Parus Holdings Inc. v. Microsoft Corporation
Filing
91
Redacted Copy of 89 Sealed MEMORANDUM OPINION AND ORDER GRANTING 29 Opposed Sealed Motion to Transfer Venue to the Western District of Washington. (zv)
Case 6:21-cv-00570-ADA Document 91 Filed 12/04/22 Page 1 of 23
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
WACO DIVISION
PARUS HOLDINGS, INC.,
Plaintiffs,
v.
MICROSOFT CORPORATION,
Defendant.
6:21-CV-00570-ADA
JURY TRIAL DEMANDED
MEMORANDUM OPINION AND ORDER
Came on for consideration this date is Defendant Microsoft Corporation’s (“Microsoft”)
Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) to the Western District of Washington
(the “Motion”). ECF No. 29. Plaintiff Parus Holdings, Inc., (“Parus”) filed an opposition on May
2, 2022, ECF No. 59, to which Microsoft replied on May 16, 2022. ECF No. 62. After careful
consideration of the Motion, the Parties’ briefs, and the applicable law, the Court GRANTS
Microsoft’s Motion to Transfer Venue to the Western District of Washington.
I. BACKGROUND
Parus filed this action against Microsoft on June 4, 2021, ECF No. 1, and filed a First
Amended Complaint (“FAC”) on August 11, 2021. ECF No. 18. Microsoft answered the FAC on
August 26, 2021. ECF No. 20. Parus then requested leave to file a Second Amended Complaint
(“SAC”) to add an additional patent, to which Microsoft consented, on September 29, 2021. ECF
No. 23. Microsoft responded to the SAC on November 15, 2021. ECF No. 28. Parus accuses
Microsoft of infringing U.S. Patent Nos. 6,721,705 (the ’705 patent) and 8,185,402 (the ’402
patent) (collectively, the “Asserted Patents”). ECF No. 23-1 ¶ 21. The Asserted Patents share a
specification and are related. Id. ¶ 16. The SAC lists these products as the “Accused Products”:
“the Microsoft Surface, Windows 10 Operating System, and Windows 10 Mobile Operating
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System.” Id. ¶ 21. The SAC alleges that the Accused Products infringe because they include
Cortana, which Parus claims can use voice recognition software to perform an internet search using
Bing. Id. ¶¶ 26-42, 47-55. For example, the Windows operating systems are accused because they
include Cortana. Id. ¶ 21 (“…each of these products infringed through the use of Cortana…”).
Thus, Microsoft asserts these products be called “Relevant Products”: Cortana, Bing used in
conjunction with Cortana, and Microsoft Surface products that can run Cortana (“Surface
Devices”).
In its Motion, Microsoft claims that:
•
Microsoft is a Washington corporation, headquartered in Redmond, Washington,
and has no relevant witnesses, facilities, or documents in this District. Id. at 1.
•
Microsoft’s specific witnesses identified in its Motion are all located within the
Western District of Washington (“WDWA”). Id.
•
The teams responsible for the Accused Products identified in the SAC are based
primarily in Redmond and Bellevue, Washington. Id.
•
Parus has no connection to the WDTX. Parus is incorporated in Delaware and has
its principal place of business in Illinois. Id.
On June 8, 2022, Microsoft filed its Motion to Transfer, citing, among others, those facts
above. ECF No. 29. That Motion is now ripe for judgment.
II. LEGAL STANDARD
In patent cases, motions to transfer under 28 U.S.C. § 1404(a) are governed by the law of
the regional circuit. In re TS Tech USA Corp., 551 F.3d 1315, 1319 (Fed. Cir. 2008). Title 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
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have been brought or to any district or division to which all parties have consented.” “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 preliminary question under § 1404(a) is whether a civil action ‘might have been
brought’ in the [transfer] destination venue.” In re Volkswagen, Inc., 545 F.3d 304, 312 (5th Cir.
2008) (“Volkswagen II”). If the destination venue would have been a proper venue, then “[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 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; 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”) (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1982)). The public
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 of the
application of foreign law.” Id. When analyzing these factors, courts may consider facts arising
after plaintiff filed suit unless there is some suggestion that they arose primarily to affect the
transfer analysis. See Lynk Labs, Inc. v. Home Depot USA, Inc., No. 6:21-CV-00097-ADA, 2022
WL 1593366, at *6 (W.D. Tex. May 19, 2022) (explaining how post-complaint facts must be
disregarded when considering § 1404(a)’s preliminary question, but not when evaluating
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convenience); In re: NetScout Sys., Inc., No. 2021-173, 2021 WL 4771756, at *4 (Fed. Cir. Oct.
13, 2021) (disregarding, under the practical-problems factor, later-filed cases in the transferor
district).
The weight the Court gives to each of these assorted convenience factors will necessarily
vary from case to case. See Burbank Int’l, Ltd. v. Gulf Consol. Int’l, Inc., 441 F. Supp. 819, 821
(N.D. Tex. 1977). A court should not deny transfer where “only the plaintiff’s choice weighs in
favor of denying transfer and where the case has no connection to the transferor forum and virtually
all of the events and witnesses regarding the case . . . are in the transferee forum.” In re Radmax,
Ltd., 720 F.3d 285, 290 (5th Cir. 2013).
