Godo Kaisha IP Bridge 1 v. Broadcom Limited et al
MEMORANDUM ORDER re 64 SEALED MOTION (Defendants' Motion to Transfer Venue Pursuant to 28 U.S.C. Section 1404(a)) filed by Broadcom Limited, Avago Technologies, Ltd., LSI Corporation, Avago Technologies U.S., Inc., Broadcom Corporation.. Signed by Magistrate Judge Roy S. Payne on 2/27/2017. (nkl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
GODO KAISHA IP BRIDGE 1
BROADCOM LIMITED, ET AL.
Case No. 2:16-CV-0134-JRG-RSP
Before the Court is Defendants Broadcom Ltd., Broadcom Corp., Avago Technologies
Ltd., Avago Technologies U.S. Inc., and LSI Corporation (“Defendants”)’s Motion to Transfer
Venue Pursuant to 28 U.S.C. § 1404(a) (Dkt. No. 64), specifically to the Northern District of
California, to which Plaintiff Godo Kaisha IP Bridge 1 (“GK”) filed a Response in Opposition
(Dkt. No. 97), Defendants filed a Reply (Dkt. No. 101) and GK filed a Sur-Reply (Dkt. No. 104).
Plaintiff GK is a Japanese company with its principal place of business located in Tokyo.
(Dkt. No. 42 at 2, para. 2). Defendants Broadcom Ltd., Avago Ltd., and Avago U.S. all have
principal places of business in San Jose, California, Defendant LTI has its principal place of
business in Milpitas, California, and Defendant Broadcom Corp. has its principal place of
business in Irvine, California. Id. at 2-3, paras. 3-7.
In its Amended Complaint (Dkt. No. 42), GK accuses Defendants of infringing six
patents: U.S. Patent Nos. 6,538,324 (“the ’324 patent”), 6,197,696 (“the ’696 patent”), RE41,980
(“the ’980 patent”), 7,126,174 (“the ’174 patent”), 8,354,726 (“the ’726 patent”), RE43,729 (“the
’729 patent”) (“the Asserted Patents”).
Five of these patents – the ’324 patent, ’696 patent, the ’980 patent, the ’174 patent, and
the ’726 patent (“the Fabrication Patents”) – are directed to semiconductor structures and
manufacturing processes. (Dkt. No. 42 at FAC at 12-30, paras. 42, 52, 62, 72, 82.) The sixth
patent – the ’729 patent (“the Processor Patent”) – is directed to processor instruction sets. Id. at
32-33, para. 92. All of the Asserted Patents were originally assigned to either Panasonic Corp. or
NEC Corp., which are both Japanese companies with headquarters in Japan. (Dkt. No. 64 at 2-3).
GK now owns the Asserted Patents. (Dkt. No. 42 at 2, para. 2).
28 U.S.C. § 1404(a) provides that “[f]or the convenience of parties and witnesses, in the
interest of justice, a district court may transfer any civil action to any other district or division
where it might have been brought.” 28 U.S.C. § 1404(a) (2006). The first inquiry when
analyzing a case’s eligibility for § 1404(a) transfer is “whether the judicial district to which
transfer is sought would have been a district in which the claim could have been filed.” In re
Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) (“Volkswagen I”).
Once that threshold is met, courts analyze both public and private factors relating to the
convenience of parties and witnesses as well as the interests of particular venues in hearing the
case. See Humble Oil & Ref. Co. v. Bell Marine Serv., Inc., 321 F.2d 53, 56 (5th Cir. 1963); In
re Nintendo Co., Ltd., 589 F.3d 1194, 1198 (Fed. Cir. 2009); In re TS Tech USA Corp., 551 F.3d
1315, 1319 (Fed. Cir. 2009).
The private factors are: (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. Volkswagen I, 371 F.3d at 203; Nintendo, 589 F.3d at 1198;
TS Tech, 551 F.3d at 1319. The public factors are: (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 or in the application of foreign law. Volkswagen I, 371
F.3d at 203; Nintendo, 589 F.3d at 1198; TS Tech, 551 F.3d at 1319.
The plaintiff’s choice of venue is not a factor in this analysis. In re Volkswagen of Am.,
Inc., 545 F.3d 304, 314-15 (5th Cir. 2008) (“Volkswagen II”). Rather, the plaintiff’s choice of
venue contributes to the defendant’s burden of proving that the transferee venue is “clearly more
convenient” than the transferor venue. Volkswagen II, 545 F.3d at 315; Nintendo, 589 F.3d at
1200; TS Tech, 551 F.3d at 1319. Furthermore, though the private and public factors apply to
most transfer cases, “they are not necessarily exhaustive or exclusive,” and no single factor is
dispositive. Volkswagen II, 545 F.3d at 314-15. Timely motions to transfer venue should be
“should [be given] a top priority in the handling of [a case],” and “are to be decided based on
‘the situation which existed when suit was instituted.’” In re Horseshoe Entm’t, 337 F.3d 429,
433 (5th Cir. 2003); In re EMC Corp., Dkt. No. 2013-M142, 2013 WL 324154 (Fed. Cir. Jan.
