Motorola Mobility, Inc. v. Microsoft Corporation

Filing 62

Defendant's MOTION to Change Venue Defendant's Motion to Transfer This Action to the Western District of Washington and Accompanying Memorandum of Law by Microsoft Corporation. Responses due by 6/6/2011 (Attachments: #1 Exhibit Exhibit A David Kaefer's Declaration, #2 Exhibit Exhibit 1 to David Kaefer's Declaration, #3 Exhibit Exhibit 2 to David Kaefer's Declaration, #4 Exhibit Exhibit 3 to David Kaefer's Declaration, #5 Exhibit Exhibit B Curtis Miner's Declaration, #6 Exhibit Exhibit 1 to Curtis Miner's Declaration, #7 Exhibit Exhibit 2 to Curtis Miner's Declaration, #8 Exhibit Exhibit 3 to Curtis Miner's Declaration, #9 Exhibit Exhibit 4 to Curtis Miner's Declaration, #10 Exhibit Exhibit 5 to Curtis Miner's Declaration, #11 Exhibit Exhibit 6 to Curtis Miner's Declaration, #12 Exhibit Exhibit 7 to Curtis Miner's Declaration, #13 Exhibit Exhibit 8 to Curtis Miner's Declaration, #14 Exhibit Exhibit 9 to Curtis Miner's Declaration, #15 Exhibit Exhibit 10 to Curtis Miner's Declaration, #16 Exhibit Exhibit 11 to Curtis Miner's Declaration, #17 Exhibit Exhibit 12 to Curtis Miner's Declaration, #18 Exhibit Exhibit 13 to Curtis Miner's Declaration, #19 Exhibit Exhibit 14 to Curtis Miner's Declaration, #20 Exhibit Exhibit 15 to Curtis Miner's Declaration, #21 Exhibit Exhibit 16 to Curtis Miner's Declaration, #22 Exhibit Group Exhibit C to Motion, #23 Exhibit Group Exhibit D to Motion)(Miner, Curtis)

Case: 3:10-cv-00699-bbc Document #: 44

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - MOTOROLA MOBILITY, INC. and
GENERAL INSTRUMENT CORPORATION

OPINION AND ORDER

Plaintiffs,
10-cv-699-bbc
v.
MICROSOFT CORPPORATION,
Defendant.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Plaintiffs Motorola Mobility, Inc. and General Instrument Corporation are suing
defendant Microsoft Corporation for infringement of U.S. Patent No. 7,310,374, U.S.
Patent No. 7,310,375 and U.S. Patent No. 7,310,376, each of which is titled “Macroblock
Level Adaptive Frame/Field Coding for Digital Video Content.” Two motions are before the
court: (1) defendant’s motion to dismiss for failure to state a claim upon which relief may
be granted; and (2) defendant’s “motion to dismiss, stay or, in the alternative, transfer
venue.”
In the first motion, defendant argues that plaintiffs’ complaint fails to give adequate
notice of their claims as required by Fed. R. Civ. P. 8. Defendant acknowledges that

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plaintiffs mooted that motion by filing an amended complaint. In their second motion,
defendant argues that the complaint must be dismissed because it is a compulsory
counterclaim to a lawsuit defendant filed in the Western District of Washington or, in the
alternative, that the case should be transferred to Washington under 28 U.S.C. § 1404.
Because I conclude that the Western District of Washington is clearly more convenient than
this district and the interest of justice favors transfer, I am granting defendant’s motion
under § 1404. I will leave it to the Washington court to determine whether consolidation
of the two cases is required under Fed. R. Civ. P. 13.

OPINION
“For the convenience of the parties and witnesses, in the interest of justice, a district
court may transfer any civil action to any other district or division where it might have been
brought.” 28 U.S.C. § 1404(a). The Court of Appeals for the Seventh Circuit recently
discussed the proper standard to be applied by courts in considering motions brought under
this statute. Research Automation, Inc. v. Schrader-Bridgeport International, Inc., 626 F.3d
973 (7th Cir. 2010). The court stated that § 1404(a) “permits a ‘flexible and individualized
analysis’ and affords district courts the opportunity to look beyond a narrow or rigid set of
considerations in their determinations.” Id. at 978 (quoting Stewart Organization, Inc. v.
Ricoh Corp., 487 U.S. 22 487 U.S. 22, 29 (1988)). However, the court summarized the

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most salient factors:
With respect to the convenience evaluation, courts generally consider the
availability of and access to witnesses, and each party's access to and distance
from resources in each forum. Other related factors include the location of
material events and the relative ease of access to sources of proof.
The “interest of justice” is a separate element of the transfer analysis that
relates to the efficient administration of the court system. For this element,
courts look to factors including docket congestion and likely speed to trial in
the transferor and potential transferee forums; each court's relative familiarity
with the relevant law; the respective desirability of resolving controversies in
each locale; and the relationship of each community to the controversy. The
interest of justice may be determinative, warranting transfer or its denial even
where the convenience of the parties and witnesses points toward the opposite
result.
Id. (internal quotations omitted).
In this case, plaintiffs have not pointed to a single factor related to convenience that
favors Wisconsin as a forum. None of the parties are incorporated in Wisconsin or have
their headquarters or any major facilities here. The parties do not identify any potential
witnesses in Wisconsin, any relevant events that occurred here that did not occur in every
other state or even any documents that are located here. In contrast, defendant’s principal
place of business is in the Western District of Washington and at least one of the accused
products (Windows 7) was designed there. Defendant’s employees responsible for both the
development and sale of Windows 7 work in that district. Although it is true that other
parties and potential witnesses live outside Washington, this does not tip the scales in favor

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of Wisconsin because no parties or potential witnesses are located here.
With respect to the interests of justice, defendant argues that a related lawsuit is
pending in the Western District of Washington. Coffey v. Van Dorn Iron Works, 796 F.2d
217, 219-20 (7th Cir. 1986) (interest of justice factor includes question whether transfer
would facilitate consolidation of related cases). In Microsoft v. Motorola, Inc., 10-cv-1823
(W.D. Wash.), defendant is contending that defendant Motorola is breaching an agreement
to license various patents, including the three asserted in this case, at reasonable rates.
Defendant is asking the court to enjoin plaintiff Motorola “from further demanding excessive
royalties.” Plaintiffs argue that the Washington lawsuit is not related to this one because the
Washington lawsuit does not require resolution of any issues related to infringement or
invalidity, but plaintiffs do not deny defendant’s contention that the result of the
Washington lawsuit could limit the damages available to plaintiffs in this case. That is, if
the Washington court determines that plaintiff Motorola is charging too much for licensing
the ‘374 patent, the ‘375 patent and the ‘376 patent, that could limit the royalty rate that
plaintiffs could obtain for any infringement by defendant of those patents. Although the two
lawsuits are far from identical, the factual overlap between the two is another reason why the
balance favors Washington.
Also relevant to the interest of justice factor is “the relationship of each community
to the controversy.” Research Automation, 626 F.3d at 978. In this case, the Western

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District of Washington has a closer relationship to the dispute than the Western District of
Wisconsin. In fact, plaintiffs do not identify any relationship this district has with the case,
other than the potential sale of accused products, a relationship that every state in the
country shares.
The only factor that plaintiffs have identified as favoring this district is speed, but
even that factor does not weigh heavily in either direction. According to the information
provided by the parties, the difference between the average time to disposition in the two
districts is 1.4 months and the difference between the average time to trial is four months.
Plaintiffs do not identify any reason to believe that these minor differences will create an
undue hardship. E.g., Castleberg v. Davidson, No. 10-cv-647-bbc (W.D. Wis. Dec. 30,
2010) (difference of 12 months in average time to trial not dispositive). Particularly because
plaintiffs do not suggest that they make or sell any products that compete directly with the
accused products in this case or that defendant is somehow stealing market share from them,
they have not shown that time is of the essence.
I conclude that defendant has met its burden to prove that this case should be
transferred to the Western District of Washington. Defendant has shown that Washington
is more convenient for the parties in several respects and that the interest of justice factor
favors transfer to a district with a related case and a closer relationship to the dispute.
Therefore, its motion to transfer will be granted.

