Cooktek Induction Systems, LLC v. I/O Controls Corporation
Filing
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MEMORANDUM ORDER AND OPINION - It is therefore ORDERED that Defendants Motion to Transfer to the Central District of California (Dkt. 48 ) is hereby DENIED. Signed by Judge Amos L. Mazzant, III on 8/2/2016. (baf, )
United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
COOKTEK INDUCTION SYSTEMS, LLC,
v.
I/O CONTROLS CORPORATION, PANDA
RESTRAURANT GROUP, INC., and PANDA
EXPRESS, INC.,
§
§
§ CIVIL ACTION No. 4:15-cv-548-ALM
§ Judge Mazzant
§
§
§
MEMORANDUM ORDER AND OPINION
Before the Court is Defendants I/O Controls Corporation, Panda Restaurant Group, Inc.,
and Panda Express, Inc.’s (“Defendants”) Motion to Transfer to the Central District of California
(Dkt. #48). After reviewing the relevant briefing and materials, the Court finds that the motion is
denied.
BACKGROUND
Plaintiff filed suit against Defendants, asserting patent infringement of U.S. Patent No.
9,066,374 entitled “Induction-Based Food Holding/Warming System and Method” on August 13,
2015 (Dkt. #1). Plaintiff is a Delaware limited liability company (Dkt. #41 at p. 2). Plaintiff was
originally located in Chicago, Illinois, but as of November 19, 2015, Plaintiff physically
relocated its headquarters and sole office to Carrollton, Texas after merging with its affiliate
TurboChef Technologies, Inc. (Dkt. #51 at p. 2). CookTek’s decision to merge and relocate was
finalized as early as July 22, 2015 (Dkt. #51 at p. 2). Defendant I/O Controls is a corporation
organized and existing under the laws of the State of California, with its headquarters and
principal place of business located in Azusa, California (Dkt. #41 at p. 2). Defendant I/O
Controls maintains a sales office and a registered agent in the State of Texas (Dkt. #41 at p. 2-3).
Defendant Panda Restaurant Group (“Panda Group”) is a corporation organized and existing
under the laws of the State of California, with its principal place of business in Rosemead,
California (Dkt. #41 at p. 3).
Defendant Panda Express is a wholly-subsidiary of Panda
Restaurant Group (Dkt. #41 at p. 3). Defendant Panda Express is a corporation organized and
existing under the laws of the State of California, with its principal place of business in
Rosemead, California, and maintains a registered agent in Texas (Dkt. #41 at p. 3).
Defendants filed the present motion to change venue on May 13, 2016 (Dkt. #48).
Plaintiff filed a response on May 23, 2016 (Dkt. #51). Defendants filed a reply brief on June 1,
2016 (Dkt. #53). Plaintiff filed a sur-reply on June 9, 2016 (Dkt. #56).
LEGAL STANDARD
Defendants move to transfer venue to the Central District of California pursuant to 28
U.S.C. § 1404(a), which permits a district court to transfer any civil case “[f]or the convenience
of parties and witnesses, in the interest of justice . . . to any other district or division where it
might have been brought.” 28 U.S.C. § 1404(a) (emphasis added). “Section 1404(a) is intended
to place discretion in the district court to adjudicate motions for transfer according to an
‘individualized, case-by-case consideration of convenience and fairness.’” Stewart Org., Inc. v.
Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)).
The purpose of 28 U.S.C. § 1404(a) “is to prevent the waste ‘of time, energy and money’ and ‘to
protect the litigants, witnesses and the public against unnecessary inconvenience and
expense . . .’” Van Dusen v. Barrack, 376 U.S. 612, 616 (1964). As transfer of venue is not a
matter of substantive patent law, case law from the Court of Appeals for the Fifth Circuit
governs this motion. See In re TS Tech USA Corp., 551 F.3d 1315, 1319 (Fed. Cir. 2008).
The threshold inquiry when determining eligibility for transfer is “whether the judicial
district to which transfer is sought would have been a district in which the claim could have been
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filed,” or whether all parties have consented to a particular jurisdiction. In re Volkswagen AG,
371 F.3d 201, 203 (5th Cir. 2004) [hereinafter “Volkswagen I”]. Once that threshold inquiry is
met, the Fifth Circuit has held that “[t]he determination of ‘convenience’ turns on a number of
public and private interest factors, none of which can be said to be of dispositive weight.” Action
Indus., Inc. v. U.S. Fid & Guar. Co., 358 F.3d 337, 340 (5th Cir. 2004). The private interest
factors 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; (4) all other practical problems that make trial of a case easy, expeditious, and
inexpensive. In re Volkswagen of America, Inc., 545 F.3d 304, 315 (5th Cir. 2008) (en banc)
[hereinafter “Volkswagen II”].
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 or in the application of foreign law.
