Seattle Patent Litigation Update: May 2009

What recession? Seattle patent cases exploded during the months of February, March and April 2009 (list included in this post). Note that I've done something a little different for this post, I've included the patent number and the name of the plaintiff's lawyer and law firm.

While the number of cases increased over the last few months, most of these cases remain idle, without even an appearance by counsel for the Defendant(s).

One case that you've all no doubt heard about, was Microsoft's filing against TomTom over navigation devices and software. I posted something about that case when it was first filed. That case settled quickly under mostly confidential terms, putting to rest a year's worth of squabbling between the two companies. Both companies had sued the other, claiming patent infringement. Under the terms of a five-year agreement, Microsoft said in a public statement that TomTom will pay it for use of the eight car navigation and file management system patents asserted in its ITC and Seattle case, while Microsoft will be able to use the four patents included in the TomTom countersuit without any payment to TomTom.

Another interesting case on this list, is Ancora Technologies Inc v. Toshiba America Information Systems Inc et al., Cause No., 2:2009cv00270. Pending before Judge Pechman, this case involves claims asserting U.S. Patent No. 6,411,941, for a "method of restricting software operation with a license limitation." Did I hear someone say In re Bilski? We'll be watching this one closely. It was transferred from the Central District of California. Very capable lawyers on both sides, so this will be a fun one to follow.

An interesting side story to this case is that Ancora initially filed against Dell Inc., Hewlett-Packard Co. and Toshiba Corp.’s Toshiba America Information Systems unit, asserting claims that all defendants' use of Microsoft’s technology infringed the '941 patent. Microsoft filed to intervene as a defendant in the case in September. And this started accusations that Ancora's Chief Executive Officer, Miki Mullor, landed a job with Microsoft under false pretenses and gained access to confidential data. Apparently, Mullor applied for a job at Microsoft in October 2005, saying he was a former Ancora employee and that the company had gone out of business, according to a complaint filed Jan. 22 in state court in Seattle. According to Microsoft, Mullor concealed that Sammamish, Washington-based Ancora had accused Microsoft in June of infringing a 2002 patent.

Ancora responded through its attorney, Mark Cantor, saying "[t]his is simply a retaliatory lawsuit by Microsoft to get the patent case transferred to Seattle."

Retaliatory or not, it apparently worked, and the case is now here in Seattle.

Here is the list of cases filed between February 1 and April 30, 2009.

April 17, 2009

Warm Brothers Inc v. North East Hardwood Flooring Inc et al., Cause No. 3:09-cv-05223 (WA Western/Tacoma) Judge Leighton, U.S. Patent No. 6,533,185, hydronic radiant heating devices (Lawyer for patentee, Richard L. Goff)

April 16, 2009

Alpha Technologies Inc v. Ekstrom Industries Inc., Cause No. 2:2009cv00515 (WA Western/Seattle) Judge Pechman, U.S. Patent Nos. 6,428,350 and 6,443,761, (Lawyers for declaratory judgment plaintiff, Jerry Riedinger et. al., Perkins Coie).

April 10, 2009

Direct Route LLC v. Spirevision Inc et al., Cause No. 2:2009cv00486 (WA Western/Seattle) Judge Jones, U.S. Patent No. 7,467,229, method and apparatus for routing of network addresses, (Patentee’s lawyer, Duncan C. Turner, et. al., Badgley Mullins)

Ergo LLC et al v. Pacific Cycle Inc., Cause No. 2:2009cv00488 (WA Western/Seattle) Judge Robart , U.S. Patent No. 6,158,806, bicycle seat (Patentee’s attorney, Lee Burdett)

March 31, 2009

Gamakatsu USA Inc v. Matzuo America Inc., Cause No. 2:2009cv00423 (WA Western/Seattle) Judge Lasnik, U.S. Patent No., 6,691,449, Fishing Hook (Lawyers for declaratory judgment plaintiff, Ross Boundy et al., Davis Wright Tremaine)

March 30, 2009

Broadband Graphics LLC v. TIBCO Software Inc., Cause No. 2:2009cv00418 (WA Western/Seattle) Judge Lasnik, U.S. Patent No. 7,013,432; 7,313,765; 7,013,431, display container cell modification in a cell based EUI (patentee’s lawyer, Paul Beattie, et al. Schwabe)

March 26, 2009

Hicks v. Riddell Inc., Cause No. 2:2009cv00400 (WA Western/Seattle) Judge Tsuchida, U.S. Patent No. 5,661,849, protective face guard for softball (patentee’s lawyers Chase Alvord, Jody Gross)

March 24, 2009

NewTech Touch-Up Systems Inc v. Front Line Ready GA LLC et al., Cause No. 3:2009cv05158 (WA Western/Tacoma) Judge Leighton, U.S Patent No. 7,320,811, method and system for paint matching and re-touching, (patentee’s lawyer, Owen Dukelow, Kolisch Hartwell).

