Standard Innovation Corporation v. LELOi AB et al
Filing
85
MEMORANDUM OPINION AND ORDER granting 57 MOTION to Transfer Case to Northern District of California. (Signed by Judge Sim Lake) Parties notified. (cfelchak, 4)
United States District Court
Southern District of Texas
ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
STANDARD INNOVATION CORPORATION,
Plaintiff,·
v.
LELOI AB; LELO INC.; LELO
(SHANGHAI) TRADING CO., LTD.;
SUZHOU ARMOCON TECHNOLOGY CO.,
LTD.; 1960 NOVELTIES, INC.
d/b/a CINDIE'S; and SLS
SPECIALTY LLC,
Defendants.
§
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§
§
§
§
§
§
§
§
§
§
October 21, 2015
David J. Bradley, Clerk
CIVIL ACTION NO. H-11-4172
MEMORANDUM OPINION AND ORDER
Plaintiff
Innovation")
2 011,
Standard
("Standard
Corporation
filed this patent infringement suit on December 2,
naming LELO
defendants. 1
Innovation
Inc.
and LELOi AB
(collectively,
"LELO")
as
Standard Innovation is a Canadian corporation with
its principal place of business in Ottawa, Canada. 2
LELO Inc. is
a California corporation with its principal place of business in
San Jose, California. 3
LELOi AB is a Swedish corporation with its
principal place of business in Stockholm, Sweden. 4
1
See Original Complaint for
Complaint"), Docket Entry No. 1.
Patent
Pending before
Infringement
2
See Original Complaint, Docket Entry No. 1, p. 1
3
Inc.'s Answer to Complaint,
See LELO,
pp. 1-2 ~ 3.
4
See id., p. 1
~
2.
("Original
~
1.
Docket Entry No. 44,
the court is Defendants LELO Inc. and LELOi AB's Motion to Transfer
(the "Motion to Transfer")
For the reasons
(Docket Entry No. 57)
explained below, the Motion to Transfer will be granted, and this
action will be transferred to the Northern District of California
pursuant to 28 U.S.C.
I.
Standard
1404(a).
§
Factual and Procedural Background
Innovation
filed
its
Original
Complaint
in
this
patent infringement case on the same day that it filed a complaint
with the U.S.
International Trade Commission ("USITC")
the same patent,
U.S.
Patent No.
7,931,605
involving
(the "605 Patent") . 5
This action was stayed while the USITC proceeding was pending. 6
After the parties advised the court that a
appropriate,
the
court
lifted
the
scheduling an initial conference. 7
stay
2015. 8
Innovation
Amended
Infringement
its
First
entered
an
order
LELO Inc. and LELOi AB filed
original answers on August 20,
filed
and
stay was no longer
Six days later,
("First Amended Complaint")
Complaint
for
Standard
Patent
(Docket Entry No.
48),
5
See Original Complaint, Docket Entry No. 1; Complaint of
Standard Innovation (US) Corp. and Standard Innovation Corporation
Under Section 337 of the Tariff Act of 1930, as Amended ("USITC
Complaint"), Exhibit A to Motion to Transfer, Docket Entry No. 572, p. 60.
6
See Stay Order, Docket Entry No. 16.
7
See Order for Conference
Parties, Docket Entry No. 37.
8
and
Disclosure
of
Interested
See LELO, Inc.'s Answer to Complaint, Docket Entry No. 44;
LELOi AB's Answer to Complaint, Docket Entry No. 45.
-2-
which added Suzhou Armocon Technology Co. , Ltd. ( "Suzhou Armocon") ,
LELO (Shanghai) Trading Co., Ltd.
("LELO Shanghai"), SLS Specialty
LLC ("SLS"), and 1960 Novelties, Inc. d/b/a Cindie's ("Cindie's") . 9
On September 14,
2015,
LELO filed answers to the First Amended
Complaint 10 and the Motion to Transfer. 11
In this action, Standard Innovation accuses several of LELO's
couples
massagers
of
infringing
the
605
Patent. 12
Standard
Innovation and LELO Inc. are also involved in a different patent
dispute in the Northern District of California
Action") . 13
products,
There,
LELO
Inc.
accuses
(the "California
Standard
including We-Vibe couples massagers,
Innovation's
of violating its
patent on inductive charging technology in massagers. 14
9
See First Amended Complaint, Docket Entry No.
see also Plaintiff Standard Innovation Corp.'s
Opposition to Defendants LELO Inc. and LELOi AB'
Transfer ("Response in Opposition"), Docket Entry No.
Standard
48, pp. 3-6;
Response in
s Motion to
70, p. 9 n.1.
10
See LELO Inc.'s Answer to First Amended Complaint, Docket
Entry No. 55; LELOi AB's Answer to First Amended Complaint, Docket
Entry No. 56.
11
See Motion to Transfer, Docket Entry No. 57.
