Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Lenovo (United States) Inc. v. IPcom GmbH & Co., Kg

United States District Court, N.D. California, San Jose Division

December 12, 2019

LENOVO (UNITED STATES) INC., et al., Plaintiffs,
v.
IPCOM GMBH & CO., KG, Defendant.

          ORDER AUTHORIZING DISCOVERY RE SPECIFIC PERSONAL JURISDICTION; STAYING ALL OTHER DISCOVERY; TERMINATING DEFENDANT'S MOTION TO DISMISS AND PLAINTIFFS' MOTION FOR ANTI-SUIT INJUNCTION RE: DKT. NOS. 18, 40

          EDWARD J. DAVILA UNITED STATES DISTRICT JUDGE

         Plaintiffs Lenovo (United States) Inc. (“Lenovo US”) and Motorola Mobility LLC (“Motorola, ” or collectively with Lenovo US, “Plaintiffs”) initiated this action against Defendant IPCom GmbH & Co., KG (“IPCom” or “Defendant”) for breach of contract; declaratory judgment; antitrust monopolization in violation of Section 2 of the Sherman Act; and declaratory judgment of non-infringement of U.S. Patent No. 6, 307, 844 and No. 6, 920, 124. The suit is predicated on Plaintiffs' allegation that IPCom failed to offer Plaintiffs a license to its alleged standard essential patents (“SEPS”) relevant to the 2G, 3G, and 4G cellular standards on fair, reasonable, and non-discriminatory (“FRAND”) terms and conditions. Comp. ¶ 1.

         IPCOM, a company organized and existing under the laws of Germany, moves to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2).[1] Dkt. No. 18. Plaintiffs move for an anti-suit injunction. Dkt. No. 40. More specifically, Plaintiffs request that this Court (1) enjoin IPCom from prosecuting the patent infringement action IPCom filed in the United Kingdom against Plaintiffs' U.K. affiliates; and (2) enjoin IPCom from instituting against Plaintiffs, Plaintiffs' affiliates, or any of their customers any action alleging infringement of IPCom's claimed 2G, 3G and/or 4G SEPs during the pendency of this action.[2] The motions were heard on November 14, 2019. For the reasons set forth below, the parties are granted leave to conduct jurisdictional discovery, after which the parties may renew their respective motions.

         I. BACKGROUND [3]

         Plaintiff Lenovo U.S. is a corporation organized under the laws of the State of Delaware, with its principal place of business in Morrisville, North Carolina. Compl. ¶ 12. Plaintiff Motorola is an affiliate of Lenovo U.S. organized under the laws of the State of Delaware, with its principal place of business in Chicago, Illinois. Id. ¶ 13. Lenovo US's parent, Lenovo Group Limited (“Lenovo China”), acquired Motorola. Id.

         Plaintiffs are leading providers of wireless devices, including tablets, laptops, and mobile phones. Id. ¶ 1. Many of Plaintiffs' products rely on cellular connectivity. Id. ¶ 2. Cellular connectivity requires the use of widely adopted cellular standards-such as second generation (“2G”), third generation (“3G”), and/or fourth generation (“4G”)-adopted by various standard setting organizations (“SSOs”). Id. The European Telecommunications Standards Institute (“ETSI”) is one such SSO. Id.

         IPCom claims to own patents that have been declared essential to the cellular standards adopted by ETSI and implemented by Plaintiffs' products. Id. ¶ 3. As such, IPCom's patents are encumbered under ETSI's Intellectual Property Rights (“IPR”) Policies, and thus must be licensed on FRAND terms and conditions to all potential implementers of the standards, such as Plaintiffs. Id.

         IPCom is a company organized and existing under the laws of Germany, with its principal place of business in Pullach, Germany. Id. ¶ 15. IPCom is “partnered” with United States company Karols Development Co LLC (id. ¶ 18) and Fortress Investment Group (Rodewald Decl. Ex. 30).

         IPCom is a member of ETSI and has promised to license its intellectual property rights related to all ETSI standards made by it and/or its affiliates on FRAND terms and conditions. Id. ¶ 4. A majority of the patents under IPCom's ownership or control were obtained from Robert Bosch GmbH (“Bosch”) or Hitachi Ltd. (“Hitachi”), both of whom promised to license their alleged SEPs on FRAND terms and conditions. Id. As a successor-in-interest to those patents, IPCom is obligated under the FRAND commitments made by both Bosch and Hitachi. Id. Plaintiffs are third-party beneficiaries of IPCom's FRAND promises to ETSI. Id. ¶ 6.

         IPCom breached the promises made to ETSI by failing to offer a license to Plaintiffs on FRAND terms and conditions. Id. ¶ 7. Moreover, IPCom's promises to license essential patents on FRAND terms and conditions were false. Id. Plaintiffs are ready and willing to license IPCom's SEPs, but IPCom's royalty demands for a patent license violate its FRAND commitments. Id. ¶ 8. IPCom is attempting to seek supra-competitive royalty rates for a license to its 2G, 3G, and 4G patents; demanding Plaintiffs pay royalties for patents that are not essential to the ETSI standards; and demanding Plaintiffs pay royalties for expired patents or patents that will expire during the course of the proposed license. Id. Further, in an attempt to coerce Plaintiffs to enter into a license that is not on FRAND terms and conditions, IPCom told at least one of Plaintiffs' customers that its sales of Plaintiffs' products “put it at serious legal and financial risk.” Id. ¶ 9.

