Innovative Communications Technologies, Inc. v. Stalker Software, Inc.
Filing
41
OPINION AND ORDER that the Court hereby DENIES Vivox's Motion to Transfer Venue and Stalker's Motion to Transfer Venue at this time. Signed by District Judge Robert G. Doumar on 10/2/2012 and filed on 12/3/2012. (rsim, )
FILED
IN THE UNITED STATES DISTRICT COURT
OCT
3 2012'
FOR THE EASTERN DISTRICT OF VIRGINIA
CLERK, US DISTRICT COURT
Norfolk Division
NORFOLK, VA
INNOVATIVE COMMUNICATIONS TECHNOLOGIES, INC.
Plaintiff,
v.
Civil Action No. 2:12cv7
VIVOX, INC.
Defendant.
INNOVATIVE COMMUNICATIONS TECHNOLOGIES, INC.
Plaintiff,
v.
Civil Action No. 2:12cv8
OOVOO, LLC,
Defendant.
INNOVATIVE COMMUNICATIONS TECHNOLOGIES, INC.
Plaintiff,
v.
Civil Action No. 2:12cv9
STALKER SOFTWARE, INC.
Defendant.
OPINION AND ORDER
This matter involves a patent dispute between Plaintiff Innovative Communications
Technologies, Inc., ("Plaintiff) and Defendants Vivox, Inc., Oovoo, LLC, and Stalker Software,
Inc. (collectively "Defendants"). The Court has consolidated the three cases listed above for the
purposes of the Markman hearing and trial.
Defendants Vivox and Stalker have both filed
Motions to Transfer Venue pursuant to 28 U.S.C. § 1404(a) alleging that Plaintiff and this action
have no meaningful connection to the Eastern District of Virginia.
For the reasons set forth
herein, Defendants motions are DENIED at this time. The Court will allow the defendants to
file motions to transfer venue following the Markman hearing.
I.
PROCEDURAL AND FACTUAL BACKGROUND
On January 4, 2012, Plaintiff filed suit against Defendants and alleges the infringement of
United States Patent Nos.: 6,108,704 ("the '704 patent"); 6,513,066 ("the '066 patent");
6,701,365 ("the '365 patent"); 6,131,121 ("the '121 patent"); and 6,009,469 ("the '469 patent")
against Vivox and the infringement of three United States Patent Nos.: the '704 patent; the '066
patent; and the '365 patent (collectively, the "Asserted Patents") against Stalker. Plaintiff alleges
that Defendants have infringed, and continue to infringe, its Asserted Patents regarding voice
over internet protocol ("VoIP") products and/or services. Plaintiff seeks a judgment in its favor,
an injunction, and damages.
As alleged in the Complaint, Plaintiff is a Delaware corporation with its principal place
of business at 1655 Fort Meyer Drive, #700, Arlington, VA 22209. Vivox Compl. H 1. Vivox is
a Delaware corporation with a principal place of business at 2-4 Mercer Road, Natick, MA
07160. Id. U 2. Citing the declaration of Robert Seaver, the Founder and Chief Strategy Officer
of Vivox, Vivox states that it employs approximately thirty individuals at its headquarters and
provides design, development, operations, marketing, sales, and other functions from this
location. Vivox Mot. Transfer 2. Vivox further states that one employee works from a homebased office in Texas and that is has no physical presence outside of Massachusetts other than a
server collocation space leased in New York, NY.
Id.
In addition, Vivox states that all
documents and witnesses related to the design, development, operations, marketing, and sales of
the Asserted Patents are located in Massachusetts. Id.
Stalker, doing business as CommuniGate, is a California corporation with a principal
place of business at 655 Redwood Highway, Suite 275, Mill Valley, CA 94941. Stalker Compl.
K 2. Citing the declaration of Vladimir Butenko, the President of Stalker Software, Stalker states
that its evidence, documents, and witnesses relevant to this litigation and the asserted patents are
located either in the Northern District of California or overseas. Stalker Mot. Transfer 2-3.
