Virentem Ventures, LLC v. YouTube, LLC et al
Filing
87
MEMORANDUM OPINION. Signed by Judge Maryellen Noreika on 5/16/2019. (dlw)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
VIRENTEM VENTURES, LLC,
Plaintiff,
v.
YOUTUBE, LLC and GOOGLE LLC,
Defendants.
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C.A. No. 18-917 (MN)
MEMORANDUM OPINION
John G. Day, Andrew C. Mayo, ASHBY & GEDDES, Wilmington, DE; Henry C. Bunsow, Denise
De Mory, Christiana M. Finn, Jenna Elizabeth Dean, BUNSOW DE MORY LLP, Redwood City, CA
– attorneys for Plaintiff
Frederick L. Cottrell, III, Kelly E. Farnan, Sara M. Metzler, RICHARDS, LAYTON & FINGER, P.A.,
Wilmington, DE; Charles K. Verhoeven, David A. Perlson, Jordan R. Jaffe, QUINN EMANUEL
URQUHART & SULLIVAN LLP, San Francisco, CA 94111 – attorneys for Defendants
May 16, 2019
Wilmington, Delaware
NOREIKA, U.S. DISTRICT JUDGE:
Defendants YouTube, LLC (“YouTube”) and Google LLC (“Google”) 1 (collectively
“Defendants”) have moved pursuant to 28 U.S.C. § 1404(a) to transfer this case to the Northern
District of California. (D.I. 39). Plaintiff Virentem Ventures LLC (“Virentem” or “Plaintiff”)
opposes. (D.I. 53). For the reasons discussed below, the Court will deny Defendants’ motion.
I.
BACKGROUND
Plaintiff, Virentem Ventures LLC and each of the Defendants are Delaware corporations
with principal places of business in California. Plaintiff filed this action on June 20, 2018, alleging
that Defendants infringe eleven patents. On November 9, 2018, Plaintiff filed an Amended
Answer asserting infringement of the same eleven patents and adding a twelfth count titled “Unfair
Competition – Violation of Cal. Bus & Prof Code § 17200.” (D.I. 30). On December 7, 2018,
Defendants moved to dismiss Plaintiff’s claims for willful and induced infringement and to dismiss
and to strike Plaintiff’s unfair competition claims. (D.I. 34, 35).
II.
LEGAL STANDARD
District courts have 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). However, “[a] plaintiff, as the injured party, generally ha[s] been
‘accorded [the] privilege of bringing an action where he chooses,” Helicos Biosciences Corp. v.
Illumina, Inc., 858 F. Supp. 2d 367, 371 (D. Del. 2012) (quoting Norwood v. Kirkpatrick, 349 U.S.
29, 31 (1955)), and this choice “should not be lightly disturbed,” Jumara v. State Farm Ins. Co.,
55 F.3d 873, 879 (3d Cir. 1995).
The Third Circuit has recognized 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
1
YouTube LLC is a wholly-owned subsidiary of Google LLC. (D.I. 43 at 2).
1
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.
Jumara, 55 F.3d at 879 (citation omitted). The Jumara court went on to describe twelve (12)
“private and public interests protected by the language of § 1404(a).” Id. The six private interests
include:
plaintiff’s forum 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).
Id. at 879 (citations omitted). The six public interests include:
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.
Id. at 879-880.
The party seeking transfer bears the burden “to establish that a balancing of proper interests
weigh[s] in favor of transfer.” Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970). This
is a heavy burden.
Indeed, although courts have “broad discretion to determine, on an
individualized, case-by-case basis, whether convenience and fairness considerations weigh in
favor of transfer,” Jumara, 55 F.3d at 883, the Third Circuit has held that “unless the balance of
convenience of the parties is strongly in favor of [the] defendant, the plaintiff’s choice of forum
should prevail.” Shutte, 431 F.2d at 25.
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III.
DISCUSSION
As an initial matter, there is no dispute that this case could have been brought in the
Northern District of California. Thus, the issue before the Court is whether to exercise discretion
under § 1404(a) to transfer this case to that district.
1.
