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Alacritech Inc. v. Centurylink, Inc.

United States District Court, E.D. Texas, Marshall Division

September 19, 2017

ALACRITECH INC., Plaintiff,
v.
CENTURYLINK, INC., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          ROY S. PAYNE UNITED STATES MAGISTRATE JUDGE

         In this patent case, the Court will now consider Defendants' Motion to Transfer Venue to the Northern District of California [Dkt. # 59]. For the reasons set forth below, the Court concludes the movants, none of whom are based in that district, have not shown the Northern District of California is a clearly more convenient forum than this District and will deny the motion.

         I. BACKGROUND

         A. The Technology

         The technology at issue concerns transferring and storing data within a network. Compl. [Dkt. # 1] ¶ 16. According to Alacritech, traditional methodologies wasted too much processing power performing brute-force data transfer and storage. Id. ¶ 18. To address that waste, Alacritech developed the use of dedicated network interface controllers (NICs) to more efficiently handle the processing. Id. Offloading processing tasks to a dedicated NIC implementing the methodologies taught by the asserted patents accelerates data transfer between devices and allows the host CPUs to keep processing power for more substantive tasks. Id.

         B. The Parties [1]

         Defendant Dell is a Delaware corporation headquartered in Round Rock, Texas. Dell sells computers, monitors, servers, and other devices it sources and assembles from third-party suppliers. Alacritech's infringement allegations against Dell are directed to the network adapters included in various Dell products.

         Defendants Tier 3, Inc., Savvis Communications Corp., and CenturyLink Communications LLC (collectively, “the CenturyLink Defendants”) are operating entities that share a common holding company parent, CenturyLink, Inc. Tier 3 is a Washington corporation with its principal place of business in Bellevue, Washington. Savvis is a Missouri corporation with its principal place of business in Town & Country, Missouri. CenturyLink Communications is a Louisiana corporation with its principal place of business in Monroe, Louisiana. Id.

         The CenturyLink Defendants provide cloud, colocation, and hosting services to customers globally. Alacritech's infringement allegations against the CenturyLink Defendants are directed to servers that CenturyLink buys from Dell and Hewlett Packard, and which include network devices supplied by other third parties, including Intel, Broadcom, QLogic, and Mellanox.

         Defendant Wistron Corporation is a Taiwanese corporation with its principal place of business in Taipei. Wistron sells electronic equipment such as televisions, notebook PCs, servers, storage systems, and networking devices to branding companies such as Dell. Wis-tron's COO works in Grapevine, Texas.

         Defendant Wiwynn Corporation, an affiliate of Wistron, is a Taiwanese corporation with its principal place of business in Taipei. Wiwynn is involved in the cloud computing business, and provides products and services directly to end users.

         Defendant SMS InfoComm Corporation, a subsidiary of Wistron, is a Texas corporation with its principal place of business in Grapevine, Texas. SMS warehouses products for Wistron and provides after-sale service of products sold by Wistron.

         Plaintiff Alacritech is a California corporation with its principal place of business in San Jose, California. The majority of its former and current employees live in the San Francisco Bay area, as do five named inventors of the asserted patents. Alacritech's founder and president is one of those inventors.

         C. Third Parties

         Collectively, the parties identify these specific third-party (i.e., not a party employee) witnesses[2]:

• Clive Philbrick, a named inventor on all asserted patents, who lives in the San Francisco area;
• Steve Blightman, a named inventor on some of the asserted patents, who lives in the San Francisco area;
• Mark Lauer, prosecuting attorney for some of the asserted patents, who works in Pleasanton, CA;
• Michael Lazorik and Manish Mehta, former Dell employees living in Austin who communicated with Alacritech's CFO;
• Robert Winter, a former Dell network engineer from Austin who was in- volved in testing of Alacritech's technology; and
• Mark Underwood, a former Dell employee now living in Boston who acted as a primary contact for the technical team that interacted with Alacritech.

          Defendants identify Intel, Broadcom, and Qlogic as designers and manufacturers of accused network interface devices. Intel headquarters in Santa Clara, California, but has a major presence in Texas and employs 2300 people in Austin and Plano. Broadcom is headquartered in San Jose, California. QLogic's headquarters are in Aliso Viejo, California.

         Defendants also identify Nexenta Systems, Inc., Scality Inc., and Mellanox Technologies as suppliers of network controllers and software potentially implicated by Alacritech's infringement claims. Nexenta's headquarters is in Santa Clara, California. Scality's headquarters is in San Francisco, California. Mellanox's U.S. headquarters is in Sunnyvale, California, but Mellanox has a regional office in Austin. The parties' ...


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