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Scvngr, Inc. v. Echarge Licensing, LLC

United States District Court, D. Massachusetts

September 25, 2014

SCVNGR, INC., d/b/a LevelUp, Plaintiff,


DENISE J. CASPER, District Judge.

I. Introduction

SCVNGR, Inc. d/b/a LevelUp ("LevelUp") has filed this lawsuit seeking declarations of invalidity, non-infringement and unenforceability as to eight patents owned by eCharge Licensing, LLC ("eCharge"), a Chicago-based entity, as well as an allegation that eCharge's conduct has violated Mass. Gen. L. c. 93A. D. 7. eCharge has moved to dismiss this action, D. 9, 11, or in the alternative transfer the case to the Northern District of Illinois, D. 13. LevelUp has moved to stay the litigation pending Inter Partes Review ("IPR") of three of the eight patents-in-suit. D. 31. For the reasons stated below, the Court DENIES the motion to dismiss for lack of personal jurisdiction, D. 11; DENIES IN PART the motion to dismiss for failure to state a claim upon which relief can be granted, D. 9, DENIES the motion to transfer, D. 13; and DENIES the motion to stay, D. 31.

II. Standard of Review

A. Motion to Dismiss for Failure to State a Claim

To survive a motion to dismiss, a complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). The Court accepts "the truth of all well-pleaded facts and draw[s] all reasonable inferences therefrom in the pleader's favor." Grajales v. P.R. Ports Auth. , 682 F.3d 40, 44 (1st Cir. 2012). A plaintiff need not establish that it is likely to prevail, but its claim must be "plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009). To determine plausibility, the Court must separate "the complaint's factual allegations (which must be accepted as true)... from its conclusory legal allegations (which need not be credited)." Morales-Cruz v. Univ. of P.R. , 676 F.3d 220, 224 (1st Cir. 2012). The Court must then "determine whether the factual allegations are sufficient to support the reasonable inference that the defendant is liable for the misconduct alleged.'" García-Catalán v. United States , 734 F.3d 100, 103 (1st Cir. 2013) (quoting Haley v. City of Boston , 657 F.3d 39, 46 (1st Cir. 2011)).

B. Motion to Dismiss for Lack of Personal Jurisdiction

On a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing that personal jurisdiction over the defendant. Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass'n , 142 F.3d 26, 34 (1st Cir. 1998). To meet its burden, LevelUp must "demonstrate the existence of every fact required to satisfy both the forum's long-arm statute and the Due Process Clause of the Constitution." United States v. Swiss Am. Bank, Ltd. , 274 F.3d 610, 618 (1st Cir. 2001) (internal quotations and citation omitted). Under this standard, the court will look to the facts alleged in the pleadings and the parties' supplemental filings, including affidavits. Sawtelle v. Farrell , 70 F.3d 1381, 1385 (1st Cir. 1995); Ticketmaster-New York, Inc. v. Alioto , 26 F.3d 201, 203 (1st Cir. 1994). The court will "take specific facts affirmatively alleged by the plaintiff as true (whether or not disputed) and construe them in the light most congenial to the plaintiff's jurisdictional claim." Mass. Sch. of Law, 142 F.3d at 34. It will then "add to the mix facts put forward by the defendants, to the extent that they are uncontradicted." Id.

C. Motion to Transfer

A district court may, in its discretion, transfer a civil action to any other district where it might have been brought. 28 U.S.C. § 1404(a); Stewart Org., Inc. v. Ricoh Corp. , 487 U.S. 22, 29 (1988). The burden is on the moving party to show that transfer is warranted. Shipley Co., Inc. v. Clark , 728 F.Supp. 818, 823 (D. Mass. 1990). In considering whether to grant a motion to transfer venue, a district court should consider "(1) the convenience of the parties, (2) the convenience of the witnesses, (3) the relative ease of access to sources of proof, (4) the availability of process to compel attendance of unwilling witnesses, (5) cost of obtaining willing witnesses, and (6) any practical problems associated with trying the case most expeditiously and inexpensively." F.A.I. Elec. Corp. v. Chambers , 944 F.Supp. 77, 80-81 (D. Mass. 1996) (citing Gulf Oil Corp. v. Gilbert , 330 U.S. 501, 508 (1947)). There is a strong presumption in favor of the plaintiff's choice of forum. Sigros v. Walt Disney World Co. , 129 F.Supp.2d 56, 71 (D. Mass. 2001). The moving party "must establish that private and public interests weight heavily on the side of trial in the foreign forum." Mercier v. Sheraton Int'l, Inc. , 935 F.2d 419, 424 (1st Cir. 1991) (citations omitted).

D. Motion to Stay

A court's authority to stay proceedings "is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel and for litigants." Bank of Am., N.A. v. WRT Realty, L.P. , 769 F.Supp.2d 36, 39 (D. Mass. 2011) (quoting Landis v. North Am. Co. , 299 U.S. 248, 254 (1936)). Thus, the decision "whether to stay proceedings involves balancing the interests of the parties and the Court. A stay is appropriate where it is likely to conserve judicial and party time, resources, and energy.'" Id . (quoting Diomed, Inc. v. Total Vein Solutions, LLC , 498 F.Supp.2d 385, 387 (D. Mass. 2007)) (internal citation omitted).

III. Factual Background

LevelUp is a Delaware corporation with its principal place of business in Boston, Massachusetts. D. 7 ¶ 3. eCharge is an Illinois limited liability company with its principal place of business in Northbrook, Illinois. Id . ¶ 4. On August 16, 2013, eCharge, through its counsel, sent a letter to LevelUp asserting that LevelUp's application for the Apple iPhone infringes certain claims of U.S. Patent Nos. 5, 834, 747 ("the '747 patent"), 6, 308, 890 ("the '890 patent"), 6, 764, 005 ("the '005 patent"), 7, 083, 094 ("the '094 patent"), 7, 334, 732 ("the '732 patent"), 7, 530, 495 ("the '495 patent"), 7, 828, 207 ("the '207 patent") and 8, 490, 875 ("the '875 patent") (collectively "patents-in-suit"). Id . ¶ 7. On September 19, 2013, eCharge sent an email attaching a letter dated August 2, 2012 and reiterating eCharge's claims of infringement, which LevelUp alleges are a "frivolous attempt to extort payment from LevelUp based upon the threat of costly litigation." Id.

IV. Procedural History

In response to eCharge's allegations, LevelUp brought this action, D. 1, and shortly thereafter amended its complaint, D. 7. Subsequently, in the following order, eCharge moved to dismiss the action for failure to state a claim for which relief can be granted, D. 9, moved to dismiss the action for lack of personal jurisdiction, D. 11, and moved to transfer this action to the Northern District of Illinois, D. 13.

A separate litigation is currently pending in the Northern District of Illinois, in which eCharge has alleged that Square, Inc. has infringed three of eCharge's patents that are at issue in this case: the 005, 207 and 875 patents. eCharge Licensing, LLC v. Square, Inc., No. 13-cv-06445 (EEC), (N.D. Ill.) (the "Illinois litigation"). On November 18, 2013, Square, Inc. ("Square") filed three petitions for Inter-Parties Review ("IPR"). D. 32 at 6. By statute, the Patent Trial and Appeal Board ("PTAB") was required to grant or deny Square's petition to initial the IPRs by May 18, 2014. 35 U.S.C. § 314(b). It granted the petitions. D. 42 at 1-2. Pursuant to 35 U.S.C. § ...

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