12
The products include "LELO's Tiani™, the Tiani™ 2, the
Tiani™ 3, the Noa™, the 'Bridal Pleasure Set' (including the Noa™),'
the 'Indulge Me Pleasure Set' (also including the Noa™), and the
Mahana™ couples massagers." First Amended Complaint, Docket Entry
No. 48, p. 5 ~ 7. See also id. at 16-18.
13
See Declaration of Lauren E. Whittemore in Support of LELO,
Inc. and LELOi AB's Motion to Transfer ("Whittemore Declaration"),
Exhibit 1 to Motion to Transfer, Docket Entry No. 57-1, p. 2 ~ 8
(referencing LELO, Inc. v. Standard Innovation (US) Corp., et al.,
Civ. No. 3:13-cv-01393-JD (N.D. Cal.)).
14
See Response in Opposition, Docket Entry No. 70, pp. 6-7.
-3-
Innovation's
We-Vibe
couples
massagers
are
the
products
that
allegedly practice the 605 Patent at issue in this action. 15
LELO
Inc. filed the California Action against Standard Innovation and
its U.S. subsidiary in 2013. 16
The parties have begun discovery and
claim construction disclosures in the California Action. 17
II.
Applicable Law
Section 1404(a) allows a district court to transfer a civil
action
"for
the
convenience
interest of justice .
of
parties
and
witnesses,
in
the
. to any other district or division where
it might have been brought."
28 U.S.C.
§ 1404 (a).
The district
court examines a number of public and private interest factors in
considering a§ 1404(a) transfer.
See Wells v. Abe's Boat Rentals
Inc., No. H-13-1112, 2014 WL 29590, at *1 (S.D. Tex. Jan. 3, 2014)
(quoting Action Indus., Inc. v. U.S. Fidelity & Guar. Co., 258 F.3d
337,340
(5thCir.
weight.
2004)).
No one factor is given dispositive
The private- interest factors
relative ease of access to sources of proof;
of
compulsory
process
to
secure
the
are:
" ( 1)
the
(2) the availability
attendance
of
witnesses;
(3) the cost of attendance for willing witnesses; and (4) all other
practical problems that make trial of a case easy, expeditious and
inexpensive."
In re Volkswagen AG,
371 F.3d 201,
203
(5th Cir.
15
See Motion to Transfer, Docket Entry No. 57, pp. 11-12.
16
See Response in Opposition, Docket Entry No. 70, p. 6.
17
See Whittemore Declaration, Exhibit 1 to Motion to Transfer,
Docket Entry No. 57-1, p. 2 ~ 8.
-4-
2004)
[hereinafter In re Volkswagen I]
v. Reyno,
10 2 S. Ct.
factors are:
court
"(1)
congestion;
2 52,
2 58 n. 6
(2)
the
local
(3)
the
the
that
( 19 81) ) .
The public-interest
the administrative difficulties flowing from
interests decided at home;
law
(citing Piper Aircraft Co.
will
govern
interest
in
having
localized
the familiarity of the forum with
case;
and
(4)
the
avoidance
of
unnecessary problems of conflict of laws [or in] the application of
foreign law."
"weigh the
In re Volkswagen I, 371 F.3d at 203.
relevant
factors
The court must
and decide whether,
on balance,
a
transfer would serve 'the convenience of parties and witnesses' and
otherwise promote
'the interest of
Construction Company,
Inc. v.
justice.'"
Atlantic Marine
United States Dist.
Court for the
Western Dist. of Texas, 134 S. Ct. 568, 581 (20l3).
The plaintiff's choice of forum must be accorded some weight.
See Atlantic Marine,
134 S.
Ct.
at 5 81 n. 6
Kirkpatrick, 75 S. Ct. 544, 546 (1955))
the transfer "'must show good cause'"
Volkswagen
of
Am.,
Inc.,
545
F. 3d
Thus, the party seeking
for the transfer.
304,
[hereinafter In re Volkswagen II]
(en bane) .
the
moving
context
of
§
1404(a),
"a
(citing Norwood v.
315
(5th
Cir.
In re
2008)
To show good cause in
party
must
satisfy
the
statutory requirements and clearly demonstrate that a transfer is
'[f]or the convenience of parties and witnesses, in the interest of
justice.'"
Id.
(quoting 28 U.S.C.
§
1404 (a)).
If the movant
"demonstrates that the transferee venue is clearly more convenient"
-5-
than the plaintiff's chosen venue, the district court should grant
the transfer.
Id.; see also Wells, 2014 WL 29590, at *1.
Analysis
III.
Under 2 8 U.S. C.
14 04,
§
the preliminary question for
the
district court is whether the suit could have been filed originally
in the destination venue.
