Intellectual Property – Motions to Transfer
July 31, 2013
Publication| Intellectual Property
Magistrate Judge Fallon Recommends Denying Motion to Transfer
In Sensus USA Inc. v. Nxegen, LLC, C.A. No. 11-1000-SLR-SRF (D. Del. June 14, 2013), Magistrate Judge Fallon recommended that the Court deny the defendants’ motion to transfer and motion to dismiss. First, the Court concluded that since a Connecticut action filed on July 29, 2011 and the Delaware action filed on October 19, 2011 involved different patents, different inventors and different accused products, the Connecticut action did not warrant application of the first-filed rule. Second, the Court concluded that transfer was not warranted. The Court gave greater weight to Sensus’ forum preference, which weighed against transfer because all parties were incorporated in Delaware. Although neither party conducted its primary business operations in Delaware, the Court also found that Delaware was a neutral forum no less convenient for Nxegen than Sensus’ primary place of business in North Carolina and, in sum, that Nxegen had not demonstrated that litigating in Delaware would be unduly burdensome under the Jumara factors. On July 19, 2013, Judge Robinson adopted Magistrate Judge Fallon’s Report and Recommendation.
Judge Robinson Denies Transfer to the Central District of California
In Fastvdo LLC v. Paramount Pictures Corporation, C.A. No. 12-1427-SLR (D. Del. June 4, 2013), Judge Robinson denied the defendant’s motion to transfer to the Central District of California. The Court first explained that the plaintiff’s choice of venue was a significant factor. The Court then rejected the defendant’s argument that the alleged infringement was focused in California because the majority of the defendant’s facilities existed there. The Court found those facilities were not a key factor because the encoding of the discs at issue occurred in multiple states and the discs were distributed nationwide. The Court also noted that the defendant’s more significant financial and physical resources were a factor against transfer and the Court’s lack of subpoena power in some jurisdictions could be overcome by the defendant’s business relationship to the non-parties, who would most likely be willing to comply with the defendant’s requests for electronic records. In sum, the plaintiff chose a legitimate forum—its state of incorporation—and although Delaware was not the locus of any party’s business activities, it was a neutral forum and no more inconvenient for the defendant than Florida, the locus of the plaintiff’s business activities. Transfer was not warranted in the interests of justice.
Judge Robinson Grants Transfer to the Northern District of California
In Fortinet, Inc. v. Fireeye, Inc., C.A. No. 12-1066-SLR (D. Del. May 16, 2013), Judge Robinson found that “extenuating circumstances” in the case warranted transfer and granted the defendant’s motion to transfer to the Northern District of California. The plaintiff was a Delaware corporation with its principal place of business in California. The plaintiff had litigated in Northern California on at least five occasions since 2008. The defendant was a Delaware corporation with its principal place of business in California. The Court held that a plaintiff’s choice of venue for pursuing its claims was a significant factor in the Jumara analysis. The Court also considered (1) the physical and financial condition of the two entities—the plaintiff, Fortinet, being the larger company that had availed itself of the jurisdiction of Northern California on multiple occasions before; and (2) the practical considerations favoring California, because most of the potential witnesses and the headquarters for both corporations were in California.
Judge Robinson Denies Motion to Transfer to Northern District of California and Motion to Dismiss
In Versata Software, Inc., et al. v. Callidus Software Inc., C.A. No. 12-931-SLR (D. Del. May 16, 2013), Judge Robinson denied the defendant’s motion to transfer venue to the Northern District of California because the plaintiffs chose a legitimate forum that all parties had in common—their state of incorporation. Although Delaware was not the locus of any party’s business activities, it was a neutral forum and no more inconvenient for the defendant than Texas, the locus of the plaintiffs’ business activities. The Court also denied the defendant’s motion to dismiss, as the plaintiffs’ direct infringement claims sufficiently identified the accused software as required by Fed. R. Civ. P. Form 18 and the plaintiffs’ indirect infringement claims were facially plausible and provided the defendant with adequate notice.
Chief Judge Sleet Grants Transfer to the Northern District of California
In Mitel Networks Corp. et al. v. Facebook, Inc., C.A. No. 12-325-GMS (D. Del. May 1, 2013), Chief Judge Sleet granted the defendant’s motion to transfer venue to the Northern District of California. Applying Jumara, the Court found that although the plaintiffs chose to litigate in Delaware based on plaintiff Mitel (Delaware), Inc.’s Delaware incorporation, and this decision must be accorded some deference in the Section 1404(a) analysis, the fact that Delaware was not home to either Mitel Networks’ or Mitel Delaware’s principal places of business, and the fact that Mitel Networks, a Canadian corporation, was the real party in interest, reduced somewhat the weight of Mitel’s forum selection, which would otherwise be accorded “paramount consideration.” The Court also agreed with the defendant’s argument that because the design, development and engineering of the majority of Facebook’s source code and services occurred in Menlo Park, California, and Facebook maintained no facilities in Delaware, the factor of “where the claims arose” weighed slightly in favor of transfer, along with the “books and records” factor. The Court found several public interest factors also weighed in favor of transfer, and, in sum, the Court concluded that the defendant had met its burden of demonstrating that the interests of justice and convenience strongly favored transfer. Only the plaintiffs’ forum preference weighed against transfer, and that factor did not warrant maximum deference in this case.
Chief Judge Sleet Denies Motion to Transfer to the Middle District of Florida
In Devicor Medical Products, Inc. v. Biopsy Sciences, LLC, C.A. No. 10-1060-GMS (D. Del. Apr. 15, 2013), Chief Judge Sleet denied the defendant’s motion to transfer venue to the District Court for the Middle District of Florida, Tampa Division. Applying Jumara, the Court concluded that the action could have been brought in the Middle District of Florida and that the defendant failed to meet the heavy burden of establishing that the balance of convenience tipped strongly in favor of transfer. The Court found that the plaintiff’s choice of Delaware was entitled to some measure of heightened deference, although less than “paramount consideration,” since the plaintiff was a Delaware corporation but was not physically located in Delaware. Overall, the Court concluded that this heightened deference more than offset the defendant’s own forum preference as well as convenience of the parties and the private interest of location of books and records, which weighed slightly in favor of transfer.