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ORDER
IT IS ORDERED that
1. Defendant Microsoft Corporation’s motion to dismiss for failure to state a claim
upon which relief may be granted, dkt. #23, is DENIED as moot.
2. Defendant’s motion to transfer venue under 28 U.S.C. § 1404, dkt. #25, is
GRANTED. This case is TRANSFERRED to the United States District Court for the
Western District of Washington.
Entered this 18th day of February, 2011.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge

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IN THE UNITED STATES DISTRICT COURT
FOR THE W ESTERN DISTRICT OF W ISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - M OTOROLA M OBILITY INC.,
OPINION AND ORDER
Plaintiff,
10-cv-826-bbc
v.
M ICROSOFT CORPORATION,
Defendant.
- - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - In this patent infringement case plaintiff Motorola Mobility, Inc. contends that defendant
M icrosoft Corporation’s Kinect sensor device and the Xbox 360 gaming system and related
accessories and services are infringing U.S. Patents Nos. 6,992,580; 7,106,358; 6,686,931;
7,088,220 and 5,738,583. Defendant has filed permissive counterclaims alleging that plaintiff’s
smart phones are infringing U.S. Patents Nos. 6,374,276; 7,454,718; 6,822,664;
7,421,666 and 6,256,642. Now before the court is defendant’s motion to transfer the case to
the W estern District of W ashington under 28 U.S.C. § 1404 (a). Because I conclude that the
W estern District of W ashington is clearly more convenient than this district and that the
interests of justice favor transfer, I am granting defendant’s motion under 28 U.S.C. § 1404.
From plaintiff’s complaint and the parties’ submissions related to defendant’s motion to
transfer venue, I draw the following facts for the purpose of deciding this motion.

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FACTS
A. Procedural History
On November 9, 2010, defendant M icrosoft filed suit against plaintiff M otorola M obility
Inc. in the W estern District of W ashington, asserting claims of breach of contract, promissory
estoppel and waiver. M icrosoft v. M otorola, Case No. 10-cv-1823. Since then, plaintiff has filed
several suits against defendant, including three in this district, M otorola v. M icrosoft, Cases Nos.
10-cv-699, 10-cv-700 and the present suit.
Defendant moved to transfer cases 10-cv-699 and 10-cv-700 to the W estern District of
W ashington under 28 U.S.C. § 1404. I granted that motion as to 10-cv-699, on February 18,
2011, concluding that transfer was more convenient and served the interests of justice. (I took
no action on the motion in case 10-cv-700 because that case is stayed pending final resolution
by the United States International Trade Commission in In the M atter of Certain Gaming and
Entertaining Consoles, Related Software, and Components thereof, Investigation No. 377-TA752.)

B. Parties, W itnesses and Documents
Plaintiff M otorola is a Delaware corporation with its principal place of business in
Libertyville, Illinois. Defendant Microsoft is a W ashington corporation with its principal place
of business in Redmond, W ashington. Defendant developed its Xbox 360 gaming system in
Redmond, W ashington and “all key decisions regarding marketing and product direction are

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made and all witnesses with knowledge of the relevant facts” are in W ashington. Specifically,
the development and management teams responsible for the Xbox 360 gaming system,
defendant’s witnesses with knowledge of sales, marketing and finance relating to the Xbox 360
and the relevant documents, emails, other electronic files, relevant source code and related
technical documentation relating to the Xbox are all in W ashington.
Two of plaintiff’s potential third party witnesses are within the subpoena power of this
court. M ichael Kotzin, an inventor on the ‘580 and ‘220 patents, and David Noskowicz, a
lawyer involved in the prosecution of the ‘580 patent, are located within 100 miles of this
courthouse. Of the other 11 inventors and patent prosecutors, two are located in Illinois, three
in California and the remaining six are closer to M adison, W isconsin than to Seattle,
W ashington. The activities relating to the invention of three of plaintiff’s patents-in-suit took
place in Illinois and five of the 18 inventors and patent prosecutors for these patents are in
Illinois.

OPINION
Defendant has moved to transfer this case under 28 U.S.C. § 1404 (a) on the grounds
that W ashington is a more convenient forum and transfer will serve the interests of justice. A
district court “may transfer any civil action to any other district or division where it might have
been brought” if the transfer is “[f]or the convenience of the parties and witnesses [and] in the
interest of justice.” 28 U.S.C. § 1404 (a). Decisions regarding transfer of patent actions are

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governed by the law of the regional circuit. W inner International Royalty Corp. v. W ang, 202
F.3d 1340. 1352 (Fed. Cir. 2000). In the Seventh Circuit, the movant has the burden of
establishing that the transferee forum is “clearly more convenient.” Coffey v. Van Dorn Iron
W orks, 796 F.2d 217, 219-20 (7th Cir. 1986) (discussing factors relevant to § 1404 transfer
analysis).

In a recent decision, Research Automomation, Inc. v. Schrader-Bridgeport

International, Inc., 626 F.3d 973 (7th Cir. 2010), the Court of Appeals for the Seventh Circuit
explained that § 1404(a) “permits a ‘flexible and individualized analysis’ and affords district
courts the opportunity to look beyond a narrow or rigid set of considerations in their
determinations.” Id. at 978 (quoting Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 29
(1988). The court summarized the most salient factors:
W ith respect to the convenience evaluation, courts generally consider the
availability of and access to witnesses, and each party’s access to and distance
from resources in each forum. Other related factors include the location of
material events and the relative ease of access to sources of proof.
The “interest of justice” is a separate element of the transfer analysis that relates
to the efficient administration of the court system. For this element, courts look
to factors including docket congestion and likely speed to trial in the transferor
and potential transferee forums; each court’s relative familiarity with the relevant
law; and the relationship of each community to the controversy. The interests of
justice may be determinative, warranting transfer or its denial even where the
convenience of the parties and witnesses points toward the opposite result.
Id. (internal quotations and citations omitted).
The parties do not dispute that venue is proper in both the W estern District of W isconsin
and the W estern District of W ashington and that the suit could have been brought against

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defendant in the W estern District of W ashington. Thus, I need determine only whether transfer
would serve the convenience of the parties and witnesses and promote the interests of justice.

A. Convenience
Neither party has identified any party witnesses, relevant events or sources of proof
located in W isconsin.
headquarters here.

In addition, neither party is incorporated in W isconsin or has its

Defendant’s principal place of business is in the W estern District of

W ashington and all witnesses and documents relevant to this claim are located there.
Plaintiff has noted that two of its potential 13 third-party witnesses are subject to this
court’s subpoena power and many of its other witnesses are located in Illinois. The convenience
of third-party witnesses is an important consideration, but not necessarily a dispositive factor.
E.g., Merrill Iron & Steel, Inc. v. Yonkers Contracting Co., No. 05-104, 2005 U.S. Dist. LEXIS
9730, at *7-9 (W .D. W is. 2005) (convenience of third party witnesses, among other things,
weighed in favor of transfer where multiple witnesses were located in transferee district and there
was little risk that third-party witnesses in transferor district would not appear in transferee
district). In this case, plaintiff’s argument that two of its potential third party witnesses are
subject to this court’s subpoena power and not to the subpoena power of the W estern District
of W ashington is not compelling.

Plaintiff fails to demonstrate that there is a likelihood that

compulsory process would be necessary to secure the appearance of these third-party witnesses
at trial or at a deposition. “[I]n patent actions, depositions are customary and are satisfactory

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as a substitute for technical issues.” Adams v. Newell Rubbermaid Inc., 2007 U.S. Dist. LEXIS
62512, at *7 (W .D. W is. Aug. 21, 2007)(quoting M edi USA, L.P. v. Jobst Inst., Inc., 791 F.
Supp. 208, 211 (N.D. Ill. 1992)). Thus, the marginal convenience to these third party witnesses
does not weigh heavily for or against transferring this action to the W estern District of
W ashington.
Plaintiff does not deny that the W estern District of W ashington would be a more
convenient venue for defendant. Instead, plaintiff appears to argue that W isconsin is also
convenient because activities relating to the invention of several of the patents alleged to be
infringed in this case took place in Illinois and because parts for the Xbox are manufactured in
places other than W ashington. Plaintiff’s purpose behind these arguments is unclear. The
relationship that a product or a party has to a third location is not relevant in determining which
of two districts is more convenient for the purpose of transfer.
Taken collectively, the convenience factors weigh in favor of transfer. Little to no weight
is afforded to the minimal convenience to potential third party witnesses but a fair amount of
weight should be given to the fact that defendant’s headquarters, witnesses and documentation
are in W ashington.