Inc.
is
a
business
California
in
San
See Wells, 2014 WL 29590, at *1.
corporation with
Jose,
California,
throughout the United States. 18
that
sells
its
products
and
its
it
principal
sells
its
LELO
place
of
products
LELOi AB is a Swedish corporation
on
the
internet
throughout
the
United States, including in the Northern District of California. 19
As originally filed,
this action could have been brought in the
Northern District of California.
See 28 U.S.C.
§§
1391 (b)- (d),
1400 (b) .
Generally, the plaintiff's venue choice is accorded deference,
but
"when
[it]
accorded to
No.
files suit outside
the
choice
3:11-cv-0836-D,
[its]
home forum,
is diminished."
2011 WL 4100958,
at *4
the weight
Sivertson v.
(N.D. Tex.
Clinton,
Sept.
14,
2011); McCaskey v. Continental Airlines, Inc., 133 F. Supp. 2d 514,
529
(S.D.
Tex.
2001)
(" [C] lose scrutiny is given to plaintiff's
choice of forum when the plaintiff does not live in the judicial
18
See LELO Inc. 's Answer to First Amended Complaint,
Entry No. 55, p. 2 ~ 3.
19
See id. at 1
~
Docket
2; Motion to Transfer, Docket Entry No. 57,
p. 21.
-6-
district in which plaintiff has filed suit.
11
)
•
Standard Innovation
is a Canadian corporation with its principal place of business in
Ottawa. 20
Thus,
its choice to file in the Southern District of
Texas is not entitled to significant weight.
See Sivertson, 2011
WL 4100958, at *4; Rimkus Consulting Grp., Inc. v. Balentine, 693
F. Supp. 2d 681, 690 (S.D. Tex. 2010) . 21
A.
The Private-Interest Factors
1.
LELO
The Relative Ease of Access to Sources of Proof
has
submitted
the
affidavits
of
Pavle
Sedic,
the
president of LELO Inc., and Miroslav Slavic, the Chief Executive
Officer of LELOi AB, stating that LELO Inc.'s documents are located
20
See Original Complaint, Docket Entry No. 1, p. 1 ~ 1.
21
A plaintiff's choice may also receive less deference where
"most of the operative facts occurred outside the district.
See
Minka Lighting, Inc. v. Trans Globe Imports, Inc., No. 3:02-cv2538, 2003 WL 21251684, at *1 (N.D. Tex. May 23, 2003) (citing
Robertson v. Kiamichi R.R. Co., LLC, 42 F. Supp. 2d 651, 656 (E.D.
Tex. 1999). LELO Inc. has ten major distributors in California and
only one distributor in Texas.
See Declaration of Pavle Sedic in
Support of LELO, Inc. and LELOi AB' s Motion to Transfer ( "Sedic
Declaration~~) ,
Exhibit 3 7 to Motion to Transfer, Docket Entry
No. 57-37, p. 2. It shipped products to thirty-eight companies in
California and fifteen companies in Texas from January to July of
2015, generating ten times more revenue in California than Texas.
See id. at 2; see also Defendants LELO Inc. and LELOi AB's Reply in
Support of Motion to Transfer ("Reply in Support"), Docket Entry
No. 78, pp. 9-10. Some of the infringing product was sold in this
district, but most of the operative facts occurred elsewhere. See
First Amended Complaint, Docket Entry No. 48, pp. 5-6 ~~ 8-9. See
also February 3, 2014, SLS Specialty Item List, Exhibit 21 to First
Amended Complaint, Docket Entry No. 48-21; Receipt, Exhibit 22 to
Docket Entry No. 48-22.
11
-7-
in San Jose 22 and LELOi AB' s documents are in Stockholm. 23
Slavic
also states that the business relationship between LELO Inc. and
LELOi AB will make it easier for LELOi AB to provide its documents
rather than in Houston. 24
at LELO Inc.'s San Jose headquarters,
Relying on Sedic's testimony in the related USITC action, Standard
Innovation argues
that
there
is
San Jose, 25 and the
"most
LELO's
infringing
allegedly
transported. 26
not
a
"bulk of
documents"
important evidence in this case"
which
massagers,
are
in
are
easily
Standard Innovation also argues that even if there
were extensive documents, technology makes their location of little
consequence. 27
"That
access
to
some
sources
of
proof
presents
a
lesser
inconvenience now than it might have absent recent developments
does not render this factor superfluous."
F. 3d at 316.
patent
In re Volkswagen II, 545
The location of LELO's documents is relevant.
infringement
cases,
the
bulk
of
the
relevant
"In
evidence
usually comes from the accused infringer," and this factor weighs
22 See Sedic Declaration,
Docket Entry No. 57-37, p. 1
~
Exhibit 3 7 to Motion to Transfer,
5.
23 See Declaration of Miroslav Slavic in Support of LELO, Inc.
and LELOi Ab's Motion to Transfer
("Slavic Declaration"),
Exhibit 36 to Motion to Transfer, Docket Entry No. 57-36, p. 2 ~ 6.