The burden to prove that a case should be transferred for convenience falls squarely on the
moving party. In re Vistaprint Ltd., 628 F.3d 1342, 1346 (Fed. Cir. 2010). The burden that a
movant must carry is not that the alternative venue is more convenient, but that it is clearly more
convenient. Volkswagen II, 545 F.3d at 314 n.10. While “clearly more convenient” is not explicitly
equivalent to “clear and convincing,” the movant “must show materially more than a mere
preponderance of convenience, lest the standard have no real or practical meaning.” Quest NetTech
Corp. v. Apple, Inc., No. 2:19-cv-118, 2019 WL 6344267, at *7 (E.D. Tex. Nov. 27, 2019). Yet,
the Federal Circuit has clarified that, for a court to hold that a factor favors transfer, the movant
need not show that factor clearly favors transfer. In re Apple Inc., 979 F.3d 1332, 1340 (Fed. Cir.
2020).
III. ANALYSIS
A.
Venue and Jurisdiction in the Transferee Forum
To satisfy § 1404(a)’s preliminary question, the movant must show that venue and
jurisdiction would have been proper in the transferee forum when the plaintiff filed suit. See
Monolithic Power Sys., Inc. v. Meraki Integrated Cir. (Shenzhen) Tech., Ltd., No. 6:20-CV-008764
Case 6:21-cv-00570-ADA Document 91 Filed 12/04/22 Page 5 of 23
ADA, 2022 WL 958384, at *5 (W.D. Tex. Mar. 25, 2022). A defendant does not satisfy this burden
by merely consenting to jurisdiction in the transferee forum. See Hoffman v. Blaski, 363 U.S. 335,
343, 80 S. Ct. 1084, 4 L.Ed.2d 1254 (1960). And the defendant cannot, only for purposes of
satisfying § 1404(a), concede that jurisdiction in the transferee forum is proper while
simultaneously “maintaining that jurisdiction is legally improper in [the transferee forum] and
reserving its right to seek dismissal” on that ground once transfer is complete. Monolithic Power
Sys., 2022 WL 958384, at *5; New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (“[A]bsent any
good explanation, a party should not be allowed to gain an advantage by litigation on one theory,
and then seek an inconsistent advantage by pursuing an incompatible theory.”).
This Court finds that this Action could have been brought in the WDWA. See ECF No. 29
at 7. Parus does not contest this but concedes in its Complaint that Microsoft has its principal place
of business in Redmond, Washington. ECF No. 1 ¶ 3. Thus, Venue is proper in the WDWA,
because the WDWA may exercise personal jurisdiction over Microsoft. Daimler AG v. Bauman,
571 U.S. 117, 137 (2014). Because Parus could have filed this case in the WDWA, the Court must
consider the private and public interest factors. Volkswagen II, 545 F.3d at 315.
B.
Private Interest Factors
1. Cost of Attendance and Convenience of Willing Witnesses
The most important factor in the transfer analysis is the convenience of the witnesses. See
In re Genentech, Inc., 566 F.3d 1338, 1343 (Fed. Cir. 2009). The Fifth Circuit has established the
“100-mile rule,” providing 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.” Volkswagen I,
371 F.3d at 204–05. Yet the Federal Circuit has refused to apply the rule “rigidly,” such as where
it may “result in all identified witnesses having to travel away from their home and work in order
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to testify in Texas, which would ‘produce results divorced from’ the rule’s underlying rationale.”
In re Google LLC, No. 2021-170, 2021 WL 4427899, at *5 (Fed. Cir. Sept. 27, 2021) (quoting In
re TracFone Wireless, Inc., 852 F. App’x 537, 539 (Fed. Cir. 2021)). This has led the Federal
Circuit to disregard distance altogether in favor of considering travel-time statistics. See In re
Google LLC, 2021 WL 4427899, at *12 (“[T]ime is a more important metric than distance.”). Or
to simply disregard any difference in convenience between the relevant fora where it is comfortable
concluding that a witness would have to travel a significant distance no matter if the action is
transferred or not. See In re Apple, 979 F.3d at 1342 (discussing witnesses traveling from New
York to either Texas or California venues); In re Genentech, Inc., 566 F.3d at 1344 (stating that
the 100-mile rule should not be “rigidly” applied in the context of foreign witnesses); In re
Pandora Media, LLC, No. 2021-172, 2021 WL 4772805, at *6 (Fed. Cir. Oct. 13, 2021). It has
even gone as far as opining that “[t]he comparison between the transferor and transferee forum is
not altered by the presence of other witnesses and documents in places outside both forums.” In re
Toyota Motor Corp., 747 F.3d 1338, 1340 (Fed. Cir. 2014); In re Google LLC, No. 2021-170,
2021 WL 4427899, at *4 (Fed. Cir. Sept. 27, 2021).
Willing Witnesses in WDWA. Microsoft asserts that “the overwhelming majority of
Microsoft’s witnesses who have information about the Relevant Products” are in the WDWA. ECF
No. 30 ¶¶ 8-13. Microsoft also explains that it undertook an investigation into the Relevant
Products to identify specific witnesses who will likely testify in this case. ECF No. 29 at 2.
Microsoft explains that once it identified specific personnel, it analyzed its human resource records
for the people who are in the same “Cost Center” as the witnesses. Id. A
Id. at 4 n.2.
