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Saint Lawrence Communications LLC v. Amazon.Com, Inc.

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

July 5, 2019




         Before the Court is Defendants, Inc. and LLC's (collectively, “Amazon”) Motion to Transfer Pursuant to Contractual Forum Selection Clause (the “Motion”). (Dkt. No. 30.) Having considered the same and the briefing, the Court is of the opinion that the Motion should be and hereby is DENIED for the reasons set forth herein.

         I. Introduction

         A. SLC and Amazon's Prior Licensing Agreement

         Amazon and SLC entered into a Patent License and Litigation Settlement Agreement (the “Agreement”) on April 22, 2015.[1] (See Dkt. No. 37-2.) In exchange for royalty payments, SLC (and its related foreign entity) gave Amazon the right to make, use, or sell 75, 000 licensed products in twenty European countries, “solely for the purpose of encoding and decoding data in accordance with the AMR-WB Standard” as related to several of SLC's foreign patents. (See Id. §§ 1.19, 2.1, and at Appx. B.) The Agreement also includes a choice of law and forum selection provision:

This Agreement shall be governed by, interpreted and construed in accordance with the laws of New York, without reference to conflicts of laws principles. Any legal action or other legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement must be brought or otherwise commenced in a federal or state court in New York.
Each Party expressly and irrevocably consents and submits to the jurisdiction of such state and federal courts in connection with any such legal proceeding.

(See Id. at § 10.1 (emphasis added).)

         B. The Instant Lawsuit

         SLC sued Amazon on January 28, 2019, alleging infringement of U.S. Patent Nos. 6, 795, 805 (“'805 Patent”); 6, 807, 524 (“the '524 Patent”); 7, 151, 802 (“'802 Patent”); 7, 260, 521 (“'521 Patent”); and 7, 191, 123 (“'123 Patent”) (collectively, the “Asserted Patents”). (See Dkt. No. 1 (Complaint) at 7, 11, 16, 21, 25.) In its original Complaint, SLC appeared to allege that Amazon had pre-suit notice of the Asserted Patents by way of the Agreement. (See Id. ¶ 24; see also Dkt. No. 30-2 (Letter by Marc Booth on behalf of SLC to Amazon) (alleging infringement of the Asserted Patents and identifying the limited scope of the Agreement).) SLC subsequently amended the Complaint, which now indicates non-reliance on the Agreement. (Dkt. No. 36 n.9.) There is no dispute that the Asserted Patents are not covered by the Agreement. (Cf. Dkt. No. 37-2 at Appx. B.)

         SLC is a Texas limited liability company with its principal place of business at 6136 Frisco Square Blvd., Suite 400, Frisco, Texas 75034. (Dkt. No. 1 ¶ 1.) Defendant, Inc. is a Delaware corporation with its principal place of business at 410 Terry Avenue North, Seattle, Washington, 98109. (Dkt. No. 27 ¶ 2.) Defendant LLC was a Delaware corporation that ceased operations by January 1, 2018, when it merged into Services, Inc.[2] (Id. ¶ 3.)

         Amazon contends that the Agreement's forum selection clause controls this case and asks, pursuant to the Agreement and 28 U.S.C. § 1404(a), the Court to “transfer this case to the Southern District of New York[, ] where SLC is currently asserting the same patents-in-suit in pending litigation.”[3] (See Dkt. No. 30 at 1.)

         II. Applicable Law

         If venue in the district in which the case is originally filed is proper, the court may nonetheless transfer a case based on “the convenience of parties and witnesses” to “any other district or division where it might have been brought or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). The threshold inquiry when analyzing eligibility for § 1404(a) transfer is “whether the judicial district to which transfer is sought would have been a district in which the claim could have been filed.” In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) [hereinafter Volkswagen I]. As such, to prove that transfer is proper, the movant must establish that, as of the time of filing, each party “would have been amenable to process in . . . the transferee court” and that “venue as to all [parties] would have been proper [there].” See Liaw Su Teng v. Skaarup Shipping Corp., 743 F.2d 1140, 1148 (5th Cir. 1984), overruled on other grounds by In re Air Crash Disaster Near New Orleans, 821 F.2d 1147 (5th Cir. 1987); accord Hoffman v. Blaski, 363 U.S. 335, 342-44 (1960).

