Qurio Holdings, Inc. v. Comcast Corporation et al
Filing
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MEMORANDUM Opinion and Order written by the Honorable Matthew F. Kennelly on 2/9/2015: The Court grants defendant's motion to transfer [docket no. 29 ]. Former defendant Comcast Corp.'s motion to dismiss is terminated as moot [docket no . 27 ], as is plaintiff's motion to consolidate cases [docket no. 36 ]. The Clerk is directed to transfer this case to the Eastern District of Pennsylvania. The status hearing set for 2/10/2015 is vacated. Civil case terminated. Mailed notice.(pjg, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
QURIO HOLDINGS, INC.,
Plaintiff,
vs.
COMCAST CABLE
COMMUNICATIONS, LLC,
Defendant.
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Case No. 14 C 7488
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
Qurio Holdings, Inc., which is headquartered in New Hampshire, has sued
Comcast Cable Communications, LLC, which is headquartered in Philadelphia,
Pennsylvania, for infringement of three U.S. patents. The patents involve technology for
distributing television programs to personal communication devices. Qurio originally
also sued Comcast Corporation, but it dismissed its claims against that entity without
prejudice. The Court will refer to the remaining defendant as Comcast.
Comcast has moved to transfer the case to the Eastern District of Pennsylvania
pursuant to 28 U.S.C. § 1404(a), which provides that "[f]or the convenience of parties
and witnesses, in the interest of justice, a district court may transfer any civil action to
any other district . . . where it might have been brought[.]" 28 U.S.C. § 1404(a). To
obtain a transfer, the moving party must demonstrate that the proposed transferee
forum is "clearly more convenient." Heller Fin., Inc. v. MidWhey Powder Co., 883 F.2d
1286, 1293 (7th Cir. 1989); Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219–20 (7th
Cir. 1986). "'Unless the balance is strongly in favor of the defendant, the plaintiff's
choice of forum should rarely be disturbed.'" In re Nat'l Presto Indus., Inc., 347 F.3d
662, 664 (7th Cir. 2003) (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)).
"Where the balance of convenience is a close call, merely shifting inconvenience from
one party to another is not a sufficient basis for transfer." Research Automation, Inc. v.
Schrader–Bridgeport Int'l, Inc., 626 F.3d 973, 978 (7th Cir. 2010).
1.
Convenience of the parties and witnesses
In evaluating the convenience of the parties and witnesses, a court considers (1)
the plaintiff's choice of forum, (2) the situs of material events, (3) the relative ease of
access to proof, (4) the parties' convenience, and (5) the witnesses' convenience in
litigating in the respective forums. Amoco Oil Co. v. Mobil Oil Corp., 90 F. Supp. 2d
958, 960 (N.D. Ill. 2000); see also Research Automation, 626 F.3d at 978.
a.
Plaintiff's choice of forum
Courts ordinarily give substantial weight to the plaintiff's choice of a forum,
particularly when it is the plaintiff's home forum. See In re Nat'l Presto Indus., 347 F.3d
at 664 (plaintiff's choice "should rarely be disturbed"); cf. Piper Aircraft Co. v. Reyno,
454 U.S. 235, 255–56 (1981) (common law forum non conveniens doctrine). The
plaintiff's choice of a forum, however, "has minimal value where none of the conduct
complained of occurred in the forum selected by the plaintiff," Chicago, Rock Island &
Pacific R.R. Co. v. Igoe, 220 F.2d 299, 304 (7th Cir. 1955) (internal quotation marks
omitted), at least in a case like Chicago, Rock Island, in which the plaintiff sued outside
her home forum.
