Tinnus Enterprises, LLC et al v. Telebrands Corporation et al
MEMORANDUM AND OPINION and ORDER DENYING 94 MOTION to Change Venue filed by Bulbhead.com, LLC, Bed Bath & Beyond Inc, Telebrands Corporation. Signed by Magistrate Judge John D. Love on 3/9/2018. (gsg)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
TINNUS ENTERPRISES, LLC, ZURU
LTD., ZURU INC., ZURU UK LTD.,
ZURU LLC, ZURU PTY LTD.,
BULBHEAD.COM, LLC, BED BATH &
CIVIL ACTION NO. 6:17-CV-00170-RWS
MEMORANDUM OPINION AND ORDER
Before the Court is Defendants’ Bed Bath & Beyond Inc. (“Bed Bath”), Bulbhead.com
(“Bulbhead”), LLC, Telebrands Corporation (“Telebrands”) (collectively “Defendants”) Motion
to Transfer Venue pursuant to 28 U.S.C. §1404. (Doc. No. 94.) Plaintiffs filed a response (Doc.
No. 116), to which Defendants filed a reply (Doc. No. 125) and Plaintiffs filed a sur-reply (Doc.
No. 136). Upon consideration, for the reasons stated herein, Defendants’ Motion (Doc. No. 94) is
Plaintiffs filed their first suit in this Court against Defendants Bed Bath and Telebrands
on June 9, 2015, alleging that Telebrands’s Balloon Bonanza product infringes U.S. Patent No.
9,051,066 (“the ’066 Patent”). (Case No. 6:15-cv-551, Doc. No. 1.) In that action, the Court
ultimately granted a preliminary injunction, enjoining the sale of Telebrands’s Balloon Bonanza
products. (Case No. 6:15-cv-551, Doc. Nos. 66, 84, 91.) On January 24, 2017, the Federal
Circuit affirmed the Court’s injunction on the ’066 Patent. See Tinnus Enterprises, LLC v.
Telebrands Corp., 846 F.3d 1190, 1202 (Fed. Cir. 2017). That case has since been stayed
pending a subsequent appeal of the Patent Trial and Appeal Board’s (“PTAB”) final written
decision to the Federal Circuit. (Case No. 6:15-cv-551, Doc. No. 308.)
On January 26, 2016, Plaintiffs filed a related action against Defendants Telebrands and
Bulbhead, alleging Telebrands’s Battle Balloons infringe U.S. Patent No. 9,242,749 (“the ’749
Patent”), U.S. Patent No. 9,315,282 (“the ’282 Patent”). (Case No. 6:16-cv-33, Doc. Nos. 1, 3.)
On that same day, Plaintiffs also filed a related suit against Retailer1 defendants for infringement
of the ’066, ’282, and ’749 Patents.2 (Case No. 6:16-cv-34.) The Court ultimately granted
another injunction issued against Defendant Telebrands and the Retailer Defendants. (Case No.
6:16-cv-33, Doc. Nos. 159, 182, 211, 224.). The Federal Circuit recently affirmed the injunctions
against Telebrands and the Retailers. Tinnus Enterprises, LLC et al. v. Telebrands Corp. et al,
Nos. 2017-1175, 2017-1760, 2017-1811 (Fed. Cir. Jan. 16, 2018). On November 14, 2017, this
Court tried both of these actions to a jury verdict. Trial proceedings were held over the course of
seven days, and on November 21, 2017, the jury returned a verdict finding that Telebrands
infringed the ’749 and ’2823 Patents, that the ’749 and ’282 Patents were valid, and that
infringement was willful. (Case No. 6:16-cv-33, Doc. No. 544.) Post-trial proceedings for those
actions are currently ongoing.
During the pendency of Case Nos. 6:16-cv-33 and 6:16-cv-34, on March 20, 2017,
Plaintiffs filed the instant action alleging that Telebrands’s Easy Einstein Balloons infringe the
Retailer Defendants are: Bed Bath, Fry’s Electronics, Kohl’s Department Stores Inc, Sears Holding Corporation,
The Kroger Company, Toys “R” Us-Delaware, Inc., Wal-Mart Stores Inc., and Walgreens Boots Alliance, Inc.
(collectively the “Retailers”).
The claims regarding the ’066 Patent as to the Retailers have since been severed and stayed at the request of the
parties pending the appeal of the PTAB’s final written decision. Case No. 6:16-cv-33, Docket No. 256.
Telebrands stipulated to infringement of the ’282 Patent.
’749 Patent, the ’282 Patent, U.S. Patent No. 9,527,612 (“the ’612 Patent”), and U.S. Patent No.
9,533,779 (“the ’779 Patent”). (Doc. No. 1.) At that time, Telebrands’s Easy Einstein Balloons
were already on the market and Plaintiffs moved for an ex parte temporary restraining order
(“TRO”) and preliminary injunction. (Doc. No. 5.)