Plaintiff’s Forum Preference
This factor weighs against transfer. “It is black letter law that a plaintiff’s choice of a
proper forum is a paramount consideration in any determination of a transfer request” – one that
“should not be lightly disturbed.” Shutte, 431 F.2d at 25 (internal quotations and citation omitted).
“Assuming jurisdiction and proper venue, weight is given to plaintiff’s choice because it is
plaintiff’s choice and a strong showing under the statutory criteria in favor of another forum is
then required as a prerequisite to transfer.” Burroughs Wellcome Co. v. Giant Food, Inc.,
392 F. Supp. 761, 763 n.4 (D. Del. 1975).
Defendants argue that Plaintiff’s choice of forum should be afforded “minimal weight” and
also less deference “because [Plaintiff] chose to litigate in the forum where it is incorporated, rather
than the forum where its principal place of business is located.” (D.I. 40 at 9-10 (quoting Audatex
N. Am., Inc. v. Mitchell Int’l, Inc., C.A. 12-139-GMS, 2013 WL 3293611, at *3 (D. Del. June 28,
2013)). This Court has previously noted, however, that it is “‘difficult to understand why the
plaintiff’s forum choice in and of itself merits less weight when the plaintiff has no ties to the
selected forum or when the facts underlying the controversy occurred elsewhere’” and that
“‘[n]either Shutte nor Jumara hold or even intimate that a plaintiff’s motive in selecting its forum
choice is relevant for § 1404(a) purposes.’” ANI Pharm., Inc. v. Method Pharm., LLC, No. 171097 (MN), 2019 WL 176339, at *8 (D. Del. Jan. 11, 2019) (quoting VLSI Tech. LLC, v. Intel
Corp., No. 18-966 (CFC), 2018 WL 5342650, at *2, 5-6 (D. Del. Oct. 29, 2018)).
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So too, here, where Defendants have not challenged venue or jurisdiction in Delaware, the
Court is not convinced that Plaintiff’s choice should be afforded any less deference because its
principal place of business is located in California. Thus, the Court will follow Shutte and give
Plaintiff’s forum choice paramount consideration in balancing the Jumara factors.
2.
Defendant’s Forum Preference
This factor favors transfer.
3.
Whether the Claims Arose Elsewhere
This factor bears only slightly on the transfer analysis. Here, Defendants assert that
Defendants “created, developed, and engineered [their] product[s] largely in the Northern District
of California” 2 and that “[t]he engineering teams that created, implemented, and maintain the
accused products, including YouTube’s Player Infrastructure Team and the Nest teams responsible
for the Sightline feature, are all based and predominantly employed in the Northern District of
California.” (D.I. 40 at 11). That connection would favor transfer. See In re Hoffmann–La Roche,
Inc., 587 F.3d 1333, 1338 (Fed. Cir. 2009). That being said, however, patent claims arise wherever
the allegedly-infringing products are sold, and Defendants do not dispute that the accused products
in this case are marketed and sold in Delaware. VLSI, 2018 WL 5342650, at *6 (citing Treehouse
Avatar LLC v. Valve Corp., 170 F. Supp. 3d 706, 710 (D. Del. 2016) (“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.”)). Thus, this factor weighs in
favor of transfer, but does so only slightly.
2
According to Defendants, “[t]he engineers primarily responsible for functionality in
YouTube’s video player, including variable speed playback in both internet browsers and
YouTube apps, are part of a group known as the Player Infrastructure Team. As of
October 2018, there were approximately 31 people in the Player Infrastructure Team, of
which 75% work in San Bruno, California.” (D.I. 40 at 4 (internal citation omitted)). So
too Defendants assert that the teams who designed, developed and managed the accused
“Google Nest Products” “primarily worked in Northern California.” (Id. at 4-5).
4
4.
