Sophos Inc v. RPost Holdings, Inc. et al

Filing 53

Judge Denise J. Casper: ORDER entered. MEMORANDUM AND ORDER - Defendants' motions to transfer to the Eastern District of Texas, D. 24, 34, are DENIED.(Hourihan, Lisa)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
__________________________________________
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SOPHOS, INC.,
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Plaintiff,
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)
v.
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)
Civil Action No. 13-12856-DJC
RPOST HOLDINGS, INC. and
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RPOST COMMUNICATIONS LTD.,
)
)
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Defendants.
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__________________________________________)
MEMORANDUM AND ORDER
CASPER, J.
I.

May 30, 2014

Introduction
Sophos, Inc. (“Sophos”) has filed this lawsuit against RPost Holdings, Inc. (“RPH”) and

RPost Communications Ltd. (“RPC”) (collectively “Defendants”)1 seeking a declaratory
judgment that Sophos has not and is not infringing Defendants’ patents and that Defendants’
patents are invalid. D. 1. Defendants have moved to transfer this action to the Eastern District
of Texas. D. 24, 34. For the following reasons, the Court DENIES Defendants’ motions to
transfer.
II.

Standard of Review
A district court may, in its discretion, transfer a civil action to any other district where it

might have been brought. 28 U.S.C. § 1404(a). The burden is on the moving party to show that
transfer is warranted. Shipley Co., Inc. v. Clark, 728 F. Supp. 818, 823 (D. Mass. 1990). In

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RPost International Ltd. (“RPI”) was voluntarily dismissed from this action on May 9,
2014. D. 48.
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considering whether to grant a motion to transfer venue, a district court should consider “(1) the
convenience of the parties, (2) the convenience of the witnesses, (3) the relative ease of access to
sources of proof, (4) the availability of process to compel attendance of unwilling witnesses, (5)
cost of obtaining willing witnesses, and (6) any practical problems associated with trying the
case most expeditiously and inexpensively.” F.A.I. Elec. Corp. v. Chambers, 944 F. Supp. 77,
80–81 (D. Mass. 1996) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)). There is a
strong presumption in favor of the plaintiff’s choice of forum. Sigros v. Walt Disney World Co.,
129 F. Supp. 2d 56, 71 (D. Mass. 2001). The moving party “must establish that private and
public interests weigh heavily on the side of trial” in the alternative forum. Mercier v. Sheraton
Int’l, Inc., 935 F.2d 419, 424 (1st Cir. 1991) (citations omitted). “Where identical actions are
proceeding concurrently in two federal courts, entailing duplicative litigation and a waste of
judicial resources, the first filed action is generally preferred . . . .” Cainbro Corp. v. CurranLavoie, Inc., 814 F.2d 7, 11 (1st Cir. 1987).
III.

Factual Background and Procedural History
A.

Allegations in the Complaint

Between June 26, 2012 and August 6, 2013, the United States Patent and Trademark
Office (“PTO”) issued United States Patent Nos. 8,504,628 (“the ‘628 patent”), 8,224,913 (“the
‘913 patent”), 8,209,389 (“the ‘389 patent”) and 8,468,199 (“the ‘199 patent”) (collectively, the
“patents-in-suit”). D. 1 at ¶¶ 1, 11–14. At the time of issue, the ‘628, ‘913 and ‘389 patents
were assigned to RPC. Id. at ¶¶ 11–13; Exhs. B, C, D. At the time of issue, the ‘199 patent was
assigned to RPI. D. 1 at ¶ 14. Sophos alleges that RPC “has right, title, and interest in the ‘628,
‘913 and ‘389 patents” and that RPI “has right, title, and interest in the ‘199 patent.”
D. 1 at ¶¶ 16–17.

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On October 16, 2013, RPH sent a letter to Sophos alleging that certain Sophos products
infringed the patents-in-suit. Id. at ¶¶ 18–19. In response, Sophos filed this action on November
12, 2013, seeking a declaratory judgment for patent noninfringement and invalidity with respect
to the patents-in-suit. Id. at 11.
C.