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Supported by a declaration from Tara Eaves, a Human Resources Data Analyst Group
Manager at Microsoft, ECF No. 30 ¶ 1, Microsoft identified six specific witnesses from the
WDWA who have relevant information and are likely to testify in this case. ECF No. 29 at 3. It
also identified the number of employees in the same Cost Centers as the specific witnesses and
where those witnesses are located. See ECF No. 30 ¶¶ 7-13. Jonathan Hamaker is a Software
Engineering Manager for Cortana with knowledge of research, design, and development aspects
of Cortana. ECF No. 59-1 at 20.
Center, and
employees, including Mr. Hamaker work in the same Cost
of those employees work in King County, Washington (located in the WDWA)
ECF No. 30 ¶ 8. William Baer is the Product Marketing Manager for Cortana;
in the same Cost Center as Mr. Baer and
of those employees work in King County. Id. ¶ 9.
Heiko Rahmel is a Principal PM Manager for Speech; Mr. Rahmel and
in the same Cost Center, and
employees work
other employees work
of those employees work in King County. Id. ¶ 10. Andrew Oakley
is a Principal PM Manager for Bing; he and
other employees out of the
total who work in
the same Cost center work in King County. Id.¶ 11. Fabrice Canel is Principal Program Manager
for Bing; all the
employees in his same Cost Center work in King County. Id. ¶ 12. Ryan
Asdourian is a Subsidiary BG Lead for Surface with knowledge of marketing for Surface;
employees, including Mr. Asdourian, are in the same Cost center, and
of those employees work
in King County. Id. ¶ 13.
Parus argues that these are “cherry-picked results” that cannot be used to establish that
transfer is clearly more convenient. See ECF No. 59 at 5 (emphasis in original). In support, Parus
introduces evidence to try to controvert each specific witness’s relevance. See id. at 7–8. For
example, Parus asserts that Mr. Hamaker’s “role today no longer includes the underlying speech
and natural language systems for Cortana[.]” ECF No. 59 at 8 (citing ECF No. 59-1 at 21). But
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within the same document cited by Parus for support, Microsoft also explains that Mr. Hamaker
was one of the first technical staff working on Cortana and held the role of technical lead for the
e2e speech and natural language systems and solutions for Cortana in its first 4 years. ECF No.
59-1 at 21–22. Mr. Hamaker is also responsible for the Bing Answer Skill for Cortana. Id.
Parus further argues that Mr. Rahmel merely “collaborated closely with the Cortana
product team.” ECF No. 59 at 8 (citing ECF No. 59-1 at 22). But Microsoft explains that Mr.
Rahmel has worked for 11 years as the Principal Program Manager Lead/Principal PM Architect
on Speech, working on driving key features of core speech recognition technology as well as the
integration of speech recognition technology into 1st and 3rd party applications, including Cortana.
ECF No. 59-1 at 21–22. Ryan Asdourian “has knowledge of marketing for Surface products,” but
Parus alleges that Microsoft did not explain if Surface marketing in particular is important as it
relates to Cortana. ECF No. 59 at 8. Even if the Court accepts Parus’s argument that Mr. Asdourian
may not be relevant, the Court is satisfied that at least five of these witnesses- Mr. Hamaker, Mr.
Baer, Mr. Rahmel, Mr. Oakley, and Mr. Canel- work from the WDWA, that they have relevant
knowledge, and that the WDWA is a more convenient forum for these personnel.
Parus challenges that the Cost Centers as a reliable way to identify relevant witnesses. ECF
No. 59 at 6. But the Court has already found that Microsoft Cost Centers are relevant for
determining potential witnesses. Interactive Graphic Sols. LLC v. Microsoft Corp., No. 21-462ADA, 2022 WL 1314462, at *3 (W.D. Tex. Apr. 20, 2022). Parus then asserts that even if Cost
Centers are relevant, that Microsoft failed to distinguish “relevant” employees from others in the
same Cost Center located outside Washington. See, e.g., ECF No. 59 at 7 (citing ECF No. 59-3 at
1 (indicating witnesses in California, Massachusetts, and South Carolina)); see also id. (citing ECF
No. 59-3 at 1 (arguing that
other Product Marketing professionals, apart from Mr.
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Baer, are within the same Cost Center, four outside Washington)). First, the Court finds that
witnesses living in Massachusetts and South Carolina are too remote from this District and the
WDWA to have much effect under this factor. See In re Apple, 979 F.3d at 1342 (citing In re
Genentech, 566 F.3d at 1344 (“the 100-mile rule ‘should not be rigidly applied’ where witnesses
‘will be required to travel a significant distance no matter where they testify’); see also In re
Google, LLC, 2021 WL 4427899, at *4 (“Our cases have emphasized that when there are numerous
witnesses in the transferee venue and the only other witnesses are far outside the plaintiff's chosen
forum, the witness-convenience factor favors transfer”). Also, using Parus’s argument,
witnesses within the same Cost Center as Mr. Baer are located outside of Washington, but
witnesses are in King County. ECF No. 59-3 at 1. Thus, the evidence establishes there are
more witnesses located in the WDWA.
