B.E. Technology, L.L.C. v. Barnes & Noble, Inc.
Filing
48
ORDER denying 28 Motion to Change Venue. Signed by Chief Judge Jon Phipps McCalla on 7/12/13. (McCalla, Jon)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
B.E. TECHNOLOGY, LLC,
Plaintiff,
v.
BARNES & NOBLE, INC.
Defendant.
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No.: 2:12-cv-02823-JPM-tmp
ORDER DENYING MOTION TO TRANSFER VENUE
Before the Court is Defendant Barnes & Noble, Inc.’s
(“Defendant” or “Barnes & Noble”) Motion to Transfer Venue
Pursuant to 28 U.S.C. § 1404(a), filed January 7, 2013.
No. 28.)
I.
(ECF
For the reasons that follow, the Motion is DENIED.
BACKGROUND
This case concerns Defendant Barnes & Noble’s alleged
infringement of United States Patent No. 6,771,290 (the “‘290
patent”).
(ECF No. 1.)
Plaintiff B.E. Technology, LLC
(“Plaintiff or “B.E.”) is the assignee of the ‘290 patent (ECF
No. 32 at 2), currently owning “all right, title, and interest”
in the patent “throughout the period of the infringement” (ECF
No. 1 ¶ 10).
B.E. alleges that Barnes & Noble infringed the ‘290 patent
“by using, selling, and offering to sell in the United States
tablet computer products that directly infringe at least Claim 2
of the ‘290 patent either literally or under the doctrine of
equivalents.”
(Id. ¶ 11.)
B.E. alleges “[t]he accused products
include Nook Simple Touch; Nook Simple Touch with GlowLight;
Nook Color; [and] Nook Tablet.”
(Id.)
B.E. filed a Complaint in this Court on September 21, 2012.
(ECF No. 1.)
Barnes & Noble filed its Answer on December 31,
2012 (ECF No. 26) and its Motion to Transfer Venue on January 7,
2013 (ECF No. 28).
B.E. filed its Memorandum in Opposition to
Defendant’s Motion to Transfer Venue on January 25, 2013.
No. 32.)
(ECF
With leave of Court, Barnes & Noble filed a Reply
Memorandum in Support of Its Motion to Transfer on February 13,
2013.
(ECF No. 39.)
On February 14, 2013, Barnes & Noble filed
a Motion to Stay pending resolution of its Motion to Transfer
Venue.
(ECF No. 40.)
to Stay the same day.
The Court granted Barnes & Noble’s Motion
(ECF No. 41.)
Barnes & Noble seeks to transfer this case to the Northern
District of California.
(ECF No. 28-1 at 2.)
To support its
Motion, Barnes & Noble contends that “the vast majority of
activities related to Barnes & Noble’s accused NOOK® products
take place at Barnes & Noble’s offices in Palo Alto,
California.”
(Id.)
Additionally, Barnes & Noble asserts that
its employees with knowledge of the accused products and a
majority of third-party witnesses on whom it may rely are also
2
located in or around the Northern District of California.
(Id.
at 3-4.)
B.E. opposes Barnes & Noble’s Motion to Transfer.
a limited-liability company incorporated in Delaware.
1 ¶ 2.)
B.E. is
(ECF No.
B.E. was originally registered in Michigan, but
formally registered to conduct business in Tennessee in
September 2012.
(ECF No. 32 at 2.)
B.E. contends that Memphis,
Tennessee, is its principal place of business.
(ECF No. 1 ¶ 2.)
Martin David Hoyle (“Hoyle”), B.E.’s founder and CEO, is the
named-inventor of the ‘290 patent.
(ECF No. 32 at 1.)
has been a resident of Tennessee since April, 2006.
Hoyle
(Id. at 2.)
B.E. argues that transfer is inappropriate because it has
substantial connections with this district.
B.E. argues that
Hoyle has been “present in this District since 2006, and B.E.
since at least 2008,” and this district is B.E.’s principal
place of business.
(Id. at 5.)
B.E. also argues that none of
its witnesses are located in the Northern District of
California.
(Id. at 7.)
Further, B.E. argues that its
corporate documents, including documents relating to the
“conception and reduction to practice” of the patents-in-suit,
are located in this District.
(Id. at 4, 5, 12-13.)
II. STANDARD
Barnes & Noble moves the Court to transfer this case to the
Northern District of California pursuant to 28 U.S.C. § 1404(a).
3
(ECF No. 28.)
The statute provides that “[f]or 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.”
U.S.C. § 1404(a).
