Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 1 of 16 PageID #: 5072
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`
`
`
`C.A. No. 17-585 (CFC) (SRF)
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`
`
`
`) ) ) ) ) ) ) ) )
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`)
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`UNIVERSAL SECURE REGISTRY LLC,
`
`
`Plaintiff,
`
`
`
`v.
`
`
`APPLE INC., VISA INC. and
`VISA U.S.A., INC.,
`
`
`Defendants.
`
`PLAINTIFF UNIVERSAL SECURITY REGISTRY LLC’S
`RESPONSE TO DEFENDANTS’ OBJECTIONS TO THE
`SEPTEMBER 19, 2018 REPORT AND RECOMMENDATION
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Jeremy A. Tigan (#5239)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899-1347
`(302) 658-9200
`jblumenfeld@mnat.com
`jtigan@mnat.com
`
`Attorneys for Universal Secure Registry LLC
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`
`
`
`
`
`
`
`
`OF COUNSEL:
`
`Harold Barza
`Tigran Guledjian
`Valerie Roddy
`Jordan Kaericher
`QUINN EMANUEL
`URQUHART & SULLIVAN, LLP
`865 S Figueroa Street, 10th Floor
`Los Angeles, CA 90017
`(213) 443-3000
`
`Sean Pak
`Brian E. Mack
`QUINN EMANUEL
`URQUHART & SULLIVAN, LLP
`50 California Street, 22nd Floor
`San Francisco, CA 94111
`(415) 875-6600
`
`October 17, 2018
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`
`
`

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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 2 of 16 PageID #: 5073
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`TABLE OF CONTENTS
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`Page
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`TABLE OF AUTHORITIES .......................................................................................................... ii
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`I.
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`II.
`
`INTRODUCTION ...............................................................................................................1
`
`JUDGE FALLON PROPERLY DENIED DEFENDANTS’ MOTION TO DISMISS ......1
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`III.
`
`JUDGE FALLON PROPERLY DENIED DEFENDANTS’ TRANSFER MOTION ........7
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`IV.
`
`CONCLUSION ..................................................................................................................10
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`
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`i
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`

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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 3 of 16 PageID #: 5074
`
`TABLE OF AUTHORITIES
`
`Cases
`
`Page(s)
`
`Aatrix Software, Inc. v. Green Shades Software, Inc.
`882 F.3d 1121 (Fed. Cir. 2018)................................................................................................... 1
`
`Affinity Labs of Texas, LLC v. DIRECTV, LLC,
`838 F.3d 1253 (Fed. Cir. 2016)................................................................................................... 5
`
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l,
`134 S. Ct. 2347 (2014) .................................................................................................... 3, 4, 5, 6
`
`In re Altera Corp.,
`494 F. App’x 52 (Fed. Cir. 2012) ............................................................................................... 9
`
`Asghari-Kamrani v. United Servs. Auto Ass’n,
`No. 15-cv-478, 2016 WL 3670804 (E.D. Va. July 5, 2016), aff’d, 2018 WL 4352098
`(Fed. Cir. Sept. 11, 2018) ............................................................................................................ 6
`
`Autodesk Canada Co. v. Assimilate, Inc.,
`No. CIV. 08-587-SLR-LPS, 2009 WL 3151026 (D. Del. Sept. 29, 2009) ............................... 10
`
`Bascom Glob. Internet Servs., Inc. v. AT&T Mobility, LLC,
`827 F.3d 1341 (Fed. Cir. 2016)................................................................................................... 3
`
`Bilski v. Kappos,
`561 U.S. 593 (2010) ................................................................................................................ 2, 3
`
`In re Bilski,
`545 F.3d 943 (Fed. Cir. 2008)..................................................................................................... 4
`
`Cellectis S.A. v. Precision Biosciences, Inc.,
`858 F. Supp. 2d 376 (D. Del. 2012) ............................................................................................ 8
`
`Diamond v. Diehr,
`450 U.S. 175 (1981) .................................................................................................................... 4
`
`Elec. Power Grp., LLC v. Alston S.A.,
`830 F.3d 1350 (Fed. Cir. 2016)................................................................................................... 6
`
`Enfish, LLC v. Microsoft Corp.,
`822 F.3d 1327 (Fed. Cir. 2016)....................................................................................... 2, 3, 5, 6
