Judge Boyle Transfers Trademark Infringement Case Where Personal Jurisdiction Found Lacking And Denies Jurisdictional Discovery

On July 14, 2017, Judge Boyle issued an Order (available here) in Springboards to Education v. Hamilton County transferring the case out of the Northern District of Texas due to lack of personal jurisdiction. The case involved allegations of trademark infringement. Plaintiff argued that defendant (a county in Tennessee) was subject to specific personal jurisdiction in the Northern District on account of its website—i.e., that defendant “transacts a sufficient amount of business in Texas through[] the use of its interactive website and promotional materials.” Judge Boyle rejected this argument: “That argument fails because Plaintiff has not alleged that a single disinterested Texas resident used Defendant’s website at all, let alone purchased an infringing product through it.”

In rejecting the argument, Judge Boyle set forth the test applied by the Fifth Circuit for personal jurisdiction vis-à-vis websites (based on the famed Zippo case), as follows:

The Fifth Circuit has adopted what is known as the Zippo sliding scale test for determining whether internet-based contacts establish personal jurisdiction over a nonresident defendant. The aim of the Zippo test is to measure an internet site’s connection to a forum state, using a three-point spectrum of connectivity: low, medium, or high. On the low end where a website is nothing more than a passive advertisement, the court must decline to exercise personal jurisdiction. Conversely, on the high end where a website facilitates contractual relationship and the knowing and repeated transmission of computer files on the Internet, personal jurisdiction is proper. And in the middle where a website falls somewhere in between, the exercise of jurisdiction is determined by the level of interactivity and commercial nature of the exchange of information that occurs on the website.

(citations and quotations omitted).

Judge Boyle determined that defendant’s website fell in the middle of the Zippo spectrum, as the website states that any individual, no matter his or her place of residence, may register for the relevant event, donate books and to make monetary donations. The website also had a link to download the relevant app from the Apple App Store or the Android App on Google Play. But the website mainly provides contact information and volunteer resources; it does not allow the ordering of goods or services, one to enroll in memberships, or otherwise interact with defendant’s staff members. As such, the Court found that, while the website is more than a passive advertisement, it is not a “virtual store” facilitating contractual relationships.

Ultimately, the Court found that, “[t]ogether, Plaintiff’s allegations—that Defendant has national partnerships, allows people to register for a reading pledge, takes donations, and offers apps for download—fail to meet the minimum threshold for specific jurisdiction. Under Zippo, personal jurisdiction is based on actual internet sales to forum residents, not the mere possibility of sales. Plaintiff fails to allege, let alone offer prima facie proof, that a single disinterested Texas resident purchased an infringing product on Defendant’s website or, for that matter, accessed the website at all.” (quotations omitted; emphasis in original).

Judge Boyle also denied the plaintiff jurisdictional discovery. “When seeking jurisdictional discovery, a plaintiff must make a preliminary showing of jurisdiction.” (quotations omitted). Because “Plaintiff has not pled, let alone with particularity, any sales to, donations by, downloads by, or website access by Texas residents” but only “described a largely, if not entirely, non-commercial website with no tie to Texas residents other than being accessible on the web—in short, a site of the variety insufficient to confer personal jurisdiction under Zippo”, the plaintiff had not made a preliminary showing of jurisdiction and jurisdictional discovery was unwarranted.

Because the Court, when it finds lack of personal jurisdiction, may either dismiss the lawsuit or transfer it to a district in which it could have been brought, and courts generally prefer transfer to dismissal, the Court decided to transfer the case to Tennessee, where defendant is based.

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Karen Gren Scholer and Matthew Kacsmaryk Nominated To Serve On N.D. Tex. Bench

Three days ago, the White House announced that Karen Gren Scholer and Matthew Kacsmaryk have been nominated to serve as Northern District of Texas judges. Ms. Scholer had previously been nominated by President Obama to a judgeship in the Eastern District of Texas. As I understand it, Mr. Kacsmaryk would fill the Amarillo judgeship vacancy.

