Case 2:19-cv-04980-AB-FFM Document 65 Filed 11/08/19 Page 1 of 17 Page ID #:912
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`
`Michael R. Matthias (SBN 57728)
`mmatthias@bakerlaw.com
`BAKER & HOSTETLER LLP
`11601 Wilshire Boulevard, Suite 1400
`Los Angeles, CA 90025-0509
`Telephone: 310-820-8800
`Facsimile: 310-820-8859
`Kevin M. Bovard, SBN 247521
`kbovard@bakerlaw.com
`BAKER & HOSTETLER LLP
`2929 Arch Street, 12th Floor
`Philadelphia, PA 19104-2891
`Telephone: 215-568-3100
`Facsimile: 215-568-3439
`Attorneys for Defendant
`GUEST-TEK INTERACTIVE
`ENTERTAINMENT LTD.
`(additional counsel listed on following page)
`
`IN THE UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`WESTERN DIVISION
`
`NOMADIX, INC.,
`Plaintiff,
`
`v.
`GUEST-TEK INTERACTIVE
`ENTERTAINMENT LTD.,
`Defendant.
`
` Case No.: 2:19-cv-04980 AB (FFMx)
`
`NOTICE OF MOTION AND
`MOTION TO DISMISS FOR
`IMPROPER CLAIM SPLITTING
`
`HEARING DATE: Dec. 6, 2019
`10:00 a.m.
`Courtroom 7B
`
`Honorable André Birotte Jr.
`
`NOTICE OF MOTION & MOTION TO DISMISS FOR IMPROPER CLAIM SPLITTING;
`CASE NO.: 2:19-CV-04980-AB-FFM
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`GUEST TEK EXHIBIT 1026
`Guest Tek v. Nomadix, IPR2019-01191
`
`

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`Case 2:19-cv-04980-AB-FFM Document 65 Filed 11/08/19 Page 2 of 17 Page ID #:913
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`Thomas D. Warren, SBN 160921
`twarren@piercebainbridge.com
`PIERCE BAINBRIDGE BECK PRICE & HECHT LLP
`355 S. Grand Avenue, 44th Floor
`Los Angeles, CA 90071
`Telephone: 213-262-9333
`Facsimile: 213-279-2008
`
`Attorneys for Defendant
`GUEST-TEK INTERACTIVE
`ENTERTAINMENT LTD.
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`NOTICE OF MOTION & MOTION TO DISMISS FOR IMPROPER CLAIM SPLITTING;
`CASE NO.: 2:19-CV-04980-AB-FFM
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`

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`Case 2:19-cv-04980-AB-FFM Document 65 Filed 11/08/19 Page 3 of 17 Page ID #:914
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`
`TO THE HONORABLE COURT, ALL PARTIES, AND THEIR
`COUNSEL OF RECORD HEREIN:
`PLEASE TAKE NOTICE that on Friday, December 6, 2019 at 10:00 a.m.,
`or as soon thereafter as this matter may be heard, in Courtroom 7B of the above-
`captioned court, located at 350 W. First Street, Los Angeles, California 90012,
`before the Honorable André Birotte Jr., Defendant/Counter-Claimant Guest-Tek
`Interactive Entertainment Ltd. (“Guest-Tek”) will, and hereby does, move to dismiss
`the Complaint under Fed. R. Civ. P. 12(c) on grounds that the Complaint constitutes
`impermissible claim splitting.
`This motion is supported by this Notice of Motion and Motion, the
`accompanying Memorandum of Points and Authorities, the accompanying Request
`for Judicial Notice, the accompanying Declaration of Kevin M. Bovard; all
`pleadings on file in this action as well as the related matter, Nomadix Inc. v. Guest-
`Tek Interactive Entertainment Ltd., 2:16-cv-08033, and upon such other matters and
`argument as may be presented to the Court at the time of the hearing.
`This Motion is made following the pre-filing conference of counsel, which
`took place on November 4, 2019.