`
`Helicos Biosciences Corp. v. Illumina, Inc.,
`858 F. Supp. 2d 367 (D. Del. 2012 ............................................................................................. 8
`
`Idexx Labs., Inc. v. Charles River Labs., Inc.,
`2016 WL 3647971 (D. Del. July 1, 2016) .................................................................................. 3
`
`Intellectual Ventures I LLC v. Altera Corp.,
`842 F. Supp. 2d 744 (D. Del. 2012) ............................................................................................ 9
`
`Jumara v. State Farm Ins. Co.,
`55 F.3d 873 (3d Cir. 1995).......................................................................................................... 7
`
`
`
`ii
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`

`

`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 4 of 16 PageID #: 5075
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`King Pharms., Inc. v. Eon Labs, Inc.,
`616 F.3d 1267 (Fed. Cir. 2010)................................................................................................... 4
`
`Kinglite Holdings, Inc. v. Micro-Star Int’l Co. Ltd,
`2015 WL 6437836 (C.D. Cal. 2015)........................................................................................... 6
`
`L’Athene, Inc. v. EarthSpring LLC,
`570 F. Supp. 2d 588 (D. Del. 2008) ............................................................................................ 9
`
`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`132 S. Ct. 1289 (2012) ................................................................................................................ 4
`
`MAZ Encryption Techs. LLC v. Blackberry Corp.,
`2016 WL 5661981 (D. Del. Sept. 29, 2016) ............................................................................... 3
`
`McRO, Inc. v. Bandai Namco Games Am. Inc.,
`837 F.3d 1299 (Fed. Cir. 2016)....................................................................................... 3, 4, 5, 6
`
`Messaging Gateway Solutions LLC v. Amdocs, Inc.,
`2015 WL 1744343 (D. Del. April 5, 2015)................................................................................. 4
`
`In re Mobile Telecommc’ns Techs., LLC,
`243 F. Supp. 3d 478 (D. Del. 2017) ............................................................................................ 7
`
`PalTalk Holdings, Inc. v. Riot Games, Inc.,
`2017 WL 2106124 (D. Del. May 15, 2017) ................................................................................ 7
`
`Secured Mail Solutions LLC v. Universal Wilde, Inc.,
`873 F.3d 905 (Fed. Cir. 2017)..................................................................................................... 6
`
`Smart Audio Techs., LLC v. Apple, Inc.,
`910 F. Supp. 2d 718 (D. Del. 2012) ............................................................................................ 8
`
`Smart Meter Techs., Inc. v. Duke Energy Corp.,
`2017 WL 2954916 (D. Del. July 11, 2017) ................................................................................ 7
`
`Smart Systems Innovations, LLC v. Chicago Transit Authority,
`873 F.3d 1364 (Fed. Cir. 2017)................................................................................................... 6
`
`Stephenson v. Game Show Network, LLC,
`933 F. Supp. 2d 674 (D. Del. 2013) ............................................................................................ 8
`
`Stewart Org., Inc. v. Ricoh Corp.,
`487 U.S. 22 (1988) ...................................................................................................................... 7
`
`Tessera, Inc. v. Sony Elecs. Inc.,
`Civil No. 10-838 (RMB) (KW), 2012 WL 1107706 (D. Del. Mar. 30, 2012) ......................... 10
`
`Umland v. Planco Fin. Servs.,
`542 F.3d 59 (3d Cir. 2008).......................................................................................................... 1
`
`Van Dusen v. Barrack,
`376 U.S. 612 (1964) .................................................................................................................... 7
`
`Visual Memory LLC v. NVIDIA Corp.,
`867 F.3d 1253 (Fed. Cir. 2017)................................................................................................... 5
`
`
`
`iii
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`

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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 5 of 16 PageID #: 5076
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`28 U.S.C. § 1404(a) ........................................................................................................................ 7
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`35 U.S.C. § 101 ............................................................................................................................... 2
`
`Statutes
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`iv
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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 6 of 16 PageID #: 5077
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`I.
