Mears Technologies, Inc. v. Finisar Corporation

Filing 57

MEMORANDUM AND OPINION denying 11 Opposed SEALED MOTION TO TRANSFER VENUE TO THE NORTHERN DISTRICT OF CALIFORNIA filed by Finisar Corporation. Signed by Judge Rodney Gilstrap on 04/24/2014. (nkl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION

MEARS TECHNOLOGIES, INC.,
Plaintif,
v.
FINISAR CORPORATION,
Defendant.

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CASE NO. 2:13-cv-376-JRG

MEMORANDUM OPINION AND ORDER

I.

INTRODUCTION
Pending before the Court is Finisar Corporation’s (“Finisar’s”) Motion to Transfer Venue

(Dkt. No. 11). Finisar contends that the Northern District of California (“NDCA”) is a more
convenient forum than the Eastern District of Texas (“EDTX”). The Court, having considered
the motion and related briefing, DENIES Finisar’s motion because Finisar has failed to
demonstrate that the transferee venue is clearly more convenient than the EDTX.
II.

BACKGROUND
Mears Technologies, Inc. (“Mears”) is a Delaware Corporation with a principal place of

business in Newton, Massachusetts. It filed suit against Finisar on May 6, 2013, alleging that
Finisar’s WaveShaper wavelength selective switch (WSS) products infringe United Patent No.
6,141,361 (“the ’361 Patent”).
Finisar is a Delaware corporation with its principal place of business in Sunnyvale,
California and with established offices in Texas, Pennsylvania, and Australia. Finisar maintains

a design and manufacturing facility in Allen, Texas, within the EDTX. However, Finisar argues
that the Allen facility is not used to design, manufacture or sell the accused products. Finisar
sells the accused products to various customers across the US, one of which is Nu Horizons
Electronics Corp (“Nu Horizons”). Nu Horizons has twelve domestic locations, including one in
Plano, Texas, also within the EDTX.
III.

LEGAL STANDARDS
Change of venue is governed by 28 U.S.C § 1404(a). Under § 1404(a), “[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 court or division where it might have been brought.” 28 U.S.C. §
1404(a). However, a motion to transfer venue should only be granted upon a showing that the
transferee venue is “clearly more convenient” than the venue chosen by the plaintiff. In re
Nintendo Co., 589 F.3d 1194, 1197 (Fed. Cir. 2009); In re Genentech, Inc., 566 F.3d 1388, 1342
(Fed. Cir. 2009); In re TS Tech USA Corp., 551 F.3d 1315, 1319 (Fed. Cir. 2008); In re
Volkswagen of America, Inc. (Volkswagen II), 545 F.3d 304, 315 (5th Cir. 2008). District courts
have “broad discretion in deciding whether to order a transfer.” Balawajder v. Scott, 160 F.3d
1066, 1067 (5th Cir. 1998) (quoting Caldwell v. Palmetto State Sav. Bank, 811 F.2d 916, 919
(5th Cir. 1987)).
The initial question in applying the provisions of § 1404(a) is whether the suit could have
originally been brought in the proposed transferee district. In re Volkswagen AG (Volkswagen I),
371 F.3d 201, 203 (5th Cir. 2004). If the transferee district is a proper venue, then the court must
weigh the relative public and private factors of the current venue against the transferee venue.
Id. In making such a convenience determination, the Court considers several private and public
interest factors, none of which are given dispositive weight. Id. The private interest factors

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include: “(1) the relative ease of access to sources of proof; (2) the availability of compulsory
process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses;
and (4) all other practical problems that make trial of a case easy, expeditious and inexpensive.”
Nintendo, 589 F.3d at 1198; Genentech, 566 F.3d at 1342; TS Tech., 551 F.3d at 1319;
Volkswagen II, 545 F.3d at 315. 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 conflict of laws [in] the application of foreign law.”
Nintendo, 589 F.3d at 1198; Genentech, 566 F.3d at 1342; TS Tech., 551 F.3d at 1319;
Volkswagen II, 545 F.3d at 315.
IV.

ANALYSIS
A.

Proper Venue

The parties do not dispute, and the Court expressly finds, that this case could have been
brought in the Northern District of California. The threshold inquiry has therefore been met.
C.

Private Interest Factors
i.

