Samsung Electronics Co, Ltd. v. CM HK, Ltd.

Background

Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc. sought a declaratory judgment that Samsung did not infringe four patents held by or associated with CM HK and CyWee. The patents were in the same family as two patents CyWee had previously asserted against Samsung. After communications in which counsel for CM HK and CyWee discussed possible patent assertions, licensing, and new litigation, Samsung filed this action on September 18, 2024. CM HK later filed an infringement action against Samsung in the Eastern District of Texas. CyWee was dismissed from this case after Samsung voluntarily dismissed its claims against CyWee.

CM HK moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), which concerns subject-matter jurisdiction; Rule 12(b)(2), which concerns personal jurisdiction over the defendant; and Rule 12(b)(6), which concerns whether the complaint states a legally sufficient claim.

Subject-Matter Jurisdiction and First-to-File Rule

The court held that Samsung had alleged a sufficiently real and immediate dispute for its declaratory-judgment claims. The court relied on the alleged threats of patent litigation, the extent of the patent analysis, the parties’ prior patent litigation, the communications identifying allegedly infringing products, and the timing of Samsung’s lawsuit. The court therefore found that it had subject-matter jurisdiction over Samsung’s noninfringement claims.

The court also denied CM HK’s argument under the first-to-file rule. That rule generally favors the court where a related case was filed first, but CM HK argued that Samsung’s lawsuit was an improper anticipatory suit. The court found that CM HK’s communications from May through September 2024 were equivocal and did not provide specific, concrete indications that CM HK’s lawsuit was imminent. CM HK did not file its infringement action until more than six weeks after Samsung filed this case.

Personal Jurisdiction

The court found that CM HK was not subject to general personal jurisdiction in California because its contacts were not sufficiently continuous and systematic to make it essentially at home there. The court also found that CM HK’s communications with Samsung’s counsel in California did not establish specific personal jurisdiction. Neither Samsung plaintiff was a California corporation or based in California, and the court concluded that the communications were directed only to counsel located in California.

Samsung alternatively argued that the court could attribute CyWee’s California contacts to CM HK because CM HK was CyWee’s alter ego. The court found that CyWee had sufficient California contacts based on its prior patent lawsuit in the district and a later license agreement with Apple that addressed jurisdiction and venue in Santa Clara County. The court nevertheless found that Samsung had not adequately shown that CyWee controlled CM HK so extensively that CM HK was merely CyWee’s instrumentality. The court did not reach the alter-ego test’s second requirement.

Jurisdictional Discovery

The court granted Samsung’s request for jurisdictional discovery, which is discovery directed to facts relevant to whether the court has authority over the defendant. The court found that Samsung had presented a colorable basis for jurisdiction, particularly because the allegations suggested possible transfers or manipulation of patents and other assets between CyWee and CM HK. The court noted that the Asserted Patents were assigned to CM HK ten days after Samsung filed this lawsuit and that CM HK paid ten dollars for rights to forty patents and patent applications, including the Asserted Patents. The discovery was referred to a magistrate judge.

Failure to State a Claim

The court denied CM HK’s Rule 12(b)(6) challenge. It held that Samsung’s complaint adequately alleged how Samsung products did not meet at least one claim limitation of each Asserted Patent. The court cited Samsung’s allegations concerning the ’072, ’038, and ’846 Patents and found that the allegations were factual rather than merely conclusory. The opinion does not separately discuss a noninfringement allegation for the ’687 Patent in the quoted portion, but it states that Samsung had adequately alleged at least one missing claim limitation for each Asserted Patent.

Disposition

The court granted CM HK’s motion to dismiss and dismissed Samsung’s complaint with leave to amend. It granted jurisdictional discovery and stated that CM HK could renew its personal-jurisdiction challenge after discovery. The court also denied CM HK’s motion to dismiss on the first-to-file and failure-to-state-a-claim grounds. The court set a case management conference for July 29, 2025, and directed the parties to propose a schedule for the ’038 and ’072 Patents.