B. Interest of Justice
In this case the interest of justice factors do not weigh heavily in either direction. The
only argument offered by plaintiff that could potentially weigh in favor of transfer is the speed

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to trial. Neither party asserts that the W estern District of W isconsin is more familiar with the
relevant case law than the W estern District of W ashington and it is undisputed that the W estern
District of W ashington has a greater relationship to this dispute than the W estern District of
W isconsin because it involves a company headquartered there. At the same time, neither party
identifies any relationship that this district has with this dispute, aside from the potential sale
of defendant’s Xbox 360 gaming system and plaintiff’s smart phones, something that applies
equally to either forum.
Plaintiff argues that there is a great difference in docket speed between this district and
the W estern District of W ashington for patent cases. Specifically, plaintiff avers that the average
time to disposition in this district is 12 months compared with 31 months in the W estern
District of W ashington. However, the information provided by defendant shows that the average
length to trial in this district is 15 months compared to an average length of 19 months in the
W estern District of W ashington and the average length to case termination in this district is 5.3
months compared to an average of ten months in W ashington. A delay of four months is not
noteworthy. In a recent decision, Castleberg v. Davidson, Case No. 10-cv-647-bbc, dkt. #27
(W .D. W is. Dec. 30, 2010), I concluded that a difference of 12 months in average time to trial
was not a dispositive factor when determining whether speed to trial should weigh in favor of
transfer. For the same reason, a delay of four additional months is not either.
The amount of delay must be put in perspective. Although any case benefits from a
speedy resolution, in many cases the cost of delay can be remedied by the award of damages for

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the ongoing injury. Only cases in which more than money is at stake does a speedy resolution
become especially important.
Plaintiff asserts that time to trial is important because defendant’s Xbox 360 gaming
system is in competition with plaintiff’s smart phones. Plaintiff alleges that defendant has
“attempted to leverage the accused Xbox gaming system to drive sales of W indows 7 phones,
which compete directly with Motorola’s Android-based smart phones” and that defendant is
“attempting to do this by tying its Xbox Live gaming service, which is implicated by the
infringement claims in the suit, to its W indow 7 phones.” When a patent infringement case

centers on competing products in a dynamic market, the factor of speed takes on more
importance than it might in another type of case. Illumina, Inc. v. Affymetrix, No. 09-277,
2009 WL 3062786 (W.D. Wis. 2009). However, plaintiff fails to explain how the capability
of these competing smart phones to connect to Xbox Live relates to its infringement claims.
These smart phones are not accused products. If their connection to the Xbox Live network
relates to the accused products, Xbox consoles and the Kinect, plaintiff has not shown this.
Plaintiff’s assertion that Xbox Live is “implicated” in its claims is too tenuous and undeveloped
to support finding any direct competition in relation with this lawsuit. Thus, there does not
appear to be a particular need for speedy resolution in this case. The potential for a delay of
between four and 13 months does not weigh heavily against transfer.
Defendant argues that the interests of justice are served by transfer because there are

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related lawsuits already pending in the W estern District of W ashington. The basis for this
contention is that both this case and the cases in W ashington deal with the same product, the
Xbox 360 gaming system, even if only tangentially. Plaintiff disagrees and asserts that the
W ashington cases deal with patents and technology different from those at issue in this dispute.
“M icrosoft’s counterclaim patent in the 699 action relate to displaying temporary graphics in web
browsers and displaying graphical keyboards.

The counterclaim patents here relate to a

notification system, browser navigation and a file management system. Thus there is virtually
no factual overlap between this action and the two actions now in W ashington, on either liability
or damages issues.” Plt.’s Br., dkt. #31, at 3. Defendant has failed to provide any details about
these cases suggesting any real overlap between these cases. Thus, I am unwilling to conclude that
the presence of these related cases favors transfer.
As a final matter, plaintiff argues that defendant’s position that this dispute should be
transferred is undermined by its filing of permissive counterclaims in this district “alleging that
M otorola smart phones infringe M icrosoft patents— entirely unrelated to M otorola’s
claims—rather than assert these claims in its supposed preferred home forum of W ashington.”
Plt.’s Br., dkt. #31, at 4. I do not agree. At most, defendant’s choice of asserting counter claims
is a concession that it would be more efficient to have one lawsuit in an inconvenient forum than
two lawsuits, one in a convenient forum and one in a non-convenient forum.
I conclude that the factors to be considered in ruling on a motion for a change of venue
weigh in defendant’s favor. The convenience factors weigh in favor of transfer and the interest

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of justice factors are a wash. Although transfer may create delays, there is no particular need for
quick resolution of this case and the transferee court, W estern District of W ashington, has a
closer relationship to this dispute than this court. This district is not convenient to any party
but the W estern District of W ashington is clearly more convenient to defendant because it is
headquartered there and its witnesses and documents are located there. Therefore, defendant’s
motion to transfer venue will be granted and the case will be transferred to the W estern District
of W ashington.

ORDER
IT IS ORDERED that Defendant M icrosoft Corporation’s motion to transfer venue to
the United States District Court for the W estern District of W ashington under 28 U.S.C. §
1404, dkt.# 10 is GRANTED.
Entered this 31st day of M arch, 2011.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - PHILIP CASTLEBERG,
OPINION AND ORDER
Plaintiff,
10-cv-647-bbc
v.
TOMMY DAVIDSON and
KELLOR HOLDINGS, INC.,
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This is a civil action in which plaintiff Philip Castleberg is alleging breach of contract
and breach of fiduciary duty against defendants Tommy Davidson and Kellor Holdings, Inc.
Plaintiff contends that defendants, his partners in a limited partnership known as Covenant
Healthcare of Eau Claire, L.P., or Covenant LP for brevity, treated him shabbily in various
ways. He alleges that they negotiated mortgage loan transactions that affected partnership
property without obtaining the required approval of partners; negotiated lease agreements
with another entity, Covenant Healthcare LLC (Covenant LLC), for the lease of real estate
owned by Covenant LP without obtaining plaintiff’s approval; agreed to convey to a third
entity, Meadowlark, real property owned by Covenant LP to Covenant LP’s detriment; failed

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to hold partnership meetings as required; failed to notify plaintiff of the meetings; and failed
to comply with plaintiff’s requests for documents.

The case is before the court on

defendants’ motion to transfer it to the District Court for the Eastern District of Tennessee
under 28 U.S.C. § 1404(a) and on the court’s order directing the parties to show that
diversity jurisdiction exists.
In the original and amended complaints that plaintiff filed in the Circuit Court for
Eau Claire County, Wisconsin, he asserted direct claims on his own behalf and derivative
claims on behalf of Covenant LP, whom he named as an involuntary plaintiff.

After

defendants removed the case to this court, Covenant LP was realigned as a defendant by
stipulation of the parties. This realignment raised questions about the existence of diversity
jurisdiction because plaintiff is a limited partner of Covenant LP and the citizenship of a
limited partnership is determined by the citizenship of its partners. As a consequence,
Covenant is considered a citizen of Florida along with plaintiff. (It is also considered a
citizen of Tennessee along with defendants.) If plaintiff and Covenant LP were not diverse
from one another, this court would not have jurisdiction to hear the case. When this
problem was brought to the parties’ attention, the parties stipulated to the dismissal of
Covenant LP from the lawsuit.
With the issue of diversity jurisdiction resolved, I turn to defendants’ motion for
transfer. It is within the court’s discretion to grant or deny such a motion, giving due

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consideration to convenience and fairness. In deciding the issue of convenience, courts
consider the availability and access to witnesses, each party’s access to resources in each
forum, the location of material events and the relative ease of access to sources of proof.
Research Automation, Inc. v. Schrader-Bridgeport International, Inc., 2010 WL 47211588,
*3 (7th Cir. Nov. 23, 2010). In addition, they consider matters that come under the
“interest of justice” umbrella, such as docket congestion in the transferor or transferee court,
relative speed to trial, each court’s relatively familiarity with the relevant law, the respective
desirability of resolving controversies in each locale and the relationship of each community
to the controversy. Id.
As a general rule, the plaintiff’s choice of forum is honored unless the defendant can
show that when the various factors are weighed, the balance tips strongly in its favor. In re
National Presto Industries, Inc., 347 F.3d 662, 664 (7th Cir. 2003). I conclude that in this
case, defendants have made that showing. Their own convenience strongly outweighs that
of defendant; there is a slight possibility that the convenience of the witnesses weighs in their
favor; they have shown that the situs of the relevant events is in Tennessee; and they have
shown that the interest of justice favors transfer. (I have ignored the factor of access to
sources of proof, which in an electronic age is not ordinarily a factor entitled to any weight.)
For the purpose of deciding the motion, I find the following facts from the record.

