FastVDO LLC v. Paramount Pictures Corporation

Filing 35

MEMORANDUM OPINION. Signed by Judge Sue L. Robinson on 6/4/2013. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

FASTVDO LLC,
Plaintiff,
v.

PARAMOUNT PICTURES
CORPORATION,
Defendant.

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Civ. No. 12-1427-SLR

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Joseph James Farnan Ill, Esquire and Brian E. Farnan, Esquire of Farnan LLP,
Wilmington, Delaware. Counsel for Plaintiff. Of Counsel: Kevin P. Burke, Esquire,
Mark A. Fenster, Esquire, and Alexander C. D. Giza, Esquire, of Russ, August & Kabat.
John G. Day, Esquire, Tiffany Geyer Lydon, Esquire, and Andrew C. Mayo, Esquire of
Ashby & Geddes, Wilmington, Delaware. Counsel for Defendant. Of Counsel: Vincent
J. Belusko, Esquire, Jason J. Lee, Esquire, Scott C. Moore, Esquire, and Nicole M.
Smith, Esquire of Morrison & Foerster LLP.

MEMORANDUM OPINION

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2013
Dated: June
Wilmington, Delaware

~~Judge
I. INTRODUCTION

On November 9, 2012, plaintiff FastVDO LLC. ("FastVDO") filed a complaint
against defendant Paramount Pictures Corporation ("Paramount") alleging infringement
of its U.S. Patent No. RE40,081 ("the '081 patent"). (D.I. 1) Presently before the court
is Paramount's motion to transfer this action to the Central District of California. (D.I. 9)
The court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331 and 1338(a).
For the reasons that follow, Paramount's motion to transfer is denied.

II. BACKGROUND
FastVDO is a Florida limited liability corporation with its principal place of
business located at 750 N. Atlantic Ave., Cocoa Beach, Florida 32931. (D.I. 1 at~ 1)
FastVDO has no offices or employees in California.
Paramount is a Delaware corporation with its principal place of business located
at 5555 Melrose Avenue, Los Angeles, California 90038. (/d.

at~

2) Paramount avers

that the accused products were produced and distributed by a separate non-party
entity, Paramount Home Entertainment ("PHE"), also a Delaware corporation and
located at 5555 Melrose Avenue, Los Angeles, California 90038. (D.I. 10 at 5)
Paramount also avers that PHE does not encode the video itself, but relies on six
authoring houses which are headquartered in and around Los Angeles, California, and
which have facilities located in Indiana, Pennsylvania, and New York. (D.I. 11

at~

4)

Ill. STANDARD OF REVIEW
Section 1404(a) of Title 28 of the United States Code grants district courts the
authority to transfer venue "[f]or the convenience of parties and witnesses, in the

interests of justice ... to any other district or division where it might have been
brought." 28 U.S.C. § 1404(a). Much has been written about the legal standard for
motions to transfer under 28 U.S.C. § 1404(a). See, e.g., In re Link_A_Media Devices
Corp., 662 F.3d 1221 (Fed. Cir. 2011); Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d

Cir. 1995); Helicos Biosciences Corp. v. //lumina, Inc., 858 F. Supp. 2d 367 (D. Del.
2012).
Referring specifically to the analytical framework described in Helicos, the court
starts with the premise that a defendant's state of incorporation has always been "a
predictable, legitimate venue for bringing suit" and that "a plaintiff, as the injured party,
generally ha[s] been 'accorded [the] privilege of bringing an action where he chooses."'
858 F. Supp. 2d at 371 (quoting Norwood v. Kirkpatrick, 349 U.S. 29, 31 (1955)).
Indeed, the Third Circuit in Jumara reminds the reader that "[t]he burden of establishing
the need for transfer ... rests with the movant" and that, "in ruling on defendants'
motion, the plaintiff's choice of venue should not be lightly disturbed." 55 F.3d at 879
(citation omitted).
The Third Circuit goes on to recognize that,
[i]n ruling on§ 1404(a) motions, courts have not limited their consideration
to the three enumerated factors in § 1404(a) (convenience of parties,
convenience of witnesses, or interests of justice), and, indeed,
commentators have called on the courts to "consider all relevant factors to
determine whether on balance the litigation would more conveniently
proceed and the interests of justice be better served by transfer to a
different forum.

/d. (citation omitted). The Court then describes some of the "many variants of
the private and public interests protected by the language of§ 1404(a)." /d.

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The private interests have included: plaintiff's forum of preference as
manifested in the original choice; the defendant's preference; whether the
claim arose elsewhere; the convenience of the parties as indicated by
their relative physical and financial condition; the convenience of the
witnesses - but only to the extent that the witnesses may actually be
unavailable for trial in one of the fora; and the location of books and
records (similarly limited to the extent that the files could not be
produced in the alternative forum).
The public interests have included: the enforceability of the judgment;
practical considerations that could make the trial easy, expeditious, or
inexpensive; the relative administrative difficulty in the two fora resulting
from court congestion; the local interest in deciding local controversies at
home; the public policies of the fora; and the familiarity of the trial judge
with the applicable state law in diversity cases.

