings v. Intra-Gold Indus., 91 F.3d 1 (1st Cir. 1996) .............................................................................................................9 Wilton v. Seven Falls Co., 515 U.S. 277 (1995) ....................................................................................................................4 Z-Line Designs, Inc. v. Bell’O Int’l LLC, 218 F.R.D. 663 (N.D. Cal. 2003) ............................................................................................4, 6 FEDERAL STATUTES 28 U.S.C. § 1404 ...............................................................................................................................7 28 U.S.C. § 1404(a) ..........................................................................................................................7 Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 4 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 5 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF 1 DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE NOTICE OF MOTION AND MOTION PLEASE TAKE NOTICE that on March 16, 2017 at 9:00 A.M. or as soon thereafter as the matter may be heard, in the courtroom of the Honorable Beth Labson Freeman at the United States District Court for the Northern District of California, San Jose Division, located at 280 South 1st Street, San Jose, California, Defendants ON Semiconductor Corp. and Semiconductor Components Industries, LLC (collectively “ON Semiconductor”) will and hereby do move the Court for an order transferring this case to the District of Arizona, or, in the alternative, severing the causes of action concerning U.S. Patent Nos. 6,212,079 (“the ‘079 patent”), and 8,115,457 (“the ‘457 patent”) and transferring those causes of action to the District of Arizona. STATEMENT OF RELIEF REQUESTED ON Semiconductor respectfully moves that this Court issue in an order transferring this lawsuit to the District of Arizona, where a first-filed lawsuit on the subject matter of this lawsuit has been pending since August 2016. In the alternative, ON Semiconductor moves that this Court issue an order severing the causes of action concerning the ‘079 patent and the ‘457 patent and transferring those actions to the District of Arizona. MEMORANDUM OF POINTS AND AUTHORITIES Under a straightforward application of the “first-to-file” rule, this Court should transfer this lawsuit to the District of Arizona. On August 11, 2016 - nearly three months before this lawsuit was filed - ON Semiconductor filed a patent infringement and declaratory judgment lawsuit against Power Integrations, Inc. (PI) in the District of Arizona. The Arizona lawsuit is styled ON Semiconductor Corporation et al. v. Power Integrations, Inc., Case No. CV-16-02720- PHX-SPL. A copy of the original complaint in this lawsuit is attached as Exhibit 1; a copy of the original complaint in the Arizona lawsuit is attached as Ex. 2; and a copy of the First Amended Complaint (“FAC”) in the Arizona lawsuit is attached as Ex. 3. Two of the six counts in this lawsuit are entirely duplicative of the causes of action asserted by ON Semiconductor in the Arizona lawsuit. Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 5 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 6 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF 2 DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE In particular, for the ‘079 patent, the First Cause of Action in this lawsuit is for alleged infringement of the ‘079 patent (Ex. 1 at p. 2); Count Seven in the Arizona lawsuit is a claim for a declaratory judgment of noninfringement of the ‘079 patent. Ex. 2 at p. 18 (numbered as Count Six in the original complaint) and Ex. 3 at p. 25 (numbered as Count Seven in the FAC). For the ‘457 patent, the Second Cause of Action in this lawsuit is for alleged infringement of the ‘457 patent (Ex. 1 at p. 7); Count Eight of the Arizona lawsuit is a claim for a declaratory judgment of the ‘457 patent. Ex. 2 at p. 20 (numbered as Count Eight in the original complaint) and Ex. 3 at p. 27 (numbered as Count Nine in the FAC). These causes of action are precise mirror images of each other. In the first-filed lawsuit in Arizona, ON is seeking a declaration that its products do not infringe the ‘079 and ‘457 patents. Here, in the second-filed lawsuit in California, PI is alleging infringement of the ‘079 and ‘457 patents. The same legal and factual issues are presented in both cases. PI’s litigation strategy is transparent and easy to follow. Because PI does not want to proceed in the first-filed lawsuit Arizona, PI filed a retaliatory second lawsuit in this district to allege infringement of the ‘079 and ‘457 patents. And, in an attempt to avoid the first-to-file rule, PI asserted claims in this lawsuit on four patents in addition to the ‘079 and ‘457 patents to add an ostensible anchor to this lawsuit to prevent the transfer of the entirety of this lawsuit to Arizona. This Court should transfer the entirety of this lawsuit, including both the first-filed claims concerning the ‘079 and ‘457 patents and the four additional claims of patent infringement, to Arizona. Proceeding in Arizona is appropriate, whether considered under the first-file-rule or general principles of transfer. This lawsuit could have originally been brought in Arizona, and evidence concerning ON Semiconductor’s alleged infringement will originate from Arizona, not California. In the alternative, if the Court is not inclined to transfer this entire lawsuit to Arizona, the Court should sever the claims on the ‘079 and ‘457 patents and transfer the claims on the ‘079 and ‘457 patents to the District of Arizona. A. Background Facts ON Semiconductor filed the Arizona lawsuit on August 11, 2016. As detailed in the Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 6 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 7 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF 3 DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE complaint in the Arizona lawsuit, PI’s president, Balu Balakrishnan, has accused ON Semiconductor of infringing the ‘079 and ‘457 patents (Ex. 3 at Pars. 12-14), and Mr. Balakrishnan’s accusations of infringement are documented, for example, in an e-mail from Mr. Balakrishnan to the president of ON Semiconductor. Ex. 3 at Pars. 12-13 and Ex. K. Because of PI’s allegations of infringement, ON Semiconductor exercised its right to file claims for a declaratory judgment of noninfringement on the ‘079 and ‘457 patents, which are Counts Seven and Nine of the FAC of the Arizona lawsuit. ON Semiconductor served PI with the Arizona complaint on September 1, 2016, and PI has received multiple extensions of time to respond to the complaint in the Arizona lawsuit. The first extension moved PI’s response date from September 22 to October 24, 2016. PI sought and received a second extension to move PI’s response date to November 4, 2016. During the pendency of the second extension, which was sought by PI under the pretense of requiring additional time to discuss a possible negotiated stay of certain actions between parties, PI filed this lawsuit and separately moved (i) to dismiss the Arizona lawsuit under various Rule 12 grounds and (ii) to transfer the Arizona lawsuit to this district in the alternative. Because PI did not meet and confer as required by a standing order of the presiding judge of the Arizona lawsuit, Hon. Stephen P. Logan, PI had to withdraw its motion in the Arizona lawsuit so that ON Semiconductor could file an amended complaint to correct the alleged deficiencies that were the subject of the Rule 12 motion. ON Semiconductor filed its FAC on November 18, 2016 (Ex. 3), and Judge Logan has now granted PI yet another extension to respond to the FAC, currently due on January 4, 2017. ON Semiconductor’s declaratory judgment claims on the ‘079 patent and the ‘457 patent were included in the original complaint (filed August 11, 2016) and the FAC (filed November 18, 2016) in the Arizona lawsuit. B. The First-To-File Rule Applies and Its Application in this Case Should not be Controversial The application of the first-to-file rule should not be in dispute. ON Semiconductor filed the declaratory judgment claims in Arizona almost three months before this lawsuit was filed. The claims in the Arizona lawsuit and this lawsuit involve the same patents, the same parties, and Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 7 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 8 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF 4 DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE the same factual issues. When there are competing lawsuits on the same claims, it is well settled that the action should proceed in the court of the first-filed action. In patent infringement actions, Federal Circuit law controls when courts evaluate “whether to accept or decline jurisdiction in an action for a declaration of patent rights in view of a later-filed suit for patent infringement.” Elecs. for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1345-46 (Fed. Cir. 2005). When cases between the same parties raising the same issues are pending in two or more federal districts, the general rule is to favor the forum of the first-filed action, even if it is a declaratory judgment action. Micron Tech., Inc. v. Mosaid Techs., Inc., 518 F.3d 897, 904 (Fed. Cir. 2008). The first-filed suit has priority over a later-filed suit unless sound reasons “of judicial and litigant economy, and the just and effective disposition of disputes, require otherwise.” Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931, 937 (Fed. Cir. 1993), abrogated on other grounds by Wilton v. Seven Falls Co., 515 U.S. 277, 286, 288-89 (1995). The first-to-file rule requires transferring this action to the District of Arizona, and no exceptions or considerations of convenience, judicial economy, or justice suggest otherwise. C. The First-To-File Rule Requires the Transfer of This Case In applying the first-to-file rule, courts consider three threshold factors: “(1) the chronology of the two actions; (2) the similarity of the parties; and (3) the similarity of the issues.” Z-Line Designs, Inc. v. Bell'O Int'l LLC, 218 F.R.D. 663, 665 (N.D. Cal. 2003). “Exact parallelism between the two actions need not exist; it is enough if the parties and issues in the two actions are substantially similar.” Alioto v. Hoiles, No. C 04-1395 PJH, 2004 WL 2326367, at *5 (N.D. Cal. Oct. 12, 2004) (internal quotation marks omitted). Here, all three factors of the first-to-file rule weigh in favor of transfer. First, the Arizona lawsuit was filed on August 11, 2016, almost three months before the filing of this lawsuit. Second, the parties are identical. Both actions involve PI as the owner of the ‘079 and ‘457 patents, and ON Semiconductor as the accused infringer of those patents. Third, the issues between the actions are the same. There is no dispute that the Arizona action and the present action are identical with respect to the ‘079 and ‘457 patents. Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 8 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 9 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF 5 DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE As for the four additional patents in this lawsuit, the claims on these four additional patents should also be transferred to the District of Arizona. The transfer of the entire lawsuit, including the two patents subject to the first-to-file rule and the four additional patents, would be more efficient in terms of the management of the litigation as a whole. A court may transfer the second-filed action even when the second-filed action includes a patent that is not part of the first-filed action. See, e.g., Fujitsu Ltd. v. Nanya Tech. Corp., No. C 06-6613 CW, 2007 WL 484789, at *3 (N.D. Cal. Feb. 9, 2007). In Fujitsu, the district court of the second filed case held that it would transfer the second-filed case if the first-filed court decided to retain the first-filed case, even though the second-filed case included a patent that was not in the first-filed case. Id. Here, all six patents are directed to similar products and technology. Like the two patents that are subject to the first-to-file rule, the four additional patents concern power converters and power converter technology, and PI’s president, Mr. Balu Balakrishnan, overlaps as an inventor on four of the six patents. The accused products for all six patents will come from the same business unit at ON Semiconductor. Thus, there will be overlap of factual and legal issues - including issues affecting alleged infringement, damages, and discovery - across the two patents subject to the first-to-file rule and the four additional patents. The efficient administration of this dispute would involve the transfer of all six patents to the District of Arizona. It should also be understood that the four additional patents include two sets of continuation patents, meaning that the four additional patents include just two additional patent families (and therefore only two additional patent specifications). If, however, the Court is inclined to retain the four additional patents on its docket, ON Semiconductor respectfully moves that the Court sever and transfer the ‘079 and ‘457 patents to the District of Arizona so that the claims on these patents can be consolidated with the first-filed lawsuit. D. None of the Exceptions to the First-to-File Rule Apply Courts will sometimes refuse to apply the first-to-file rule if the first-filed suit was “anticipatory” or the convenience factors weigh in favor of retaining the case in the forum of the second-filed lawsuit. None of those factors apply in this instance. Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 9 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 10 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF 6 DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE First, there is no argument that the Arizona lawsuit was “anticipatory.” Although the Federal Circuit has not specified the exact circumstances for a first-filed lawsuit to be “anticipatory,” courts have traditionally considered the parties’ immediate pre-filing communications and the timing of the first-filed lawsuit to determine whether the first-filed suit was an attempt to preempt the defendant’s choice of forum. Sensus USA Inc. v. Badger Meter Inc., 16-CV-03376-LHK, 2016 WL 5390300, *3 (N.D. Cal. Sep. 27, 2016). This Court has held that a suit is anticipatory “when the plaintiff filed upon receipt of specific, concrete indications that a suit by defendant was imminent.” Z-Line Designs, 218 F.R.D. at 665. Allegations of infringement and requests to stop infringing, even when those allegations and requests may be reasonably interpreted as an indication of an impending suit, are insufficient to create an “imminent threat” of suit. See Sensus USA, 2016 WL 5390300 at *3-4 (holding that while allegations of infringement and a deadline to comply with a cease and desist letter could be reasonably interpreted as an indication of an impending suit, they do not constitute “a direct threat” of suit for purposes of an anticipatory filing); see also Barnes and Noble, Inc. v. LSI Corp., 823 F. Supp. 2d 980, 991-92 (N.D. Cal. 2011). Although ON Semiconductor had a reasonable apprehension of suit, the Arizona lawsuit cannot be labeled as “anticipatory.” There was not a race to the courthouse, and ON Semiconductor did not time the filing of the Arizona action for the purpose of preempting PI’s choice of forum. Moreover, the lack of an “anticipatory” lawsuit is clear from the timing of the suits. This action was not filed by PI until almost three months after the Arizona lawsuit, demonstrating that an affirmative suit by PI was not “imminent” at the time the Arizona lawsuit was filed. Additionally, the communications between the parties do not show that an infringement suit by PI was “imminent.” Before the filing of the Arizona lawsuit, PI had accused ON Semiconductor of infringement and requested that ON Semiconductor agree to stop selling certain products in Arizona. Ex. 3 at Pars 12-14 and Exs. J and K. These allegations and requests, without more, do not amount to an “imminent threat” of suit. See Sensus USA, 2016 WL 5390300 at *3-4. Thus, ON Semiconductor did not file the Arizona lawsuit to preempt an Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 10 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 11 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF 7 DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE infringement suit that was imminent and the first-filed lawsuit in Arizona cannot be deemed “anticipatory.” Second, the convenience factors do not favor the retention of this dispute in this forum. In determining whether there is a “sound reason that would make it unjust or inefficient to continue the first-filed action,” the Court may also consider the “convenience factors” set forth in the transfer statute, 28 U.S.C. § 1404(a), including “the convenience and availability of witnesses, absence of jurisdiction over all necessary or desirable parties, the possibility of consolidation with related litigation,” and “considerations relating to the interest of justice.” Micron Tech., 518 F.3d at 904-05. The convenience of the parties, witnesses, and access to evidence are considered when evaluating whether the convenience exception should override the application of the first-to-file rule. See Serco Services Co., L.P. v. Kelley Co., Inc., 51 F.3d 1037, 39-40 (Fed. Cir. 1995); see also Barnes & Noble, 823 F. Supp. 2d at 993 (discussing the convenience of the parties, witnesses, and the access to evidence when applying the 28 U.S.C. § 1404 convenience factors). It is well known that, “[i]n patent infringement cases, the bulk of the relevant evidence usually comes from the accused infringer.” In re Genentech, 566 F.3d 1338, 1345 (Fed. Cir. 2009). It cannot be disputed in this lawsuit that the alleged infringing activity will involve ON Semiconductor products (See, e.g., Ex. 1 at Pars. 17 and 18), and relevant evidence will come from ON Semiconductor. ON Semiconductor’s headquarters are in Arizona, and at least some of the accused products were designed by ON Semiconductor personnel in Arizona. Moreover, members of the marketing team and the application engineering team for all of the accused products live and work in Arizona. Although ON Semiconductor has employees who reside in the Northern District of California, ON Semiconductor does not anticipate that any of those employees will serve as witnesses in this lawsuit. Rather than have the parties litigate substantially similar cases in two districts, the entirety of this lawsuit should be transferred to the District of Arizona for the sake of best conserving party and judicial resources. The interest of justice is also considered as a possible exception to the first-to-file rule. Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 11 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 12 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF 8 DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE Micron Tech., 518 F.3d at 904; see also Barnes & Noble, 823 F. Supp. 2d at 993. “Factors related to the interest of justice factors include court congestion, the local interest in deciding local controversies, conflicts of laws between jurisdictions, and burdening citizens in an unrelated forum with jury duty.” Sensus USA, 2016 WL 5390300 at *6. None of these factors support retention of this lawsuit by the Court. In terms of local interest in resolving controversies, the District of Arizona has a stronger interest because it is the forum of the first filed lawsuit and the location of the party accused of infringement in this lawsuit. In terms of court congestion, this district is not more favorable, and both federal courts are adept at applying federal patent law. Thus, none of the interest of justice factors prevents the transfer of the entirety of this lawsuit to the District of Arizona. E. The Analysis of Whether an Exception Applies Must be Conducted by the Arizona Court Following Transfer of This Action Finally, the determination of whether an exception to the first-to-file rule applies must be conducted by the court of the first-filed action, which is the Arizona court. Because the elements of the first-to-file rule are met, the court of the first-filed action - the Arizona court - should weigh the convenience factors and any other factors that might create an exception to the first to file rule. See, e.g., Juniper Networks v. Mosaid Techs. Inc., No. C 11-6264 PJH, 2012 WL 1029572, at *2 (N.D. Cal. Mar. 26, 2012) (citing Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 628 (9th Cir. 1991). Although the Federal Circuit has not particularly addressed the issue, courts in nearly every circuit, including the Ninth Circuit, have held that the court in which the second action was filed should defer to courts in the first-filed action. See, e.g., Pacesetter Systems, Inc. v. Medtronic, Inc., 678 F.2d 93, 96 (9th Cir. 1982) (“normally the forum non conveniens argument should be addressed to the court in the first-filed action”); Hospah Coal Co. v. Chaco Energy Co., 673 F.2d 1161, 1163-64 (10th Cir. 1982) (holding that, as between two courts presented with duplicative litigation, the court in which the action was first filed “should be allowed to first decide issues of venue”); Tiber Labs., LLC v. Cypress Pharmaceuticals, Inc., 2007 WL 3216625, at *2 (N.D. Ga., May 11, 2007) (“Thus, once the Court determines that a likelihood of substantial overlap exists between the two suits, it is no longer up to the second filed Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 12 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 13 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF 9 DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE court to resolve the question of whether both should be allowed to proceed.”); TPM Holdings v. Intra-Gold Indus., 91 F.3d 1, 4 (1st Cir. 1996). Courts in the Northern District of California have consistently deferred the consideration of exceptions to the first-filed Court in patent cases. See, e.g., Genentech, Inc. v. GlaxoSmithKline, LLC, Case No. 5:10-cv-04255-JF /PVT, 2010 WL 4923954, at *7 (N.D. Cal. Nov. 30, 2010) (“the administration of justice would be chaotic” if the court in a second-filed action considers the convenience factors); Juniper, 2012 WL 1029572, at *2-3; SAP America, Inc. v. Purple Leaf, LLC, No. C 11-4601 PJH, 2012 WL 49239, at *2 (N.D. Cal. Jan. 9, 2012); Intel Corp. v. Wi-LAN, Inc., No. C 08-04555 JW, slip op. at 9 (N.D. Cal. June 4, 2009)1; Pacesetter, 678 F.2d at 96. Thus, although no facts or circumstances warrant an exception to the first-to-file rule, the determination of whether an exception applies must be conducted by the District of Arizona. F. Previous Litigation in this District Involving the ‘079 Patent Does not Prevent Application of the First-to-File Rule or Transfer Finally, PI will no doubt contend that litigation history involving the ‘079 patent in the Northern District of California favors retention of the claim on the ‘079 patent in this Court. The previous lawsuits involving the ‘079 patent were before Hon. Maxine Chesney, who has already confirmed by an order entered in this lawsuit that this lawsuit and the previous lawsuits are not related. Ex. 4 (Docket No. 17). In addition, the accused products in this lawsuit and the previous lawsuits involving the ‘079 patent will be considerably different. The claims on the ‘079 patent in this lawsuit and the Arizona lawsuit concern products of ON Semiconductor. The previous lawsuits on the ‘079 patent in this district concerned products of Fairchild Semiconductor. Although Fairchild Semiconductor is now owned by ON Semiconductor (as of September 2016), the accused products in this lawsuit will involve ON Semiconductor-branded power converter products that were not at issue in any of the previous lawsuits involving the ‘079 products. Further, with respect to judicial efficiency, there will be no advantage from retaining this lawsuit 1 A copy of this opinion is attached as Ex. 5. Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 13 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 14 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 5:16-cv-06371-BLF 10 DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE in this district. Judge Chesney has ruled that this action is not related (Ex. 4), meaning that a different judge - whether the judge assigned to this lawsuit (Hon. Beth Labson Freeman) or the judge of the Arizona lawsuit (Hon Stephen P. Logan) - will handle the infringement claim on the ‘079 patent asserted in this lawsuit. As for the ‘457 patent, which was also the subject of the first- filed action in Arizona, there is previous litigation involving the ‘457 patent in the District of Delaware between PI and Fairchild Semiconductor. (Fairchild Semiconductor Corporation et al v. Power Integrations Inc., Case No. 1:12-cv-00540-LPS). But the ‘457 has never before been the subject of litigation in this district. Also, the four additional patents have no previous litigation history in any court. In sum, the previous litigation in this district involving the ‘079 does not present a persuasive reason for retaining this lawsuit in this district, and the remaining causes of action present no reason at all for proceeding in this district. G. PI’s Previous Challenge to Personal Jurisdiction in Arizona Does Not Prevent Transfer under the First-to-File Rule In the Arizona action, PI filed a motion seeking a dismissal for lack of personal jurisdiction. PI withdrew the motion and has not refiled it. Even if PI refiles its personal jurisdiction motion before this motion is resolved, the pendency of a personal jurisdiction motion in the court of the first-filed action does not prevent transfer under the first-to-file rule. See AOptix Technologies v. Blue Spike LLC, Civ. No. 13-cv-1105 YGR, slip op. at 2-3 (N.D. Cal. Dec. 10, 2013) (applying the first-to-file doctrine despite a pending motion to dismiss for lack of personal jurisdiction pending in the first-filed court).2 Because the first-to-file rule applies, this Court should transfer this action to Arizona. If PI refiles its personal jurisdiction motion, that motion will be resolved in the first instance by the Arizona court. Id. at 2. H. Conclusion For the reasons set out above, ON Semiconductor moves that the Court transfer this case to the District of Arizona, or, in the alternative, sever the causes of action concerning the ‘079 and the ‘457 patents and transfer those causes of action to the District of Arizona. 2 A copy of this opinion is attached as Ex. 6. Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 14 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 15 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CASE NO. 5:16-cv-06371-BLF 11 DEFENDANTS’ MOTION TO TRANSFER OR TO SEVER AND TRANSFER IN THE ALTERNATIVE Dated: December 21, 2016 BAKER BOTTS L.L.P. By: /s/ Jon V. Swenson Jon V. Swenson ATTORNEY FOR DEFENDANTS ON SEMICONDUCTOR CORP. AND SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC Case 5:16-cv-06371-BLF Document 18 Filed 12/21/16 Page 15 of 15 Case 2:16-cv-02720-SPL Document 29-4 Filed 12/29/16 Page 16 of 16 EXHIBIT B Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 1 of 23 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION ON SEMICONDUCTOR CORPORATION, and SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC; PLAINTIFFS, v. POWER INTEGRATIONS, INC. DEFENDANT. Cause No. ____________ JURY DEMANDED COMPLAINT FOR PATENT INFRINGEMENT Plaintiff ON Semiconductor Corporation and Plaintiff Semiconductor Components Industries, LLC (collectively, “Plaintiffs” or “ON Semiconductor”) bring this civil action against Defendant Power Integrations, Inc. (“Power Integrations”) and hereby aver and complain as follows: PARTIES 1. Plaintiff ON Semiconductor Corporation is a Delaware corporation with its principal place of business at 5005 East McDowell Road, Phoenix, Arizona, 85008. 2. Plaintiff Semiconductor Components Industries, LLC is a Delaware limited liability company with its principal place of business at 5005 East McDowell Road, Phoenix, Arizona, 85008. Semiconductor Components Industries, LLC is the principal domestic operating subsidiary of ON Semiconductor Corporation and does business under the name of ON Semiconductor. Plaintiffs design, manufacture, and market a comprehensive portfolio of semiconductor products, including AC-DC controllers and regulators. Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 1 of 22 PageID #: 1 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 2 of 23 3. Defendant Power Integrations, Inc. is incorporated under the laws of the state of Delaware, and has a regular and established place of business at 5245 Hellyer Avenue, San Jose, California, 95138. Power Integrations may be served through its registered agent at 5245 Hellyer Avenue, San Jose, California, 95138. JURISDICTION AND VENUE 4. This action arises under the patent laws of the United States, 35 U.S.C. § 271, et seq. Jurisdiction in this Court over this cause of action is proper pursuant to 28 U.S.C. § § 1331 and 1338 and 35 U.S.C. § 1, et seq. 5. This Court has personal jurisdiction over the Defendant. Power Integrations has conducted and does conduct business within the State of Texas and this judicial district. Power Integrations, directly or through intermediaries (including distributors, retailers, and others), places infringing products within the stream of commerce, which stream is directed at this district and includes the distribution of infringing products in this district, with the knowledge that such products will be sold or used in this judicial district. 6. As an example of the distribution of infringing products into this district, a Tenergy 2-port Adaptive Fast Wall Charger is available for sale and was purchased at Fry’s Electronics at 700 E. Plano Parkway, Plano, Texas, which is a location within the Eastern District of Texas. The Tenergy 2-port Adaptive Fast Wall Charger includes an InnoSwitch product of Power Integrations with part number SC1223K. 7. As another example of the distribution of infringing products into this district, InnoSwitch products of Power Integrations, including InnoSwitch products having part number SC1224K, are distributed with the 18W USB Type-CTM charger included with the Google Pixel phones (including both the Pixel 5” display and the Pixel XL 5.5” display). Google Pixel phones 2 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 2 of 22 PageID #: 2 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 3 of 23 are products of Google Inc., which is incorporated under the laws of the state of Delaware, and has a regular and established place of business at 1600 Amphitheatre Parkway, Mountain View, California, 94043. Google Pixel phones and chargers are for sale and have been purchased at Best Buy at 422 W. Loop 281, Longview, Texas, which is a location in the Eastern District of Texas. On information and belief, Google Pixel phones and chargers are distributed throughout the district, including through retailers such as Best Buy and Verizon Wireless. In addition, InnoSwitch products are available for sale from Mouser Electronics and may be shipped into this judicial district. 8. Venue is proper in the Eastern District of Texas under 28 U.S.C. § § 1391(b) and 1400(b) because the acts and transactions constituting the violations alleged herein occurred in part in this judicial district and the Defendant transacts business in this judicial district. Venue is also proper in this district under 28 U.S.C. § 1391(c) because Power Integrations is an entity that is subject to personal jurisdiction in this district. FACTUAL BACKGROUND 9. After a full and fair examination, the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 7,440,298, entitled “Synchronous Rectification Circuit for Power Converters” (hereinafter, “the ‘298 patent”) on October 21, 2008. A true and correct copy of the ‘298 patent is attached as Exhibit A. 10. After a full and fair examination, the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 7,564,705, entitled “Synchronous Rectification Circuit for Power Converters” (hereinafter, “the ‘705 patent”) on June 21, 2009. A true and correct copy of the ‘705 patent is attached as Exhibit B. 3 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 3 of 22 PageID #: 3 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 4 of 23 11. After a full and fair examination, the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 9,077,258, entitled “Regulation Circuit Associated with Synchronous Rectifier Providing Cable Compensation for the Power Converter and Method Thereof” (hereinafter, “the ‘258 patent”) on July 7, 2015. A true and correct copy of the ‘258 patent is attached as Exhibit C. 12. After a full and fair examination, the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 7,796,407, entitled “Method and Apparatus for Providing Synchronous Regulation for Offline Power Converter” (hereinafter, “the ‘407 patent”) on September 14, 2010. A true and correct copy of the ‘407 patent is attached as Exhibit D. 13. After a full and fair examination, the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 7,800,923, entitled “Offline Synchronous Switching Regulator” (hereinafter, “the ‘923 patent”) on September 21, 2010. A true and correct copy of the ‘923 patent is attached as Exhibit E. 14. After a full and fair examination, the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 7,102,211, entitled “Semiconductor Device and Hybrid Integrated Device” (hereinafter, “the ‘211 patent”) on September 5, 2006. A true and correct copy of the ‘211 patent is attached as Exhibit F. 15. Semiconductor Components Industries, LLC owns title and all rights to the ‘298, ‘705, ‘258, ‘407, ‘923, and ‘211 patents (“the Asserted Patents”), including the right to prevent others from making, having made, using, offering for sale, importing, or selling products and services covered by those patents; the right to enforce those patents against the Defendant; and the right to collect damages for all relevant times. 