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IBM v. Expedia, Inc.

United States District Court for the District of Delaware

July 24, 2019, Decided; July 24, 2019, Filed

Civil Action No. 17-1875-LPS-CJB

Opinion

REPORT AND RECOMMENDATION

In this patent infringement action filed by Plaintiff International Business Machines Corporation ("IBM" or "Plaintiff) against Expedia, Inc. ("Expedia Group"), Expedia, Inc. ("Expedia-WA"), Homeaway.com, Inc., Hotels.com L.P. ("Hotels.com"), Hotwire, Inc., Orbitz Worldwide, Inc., Orbitz, LLC, and Travelscape LLC ("Travelscape") (collectively, "Defendants"), presently [*2]  before the Court is Defendants' motion to dismiss, filed pursuant to Federal Rules of Civil Procedure 12(b)(3) and 12(b)(6) ("Motion"). (D.I. 31) In a previously-issued April 11, 2019 Report and Recommendation ("April 11, 2019 R&R"), the Court addressed the portion of that Motion relating to whether, pursuant to Rule 12(b)(6), Plaintiff had sufficiently pleaded facts alleging that Expedia Group infringes the patents-in-suit. (D.I. 104) Now, in this Report and Recommendation, the Court will address the remaining portion of the Motion, which relates to Defendants' assertions that pursuant to Rule 12(b)(3), venue is improper as to Expedia Group subsidiaries Expedia-WA, Hotels.com and Travelscape. For the reasons that follow, the Court recommends that this portion of the Motion be GRANTED-IN-PART and be DENIED-IN-PART without prejudice.

I. BACKGROUND

A. Factual Background

Plaintiff IBM is a New York corporation engaged in the business of science and technology. (D.I. 27 at ¶¶ 3, 41) It is the owner of the five patents-in-suit in this case, which bear on certain Internet-related technologies: United States Patent Nos. 5,796,967, 7,072,849, 5,961,601, 7,631,346 and 6,374,359 (collectively, the "patents-in-suit"). (Id. at ¶¶ 2, 47-55)

It is alleged in the operative Amended Complaint that Defendant Expedia-WA is a Washington corporation, [*3]  (id. at ¶ 7), Defendant Hotels.com is a Texas limited partnership, (id. at ¶ 12), and Defendant Travelscape is a Nevada limited liability company, (id. at ¶ 19). Expedia-WA, Hotels.com and Travelscape are subsidiaries of Defendant Expedia Group, a Delaware corporation. (Id. at ¶¶ 4-5) It is alleged that all Defendants offer travel and reservation services through their respective websites and mobile applications, (id. at ¶¶ 8, 10-20), which are alleged to infringe the patents-in-suit, (see, e.g., id. at ¶¶ 65-177).1

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2019 U.S. Dist. LEXIS 123739 *; 2019 WL 3322542

INTERNATIONAL BUSINESS MACHINES CORPORATION, Plaintiff, v. EXPEDIA, INC., EXPEDIA, INC., H0MEAWAY.COM, INC., HOTELS.COM L.P., HOTWIRE, INC., ORBITZ WORLDWIDE, INC., ORBITZ, LLC, AND TRAVELSCAPE LLC, Defendants.

Subsequent History: Adopted by, Objection overruled by, Dismissed by, in part, Motion denied by, in part IBM v. Expedia, Inc., 2019 U.S. Dist. LEXIS 162977 (D. Del., Sept. 24, 2019)

Prior History: IBM, Corp. v. Expedia, Inc., 2019 U.S. Dist. LEXIS 63130 (D. Del., Apr. 11, 2019)

CORE TERMS

venue, subsidiary, discovery, alter-ego, infringement, entity, injustice, franchisees, technology, websites, Cruise, travel, place of business, Recommendation, Defendants', brands, allegations, established place of business, CruiseShipCenters, venue-related, purposes, factors, regular, second prong, asserting, platform, resides, mobile, corporate form, patents-in-suit