29, 2013) (quoting Hoffman v. Blaski, 363 U.S. 335, 443 (1960)).
A threshold issue in the §1404(a) analysis is “whether the judicial district to which
transfer is sought would have been a district in which the claim could have been filed.”
Volkswagen I, 371 F.3d at 203. In a patent infringement action, venue is proper in “the judicial
district where the defendant resides, or where the defendant has committed acts of infringement
and has a regular and established place of business.” 28 U.S.C. § 1400(b).
Defendants argue that there is no question that this case could have been brought in the
Northern District of California because each of the Defendants is subject to personal jurisdiction
in that venue: specifically, four of the Defendants – Broadcom Ltd., Avago Ltd., Avago U.S.,
and LSI – have headquarters in or near San Jose, which is within the Northern District of
California – and Defendant Broadcom Corp. is a California corporation with its headquarters
also in California, specifically Irvine, California, such that a civil action under 28 U.S.C. §
1391(b)(1) can be brought in the Northern District of California, “a judicial district in which any
defendant resides, if all defendants are residents of the State in which the district is located.”
(Dkt. No. 64 at 5-6).
GK contends that transfer is not warranted here because Defendants “substantially and
inexcusably delayed filing their motion more than six months after this case was filed, a week
after the close of claim construction discovery, and just one week before the deadline for the
substantial completion of document production and submission of opening claim construction
briefs.” (Dkt. No. 97 at 1). However, because this issue involves the timing of motion practice
within the overall schedule of a case, the Court will address the date when Defendants filed their
present Motion to Transfer (Dkt. No. 64) when it reaches analysis of the fourth private factor
(“all other practical problems that make trial of a case easy, expeditious, and inexpensive.”).
In addition, GK asserts that Defendant’s Motion to Transfer (Dkt. No. 64) must be denied
because Defendants have failed to carry their significant burden of demonstrating that the
Northern District of California is the “clearly more convenient” forum. (Dkt. No. 97 at 1, 4-5).
As a threshold matter, the Court finds that the suit could have been filed in the Northern
District of California. Thus, the Court will now turn to weighing the private and public interest
factors in order to ascertain if transfer to the Northern District of California is warranted here.
Private Interest Factors
Relative Ease of Access to Sources of Proof
“In patent infringement cases, the bulk of the relevant evidence usually comes from the
accused infringer. Consequently, the place where the defendant’s documents are kept weighs in
favor of transfer to that location.” In re Genentech, Inc., 566 F.3d 1338, 1345 (Fed. Cir. 2009)
(citation omitted). This factor is still to be weighed, regardless of whether the documents are in
electronic form and can be easily transported. See Kroy IP Holdings, LLC v. Starbucks Corp.,
Inc., No. 2:13-cv-936-JRG, 2014 WL 5343168, at *2 (E.D. Tex. Sept. 30, 2014) (“Despite
technological advances in transportation of electronic documents, physical accessibility to
sources of proof continues to be weighed as a private interest factor… Indeed, the Federal Circuit
has indicated that access to an alleged infringer's proof is important to venue transfer analyses in
patent infringement cases.”). However, this factor may be accorded less weight if the documents
are in easily-transportable electronic form. See Rembrandt Patent Innovations, LLC v. Apple,
Inc., No. 2:14-cv-0015-JRG, 2014 WL 3835421, at *2 (E.D. Tex. Aug. 1, 2014) (“[G]iven the
ease in the modern era of transferring electronic data from one place to another, this factor
weighs only slightly in [The Court]’s decision.”).
Defendants contend that a significant portion of the relevant documents and things
necessary to resolve this case (e.g. relevant documents and evidence regarding the structure,
operation, function, marketing and sales – including financials – of the accused products) are
located in the Northern District of California, where four of the Defendants maintain their
corporate headquarters. (Dkt. No. 64 at 10). Defendants also argue that the Northern District of
California provides easier access to such documents and evidence for Defendant Broadcom
Corp., which is located in Irvine, California. Id.
