Judge Lucy Koh.

It looks as if U.S. District Judge Lucy Koh of the Northern District of California has had enough IP licensing/antitrust litigation for now.

After six months of skirmishing over venue, the judge has sent a dispute between automotive telematics supplier Continental Automotive Systems Inc. and several large wireless connectivity patent holders to the Northern District of Texas.

Continental had argued that the case belongs in Silicon Valley because it's similar to the Federal Trade Commission v. Qualcomm case Koh heard earlier this year, and because of the impact it will have on the internet of things, electric vehicle and automotive technology industries. "It was properly filed here, where the IoT industry will feel the substantial effects of the court's rulings regarding defendants' anti-competitive practices and FRAND obligations," Continental argued in a filing signed by Sheppard, Mullin, Richter & Hampton partner Lai Yip.

But Koh ruled Thursday in Continental Automotive Systems v. Avanci that she's not persuaded "that what appears to be an essentially international controversy is actually a local one." Because co-defendant Nokia employs thousands of people in Dallas, Irving and Plano, Texas, and most of the allegedly collusive conduct was channeled though the Avanci LLC licensing platform in Texas, the Northern District of Texas is the most convenient forum for litigating the case, she concluded in a 36-page order.

The ruling is the latest setback for Continental and, by extension, its customer Daimler AG, which is battling Nokia, Conversant Wireless Licensing SARL, and Sharp Corp. over alleged patent infringement in Europe. A German court enjoined Daimler from infringing Nokia's patents earlier this year. Continental then sued in San Jose and asked Koh to block the injunction, but Koh declined.

The move to Texas, and away from a judge who squarely endorsed Continental's theory of antitrust liability earlier this year in the Qualcomm case, will surely improve the patent owners' negotiating leverage. A Winston & Strawn team featuring partners Jeffrey Kessler, Aldo Badini, Susannah Torpey, Ian Papendick and associate Jeanifer Parsigian represented Avanci. Baker Botts partners James Kress, Peter Huston and associate Tina Ngo represented Conversant. Alston & Bird partners Mark McCarty, Matthew Richardson, John Haynes, Andrew Tuck, Ryan Koppelman and Teresa Bonder and associate Cassandra Kerkhoff Johnson represented Nokia.

"None of the allegedly unlawful or anti-competitive conduct occurred anywhere near" the Northern District of California, they argued to Koh, and "the parties' relevant connections to this district are negligible or non-existent."

Continental's team is headed up by Sheppard Mullin partners Stephen Korniczky, Matthew Holder, Martin Bader and Michael Scarborough.

Continental manufactures the telematics control units that are installed in automobiles and enable telecommunications, infotainment and safety features. It's seeking a declaration that the patent owners must license patents that are essential to practicing the 2G, 3G and 4G wireless standard to Continental at fair, reasonable and non-discriminatory (FRAND) rates.

Continental says the patent owners have colluded through the Avanci licensing platform to offer licenses only to automobile manufacturers. The allegation is that a $15 royalty on a $30,000 auto will seem much more reasonable to judges, jurors and arbitrators than on the $100 unit that implements the patented technology. Continental alleges this conduct breaches the FRAND commitments the patent owners made to standard-setting organizations (SSOs) in exchange for incorporating their technology into the wireless standards, and that it's anti-competitive too.

The FTC leveled similar charges at Qualcomm at a bench trial before Koh earlier this year. Koh found antitrust violations and ordered Qualcomm to license its standard-essential patents (SEPs) not only to smartphone makers but to rival chip suppliers. Qualcomm is appealing to the Ninth Circuit.

Now Continental will have to say good-bye to Koh and to Ninth Circuit caselaw, which interprets the SSO contracts as requiring that SEPs be licensed "worldwide to all comers."

Nokia, meanwhile, says it's been negotiating with Daimler since 2017 and has made FRAND offers. Daimler is simply trying to avoid paying a license, Nokia has said. Nokia sued for patent infringement in March in Germany and then in May asked the German courts to enjoin Daimler from selling its cars. Nokia put that campaign on hold this week to allow more time for mediation.

Before Koh, Continental argued that local interest in the case and judicial economy were among the factors that favored keeping the case in San Jose. Electric vehicle companies such as Tesla, Lucid, Rivian and Faraday and automotive technology companies like Uber, Lyft and Cruise are based in or have "significant operations" in the Northern District of California, Continental argued, while established automakers such as Ford, BMW, GM, Honda, Mercedes-Benz and Nissan-Renault have opened research labs in the district, "chasing a vision of cars connected to the web."

Koh wasn't moved. "In plaintiff's own words … this dispute 'will profoundly impact an entire global industry,'" she wrote. Continental is based in Michigan, and there's no evidence connecting its licensing operations to its Silicon Valley sales and research facility.

"If anything, the Northern District of Texas's local interest is the greater one because of Avanci LLC's presence there," she wrote. "Courts have found that a district where the allegedly unlawful activity was concentrated may have a local interest."

As for judicial economy, Continental had argued that Koh is already "extremely familiar with the legal issues in this lawsuit because it recently decided FTC v. Qualcomm … another case involving FRAND, SEP and related antitrust issues."

But, Koh wrote, the plaintiffs didn't seek to relate or consolidate its case to the Qualcomm case. "Again, federal district courts are 'presumed to be equally familiar with the applicable statutes,'" she wrote. "The factor of judicial economy is therefore neutral."