March 23, 2009

G. Vincent Ltd. v. Dux Area Inc., Cause No. 2:2009cv00383, U.S. Patent Nos. 7,004,404, 7,234,649, (WA Western/Seattle) Judge Theiler , spray guns for paint (plaintiff’s lawyer, Amanda Beane, Perkins Coie).

March 19, 2009

Broadband Graphics LLC v. TLM Inc., Cause No. 2:2009cv00355, (WA Western/Seattle) Judge Jones, U.S. Patent No. 7,013,432; 7,313,765, display container cell modification in a cell based EUI (patentee’s lawyer, Paul Beattie, et al. Schwabe).

March 13, 2009

Randy's Ring & Pinion Service Inc v. Regal-Beloit Corporation et al., 2:2009cv00329 (WA Western/Seattle) Judge Jones, U.S. Patent Nos. 5,413,015, differential (declaratory judgment plaintiff’s lawyer, Larry Graham et al., Black Lowe & Graham).

March 11, 2009

Progressive International Corporation v. Jaxco Industries Inc., Cause No. 2:2009cv00317 (WA Western/Seattle) Judge Lasnik, U.S. Patent Nos. D548,022, food chopper blade tray, D548,025, chopper, 7,191,691, food chopper, (patentee’s lawyer, Larry Graham, et al., Black Lowe & Graham).

March 5, 2009

The Active Network Inc v. Arena Group Inc et al., Cause No. 2:2009cv00289, (WA Western/Seattle) Judge Pechman, U.S. Patent No. 6,289,348, electronic processing of membership information in an organization (patentee’s lawyer, Sarah Turner, Gordon & Rees)

February 27, 2009

Ancora Technologies Inc v. Toshiba America Information Systems Inc et al., Cause No., 2:2009cv00270 (WA Western/Seattle) Judge Pechman, U.S. Patent No. 6,411,941, Method of restricting software operation with a license limitation, (transferred from CD of Calif., Patentee’s lawyers, Brooks Kushman)

February 25, 2009

Microsoft Corporation v. TomTom NV et al., 2:2009cv00247, (WA Western/Seattle) Judge Jones, U.S. Patent Nos, 6,175,789; 7,054,745; 6,704,032; 7,117,286; 6,202,008; 5,579,517; 5,758,352; and 6,256,642, portable navigation devices and software (lawyers for patentee Adam Wichman et. al., Klarquist Sparkman and Sidley)

February 24, 2009

Knudtzon et al v. Intuit Inc., Cause No. 2:2009cv00240, (WA Western/Seattle), Judge Martinez, U.S. Patent No. 7,120,597, Computerized Accounting Systems and Methods (Lawyer for patentee, Ed Goldstein, Houston TX, local counsel, James Rogers)

February 17, 2009

Bow Jax Inc v. Sims Vibration Laboratory Inc et al., Cause No., 2:2009cv00047 (WA Eastern/Spokane) Judge Whaley, U.S. Patent No, 5,362,046; 6,684,874, bow limb dampaners (Declaratory judgment plaintiff’s lawyers, John S. Reid).

Data Retrieval Patent Case Transferred

As a counterpoint to my previous post, regarding an order denying a defendant's motion to transfer patent litigation out of the WD of Wash., this post features the opposite result, a defendant winning a transfer to the N.D. of California. The case is Data Retrieval Tech v. SybaseC08-1702-RSM.

There are key differences that made this case susceptible to transfer. Judge Martinez explained in his order that most of the witnesses were located in California, most of the documents and activities occurred there, and the parties are located there.

Plaintiff's primary argument for keeping the litigation in Seattle was the fact that the inventors were located here and that the patents had been previously litigated in this district. Judge Martinez disposed of these arguments as follows:

"DRT maintains that the inventors of the patents at-issue all reside in this district. But as Defendants indicate, the exclusive license agreement between Timeline and APAC indicates that these former employees of Timeline are obligated to fully cooperate in any litigation to enforce the patent rights. (Dkt. #21, Decl. of Bovich, Ex. E, § 5.4). The license agreement also reveals that the Timeline employees will be represented by counsel at no additional charge, compensated for any substantial time spent on the case, and reimbursed for out-of-pocket travel expenses. (Dkt. #35, Supp. Decl. of Bovich, Ex. A, § 2.4). Consequently, the inventors will not be substantially inconvenienced in the event they have to travel to the Northern District of California to participate in this case.