`
`Dated: November 8, 2019
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`
`
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`Respectfully submitted,
`
`BAKER & HOSTETLER LLP
`
`/s/ Kevin M. Bovard
`By:
`
`
`Attorneys for Defendant
`GUEST-TEK INTERACTIVE
`ENTERTAINMENT LTD.
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`MOTION TO DISMISS FOR IMPROPER CLAIM SPLITTING;
`CASE NO.: 2:19-CV-04980-AB-FFM
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`Case 2:19-cv-04980-AB-FFM Document 65 Filed 11/08/19 Page 4 of 17 Page ID #:915
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`TABLE OF CONTENTS
`
`I.
`INTRODUCTION ........................................................................................... 1
`BACKGROUND ............................................................................................. 3
`II.
`III. LEGAL STANDARD ..................................................................................... 4
`IV. ARGUMENT .................................................................................................. 6
`A.
`The causes of action and relief sought are the same ............................. 6
`B.
`The parties are the same. ....................................................................... 8
`C.
`Nomadix filed a separate suit to circumvent the Court’s deadline
`for amending the pleadings in the 2016 Action, which is improper. .... 9
`CONCLUSION ............................................................................................. 10
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`V.
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`MOTION TO DISMISS FOR IMPROPER CLAIM SPLITTING;
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`Case 2:19-cv-04980-AB-FFM Document 65 Filed 11/08/19 Page 5 of 17 Page ID #:916
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`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Adams v. Cal. Dep’t of Health Servs.,
`487 F.3d 684 (9th Cir. 2006) .................................................................... 2, 5, 7, 8
`Aquawood, LLC v. Toys “R” Us-Delaware, Inc.,
`No. 15-cv-5869-AB, 2016 WL 10576620 (C.D. Cal. Mar. 10,
`2016) ..................................................................................................................... 4
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ............................................................................................. 4
`Bovarie v. Giurbino,
`421 F. Supp. 2d 1309 (S.D. Cal. 2006) ................................................................ 6
`Chavez v. United States,
`683 F.3d 1102 (9th Cir. 2012) .............................................................................. 4
`Clements v. Airport Auth. of Washoe Cnty.,
`69 F.3d 321 (9th Cir. 1995) .................................................................................. 5
`Cook v. C.R. England, Inc.,
`No. 12-cv-3515-GW, 2012 WL 2373258 (C.D. Cal. June 21, 2012) ........ 2, 5, 10
`Costantini v. Trans World Airlines,
`681 F.2d 1199 (9th Cir. 1982) .......................................................................... 5, 6
`Efficient Frontiers, Inc. v. Marchese,
`No. 16-cv-6920-DDP, 2016 WL 7117243 (C.D. Cal. Dec. 6, 2016) ............... 5, 8
`Falcon Stainless, Inc. v. Larsen Supply Co.,
`No. 10-cv-04587-JHN(AJWx), 2011 WL 13217115 (C.D. Cal.
`June 6, 2011)................................................................................................. 4, 5, 6
`Fleming v. Pickard,
`581 F.3d 922 (9th Cir. 2009) ................................................................................ 4
`Johnson v. Mammoth Recreations, Inc.,
`975 F.2d 604 (9th Cir. 1992) ................................................................................ 9
`
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`Case 2:19-cv-04980-AB-FFM Document 65 Filed 11/08/19 Page 6 of 17 Page ID #:917
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`Pollok v. Vanguard Marketing Corp.,
`No. 18-cv-1099-JLS, 2018 WL 6118602 (C.D. Cal May 29, 2018) ................... 2
`Sensormatic Sec. Corp. v. Sensormatic Elecs. Corp.,
`452 F. Supp. 2d 621 (D. Md. 2006) ................................................................. 6, 7
`Stark v. Starr,
`94 U.S. 477 (1876) ............................................................................................... 5
`United States v. Author Servs., Inc.,
`804 F.2d 1520 (9th Cir. 1986) .............................................................................. 6
`United States v. Haytian Republic,
`154 U.S. 118 (1894) ............................................................................................. 5
`Walton v. Eaton Corp.,
`563 F.2d 66 (9th Cir. 1977) ............................................................................ 2, 10
`Rules
`Fed. R. Civ. P. 12(c) ...................................................................................... 1, 2, 4, 5
`Fed. R. Civ. P. 16(b) .................................................................................................. 9
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`Case 2:19-cv-04980-AB-FFM Document 65 Filed 11/08/19 Page 7 of 17 Page ID #:918
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`I.