Lastly, Parus asserts that Microsoft “hides behind privilege to avoid providing any
information on their ‘investigation,’ so neither Parus nor the Court have any basis to know if their
investigation is reliable. Id. (citing ECF No. 59-7 at 14). To be sure, if parties believe the opposing
party failed to provide discovery, parties should timely seek appropriate relief. Yet, while the Court
takes issue with parties using privilege to attempt to avoid providing important discovery, the
Court does not agree with Parus’s assertion that the Court has no basis to know if the investigation
is reliable. Based on the record before it, Microsoft provided sufficient information to show that
the potential witnesses Microsoft identified in the WDWA are relevant and Parus did not provide
contradictory evidence to show otherwise. The Court is satisfied that the potential witnesses have
relevant and material information, and that is all the Court can demand at this point. See In re Hulu,
LLC, No. 2021-142, 2021 WL 3278194, at *3 (Fed. Cir. Aug. 2, 2021); see also In re Toyota Motor
Corp., 747 F.3d 1338, 1340 (Fed. Cir. 2014).
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Willing Witnesses in WDTX. As discussed, Parus questions Microsoft’s choice of relevant
witnesses. Parus argues that it has identified multiple relevant Microsoft employee witnesses in
Texas. ECF No. 59 at 9. But the only evidence Parus cites to as support for these assertions are the
individuals’ LinkedIn profiles. Id. Indeed, Parus asserts that “[p]ublic information shows that each
of these employees have knowledge of Microsoft’s AI functionality, including the infringing voice
virtual assistant Cortana.” Id. But this is not enough to show that these witnesses possess
knowledge relevant to the alleged infringement. In re Google LLC, 2021 WL 4427899, at *7
(allocating no weight to a potential witness that plaintiff found on LinkedIn because plaintiff “was
not at all specific about what testimony it expected to elicit from [that witness], or even if he
possesses knowledge of the facts relevant to this infringement action”); see also Logantree LP v.
Apple Inc., No. 6:21-CV-00397-ADA, 2022 WL 1491097, at *20 (W.D. Tex. May 11, 2022)
(“Gauging and articulating the relevance of a party’s personnel to a particular case—especially
personnel from a company the size of Apple—based only on vague LinkedIn profiles is a
challenge”). The relevance of these witnesses is far too speculative. The Court, therefore, accords
little to no weight to their convenience. The Court similarly gives no weight to Parus’s allegations
that Microsoft is actively hiring employees to work on the accused technology in this District, as
Parus’s reliance on public job postings, without more, is too speculative. ECF No. 59 at 10.
Microsoft, along with the employees it identifies in relevant Cost Centers in WDWA,
acknowledges that
of its employees who work in relevant Cost Centers work in the WDTX.
ECF No. 30 ¶¶ 8, 11, 13; see also ECF No. 62 at 3. Microsoft avers, though, that
of those
employees do not work on Cortana and have never worked on Relevant Products. See id. Parus
presents no evidence showing otherwise. Microsoft does concede, however, that one employee,
Enrique Mitchell, may have “peripheral” or “minimal” knowledge. ECF No. 62 at 2.
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Parus argues also that Alex Kurganov, an inventor of the ’705 patent, has agreed to
testify willingly in this District. ECF No. 59 at 11. Mr. Kurganov asserts that
Id.
ECF No. 59-2 ¶¶ 4–9. Mr. Kurganov lives in
, which he attests is a 28-hour drive
to Waco and a 46-hour drive to Seattle, Washington. Yet the Federal Circuit has consistently
held that witnesses on one coast are not accorded weight when the transferee district is on the
other coast. See In re Apple Inc., No. 2022-128, 2022 WL 1196768, at *3 (Fed. Cir. Apr. 22,
2022) (holding that witnesses in Florida would find Texas no more convenient than California);
In re Apple Inc., 979 F.3d 1332, 1342 (Fed. Cir. 2020) (witnesses in New York find Texas no
more convenient than California); Kajeet, Inc. v. Trend Micro, Inc., No. 6:21-CV-389-ADA,
2022 WL 126490, at *5 (W.D. Tex. Jan. 12, 2022) (holding that witnesses in Virginia would find
Texas no more convenient than California). The Court gives little weight to Mr. Kurganov’s
indication that he is willing to attend trial in the WDTX but unwilling to attend trial in the
WDWA. Regardless of the forum, he would have to travel a significant distance from home. See
In re Apple, 979 F.3d at 1342 (“the 100-mile rule should not be rigidly applied where witnesses
will be required to travel a significant distance no matter where they testify”).
Conclusion. The Court finds that this factor heavily favors transfer. Microsoft identified
several Microsoft employees with relevant and material knowledge working in the WDWA. Only
one potentially relevant Microsoft employee resides in Texas. Parus also identified one inventor
of the ’705 patent located in
who is willing to travel to this District but unwilling
to travel to the WDWA because of
. The Court is therefore satisfied that the
convenience of the potential witnesses located in the WDWA heavily favors transfer.
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2. Relative Ease of Access to Source of Proof
“In considering the relative ease of access to proof, a court looks to where documentary
evidence, such as documents and physical evidence, is stored.” Fintiv, Inc. v. Apple Inc., No. 6:18cv-00372-ADA, 2019 WL 4743678, at *5 (W.D. Tex. Sept. 10, 2019). This factor relates to the
relative—not absolute—ease of access to non-witness evidence. See In re Radmax, 720 F.3d at
288; In re Apple, 979 F.3d at 1339. “[T]he movant need not show that all relevant documents are
located in the transferee venue to support a conclusion that the location of relevant documents
favors transfer.” In re Apple, 979 F.3d at 1340; In re Juniper Networks, Inc., 14 F.4th 1313, 1321
(Fed. Cir. 2021) (“We have held that the fact that some evidence is stored in places other than
either the transferor or the transferee forum does not weigh against transfer.”).