***

The Court also finds no merit in DRT’s contention that previous cases filed in this district court involving the patents at-issue precludes transfer. These cases involved different parties, were assigned to different judges in this district court, and are all currently closed. See Timeline Inc. v. ProClarity Corp., C05-1013 JLR; Timeline Inc. v. Hyperion Solutions, C01-0977 MJP; Timeline Inc. v Oracle Corp., C00-1140 JCC; Timeline Inc. v. Broadbase Software, C99-1172 RSL; Timeline Inc. v. Sagent Tech. Inc., C99-414 JCC. Thus, efficiencywill not be served by retaining the case before the undersigned judge."

Another interesting aspect to this case is that it validates a strategy of filing a DJ counterclaim for invalidity in a "target venue" as opposed to filing them in the lead, "plaintiff's case."

From the order:

"Here, it is indisputable that there is a related action that is currently pending in the Northern District of California. Defendants have brought a declaratory action for nonenforceability against DRT in that district. And while DRT contends that this action was surreptitiously brought, DRT cannot deny it was a legitimate lawsuit based on the inconsistent record of assignment by Timeline. In addition, DRT’s contention that the declaratory action is irrelevant because it is identical to the counterclaims in this district is also unavailing. Counterclaims involving the same patents and products are compulsory rather than permissive. See FRCP 13(a)(1)(A); Akzona Inc. v. E.I. du Pont de Nemours & Co., 662 F.Supp. 603, 618 (D.Del. 1987) (citing 6 C. Wright & A Miller § 1410). Therefore Defendants were required to bring their counterclaims in this Court. Defendants’ strategy to bring a declaratory action in another district is a litigation tactic that the Court need not
question."

Potato Case Stays in Seattle

In the case Pace International LLC v. Industrial Ventilation, Inc., 08-1822-RSL, Judge Lasnik recently denied the Defendant's motion to transfer the case to the District of Idaho.

This case involves allegations of infringement of a patent owned by Xeda International, S.A., a French Corporation (also a plaintiff). Defendants in this case provide sprout-inhibiting products and services to potato growers and operators of potato storage facilities. Pace is based in Seattle and is the exclusive United States licensee of Xeda’s patent, U.S. 6,723,364. Defendants are all Idaho corporations. The allegedly infringing product is called Sprout Torch.

Neither party disputed jurisdiction or whether the action could properly be brought in either district (Washington or Idaho), so the Court's decision involved a classic application of the forum non conveniens doctrine.

In denying the motion, Judge Lasnik reasoned as follows:

1. Location of Relevant Events

The initial distribution of 1,4Group’s allegedly infringing product, Sprout Torch,
occurred in Idaho. IVI, a customer of 1,4Group, has offices in both Idaho and the Eastern District of Washington from which it has sold Sprout Torch. Defendants deny that they have ever sold products “that contain eugenol in Western Washington.” Motion at 2-3. Because the focus of this litigation is the allegedly infringing conduct of defendants, the “hub of activity” is where defendants performed the patented process. See Amazon.com v. Cendant Corp., 404 F. Supp.2d 1256, 1260 (W.D. Wash. 2005). In this case, both Idaho and the Eastern District of Washington saw accused activity, with a preponderance of the relevant events occurring in, or directed from, Idaho.

There are, however, other allegations and claims involved in this litigation which arose, at least in part, in the Western District of Washington. Plaintiffs allege that defendants’ conduct was willful because they gave notice of the alleged infringement more than three years before this suit was filed. Defendants, for their part, have asserted that one or more of the claims of Xeda’s patent are invalid under 35 U.S.C. §§ 102, 103, and/or 112. Although the exact nature of this challenge is unclear, some of the statutory counterclaims, such as the § 103(b) “on-sale” bar, would likely involve events that occurred in the Western District of Washington.
Overall, the Court finds that this factor weighs in favor of a transfer to Idaho, despite the fact that relevant events occurred in all three judicial districts under consideration.

2. Familiarity with Governing Law

Only federal claims are asserted in this litigation. This consideration is therefore
neutral.

3. Plaintiffs’ Choice of Forum

This factor is generally given great weight: there is a presumption that plaintiff’s
choice of forum will not be disturbed absent a strong showing that the convenience of the parties and/or the interests of justice warrant a transfer. Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1180 (9th Cir. 2006). Plaintiff Pace International has its principal place of business in this forum and a significant interest in having this dispute resolved here. Plaintiffs’ choice of forum is therefore entitled to significant weight and favors the Western District of Washington.