16. Defendant Power Integrations has offered and continues to offer infringing 4 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 4 of 22 PageID #: 4 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 5 of 23 semiconductors, including the InnoSwitch family of products, for sale, directly and through intermediaries (including distributors, retailers, and others), in this district and elsewhere. As just one example, InnoSwitch products are included in the 18W USB Type-CTM charger that is sold and distributed with the Google Pixel phone, which is shown below: The 18W USB Type-CTM charger for the Google Pixel phone, which is shown below, includes an InnoSwitch product having part number SC1224K: 5 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 5 of 22 PageID #: 5 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 6 of 23 In the photograph below, the white charger has been disassembled to show the InnoSwitch SC1224K product mounted on the circuit board: 17. The distribution of infringing InnoSwitch products in the Google Pixel phone charger is part of a shared strategy of Power Integrations and Google of offering products that can support and enable fast charging. Power Integrations explains that “[f]ast charger protocols such as USB-PD/QC3.0 are dramatically reducing the charging time for a cellphone from an overnight charge to less than 30 minutes. This makes charging more convenient for the user allowing almost continual access to mobile devices.” (https://ac-dc.power.com/applications/usb- pd-fast-chargers/). The InnoSwitch is specifically designed to accommodate and support fast charging. For example, Power Integrations describes the InnoSwitch as “[t]he most integrated 6 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 6 of 22 PageID #: 6 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 7 of 23 and efficient solution for USB-PD and fast charging.” (https://ac- dc.power.com/applications/usb-pd-fast-chargers/). In a recent earnings call, Power Integrations identified the fast charging feature of the InnoSwitch as being a driver of growth: “We expect rapid charging to be a significant growth driver beyond the current year as the penetration rate of fast chargers continue to go up, power levels continue to raise in support of increasingly feature- rich devices and new technologies such as USB PD, direct charging and Type-CTM connectors, drive the need for sophisticated power conversion technologies such as InnoSwitch.” (http://www.nasdaq.com/aspx/call-transcript.aspx?StoryId=4016090&Title=power-integrations- powi-q3-2016-results-earnings-call-transcript). 18. Google advertises that the Google Pixel phone is specially adapted to provide “Fast charging: up to 7 hours of use from only 15 minutes of charging.” (https://madeby.google.com/phone/specs/). Further, Google specifies that charging of the Google Pixel phone is accomplished using a co-packaged USB Type-C™ 18W adaptor with USB-PD, which charging protocol is specifically enabled by a Power Integrations’ InnoSwitch product. (https://madeby.google.com/phone/specs/). 19. Many of the Asserted Patents describe and claim power converters with a feature known as synchronous rectification. Synchronous rectification is a rectification technique for the secondary side of the power converter that offers improved efficiency and reduced power consumption. Power Integrations’s InnoSwitch line of products uses synchronous rectification, and Power Integrations has claimed that the “design of the InnoSwitch family is ideal for safe and reliable synchronous rectification.” (https://ac-dc.power.com/videos/innoswitch- synchronous-rectification/). Power Integrations has also promoted in its marketing literature that the InnoSwitch “optimizes the effectiveness of output synchronous rectification, resulting in 7 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 7 of 22 PageID #: 7 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 8 of 23 extremely high efficiency across the full load range.” (http://investors.power.com/investors/press-releases/press-release-details/2016/Power- Integrations-InnoSwitch-CP-ICs-Dramatically-Improve-Charging-Performance-of-Smart- Mobile-Devices/default.aspx). Plaintiffs are innovators in the field of synchronous rectification in power converters, and the InnoSwitch family of products infringes Plaintiffs’ patents in this critical technology field. The past and continuing unauthorized use of Plaintiff’s technology by Power Integrations, Google, and others has caused and continues to cause substantial harm to ON Semiconductor. COUNT ONE INFRINGEMENT OF U.S. PATENT NO. 7,440,298 BY POWER INTEGRATIONS 20. Plaintiffs repeat and re-allege each and every allegation of paragraphs 1-19 as though fully set forth herein. 21. The ‘298 patent is valid and enforceable. 22. Power Integrations has at no time, expressly or impliedly, been licensed under the ‘298 patent. 23. Upon information and belief, Power Integrations has been directly infringing and is now directly infringing the ‘298 patent under 35 U.S.C. § 271, either literally or under the doctrine of equivalents, in this District and elsewhere by making, using, selling, offering for sale, and/or importing into the United States infringing products. Infringing products include, but are not limited to, one or more products in the InnoSwitch family of products, and include any similarly functioning product that includes a power converter with a synchronous rectification circuit that includes a power switch and a switching-control circuit arranged in an infringing manner in accordance with claim 1 of the ‘298 patent. Infringing products in the InnoSwitch family of products include at least the following InnoSwitch model numbers: InnoSwitch-CH 8 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 8 of 22 PageID #: 8 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 9 of 23 family (INN2003K, INN2023K, INN2004K, INN2024K, INN2005K, INN2025K), InnoSwitch-EP family (INN2603K, INN2604K, INN2605K, INN2904K), InnoSwitch-CP family (INN2214K, INN2215K), InnoSwitch-CE family (INN2103K, INN2123K, INN2104K, INN2124K, INN2105K, INN2125K), SC1221K, SC1223K, SC1225K, SC1226K, SC1229K1, SC1262K, and SC1271K. 24. Further, Power Integrations induces infringement of one or more of the claims of the ‘298 patent by others and is therefore liable for its indirect infringement. Specifically, by way of example only, Power Integrations provides the InnoSwitch family of products to be incorporated into consumer electronic products such as the charger shipped with the Google Pixel phone. These consumer electronic products are imported, sold, offered for sale, or used within the United States by others, who are direct infringers of the ‘298 patent. Power Integrations has had knowledge of, or was willfully blind to, the ‘298 patent and has had knowledge of, or was willfully blind to the fact that its actions would induce infringement since at least as early as the filing of this Complaint. Infringing products include any charger, adapter, power converter, electronic device, or other product that includes an InnoSwitch product, including for example, but not limited to, the 18W USB Type-CTM charger shipped with the Google Pixel phone. 25. Power Integrations possessed a specific intent to induce infringement by, at a minimum, providing product briefs, specification sheets and/or instructions on how to incorporate the accused products into consumer electronic products in a way that would infringe the ‘298 patent. As one example of Power Integrations’s inducing activity, reference designs for the InnoSwitch family of products are available on the Power Integrations web site, and 9 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 9 of 22 PageID #: 9 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 10 of 23 examples are shown at https://ac-dc.power.com/sites/default/files/PDFFiles/rdr420.pdf and https://ac-dc.power.com/sites/default/files/PDFFiles/der518.pdf. 26. Plaintiffs have been irreparably harmed by Power Integrations’s infringement of the ‘298 patent and will continue to be harmed unless and until Power Integrations’s infringement is enjoined by this Court. Plaintiffs have no adequate remedy at law to redress Power Integrations’s continuing infringement. The hardships that would be imposed upon Power Integrations by an injunction are less than those faced by Plaintiffs should an injunction not issue. Furthermore, the public interest would be served by issuance of an injunction. 27. Also as a result of Power Integrations’s infringement, Plaintiffs have suffered and will continue to suffer damages in an amount to be proved at trial. COUNT TWO INFRINGEMENT OF U.S. PATENT NO. 7,564,705 BY POWER INTEGRATIONS 28. Plaintiffs repeat and re-allege each and every allegation of paragraphs 1-27 as though fully set forth herein. 29. The ‘705 patent is valid and enforceable. 30. Power Integrations has at no time, expressly or impliedly, been licensed under the ‘705 patent. 31. Upon information and belief, Power Integrations has been directly infringing and is now directly infringing the ‘705 patent under 35 U.S.C. § 271, either literally or under the doctrine of equivalents, in this District and elsewhere by making, using, selling, offering for sale, and/or importing into the United States infringing products. Infringing products include, but are not limited to, one or more products in the InnoSwitch family of products, and include any similarly functioning product that includes a power converter with a synchronous rectification circuit that includes a power switch and a switching-control circuit arranged in an infringing 10 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 10 of 22 PageID #: 10 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 11 of 23 manner in accordance with claim 1 of the ‘705 patent. Infringing products in the InnoSwitch family of products include at least the following InnoSwitch model numbers: InnoSwitch-CH family (INN2003K, INN2023K, INN2004K, INN2024K, INN2005K, INN2025K), InnoSwitch-EP family (INN2603K, INN2604K, INN2605K, INN2904K), InnoSwitch-CP family (INN2214K, INN2215K), InnoSwitch-CE family (INN2103K, INN2123K, INN2104K, INN2124K, INN2105K, INN2125K), SC1221K, SC1223K, SC1225K, SC1226K, SC1229K1, SC1262K, and SC1271K. 32. Further, Power Integrations induces infringement of one or more of the claims of the ‘705 patent by others and is therefore liable for its indirect infringement. Specifically, by way of example only, Power Integrations provides the InnoSwitch family of products to be incorporated into consumer electronic products such as the charger shipped with the Google Pixel phone. These consumer electronic products are imported, sold, offered for sale, or used within the United States by others, who are direct infringers of the ‘705 patent. Power Integrations has had knowledge of, or was willfully blind to, the ‘705 patent and has had knowledge of, or was willfully blind to the fact that its actions would induce infringement since at least as early as the filing of this Complaint. Infringing products include any charger, adapter, power converter, electronic device, or other product that includes an InnoSwitch product, including for example, but not limited to, the 18W USB Type-CTM charger shipped with the Google Pixel phone. 33. Power Integrations possessed a specific intent to induce infringement by, at a minimum, providing product briefs, specification sheets and/or instructions on how to incorporate the accused products into consumer electronic products in a way that would infringe the ‘705 patent. As one example of Power Integrations’s inducing activity, reference designs for 11 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 11 of 22 PageID #: 11 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 12 of 23 the InnoSwitch family of products are available on the Power Integrations web site, and examples are shown at https://ac-dc.power.com/sites/default/files/PDFFiles/rdr420.pdf and https://ac-dc.power.com/sites/default/files/PDFFiles/der518.pdf. 34. Plaintiffs have been irreparably harmed by Power Integrations’s infringement of the ‘705 patent and will continue to be harmed unless and until Power Integrations’s infringement is enjoined by this Court. Plaintiffs have no adequate remedy at law to redress Power Integrations’s continuing infringement. The hardships that would be imposed upon Power Integrations by an injunction are less than those faced by Plaintiffs should an injunction not issue. Furthermore, the public interest would be served by issuance of an injunction. 35. Also as a result of Power Integrations’s infringement, Plaintiffs have suffered and will continue to suffer damages in an amount to be proved at trial. COUNT THREE INFRINGEMENT OF U.S. PATENT NO. 9,077,258 BY POWER INTEGRATIONS 36. Plaintiffs repeat and re-allege each and every allegation of paragraphs 1-35 as though fully set forth herein. 37. The ‘258 patent is valid and enforceable. 38. Power Integrations has at no time, expressly or impliedly, been licensed under the ‘258 patent. 39. Upon information and belief, Power Integrations has been directly infringing and is now directly infringing the ‘258 patent under 35 U.S.C. § 271, either literally or under the doctrine of equivalents, in this District and elsewhere by making, using, selling, offering for sale, and/or importing into the United States infringing products. Infringing products include, but are not limited to, one or more products in the InnoSwitch family of products, and include any similarly functioning product that includes a power converter with a regulation circuit that 12 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 12 of 22 PageID #: 12 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 13 of 23 includes a signal generator and an error amplifier arranged in an infringing manner in accordance with claim 1 of the ‘258 patent. Infringing products in the InnoSwitch family of products include at least the following InnoSwitch model numbers: InnoSwitch-CH family (INN2023K, INN2024K, INN2025K). 40. Further, Power Integrations induces infringement of one or more of the claims of the ‘258 patent by others and is therefore liable for its indirect infringement. Specifically, by way of example only, Power Integrations provides the InnoSwitch family of products to be incorporated into consumer electronic products such as the charger shipped with the Google Pixel phone. These consumer electronic products are imported, sold, offered for sale, or used within the United States by others, who are direct infringers of the ‘258 patent. Power Integrations has had knowledge of, or was willfully blind to, the ‘258 patent and has had knowledge of, or was willfully blind to the fact that its actions would induce infringement since at least as early as the filing of this Complaint. Infringing products include any charger, adapter, power converter, electronic device, or other product that includes an InnoSwitch product, including for example, but not limited to, the 18W USB Type-CTM charger shipped with the Google Pixel phone. 41. Power Integrations possessed a specific intent to induce infringement by, at a minimum, providing product briefs, specification sheets and/or instructions on how to incorporate the accused products into consumer electronic products in a way that would infringe the ‘258 patent. As one example of Power Integrations’s inducing activity, reference designs for the InnoSwitch family of products are available on the Power Integrations web site, and examples are shown at https://ac-dc.power.com/sites/default/files/PDFFiles/rdr420.pdf and https://ac-dc.power.com/sites/default/files/PDFFiles/der518.pdf. 13 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 13 of 22 PageID #: 13 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 14 of 23 42. Plaintiffs have been irreparably harmed by Power Integrations’s infringement of the ‘258 patent and will continue to be harmed unless and until Power Integrations’s infringement is enjoined by this Court. Plaintiffs have no adequate remedy at law to redress Power Integrations’s continuing infringement. The hardships that would be imposed upon Power Integrations by an injunction are less than those faced by Plaintiffs should an injunction not issue. Furthermore, the public interest would be served by issuance of an injunction. 43. Also as a result of Power Integrations’s infringement, Plaintiffs have suffered and will continue to suffer damages in an amount to be proved at trial. COUNT FOUR INFRINGEMENT OF U.S. PATENT NO. 7,497,407 BY POWER INTEGRATIONS 44. Plaintiffs repeat and re-allege each and every allegation of paragraphs 1-43 as though fully set forth herein. 45. The ‘407 patent is valid and enforceable. 46. Power Integrations has at no time, expressly or impliedly, been licensed under the ‘407 patent. 47. Upon information and belief, Power Integrations has been directly infringing and is now directly infringing the ‘407 patent under 35 U.S.C. § 271, either literally or under the doctrine of equivalents, in this District and elsewhere by making, using, selling, offering for sale, and/or importing into the United States infringing products. Infringing products include, but are not limited to, one or more products in the InnoSwitch family of products, and include any similarly functioning product that includes a synchronous regulation power converter that includes a secondary side switching circuit, an isolation device, a primary side switching circuit, and a synchronous switch arranged in an infringing manner in accordance with claim 1 of the ‘407 patent. Infringing products in the InnoSwitch family of products include at least the 14 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 14 of 22 PageID #: 14 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 15 of 23 following InnoSwitch model numbers: InnoSwitch-CH family (INN2003K, INN2023K, INN2004K, INN2024K, INN2005K, INN2025K), InnoSwitch-EP family (INN2603K, INN2604K, INN2605K, INN2904K), InnoSwitch-CP family (INN2214K, INN2215K), InnoSwitch-CE family (INN2103K, INN2123K, INN2104K, INN2124K, INN2105K, INN2125K), SC1221K, SC1223K, SC1225K, SC1226K, SC1229K1, SC1262K, and SC1271K. 48. Further, Power Integrations induces infringement of one or more of the claims of the ‘407 patent by others and is therefore liable for its indirect infringement. Specifically, by way of example only, Power Integrations provides the InnoSwitch family of products to be incorporated into consumer electronic products such as the charger shipped with the Google Pixel phone. These consumer electronic products are imported, sold, offered for sale, or used within the United States by others, who are direct infringers of the ‘407 patent. Power Integrations has had knowledge of, or was willfully blind to, the ‘407 patent and has had knowledge of, or was willfully blind to the fact that its actions would induce infringement since at least as early as the filing of this Complaint. Infringing products include any charger, adapter, power converter, electronic device, or other product that includes an InnoSwitch product, including for example, but not limited to, the 18W USB Type-CTM charger shipped with the Google Pixel phone. 