Mitek Systems, Inc. v. United Services Automobile Association

• Court: District Court, N.D. California
• Decided: March 25, 2020
• Docket: 3:19-cv-07223
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MITEK SYSTEMS, INC., Case No. 19-cv-07223-EMC

8 Plaintiff, ORDER RE SUPPLEMENTAL 9 v. BRIEFING

10 UNITED SERVICES AUTOMOBILE ASSOCIATION, 11 Docket No. 19 Defendant. 12

13 14 15 Plaintiff Mitek Systems, Inc. seeks a declaration that it does not infringe four patents (the 16 ‘779, ‘517, ‘090, and ‘571 patents) held by Defendant United States Automobile Association 17 (“USAA”). Currently pending before the Court is USAA’s motion to dismiss for lack of subject 18 matter jurisdiction – more specifically, on the basis that there is no case or controversy between 19 the parties. In the alternative, USAA asks that the Court transfer the instant case to the Eastern 20 District of Texas pursuant to 28 U.S.C. § 1404(a). Having considered the parties’ briefs and 21 accompanying submissions, the Court hereby orders the parties to provide supplemental briefing 22 on the issue discussed below. The supplemental briefs shall be filed within one week of the 23 date of this order. 24 Assuming that there is subject matter jurisdiction, and that the Court does not decline to 25 exercise jurisdiction over the declaratory judgment claims, Mitek has the burden of establishing 26 that the Northern District of California is a proper venue for the instant action. If venue is not 27 proper in this District, transfer would be appropriate under 28 U.S.C. § 1406(a); § 1404(a) would 1 Mitek seems to assert that venue in this District is proper under 28 U.S.C. § 1391(b)(2) – 2 i.e., because “a substantial part of the events or omissions giving rise to the claim occurred, or a 3 substantial part of property that is the subject of the action is situated.” 28 U.S.C. § 1391(b)(2). 4 Both parties have suggested that the events “giving rise to the claim” are the actions that USAA 5 took or has taken to enforce its patents. But what actions USAA took or has taken to enforce its 6 patents is relevant to whether there is a case or controversy. The actual declaratory judgment 7 claim is a claim that Mitek does not infringe the patents at issue. That is the basis for venue. “For 8 declaratory judgment actions in [a] patent infringement case, section 1391(b)(2) refers to the 9 district where the allegedly infringing actions took place,” Dex Prods. v. Houghteling, No. C 05- 10 05126 SI, 2006 U.S. Dist. LEXIS 45237, at *7 (N.D. Cal. June 23, 2006) (emphasis added)1 – or 11 possibly where the patent is held. See Modern Comput. Corp. v. Ma, 862 F. Supp. 938, 947 12 (E.D.N.Y. 1994) (stating that “[i]t is well-established that in a declaratory judgment action for 13 non-infringement and invalidation of a patent, a cease and desist letter cannot form the basis for 14 venue under section 1391 on the grounds that the sending of the letter constitutes ‘a substantial 15 part of the events giving rise to the claim’[;] [i]n such cases, the transaction at issue is the granting 16 of the copyright or patent, and the source of the cause of action for noninfringement is the 17 ownership and existence of the copyright or patent, not the sending of the cease and desist letter”). 18

19 1 Dex did rely on a Ninth Circuit case, and not a Federal Circuit case, for the above proposition. 20 See Dex, 2006 U.S. Dist. LEXIS 45237, at *23 (citing U.S. Alum. Corp. v. Kawneer Co., Inc., 694 F.2d 193, 195 (9th Cir. 1982)); U.S. Alum., 694 F.2d at 195 (stating that “[§] 1391(b) provides in 21 essence, venue is proper in the district where all defendants reside or in which the claim [for declaratory judgment of noninfringement] arose[;] [h]ere, because the conduct in dispute is the 22 shipment of Aluminum’s mullions and their installation by Glass and Metal Erectors in Atlanta, venue does exist in the Northern District of Georgia”). But the principle is still sound. See also 23 Jeffers Handbell Supply, Inc. v. Schulmerich Bells, LLC, No. 0:16-cv-03918-JMC, 2017 U.S. Dist. LEXIS 132084, at *24-25 (D.S.C. Aug. 18, 2017) (stating that, “[i]n determining whether venue is 24 appropriate in a declaratory judgment action alleging non-infringement of a patent, courts have concluded that a substantial part of the events or omissions giving rise to such an action occurs 25 where the acts that would give rise to a potential claim of patent infringement occurred”); Election Sys. & Software v. Avante Int'l Tech. Corp., No. 8:07CV375, 2008 U.S. Dist. LEXIS 27963, at *8 26 (D. Neb. Apr. 7, 2008) (stating that “venue for this action is proper in Nebraska” because “a substantial part of the events or omissions giving rise to the claim occurred in Nebraska, e.g., [the 27 alleged infringer’s] design and manufacture of the DS200 product”); cf. Cottman Transmission Sys. v. Martino, 36 F.3d 291, 295 (3d Cir. 1994) (stating that, “[i]n assessing whether events or 1 The Federal Circuit case that the parties cite, Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 2 1324 (Fed. Cir. 2008), does not appear to be on point because that case was addressing personal 3 jurisdiction, and not venue under § 1391(b)(2). See id. at 1336 (stating that, “if the defendant 4 || patentee purposefully directs activities at the forum which relate in some material way to the 5 enforcement or the defense of the patent, those activities may suffice to support specific 6 || jurisdiction”). 7 Accordingly, the Court orders the parties to file supplemental briefs as to whether this 8 || District is a proper venue under § 1391(b)(2). As the complaint focuses primarily on whether 9 || Mitek has engaged in indirect infringement (i.e., committed contributory infringement or induced 10 || infringement with respect to its customers), the parties shall discuss where an (alleged) indirect 11 infringement substantially takes place, particularly in the context where the accused party has 12 || multiple customers (through which indirect infringement is alleged) located in more than one 13 district. The parties shall also address where the alleged direct infringement substantially takes 14 || place. 15 16 IT IS SO ORDERED.

|| Dated: March 25, 2020 19 <4 ED M. CHEN 21 United States District Judge 22 23 24 25 26 27 28