FG SRC LLC v. Xilinx, Inc.

CourtDistrict Court, D. Delaware
DecidedFebruary 10, 2021
Docket1:20-cv-00601
StatusUnknown

This text of FG SRC LLC v. Xilinx, Inc. (FG SRC LLC v. Xilinx, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
FG SRC LLC v. Xilinx, Inc., (D. Del. 2021).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

FG SRC LLC, : Plaintiff, : Vv. : C.A. No. 20-601-LPS XILINX, INC., : Defendant. :

Stamatios Stamoulis and Richard C. Weinblatt, STAMOULIS & WEINBLATT LLC, Wilmington, Delaware Michael W. Shore, Alfonso Garcia Chan, Ari B. Rafilson, William D. Ellerman, and Paul T. Beeler, SHORE CHAN DEPUMPO LLP, Dallas, Texas Attomeys for Plaintiff

Warren K. Mabey, Jr., FISH & RICHARDSON P.C., Wilmington, Delaware David M. Hoffman, FISH & RICHARDSON P.C., Austin, Texas Ashley A. Bolt, FISH & RICHARDSON P.C., Atlanta, Georgia Esha Bandyopadhyay and Bryan K. Basso, FISH & RICHARDSON P.C., Redwood City, California Attorneys for Defendant

MEMORANDUM OPINION

February 10, 2021 Wilmington, Delaware

TREN AY STARK, U.S. District Judge: Pending before the Court are two motions filed by Defendant Xilinx, Inc. (“Defendant” or “Xilinx”): a Motion to Transfer Venue to the United States District Court for the Northern District of California (D.I. 19) and a Motion to Dismiss for failure to state a claim for induced infringement (D.I. 12).! The Court held a teleconference on January 14, 2021 to hear argument from the parties on both motions. For the reasons set forth below, the Court will deny both motions. L BACKGROUND Plaintiff FG SRC LLC (“Plaintiff’ or “SRC”) is a limited liability company organized under the laws of Delaware. (D.I. 11 (2) It does not claim to have a principal place of business, but it has a mailing address in Dallas, Texas. (See DI. 20 at 1) Plaintiff is the successor to SRC Computers, LLC, which restructured in February 2016 into three new entities: SRC, DirectStream, LLC (“DirectStream”), and SRC Labs, LLC. (D.I. 11 □□□ 2, 26) Defendant Xilinx is a Delaware corporation with its principal place of business in San Jose, California, located in the Northern District of California (“Northern District”). Ud § 3; 20 at 2) Xilinx has no offices in Delaware, and the majority of its accused products were researched, designed, developed, and marketed in San Jose. (D.I. 20 at 2-3) A global corporation, Xilinx has over 60,000 customers and approximately 5,000 employees worldwide. (D.1. 26 at 1) In 2019, Xilinx reported revenues of more than $3 billion. Ud. at 2)

! Defendant’s motion to dismiss also alleged that Plaintiff lacked standing to sue because then- unresolved bankruptcy proceedings diminished Plaintiff's rights to the asserted patents. (See D.I. 13 at 2-3, 8-10) Defendant, however, withdrew that portion of its motion to dismiss on January 29, 2021, after the bankruptcy court approved a settlement agreement that affirmed the assignment of the asserted patents to Plaintiff. (D.L. 32)

On January 22, 2020, DirectStream assigned the patents-in-suit - U.S. Patent Nos. 7,149,867 (the “867 patent”) and 9,153,311 (the “’311 patent”) — to SRC via a foreclosure that occutred before DirectStream filed for bankruptcy in the United States Bankruptcy Court for the District of Delaware. (D.L. 11 59; D.L. 17 at 2) On January 29, 2021, the bankruptcy court approved the settlement agreement between SRC and the trustee for DirectStream’s estate that affirmed this assignment.? See Order Approving Motion of Don A. Beskrone, Chapter 7 Trustee, to Approve Settlement with FG SRC, LLC and Affiliates, In re DirectStream, LLC, No. 20- 10535 (Bankr. D, Del. Jan. 29, 2021). Meanwhile, on April 30, 2020, SRC filed the instant action, alleging that several of Xilinx’s products infringe the patents-in-suit. (D.I. 1) Plaintiff filed an Amended Complaint on July 20, 2020, adding allegations of induced infringement. (DI. 11 J] 72-84) Il. LEGAL STANDARDS A. Motion to Transfer Pursuant to 28 U.S.C. § 1404(a), a district court may transfer any civil action to any other district where the action might have been brought, for the convenience of the parties and witnesses and in the interests of justice. Congress intended through Section 1404 to place discretion in the district court to adjudicate motions to transfer according to an individualized, case-by-case consideration of convenience and the interests of justice. See Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29 (1988); Affymetrix, Inc. v. Synteni, Inc., 28 F. Supp. 2d 192, 208 (D. Del. 1998).

2 Between the time of assignment and the bankruptcy court’s approval, Arbor Global Strategies LLC, an owner of an interest in DirectStream, alleged that SRC had defrauded DirectStream’s interest holders to seize the asserted patents. (See D.I. 17 at 3; DL. 18 at 1) The bankruptcy court ordered three months of discovery into this assertion and, after hearing argument from the parties, ultimately approved the settlement agreement. (See D.I. 18 at 1)

Unless the balance of convenience strongly favors transfer, the plaintiff's choice of forum should prevail. See Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970). Thus, “a transfer is not to be liberally granted.” Jd. (internal quotation marks omitted). The deference afforded a plaintiff's choice of forum will ordinarily apply as long as a plaintiff has selected the forum for some legitimate reason. See, e.g., Medtronic, Inc. v. Boston Sci. Corp., 587 ¥. Supp. 2d 648, 654 (D. Del. 2008); Cypress Semiconductor Corp. v. Integrated Cir, Sys., Inc., 2001 WL 1617186, at *2 (D. Del. Nov. 28, 2001). It follows that “transfer will be denied if the factors are evenly balanced or weigh only slightly in favor of the transfer.” Angiodynamics, Inc. v. Vascular Sols., Inc., 2010 WL 3037478, at *2 (D. Del. July 30, 2010) (internal citations omitted). Although “there is no definitive formula or list of the factors to consider” in assessing whether to transfer, typically a series of private and public interests are evaluated. See Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995). The private interests include: (1) plaintiff's forum preference as manifested in the original choice; (2) defendant’s preference, (3) whether the claim arose elsewhere; (4) the convenience of the parties as indicated by their relative physical and financial condition; (5) the convenience of the witnesses but only to the extent they may actually be unavailable for trial in one of the fora; and (6) the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum). See id. The public interests include: (1) the enforceability of the judgment; (2) practical considerations that could make the trial easy, expeditious, or inexpensive; (3) the relative administrative difficulty in the two fora resulting from court congestion; (4) the local interest in deciding local controversies at home; (5) the public policies of the fora; and (6) the familiarity of the trial judge with the applicable state law in diversity cases. See id. at 879-80.

B. Motion to Dismiss Evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(6)(6) requires the Court to accept as true all material allegations of the complaint. See Spruill v. Gillis, 372 F.3d 218, 223 (3d Cir, 2004). “The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.” In re Burlington Coat Factory See.

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FG SRC LLC v. Xilinx, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/fg-src-llc-v-xilinx-inc-ded-2021.