49. Power Integrations possessed a specific intent to induce infringement by, at a minimum, providing product briefs, specification sheets and/or instructions on how to incorporate the accused products into consumer electronic products in a way that would infringe the ‘407 patent. As one example of Power Integrations’s inducing activity, reference designs for the InnoSwitch family of products are available on the Power Integrations web site, and 15 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 15 of 22 PageID #: 15 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 16 of 23 examples are shown at https://ac-dc.power.com/sites/default/files/PDFFiles/rdr420.pdf and https://ac-dc.power.com/sites/default/files/PDFFiles/der518.pdf. 50. Plaintiffs have been irreparably harmed by Power Integrations’s infringement of the ‘407 patent and will continue to be harmed unless and until Power Integrations’s infringement is enjoined by this Court. Plaintiffs have no adequate remedy at law to redress Power Integrations’s continuing infringement. The hardships that would be imposed upon Power Integrations by an injunction are less than those faced by Plaintiffs should an injunction not issue. Furthermore, the public interest would be served by issuance of an injunction. 51. Also as a result of Power Integrations’s infringement, Plaintiffs have suffered and will continue to suffer damages in an amount to be proved at trial. COUNT FIVE INFRINGEMENT OF U.S. PATENT NO. 7,800,923 BY POWER INTEGRATIONS 52. Plaintiffs repeat and re-allege each and every allegation of paragraphs 1-51 as though fully set forth herein. 53. The ‘923 patent is valid and enforceable. 54. Power Integrations has at no time, expressly or impliedly, been licensed under the ‘923 patent. 55. Upon information and belief, Power Integrations has been directly infringing and is now directly infringing the ‘923 patent under 35 U.S.C. § 271, either literally or under the doctrine of equivalents, in this District and elsewhere by making, using, selling, offering for sale, and/or importing into the United States infringing products. Infringing products include, but are not limited to, one or more products in the InnoSwitch family of products, and include any similarly functioning product that practices a synchronous switching regulation method that involves switching a transformer to generate a switching signal, generating pulse signals, 16 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 16 of 22 PageID #: 16 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 17 of 23 transferring the pulse signals to a latch, setting or resetting the latch, and turning on and off a power switch in accordance with claim 12 of the ‘923 patent. Infringing products in the InnoSwitch family of products include at least the following InnoSwitch model numbers: InnoSwitch-CH family (INN2003K, INN2023K, INN2004K, INN2024K, INN2005K, INN2025K), InnoSwitch-EP family (INN2603K, INN2604K, INN2605K, INN2904K), InnoSwitch-CP family (INN2214K, INN2215K), InnoSwitch-CE family (INN2103K, INN2123K, INN2104K, INN2124K, INN2105K, INN2125K), SC1221K, SC1223K, SC1225K, SC1226K, SC1229K1, SC1262K, and SC1271K. 56. Further, Power Integrations induces infringement of one or more of the claims of the ‘923 patent by others and is therefore liable for its indirect infringement. Specifically, by way of example only, Power Integrations provides the InnoSwitch family of products to be incorporated into consumer electronic products such as the charger shipped with the Google Pixel phone. These consumer electronic products are imported, sold, offered for sale, or used within the United States by others, who are direct infringers of the ‘923 patent. Power Integrations has had knowledge of, or was willfully blind to, the ‘923 patent and has had knowledge of, or was willfully blind to the fact that its actions would induce infringement since at least as early as the filing of this Complaint. Infringing products include any charger, adapter, power converter, electronic device, or other product that includes an InnoSwitch product, including for example, but not limited to, the 18W USB Type-CTM charger shipped with the Google Pixel phone. 57. Power Integrations possessed a specific intent to induce infringement by, at a minimum, providing product briefs, specification sheets and/or instructions on how to incorporate the accused products into consumer electronic products in a way that would infringe 17 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 17 of 22 PageID #: 17 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 18 of 23 the ‘923 patent. As one example of Power Integrations’s inducing activity, reference designs for the InnoSwitch family of products are available on the Power Integrations web site, and examples are shown at https://ac-dc.power.com/sites/default/files/PDFFiles/rdr420.pdf and https://ac-dc.power.com/sites/default/files/PDFFiles/der518.pdf. 58. Plaintiffs have been irreparably harmed by Power Integrations’s infringement of the ‘923 patent and will continue to be harmed unless and until Power Integrations’s infringement is enjoined by this Court. Plaintiffs have no adequate remedy at law to redress Power Integrations’s continuing infringement. The hardships that would be imposed upon Power Integrations by an injunction are less than those faced by Plaintiffs should an injunction not issue. Furthermore, the public interest would be served by issuance of an injunction. 59. Also as a result of Power Integrations’s infringement, Plaintiffs have suffered and will continue to suffer damages in an amount to be proved at trial. COUNT SIX INFRINGEMENT OF U.S. PATENT NO. 7,102,211 BY POWER INTEGRATIONS 60. Plaintiffs repeat and re-allege each and every allegation of paragraphs 1-59 as though fully set forth herein. 61. The ‘211 patent is valid and enforceable. 62. Power Integrations has at no time, expressly or impliedly, been licensed under the ‘211 patent. 63. Upon information and belief, Power Integrations has been directly infringing and is now directly infringing the ‘211 patent under 35 U.S.C. § 271, either literally or under the doctrine of equivalents, in this District and elsewhere by making, using, selling, offering for sale, and/or importing into the United States infringing products. Infringing products include, but are not limited to, one or more products in the InnoSwitch family of products, and include any 18 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 18 of 22 PageID #: 18 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 19 of 23 similarly functioning product that includes an integrated circuit that includes a hybrid integrated circuit board, a semiconductor element or passive element mounted on the board, a plurality of leads, and a resin-sealing body arranged in an infringing manner in accordance with at least claims 1 and 5 of the ‘211 patent. Infringing products in the InnoSwitch family of products include at least the following InnoSwitch model numbers: InnoSwitch-CH family (INN2003K, INN2023K, INN2004K, INN2024K, INN2005K, INN2025K), InnoSwitch-EP family (INN2603K, INN2604K, INN2605K, INN2904K), InnoSwitch-CP family (INN2214K, INN2215K), InnoSwitch-CE family (INN2103K, INN2123K, INN2104K, INN2124K, INN2105K, INN2125K), SC1221K, SC1223K, SC1225K, SC1226K, SC1229K1, SC1262K, and SC1271K. Infringing products also include Power Integrations’s SCALE-iDriver products having part numbers SID1132K, SID1152K, SID1182K. 64. Further, Power Integrations induces infringement of one or more of the claims of the ‘211 patent by others and is therefore liable for its indirect infringement. Specifically, by way of example only, Power Integrations provides the InnoSwitch family of products to be incorporated into consumer electronic products such as the charger shipped with the Google Pixel phone. These consumer electronic products are imported, sold, offered for sale, or used within the United States by others, who are direct infringers of the ‘211 patent. Power Integrations has had knowledge of, or was willfully blind to, the ‘211 patent and has had knowledge of, or was willfully blind to the fact that its actions would induce infringement since at least as early as the filing of this Complaint. Infringing products include any charger, adapter, power converter, electronic device, or other product that includes an InnoSwitch product, including for example, but not limited to, the 18W USB Type-CTM charger shipped with the Google Pixel phone. 19 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 19 of 22 PageID #: 19 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 20 of 23 65. Power Integrations possessed a specific intent to induce infringement by, at a minimum, providing product briefs, specification sheets and/or instructions on how to incorporate the accused products into consumer electronic products in a way that would infringe the ‘211 patent. As one example of Power Integrations’s inducing activity, reference designs for the InnoSwitch family of products are available on the Power Integrations web site, and examples are shown at https://ac-dc.power.com/sites/default/files/PDFFiles/rdr420.pdf and https://ac-dc.power.com/sites/default/files/PDFFiles/der518.pdf. 66. Plaintiffs have been irreparably harmed by Power Integrations’s infringement of the ‘211 patent and will continue to be harmed unless and until Power Integrations’s infringement is enjoined by this Court. Plaintiffs have no adequate remedy at law to redress Power Integrations’s continuing infringement. The hardships that would be imposed upon Power Integrations by an injunction are less than those faced by Plaintiffs should an injunction not issue. Furthermore, the public interest would be served by issuance of an injunction. 67. Also as a result of Power Integrations’s infringement, Plaintiffs have suffered and will continue to suffer damages in an amount to be proved at trial. DEMAND FOR JURY TRIAL 68. Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiffs ON Semiconductor Corporation and Semiconductor Components Industries, LLC hereby demand a trial by jury as to all issues so triable. PRAYER FOR RELIEF 69. WHEREFORE, Plaintiffs request a judgment: A. That Plaintiffs are the owner of all right, title, and interest in and to U.S. Patent Nos. 7,440,298; 7,564,705; 9,077,258; 7,796,407; 7,800,923; and 20 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 20 of 22 PageID #: 20 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 21 of 23 7,102,211, together with all the rights of recovery under such patents for past and future infringements thereof; B. That Defendant has infringed U.S. Patent Nos. 7,440,298; 7,564,705; 9,077,258; 7,796,407; 7,800,923; and 7,102,211. C. That U.S. Patent Nos. 7,440,298; 7,564,705; 9,077,258; 7,796,407; 7,800,923; and 7,102,211 are valid and enforceable in law; D. Awarding Plaintiffs their damages caused by Defendant’s infringement, including an assessment of pre-judgment and post-judgment interest and costs, and an accounting as appropriate for infringing activity not captured within any applicable jury verdict; E. Entering a permanent injunction against Defendant, their respective officers, agents, servants, employees, attorneys, all parent and subsidiary corporations and affiliates, their assigns and successors in interest, and those persons in active concert or participation with any of them who receive notice of the injunction, enjoining them from continuing acts of infringement of U.S. Patent Nos. 7,440,298; 7,564,705; 9,077,258; 7,796,407; 7,800,923; and 7,102,211, including, without limitation, from continuing to make, use, sell, offer for sale, or import infringing semiconductors or products including such semiconductors; F. That this is an exceptional case and awarding to Plaintiffs their costs, expenses, and reasonable attorneys’ fees pursuant to 35 U.S.C. § 285; 21 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 21 of 22 PageID #: 21 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 22 of 23 G. In the event a permanent injunction preventing future acts of infringement is not entered, that Plaintiffs be awarded a compulsory ongoing licensing fee; and H. Awarding to Plaintiffs such other and further relief as this Court may deem just and proper. Dated: December 27, 2016 Respectfully submitted, /s/ Roger Fulghum Deron R. Dacus Texas Bar No. 00790553 The Dacus Firm, PC 821 ESE Loop 323 Suite 430 Tyler, TX 75701 Email: ddacus@dacusfirm.com Roger Fulghum Texas State Bar No. 00790724 Michael A. Hawes Texas State Bar No. 24010761 BAKER BOTTS LLP One Shell Plaza 910 Louisiana Street Houston, Texas 77002 Tel: 713.229.1234 Fax: 713.229.1522 roger.fulghum@bakerbotts.com Brett Thompsen Texas State Bar No. 24075157 BAKER BOTTS L.L.P. 98 San Jacinto Boulevard Suite 1500 Austin, Texas 78701 Telephone: 512.322.2500 Facsimile: 512.322.2501 brett.thompsen@bakerbotts.com ATTORNEYS FOR ON SEMICONDUCTOR CORPORATION AND SEMICONDUCTOR COMPONENTS INDUSTRIES LLC 22 Case 2:16-cv-01451 Document 1 Filed 12/27/16 Page 22 of 22 PageID #: 22 Case 2:16-cv-02720-SPL Document 29-5 Filed 12/29/16 Page 23 of 23 EXHIBIT C Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 1 of 44 No. 16- In the Supreme Court of the United States On PetitiOn fOr a Writ Of CertiOrari tO the United StateS COUrt Of aPPealS fOr the federal CirCUit A (800) 274-3321 • (800) 359-6859 PETITION FOR A WRIT OF CERTIORARI 267237 TC HEARTLAND, LLC D/B/A HEARTLAND FOOD PRODUCTS GROUP, Petitioner, v. KRAFT FOODS GROUP BRANDS LLC, Respondent. James W. Dabney Counsel of Record hughes hubbarD & reeD LLP One Battery Park Plaza New York, New York 10004 (212) 837-6803 james.dabney@hugheshubbard.com John F. DuFFy rIcharD m. KoehL emma L. baratta Of Counsel Counsel for Petitioner Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 2 of 44 i QUESTION PRESENTED The patent venue statute, 28 U.S.C. § 1400(b), provides that patent infringement actions “may be brought in the judicial district where the defendant resides . . . .” The statute governing “[v]enue gener- ally,” 28 U.S.C. § 1391, has long contained a subsec- tion (c) that, where applicable, deems a corporate en- tity to reside in multiple judicial districts. In Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957), this Court held that § 1400(b) is not to be supplemented by § 1391(c), and that as applied to corporate entities, the phrase “where the defendant resides” in § 1400(b) “mean[s] the state of incorporation only.” Id. at 226. The Court’s opinion concluded: “We hold that 28 U.S.C. § 1400(b) is the sole and exclusive provision control- ling venue in patent infringement actions, and that it is not to be supplemented by the provisions of 28 U.S.C. § 1391 (c).” Id. at 229. Federal Circuit precedent holds to the contrary. Although Congress has not amended § 1400(b) since Fourco, the Federal Circuit has justified its depar- ture from Fourco’s interpretation of § 1400(b) based on amendments to § 1391(c). As stated in the deci- sion below, Federal Circuit precedent holds that “the definition of corporate residence in the general venue statute, § 1391(c), applie[s] to the patent venue stat- ute, 28 U.S.C. § 1400” (App. 4a) and that “Fourco was not and is not the prevailing law” (App. 8a) on where venue is proper in patent infringement actions under § 1400(b). The question in this case is thus precisely the same as the issue decided in Fourco: Whether 28 U.S.C. § 1400(b) is the sole and ex- clusive provision governing venue in patent in- fringement actions and is not to be supplemented by 28 U.S.C. § 1391(c). Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 3 of 44 ii RULE 29.6 STATEMENT Petitioner states that its parent company is Heartland Consumer Products Holdings LLC and no publicly held company owns 10% or more of Petition- er’s stock. Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 4 of 44 iii TABLE OF CONTENTS Page QUESTION PRESENTED................................... i RULE 29.6 STATEMENT ................................... ii TABLE OF CONTENTS ................................... iii TABLE OF AUTHORITIES ................................ v OPINIONS BELOW ............................................ 1 JURISDICTION .................................................. 1 STATUTORY PROVISIONS INVOLVED .......................................................... 1 STATEMENT OF THE CASE ............................ 