RPH and RPC’s Patent Infringement Actions in the Eastern District of Texas
and Northern District of California

RPH and RPC are currently plaintiffs in numerous patent infringement cases pending in
the Eastern District of Texas (Gilstrap, J.). D. 25 at 8–10, 14. Some of these lawsuits involve
the ‘389 and ‘913 patents at issue here. Id. Further, the Eastern District of Texas has construed
some terms relevant to the patents-in-suit. See id. Sophos is a defendant in one such action filed
on November 13, 2013, the day after this lawsuit was filed. RPost Holdings, Inc. v. Sophos, Inc.,
2:13-cv-959-JRG. Judge Gilstrap consolidated three of RPH and RPC’s actions in the Eastern
District of Texas and has stayed the actions pending the outcome of a related case in California.
See RPost Holdings, et al. v. Epsilon Data Mgmt., LLC, et al., No. 2:12-cv-00511-JRG, D. 79
(E.D. Tex. Jan. 30, 2014). Judge Gilstrap stayed the actions because the outcome of the related
case could “have a considerable impact on Plaintiffs’ standing to sue in each of the above
actions.” Id. at 11.
RPH and RPC are also defendants in a pending case in California, Trend Micro, Inc. v.
RPost Holdings, Inc. et al., No. 13-cv-05227-WHO (N.D. Cal.), in which the court recently
denied Defendants’ motion to transfer that matter to the Eastern District of Texas “because Trend
Micro was the first to file suit and the convenience factors weigh[ed] in favor of litigation in this
District.”

Trend Micro Inc. v. RPost Holdings, Inc., No. 13-CV-05227-WHO, 2014 WL

1365491, at *1 (N.D. Cal. Apr. 7, 2014).

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D.

Procedural History of This Matter

Sophos filed this action on November 13, 2013. D. 1. RPH moved to transfer this action
on January 13, 2014. D. 24. RPC and RPI moved to dismiss this action on January 23, 2014. D.
27. RPC and RPI moved to transfer this action on February 13, 2014. D. 34. RPC and RPI
withdrew the portion of its motion addressing insufficient service of process on May 2, 2014. D.
47. Sophos voluntarily dismissed its claims against RPI on May 8, 2014. D. 48. The Court
heard oral argument on the pending motions on May 13, 2014 and took them under advisement.
D. 50. On the same day, the Court denied as moot Defendants’ motion to dismiss. D. 49.
IV.

Discussion
A.

Defendants Have Failed to Meet Their Burden to Transfer this Action

Defendants have moved to transfer this action to the Eastern District of Texas under
28 U.S.C. § 1404(a). D. 24; D. 34. In evaluating this motion, the Court must consider whether
the outcome is dictated by the first-filed rule and whether the convenience factors of § 1404(a)
favor transferring the action to the Eastern District of Texas.
1.

Sophos Filed the Instant Action First

The parties disagree over whether this Court should apply the first-filed rule. Sophos
argues that the first-filed rule applies because it filed this action a day before Defendants filed
their action in the Eastern District of Texas.

D. 29 at 2, 5.

Sophos further contends that

Defendants filed their action in response to Sophos’s action for declaratory judgment in this
Court and, therefore, this is exactly the type of situation that the first-filed rule is intended to
govern. Id. at 2. Defendants argue that the first-filed rule should not apply because they filed
their action in the Eastern District of Texas only one day after Sophos filed in this Court, and