The Fifth Circuit has held that, even in the context of electronic documents that can be
accessed anywhere on earth, this factor is not superfluous. See Volkswagen II, 545 F.3d at 316; see
also In re Dish Network LLC, No. 2021-182, 2021 WL 4911981, at *6 (Fed. Cir. Oct. 21, 2021).
Though having consistently characterized that holding as antiquated in the setting of a modern
patent dispute, this Court will continue to analyze this factor with a focus on the location of:
physical documents and other evidence; and the hardware storing the relevant electronic evidence.
See Def. Distributed v. Bruck, 30 F.4th 414, 434 & n.25 (5th Cir. 2022) (giving weight to the
location of servers hosting the electronic documents in dispute). The Federal Circuit has held,
however, that it is error not to also consider: “the location of document custodians and location
where documents are created and maintained, which may bear on the ease of retrieval.” In re
Google LLC, No. 2021-178, 2021 WL 5292267, at *2 (Fed. Cir. Nov. 15, 2021); see also Def.
Distributed, 30 F.4th at 434 & n.25 (considering, under this factor, where the “research, design,
development, manufacturing, and publishing” of the allegedly offending files occurred). Finally,
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evidence located at a party’s office that is not a “place of regular business” may be discounted. See
In re Google LLC, No. 2022-140, 2022 WL 1613192, at *4 (Fed. Cir. May 23, 2022).
This factor weighs heavily in favor of transfer. It seems to this Court that the majority of
employees who work on the Relevant Products are in the WDWA. Microsoft asserts that
Microsoft’s engineering, sales, and financial documents are primarily located in the WDWA, and
that the majority of employees who work on the Accused products are also there. ECF 30 ¶¶ 6, 8–
13. Accordingly, the location of several relevant personnel in the WDWA likely acting as
custodians for relevant technical documentation pushes this factor more towards transfer.
Parus contends that Microsoft is “unable or unwilling to identify the location of its relevant
documents,” thus, the Court cannot adequately determine where the sources of proof are located.
ECF No. 59 at 3. The Court disagrees.
). Microsoft also concedes that it has attempted to find the location of the data center on which
documents relevant to this litigation are stored but has been unable to confirm the exact location
of all such documents. ECF No. 59-4 at 20.
the Court has already determined that more relevant witnesses
are in WDWA than in this District. See supra III. B. 1; see also In re Juniper Networks, Inc., 14
F.4th 1313, 1321 (Fed. Cir. 2021) (“We have held that the fact that some evidence is stored in
places other than either the transferor or the transferee forum does not weigh against transfer.”).
The Federal Circuit has time and again reminded this Court to look to where the custodians of
relevant electronic documentation is, as they may bear on the relative ease of access to sources of
proof. Thus, the custodians of relevant electronic documentation are in the WDWA. Microsoft
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“need not show that all relevant documents are located in the transferee venue to support a
conclusion that the location of relevant documents favors transfer.” In re Apple, 979 F.3d at 1340.
Parus also contends that its documents are “or will be” in Austin, Texas. ECF No. 59 at 4.
Parus’s CEO, Taj Reneau asserts that “a considerable amount of documents have already been
relocated to Austin and are in storage.” ECF No. 59-6 ¶ 8. Parus does not identify any specific
material in the WDTX. But even if relevant documents are or will be in this District by the time
of trial, this Court recognizes, as it has done many times before, that the bulk of relevant evidence
in a patent infringement case will come from the accused infringer. In re Genentech, 566 F.3d at
1345. Consequently, the place where the defendant's documents are kept weighs in favor of
transfer to that location. Id.
is not enough to outweigh the
Conclusion.
fact that the majority of employees who work on the Relevant Products are in the WDWA, that
Microsoft’s engineering, sales, and financial documents are primarily located in Redmond,
Washington, and that the majority of employees who work on the Accused products are in the
WDWA. For those reasons, the Court finds that this factor heavily favors transfer.
3. Availability of Compulsory Process
Under the Federal Rules, a court may subpoena a witness to attend trial only (a) “within
100 miles of where the person resides, is employed, or regularly transacts business in person”; or
(b) “within the state where the person resides, is employed, or regularly transacts business in
person, if the person . . . is commanded to attend a trial and would not incur substantial expense.”
Fed. R. Civ. P. 45(c)(1)(A), (B)(ii); Gemalto S.A. v. CPI Card Grp. Inc., No. 15-CA-0910, 2015
WL 10818740, at *4 (W.D. Tex. Dec. 16, 2015). Under this factor, the Court focuses on non-party
witnesses whose attendance may need to be secured by a court order. Fintiv, 2019 WL 4743678,
at *14 (citing Volkswagen II, 545 F.3d at 316). This factor “weigh[s] heavily in favor of transfer
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when more third-party witnesses reside within the transferee venue than reside in the transferor
venue.” In re Apple, Inc., 581 F. App’x 886, 889 (Fed. Cir. 2014). When “there are several
witnesses located in the transferee forum and none in the transferor forum,” this factor favors
transfer. In re Google, No. 2021-171, 2021 WL 4592280, at *5 (Fed. Cir. Oct. 6, 2021). Further,
this Court cannot “discount” third-party “entities” having pertinent information in the transferee
venue “just because individual employees were not identified.” In re Apple Inc., No. 2021-181,
2021 WL 5291804, at *8 (Fed. Cir. Nov. 15, 2021) (quoting In re HP Inc., 826 F. App’x 899, 903
(Fed. Cir. 2020)).
