Cobalt Boats, LLC v. Sea Ray Boats, Inc.
Filing
33
OPINION & ORDER denying 17 MOTION to Transfer Case Pursuant to 28 USC Sec. 1404(a). Signed by District Judge Henry C. Morgan, Jr and filed on 4/16/2015. (rsim, )
IN THE UNITED STATES DISTRICT COU
FOR THE EASTERN DISTRICT OF VIRGINIA
Norfolk Division
COBALT BOATS, LLC,
NO^:- Oi-K. VA
Plaintiff,
Civil Action No. 2:15cv21
V.
SEA RAY BOATS, INC. &
BRUNSWICK CORP.,
Defendants.
OPINION & ORDER
This matter is before the Court pursuant to Defendants Sea Ray Boats, Inc. ("Sea Ray")
and Brunswick Corporation's ("Brunswick"), (collectively, "Defendants"), Motion to Transfer
Venue Pursuant to 28 U.S.C. § 1404(A) ("Motion"). Doc. 17. For the reasons stated herein, the
Court DENIES Defendants' Motion.
I. BACKGROUND
A. Factual Background
This patent infringement action arises out of the alleged infringement of U.S. Patent No.
8,375,880 ("'880 Patent"), owned by Plaintiff Cobalt Boats, LLC ("Plaintiff of "Cobalt"), by
Defendants. Am. Compl. at 1, 4. Sea Ray is a wholly owned subsidiary of Brunswick. Answer
at 4-5. The '880 Patent was issued to Cobalt on February 19, 2013 for a "Retractable Step for
Boat Swim Platform" ("Swim Step"), which is described as follows:
A retractable step for use with a boat in water comprising at least one moveable
arm pivotally coupled with the boat, a step coupled with the arm such that the step
is moveable between a stored position above the water surface and a deployed
position below the water surface, and a lock configured to hold the moveable arm
in a stationary position when the step is in its deployed position, but is releasable
to accommodate movement of the step to its stored position.
Am. Compl., Ex. A at 1. Beginning in 2014, Plaintiff alleges that Defendants, two of its industry
competitors, "began promoting and selling boats that include a Swim Step feature described as a
'submersible swim step'," which infringes upon the '880 Patent. Id. at 5.
Plaintiff contends that the Sea Ray boats with the infringing Swim Step include, but are
not limited to, the Sea Ray 220 Sundeck, Sea Ray 240 Sundeck, Sea Ray 270 Sundeck, and Sea
Ray 290 Sundeck. Id. at 6. Specifically, Plaintiff argues that Defendants' version of the Swim
Step infringes on at least claims 1, 3, 5, and 6 of the '880 Patent. Id. at 7. On October 1, 2014,
Cobalt notified Sea Ray of the alleged infringement, and to date, Sea Ray continues to
manufacture, use, and sell its version of the Swim Step. Id. at 6. Defendants deny having had
knowledge of the '880 Patent prior to October 1, 2014, and further deny that their products
infringe upon the '880 Patient. Answer at 9-10.
A. Procedural History
Plaintiff is a Delaware limited liability company headquartered in Neodesha, Kansas.
Doc. 28 at 3. Defendant Brunswick is a Delaware corporation headquartered in Lake Forest,
Illinois, and Defendant Sea Ray is a Florida corporation headquartered in Knoxville, Tennessee.
Answer at 2. Further, Defendant Brunswick's Recreational Boat Group ("Boat Group"), which
"is responsible for the design, manufacturing, management, and marketing" of the alleged
infringing products, is also headquartered in Knoxville, Tennessee. Doc. 18 at 1. The Parties
concede that venue is proper within the Eastern District of Virginia, Answer at 4, but in the
present Motion Defendants contend that the facts support a transfer to the Eastern District of
Tennessee under Title 28, United States Code Section 1404(a) ("Section 1404(a)"). Id
II. LEGAL STANDARDS
Under Section 1404(a), courts may, "[fjor the convenience of parties and witnesses, . . .
transfer any civil action to any other district or division where it might have been brought." 28
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U.S.C. § 1404(a). In determining whether transfer is proper, "a district court must make two
inquiries: (1) whether the claims might have been brought in the transferee forum, and (2)
whether the interest of justice and convenience of the parties and witnesses justify transfer to that
forum." Pragmatus AV. LLC v. Facebook. Inc., 769 F. Supp. 2d 991, 994 (E.D. Va. 2011)
(quoting Agilent Tech.. Inc. v. Micromuse. Inc., 316 F. Supp. 2d 322, 324-25 (E.D. Va. 2004)).