Defendants state that they do not manufacture any of the accused devices, but rather
purchase them from third-party “foundries” which manufacture them outside the U.S. and which
include GlobalFoundries Inc., Taiwan Semiconductor Manufacturing Company Ltd. (“TSMC”),
Semiconductor Manufacturing International Corp. (“SMIC”) and United Microelectronics
Company (“UMC”). (Dkt. No. 64 at 3). Thus, “significant” third-party evidence exists in the
Northern District of California, because files and documents in the possession of the U.S.
foundry GlobalFoundries are present or accessible at its corporate headquarters in Santa Clara
and other relevant documents and information exist in at least eight other foundries in the
Northern District of California, which GK seeks to obtain via subpoenas. Id. at 10. Defendants
also note that in their invalidity contentions served on GK, a number of prior art publications and
prior art devices are identified as belonging to Intel Corp. (“Intel”) and Sun Microsystems
(“Sun”). Id. at 4. As a result, the Northern District of California is where evidence pertaining to
certain prior art is kept, because that is the district where the headquarters of Intel and Oracle
Corporation (“Oracle”), the successor to Sun, are located. Id. at 10. Defendants further indicate
that of the seven companies that GK has engaged in licensing negotiations, five of them – AMD,
Intel, Marvell, Nvidia, and OmniVision – are headquartered in the Northern District of
California. Id. at 10-11. Therefore, Defendants aver that “significant” evidence relating to GK’s
efforts to license the Asserted Patents is more readily accessible in the Northern District of
California. Id. at 10. Defendants finally mention that GK, a foreign company, is unlikely to have
any relevant evidence located in this District and none of the Defendants have any facilities or
employees in this District. Id. at 11.
In response, GK asserts that Defendants cannot dispute that the large majority of proof
will be established through documents produced in electronic form, thereby obviating arguments
that there is a burden on document transportation. (Dkt. No. 97 at 8). GK also points to Brad
Mitchell, Defendants’ Rule 30(b)(6) witness, who testified that he was not aware of any
difficulties Defendants’ experienced by collecting and producing documents in this District. Id.
at 8-9. GK further notes that Defendants, either directly or through their subsidiaries, have filed
nine patent infringement suits in this District, thereby showing that they would not be
inconvenienced by litigation here. Id. at 9.
GK also identifies substantial sources of proof within, immediately adjacent to, or
otherwise closer to this District than to the Northern District of California, which include: (i)
Defendants’ 30(b)(6) designee testified that the Broadcom employee who interfaces most with
engineers from ARM (which provides accused technology) is located in Boston, Massachusetts –
closer to Texas than California; (ii) ARM, a relevant third party identified by Defendants,
produced its source code in Washington, D.C., which is closer to Marshall, Texas than
California; (iii) authorized distributors of the accused products exist in Texas who may have
relevant sales and marketing information, such as Avnet Electronic Marketing, a Broadcom
national distributor with locations in Richardson, Sugarland, and Austin, Texas; (iv) GK has
subpoenaed several third parties with offices in or near this District, including GlobalFoundries
(Richardson and Austin, TX), ARM Ltd. (Plana and Austin, TX), and TSMC Americas (Austin,
TX); and (v) Defendants sell the accused products to many third-party customers – including HP
and Dell – located in or near this District, have offices (with at least 168 employees) in this
District and an international sales force. 1
E.g. “Cisco (facilities and offices in Irving, Richardson, Houston, San Antonio, and Lubbock, TX), Arris
(facilities and offices in Austin and Houston, TX), Alcatel-Lucent (regional headquarters in Plano,
TX),16 Huawei (North America headquarters in Plano, TX and facilities in Richardson, TX),17 Dell
(headquarters in Round Rock, TX),18 Verizon (facilities and offices in Dallas, Irving, Richardson, and
Westlake, TX),19 Apple (second-largest office complex in Austin, Texas),20 Enseo (headquarters in
Richardson, TX),21 and EMC Corp. (facilities and offices in Austin, Coppell, Dallas, Houston,
Richardson, and San Antonio, TX). Id. at 10. “Furthermore, as of the filing of the motion, Defendants had
four offices in Texas, with at least 168 employees, many of whom likely have relevant evidence. Indeed,
two large customers—HP and Dell—are serviced primarily out of Texas. Defendants have not proven that
for each accused product there is only duplicative documentation in those locations. In addition,
Defendants’ corporate designee testified that Defendants maintain a sales force, another significant source
of proof, throughout the United States and the world.” Id. at 10-11.
On balance, the Court finds that this factor favors transfer, but only slightly. Although
courts look to the location of the accused infringer’s documents, and the bulk of Defendants’
documents relevant to this case appear to be in the Northern District of California, there is no
dispute that nearly all of these documents are in electronic form. The same would apply to any of
GK’s documents, albeit located in Texas or in the Northern District of California. Accordingly,
the burden of accessing, collecting, producing or transporting documents is minimal for both
parties, regardless of where those documents are from.
Availability of Compulsory Process to Secure the Attendance of Witnesses
‘This factor will weigh heavily in favor of transfer when more third-party witnesses
reside within the transferee venue than reside in the transferor venue.” In re Apple, Inc., 581 Fed.
Appx. 886, 889 (Fed. Cir. 2014), citing Genentech, 566 F.3d at 1345.
Defendants assert that there are no less than nine relevant non-party corporate entities
from which the Northern District of California may compel testimony at trial: GlobalFoundries,
Intel, Oracle Corp., Seagate, Cypress Semiconductor, AMD, Marvell, Nvidia, and OmniVision –
each of which is located 25 miles from the courthouse in San Jose. (Dkt. No. 64 at 11).