On March 28, 2017, the Court held a contested evidentiary hearing on the TRO and
preliminary injunction in this action. The Court denied Plaintiffs’ application for a TRO, but set
the preliminary injunction on an expedited briefing schedule and set an additional evidentiary
hearing. (Doc. No. 28.) Plaintiffs filed a motion for preliminary injunction on April 3, 2017
(Doc. No. 41), and the Court held a second contested evidentiary hearing on April 12, 2017. The
Court granted the preliminary injunction on May 19, 2017. (Doc. No. 89.) Recently, the Federal
Circuit affirmed the Court’s injunction. Tinnus Enterprises, LLC et al. v. Telebrands Corp. et al,
No. 2017-2194 (Fed. Cir. Jan. 16, 2018). Although venue was not contested during the injunction
proceedings in this matter, Defendants filed a motion to dismiss for improper venue as to
Plaintiffs’ amended complaint (Doc. No. 74) on May 26, 2017. (Doc. No. 90.) On that same day,
Defendants filed the instant motion to transfer the remainder of this action to the District of New
Jersey. (Doc. No. 94.)
Section 1404(a) 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.” 28 U.S.C. § 1404(a). The goals of § 1404(a) are to prevent
waste of time, energy, and money, and also to protect litigants, witnesses, and the public against
unnecessary inconvenience and expense. Van Dusen v. Barrack, 376 U.S. 612, 616 (1964).
Ultimately it is within a district court’s sound discretion to transfer venue pursuant to 28 U.S.C.
§ 1404(a), but the court must exercise its discretion in light of the particular circumstances of the
case. Hanby v. Shell Oil Co., 144 F. Supp. 2d 673, 676 (E.D. Tex. 2001); Mohamed v. Mazda
Corp., 90 F. Supp. 2d 757, 768 (E.D. Tex. 2000). The party seeking transfer must show good
cause for the transfer. In re Volkswagen of America, Inc., 545 F.3d 304, 315 (5th Cir. 2008) (en
banc) (“Volkswagen II”).
To show good cause, the moving party must demonstrate the
transferee venue is clearly more convenient. Id.
When deciding whether to transfer venue, a district court balances the private interests of
the parties and the public interests in the fair and efficient administration of justice. The private
interest factors the court considers 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. In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004)
(“Volkswagen I”). The public interest 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 laws or in the application of foreign law. Id.
As an initial matter, Defendants’ Motion is entirely contingent on the Court dismissing
the claims against Telebrands and Bulbhead for improper venue. (Doc. No. 94, at 1.) Because the
Court has issued a contemporaneous recommendation that Defendants’ Motion to Dismiss for
improper venue (Doc. No. 156) be denied, this Motion should be denied as well. However, even
considering the convenience factors, there is no showing that this action would be clearly more
convenient in the District of New Jersey. Indeed, in the first action brought before this Court
(6:15-cv-551) Defendants Telebrands and Bed Bath brought this exact same motion before the
Court and, considering the convenience factors, the Court denied transfer. (Case No. 6:15-cv551, Doc. Nos. 57, 83.) That decision was later affirmed by the Federal Circuit. In re Telebrands
Corp., No. 2016-106 (Fed. Cir. Feb. 24, 2016). Since that time, the circumstances have not
significantly changed other than this Court’s increased familiarity with the parties and the
allegations and the expenditure of judicial resources in these matters.
a. The Private Interest Factors
The Relative Ease of Access to Sources of Proof
For this factor to weigh in favor of transfer, the movant must demonstrate that transfer
will result in more convenient access to sources of proof. The Federal Circuit requires the Court
to assume that the bulk of all relevant evidence will come from the accused infringer.
Genentech, 566 F.3d at 1345. As a result, “the place where the defendant’s documents are kept
weighs in favor of transfer to that location.” Id. (quoting Neil Bros. Ltd. v. World Wide Lines,
Inc., 425 F. Supp. 2d 325, 330 (E.D.N.Y. 2006)). To meet its burden, Defendants must identify
their sources of proof with some specificity such that the Court may determine whether transfer
will increase the convenience of the parties. In re Apple, 743 F.3d 1377, 1379 (Fed. Cir. 2014);
see also Invitrogen v. Gen. Elec. Co., No. 6:08–CV–113, 2009 WL 331889 at *3 (E.D. Tex. Feb.
9, 2009) (finding that general statements that relevant documents were located in either England
or New Jersey “fail to show that transfer would make access to sources of proof either more or
less convenient for the parties”).
Through their declarations, Telebrands does not identify the location of its documents
and simply provides attorney argument that documents related to the design, manufacturing,
marketing, and sales of the Easy Einstein Balloons are located in the District of New Jersey.
