Saturday, March 27, 2021

Samsung gets 'westerndistricted' by non-practicing entity asserting LED patents in Waco, TX

When companies like Ericsson, but also numerous non-practicing entities, want to sue Samsung over U.S. patents, they traditionally went to the Eastern District of Texas. This Harvard Business School Working Knowledge article discusses how Samsung seeks to generate goodwill from the local community (from which the court picks its jurors) such as by building the only outdoor ice skating rink in Texas and an annual Wonderland of Lights festival, which "started with the Samsung Holiday Celebration Show, featuring music by the local symphony as 250,000 Christmas lights lit up the county courthouse."

But there's an east-to-west "case drain" with the Western District of Texas having gone from a secondary patent litigation forum at best to the undisputed "market leader" among all roughly 100 U.S. federal judicial districts. And occasionally, even Samsung gets sued in the Western District, such as by a non-practicing entity named LED Wafer Solutions on Thursday (click on the image to enlarge):

All one can google about that company is this lawsuit. It appears that this entity strategically chose to designate Waco, TX (where Judge Alan Albright presides over the Western District's patent cases, unless he transfers them within the district to Austin and stays on top anyway) as its legal domicile:

"Plaintiff LED Wafer is a limited liability company organized and existing under the law of the State of Delaware, with its principal place of business located at 7215 Bosque Blvd., Suite 156, Waco, TX 76710.

How many people this entity actually employs, and how much time they actually spend in Waco, is another question.

While Samsung's presence in East Texas is stronger than in West Texas, the complaint says the following:

"On information and belief, Samsung Electronics America, Inc. conducts business operations in the Western District of Texas in its facilities at 12100 Samsung Blvd., Austin, Texas 78754. Samsung Electronics America, Inc. has offices in the Western District of Texas where it sells and/or markets its products, including an office in Austin, Texas."

So there's even a Samsung Boulevard in Austin... though the ice skating rink is in another district.

In order to have a perfect basis for selecting this particular forum, other than seeking to benefit from it the way Caltech is trying against Microsoft and others are trying against Tesla all the time, the plaintiff would have to be able to allege that Samsung's Austin operation is where the alleged act of infringement primarily occurred. Should Samsung's Austin presence have nothing to do with the specific issues of this case, the plaintiff can still try to leverage the combination of formally being a local Waco company and of Samsung having at least some significant presence in the Western District. Judge Albright, like his colleagues in the Eastern District, isn't quite inclined to transfer cases out of his district, but the Federal Circuit can do so.

If Samsung brings a motion to transfer venue, where would it suggest the case be transferred? The Eastern District of Texas? It would be rather uncommon for a defendant to an NPE patent case actually asking for the case to be sent to the Eastern District of Texas, rather than to be transferred out of there...

I'm keeping an eye on developments in the Western District, now the world's #1 hotspot for patent infringement damages. I've already done some research and will soon share a number of observations. For now, what I found interesting about this Samsung case is that this defendant may be the first alleged patent infringer (or the first in a long time, or at least one of a very, very few) to consider the Eastern District of Texas a desirable destination: LED patents and a light festival, wouldn't that make sense? Furthermore, this complaint shows that the Western District's immense popularity among NPEs affects not only out-of-state investors such as Tesla, Intel, and Google, but also foreign investors like Samsung.

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