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RECORD FACTS
Plaintiff Philip Castleberg is a citizen of Florida. Defendant Tommy Davidson is a
citizen of Tennessee and defendant Kellor Holdings is a Tennessee corporation with its
principal place of business in Tennessee. Defendant Kellor Holdings is the general partner
of Covenant Health Care of Eau Claire, L.P. (Covenant LP). Kellor Holdings, plaintiff and
defendant Davidson are the current partners of the partnership, which is a Tennessee limited
partnership with its principal place of business located in that state.
Sometime before or in February 1997, plaintiff and defendant Davidson formed
Covenant Healthcare LLC (Covenant LLC), a Tennessee limited liability company that
purchased a skilled nursing home from the county of Eau Claire, in Wisconsin, sometime
around February 1997. On November 13, 1997, plaintiff executed an agreement of limited
partnership with defendants and a Tennessee general partnership, S and R Finance, that set
out the terms and governance of Covenant LP. At the time Covenant LP was formed,
plaintiff had a 30% interest in Covenant LP; defendants had a total interest of 30% and S
and R Finance had a 40% interest.
Covenant LP was formed to hold the real estate of the Eau Claire nursing home. On
November 25, 1997, the two entities, Covenant LP and Covenant LLC, filed a warranty deed
evidencing the transfer of the real estate and associated loan from Covenant LLC to
Covenant LP.

When plaintiff contributed funds to Covenant LP to reduce the loan,

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Filed: 12/30/10 Page 5 of 13

defendant Davidson failed to record the payment as a capital contribution to the
partnership. Covenant LP took out a mortgage for $6.46 million on the real estate but failed
to obtain approval of the loan by a super majority of the partners, as required under the
limited partnership agreement. Plaintiff did not give his approval.
On February 25, 2002, defendant Davidson held a meeting of the members of
Covenant LLC and voted to expel plaintiff as a member. Later defendant Davidson settled
his dispute with plaintiff over the expulsion and plaintiff agreed to withdraw from the
company.
Plaintiff makes other allegations of wrongdoing by defendants in connection with
Covenant LLC and Covenant LP, all supposedly benefiting defendant Davidson, in violation
of his fiduciary duty to act in the best interests of Covenant LP. For example, defendant
Davidson is a member of another Tennessee limited liability company known as Meadowlark
Health Services LLC. On or around August 30, 2004, Meadowlark obtained land in Eau
Claire from Covenant LP on which it has built an assisted living facility that is physically
attached to Covenant LP’s skilled nursing facility. Plaintiff alleges that the consideration for
the land purchase was inadequate and that the building of the new facility reduced the value
of the existing one owned by Covenant LP.
The partnership agreement establishing Covenant LP requires the application of
Tennessee law to all partnership disputes.

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Filed: 12/30/10 Page 6 of 13

Over the years, plaintiff has participated in meetings in Chattanooga, Tennessee,
regarding the business operations, management decisions and business strategy for Covenant
LP, Covenant LLC, Meadowlark, Arcadia Healthcare, LLC, Scenic Highway Holdings, LLC,
and Dove Healthcare, LLC, all of which are Tennessee companies located in Chattanooga.
In some instances, he was present in person; in others, he participated by telephone.
Defendants intend to call as witnesses Kevin Pennington, Ellsworth McKee, Sharon
McKee, Rusty McKee and Barry Hand, all of whom are residents of Tennessee. All but
Pennington are identified as connected with S and R Finance, which was a limited partner
in Covenant LP when it was formed in 1997. Plaintiff intends to call as witnesses lawyers
from the law firm that handled the recording of the deed for the real property Covenant LP
sold to Meadowlark. In addition, he wants to call Wisconsin real estate experts to testify
about the value of the real property, along with one Dennis Hyde, who would testify about
having personal and business dealings with defendant Davidson that are similar to those that
plaintiff has had with Davidson. Also, Hyde would testify about defendant Davidson’s
motives, habits, practices and reputation in the community.

OPINION
Under 28 U.S.C. § 1404(a), a federal trial court may transfer a case to another federal
court for the parties’ or witnesses’ convenience or in the interest of justice, provided that the

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Filed: 12/30/10 Page 7 of 13

transferee court is one in which the case could have been brought originally. The parties do
not deny that this case could have been brought originally in the Eastern District of
Tennessee; venue is proper there and the court would have personal jurisdiction over the
defendants, who are Tennessee citizens. Thus, the only issue is whether defendants have
shown that Tennessee is so much more convenient for the parties and witnesses as to
outweigh plaintiff’s choice of forum.
Plaintiff’s choice is entitled to deference. “‘[U]unless the balance is strongly in favor
of the defendant, the plaintiff’s choice of forum should rarely be disturbed.’” In re National
Presto Industries, Inc., 347 F.3d at 664 (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501,
508 (1947)). In this case, however, defendants have shown that the balance tips strongly
in their favor. Not only is Wisconsin not the situs of the material events in the case, but
defendants have shown that the factors of convenience and the interest of justice support a
transfer.
Although plaintiff emphasizes those aspects of his case that favor keeping the case in
this district, such as the location of the disputed real estate and the existence of the nursing
homes in Wisconsin, a closer look at those aspects reveals their tangential importance to his
breach of contract and breach of fiduciary duty claims. These claims are premised on
plaintiff’s allegations that defendants negotiated mortgages, lease agreements and property
transfers without obtaining the necessary approval of the other partners, to the detriment

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Filed: 12/30/10 Page 8 of 13

of Covenant LP, that they failed to hold partnership meetings as required, failed to notify
plaintiff of the meetings and failed to comply with plaintiff’s requests for documentation
regarding Covenant LP and its business dealings. Plaintiff does not allege any wrongdoing
by defendants in the state of Wisconsin, with the possible exception of Meadowlark’s
purchase of land and building of the assisted living facility in Eau Claire. It appears that all
of the other alleged wrongs would have taken place in Tennessee, the headquarters of
Covenant LP, Covenant LLC and Meadowlark. Even the purchase of the land and the
construction of the facility are merely manifestations of the allegedly illegal decisions
defendants made in Tennessee. Plaintiff’s alleged connection to Wisconsin is the real estate,
but little about the real estate is at stake in the case. What is at stake is the way in which
the conveyance of the real estate was decided upon, carried out and reported on the books
of the entities involved. There may be disputes about the valuation of the property, but
these disputes would be peripheral to the liability issues that plaintiff is asserting.
As for the convenience of the parties factor, plaintiff has shown only that it might be
more convenient for him to litigate here because he has rental property and business interests
here, albeit several hours away from the courthouse in Madison. The record facts show that
plaintiff has had a number of occasions to visit Tennessee for meetings involving Covenant
LP. Indeed, it is odd that plaintiff would be claiming inconvenience now when it is evident
that he entered purposefully into agreements with Tennessee residents and participated in

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Filed: 12/30/10 Page 9 of 13

the creation of Tennessee entities. As for defendants, it is clear that it would be far more
convenient for them to try the case in Tennessee, where defendant Davidson resides and
where Kellor Holdings is headquartered.
As for the convenience of witnesses factor, plaintiff has listed the members of the firm
that handled the recording of the deed and other tasks following the decision to have
Meadowlark purchase land from Covenant LP and build on it. Plaintiff does not say that
these lawyers would have knowledge of any of the details of the transaction, such as why it
was entered into, the benefits to the parties or the detrimental effect on the other partners
or the details of the transaction.
Plaintiff wants to call experts in Wisconsin real estate values to testify about the value
of the property Covenant LP conveyed to Meadowlark. He asserts, no doubt correctly, that
such witnesses would be likely to be residents of Wisconsin, but even if they are, plaintiff will
be able to call them as witnesses in a Tennessee court. Unlike witnesses who could refuse
to come to court unless legally required to do so, expert witnesses need no subpoena to show
up. Testifying is inherent in their agreement to serve as expert witnesses.
Plaintiff has listed only one anticipated witness by name, saying that he wants to call
Dennis Hyde to testify about his own experiences with defendant Davidson. It is unlikely
that any of that testimony would be admissible. The question at trial will not be whether
defendant acted in conformity with his past acts but whether the acts he is alleged to have

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Filed: 12/30/10 Page 10 of 13

performed in this case were legal. Hyde’s testimony about defendant Davidson’s reputation
would be admissible if it related to defendant’s reputation for truthfulness, but plaintiff has
not shown either that Hyde would be unwilling to appear voluntarily at a trial in Tennessee
to give such testimony or that the testimony is important enough to outweigh the
inconvenience to defendants’ witnesses of traveling to Wisconsin.
Finally, plaintiff says that he wants to call administrators and staff of the Eau Claire
nursing facility; again, he does not say what they would testify about. It is improbable that
any of these persons would have knowledge of the decisions made in Chattanooga about
which entity should hold title to which property, whether plaintiff’s approval was required
for certain transactions or the legality of defendants’ decisions regarding the transactions
between Covenant LP and Covenant LLC or with Meadowlark.
Neither side has given the court a firm idea of what its witnesses would testify about,
but it seems likely that at least four of the witnesses defendants have identified (the three
members of S and R Finance (Rusty, Sharon and Ellsworth McKee), together with their
financial adviser, Barry Hand), would have admissible and relevant testimony about the
meetings, decisions and operations of the entities involved in this case, at least during the
period that S and R Finance was involved in the partnership. With the limited information
in the record, I am persuaded that the convenience of the witnesses factor favors defendants
slightly.