According to the White House:

  • “If confirmed, Karen Gren Scholer of Texas will serve as a District Judge on the U.S. District Court for the Northern District of Texas. Karen Scholer is a principal and serves as the co-managing partner in the Dallas law firm of Carter Scholer PLLC, where her practice focuses on complex business, tort, and other civil litigation in State and Federal courts. Before joining the firm, she was a partner at the law firm of Jones Day. In 2000, she was elected, and in 2004 reelected, by the people of Texas to serve for eight years as a State District Judge in Dallas County, where she presided over thousands of cases, including more than 100 cases tried to jury verdict. In 2007, she also served as the Presiding Judge for the Dallas County Civil District Judges. Ms. Scholer has been identified as one of the Top 50 Women Lawyers in Texas by Thomson Reuters’ Super Lawyers, and she has received awards for professional excellence from a number of Asian-American community and service organizations. Ms. Scholer earned her B.A. from Rice University and her J.D. from Cornell University Law School.”
  • “If confirmed, Matthew J. Kacsmaryk of Texas will serve as a District Judge on the U.S. District Court for the Northern District of Texas. Matthew Kacsmaryk is Deputy General Counsel to First Liberty Institute, where his practice focuses on religious liberty litigation in federal courts and amicus briefs in the U.S. Supreme Court. From 2008 through 2013, he served as an Assistant United States Attorney in the Northern District of Texas, where he was lead counsel in over 75 criminal appeals and co-counsel in high-profile criminal and terrorism trials. In 2013, Mr. Kacsmaryk received the Attorney General’s Award for Excellence in Furthering the Interests of U.S. National Security for his work in United States v. Aldawsari. From 2003 to 2008, he was an associate in the Dallas office of Baker Botts LLP, where he focused on commercial, constitutional, and intellectual property litigation. In 2005, he received the firm’s Opus Justitiae Award for Outstanding Commitment to Pro Bono Work. He earned his J.D. with honors from the University of Texas School of Law in 2003 and his B.A., summa cum laude, from Abilene Christian University in 1999.”

Congratulations to Ms. Scholer and Mr. Kacsmaryk on their respective nominations!

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Judge Fitzwater Dissolves TRO, Clearing Way for City of Dallas to Remove Robert E. Lee Statue In Dallas’ Lee Park

On September 7, 2017, Judge Fitzwater dissolved the TRO he had previously entered restraining the City of Dallas from removing a statue of Robert E. Lee in Dallas’ Lee Park. This new ruling (available here) clears the way for Dallas to continue the process it had begun to remove the Lee statute from the park.

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Judge Kinkeade Orders Parties To Meet And Confer To Narrow Disputed Patent Claim Terms Down From 19, Suggests 8 Or Fewer Is Appropriate Amount

On July 20, 2017, Judge Kinkeade entered an Order (available here) in Berman v. DirectTV. In the case, the parties had submitted 19 disputed claim terms/phrases to the Court for construction. Upon review of the parties’ briefing, Judge Kinkeade determined that this number could be reduced. Accordingly, the Court required the parties to meet and confer to narrow the number of disputed claim terms or phrases. The Court further suggested that 8 or fewer terms/phrases would be a more reasonable number for a jury to comprehend and resolve. Judge Kinkeade ordered the parties to, within 14 days, file a revised joint claim construction chart.

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N.D. Tex. Judge Fitzwater Grants Temporary Restraining Order Prohibiting The City of Dallas From Removing Statue of Robert E. Lee in Dallas’ Lee Park

This afternoon, the Northern District of Texas’ Judge Fitzwater issued a Temporary Restraining Order (available here) prohibiting the City of Dallas from removing its statue of Robert E. Lee that sits in the City of Dallas’ Lee Park. The City’s work crew had straps around the statue and had been chiseling away at its base at the time the TRO issued. Various news outlets were live streaming the process, and a relatively large crowd had gathered to watch it.

