Jetblue Airways Corp. v. Helferich Patent Licensing, LLC

960 F. Supp. 2d 383, 2013 WL 713929, 2013 U.S. Dist. LEXIS 28439
CourtDistrict Court, E.D. New York
DecidedFebruary 28, 2013
DocketNo. 12-CV-5847
StatusPublished
Cited by36 cases

This text of 960 F. Supp. 2d 383 (Jetblue Airways Corp. v. Helferich Patent Licensing, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jetblue Airways Corp. v. Helferich Patent Licensing, LLC, 960 F. Supp. 2d 383, 2013 WL 713929, 2013 U.S. Dist. LEXIS 28439 (E.D.N.Y. 2013).

Opinion

Memorandum and Order Granting in Part and Denying in Part Defendant’s Motion to Dismiss or Transfer

JACK B. WEINSTEIN, Senior District Judge:

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I. Introduction

Helferich Patent Licensing, LLC (“Helferich” or “Defendant”) is a company that licenses and enforces patents to which it lays claim. It is registered to do business and has an office in Illinois. Its principal place of business is Arizona. It does not manufacture or sell products derived from the patents it claims to own. Rather, it seeks to enforce its patents and demands licensing fees from companies employing what it considers to be infringing technology.

Through written correspondence and telephone calls to New York, in the summer of 2012 Helferich placed plaintiff Jet-Blue Airways Corporation (“JetBlue” or “Plaintiff’), a corporation headquartered [388]*388in New York that operates aircraft throughout the nation, “on notice that its activities of wireless content provision and messaging ... infringe numerous claims of Helferich’s issued patents and pending applications.” Compl. Ex. A, Nov. 27, 2012, CM/ECF No. 1-2 (“Compl. Ex. A”), at 1. Offered by Helferich to JetBlue was the opportunity to enter into a licensing agreement, cease use, or face patent-enforcement litigation. Id. at 30-31. Helferich noted that it had licensed use of its patents to others and, in cases where agreements could not be reached, it had sued. Id. at 1.

In November 2012, JetBlue sued Helferich in this court. It seeks declarations of noninfringement and invalidity. It asserts that Helferich’s business is the licensing of patents and that it routinely conducts corporate activity in New York. See Compl., Nov. 27, 2012, CM/ECF No. 1 (“Compl.”), at ¶ 88.

Helferich moves to dismiss the complaint for lack of personal jurisdiction or to transfer the case to the Northern District of Illinois where it has already initiated litigation against other companies over the validity of the same patents.

Defendant is “doing business” in New York. There is a basis for exercising personal jurisdiction over it. Policy issues affecting substantive patent law in litigation such as the present one do not affect the personal jurisdiction decision. C.f. Overstock, com, Inc. v. Furnace Brook, LLC, 420 F.Supp.2d 1217, 1222-23 (D.Utah 2005) (acknowledging that substantive patent policy should be determined by Congress or the Court of Appeals for the Federal Circuit); Richard A. Poster, Why There Are Too Many Patents in America, The Atlantic, July 12, 2012, available at http://www.theatlantic.com/business/ archive/2012/07/why-there-are-too-many-patents-in-america/259725/ (last visited Feb. 26, 2013) (discussing “the general problems posed by the structure and administration of our current patent laws, a system that warrants reconsideration by our public officials”).

In the interest of justice, judicial economy, and for convenience of the parties and witnesses, Defendant’s motion to transfer the case to the Northern District of Illinois, where earlier-filed cases present the same issues, is granted.

Defendant previously requested, and was granted, a sealing order pertaining to certain of its commercial records. See Order Granting Motion for Leave to Electronically File Document under Seal, Feb. 12, 2013, ECF No. 24 (“Sealing Order”). The information it wants to shield from disclosure is necessary to decide the present motions and should not be kept from the public. The previously granted order is revoked.

II. Facts

Helferich lacks any permanent physical presence in New York, but it derives significant economic benefit from substantial ongoing activities within the State. Despite a lack of property or employees in the state, it maintains sustained commercial contacts in New York.

It is the holder of a portfolio of patents relating to mobile phone websites, applications, and social networking tools. See Def.’s Mem. L. Supp. of Mot. to Dismiss or Transfer Ex. A, Dec. 20, 2012, CM/ECF No. 7 (“Def.’s Mem.”), at 2. It does not manufacture or sell tangible products — in New York or elsewhere — that incorporate its patents. Its income is derived from licensing agreements, settlements and court judgments. See Deck of Victoria Curtin in Supp. of Def.’s Mem., Dec. 20, 2012, CM/ECF No. 7 (“Curtin Deck”), at ¶¶ 3 -4.

[389]*389As it did with JetBlue, Helferich notifies those it accuses of patent infringement of the alternatives of entering a licensing agreement or facing litigation. In the last year, more than twelve percent of the companies receiving “license or litigate” letters from Helferich were based in New York. See Def.’s Supp. Br. in Supp. of Mot. to Dismiss or Transfer Ex. B, Feb. 7, 2013, CM/ECF No. 22-1 (“Def.’s Supp. Br. Ex. B”), at ¶ 6.

Since early 2007, Helferich has entered into over 165 non-exclusive licensing agreements related to its stock of patents. Id. at ¶ 5. Thirteen percent of Helferich’s licensing agreements have been negotiated and entered into with New York companies, resulting — in the last twelve months alone — in revenue to Helferich of over three million dollars from New York companies. Id. at ¶¶ 2-3.

Where licensing agreements cannot be reached with infringing entities based in New York, Helferich has pursued enforcement litigation. While it has never filed suit in New York, it has conducted six depositions in the State in connection with its out-of-state litigation. See Curtin Decl. ¶ 8.

In the instant litigation, Helferich first contacted JetBlue by a letter sent to Jet-Blue’s corporate headquarters in New York on June 1, 2012. See Compl. Ex. A. It alleged infringement by JetBlue, explained how Helferich has licensed its patents to several entities while suing others, and requested that JetBlue pay for licenses of the allegedly infringed-upon patents. Id. Thereafter, Helferich’s attorneys exchanged nine emails with JetBlue’s in-house counsel located in New York regarding the scheduling of a conference call. See Curtin Decl. ¶ 6. Subsequent communications between Helferich and JetBlue involved JetBlue’s outside-counsel located in Texas. Id.

Unwilling to reach a licensing agreement, JetBlue filed a declaratory judgment action for non-infringement in the federal court for the Eastern District of New York on November 27, 2012. See Compl.

Earlier enforcement litigation brought by Helferich and involving the same patents at issue in the instant case is ongoing in federal district courts in Arizona and Illinois. Before the same judge in the Northern District of Illinois, Helferich is involved in five such litigations. Id. at ¶ 9. The parties there are to begin briefing the defendants’ joint motion for summary judgment on the issue of patent exhaustion in March 2013, with a hearing on the issue set for July 2013. See Helferich Patent Licensing, LLC v. The New York Times Co., No. 10-CV-4387, and related cases (D.Ill. Jan. 15, 2013) (scheduling order), ECF No. 197. The issue of claim construction will be briefed and heard in the Illinois cases later this summer. Id.

An additional four cases involving the same patents are consolidated in the District of Arizona before one district judge. Id. ¶ 10.

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960 F. Supp. 2d 383, 2013 WL 713929, 2013 U.S. Dist. LEXIS 28439, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jetblue-airways-corp-v-helferich-patent-licensing-llc-nyed-2013.