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because judicial economy and the convenience factors favor litigating Sophos’s claims in the
Eastern District of Texas. D. 25 at 2-3, 8.
“Where identical actions are proceeding concurrently in two federal courts . . . the first
filed action is generally preferred in a choice-of-venue decision.” Cianbro Corp. v. Curran–
Lavoie, Inc., 814 F.2d 7, 11 (1st Cir. 1987). The first-filed rule applies in duplicative patent
cases. See Genentech, Inc. v. Eli Lilly Co., 998 F.2d 931, 937-39 (Fed. Cir. 1993). The parties
do not dispute that the issues and parties involved in both this lawsuit and the Defendants’ action
in the Eastern District of Texas are identical, making this the type of suit to which the first-filed
rule normally would apply. Instead, Defendants argue that because they intended to file its
action in the Eastern District of Texas on the same day as Sophos, but were prevented from
doing so by “computer problems,” this Court should not follow the first-filed rule in this case.
D. 25 at 8. Defendants cite no case law in support of this proposition. Defendants do not
contend that they initiated their filing before Sophos filed this complaint, or that but-for the
computer glitch the Defendants’ complaint would have been the first-filed. Moreover, the mere
passage of a single day is enough to trigger the first-filed rule. See Veryfine Prods., Inc. v. Phlo
Corp., 124 F. Supp. 2d 16, 26 (D. Mass. 2000) (denying motion to transfer where defendant filed
duplicative lawsuit one day after plaintiff).
There are exceptions to the first-filed rule, including exceptions for “special
circumstances” justifying a transfer, such as where one party misleads another to win a “race to
the courthouse,” or where the balance of convenience substantially favors the second-filed
action. See EMC Corp. v. Parallel Iron, LLC, 914 F. Supp. 2d 125, 127 (D. Mass. 2012). Here,
where Defendants do not contend that Sophos misled them, the Court focuses on the “balance of
convenience,” id., and the related factors courts use to apply 28 U.S.C. § 1404(a).

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2.

The Section 1404(a) Factors Do Not Weigh in Favor of Transfer

Defendants argue that judicial economy and the interests of justice favor transferring this
case to the Eastern District of Texas where Defendants have at least nine other actions pending,
some of which involve some of the patents-in-suit. D. 25 at 8-10. Defendants have made no
claim that they are not amenable to personal jurisdiction in Massachusetts.
As discussed above, there is a strong presumption in favor of a plaintiff’s choice of
forum. See Sigros, 129 F. Supp. 2d at 71. Further, “a plaintiff’s choice of forum is entitled to
greater deference when the plaintiff has chosen the home forum.” Piper Aircraft Co. v. Reyno,
454 U.S. 235, 255 (1981); see also Koster v. Lumbermens Mut. Cas. Co., 330 U.S. 518, 524
(1947) (stating that “[i]n any balancing of conveniences, a real showing of convenience by a
plaintiff who has sued in his home forum will normally outweigh the inconvenience the
defendant may have shown”).
As an initial matter, it is clear that the strong presumption in favor of Sophos’s choice of
forum applies here as Massachusetts is Sophos’s home forum.

For the same reasons, the

convenience factors weigh against transfer. Sophos has a significant presence in this district
with numerous potential witnesses living or working here. D. 29 at 3. By contrast, RPH—a
Delaware corporation—has a single office in the Eastern District of Texas with no full-time
employees there. D. 25 at 3, 11. RPH states that most of its witnesses are located in Los
Angeles, California. Id. at 12. Of the party witnesses identified by Defendants, one lives in the
Northern District of Texas and two live in Los Angeles, California. D. 35 at 1. Both parties
have identified third-party witnesses residing in or near2 their forum of choice, making neither

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At oral argument, Defendants did not dispute Sophos’s position that Defendants had
identified witnesses in Dallas, Texas, which is located in the Northern District of Texas, but none
within the Eastern District.
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forum significantly more convenient than the other in this regard. D. 25 at 13; D. 29 at 14. Even
assuming that litigating in the Eastern District of Texas would be more convenient for
Defendants’ witnesses, the Eastern District of Texas would certainly be less convenient for
Sophos’s witnesses and “transfer is not appropriate where its effect is merely to shift the
inconvenience from one party to the other.” Kleinerman v. Luxtron Corp., 107 F. Supp. 2d 122,
125 (D. Mass. 2000).
Similarly, the ease of access to evidence weighs against transfer. RPC contends that most
of their relevant documents are located in Bermuda or Los Angeles, including the only specific
evidence identified by RPC—source code related to the patented products.