Relative Ease of Access to Sources of Proof

Despite technological advances in transportation of electronic documents, physical
accessibility to sources of proof continues to be weighed as a private interest factor. See
Volkswagen II, 545 F.3d at 316; TS Tech, 551 F.3d at 1321. Indeed, the Federal Circuit has
indicated that access to an alleged infringer’s proof is important to venue transfer analyses in
patent infringement cases. See Genentech, 566 F.3d at 1345.
Finisar claims that the liquid crystal on silicon (“LCoS”) technology accused on
infringing the ’361 Patent was originally acquired by Finisar from MicroDisplay Corporation, a

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now-defunct company located in Fremont, California. Finisar argues that it expects to call two
former employees of MicroDisplay, and that “to the best of Finisar’s knowledge” such witnesses
are located in NDCA. Finisar further contends that the case will involve its new generation
LCoS components, currently under development in Sunnyvale, California. However, Finisar
admits that it conducts work on the accused products in multiple locations, including: Fremont
and Sunnyvale, California; Horsham Pennsylvania; Sydney, Australia; Tel-Aviv, Israel; and
Shanghai, China. For instance, Finisar admits that manufacture and assembly of the accused
products takes place in Australia and China. Accordingly, the Court is persuaded that Finisar’s
relevant documentary evidence is located in multiple locations across the globe.
Under § 1404(a), the movant bears the burden to clearly demonstrate that a transfer is
“clearly more convenient” than the venue chosen by the plaintiff. In re Nintendo, 589 F.3d at
1197, 1200. Based on the evidence presented, there are certainly some sources of proof for the
development of the LCoS technology in Finisar’s California offices. On the other hand, the
sources of proof are scattered across the United States and abroad. Finisar has failed to identify
which any real particularity which locations will provide the actual sources of proof in this case.
Accordingly, the Court finds that this factor is neutral.
ii.

Availability of Compulsory Process

The second private interest factor is the availability of compulsory process to secure the
attendance of non-party witnesses.

A venue that has “absolute subpoena power for both

deposition and trial” is favored over one that does not. Volkswagen II, 545 F.3d at 316. Rule 45
of the Federal Rules of Civil Procedure limits the court’s subpoena power by protecting nonparty witnesses who work or reside more than 100 miles from the courthouse. Id. Some of
Finisar’s relevant witnesses are concentrated NDCA, but Finisar has also identified potential

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witnesses from Pennsylvania and Australia.

Mears’s relevant witnesses are located in

Massachusetts. Neither the NDCA nor EDTX has absolute subpoena power over all the relevant
non-party or party witnesses.
With respect to third-party witnesses, Finisar has identified two ex-employees of
MicroDisplay, Jean-Jacques Drolet and Carlin Vieri, who are within NDCA’s subpoena powers.1
However, Finisar offers no explanation of what relevant and material information is to be
obtained from said witnesses, beyond a declaration from a Finisar employee stating: “I
understand that both Drs. Drolet and Vieri could testify as to the development and operation of
the Accused Technology…” Declaration of John Clark (“Clark Declaration”), Dkt. No. 11-1, at
¶ 13. However, Finisar further declares that “[f]or close to the past four years, Finisar has
developed new, higher resolution and density components based on the Accused technology.”
Id. at 15.
This type of nebulous speculation that some third-party witness “could” offer testimony
fails to establish with necessary specificity how, if at all, compulsory process would affect this
case. Moreover, Finisar’s sworn statements indicate an intimate familiarity with the technology
at issue, and establish that Finisar’s witnesses—not third-party witnesses—will provide
testimony material to the issues before the Court, namely infringement, validity and willfulness.
Id. at ¶¶ 15, 16. Ultimately, Finisar has not shown that the availability of compulsory process
weighs in favor of transfer to the NDCA; this factor is neutral.
iii.

Cost of Attendance for Willing Witnesses

The third private interest factor is the cost of attendance for willing witnesses. “The
convenience of the witnesses is probably the single most important factor in a transfer analysis.”
In re Genentech, Inc., 556 F.3d at 1342. The Court in Volkswagen I explained:
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Finisar has also identified Sergei Yakovenko, but has failed to explain how his testimony is relevant to this case.

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[T]he factor of inconvenience to witnesses increases in direct relationship to the
additional distance to be traveled. Additional distance 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.
371 F.3d at 205. Typically, “it is the convenience of non-party witnesses…that is the more
important factor and is accorded greater weight in a transfer of venue analysis.” Mohamed v.
Mazda Motor Corp., 90 F.Supp.2d 757, 775 (E.D. Tex. 2000); see also id. at 204 (requiring
courts to “contemplate consideration of the parties and witnesses”); Fujitsu Ltd. v. Tellabs, Inc.,
639 F. Supp. 2d 761, 765-66 (E.D. Tex. 2009).
However, Finisar has failed to show that the identified non-party witnesses will provide
relevant and material testimony. Instead, Finisar has relied on a declaration from its employee,
containing vague references to the potential non-party witnesses’ knowledge concerning the
operation of the accused technology. Clark Declaration, Dkt. No. 11-1, at ¶ 13. The same sworn
statement indicates that said non-party testimony is likely to be duplicative of testimony from
Finisar’s employees.

Id. at ¶¶ 15, 16.