28
“As the permissive language of the transfer
statute suggests, district courts have ‘broad discretion’ to
determine when party ‘convenience’ or ‘the interest of justice’
make a transfer appropriate.”
Reese v. CNH Am. LLC, 574 F.3d
315, 320 (6th Cir. 2009).
In determining whether to transfer a case under § 1404(a),
the court must first determine whether the claim could have been
brought in the transferee district.
28 U.S.C. § 1404(a)
(allowing transfer to any other district in which the claim
“might have been brought”).
Once the court has made this
threshold determination, the court must then determine whether
party and witness “convenience” and “the interest of justice”
favor transfer to the proposed transferee district.
Reese, 574
F.3d at 320; Esperson v. Trugreen Ltd., No. 2:10-cv-02130-STAcgc, 2010 WL 4362794, at *5 (W.D. Tenn. Oct. 5, 2010), adopted
2010 WL 4337823 (W.D. Tenn. Oct. 27, 2010).
In weighing these
statutory factors, the court may still consider the private- and
public-interest factors set forth in the pre-Section 1404(a)
case, Gulf Oil v. Gilbert, 330 U.S. 501, 508-09 (1947), but
courts are not burdened with “preconceived limitations derived
4
from the forum non conveniens doctrine.”
Norwood v.
Kirkpatrick, 349 U.S. 29, 31 (1955) (quoting All States Freight
v. Modarelli, 196 F.2d 1010, 1011 (3d Cir. 1952)) (internal
quotation marks omitted); Esperson, 2010 WL 4362794, at *5.
The
United States Court of Appeals for the Sixth Circuit has stated
that when deciding “a motion to transfer under § 1404(a), a
district court should consider the private interests of the
parties, including their convenience and the convenience of
potential witnesses, as well as other public-interest concerns,
such as systemic integrity and fairness, which come under the
rubric of ‘interests of justice.’”
Moore v. Rohm & Haas Co.,
446 F.3d 643, 647 n.1 (6th Cir. 2006).
Additionally, the “interest of justice” factor has been
interpreted broadly by courts, influenced by the individualized
circumstances of each case.
The United States Court of Appeals
for the Federal Circuit has set forth a non-exhaustive list of
pertinent public-interest factors:
The
public
interest
factors
include
(1)
the
administrative
difficulties
flowing
from
court
congestion; (2) the local interest in having localized
interests decided at home; (3) the familiarity of the
forum with the law that will govern the case; and (4)
the avoidance of unnecessary problems of conflicts of
laws or in the application of foreign law.
In re Acer Am. Corp., 626 F.3d 1252, 1254 (Fed. Cir. 2010); see
also In re Nintendo Co., Ltd., 589 F.3d 1194, 1198 (Fed. Cir.
2009) (finding the local-interest factor weighed heavily in
5
favor of transfer); Cincinnati Ins. Co. v. O’Leary Paint Co.,
676 F. Supp. 2d 623, 633 (W.D. Mich. 2009) (considering
additional factors such as the relative docket congestion of
each district).
Initially, B.E. argues that there is a strong presumption
in favor of its choice of forum, and its choice of forum should
not be disturbed unless the defendant carries its burden to
demonstrate that the balance of convenience strongly favors
transfer.
(ECF No. 32 at 4-6.)
B.E.’s argument is erroneously
derived from the more stringent forum-non-conveniens standard.
Compare Hunter Fan Co. v. Minka Lighting, Inc., No. 06–2108
M1/P, 2006 WL 1627746 (W.D. Tenn. June 12, 2006) (applying the
appropriate private- and public-interest factors but relying on
the forum-non-conveniens doctrine to accord strong deference to
the plaintiff’s choice of forum), with
OneStockDuq Holdings,
LLC v. Becton, Dickinson, & Co., No. 2:12–cv–03037–JPM–tmp, 2013
WL 1136726, at *3 (W.D. Tenn. Mar. 18, 2013), and Roberts
Metals, Inc. v. Florida Props. Mktg. Grp., Inc., 138 F.R.D. 89,
92-93 (N.D. Ohio 1991) (recognizing defendants need to make a
lesser showing to overcome plaintiff’s choice of forum under
§ 1404(a)), aff’d per curiam, 22 F.3d 1104 (6th Cir. 1994).
Although there is a strong presumption in favor of the
plaintiff’s choice of forum under the doctrine of forum non
conveniens, under § 1404(a), a plaintiff’s choice of forum may
6
be considered, but is entitled to less deference.