`
`MEMORANDUM OF POINTS AND AUTHORITIES
`INTRODUCTION
`This action must be dismissed because it is an improper attempt by Nomadix
`to assert claims that could have and should have been asserted in a related action,
`Nomadix Inc. v. Guest-Tek Interactive Entertainment Ltd., 2:16-cv-08033 (the “2016
`Action”). In the 2016 Action, Nomadix sued Guest-Tek for breach of the parties’
`Confidential License Agreement (“License Agreement”) on October 28, 2016. The
`2016 Action, which is ongoing, involves claims that certain Guest-Tek Internet
`solutions are covered by Nomadix patents and are therefore royalty bearing. (2016
`Action, D.I. 32.) The 2016 Action also alleges that Guest-Tek breached the License
`Agreement by filing petitions for inter partes review (“IPRs”) at the USPTO, in
`violation of the License Agreement’s no-challenge provision. (2016 Action,
`Supplemental Complaint, D.I. 274.) These IPRs were first filed in December 2017.
`Nomadix has now chosen, improperly, to litigate its claims piecemeal, filing
`this action (the “2019 Action”) on June 7, 2019. In the 2019 Action, the sole claim
`is also premised on Nomadix’s position that Guest-Tek breached the License
`Agreement by filing IPRs. The only difference is that in the 2016 Action’s
`Supplemental Complaint, Nomadix alleges that the IPRs constitute a breach of the
`License Agreement’s no-challenge clause (2016 Action, D.I. 32; 2019 Action D.I.
`1, Exhibit 1 at § 2.10), while in the 2019 Complaint, Nomadix alleges that the IPRs
`constitute a breach of a forum selection clause (2019 Action, D.I. 1, Exhibit 1 at §
`8.10). What is undisputed is that both cases involve claims turning on the same
`operative facts, i.e., whether Guest-Tek’s IPRs constituted breach of the License
`Agreement.
`Nomadix’s strategy of scattershot litigation in multiple concurrent actions is
`barred by the doctrine against claim-splitting. The federal doctrine against claim-
`splitting instructs that “plaintiffs generally have ‘no right to maintain two separate
`actions involving the same subject matter at the same time in the same court and
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`MOTION TO DISMISS FOR IMPROPER CLAIM SPLITTING;
`CASE NO.: 2:19-CV-04980-AB-FFM
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`Case 2:19-cv-04980-AB-FFM Document 65 Filed 11/08/19 Page 8 of 17 Page ID #:919
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`against the same defendant.’” Pollok v. Vanguard Marketing Corp., No. 18-cv-1099-
`JLS, 2018 WL 6118602, at *3 (C.D. Cal. May 29, 2018) (quoting Adams v. Cal.
`Dep’t of Health Servs., 487 F.3d 684, 687 (9th Cir. 2007)). The proper remedy is
`dismissal of the follow-on action, with prejudice. Id. Here there is no dispute that
`Nomadix’s co-pending actions involve the same subject matter, are brought in the
`same court, and against the same defendant. Accordingly, dismissal is warranted.
