Filtalert Corporation v. International Business Machines Corporation et al
Filing
60
ORDER granting 32 Defendants' Joint Motion to Transfer Venue to the Eastern District of North Carolina. This action is transferred in its entirety to the United States District Court for the Eastern District of North Carolina. All other motions are denied as moot. This case is CLOSED in this District. Signed by Judge Darrin P. Gayles on 12/29/2015. (zvr) [Transferred from Florida Southern on 12/30/2015.]
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
FILTALERT CORPORATION,
Plaintiff,
v.
Case No. 15-22845-CIV-GAYLES
INTERNATIONAL BUSINESS
MACHINES CORPORATION and
LENOVO (UNITED STATES) INC.,
Defendants.
/
ORDER
Plaintiff Filtalert Corporation (“Filtalert”) alleges in this patent infringement action that
Defendants International Business Machines Corporation (“IBM”) and Lenovo (United States)
Inc. (“Lenovo”) infringed U.S. Patent No. 6,620,222 (the “’222 patent”), which “is directed to a
system and method for filtering air going into a computer.” Compl. ¶ 1. Filtalert alleges that the
Defendants infringed several claims of the ’222 Patent through, inter alia, the use of the System
X™ and BladeCenter™ products (the “Accused Products”), which Lenovo acquired from IBM
in 2014. Id. ¶¶ 16-17; Defs.’ Mot. at 2.
Before the Court is the Defendants’ Joint Motion to Transfer Venue to the Eastern
District of North Carolina, Filtalert’s response in opposition thereto, and the Defendants’ reply.
For the reasons that follow, the motion to transfer venue is hereby GRANTED.
I.
BACKGROUND
The Defendants jointly filed the present Motion to Transfer Venue on October 8, 2015. In
it, they request that the Court transfer this case to the U.S. District Court for the Eastern District
of North Carolina, pursuant to 28 U.S.C. § 1404(a). The Defendants argue that the Eastern District
of North Carolina is a more convenient forum for all parties for several reasons, including that
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(1) Defendant Lenovo’s headquarters and primary operations relevant to the Accused Products are
located in that District; (2) IBM has significant operations within that District; (3) Filtalert and
the named inventor are located in Virginia, which is closer to that District; (4) documents related to
the research, development, and sale of the Accused Products are located in that District; and (5) the
“vast majority” of witnesses likely to have relevant knowledge are located in or near that District.
Defs.’ Mot. at 1.
Filtalert filed its response on November 7, 2015, arguing that it chose to litigate in the
Southern District of Florida because, inter alia, all parties sell products here, both Defendants
have major offices here, and this District has a reputation as being a comparatively speedy district.
See Pl.’s Mot. at 7. Filtalert also contends that the Eastern District of North Carolina would be an
unfair forum because of the vast presence both IBM and Lenovo have there as employers of a
large number of the District’s residents.
II.
DISCUSSION
The statute governing venue transfer, 28 U.S.C. § 1404(a), provides, in relevant part, 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.” This analysis
requires a two-pronged inquiry. First, a court must determine whether the case may have been
brought in the desired district of transfer. Meterlogic, Inc. v. Copier Solutions, Inc., 185 F. Supp.
2d 1292, 1299 (S.D. Fla. 2002). This question depends on whether IBM and Lenovo are subject
to jurisdiction in North Carolina, whether venue is appropriate in the Eastern District of North
Carolina, and whether IBM and Lenovo are amenable to service of process in North Carolina.
See id. Because the parties do not dispute that this action could have been brought in the Eastern
District of North Carolina, the Court turns to a discussion of the second prong.
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“Once a court finds an action could have been brought in the transferee forum, the court
must weigh various factors . . . to determine if a transfer . . . is justified.” Elite Advantage, LLC v.
Trivest Fund, IV, L.P., No. 15-22146, 2015 WL 4982997, at *5 (S.D. Fla. Aug. 21, 2015) (citation
and internal quotation marks omitted). The Eleventh Circuit instructs that a district court should
consider the following list, albeit nonexhaustive, of private and public interest factors to
determine whether a transfer is appropriate:
(1) the convenience of the witnesses; (2) the location of the relevant documents
and the relative ease of access to sources of proof; (3) the convenience of the
parties; (4) the locus of operative facts; (5) the availability of process to compel
the attendance of unwilling witnesses; (6) the relative means of the parties; (7) a
forum’s familiarity with the governing law; (8) the weight accorded a plaintiff’s
choice of forum; and (9) trial efficiency and the interests of justice, based on the
totality of the circumstances.
