Va. Innovation Scis., Inc. v. Amazon.com, Inc.
| Decision Date | 15 July 2019 |
| Docket Number | Civil Action No. 4:18-cv-475,Civil Action No. 4:18-cv-474,Civil Action No. 4:18-cv-476,Civil Action No. 4:18-cv-477 |
| Parties | VIRGINIA INNOVATION SCIENCES, INC. v. AMAZON.COM, INC., et al INNOVATION SCIENCES, LLC v. RESIDEO TECHNOLOGIES, INC. INNOVATION SCIENCES, INC. v. HTC CORPORATION INNOVATION SCIENCES, INC. v. VECTOR SECURITY, INC. |
| Court | U.S. District Court — Eastern District of Texas |
MEMORANDUM OPINION AND ORDER
Pending before the Court are Motion of Defendant Amazon.com, Inc. to Transfer Venue to the Eastern District of Virginia ("Amazon's Motion to Transfer"), Virginia Innovation Sciences, Inc. v. Amazon.com, Inc. ("Amazon III"), 4:18-cv-474, (Dkt. #9); Plaintiff's Contested Motion to Substitute Party ("Motion to Substitute"), Amazon III, 4:18-cv-474, (Dkt. #22); Motion to Stay of Amazon.com, Inc., Amazon Digital Services, LLC, and Amazon Web Services, Inc.1 Pending Decision on Their Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) ("Motion to Stay"), Amazon III, 4:18-cv-474, (Dkt. #105); Honeywell International Inc.'s Motion to Dismiss for Improper Venue Under 28 U.S.C. § 1406, or, in the Alternative, to Transfer to a More Convenient Forum Under 28 U.S.C. § 1404 ("Honeywell's Motion to Dismiss or Transfer"), Innovation Sciences, LLC v. Resideo Technologies, Inc. ("Resideo"), 4:18-cv-475, (Dkt. #15); Motion of Defendant HTC Corporation to Transfer Venue to the Eastern District of Virginia ("HTC's Motion to Transfer"), Innovation Sciences, LLC v. HTC Corporation ("HTC III"), 4:18-cv-476, (Dkt. #22); and Motion of Defendant Vector Security, Inc. to Transfer Venue to the Eastern District of Virginia Pursuant to 28 U.S.C. § 1404(a) ("Vector's Motion to Transfer"), Innovation Sciences, LLC v. Vector Security, Inc. ("Vector"), 4:18-cv-477, (Dkt. #16). Having considered the motions and the relevant pleadings, the Court finds that Amazon's Motion to Transfer, Honeywell's Motion to Dismiss or Transfer, HTC's Motion to Transfer, and Vector's Motion to transfer should be denied, that the Motion to Stay should be denied as moot, and the Motion to Substitute should be granted.
The four above-mentioned patent lawsuits presently before the Court have been consolidated for pretrial purposes. The patent infringement allegations include U.S. Patent No. 9,723,443 ("the '443 Patent") and the '798 Patent Family, including U.S. Patent Nos. 9,942,798 ("the '798 Patent"), 9,912,983 ("the '983 Patent"), and U.S. Patent No. 9,729,918 ("the '918 Patent") (collectively "the patents-in-suit"). Plaintiff asserts the '443 Patent and the '798 Patent Family against Defendant Amazon.com, Inc. ("Amazon"), the '983 Patent against HoneywellInternational, Inc. ("Honeywell"), the '798 Patent Family against HTC Corporation ("HTC"), and the '983 Patent against Vector Security, Inc. ("Vector").2
Plaintiff alleges that Amazon infringes the '798 Patent Family with the Amazon Echo, Echo Plus, Echo Show along with Amazon's Alexa Voice Service and associated back-end servers (the "Accused Echo Instrumentalities"), the Amazon Dash Button, Dash Replenishment Service (the "Accused Dash Instrumentalities"), and the Amazon Fire TV and family of devices associated and back-end servers (the "Accused Fire TV Instrumentalities"). Amazon III, 4:18-cv-474, (Dkt. #1). Plaintiff alleges Amazon infringes the '443 Patent with Accused Dash Instrumentalities. Amazon III, 4:18-cv-474, (Dkt. #1). Plaintiff alleges that Honeywell infringes the '983 Patent with its wireless hub system, which includes the L5200 and L7000 series security systems, the C2 Wi-Fi Security Camera, Honeywell Smart Home Security System, and associated mobile apps (the "Accused Honeywell Instrumentalities"). Resideo, 4:18-cv-475, (Dkt. #1). Plaintiff alleges that HTC infringes the '798 Patent Family with a wireless hub system and wireless apparatus, including the HTC U 11 and U 12 smartphones (the "Accused HTC Instrumentalities"). HTC III, 4:18-cv-476, (Dkt. #1). Plaintiff alleges Vector infringes the '983 Patent with its wireless hub system, which includes the Vector Security Home Security System, the Vector Security Home Security Video System, the Vector Security Voice Control with Amazon's Echo Dot, and the Vector Security Mobile App (the "Accused Vector Instrumentalities"). Vector, 4:18-cv-477, (Dkt. #1).
On October 1, 2018, Amazon filed Amazon's Motion to Transfer Venue. Amazon III, 4:18-cv-474, (Dkt. #9). Plaintiff sought five extensions of time to file a response to the motion. Amazon III, 4:18-cv-474, (Dkt. #11; Dkt. #13; Dkt. #15; Dkt. #17; Dkt. #20). As they were filed unopposed, the Court granted the motions. Amazon III, 4:18-cv-474, (Dkt. #12; Dkt. #14;Dkt. #16; Dkt. #18; Dkt. #21). On December 4, 2018, Plaintiff filed its response to Amazon's motion to transfer. Amazon III, 4:18-cv-474, (Dkt. #24). Amazon filed a reply on December 18, 2018 (Dkt. #28) and Plaintiff filed a sur-reply on December 26, 2018. Amazon III, 4:18-cv-474, (Dkt. #30). Further, on May, 10, 2019, Amazon filed its Notice of Supplemental Evidence in Support of Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a). Amazon III, 4:18-cv-474, (Dkt. #113). Plaintiff filed a response to the supplemental evidence on May 15, 2019. Amazon III, 4:18-cv-474, (Dkt. #117).