"The second prong of the 1404(a) analysis is a balancing test that weighs (1) the plaintiffs choice
of forum, (2) convenience of the parties, (3) witnesses conveniences and access, and (4) the
interest of justice." Patent Licensing & Inv. Co.. LLC v. Green Jets, Inc., No. 2:10cv421, 2011
WL 11797320, at *3 (E.D. Va. June 13, 2011) (quoting Pargmatus. 2011 WL 320952, at *2)
(internal quotation marks omitted).
Whether a case merits transfer is a decision that rests with the discretion of the Court,
which must balance any relevant factors, including:
(1) ease of access to sources of proof; (2) the convenience of the parties and
witnesses; (3) the cost of obtaining the attendance of witnesses; (4) the
availability of compulsory process; (5) the interest in having local controversies
decided at home; (6) in diversity cases, the court's familiarity with the applicable
law; and (7) the interest ofjustice.
BHP Intern. Inv.. Inc. v. OnLine Exchange. Inc.. 105 F. Supp. 2d 493, 498 (E.D. Va. 2000).
"The party seeking transfer bears the burden of proving 'that the circumstances of the case are
strongly in favor of transfer,1" and "transfer is not appropriate where it will only serve to shift the
balance of inconvenience from one party to the other." Heinz Kettler GMBH & Co. v. Razor
USA. LLC. 750 F. Supp. 2d 660, 667, 668 (E.D. Va. 2010) (quoting Jones v. Frazier. No.
I:09cv513, 2009 WL 2601355, at *8 (E.D. Va. Aug. 18, 2009) (emphasis in original).
III. ANALYSIS
A. Venue is Proper in the Transferee Court
In a civil action, venue is proper in any judicial district "in which any defendant is subject
to the court's personal jurisdiction." 28 U.S.C. § 1391(b). In patent infringement actions, venue
is proper "in the judicial district where the defendant resides, or where the defendant has
committed acts of infringement and has a regular and established place of business." 28 U.S.C.
§ 1400 (b). The parties do not contest that Defendant Sea Ray is headquartered in Knoxville,
Tennessee, see Answer at 2, and Defendant Brunswick's Boat Group has an established place of
business in that local. Doc. 18 at 5. Corporate Defendants are deemed to reside in any district in
which they would be subject to personal jurisdiction. See 28 U.S.C. § 1391(d); BHP Intern., 105
F. Supp. 2d at 498. Accordingly, Plaintiffs claims could have properly been brought in the
Eastern District of Tennessee.
B. Interests of Justice & Convenience of Witnesses
/'. Plaintiffs Choice ofForum
Traditionally, "a plaintiffs choice of forum is entitled to substantial weight," Patent
Licensing, 2011 WL 11797320, at *3 (quoting Board of Trustees v. Baylor Heating & Air
Conditioning, Inc., 702 F. Supp. 1253, 1256 (E.D. Va. 1998)), and the parties do not dispute that
Cobalt dealers in Virginia are affected by the alleged infringement. Doc. 29 at 4. If Virginia is
not a plaintiffs home forum, however, courts in the Eastern District have held that "[w]hen a
plaintiff chooses a foreign forum and the cause of action bears little or no relation to that forum,
the plaintiffs chosen venue is not entitled to such substantial weight." GTE Wireless, Inc. v.
Qualcomm, Inc., 71 F. Supp. 2d 517, 519 (E.D. Va. 1999); see also Lvcons, Inc. v. TiVo Inc..
499 F. Supp. 2d 685, 692 (E.D. Va. 2007).
In actions for patent infringement when a district is not a plaintiffs home forum, the
general rule is that "the preferred forum is that which is the center of the accused activity." Id.
(quoting Santrade Ltd. v. Berndorf ICB International Conveyor Belts. Inc., No.6:92-2032-3,
1992 WL 470482, at *2 (D.S.C. 1992)) (internal quotation marks omitted). The availability of
modern technology, however, has alleviated the substantiality of this doctrine to the extent that
transportation of evidence in patent suits is no longer as expensive and time consuming as it once
was. See Fujitsu Ltd. v. Netgear. Inc., No. 07-cv-710-BBC, 2008 WL 2540602, at *l-3 (W.D.