Discussing
the difference between the common-law doctrine of forum non
conveniens and the federal transfer-of-venue statute in Norwood,
the Supreme Court stated,
When Congress adopted § 1404(a), it intended to
do more than just codify the existing law on forum non
conveniens. . . . [W]e believe that Congress, by the
term “for the convenience of parties and witnesses, in
the interest of justice,” intended to permit courts to
grant
transfers
upon
a
lesser
showing
of
inconvenience.
This is not to say that the relevant
factors have changed or that the plaintiff’s choice of
forum is not to be considered, but only that the
discretion to be exercised is broader.
Norwood, 349 U.S. at 32; see also Lemon v. Druffel, 253 F.2d
680, 685 (6th Cir. 1958) (“The choice of the forum by the
petitioner is no longer as dominant a factor as it was prior to
the ruling in Norwood v. Kirkpatrick[.]”); Esperson, 2010 WL
4362794, at *5-6.
Defendant’s burden under § 1404(a) is to demonstrate that a
change of venue to the transferee district is warranted.
See
Eaton v. Meathe, No. 1:11-cv-178, 2011 WL 1898238, at *2 (W.D.
Mich. May 18, 2011); Amphion, Inc. v. Buckeye Elec. Co., 285 F.
Supp. 2d 943, 946 (E.D. Mich. 2003); Roberts Metals, Inc., 138
F.R.D. at 93.
“Merely shifting the inconvenience from one party
to another does not meet Defendant’s burden.”
McFadgon v. Fresh
Mkt., Inc., No. 05-2151-D/V, 2005 WL 3879037, at *2 (W.D. Tenn.
Oct. 21, 2005).
“[T]he movant must show that the forum to which
7
he desires to transfer the litigation is the more convenient one
vis a vis the Plaintiff’s initial choice.”
Roberts Metals,
Inc., 138 F.R.D. at 93 (quoting Mead Corp. v. Oscar J. Boldt
Constr. Co., 508 F. Supp. 193, 198 (S.D. Ohio 1981)) (internal
quotation marks omitted).
If the court determines that the
“balance between the plaintiff’s choice of forum and defendant’s
desired forum is even, the plaintiff’s choice of [forum] should
prevail.”
Stewart v. Am. Eagle Airlines, Inc., No. 3:10-00494,
2010 WL 4537039, at *2 (M.D. Tenn. Nov. 3, 2010).
III. ANALYSIS
Barnes & Noble asserts that B.E. could have brought this
action in the Northern District of California.
1 at 6.)
at 4.)
(See ECF No. 22-
B.E. does not dispute this assertion.
(See ECF No. 32
The Court agrees with the parties that B.E. could have
brought suit in the Northern District of California as personal
jurisdiction over Barnes & Noble exists in that district.
Therefore, the only issue remaining is whether the balance of
the statutory factors — the convenience to the witnesses, the
convenience to the parties, and the interest of justice — favors
transfer to the Northern District of California.
The Court will
address each statutory factor separately and balance these
factors to determine whether transfer to the Northern District
of California is proper pursuant to § 1404(a).
8
A.
Convenience of the Witnesses
When asserting that a transferee district is more
convenient for witnesses, a party “must produce evidence
regarding the precise details of the inconvenience” of the forum
chosen by the plaintiff.
Esperson, 2010 WL 4362794, at *8.
To
satisfy its burden, the movant must do “more than simply
assert[] that another forum would be more appropriate for the
witnesses; he must show that the witnesses will not attend or
will be severely inconvenienced if the case proceeds in the
forum district.”
at 93).
Id. (quoting Roberts Metals, Inc., 138 F.R.D.
Further, “[t]o sustain a finding on [this factor] . . .
the party asserting witness inconvenience has the burden to
proffer, by affidavit or otherwise, sufficient details
respecting the witnesses and their potential testimony to enable
a court to assess the materiality of evidence and the degree of
inconvenience.”
Eaton v. Meathe, No. 1:11-cv-178, 2011 WL
1898238, at *3 (W.D. Mich. May 18, 2011) (quoting Rinks v.
Hocking, 1:10-CV-1102, 2011 WL 691242, at *3 (W.D. Mich. Feb.
16, 2011)) (internal quotation marks omitted).
It is the
“materiality and importance of the testimony of prospective
witnesses, and not merely the number of witnesses,” that is
crucial to this inquiry.
Rinks, 2011 WL 691242, at *3.
Barnes & Noble contends that witness convenience favors
transfer to the Northern District of California.
9
(ECF No. 37 at
7-8.)
To support this contention, Barnes & Noble asserts that a
majority of the witnesses on which it intends to rely are
located in that district.