With regard to Vivox, after repeated requests for extensions of time in which to file an
Answer, which the Court granted, Vivox filed an Answer on June 25, 2012. On July 12, 2012,
this Court entered its Markman Order and consolidated this case with the above-captioned cases
for the purposes of the Markman Hearing and Trial. On August 7, 2012, Vivox filed its initial
Claim Construction Brief, and it filed its subsequent Claim Construction Brief on September 14,
2012.
On August 10, 2012, Vivox filed the instant Motion to Transfer Venue. Plaintiff filed a
timely Response in Opposition, and Vivox filed a timely Reply. Therefore, this matter is ripe for
decision.
After repeated requests for extensions of time in which to file an Answer, Stalker filed an
Answer on April 10, 2012.
On June 15, 2012, this Court entered its Markman Order and
consolidated this case with the above-captioned cases for the purposes of the Markman Hearing
and Trial. Stalker filed its initial Claim Construction Brief on August 7, 2012, and its subsequent
Claim Construction Brief on September 14, 2012.
After fully briefing the Markman Hearing,
and only sixteen days before the date of the Markman hearing, the date of which was set on June
15, 2012, Stalker filed its Motion to Transfer Case.
Plaintiff has not yet filed a Response.
However, in the interests of judicial economy, since both Vivox and Stalker raise substantially
similar arguments in their motions to transfer venue—indeed, parts of their motions are
identical—the Court will decide both motions simultaneously.
Although the Court denies
Defendants' motions at this time, the Court will entertain renewed motions concerning transfer
of venue following the Markman hearing on October 10,2012.
II.
APPLICABLE LAW AND ANALYSIS
Under 28 U.S.C. § 1404(a) "[t]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...." The decision to transfer venue is committed to the sound discretion
of the district court. See One Beacon Ins. Co. v. JNB Storage Trailer Rental Corp., 312
F.Supp.2d 824, 828 (E.D.Va.2004) (citing Heinz Kettler GMBH & Co. v. Razor USA, LLC, 750
F. Supp. 2d 660, 667 (E.D. Va. 2010)). In considering whether to allow transfer, the court makes
two inquiries: whether the claims could have been brought in the transferee forum, and whether
the interests of justice and convenience of the parties and witnesses support the transfer. Koh v.
MicrotekInt'l, Inc., 250 F. Supp. 2d 627, 630 (E.D. Va. 2003).
In this matter, it does not appear that the parties contest that these suits could have been
filed originally in the United States District Court for the District of Massachusetts with regard to
Vivox and for the Northern District of California with regard to Stalker. A corporation is subject
to personal jurisdiction in a district where it has its principal place of business, where it has
certain "minimum contacts," or where the litigation results from injuries that arise out of or relate
to the corporation's activities in the district. See, e.g., Koh 250 F. Supp. 2d at 631; NanoEnTek,
Inc. v. Bio-Rad Labs., 2:11CV427, 2011 U.S. Dist. LEXIS 138535, at *4-5 (E.D. Va. Dec. 2,
2011).
If personal jurisdiction is proper for a corporate defendant, then venue is also proper:
"[U]nder §
1400(b) [and]
§
1391(c), the tests for venue and personal jurisdiction are
interchangeable for corporations." LG Elecs. Inc. v. Advance Creative Computer Corp., 131 F.
Supp. 2d 804, 810 (E.D. Va. 2001); see 28 U.S.C. § 1391(c) ("[A] defendant that is a corporation
shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at
the time the action is commenced."); 28 U.S.C. § 1400(b) (venue proper where the defendants
reside).
Vivox has its principal place of business in Massachusetts and is subject to personal
jurisdiction in the District of Massachusetts. Therefore venue in the District of Massachusetts is
proper as well with regard to Vivox.
Similarly, Stalker has its principal place of business in
California and is subject to personal jurisdiction in the Northern District of California. Therefore
venue in the Northern District of California is proper as well with regard to Stalker.
With this threshold inquiry met, the Court turns to the question of the interests of justice
and the convenience of the parties and witnesses.
