Buffalo Patents, LLC v. ZTE Corporation

CourtDistrict Court, W.D. Texas
DecidedJune 3, 2022
Docket6:21-cv-01065
StatusUnknown

This text of Buffalo Patents, LLC v. ZTE Corporation (Buffalo Patents, LLC v. ZTE Corporation) is published on Counsel Stack Legal Research, covering District Court, W.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Buffalo Patents, LLC v. ZTE Corporation, (W.D. Tex. 2022).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS WACO DIVISION

BUFFALO PATENTS, LLC, § Plaintiff § § W-21-CV-01065-ADA -vs- § § ZTE CORPORATION, § Defendant § §

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR IMPROPER SERVICE AND LACK OF PERSONAL JURISDICTION Before the Court is Defendant ZTE Corporation’s (“ZTE” or “Defendant”) Motion to Dismiss for Improper Service and Lack of Personal Jurisdiction (the “Motion”). ECF No. 14. Plaintiff Buffalo Patents, LLC (“Buffalo Patents” or “Plaintiff”) filed its Response. ECF No. 15. In turn, Defendants filed a Reply. ECF No. 16. Plaintiff further sought leave to file a sur-reply (ECF No. 17), which the Court granted during the oral hearing held on May 19, 2022. After a thorough review of the briefs, relevant facts, oral arguments, and the applicable law, the Court GRANTS Defendant ZTE’s Motion to Dismiss for Improper Service and Lack of Personal Jurisdiction. Additionally, the Court DENIES Plaintiff’s Motion for Alternative Service. I. BACKGROUND On October 13, 2021, Buffalo Patents filed this lawsuit accusing ZTE of infringing four patents. See generally ECF No. 1. The asserted patents include: U.S. Patent Nos. 7,187,670 (the “’670 patent”), 7,408,915 (the “’915 patent”), 8,611,328 (the “’328 patent”), and 9,001,816 (the “’816 patent”). Id. ¶¶ 16, 44, 71, and 87. The patents “generally relate to internet and wireless network telephony” including “methods and systems for transmitting voice information to an end user in a digital format based on a network protocol.” Id. ¶ 10. On November 5, 2021, ZTE filed a Notice of Special Appearance and Agreed Extension. ECF No. 11. After a second and third agreed extension (ECF Nos. 12, 13), ZTE filed the instant Motion to Dismiss. ECF No. 14. ZTE argues that this Court lacks jurisdiction because it was not

properly served. ECF No. 14 at 4. For support, ZTE states that this case falls squarely under ACQIS. Id. at 5. There, this Court found the Hague Service Convention applied to service on the Texas Secretary of State for a nonresident defendant because the Secretary is required by statute to forward the process via mail. ACQIS LLC v. Lenovo Group LTD., W-20-CV-00967, 2021 WL 5332314, at *5 (W.D. Tex. Nov. 16, 2021). China has objected to service via mail. ECF No. 14 at 6–7. Therefore, Defendant argues, service via the Texas Secretary of State is insufficient. Id. Buffalo Patents contends that service was valid and complete in Texas when process was served on the Secretary of State before any documents were mailed to China. ECF No. 15 at 7. Accordingly, per Plaintiff, the Hague Service Convention is not implicated. Id. Implicit in

Plaintiff’s position is a consequential reversal of this Court’s prior ACQIS opinion and a rubber stamp approval to evade the treaty and serve foreign defendants via the Texas Secretary of State. See ECF No. 15 at 13. In the event that this Court were to grant Defendant’s Motion, Plaintiff requests an order from the Court permitting alternative service pursuant to Federal Rule of Civil Procedure 4(f)(3). ECF No. 15 at 18. As this Court has addressed in numerous recent opinions under similar facts, the Court denies Plaintiff’s request for alternative service. II. LEGAL STANDARD A. Improper Service The Federal Rules of Civil Procedure govern service of process and the establishment of personal jurisdiction over foreign defendants. See Fed. R. Civ. P. 4(f), (h), (k). To establish personal jurisdiction, the state long-arm statute must permit service on the defendant, and the

court must find the requirements of due process are satisfied. Breckenridge Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d 1356, 1361 (Fed. Cir. 2006). In Texas, the long-arm statute extends to the limits of due process: “Because the Texas Long Arm Statute is coextensive with the confines of due process, questions of personal jurisdiction in Texas are generally analyzed entirely within the framework of the Constitutional constraints of Due Process.” Religious Tech. Ctr. v. Liebreich, 339 F.3d 369, 373 (5th Cir. 2003). B. Alternative Service Federal Rule of Civil Procedure 4(h)(2) provides for service on a foreign corporation outside the United States “in any manner prescribed by Rule 4(f) regarding service on an individual. Fed. R. Civ. P. 4(h)(2). Also, Federal Rule of Civil Procedure 4(f)(3) allows the court to authorize service on a foreign individual “by other means not prohibited by international

agreement.” Fed. R. Civ. P. 4(f)(3). When a method of service is not prohibited by international agreement, courts have considerable discretion whether to allow alternative methods of service. Monolithic Power Systems, Inc. v. Meraki Integrated Circuit Technology, LTD., No. 6:20-CV- 00876-ADA, 2021 WL 4974040 (N.D. Tex. Oct. 25, 2021). While service under Rule 4(f)(3) is neither a “last resort” or “extraordinary relief,” this Court has held that it is more likely to permit alternative service after service in compliance with the Hague Service Convention was attempted, not before. Id. at 1. III. DISCUSSION A. Improper Service 1. The Hague Service Convention The United States of America and China are both signatories to the Hague Service Convention, a multilateral treaty intended to “simplify, standardize, and generally improve the process of serving documents abroad.” Water Splash, Inc. v. Menon, 137 S. Ct. 1504, 1507

(2017). The Hague Service Convention defines service as “a formal delivery of documents sufficient to charge the defendant with legal notice.” Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matter, Nov. 15, 1965, 20 U.S.T. 361 (emphasis added). Further, it “specifies certain approved methods of service and ‘pre-empts inconsistent methods of service’ wherever it applies.” Id. (quoting Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 699 (1988)). Because the Hague Service Convention does not set a standard for the sufficiency of the delivery, courts refer to the laws of the forum state to make that determination. Schlunk, 486 U.S. at 700 (“The legal sufficiency of a formal delivery of documents must be measured against some standard. The Convention does not prescribe a standard, so we almost necessarily must refer to the internal law of the forum state. If

the internal law of the forum state defines the applicable method of serving process as requiring the transmittal of documents abroad, then the Hague Service Convention applies.”). Here, the central question is whether Texas law requires transmittal of documents abroad to serve a foreign defendant, and whether such a transmittal triggers application of the treaty. Embedded in that question is a further assessment of due process. While each forum state’s laws may vary, adequate notice is always required. Id. at 705.

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Buffalo Patents, LLC v. ZTE Corporation, Counsel Stack Legal Research, https://law.counselstack.com/opinion/buffalo-patents-llc-v-zte-corporation-txwd-2022.