Nomadix, Inc. v. Guest-Tek Interactive Entertainment Ltd.
2:19-cv-04980
| C.D. Cal. | Apr 22, 2020Background
- Plaintiff Nomadix and Defendant Guest-Tek are parties to a License Agreement containing a forum-selection clause (Section 8.10) requiring disputes be brought in the U.S. District Court for the Central District of California.
- Guest-Tek filed inter partes review (IPR) petitions at the PTAB challenging several Nomadix patents.
- On January 23, 2020, the Court granted Nomadix’s summary judgment, holding Guest-Tek breached the forum-selection clause by filing the PTAB petitions.
- Nomadix later moved for a permanent injunction to enforce the clause; the Court applied California law to the request for equitable relief.
- The Court found monetary damages inadequate because the PTAB filings deprived Nomadix of the presumption of patent validity, contract-based defenses, and a jury determination in Central District of California and granted the permanent injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a permanent injunction should issue to enforce the forum-selection clause | Injunctive relief is necessary to secure Nomadix’s full contractual right to litigate patent validity in the Central District of California | Injunction unnecessary or unavailable; monetary relief or other remedies suffice | Granted: injunction appropriate to enforce the forum-selection clause |
| Whether pecuniary compensation would afford adequate relief for the breach | Money cannot restore the lost presumption of patent validity, contract defenses, or jury adjudication in the designated forum | Money damages (e.g., litigation costs) could compensate Nomadix | Held inadequate: monetary damages do not secure Nomadix’s whole rights; injunction warranted |
| Whether a final injunction is permitted under Cal. Civ. Code § 3422 because it "prevents the breach of an obligation" | The breach is ongoing (PTAB proceedings continue); injunction would prevent continued breach | Argues a final injunction cannot be issued because it would not prevent breach | Held: breach is ongoing; § 3422 permits a final injunction to prevent the ongoing breach |
Key Cases Cited
- Hicks v. Clayton, 136 Cal. Rptr. 512 (Ct. App. 1977) (describing adequacy of legal remedy standard for equitable relief)
- Quist v. Empire Water Co., 269 P. 533 (Cal. 1928) (equitable relief must reach the whole mischief and secure the whole right)
- Andal v. City of Stockton, 40 Cal. Rptr. 3d 34 (Ct. App. 2006) (equitable relief unavailable where plain, complete, speedy, and adequate legal remedy exists)
- Dodocase VR, Inc. v. MerchSource, LLC, [citation="767 F. App'x 930"] (Fed. Cir. 2019) (filing IPR in breach of forum-selection clause can constitute irreparable injury)
- Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008) (standard for preliminary injunction and irreparable harm analysis)
- Sullivan v. Vallejo City Unified Sch. Dist., 731 F. Supp. 947 (E.D. Cal. 1990) (federal courts adjudicating state-law claims should apply state law on availability of injunctive relief)