Comcast suggests that a plaintiff's choice of a forum is entitled to no weight if it is
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not the plaintiff's home or does not otherwise have a significant connection with the
subject matter of the litigation. See Defs.' Mot. to Transfer at 12 ("Plaintiff's Choice of
Forum Is Not Entitled to Deference"; "Plaintiff's choice of forum is simply one factor
among many that should be considered") (internal quotation marks omitted). But that is
not what the Seventh Circuit has said, and the Court does not understand the law this
way. Piper Aircraft, a common law forum non conveniens case often cited as authority
on section 1404(a) motions, does not say that the plaintiff's choice is entitled to no
deference if it is not the plaintiff's home. Rather, it says (speaking of a non-U.S.
plaintiff) that "[w]hen the home forum has been chosen, it is reasonable to assume that
this choice is convenient. When the plaintiff is foreign, however, this assumption is
much less reasonable. Because the central purpose of any forum non conveniens
inquiry is to ensure that the trial is convenient, a foreign plaintiff's choice deserves less
deference." Id. at 255-56. Less deference does not mean no deference.
b.
Situs of material events
The events underlying the litigation have no relationship with this district.
Infringement is claimed to have occurred here, but given the products at issue, this does
not differentiate this district from any other federal district. See In re Acer Am. Corp.,
626 F.3d 1252, 1256 (Fed. Cir. 2010) ("[T]he sale of an accused product offered
nationwide does not give rise to a substantial interest in any single venue."). There is
no basis to say that the degree of infringement in this district is more significant than in
other districts generally, or in the proposed transferee district in particular.
Qurio's attorneys in this lawsuit are located here, but it does not argue that this is
a relevant factor. Though the Court can imagine a case where it might be, this is not
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such a case; reliance on this factor would permit a plaintiff in a patent infringement suit
to pick its venue by its choice of attorneys.
No events of significance took place in this district. The patented products and
methods appear to have been developed in North Carolina, and the patents were
likewise prosecuted by attorneys located there. See Compl., Exs. A, B & C. And the
materials provided by Comcast in support of its motion sufficiently reflect that the
accused products were developed in the proposed transferee district, namely the
Eastern District of Pennsylvania. This is a relevant factor in the analysis. See Acer
Am. Corp., 626 F.3d at 1256.
Because this is not Qurio's home district and no material events took place here,
its choice of this district is not entitled to significant weight in balancing the factors under
section 1404(a).
c.
The parties' convenience
The only contact of significance between the lawsuit and this district is the fact
that Qurio has separately sued two other defendants here for infringement of the same
patents, and the claims in each of these lawsuits overlap. Qurio says the ability to sue
all three defendants in the same place is why it filed the lawsuit here and that this is a
significant factor when considering convenience of the parties. Qurio argues that it is
more convenient for all of its lawsuits concerning the patents in suit to proceed in
tandem for pretrial purposes (including claim construction), to avoid extra expense,
duplication of effort, and conflicting rulings. Qurio says that it is not well-heeled and that
litigating the same issues in different districts would pose a hardship.
This is a relevant factor in the analysis, which the Court will take into account.
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The Court notes, however, that procedures exist by which lawsuits pending in different
districts, including patent infringement suits, may be transferred to a single district and
judge for pretrial purposes. See 28 U.S.C. § 1407 (multidistrict litigation). The Court
will discuss this point further when addressing the interests of justice.
It is typically more convenient for a party to litigate in its home district, and thus
this factor is usually a tie when a court considers a section 1404(a) motion. In this case,
however, Qurio filed the case outside its home district. Qurio says that it might have
had difficulty obtaining personal jurisdiction over Comcast in New Hampshire or in North
Carolina, but it has not supported this contention (such as by showing that Comcast
does not distribute the accused products into those states).
d.
Access to sources of proof
Because the convenience of witnesses is assessed separately, the factor of
"access to sources of proof" typically involves relevant records. In this case, there are
no relevant records in the Northern District of Illinois, at least not that anyone has
identified. Records relating to the work of the inventors and prosecution of the patent
likely are located in North Carolina. Records relating to the development and sale of the
accused devices are located in the Eastern District of Pennsylvania. And there are
records regarding prior art—which might be relevant regarding validity of the patents—
that are, or at least may be, located in the Northern District of California.
The Federal Circuit has, at least in some cases, cited the location and
transportation of records as a significant consideration in assessing convenience. See,
e.g., In re Genentech, Inc., 566 F.3d at 1345-46 (discussing the "burden on the
petitioners to transport documents"). Respectfully, it is difficult to take this seriously.