Defendants additionally point out that GlobalFoundries, which is headquartered in Santa Clara,
California, is also the only U.S. foundry at issue in this case, and, as GK’s own disclosures
recognize, is the best source of information about the details relating to its accused
manufacturing processes. Id. at 11-12. Seagate and Cypress Semiconductor – also located in the
Northern District of California – now own the businesses relating to two of the six products
charted by GK in its Infringement Contentions. Id. at 12. Furthermore, nearly all of the targets of
GK’s licensing efforts – Intel, AMD, Marvell, Nvidia, and Omnivision – are subject to
compulsory process in the Northern District of California. Id. Defendants further allege that the
ability to compel testimony from Intel is particularly significant here because it is also the
developer of several key pieces of prior art (e.g., the Yonah, Prescott, Klamath, and Pentium
processors) which Defendants intend to rely on to prove that at least three of the Asserted Patents
are invalid. Id. Similarly, Oracle, the successor to Sun – which developed the processors that
Defendants intend to rely upon to prove the invalidity of the ’729 patent – is also located in the
Northern District of California. Id. Defendants also identify four non-party witnesses who “are
believed to possess factual knowledge of the existence, structure and operation of [Oracle or
Sun]’s invalidating prior art systems” and are all based in the Northern District of California:
Leslie Kohn, Carole Dulong, Millind Mittal and Michael Kagan. Id. Defendants lastly note that
in contrast to the Northern District of California, there are no known non-party witnesses subject
to the subpoena power of this District or this Court. Id.
In response, GK states that while Defendants contend that there are nine non-party
entities over which the District of Northern California has the power to compel trial testimony,
they fail to demonstrate that even one has relevant evidence. (Dkt. No. 97 at 11). For example,
GK notes that four of the five entities that Defendants mention were “targets” of GK’s licensing
efforts – AMD, Marvell, Nvidia and OmniVision – did not end up deciding to enter into licenses
with GK after negotiations, and such discussions – years after the hypothetical negotiation date
here – have no bearing on damages issues. Id. GK also asserts that Cypress Semiconductor also
has no relevant information that is non-duplicative of what Defendants already have, that Intel
and Oracle allegedly have information about prior art, but despite having months to take
discovery, Defendants have not shown that those entities in fact have any relevant, discoverable
information in the Northern District of California, and that Defendants have not demonstrated
that GlobalFoundries, which manufactures certain accused products abroad, has any relevant
evidence kept at its entity in the Northern District of California. Id. Finally, GK argues that
Defendants’ reliance on their four self-identified prior art non-party witnesses should also be
given little weight because these individuals were added in Defendants’ Supplemental Initial
Disclosures, which was served concurrently with the present Motion to Transfer (Dkt. No. 64),
“solely in a transparent attempt to bolster the connection to the transferee court.” Id. at 11-12.
GK further mentions that there are several third parties outside the subpoena power of
courts in both Districts: in particular, all of the foundries (TSMC, SMIC, UMC, and
GlobalFoundries) that manufacture the accused products do so outside the U.S., and all but
GlobalFoundries are headquartered in Asia, and third-party ARM, which provides relevant
technology, is headquartered in the United Kingdom (“UK”). Id. at 12.
On balance, the Court finds that this factor also leans but slightly in favor of transfer.
Both Defendants and GK have potential party and non-party witnesses who are beyond the
subpoena power of either this District or the Northern District of California. Considering just the
third party witnesses of both parties – which include three foundries headquartered in Asia and
one company, ARM, headquartered in the UK – it does not appear that either District has
absolute subpoena power over them or is clearly more convenient in this regard.
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., 566 F.3d 1338, 1342 (Fed. Cir. 2009). While the Court
must consider the convenience of both the party and non-party witnesses, 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. Diamond Grading Techs. v. Am. Gem Soc’y, No. 2:14-cv-1161-JRG-RSP,
2016 WL 1271568 (E.D. Tex. Mar. 31, 2016); Saint Lawrence Comm. LLC v. LG Elecs., Inc.,
No. 2:14-cv-1055-JRG, 2015 WL 7854738 (E.D. Tex. Mar. 20, 2014); see also 15 Charles Alan
Wright & Arthur R. Miller, Federal Practice and Procedure § 3851 (3d ed. 2012). The
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inconvenience to witnesses increases with the additional distance to be traveled, including
additional travel time with overnight stays, an increased probability of meal and lodging
expenses, and time away from their regular employment. Portal Technologies LLC v. Yahoo!
Inc., No. 2:11-cv-440-JRG, 2012 WL 3242205, at *4 (quoting Volkswagen I, 371 F.3d at 205).
