Nomadix, Inc. v. Guest-Tek Interactive Entertainment Ltd.

[7] 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 Case No. 2:19-cv-04980-AB-FFM NOMADIX, INC., 11 ORDER GRANTING PLAINTIFF’S MOTION FOR A PERMANENT 12 Plaintiff, INJUNCTION [Dkt. No. 121] 13 v. [14] GUEST-TEK INTERACTIVE 15 ENTERTAINMENT, LTD., [16] Defendant. [17] 18 I. INTRODUCTION 19 Before the Court is Plaintiff Nomadix, Inc.’s (“Nomadix”) motion for a 20 permanent injunction. (Dkt. No. 121.) Defendant Guest-Tek Interactive Entertainment 21 Ltd. (“Guest-Tek”) opposes Nomadix’s motion. (Dkt. No. 122.) For the reasons stated 22 below, the Court GRANTS Nomadix’s motion for a permanent injunction. 23 II. BACKGROUND 24 This case arises from the breach of a forum selection clause negotiated between 25 the parties. On January 23, 2020, the Court granted Nomadix’s summary judgment 26 motion, concluding that Guest-Tek breached the parties’ forum selection clause by 27 filing inter partes review petitions in the United States Patent and Trademark Office’s [28] 1 Patent Trial and Appeal Board (“PTAB”) challenging several of Nomadix’s patents. 2 (See Dkt. No. 113.) In particular, the Court concluded that by filing inter partes 3 review petitions in the PTAB, Guest-Tek breached Section 8.10 of the parties’ License 4 Agreement, which provides, in relevant part, that “all disputes arising out of or in 5 connection with this Agreement shall be brought in the United States District Court 6 for the Central District of California[.]” (Id.) 7 After granting Nomadix’s summary judgment motion, the Court ordered the 8 parties to submit a proposed judgment within ten days. (Id.) Nomadix submitted its 9 proposed judgment on February 3, 2020, seeking a permanent injunction. (See Dkt. 10 No. 115.) Because Nomadix did not move for a permanent injunction in its summary 11 judgment motion, the Court denied Nomadix’s request to enter its proposed judgment, 12 and set a briefing schedule on the issue of whether a permanent injunction should 13 issue. (See Dkt. No. 120.) 14 III. LEGAL STANDARD 15 Because Nomadix seeks a permanent injunction to enforce its meritorious 16 California breach of contract claim, California law governs whether a permanent 17 injunction should issue. See Sullivan By and Through Sullivan v. Vallejo City Unified 18 Sch. Dist., 731 F. Supp 947, 956 (E.D. Cal. 1990) (“Where federal courts are called 19 upon to adjudicate a claim predicated on state law, under either its diversity or 20 pendent claim jurisdiction, there appears to be no question that the ultimate issue of 21 whether injunctive relief may issue must be decided under applicable state law.” 22 (citing 7 Moore’s Federal Practice, Pt. 2, ¶ 65.18[1])). Pursuant to California’s Civil 23 Code, a permanent injunction may be granted to prevent the breach of an obligation 24 where: (1) pecuniary compensation would not afford adequate relief, (2) it would be 25 extremely difficult to ascertain the amount of compensation which would afford 26 adequate relief, (3) the restraint is necessary to prevent a multiplicity of judicial 27 proceedings, or (4) the obligation arises from a trust. See Cal. Civ. Code § 3422 . 28 // 1 IV. DISCUSSION 2 a. Nomadix has demonstrated that pecuniary compensation would not 3 afford it adequate relief for its breach of contract claim. 4 In moving for a permanent injunction, Nomadix identifies several injuries that it 5 alleges cannot be adequately remedied by monetary damages. For a remedy at law to 6 be adequate, “[i]t must reach the whole mischief and secure the whole right of the 7 party in a perfect manner at the present time and not in the future.” See Hicks v. 8 Clayton, 136 Cal. Rptr. 512, 520 (Ct. App. 1977) (quoting Quist v. Empire Water Co., [9] 269 P. 533, 535 (Cal. 1928)); see also Andal v. City of Stockton, 40 Cal. Rptr. 3d 34 , 10 37 (Ct. App. 2006) (“[E]quitable relief will not be granted if there is a plain, complete, 11 speedy, and adequate remedy at law.”). As a result of Guest-Tek’s breach of the forum 12 selection clause, Nomadix has suffered injuries including: (1) loss of the presumption 13 of patent validity that is applied in district court proceedings pursuant to 35 U.S.C. § 14 282(a), (2) loss of the ability to assert contract-based defenses to Guest-Tek’s patent 15 invalidity challenges, and (3) loss of the opportunity to have its patents’ validity 16 determined by a jury of at least six persons from the Los Angeles area. With respect to 17 these injuries, money damages would not afford an adequate and complete remedy. 18 Although money damages may compensate Nomadix for its litigation expenses in the 19 PTAB, such damages would not secure to Nomadix its whole rights under the forum 20 selection clause to litigate patent validity in the United States District Court for the 21 Central District of California.1 See Hicks, 136 Cal. Rptr. at 520 ; see also Dodocase 22 VR, Inc. v. MerchSource, LLC, 767 F. App’x. 930, 935 (Fed. Cir. 2019) (mem.) [24] 1 Separately, the Court rejects Guest-Tek’s argument that a final injunction cannot 25 issue under California Civil Code § 3422 because such an injunction would not “prevent the breach of an obligation.” Here, Nomadix has shown that Guest-Tek’s [26] breach of the forum selection clause is ongoing, as Guest-Tek continues to seek to 27 invalidate Nomadix’s patents in the PTAB. Accordingly, issuing a final injunction under California Civil Code § 3422 would prevent this ongoing breach of the parties’ 28 forum selection clause. 1 | cholding that filing a petition for inter partes review in the PTAB in breach of a forum 2 | selection clause constitutes irreparable injury under the preliminary injunction 3 | standard set out in Winter v. Natural Resources Defense Council, Inc., 555 U.S. □ 4 | (2008)). 5 Accordingly, because Nomadix has shown that money damages would not 6 | provide adequate relief for Guest-Tek’s breach of the parties’ forum selection clause, 7 | the Court GRANTS Nomadix’s motion for a permanent injunction. The Court shall 8 | enter Nomadix’s proposed judgment separately from this order. 9 | ITISSO ORDERED. □ — 11 | Dated: April 22, 2020 12 HONORABLE ANDRE BIROTTE JR. UNITED STATES DISTRICT COURT JUDGE [28] 4.