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Filed: 12/30/10 Page 11 of 13

As I have indicated, the situs of the material events is Tennessee, the state in which
the partnership and company meetings took place and where the decisions that plaintiff
challenges were made. Defendants recorded deeds in Wisconsin to preserve their claims to
real estate but plaintiff is not challenging anything about the recording itself or any other
acts performed by Wisconsin lawyers. His objections are to the acts leading up to the
challenged conveyances.
It is undisputed that the documentary proof is more readily available in Tennessee
than in Wisconsin, although plaintiff alleges that some of that proof is located at the skilled
nursing facility in Eau Claire. Defendants deny that allegation, but it is not necessary to
decide whether they are correct. As I have said in numerous opinions, e.g., Gibson v. Unum
Life Insurance Co. of America, 2010 WL 3244901, *2 (W.D. Wis. 2010); Illumina, Inc. v.
Affymetrix, Inc., 2009 WL 3062786, *2 (W.D. Wis. 2009), now that it is so easy to store
and move documentary proof electronically, it would be an unusual case in which this factor
would have any weight in the transfer determination.
On the convenience side of the transfer analysis, defendants are ahead. This leaves
the final factor, the interest of justice. This factor relates to the efficient administration of
the court system. Research Automation, Inc., 2010 WL 4721588, *3. It includes such
considerations as docket congestion, likely speed to trial, each court’s relative familiarity with
the relevant law, Van Dusen v. Barrack, 376 U.S. 612, 622 (1964), the respective desirability

11

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Filed: 12/30/10 Page 12 of 13

of resolving controversies in each locale and the relationship of each community to the
dispute. Research Automation 2010 WL 4721588, *3.
Starting with the first of these considerations, the information submitted by plaintiff
shows that in 2009, civil cases in this district took 5.3 months from filing to disposition and
15 months from filing to trial and that civil cases in the Eastern District of Tennessee took
11.6 months from filing to disposition and 23 months from filing to trial. These differences
are not so stark as to be decisive. The Eastern District of Tennessee had 110 fewer filings
per judgeship in 2009 than this district; it may very well be that in 2011, that court will have
a shorter disposition time than this court. In any event, plaintiff waited for more than six
years to bring this lawsuit contesting a 2004 real estate transaction, making it evident that
speed is of no concern for him.
The second consideration is of much greater importance. The parties’ agreements
provide that all disputes are to be decided under Tennessee law. It is indisputable that a
court in Tennessee will have more experience interpreting and applying Tennessee law than
a court in Wisconsin. Plaintiff maintains that any court can apply the fundamental concepts
of breach of contract and breach of fiduciary duty, which is true. If plaintiff had shown that
the case must be tried here, I would be able to determine what the Tennessee law is on these
subjects, but a Tennessee court would be at a considerable advantage in performing the same
task.

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Filed: 12/30/10 Page 13 of 13

Neither side has suggested any reason why it would be more desirable to decide this
case in Wisconsin than in Tennessee or vice versa or that the relationship of the community
to the controversy is relevant to the transfer decision. Both of these considerations can be
ignored.
I conclude that defendants have met their burden to prove that this case should be
transferred to the Eastern District of Tennessee. Defendants have shown that Tennessee is
more convenient for the parties in several respects and that the interest of justice factor
favors transfer to a court that would be familiar with the governing law. Therefore, their
motion to transfer will be granted.

ORDER
IT IS ORDERED that the motion of defendants Tommy Davidson and Kellor
Holdings, Inc. to transfer this case to the Eastern District of Tennessee under 28 U.S.C. §
1404(a) is GRANTED.
Entered this 30th day of December, 2010.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge

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Case 2:10-cv-01577-RSM Document 34

Filed 11/09/10 Page 1 of 5

The Honorable Ricardo S. Martinez

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UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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MICROSOFT CORPORATION,
CASE NO. C10-01577-RSM

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Plaintiff,

10

STIPULATION AND ORDER TO STAY
ACTION

v.

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MOTOROLA, INC., and
MOTOROLA MOBILITY, INC.,

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Defendants.

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STIPULATION
Plaintiff Microsoft Corporation and Defendants Motorola, Inc., and Motorola Mobility,

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Inc., collectively (“the Parties”), by and through their respective counsel of record, hereby

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stipulate and agree as follows:

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1.

Pursuant to 28 U.S.C. § 1659, the Parties stipulate to a stay of proceedings in the

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above-captioned matter pending a final determination of the United States International Trade

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Commission (“ITC”) in In the Matter of Certain Mobile Devices, Associated Software, and

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Components Thereof, Investigation No. 337-TA-744.

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2.

On October 1, 2010, Plaintiff Microsoft Corporation (“Microsoft”) filed a

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Complaint in this matter. Five days later, on October 6, 2010, Microsoft filed an Amended

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Complaint, which added Motorola Mobility, Inc. (“Motorola Mobility”) as a defendant. Microsoft

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served its Amended Complaint on Motorola, Inc. (“Motorola”) on October 8, 2010 and on
STIPULATION AND ORDER TO STAY ACTION - 1
CASE NO. C10-01577-RSM

SUMMIT LAW GROUP PLLC
315 FIFTH AVENUE SOUTH, SUITE 1000
SEATTLE, WASHINGTON 98104-2682
Telephone: [phone]
Fax: [phone]

Case 2:10-cv-01577-RSM Document 34

Filed 11/09/10 Page 2 of 5

1

Motorola Mobility on October 28, 2010. In a Stipulation filed on October 27, 2010, the Parties

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agreed that Motorola and Motorola Mobility’s deadline to answer or otherwise move the Court for

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relief in this action should be extended from October 29, 2010 to November 22, 2010. The Court

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so Ordered this extension on November 1, 2010. ECF No. 32.

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3.

The Amended Complaint alleges that Motorola and Motorola Mobility have

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infringed, either directly or indirectly, nine Microsoft patents: U.S. Patent Nos. 5,579,517;

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5,758,352; 6,621,746; 6,826,762; 6,909,910; 7,644,376; 5,665,133; 6,578,054; and 6,370,566. See

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Amended Complaint, ¶¶ 11-12, 14-15, 17-18, 20-21, 23-24, 26-27, 29-30, 32-33, and 35-36. The

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same day Microsoft filed its initial Complaint in this action—October 1, 2010—it also filed a

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Complaint with the ITC against Motorola and in connection with the same nine Microsoft patents,

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asserting that Motorola has infringed these patents and has therefore engaged in unfair competition

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or violated Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337.

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4.

Eleven days later, on October 12, 2010, Microsoft amended its ITC Complaint to

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add Motorola Mobility as a respondent. On November 1, 2010, the ITC instituted an investigation

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based on the Amended Complaint and formally named Motorola and Motorola Mobility as

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respondents. Thus, at present, Motorola and Motorola Mobility are both defendants in this civil

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action and respondents in the ITC proceeding.

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5.

28 U.S.C. § 1659(a) provides that “[i]n a civil action involving parties that are also

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parties to a proceeding before the [ITC] under section 337 of the Tariff Act of 1930, at the request

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of a party to the civil action that is also a respondent in the proceeding before the Commission, the

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district court shall stay, until the determination of the Commission becomes final, proceedings in

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the civil action with respect to any claim that involves the same issues involved in the proceeding

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before the commission,” so long as “such request is made within (1) 30 days after the party is

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named as a respondent in the proceeding before the Commission, or (2) 30 days after the district

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court action is filed, whichever is later.” 28 U.S.C. § 1659(a) (emphasis added). Motorola and

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Motorola Mobility are parties to the above-captioned civil action and also the respondents in In the
STIPULATION AND ORDER TO STAY ACTION - 2
CASE NO. C10-01577-RSM

SUMMIT LAW GROUP PLLC
315 FIFTH AVENUE SOUTH, SUITE 1000
SEATTLE, WASHINGTON 98104-2682
Telephone: [phone]
Fax: [phone]

Case 2:10-cv-01577-RSM Document 34

Filed 11/09/10 Page 3 of 5

1

Matter of Certain Mobile Devices, Associated Software, and Components Thereof, an ITC

2

proceeding involving the same issues involved here—the putative infringement of nine Microsoft

3

patents.
6.

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This requested stipulation is timely. The 30-day period under 28 U.S.C.

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§ 1659(a)(1) did not begin to run until November 1, 2010—the day Motorola and Motorola

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Mobility were “named as [] respondent[s] in the proceeding before the Commission.” 28 U.S.C.