“A district court should [also] assess the relevance and materiality of the information the witness
may provide.” Genentech, 566 at 1343; see also ThinkTank One Research, LLC v. Energizer
Holdings, Inc., No. M-15-0389, 2015 WL 4116888, at *2 (E.D. Tex. July 7, 2015). However,
even though there is no requirement that the movant identify “key witnesses,” or show “that the
potential witness has more than relevant and material information,” the movant must still provide
enough information to allow the Court to make the required assessment. Genentech at 1343-44.
Defendants argue that in this case, transfer to the Northern District of California would
substantially reduce the cost and burden of attendance at trial for both party and non-party
witnesses. (Dkt. No. 64 at 7).
For party witnesses, Defendants contend that any party witnesses for GK located in Japan
would undoubtedly have lower costs and shorter travel to California, as opposed to having to
travel an additional 1,500 miles to this District. Id. For their own party witnesses, Defendants
indicate that there are 10 individuals who have overall responsibility for market research, sales,
and product planning with respect to the accused semiconductor products, nearly all of which are
based in San Jose, California, and that there are additional individuals knowledgeable about the
technical aspects of the accused products who are primarily located in California, with some of
them located in Colorado and Pennsylvania. Id. Furthermore, out of the nearly 8,300 U.S.
employees of the Defendants, nearly two-thirds of them (over 5,100) are located in California,
with more than a third of them (over 2,800) being in San Jose or offices nearby, whereas
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Defendants collectively have no employees in this District and as for their 130 employees that do
reside in Texas, these individuals allegedly do not have specific information or documentation
relevant to the current litigation, either because their work is entirely unrelated to the accused
processes and accused ARM Cortex technology (e.g. their work deals with sales and customer
support), or because any knowledge they do have would be redundant of the knowledge of
witnesses located elsewhere, primarily in the Northern District of California. Id. at 7-8.
Defendants further contend that specifically, the Broadcom employees located in its Austin,
Texas facility do not have relevant information because their work is focused on circuit design,
not layout of the accused semiconductor products; the layout of these accused products being
performed by Broadcom employees located in California, not Texas. Id. at 8.
For non-party witnesses, Defendants argue that the Northern District of California
would be more convenient because the accused technology in this case is not that of Defendants,
but rather third party foundries such as GlobalFoundries, TSMC, SMIC and UMC, which – as
GK acknowledges in its Initial Disclosures, have knowledge of the “[i]nformation relating to
manufacture and design of the accused products.” Id. Defendants assert that these foundries are
the only ones who know the specific details of their manufacturing processes for the accused
semiconductor products and because these processes are highly sensitive, proprietary trade
secrets for the foundries, even Defendants (the foundries’ customers) are not provided access to
the specific details of the fabrication processes used to make their devices. Id. Also,
GlobalFoundries (who manufactures two of the three Broadcom products charted in GK’s
Infringement Contentions) is headquartered in Santa Clara, California (located in the Northern
District of California) while TSMC, SMIC and UMC are headquartered in China, but have a
U.S. subsidiary or U.S. office located in or near San Jose, California (also in the Northern
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District of California) and ARM (the supplier for the accused technology involving the ’729
patent) is headquartered in the UK while the headquarters of its U.S. subsidiary, ARM Inc., is
located in San Jose, California. Id. at 8-9. Defendants finally note that GK’s Initial Disclosures
do not identify a single witness or any evidence that is located in this District, GK is located in
Tokyo, Japan and to the best of Defendants’ knowledge, the named inventors all reside in Japan,
and Defendants are not aware of any relevant witnesses who reside in this District. Id. at 9.
In response, GK argues that because the convenience of party witnesses and U.S.
employees of Defendants located in California is entitled to less weight than the convenience of
identified relevant non-party witnesses, such as third-party foundries and Defendants’ third-party
customers of the accused products that have offices in and near this District, Defendants have not
shown that the Northern District of California is “clearly more convenient” to willing witnesses
than this District. (Dkt. No. 97 at 12-13). GK then points to the existence of various potential
third-party witnesses that are in fact likely to be located in this District, including individuals
from: (1) ARM’s two offices in Texas (Plano and Austin), which have over 300 employees that
perform engineering activities, among others; (2) GlobalFoundries’ Texas facilities (Richardson
and Austin) and TSMC’s Texas facilities (Austin), which have employees whose responsibilities
include integrated-circuit engineering; and (3) Huawei Technologies Co., Ltd. (“Huawei”)’s
headquarters in Plano (in this District), which has employees that sell or manufacture products
that contain the BCM4334 accused component. Id. at 13. Moreover, at least 17 named inventors
of prior art cited or produced by Defendants who are likely knowledgeable about alleged prior
art and the differences between it and the claimed inventions currently reside in or near this
District (who would be more inconvenienced traveling to the Northern District of California than
this District), and of the “five potential witnesses in connection with this litigation” LSI
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employee Dan Fisher cites in his Declaration, two are located in Colorado (Colorado Springs and
Fort Collins), and one is located in Pennsylvania (Allentown), all of which are closer to this
District than the Northern District of California. Id. at 13-14; see also Id. at 13, n. 23.