Also, during this time, on November 29, 2018, prior to filing its response to Amazon's Motion to Transfer, Plaintiff filed its Motion to Substitute. Amazon III, 4:18-cv-474, (Dkt. #22). Amazon filed a response on December 13, 2018. Amazon III, 4:18-cv-474, (Dkt. #25). On December 20, 2018, Plaintiff filed a reply to the motion. Amazon III, 4:18-cv-474, (Dkt. #29). No sur-reply was filed.
On October 2, 2018, Honeywell filed Honeywell's Motion to Dismiss or Transfer. Resideo, 4:18-cv-475, (Dkt. #15). Plaintiff sought four extensions of time to file a response. Resideo, 4:18-cv-475, (Dkt. #20; Dkt. #22; Dkt. #24; Dkt. #27). As they were filed unopposed, the Court granted the motions. Resideo, 4:18-cv-475, (Dkt. #21; Dkt. #23; Dkt. #25; Dkt. #28). Plaintiff filed its response on December 4, 2018. Resideo, 4:18-cv-475, (Dkt. #31). On December 7, 2018, Honeywell field a supplemental brief in support of the motion. Resideo, 4:18-cv-475, (Dkt. #35). Plaintiff filed a response to the supplemental brief on December 14, 2018. Resideo, 4:18-cv-475, (Dkt. #38). Additionally, on December 18, 2018, Honeywell filed its reply to the motion. Resideo, 4:18-cv-475, (Dkt. #43). Finally, Plaintiff filed its sur-reply on December 26, 2018. Resideo, 4:18-cv-475, (Dkt. #46).3
On December 27, 2018, HTC filed HTC's Motion to Transfer. HTC III, 4:18-cv-476, (Dkt. #22). On January 11, 2019, Plaintiff filed its response. HTC III, 4:18-cv-476, (Dkt. #30). Then, HTC filed its reply on January 18, 2019. HTC III, 4:18-cv-476, (Dkt. #32). Finally, on January 28, 2019, Plaintiff filed a sur-reply. HTC III, 4:18-cv-476, (Dkt. #34).
On November 15, 2018, Vector filed Vector's Motion to Transfer. Vector, 4:18-cv-477, (Dkt. #16). Plaintiff filed its response on November 29, 2018. Vector, 4:18-cv-477, (Dkt. #21). Vector filed its reply on December 7, 2018, and Plaintiff filed its sur-reply on December 17, 2018. Vector, 4:18-cv-477, (Dkt. #27; Dkt. #30).
On April 29, 2019, Amazon filed its Motion to Stay pending the resolution of the motion to transfer venue. Amazon III, 4:18-cv-474, (Dkt. #105). Vector, HTC, and Honeywell joined in the motion. Amazon III, 4:18-cv-474, (Dkt. #106; Dkt. #107; Dkt. #110). On May 13, 2019, Plaintiff filed a response to the motion. Amazon III, 4:18-cv-474, (Dkt. #115). On May 14, 2019, Defendants filed their Joint Notice of Ripeness Regarding Motion to Stay Pending Decision on Motions to Transfer Venue Pursuant to 28 U.S.C. § 1404(a). Amazon III, 4:18-cv-474, (Dkt. #116).
On July 2, 2019, Defendants filed their Joint Notice of Ripeness Regarding Pending Motions. Amazon III, 4:18-cv-474, (Dkt. #149). Further, on July 3, 2019, Amazon filed its Notice of Relevant Federal Circuit Determination in Support of Motions to Transfer Venue Pursuant to 28 U.S.C. § 1404(a). Amazon III, 4:18-cv-474, (Dkt. #156). On July 8, 2019, Plaintiff filed a response to the notice. Amazon III, 4:18-cv-474, (Dkt. #159). On July 12, 2019, Plaintiff filed a supplemental response to the notice. Amazon III, 4:18-cv-474, (Dkt. #160).
Plaintiff seeks to substitute Innovation Sciences, LLC ("Innovation") for Virginia Innovation Sciences, Inc. ("VIS") as plaintiff in this case because VIS merged into Innovation. VIS was terminated and all issued and outstanding stock of VIS was converted into limited liability company membership interests in Innovation. Plaintiff maintains that VIS no longer exists, and holds no right, title, or interest in the patents-in-suit. Innovation now holds all rights, title, and interest in the patents-in-suit. Therefore, according to Plaintiff, Innovation is the proper plaintiff in this case. Amazon4 contests the Motion to Substitute, arguing that the merger is a sham to manipulate venue. However, the Court finds these arguments more appropriate for a discussion on the motions to transfer venue, as opposed to the Motion to Substitute.5 Instead, the Court focuses on the law surrounding party substitution.
Federal Rule of Civil Procedure 25(c) dictates that "[i]f an interest is transferred, the action may be continued by or against the original party unless the court, on motion, orders the transfereeto be substituted in the action or joined with the original party." As has previously been identified in the Eastern District of Texas, "[a] 'transfer of interest,' as described in Rule 25(c), includes circumstances where a corporation is the successor to the original corporate party by merger." IDQ Operating, Inc. v. Aerospace Commc'ns Holding, 6:15-cv-781, 2016 WL 6877772, at *1 (E.D. Tex. July 5, 2016). This is a permissive rule that is generally left to the Court's discretion. See id.
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