These witnesses include Barnes &
Noble employees located at its Palo Alto, California,
facilities; employees of third-party companies such as Netflix,
Inc., and Hulu, LLC, both of which are non-parties to the
instant litigation that B.E. has indicated produce “programs,
features, firmware, or applications” for use on the allegedly
infringing Barnes & Noble products (ECF No. 39 at 3); and thirdparty witnesses related to prior art.
(ECF No. 28-1 at 7-8; ECF
No. 39 at 3-5.)
In response, B.E. argues that “transfer to the Northern
District of California would be equally inconvenient to B.E.’s
witnesses, none of whom is located in the Northern District of
California.”
(ECF No. 32 at 7.)
B.E. identifies Hoyle, the
named-inventor of the patent-in-suit and founder and CEO of
B.E., as its key witness who is located in the Western District
of Tennessee.
(Id. at 5, 7-8.)
Because the convenience of party and non-party witnesses is
given different weight, the Court will analyze the witnesses
separately.
See Azarm v. $1.00 Stores Servs., Inc., No. 3:08-
1220, 2009 WL 1588668, at *4 (M.D. Tenn. June 5, 2009) (“[T]he
convenience of potential non-party witnesses, who are not
subject to the control of the parties, is a particularly weighty
10
consideration, because it is generally presumed that party
witnesses will appear voluntarily in either jurisdiction, but
non-party witnesses, with no vested stake in the litigation, may
not.”).
1.
Party Witnesses
Barnes & Noble asserts that its “witnesses work and/or
reside primarily in the Northern District of California, and
none are located in Tennessee.”
(ECF No. 28-1 at 7-8.)
Barnes
& Noble asserts that the accused products – the Nook product
line – were designed and developed in the transferee district.
(Id. at 8.)
Additionally, Barnes & Noble’s office located in
the Northern District of California “houses more than 400
employees, including the employees who are most knowledgeable in
the company regarding the design, development, and operation of
the accused products.”
(Id.)
In its Reply, Barnes & Noble
defends its general identification of potential employeewitnesses by stating that the testimony of any employee involved
with the Nook product line, “no matter which individual
employees are ultimately identified, is plainly relevant to the
issues in this case.”
(ECF No. 39 at 5.)
Barnes & Noble also
notes that “there are likely some witnesses . . . relevant to
other issues, such as the sales and marketing of the accused
NOOK® products, that may be located outside the Northern District
of California.”
(ECF No. 28-1 at 3 n.3.)
11
Barnes & Noble does not provide any evidence showing that
its employees will be unwilling to testify in the Western
District of Tennessee if asked to do so, but notes generally
that travel to the transferor district to testify would “impose
a significant inconvenience” for its witnesses, and that their
absence from Barnes & Noble’s Northern California office would
“adversely affect” its operations.
(ECF No. 28-1 at 8.)
Esperson, 2010 WL 4362794, at *8.
See
Courts have noted that
“normally a corporation is able to make its employees available
to testify when needed.”
Clark v. Dollar Gen. Corp., No. 3-00-
0729, 2001 U.S. Dist. LEXIS 25975, at *9 (M.D. Tenn. Mar. 6,
2001); see also Zimmer Enters. v. Atlandia Imps., Inc., 478 F.
Supp. 2d 983, 991 (S.D. Ohio Mar. 14, 2007) (finding that the
convenience of witnesses who are employees “will not ordinarily
be considered, or at least, that the convenience of such
employees will not generally be given the same consideration as
is given to other witnesses”).
Accordingly, it appears that
Barnes & Noble’s employees will be able to attend absent any
evidence to the contrary.
Therefore, regarding its employees, Barnes & Noble does not
satisfy its burden.
Barnes & Noble argues that due to the
distance between Memphis and the Northern District of
California, approximately 1800 miles, travel to Memphis “would
impose a significant inconvenience for [its] witnesses.”
12
(ECF
No. 28-1 at 8.)
Yet, the same is true for B.E.’s witnesses,
which B.E. asserts do not reside in the Northern District of
California.
(ECF No. 32 at 7.)
In the instant case, the Court
agrees that Barnes & Noble’s employees related to the
development and operation of its Nook products are located in
the transferee district, and that that their testimony is likely
material.
Barnes & Noble, however, has only provided a general
statement about the necessity of those employees to its business
and has not indicated how many employees it would be inclined to
call as potential witnesses.
Additionally, Barnes & Noble has
indicated that other employee-witnesses not located in the
transferee district may be called as witnesses.