Manuel v. Convergys Corp., 430 F.3d 1132, 1135 n.1 (11th Cir. 2005) (citation omitted). The
Court addresses these factors in turn.
A.
Convenience of Witnesses
“The convenience of the witnesses is probably the single most important factor in transfer
analysis.” In re Genentech, Inc., 566 F.3d 1338, 1343 (Fed. Cir. 2009) (quoting Neil Bros. Ltd. v.
World Wide Lines, Inc., 425 F. Supp. 2d 325, 239 (E.D.N.Y. 2006)) (internal quotation marks
omitted). The U.S. Court of Appeals for the Federal Circuit has adopted the Fifth Circuit’s “100
mile” rule, which requires that “[w]hen the distance between an existing venue for trial of a
matter and a proposed venue under § 1404(a) is more than 100 miles, the factor of inconvenience
to witnesses increases in direct relationship to the additional distance to be traveled.” Id. (quoting
In re Volkswagen of Am., Inc., 545 F.3d 304, 317 (5th Cir. 2008)).
“The party seeking the transfer must support its motion by clearly specifying the key
witnesses to be called and particularly stating the significance of their testimony.” Mason v.
Smithkline Beecham Clinical Labs., 146 F. Supp. 2d 1355, 1362 (S.D. Fla. 2001) (citation
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omitted). When considering parties’ proposed witnesses for purposes of an analysis of this factor,
“the witnesses’ actual knowledge relative to the instant dispute, and the location and convenience
of the witnesses are important considerations.” Microspherix LLC v. Biocompatibles, Inc., No.
11-80813, 2012 WL 243764, at *3 (S.D. Fla. Jan. 25, 2012).
The Defendants have identified Lenovo employees Paul Wormsbecher, David Jensen,
and Brian Trumbo as having knowledge of relevant facts about the design, operation, and
accused functionality of the Accused Products, and Antoine Johnson as a Lenovo employee
having knowledge regarding the sales of the Accused Products. See Defs.’ Mot. at 4. All of these
employees are located in Morrisville, North Carolina, within the Eastern District of North
Carolina. The Defendants also identified David A. Brown as an IBM employee with knowledge
of pre-acquisition sales of the Accused Products; he is located at IBM’s office at the Research
Triangle Park in Durham, North Carolina, within the Eastern District of North Carolina. Id. In
their reply, IBM identified several other witnesses as corporate representatives to testify on
topics Filtalert identified as potential 30(b)(6) deposition topics: Mark Nyeck in Raleigh, North
Carolina; Hance Huston in Fishkill, New York; Curtis Glover in Austin, Texas; and Vic Mahaney
in Austin, Texas. Moreover, the Defendants have identified the named inventor’s employer at the
time he filed the application for the ’222 patent; the prosecuting attorney; and inventors of prior
art, each of whom resides closer to the Eastern District of North Carolina than to the Southern
District of Florida. See Defs.’ Mot. at 10; see also Brown Decl. ¶¶ 15-28.
In its opposition, Filtalert provided a list of seven LinkedIn profiles for the purposes of
“show[ing] that people with relevant, material knowledge related to the conception, design,
development, marketing, manufacturing, sales, and support for the Accused Products reside in
Florida and outside of North Carolina.” Pl.’s Opp’n at 15-16. The Defendants, however, attached
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to their reply declarations from four of these individuals to show that they have no knowledge
relevant to the issues in this case. See Defs.’ Reply at 5.