On balance, the Court finds that this factor is neutral as to transfer. Considering the
potential non-party witnesses of both parties, which should be given more weight in the analysis,
it appears that the inconvenience incurred by Defendants’ potential non-party witnesses
(individuals from any of the foundries – TSMC, SMC and UMC – based in China or San
Jose/Milpitas, from GlobalFoundries based in Santa Clara, and from Arm in the UK or San Jose)
in traveling from their respective locations to this District is more or less counterbalanced by the
inconvenience incurred by GK’s potential non-party witnesses (individuals who work in the
Texas offices of ARM, GlobalFoundries, TSMC and Huawei, prior art inventors that live in or
near this District and potential third party witnesses located in Colorado and Pennsylvania) in
traveling from their respective locations to the Northern District of California. The calculus does
not differ by much if the party witnesses from both sides are added to the equation. Therefore,
the Court finds that this factor is neutral as to transfer.
All Other Practical Problems that Make Trial of a Case Easy, Expeditious,
Defendants argue that there are no practical problems that are so significant as to weigh
against transfer because this case is in its early stages; therefore, there is no expectation of
judicial economy by keeping this suit in this venue. (Dkt. No. 64 at 13).
In response, GK asserts that the purpose of 28 U.S.C. § 1404(a) “is to prevent the waste
of time, energy and money and to protect litigants, witnesses and the public against unnecessary
inconvenience and expense.” Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (internal
quotations and citation omitted). Therefore, GK argues that during Defendants’ long delay in
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filing their motion (which will be discussed next), the Court became familiar with the issues
relating to this case and significant delay as well as waste of judicial resources would further
result from the redundancy of the transferee Court having to learn about the technology, parties,
contentions, discovery disputes and Court orders to date, not to mention the transferee Court
having to set a new date for trial. (Dkt. No. 97 at 14). GK also avers that patent trials in this
District are likely to be shorter and less burdensome than in the Northern District of California,
which also counsels against transfer. Id.
However, GK’s main argument with respect to judicial efficiency is Defendant’s delay in
filing the present Motion to Transfer (Dkt. No. 64), specifically, filing it on August 19, 2016,
which is more than six months after this case was filed (February 14, 2016), a week after the
close of claim construction discovery (August 12, 2016), and just one week before the deadline
for the substantial completion of document production and submission of opening claim
construction briefs (August 26, 2016). (Dkt. No. 97 at 1); See also Docket Control Order (Dkt.
Thus, declaring that a motion to transfer venue under 28 U.S.C. §1404(a) must be filed
with “reasonable promptness,” GK argues that Defendants’ failure to bring their Motion to
Transfer (Dkt. No. 64) with “reasonable promptness” alone compels denial of it. (Dkt. No. 97 at
3-5), citing Peteet v. Dow Chem. Co., 868 F.3d 1248, 1436 (5th Cir. 1989); See Moto Photo, Inc.
v. K.J. Broadhurst Enters., Inc., No. 301CV2282-L, 2003 WL 298799, at *5 (N.D. Tex. Feb. 10,
2003) (“Although a motion to transfer venue under section 1404(a) is not subject to the pleading
requirement of rule 12(h), it still must be filed with ‘reasonable promptness.’); Novartis Vaccines
& Diagnostics, Inc. v. Wyeth, No. 2:08-CV-00067, 2010 WL 1374806, at *4 (E.D. Tex. Mar. 31,
2010) (“The Federal Circuit has found that, in patent cases, the ‘consideration of the interest of
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justice, which includes judicial economy, may be determinative to a particular transfer motion,
even if the convenience of the parties and witnesses might call for a different result.’”); Konami
Digital Entm’t Co. v. Harmonix Music Sys., Inc., No. 6:08CV296, 2009 WL 781134, at *7 (E.D.
Tex. Mar. 23, 2009) (“[I]f the party opposing transfer can show that the section 1404(a) transfer
motion would result in prejudice solely due to the delay in bringing the motion or that the motion
is a dilatory tactic, then the movant has failed to show ‘reasonable promptness’”). GK further
cites the case of Ralph v. Exxon Mobile Corp., which states:
Any transfer will produce some delay, and as such, Plaintiff must show that a
transfer at this stage of the proceedings would cause a significant or unusual
delay. See In Re: Horseshoe Entertainment, 337 F.3d 429, 434 (5th Cir.2002)
(“[I]n rare and special circumstances a factor of ‘delay’ or ‘prejudice’ might be
relevant in deciding the propriety of transfer, but only if such circumstances are
established by clear and convincing evidence.”). Defendant argues that there is
little chance of delay or prejudice because this is a routine Jones Act case, and the
transferee court is likely to be familiar with the issues involved. The Court
respectfully disagrees. Plaintiff filed his lawsuit on November 30, 2005, and the
Rule 16 Conference was held on February 1, 2006. Exxon did not seek transfer
until June 13, 2006, over six months after this case was filed. Trial in this case is
set for October 23, 2006, a little less than three months away. A transfer at this
late stage in the proceedings would work a significant hardship on Plaintiff, who
would be forced to move to the end of the line in any transferee court…This
factor supports retention, and outweighs all of the other factors supporting
transfer. (citations omitted).
