How one patent troll is desperately trying to stay in East Texas

Uniloc, one of the nation's most well-known patent-holding companies, sued Google earlier this year in the Eastern District of Texas. Even though neither Uniloc nor Google has meaningful ties to that area, the lawsuit was no surprise—East Texas has long been the most popular venue for patent-holding companies to file lawsuits.

But the rules around patent venue changed dramatically last month when the US Supreme Court issued its decision in TC Heartland v. Kraft Foods. The decision held that patent-holders must sue either where the defendant company is incorporated or where it "has committed acts of infringement and has a regular and established place of business."

Now Uniloc is scrambling to keep Google and other big tech defendants in East Texas federal courts. Uniloc filed a brand-new complaint (PDF) last week, which spends twice as much time describing Google's ties to Texas as it does explaining how Google supposedly infringes two Uniloc patents, numbered 8,995,433 and 7,535,890. The patents, entitled "System and Method for VoIP messaging," describe sending instant messages and voice messages over the Internet.

Geography

Uniloc lawyers have taken an "everything but the kitchen sink" approach in an effort to make their re-filed complaint stick in Texas. The lawsuit is full of pictures of Google services, which can all be seen on the phones and Web browsers of—you guessed it—Eastern District residents.

Uniloc's complaint is full of Google's geographic sins, including the company's "highly interactive and commercial websites," which do things such as:

solicit users and do business directly with residents of the Eastern District of Texas to create a user account and a Gmail email address; create an address book of contacts of friends, family, and business associates; participate in interactive messaging with other users; participate in interactive video conferencing with other users; and make voice calls using an interactive software dialer to other users as well as to nonuser phone numbers in the United States, Canada, and internationally. Further, Defendant’s website also accepts payment from residents of the Eastern District of Texas (via payments.google.com) to make long distance and international calls.

Then there's Google's "highly interactive search engine," which operates by "directly interacting with users in the Eastern District of Texas." Google "sells products directly to individuals in the Eastern District of Texas," including Google Home, Chromecast products, and Pixel phones.

Uniloc lawyers also detail at length the offices and employees that Google maintains in Texas—entirely in Dallas and Austin, neither of which are in the Eastern District. It's an incredible amount of utterly irrelevant information that won't help Uniloc maintain venue.

Uniloc seems to have searched for every iota of Google's business activity in a large state and thrown it into its lawsuit. The complaint details Google's three offices in Austin—including a downtown location that has more than 200,000 square feet of office space—which contain "hundreds" of employees.

Google provides services to Texas universities, including Texas A&M University—which has facilities in the Eastern District. Uniloc lawyers eagerly note that Google has "massively scanned" books from Texas universities and that Google has provided the state of Texas with aerial imagery. Waze partners with the (non-Eastern District) City of Fort Worth to provide traffic data.

Google provides services to Eastern District schools and businesses—the complaint cites the Frisco Independent School District's Google Apps link in a footnote. The company provides advertising to Eastern District businesses and solicits reviews of those businesses. And Google "tracks the locations of individuals in the Eastern District of Texas" through their Google accounts and Android phones.

The complaint even notes that Google will provide traffic conditions to the Marshall federal courthouse, as well as a street view of the same courthouse.

Below are some images from Uniloc's complaint, highlighting its various arguments to remain in the Eastern District.

“Irrelevant nonsense”

The big question is—will it work? It seems very unlikely. If simply offering Web-based services to a district's residents is enough to maintain venue there, then the Supreme Court's TC Heartland ruling will have almost no effect. It seems unlikely that a district court judge would be willing to offer such a direct challenge to a clear directive from the nation's highest court.

The exact argument Uniloc is making here is already contradicted by existing law, as pointed out by Josh Landau, a lawyer for the Computer and Communications Industry Association, in a recent blog post. A case called In re Cordis established that a "permanent and continuous presence" in the district is required to meet the venue statute. A commercial website isn't enough.

"In University of Illinois Foundation v. Channel Master, a company that sold products into a state but did not itself have a facility there, (although it did have a salesman) didn’t have a 'regular and established place of business,'" Landau writes. "Essentially, promotion of sale or use of products in a location simply isn’t enough to be a regular and established place of business."

Google's activities in Austin and Dallas "simply aren't relevant," nor is the presence of the Google Street View cars taking pictures in Marshall and elsewhere. Landau points out that the venue statutes have already been interpreted regarding a company that "periodically and regularly" has vehicles in a state in a railroad case called Phillips v. Baker.

There will be other important cases that are more likely to test the limits of TC Heartland, which probably won't be a get-out-of-Texas-free card for every type of business. Because defendants can still be sued where they have a "regular and established" place of business, it isn't clear that national retailers that truly do have stores and employees in the Eastern District will be able to easily transfer their cases out.

Google isn't the only company Uniloc is trying to keep in its favored district. Uniloc also sued Apple on Friday, using patents it says cover pedometer technology and device wake-up features, such as those in Apple Watch.

Origins

Both of the patents in Uniloc's Google lawsuit originated at Ayalogic, an Ohio company that created voice technology for the video-game industry. Ayalogic founder Michael Rojas is named as the inventor. TechCrunch's business database states that Ayalogic closed in 2011, and the Internet Archive's records suggest Ayalogic's website went offline around 2012.

Patent records show that Rojas continues to file patents. Since 2015, he has assigned patent applications to both Uniloc and Empire IP, another large patent monetization firm.

Uniloc has filed more than 100 patent lawsuits, using at least 39 different patents. The company's original successes were based on its "software activation" patent, which Uniloc used to lay a broad claim to anti-piracy technologies. The patent resulted in a $388 million jury verdict against Microsoft. It was invalidated by the patent office last year after Sega, Ubisoft, and other game companies challenged the patent.

A Uniloc attorney didn't respond to a request for comment for this story. Google declined to comment on the case.