Automated Tracking Solutions, LLC v. ValidFill, LLC et al
Filing
63
MEMORANDUM OPINION. Signed by District Judge Henry E. Hudson on 12/15/15. Memorandum Opinion electronically sent to all counsel of record. (sbea, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
AUTOMATED TRACKING,
SOLUTIONS, LLC,
Plaintiff,
Civil Action No. 3:15cvI42-HEH
VALIDFILL, LLC, et ai.
Defendants.
MEMORANDUM OPINION
(Motion to Transfer Venue)
THIS MATTER is before the Court on Defendant, Coca-Cola Company's ("Coca-
Cola"), Motion to Transfer (ECF No. 55). Plaintiff Automated Tracking Solutions, LLC
("ATS") alleges that Coca-Cola infringed on four of its patents relating to Radio
Frequency Identification ("RFID") technology. Coca-Cola now asks this Court to
transfer the action to the Northern District of Georgia. For the reasons set forth below,
the Court will grant Coca-Cola's motion.
On March 9,2015, ATS filed this action alleging that Coca-Cola, Royal Caribbean
Cruises, and ValidFill, LLC infringed on United States Patent Nos. 7,551,089; 7,834,766;
8,842,013; and 8,896,449 (collectively the "patents-in-suit") through the use of RFIDbased technology in Coca-Cola's Freestyle beverage systems ("Freestyle system")
(Compl.
23-34, ECF No. 1.) According to ATS, ValidFill was contracted by Coca-
Cola to install RFID-based inventory technology in the Freestyle system, which was then
installed in Royal Caribbean cruise ships. In its original filings, ATS asserted that this
Court had personal jurisdiction over Coca-Cola based on the fact that its Freestyle
systems were installed on Royal Caribbean cruise ships that operated out of Norfolk,
Virginia. On June 22, 2015, ATS filed its Amended Complaint against all Defendants
and expanded claims of infringement against Coca-Cola based on the use of RFID
technology in the Freestyle system. (Am. Compl.
23-38, ECF No. 33). On August
20, 2015, this Court dismissed the claims between ATS, Royal Caribbean, and ValidFill.
(ECF No. 53.) As the lone remaining Defendant, Coca-Cola now moves to transfer
venue to the Northern District of Georgia.
"For the convenience of parties and witnesses, in the interest ofjustice, 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). Provided that the plaintiffs claims could initially
have been brought in the transferee forum, "[t]he decision whether to transfer an action
pursuant to § 1404(a) Ms committedto the sound discretion of the district court.'" BMP
Int'lInv., Inc. v. Online Exch., Inc., 105 F. Supp. 2d 493,498 (E.D. Va. 2000) (quoting
Verosol B.V. v. Hunter Douglas, Inc., 806 F. Supp. 582, 591 (E.D. Va. 1992)). In making
that determination, the Court considers: "(1) the weight accorded to plaintiffs choice of
venue; (2) witness convenience and access; (3) convenience of the parties; and (4) the
interest ofjustice." Trustees ofthe Plumbers & Pipefitters Nat'I Pension Fund v.
Plumbing Servs., Inc., 791 F.3d 436,444 (4th Cir. 2015). The movant bears the burden
of establishing that the factors strongly favor transfer. United States v. Douglas, 626 F.
Supp. 621, 626 (E.D. Va. 1985) (quoting Tex. GulfSulfur Co. v. Ritter, 371 F.2d 145, 147
(10th Cir. 1967)). The parties do not dispute that the claims against Coca-Cola could
2
have been brought in the Northern District of Georgia.' Rather, the parties focus on the
discretionary factors governing transfer. The Court considers these factors in turn.
Coca-Cola contends that ATS's choice of forum should be given little weight
because this matter's connection to this district is overstated. (Def.'s Mem. Supp. Def.'s
Mot. Transfer Venue ("Def.'s Mem.") 7-9, ECF No. 55-1.) Conversely, ATS argues that
as Plaintiff, this Court should afford ATS's choice of forum substantial weight. (PL's
Opp'n Def.'s Mem. Supp. Def.'s Mot. Transfer Venue ("PL's Opp'n") 7-9, ECF No. 56.)
"[T]he plaintiffs choice of forum is ordinarily entitled to substantial weight."