No. Civ. A. G-05-655, 2006 WL 2266258, at *4 (S.D. Tex. Aug. 8, 2006). GK also cites
additional authority for its argument that Defendants’ failure to bring their Motion to Transfer
(Dkt. No. 64) with “reasonable promptness” alone compels denial of it. 2
“Fifth Circuit courts consistently deny transfer motions under the ‘reasonable promptness’ standard
where the moving party has delayed as Defendants have here. In Novartis Vaccines and Diagnostics, Inc.
v. Wyeth, for example, the court denied a motion to dismiss where, like here, ‘the parties negotiated a
docket control, discovery, and protective orders, completed initial disclosures, exchanged infringement
and invalidity contentions and have proceeded through extensive document production.’ 2010 WL
1374806, at *5. In another case that parallels this one, Ralph v. Exxon Mobil Corp., the court denied a
motion to transfer because it was brought ‘over six months after [the] case was filed’ and found ‘[a]
transfer at this late stage in the proceedings would work a significant hardship on Plaintiff.’ 2006 WL
2266258, at *4. Similarly, in FTC v. Multinet Mktg., LLC, the court denied a motion to transfer because it
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GK additionally argues that Defendants were aware of nearly all – if not all – of the facts
that they allege support their motion months before they filed it. (Dkt. No, 97 at 5). For example,
as of the February 2016 filing of the Complaint in this action, or shortly thereafter, Defendants
knew the location of their employees, their documents, the foundry manufacturers of the accused
products (TSMC, SMIC, UMC and GlobalFoundries), ARM (provider of accused technology),
Seagate (acquirer in 2014 of an accused product) and GK. Id. GK further alleges that by the time
Defendants served their invalidity contentions on June 20, 2016, Defendants knew of the
locations of individuals or companies with possible knowledge of alleged prior art, who
comprise all the persons and entities Defendants identify with potentially relevant sources of
proof. Thus, GK avers that Defendant’s decision to wait until August 19, 2016 – more than six
months after the complaint in this case and only one week before the substantial completion of
document discovery – to file their Motion to Transfer (Dkt. No. 64) is a “clear sign of calculated
delay.” GK then cites many events in this case which have now passed, since as the date of this
Order, the Court has already held a Markman claim construction hearing and issued a Markman
Order on November 4, 2016 (Dkt. No. 104). GK additionally mentions that a transfer to the
Northern District of California would require these dates to be rescheduled very far into the
future and since patent cases in that District take a median of 2.4 years to get to trial, a transfer
would likely mean that trial there would not be scheduled until at least 2018. (Dkt. No. 97 at 7;
Dkt. No. 104 at 1, n.1).
was brought seven months after the plaintiff filed the action and therefore was not brought with
‘reasonable promptness.’ 959 F. Supp. 394, 395-96 (N.D. Tex. 1997) (internal quotations and citation
omitted). The court also held that ‘[a] change of venue now is likely to upset the discovery and trial
schedule and waste judicial resources.” Id. Such is likely to be the result in the instant case as well.’ (Dkt.
No. 97 at 7).
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In response, Defendants contend that their Motion to Transfer (Dkt. No. 64) was filed
promptly, specifically after service of IP Bridge’s infringement contentions – a period during
which Defendants investigated the facts pertaining to the location of evidence and identities of
witnesses relevant to the different products that have been accused of infringement by GK. (Dkt.
No. 83 at 1; Dkt. No. 101 at 2, n.4). Moreover, Defendants assert that they filed their Motion to
Transfer (Dkt. No. 64) only two months after the service of invalidity contentions during which
time Defendants were investigating the sources of prior art and the location of non-party
evidence and witnesses. (Dkt. No. 64 at 10, citing Ex. 32; Dkt. No. 101 at 2, n.4). Furthermore,
Defendants argue that the law is also quite clear that only “in rare and special circumstances” are
the factors of “delay” or “prejudice” even relevant “in deciding the propriety of transfer” and
“only if such circumstances are established by clear and convincing evidence.” (Dkt. No. 101 at
2), citing In re Horseshoe, 337 F.3d at 434. Thus, Defendants argue that GK’s proof fall far short
of demonstrating by clear and convincing evidence that such rare circumstances exist here.
Furthermore, Defendants argue that GK can hardly be heard to claim prejudice based on
delay when it requested and was granted courtesy extensions of almost forty days to file its
answering brief on this Motion to Transfer (Dkt. No. 64); Defendants say that this is particularly
true when nearly all of the information that GK needed to respond to the current Motion to
Transfer was available without need for any of the discovery or extensions that they sought.