D. 35 at 1.

Defendants claim that it maintains documents at its Plano, Texas office including “relevant
marketing and sales information” may be used to support their claims, though they do not
explain why these documents are relevant. D. 25-4 ¶ 9. Sophos states that the bulk of its
evidence will come from its headquarters in Burlington, Massachusetts. D. 29 at 14. Again,
even assuming that the Eastern District of Texas is more convenient for Defendants’ production
of evidence, the mere shifting of convenience from one party to another, particularly when the
plaintiff chooses its home forum, is not appropriate here. See Kleinerman, 107 F. Supp. 2d at
125. In addition, given that “[i]n patent infringement cases, the bulk of the relevant evidence
usually comes from the accused infringer,” transfer is inappropriate where Sophos – a
Massachusetts company – is the accused infringer. In re Genentech, Inc., 566 F.3d 1338, 1345
(Fed. Cir. 2009).
It is true that as a practical matter Judge Gilstrap may have significant expertise with
some of Defendants’ patents and may eventually construe two of the patents-in-suit, but this
hardly overcomes the presumption against transfer in this case. See Kleinerman, 107 F. Supp. 2d

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at 126 (denying transfer because judicial economy “[did] not eclipse [plaintiff’s] choice” of
forum). Further, RPH and RPC have at least one other action pending in this forum. Yesware,
Inc. v. RPost Holdings, Inc. et al., No. 13-cv-12837-RGS (D. Mass. Nov. 8, 2013). In addition,
although judicial economy is important, another court’s construction of the claims that may
eventually be at issue in this case does not militate in favor of transfer, where the principle of
collateral estoppel may apply or, at a minimum, another judge’s claim construction may be cited
as persuasive authority to this Court.
The court’s decision in the related Trend Micro case is also instructive here. In Trend
Micro, Defendants and related entities moved to transfer that case to the Eastern District of
Texas, despite the fact that Trend Micro was filed first. Trend Micro, 2014 WL 1365491, at *8.
The Court concluded not only that its case was filed before the related Texas cases, but also that
the balance of convenience did not warrant upsetting Trend Micro’s choice of forum. Id., at *11.
First, the court noted that Trend Micro’s decision to bring suit in its home forum was entitled to
substantial weight. Id., at *10. The same is true here. Second, the court noted that Defendants
have identified no witnesses who live in the Eastern District of Texas. Id. The same is true here,
where Defendants have identified only a witness living in a judicial district adjacent to the
Eastern District of Texas. Third, the Court noted that most evidence is located in California and
not in Texas. Id. That is true here, where Sophos is headquartered in Massachusetts and
Defendants have only an office in Texas without any full-time employees, a fact that the Trend
Micro court also considered. Id. Finally, the Trend Micro court rejected Defendants’ efficiency
argument, noting that Judge Gilstrap has not yet construed certain patents and has stayed actions
pertaining to other patents, suggesting that he will likely never construe claim terms in those
patents that are implicated in the stayed actions. Id., at *11. At base, Defendants argue that

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consolidation of this matter with one another will mean that one less judge will need to construe
the claims at issue in this case. The Court, however, is not persuaded by this argument where the
parties in many, if not most, of the pending actions have not even identified which claims of the
patents-in-suit require construction. In addition, the Court cannot say with certainty that transfer
would decrease the number of forums in which Defendants will litigate the patents-in-suit, where
Defendants are involved in another related litigation in this district. See Yesware, Inc. v. RPost
Holdings, Inc. et al., No. 13-cv-12837-RGS.3
Ultimately, Defendants have failed to make the showing of inconvenience necessary to
warrant upsetting Sophos’s choice of its home forum where it filed first.
V.

Conclusion
For the foregoing reasons, Defendants’ motions to transfer to the Eastern District of

Texas, D. 24, 34, are DENIED.
So Ordered.

/s/ Denise J. Casper
United States District Judge

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At oral argument, Defendants cited In re Volkswagen of Am., Inc., 566 F.3d 1349 (Fed.
Cir. 2009), which they believed was instructive here. In re Volkswagen, however, is
distinguishable and does not support Defendants’ position. That case addressed a petition for a
writ of mandamus putatively directing the district court to vacate an order denying a motion to
transfer venue, which the Federal Circuit declined to do. Id. at 1352. Accordingly, not only was
the court faced with an extremely deferential standard of review, but it allowed the plaintiff to
pursue its case in its chosen forum.
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