`Dismissal is doubly appropriate here because (1) all relevant facts and
`allegations were known and could have been included in Nomadix’s Supplemental
`Complaint in the 2016 Action, and (2) Nomadix’s decision to file a second lawsuit—
`as opposed to amending its claims in the 2016 Action—is an attempt to avoid the
`deadline for amending the pleadings in the 2016 Action. This is improper. Walton
`v. Eaton Corp., 563 F.2d 66, 71 (9th Cir. 1977) (“[T]he court must ensure that the
`plaintiff does not use the incorrect procedure of filing duplicative complaints for the
`purpose of circumventing the rules pertaining to the amendment of complaints and
`demand for trial by jury.”); Cook v. C.R. England, Inc., No. 12-cv-3515-GW (CWx),
`2012 WL 2373258, at *9 (C.D. Cal. June 21, 2012) (dismissing follow-on action
`with prejudice and noting that “courts must be vigilant in deterring plaintiffs who
`attempt to split claims between multiple suits in order to evade procedural rules”)
`Under the doctrine of claim-splitting, this action must be dismissed under Rule
`12(c).1
`
`
`1 In the alternative, the two cases should at the very least be consolidated, with the
`case schedule for the later-filed action adopted, and a trial date set for late 2020. It
`would be a waste of the parties’ and the Court’s resources to have back-to-back trials
`on completely intertwined issues. However, Guest-Tek notes that courts in
`circumstances such as
`these
`favor dismissals-with-prejudice
`rather
`than
`consolidation so as “not to ‘reward’ [the plaintiff] with consolidation for failing to
`bring a claim [] and then filing a second action in the same court to obscure that
`
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`failure.” Cook, 2012 WL 2373258, at *9.
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`MOTION TO DISMISS FOR IMPROPER CLAIM SPLITTING;
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`Case 2:19-cv-04980-AB-FFM Document 65 Filed 11/08/19 Page 9 of 17 Page ID #:920
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`II. BACKGROUND
`The 2016 Action was filed on October 28, 2016, asserting breach of the
`License Agreement based on Guest-Tek’s purported underpayment of patent license
`royalties.
`On December 22 and 28, 2017, Guest-Tek filed two IPR petitions relating to
`two of the Nomadix Licensed Patents asserted against Guest-Tek in the 2016 Action.
`(2016 Action, D.I. 210-1 at 2; Guest-Tek Interactive Ent. Ltd. v. Nomadix, Inc.,
`IPR2018-00376, (PTAB Dec. 22, 2017); Guest-Tek Interactive Ent. Ltd. v. Nomadix,
`Inc., IPR2018-00392 (PTAB Dec. 28, 2017).)
`Based on these IPRs, on February 23, 2018, Nomadix sought leave to file a
`Supplemental Complaint adding a new cause of action: Breach of Contract on the
`basis that the December 2017 IPRs breached the License Agreement’s “no-
`challenge” clause. (2016 Action, D.I. 208, 210.)
`The deadline to amend the pleadings in the 2016 Action was February 26,
`2018. (2016 Action, D.I. 56; D.I. 261 (recognizing that “the deadline to amend
`pleadings was February 26, 2018”)).
`The Court permitted the Supplemental Complaint by Order dated April 3,
`2018. (2016 Action, D.I. 261.)
`On April 4, 2018, Nomadix filed its Supplemental Complaint in the 2016
`Action alleging that Guest-Tek’s IPR petitions breached the “no-challenge clause”
`of the License Agreement. (2016 Action, D.I. 264, 274.)2 Nomadix did not allege in
`its Supplemental Complaint that the IPR petitions also breached the Agreement’s
`“forum selection clause.” Id. In the ensuing months, Guest-Tek would file five
`additional IPR petitions. (IPR2018-01660 (PTAB Sept. 5, 2018); IPR2018-01668
`
`
`2 There was no breach of the no-challenge clause. Section 2.10 of the Agreement
`provides that Guest-Tek may challenge the validity of the licensed Nomadix patents
`if Nomadix “asserts” any of them against Guest-Tek. The 2016 Action was such an
`
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`assertion, and thus authorized the IPR petitions.
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