The TRO came about as a result of a lawsuit (available here) brought by Hiram Patterson and the Sons of the Confederate Veterans, Inc. Plaintiffs allege that, this morning, the Dallas City Council voted to remove the statute, but the Council’s actions violate the First Amendment. According to the lawsuit:

The Confederate Monument was erected to express a controversial political opinion. The City’s plan to remove the Monument in a matter of hours is an imminent and unconstitutional attempt to curtail free speech by ordaining what mute political symbols must mean. The City’s planned suppression of the Monuments’ political speech is a first step in a totalitarian move to determine authorized forms of political communication and to punish unauthorized political speech. The City has expressed no compelling interest in the abridgment of this core political speech.

The lawsuit also alleges that the Council’s actions violated the Constitution’s Due Process clause because, per Plaintiffs,

The Dallas City Council is preventing meaningful hearing of public opinion on the removal of Confederate Monuments by voting on the Monuments’ removal in a manner not permitted under City Council Rules. These Rules were promulgated in order to provide fair notice and opportunity to appear before the Council. However, when the City Council votes in a briefing session and not during an agenda session, the City Council is purposefully avoiding public participation of a highly controversial issue that public polling shows favors the retention of these Confederate Monuments. The Council’s removal votes in a procedurally improper hearing creates unfairness to the public that the Council represents.

Judge Fitzwater has set a hearing on Plaintiffs’ TRO request for tomorrow (September 7, 2017) at 1:30 p.m. While I generally avoid commenting on the merits of lawsuits, I give this one no chance of success. The Plaintiffs may lack standing to bring the lawsuit, and, of course, a city can generally determine what monuments its wishes to erect—or keep—on its own property.

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Former Dallas Cowboy Deion Sanders Sanctioned, Ordered To Show Cause in N.D. Tex. Qui Tam Case

On August 11, 2017, Magistrate Judge Ramirez sanctioned former Dallas Cowboys player Deion Sanders and ordered him to show cause in a qui tam case brought against Sanders. In the sanctions Order (available here), Judge Ramirez noted that Sanders failed to attend a court hearing after being ordered to personally attend. (Note to self: If I’m ever ordered to personally attend a hearing by a court and miss it, I’d better be dead or in the hospital.) Sanders further failed to comply with an earlier order that ordered him to provide certain discovery. Judge Ramirez assessed costs and fees against Sanders in the amount of $2,200, and ordered him to provide his discovery responses and documents by August 25, 2017.

In the Order to Show Cause (available here), Judge Ramirez ordered Sanders to show cause at an evidentiary hearing why his pleadings should not be stricken and default entered as a discovery sanction for failure to comply with past discovery orders and his failure to comply with the Court’s Order requiring him to appear at the discovery hearing.

The evidentiary hearing was set for Friday, September 1, 2017. On September 1, the Court entered the following minute entry: “ELECTRONIC Minute Entry for proceedings held before Magistrate Judge Irma Carrillo Ramirez: Evidentiary Hearing NOT HELD on 9/1/2017. Deion L Sanders did no[t] appear or otherwise notify the court.” If I were a betting man, I’d say that things are not going to end well for Sanders.

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Judge Godbey Grants Summary Judgment In AT&T’s Favor In Suit Brought By Advanced Media Networks

On August 25, 2017, Judge Godbey issued an Order (available here) granting AT&T summary judgment in Advanced Media Networks v. AT&T Mobility. Judge Godbey began by noting that his Markman opinion had found that the claim phrase “ethernet packet switching protocol” did not encompass “internet protocol.” Accordingly, because AT&T’s accused devices do not use an ethernet packet switching protocol, summary judgment was appropriate in AT&T’s favor.

Additionally, the plaintiff had conceded that a construction of “ethernet packet switching protocol” that did not include internet protocol would render new claims that the plaintiff had added during reexamination invalid. As such, the Court found that those claims were invalid.