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Although section 1404(a) was adopted in the 1940s, it does not require a court to
pretend that lawsuits are litigated and tried as they were in that era. Business records
nowadays are nearly all maintained digitally. More to the point, as any experienced
litigator or trial judge can attest, when records are produced in litigation nowadays, they
are all (or virtually all) produced digitally. The old saw about "backing up the truck"
when a party seeks broad production of records now has meaning only to litigators of a
certain age. There is no truck and, for the most part, there are not even boxes. Rather,
documents are produced on digital media. Records that are in California are barely less
accessible to a litigant in Illinois than they would be if they were in Illinois. And to
directly address the point made in Genentech, the days when records had to be
physically shipped in for trial or even document production during discovery are long
gone. The Seventh Circuit, whose cases concerning section 1404(a) govern here, has
acknowledged this. See Bd. of Trs., Sheet Metal Workers' Nat'l Pension Fund v. Elite
Erectors, Inc., 212 F.3d 1031, 1037 (7th Cir. 2000) (discussing section 1404(a); "Easy
air transportation, the rapid transmission of documents, and the abundance of law firms
with nationwide practices, make it easy these days for cases to be litigated with little
extra burden in any of the major metropolitan areas.").
A court need not and should not put on blinders when it considers this factor. As
the Court has indicated, the fact that section 1404(a) has been around for decades does
not mean that "access" should be assessed the same way in 2015 as it was in 1948 or
even, for that matter, in 2000. The Court acknowledges that some Federal Circuit
decisions seem to point the other way, but they reflect a misunderstanding of how
litigants and lawyers access relevant records these days. And contrary to the court's
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indication in Genentech, this in no way reads this factor out of the section 1404(a)
analysis or renders it "superfluous." Rather, the Court is addressing the weight
appropriately given this factor in the "individualized, case-by-case consideration of
convenience and fairness" mandated by the Seventh Circuit, Coffey, 796 F.2d at 219,
and the Supreme Court. See Van Dusen v. Barrack, 376 U.S. 612, 622 (1964).
e.
Convenience of witnesses
As the Court has indicated, neither side identifies any witnesses who are located
in this district. The inventors and the attorney who prosecuted the patent may be
witnesses, but they are located in North Carolina. Comcast identifies a number of
witnesses who are located in the Eastern District of Pennsylvania. Most of these are
Comcast employees. Comcast says this does not matter and that the Federal Circuit
considers this sort of inconvenience on a par with that involving non-party witnesses.
See Def.'s Mot. to Transfer at 7. The Federal Circuit cases that Comcast cites,
however, all apply Fifth Circuit law (because the Federal Circuit applies regional circuit
law on procedural matters like this one), and that circuit seems to have evaluated the
two types of witnesses the same way. See Genentech, 566 F.3d at 1434 (citing In re
Volkswagen of Am., Inc., 545 F.3d 304, 317 (5th Cir. 2008)); Acer Am. Corp., 626 F.3d
at 1255; In re Nintendo Co., 589 F.3d 1194, 1199 (Fed. Cir. 2009). There is no
Seventh Circuit authority on this point, but the overwhelmingly predominant view among
district courts in the circuit is that because party witnesses are likely to appear
voluntarily, the convenience factor is less significant with regard to party witnesses than
non-party witnesses. See, e.g., Placon Corp. v. Sabert Corp., No. 14-cv-587, 2015 WL
327606, at *3 (W.D. Wis. Jan. 23, 2015); Perry v. CNN Interactive Grp., Inc., No. 14 C
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1194, 2014 WL 4214873, at *3 (N.D. Ill. Aug. 25, 2014); Villafuerte v. Decker Truck
Line, Inc., No. 2:14-CV-177, 2014 WL 3721962, at *3 (N.D. Ind. July 25, 2014);
Caterpillar, Inc. v. ESCO Corp., 909 F. Supp. 2d 1026, 1031 (C.D. Ill. 2012); Tech.
Licensing Corp. v. Harris Corp., No. 09 C 820, 2012 WL 1298611, at *3 (N.D. Ill. Apr.