In addressing this question, the Court
considers four factors: (1) the plaintiffs choice of forum; (2) the convenience of the parties; (3)
the convenience of the witnesses; and (4) the interests of justice. See Heinz Kettler GMBH &
Co. v. Razor USA, LLC, 750 F. Supp. 2d 660, 667 (E.D. Va. 2010). The party seeking transfer
bears the burden of demonstrating that "the circumstances of the case are strongly in favor of
transfer."
Id (emphasis in original).
In balancing these four factors, the Court finds that
Defendants Vivox and Stalker have not met their burden.
A.
Plaintiff's Choice of Forum
Typically, a plaintiffs choice of forum is entitled to substantial weight, especially where
the chosen forum is the plaintiffs home forum or bears a substantial relation to the cause of
action.
Id (citing Koh, 250 F. Supp. 2d at 633).
To overcome the plaintiffs privilege of
choosing the forum, a "movant bears the burden of demonstrating that the balance of
convenience among the parties and witnesses is strongly in favor of the forum to which transfer
is sought."
original).
JTH Tax, Inc. v. Lee, 482 F. Supp. 2d 731, 736 (E.D. Va. 2007) (emphasis in
However, a plaintiffs chosen venue is "not given such substantial weight when the
plaintiff selects a forum other than its home forum and the claims bear little or no relation to the
chosen forum." Koh, 250 F. Supp. 2d at 633. Both Vivox and Stalker dispute that the Eastern
District of Virginia is Plaintiffs home forum, and the Court must, therefore determine whether
the Eastern District of Virginia is a home forum for Plaintiff and whether Plaintiffs claims are
sufficiently related to this District.
Although Plaintiff alleges in its Complaint that its principal place of business is located in
Arlington, VA within the Eastern District, Vivox and Stalker argue that this is a non-permanent,
virtual office.
Vivox Mot. Transfer 3; Stalker Mot. Transfer 1.
In support of this allegation,
Vivox and Stalker cite the declarations of a private investigator hired to investigate Plaintiffs
principal place of business. See Vivox Mot. Transfer 3. Defendants also cite the fact that Dun
& Bradstreet has no information about Plaintiff and Standard and Poor's Capital IQ database
reports that Plaintiff has offices at 520 Broad Street, Newark, NJ 07102, which is the same
address as Plaintiffs corporate parent, IDT Corporation. Id 3-4. In terms of additional ties to
this District, Defendants argue that none of the six witnesses Plaintiff has identified in its initial
disclosures reside within this District. Id 4. Three reside in the greater New York City area, and
three reside in Florida. Id
In response, Plaintiff has provided the Court with declarations that refute the allegations
made by Defendants' private investigator to some degree. PL's Resp. 2-3. Plaintiff states that it
maintains a dedicated office that contains physical files and records and that is used by its
employees.
Id.
Plaintiff also states that it filed a Form 15-12G to terminate its registration of
class B shares, which suspended the requirement that it file periodic reports with the Securities
and Exchange Commission under the Securities Exchange Act. Id. 3-4. Thus, Plaintiff has not
updated prior disclosures regarding its offices and operations. With regard to ties to this District,
Plaintiff argues that Virginia residents use Vivox products and services containing the Asserted
Patents and that Vivox customers, such as T-Mobile and Linden Lab, conduct substantial activity
in Virginia. Id. 5.
For the purposes of these motions, the Court "must construe all relevant pleading
allegations in the light most favorable to the plaintiff, assume credibility, and draw the most
favorable inferences for the existence of jurisdiction." Combs v. Bakker, 886 F.2d 673, 676 (4th
Cir. 1989). However, the evidence presented in the pleadings indicates that while Plaintiff may
have an office and presence in this District, and while Plaintiff states that this office is its
principal place of business and sole office, it is questionable whether Plaintiffs presence at this
office is sufficient to entitle it to home forum deference when weighing this first factor. Indeed,
Plaintiffs connection to this District appears to be somewhat tenuous despite the fact that it
maintains an office in Arlington—especially since it appears that no employees work there
permanently.