As a result,
the Court cannot assess the degree to which Barnes & Noble’s
business would be disrupted compared to the disruption B.E. will
endure due to its CEO’s absence should the case be transferred.
Accordingly, the Court finds transfer would only shift the
inconvenience to B.E.
See McFadgon, 2005 WL 3879037, at *2.
Therefore, because § 1404(a) provides for transfer “to a
more convenient forum, not to a forum likely to prove equally
convenient or inconvenient,” distance of travel for employee
witnesses does not weigh in favor of transfer.
Hunter Fan, 2006
WL 1627746, at *2 (citing Van Dusen v. Barrack, 376 U.S. 612,
645-46 (1964)).
13
Barnes & Noble further argues that because it intends to
call employee-witnesses located in the transferee district and
because B.E. only identified one witness, Hoyle, this factor
weighs in favor of transfer.
(See ECF No. 39 at 3-4.)
While
B.E. did not specifically identify any witnesses beyond Hoyle,
however, B.E. does not have the burden to do so.
Despite B.E.
not identifying any individuals beyond Hoyle, Barnes & Noble’s
identification of some 400 employees “knowledgeable of the
design, development, and operation of the NOOK® products” as
material witnesses does not satisfy its burden on this factor.
(Gilbert Decl., ECF No. 28-2, ¶¶ 3.)
A simple numerical
advantage is insufficient on the issues raised by a motion to
transfer.
Moreover, B.E. argues that “[i]t is likely that Barnes &
Noble’s California-based employees will be deposed in California
where B.E.’s lead counsel is based.”
(ECF No. 32 at 10.)
This
further indicates that the witness-convenience factor does not
weigh in favor of transfer.
See Hunter Fan, 2006 WL 1627746, at
*2 (finding relevant that the plaintiff planned to take
depositions of the defendant’s witnesses in California in
determining that the witness convenience factor did not favor
transfer).
14
2.
Non-Party Witnesses
While convenience to party witnesses is an important
consideration, “it is the convenience of non-party witnesses,
rather than employee witnesses . . . that is the more important
factor and is accorded greater weight.”
Steelcase Inc. v. Smart
Techs., 336 F. Supp. 2d 714, 721 (W.D. Mich. Mar. 5, 2004)
(citation omitted) (internal quotation marks omitted).
Barnes &
Noble, referencing arguments related to prior-art witnesses made
by Google, Inc. (see No. 2:12-cv-2830-JPM-tmp, ECF No. 22-1, at
5-6), and Apple, Inc. (see No. 2:12-cv-2831-JPM-tmp, ECF No. 221, at 8-9), asserts that there are non-party witnesses who have
knowledge about prior art related to the patent-in-suit.
(ECF
No. 28-1 at 4.)
Additionally, Barnes & Noble argues that B.E., in its
infringement contentions filed after the Motion to Transfer, has
implicated “Barnes & Noble products and/or services with
programs, features, firmware, or applications from two thirdparty companies, Netflix and Hulu, both of which are
headquartered in California.”
(ECF No. 39 at 3.)
As a result,
potential witnesses from these third parties are likely located
within the transferee district, specifically, or within the
state of California, generally.
(Id. at 4.)
Barnes & Noble
claims that it will not be able to compel these witnesses to
testify at trial if the case remains in Tennessee, but will be
15
able to compel the witnesses to testify at trial, whether they
reside within the transferee district or within the state of
California, if the case is transferred to the Northern District
of California.
(Id. at 4 n.1 (citing Brackett v. Hilton Hotels
Corp., 619 F. Supp. 2d 810, 821 (N.D. Cal. 2008) (“The
California district courts have the power to subpoena witnesses
throughout the state pursuant to [Federal Rule of Civil
Procedure] 45(b)(2)(C) . . . .”)).)
B.E. argues that the convenience of third-party witnesses
is not entitled to great weight in the instant case because
Barnes & Noble has made “no showing whatsoever regarding the
location, availability, or convenience of third party witnesses
with knowledge of potential prior art.”
(ECF No. 32 at 10.)
B.E. contends that Barnes & Noble has only relied on the
arguments of two other defendants – Google, Inc., and Apple,
Inc. – and has neither identified any prior-art witnesses
itself, nor made a “showing that the third party testimony will
be material or important.”
(Id. at 11.)
Finally, B.E. argues
that Barnes & Noble has not established the “current locations”
of any potential prior-art witnesses to the extent that
compulsory process would be available in the transferee or
transferor districts.
(Id. at 11-12.)