The Convenience of The Parties As Indicated by Their Relative
Physical and Financial Conditions
This factor is effectively neutral. Defendants argue that “[i]t is clearly more convenient
for the parties to litigate in the Northern District of California, a familiar court at the site of their
principal places of business.” (D.I. 40 at 13 (citing Illumina, Inc. v. Complete Genomics, Inc.,
C.A. 10-649 (RFK), 2010 WL 4818083, at *3 (D. Del. Nov. 9, 2010)). Defendants’ size, financial
resources, and status as Delaware corporations, however, negate any assertion that they are
actually inconvenienced by having to litigate in Delaware. As Delaware corporations with global
operations, Defendants demonstrate “inconvenience” pursuant to § 1404(a) only if they “prove
that litigating in Delaware would pose a unique or unusual burden on [its] operations.” VLSI, 2018
WL 5342650, at *6 (quoting Graphics Props. Holdings Inc. v. Asus Computer Int’l, Inc.,
964 F. Supp. 2d 320, 325 (D. Del. 2013) and citing ADE Corp. v. KLA-Tencor Corp., 138 F. Supp.
2d 565, 573 (D. Del. 2001) (“[A]bsent some showing of a unique or unexpected burden, a company
should not be successful in arguing that litigation in its state of incorporation is inconvenient.”)).
Indeed, “when a party accepts the benefits of incorporation under the laws of the State of Delaware,
a company should not be successful in arguing that litigation in Delaware is inconvenient, absent
some showing of a unique or unexpected burden.” Universal Secure Registry, LLC v. Apple Inc.,
No. 17-585 (CFC) (SRF), 2018 WL 4502062, at *3 (D. Del. Sept. 19, 2018).
Here, Defendants have not identified any significant inconvenience – let alone a unique or
unusual burden – that it would incur as a party to litigation in this Court. Nor have Defendants
contended that Delaware would pose an undue burden on their party witnesses. Moreover, as
noted above, Defendants are large corporations with employees located all over the world. They
chose to incorporate in Delaware and have afforded themselves the benefits of their status as
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Delaware corporations as well as by bringing litigation here in the past. The Court thus finds that
Defendants would not be inconvenienced by keeping this action in Delaware.
As to Plaintiff, the Northern District of California and this District appear equally
convenient. Plaintiff, however, “has chosen to litigate this matter in Delaware and that choice
signals its belief that litigation here is most convenient for it, for whatever its reasons.” Tessera,
Inc. v. Sony Elecs. Inc., No. 10-838 (RMB) (KW), 2012 WL 1107706, at *4 (D. Del. Mar. 30,
2012)). Thus, the convenience of the parties is a neutral factor under § 1404(a).
5.
The Convenience of Witnesses
This factor weighs slightly in favor of transfer. Courts in this District have held that this
factor carries weight “only to the extent that the witnesses may actually be unavailable for trial in
one of the fora.” VLSI, 2018 WL 5342650, at *7 (quoting Jumara, 55 F.3d at 879 and citing Smart
Audio Techs., LLC v. Apple, Inc., 910 F. Supp. 2d 718, 732 (D. Del. 2012)). “[W]itnesses who are
employed by a party carry no weight,” because “each party is able, indeed, obligated to procure
the attendance of its own employees for trial.” Affymetrix, Inc. v. Synteni, Inc., 28 F. Supp. 2d
192, 203 (D. Del. 1998).
Here, Defendants argue that relevant witnesses are in the Northern District of California
but none are in Delaware. They have identified three categories of individuals whose appearance,
they assert, may be required but cannot necessarily be compelled: inventors, the parties’ exemployees, and third parties with knowledge of prior art. Defendants offer no record evidence
that demonstrates that necessary witnesses will refuse to appear in Delaware for trial.
With respect to the inventors, only one, Don Hejna, has been identified as located in the
Northern District of California. 3 As both parties agree, Mr. Hejna is the Managing Partner of
3
The other inventors identified are from Massachusetts and Washington State.
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Plaintiff. Being so affiliated with the Plaintiff, Plaintiff represents (and the Court accepts and will
hold Plaintiff to that representation) that Mr. Hejna would be available for trial – that he would
voluntarily appear in this District, or could be compelled to do so.