Wise. Apr. 4, 2008). Although still entitled to some weight, when a plaintiff does not file suit in
its home forum and the connection to the chosen forum is not unique, this factor is not
dispositive.
//'. Convenience to the Parties and Witnesses
In determining the convenience of transfer as to the parties, the Court must consider "the
'ease of access to sources of proof, the costs of obtaining witnesses, and the availability of
compulsory process1." com Score, 924 F. Supp. 2d at 686 (quoting Lycos, 499 F. Supp. 2d at
693).
There is little dispute that transfer to the Eastern District of Tennessee would favor
Defendants, as Sea Ray is headquartered in the district and Brunswick's team "responsible for the
management, marketing, sales, accounting, and manufacturing" of the accused infringing Swim
Steps are located in the district as well. Doc. 18 at 7.
a. Access to Sources of Proof
According to Defendants, the likely sources of proof including "documentation about the
functionality" of the products, along with "development documents, operation documents, and
other documents and materials associated with" those products, are located in Knoxville,
Tennessee. Id. Plaintiff argues that this factor should not be considered favorable to Defendants
as modern technology and the availability of electronically stored information ("ESI") abrogates
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its importance. Doc. 28 at 14 (citing Fujitsu Ltd. v. Netgear, Inc., No. 07-cv-710-BBC, 2008
WL 2540602, at *l-3 (W.D. Wise. Apr. 4, 2008)). According to one district court,
[technological advancements, such as email, photocopying, scanning and the
trend toward creating documents electronically, have made the transportation of
evidence in patent infringement suits much easier. As a result, the location of
evidence has, in general, become a neutral factor in determining the convenience
of a forum.
Id. Although disputes may still arise when certain sources of proof cannot be made available
electronically, when the substantial majority of evidence is documentary and/or electronically
stored, this factor is de minimis and not entitled to substantial weight in the overall balance.
b. Convenience of Witnesses & Availability of Compulsory Process
"The convenience of the witnesses is of considerable importance in determining whether
a transfer of venue is appropriate under Section 1404(a)." Samsung Electronics Co.. Ltd. v.
Rambus, Inc.. 386 F. Supp. 2d 708, 718 (E.D. Va. 2005). This factor, however, tends to fall on
the convenience to the non-party witnesses as opposed to the party witnesses, who can be
compelled to testify and would likely be more willing to do so. Id. In order for the Court to
make an informed decision as to witness convenience, the moving party must assert specific
details related to the nature of any witness' potential testimony and the alleged inconvenience.
See Samsung, 386 F. Supp. 2d at 718. Defendants state that neither the Boat Group nor Sea Ray
have any offices or employees in Virginia and none of their potential witnesses are located in this
District. Doc. 18 at 3.
In support of their position, Defendants have submitted one declaration, that of Bradley
Anderson, Senior Vice President of Portfolio Marketing for Brunswick's Boat Group. Doc. 19.
In his declaration, Mr. Anderson states that he is an employee of the Boat Group who works out
of the main office in Tennessee and has knowledge of the "design and manufacturing activities"
related to the alleged infringing Swim Steps. Id at 1. Mr. Anderson identifies himself and Mr.
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Walter "Scott" Kent, Chief Financial Officer of the Boat Group, as potential party witnesses. Id.
at 2. As to potential non-party witnesses, in their brief Defendants identify the named inventors
of the '880 patent, who all appear to reside in the Midwest, and the prosecuting attorney, who
appears to reside in the Kansas City, Missouri area. Doc. 18 at 9-10. Plaintiff, however, has
submitted declarations from each of these parties pledging their willingness to travel to the
Eastern District of Virginia for any necessary proceedings. Doc. 28, Ex. A-F.
Plaintiff argues that it intends to have two of its non-party Cobalt dealers from the
Eastern District of Virginia testify at trial, Doc. 28 at 12, but Defendants counter that there is no
reason Cobalt cannot seek similar testimony from its dealers in the Eastern District of Tennessee.
Doc. 29 at 6. Further, Defendants contend that the Eastern District of Tennessee is actually
closer to the non-party witness in the Midwest and that "pursuing this litigation in the Eastern
District of Virginia would be no more convenient for Cobalt than it would be to proceed in the
Eastern District of Tennessee." Doc. 18 at 8. Considering these parties are potentially outside
the subpoena power of both the Eastern Districts of Virginia and Tennessee, the availability of
the compulsory process is a neutral factor, and Defendants have not produced evidence sufficient
to support their contentions that the convenience of the witnesses weights strongly in favor of
transfer. Although transfer may be convenient for Defendants' party witnesses, all identified non
party witnesses have declared their willingness to travel to the Eastern District of Virginia to
testify. Doc. 28 at 12, Ex. A-F. This cannot be said of the Eastern District of Tennessee.