1 The Court’s Prior Construction of § 1400(b) ................................................................. 2 The 1988 Amendment of 28 U.S.C. § 1391(c) .................................................................. 3 The Federal Circuit’s Abrupt Rejection of Fourco .............................................................. 4 The 2011 Amendment of 28 U.S.C. § 1391(c) .................................................................. 5 The Proceedings Below ....................................... 6 REASONS FOR GRANTING THE PETITION ........................................................... 8 Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 5 of 44 iv I. THE DECISION BELOW OPENLY CONFLICTS WITH THIS COURT’S PATENT VENUE PRECEDENTS. ...................... 9 A. The Statutory Predecessors of § 1400(b) ............................................ 9 B. The Enactment of § 1400(b) in 1948 ................................................. 11 C. The Circuit Split Resolved in Fourco .............................................. 12 D. The Federal Circuit Rejects Fourco .............................................. 14 II. THE PROPER INTERPRETATION OF 28 U.S.C. § 1400(b) IS IMPORTANT AND WORTHY OF THIS COURT’S ATTENTION. .......... 15 III. THE DECISION BELOW IS CLEARLY WRONG AND SHOULD BE REVERSED. ................ 23 IV. THIS CASE PROVIDES A GOOD VEHICLE FOR RAISING THE QUESTION PRESENTED. ................ 30 CONCLUSION .................................................. 30 Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 6 of 44 v TABLE OF AUTHORITIES Cases Page(s) Agostini v. Felton, 521 U.S. 203 (1997) .................... 14 Anderson v. Pac. Coast S.S. Co., 225 U.S. 187 (1912) ..................................................... 24 Atlantic Marine Construction Co. v. United States District Court for the Western District of Texas, 134 S. Ct. 568 (2013) ................................................... 7, 26, 28 Bilski v. Kappos, 561 U.S. 593 (2010) ...................... 27 Brunette Mach. Works, Ltd. v. Kockum Indus., Inc., 406 U.S. 706 (1972) ......... 2, 14, 24, 26 Chisom v. Roemer, 501 U.S. 380 (1991) ................... 24 Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920 (2015) .......................................... 27 In re Cordis Corp., 769 F.2d 733 (Fed. Cir. 1985) ................................................................ 2 D. Ginsberg & Sons, Inc. v. Popkin, 285 U.S. 204 (1932) ..................................................... 25 Dickinson v. Zurko, 527 U.S. 150 (1999) .................. 28 Doelcher Prods., Inc. v. Hydrofoil Int’l, Inc., 735 F. Supp. 666 (D. Md. 1989) ..................... 4 Eli Lilly & Co. v. Sav-on-Drugs, Inc., 366 U.S. 276 (1961) .............................................. 23 Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 7 of 44 vi Erlenbaugh v. United States, 409 U.S. 239 (1972) ............................................................. 25 Finley v. United States, 490 U.S. 545 (1989) .................................................................... 24 Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222 (1957) ........................... passim Gen. Elec. Co. v. Marvel Rare Metals Co., 287 U.S. 430 (1932)....................................... 10 Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) ............................. 29 Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016) .......................................... 27 Hoffman v. Blaski, 363 U.S. 335 (1960) ......... 8, 14, 26 In re Hoffmann-La Roche Inc., 587 F.3d 1333 (Fed. Cir. 2009) ........................................... 23 Joslyn Mfg. Co. v. Amerace Corp., 729 F. Supp. 1219, 1223 (N.D. Ill. 1990) ...................... 4 In re Keasbey & Mattison Co., 160 U.S. 221 (1895) ............................................................. 10 KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007) ............................................................. 27 Limelight Networks, Inc. v. Akamai Techs., Inc., 134 S. Ct. 2111 (2014) ..................... 27 In re Link_A_Media Devices Corp., 662 F.3d 1221 (Fed. Cir. 2011) ................................... 22 Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 8 of 44 vii MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007) .............................................. 28 In re Microsoft Corp., 630 F.3d 1361 (Fed. Cir. 2011) .................................................... 22 Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014) .................................. 27 In re Nintendo of Am., Inc., 756 F.3d 1363 (Fed. Cir. 2014) ........................................... 22 Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014) ................... 27 Palmer v. BRG of Ga., Inc., 498 U.S. 46 (1990) .................................................................... 30 Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014) .......................................... 29 Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617 (2008) ...................................... 27 Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477 (1989) ...................... 14 Schnell v. Peter Eckrich & Sons, Inc., 365 U.S. 260 (1961) ............................ 10, 14, 22, 26 Shaw v. Quincy Mining Co., 145 U.S. 444 (1892) ......................................................... 9, 23 State Oil Co. v. Khan, 522 U.S. 3 (1997) .............. 9, 14 Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 9 of 44 viii Transmirra Prods. Corp. v. Fourco Glass Co., 233 F.2d 885 (2d Cir. 1956), rev’d, 353 U.S. 222 (1957) ......................... 13 VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990) ...................................................... passim Wachovia Bank v. Schmidt, 546 U.S. 303 (2006) ............................................................. 25 Walden v. Fiore, 134 S. Ct. 1115 (2014) ................... 29 Whitman v. Am. Trucking Ass’ns, Inc., 531 U.S. 457 (2001) .............................................. 24 Statutes and Rules 10 Del. C. § 3104 ........................................................ 29 5 U.S.C. § 706 ............................................................ 28 28 U.S.C. § 109 (1940) ................................................. 2 28 U.S.C. § 1254(1) ...................................................... 1 28 U.S.C. § 1338(a) ...................................................... 1 28 U.S.C. § 1391 ................................................ passim 28 U.S.C. § 1400 ................................................ passim 28 U.S.C. § 1404 ........................................................ 22 28 U.S.C. § 1406 .......................................................... 7 28 U.S.C. § 1694 ........................................ 1, 12, 25, 29 Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 10 of 44 ix 35 U.S.C. § 101 .......................................................... 27 35 U.S.C. § 103 .......................................................... 28 35 U.S.C. § 112 .......................................................... 27 35 U.S.C. § 271(b) ...................................................... 27 35 U.S.C. § 284 .......................................................... 27 35 U.S.C. § 285 .......................................................... 27 35 U.S.C. § 321 (2012) ............................................... 28 Fed. R. Civ. P. 4(k)(1)(A) ........................................... 29 Federal Courts Jurisdiction and Clarification Act of 2011, Pub. L. No. 112-63, § 202, 125 Stat. 758, 763 (2011) ...................................................................... 6 Judicial Improvements and Access to Justice Act of 1988, Pub. L. No. 100- 702, § 1013, 102 Stat. 4642, 4669 (1988) ...................................................................... 3 Judiciary Act of 1911, Chapter 231, 36 Stat. 1100 (1911) .................................................. 11 Judiciary Act of 1948, 62 Stat. 936, 945 (1948) .................................................................... 12 Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 18(c), 129 Stat. 284, 331 (2011) ............................................................. 28 Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 11 of 44 x Legislative and Administrative Proceedings 29 CONG. REC. 1900 (daily ed. Feb. 16, 1897) ..................................................................... 11 H.R. REP. NO. 100-889, at 66 (1988), reprinted in 1988 U.S.C.C.A.N. 5982 .............. 3, 24 Treatises and Periodical Materials J. Jonas Anderson, Court Competition for Patent Cases, 163 U. PA. L. REV. 631 (2015) ....................................................... 18, 21 Colleen V. Chien & Michael Risch, A Patent Reform We Can All Agree On, WASH. POST, Nov. 20, 2015 ........................... 19 Julie Creswell, So Small a Town, So Many Patent Suits, N.Y. TIMES, Sep. 24, 2006 ................................................................ 21 Theodore H. Davis, Jr., Report 108C, A.B.A. SEC. INTELL. PROP. L. (2016) ................ 6, 17 Jeanne C. Fromer, Patentography, 85 N.Y.U. L. REV. 1444 (2010) .................................. 18 Brian Howard, Lex Machina 2015 End- of-Year Trends Fig.3 (Jan. 7, 2016) ....................... 5 Daniel Klerman & Greg Reilly, Forum Selling, 89 S. CAL. L. REV. 241 (2016) ............ 18, 21 Bruce A. Lehman, Venue Shopping in Patent Cases Must Stop, NAT’L L.J., Nov. 16, 2009 .................................................. 20, 22 Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 12 of 44 xi Yan Leychkis, Of Fire Ants and Claim Construction: An Empirical Study of the Meteoric Rise of the Eastern District of Texas as a Preeminent Forum for Patent Litigation, 9 YALE J. L. & TECH. 193 (2007) ....................................... 19 Elizabeth P. Offen-Brown, Forum Shopping and Venue Transfer in Patent Cases: Marshall’s Response to TS Tech and Genentech, 25 BERKELEY TECH. L.J. 61 (2010) ............................ 19 Bruce Sewell, Patent Nonsense, WALL STREET J., July 12, 2007 ...................................... 20 Ranganath Sudarshan, Nuisance-Value Patent Suits: An Economic Model and Proposal, 25 SANTA CLARA. COMPUTER & HIGH TECH. L.J. 159 (2008) ................................................................ 6, 19 Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 13 of 44 1 TC Heartland LLC hereby petitions for a writ of certiorari to review the final decision of the United States Court of Appeals for the Federal Circuit en- tered in this action on April 29, 2016. OPINIONS BELOW The opinion of the Court of Appeals is reported at 821 F.3d 1338 and is reproduced in Appendix A. The opinions of the District Court are unreported and are reproduced in Appendix B. JURISDICTION The final decision of the Court of Appeals was en- tered on April 29, 2016. No petition for rehearing was filed. On July 13, 2016, this Court extended Pe- titioner’s time to file a petition for a writ of certiorari to and including September 12, 2016. This Court’s jurisdiction is invoked under 28 U.S.C. § 1254(1). This civil action is one arising under federal pa- tent law, over which the district court had subject matter jurisdiction under 28 U.S.C. § 1338(a). The Federal Circuit had appellate jurisdiction under the All Writs Act, 28 U.S.C. § 1651. STATUTORY PROVISIONS INVOLVED 28 U.S.C. § 1400(b) provides: Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringe- ment and has a regular and established place of business. The full text of 28 U.S.C. § 1694 (concerning ser- vice of process in patent infringement actions) and portions of the text of 28 U.S.C. § 1391 (“Venue gen- erally”) are reproduced in Appendix C. STATEMENT OF THE CASE This case raises a question of broad and general importance: What is the proper interpretation of the patent venue statute, 28 U.S.C. § 1400(b)? The an- Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 14 of 44 2 swer to this question is a matter of concern to every domestic corporate manufacturer, distributor, retail- er, service provider, or end user that is potentially subject to suit for alleged patent infringement. The Court’s Prior Construction of § 1400(b) Section 1400(b) prescribes that civil actions for al- leged patent infringement may be brought in “the judicial district where the defendant resides . . . .” (emphasis added). Shortly after § 1400(b) was codi- fied in Title 28, this Court held that its phrase, “the judicial district where the defendant resides” (em- phasis added), was synonymous with the pre- codification phrase, “the district of which the defend- ant is an inhabitant” (28 U.S.C. § 109 (1940) (em- phasis added)); and that as applied to a corporate de- fendant, the phrase referred to “the state of incorpo- ration only.” Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 226 (1957). Accord Brunette Mach. Works, Ltd. v. Kockum Indus., Inc., 406 U.S. 706, 707 n.2 (1972) (“the residence of a corporation for purposes of § 1400(b) is its place of incorpora- tion”). In reaching that result, Fourco specifically con- sidered whether to follow Stonite Products Co. v. Melvin Lloyd Co., 315 U.S. 561 (1942), which had in- terpreted the pre-codification version of the patent venue statute as being “complete, independent and alone controlling in its sphere.” 353 U.S. at 228 (de- scribing Stonite’s holding). After extensively analyz- ing the text, structure and history of § 1400(b) and its pre-codification predecessor, the Court adhered to Stonite and concluded: “We hold that 28 U.S.C. § 1400(b) is the sole and exclusive provision control- ling venue in patent infringement actions, and that it is not to be supplemented by the provisions of 28 U.S.C. § 1391(c).” 353 U.S. at 229. That interpreta- tion of § 1400(b) was accepted and unquestioned law for more than three decades. See, e.g., In re Cordis Corp., 769 F.2d 733, 736 (Fed. Cir. 1985) (“The Su- preme Court has held that § 1400(b) is the sole and exclusive provision controlling venue in patent in- Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 15 of 44 3 fringement actions, and that it is not to be supple- mented by the provisions of 28 U.S.C. § 1391(c), hav- ing to do with general corporation venue.”). The 1988 Amendment of 28 U.S.C. § 1391(c) In 1988, the first sentence of § 1391(c) was re- vised as indicated below (emphasis added): Pre-1988 Text of § 1391(c) 1988 Text of § 1391(c) A corporation may be sued in any judicial dis- trict in which it is incor- porated or licensed to do business or is doing busi- ness, and such judicial district shall be regarded as the residence of such corporation for venue purposes. For purposes of venue under this chapter, a de- fendant that is a corpora- tion shall be deemed to reside in any judicial dis- trict in which it is subject to personal jurisdiction at the time the action is commenced. As shown above, between 1952 and 1988 the first sentence of § 1391(c) had provided that certain dis- tricts would be “regarded as the residence of such corporation for venue purposes” (emphasis added), whereas in 1988 this sentence was re-written to say that corporations would be “deemed to reside” in cer- tain districts “[f]or purposes of venue under this chapter,” with “this chapter” referring to chapter 87 entitled “District Courts; Venue.” See Judicial Im- provements and Access to Justice Act of 1988, Pub. L. No. 100-702, § 1013, 102 Stat. 4642, 4669 (1988) (the “1988 Act”). The section of the 1988 Act which amended § 1391(c) was located in a “Miscellaneous Amendments” title and characterized in a contempo- raneous House Report as being one of a series of “miscellaneous provisions dealing with relatively mi- nor discrete proposals.” H.R. REP. NO. 100-889, at 66 (1988), reprinted in 1988 U.S.C.C.A.N. 5982, 6027. Shortly following the enactment of the 1988 Act, the question arose whether the 1988 Act had effected a change in patent infringement case venue. One dis- trict court noted, “the recent amendment to § 1391(c) Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 16 of 44 4 in no way indicates that an alteration was intended in the operation of § 1400(b).” Doelcher Prods., Inc. v. Hydrofoil Int’l, Inc., 735 F. Supp. 666, 668 (D. Md. 1989). “Not only is the language of the statute itself silent in this respect, the legislative history behind the amendment of § 1391(c) is devoid of any indica- tion that an amendment to § 1400(b) was intended or even contemplated.” Id. Accord Joslyn Mfg. Co. v. Amerace Corp., 729 F. Supp. 1219, 1223 (N.D. Ill. 1990) (“Because the congressional history shows no clear intent to change settled law, we conclude that the 1988 amendment of § 1391(c) had no effect on the exclusivity of § 1400(b)”). The Federal Circuit’s Abrupt Rejection of Fourco Rejecting the reasoning of the district court deci- sions cited above, the Federal Circuit in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990), held that the change in the wording of § 1391(c) noted on p. 3, supra, created a situation in which “[s]ection 1391(c) as it was in Fourco is no longer” and “[t]he issue is, what, as a matter of first impression, should we conclude the Congress now intends by this new language in the venue act.” 917 F.2d at 1579. The court acknowledged that the legislative his- tory of the 1988 Act gave no indication of any con- gressional intent to change the patent case venue statute. Id. at 1580-81. The court reasoned, however, that “Congress’ silence on this issue does not support a negative inference that