`
`INTRODUCTION
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`Defendants Apple Inc. (“Apple”) and Visa Inc. and Visa U.S.A. Inc. (“Visa”) have filed
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`objections to Magistrate Judge Fallon’s carefully-considered 27-page September 19, 2018 Report
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`and Recommendation (D.I. 137) (“R&R”). In their Objections (D.I. 147) (“Objections” or
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`“Objs.”)—as in their original moving and reply papers—Defendants advance arguments that ignore
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`both controlling Supreme Court and Federal Circuit precedent and facts that do not support their
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`positions. The Court should adopt the R&R in its entirety.
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`II.
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`JUDGE FALLON PROPERLY DENIED DEFENDANTS’ MOTION TO DISMISS
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`Judge Fallon’s R&R properly analyzed the challenged patent claims under the Supreme
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`Court’s two-step framework for determining patent eligibility under Section 101 to conclude that the
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`technical innovations claimed in the four Asserted Patents are patent-eligible subject matter. Closely
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`adhering to the Supreme Court’s mandate to consider each claim’s recited elements “both
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`individually and as an ordered combination”—a mandate that Defendants Apple and Visa
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`repeatedly ignored—Judge Fallon correctly denied Defendants’ Motion to Dismiss after determining
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`that each claimed invention presents a technological improvement sufficient to distinguish USR’s
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`inventions from mere unpatentable abstract ideas. Plaintiff USR respectfully requests that the Court
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`overrule Defendants’ Objections and adopt the R&R in its entirety.
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`As Judge Fallon correctly noted, on a motion to dismiss, “the court must accept as true all
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`factual allegations in the complaint and view them in the light most favorable to the plaintiff.” R&R
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`at 12 (citing Umland v. Planco Fin. Servs., 542 F.3d 59, 64 (3d Cir. 2008); id. at 16 (citing Aatrix
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`Software, Inc. v. Green Shades Software, Inc. 882 F.3d 1121, 1124 (Fed. Cir. 2018) (same)). In
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`Plaintiff’s Answering Brief in Opposition to Defendants’ Motion to Dismiss (D.I. 30) (“101 Opp.”),
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`USR provided a detailed explanation of the technical innovations of the claimed inventions,
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`supporting each explanation with pinpoint evidentiary citations to the Complaint and to the
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`
`
`1
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`

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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 7 of 16 PageID #: 5078
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`specifications of each of the four Asserted Patents. See, e.g., id. at 2-4, 10, 13-15, 17. For each
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`analyzed claim, Judge Fallon repeatedly, and consistently, relied on the uncontroverted averments in
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`the Complaint and the patents to conclude that each challenged claim presents “an improvement to
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`computer functionality itself” by way of claiming “an unconventional technological solution…to a
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`technical problem” that represents “a technological improvement sufficient to distinguish the
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`invention from an unpatentable abstract idea.” See, e.g., R&R at 17-25. As such, Judge Fallon
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`determined that the challenged claims are directed to patent-eligible subject matter under 35 U.S.C. §
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`101 (“any new and useful process, machine, manufacture, or composition of matter, or any new and
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`useful improvement thereof”).
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`Defendants’ Objections—like their motion to dismiss—fail to show that any of the
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`challenged claims fall within the three narrow exceptions of 35 U.S.C. § 101: “laws of nature,
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`physical phenomena, and abstract ideas.” Bilski v. Kappos, 561 U.S. 593, 601-02 (2010).