(Doc. No. 94-1, Declaration of Bala Iyer “Iyer Decl.” at ¶¶ 1–6.) Indeed, in his declaration, Mr.
Iyer simply identifies the principal places of business of Telebrands and Bulbhead and states that
he would testify if called. Id. Bed Bath contends that documents related to its purchasing of Easy
Einstein Balloons, sales, customer reviews, store placement, and financial information are all
located in New Jersey. (Doc. No. 94-2, Declaration of Scott Hames “Hames Decl.” at ¶¶ 4–5.)
Plaintiffs’ declarations identify documents, including the documents related to conception and
reduction to practice, prototypes, sales and financial documents located in Plano, Texas. (Doc.
No. 116-2, Declaration of Josh Malone “Malone Decl.” at ¶ 11.)
Plaintiffs also identify
prosecution documents located in Texas as well as documents in the possession of Defendants’
witness Kendall Harter located in Texas. Id. at ¶ 6; Doc. No. 116-3 Declaration of Cortland
Putbrese “Putbrese Decl.” at ¶ 2. Plaintiffs also identify documents of its experts located in
Texas, Minnesota, and Illinois. Malone Decl. at ¶¶ 12–14.
Here, the Court can give little weight to Defendants’ attorney argument regarding the
location of its sources of proof. Indeed, Telebrands has not provided a declaration asserting the
location of its sources of proof. While Bed Bath identifies certain of its documents located in
New Jersey, weighing the location of those documents against the specific identification of
documents relevant to this litigation identified by Plaintiffs that are located in this District, the
Court finds this factor is neutral.
ii. The Availability of the Compulsory Process to Secure the Attendance of
The second private interest factor instructs the Court to consider the availability of
compulsory process to secure the attendance of witnesses, particularly non-party witnesses
whose attendance may need to be secured by a court order. See In re Volkswagen II, 545 F.3d at
316. The Court gives more weight to those specifically identified witnesses and affords less
weight to vague assertions that witnesses are likely located in a particular forum. See Novelpoint
Learning v. Leapfrog Enter., No 6:10-cv-229, 2010 WL 5068146, at *6 (E.D.Tex Dec. 6, 2010)
(stating that the Court will not base its conclusion on unidentified witnesses); see also West
Coast Trends, Inc. v. Ogio Int’l, Inc., No. 6:10-cv-688, 2011 WL 5117850, at *3 (E.D. Tex. Oct.
For this factor, Defendants identify seven individuals in New Jersey and eight located in
New York, most of whom are retail buyers, analysts, or distributors. (Doc. No. 94, at 4–6.)
Plaintiffs identify eight third-parties who are in or near this District, including the wife of the
inventor of the asserted patents who has knowledge of the invention process and timeline, two
prosecuting attorneys with knowledge related to the prosecution of the patent application, and
Kendall Harter who has been listed as a trial witness by Telebrands. (Doc. No. 116, at 7–8.)
Here, the parties have listed witnesses in and around each forum without stating the
importance of their testimony or providing a good faith basis that they intend to call them at trial.
See Adaptix, Inc. v. Cellco Partnership, No. 6:15-cv-45 (E.D. Tex. Aug. 12, 2015) (Doc. No. 32,
at 7) (“when parties simply name third-party witnesses subject to the subpoena power of a
particular court without identifying the nature of the testimony or asserting, on a good faith basis,
whether a party intends to depose or call a witness to trial, analysis of this factor is a futile and
pointless exercise.”). This failure is particularly concerning given that not one of the listed
individuals testified at trial during the 6:16-cv-33 and 6:16-cv-34 cases. Thus, the Court has
difficulty placing stock into the attorney assertions in the briefing as to the convenience of trial
for relevant third-party witnesses. Even if the Court could afford these witnesses significant
weight in its transfer analysis, there is a nearly equal amount of individuals located in New
Jersey as there are in this District. Accordingly, this factor is neutral.
iii. The Cost of Attendance for Willing Witnesses
In analyzing this factor, all parties and witnesses must be considered. Volkswagen I, 371
F.3d at 204. “Because it generally becomes more inconvenient and costly for witnesses to attend
trial the further they are away from home, the Fifth Circuit established in Volkswagen I a ‘100mile’ rule, which requires that ‘[w]hen the distance between an existing venue for trial of a
matter and a proposed venue under §1404(a) is more than 100 miles, the factor of inconvenience
to witnesses increases in direct relationship to the additional distance to be traveled.’” In re TS
Tech USA Corp., 551 F.3d 1315, 1320 (Fed. Cir. 2008) (citations omitted).