In addition, other courts in this District have held that "[wjhether the Defendants
sold or offered for sale their allegedly infringing products or services in this district is of little
import: Sales activity alone does not establish a substantial connection to the forum." Augme
Techs., Inc., v. Gannett Co., 3:11CV282, 2011 U.S. Dist. LEXIS 81605 at *7-8 (E.D. Va. July
26, 2011) (citing Agilent Techs., Inc. v. Micromuse, Inc., 316 F. Supp. 2d 322, 327 n.3 (E.D. Va.
2004). Some courts in this District have also held, "a plaintiff filing suit in a district where it is
not a resident loses only some of the deference given its choice of forum." E. Scientific MJctg.,
Inc. v. Tekna-Seal, Inc., 696 F. Supp. 173, 179 (E.D. Va. 1988). Nevertheless, the Court finds
that Plaintiffs choice of forum here does not strongly weigh against transfer since Plaintiffs
presence in Arlington is negligible.
Indeed, it appears that this District probably should not be
considered Plaintiffs home forum, and the claims bear almost no relation to this District. The
Court, therefore, gives this factor little or no weight in favor of Plaintiff.
B.
Convenience of the Parties and Witnesses
The convenience of the parties and witnesses weighs neither for nor against transfer in
this matter with regard to the Markman hearing since the parties and witnesses are located in
many different fora. As the Court will discuss further below in analyzing the interests of justice,
these cases have been consolidated, the Markman hearing has been set and is fully briefed, and a
trial date has also been set.
There are three defendants.
Vivox is located in Massachusetts,
Stalker is located in California, and 00V00 is located in New York, NY.
Vivox argues that all of the relevant evidence, documents, and key witnesses are located
in Massachusetts, and that it would be more convenient for its employees to remain in
Massachusetts rather than disrupt their work obligations by traveling to Virginia.
Transfer 9-10.
Vivox Mot.
Stalker makes the same argument with regard to California and also states that
evidence, documents, and witnesses are located overseas.
Stalker Mot. Transfer 3, 8-10.
Defendants state that no key witnesses or documents are located in Virginia.
Defendants cite Augme Techs,, 2011 U.S. Dist. LEXIS 81605, at *8, for the proposition
that "the more important question is where the majority of the witnesses and evidence is
located." This argument may weigh in their favor if the Defendants were individually before the
Court.
However, for the purposes of the Markman hearing, they are not, and the pleadings
indicate that the majority of the witness and evidence is not located in one single forum. Rather,
witnesses and evidence are located in Massachusetts, California, New York City, New Jersey,
Florida, and "overseas." This suggests that "the Eastern District of Virginia is no less convenient
than [a transferee] Court" at this time.
3414612, *5 (E.D. Va. Oct. 20, 2009).
WiAV Solutions, LLC v. Motorola, Inc., 2009 WL
"As the proponents of transfer, the Movants bear the
burden of showing that the Eastern District of Virginia is an inconvenient forum to litigate, not
merely that the [transferee court] is a more convenient forum." Id. at *4. There is no question
that it is more convenient for the parties to litigate in their home forum.
However, where, as
here, all of the parties come from different fora, this argument also weighs against Defendants at
the present time.
In addition, one court in this District found that where convenience of the witnesses "is a
close
issue
and
ultimately
cannot be
confidently
determined
from
the
existing
sparse
record...[because] [n]either party [has] provide[d] the requisite particularity about the expected
witnesses and their potential testimony," the court should not accord this factor much weight.
Affinity Memory & Micro v.K&Q Enters., 20 F. Supp. 2d 948, 955 (E.D. Va. 1998).
Another
court in this District found that where "the original forum is convenient for plaintiffs witness,
but inconvenient for defendant's
witnesses,
and the reverse
is true for the transferee
forum...transfer is inappropriate because the result of transfer would serve only to shift the
balance of inconvenience." Board of Trustees v. Baylor Heating & Air Conditioning, Inc., 702
F. Supp. 1253, 1258 (E.D. Va. 1988). The court in Baylor Heating also stated the following:
Witness convenience is often dispositive in transfer decisions. But the influence
of this factor cannot be assessed in the absence of reliable information identifying
the witnesses involved and specifically describing their testimony. This type of
particularized information, typically submitted in affidavit form, is necessary to
enable the court to ascertain how much weight to give a claim of inconvenience.