Having considered the briefing and supporting

declarations, the Court is persuaded that it is the relative convenience of Finisar’s witnesses that
is the true driver of the present motion to transfer.
With respect to party witnesses, Finisar has identified both employees from its Sunnyvale
offices as well as employees from its locations in Pennsylvania and Australia. Mears’s willing
witnesses reside in Massachusetts.

Foreign and out-of-state witnesses will be equally

inconvenienced by traveling to the NDCA as they will by traveling to the EDTX. Furthermore,
once such travel occurs, the other costs incurred by foreign and out-of-state witnesses (e.g. food
and lodging) are substantially less expensive in Marshall, Texas as opposed to San Francisco,
California. See Portal Techs. LLC v. Yahoo! Inc., No. 2:11-cv-440, 2012 U.S. Dist. LEXIS

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110495 at *9 (E.D. Tex. August 7, 2012). Although Finisar’s California witnesses may be
inconvenienced by traveling to the EDTX, the Court is persuaded that this factor weighs only
slightly in favor of transfer.
iv.

Other Practical Problems

Practical problems include those that are rationally based on judicial economy. Eolas
Tech., Inc. v. Adobe Sys., Inc., 2010 WL 3835762, at *6 (denying a request to sever defendants),
aff’d In re Google, Inc., 412 Fed. Appx. 295 (Fed. Cir. 2011); see also Volkswagen II, 566 F.3d
1349, 1351 (Fed. Cir. 2009) (quoting Continental Grain Co. v. The FBL-585, 364 U.S. 19, 26
(1960) (“[T]he existence of multiple lawsuits involving the same issues is a paramount
consideration when determining whether a transfer is in the interest of justice … [T]o permit a
situation in which two cases involving precisely the same issues are simultaneously pending in
different District Court leads to the wastefulness of time, energy and money that § 1404 was
designed to prevent.”)).
The Court does not find any practical problems that would justify transfer to the NDCA.
To the contrary, this Court currently presides over another patent case against Finisar involving
similar accused technology. The Court’s familiarity with the technology at issue allows it to best
preside over this action without “the wastefulness of time, energy and money that § 1404 was
designed to prevent”.

Volkswagen II, 566 F.3d at 1351 (internal quotations and citations

omitted). Accordingly, this factor weighs against transfer.
D.

Public Interest Factors

Of the four public interest factors recited above, the parties dispute only two: court
congestion and local interest.
i.

Court Congestion

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In its § 1404(a) analysis, the court may consider how quickly a case will come to trial and
be resolved. Genentech, 566 F.3d at 1347. However, where “several relevant factors weigh in
favor of [or against] transfer and others are neutral, the speed of the transferee district court
should not alone outweigh all of the other factors.” Id. Finisar argues that the time to trial
comparison between the EDTX and NDCA is “speculative,” and should be found to be neutral in
this venue analysis. The Court agrees.
ii.

Local interest in having localized interests decided at home

The Court must also consider local interest in the litigation because “[j]ury duty is a
burden that ought not to be imposed upon the people of a community which has no relation to the
litigation.” Volkswagen I, 371 F.3d at 206 (5th Cir. 2004). Interests that “could apply virtually
to any judicial district or division in the United States,” such as the nationwide sale of infringing
products, are disregarded in favor of particularized local interests. Volkswagen II, 545 F.3d at
318; In re TS Tech, 551 F.3d at 1321.
Finisar contends that the NDCA has a greater localized interest in this case than the
EDTX because Finisar is based in Sunnyvale, California. However, while the concentration of
Finisar’s activities may take place in the NDCA, significant acts, including the manufacture of
the accused products, occur outside of California. Moreover, Finisar maintains a substantial
presence in the EDTX through its facilities in Allen, Texas. Accordingly both the NDCA and
EDTX have an interest in the resolution of this case, and this factor is neutral.
VI.

CONCLUSION

A motion to transfer venue should only be granted upon a showing that the transferee
venue is “clearly more convenient” than the venue chosen by the plaintiff. In re Nintendo Co.,
589 F.3d at 1197; In re Genentech, Inc., 566 F.3d at 1342 (Fed. Cir. 2009). After weighing the

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evidence as a whole, the Court finds that this is not such a situation. Only one factor, the ease of
access for potential witnesses, weighs slightly in favor of transfer. However, the Court is
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persuaded that the practical realities of this case and considerations of judicial economy weigh
substantially against transfer. The remaining factors are neutral and on balance, Finisar has
fallen short of meeting its burden to show that the NDCA would be a clearly more convenient
forum than the EDTX. Accordingly, Finisar’s Motion to Transfer Venue (Dkt. No. 11) is
DENIED.

SIGNED this 19th day of December, 2011.
So ORDERED and SIGNED this 24th day of April, 2014.

____________________________________
RODNEY GILSTRAP
UNITED STATES DISTRICT JUDGE

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