24Id.
25 See Response in Opposition, Docket Entry No. 70, pp. 11-13.
26 See id. at 11.
27 See id. at 13.
-8-
in
favor
of
transfer
documents are kept.
(Fed.
Cir.
2009)
documentation
is
to
the
location
where
the
defendant's
See In re Genentech, Inc., 566 F.3d 1338, 1345
(quotations
stored
Even
omitted).
digitally,
"this
if
does
significance of having trial closer to where
most
not
of
the
negate
the
[the defendant's]
physical documents and employee notebooks are located."
In re Toa
Techs., Inc., 543 F. App'x 1006, 1009 (Fed. Cir. 2013).
Standard
Innovation
does
not
argue
that
Texas
Standard Innovation to produce evidence. 28
is
more
convenient
for
The location of all of
LELO Inc.'s documents in the Northern District of California and
the business relationship between LELO Inc. and LELOi AB weigh in
favor of transfer. 29
ease of access,
See id.
("The critical inquiry is relative
not absolute ease of access.")
(quoting In re
Radmax, Ltd., 720 F.3d 285, 288 (5th Cir. 2013)).
2.
The Availability of Compulsory Process to Secure the
Attendance of Witnesses
Under the Federal Rules of Civil Procedure, a district court
may enforce a subpoena issued to a nonparty witness "within the
state where the person resides, is employed, or regularly transacts
28
See id. at 11-13.
LELO argues that Standard Innovation's
relevant
documents
are
"likely maintained at
its
Canada
headquarters, not in Texas."
Motion to Transfer, Docket Entry
No. 57, p. 17 (citing In re Acer America Corp., 626 F.3d 1252, 1256
(Fed. Cir. 2010)).
29
LELO argues that SLS and Cindie's, as a distributor and
retailer, likely have documents that are duplicative of LELO's, or
that could be obtained from similarly situated parties located in
the Northern District of California.
See Motion to Transfer,
Docket Entry No. 57, p. 23.
-9-
business in person, if the person . . . would not incur substantial
expense."
Fed. R. Civ. P. 45(c) (1) (B); see In re Volkswagen II,
545 F.3d at 316.
Standard Innovation argues that this factor does
not weigh in favor of transfer, as "this is not a case where nonparty witnesses known to live in the transferee venue are important
to
establishing
essential
Standard Innovation also
Vesey,
31
causation
argues
that
and
liability
issues." 30
SLS,
Cindie's,
Ms.
Cathy
and "other LELO retailers and customers" are located in the
Southern District of Texas and "would actually have key evidence in
this case." 32
Sedic
retailers"
states
and
that
LELO
has
"well over 100
"10
major
smaller stores"
distributors
and
served by those
distributors in California, while LELO's only Texas distributor is
SLS. 33
LELO Inc. made shipments to 38 companies in California from
January to July of 2015, while it only shipped to 15 companies in
Texas. 34
LELO
also
lists
the
following
potential
witnesses:
30
Response in Opposition, Docket Entry No. 70, p. 13 (citing
ON Semiconductor Corp. et al. v. Hynix Semiconductor, Inc., et al.,
No. 6:09-cv-00390, 2010 WL 3855520, at *8 (E.D. Tex. Sept. 30,
2010)).
31
Ms. Vesey is Standard Innovations' hired private investigator
in Texas.
See Reply in Support, Docket Entry No. 78, p. 10.
32
Response in Opposition, Docket Entry No. 70, p. 14.
33
See Motion to Transfer, Docket Entry No. 57, p. 18; Sedic
Declaration, Exhibit 37 to Motion to Transfer, Docket Entry No. 5737, p. 2 ~ 7.
34
Sedic Declaration, Exhibit 37 to Motion to Transfer, Docket
Entry No. 57-37, p. 2 ~ 8; see Motion to Transfer, Docket Entry
No. 57, p. 18.
-10-
Standard Innovation's counsel for the ex parte reexamination of the
605 Patent (in Houston, but the firm has a California office); the
firm that prosecuted the 605 Patent
(located in New Jersey and
New York) ;
from
"numerous
USITC action
(at
co-defendants"
least · four
of
nineteen
Standard
are
Innovation's
incorporated and
headquartered in California, while none are in Texas) ; and named
inventors of prior art that LELO intends to assert against the 605
Patent (several listed reside in California)
potential non-party witnesses
LELO has identified
subject to compulsory process
California, 36 and specified how their
issues in this case. 37
35
testimony
relates
to
in
the
Besides Ms. Vesey, no third-party witnesses
have been identified in this district.
This factor weighs in favor
of transfer.
35
Motion to Transfer, Docket Entry No. 57, pp. 18-19.
36
See Fed. R. Ci v. P. 4 5 (c) ( 1) .
