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HTC Corporation v. Telefonaktiebolaget Lm Ericsson

United States District Court, W.D. Washington, Seattle

May 17, 2018

HTC CORPORATION, Plaintiff,
v.
TELEFONAKTIEBOLAGET LM ERICSSON, et al., Defendants.

          ORDER ON MOTION TO DISMISS OR TRANSFER

          THE HONORABLE MARSHA J. PECHMAN UNITED STATES SENIOR DISTRICT COURT JUDGE.

         The above-entitled Court, having received and reviewed:

1. Defendants' Motion to Dismiss or Transfer (Dkt. No. 46),
2. Plaintiff's Opposition to Defendants' Motion to Dismiss or Transfer (Dkt. No. 50),
3. Defendants' Reply in Support of Motion to Dismiss or Transfer (Dkt. No. 64), all attached declarations and exhibits, and relevant portions of the record, and rules as follows:

         IT IS ORDERED that the motion is PARTIALLY GRANTED and PARTIALLY DENIED. The motion to transfer is GRANTED, and this matter shall be transferred to the Eastern District of Texas forthwith; the motion to dismiss is DENIED.

         Background[1]

         Telefonaktiebolaget LM Ericsson (“LME”) is a Swedish corporation with its principal place of business in Stockholm. ¶ 14. Defendant Ericsson Inc. (“Ericsson”) is a Delaware corporation, a wholly-owned subsidiary of LME with its principal place of business in Plano, Texas and an office in Bellevue. ¶ 15. Ericsson has employees in the State of Washington and offer products for sale here. ¶ 20.

         Both Defendant organizations are involved in the development and licensing of Standard Essential Patents (“SEPs”) in the telecommunications field. ¶¶ 15-17. In order to insure “interoperability” in the cellular communication world, Defendants are subscribing members of various Standard Setting Organizations (“SSOs”), among them the European Telecommunication Standards Institute (“ETSI”). ¶¶ 26-28. The organizations broker agreements to follow a common set of standards which allows the various products of the various parts of the telecommunications industry to connect and communicate with each other. ¶ 29.

         Critical to these standards-setting agreements are requirements that the participants which own SEPs make them available to everyone either royalty-free or on “fair, reasonable, and non-discriminatory (‘FRAND') terms.” These requirements are intended to prevent the abuse of the monopoly potential represented by the SEPs. ¶¶ 34-35. At the heart of this lawsuit is Plaintiff HTC Corporation's (“HTC”) allegation that Defendants are offering to license certain SEP technology at rates which are unreasonable and violate their FRAND obligations. ¶¶ 50-69. Plaintiff alleges that Defendants have refused to lower their rates and have continually threatened patent litigation against HTC. ¶¶ 70-71. Fearing that such litigation could destroy its business, Plaintiff has paid “substantial royalties” to Ericsson. ¶ 73. This lawsuit seeks recoupment of those royalties and prospective relief enjoining Defendants from further demands for excessive royalties. FAC, § VI.

         Discussion/Analysis

         Personal jurisdiction can be found in two ways: general and specific.

         General jurisdiction

         General jurisdiction arises when a defendant's contacts with a forum are “so constant and pervasive ‘as to render [the defendant] essentially at home in the forum state.'” Daimler AG v. Bauman, 134 S.Ct. 746, 751 (2014)(quoting ...


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