         II. STANDARDS

         A. Personal Jurisdiction

         Federal Rule of Civil Procedure 12(b)(2) allows a party to challenge the court's personal jurisdiction over a party. “In opposition to a defendant's motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is proper.” Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008) (citing Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990)). If a court decides the motion without an evidentiary hearing, “the plaintiff need only make a prima facie showing of the jurisdictional facts.” Id. (quoting Caruth v. Int'l Psychoanalytical Ass'n, 59 F.3d 126, 127-28 (9th Cir. 1995)). In such cases, the inquiry is whether the plaintiff's pleadings and affidavits make a prima facie showing of personal jurisdiction.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). Uncontroverted allegations in the plaintiff's complaint must be taken as true, and any conflicts between the parties over statements contained in affidavits must be resolved in the plaintiff's favor. Id.

         A court's power to exercise jurisdiction over a party is limited by both statutory and constitutional considerations. First, a long-arm statute must confer jurisdiction over a defendant. Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154-55 (9th Cir. 2006) (citing Fireman's Fund Ins. Co. v. Nat'l Bank of Coops., 103 F.3d 888, 893 (9th Cir. 1996)). California's long arm statute is coextensive with the limits of due process. Daimler AG v. Bauman, 571 U.S. 117, 125 (2014).

         Second, for a court to exercise personal jurisdiction over a nonresident defendant consistent with due process, that defendant must have “certain minimum contacts” with the relevant forum such that the exercise of jurisdiction “does not offend traditional notions of fair play and substantial justice.'” Schwarzenegger, 374 F.3d at 801 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, (1945); Asahi Metal Indus. Co. v. Super. Ct. of Cal., Solano Cnty., 480 U.S. 102, 109 (1987) (“[T]he constitutional touchstone” of the determination whether an exercise of personal jurisdiction comports with due process “remains whether the defendant purposefully established ‘minimum contacts' in the forum State.”) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)).

         Under the minimum contacts test, jurisdiction can be either “general” or “specific.” Doe v. Unocal Corp., 248 F.3d 915, 923 (9th Cir. 2001) (per curiam), abrogated on other grounds by Daimler AG v. Bauman, 571 U.S. 117, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014). “A court may exercise specific jurisdiction where the cause of action arises out of or has a substantial connection to the defendant's contacts with the forum.” Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1123 (9th Cir. 2002) (citing Hanson v. Denckla, 357 U.S. 235, 251 (1958)). “Alternatively, a defendant whose contacts are substantial, continuous, and systematic is subject to a court's general jurisdiction even if the suit concerns matters not arising out of his contact with the forum.” Id. (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415 n.9 (1984)).

         B. Federal Rule of Civil Procedure 4(k)(2)-Personal Jurisdiction

         Federal Rule of Civil Procedure 4(k)(2) states:

(2) Federal Claim Outside State-Court Jurisdiction. For a claim that arises under federal law, serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant if:
(A) the defendant is not subject to jurisdiction in any state's courts of general jurisdiction; and
(B) exercising jurisdiction is consistent with the United States Constitution and laws.

Fed. R. Civ. P. 4(k)(2). Rule 4(k)(2) establishes personal jurisdiction over a defendant who “is not subject to jurisdiction in any state's courts of general jurisdiction” so long as “exercising jurisdiction is consistent with the United States Constitution and laws.” See Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 1416 (Fed. Cir. 2009) (“Rule 4(k)(2) contemplates a defendant's contacts with the entire United States, as opposed to the state in which the district court sits.”) (internal quotations and citations omitted). “[F]or a court to exercise personal jurisdiction over a defendant under that rule, the plaintiff's claim must arise under federal law, the defendant must not be subject to jurisdiction in any state's courts of general jurisdiction, and exercise of jurisdiction must comport with due process.” Touchcom, 574 F.3d at 1412. “The third requirement under Rule 4(k)(2) - the due process analysis - contemplates a defendant's contacts with the entire United States, as opposed to the state in which the district court sits.” Synthes (U.S.A.) v. G.M. Dos Reis Jr. Ind. Com. de Equip. Medico, 563 F.3d 1285, 1295 (Fed. Cir. 2009).

         III. DISCUSSION

         IPCom argues that the Complaint contains no facts to support this Court's exercise of personal jurisdiction over IPCom. IPCom presents several undisputed facts to underscore its lack of contacts with the United Sates. It is undisputed that IPCom is a small company, having just six (6) employees, with its sole place of business located in Germany. Suh Decl. in Support of Defs.' Mot. to Dismiss ¶¶ 3-4. Further, IPCom has never conducted business in the United States. Id. ¶¶ 2-14. IPCom has never employed anyone in the United States. Id. ¶ 5. IPCom has also never owned or leased property in the United States, and has never had a place of business here. Id. ¶¶ 3, 7-8. Nor has IPCom ever paid taxes in the United States. Id. ¶ 10. IPCom has never sought to have its rights adjudicated by a court in the United States other than when compelled to answer a single complaint for declaratory judgment brought by an infringer.[4] Id. ¶¶ 14, 17-18.

         IPCom represents that its contacts with the United States consist solely of meetings in the United States with potential licensees, written correspondence with United States licensees, and telephone calls to and from the United States related to license negotiations. IPCom's Mot. To Dismiss 3 (citing Suh Decl. ¶ 15). IPCom's meetings in the United States have generally occurred only when specifically requested or dictated by potential licensees, as is the case with Lenovo China. Id.

         Implicitly acknowledging the facts above, Plaintiffs refrain from arguing that this Court may exercise general jurisdiction over IPCom. Instead, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.