/d. (citations omitted) (emphasis added).
Ill. ANALYSIS

With the above "jurisdictional guideposts" in mind, the court turns to the "difficult
issue of federal comity" that transfer motions present. E.E.O.C. v. Univ. of Pa., 850
F.2d 969, 976 (3d Cir. 1988). FastVDO has not challenged Paramount's assertion that
venue would also be proper in the Central District of California; 1 therefore, the court will
not address this further. See 28 U.S.C. § 1404(a); (D. I. 18 at 2-3)
The parties have all chosen legitimate forums in which to pursue the instant
litigation. In this regard, certainly a party's state of incorporation is a traditional and
legitimate venue, as is the locus of a party's business activities. Given that
"convenience" is separately considered in the transfer analysis, the court declines to
elevate a defendant's choice of venue over that of a plaintiff based on defendant's
convenience. Therefore, the fact that plaintiffs have historically been accorded the
1

Because both Paramount and PHE are Delaware corporations, party
substitution will not affect this decision. (D.I. 21 at 1 n.1)

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privilege of choosing their preferred venue for pursuing their claims remains a
significant factor.
A claim for patent infringement arises wherever someone has committed acts of
infringement, to wit, "makes, uses, offers to sell, or sells any patented invention" without
authority. See generally 35 U.S.C. § 271 (a); Red Wing Shoe Co., Inc. v. Hockerson-

Halberstadt, Inc., 148 F.3d 1355, 1360 (Fed. Cir. 1998) (an infringement claim "arises
out of instances of making, using, or selling the patented invention"). FastVDO alleges
Paramount has directly and indirectly committed infringing activities throughout the
United States by first encoding video onto Blu-ray discs using FastVDO's patented
codec, then distributing those Blu-ray discs to the public having reason to know that it
would cause the patented method to be performed. Paramount responds that any
infringing activities occurred primarily in the Los Angeles Area, where the majority of the
authoring house headquarters and facilities exist.
The record indicates that the coding occurs in multiple states. That fact,
combined with the nationwide distribution of Blu-ray discs, negates the argument that
the alleged infringement is focused in California.
The Third Circuit in Jumara indicated that, in evaluating the convenience of the
parties, a district court should focus on the parties' relative physical and financial
condition. In this case, Paramount is a significantly larger company based on revenue
and number of employees. The parties' litigation history show that both parties have
litigated in multiple states, although Paramount has litigated in significantly more. 2

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Searches by party name in the PACER case locator reveal Paramount Pictures
Corporation as a party to 2,778 civil cases in almost every state, PHE to 14 cases in six

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Considering the convenience of the witnesses and specifically whether witnesses
"actually may be unavailable for trial in one of the fora," Paramount argues that former
employees and employees of the third-party authoring houses could not be compelled
to attend a trial in Delaware, but does not indicate any witness that would be
unavailable, or provide reasons for any unwillingness to testify absent a subpoena. 3
(D.I. 10 at 12-14); see Smart Audio Techs., L.L.C. v. Apple, Inc., 2012 WL 5865742, at
*8 (D.Del. Nov.16, 2012) ("[T]his factor is only given weight when there is some reason
to believe that a witness actually will refuse to testify absent a subpoena.").
According to Paramount, while PHE's records are maintained at its California
headquarters, potentially relevant documentation is in the possession of the non-party
authoring house headquarters that are not within the subpoena power of this court.
However, as the authoring houses manufacture the Blue-ray discs at the behest of
PHE, it is unlikely they would refuse any reasonable request to produce information
from their business partner in electronic format.
As to practical considerations, the court recognizes that trial in California would
be less expensive and easier for Paramount. Since FastVDO's Cocoa Beach
headquarters are closer to Delaware than to Central California, it would most likely be
more expensive for FastVDO to litigate in Central California than in Delaware.

states, and FastVDO to 40 cases in California, Delaware, and Maryland.
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With respect to trials, in the nine patent jury trials this judicial officer conducted
between March 2010 and October 2011, an average of three fact witnesses per party
appeared live for trial, with the average length of trial being 28 hours (with the parties
often using less time than allocated, on average, 25 hours). Further, depositions in the
cases over which this judicial officer presides are generally taken where the deponents
reside or work. There is no suggestion that this case will be an exception.

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With respect to administrative difficulty, trial in this case will be scheduled
consistent with the parties' proposals. Local interest in deciding local controversies is
not a dispositive factor, as patent litigation does not constitute a local controversy in
most cases. Indeed, patent litigation implicates constitutionally protected property
rights, is governed by federal law reviewed by a court of appeals of national (as
opposed to regional) stature, and affects national (if not global) markets. See Cradle

IP, LLC v. Texas Instruments, Inc., --- F.Supp.2d ----, 2013 WL 548454, at *4 (D. Del.
February 13, 2013). The instant litigation involves Blu-ray discs sold and distributed
throughout the United States. There are twenty-four other related suits pending in this
district; while this case will be argued separately, there are efficiencies in having all
related cases considered in a single district. The remaining Jumara public interest
factors -the enforceability of a judgment, the public policies of the fora, and the
familiarity of the judge with state law - carry little weight in this transfer analysis.

IV. CONCLUSION
In sum, Paramount has the burden of persuading the court that transfer is
appropriate, not only for its convenience but in the interests of justice. In this case,
FastVDO chose a legitimate forum- Paramount's state of incorporation. As is usual in
these cases, the convenience factors do not weigh in favor of transfer, because
discovery is a local event and trial is a limited event. Although Delaware is not the locus
of any party's business activities, it is a neutral forum and no more inconvenient for
Paramount than Florida, the locus of FastVDO's business activities. Given that both

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Paramount and FastVDO have experience litigating in multiple jurisdictions, the court is
not persuaded that transfer is warranted in the interests of justice.

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