Inconvenience to a witness whose testimony is cumulative is not entitled to
greater weight. By contrast, greater weight should be accorded inconvenience to
witnesses whose testimony is central to a claim and whose credibility is also
likely to be an important issue. Id.
In this matter, except for Stalker's identification of one potential, named witness who lives in the
Northern District of California, Defendants have made only vague generalizations about their
expected witnesses in Massachusetts and California and their potential testimony.
As a result,
given that multiple defendants are involved in this matter, and that relevant evidence, documents,
and key witnesses witness are located in several fora, convenience of the parties and witnesses
does not support a decision to transfer this action at this time.
C.
The Interests ofJustice
The Court finds that the interests of justice weigh heavily against transfer at this point in
the proceedings after these three cases have been consolidated, right before the Markman
hearing, and after the Markman hearing has been fully briefed.
The interests of justice is a purposefully broad category which takes into account all
factors other than convenience and the parties' initial choice of venue.
See Precision
Franchising, LLC v. Coombs, 1:O6CV1148, 2006 WL 3840334, at *6 (E.D. Va. Dec. 27, 2006);
Bd. ofTrs., Sheet Metal Workers Nat'I Fund v. Baylor Heating & Air Conditioning, Inc., 702
F.Supp. 1253, 1256 (E.D. Va. 1988). Such factors include "the pendency of a related action, the
court's familiarity with the applicable law, docket conditions, access to premises that might have
to be viewed, the possibility of unfair trial, the ability to join other parties, and the possibility of
harassment." Koh, 250 F. Supp. at 639. Courts in this District also entertain another factor—the
extent to which a plaintiff has engaged in forum shopping due to the presence of the "rocket
docket" in this District. See, e.g., Telepharmacy Solutions, Inc. v. Pickpoint Corp., 238 F. Supp.
2d 741, 744 (E.D. Va. 2003).
While Plaintiff may have a more tenuous connection to this
District, the Court does not find that Plaintiff has engaged in blatant forum shopping.
10
Analyzing the other factors, the undersigned is familiar with patent law, and the docket is
not overburdened. In fact, the undersigned has no other patent cases pending at the present time.
In addition, no party has argued that the present venue will lead to an unfair trial.
The most
important factor for this Court in considering the interests of justice is the pendency of other
actions, judicial economy, and the risk of inconsistent judgments.
As the court stated in Heinz
Kettler, this final factor "encompasses public interest factors aimed at systemic integrity and
fairness" including "judicial economy and the avoidance of inconsistent judgments."
750 F.
Supp. 2d at 669. Indeed, "[o]ne of the most commonly cited aspects of the 'interest of justice'
factor is the goal of avoiding 'multiplicity of litigation from a single transaction.'" Samsung
Electronics Co. v. Rambus, Inc., 386 F. Supp. 2d 708, 721 (E.D. Va. 2005). It is important to
consider the pendency of related cases because "[i]n most cases, the 'litigation of related claims
in the same tribunal facilitates efficient, economical, and expeditious pre-trial proceedings and
discovery,' and prevents Muplicative litigation and inconsistent results.'" Id.
Vivox and Stalker argue that the Federal Circuit's decision in In re Zimmer Holdings,
Inc., 609 F.3d 1378 (Fed. Cir. 2010) rejects the argument that the pendency of other actions
weights against transfer.
However, contrary to the way Defendants characterize Zimmer
Holdings, that case does not stand for a blanket rejection for considering the pendency of other
actions.
Rather, as the Federal Circuit, clearly stated, although the district court had assigned
substantial weight to the fact that the plaintiff had filed another suit in the same forum, the
"circumstances of [that] case" did not outweigh the convenience factors where it found that the
overlap between the two cases pending before the district court was negligible.
Id. at 1382.
Indeed, the Federal Circuit found that the Eastern District of Texas was only convenient for
Medldea's litigation counsel. Id.