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§ 1659(a)(1); see 19 C.F.R. § 210.3 (defining “respondent” as “any person named in a notice of

8

investigation”).

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7.

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Accordingly, the Parties respectfully request that the Court enter an Order directing

that:
A.

Pursuant to 28 U.S.C. § 1659(a) et seq. and the Court’s inherent power to

12

control its docket, this civil action is stayed until a final determination of the ITC proceeding in In

13

the Matter of Certain Mobile Devices, Associated Software, and Components Thereof,

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Investigation No. 337-TA-744;

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B.

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17

The deadline for Motorola and Motorola Mobility to move, answer, or

otherwise respond to the Amended Complaint is vacated; and
C.

Within 30 days of a final determination of the ITC proceeding in In the

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Matter of Certain Mobile Devices, Associated Software, and Components Thereof, Investigation

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No. 337-TA-744, and the associated expiration of this stay, the Parties shall confer with each other

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and contact the Court for purposes of setting a Scheduling Order, which shall include the setting of

21

a new deadline for Motorola and Motorola Mobility to move, answer, or otherwise respond to

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Microsoft’s Amended Complaint.

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STIPULATION AND ORDER TO STAY ACTION - 3
CASE NO. C10-01577-RSM

SUMMIT LAW GROUP PLLC
315 FIFTH AVENUE SOUTH, SUITE 1000
SEATTLE, WASHINGTON 98104-2682
Telephone: [phone]
Fax: [phone]

Case 2:10-cv-01577-RSM Document 34

DATED this 8th day of November, 2010.

1
2

Filed 11/09/10 Page 4 of 5

SUMMIT LAW GROUP PLLC

DANIELSON HARRIGAN LEYH & TOLLEFSON
LLP

6

By /s/ Philip S. McCune
Philip S. McCune, WSBA #21081
Lynn M. Engel, WSBA #21934
[e-mail]
[e-mail]

By /s/ Christopher T. Wion
Arthur W. Harrigan, Jr., WSBA #1751
Christopher T. Wion, WSBA #33207
[e-mail]
[e-mail]

7

And by

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5

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Edward J. DeFranco (pro hac vice)
Quinn Emanuel
51 Madison Avenue, 22nd Floor
New York, NY 10010
[phone]
[e-mail]
Charles K. Verhoeven (pro hac vice)
Quinn Emanuel
50 California Street, 22nd Floor
San Francisco, CA 94111
[phone]
[e-mail]
David Nelson (pro hac vice)
Quinn Emanuel
500 W. Madison Street, Suite 2450
Chicago, IL 60661
[phone]
[e-mail]
Attorneys for Defendants Motorola, Inc., and
Motorola Mobility, Inc.

T. Andrew Culbert, WSBA #35925
David E. Killough, WSBA #40185
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052
[phone]
[e-mail]
[e-mail]
Of Counsel:
David T. Pritikin
Richard A. Cederoth
Douglas I. Lewis
John W. McBride
Sidley Austin LLP
One South Dearborn
Chicago, IL 60603
[phone]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
Brian R. Nester
Kevin C. Wheeler
Sidley Austin LLP
1501 K Street NW
Washington, DC 20005
[phone]
[e-mail]
[e-mail]

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Attorneys for Plaintiff Microsoft Corporation

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STIPULATION AND ORDER TO STAY ACTION - 4
CASE NO. C10-01577-RSM

SUMMIT LAW GROUP PLLC
315 FIFTH AVENUE SOUTH, SUITE 1000
SEATTLE, WASHINGTON 98104-2682
Telephone: [phone]
Fax: [phone]

Case 2:10-cv-01577-RSM Document 34

Filed 11/09/10 Page 5 of 5

ORDER

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2

IT IS SO ORDERED.

3

DATED this 9 day of November 2010.

4

A

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6

RICARDO S. MARTINEZ
UNITED STATES DISTRICT JUDGE

7
8

Presented by:

9

SUMMIT LAW GROUP PLLC

DANIELSON HARRIGAN LEYH & TOLLEFSON
LLP

By /s/ Philip S. McCune
Philip S. McCune, WSBA #21081
Lynn M. Engel, WSBA #21934
[e-mail]
[e-mail]

By /s/ Christopher T. Wion
Arthur W. Harrigan, Jr., WSBA #1751
Christopher T. Wion, WSBA #33207
[e-mail]
[e-mail]

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And by
Edward J. DeFranco (pro hac vice)
Quinn Emanuel
51 Madison Avenue, 22nd Floor
New York, NY 10010
[phone]
[e-mail]
Charles K. Verhoeven (pro hac vice )
Quinn Emanuel
50 California Street, 22nd Floor
San Francisco, CA 94111
[phone]
[e-mail]
David Nelson (pro hac vice)
Quinn Emanuel
500 W. Madison Street, Suite 2450
Chicago, IL 60661
[phone]
[e-mail]
Attorneys for Defendants Motorola, Inc., and
Motorola Mobility, Inc.

T. Andrew Culbert, WSBA #35925
David E. Killough, WSBA #40185
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052
[phone]
[e-mail]
[e-mail]
And by
David T. Pritikin
Richard A. Cederoth
Douglas I. Lewis
John W. McBride
Sidley Austin LLP
One South Dearborn
Chicago, IL 60603
[phone]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Brian R. Nester
Kevin C. Wheeler
Sidley Austin LLP
1501 K Street NW
Washington, DC
20005
[phone]
[e-mail]
[e-mail]

Attorneys for Plaintiff Microsoft Corporation
STIPULATION AND ORDER TO STAY ACTION - 5
CASE NO. C10-01577-RSM

SUMMIT LAW GROUP PLLC
315 FIFTH AVENUE SOUTH, SUITE 1000
SEATTLE, WASHINGTON 98104-2682
Telephone: [phone]
Fax: [phone]

Case: 3:10-cv-00699-bbc Document #: 44

Filed: 02/18/11 Page 1 of 6

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - MOTOROLA MOBILITY, INC. and
GENERAL INSTRUMENT CORPORATION

OPINION AND ORDER

Plaintiffs,
10-cv-699-bbc
v.
MICROSOFT CORPPORATION,
Defendant.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Plaintiffs Motorola Mobility, Inc. and General Instrument Corporation are suing
defendant Microsoft Corporation for infringement of U.S. Patent No. 7,310,374, U.S.
Patent No. 7,310,375 and U.S. Patent No. 7,310,376, each of which is titled “Macroblock
Level Adaptive Frame/Field Coding for Digital Video Content.” Two motions are before the
court: (1) defendant’s motion to dismiss for failure to state a claim upon which relief may
be granted; and (2) defendant’s “motion to dismiss, stay or, in the alternative, transfer
venue.”
In the first motion, defendant argues that plaintiffs’ complaint fails to give adequate
notice of their claims as required by Fed. R. Civ. P. 8. Defendant acknowledges that

1

Case: 3:10-cv-00699-bbc Document #: 44

Filed: 02/18/11 Page 2 of 6

plaintiffs mooted that motion by filing an amended complaint. In their second motion,
defendant argues that the complaint must be dismissed because it is a compulsory
counterclaim to a lawsuit defendant filed in the Western District of Washington or, in the
alternative, that the case should be transferred to Washington under 28 U.S.C. § 1404.
Because I conclude that the Western District of Washington is clearly more convenient than
this district and the interest of justice favors transfer, I am granting defendant’s motion
under § 1404. I will leave it to the Washington court to determine whether consolidation
of the two cases is required under Fed. R. Civ. P. 13.

