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Cell Tech Co. Wants Patent Suits Grouped in Lone Star State

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Law360

By Matthew Santoni

Law360 (May 26, 2022, 5:44 PM EDT) -- A federal district court near Texas' border with Louisiana and Arkansas should handle a Pennsylvania technology firm's lawsuits accusing multiple carmakers of violating its patents for in-vehicle cellular connectivity, the company's attorney told the Judicial Panel on Multidistrict Litigation on Thursday.

To support a bid for consolidating seven patent cases into a multidistrict litigation, counsel for Wayne, Pennsylvania-based Neo Wireless LLC said the Marshall division of the Eastern District of Texas was close to the headquarters of defendants Tesla and Toyota North America, while other defendants like General Motors had factories, research facilities or support facilities in Texas or nearby.

Neo Wireless came to the JPML's hearing in Pittsburgh on Thursday to seek consolidation in the Eastern District of Texas, while several of the automaker defendants said Michigan would be a better venue for the cases.

"Defendants have headquarters and manufacturing all across the country," said Jason D. Cassady of Caldwell Cassady Curry, representing Neo Wireless. "The headquarters for Toyota and Tesla are in Texas; GM's IT department is in Texas ... The witnesses are not in Michigan, they're in Texas and all over the country."

According to the underlying lawsuits, Ford Motor Co., American Honda Motor Co., Volkswagen Group of America Inc., Nissan North America Inc., Toyota Motor North America Inc., General Motors Co. and Tesla Inc. had infringed six Neo Wireless patents with 4G/LTE cell technology integrated into some of their vehicles, which they used for features like diagnostics, emergency roadside assistance, and remote starting, locking and unlocking.

Neo Wireless had filed three of the seven suits in the Eastern District of Texas, noting that Toyota's American headquarters is there, Tesla's headquarters is "a few hours away" and GM has a large manufacturing facility in Arlington. It sued Ford in Missouri, where the automaker has its largest factory; Nissan in Tennessee's Middle District, where it has its U.S. headquarters; Honda in Ohio's Southern District to correspond to a research hub that had developed the allegedly infringing products; and Volkswagen in Tennessee's Eastern District, where VW has its main U.S. manufacturing and engineering offices.

Neo Wireless had proposed consolidating the cases before U.S. District Judge Rodney Gilstrap, but noted that he had voluntarily recused himself from other cases involving Ford, so Cassady suggested the panel send the cases to U.S. District Judge Robert Schroeder III, based in Texarkana.

But attorneys for several of the automakers said the Eastern District of Michigan, in Detroit, would be a better fit for the cases, since more of the companies were headquartered or had a sizeable presence in the Motor City.

"Detroit research and development facilities will be a relevant locus of evidence in Michigan," said Joseph Herriges of Fish & Richardson PC, representing GM. "For all the defendants, third-party evidence from their suppliers will be in Michigan."

Only one of the defendants is actually headquartered in the Eastern District of Texas, none of the relevant suppliers are there, and no courts there had handled enough of the case to build up familiarity with the issues, said William Milliken of Sterne Kessler Goldstein & Fox, representing Volkswagen.

"A run-of-the-mill set of patent cases can be litigated separately," he told the panel. "If this were truly aimed at centralizing or convenience, they wouldn't have proposed Texas."

Panel Judge Matthew Kennelly asked how, in the absence of an MDL, multiple judges could be called upon to interpret the same patent claims, but Milliken said one judge would usually be first to interpret the claims and subsequent judges' rulings would usually defer to the first one.

The JPML took the arguments under advisement Thursday.

The patents in suit are U.S. Patents No. 8,467,366; No. 10,833,908; No. 10,075,941; No. 10,447,450; No. 10,965,512; and No. 10,771,302.

Neo Wireless is represented by Jason D. Cassady of Caldwell Cassady Curry PC.

The automakers are represented by Paul R. Steadman and Matthew Satchwell of DLA Piper LLP; Daniel E. Yonan and William Milliken of Sterne Kessler Goldstein & Fox; John T. Johnson, Joseph Herriges and Ruffin B. Cordell of Fish & Richardson; Peter J. Brennan and Reginald J. Hill of Jenner & Block LLP; Michael A. Berta of Arnold & Porter Kaye Scholer LLP; and Matthew J. Moore of Latham & Watkins LLP.

The case is In Re: Neo Wireless LLC Patent Litigation, MDL Number 3034, before the Judicial Panel on Multidistrict Litigation.

--Editing by Kelly Duncan.

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