37
See Motion to Transfer, Docket Entry No. 57, pp. 18-20;
Reply in Support, Docket Entry No. 78, pp. 10-12. "[T]he testimony
of the attorney who prosecuted a patent is relevant, for example,
to inequitable conduct issues. Moreover, inventors of prior art,
whom [LELO] specifically identified, possess evidence and may
testify on issues that go to the heart of [LELO' s] invalidity
defense . . . . Likewise, the ITC co-defendants from California are
relevant to the issues in this case-SIC would hardly have sued them
for infringing the '605 Patent in the ITC otherwise.
These codefendants sold products SIC alleged infringed the '605 Patent and
entered into agreements with SIC to resolve their involvement in
the ITC case.
Discovery as to these issues is relevant and the
location of these co-defendants in California as parties subject to
the subpoena power of the Northern District is therefore relevant
to the transfer analysis." Reply in Support, Docket Entry No. 78,
pp. 11-12 (internal references omitted).
-11-
3.
The Cost of Attendance for Willing Witnesses
"When the distance between an existing venue for trial of a
matter and a proposed venue under§ 1404(a) is more than 100 miles,
the
factor
of
inconvenience
to
witnesses
in
direct
relationship to the additional distance to be traveled."
In re
Volkswagen I, 371 F.3d at 204-05.
Houston is
increases
Standard Innovation argues that
relatively centrally located between San Francisco,
California and Ottawa, Canada. 38
LELO
argues that the difference
in cost for Standard Innovation is negligible,
because Standard
Innovation has a business relationship with California (and other
states)
and regularly travels
business. 39
to the United States
to conduct
Centrality is not one of the Volkswagen factors.
See
In re Nintendo Co., Ltd., 589 F.3d 1194, 1200 (the district court
"improperly substituted its own central proximity for a measure of
convenience of the parties, witnesses, and documents").
Even if
Houston were central, witnesses from California would incur costs
traveling that they would not incur if the case were in California.
Witnesses from Canada must incur travel costs to either venue.
Standard Innovation also argues that
"Standard Innovation,
SLS, and Cindie's would have five to ten party witnesses between
them and LELO Inc. would only have one or two party witnesses," but
Standard Innovation does not offer support for this assertion. 40
38
See Response in Opposition, Docket Entry No. 70, p. 17.
39
See Motion to Transfer, Docket Entry No. 57, pp. 22-23.
40
See Response in Opposition, Docket Entry No. 70, p. 17.
-12-
Standard Innovation argues that lodging costs are lower in Houston
than in San Francisco. 41
But hotel costs can vary,
and lodging
costs are not determinative in assessing convenience.
See Stone &
Webster Const., Inc. v. E-J Elec. Installation Co., No. H-06-2426,
2006 WL 2880453, at *2 (S.D. Tex. Oct. 6, 2006).
LELO argues that the Northern District of California is more
convenient because LELO Inc. is headquartered in San Jose, where
all but two of its employees live and work. 42
here,
many witnesses
live and work
See id.
("Where, as
in the New York area,
the
Eastern District of New York is a more convenient forum even if it
may be a more expensive forum for witnesses who are not from the
northeast.").
witnesses
to
LELO argues that it will be easier for LELOi AB
appear
in
California
relationship with LELO Inc. 43
because
of
For the same reason,
the
business
and because
California is geographically close to China, the Chinese defendants
in Suzhou and Shanghai will be less inconvenienced by traveling to
California. 44
Flights to California are generally cheaper and more
frequently available. 45
LELO's exhibits show no non-stop flights
41
See id. at 18-19; Travelocity Hotel Search,
Response in Opposition, Docket Entry No. 70-3.
Exhibit 2 to
42
See Motion to Transfer, Docket Entry No. 57, p. 21; Sedic
Declaration, Exhibit 37 to Motion to Transfer, Docket Entry No. 5737, p. 1 ~ 3.
43
See Motion to Transfer, Docket Entry No. 57, p. 21.
44
See id. at 21-22.
45
See id. at 22; Expedia Flight Search: Suzhou to Houston,
Exhibit R to Motion to Transfer, Docket Entry No. 57-19; Expedia
(continued ... )
-13-
between Suzhou and Houston or Shanghai and Houston,
but direct
flights between Shanghai and San Francisco. 46
Standard Innovation argues that the cost of travel and lodging
for its Houston-based trial team as well as costs for local counsel
were not anticipated when the suit was filed, and add a significant
burden to plaintiff. 47
Counsel's convenience is not a factor the
court considers in the§ 1404(a) analysis.
See In re Volkswagen I,
371 F.3d at 206; Rosemond v. United Airlines, Inc., No. H-13-2190,
2014 WL 1338690,
at *4
(S.D.
Tex.
April 2,
2014).