This case is clearly distinguishable from Zimmer Holdings
11
since the overlap between the three cases pending before this Court is not negligible—it is
significant for the purpose of the Markman hearing.
Vivox also cites In re Morgan Stanley, 417 Fed. Appx. 947 (Fed. Cir. 2011) and In re
Verizon Bus. Network Servs. Inc., 635 F.3d 559, 562 (Fed. Cir. 2011) for the proposition that
transfer is appropriate even where a trial court has some familiarity with a matter from prior
litigation or has actually previously issued a claim construction order in a case involving the
same patent. However, importantly, in Verizon, the district court had denied transfer solely on its
prior familiarity with the patent at issue five years before.
The Federal Circuit found that this
alone was not sufficient to deny transfer when the convenience of the witnesses weighed in favor
of transfer and since the district court had to relearn a considerable amount due to a time lapse
between the suits and new materials that were not part of the record of the previous suit. In re
Verizon, 635 F.3d at 562. The Court finds that the present matter is clearly distinguishable from
these cases because this Court is not basing its decision solely on its familiarity with the patents
at issue. Indeed, the Court has not seen these patents before. The Court finds that the situation
before it is more analogous to the Federal Circuit's ruling in In re Vistaprint Ltd., 628 F.3d 1342,
(Fed.Cir.2010) where the court stated the following:
Our holding today does not mean that, once a patent is litigated in a particular
venue the patent owner will necessarily have a free pass to maintain all future
litigation involving that patent in that venue. However, where, as here, the trial
court performed a detailed analysis explaining that it is very familiar with the only
asserted patent and the related technology, and where there is a co-pending
litigation before the trial court involving the same patent-in-suit, and pertaining to
the same underlying technology and accusing similar services, we cannot say the
trial court clearly abused its discretion in denying transfer. Id. at 1347.
The matter presently before the Court involves the same patents, and pertains to the same
underlying technology and services, and this Court does not deny Defendants' motions on solely
12
one ground but rather because the balance of all of the factors considered together weighs against
Defendants at this time for the purpose of the Markman hearing.
In this case, the Court has consolidated three cases.
The patents-in-suit contain
specifications that are substantially the same. Indeed, the technology and patents overlap to such
a degree that in the parties' joint Markman statement, Stalker and Vivox proposed identical
claim terms for construction and proposed construction, and 00V00 proposed identical
constructions plus one additional term. See ECF No. 27. In addition, all three Defendants have
filed a joint Claim Construction Brief. ECF No. 47. Even if, as Vivox argues in a footnote in its
Reply, ECF No. 34, that the recent amendments to the patent statute under 35 U.S.C. § 299 only
allow for joinder for the purposes of trial when two conditions apply—which Vivox has not
alleged apply here—, the Court notes that Vivox has not filed a motion to sever. Regardless of
whether these cases will or may remain consolidated for the purpose of trial, for the purpose of
the Markman hearing, the Court finds that the efficiency of the judicial process, economy of
judicial
resources, the
pendency
of nearly
identical
actions
which have already been
consolidated, and the risk of inconsistent judgments all demonstrate that the interests of justice
weigh heavily against transfer of venue in this matter at the present time. Having considered and
given appropriate weight to Plaintiffs choice of forum, the convenience of the parties and
witnesses, and the interests of justice, the Court denies Defendants Vivox and Stalker's motions
to transfer venue at this time.
III.
CONCLUSION
For the reasons set forth in detail above, the Court hereby DENIES Vivox's Motion to
Transfer Venue and Stalker's Motion to Transfer Venue at this time.
Having considered and
weighed Plaintiffs choice of forum, the convenience of the parties and witnesses, and the
13
interests of justice, the Court finds the current balance of the factors weighs against transfer of
venue prior to the Markman hearing that has already been fully briefed and is scheduled to take
place in ten days. Following the Markman hearing, the Court will allow the defendants to file
motions to transfer venue, if they so desire. The Clerk of the Court is DIRECTED to transmit a
copy of this Order to all counsel of record.
IT IS SO ORDERED.
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