(Dkt. No. 101 at 4). Thus, Defendants argues that the information GK obtained by deposition
was almost entirely duplicative of that provided by the Declarations and Exhibits accompanying
the present Motion to Transfer, and nearly all the information GK cites to in its opposition brief
(Dkt. No. 97) comes from publicly available sources. (Dkt. No. 101 at 4). Defendants concede
that briefing on the transfer motion did not conclude before the Markman hearing (on October 7,
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2016), but assert that they pursued their Motion to Transfer diligently and filed it with reasonable
GK disputes that Defendants pursued the present motion diligently, and
distinguishes the case law that Defendants also cite, in particular that
the case of In re
Horseshoe does not deal at all with the moving party’s promptness, or that delay must be
established by “clear and convincing” evidence, because in that case, the Fifth Circuit held that it
was error for the district to deny a motion to transfer where, unlike here, all parties and witnesses
resided in the transferee forum, based on concerns about delay or prejudice resulting from
transfer where there was no evidence supporting such concerns; that case also did not involve the
discussion of judicial efficiency or conserving judicial resources. (Dkt. No. 104 at 1-4).
On balance, the Court finds that this factor weighs heavily against transfer. As of the
date of this Order, a Markman claim construction hearing was held (October 7, 2016), a
Markman Order was issued by the Court on November 4, 2016 (Dkt. No. 104), the Deadline to
Complete Expert Discovery is March 9, 2017, the Pretrial Conference is scheduled for May 9,
2017 and Jury Selection is on June 5, 2017. See Latest Docket Control Order (Dkt. No. 186).
The law is clear that if a timely motion to transfer is filed, the Court should consider the
posture of the case at the time the suit was filed. However, where the motion was not filed
timely, the Court may consider the time and effort invested in the case before the motion was
filed. Thus, in the name of preserving judicial efficiency, as well as time, energy and money, the
Court finds that this factor weighs strongly against transfer.
Public Interest Factors
Administrative Difficulties Flowing From Court Congestion
The “speed with which a case can come to trial and be resolved” may be a factor in the
transfer analysis. Genentech, 566 F.3d at 1347. A proposed transferee court’s “less congested
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docket” and “[ability] to resolve this dispute more quickly” is also a factor to be considered. In
re Hoffman-La Roche, 587 F.3d 1333, 1336 (Fed. Cir. 2009).
However, this factor is the “most speculative,” and 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 those other factors.” In re Genentech, 566 F.3d at 1347.
GK argues that this factor weighs against transfer because of this District’s speedier
disposition of patent cases in comparison to the Northern District of California. (Dkt. No. 97 at
15). Defendants assert that because both Districts provide for efficient and prompt disposition of
patent cases and have detailed local patent rules and scheduling orders to avoid congestion and
keep patent actions on track to timely resolutions, this factor is neutral to the transfer analysis.
(Dkt. No. 64 at 14-15). While this factor weighs against transfer, it does so only slightly.
Local Interest in Having Localized Interests Decided at Home
This factor considers the interest of the locality of the chosen venue in having the case
resolved there. Volkswagen I, 371 F.3d at 205-06. When significant connections exist between a
venue and the events that gave rise to the suit, this factor weighs in favor of that venue. In re
Hoffman-La Roche Inc., 587 F.3d 1333, 1338 (Fed. Cir. 2009).
Defendants argue that this factor weighs in favor of transfer because the Northern District
of California has significant connections to this case in that four of the five Defendants are
headquartered there, and because the management, sales and marketing of the accused products
is based out of those locations. (Dkt. No. 64 at 13). Defendants also assert that this District has
little or no connection to the facts of this case other than the alleged sale of accused products in
this District. Id. GK contends that because many of Defendants’ customers of the accused
products are based in Texas and likely have witnesses and evidence within or near this District,
this factor is at a minimum neutral. The Court agrees, and also finds that the competing interests
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on both sides of the equation more or less cancel each other out. Accordingly, this factor is
neutral as to transfer.
Familiarity of the Forum With the Law that Will Govern the Case
Defendants say that the third and fourth public interest factors are neutral here. (Dkt. No.
64 at 15). GK does not seem to dispute this, because it does not even address the third or fourth
public interest factors in its briefing. Thus, the Court finds this factor is neutral as to transfer.
Avoidance of Unnecessary Problems of Conflict of Laws or in the
Application of Foreign Law
For the same reasons provided immediately above for the third public interest factor, the
Court finds this factor is neutral as to transfer.
Considering the foregoing, the Court finds that Defendants have not shown that the
Northern District of California is a “clearly more convenient” forum for this action. As a result,
the Court hereby DENIES Defendants’ Motion to Transfer (Dkt. No. 64).
SIGNED this 3rd day of January, 2012.
SIGNED this 27th day of February, 2017.
ROY S. PAYNE
UNITED STATES MAGISTRATE JUDGE
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