The incon-
venience for Standard Innovation's counsel does not weigh against
transfer. 48
45
( • • • continued)
Flight Search: Shanghai to Houston, Exhibit S to Motion to
Transfer, Docket Entry No. 57-20; Expedia Flight Search: Shanghai
to San Francisco, Exhibit T to Motion to Transfer, Docket Entry
No. 57-21; Expedia Flight Search: Suzhou to San Francisco,
Exhibit U to Motion to Transfer Venue, Docket Entry No. 57-22.
Standard Innovation challenges LELO' s proof regarding air fares and
schedules because these can vary.
See Response in Opposition,
Docket Entry No. 70, pp. 17-18.
46
See Expedia Flight Search: Suzhou to Houston, Exhibit R to
Motion to Transfer, Docket Entry No. 57-19; Expedia Flight Search:
Shanghai to Houston, Exhibit S to Motion to Transfer, Docket Entry
No. 57-20; Expedia Flight Search: Shanghai to San Francisco,
Exhibit T to Motion to Transfer, Docket Entry No. 57-21; Expedia
Flight Search: Suzhou to San Francisco, Exhibit U to Motion to
Transfer Venue, Docket Entry No. 57-22.
47
See Response in Opposition, Docket Entry No. 70, p. 19.
48
Standard Innovation's counsel also maintains an office in the
Northern District of California.
See Osha Liang Website:
Locations, Exhibit H to Motion to Transfer, Docket Entry No. 57-9,
showing a Silicon Valley office in Santa Clara, California.
-14-
LELO also argues that there will be overlap between party
witnesses testifying in the California Action and this action. 49
Standard
Innovation
responds
that
only LELO
Inc.
and Standard
Innovation are parties to the California Action, and the cases are
unrelated and on different schedules. 50
LELO identifies several
members of Standard Innovation's management who will likely testify
in both actions, making it more convenient for both cases to be in
the Northern District of California. 51
Although witnesses for SLS
and Cindie's will be inconvenienced if the case is transferred, 52
the other parties will either face the same amount of inconvenience
or less in the Northern District of California.
This factor weighs
in favor of transfer.
4.
All Other Practical Problems That Make Trial of a Case
Easy, Expeditious, and Inexpensive
This action is in its early stages,
and the court has not
"obtained any substantial familiarity with the case that would
49
See Motion to Transfer, Docket Entry No. 57, pp. 23-24.
50
See Response in Opposition, Docket Entry No. 70, pp. 19-20.
51
See
Standard
Transfer,
Entry No.
Motion to Transfer, Docket Entry No. 57, pp. 23-24;
Innovation's Management Team, Exhibit Z to Motion to
Docket Entry No. 57-27, p. 2; Reply in Support, Docket
78, pp. 12-13.
52
Neither SLS nor Cindie's has entered an appearance in this
action.
LELO argues that "SLS and Cindie's are not required for
[Standard Innovation] to assert its patent against [LELO] . As mere
resellers, they have no evidence regarding the design of the
accused products, their importation, or their marketing.
But
[Standard Innovation] can obtain discovery from SLS and Cindie's as
third parties through subpoenas, or [Standard Innovation] can name
many similar companies in California that resell LELO products."
Motion to Transfer, Docket Entry No. 57, p. 24.
-15-
support judicial economy in retaining and trying this suit."
Sewing v.
Stryker Corp.,
No.
H-10-4818,
2012 WL 3599459,
See
at *3
(S.D. Tex. Aug. 14, 2012); see also Zoltar Satellite Systems, Inc.
v. LG Electronics Mobile Commc'ns Co., 402 F. Supp. 2d 731, 735-36
(E.D. Tex. 2005).
At a hearing in the California Action, District
Judge James Donato noted:
"I know they're two different patents,
but it's the same parties, it's a single business dispute.
it just makes life a
forum. " 53
I mean,
lot easier if you get things done in one
Standard Innovation argues that there is no overlap in
discovery or witnesses,
54
but the California Action involves two of
the same parties and at least one of the same products. 55
This
factor weighs slightly in favor of transfer.
53
See Transcript of Proceedings for LELO Inc. v. Standard
Innovation (US) Corp., et al., No. 13-cv-01393-JD, San Francisco,
California, Wednesday, June 17, 2015, Exhibit G. to Motion to
Transfer, Docket Entry No. 57-8, pp. 3-4.
54
See Response in Opposition, Docket Entry No. 70, pp. 9-11,
21.
55
See Whittemore Declaration, Exhibit 1 to Motion to Transfer,
Docket Entry No. 57-1, p. 2 ~ 5. The We-Vibe, alleged to practice
the 605 Patent, is accused of infringing the patent in the
California Action.
See Response in Opposition, Docket Entry
No. 70, pp. 10-11.
Standard Innovation admits the We-Vibe is
relevant here, although it argues that it "need not prove it has
such a product in order to recover damages."
Id.
LELO responds
that Standard Innovation will have to show that its products
practice the 605 Patent to receive the injunction it is seeking in
this case. See Reply in Support, Docket Entry No. 78, pp. 8-9.
