Mitek Systems, Inc. v. United Services Automobile Association

Background

Mitek Systems, Inc. brought a patent declaratory-judgment action seeking a declaration that it did not infringe four patents—the ‘779, ‘517, ‘090, and ‘571 patents—owned by United Services Automobile Association (USAA). The patents concern mobile check-deposit technology, and Mitek’s MiSnap product was at issue.

USAA had sent more than 1,000 patent-licensing demand letters to financial institutions, many of which were Mitek customers. USAA later sued Wells Fargo, one of Mitek’s main customers, in the Eastern District of Texas for infringement of the same patents. Mitek was involved in that litigation as a third party, providing documents, source code, and witness testimony. A jury returned a verdict for USAA and awarded $200 million.

Motions and transfer analysis

USAA moved to dismiss for lack of subject-matter jurisdiction, arguing that there was no actual dispute between the parties. In the alternative, USAA moved to transfer the case to the Eastern District of Texas under 28 U.S.C. § 1404(a), which allows transfer for the convenience of the parties and witnesses and in the interests of justice. The court considered the transfer request first because, if transfer were appropriate, the transferee court should decide the dismissal motion.

The court determined that the action could have been brought in the Eastern District of Texas. USAA submitted evidence that it maintained eight offices in Texas, including a Plano office in the Eastern District, where its Chief Technology and Design Office and more than 800 employees were located. The court concluded that these facts established general jurisdiction there.

The court gave little weight to Mitek’s choice of the Northern District of California. It stated that Mitek did not reside in that district and that the district had only a weak connection to the dispute. The court noted that the alleged indirect infringement would largely concern Mitek’s conduct in the Southern District of California, where Mitek was based. The court also found that the presence of 13 Mitek customers using MiSnap in the Northern District was insufficient to establish a significant connection.

The convenience-of-witnesses factor was largely neutral because the important witnesses appeared to be Mitek witnesses in the Southern District of California or USAA witnesses in the Eastern or Western Districts of Texas. The court found that coordination with the earlier Texas litigation strongly favored transfer because that case involved the same patents and examined how Mitek’s technology was used by a customer accused of infringement.

Rulings

The court granted USAA’s motion to transfer and ordered the clerk to transfer the case to the Eastern District of Texas and close the Northern District of California file. The court did not rule on USAA’s motion to dismiss for lack of subject-matter jurisdiction. It also granted USAA’s administrative motion for leave to file a response and overruled Mitek’s objection to evidence submitted with USAA’s reply.