         Once this initial threshold has been met, courts determine whether the case should be transferred by analyzing various public and private factors. See Humble Oil & Ref. Co. v. Bell Marine Serv., Inc., 321 F.2d 53, 56 (5th Cir. 1963); accord In re Nintendo Co., Ltd., 589 F.3d 1194, 1198 (Fed. Cir. 2009). The private factors are: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious, and inexpensive. Volkswagen I, 371 F.3d at 203 (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981)). The public factors are: (1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws or in the application of foreign law. Id. These factors are to be decided based on “the situation which existed when suit was instituted.” Hoffman, 363 U.S. at 343. Though the private and public factors apply to most transfer cases, “they are not necessarily exhaustive or exclusive, ” and no single factor is dispositive. In re Volkswagen of Am., Inc., 545 F.3d 304, 314-15 (5th Cir. 2008) [hereinafter Volkswagen II].

         To prevail on a motion to transfer under § 1404(a), the movant must show that transfer is “clearly more convenient” than the venue chosen by the plaintiff. Id. at 315; accord In re Apple Inc., 456 Fed.Appx. 907, 909 (Fed. Cir. 2012) (holding that a movant must “meet its burden of demonstrating [] that the transferee venue is ‘clearly more convenient.'”) (internal citation omitted). Absent such a showing, plaintiff's choice of venue is to be respected. Volkswagen II, 545 F.3d at 315. When deciding a motion to transfer under § 1404(a), the court may consider undisputed facts outside of the pleadings such as affidavits or declarations, but it must draw all reasonable inferences and resolve factual conflicts in favor of the non-moving party. See Sleepy Lagoon, Ltd., v. Tower Grp., Inc., 809 F.Supp.2d 1300, 1306 (N.D. Okla. 2011); see also Cooper v. Farmers New Century Ins. Co., 593 F.Supp.2d 14, 18-19 (D.D.C. 2008).

         The above two-step process differs, however, when the movant has raised the applicability of a forum selection clause. As the Supreme Court has recognized, § 1404(a) provides “a mechanism for enforcement of forum-selection clauses that point to a particular federal district.” Atl. Marine Constr. Co. v. U.S. Dist. Court for the W. Dist. of Tex., 134 S.Ct. 568, 579 (2013). In those cases, the court must first consider whether the party asserting the clause and the defense or claim triggering that clause crosses the threshold required to trigger the application of the forum selection clause. Gen. Protecht Grp., Inc. v. Leviton Mfg. Co., 651 F.3d 1355, 1359 (Fed. Cir. 2011) [hereinafter GPG] (citing Tex. Instruments, Inc. v. Tessera, Inc., 231 F.3d 1325, 1328 (Fed. Cir. 2000)). If the court concludes that it does, then the usual § 1404 analysis is altered in two relevant ways: (1) the plaintiff's choice of forum merits no weight, and (2) the district court should consider arguments about public interest factors only. Atl. Marine, 651 U.S. at 581-82.

         To determine whether a forum selection clause is applicable, the Federal Circuit has instructed that the nexus between the current claims and the alleged defense flowing from the prior license or settlement agreement must be “non-frivolous.” GPG, 651 F.3d at 1359. A bare allegation that a license provides a defense to the claims in suit is insufficient to trigger the forum selection clause. Id. While, the Federal Circuit has not strictly demarcated the boundaries and scope of the “non-frivolous” standard, this Court has previously used a “less than one-half and nearer to one-quarter” standard. The “attachment point” along a continuum existing between a wholly frivolous assertion of a license defense and a conclusive showing of success on the merits where an asserted defense is “almost assuredly . . . found before we reach the mid-point of the spectrum” and is probably “found nearer the one-quarter marker.” Zix Corp. v. Echoworx Corp., No. 2:15-cv-1272-JRG, 2016 WL 7042221, at *2-4 (E.D. Tex. June 9, 2016).

         III. ...

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