16, 2010); Lewis v. Grote Indus, Inc., 841 F. Supp. 2d 104, (N.D. Ill. 2012); Elanco
Animal Health, a Div. of Eli Lilly & Co. v. Archer Daniels Midland Animal Health &
Nutrition Div., No. 1:08-cv-00386, 2008 WL 4099882, at *4 (S.D. Ind. Sept. 4, 2008).
The reason, as Judge McDade put it in Caterpillar, is that "their participation in the suit
will be obtained as part of their employment, rather than by their own willingness or the
Court's subpoena power, and their compensation and expenses will be paid by their
employers." Caterpillar, 909 F. Supp. 2d at 1031.
Again, however, giving a factor less weight is not the same as giving it no weight.
The Court agrees that Comcast has adequately identified seven of its employees who
are likely witnesses because they have direct and material knowledge regarding the
development, design, distribution, and sales of the accused products, and all of whom
live in the Eastern District of Pennsylvania. See Def.'s Mot. to Transfer at 8. This is a
point worthy of consideration, even if it is not given controlling weight. And in addition,
Comcast has identified one former employee—over whose appearance it will have no
control—who was the product manager for development of its accused products. See
id. at 9. This person, it would appear, is likely to be a key witness. His appearance at
trial cannot be assured if the case proceeds in this district.
2.
Interests of justice
Consideration of the "interests of justice" under § 1404(a) "may be determinative
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in a particular case, even if the convenience of the parties and witnesses might call for a
different result." Coffey, 796 F.2d at 220. The Seventh Circuit has stated that factors
typically considered "relate to the efficient administration of the court system." Id. at
221. One such factor involves "where the litigants are more likely to receive a speedy
trial." Id. In addition, the Seventh Circuit has stated that "related litigation should be
transferred to a forum where consolidation is feasible." Id.; see also Heller Fin., 883
F.2d at 1293 ("trying related litigation together" is a relevant interests-of-justice factor).
Another factor is the respective courts' familiarity with the applicable law. See id. This,
however, is typically a consideration only in diversity cases. It would be difficult to say,
perhaps with some small number of exceptions, that any given federal judge is more
familiar with patent law than any other. Other factors that may be considered include
"the respective desirability of resolving controversies in each locale and the relationship
of each community to the controversy." Research Automation, 626 F.3d at 978 (internal
citation omitted).
Comcast cites statistics indicating that cases get to trial considerably quicker in
the Eastern District of Pennsylvania than in this district. See
http://www.uscourts.gov/Viewer.aspx?doc=/uscourts/Statistics/FederalJudicialCaseload
Statistics/2014/tables/C05Mar14.pdf (last viewed Feb. 8, 2015). That is true (16.7
months vs. 31.2 months), but only a minuscule percentage of go to trial, and the time to
disposition for cases that do not go to trial is approximately the same in both districts.
And as the Federal Circuit has noted, "case-disposition statistics may not always tell the
whole story." Genentech, 566 F.3d at 1347. More to the point, the statistics in
question cover the whole gamut of civil cases and say nothing about the time it takes
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patent infringement cases to get to trial. In short, the statistics that Comcast cites
provide little assistance in determining whether the case would be resolved more
quickly in one district or the other. In this case, this is not a significant factor in the
analysis.
As far as the relationship of the two communities to the dispute, the Court has
already addressed this in discussing the situs of the material events. In a nutshell, this
district has no relationship to Qurio's dispute with Comcast, whereas the Eastern District
of Pennsylvania has a significant relationship with it.
The last factor the Court will discuss is the matter of related litigation and the
possibility of consolidation. The Seventh Circuit, as noted earlier, has specifically
identified this as a relevant consideration under section 1404(a). Coffey, 796 F.2d at
220; see also Heller Fin., 883 F.2d at 1293. This is the key factor upon which Qurio
relies; indeed it is the reason Qurio cites for filing the present lawsuit here. If the case is
transferred, Qurio argues, the courts will not be able to resolve related litigation
together. This disserves the interests of justice, because it makes it more likely that
there will be judicial duplication of effort involving, among other things, construction of
patent claims involved in all or more than one of the cases.