The Court is cognizant of the fact that “the mere length of an individual parties’ [sic] list
of potential witnesses is not of great significance” and that it is not to “merely tally the number
of witnesses who reside in the current forum in comparison to the number located in the
proposed transferee forum.” Microspherix, 2012 WL 243764, at *3 (quoting Fuji Photo Film Co.
v. Lexar Media, Inc., 415 F. Supp. 2d 370, 373 (S.D.N.Y. 2006)) (internal quotation marks
omitted). And the Court notes that most of these witnesses are employees under the Defendants’
control who could be compelled to testify wherever the litigation was held. That said, the
Defendants have done as they are required and specified witnesses with actual knowledge relative
to the issues in this case. Most of those witnesses currently reside in North Carolina; and a
majority of those who live elsewhere live significantly closer to North Carolina than to Miami,
such that it would be much more convenient for those witnesses if this litigation is held in North
Carolina rather than in the Southern District of Florida. See In re TS Tech U.S. Corp., 551 F.3d
1315, 1320 (Fed. Cir. 2008) (“Additional distance [from home] means additional travel time;
additional travel time increases the probability for meal and lodging expenses; and additional
travel time with overnight stays increases the time which these fact witnesses must be away from
their regular employment.”).
Although Filtalert named several potential witnesses who reside in Florida, many of those
witnesses have declared to the Court that they have no actual knowledge relative to the issues in
this case. Weighing the parties’ submissions, the Court concludes that the convenience of the
witnesses favors transfer.
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B.
Location of Relevant Documents and Ease of Access to Sources of Proof
“In patent infringement cases, the bulk of the relevant evidence usually comes from the
accused infringer.” In re Nintendo Co., 589 F.3d 1194, 1199 (Fed. Cir. 2009). Filtalert seems to
concede that the majority of relevant documents in this case is located in the Eastern District of
North Carolina. See Pl.’s Opp’n at 21. However, given that the electronic storage and transfer of
documents between litigants has become the norm, many courts find that the location of relevant
documents should be given little weight in the transfer analysis. See, e.g. Microspherix, 2012
WL 243764, at *3 (“In a world with fax machines, copy machines, email, overnight shipping,
and mobile phones that can scan and send documents, the physical location of documents is
irrelevant.”). This Court agrees with those courts and finds that this factor is neutral.
C.
Convenience of Parties
The Defendants have shown that conducting this litigation in the Eastern District of
North Carolina would be more convenient to them: Lenovo is headquartered in that District and
IBM has an established place of business there, as well. Filtalert makes four assertions that
conducting the litigation in the Southern District of Florida would be more convenient for them:
(1) this District is a speedy forum; (2) Filtalert’s principal’s “only business partner resides in
Miami, Florida”; (3) both Filtalert and the Defendants sell their respective products here; and (4)
Filtalert’s counsel is located here. See Pl.’s Opp’n Ex. B ¶¶ 7, 9, 10-11. The Court must consider,
however, that “[w]here a transfer ‘merely shifts the inconvenience from one party to another,
Plaintiff’s choice of forum should remain.’” Mason, 146 F. Supp. 2d at 1361 (quoting Eye Care
Int’l v. Underhill, 119 F. Supp. 2d 1313, 1319 (M.D. Fla. 2000)).
A discussion of Filtalert’s first assertion, whether this District is a speedy forum, is more
appropriately addressed in a consideration of “trial efficiency and the interests of justice,”
Manuel, 430 F.3d at 1135 n.1, rather than the convenience of the parties. The assertion that both
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Filtalert and the Defendants sell their products here does not weigh in favor of convenience:
according to the Complaint, Filtalert’s products “are sold through various outlets, including
Filtalert’s website www.purapc.com, and Amazon.com.” Compl. ¶ 12. Because the products are
available—and likely sold—throughout the United States, Filtalert has not provided the Court with
anything to show why this District would be any more convenient than the many others in which
its products are sold. And the Court need not address Filtalert’s assertion that its counsel is located
here because “convenience to counsel ‘is generally not an appropriate consideration’ in a 1404(a)
transfer motion.” Cellularvision Technology & Telecommunications, L.P. v. Alltel Corp., 508 F.