Id. These factors are not exhaustive or exclusive, and no single factor is dispositive. Id.
The party seeking transfer of venue must show good cause for the transfer. Volkswagen
II, 545 F.3d at 315. The moving party must show that the transferee venue is “clearly more
convenient” than the transferor venue. Id. The plaintiff’s choice of venue is not a factor in this
analysis, but rather contributes to the defendant’s burden to show good cause for the transfer. Id.
at 313 & 314 n.10 (“[W]hile a plaintiff has the privilege of filing his claims in any judicial
division appropriate under the general venue statute, § 1404(a) tempers the effects of the exercise
of this privilege.”). However, “when the transferee venue is not clearly more convenient than the
venue chosen by the plaintiff, the plaintiff’s choice should be respected.” Id. at 315.
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ANALYSIS
The first, threshold issue that the Court must determine is whether the suit could have
been filed originally in the destination venue. Volkswagen II, 545 F.3d at 312. Defendants argue,
and Plaintiff does not contest (Dkt. #51 at p. 2 n. 2), that, in accordance with 28 U.S.C. § 1400(b),
this suit could have been brought originally in the Central District of California because
Defendants are California corporations with their headquarters located in the district (Dkt. #48 at
p. 5).
The Court agrees, noting that venue would have been proper as Defendants are
incorporated in California and their principal place of business is located in the Central District
of California. See 28 U.S.C. § 1391(d).
The question, therefore, is whether Defendants have met their burden to demonstrate
whether the Central District of California is a “clearly more convenient” forum than the present
judicial district.
A.
Public Interest Factors
The Fifth Circuit applies four non-exclusive public interest factors in determining a
§ 1404(a) venue transfer question: (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 law or the application of foreign law.
1. The administrative difficulties flowing from court congestion
In considering this factor, the speed with which a case can come to trial and be resolved
may be a factor. In re Genentech, Inc., 566 F.3d 1338, 1347 (Fed. Cir. 2009) (citing Gates
Learjet Corp. v. Jenson, 743 F.2d 1325, 1337 (9th Cir. 1984) (“[T]he real issue is not whether
[transfer] will reduce a court’s congestion but whether a trial may be speedier in another court
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because of its less crowded docket.”)). The Federal Circuit has noted that this factor appears to
be the most speculative, and case-disposition statistics may not always tell the whole story. Id.
The most recent statistics obtained by this Court for the 12-month period ending in March
31, 2016, indicate that the median time from filing to trial in civil cases in the Eastern District of
Texas was 20.9 months, as compared to 20.2 months in the Central District of California.1 There
is little difference in the median amount of time in which this case can come to trial and/or be
resolved in either district. The Court finds that this factor is neutral.
2. The local interest in having localized interests decided at home
The second public interest factor is the local interest in having localized interests decided
at home. Volkswagen II, 545 F.3d at 315. “Jury duty is a burden that ought not to be imposed
upon the people of a community which has no relation to the litigation.” Affinity Labs of Texas v.
Samsung Electronics Co., Ltd., 968 F. Supp. 2d 852, 855 (E.D. Tex. 2013) (citing Volkswagen I,
371 F.3d at 206). The mere sale of “several” or “some” of the allegedly infringing products in a
given district is not enough to shift this factor in favor of one party. See In re TS Tech USA Corp,
551 F.3d 1315, 1321 (Fed. Cir. 2008).
Defendants contend that the Eastern District of Texas does not have a strong interest in
this case because it has no “significant connections to Texas” (Dkt. #48 at p. 11). The Court
disagrees. Because Plaintiff is located in Texas, and the owner of the patent at issue, this case
does have a significant connection to this district. See iFly Holdings LLC v. Indoor Skydiving
Germany GMBH, 2015 WL 5909729, at *5 (E.D. Tex. Oct. 7, 2015) (“Texas residents have a
strong interest in deciding a patent infringement dispute involving a patent owned by a Texas
company.”). Although Plaintiff did not have its offices in Texas until November 19, 2015 (Dkt.
1
See Federal Court Management Statistics, March 2016, http://www.uscourts.gov/statistics/table/na/federal-courtmanagement-statistics/2016/03/31-1, accessed July 11, 2016.
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#41), as early as July 22, 2015, the decision for Plaintiff to consolidate with Turbochef and
relocate to Carrolton, Texas was reported to Defendant Panda Express (Dkt. #51 at p. 2.). It
appears to the Court that Defendants insinuate that Plaintiff relocated to Texas in an attempt to
manufacture venue. Prior to the initiation of this lawsuit, however, Plaintiff had intent to merge
and relocate with its affiliate, Turbochef (Dkt. #51 at p. 2). Although Plaintiff did not physically
relocate to Texas until after the commencement of this lawsuit, Defendants have not
demonstrated that Plaintiff’s physical relocation after the initiation of this suit was an attempt to
manufacture venue. See Core Wireless Licensing S.a.r.l. v. LG Elecs. Inc., 2015 WL 5143395, at
*5 n. 6 (E.D. Tex. Sept. 1, 2015) (finding that information located in Texas need not be
discounted from the transfer analysis because “Defendants have failed to provide evidence to
support their allegations that [plaintiff] purposefully transplanted documents to manufacture
venue”).