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`Defendants’ arguments distill essentially to asserting that patent-eligible claims can neither include
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`computer components, nor describe an invention that can be used on general purpose computer
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`components (in other words, cannot be directed to a software improvement). Federal Circuit
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`authority is to the contrary. First, there is no general rule that an invention’s novel use of
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`purportedly “known” computer components—e.g., a biometric sensor, user
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`interface,
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`communication interface, processor, and a secure registry—to provide more secure mobile
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`transaction authentication dooms the claims under Section 101, and Judge Fallon was right to reject
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`this reasoning. See Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1338 (Fed. Cir. 2016) (“[W]e are
`
`not persuaded that the invention’s ability to run on a general-purpose computer dooms the claims.”).
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`Moreover, the Federal Circuit has repeatedly and soundly rejected Defendants’ suggestion that
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`software inventions are unpatentable. See id., 822 F.3d at 1339 (claims not required to be defined by
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`reference to “physical” components, for holding otherwise “risks resurrecting a bright-line machine-
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`2
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`

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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 8 of 16 PageID #: 5079
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`or-transformation test,…or creating a categorical ban on software patents, [citing Bilski]”). The
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`Federal Circuit’s rejection of Defendants’ simplistic argument that a claim’s reference to “known”
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`computer components makes the claim unpatentably abstract is amply demonstrated in Bascom
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`Glob. Internet Servs., Inc. v. AT&T Mobility, LLC, 827 F.3d 1341 (Fed. Cir. 2016), where the Court
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`held that a claim directed to an abstract idea was still patent-eligible, even though “the limitations of
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`the claims, taken individually, recite generic computer, network and Internet components, none of
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`which is inventive by itself.” Id. at 1349.
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`The primary disconnect between Judge Fallon’s sound reasoning and Defendants’ flawed
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`arguments is that, although Judge Fallon focused in her Step 1 analysis on the actual, recited
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`limitations of the challenged claims (see, e.g., R&R at 17-18, 19-20, 21-22, 23), Defendants’ Step 1
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`approach was to grossly oversimplify (and ignore) express claim language, “run[ning] afoul of the
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`Federal Circuit’s guidance in Enfish that courts should not ‘oversimplif[y]’ key inventive concepts or
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`‘downplay’ an invention’s benefits in conducting a step-1 analysis.” MAZ Encryption Techs. LLC v.
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`Blackberry Corp., 2016 WL 5661981 at *6 (D. Del. Sept. 29, 2016); see also McRO, Inc. v. Bandai
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`Namco Games Am. Inc., 837 F.3d 1299, 1313 (Fed. Cir. 2016) (“[C]ourts must be careful to avoid
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`oversimplifying the claims by looking at them generally and failing to account for the specific
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`requirements of the claims.”) (internal quotation marks omitted). “Describing the claims at such a
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`high level of abstraction and untethered from the language of the claims all but ensures that the
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`exceptions to § 101 swallow the rule.” Enfish, 822 F.3d at 1337; Alice Corp. Pty. Ltd. v. CLS Bank
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`Int’l, 134 S. Ct. 2347, 2354 (2014) (“[W]e tread carefully in construing this exclusionary principle,
`
`lest it swallow all of patent law….At some level, ‘all inventions. . .embody, use, reflect, rest upon, or
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`apply laws of nature, natural phenomena, or abstract ideas’); Idexx Labs., Inc. v. Charles River
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`Labs., Inc., 2016 WL 3647971, *4 (D. Del. July 1, 2016) (The “level of abstraction” “in describing
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`the claims must be consonant with the level of abstraction expressed in the claims themselves.”);
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`3
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`

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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 9 of 16 PageID #: 5080
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`Messaging Gateway Solutions LLC v. Amdocs, Inc., 2015 WL 1744343, *5 (D. Del. April 5, 2015)
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`(“If one looks at almost any patent from far enough away, it could arguably claim an abstract idea.”).