Koh V. Microtek Int'I, Inc., 250 F. Supp. 2d 627, 633 (E.D. Va. 2003). However, "if there
is little connection between the claims and th[e] judicial district, that would militate
against a plaintiffs chosen forum and weigh in favor of transfer to a venue with more
substantial contacts." Id. at 635. Even when a plaintiff sues in its home forum, that fact
alone is not controlling and the weight of that factor depends on the nexus between the
case and forum. Global TelLink Corp. v. Securus Tech. Inc., 2014 WL 860609, at *4
(E.D. Va. Mar. 5, 2014).
In this case, ATS's choice of forum is not entitled to the substantial weight that
typically attends a plaintiffs choice of forum. ATS maintains its headquarters at 8500
' Ina patent infringement action, venue is proper inany "judicial district where the defendant
resides." 28 U.S.C. § 1400(b). For the purposes of venue, a corporate defendant resides in any
judicial district where it is subject to personal jurisdiction. 28 U.S.C. § 1391(c). Coca-Cola is
headquartered and has its principal place of business in Atlanta, Georgia, and is, therefore,
subject to personal jurisdiction in the Northern District of Georgia.
Fort Hunt Road, Alexandria, Virginia. Dr. Frederick Sawyer ("Sawyer"), ATS's founder.
Chief Technical Officer, and inventor ofthe patents-in-suit, also resides in Alexandria.^
Although ATS focuses heavily on the apparent time that Sawyer dedicated in
Alexandria to the development of his patents, ATS's business appears to be solely based
around the sale and enforcement of its intellectual property rights. Indeed, it does not
appear, and ATS does not allege, that it currently designs, develops, manufactures, or
sells any products in Virginia or elsewhere. Conversely, it has filed at least nine patent
infringement suits in the past several years, one ofwhich was not in this district. Such
"non-practicing" entities whose only form of business is the enforcement of intellectual
property rights have generally been afforded minimal weight in their choice of forum.
See. e.g., CIVIX-DDI, LLC v. Loopnet, Inc., 2012 WL 3776688, at *3-4 (E.D. Va. Aug.
30, 2012). Here, aside from ATS declaring its headquarters in Alexandria and Sawyer's
residence there, no other significant connection exists between ATS and Virginia. This
minimal connection cuts against the weight ordinarily afforded to a plaintiffs choice of
forum.
Additionally, whether the Defendant 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. Agilent Techs., Inc. v. Micromnse,
Inc., 316 F. Supp. 2d 322, 327 n.3 (E.D. Va. 2004). Although ATS has alleged that the
^Coca-Cola contends that the location of ATS's headquarters is Sawyer's personal residence.
(Def.'s Mem. 1.) ATS does not address that issue in responding to Coca-Cola's Motion to
Transfer. Because the Court finds that Coca-Cola has met its burden in showing this matter
should be transferred independent of that fact, whether or not ATS is headquartered at Sawyer's
personal residence is of little import.
Freestyle system is utilized throughout Virginia, it is undoubtedly used to an equal degree
throughout the country. Coca-Cola's activity here is not unique to this forum and does
not support a significant connection to this district for the purposes of this motion.
Accordingly, the Court does not afford ATS's choice of forum significant weight.
Tuming next to the convenience of the witnesses and sources of evidence, Coca-
Cola contends the majority of accused Coca-Cola devices and systems, witnesses aware
of those devices and systems, and documents pertaining to those devices and systems are
located in the Northern District of Georgia. (Def.'s Mem. 9-11.) On the other hand,
ATS proffers that Sawyer, as its main witness, and a "prototype" of the system
performing the functions subjectto the patents-in-suit are both located in Alexandria,
Virginia. (PL's Opp'n 12-13.)
Generally, the preferred forum in a patent infringement action "is that which is
the center of the accused activity, and the trier of fact ought to be as close as possible to
the milieu of the infringing device and the hub of activity centered around its
production." Global TouchSolutions, LLC v. Toshiba Corp.,
F. Supp. 3d
,2015
WL 3798085, at *14 (E.D. Va. June 15, 2015) (quoting GTE Wireless, Inc. v. Qualcomm,
Inc., 71 F. Supp. 2d 517, 519 (E.D. Va. 1999)) (internal quotations omitted). To that end,
the forum that contains the nucleus of infringement activity would inherently be the most
convenient location to litigate a case because the bulk of witnesses or evidence of
infringement is likely to be located there. Because the majority of witnesses and
evidence pertaining to infringement are located in the Northern District of Georgia, this
factor weighs heavily in favor of transfer.