With regard to willing witnesses, Defendants identify thirteen willing witnesses in New
Jersey. (Doc. No. 94, at 7.) Plaintiffs contend there are at least nine potential witnesses located in
Texas, and at least five willing witnesses who are located outside of this District for whom this
District would not be more inconvenient. (Doc. No. 116, at 10–11.)
Again, while the Court affords the most weight to those witnesses who are specifically
named, the Court has difficulty deciphering the relevance or importance of many of these
witnesses from the parties’ briefing. While Defendants have named four witnesses who actually
testified at trial in the related matters, Plaintiffs have identified only the inventor, Josh Malone.
Considering the remainder of the witnesses would amount to speculation regarding the
convenience for trial for individuals listed who simply happen to be located in or nearer to one
district or the other or are otherwise willing to travel.
factor weighs only slightly in favor transfer.
iv. Other Practical Problems
1. Judicial Economy
Thus, on balance, the Court finds this
Although judicial economy is not among the list of the enumerated factors, it can be a
consideration when determining whether a transfer is in the interest of justice. Volkswagen II,
565 F.2d at 1351. Defendants contend that judicial economy weighs in favor of transferring this
case to New Jersey because Defendants believe that the action as to Telebrands is only proper in
New Jersey. However, as discussed above, and in the Court’s contemporaneous opinion, venue is
proper in this District. Plaintiffs argue that this Court’s familiarity with the parties, products,
patents, and claims strongly weigh against transfer where the District of New Jersey has no
familiarity with the patent claims. (Doc. No. 116, at 13–14.)4
Here, at the time Defendants’ Motion was filed, the Court had two related actions which
were nearing trial (6:16-cv-33, 6:16-cv-34) and one action that was stayed pending appeal (6:15cv-551). Notably, the Court’s involvement in and familiarity with these actions is unique given
the issuance of injunctions and management of those injunctions. Indeed, these actions are not
simply related, but are continuations of each prior action resulting from Defendants’ designaround based on this Court’s orders. Specifically in this case, the Court had already held
extensive injunction proceedings by the time the instant motion was filed and currently has an
injunction in place. Transferring the case to the District of New Jersey, a forum that has no
familiarity with the patents-in-suit or the Court’s injunction, would be inefficient. Moreover, it
would require the court in New Jersey to enforce and monitor this Court’s injunction. Such
monitoring is inevitable given that there is a currently pending motion to modify the Court’s
injunction (Doc. No. 135) for which this Court has already held a lengthy hearing. Given the
Defendants contend that the Court in New Jersey has familiarity with the Lanham Act claims, but only generically
identify the parties’ marketing messages as the factual overlap. (Doc. No. 94, at 10.) The Court finds this
unpersuasive to warrant transfer to the District of New Jersey, where the primary asserted claims in this action are
for patent infringement.
unique circumstances of this action and the related actions before this Court, this factor weighs
b. The Public Interest Factors
The parties agree that the public interest factors are neutral, aside from local interest
i. The Local Interest in Having Localized Interests Decided at Home
Defendants argue that the local interest in having disputes decided at home favors
transfer to New Jersey because all of the Defendants have a principal place of business in New
Jersey. (Doc. No. 94, at 10.) Plaintiffs contend that the local interest strongly favors keeping the
case in this District because the inventor of the patent-in-suit lives and works in this District, all
of the research and development that went into his invention of Plaintiffs’ Bunch O Balloons
product occurred in this District, and the initial marketing, order placing, and selling of that
product occurred in this District. (Doc. No. 116, at 14.) Again, Defendants fail to point to any
specific local interest other than the mere location of Defendants in New Jersey. Defendants do
not, for example, identify any employees whose reputations or work would be called into
question as it relates to this action. Plaintiffs, on the other hand, have identified the inventor of
the patent-in-suit who lives and works in this District, and whose invention of the Bunch O
Balloons will be directly called into question in this litigation. See Hoffman-La Roche, 587 F.3d
at 1336 (“[L]ocal interest in this case remains strong because the cause of action calls into
question the work and reputation of several individuals residing in or near that district and who
presumably conduct business in that community.”); Eon Corp. IP Holdings, LLC v. Sensus, USA
Inc., No. 2:10-cv-448, 2012 WL 122562, at *5 (E.D. Tex. Jan. 9, 2012). Accordingly, this
District has a strong local interest in the instant action and this factor weighs against transfer.
ii. The Remaining Public Interest Factor
As there are no conflicts to avoid, the remaining public interest factor is neutral.
In sum, Defendants have failed to meet their burden to show the District of New Jersey is
clearly more convenient. On balance, the majority of factors were neutral, while only the
convenience of witnesses weighed slightly in favor of transfer and both the practical
considerations and local interest weighed against transfer. Thus, for the reasons stated herein,
Defendants’ Motion (Doc. No. 94) is DENIED.
So ORDERED and SIGNED this 9th day of March, 2018.
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