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`Instead of adopting Defendants’ overly-abstracted, piecemeal interpretation of the claims,
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`Judge Fallon’s Step 1 approach focused on the specific, concrete, technological solutions recited in
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`the claims themselves, thus comporting with the Supreme Court’s and Federal Circuit’s mandate to
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`analyze the entire claim as an ordered combination. See McRO, 837 F.3d at 1313 (“Whether at step
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`one or step two of the Alice test,…a court must look to the claims as an ordered combination,
`
`without ignoring the requirements of the individual steps.”) (emphasis added). Defendants are
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`wrong when they argue that Judge Fallon’s Alice analysis should have focused on the individual
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`computer components in the claims, as this would contradict the Supreme Court’s mandate that
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`claims are not to be dissected into individual components, but rather considered as a whole. See
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`Diamond v. Diehr, 450 U.S. 175, 188-89 (1981); Alice, 134 S. Ct. at 2355 (“[W]e consider the
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`elements of each claim both individually and ‘as an ordered combination’ to determine whether the
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`additional elements ‘transform the nature of the claim’ into a patent-eligible application.”) (quoting
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`Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1297-98 (2012)); In re Bilski,
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`545 F.3d 943, 958 (Fed. Cir. 2008) (“[I]t is irrelevant that any individual step or limitation of such
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`processes by itself would be unpatentable under § 101.”); King Pharms., Inc. v. Eon Labs, Inc., 616
`
`F.3d 1267, 1277 (Fed. Cir. 2010) (“The Supreme Court has stated that a § 101 patentability analysis
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`is directed to the claim as a whole, not individual limitations.”).
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`Defendants argue that Judge Fallon should not have considered the claim as a whole under
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`Alice Step 1 in determining whether the claim is directed primarily to an abstract idea, but should
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`have instead waited until Step 2 before taking into account the claimed invention’s character as a
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`whole. Objs. at 5. The Federal Circuit has repeatedly held otherwise, as Judge Fallon correctly
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`noted. R&R at 24 (citing McRO, 837 F.3d at 1313 (“Whether at step one or step two of the Alice
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`4
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`

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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 10 of 16 PageID #: 5081
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`test…a court must look to the claims as an ordered combination, without ignoring the requirements
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`of the individual steps.”)); see also Enfish, 822 F.3d at 1338; Affinity Labs of Texas, LLC v.
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`DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) (“The ‘abstract idea’ step of the inquiry calls
`
`upon us to look at the ‘focus of the claimed advance over the prior art’ to determine if the claim’s
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`‘character as a whole’ is directed to excluded subject matter.”); Visual Memory LLC v. NVIDIA
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`Corp., 867 F.3d 1253, 1258 (Fed. Cir. 2017) (Alice two-step framework “involve[s] overlapping
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`scrutiny of the content of the claims” requiring that the Court “ask whether the claims are directed to
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`an improvement to computer functionality versus being directed to an abstract idea.”). Judge Fallon
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`correctly followed Supreme Court and Federal Circuit guidance in choosing to consider the claim
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`limitations on the whole (along with specific statements in each Asserted Patent) to determine under
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`Alice Step 1 that the Asserted Claims are not directed to abstract ideas because the plain focus of
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`each claim is “on an improvement to computer functionality itself, not on economic or other tasks
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`for which a computer is used in its ordinary capacity.” R&R at 17, 19, 21, 23 (citing Visual
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`Memory, 867 F.3d at 1258, Enfish, 822 F.3d at 1336).
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`Defendants assert that Judge Fallon’s R&R “fails to follow Supreme Court and Federal
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`Circuit precedent” (Objs. at 6, § C), but that assertion is without substance. Throughout the R&R,
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`Judge Fallon repeatedly (and correctly) applied the appropriate Section 101 analysis set forth by the
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`Supreme Court and the Federal Circuit. As a reading of Section C of their Objections shows, what
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`Defendants appear to actually take issue with is Judge Fallon’s rejection of the analogies that
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`Defendants attempted to draw between USR’s claimed technical innovation, and different patent
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`claims analyzed by different courts in other cases. For example, Defendants cite the Supreme
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`Court’s Alice decision as controlling, but nothing in Alice mandates a finding of unpatentability here;
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`the Alice claims were directed to a “fundamental economic practice” covering concepts that had
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`been “long prevalent in our system of commerce,” Alice, 134 S. Ct. at 2355-56, a showing that Judge
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`5
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`

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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 11 of 16 PageID #: 5082
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`Fallon found Defendants failed to make here. Defendants also drew analogies to the claims at issue
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`in Secured Mail Solutions LLC v. Universal Wilde, Inc., 873 F.3d 905 (Fed. Cir. 2017) and Smart
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`Systems Innovations, LLC v. Chicago Transit Authority, 873 F.3d 1364, 13 72-73 (Fed. Cir. 2017),
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`but Judge Fallon expressly distinguished those claims from those at issue here. See R&R at 25.