5
As Coca-Cola details in its pleading, "the majority of the Coca-Cola employees
responsible for the technical development, execution, and support of the Freestyle
beverage dispensers reside in Atlanta." (Def.'s Mem. 10.) Additionally, none of the
Coca-Cola employees with information pertinent to this action, and who could potentially
be called to testify, resides in Virginia. (Jd.) As with witnesses, Coca-Cola asserts that
no documentation relevant to this action is located in Virginia. (Id.)
Although Plaintiffs suit relates to cruise ships docked in Norfolk, Virginia, the
essence of ATS's case stems from Coca-Cola's general alleged infringement in the
creation ofthe Freestyle system. Moreover, the "hub of activity around" infringement
undoubtedly lies in the Northern District of Georgia where Coca-Cola developed and
produced the allegedly infringing system. In sum, the convenience of witnesses and
evidence factors weigh heavily in favor of transfer to the Northern District of Georgia.
Next, in assessing the convenience of the parties, ATS contends that the
inconvenience of transfer to the Northern District of Georgia would be greater than the
inconvenience on Coca-Cola in litigating in this district. (PL's Opp'n 13.) As detailed
above, the majority of the witnesses and evidence are found at Coca-Cola's headquarters.
For similar reasons, the convenience of the parties factor weights in favor of transfer.
Finally, Coca-Cola advances the interest ofjustice factor, suggesting that the
Eastern District of Virginia has no truly local interest in hearing this suit. (Def.'s Mem.
12.) To the contrary, Coca-Cola points out that the Northern District of Georgia has
unique interests in resolving this matter as Coca-Cola developed and tested the Freestyle
system in that district. (Id. at 12-13.) On the other hand, ATS believes that this district
6
has a particular interest in deciding this case because ATS is headquartered here and a
substantial amount of work was done on the patents-in-suit in Alexandria.
"The interest ofjustice 'encompasses public interest factors aimed at systemic
integrity and fairness.'" Byerson v. Equifax Info. Servs., LLC, 467 F. Supp. 2d 627, 635
(E.D. Va. 2006) (quoting SamsungElecs. Co. v. Rambus, Inc., 386 P. Supp. 2d 708, 721
(E.D. Va. 2005)). Key considerations include "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."
Jaffee v. LSI Corp., 874 P. Supp. 2d 499, 505 (E.D. Va. 2012) (quoting Byerson, 467 P.
Supp. 2d at 635).
Foremost among the various considerations here is the "interest in deciding a local
controversy." At best, if Coca-Cola's Freestyle system did in fact infringe on ATS's
patents, this would be a national controversy—not one specific to this district.^ As
detailed above, the fact that ATS appears to be a "non-practicing" entity based in
Alexandria has minimal jurisdictional significance, and thus does little to support ATS's
contention that this is a local issue. As in Jajfe, "citizens in the EDVA have no special
interest in this case's outcome ... and any alleged infringement through the product is
not unique to the EDVA." Id. at 506.
The remaining considerations do not weigh significantly for or against transfer.
For example, the Eastern District of Virginia is not uniquely suited to address patent
^Indeed, as Coca-Cola points out, since the Freestyle system's public launch in 2009, Coca-Cola
customers "have leased and installed thousands of Freestyle dispensers throughout the United
States." (Def.'s Mem. 2 (emphasis added).)
cases over other districts, and there is no apparent implication of a necessity to avoid
conflicts of law.
Taking all of the § 1404(a) factors into consideration, Coca-Cola has met its
burden of showing that those factors weigh strongly in favor of transfer to the Northern
District of Georgia. For the reasons stated above, the Court will grant Coca-Cola's
Motion to Transfer. The action will be transferred to the Northern District of Georgia.
An appropriate order shall issue.
It is SO ORDERED.
M
Henry E. Hudson
United States District Judge
Date:
ZOIS
Richmond, Virginia
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?