This is a valid consideration, but in the Court's view it is not appropriately given
controlling weight in this case, given the lack of any other material connection between
this district and the parties, the witnesses, or the underlying dispute. The Federal
Circuit has indicated that in this scenario, the pendency of other related litigation in the
district where the plaintiff filed is not a basis to defeat transfer of a particular lawsuit. In
In re Apple, Inc., 581 F. App'x 886 (Fed. Cir. 2014), the court granted (on a 2-1 vote) a
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petition for mandamus directing a district court to grant a defendant's motion to transfer
venue. The plaintiff had no significant business presence in its chosen venue, and the
defendant was located in the proposed transferee venue. In addition, there were
numerous witnesses—including some non-party witnesses—in the transferee venue,
and none in the plaintiff's chosen forum. See id. at 887. The trial court nonetheless
declined to transfer the case, relying in large part on the fact that there were other
pending cases in its district involving the same patents in suit and that it was likely the
cases could be consolidated, thus achieving "significant judicial economy." Id. at 88788. The Federal Circuit concluded that the trial court had clearly abused its discretion,
making mandamus appropriate. With regard to the related-cases issue, the court said
that "judicial economy is just one relevant consideration," and that although "transfer
may mean that some of the other related cases remain in the [plaintiff's chosen forum],
multidistrict litigation procedures exist to mitigate inefficiencies in this type of situation."
Id. at 889. Though this "do[es] not render the practical problems factor neutral," the
court said, "it do[es] mitigate some judicial economy concerns such that the district court
should not have weighed this factor so heavily against transfer." Id. at 889-90.
There is arguably some tension between In re Apple and the Federal Circuit's
earlier decision in In re Vistaprint Ltd., 628 F.3d 1342 (Fed. Cir. 2010), in which it
declined to grant a writ of mandamus ordering the trial court to transfer a case. The trial
court had relied in part on the existence of "co-pending litigation before the trial court
involving the same patent and underlying technology." Id. at 1346. The Federal Circuit
concluded that this, along with other factors, "provide[d] a substantial justification for
maintaining suit" in the plaintiff's chosen forum and declining transfer. Id. at 1346. In
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Vistaprint, however, "no defendant party [was] actually located in the [proposed]
transferee venue and the presence of the witnesses in that location [was] not
overwhelming." Id. at 1346-47. The present case is different. Comcast is located in the
proposed transferee district, and a number of witnesses whose testimony regarding the
accused products is likely—at least one of whom is a non-party who is not under the
control of Comcast—are located there as well. Thus this case differs significantly from
Vistaprint.
Conclusion
Qurio chose this forum hoping to litigate three interrelated cases in a single
district. This was an appropriate objective, but it does not carry the day. Qurio's choice
of this district is entitled to little weight because it is not Qurio's home district, and its
dispute with Comcast has no significant relationship to this district. No material events
took place here, and no witnesses are located here. On balance, the Eastern District of
Pennsylvania, where Comcast seeks to transfer the case, is clearly more convenient,
because the accused products were developed there, and a number of significant
witnesses reside there. For these reasons, the Court grants defendant's motion to
transfer [docket no. 29]. Former defendant Comcast Corp.'s motion to dismiss is
terminated as moot [docket no. 27], as is plaintiff's motion to consolidate cases [docket
no. 36]. The Clerk is directed to transfer this case to the Eastern District of
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Pennsylvania.1
Date: February 9. 2015
________________________________
MATTHEW F. KENNELLY
United States District Judge
1
Comcast makes an alternative argument to transfer the case to the Northern District of
California, evidently so that it might be litigated in tandem with Qurio's suit against DISH
Network, which DISH has moved to transfer to that district. There is no viable basis to
transfer the present case to the Northern District of California. No likely trial witness
resides there; the likelihood of trial testimony by "prior art" witnesses cited by Comcast
is virtually nil. See, e.g., Finnigan Corp. v. ITC, 180 F.3d 1354, 1366 (Fed. Cir. 1999).
And the Qurio-Comcast dispute is completely unrelated to that district. Transferring this
case there so it can be litigated with the DISH case would run afoul of the Federal
Circuit's resolution of the "practical problems" argument in In re Apple, discussed above.
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