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`Finally, Defendants also raise (for the first time) two decisions issued from trial courts outside of
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`both this district and the Third Circuit.1 Obviously, neither of these out-of-circuit trial court
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`decisions constitute “precedent” that would mandate a different conclusion here.
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`Defendants object that Judge Fallon failed to “perform an Alice Step 2 analysis,” Objs. at 7,
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`but acknowledge that, having found that the Asserted Claims are not directed to an unpatentable
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`abstract idea in Alice step 1, Judge Fallon was under no obligation to analyze any of these claims
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`under Alice step 2. See McRO, 837 F.3d at 1316 (“Because we find that claim 1 is not directed to
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`ineligible subject matter, we do not reach Alice step two.”); Enfish, 822 F.3d at 1339 (same).
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`Nevertheless, relying on her analysis of the technical innovations recited in the Asserted Claims, and
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`noting the significant overlap between Steps 1 and 2 of the Alice inquiry, Judge Fallon still
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`concluded that each of the four Asserted Patents claims an “inventive concept” sufficient to satisfy
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`Alice Step 2. See R&R at 19, 21, 23, 26 (citing Elec. Power Grp., LLC v. Alston S.A., 830 F.3d
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`1350, 1353 (Fed. Cir. 2016)).
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`Finally, Defendants argue that Judge Fallon was required to consider whether the asserted
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`claims of some (but not all) of the patents are directed to an “unpatentable mental process.” Objs. at
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`8. There is no requirement that the Court review the abstractness of any challenged claim under a
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`“mental steps” analysis. Moreover, although Defendants raised this “mental process” argument in
`
`
`1 Asghari-Kamrani v. United Servs. Auto Ass’n, No. 15-cv-478, 2016 WL 3670804 (E.D. Va. July
`5, 2016), aff’d, 2018 WL 4352098 (Fed. Cir. Sept. 11, 2018), and Kinglite Holdings, Inc. v. Micro-
`Star Int’l Co. Ltd, 2015 WL 6437836 (C.D. Cal. 2015).
`
`
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`6
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`

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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 12 of 16 PageID #: 5083
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`their motion papers, and again in their objections, Defendants have never provided any citation to the
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`record (either to the Complaint or to the Asserted Patents) to support this assertion, choosing to
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`instead rely entirely on attorney argument. See, e.g., Objs. at 9-10, 15. In the absence of any
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`evidence of record, Judge Fallon was under no obligation to consider Defendants’ “mental process”
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`argument. See Smart Meter Techs., Inc. v. Duke Energy Corp., 2017 WL 2954916 at *3 n.1, *5 (D.
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`Del. July 11, 2017) (rejecting on a motion to dismiss as “attorney argument” defendant’s statements
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`where “the specification does not admit that humans could perform any of these functions.”);
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`PalTalk Holdings, Inc. v. Riot Games, Inc., 2017 WL 2106124 at *5 (D. Del. May 15, 2017) (same).
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`III.
`
`JUDGE FALLON PROPERLY DENIED DEFENDANTS’ TRANSFER MOTION
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`28 U.S.C. § 1404(a) “is intended to place discretion in the district court to adjudicate motions
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`to transfer according to an ‘individualized, case-by-case consideration of convenience and fairness.”
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`Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S.