The availability of compulsory process for unwilling
witnesses is a consideration closely related to the convenience16
of-witnesses factor and the costs of procuring the witness, and
therefore is an important consideration for the Court.
See,
e.g., In re Acer, 626 F.3d at 1255; Rinks, 2011 WL 691242, at
*4.
Whether this factor should be given considerable weight
depends on the materiality of the testimony to the resolution of
the case.
Rinks, 2011 WL 691242, at *4.
A federal court in the
Northern District of California would be able to compel the nonparty witnesses living in the state of California to testify at
trial.
See Fed.
R. Civ. P. 45(b)(2).
In contrast, the non-
party witnesses would not be subject to the subpoena power in
this district, see Fed. R. Civ. P 45(c)(3)(A)(ii), but would be
available for deposition in the Northern District of California
if unwilling to testify in this district.
Therefore, the
testimony of such witnesses potentially would “not be live and
therefore could be less persuasive.”
Rinks, 2011 WL 691242, at
*4.
Barnes & Noble, however, has not (1) indicated the number
of non-party witnesses it may require for trial; (2) indicated
whether it intends to call any of the prior-art witnesses
identified in Google, Inc.’s Motion to Transfer (see No. 2:12cv-2830-JPM-tmp, ECF No. 22-1, at 5-6); (3) disclosed the
particulars of the testimony of the potential prior-art
witnesses or the third-party witnesses from Netflix, Inc., and
Hulu, LLC; or (4) indicated why depositions of prior-art
17
witnesses or third-party witnesses would be inadequate and live
testimony required.
To the extent these non-party witnesses’
testimony may be presented by deposition, witness inconvenience
would not be an issue.
Barnes & Noble’s general statements are
not sufficient to allow the Court to determine whether live
testimony of Barnes & Noble’s non-party witnesses is necessary.
Further, Barnes & Noble does not state whether it is aware that
any of the non-party witnesses would be unwilling to testify in
this district if asked to do so.
As a result, this factor does
not weigh in favor of transfer.
B.
Convenience of the Parties
Barnes & Noble argues that the Northern District of
California is “clearly a more convenient venue for this
litigation.”
(ECF No. 22-1 at 2.)
While Barnes & Noble
organizes its arguments somewhat differently than the Court, the
Court finds the considerations relevant to the convenience-ofthe-parties factor are the location of the sources of proof and
the parties’ financial hardships due to litigation in the chosen
forum.
1.
Location of Sources of Proof
Barnes & Noble argues that “the potentially relevant Barnes
& Noble documents relating to the accused NOOK® products” and
“the physical and documentary evidence relevant to at least the
critical issue of alleged infringement are located in the
18
Northern District of California.”
(ECF No. 28-1 at 8.)
Barnes
& Noble contends that the volume of these “potentially relevant
documents . . . far exceeds the volume of B.E.’s potentially
relevant documents maintained in Tennessee.”
(ECF No. 39 at 4.)
B.E. argues that, because its CEO resides in the Western
District of Tennessee, its corporate documents and records,
“including documents demonstrating the conception and reduction
to practice of [the patent-in-suit],” are located in the Western
District.
(ECF No. 32 at 5, 12.)
B.E. notes that while Barnes
& Noble’s sources of proof are located in the Northern District
of California, B.E.’s own sources of proof are located in
Tennessee and have been maintained there for years.
12.)
(Id. at
B.E. also argues that Barnes & Noble has indicated that
some relevant documents – namely those related to sales and
marketing – are not located within the transferee district.
(Id. (citing ECF No. 28-1 at 3 n.3).)
B.E. also contends that
“the location of relevant documentary evidence is increasingly
less important in deciding motions to transfer,” and that
because documents can be exchanged electronically, the weight
given this factor should be minimal.
(Id. at 12-13.)
B.E.
finally argues that this factor does not weigh in favor of
transfer because “it can be expected that Barnes & Noble will
eventually produce its documents to B.E.’s lead counsel in
California, not to B.E. in Tennessee.”
19
(Id. at 13.)
As an initial matter, the Court disagrees with B.E.’s
contention that advances in electronic document transfer reduce
the importance of the location-of-sources-of-proof factor.
This
notion has been expressly rejected by the Federal Circuit.
See,
e.g., In re Link_A_Media Devices Corp., 662 F.3d 1221, 1224
(Fed. Cir. 2011) (reversing a district court that did not
consider the factor, stating, “While advances in technology may
alter the weight given to these factors, it is improper to
ignore them entirely”); In re Genentech, Inc., 566 F.3d 1338,
1345-46 (Fed. Cir. 2009) (finding clear error where a district
court “minimized the inconvenience of requiring the petitioners
to transport their documents by noting that ‘[t]he notion that
the physical location of some relevant documents should play a
substantial role in the venue analysis is somewhat antiquated in
the era of electronic storage and transmission’” (quoting
Sanofi-Aentis Deutschland GmbH v. Genentech, Inc., 607 F. Supp.
