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Sony Electronics, Inc. v. Media Technologies

November 6, 2007

SONY ELECTRONICS, INC., PLAINTIFF,
v.
MEDIA TECHNOLOGIES, LTD., DEFENDANT.



The opinion of the court was delivered by: Hon. Rudi M. Brewster United States Senior District Judge

ORDER DENYING GUARDIAN DEFENDANT'S MOTION TO DISMISS OR TO TRANSFER [# 74-1 & 74-2]

Consolidated Cases.

The Federal Circuit held that these consolidated cases presented an "actual controversy" within the meaning of the Declaratory Judgment Act as interpreted by the Supreme Court in MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 764 (2007). Sony Elecs., Inc. v. Guardian Media Techs., Ltd., 497 F.3d 1271 (Fed. Cir. 2007). The Federal Circuit remanded for this Court to determine, in its discretion, whether to hear the actions filed by Sony Electronics, Inc., Mitsubishi Digital Electronics America, Inc., Victor Company of Japan, Ltd. ("JVC"), and Matsushita Electric Industrial Co., Ltd. (Thomson, Inc. has re-filed its suit) (hereinafter "Plaintiffs"). Defendant Guardian Media Technologies, Ltd., moves to dismiss or in the alternative to transfer the cases to the Central District of California. Having carefully considered the briefs and the arguments at the November 1, 2007 hearing, the Court denies both motions.

Background

In 2003, Defendant Guardian purchased two patents related to the methods of blocking the viewing of certain television programs. U.S. Patent Nos. 4,930,158 and No. 4,930,160 expire in August 2008. The assignment agreement listed Guardian as having its office in La Jolla. Dowler Decl. Ex. 4. [# 22]

From August 2004 until these suits were filed in September 2005, Guardian pursued licensing agreements with the Plaintiffs, but Plaintiffs contended that the two patents were obvious and rejected Guardian's proposals. See Smith Decl. Ex. O (Guardian reports 26 licenses with other manufacturers). Plaintiffs allege that they do not infringe the two patents, and that they are not valid and not enforceable.

In October 2005, Plaintiffs filed ex parte applications with the Patent and Trademark Office ("PTO") requesting reexamination of the two patents. The PTO found substantial questions of patentability and granted both requests.*fn1

On March 16, 2006, this Court granted Guardian's motion to dismiss for lack of subject matter jurisdiction. Consequently, the Court denied as moot Plaintiffs' motion to stay pending the completion of the reexamination process.

Within two months, Guardian sued several different television manufacturers for patent infringement in the Western District of Wisconsin. Smith Decl. Ex. K (Kenwood Corp.); Id. Exs. M & N (Audiovox, Mustek, and their affiliates). One alleged infringer moved to either stay the action pending the reexamination proceedings, or in the alternative, to transfer the action to the Central District of California for the convenience of the witnesses. Id. Ex. N. Guardian opposed the transfer on the ground that it did not have any contacts with California. Id. Ex. P at 2, 11-12 & n.6; see id. Ex. L ¶ 2 (Guardian states it has no place of business in California). Nonetheless, the Guardian v. Mustek case was transferred to Los Angeles. Id. Exs. N & Q. (Guardian settled its two other Wisconsin patent infringement cases. Id. Exs. K & M). The Central District Court rejected the argument that Guardian's patent infringement case should be stayed pending the reexamination process. Id. Ex. Q (Docket Entry 40). Soon thereafter, Guardian filed another patent infringement case in Los Angeles against other manufacturers (including LG Electronics). Id. Ex. R. Subsequently, the Mustek action settled. Id. Ex. Q (Docket Entries 41 & 43). Answers were filed and some discovery has been exchanged in the LG Electronics case, which remains open in Los Angeles. Some parties in the LG Electronics action moved to stay the proceedings pending the reexamination process, but the Court, consistent with its prior order in the Mustek case, denied that motion. Id. Ex. R (Docket Entry 56); PACER (Docket Entry 62).

Following remand to this Court of the Federal Circuit's decision, Defendant Guardian renewed its motion to dismiss and argues that this Court should decline to exercise jurisdiction over Plaintiffs' declaratory judgment lawsuits. In the alternative, Defendant Guardian asks the Court to transfer these consolidated cases to the Central District, where it now has the previously-mentioned case pending on the same patents.

Discussion

I. Motion to Dismiss -- Discretion Whether to Decline Jurisdiction

The Declaratory Judgment Act, 28 U.S.C. § 2201, empowers federal courts to issue declarations of rights in actual controversies, but the district court has substantial discretion to decline that jurisdiction when proceeding to the merits "will serve no useful purpose." Wilton v. Seven Falls Co., 515 U.S. 277, 282-88 (1995).

Guardian argues the Court should exercise its discretion to decline jurisdiction because Plaintiffs' actions show they are not in a hurry to litigate the patents. For example, Plaintiffs waited until the end of the 120-day period to serve their complaints and they intend to move to stay these actions. Defendant Guardian also argues that the interests of justice weigh against entertaining the suits because Plaintiffs filed this suit as a "placeholder" until Guardian's patents expire in 2008, ...


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