With respect to former employees, Defendants identify two former employees of Enounce
(the company that brought the earlier litigation) who currently reside in Northern California, one
of whom Enounce “identified as having relevant knowledge in its initial disclosures” in the prior
litigation. Defendants also refer generally to its own former employees and to third parties
identified in connection with respect to prior art documents. There is no discussion, however, as
to whether any of these would actually be necessary witnesses or whether they would agree to
appear at trial. Thus, the Court finds that this factor weighs slightly in favor of transfer.
6.
The Location of Books and Records
This factor is neutral. Courts give weight to the location of books and records only “to the
extent that the files [and other documentary evidence] could not be produced in the alternative
forum.” Jumara, 55 F.3d at 879. Here, Defendants asserts that “all or nearly all relevant party
documents, including highly proprietary information and source code, are available in the Northern
District of California.” (D.I. 40 at 15). Defendants, however, have not identified any evidence
that could only be available in the Northern District of California or could not be produced in
Delaware. 4
Thus, this factor is neutral.
See Signal Tech, LLC v. Analog Devices, Inc.,
2012 WL 1134723, at *3 (D. Del. Apr. 3, 2012).
4
Defendants refer generally to source code, but as Plaintiff notes, “it is routine for parties to
reach agreements regarding where source code will be produced and reviewed in a manner
that mitigates burden to all regardless of where a case is pending.” (D.I. 53 at 10) (citing
VLSI Technology, 2018 WL 5342650, at *7)).
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7.
Enforceability of the Judgment
The parties agree that this factor is neutral, as judgments from this District and the Northern
District of California would be equally enforceable. (D.I. 40 at 16 n.5).
8.
Practical Considerations
This factor is neutral. Defendants assert that practical considerations favor trial in the
Northern District of California. First, Defendants assert that transfer will “increase efficiency
because the transferee court has already considered and construed language from certain patent
claims at issue.” (D.I. 40 at 16). The Court finds that assertion to be overstated. The prior
litigation was filed more than six years ago by another company. 5 It involved only two of the
eleven Asserted Patents, and was resolved more than four years ago without a trial. Moreover, it
is unclear whether this case would necessarily be assigned to the judge who handled the earlier
litigation.
See
Northern
District
of
California
General
Order
44
(available
at
https://www.cand.uscourts.gov/filelibrary/132/GO-44_01.01.18.pdf) (stating that a transferred
case would be randomly assigned); see also Hynix Semiconductor Inc. v. Rambus Inc., No. C-0020905 RMW, 2008 WL 3916304, at *1-2 (N.D. Cal. Aug. 24, 2008) (declining to find that a second
case involving seventeen patents was “related” to an earlier case that involved six of the seventeen
patents because having the cases before the same judge was “not necessary to avoid an unduly
burdensome duplication of labor and expense or to minimize the chance of conflicting results”).
Additionally, Defendants assert trial in the Northern District of California will be easier,
more efficient, and less costly and “[w]hen ‘neither party operates nor has facilities, offices, or
employees in Delaware, the court [should find] that the practical considerations of efficiency,
expense, and ease favor transfer.’” (D.I. 40 at 17) (quoting Mitel Networks Corp. v. Facebook,
5
Plaintiff asserts that the earlier suit was filed by its predecessor in interest. Defendants
suggest that it may have been filed by Plaintiff’s parent corporation.
8
Inc., 943 F. Supp. 2d 463, 476 (D. Del. 2013)). As Plaintiff points out, however, Defendants’
conclusory assertions are “not necessarily true. The Bay Area is widely known to have one of the
highest costs of living in the country. Trial in that venue might be more expensive in some ways
than trying the case in Delaware.” (D.I. 53 at 14). Similarly, the Court agrees with Plaintiff that
Defendants have offered no compelling evidence that the Northern District operates more
efficiently than does this Court. This factor is neutral and does not weigh in favor of transfer.
9.
Relative Administrative Difficulty Due to Court Congestion
This factor weighs against transfer. Defendants argue that the number of patent cases filed
in this district is substantially higher than the case filings in the Northern District of California.