-16-
B.
The Public-Interest Factors
1.
The Administrative Difficulties Flowing from Court
Congestion
The focus of the first public-interest factor is "'not whether
[transfer] will reduce a court's congestion but whether a trial may
be speedier in another court because of its less crowded docket.'"
Rosemond,
2014
WL 1338690,
at
*4
(quoting Siragusa v.
No. 3:12-cv-04497-M, 2013 WL 5462286, at *7
2013)).
Arnold,
(N.D. Tex. Sept. 16,
Standard Innovation notes that more than twice the number
of intellectual property cases are filed per year in the Northern
District of California than in the Southern District of Texas. 56
The median disposition time is 2.0 years in this district for such
cases and 2.7 years in the Northern District of California. 57
compares the median disposition times for a civil case:
LELO
6.9 months
in the Southern District of Texas versus 7.9 months in the Northern
District of California. 58
A few months' difference in disposition
time is negligible and does not weigh for or against transfer.
id. at *4; ExpressJet Airlines,
No.
4:09-cv-00992,
2009) .
56
See
Inc. v. RBC Capital Mkts. Corp.,
2009 WL 2244468,
at *12
(S.D.
Tex.
July 27,
Also, "speed of disposition of lawsuits without any [forum]
See Response in Opposition, Docket Entry No. 70, p. 22.
57
See id.; 2015 Patent Litigation Study, Exhibit 6 to Response
in Opposition, Docket Entry No. 70-7.
58
See Motion to Transfer,
Docket Entry No. 57, p. 28; U.S.
District Court - Judicial Caseload Profile, Exhibit FF to Motion to
Transfer, Docket Entry No. 57-33.
-17-
I
I
I
I
I
I
t
I
connection is not a valid reason for forum shopping."
Shell Oil,
144
omitted).
2.
F.
Supp.
673,
679
(E.D.
Tex.
2001)
Hanby v.
(citations
This factor is neutral.
The Local Interest in Having Localized Interests Decided
at Home
Standard Innovation states "LELO sells the accused products
not only nationwide, but in this District." 59
Because the accused
products are sold nationwide,
this argument does not favor the
Southern
over
District
California. 60
All
of
Texas
but
two
of
LELO
the
Northern
Inc. 's
District
employees
work
of
in
San Jose, California, and LELOi AB has an ongoing relationship with
LELO Inc. 61
The USITC proceeding involved 19 defendants besides
LELO Inc. and LELOi AB, including retailers and distributors of the
accused LELO products. 62
59
None of them were located in Texas, but
See Response in Opposition, Docket Entry No. 70, p. 22.
60
See First Amended Complaint, Docket Entry No. 48, pp. 5-6,
~~ 8-9.
See also Response in Opposition, Docket Entry No. 70,
pp. 8, 14, 17, 23, 24-25.
"LELO has continued to specifically
target others in this
[Southern]
District
[of Texas]
with
infringing sales."
Id. at 19.
Standard Innovation provides a
series of three e-mails between Catherine Vesey Edwards and
michael.solomon®lelo.com, with the subject "Becoming a LELO
Retailer."
See e-mails, Exhibit 9 to Response in Opposition,
Docket Entry No. 70-8.
61
See Sedic Declaration, Exhibit 3 7 to Motion to Transfer,
Docket Entry No. 57-37, p. 1 ~ 3; see also Reply in Support, Docket
Entry No. 78, pp. 16-17.
62
See Motion to Transfer, Docket Entry No. 57, p. 19; USITC
Complaint, Exhibit A to Motion to Transfer, Docket Entry No. 57-2,
pp. 2-4.
-18-
several were located in California. 63
Standard Innovation argues
that the fact that SLS and Cindie's are located in the Southern
District of Texas at least neutralizes this factor.
64
LELO responds
that SLS and Cindie's are late additions to this case that Standard
Innovation is using in an attempt to hold venue in this
convenient forum.
65
less-
Standard Innovation added SLS and Cindie's by
amended complaint two days after LELO's counsel contacted Standard
Innovation
seeking
to
meet
and
confer
regarding
a
motion
to
transfer. 66
Section 1404(a)
"should be construed to prevent parties who
are opposed to a change of venue from defeating a transfer which,
but for their own deliberate acts or omissions, would be proper,
convenient and just."
Van Dusen v. Barrack,
84 S. Ct.
805,
813
(1964); see In re Hoffman-La Roche Inc., 587 F.3d 1333, 1337 (Fed.
Cir. 2009)
(discussing VanDusen).
Westernbank P.R.,
In MMB Development Grp. Ltd. v.
the court addressed a Puerto Rican defendant's
63
See USITC Complaint, Exhibit A to Motion to Transfer, Docket
Entry No. 57-2, pp. 2-4.