The Federal Circuit has held that, under Fifth Circuit law, “when there is no indication that
a non-party witness is willing, the witness is presumed to be unwilling and considered under the
compulsory process factor.” In re HP Inc., No. 2018-149, 2018 WL 4692486, at *3 n.1 (Fed. Cir.
Sept. 25, 2018); see also In re Hulu, LLC, No. 2021-142, 2021 WL 3278194, at *4 (Fed. Cir. Aug.
2, 2021) (“[W]here . . . the movant has identified multiple third-party witnesses and shown that
they are overwhelmingly located within the subpoena power of only the transferee venue, this
factor favors transfer even without a showing of unwillingness for each witness”).
In its Motion, Microsoft alleges that there are no third-party witnesses yet identified in
either the WDWA or the WDTX, and so this factor is neutral. ECF No. 29 at 9. However, Parus
identifies multiple potential third-party witnesses in its Response. ECF No. 59 at 11. It explains
that Parus was previously “Webley System, Inc.” and that multiple former employees with
“knowledge of the company, software engineering, and more” reside in the state of Texas. Id.
Pavel “Paul” Leonovich, a senior software engineer familiar with the Webley voice application
development, resides in the Austin area. Id. John Ackelbein, former VP of sales at Webley,
possesses knowledge of the features of the Webley personal assistant and was responsible for
all business-to-business
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sales and resides in the Dallas area. Id. Hal Poel, former marketing executive of Webley, possesses
relevant knowledge related to the telecom features of the Webley product, resides in Sugar Land,
and Parus alleges he will testify in Waco. Id.1 Parus also identifies six prior art witnesses within
the Dallas-Fort Worth Metroplex, potentially within the subpoena power of this Court; while only
one prior artist has been identified in Washington. ECF Nos. 60-50–60-55; ECF No. 60-56.
Yet Parus, again, cites only to LinkedIn to connect the named third-party witnesses with
the Accused Products. See ECF Nos. 60-25; 60-65; 60-27; 60-50–60-56. It provides no basis for
its assertions that the Webley former employees or the potential prior art witnesses are relevant.
See id. Microsoft, in its reply, though, does not contest the relevancy of these witnesses. ECF No.
62 at 5. Thus, the Court will accord some weight to these witnesses. See Scramoge Tech. Ltd. v.
Apple Inc., No. 6:21-CV-00579-ADA, 2022 WL 1667561, at *6 (W.D. Tex. May 25, 2022) (giving
weight to prior art witnesses identified in reply because the opposing party did not question
their relevance through, for example, a sur-reply). Even given the potential relevancy of the prior
artists, though, while this Court will not categorically reject prior art witnesses without
considering the facts of the case, it discounts them because prior art witnesses rarely appear at
trial. In re Hulu, LLC, 2021 WL 3278194, at *3.
Microsoft’s only argument against Parus’s third-party witnesses is that they are not within
this Court’s subpoena power, because those witnesses are outside the 100-mile range of this Court.
1
Parus alleges Mr. Ackelbein and Mr. Poel “will testify in Waco,” but argues that these non-party
witnesses are within this Court’s subpoena power. Thus, it is somewhat unclear whether these
witnesses are willing or unwilling. Because Parus asserts that these witnesses are within this
Court's subpoena power, the Court will evaluate this argument under the “compulsory process”
factor. Even if Mr. Poel and Mr. Ackelbein are willing witnesses, though, the Court is satisfied
that it would not change its opinion that the willing witness factor weighs heavily in favor of
transfer, given their questionable knowledge of relevant information and that more witnesses are
in the WDWA.
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ECF No. 62 at 5. But under the Federal Rules of Civil Procedure, a court in the Western District
of Texas can subpoena a person to attend a trial, hearing, or disposition within the state where the
person resides, is employed, or regularly transacts business in person, if the person is commanded
to attend a trial and would not incur a substantial expense. See Fed. R. Civ. P. 45(c)(1)(B)(ii).
Given that Parus identified six prior art witnesses and three former Webley employees all located
within Texas, this Court will generally not, at this very early stage of the case, disqualify such
witnesses on the ground that they would “incur substantial expense” in traveling to testify. Fed. R.
Civ. P. 45(c)(1)(B). See Honeywell Int’l Inc., 2022 WL 2161058.
Conclusion. Parus identifies three former Webley employees and six potential prior artists
located in Texas whose relevance, though questionable, goes uncontested by Microsoft. Only one
potential prior artist is in the WDWA. Accordingly, the Court finds that this factor weighs against
transfer.
4. Practical Problems
When considering the private interest factors, courts must consider “all other practical
problems that make trial of a case easy, expeditious and inexpensive.” Volkswagen II, 545 F.3d at
314. “[G]arden-variety delay associated with transfer is not to be taken into consideration when
ruling on a § 1404(a) motion to transfer” but delay in already protracted litigation may account for
some weight. In re Radmax, 720 F.3d at 289.
“Particularly, the existence of duplicative suits involving the same or similar issues may
create practical difficulties that will weigh heavily in favor or against transfer.” PersonalWeb
Techs., LLC v. NEC Corp. of Am., Inc., No. 6:11-cv-655, 2013 WL 9600333, at *5 (E.D. Tex. Mar.