While that may be true, as of December of 2018, the average time to trial in Delaware remained
several months quicker than the time to trial in the Northern District of California. See Federal
Court
Management
Statistics,
December
2018
(available
at
https://www.uscourts.gov/sites/default/files/fcms_na_distcomparison1231.2018.pdf). 6
10.
Local Interest in Deciding Local Controversies at Home
This factor is neutral. It is clear that “[p]atent issues do not give rise to a local controversy
or implicate local interests.” Intellectual Ventures I LLC v. Checkpoint Software Techs. Ltd.,
797 F. Supp. 2d 472, 486 (D. Del. 2011) (quoting TriStata Tech., Inc. v. Emulgen Labs., Inc.,
537 F. Supp. 2d 635, 643 (D. Del. 2008)). Moreover, although Defendants argue that the Northern
District of California has a strong local interest “because the cause of action calls into question the
work and reputation of several individuals residing in or near that district and who presumably
conduct business in that community,” accusing them of inter alia, willful infringement, it ignores
that this action involves a dispute between Delaware corporate citizens. (D.I. 40 at 18 (citing In
6
While the actual trial date set in this case is later than would be expected based on the
average time to trial in the District of Delaware, that is solely due to the parties’ agreement
to that date in its proposal to the Court. (D.I. 61, 69).
9
re Hoffman-La Roche, 587 F.3d 1333, 1336 (Fed. Cir. 2009)). Delaware has a substantial interest
in adjudicating disputes involving companies incorporated in Delaware. Intellectual Ventures I,
797 F. Supp. 2d at 486. Moreover, Defendants also employ thousands of employees around the
world and are truly not “local” companies in the Northern District.
Finally, Defendants’ assertion that the “Northern District of California’s local interest is
further shown because Virentem accuses Defendants of committing unfair business practices
violating California unfair competition law” ignores that Defendants have moved both to dismiss
and to strike the unfair competition claims on multiple grounds, including for lack of subject matter
jurisdiction, as time barred, because they fail to state a claim, and as “an impermissible strategic
lawsuit against public participation.” (D.I. 34, 35, 36 at 18-29). Thus, it is unclear at this time
whether those claims will remain in this lawsuit. (D.I. 40 at 19). Even if that one count does
survive, however, it is one of twelve counts in the complaint and appears to overlap to some degree
with the patent issues asserted. Thus, it does not evince a strong local interest.
11.
Public Policies of The Fora
Delaware’s public policy encourages Delaware corporations to resolve their disputes in
Delaware courts. Round Rock Research, LLC v. Dell, Inc., 904 F. Supp. 2d 374, 378 (D. Del.
2012). Defendants have not addressed this factor. Thus, this factor weighs against transfer.
12.
Familiarity of The Trial Judges with The Applicable State Law in
Diversity Cases
This factor is neutral. This case is primarily a patent case. Eleven of the twelve counts in
Plaintiff’s complaint arise under the federal patent laws. Defendants do not argue that there is any
distinction between the two districts with respect to the patent claims. Instead, they argue that the
California state law unfair competition claim added in the Amended Complaint favors transfer to
California. Moreover, as discussed above, Defendants have moved both to dismiss and to strike
the unfair competition claims on multiple grounds and it is unclear whether those claims will
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remain in the case. (D.I. 34, 35, 36 at 18-29). Even if that claim does survive, however, it is one
count of twelve in the complaint that, as noted above, overlaps to some degree with the patent
issues asserted. This Court is competent to apply state law to that claim. Indeed, “the nature of
federal practice requires the Court to routinely interpret laws from jurisdictions across the nation.”
JTH Tax, Inc. v. Lee, 482 F. Supp. 2d 731, 739 (E.D. Va. 2007) (internal quotation marks omitted).
Thus, this factor is neutral.
IV.
CONCLUSION
Of the twelve Jumara factors, six are neutral, three weigh to varying degrees against
transfer, and three weigh in favor of transfer. Looking at the factors as a whole and treating
Plaintiff’s choice of this forum as a paramount consideration, Defendants have failed to
demonstrate that the Jumara factors weigh strongly in favor of transfer. Defendants’ motion to
transfer will, thus, be denied. An appropriate order will be entered.
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