2d 769, 777 (E.D. Tex. 2009))).
The Court agrees that it is likely that the sheer volume of
documents Barnes & Noble has in its possession outnumbers the
patent-related documents in B.E.’s possession, but the Court
disagrees that this is enough to tip the balance in favor of
transfer.
The Court finds that both parties maintain some
documents in their respective districts; that both sets of
documents will be integral to the proceedings; and that Barnes &
20
Noble will be expected to serve its documents to B.E.’s counsel
in Northern California, not in the Western District of
Tennessee.
Barnes and Noble’s reliance on L&P Property
Management Co. v. JTMD, LLC, No. 06-13311, 2007 WL 295027 (E.D.
Mich. Jan. 29, 2007), is misplaced.
(See ECF No. 28-1 at 8.)
In L&P Property Management, the court found that transfer was
appropriate as all of the movant’s relevant documents were
located in the transferee district and there were no relevant
documents in the transferor district.
2007 WL 295027, at *4.
See L&P Prop. Mgmt. Co.,
In the instant case, Barnes & Noble
indicated that some of its relevant documents are likely located
outside the transferee district, and B.E. has shown that
relevant documents are located in Tennessee.
Taken together,
the aforementioned facts indicate that as to the location of the
sources of proof, the Northern District of California may only
be a somewhat more convenient venue for the parties to the
instant case.
This factor, however, is not sufficient, by
itself, to require transfer.
2.
Financial Hardships Attendant to Litigating in
the Chosen Forum
Barnes & Noble argues that its witnesses “work and/or
reside primarily in the Northern District of California, and
none are located in Tennessee.”
(ECF No. 28-1 at 7-8.)
As a
result, Barnes & Noble contends that travel to Tennessee would
21
“impose a significant inconvenience for [its] witnesses,” and as
the likely trial witnesses are “the most knowledgeable” about
the accused products, their absence “would adversely affect
Barnes & Noble’s operations.”
(Id. at 8.)
B.E. states that it “would face a financial burden by
having to litigate in the Northern District of California.”
(ECF No. 32 at 14.)
B.E.’s CEO Hoyle states that “B.E. will
incur expenses it will not incur if the case remains in
Memphis.”
(Hoyle Decl., ECF No. 32-1, ¶ 9.)
B.E. also states
that “[i]t is reasonable to require companies with the wealth
and size of Barnes & Noble to litigate in jurisdictions in which
they regularly conduct business.”
(ECF No. 32 at 7.)
The Court has considered “the relative ability of litigants
to bear expenses in any particular forum” among the factors in a
§ 1404(a) case.
Ellipsis, Inc. v. Colorworks, Inc., 329 F.
Supp. 2d 962, 970 (W.D. Tenn. 2004).
In the instant case,
B.E.’s CEO stated that the company will incur additional
expenses, but it has not shown with any specificity how
detrimental those expenses would be to the company.
Further,
while Hoyle stated that his personal financial status would be
adversely affected by litigating in the Northern District of
California, he did not state why or how his personal finances
would impact B.E., the party to the instant case.
Decl., ECF No. 30-1, ¶ 9.)
(See Hoyle
B.E. has shown that Barnes & Noble
22
has the ability to bear expenses in this forum (see ECF No. 323), but the Court does not find this to be a dispositive factor
in denying Barnes & Noble’s Motion.
But see Siteworks
Solutions, LLC v. Oracle Corp., No. 08-2130-A/P, 2008 WL
4415075, at *4 (W.D. Tenn. Sept. 22, 2008) (finding the relative
financial strengths of the parties did not weigh in favor of
transferring the case, as the party opposed to transfer showed
it “ha[d] no net worth, very little revenue, no gross profits,
no assets, and [would have to] borrow from its owners in order
to pay the litigation expenses”).
The Court finds that the
evidence presented is insufficient to make a showing that B.E.
or Barnes & Noble will be adversely affected by litigating in
either forum.
The paramount consideration remains whether the
Northern District of California is more convenient to the
parties than B.E.’s chosen forum.
With respect to convenience, the Court finds this factor
does not weigh in favor of transfer.
