Motions to Transfer Venue in the Eleventh Circuit

A district court may transfer a civil action to another district, one in which the case could have originally been brought, “[f]or the convenience of parties and witnesses, in the interest of justice ….”  28 U.S.C. § 1404(a).  Thus, a court deciding a motion to transfer must first determine whether the case could have been brought in the transferee district.  Venue in patent infringement cases is governed by 28 U.S.C. § 1400(b), which allows an action to be filed 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.”

If it is determined that venue would be proper in the transferee district, the court must then balance private and public factors under the prevailing Circuit case law.  In the Eleventh Circuit, courts consider: (1) the convenience of the witnesses; (2) the location of relevant documents and the relative ease of access to sources of proof; (3) the convenience of the parties; (4) the locus of operative facts; (5) the availability of process to compel the attendance of unwilling witnesses; (6) the relative means of the parties; (7) a forum’s familiarity with the governing law; (8) the weight accorded a plaintiff’s choice of forum; and (9) trial efficiency and the interests of justice, based on the totality of the circumstances” (the “Manuel factors”). [1]  Upon evaluating these factors, courts have broad discretion whether to transfer a case under Section 1404(a).

Typically, motions to transfer are filed by defendants seeking to shift the fight to a more friendly venue.  In this unusual case, the plaintiff, IP Co., LLC (“IPCO”), a patent holding company based in Atlanta, Georgia, decided six years after the case was filed that it wanted to move the action to the Eastern District of Texas. 

In October 2005, Tropos Networks, Inc. (“Tropos”), a Delaware corporation with its principal place of business in Sunnyvale, California, filed a declaratory judgment action in the Northern District of California seeking a judgment declaring two IPCO patents, U.S. Patent No. 6,249,516 (the ‘516 patent) and U.S. Patent No. 6,044,062 (the ‘062 patent), invalid, unenforceable and/or not infringed.  In March 2006, IPCO filed a patent infringement action in the Northern District of Georgia alleging that Tropos’ Wi-Fi mesh network products and services infringed the ‘516 and ‘062 patents.  The defendants in each action filed motions to dismiss or transfer the case to the alternative Court.  The California Court transferred Tropos’ action to the Northern District of Georgia in July 2006.  Several months later, Tropos moved the Georgia Court to stay the litigation pending USPTO reexamination of the ‘516 and ‘062 patents.  The Court granted the stay, which was in effect until the fall of 2011, at which point IPCO moved transfer the case to the Eastern District of Texas.

In an October 5, 2012 order, Judge Cooper first noted that “IPCO must show that at the time of its Complaint, Tropos resided, or committed acts of infringement and had a regular and established place of business in the Eastern District of Texas.” [2]  IPCO failed to show that Tropos resided in the Eastern District of Texas.  IPCO alleged that Tropos was a Delaware corporation with “a national and international presence.”  The Court found those allegations insufficient to prove residence in Texas.  Likewise, IPCO failed to prove that Tropos had a regular and established place of business in Texas.  IPCO alleged that Tropos had “customers all over the United States, and … solicits Texan customers throught its website and holds conferences in Texas.”  The Court held that the “regular and established place of business” standard requires more than simply doing business in a district, and contemplates a “permanent and continuous presence there.” [3]  Thus, Judge Cooper found that IPCO had failed to establish proper venue in the Eastern District of Texas, and did not address the issues of personal or subject matter jurisdiction.

Nevertheless, the court found that even if venue in the Eastern District of Texas was appropriate, it was not a more convenient forum and the nine Manuel factors weighed against transfer.  The convenience of the witnesses, often considered the most important factor, weighed against transfer because the only identified witnesses to date were in Georgia.  Most significantly, IPCO conceded that it originally choose to file the action in the Northern District of Georgia and “a plaintiff’s choice of forum should not be disturbed unless it is clearly outweighed by other considerations.” [4]  Therefore, the Court found, based on the totality of the circumstances, that trial efficiency and the interests of justice would be served by maintaining venue in the Northern District of Georgia.

Another Nothern District of Georgia case followed a more standard fact pattern.  Plaintiff Omega Patents, LLC (“Omega”), of Douglasville, Georgia, wholly owned by prolific solo inventor Kenneth E. Flick, filed an action in the Northern District of Georgia against General Motors LLC (“GM”) and OnStar, LLC (“OnStar”), both Delaware limited liability companies headquartered in Detroit, Michigan, alleging infringement six patents relating to remote tracking and operation of motor vehicles.