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`612, 622 (1964)). “The burden of establishing the need for transfer…rests with the movant,” and
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`“‘in ruling on [a motion to transfer] the plaintiff’s choice of venue should not be lightly disturbed.’”
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`Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995). Judge Fallon correctly concluded
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`that the private and public interest factors do not weigh in favor of transfer.
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`The Parties’ Forum Preferences Do Not Favor Transfer. Although USR does not reside in
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`this District, “[t]he deference afforded a plaintiff’s choice of forum will ordinarily apply as long as a
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`plaintiff has selected the forum for some legitimate reason.” In re Mobile Telecommc’ns Techs.,
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`LLC, 243 F. Supp. 3d 478, 483 (D. Del. 2017) (emphasis added). Here, USR had legitimate reasons
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`for filing in Delaware instead of its “home turf” of Massachusetts, including that venue was likely
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`improper as to Visa in Massachusetts,2 yet certain in Visa’s state of incorporation in nearby
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`2 See Plaintiff Universal Secure Registry’s Answering Brief in Opposition to Defendants’ Motion to
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`7
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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 13 of 16 PageID #: 5084
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`Delaware. See, e.g., R&R at 2 (both Visa Defendants incorporated in Delaware); Helicos
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`Biosciences Corp. v. Illumina, Inc., 858 F. Supp. 2d 367, 373 (D. Del. 2012) (suit was filed in
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`Delaware “for legitimate reasons” because “Delaware is a venue close to [plaintiff’s] principal place
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`of business [in Massachusetts] and . . . it is a venue where all of the defendants could be sued”); see
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`also Cellectis S.A. v. Precision Biosciences, Inc., 858 F. Supp. 2d 376, 381 (D. Del. 2012)
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`(plaintiff’s choice of forum was based on “legitimate reasons” where defendant was incorporated in
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`Delaware, weighing against transfer). In any event, there is no merit to Defendants’ criticism that
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`“the R&R errs by effectively making USR’s forum preference dispositive.” Objs. at 8. To the
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`contrary, Judge Fallon expressly afforded USR’s forum preference less weight than if it had a
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`presence in Delaware, finding it weighed only “slightly against transfer,” R&R at 6, just as
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`Defendants urged her to do.3 Judge Fallon simply (and correctly) declined to give Defendants’
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`preference for a home-field advantage in a venue where they happen to be major employers more
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`weight than USR’s rational preference for trial in the “traditional and legitimate venue” of the Visa
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`Defendants’ own chosen state of incorporation. R&R at 6; Stephenson v. Game Show Network,
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`LLC, 933 F. Supp. 2d 674, 678 (D. Del. 2013)).
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`The Location Where the Claim Arose Does Not Favor Transfer. Without citing to any
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`authority, Defendants contend that “[t]he R&R errs by focusing on the sale of accused products
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`nationwide, including in Delaware, as a basis for where the claim arose.” Objs. at 9. In fact, “when
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`the defendant in a patent infringement action operates on a national or global level, this factor is
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`typically neutral.” Smart Audio Techs., LLC v. Apple, Inc., 910 F. Supp. 2d 718, 729, n.10 (D. Del.
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`2012). Defendants do not dispute that the accused products are ubiquitous nationwide (and
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`Transfer Venue to the Northern District of California, D.I. 31 (“Transfer Opp.”) at 4 n.1.
`3 See, e.g., Defendants’ Reply (D.I. 38) at 2 (arguing that “USR’s ‘preference for Delaware’ . . .
`‘weighs minimally against transferring venue’”).
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`
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`8
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`

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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 14 of 16 PageID #: 5085
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`globally). Defendants’ singular focus on where the accused products were developed—rather than
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`sold—finds no support in the law.
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`The Convenience of the Parties Does Not Favor Transfer. Defendants also incorrectly
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`contend that Judge Fallon found Apple and Visa could not obtain transfer from an inconvenient
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`forum simply because they are large companies. Objs. at 9. To the contrary, Judge Fallon noted the
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`well-established principle that defendants who are incorporated in Delaware (like Visa) can rarely
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`credibly argue that litigating in their own state of incorporation is inconvenient. R&R at 7; see also
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`Intellectual Ventures I LLC v. Altera Corp., 842 F. Supp. 2d 744, 751 (D. Del. 2012) (Stark, J.)