While Barnes & Noble has
made a showing that its business would be disrupted by the
absence of its proposed witnesses, B.E. has made an equal
showing that its business would be disrupted in having to
prosecute the instant case in California.
Barnes & Noble has
shown that the Northern District of California would be a more
convenient forum for it, but it has not shown that the Northern
District of California is a more convenient forum for both
23
parties.
As a result, the hardship to Barnes & Noble does not
indicate transfer is more convenient.
C.
Interests of Justice
Barnes & Noble argues that transfer to the Northern
District of California is appropriate based on additional
considerations that pertain to the interests-of-justice factor.
(ECF No. 28-1 at 9-11; ECF No. 39 at 8-9.)
These considerations
include the “public-interest concerns, such as systemic
integrity and fairness,” of the proceedings.
F.3d at 647 n.1.
See Moore, 446
In the instant case, the Court will consider
the relative trial efficiency of the transferee and transferor
districts and the localized interest in the litigation.
1.
Trial Efficiency
Barnes & Noble argues that while the Western District of
Tennessee has a shorter median time from filing to trial, “the
average docket of pending cases per Judge [is] actually higher”
in the Western District of Tennessee than in the Northern
District of California.
(ECF No. 39 at 9.)
Barnes & Noble
admits, however, that in general this factor is neutral.
(ECF
No. 28-1 at 10.)
B.E. argues that transfer to the Northern District of
California “would likely delay trial of this case by at least
one year.”
(ECF No. 32 at 14.)
B.E. cites the 2011 Federal
Court Management Statistics for both districts to illustrate
24
that the median time from filing to trial in the Northern
District of California was 35.4 months, while the median time
from filing to trial in the Western District of Tennessee was
20.8 months.
(Id. (citing ECF No. 32-4).)
The Court agrees with Barnes & Noble and finds this factor
neutral to its determination of whether the Northern District of
California is the more convenient forum.
2.
Local Interest
Barnes & Noble argues that the Northern District of
California has strong local ties to the instant case because
Barnes & Noble’s Nook operations are located there, the majority
of potential witnesses are located there, the sources of proof
are located there, and the alleged infringement took place
there.
(ECF No. 28-1 at 9; ECF No. 39 at 8-9.)
Barnes & Noble
also asserts that B.E.’s ties to the Western District of
Tennessee should be discounted because they are “very weak” and
possibly manufactured for this litigation.
(ECF No. 39 at 2-3,
9; see ECF No. 28-1 at 4)
B.E. argues that the Western District of Tennessee has a
substantial local interest in the instant case because the
holder of the patent-in-suit is located here.
15.)
(ECF No. 32 at
B.E. contends that the Western District of Tennessee has a
“local interest in deciding whether one of its resident’s patent
rights have been violated and [in] awarding an appropriate
25
amount of damages.”
(ECF No. 32 at 15.)
B.E. also asserts that
its ties to Tennessee are not “recent, ephemeral, or
manufactured for the purposes of litigation.”
(Id.)
Hoyle
stated that he has resided in the Western District of Tennessee
since 2006, that Memphis is B.E’s principal place of business,
and that the sources of proof pertinent to the instant case are
located in the district.
(Hoyle Decl., ECF No. 30-1, ¶¶ 2-4, 7-
8.)
The Court finds that this factor does not weigh in favor of
transfer.
While Barnes & Noble has strong local ties to the
Northern District of California, the Court finds that B.E.’s
connection to the Western District of Tennessee was not
manufactured for the purposes of litigation.
B.E.’s founder and
CEO, who is also the holder of the patent-in-suit, has resided
in the district for seven years.
B.E.’s connections, therefore,
are neither “recent” nor “ephemeral.”
As a result, Barnes &
Noble has not demonstrated that the Northern District of
California’s local interest outweighs that of the Western
District of Tennessee.
IV.
CONCLUSION
For the foregoing reasons, the Court finds that, in
balancing the statutory factors, Barnes & Noble has not
demonstrated that the Northern District of California is a more
26
convenient forum than the Western District of Tennessee.
Therefore, Barnes & Noble’s Motion to Transfer Venue is DENIED.
Accordingly, the Court hereby LIFTS the February 14, 2013,
stay of all proceedings.
(ECF No. 41.)
Regarding Plaintiff’s
Motion to Dismiss and Motion to Strike, filed January 25, 2013
(ECF No. 33), Defendant shall have eleven (11) days from the
date of entry of this Order, up to and including July 23, 2013,
to file its Response.
IT IS SO ORDERED this 12th day of July, 2013.
/s/ Jon P. McCalla
CHIEF U.S. DISTRICT JUDGE
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