Adobe Systems Incorporated v. Bargain Software Shop, LLC

Filing 38

ORDER by Judge Edward M. Chen Denying 20 Defendant's Motion to Dismiss, or in the Alternative, to Transfer Venue. (emcsec, COURT STAFF) (Filed on 12/8/2014)

1
2
3
4
5

UNITED STATES DISTRICT COURT

6

NORTHERN DISTRICT OF CALIFORNIA

7
8

ADOBE SYSTEMS INCORPORATED,

9

Plaintiff,
ORDER DENYING DEFENDANT’S
MOTION TO DISMISS, OR IN THE
ALTERNATIVE, TO TRANSFER
VENUE

v.

11
For the Northern District of California

United States District Court

10

No. C-14-3721 EMC

BARGAIN SOFTWARE SHOP, LLC,

12

Defendant.
___________________________________/

(Docket No. 20)

13
14
15
16

I.

INTRODUCTION

On November 13, 2014, this Court heard argument on Defendant Bargain Software Shop

17

LLC’s (“Bargain Software”) motion to dismiss for lack of personal jurisdiction or, in the alternative,

18

to transfer this action to the Western District of Texas. Bargain Software’s motion to transfer was

19

predicated on both 28 U.S.C. § 1404 as well as the first to file rule, in light of Bargain Software’s

20

currently pending case against Plaintiff Adobe Systems, Inc. in the Western District of Texas. See

21

Bargain Software Shop, LLC v. Adobe Systems, Inc., No. 1:14-cv-0480-LY (W.D. Tex.). At the

22

hearing, the Court ruled that it had personal jurisdiction over Bargain Software, but deferred ruling

23

on the motion to transfer. Specifically, in light of the unique circumstances of this case, the Court

24

requested that the parties file short letter briefs on the question of whether this Court or the Western

25

District of Texas should decide whether the first to file rule applied. Having considered the parties

26

briefing, the Court DENIES Bargain Software’s motion to transfer.

27
28

1

II.

2

DISCUSSION

Traditionally, where two separate cases encompassing the same dispute are between different

3

courts, the court with jurisdiction over the earlier filed action will decide (1) whether to apply the

4

first-to-file rule and (2) whether the convenience of the parties warrant transfer under § 1404. See,

5

e.g., StemCells, Inc. v. Neuralstem, Inc., No. C08-2364 CW, 2008 WL 2622831, at *4 (N.D. Cal.

6

July 1, 2008) (“[T]he court in the first-filed action should decide whether there is an exception to the

7

first-to-file rule.”); see also Hilton v. Apple Inc., No. C13-2167 EMC, 2013 WL 5487317, at *10

8

(N.D. Cal. Oct. 1, 2013) (“[T]o the extent that Plaintiff argues that the balance of convenience

9

factors weigh in favor of this case being litigated in this district, the case law makes clear that such
arguments are properly reserved for the forum where the first-filed action is pending.”).

11
For the Northern District of California

United States District Court

10

Determining whether this Court or the Western District of Texas has the earlier filed action depends

12

on the priority-effect of the previously dismissed case Adobe v. Colorado Internet Services, LLC

13

action.

14

In arguing that the Western District of Texas is the earlier filed action and should decide this

15

issue, Bargain Software cites two Northern District of California cases declining to afford first-to-

16

file status to a case that had been previously dismissed and were no longer pending. See Wallerstein

17

v. Dole Fresh Vegetables, Inc., 937 F. Supp. 2d 1289, 1293-94 (N.D. Cal. 2013) (“Actions that were

18

previously filed and voluntarily dismissed are no longer pending and are therefore moot for the

19

purposes of the first-to-file rule.”); ASUSTeK v. AFTG-TG LLC, No. 5:CV 11-0192-EJD, 2011 WL

20

6845791 (N.D. Cal. Dec. 29, 2011) (holding, where a previous action had been dismissed for lack of

21

personal jurisdiction in Wyoming, that defendants had “not articulated why a dismissal or transfer

22

[to Wyoming] would serve the principles of the rule when the Wyoming Actions are no longer

23

pending in that district”).1

24
25
1

26
27
28

Bargain Software also cites the unpublished Ninth Circuit case of Com Systems, Inc. v.
Nahmad, 924 F.2d 1062 (9th Cir. 1991) (unpublished table op.), another voluntary dismissal case.
The Court will not consider this decision as Bargain Software’s citation of the case violates the
Ninth Circuit’s rules. Under Ninth Circuit Rule 36-3, unpublished dispositions of the U.S. Court of
Appeals for the Ninth Circuit issued before January 1, 2007 “may not be cited to the courts of this
circuit” except in limited circumstances not applicable here.

2

1

The Court finds these cases distinguishable. The Adobe v. Colorado Internet Services, LLC

2

action related to the instant action was not voluntarily dismissed by Adobe nor did this Court

3

conclude that it did not have jurisdiction over a party. Rather, it dismissed the action on a technical

4

procedural ground without prejudice to Adobe refiling the action without misjoined parties.