4. Parties’ Contacts with the Forum

Plaintiff Pace International, the exclusive licensee of Xeda’s patent in the United
States, is based in Seattle. Xeda is a French corporation and defendants are Idaho corporations. Although defendants have no offices in the Western District of Washington, their carefully crafted declarations imply that they sell goods and services to customers here. On the whole, the balance of contacts is fairly even: this consideration is neutral.

5. Contacts Relevant to this Dispute

For the reasons set forth in section 1, this factor weighs in favor of a transfer to
Idaho.

6. Cost of Litigation

The Court has no information regarding the comparative costs of litigation in
Idaho, the Eastern District of Washington, and the Western District of Washington. Defendants have failed to show that this consideration favors transfer.

7. Availability of Compulsory Process

Defendants have identified a number of witnesses in Idaho and the Eastern District
of Washington who would testify regarding the process used to inhibit sprout growth and possible damages. Motion at 6-7. Contrary to defendants’ unsupported assertion, some of these witnesses are subject to the subpoena power of this Court. Trial subpoenas may issue under Rule 45 to a party and a party’s officers, including Frank Bushman and Jerry Bartels. The Court also has discretion to compel the attendance of witnesses who reside, work, or regularly transact business in Washington, including IVI’s employees in Pasco, Washington. See Rule 45(c)(3)(A)(ii) and Rule 45(c)(3)(B)(iii). The Court is willing to assume that some of the Idaho witnesses do not regularly transact business in Washington and cannot, therefore, be compelled
to attend trial under Rule 45. Nevertheless, a transfer of venue to Idaho would simply change the group of witnesses over whom the court lacks subpoena power: witnesses in Seattle and Pasco fall outside the 100 mile reach of the federal courthouses in Boise, Couer d’Alene, Pocatello, and Moscow. This consideration is neutral.

8. Access to Sources of Proof

Convenience of witnesses is a key consideration in the § 1404(a) analysis. See,
e.g., 15 Charles Alan Wright, et al., Federal Practice and Procedure § 3851, at 415 (2d ed. 1986). Unfortunately, the witnesses in this case are spread across three judicial districts. The choice of one venue will necessarily inconvenience the witnesses in the other two. Because plaintiffs have not identified individuals who are likely to testify in this matter, the Court will assume that there are more witnesses in Idaho, the headquarters of both defendants, than there are in the Eastern District of Washington or the Western District of Washington. The documents that will be relevant to this litigation are concentrated in France, Seattle, Boise, and Pasco. Although the advent of electronic discovery has reduced the burdens associated with actually producing documents to an opposing party, the culling of the party’s files and, if warranted, the initial selection process are more easily accomplished where the documents are stored. Because two of the named parties are headquartered in Idaho and the focus of this litigation is defendants’ conduct, the Court assumes that more relevant documents will be found in the District of Idaho than in either of the Washington districts. This consideration weighs in favor of a transfer to Idaho.

9. Related Litigation

Neither party has identified pending litigation related to Xeda’s patent. This
consideration is neutral.

10. Relative Congestion

According to the most recent reports regarding the Judicial Business of the United
States Courts, during the twelve-month period ending September 30, 2008, the median time interval from filing a civil case to disposition was 7.1 months in the Western District of Washington, 8.1 months in the Eastern District of Washington, and 11.0 months in the District of Idaho. See http://www.uscourts.gov/judbus2008/contents.cfm, Table C-5. The Eastern District of Washington and the District of Idaho also have significantly higher percentages of cases pending for three years or more. See http://www.uscourts.gov/judbus2008/contents.cfm, Table C-6. To the extent that these statistics accurately measure congestion (which is debatable), this district has a clear advantage.

11. Public Interest in Local Adjudication

Both the District of Idaho and the Western District of Washington have an interest
in adjudicating the commercial rights and obligations of their corporate citizens. The Eastern District of Washington has very little interest in this dispute.

Thus, as is often the case, the convenience of defendants and their witnesses is illserved by plaintiffs’ choice of forum. Because defendants may not rely on their ties to both Idaho and the Eastern District of Washington as a counterweight to plaintiffs’ contacts with the Western District, the Court has not considered defendants’ presence in the Eastern District. (footnote omitted) Although the weight of relevant contacts favors a transfer to the District of Idaho, plaintiffs’
documents and witnesses are in this district and a transfer would simply shift, rather than eliminate, the inconvenience of litigation. Such a result would be inappropriate. See Decker Coal, 805 F.2d at 843. In addition, past performance suggests that this case will be resolved more quickly in this district. The motion to transfer is therefore DENIED.