the 1988 amendment was not intended to affect § 1400(b).” Id. at 1581. In mod- ifying the language of § 1391(c) from “for venue pur- poses” to “[f]or purposes of venue under this chapter” (where that chapter was entitled “District Court; Venue”), Congress had changed § 1391(c) so that it “clearly applies to § 1400(b)” and thus, the court be- lieved, Congress had “redefine[d] the meaning of the term “resides” in [§ 1400(b)].” Id. at 1578. VE Holding concluded that the § 1400(b) phrase, “the judicial district where the defendant resides,” Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 17 of 44 5 means “any district where there would be personal jurisdiction over the corporate defendant.” Id. at 1583. Under the color of this ruling, corporate de- fendants were suddenly exposed to patent infringe- ment suits in almost any judicial district. An enor- mous amount of forum shopping ensued, with the re- sult being that in 2015 more than 43% of patent in- fringement cases were brought in a single district (E.D. Tex.) as illustrated in the chart below (Brian Howard, Lex Machina 2015 End-of-Year Trends Fig.3 (Jan. 7, 2016), available at http://www.lexmachina.com/lex-machina-2015-end- of-year-trends): The 2011 Amendment of 28 U.S.C. § 1391(c) The Federal Courts Jurisdiction and Clarification Act of 2011, Pub. L. No. 112-63, § 202, 125 Stat. 758, 763 (2011) (the “2011 Act”), completely overhauled 28 U.S.C. § 1391 and added a new subparagraph (a) headed “Applicability of Section.” In its current form, 28 U.S.C. § 1391(a)(1) (2012) states in part: “Except as otherwise provided by law . . . (1) this section shall govern the venue of all civil actions brought in dis- Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 18 of 44 6 trict courts of the United States . . . .” (emphasis added). In Atlantic Marine Construction Co. v. Unit- ed States District Court for the Western District of Texas, 134 S. Ct. 568 (2013), this Court noted: “Sec- tion 1391 governs ‘venue generally,’ that is, in cases where a more specific venue provision does not ap- ply.” Id. at 577 n.2. To illustrate this point, Atlantic. Marine cited 28 U.S.C. § 1400 as “identifying proper venue for copyright and patent suits.” Id. Even though the 2011 Act eliminated from § 1391(c) the very phrase (“[f]or purposes of venue under this chapter”) that VE Holding had relied on to justify its rejection of Fourco, the Federal Circuit has remained adamant in its view that this Court’s interpretation of § 1400(b) in Fourco purportedly is “no longer the law because in the 1988 amendments Congress had made the definition of corporate resi- dence applicable to patent cases.” App. 6a (emphasis added). The Proceedings Below Petitioner is a limited liability company organized and existing under the laws of Indiana. Petitioner is not registered to do business in Delaware and does not have any regular or established place of business in Delaware. Respondent sued Petitioner for alleged patent in- fringement in the District of Delaware. Respondent alleges that certain liquid water enhancer (“LWE”) products made and sold by Petitioner embody alleged inventions claimed in three patents owned by Re- spondent. The accused LWE products were designed and are manufactured by Petitioner in Indiana. In the year ending December 31, 2014, approximately 2% of Petitioner’s LWE sales were shipped by com- mon carrier to destinations in Delaware on the in- structions of a customer based in Arkansas. Petitioner moved to dismiss or transfer this ac- tion under 28 U.S.C. § 1406. Petitioner argued that (i) the District of Delaware was not “the judicial dis- trict where the defendant [Petitioner] resides” within Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 19 of 44 7 the meaning 28 U.S.C. § 1400(b); and (ii) insofar as the VE Holding decision suggested otherwise, it was subordinate to controlling precedents of this Court and in any event, the 2011 Act had repealed the statutory language that VE Holding had relied on to justify its departure from this Court’s interpretation of § 1400(b) in Fourco and subsequent cases. The district court denied Petitioner’s motion, con- sidering itself bound by VE Holding. App. 16a. Peti- tioner then timely petitioned the Federal Circuit for a writ of mandamus under 28 U.S.C. § 1651, which authorizes appellate courts to review whether a dis- trict court has wrongly refused to dismiss or transfer a case where venue is improper. See Hoffman v. Blaski, 363 U.S. 335, 336-44 (1960) (affirming order granting writ of mandamus directing transfer of pa- tent infringement action). The Federal Circuit affirmed the district court’s order. The court stated that “[t]he arguments raised concerning venue have been firmly resolved by VE Holding, a settled precedent for over 25 years.” App. 4a. The court further stated: The venue statute was amended in 1988 and in VE Holding, this court held that those amendments rendered the statutory definition of corporate residence found in § 1391 applica- ble to patent cases. In VE Holding, we found that the Supreme Court’s decision in Fourco with regard to the appropriate definition of corporate residence for patent cases in the ab- sence of an applicable statute to be no longer the law because in the 1988 amendments Congress had made the definition of corporate residence applicable to patent cases. 28 U.S.C. § 1391(c) (1988) (“For the purposes of venue under this chapter”). In 1988, the common law definition of corporate residence for patent cases was superseded by a Congressional one. Thus, in 2011, there was no established gov- erning Supreme Court common law ruling which Congress could even arguably have Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 20 of 44 8 been codifying in the language “except other- wise provided by law.” App. 6a-7a. This petition followed. REASONS FOR GRANTING THE PETITION The Court should grant certiorari in this case for four basic reasons: First, the decision below openly rejects the inter- pretation of 28 U.S.C. § 1400(b) that this Court an- nounced in Fourco and asserts that “the Supreme Court’s decision in Fourco . . . [is] no longer the law.” App. at 6a. But “it is this Court’s prerogative alone to overrule one of its precedents.” State Oil Co. v. Khan, 522 U.S. 3, 20 (1997). Whether this Court’s precedents interpreting § 1400(b) are “no longer the law” (App. at 6a) is a question that only this Court can resolve, and it should do so. Second, the Federal Circuit’s departure from this Court’s holding in Fourco has dramatically expanded venue in patent cases, producing a plague of forum shopping that has been extensively documented, dis- cussed, and debated in law reviews, legal journals and even leading newspapers such as The New York Times, The Washington Post, and The Wall Street Journal. The current practice has engendered wide- spread criticism and calls for reform. Indeed, the is- sue has such importance and prominence that in Au- gust 2016 the American Bar Association’s House of Delegates passed a resolution specifically disagree- ing with the Federal Circuit’s precedent on patent venue and calling for a restoration of this Court’s in- terpretation of § 1400(b). See ABA House of Dele- gates, Resolution 108C (August 2016), available at http://www.americanbar.org/news/reporter_resources /annual-meeting-2016/house-of-delegates- resolutions/108c.html. Third, the decision below is clearly wrong and should be reversed. When § 1400(b) was enacted, the law was well-settled that: “the domicil, the habitat, the residence, the citizenship of the corporation can Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 21 of 44 9 only be in the state by which it was created, although it may do business in other states whose laws permit it.” Shaw v. Quincy Mining Co., 145 U.S. 444, 450 (1892). Fourco held that that the term “resides” in § 1400(b) has that traditional meaning, see 353 U.S. at 226 (citing Shaw), and rejected the very contrary argument that the Federal Circuit has accepted. Un- der the original meaning of the statute’s language (as authoritatively construed by this Court in Four- co) § 1400(b) plainly precludes the district court from hearing this action. Fourth, this case provides a good vehicle for de- ciding the question presented. The decision below rests entirely on an errant interpretation of the phrase, “the judicial district where the defendant re- sides,” in 28 U.S.C. § 1400(b). The question present- ed by the Petition is dispositive of whether Petitioner was subject to suit for alleged patent infringement in the District of Delaware. There is no factual or pro- cedural issue that would prevent the Court from de- ciding the question presented by the Petition. I. THE DECISION BELOW OPENLY CONFLICTS WITH THIS COURT’S PATENT VENUE PRECEDENTS. A. The Statutory Predecessors of § 1400(b) Prior to 1897, “a suit for infringement might have been maintained in any district in which jurisdiction of defendant could be obtained.” Gen. Elec. Co. v. Marvel Rare Metals Co., 287 U.S. 430, 434 (1932). This result followed from precedents holding that pa- tent infringement suits, being subject to exclusive federal court jurisdiction, were “therefore not affect- ed by general provisions regulating the jurisdiction of the courts of the United States, concurrent with that of the several states.” In re Keasbey & Mattison Co., 160 U.S. 221, 230 (1895) (emphasis added). “Congress adopted the predecessor to § 1400(b) as a special venue statute in patent infringement ac- tions to eliminate the ‘abuses engendered’ by previ- ous venue provisions allowing such suits to be Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 22 of 44 10 brought in any district in which the defendant could be served.” Schnell v. Peter Eckrich & Sons, Inc., 365 U.S. 260, 262 (1961) (quoting Stonite, 315 U.S. at 563). That predecessor statute was the Act of March 3, 1897, ch. 395, 29 Stat. 695 (1897) (the “1897 Act”), which contained only two sentences. The first sentence in the 1897 Act authorized pa- tent infringement suits to be brought either “[i] in the district of which the defendant is an inhabitant, or [ii] in any district in which the defendant, whether a person, partnership, or corporation, shall have committed acts of infringement and have a regular and established place of business.” Id. (emphases and numerals added). As shown by the contrasting uses of the words “the district” and “any district,” Con- gress plainly contemplated that a defendant could be an inhabitant of only one district but that there might be multiple districts in which a defendant might have a “regular and established place of busi- ness.” The second sentence of the 1897 Act authorized plaintiffs to serve process on defendants outside the district in which the defendant was an inhabitant, and that authorization was limited to places where the defendant had “a regular and established place of business”: If such suit is brought in a district of which the defendant is not an inhabitant, but in which such defendant has a regular and estab- lished place of business, service of process, summons, or subpoena upon the defendant may be made by service upon the agent or agents engaged in conducting such business in the district in which suit is brought. The 1897 Act “was intended to define the exact limits of venue in patent infringement suits” and “was a restrictive measure, limiting a prior, broader venue.” Stonite, 315 U.S. at 566. “Congress did not intend the Act of 1897 to dovetail with the general provisions relating to the venue of civil suits, but ra- Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 23 of 44 11 ther that it alone should control venue in patent in- fringement proceedings.” Id. “The main purpose” of the 1897 Act, according to its principal sponsor, was “to give original jurisdiction to the court where a permanent agency transacting the business is locat- ed, and that business is engaged in the infringement of the patent rights of someone who has such rights anywhere in the United States.” 29 CONG. REC. 1900 (daily ed. Feb. 16, 1897) (statement of Rep. Lacey). “Isolated cases of infringement would not confer this jurisdiction, but only where a permanent agency is established.” Id. The 1897 Act was re-enacted in § 48 of the Judi- ciary Act of 1911, ch. 231, 36 Stat. 1087, 1100 (1911) (the “1911 Act”), without change except that an out- dated reference to “circuit courts” was changed to “district courts.” In Stonite, this Court held that § 48 of the 1911 Act was “the exclusive provision controlling venue in patent infringement proceedings.” Stonite, 315 U.S. at 563. Stonite held that a corporate defendant could not be sued for patent infringement in a district where venue was improper under the special patent venue statute, notwithstanding that venue might appear to be proper under provisions in a general venue statute. Id. at 563-67. B. The Enactment of § 1400(b) in 1948 In 1948, Congress enacted title 28 of the United States Code as positive law. See Act of June 25, 1948, 62 Stat. 869. As part of that codification, the first and second sentences of § 48 of the 1911 Act were revised and codified in § 1400(b) and § 1694 of the new title 28. See 62 Stat. at 936, 945. The revised sections used the words “resides” and “resident” in place of the word “inhabitant,” which was used in both sentences in the pre-codification version. The texts of current 28 U.S.C. §§ 1400(b) and 1694 are identical to their original form in the 1948 codifica- tion. Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 24 of 44 12 28 U.S.C. § 1400(b) provides: Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a reg- ular and established place of business. 28 U.S.C. § 1694 provides: In a patent infringement action commenced in a district where the defendant is not a resi- dent but has a regular and established place of business, service of process, summons or sub- poena upon such defendant may be made upon his agent or agents conducting such business. The codified title 28 also included a new § 1391 headed “Venue generally” whose full text was: (a) A civil action wherein jurisdiction is found- ed only on diversity of citizenship may, except as otherwise provided by law, be brought only in the judicial district where all plaintiffs or all defendants reside. (b) A civil action wherein jurisdiction is not founded solely on diversity of citizenship may be brought only in the judicial district where all defendants reside, except as otherwise pro- vided by law. (c) A corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the resi- dence of such corporation for venue purposes. (d) An alien may be sued in any district. C. The Circuit Split Resolved in Fourco Following the codification of title 28, a circuit split developed over whether the new definition of corporate “residence” in § 1391(c) should be applied to the term “resides” found in § 1400(b). See Fourco, 353 U.S. at 224 n.3. This Court accordingly granted Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 25 of 44 13 review to consider “whether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions, or whether that section is supplemented by 28 U.S.C. § 1391(c).” Id. at 222. The Second Circuit in Fourco had reasoned that the “plain meaning of the two statutes” requires that the definition of corporate residence be incorporated into § 1400(b), “just as that definition is properly to be incorporated into other sections of the venue chapter, e.g., §§ 1392, 1393, 1395, 1396, 1397, 1400, etc.” Transmirra Prods. Corp. v. Fourco Glass Co., 233 F.2d 885, 886 (2d Cir. 1956), rev’d, 353 U.S. 222 (1957). This Court rejected the Second Circuit’s rea- soning and reversed the Second Circuit’s judgment holding that the Fourco petitioner “reside[d]” in a district located outside the state of its incorporation. As this Court framed the issue, “[t]he question is not whether § 1391(c) is clear and general, but, ra- ther, it is, pointedly, whether § 1391(c) supplements § 1400(b), or, in other words, whether the latter is complete, independent and alone controlling in its sphere as was held in Stonite, or is, in some meas- ure, dependent for its force upon the former.” Four- co, 353 U.S. at 228. After considering the long histo- ry of patent venue legislation, the Court’s interpreta- tion of § 1400(b)’s immediate predecessor in Stonite, and applicable canons of statutory construction, the Court in Fourco held that “28 U.S.C. § 1400(b) is the sole and exclusive provision controlling venue in pa- tent infringement actions” and “it is not to be sup- plemented by the provisions of 28 U.S.C. § 1391(c).” 353 U.S. at 229. This Court has never wavered from that holding. See Schnell, 365 U.S. at 262-64; Hoffman, 363 U.S. at 340-44. In Brunette the Court stated: “it is fair to say, as the Court did in Stonite and Fourco, that in 1897 Congress placed patent infringement cases in a class by themselves, outside the scope of general venue legislation.” 406 U.S. at 713. Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 26 of 44 14 D. The Federal Circuit Rejects Fourco As shown by the decision below, the Federal Cir- cuit openly rejects the interpretation of § 1400(b) that this Court adopted in Fourco and has gone so far as to assert that Fourco is “no longer the law.” App. 6a. Under Federal Circuit precedent, the statu- tory phrase, “the judicial district where the defend- ant resides,” 28 U.S.C. § 1400(b) (emphasis added), purportedly means any and every judicial district where a corporate defendant is deemed to reside in 28 U.S.C. § 1391(c)(2). In embracing that interpreta- tion of § 1400(b), the Federal Circuit has purported to expand patent case venue in the very manner that this Court rejected in Fourco. Indeed, the Federal Circuit’s reasoning for rejecting Fourco-that § 1391(c) includes “exact and classic language of in- corporation: ‘For purposes of venue under this chap- ter . . .’” (VE Holding, 917 F.2d at 1579)-is almost identical to the reasoning in the court of appeals opinion reversed by the Fourco Court. See Transmir- ra, 233 F.2d at 886 (reasoning that the definition of residence in § 1391(c) must be read into § 1400(b) “just as that definition is properly to be incorporated into other sections of the venue chapter, e. g., §§ 1392, 1393, 1395, 1396, 1397, 1400, etc.”). “[I]t is this Court’s prerogative alone to overrule one of its precedents.” State Oil, 522 U.S. at 20. “[I]f a precedent of this Court has direct application in a case, . . . the Court of Appeals should follow the case which directly controls, leaving to this Court the pre- rogative of overruling its own decisions.” Agostini v. Felton, 521 U.S. 203, 237 (1997) (quoting Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 484 (1989)). The Court of Appeals did not follow this principle here. In interpreting § 1400(b) in a manner that is di- rectly contrary to this Court’s interpretation of that same statute in Fourco, and in asserting that Fourco purportedly is “no longer the law” (App. 6a), the Fed- eral Circuit has exceeded its authority and created Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 27 of 44 15 an extreme divergence in statutory interpretations that warrants this Court’s review. II. THE PROPER INTERPRETATION OF 28 U.S.C. § 1400(B) IS IMPORTANT AND WORTHY OF THIS COURT’S ATTENTION. Numerous objective indications demonstrate that the question presented by this Petition is an ex- tremely important issue for the patent system. 1. The Historical Attention of Congress and This Court to Patent Venue. Perhaps the best gauge of the importance of the question presented is the con- sistent and longstanding approach of both Congress and this Court to the issue. Patent venue was important enough in 1897 to merit its own special statute wherein Congress sought “to define the exact jurisdiction of the federal courts in actions to enforce patent rights . . . .” Ston- ite, 315 U.S. at 565. For nearly one hundred years, that statute was followed in the lower courts in part because this Court repeatedly granted certiorari to reverse lower court decisions that threatened to un- dermine the sensible limitations that Congress im- posed on patent venue. Thus, in Stonite, this Court granted certiorari and reversed a Third Circuit opinion that had ex- panded patent venue beyond the limits imposed by Congress in the 1911 Act. The Stonite Court inter- preted the statute as being “the exclusive provision controlling venue in patent infringement proceed- ings.” 315 U.S. at 563. Similarly, this Court in Four- co granted certiorari and reversed the Second Circuit on the same issue presented in this petition. The question of where civil actions for alleged pa- tent infringement may rightly be brought is no less important now than it was in 1897 when Congress acted, in 1942 when Stonite was decided, and in 1957 when Fourco adopted the interpretation of § 1400(b) that the Federal Circuit rejects. Then as now, the is- sue is a matter of concern to every domestic corpo- Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 28 of 44 16 rate manufacturer, distributor, retailer, service pro- vider, or end user that is potentially subject to suit for alleged patent infringement. 2. The 2016 ABA Resolution. The ABA is the largest voluntary professional membership organiza- tion and the leading organization of legal profession- als in the United States. See Brief for the American Bar Association as Amicus Curiae in Support of Peti- tioner, Moore v. Texas, No. 15-797 (Aug. 4, 2016), 2016 WL 4151449 at *1. Its nearly 400,000 members come from all fifty states and include judges, legisla- tors, law professors, and law students. Id. at *1-2. On August 8, 2016, on the recommendation of the ABA Section of Intellectual Property Law, the ABA House of Delegates adopted Resolution 108C con- cerning the question presented in this case. The reso- lution states: RESOLVED, That the American Bar Associa- tion supports an interpretation of the special patent venue statute, 28 U.S.C. § 1400(b), that does not adopt the definition of “resides” in the separate, general venue statute, 28 U.S.C. § 1391(c), to ascertain the meaning of “resides” in § 1400(b); and FURTHER RESOLVED, That the American Bar Association supports an interpretation of 28 U.S.C. § 1400(b) such that venue in a pa- tent infringement case involving a business entity defendant is proper only in a judicial district (1) located in the state under whose laws the business entity was formed or (2) where the business entity has committed acts of infringement and has a regular and estab- lished place of business. ABA House of Delegates, Resolution 108C (August 2016), available at http://www.americanbar.org/news/reporter_resources /annual-meeting-2016/house-of-delegates- resolutions/108c.html Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 29 of 44 17 The mere existence of that Resolution provides a significant measure of importance, but the content of the accompanying report confirms another aspect of importance. That report-submitted by the Chair of the ABA Section of Intellectual Property Law- states that the Federal Circuit’s decisions in VE Holding and this case “misinterpret the venue stat- utes and do not follow Supreme Court precedent.”1 “The [ABA] Resolution,” the report summarizes, “dis- favors the Federal Circuit precedent and favors ap- plying Supreme Court precedent for reading the spe- cial patent venue statute as it stands alone and not supplemented by the definition of corporate resi- dence found in §1391(c).”2 The ABA report thus confirms that the stakes here involve not only patent venue, but also the very relationship between the Federal Circuit and this Court. For if a large number of sophisticated practic- ing attorneys can reasonably believe that the Federal Circuit is “not follow[ing] Supreme Court precedent” and that a Resolution is needed to “favor[] applying Supreme Court precedent” on an important statutory issue, that belief itself can have significant conse- quences for attorneys’ confidence in the actual alloca- tion of judicial power between the two courts. 3. The Vast Amount of Literature on Patent Ven- ue and Forum Shopping. The Federal Circuit’s ex- pansion of patent venue has produced such a pro- found change in patent infringement litigation that it has generated its own vein of literature in law journals as well as in the nation’s leading newspa- 1 Theodore H. Davis, Jr., Report 108C, A.B.A. SEC. INTELL. PROP. L. 2 (2016) (emphasis added), available at http://www.americanbar.org/news/reporter_resources/annual- meeting-2016/house-of-delegates-resolutions/108c.html. 2 Id. Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 30 of 44 18 pers. Four points about this literature are worthy of special attention. First, the literature provides thorough documen- tation of the “extensive”3 and “rampant forum shop- ping due to permissive venue rules”4 that has al- lowed patent litigation to become an “astounding proportion” of certain district court dockets.5 Second, the literature confirms that such ram- pant forum shopping is directly traceable to the Fed- eral Circuit’s decision in VE Holding rejecting this Court’s interpretation of the patent venue statute. For example, Professor Fromer has noted that, while this Court had consistently interpreted the concept of corporate residence in § 1400(b) “narrowly” such that “a corporation resides only in its state of incorpora- tion,” “[i]n 1990, the Federal Circuit held that corpo- rate residency ought to be determined more broad- ly . . . .”6 Other commentators also trace responsibil- ity for extensive patent forum shopping to the Feder- al Circuit’s 1990 decision in VE Holding to expand patent venue.7 3 Daniel Klerman & Greg Reilly, Forum Selling, 89 S. CAL. L. REV. 241, 248 (2016). 4 Jeanne C. Fromer, Patentography, 85 N.Y.U. L. REV. 1444, 1449 (2010). 5 J. Jonas Anderson, Court Competition for Patent Cases, 163 U. PA. L. REV. 631, 633 (2015) (setting forth data concerning the dockets of Eastern District of Texas and the District of Dela- ware). 6 Fromer, supra note 4, at 1453 (citing VE Holding, 917 F.2d at 1583). 7 See, e.g., Klerman and Reilly, supra note 3, at 247-48 (noting that “forum shopping in patent cases has been extensive since Footnote continued Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 31 of 44 19 Third, the literature shows pervasive dissatisfac- tion with the Federal Circuit’s broad patent venue, with a large number of commentators criticizing cur- rent practices in the lower courts and calling for change.8 Footnote continued from previous page at least the late 1990s” and tracing the trend to VE Holding); Elizabeth P. Offen-Brown, Forum Shopping and Venue Trans- fer in Patent Cases: Marshall’s Response to TS Tech and Genentech, 25 BERKELEY TECH. L.J. 61, 65 (2010) (“Though the patent venue statute was historically distinct from the more general venue provision, the Federal Circuit held in VE Holding Corp. v. Johnson Gas Appliance Co. that the meaning of the term ‘resides’ as defined in the patent statute should be inter- preted in accordance with the general venue statute”); Ranga- nath Sudarshan, Nuisance-Value Patent Suits: An Economic Model and Proposal, 25 SANTA CLARA COMPUTER & HIGH TECH. L.J. 159, 165 (2009) (citing VE Holding as the precedent that allows “nuisance plaintiffs” to file “suit in far-flung, perceivably- plaintiff-friendly ‘magnet jurisdictions’” and thereby “subject[] defendants to the cost and inconvenience of having to litigate in a distant location”); Yan Leychkis, Of Fire Ants and Claim Con- struction: An Empirical Study of the Meteoric Rise of the East- ern District of Texas as a Preeminent Forum for Patent Litiga- tion, 9 YALE J.L. & TECH. 193, 197 (2007) (also citing VE Hold- ing as the reason why “most large national corporations may now be sued for patent infringement in virtually any of the ninety-four federal district courts”). 8 See, e.g., Klerman and Reilly, supra note 3, at 308 (summariz- ing the reasons why “forum selling” is undesirable and recom- mending that “the simplest way to prevent forum selling is to constrict jurisdictional choice”); Fromer, supra note 4, at 1507 (recommending “constraining venue rules” as a solution to fo- rum shopping); Colleen V. Chien & Michael Risch, A Patent Reform We Can All Agree On, WASH. POST, Nov. 20, 2015, http://www.washingtonpost.com/news/in-theory/wp/2015/11/20/ Footnote continued Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 32 of 44 20 Fourth and perhaps most importantly, the litera- ture shows that the intensity of forum shopping in patent cases is so extreme that it poses perceived threats to the very integrity of the federal judicial system. For example, in the article Forum Selling, Professors Klerman and Reilly extensively document the degree to which a few federal district judges have “sought to attract patent plaintiffs to their district and have distorted the rules and practices relating to case assignment, joinder, discovery, transfer, and summary judgment in a pro-patentee (plaintiff) di- rection.”9 The authors cite public statements in which past and present federal judges acknowledge that they are intentionally trying to attract patent Footnote continued from previous page why-do-patent-lawyers-like-to-file-in-texas/ (arguing that the “staggering concentration of patent cases in just a few federal district courts is bad for the patent system” and that “changing where patent lawsuits can be filed will solve many of the prob- lems”); Bruce Sewell, Patent Nonsense, WALL ST. J. July 12, 2007, http://www.wsj.com/articles/SB118420277223364135 (not- ing that companies putting “products into the stream of com- merce can be sued for patent infringement virtually anywhere in the U.S. that the product is sold,” and arguing that “[t]his encourages lawsuits in venues with little relationship to the actual alleged acts of infringement or the parties in the suit”); Bruce A. Lehman, Venue Shopping in Patent Cases Must Stop, NAT’L L.J. Nov. 16, 2009, http://www.nationallawjournal.com/id=1202435438325/Venue- shopping-in-patent-cases-must-stop (former head of the Patent & Trademark Office arguing for change because “[v]enue shop- ping in patent cases is rampant, with plaintiff-friendly jurisdic- tions rendering verdicts that are outsized to the point of being perverse”). 9 Klerman and Reilly, supra note 3, at 243. Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 33 of 44 21 cases because they find such cases “interesting” and “enjoyed the intellectual challenge.”10 There is also, however, at least the possible per- ception that the judicial encouragement of forum shopping is influenced by a variety of reputational and economic incentives.11 That perception is not dispelled when, in a N.Y. Times article describing the economic benefits of patent infringement litiga- tion to local businesses in the Eastern District of Texas, a then-sitting federal judge in the district is quoted as asserting that his judicial district “is, his- torically anyway, a plaintiffs-oriented district.”12 Yet even if federal judges are fostering forum shopping merely because of their personal intellectu- al interest in patent cases, that practice is still not especially healthy for the federal judicial system for it can lead to “inefficient distortions of substantive law, procedure, and trial management practices”13 and “plaintiff-friendly” rules and practices that “in- evitabl[y]” raise “questions of judicial neutrality.”14 Articles and editorials such as Forum Selling, Court Competition for Patent Cases, and Venue 10 Id. at 271. 11 Anderson, supra note 5, at 651-66 (documenting the personal and professional incentives for judges to try to attract patent infringement cases and the extent to which patent-friendly ju- dicial districts profit from such litigation). 12 Julie Creswell, So Small a Town, So Many Patent Suits, N.Y. TIMES, Sep. 24, 2006, http://www.nytimes.com/2006/09/24/business/24ward.html. 13 Klerman and Reilly, supra note 3, at 246. 14 Anderson, supra note 5, at 645. Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 34 of 44 22 Shopping in Patent Cases Must Stop demonstrate even by their very titles that the dramatic expansion of patent venue is an issue worthy of this Court’s at- tention and not a matter to be left solely to the Fed- eral Circuit. The issue falls outside whatever special- ized expertise the Federal Circuit possesses in mat- ters of substantive patent law and affects a subject for which this Court bears ultimate responsibility under Article III of the Constitution-the public’s perception of, and ultimate confidence in, the federal judicial system. 4. Support of Amici. Urging the Court of Appeals to follow this Court’s precedents on patent venue, twenty-four corporate amici described how forum shopping is now such a “serious problem in U.S. pa- tent litigation” that it is undermining “core public policies of our patent system.” Brief of Acushnet et al. as Amici Curiae in Support of Petitioner, In re TC Heartland LLC, 2015 WL 8387461, at *2, *10. Simi- larly, amici the Electronic Frontier Foundation, Pub- lic Knowledge, and Engine Advocacy have observed that VE Holding has “led to one of the worst, most notorious situations of forum shopping in recent his- tory.” Brief of Electronic Frontier Foundation et al., In re TC Heartland LLC, 2015 WL 8387460, at *2. In sum, the amici described how history has re- peated itself-how the Federal Circuit’s revisionist interpretation of § 1400(b) has brought back “the ‘abuses engendered’ by previous venue provisions al- lowing such [patent] suits to be brought in any dis- trict in which the defendant could be served.” Schnell, 365 U.S. at 262 (quoting Stonite, 315 U.S. at 564). 5. Entrenchment of VE Holding. The Federal Circuit’s misinterpretation of 28 U.S.C. § 1400(b) has generated an explosion of motions for discretionary transfers of venue under 28 U.S.C. § 1404 and peti- tions for appellate review of such orders. See, e.g., In re Nintendo of Am., Inc., 756 F.3d 1363 (Fed. Cir. 2014) (granting petition for review of order denying venue transfer motion); In re Link_A_Media Devices Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 35 of 44 23 Corp., 662 F.3d 1221 (Fed. Cir. 2011) (same); In re Microsoft Corp., 630 F.3d 1361 (Fed. Cir. 2011) (same); In re Hoffmann-La Roche Inc., 587 F.3d 1333 (Fed. Cir. 2009) (same). Yet the decision below states that Petitioner’s questioning of the correctness of the VE Holding decision is “utterly without merit or log- ic.” App. 6a (emphasis added). “The arguments raised regarding venue,” the decision below states, “have been firmly resolved by VE Holding, a settled precedent for over 25 years.” App. at 4a (emphasis added). The Federal Circuit does not view its inter- pretation of § 1400(b) as erroneous and there is, thus, no foreseeable prospect that the Federal Circuit will change its view. III. THE DECISION BELOW IS CLEARLY WRONG AND SHOULD BE REVERSED. The decision below holds that Petitioner is subject to suit for alleged patent infringement in Delaware because the District of Delaware purportedly is “the judicial district where the defendant resides.” 