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Mitek Systems, Inc. v. United Services Automobile Association

In November 2019, Mitek Systems, Inc. brought suit in the United States District Court for the Northern District of California against United Services Automobile Association (USAA). It sought a declaratory judgment, under the Declaratory Judgment Act, 28 U.S.C. § 2201(a), that Mitek and its customers have not infringed, either directly or indirectly, any valid and enforceable claim of USAA’s U.S. Patent Nos. 8,699,779, 9,336,517, 8,977,571, and 9,818,090 (hereinafter referred to as the patents-in-suit). In response, USAA filed a motion making two requests. It sought dismissal of the complaint on the grounds that there was no case or controversy between USAA and Mitek as required by Article III of the Constitution, so the case should be dismissed under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction, and in any event, the court should exercise discretion not to hear Mitek’s claim for declaratory relief. In the alternative, USAA requested transfer of the action to the United States District Court for the Eastern District of Texas pursuant to 28 U.S.C. § 1404.

In April 2020, the California court, without ruling on the dismissal part of the motion, ordered the case transferred to the Texas forum. Mitek Systems, Inc. v. United Services Automobile Association, No. 19-cv-07223, 2020 WL 1922635 (N.D. Cal. Apr. 21, 2020) (Transfer Order). In April 2021, the Texas court dismissed for want of a case or controversy and stated that, even if jurisdiction existed, it would exercise its discretion to decline to entertain the declaratory-judgment action. Order, Mitek Systems, Inc. v. United Services Automobile Association, No. 2:20-cv-00115 (E.D. Tex. Apr. 28, 2021), ECF No. 69 (Dismissal Order); see also J.A. 11–19. On Mitek’s appeal, we vacate the Texas court’s dismissal and remand for further proceedings. The remand is to the Texas court because we affirm the California court’s transfer order.

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