Supp. 2d 1186, 1190 (S.D. Fla. 2007) (quoting Solomon v. Cont’l Am. Life Ins. Co., 472 F.2d 1043,
1047 (3d Cir. 1973)). What remains is the fact that Filtalert’s principal’s business partner is located
here. Although Filtalert has not named this partner, has not described its partner’s business, and
has not described at all the relationship between them, the Court will assume, for purposes of
argument, that this is a convenience factor favoring the Southern District of Florida as a venue.1
Filtalert argues that the Eastern District of North Carolina would be an inconvenient forum
because its principal lives three-and-a-half hours from Raleigh, North Carolina, and because
Lenovo and IBM are two “global behemoths” who have a “visible presence and influence in the
Eastern District of North Carolina” such that the district would be “unfairly favorable to
Defendants.” Pl.’s Opp’n Ex. B ¶¶ 4, 8. Comparing the distance between Palmyra, Virginia, and
Raleigh, North Carolina, and the distance between Palmyra, Virginia, and Miami, Florida, it is
clear that it is not inconvenient for the Plaintiff to travel a shorter distance to the Eastern District
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Filtalert’s position is akin to the one taken by the plaintiff in Cellularvision. There, the plaintiff, who was not
headquartered in Florida, opposed the defendants’ motion to transfer venue from this District to the Eastern
District of Arkansas, without indicating in its opposition why this District would in any way be a convenient
forum for it other than a statement that, because it made the decision to commence the action here, it “obviously
found it convenient.” 508 F. Supp. 2d at 1190. While the Cellularvision plaintiff provided nothing in support of
the convenience of this District as a forum other than its own self-serving statement, here Filtalert does not
proffer much more.
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of North Carolina. The remainder of Filtalert’s unfairness rationale is based purely on speculation,
and Filtalert has provided nothing more than such speculation to support its assertion that the
Eastern District of North Carolina would be “unfairly favorable” to the Defendants. This Court
has the utmost confidence in its colleagues in the Eastern District of North Carolina and their
ability to preside over the selection of a fair, unbiased, and impartial jury.
The Court finds it difficult to believe that Filtalert, a Virginia corporation with a principal
who resides in Virginia, would be more inconvenienced by prosecuting this case in North
Carolina rather than Florida, considering that Filtalert has very little connection to the Southern
District of Florida. By contrast, the Defendants have shown it would be much more convenient
for them to proceed where Lenovo is headquartered nationally and where IBM has an extensive
base of operations. The convenience of the parties therefore weighs in favor of transfer.
D.
Locus of Operative Facts/“Center of Gravity”
“Several district courts have held that the ‘center of gravity’ for a patent infringement
case is [the place] where the accused product was designed and developed.” Motorola Mobility,
Inc. v. Microsoft Corp., 804 F. Supp. 2d 1271, 1276 (S.D. Fla. 2011) (citations, internal quotation
marks, and footnote omitted) (citing Trace-Wilco, Inc. v. Symantec Corp., No. 08-80877, 2009
WL 455432, at *2-3 (S.D. Fla. Feb. 23, 2009)). “The district court ought to be as close as possible
to the milieu of the infringing device and the hub of activity centered around its production. For
that reason, district courts may disregard plaintiff’s choice of forum in cases involving claims of
patent infringement.” Trace-Wilco, Inc., 2009 WL 455432 at *2-3 (citations and internal quotation
marks omitted). The Defendants state that the Accused Products were part of IBM’s x86 server
business, which was “located primarily at IBM’s business operations in Research Triangle Park,
North Carolina,” and that “Lenovo now designs, develops, manufactures, markets, and sells the
Accused products primarily in Morrisville, North Carolina.” Defs.’ Mot. at 3; id. Ex. C at ¶¶ 4, 6.
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Based on the Defendants’ proffer, the Court has no choice but to find that the center of gravity in
this litigation is in North Carolina. This factor weighs in favor of transfer.
E.
Availability of Process
The parties appear to agree this factor is neutral because both neither district would have
the power to compel identified non-party witnesses to appear at trial. See Defs.’ Mot. at 13; Pl.’s
Opp’n at 23. Therefore, it does not weigh against transfer to the Eastern District of North Carolina.
F.