28 U.S.C. § 1400(b) (emphasis added). This holding is clearly wrong and should be reversed. The definite article, “the,” connotes a particular district. When the special patent venue statute was first enacted in 1897, the law as well-settled that: “the domicil, the habitat, the residence, the citizen- ship of the corporation can only be in the State by which it was created, although it may do business in other States whose laws permit it.” Shaw v. Quincy Mining Co., 145 U.S. 444, 450 (1892). Fourco held that that this traditional meaning of “resides” was carried over in § 1400(b). See 353 U.S. at 226 (citing Shaw). The law has long distinguished between res- ident and non-resident corporate entities. Cf. Eli Lilly & Co. v. Sav-on-Drugs, Inc., 366 U.S. 276, 276- 84 (1961) (New Jersey door closing statute barred suit by non-resident corporation that was not regis- tered to do business in New Jersey). By 1988, this Court’s construction of § 1400(b) as being “the sole and exclusive provision controlling Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 36 of 44 24 venue in patent infringement actions,” Fourco, 353 U.S. at 229, and as “not to be supplemented by the provisions of 28 U.S.C. § 1391(c),” id., and as placing “patent infringement cases in a class by themselves, outside the scope of general venue legislation,” Bru- nette, 406 U.S. at 713, had stood as settled law of the land for decades. In these circumstances, the estab- lished construction of § 1400(b) could not rightly be held “to be no longer the law” (App. 6a) on the basis of the trivial stylistic language change in § 1391(c) set out on page 3 supra. “Under established canons of statutory construc- tion, ‘it will not be inferred that Congress, in revising and consolidating the laws, intended to change their effect unless such intention is clearly expressed.’” Finley v. United States, 490 U.S. 545, 554 (1989) (quoting Anderson v. Pac. Coast S.S. Co., 225 U.S. 187, 199 (1912)). Where Congress wants to change a longstanding and accepted rule of statutory law, it will make the change “explicit in the statute, or at least . . . mention[] it at some point in the . . . legisla- tive history.” Chisom v. Roemer, 501 U.S. 380, 396 (1991). Congress “does not, one might say, hide ele- phants in mouseholes.” Whitman v. Am. Trucking Ass’ns, Inc., 531 U.S. 457, 468 (2001). Yet here, the decision below assumes the exist- ence of a huge elephant-indeed, a revolution in pa- tent case venue law-in the smallest of mouseholes- an enactment that was not amending the patent venue statute; that was expressly labeled as “Miscel- laneous” in the text of the legislation; and that was described in the legislative history as “dealing with relatively minor discrete proposals.” H.R. REP. NO. 100-889, at 66 (1988), reprinted in 1988 U.S.C.C.A.N. 5982, 6027. But rather than ask whether there was any “clearly expressed” intent to change what was then settled law, the Federal Circuit turned the in- quiry upside down and asked whether the history or purpose of the 1988 Act revealed any intent not to change the law from what the Federal Circuit was then reading the 1988 Act to provide for the first Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 37 of 44 25 time. The court stated, “Congress has not clearly ex- pressed that its intent is contrary to the words of the statute.” 917 F.2d at 1580. But under this Court’s precedents, that was not the correct question to ask. The decision below also conflicts with the canon in pari materia, under which “statutes addressing the same subject matter generally should be read ‘as if they were one law.’” Wachovia Bank v. Schmidt, 546 U.S. 303, 315-16 (2006) (quoting Erlenbaugh v. United States, 409 U.S. 239, 243 (1972)). This canon clearly applies to 28 U.S.C. §§ 1400(b) and 1694, which were originally the first and second sentences of the 1897 Act. Section 1694 authorizes service of process in patent infringement actions commenced “in a district where the defendant is not a resident but has a regular and established place of business . . . .” As construed in Fourco, the word “resides” in § 1400(b) denotes the same relation between a de- fendant and a judicial district as does the word “resi- dent” in § 1694. In contrast, the decision below ac- cords the term “resides” in § 1400(b) a different meaning than is accorded the term “resident” in § 1694 (because § 1694 is not a venue statute in the venue chapter of title 28 and thus, even under the reasoning of VE Holding, could not have had its meaning changed by the 1988 amendments to § 1391(c)). Thus, under the Federal Circuit position, a judicial district can purportedly be one in which a corporate defendant simultaneously “resides” (§ 1400(b)) but “is not a resident” (§ 1694). The decision below also conflicts with the “set- tled” canon that, “[h]owever inclusive may be the general language of a statute, it ‘will not be held to apply to a matter specifically dealt with in another part of the same enactment. . . . Specific terms pre- vail over the general in the same or another statute which otherwise might be controlling.’” Fourco, 353 U.S. at 228-29 (quoting D. Ginsberg & Sons, Inc. v. Popkin, 285 U.S. 204, 208 (1932)). Section 1400(b) is, as Fourco held, a statute that specifically deals with venue in patent infringement actions, over which Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 38 of 44 26 federal courts have exclusive original jurisdiction; whereas 28 U.S.C. § 1391 is a general statute that applies to civil actions invoking diversity jurisdiction and federal court question jurisdiction that is con- current with that of state courts. Further, as is pointed out in the report which ac- companies the 2016 ABA Resolution, the 2011 Act removed any possible basis for arguing that the 1988 Act had hidden an elephant-sized patent venue revo- lution in the mousehole of a stylistic wording change from “for venue purposes” to “for purposes of venue under this chapter.” See p. 3 supra. Not only did the 2011 Act repeal the statutory language of the 1988 Act that VE Holding and the decision below treated as having nullified this Court’s Fourco decision and rendered it “no longer the law” (App. 6a), but current 28 U.S.C. § 1391 (2012) also includes a new subsec- tion (a) titled “Applicability of Section” which reads in pertinent part: “Except as otherwise provided by law-(1) this section shall govern the venue of all civ- il actions brought in district courts of the United States . . . .” (emphasis added). Cf. Atlantic Marine, 134 S. Ct. at 577 n.2 (stating that “Section 1391 gov- erns ‘venue generally,’ that is, in cases where a more specific venue provision does not apply” and citing 28 U.S.C. § 1400 as “identifying proper venue for copy- right and patent suits”). The decision below rejects the 2011 Act as a basis for following this Court’s interpretation of § 1400(b) in Fourco on two grounds, neither of which has mer- it. First, the decision below characterizes Fourco as having announced “federal common law” and, as such, was not a type of “law” referred to by “[e]xcept as otherwise provide by law” in current § 1391. App. 6a-7a. In fact, Fourco, Schnell, Hoffman, and Bru- nette are all cases in which this Court construed the meaning of statutory language. The proper meaning of the phrase, “the judicial district in which the de- fendant resides,” 28 U.S.C. § 1400(b), is not a matter of “federal common law,” but rather is a matter of construing the meaning of “resides” and “resident” in Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 39 of 44 27 28 U.S.C. §§ 1400(b) and 1694 in a manner that ac- cords with applicable canons of statutory construc- tion and is consistent with the scheme for directing the filing of patent infringement suits that those two statutes prescribe. The decision below alternatively holds that, even if case law interpreting a statute is “law” within the meaning of the phrase “[e]xcept as otherwise provid- ed by law” in 28 U.S.C. § 1391 (2012), the relevant case “law” that existed at the time of the 2011 Act was not the law stated by this Court in Fourco, but rather was the “law” stated by the Federal Circuit in its 1990 VE Holding decision. The decision below states: “Even if Congress’ 2011 amendments were meant to capture existing federal common law, . . . Fourco was not and is not the prevailing law that would have been captured. We reject [Petitioner’s] argument that in 2011 Congress codified the common law regarding venue in patent suits as described in Fourco.” App. 8a. In support of this last conclusion, the court cited three scattered legislative reports that purportedly “recognized that VE Holding is the prevailing law.” Id. But the Federal Circuit has no authority to over- rule precedents of this Court and it is, thus, irrele- vant whether a legislative report may have “recog- nized that VE Holding is the prevailing law.” Id. In recent years, this Court has disapproved a number of Federal Circuit precedents that district courts or leg- islators might have “recognized” as “law” until this Court intervened.15 Cf. Dickinson v. Zurko, 527 U.S. 15 Cf. Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016) (disapproving Federal Circuit precedent interpreting 35 U.S.C. § 284); Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920 (2015) (disapproving Federal Circuit precedent interpret- ing 35 U.S.C. § 271(b)); Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014) (disapproving Federal Circuit prec- edent interpreting 35 U.S.C. § 112); Limelight Networks, Inc. v. Footnote continued Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 40 of 44 28 150, 162 (1999) (disapproving longstanding Federal Circuit precedent interpreting 5 U.S.C. § 706 and stating: “This Court, however, has not previously set- tled the matter.”). The dubious status of VE Holding is suggested by the Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 18(c), 129 Stat. 284, 331 (2011) (reproduced in note to 35 U.S.C. § 321 (2012)), which provides: (c) In an action for infringement under section 281 of title 35, United States Code, of a cov- ered business method patent, an automated teller machine shall not be deemed to be a regular and established place of business for purposes of section 1400(b) of title 28, United States Code. The above-quoted provision makes no sense un- less Fourco remains good law; for if VE Holding were correct, a corporate owner of an ATM would be Footnote continued from previous page Akamai Techs., Inc., 134 S. Ct. 2111 (2014) (disapproving Fed- eral Circuit precedent interpreting 35 U.S.C. § 271(b)); Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014) (disapproving Federal Circuit precedent interpreting 35 U.S.C. § 285); Bilski v. Kappos, 561 U.S. 593 (2010) (disapprov- ing Federal Circuit precedent interpreting 35 U.S.C. § 101); Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617 (2008) (disapproving Federal Circuit precedent interpreting patent “exhaustion” doctrine); KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007) (disapproving Federal Circuit precedent interpreting 35 U.S.C. § 103). Under 28 U.S.C. § 1295(a)(1), the Federal Circuit since October 1, 1982, has had exclusive jurisdiction of appeals from final decisions of district courts in civil actions “arising under” federal patent law, but this Court has continued to exercise its plenary authority over the proper interpretation of federal statutes governing patent infringement actions. Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 41 of 44 29 deemed to “reside” wherever the machine’s use or operation infringed a patent, and it would make no difference whether the machine were deemed to be “a regular and established place of business” for pur- poses of 28 U.S.C. § 1400(b). Similarly, in Atlantic Marine, this Court showed its belief that § 1391 is not applicable to patent cases, and § 1400(b) is. 134 S. Ct. at 577 n.2. Finally, as shown in this case, the Federal Cir- cuit’s interpretation of § 1400(b) destroys the historic relationship between § 1400(b) and § 1694. Respond- ent sought to circumvent the limitations on service of process in § 1694 by serving Petitioner in Indiana under the purported authority of the Delaware “long- arm statute, 10 Del. C. § 3104” (App. 23a). Where, however, a plaintiff relies on state law to authorize service of a summons on a defendant, such service of process can establish specific personal ju- risdiction over the defendant only if the defendant would be subject to the personal jurisdiction of the state court with respect to the action (Federal Rule of Civil Procedure 4(k)(1)(A)), and constitutional limita- tions on personal jurisdiction require that the action must arise from “an activity or an occurrence that takes place in the forum state.” Walden v. Fiore, 134 S. Ct. 1115, 1121 n.6 (2014) (internal quotation omit- ted). In this case, the Respondent’s complaint is not restricted to alleged acts of patent infringement that took place in Delaware, but rather seeks relief for al- leged acts that occurred in Indiana, California, Flor- ida, and other non-Delaware locations. Because each act of alleged infringement gives rise to a discrete claim, see Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962, 1969 (2014), Respondent has needed to rely on expansive and ahistorical Federal Circuit theories to justify relying on Delaware’s long-arm statute to generate personal jurisdiction over a na- tionwide set of claims, the vast majority of which have no connection to Delaware. A restoration of this Court’s interpretation of § 1400(b) would eliminate the occasion for such ex- Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 42 of 44 30 pansive jurisdictional theories, because venue under § 1400(b) would be proper over non-resident corpo- rate entities only in districts where the federal stat- ute § 1694 allows service of process and thereby es- tablishes specific jurisdiction on a nationwide basis in the manner specifically authorized by Congress. IV. THIS CASE PROVIDES A GOOD VEHICLE FOR RAISING THE QUESTION PRESENTED. As noted above, the facts relevant to this petition are undisputed and sharply frame the question of statutory interpretation raised. It is undisputed that Petitioner is not incorpo- rated in Delaware and has no regular or established or indeed any place of business in Delaware. If 28 U.S.C. § 1400(b) continues to have the meaning that this Court held that it had in Fourco, this is an easy case and the Court can and should summarily re- verse and remand. Cf. Palmer v. BRG of Ga., Inc., 498 U.S. 46, 50 (1990) (granting certiorari and sum- marily reversing judgment of non-liability for anti- trust law violation, where challenged agreement “was unlawful on its face”). If this Court grants certiorari, the undisputed facts of this case ensure that the Court will be able to reach and decide the question presented without the risk of some disputed fact or procedural default in- tervening. The decision below rests entirely on the Federal Circuit’s errant interpretation of § 1400(b). The issue presented here was fully briefed and con- sidered by the Federal Circuit, and the Court accord- ingly has the benefit of the Federal Circuit’s views on the subject which, as quoted above, are quite ada- mant. The question presented by this Petition has generated a vigorous debate that is fully joined. It is ripe for a decision by this Court. CONCLUSION For the reasons set forth above, this Petition for a Writ of Certiorari should be granted. Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 43 of 44 31 Respectfully submitted, John F. Duffy Richard M. Koehl Emma L. Baratta Of Counsel James W. Dabney Counsel of Record HUGHES HUBBARD & REED LLP One Battery Park Plaza New York, New York 10004 (212) 837-6000 Attorneys for Petitioner 72167876 Case 2:16-cv-02720-SPL Document 29-6 Filed 12/29/16 Page 44 of 44 EXHIBIT D Case 2:16-cv-02720-SPL Document 29-7 Filed 12/29/16 Page 1 of 2 (ORDER LIST: 580 U.S.) WEDNESDAY, DECEMBER 14, 2016 CERTIORARI GRANTED 15-1503 15-1504 ) ) ) TURNER, CHARLES S., ET AL. V. UNITED STATES OVERTON, RUSSELL L. V. UNITED STATES The petitions for writs of certiorari are granted limited to the following question: “Whether the petitioners’ convictions must be set aside under Brady v. Maryland, 373 U. S. 83 (1963).” The cases are consolidated and a total of one hour is allotted for oral argument. 16-327 LEE, JAE V. UNITED STATES 16-341 TC HEARTLAND LLC V. KRAFT FOOD BRANDS GROUP LLC The petitions for writs of certiorari are granted. Case 2:16-cv-02720-SPL Document 29-7 Filed 12/29/16 Page 2 of 2 UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA ON Semiconductor Corporation; and Semiconductor Components Industries, LLC, Plaintiffs v. Power Integrations, Inc., Defendant. Case No. 2:16-cv-02720-SPL [PROPOSED] ORDER GRANTING POWER INTEGRATIONS’ MOTION TO DISMISS FOR IMPROPER VENUE AND LACK OF PERSONAL JURISDICTION, OR IN THE ALTERNATIVE TO TRANSFER VENUE Having reviewed Power Integrations’ Motion to Dismiss for Improper Venue and Lack of Personal Jurisdiction, or in the Alternative to Transfer Venue, and good cause appearing, IT IS HEREBY ORDERED that this case is dismissed for improper venue and lack of personal jurisdiction. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case 2:16-cv-02720-SPL Document 29-8 Filed 12/29/16 Page 1 of 1