21, 2013). The interests of justice may be best served by transferring ancillary matters pending in
other forums to the forum of the main action, particularly if the main action is complex. Bank of
Texas v. Computer Stat., Inc., 60 F.R.D. 43, 45 (S.D. Tex. 1973). “[T]he ability to transfer a case
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to a district with numerous cases involving some overlapping issues weighs at least slightly in
favor of such a transfer.” In re Apple, 979 F.3d at 1344. But district courts should not rely “on
considerations of judicial economy arising after the filing of the lawsuit or the transfer motion,”
such as suits filed in the transferor district after a request to transfer. In re Netscout, 2021 WL
4771756, at *12. Further, “the mere co-pendency of infringement suits in a particular district” does
not automatically tip transfer in one direction or the other. Id. at *13.
This case has not proceeded to a Markman hearing and so has not yet matured to a stage
where this factor biases toward transfer. Parus argues that the presence of three other Parus cases
pending in this Court weighs against transfer. ECF No. 59 at 15. 2 But all three of the other Parus
cases also have pending motions to transfer, so the Court will not rule that those cases weigh
against transfer. See In re Google, 2021 WL 5292267, at *3. (“copending suits are not to be overweighed if they are also subject to motions to transfer.”). Given that a lack of facts supporting or
disfavoring transfer does not weigh against transfer, the Court will similarly not find that this
scenario favors transfer either. See Interactive Graphic Sols. LLC v. Microsoft Corp., No. W-21CV-00462-ADA, 2022 WL 1314462, at *4 (W.D. Tex. Apr. 20, 2022).
Conclusion. Accordingly, the Court finds this factor neutral.
C.
Public Interest Factors
1. Court Congestion
The relevant inquiry under this factor is “[t]he speed with which a case can come to trial
and be resolved.” In re Genentech, 566 F.3d at 1347; In re Apple, 979 F.3d at 1343. A faster
average time to trial means more efficient and economical resolutions of the claims at issue. That
2
Parus Holdings Inc. v. Google, LLC., No. 6:21-cv-571; Parus Holdings Inc. v. Apple Inc., No.
6:21-cv-968; Parus Holdings Inc. v. Samsung Elecs. Co., Ltd., No. 6:21-cv-1073.
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said, “[a] court’s general ability to set a fast-paced schedule is not particularly relevant to this
factor.” In re Apple, 979 F.3d at 1344. Moreover, when other relevant factors weigh in favor of
transfer or are neutral, “then the speed of the transferee district court should not alone outweigh
all of those other factors.” In re Genentech, 566 F.3d at 1347.
The Federal Circuit has held that a difference in the number of pending cases between the
transferor and transferee forums is “too tenuously related to any differences in speed by which
these districts can bring cases to trial.” Id. In another case, it has opined that a “proper” analysis
“looks to the number of cases per judgeship and the actual average time to trial.” In re Juniper
Networks, 14 F.4th at 1321. It has further ruled that, if time-to-trial statistics favor one district over
another, the court must “point to any reason that a more rapid disposition of the case that might be
available in Texas is worthy of important weight.” Id. 1322; In re Samsung Elecs. Co., 2 F.4th
1371, 1380–81 (Fed. Cir. 2021).
The Court finds that this factor favors keeping this Action here. Microsoft argues that this
factor is neutral because of the “close similarity of cases per judgeship and average time to trial of
the two forums.” ECF No. 29 at 11 (citing In re Hulu, 2021 WL 3278194, at *5). Microsoft uses
the time-to-trial statistics for the WDTX as a whole to compare to the WDWA. ECF No. 29 at 11.
(arguing that for the 12-month period ending June 30, 2021, the WDWA had 402 civil actions per
judgeship (494 total actions) and the time to trial was 22.2 months, and the WDTX had 336 civil
actions per judgeship (997 total actions) and the time to trial was 23.8 months). Parus, however,
correctly points out that this Court’s average time to trial in this District is faster than in the
WDWA. ECF No. 59 at 13–14.
Parus also argues under this factor that Microsoft has had a “recent change in heart”
regarding the convenience of this District, given that “of the sixty-four cases involving Microsoft
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in this District, Microsoft moved for transfer only twenty-five times.” ECF No. 59 at 14. The Court
has addressed this argument before. See Interactive Graphic Sols. LLC, 2022 WL 1314462, at *4.
While this position may carry some weight, each case presents unique facts that may warrant
transfer. See id. Despite Microsoft's litigation history in this forum, the Court will not automatically
assume that this forum is convenient given the unique facts in this case.
Conclusion. The Federal Circuit has concluded that the speed of the transferee district
should not alone outweigh all other factors. Thus, the Court finds that this factor weighs only
slightly against transfer.
2. Local Interest
Under this factor, the Court must evaluate whether there is a local interest in deciding local
issues at home. Volkswagen II, 545 F.3d at 317. Local interests in a patent case “are not a fiction.”