Relative Means of the Parties
This factor at first appears to weigh in favor of retaining the action in the Southern
District of Florida as IBM and Lenovo are large corporate entities and the Plaintiff is not. But
while Filtalert states that its costs would increase were this case to be transferred because it
would need to secure local counsel in North Carolina, it “does not claim it would be unable to
bear the costs of litigation in the event of a transfer.” Game Controller Tech. LLC v. Sony
Computer Entm’t Am. LLC, 994 F. Supp. 2d 1268, 1275 (S.D. Fla. 2014). Other than the increase
in costs needed to secure local counsel, no party argues that it would be significantly financially
impacted by a transfer in any way. See Osgood v. Discount Auto Parts, LLC, 981 F. Supp. 2d
1259, 1266 (S.D. Fla. 2013) (“This is not a case where Defendant is simply looking to shift the
inconvenience onto the Plaintiff who lacks the means or ability to cope with it.”). The Court
acknowledges that the costs may not be identical should the case be transferred, but finds this
factor only slightly supports a denial of transfer.
G.
Forum’s Familiarity with Governing Law
The parties agree this factor is neutral because both courts would be analyzing federal
patent law. See Defs.’ Mot. at 14; Pl.’s Opp’n at 23. Therefore, it does not weigh against transfer
to the Eastern District of North Carolina.
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H.
Weight Accorded a Plaintiff’s Choice of Forum
The movant seeking a venue transfer has the burden to establish that a transfer is warranted,
and a plaintiff’s choice of forum “should not be disturbed unless it is clearly outweighed by other
considerations.” Elite Advantage LLC v. Trivest Fund, IV, L.P., No. 15-22146, 2015 WL 4982997,
at *5 (S.D. Fla. Aug. 21, 2015) (quoting Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253, 260
(11th Cir. 1996)) (internal quotation marks omitted). However, “where a plaintiff has chosen a
forum that is not its home forum, only minimal deference is required, and it is considerably easier
to satisfy the burden of showing that other considerations make transfer proper.” Cellularvision,
508 F. Supp. 2d at 1189 (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255-56 (1981)).
Furthermore, courts accord plaintiffs less deference “when the operative facts underlying the
action occurred outside the district chosen by the plaintiff.” Moghaddam v. Dunkin Donuts, Inc.,
No. 02-60045, 2002 WL 1940724, at *3 (S.D. Fla. Aug. 13, 2002).
Plaintiff cites Mason v. Smithkline Beecham Clinical Laboratories, 146 F. Supp. 2d 1355
(S.D. Fla. 2001), for the proposition that “[d]efendants moving for transfer have a heightened
burden as they must prove with particularity the inconvenience caused by a plaintiff’s choice of
forum. Transfer can only be granted where the balance of convenience of the parties strongly
favors the defendant.” Id. at 1359 (citations and internal quotation marks omitted). This statement,
while accurate, is inapposite. In Mason, the plaintiff was an individual who chose to sue in her
forum of residence because of weak health and the court therefore found that her choice of forum
should be afforded “considerable deference.” As recounted throughout this Order, Filtalert is not
suing in its home forum, so the level of deference discussed in Mason is not applicable here.
And, as discussed above, the operative facts underlying this action occurred outside this District.
Accordingly, the Court does not accord deference to Filtalert’s forum choice, and this factor does
not weigh against transfer to the Eastern District of North Carolina.
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I.
Trial Efficiency and the Interests of Justice
Filtalert has provided a declaration that relies on the 2014 Report on Judicial Business of
the U.S. Courts, which found that the median time to trial in this District is 16 months, as
compared to 27 months in the Eastern District of North Carolina. See Talavera Decl. ¶ 21. The
Defendants do not dispute that this District is a comparatively speedier district. This factor thus
weighs against transfer.
III.
CONCLUSION
Upon consideration of the above Section 1404(a) analysis, this Court concludes that the
private and public interest factors weigh in favor of transfer to the Eastern District of North
Carolina. Accordingly, it is ORDERED AND ADJUDGED as follows:
(1)
the Defendants’ Motion [ECF No. 32] is GRANTED;
(2)
all other motions are DENIED AS MOOT;
(3)
this action is TRANSFERRED in its entirety to the United States District Court
for the Eastern District of North Carolina; and
(4)
the Clerk is directed to mark this case as CLOSED in this District.
DONE AND ORDERED in Chambers at Miami, Florida, this 29th day of December, 2015.
__________________________________
DARRIN P. GAYLES
UNITED STATES DISTRICT JUDGE
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