Symbology Innovations, LLC v. Lego Sys., Inc.

282 F. Supp. 3d 916
CourtDistrict Court, E.D. Virginia
DecidedSeptember 28, 2017
DocketCivil No. 2:17–cv–86
StatusPublished
Cited by41 cases

This text of 282 F. Supp. 3d 916 (Symbology Innovations, LLC v. Lego Sys., Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Symbology Innovations, LLC v. Lego Sys., Inc., 282 F. Supp. 3d 916 (E.D. Va. 2017).

Opinion

Arenda L. Wright Allen, United States District Judge

In this patent infringement suit, two corporations hailing from distant states find themselves litigating in the Eastern District of Virginia. This sort of forum shopping in patent litigation has proliferated over the past thirty years. See Daniel Klerman & Greg Reilly, Forum Selling , 89 S. CAL. L. REV. 241, 247-48 (2016). This practice has subjected defendants to litigation in distant forums largely unrelated to the alleged infringement and has given a few federal district courts, including the Eastern District of Virginia, inordinate power over the interstate market for innovation.1 See id. at 249-50, 280-81.

Two recent decisions, TC Heartland, LLC v. Kraft Foods Group Brands, LLC , --- U.S. ----, 137 S.Ct. 1514, 197 L.Ed.2d 816 (2017) and In re Cray, Inc. , 871 F.3d 1335, 2017 WL 4201535 (Fed. Cir. Sept. 21, 2017), have clarified that the permissible venues for patent litigation are narrower than has been allowed in recent practice, however. In the wake of these decisions, venue for this suit does not properly lie in the Eastern District of Virginia, and the interests of justice require that this action be transferred to the District of Connecticut pursuant to 28 U.S.C. § 1406(a).

I. BACKGROUND

Plaintiff Symbology Innovations, LLC ("Symbology") filed this suit against Defendant Lego Systems, Inc. ("Lego Systems") alleging patent infringement and *922seeking damages, attorneys' fees, costs, and further relief under 35 U.S.C. § 271. See Am. Compl. ¶ 1. A PACER search revealed that Symbology has filed approximately ninety such suits since 2015.2 Despite the volume of litigation, a Westlaw search reveals that no reported or unreported decisions have been issued in any of these cases.

A. Symbology's Patents

Symbology owns four patents ( Patent Numbers 7,992,773, 8,424,752, 8,651,369, and 8,936,190 ), each titled "System and Method for Presenting Information about an Object on a Portable Electronic Device." See Am. Compl. ¶¶ 10-11, 15-16, 20-21, 25-26. The patents relate to quick response codes ("QR codes"). See id.

A QR code is an encoded image used to link printed material to digitally stored information. See 2 HARRY M. PHILO, JR., LAWYERS DESK REFERENCE § 9:33 (10th ed.). It functions as an elaborate bar code that "consists of black modules arranged in a square pattern on a white background." Id. ; see also Figure 1.

To access information stored in the QR code, a consumer must have a QR code reader application ("app") installed on the consumer's smart phone. See Styer v. Prof'l Med. Mgmt., Inc. , 114 F.Supp.3d 234, 236 (M.D. Pa. 2015). When presented with a QR code, the consumer opens the app, which activates the smartphone's camera to scan the QR code. See James E. Cabral et al., Using Technology to Enhance Access to Justice , 26 HARV. J.L. & TECH. 241, 273-74 (2012). The app then processes the QR code, decodes its message, and uses the encoded URL to access the online content sought by the consumer. Id.

Symbology's infringement claims concern a method for reading QR codes encoded with URLs.3 See Am. Compl. ¶¶ 14, 19, 24, 29. The patents purport to cover particular methods for using a digital device to capture and process a QR code and using the decoded URL to access the associated website. See id.

B. Lego Systems' Business and Contacts with the Forum

Lego Systems is a Danish company incorporated in Delaware and headquartered in Enfield, Connecticut. Am. Compl. ¶ 3. Lego Systems creates and sells the popular Lego brand construction toys. See 1st Quaglia Decl. ¶ 3 (ECF No. 31-1); see also Nielson Decl. ¶ 3 (ECF No. 31-2). Lego toys are manufactured exclusively outside of the Commonwealth of Virginia. See 1st Quaglia Decl. ¶ 3. Lego Systems designs advertisements and packaging for its American products at its headquarters in Billund, Denmark and in Enfield, Connecticut. See Am. Comp. ¶ 37; see also 1st Quaglia Decl. ¶ 4.

Some of Lego Systems' product packaging features QR codes. See, e.g. , Am. Compl. ¶¶ 30, 52. Lego Systems does not make, generate, or otherwise create QR codes, nor does it make or offer for sale any software that detects and processes *923QR codes. 1st Quaglia Decl. ¶¶ 6-7. To generate, detect, and process QR codes, consumers must use third-party software. Id. ¶ 8. Symbology alleges that, by featuring QR codes on its boxes, Lego Systems induces shoppers to infringe on its patents. See id. Symbology also alleges that Lego Systems directly infringed on its patents by using an app while internally testing the QR codes. See id.

Although headquartered in Denmark and Connecticut, Lego Systems has several contacts with the Eastern District of Virginia. The company derives revenue from products sold in this District, holds promotional events here, is registered with the Commonwealth as a foreign corporation, and has a registered agent to accept service of process. See Supp. Resp. at 4; see also Pl.'s Exh. 2 (ECF No. 21-2). Symbology alleges that Lego Systems directly infringes and induces consumers to infringe on its patents in this District. See Am. Compl. ¶ 7.

Lego Systems operates no retail stores in this District (or anywhere else). See 1st Quaglia Decl. ¶ 10. A subsidiary, Lego Brand Retail, Inc., operates Lego Store locations in at least thirty states, including three stores in Virginia. Id. Lego Systems and Lego Brand Retail are separate entities with separate corporate officers, records, finances, and assets. See Nielsen Decl. ¶ 4.

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Bluebook (online)
282 F. Supp. 3d 916, Counsel Stack Legal Research, https://law.counselstack.com/opinion/symbology-innovations-llc-v-lego-sys-inc-vaed-2017.