OPINION
“For the convenience of the parties and witnesses, in the interest of justice, a district
court may transfer any civil action to any other district or division where it might have been
brought.” 28 U.S.C. § 1404(a). The Court of Appeals for the Seventh Circuit recently
discussed the proper standard to be applied by courts in considering motions brought under
this statute. Research Automation, Inc. v. Schrader-Bridgeport International, Inc., 626 F.3d
973 (7th Cir. 2010). The court stated that § 1404(a) “permits a ‘flexible and individualized
analysis’ and affords district courts the opportunity to look beyond a narrow or rigid set of
considerations in their determinations.” Id. at 978 (quoting Stewart Organization, Inc. v.
Ricoh Corp., 487 U.S. 22 487 U.S. 22, 29 (1988)). However, the court summarized the

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Case: 3:10-cv-00699-bbc Document #: 44

Filed: 02/18/11 Page 3 of 6

most salient factors:
With respect to the convenience evaluation, courts generally consider the
availability of and access to witnesses, and each party's access to and distance
from resources in each forum. Other related factors include the location of
material events and the relative ease of access to sources of proof.
The “interest of justice” is a separate element of the transfer analysis that
relates to the efficient administration of the court system. For this element,
courts look to factors including docket congestion and likely speed to trial in
the transferor and potential transferee forums; each court's relative familiarity
with the relevant law; the respective desirability of resolving controversies in
each locale; and the relationship of each community to the controversy. The
interest of justice may be determinative, warranting transfer or its denial even
where the convenience of the parties and witnesses points toward the opposite
result.
Id. (internal quotations omitted).
In this case, plaintiffs have not pointed to a single factor related to convenience that
favors Wisconsin as a forum. None of the parties are incorporated in Wisconsin or have
their headquarters or any major facilities here. The parties do not identify any potential
witnesses in Wisconsin, any relevant events that occurred here that did not occur in every
other state or even any documents that are located here. In contrast, defendant’s principal
place of business is in the Western District of Washington and at least one of the accused
products (Windows 7) was designed there. Defendant’s employees responsible for both the
development and sale of Windows 7 work in that district. Although it is true that other
parties and potential witnesses live outside Washington, this does not tip the scales in favor

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of Wisconsin because no parties or potential witnesses are located here.
With respect to the interests of justice, defendant argues that a related lawsuit is
pending in the Western District of Washington. Coffey v. Van Dorn Iron Works, 796 F.2d
217, 219-20 (7th Cir. 1986) (interest of justice factor includes question whether transfer
would facilitate consolidation of related cases). In Microsoft v. Motorola, Inc., 10-cv-1823
(W.D. Wash.), defendant is contending that defendant Motorola is breaching an agreement
to license various patents, including the three asserted in this case, at reasonable rates.
Defendant is asking the court to enjoin plaintiff Motorola “from further demanding excessive
royalties.” Plaintiffs argue that the Washington lawsuit is not related to this one because the
Washington lawsuit does not require resolution of any issues related to infringement or
invalidity, but plaintiffs do not deny defendant’s contention that the result of the
Washington lawsuit could limit the damages available to plaintiffs in this case. That is, if
the Washington court determines that plaintiff Motorola is charging too much for licensing
the ‘374 patent, the ‘375 patent and the ‘376 patent, that could limit the royalty rate that
plaintiffs could obtain for any infringement by defendant of those patents. Although the two
lawsuits are far from identical, the factual overlap between the two is another reason why the
balance favors Washington.
Also relevant to the interest of justice factor is “the relationship of each community
to the controversy.” Research Automation, 626 F.3d at 978. In this case, the Western

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District of Washington has a closer relationship to the dispute than the Western District of
Wisconsin. In fact, plaintiffs do not identify any relationship this district has with the case,
other than the potential sale of accused products, a relationship that every state in the
country shares.
The only factor that plaintiffs have identified as favoring this district is speed, but
even that factor does not weigh heavily in either direction. According to the information
provided by the parties, the difference between the average time to disposition in the two
districts is 1.4 months and the difference between the average time to trial is four months.
Plaintiffs do not identify any reason to believe that these minor differences will create an
undue hardship. E.g., Castleberg v. Davidson, No. 10-cv-647-bbc (W.D. Wis. Dec. 30,
2010) (difference of 12 months in average time to trial not dispositive). Particularly because
plaintiffs do not suggest that they make or sell any products that compete directly with the
accused products in this case or that defendant is somehow stealing market share from them,
they have not shown that time is of the essence.
I conclude that defendant has met its burden to prove that this case should be
transferred to the Western District of Washington. Defendant has shown that Washington
is more convenient for the parties in several respects and that the interest of justice factor
favors transfer to a district with a related case and a closer relationship to the dispute.
Therefore, its motion to transfer will be granted.

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ORDER
IT IS ORDERED that
1. Defendant Microsoft Corporation’s motion to dismiss for failure to state a claim
upon which relief may be granted, dkt. #23, is DENIED as moot.
2. Defendant’s motion to transfer venue under 28 U.S.C. § 1404, dkt. #25, is
GRANTED. This case is TRANSFERRED to the United States District Court for the
Western District of Washington.
Entered this 18th day of February, 2011.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge

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IN THE UNITED STATES DISTRICT COURT
FOR THE W ESTERN DISTRICT OF W ISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - M OTOROLA M OBILITY INC.,
OPINION AND ORDER
Plaintiff,
10-cv-826-bbc
v.
M ICROSOFT CORPORATION,
Defendant.
- - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - In this patent infringement case plaintiff Motorola Mobility, Inc. contends that defendant
M icrosoft Corporation’s Kinect sensor device and the Xbox 360 gaming system and related
accessories and services are infringing U.S. Patents Nos. 6,992,580; 7,106,358; 6,686,931;
7,088,220 and 5,738,583. Defendant has filed permissive counterclaims alleging that plaintiff’s
smart phones are infringing U.S. Patents Nos. 6,374,276; 7,454,718; 6,822,664;
7,421,666 and 6,256,642. Now before the court is defendant’s motion to transfer the case to
the W estern District of W ashington under 28 U.S.C. § 1404 (a). Because I conclude that the
W estern District of W ashington is clearly more convenient than this district and that the
interests of justice favor transfer, I am granting defendant’s motion under 28 U.S.C. § 1404.
From plaintiff’s complaint and the parties’ submissions related to defendant’s motion to
transfer venue, I draw the following facts for the purpose of deciding this motion.

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FACTS
A. Procedural History
On November 9, 2010, defendant M icrosoft filed suit against plaintiff M otorola M obility
Inc. in the W estern District of W ashington, asserting claims of breach of contract, promissory
estoppel and waiver. M icrosoft v. M otorola, Case No. 10-cv-1823. Since then, plaintiff has filed
several suits against defendant, including three in this district, M otorola v. M icrosoft, Cases Nos.
10-cv-699, 10-cv-700 and the present suit.
Defendant moved to transfer cases 10-cv-699 and 10-cv-700 to the W estern District of
W ashington under 28 U.S.C. § 1404. I granted that motion as to 10-cv-699, on February 18,
2011, concluding that transfer was more convenient and served the interests of justice. (I took
no action on the motion in case 10-cv-700 because that case is stayed pending final resolution
by the United States International Trade Commission in In the M atter of Certain Gaming and
Entertaining Consoles, Related Software, and Components thereof, Investigation No. 377-TA752.)

B. Parties, W itnesses and Documents
Plaintiff M otorola is a Delaware corporation with its principal place of business in
Libertyville, Illinois. Defendant Microsoft is a W ashington corporation with its principal place
of business in Redmond, W ashington. Defendant developed its Xbox 360 gaming system in
Redmond, W ashington and “all key decisions regarding marketing and product direction are

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made and all witnesses with knowledge of the relevant facts” are in W ashington. Specifically,
the development and management teams responsible for the Xbox 360 gaming system,
defendant’s witnesses with knowledge of sales, marketing and finance relating to the Xbox 360
and the relevant documents, emails, other electronic files, relevant source code and related
technical documentation relating to the Xbox are all in W ashington.
Two of plaintiff’s potential third party witnesses are within the subpoena power of this
court. M ichael Kotzin, an inventor on the ‘580 and ‘220 patents, and David Noskowicz, a
lawyer involved in the prosecution of the ‘580 patent, are located within 100 miles of this
courthouse. Of the other 11 inventors and patent prosecutors, two are located in Illinois, three
in California and the remaining six are closer to M adison, W isconsin than to Seattle,
W ashington. The activities relating to the invention of three of plaintiff’s patents-in-suit took
place in Illinois and five of the 18 inventors and patent prosecutors for these patents are in
Illinois.

OPINION
Defendant has moved to transfer this case under 28 U.S.C. § 1404 (a) on the grounds
that W ashington is a more convenient forum and transfer will serve the interests of justice. A
district court “may transfer any civil action to any other district or division where it might have
been brought” if the transfer is “[f]or the convenience of the parties and witnesses [and] in the
interest of justice.” 28 U.S.C. § 1404 (a). Decisions regarding transfer of patent actions are

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governed by the law of the regional circuit. W inner International Royalty Corp. v. W ang, 202
F.3d 1340. 1352 (Fed. Cir. 2000). In the Seventh Circuit, the movant has the burden of
establishing that the transferee forum is “clearly more convenient.” Coffey v. Van Dorn Iron
W orks, 796 F.2d 217, 219-20 (7th Cir. 1986) (discussing factors relevant to § 1404 transfer
analysis).

