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Avanci, Nokia trying to escape Judge Koh’s jurisdiction over Continental case: motion to transfer venue from San Jose to Dallas

In soccer terminlogy, Nokia’s “Munich Maneuver” may be the Goal of the Century, subject to whether or not the anti-antisuit-injunction injunction (“AAII”) is lifted. As of now, it appears Daimler supplier Continental, which argues that is hasn’t been properly served yet, still hasn’t filed an objection to the preliminary injunction. An objection would lead to a hearing. But presumably Continental wants to stay consistent with its views on service (I can’t offer any opinion on that procedural part).

Service (of process) is also an issue affecting Continental’s U.S. FRAND/antitrust case against Avanci, Nokia, and others. The defendants (mostly, but not exclusively, the Avanci licensing firm, Nokia, and some privateers holding former Nokia patents) have asked Judge Koh to postpone the upcoming case management conference because “[d]efendant Sharp Corporation has not yet appeared in this case.”

At the same time, Avanci-Nokia are trying to get the entire case transferred out of Judge Lucy H. Koh’s court in the Northern District of California by way of a motion filed on Wednesday Pacific Time (this post continues below the document):

19-07-31 Avanci Et Al. Moti… by Florian Mueller on Scribd

The motivation for this is not in the above motion, which instead states all sorts of largely or entirely pretextual reasons for the desired transfer from the Northern District of California (in this case, San Jose) to the Northern District of Texas (which practically means Dallas). The real reasons for this are Judge Koh and her case law. Forget about the rest, which is irrelevant for such a high-stakes dispute involving in no small part organizations from overseas.

Qualcomm, which just missed estimates and is anxiously awaiting the Ninth Circuit’s decision on its motion to stay the enforcement of the FTC’s antitrust remedies, is an Avanci member. But even if it weren’t, the key findings in the Qualcomm case regarding component-level licensing and the smallest salable patent-practicing unit (SSPPU), and the conclusions Judge Koh had previously reached in GPNE Corp. v. Apple with respect to the SSPPU, would have Avanci, Nokia and the rest of the group concerned to an undiminished degree.

In the Northern District of Texas, those questions haven’t been resolved. But it’s a different circuit, and that’s why I’m sure Avanci and Nokia wouldn’t even want to go to another West Coast district because once the Ninth Circuit affirms any parts of Judge Koh’s ruling, the other districts in the circuit would follow suit. If Avanci and Nokia got their way, they’d be in the Fifth Circuit, and they could at least make an argument based on Judge Rodney Gilstrap’s HTC v. Ericsson decision in a neighbor district within the same circuit, the notoriously patentee-friendly Eastern District of Texas. While a decision by another district in the same circuit isn’t binding, proximity may yet give this one slightly more weight than Judge Koh’s very well-reasoned holdings in FTC v. Qualcomm. By contrast, Judge Gilstrap has often made extremely patentee-friendly decisions, as have other judges in his district, and the related reputation of the Eastern District of Texas limits the persuasive impact of any of its case laws in other circuits. Also, Judge Koh is a rockstar judge who was in the process of being appointed to the Ninth Circuit and on Hillary Clinton’s list for the Supreme Court. But… she’s in the Ninth Circuit, and all Texas districts (and some others) are in the Fifth.

The Avanci-Nokia motion to transfer venue doesn’t make extremely strong arguments for Texas. Where they are certainly right is that there was no particular reason for NorCal (other than case law, which obviously doesn’t count, and probably that Continental’s lawyers hoped the case would be assigned to Judge Koh, for which there was no guarantee but which fortunately happened). A former Apple licensing executive, Boris Teksler, is still based in Silicon Valley, and he manages Conversant, one of the patent assertion entities in the case that hold former Nokia patents. Then there are some offices of various defendants in the Northern District of California, but Avanci and its co-defendants deny that those offices really are relevant to the issues in the case.

The convenience argument for the Northern District of Texas is relatively weak. To give you an example, they argue that Europe-based witnesses and experts (Nokia, Continental etc.) have a slightly shorter flight time to Dallas than to San Francisco. It’s like a little less than 10 hours in one case and slightly over 10 hours in the other–something no traveler (and I’ve gone back and forth dozens of times) would care about. In that context, they didn’t even do their research homework properly: they base their estimates on the distance from Munich to the two alternative venues, but Continental is headquartered in Hanover (far up north from Munich), where the nearest airport serving direct flights to many U.S. cities is Frankfurt (which is also the #1 airport in Germany, though Munich has become more important over time).

That reminds me of a non-fatal but stupid mistake they had in their otherwise very well-crafted opposition to Continental’s U.S. motion for an antisuit injunction: they described a consumer class action against Qualcomm as an Apple case. Since the consumer case was consolidated with FTC v. Qualcomm, it was Judge Koh who made the decision (not to grant an antisuit injunction at the given time) that they cited. It doesn’t make the motion weaker, but since I criticized the Continental side, and in the context of the use of Munich instead of Frankfurt in the latest motion, I wanted to mention this anyway.

What weighs in favor of the Avanci-Nokia venue transfer motion is that there was no absolutely pressing reason for bringing the case in San Jose, other than case law. But case law doesn’t count, though it is relevant to the efficiency argument: the Northern District of Texas is less busy, and slightly faster to adjudicate cases, as the Avanci-Nokia motion argues. Obviously, if they really wanted rapid adjudication, they wouldn’t slow things down with a transfer motion. And the fact that Judge Koh knows the issues at the heart of the case so well, and can cite to some of her own holdings, really does make NorCal the ideal place even from a pure efficiency point of view–just that the outcome will likely not be the one that Avanci and Nokia like.

Continental’s lawyers now have some homework to do. They have to identify and explain some weaknesses in Avanci-Nokia’s arguments for Dallas, and they have to explain why the Northern District of California is just as good a venue for this as North Texas–or that even if Dallas seemed preferable, it wouldn’t be the better choice by a wide margin, and given what’s at stake and how deep-pocketed all parties to this dispute are, some convenience factors that may be more relevant to lower-profile cases shouldn’t be given too much weight.

What Nokia’s flash-of-genius Munich Maneuver and Avanci-Nokia’s motion to transfer venue have in common is that they are on the run from the one and only Judge Koh.

Now I just hope that Continental will do a better job on its opposition to the motion to transfer venue than in the antisuit injunction context.

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