In June 2012, shortly after filing their answers, the defendants moved to transfer the action to the Eastern District of Michigan, which they argued is a more convenient forum.  GM and OnStar, while conceding that they regularly conduct business in Georgia, contended that all of the relevant technical information and documents, as well as ten employees identified as potential witnesses, are located in Michigan.  Further, GM argued that certain technical documents relating to the accused products are highly sensitive and can only be accessed in a special “Reading Room” in the Eastern District of Michigan.  In its opposition, Omega identified Flick as a potential witness and also indicated a willingness to submit to a protective order that would require it to review GM’s sensitive documents in the Reading Room.

In an October 4, 2012 order, Judge Duffey denied the defendants’ motion to transfer to Michigan. [5]  In contrast to the case above, the Court first determined that the case could have properly been brought in the Eastern District of Michigan because GM and OnStar reside in that district.  The Court then evaluated the nine Manuel factors to determine whether transfer was appropriate:

1. Convenience of the Witnesses:  The Court noted that this factor contemplates the convenience of non-party witnesses, not those witnesses closely aligned with the parties, such as employees. [6]  Though GM and OnStar identified ten employees in Michigan as potential witnesses and Omega identified one potential witness in Georgia, neither party identified any non-party witnesses who would be inconvenienced by trial in any particular forum.  Thus, the Court found this factor to be neutral.
2. Access to Sources of Proof:  The Court observed that the parties each had relevant documents in their home states, Michigan and Georgia. The Court also found that to the extent that the limited availability of the sensitive GM documents created an inconvenience, it inconvenienced Omega.  Thus, the Court found this factor to weigh against transfer.
3. Convenience of the Parties:  The Court may not simply shift inconvenience from one party to another, which GM and OnStar sought to do. [7]  As a result, this factor weighed against transfer.
4. Locus of the Operative Facts:  In patent cases, the “locus of operative facts” is generally where the allegedly infringing product was designed, developed, and produced. [8]  Here, the accused products were designed, developed, and produced in Michigan, so this factor favored transfer.
5. Ability to Compel Unwilling Witnesses: The Court combined this factor with factor 1 above.
6. Relative Means of the Parties: The Court found this factor to be neutral because neither party indicated an inability to litigate in a particular forum.
7. Familiarity with the Governing Law:  The Court found this factor to be neutral because both the Georgia and Michigan Courts are familiar with patent law.
8. Weight Afforded to Plaintiff’s Choice of Forum:  As noted above, a plaintiff’s choice of forum should be given considerable weight, especially so where the plaintiff has chosen to litigate in its home forum. [9]  Thus, the Court found this factor to weigh strongly against transfer.
9. Trial Efficiency and the Interests of Justice:  The Court did not find any evidence that the action would be resolved more quickly or easily in the Eastern District of Michigan, and thus found this factor to be neutral.

—————————————————-

[1] Manuel v. Convergys Corp., 430 F.3d 1132, 1135 & n.1 (11th Cir. 2005).

[2] IP Co., LLC v. Tropos Networks, Inc., 1:06-cv-585-CC, Order, Doc. # 88 (Oct. 5, 2012) (J. Cooper).

[3] HomeBingo Network, Inc. v. Chayevsky, 428 F. Supp. 2d 1232, 1249 (S.D. Ala. 2006) (quoting In re Cordis Corp., 769 F.2d 733, 737 (Fed. Cir. 1985)).  

[4] Ins. Co. of N. Am. v. Levin, No. 10-cv-60130, 2011 LW 1398473, at *2 (S.D. Fla. 2011).

[5] Omega Patents, LLC v. General Motors LLC et al., 1:12-cv-1192, Order, Doc. # 34 (Oct. 4, 2012) (J. Duffey).

[6] Trinity Christian Ctr. of Santa Ana, Inc. v. New Frontier Media, Inc., 761 F. Supp. 2d 1322, 1327 (M.D. Fla. 2010).

[7] United States v. $633,021.67, 842 F. Suppl 528, 535 (N.D. Ga. 1993).

[8] TouchTunes Music Corp. v. Rowe Int’l Corp., 676 F. Supp. 2d 169, 175 (S.D.N.Y. 2009).

[9]  Esfeld v. Costa Crociere, S.P.A., 289 F.3d 1300, 1311-12 (11th Cir. 2002).