Although Texas residents would have an interest in the outcome of this case because the
patent owner is a Texas company, a local interest exists in California as well because Defendants
are California companies (Dkt. #41 at pp. 2-3). However, because the patent-in-suit is owned by
a Texas company, the Court finds that this factor weighs slightly against transfer.
3. The familiarity of the forum with the law that will govern the case
The parties do not dispute that both courts are familiar with the relevant law. This case
arises under federal patent law, with which both districts are familiar and able to apply
appropriately. The Court finds that this factor is neutral.
4. The avoidance of unnecessary problems in conflict of laws
As this is a patent case arising under federal law, there are no issues relating to conflict of
laws. The Court agrees with the parties that this factor is neutral.
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B. The Private Interest Factors
The Fifth Circuit also considers four non-exclusive “private” factors: (1) the relative ease
of access to sources of proof; (2) the availability of compulsory process to secure the attendance
of willing witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical
problems that make a trial easy, expeditious, and inexpensive. Volkswagen II, 545 F.3d at 315.
1. The relative ease of access to sources of proof
The first private interest factor is the relative ease of access to the sources of proof.
Volkswagen I, 371 F.3d at 203. “The Fifth Circuit has cautioned that this factor remains relevant
despite technological advances having made electronic document production commonplace.”
DataQuil, Ltd. v. Apple Inc., 2014 WL 2722201, at *3 (W.D. Tex. June 13, 2014) (citing
Volkswagen II, 545 F.3d at 316).
“The Federal Circuit has observed that ‘[i]n patent
infringement cases, the bulk of the relevant evidence usually comes from the accused infringer,
and therefore the location of the defendant’s documents tends to be the more convenient venue.’”
Id. (citing Genentech, 566 F.3d at 1345). However, where evidence is dispersed across venues,
this private interest factor will be neutral. Principal Tech. Eng’g, Inc. v. SMI Cos., 2009 WL
4730609, at *5 (E.D. Tex. Nov. 12, 2009) (Mazzant, then-Mag. J.) (finding that this factor is
neutral because “all of the documents and physical evidence are not located in and around the
destination venue”). Thus, the Court will consider the location of the relevant documents at
issue.
Defendants argue that the bulk of the relevant documents is located in the Central District
of California (Dkt. #48 at p. 2). Specifically, Defendants argue that the Central District of
California is proper for three main reasons. First, the Central District of California is the location
of the witnesses knowledgeable about the research, design, development, testing, and
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specifications of the accused devices (Dkt. #48 at p. 2). Second, Defendant I/O Controls and
Defendant Panda Group’s employees responsible for developing, testing, and purchasing the
devices reside in the Central District of California (Dkt. #48 at p. 2). Third, the I/O Controls’
California headquarters and the Panda Group’s offices located in the Central District of
California house relevant documents reflecting the technical specification and communications
between the companies (Dkt. #48 at pp. 2-3).
Undoubtedly, relevant documentation resides in the Central District of California,
however, documentation also resides in Taiwan with SEF Tech, the company contracted by
Defendants to develop the allegedly infringing products (Dkt. #51 at p. 6). Aside from Taiwan,
Plaintiff alleges that relevant documentation may be located in Illinois with the three inventors of
the patent-in-suit (Dkt. #51 at p. 7), in Lumberton, New Jersey with one of Panda’s stainless steel
container providers (Dkt. #51 at p. 7), and Plaintiff’s own in-house documentation regarding the
patent-in-suit and communications between companies is located in Carrollton, Texas (Dkt. #51
at p. 7). In addition to various documentation locals, Plaintiff’s potential witnesses are located in
at least three different states: Texas, Kentucky, and Missouri (Dkt. #51 at p. 7).
Although sources of proof and witnesses originate in an array of locations across this
country and also in Taiwan, this Court acknowledges that a substantial amount of evidence,
documentation, and witnesses will likely come from the Central District of California. This
Court notes that at this early stage the relevancy of witnesses and evidence is difficult to
ascertain. Therefore, this Court finds this factor to be only slightly in favor of transfer, if not
neutral. See, e.g., Konami Digital Entm’t Co., Ltd v. Harmonix Music Sys., Inc., 2009 WL
781134, at *5 (E.D. Tex. Mar. 23, 2009) (“Because the sources of proof originate from varied
locations across the country and the globe, this factor is neutral.”).
