Not a Lexis Advance subscriber? Try it out for free.

Cont'l Auto. Sys. v. Avanci, LLC

United States District Court for the Northern District of California, San Jose Division

December 11, 2019, Decided; December 11, 2019, Filed

Case No. 19-CV-02520-LHK

Opinion

ORDER GRANTING MOTION TO TRANSFER VENUE

Re: Dkt. No. 110

Continental Automotive Systems, Inc., the Plaintiff in this case, seeks licenses for various standard essential patents associated with the 2G, 3G, and 4G cellular standards. Plaintiff believes the twelve defendants in this case have unlawfully conspired to deny such licenses to Plaintiff on fair, reasonable, and non-discriminatory ("FRAND") terms, wherefore Plaintiff brings this multi-count suit. A subset of the defendants in this case have now moved to transfer the case to the Northern District of Texas pursuant to 28 U.S.C. § 1404(a). ECF No. 110. Having considered the parties' briefing, the relevant law, and the record in the case, the Court GRANTS [*4]  the Motion to Transfer Venue.

I. BACKGROUND

A. Factual Background

Because they are relevant to the Motion to Transfer Venue, the Court briefly summarizes the allegations in Plaintiff's First Amended Complaint ("FAC").

Plaintiff Continental Automotive Systems, Inc. is a Delaware corporation with its principal place of business in Auburn Hills, Michigan. FAC ¶ 16. Plaintiff is in the business of making automotive components, which it sells to car manufacturers. FAC ¶ 103. The car manufacturers, or "OEMs" as Plaintiff calls them, then assemble the components from Plaintiff and their other various suppliers into the finished car. FAC ¶ 103. As relevant here, Plaintiff produces telematics control units ("TCUs"), which offer various "telecommunications, infotainment, and safety features." Id. ¶ 18. These TCUs engage in and rely upon cellular communications in order to function, which means they implement cellular communications standards. Id. ¶¶ 18, 70. Cellular communications standards are technical standards that facilitate communication and compatibility across different devices, providers, and geographies. Id. ¶¶ 70, 71. They are commonly identified by their "generation"—i.e., 1G, 2G, 3G, [*5]  and 4G. Id. ¶¶ 70-76. Importantly, cellular communications standards are not mandated by law, but rather voluntarily adopted by members of the industry. Hence, industry groups called standard-setting organizations, or "SSOs" evolved to develop and manage these standards. Id. ¶ 71. Among the SSOs implicated in this case are the European Telecommunications Standards Institute ("ETSI"), the Alliance for Telecommunications Industry Solutions ("ATIS"), and the Telecommunications Industry Association ("TIA"). Id.

Although standardization has benefits, it also has the potential for anticompetitive consequences. Id. at 77. That is because standards will often incorporate patented technology, known as standard essential patents ("SEPs"). The holders of those SEPs—who are typically members of the SSOs—would then be able to charge exorbitant royalties from or refuse to license to certain users of the standards. Id. ¶ 123. In other words, each SEP holder acquires monopoly power when their patented technologies become a standard that others must use in order to participate in the cellular communications industry. Id. at 121. To prevent these eventualities, SSOs have intellectual property right ("IPR") policies to [*6]  which their members must adhere. Id. ¶ 79, 122. According to Plaintiff, the IPR policies of the SSOs involved in this case require SSO members "to commit to license their asserted SEPs to firms implementing the standard on [fair, reasonable, and non-discriminatory ("FRAND")] terms and conditions." Id. ¶ 79. Plaintiff believes these IPR policies also "require a SEP holder to license its alleged SEPs on FRAND terms and conditions to any implementer within a given supply chain that uses the standards." Id. ¶ 20.

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

2019 U.S. Dist. LEXIS 214608 *; 2019-2 Trade Cas. (CCH) P81,040; 2019 WL 6735604

CONTINENTAL AUTOMOTIVE SYSTEMS, INC., Plaintiff, v. AVANCI, LLC, et al., Defendants.

Prior History: Cont'l Auto. Sys. v. Avanci, 2019 U.S. Dist. LEXIS 212794 (N.D. Cal., Dec. 5, 2019)

CORE TERMS

license, convenient, witnesses, personal jurisdiction, venue, Defendants', employees, cellular, alleges, patent, entities, Licensors, district court, Technologies, royalties, local interest, non-party, state law claim, anticompetitive, headquartered, factors, injunction, antitrust, deference, suppliers, parties, initial disclosure, instant case, communications, negotiations