64
See Response in Opposition, Docket Entry No. 70, p. 23
(citing Principal Tech. Eng'g, Inc. v. SMI Cos., No. 4:09-cv-00316,
2010 WL 997537, at *5, 8 (E.D. Tex. Feb. 19, 2010))
65
SeeReplyinSupport, DocketEntryNo. 78, pp. 7,17-18. See
also Motion to Transfer, Docket Entry No. 57, pp. 13-15 (citing
In re Microsoft Corp., 630 F.3d 1361, 1364-65 (Fed. Cir. 2011);
In re Zimmer Holdings, Inc., 609 F.3d 1378, 1381 (Fed. Cir. 2010);
Hoffman-LaRoche, 587 F.3d at 1336-37)).
66
Motion to Transfer, Docket Entry No. 57, p. 14; Whittemore
Declaration, Exhibit 1 to Motion to Transfer, Docket Entry
No. 57-1, ~ 10.
-19-
motion to transfer the action from the Southern District of Texas
to the District of Puerto Rico.
See MMB Development Grp. Ltd. v.
Westernbank P.R., No. H-08-3731, 2009 WL 2423990,
Aug . 3 , 2 oo9 ) .
at *1 (S.D. Tex.
The court found that the second public-interest
factor "weigh[ed] heavily in favor of transfer."
Id. at *5.
The
court noted that "[t]his case involves a real estate and financing
deal as part of a project to be built in Puerto Rico .
. and
the Plaintiff, though residing in the Southern District of Texas,
conducts business and makes
Because of those facts,
investments
in Puerto Rico."
the court found that
Id.
"[t] he connection
between this case and the Southern District of Texas is much weaker
than
its
connection with
Puerto
Cindie's and SLS each sell one of LELO' s
products in this district. 67
have
a
direct
business
In
Rico."
this
action
allegedly infringing
The named international defendants
relationship
with LELO
Inc.,
which
is
headquartered in California and is responsible for importing and
distributing the products. 68
More revenue
from these sales
is
See First Amended Complaint, Docket Entry No. 4 8, pp. 5-6 ~ 8
("SLS Specialty operates the website http://www.slsspecialty.com,
from which it sells LELO's Noa™ couples massager to customers in
this District[.]"); ~ 9 ("Cindie's sells LELO's Tiani 3™ couples
massager to customers in this District.").
See also February 3,
2014, SLS Specialty Item List, Exhibit 21 to First Amended
Complaint, Docket Entry No. 48-21; Receipt, Exhibit 22 to Docket
Entry No. 48-22.
67
See First Amended Complaint, Docket Entry No. 48, pp. 4-5 ~ 6
("On information and belief, LELO Sweden, LELO Inc. , LELO Shanghai,
and Armocon are all affiliated companies in a coordinated enterprise engaged together, among other businesses, in the design,
(continued ... )
68
-20-
generated in California, and more retailers and distributors are
located there. 69
The Northern District of California has a stronger
connection to this case.
See id.
This factor weighs in favor of
transfer.
3.
The Familiarity of the Forum with the Law That Will
Govern the Case and the Avoidance of Unnecessary Problems
in Conflicts of Laws
The parties agree that the Northern District of California and
the Southern Dist-rict of Texas are equally capable of adjudicating
the patent issues in this case. 7 °
Federal patent law applies, so
there are no conflict of laws issues.
See Two-Way Media LLC v.
AT&T Inc., 636 F. Supp. 2d 527, 540 (S.D. Tex. 2009)
TS Tech,
551 F. 3d 1315,
1320
(Fed.
Cir.
2009))
(citing In re
The third and
fourth public-interest factors are neutral.
C.
Conclusion
Weighing the relevant factors,
the court finds that the four
private factors and one of the public factors weigh in favor of
transfer, while the rest are neutral.
Accordingly, LELO has met
its burden of showing that the Northern District of California "is
68
( • • • continued)
manufacture, importation,
lifestyle products.").
distribution,
and
sale
of
intimate
69
See Motion to Transfer, Docket Entry No. 57, p. 18; Sedic
Declaration, Exhibit 37 to Motion to Transfer, Docket Entry
No. 57-37.
70
See id. at 30; Response in Opposition, Docket Entry No. 70,
p. 23.
-21-
clearly more convenient" than this court,
transferred.
and this case will be
See In re Volkswagen II, 545 F.3d at 315.
IV.
Conclusions and Order
For the reasons stated above,
the court concludes that the
Northern District of California is a clearly more convenient venue
than this court.
Accordingly, Defendants LELO Inc. and LELOi AB's
Motion to Transfer (Docket Entry No. 57) is GRANTED, and the action
is TRANSFERRED to the United States District Court for the Northern
District of California pursuant to 28 U.S.C.
§
1404(a).
SIGNED at Houston, Texas, on this 21st day of October, 2015.
SIM LAKE
UNITED STATES DISTRICT JUDGE
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