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2. The availability of compulsory process to secure the attendance of witnesses
The second private interest factor is the availability of compulsory process to secure the
attendance of witnesses. Volkswagen I, 371 F.3d at 203. A court cannot compel nonparty
witnesses to travel more than 100 miles, unless it is within the same state and will not cause the
witnesses to incur substantial travel expenses. FED. R. CIV. P. 45(c)(3)(A)(ii), 45(c)(3)(B)(iii).
Furthermore, where both courts have subpoena power over some witnesses and not over others,
the factor is considered neutral.
Defendants argue that “substantially all” third-party witnesses are located in California
(Dkt. #48 at p. 8). However, only GSW Products, one of Panda’s suppliers of stainless steel
containers, is named specifically (Dkt. #48 at p. 8). Moreover, Plaintiff contends that other
third-party witnesses reside throughout the country and are not subject to the subpoena power of
either the Central District of California or the Eastern District of Texas: another stainless steel
container supplier in New Jersey, SEF Tech in Taiwan, and the three patent-in-suit inventors in
Illinois (Dkt. #51 at p. 9). The Court notes that the Eastern District of Texas may have subpoena
power over one of the patent-in-suit inventors due to his regular business travel and contact with
the State of Texas (Dkt. #51 at p. 9.). See FED. R. CIV. P. 45(c)(1)(B). The Court finds that this
factor is neutral because, of the potential witnesses identified, one third-party-witness is subject
to the subpoena power of the Central District of California, one is subject to the subpoena power
of the Eastern District of Texas, and three witnesses are subject to neither court’s subpoena
power.
3. The cost of attendance for willing witnesses
The third private interest factor is the cost of attendance for willing witnesses.
Volkswagen I, 371 F.3d at 203. In Volkswagen II, the Fifth Circuit noted that “[a]dditional
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distance means additional travel time; additional travel time increases the time in which these
fact witnesses must be away from their regular employment.” Volkswagen II, 545 F.3d at 317.
The Fifth Circuit established the “100-mile” rule to determine the convenience of the transferee
district to the witnesses and parties. “When the distance between an existing venue for trial of a
matter and a proposed venue under § 1404(a) is more than 100 miles, the factor of the
convenience to witnesses increases in direct relationship to the additional distance to be traveled.”
Volkswagen I, 371 F.3d at 204-05. When inconvenience would exist in either potential venue,
merely shifting inconvenience from one party’s witnesses to the other is insufficient to affect a
transfer of venue analysis. See In re Google Inc., 412 F. App’x 295, 296 (Fed. Cir. 2011).
Defendants’ willing witnesses are located in the Central District of California (Dkt. #48
at p. 8). Plaintiffs have identified twelve witnesses whom are employees of TurboChef and
Middleby—the parent company of both TurboChef and CookTek—that reside in Texas (Dkt.
#51 at p. 10).
Additionally, relevant witnesses outside of both California and Texas are
substantially closer to the Eastern District of Texas than to the Central District of California (Dkt.
#51 at p. 11). The three patent-in-suit inventors are located in Chicago, Illinois, approximately
861 miles from Eastern District of Texas as compared to the 2,024 miles from Los Angeles (Dkt.
#51 at p. 11).
The Court acknowledges that there are potential witnesses located close to both the
Central District of California and the Eastern District of Texas. Further the Court acknowledges
that, at this early stage, it is difficult to determine the level of relevance of particular potential
witnesses. However, because transfer would inconvenience the potentially relevant witnesses
residing in Illinois and because transfer is merely shifting inconvenience from Defendants’
witnesses to Plaintiff’s witnesses, the Court finds that this factor weighs slightly against transfer.
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4. All other practical problems that make trial easy, expeditious, and inexpensive
The fourth private interest factor considers whether any other practical problems that
make trial easy, expeditious, and inexpensive are promoted by transfer. Volkswagen II, 545 F.3d
at 315. This case is in its early stages, and therefore, no practical problems exist that would deter
this Court from transferring this litigation. Discovery has only just begun, and could easily be
continued in a different forum; this Court has not previously considered any of the substantive
issues; and no claim construction order has been entered. There are no practical problems that
make trial easy, expeditious, or inexpensive in either forum. This factor is neutral.
CONCLUSION
The Court finds that the second public interest factor and the third private interest factor
weigh slightly against transfer while the first private interest factor weighs slightly in favor of
transfer. The remaining factors are neutral. Considering all the factors, the Court finds that
.
Defendants have failed to meet their burden of showing that the Central District of California is
clearly more convenient than the current forum for this litigation.
It is therefore ORDERED that Defendants’ Motion to Transfer to the Central District of
California (Dkt. #48) is hereby DENIED.
SIGNED this 2nd day of August, 2016.
___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
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