Hi. Interests ofJustice
This factor "encompasses public interest factors aimed at 'systemic integrity and
fairness1."1 Bverson v. Equifax Info. Servs.. LLC. 467 F. Supp. 2d 627, 635 (E.D. Va. 2006)
1Although not brought pursuant to federal diversity jurisdiction, the purpose behind allowing an out-of-state party to
avoid prejudice by litigating in a neutral forum is a principle embedded in American jurisprudence. "The power of
Congress to confer such jurisdiction was based on the desire of the Framers to assure out-of-state litigants courts
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(quoting Samsung, 386 F. Supp. 2d at 716). "Fairness is assessed by considering docket
congestion, interest in having local controversies decided at home, knowledge of applicable law,
unfairness in burdening forum citizens with jury duty, and interest in avoiding unnecessary
conflicts of law."
Id
As this case arises under federal patent law, all federal Courts are
presumed to have equal knowledge of the applicable law, and the Court considers its legal
knowledge and potential conflicts of law neutral issues. This Court has also held that "[pjatent
disputes are not a local controversy that could be said to unfairly burden jurors in any
jurisdiction," comScore, 924 F. Supp. 2d at 691, so these factors are also neutral. The only
relevant consideration remaining is that of docket congestion.
In the Eastern District of Virginia, the median time from filing to final disposition for
cases that go to trial is 11.9 months, and the average time difference between dispositions in this
District and the Eastern District of Tennessee is 13.7 months.
Plaintiff has argued that transfer
"would increase Cobalt's inconvenience . . . increase the parties' litigation costs . . . [and] deprive
Cobalt of a speedy resolution of its claim" because this District resolves patent disputes "more
quickly." Doc. 28 at 18. Federal Rule of Civil Procedure 1 states that civil actions should be
administered to foster the "just, speedy, and inexpensive determination of every action and
proceeding." Accordingly, whether transfer under Section 1404(a) will foster the interest of
justice should be interpreted in light of Rule 1. When a plaintiff chooses a forum for purposes of
fostering speedy and inexpensive litigation, this factor's weight should not be diminished in the
overall balance.
free from susceptibility to potential local bias." Lumbermen's Mut. Cas. Co. V. Elbert, 348 U.S. 48, 54 (1954)
(Frankfurter, J. concurring). In their Motion, Defendants seek to force Plaintiff out of a neutral forum and into the
Eastern District of Tennessee, where Defendants admit to having a substantial presence. This is not a harmless
reorientation. Rather, Plaintiff would be denied the benefits of neutral forum and instead be forced to litigate in a
forum almost exclusively in Defendants' interest.
2Federal Judicial Caseload Statistics 2014, United States Courts,
http://www.uscourts.gov/Viewer.aspx?doc=/uscourts/Statistics/FederalJudicialCaseloadStatistics/20l4/tables/C05M
arl4.pdf (last visited April 15, 2015).
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C. Weight of the Factors
In balancing the factors pertinent to a Section 1404(a) analysis, the Court FINDS that
Defendants have not met their strong burden. This Court has found that the action could have
been brought in the Eastern District of Tennessee, and although Defendants' alleged sources of
proof are located in that district, modern technology has abrogated the weight of the "center of
accused activity" doctrine. Weighing in Plaintiffs favor are its choice of forum, intent to call
two non-party Virginia witnesses, the willingness of the remaining non-party witnesses to travel
to the Eastern District of Virginia, and the interests of justice in fostering the speedy and
inexpensive resolution of civil litigation. The remaining factors are either neutral or of lesser
importance in the present analysis, and in consideration of Defendants' strong burden, the Court
in its discretion FINDS that transfer to the Eastern District of Tennessee is not warranted.
IV. CONCLUSION
For the reasons set forth herein, the Court DENIES Defendants' Motion.
The Clerk is REQUESTED to mail a copy of this Order to all counsel of record.
It is so ORDERED.
/s/
Henry Coke Morgan, Jr.
Senior United States District Judge^ / ^
HENRY COKE MORGAN, JR. J^IU'l
SENIOR UNITED STATES DISTRICT JUDGE
Norfolk, VA
April /f?,2015
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