In a recent decision, Research Automomation, Inc. v. Schrader-Bridgeport

International, Inc., 626 F.3d 973 (7th Cir. 2010), the Court of Appeals for the Seventh Circuit
explained that § 1404(a) “permits a ‘flexible and individualized analysis’ and affords district
courts the opportunity to look beyond a narrow or rigid set of considerations in their
determinations.” Id. at 978 (quoting Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 29
(1988). The court summarized the most salient factors:
W ith respect to the convenience evaluation, courts generally consider the
availability of and access to witnesses, and each party’s access to and distance
from resources in each forum. Other related factors include the location of
material events and the relative ease of access to sources of proof.
The “interest of justice” is a separate element of the transfer analysis that relates
to the efficient administration of the court system. For this element, courts look
to factors including docket congestion and likely speed to trial in the transferor
and potential transferee forums; each court’s relative familiarity with the relevant
law; and the relationship of each community to the controversy. The interests of
justice may be determinative, warranting transfer or its denial even where the
convenience of the parties and witnesses points toward the opposite result.
Id. (internal quotations and citations omitted).
The parties do not dispute that venue is proper in both the W estern District of W isconsin
and the W estern District of W ashington and that the suit could have been brought against

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defendant in the W estern District of W ashington. Thus, I need determine only whether transfer
would serve the convenience of the parties and witnesses and promote the interests of justice.

A. Convenience
Neither party has identified any party witnesses, relevant events or sources of proof
located in W isconsin.
headquarters here.

In addition, neither party is incorporated in W isconsin or has its

Defendant’s principal place of business is in the W estern District of

W ashington and all witnesses and documents relevant to this claim are located there.
Plaintiff has noted that two of its potential 13 third-party witnesses are subject to this
court’s subpoena power and many of its other witnesses are located in Illinois. The convenience
of third-party witnesses is an important consideration, but not necessarily a dispositive factor.
E.g., Merrill Iron & Steel, Inc. v. Yonkers Contracting Co., No. 05-104, 2005 U.S. Dist. LEXIS
9730, at *7-9 (W .D. W is. 2005) (convenience of third party witnesses, among other things,
weighed in favor of transfer where multiple witnesses were located in transferee district and there
was little risk that third-party witnesses in transferor district would not appear in transferee
district). In this case, plaintiff’s argument that two of its potential third party witnesses are
subject to this court’s subpoena power and not to the subpoena power of the W estern District
of W ashington is not compelling.

Plaintiff fails to demonstrate that there is a likelihood that

compulsory process would be necessary to secure the appearance of these third-party witnesses
at trial or at a deposition. “[I]n patent actions, depositions are customary and are satisfactory

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as a substitute for technical issues.” Adams v. Newell Rubbermaid Inc., 2007 U.S. Dist. LEXIS
62512, at *7 (W .D. W is. Aug. 21, 2007)(quoting M edi USA, L.P. v. Jobst Inst., Inc., 791 F.
Supp. 208, 211 (N.D. Ill. 1992)). Thus, the marginal convenience to these third party witnesses
does not weigh heavily for or against transferring this action to the W estern District of
W ashington.
Plaintiff does not deny that the W estern District of W ashington would be a more
convenient venue for defendant. Instead, plaintiff appears to argue that W isconsin is also
convenient because activities relating to the invention of several of the patents alleged to be
infringed in this case took place in Illinois and because parts for the Xbox are manufactured in
places other than W ashington. Plaintiff’s purpose behind these arguments is unclear. The
relationship that a product or a party has to a third location is not relevant in determining which
of two districts is more convenient for the purpose of transfer.
Taken collectively, the convenience factors weigh in favor of transfer. Little to no weight
is afforded to the minimal convenience to potential third party witnesses but a fair amount of
weight should be given to the fact that defendant’s headquarters, witnesses and documentation
are in W ashington.

B. Interest of Justice
In this case the interest of justice factors do not weigh heavily in either direction. The
only argument offered by plaintiff that could potentially weigh in favor of transfer is the speed

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to trial. Neither party asserts that the W estern District of W isconsin is more familiar with the
relevant case law than the W estern District of W ashington and it is undisputed that the W estern
District of W ashington has a greater relationship to this dispute than the W estern District of
W isconsin because it involves a company headquartered there. At the same time, neither party
identifies any relationship that this district has with this dispute, aside from the potential sale
of defendant’s Xbox 360 gaming system and plaintiff’s smart phones, something that applies
equally to either forum.
Plaintiff argues that there is a great difference in docket speed between this district and
the W estern District of W ashington for patent cases. Specifically, plaintiff avers that the average
time to disposition in this district is 12 months compared with 31 months in the W estern
District of W ashington. However, the information provided by defendant shows that the average
length to trial in this district is 15 months compared to an average length of 19 months in the
W estern District of W ashington and the average length to case termination in this district is 5.3
months compared to an average of ten months in W ashington. A delay of four months is not
noteworthy. In a recent decision, Castleberg v. Davidson, Case No. 10-cv-647-bbc, dkt. #27
(W .D. W is. Dec. 30, 2010), I concluded that a difference of 12 months in average time to trial
was not a dispositive factor when determining whether speed to trial should weigh in favor of
transfer. For the same reason, a delay of four additional months is not either.
The amount of delay must be put in perspective. Although any case benefits from a
speedy resolution, in many cases the cost of delay can be remedied by the award of damages for

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the ongoing injury. Only cases in which more than money is at stake does a speedy resolution
become especially important.
Plaintiff asserts that time to trial is important because defendant’s Xbox 360 gaming
system is in competition with plaintiff’s smart phones. Plaintiff alleges that defendant has
“attempted to leverage the accused Xbox gaming system to drive sales of W indows 7 phones,
which compete directly with Motorola’s Android-based smart phones” and that defendant is
“attempting to do this by tying its Xbox Live gaming service, which is implicated by the
infringement claims in the suit, to its W indow 7 phones.” When a patent infringement case

centers on competing products in a dynamic market, the factor of speed takes on more
importance than it might in another type of case. Illumina, Inc. v. Affymetrix, No. 09-277,
2009 WL 3062786 (W.D. Wis. 2009). However, plaintiff fails to explain how the capability
of these competing smart phones to connect to Xbox Live relates to its infringement claims.
These smart phones are not accused products. If their connection to the Xbox Live network
relates to the accused products, Xbox consoles and the Kinect, plaintiff has not shown this.
Plaintiff’s assertion that Xbox Live is “implicated” in its claims is too tenuous and undeveloped
to support finding any direct competition in relation with this lawsuit. Thus, there does not
appear to be a particular need for speedy resolution in this case. The potential for a delay of
between four and 13 months does not weigh heavily against transfer.
Defendant argues that the interests of justice are served by transfer because there are

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related lawsuits already pending in the W estern District of W ashington. The basis for this
contention is that both this case and the cases in W ashington deal with the same product, the
Xbox 360 gaming system, even if only tangentially. Plaintiff disagrees and asserts that the
W ashington cases deal with patents and technology different from those at issue in this dispute.
“M icrosoft’s counterclaim patent in the 699 action relate to displaying temporary graphics in web
browsers and displaying graphical keyboards.

The counterclaim patents here relate to a

notification system, browser navigation and a file management system. Thus there is virtually
no factual overlap between this action and the two actions now in W ashington, on either liability
or damages issues.” Plt.’s Br., dkt. #31, at 3. Defendant has failed to provide any details about
these cases suggesting any real overlap between these cases. Thus, I am unwilling to conclude that
the presence of these related cases favors transfer.
As a final matter, plaintiff argues that defendant’s position that this dispute should be
transferred is undermined by its filing of permissive counterclaims in this district “alleging that
M otorola smart phones infringe M icrosoft patents— entirely unrelated to M otorola’s
claims—rather than assert these claims in its supposed preferred home forum of W ashington.”
Plt.’s Br., dkt. #31, at 4. I do not agree. At most, defendant’s choice of asserting counter claims
is a concession that it would be more efficient to have one lawsuit in an inconvenient forum than
two lawsuits, one in a convenient forum and one in a non-convenient forum.
I conclude that the factors to be considered in ruling on a motion for a change of venue
weigh in defendant’s favor. The convenience factors weigh in favor of transfer and the interest

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of justice factors are a wash. Although transfer may create delays, there is no particular need for
quick resolution of this case and the transferee court, W estern District of W ashington, has a
closer relationship to this dispute than this court. This district is not convenient to any party
but the W estern District of W ashington is clearly more convenient to defendant because it is
headquartered there and its witnesses and documents are located there. Therefore, defendant’s
motion to transfer venue will be granted and the case will be transferred to the W estern District
of W ashington.

ORDER
IT IS ORDERED that Defendant M icrosoft Corporation’s motion to transfer venue to
the United States District Court for the W estern District of W ashington under 28 U.S.C. §
1404, dkt.# 10 is GRANTED.
Entered this 31st day of M arch, 2011.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge

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