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Gree, Inc v. Supercell Oy

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

October 30, 2019

GREE, INC., Plaintiff,
v.
SUPERCELL OY, Defendant.

          MEMORANDUM ORDER

          ROY S. PAYNE UNITED STATES MAGISTRATE JUDGE

         Defendant Supercell Oy filed this motion to transfer this action and two others (collectively, “Texas Actions”) from this District to the Northern District of California, or alternatively, to dismiss or stay the Texas Actions. (Dkt. No. 26).[1]

         Supercell argues that the Texas Actions should be transferred to the N.D.Cal. for two reasons. First, Supercell argues that Plaintiff GREE, Inc. breached a Confidential Settlement Agreement (Dkt. No. 26-4) between the parties with the proper remedy being transfer. Second, Supercell argues that an analysis under 28 U.S.C. § 1404(a) dictates transfer.

         Supercell has already presented many of these same arguments to the Court in the N.D.Cal.., prompting that Court to note that “principles of comity among federal courts and judicial efficiency weigh heavily in favor of resolving all of the parties' disputes in Texas.” Supercell OY v. GREE, Inc., No. 3:19-CV-01106, Dkt. 32 (N.D. Cal. May 31, 2019). This Court agrees with that conclusion.

         I. BACKGROUND

         a. Parties

         Supercell is a mobile game development company founded in 2010 and headquartered in Finland. (Dkt. No. 26, at 5-6). Supercell releases mobile games and distributes its games internationally and throughout the United States, including Texas. (Id., at 6).

         GREE is a social media company that provides mobile content and services, including games, entertainment, media, advertising, and investment services. It was founded in 2004 and is based in Japan. (Dkt. No. 1, at 3).

         b. Prior Actions

         In 2017, GREE and Supercell commenced patent infringement litigations and patent office proceedings in Japan, China, and the United States against each other.[2] In Japan, GREE filed actions against Supercell and Supercell filed actions against GREE. In China, Supercell filed actions against GREE and GREE filed invalidity contentions against Supercell. In the United States, Supercell filed an action against GREE in the the N.D.Cal., entitled Supercell Oy v. GREE Inc., GREE International Entertainment, Inc., and Funzio Games, Inc., No. 3:17-cv-5556. In addition, Supercell filed Post-Grant Reviews against some of GREE's patents, which are currently on appeal before the Federal Circuit. (Dkt. No. 26-4, at 2).

         c. Agreement

         On February 7, 2019, the parties entered a Settlement Agreement in order to resolve the Japanese actions, dismiss the Chinese actions and U.S. action, and effect a standstill agreement with respect to those actions and any further litigation or claims between the parties. A resolution of the Post-Grant Reviews was not provided for in the Agreement. (Id.).

         The Settlement Agreement included a licensing clause, but only as to GREE's Japanese patents and applications, expressly excluding “all non-Japanese patents and patent applications” including the patents at issue in the Texas Actions. (Id., at 3).

         The Settlement Agreement also had a standstill provision, which provided in part that the parties would not “commence . . . any patent litigation action or proceeding . . . against the other Party . . . until February 28, 2019” (“Standstill Period”). (Id., at 10). Within the same standstill clause, each party agreed to “[d]uring the Standstill Period . . . notify the other [Party] promptly in writing of any patent infringement claims . . . of which it becomes aware.” (Id., at 10-11).

“6.1 Each Party . . . irrevocably covenants that it . . . will not commence, maintain, or prosecute any patent litigation action or proceeding, including, but not limited to, any action alleging infringement by or seeking a declaratory judgment of invalidity, non-infringement or unenforceability, against the other . . . anywhere in the world from the Effective Date until February 28, 2019 . . . During the Standstill Period, each Party agrees to notify the other promptly in writing of any patent infringement claims . . . of which it becomes aware.”

(Id.).

         The parties included a choice of law clause in the Settlement Agreement, agreeing that the “Agreement and all related documents, and all matters arising out of or relating to this Agreement” are governed by California law. Furthermore, the parties agreed that “sole jurisdiction and venue for any action for breach of or to enforce this agreement shall be” the N.D.Cal.. (Id., at 13).

8.5 Governing Law; Submission to Jurisdiction. This Agreement and all related documents, and all matters arising out of or relating to this Agreement, are governed by, and construed in accordance with, the laws of the State of California, United States of America (including California choice of law statutes), without regard to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of California . . . The sole jurisdiction and venue for any action for breach of or to enforce this Agreement shall be the United States District Court for the Northern District of California. All Parties consent to the jurisdiction of such courts for any such action and agree that process may be served in the manner allowed by the laws of the State of California or United States federal law.

(Id.).

         The final relevant passage of the Settlement Agreement dealt with applicable relief if either party breached the agreement. It provided that the non-breaching party can seek equitable relief if the breaching party causes irreparable harm. (Id., at 13).

“8.6 Equitable Relief. Each party acknowledges that a breach by the other party of this Agreement may cause the non-breaching party irreparable harm, for which an award of damages would not be adequate compensation and, in the event of such a breach or threatened breach, the non-breaching party shall be entitled to seek equitable relief, including in the form of a restraining order, orders for preliminary or permanent injunction, specific performance, and any other relief that may be available from any court . . . These remedies shall not be deemed to be exclusive but shall be in addition to all other remedies available under this Agreement at law or inequity, subject to any express exclusions or limitations in this Agreement to the contrary.”

(Id.).

         d. Current Litigation

         After the standstill period ended on February 28, 2019, GREE commenced the three Texas Actions against Supercell in the Eastern District of Texas alleging only patent infringement claims.[3] Later that day, Supercell sued GREE in the N.D.Cal., alleging, as amended, breach of contract claims and declaratory judgment claims related to all patents asserted in the Texas Actions as well as two additional patents. (Dkt. No. 26, at 4).

         Supercell then moved for a temporary restraining order in the the N.D.Cal. action, seeking to prevent GREE from pursuing the Texas Actions. The California court denied the motion and stayed the action, pending resolution of this Motion. (Dkt. No. 64, at 1 n.1).

         II. ...


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