Fed Circuit transfers NPE’s Samsung, LG suit out of Western Texas
The US Court of Appeals for the Federal Circuit has transferred a patent lawsuit against Samsung and LG to a California court, citing the plaintiff’s “manipulation” of venue.
Non-practising entity (NPE) Ikorongo sued the South Korean tech companies for patent infringement at the US District Court for the Western District of Texas in March 2020. The complaint relates to the automatic recording and sharing of data, including visited websites and location data. Samsung and LG argue that these functionalities are practiced by third-party apps such as Google Maps and YouTube Music, rather than their own devices.
The lawsuits were filed by Ikorongo Texas, established a month previously. The asserted patents are owned by Ikorongo Technology, a California-based company which is run from the same office as the Texas firm, although Ikorongo contended that the companies were unrelated.
Ten days prior to the lawsuit being filed, Ikorongo assigned rights to sue for infringement of the patents to Ikorongo Texas. Those rights applied only in the Western Texas district where the complaints against Samsung and LG were filed, with Ikorongo Tech retaining control over the patents in the rest of the country.
The Western Texas district is known as a hotspot of NPE litigation, with patent filings soaring in the district over the past two years since the appointment of District Judge Alan Albright. After taking the bench in 2018, Albright instituted new rules which have been seen as favourable to IP litigants, including a reluctance to stay cases pending a parallel inter partes review.
Samsung and LG wanted the lawsuit transferred to the US District Court for the Northern District of California, where Ikorongo is based, but the Texas court refused. That decision has now been overruled by the Federal Circuit, which has reiterated case law prohibiting plaintiffs from trying to “manipulate venue” in patent litigation.
In a precedential opinion, the Federal Circuit found that Ikorongo Texas “seems to exist for the sole purpose of limiting venue to the Western District of Texas,” adding: “The presence of Ikorongo Texas is plainly recent, ephemeral, and artificial—just the sort of manoeuver in anticipation of litigation that has been routinely rejected.”
The court found that Northern California was a much more suitable venue for resolving the dispute, given that it concerns tech applications developed there: “The relevant events leading to the infringement claims here took place largely in Northern California, and not at all in the Western District of Texas. Both petitioners are accused of infringing the asserted patents based on third party applications running on LG’s and Samsung’s accused products.”
“It is undisputed that those third parties researched, designed, and developed most of those applications in Northern California. These are significant factors that give the Northern District of California a legitimate interest in adjudicating the cases,” the Federal Circuit opinion said.
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