A French government-sponsored patent assertion entity and its lawyers at McKool Smith have won a fight over their preferred U.S. battleground, persuading a judge to keep their patent infringement suit against HTC America Inc. and LG Electronics in the plaintiffs-friendly Eastern District of Texas.
The plaintiff, NFC Technology LLC, accuses HTC and LG of infringing two patents related to Near Field Communication capability, a technology that enables short-range interactions between devices. NFC is a creation of France Brevets, a patent acquisition and monetization company set up by the French government three years ago. France Brevets, which critics have attacked as a worrisome example of state-funded patent trolling, made its first (and so far only) foray into U.S. patent litigation in December 2013, when NFC sued HTC and LG in federal court in Marshall, Texas.
HTC’s lawyers at Perkins Coie moved to dismiss or transfer the case in March, arguing that HTC was improperly joined as a defendant and that the suit should have been filed in the Northern District of California. U.S. District Judge Rodney Gilstrap rejected both arguments on Friday, concluding that the patent claims against HTC and LG were sufficiently related and that litigating in Marshall rather than California wouldn’t overly burden the defendants.
LG, represented by Fish & Richardson, previously struck out with the same joinder defense. LG withdrew its own motion to transfer venue.
France Brevets was established in 2011 with 100 million euros in funding provided by the French government and a French economic development agency. France Brevets created NFC Technology in Texas in November 2013, and NFC filed its complaint just 16 days later. The suit alleges that HTC and LG make and sell mobile phones or other devices equipped with semiconductor chips using NFC’s patented technology.
Those claims apparently alarmed NXP Semiconductors USA Inc., a San Jose-based company that sells chips with Near Field Communication capability to HTC and LG.
NXP hired Ropes & Gray to file a declaratory judgment suit in San Francisco in March, seeking a ruling that NFC’s patents are invalid. The suit names both France Brevets and NFC as defendants, calling NFC an “alter ego” or “agent” of the French company. NFC’s licensing and patent enforcement activities “threaten to harm the goodwill of NXP’s customers towards NXP” and “may prompt users of NXP products to cease using NXP products,” the complaint asserts.
NXP is a subsidiary of a NXP Semiconductors N.V., a company based in the Netherlands formerly known as Philips Semiconductor. Along with France Brevets and NFC Technology, its complaint names as a defendant INSIDE Secure, a French company that assigned the patents in question to NFC. INSIDE Secure is represented by Skadden, Arps, Slate, Meagher & Flom.
The same day NFC Technology filed suit in Texas, France Brevets filed lawsuits in Düsseldorf, Germany, against the German divisions of LG Electronics and HTC, alleging infringement of the European equivalents of the same patents asserted in Texas.
France Brevets VP Yann Dietrich has discouraged comparisons between his organization and U.S.-style patent trolls. The company had no intention of pursuing aggressive litigation strategies, he told Reuters in March 2013. The goal, he said, was investing in quality IP so French companies can better monetize their technology. “We are not playing with the rules to extract money,” he said.
France Brevets and NFC are represented in both cases by a McKool Smith team led by Robert Auchter and Sam Baxter. The lineup for the other companies includes Matthew Bernstein of Perkins Coie (for HTC); Michael McKeon of Fish & Richardson (for LG); and Mark Rowland of Ropes & Gray (for NXP). Lawyers for the parties didn’t immediately respond to requests for comment.