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N.D. Tex. Jury: Nintendo Must Pay $10.1 Million For Infringing ILife’s Patent

On August 31, 2017, a jury in Chief Judge Lynn’s court found that Nintendo infringed a patent held by iLife Technologies through the sale of Nintendo’s Wii and Wii U video game systems and software, and that Nintendo failed to prove that the patent is invalid. (Verdict form available here.) For damages, the jury awarded $10,100,000 in a lump sum reasonable royalty. Rolling Stone wrote an article about the case (available here). The article indicates that Nintendo plans to raise infringement and invalidity with post-trial motions and, if unsuccessful before the district court, on appeal.

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Differences Between the Northern District of Texas’ and the Eastern District of Texas’ Patent Rules

With more patent cases being filed in the Northern District of Texas (given the Supreme Court’s recent TC Heartland venue ruling), it’s probably a good time to refresh practitioners’ recollections as to the differences between the Northern District of Texas’ and the Eastern District of Texas’ patent rules. Luckily, my friends over at Klemchuk LLP have done the heavy lifting of comparing the deadlines contained in the two sets of rules (N.D. Tex. rule summary; E.D. Tex. rule summary), and summarized them in easy-to-follow charts (N.D. Tex. chart; E.D. Tex. chart) and checklists (N.D. Tex. checklist; E.D. Tex. checklist).

As one can see, the two venues’ rules are very close to one another’s, with certain deadlines tweaked a bit. Two of the bigger differences between the two sets of rules are as follows:

  • Infringement contentions are served 10 days before the Initial Case Management Conference in the E.D. Tex., and within 14 days after the Initial Case Management Conference in the N.D. Tex. (In my opinion, the E.D. Tex. rule here makes more sense. It’s better to have the plaintiff’s infringement contentions out there prior to the Initial Case Management Conference, so that everyone will know the general scope of the case at the Initial Case Management Conference and to allow any issues with infringement contentions to be discussed then as well. That said, given the E.D. Tex. “cattle calls,” where the parties simply show up to the conference and receive a trial date, I’m not sure it makes much of a difference.)
  • Opening and responsive claim-construction briefs are served simultaneously in the N.D. Tex. (i.e., both the plaintiff and the defendant serve their opening briefs on the same day, and serve their responsive briefs two weeks later on the same day), while the plaintiff serves its opening claim-construction brief in the E.D. Tex. first, followed by the defendant’s responsive brief, followed by the plaintiff’s reply brief. (I’ve never been a fan of simultaneous briefing, as it inevitably ends up like two ships crossing in the night—i.e., the parties talk past each other because they don’t know what arguments the other side will be making. And everyone saves their best arguments for their responsive briefs and then, because there are no replies, neither party ends up responding to the other’s best arguments.)

Finally, and as a practical matter, I’ve never seen a case that strictly adheres to the rules’ deadlines. The patent rules are designed to move cases very quickly along towards trial. If a case followed the default deadlines set by the rules, the court could theoretically set a trial for approximately one year after the filing of the complaint. But courts in both the N.D. Tex. and the E.D. Tex. have been setting cases for trial well over a year after their filings, and parties in district-court litigation rarely want a trial date within 1 year of the case’s filing. Once the court sets a trial date (or the parties agree on a trial date), the parties generally can agree on all pre-trial deadlines. And, when they do, they typically provide longer periods of time for compliance with the events listed in the patent rules than the default deadlines set by the rules.

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New Patent Cases

In the last several weeks, there have been several new patent-infringement lawsuits filed in the Northern District of Texas, including:

  • Uniloc v. Akamai (two cases, complaints available here and here);
  • Uniloc v. Infor (two cases, complaints available here and here);
  • Crane Merchandising Systems v. Best Buy (complaint available here);
  • Cheetah v. AT&T (complaint available here);
  • Millenium Commerce v. Tabletop Media (complaint available here);
  • Noble Systems v. Acqueon Technologies (complaint available here); and
  • Somaltus v. Universal Power Group (complaint available here).
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