In re Samsung, 2 F.4th at 1380. “This factor most notably regards not merely the parties’
significant connections to each forum writ large, but rather the ‘significant connections between a
particular venue and the events that gave rise to a suit.’” In re Apple, 979 F.3d at 1344 (quoting In
re Acer Am. Corp., 626 F.3d 1252, 1256 (Fed. Cir. 2010)) (emphasis in original). The Federal
Circuit has accorded significant weight under this factor to the location where the accused product
or functionality was “designed, developed, and tested.” In re Apple, 979 F.3d at 1345. It has
accorded no weight to the location of the sale of an accused product where that product is offered
nationwide. In re Hoffmann-La Roche Inc., 587 F.3d 1333, 1338 (Fed. Cir. 2009). Courts should
not heavily weigh a party’s general presence in the forum. In re Apple, 979 F.3d at 1345. For
example, the Federal Circuit recently attributed error to this Court for granting even some weight
to Apple’s significant general presence in this District. In re Apple Inc., No. 2022-137, 2022 WL
1676400, at *2 (Fed. Cir. May 26, 2022) (“The court’s reliance on [the defendant’s Austin] offices,
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which lack such a connection to the locus of the events giving rise to the dispute, amounts to a
clear abuse of discretion”).
“Important considerations include the location of the injury, witnesses, and the [p]laintiff’s
residence.” Def. Distributed, 30 F.4th at 435. Yet the Federal Circuit has instructed that plaintiff’s
residence in the transferor forum is owed no weight if it is “recent and ephemeral.” In re Juniper
Networks, 14 F.4th at 1320 (quoting In re Microsoft Corp., 630 F.3d 1361, 1365 (Fed. Cir. 2011)).
The Federal Circuit has also clarified that a plaintiff’s residence is owed zero weight if it lies
beyond the transferor judicial district, even if just so. See In re Apple, 2022 WL 1676400, at *2
(granting little to no weight to the design, development, and testing of the claimed invention
occurring just over 100 miles from the transferor court); In re Google, 2021 WL 4592280, at *6
(finding error with district court’s reliance on plaintiff’s office in Texas, where the office was
located outside this District).
The Court finds that this factor heavily favors transfer. The Federal Circuit has repeatedly
admonished this court to focus on “significant connections between a particular venue and the
events that gave rise to a suit.” In re Apple Inc., 979 F.3d at 1345. Microsoft’s headquarters are in
the WDWA and the teams that designed and developed the Accused Products are primarily located
in the WDWA. ECF No. 29 at 12. The presence of Microsoft’s data centers and offices in this
District cannot outweigh the presence of Microsoft’s headquarters and the fact that the majority of
the Accused Products were designed and developed primarily in the WDWA. The Court also
attributes no weight to the fact that Parus is in the midst of transferring all operations to the Austin
area, ECF No. 29 at 14, given that any presence Parus may have in this District is “recent and
ephemeral.” In re Juniper Networks, 14 F.4th at 1320 (quoting In re Microsoft Corp., 630 F.3d
1361, 1365 (Fed. Cir. 2011)).
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Conclusion. Accordingly, this factor heavily favors transfer.
3. The Other Public Interest Factors are Neutral.
The other public interest factors are neutral. 3 This Court and the WDWA are both familiar
with patent law. And to the extent any conflicts of law arise, both courts are equally capable of
addressing them.
IV. CONCLUSION
Having considered the private and public interest factors, the Court’s conclusions for each
factor is summarized in the following table:
Factor
Cost of attendance for willing witnesses
Relative ease of access to sources of proof
Availability of compulsory process to secure the
attendance of witnesses
All other practical problems that make trial of a
case easy, expeditious and inexpensive
Administrative difficulties flowing from court
congestion
Local interest
Familiarity of the forum with law that will govern
case
Problems associated with conflict of law
The Court’s Finding
Weighs heavily in favor of transfer
Weighs heavily in favor of transfer
Weighs against transfer
Neutral
Weighs slightly against transfer
Weighs heavily in favor of transfer
Neutral
Neutral
The Court gives the “practical problems” factor less weight because the Federal Circuit has
held that judicial economic considerations from related cases cannot “negate[] the significance of
having trial close to where most of the identified witnesses reside and where the other convenience
3
Microsoft concedes that both the remaining factors- “familiarity of forum with governing law”
and “conflict of laws”- are neutral. ECF No. 29 at 12. Parus also concedes that the “conflict of
laws” factor is neutral. ECF No. 59 at 15. But Parus argues under the “familiarity of the forum
with governing law” factor, that this Court should consider the pendency of Parus’s related cases.
ECF No. 59 at 15. Parus states, though, that “[f]ederal patent law will apply regardless of where
this case is litigated.” Id. The Court does not interpret Parus’s argument regarding co-pendency of
related cases as an assertion that either forum is not familiar with the relevant law.
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factors clearly favor.” In re Zimmer Holdings, Inc., 609 F.3d 1378, 1382 (Fed. Cir. 2010). Any
judicial economy considerations would be insufficient to outweigh the clear benefits of transfer
given the imbalance in the parties’ presentations on the other private-interest and public-interest
factors. See In re: NetScout Sys., Inc., 2021 WL 4771756, at *5.
The Federal Circuit has also consistently told the Court to diminish the weight given to the
docket-congestion factor. Microsoft has more sources of proof and willing witnesses in the
WDWA. The WDWA likely has a stronger localized interest because of Microsoft’s significant
general presence there coupled with significant development and design there. That the WDWA
would be unable to subpoena potential witnesses located near this District has not stopped
Microsoft from showing that the WDWA is a clearly more convenient venue.
IT IS ORDERED that Defendants’ Motion to Transfer Venue to the Western District of
Washington (ECF No. 29) is GRANTED. The Court’s Clerk is directed to transfer this Action to
the U.S. District Court for Western District of Washington.
SIGNED this 29th day of November, 2022.
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