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`(“When transfer is sought by a defendant with operations on a national or international scale, that
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`defendant ‘must prove that litigating in Delaware would pose a unique or unusual burden on [its]
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`operations.’”) (quoting L’Athene, Inc. v. EarthSpring LLC, 570 F. Supp. 2d 588, 592 (D. Del.
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`2008)), writ denied sub nom. In re Altera Corp., 494 F. App’x 52, 54 (Fed. Cir. 2012).4 Defendants
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`also erroneously contend that the Court should not have considered the convenience of USR’s
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`founder Dr. Weiss because “USR could have sued in Boston, less than ten miles from his home.”
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`Objs. at 9. As noted above, however, venue over Visa would likely be improper in the District of
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`Massachusetts (a point Visa did not contest in Defendants’ reply, D.I. 38) such that USR could not
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`have sued in Boston. Judge Fallon correctly considered the relative inconvenience to USR—a small
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`company with negative cash flows that, together with its sister company that develops and markets
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`products practicing Dr. Weiss’s patents, has less than a dozen employees and consultants—of being
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`forced to litigate on an opposite coast and found it greater than the inconvenience to Apple and Visa.
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`R&R at 7-8. Defendants cite no basis for disturbing that finding.
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`4 Although Apple is not incorporated in Delaware, it has a significant presence in Delaware. For
`example, Apple’s retail store in Newark, Delaware sells more infringing iPhones than any other
`Apple retail location, and sells and/or supports the second-most volume of infringing products out of
`any Apple retail location. See Transfer Opp. at 7 n.6.
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`
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`9
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`

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`Case 1:17-cv-00585-CFC-SRF Document 150 Filed 10/17/18 Page 15 of 16 PageID #: 5086
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`The Convenience of the Witnesses Does Not Favor Transfer. Defendants complain that
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`Judge Fallon did not afford greater weight to the location of six prior artists (identified by
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`Defendants from patent applications) who happen to reside within the subpoena power of the
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`transferee forum. But Defendants did not explain why these witnesses are relevant. Tessera, Inc. v.
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`Sony Elecs. Inc., Civil No. 10-838 (RMB) (KW), 2012 WL 1107706, at *6 (D. Del. Mar. 30, 2012)
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`(“It is the defendant[s’] burden to show . . . that witness’ importance to the defendant[s’] case.”).5 In
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`contrast, a number of third party witnesses in Massachusetts (some of whom Apple has already
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`subpoenaed), testified that they are willing to testify in Delaware. D.I. 32, 34, 79, 82.
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`The Practical Considerations and Local Interest Factors Do Not Favor Transfer. Finally,
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`Judge Fallon correctly declined to double-count the convenience of Defendants’ witnesses and the
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`location of evidence as “practical considerations.” R&R at 10. Defendants’ ipse dixit assertion that
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`considering these factors again is not double counting is erroneous on its face. Objs. at 10. Likewise,
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`Defendants’ one-sentence argument that “N.D. Cal. has a stronger [local] interest because the
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`accused products were designed and developed there” ignores the ample case law in this District
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`rejecting this argument, see Transfer Opp. at 18-19, R&R 11-12, and Delaware’s competing local
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`interest in suits against its citizens (here, Visa). See, e.g., Autodesk Canada Co. v. Assimilate, Inc.,
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`No. CIV. 08-587-SLR-LPS, 2009 WL 3151026, at *9 (D. Del. Sept. 29, 2009) (in local interest
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`analysis, defendant’s incorporation in Delaware is “the crucial fact”).
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`IV. CONCLUSION
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`For all of the foregoing reasons, the R&R should be adopted in its entirety.
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`5 Although beyond the scope of the motion before Judge Fallon, the reason movants must explain
`the significance of third parties they identify in the tra