5

Following dismissal, Adobe continued to pursue its dispute with Bargain Software through informal

6

negotiations, filing the instant action after those negotiations broke down. While the Western

7

District of Texas action may, in a technical sense, have been filed before the instant action, the first

8

to file rule should not be mechanically applied but rather should be “applied with a view to the

9

dictates of sound judicial administration.” Pacesetter Sys. Inc. v. Medtronic, Inc., 678 F.2d 93, 9495 (9th Cir. 1982). On the unique procedural facts of this dispute – the nature of the Colorado

11
For the Northern District of California

United States District Court

10

Internet dismissal, the conduct of the parties following that dismissal, and the fact that this Court has

12

formally related this case to the Colorado Internet action – the Court finds that this action is the

13

“earlier filed action” based on the “dictates of sound judicial administration.” See N.D. Cal. Local

14

R. 3-12(a) (related cases are those which “concern substantially the same parties, property,

15

transaction or event”). Accordingly, the Court denies Bargain Software’s motion to dismiss under

16

the first-to-file rule.2

17

Having found that this case is the earlier filed action, the Court declines to transfer this

18

action under 28 U.S.C. § 1404. Section 1404(a) provides that “[f]or the convenience of parties and

19

witnesses, in the interest of justice, a district court may transfer any civil action to any other district

20

or division where it might have been brought or to any district or division to which all parties have

21

consented.” 28 U.S.C. § 1404(a). In ruling on a motion to transfer, the Court “must balance the

22

preference accorded plaintiff’s choice of forum with the burden of litigating in an inconvenient

23

forum.” Sillah v. Command Int’l Security Services, No. 14-CV-1960-LHK, 2014 WL 5144540, at

24

*4 (N.D. Cal. Oct. 13, 2014). A defendant seeking transfer must make a “strong showing of

25

inconvenience to warrant upsetting the plaintiff’s choice of forum.” Decker Coal Co. v.

26

Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986).

27
2

28

Even if the Texas action were deemed the first-to-file suit, that action appears to have been
an anticipatory suit.

3

1

Bargain Software has failed to make a “strong showing” of inconvenience. First, the

under § 1404(a).” Adobe Systems Inc. v. Trinity Software Distribution, Inc., No. C12-1614 SI, 2012

4

WL 3763643, at *9 (N.D. Cal. Aug. 2012). Here, while Bargain Software’s witnesses will likely be

5

located in Texas, Adobe’s witnesses as to the nature of its products, its investigation, etc. will likely

6

be located in California. In addition, to the extent that depositions of Texas residents is necessary,

7

the Court has admonished both sides that it expects discovery to be conducted at a place and time

8

convenient for the deponent. Second, the location of evidence in this action is likely insignificant as

9

this case involves sales conducted over the internet and modern technology has rendered the location

10

of documents “much less important to determining the convenience of the parties than it once was.”

11
For the Northern District of California

“convenience of the witnesses is often considered the most important factor in ruling on a motion

3

United States District Court

2

Sheffer v. Novartis Pharms. Corp., 873 F. Supp. 2d 371, 378 (D.D.C. 2012). Finally, California has

12

a strong interest in protecting its citizens from trademark and copyright infringement. Cf. Authentify

13

Patent Co. v. StrikeForce Techs., Inc., — F. Supp. 2d — , C13-0741-RSM, 2014 WL 3767480, at *8

14

(W.D. Wash. July 31, 2014) (“Washington has a substantial interest in protecting its residents from

15

the sale of allegedly infringing patents.”); Walter Kidde Portable Equip., Inc. v. Universal Security

16

Instruments, Inc., 304 F. Supp. 2d 769, 772 (M.D.N.C. 2004) (“North Carolina has a strong interest

17

in protecting resident patentees from patent infringement.”). Finally, the Court notes that Bargain

18

Software’s main counsel in both this action and the action pending before the Western District of

19

Texas is located in this District.

20

Ultimately, a court “should give a plaintiff’s choice of forum great deference.” AV Media,

21

Pte, Ltd. v. OmniMount Systems, Inc., No. C06-3805 JSW, 2006 WL 2850054, at *2 (N.D. Cal. Oct.

22

5, 2006). Bargain Software has not made a strong enough showing on the record that litigating in

23

this forum would be so inconvenient as to upset Adobe’s choice of forum. See Adobe Systems Inc.

24

v. Childers, 5:10-cv-03571-JF/HRL, 2011 WL 566812, at *9 (N.D. Cal. Feb. 14, 2011) (“[T]ransfer

25

should not be granted if the effect is simply to shift the inconvenience to the plaintiff.”).

26

///

27

///

28

///

4

1
2

III.

CONCLUSION

For the foregoing reasons, Bargain Software’s motion to dismiss this action under the first to

3

file rule or to transfer this action to the Western District of Texas under 28 U.S.C. § 1404 is

4

DENIED.

5

This order disposes of Docket No. 20.

6
7

IT IS SO ORDERED.

8
9

Dated: December 8, 2014
_________________________
EDWARD M. CHEN
United States District Judge

11
For the Northern District of California

United States District Court

10

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

5