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Intellectual Ventures I LLC v. Capital One Finance Corp.

United States District Court, D. Maryland, Southern Division

March 12, 2014

INTELLECTUAL VENTURES I LLC, et al., Plaintiffs,
v.
CAPITAL ONE FINANCE CORP., et al., Defendants.

MEMORANDUM OPINION

PAUL W. GRIMM, District Judge.

Plaintiffs Intellectual Ventures have brought two patent infringement lawsuits against Defendants Capital One, first in the Eastern District of Virginia with regard to five patents, and now in this Court, with regard to five other patents.[1] I must decide whether to transfer this case to the Eastern District of Virginia, Alexandria Division where the other case is set for trial in April, as Defendants request, or to retain jurisdiction, as Plaintiffs contend I should do.[2] Given the proximity of the courts and the reach of their subpoena powers, the difference between the courts appears negligible in terms of convenience for potential witnesses or the parties, or ease of access to sources of proof. Additionally, although Defendants argue that transfer is in the interest of justice because the Capital One technology that allegedly infringes one of Plaintiffs' patents in this case also allegedly infringes one of Plaintiffs' patents in the Virginia case, where the court already has overseen discovery with regard to this technology, the patents are distinct. More significantly, Defendants' one vague and perfunctory affidavit provides no specificity whatsoever as to the benefits Defendants perceive to transfer. Because Defendants have not produced any evidence of the overlap between the cases or the relevance of the discovery in the other case to the issues in this case, I cannot conclude that transferring the case to the Eastern District of Virginia, Alexandria Division would promote judicial economy and outweigh the other factors that militate toward retaining the case, and therefore I will deny Defendants' Motion.

I. BACKGROUND

Plaintiffs, two companies whose "businesses include purchasing important inventions from individual inventors and institutions and then licensing the inventions to those who need them, " claim that, "[i]n connection with the[] online banking services and other systems and services" that Defendants "provide[]... via electronic means, " Defendants "infringe[d] one or more claims of each of the Patents-in-Suit." Compl. ¶¶ 13 & 23. Most relevantly to this motion, Plaintiffs allege that Defendants infringed the '002 Patent "by making, using, providing, offering to sell and/or selling their Mobile Banking and ShareBuilder Applications, " id. ¶ 47, and "by inducing others to infringe or contributing to the infringement of others, including in this District Defendants seek to have this case transferred). Therefore, I construe their Motion as a motion to transfer to the Alexandria Division. See Fed.R.Civ.P. 1. and elsewhere in the United States, " id. ¶ 48. Plaintiffs also claim that Defendants infringed the '271 Patent "by making, using, providing, offering to sell and/or selling parallel data decompression and/or compression features and technology, including within IBM Netezza systems, " id. ¶ 25, and the '081 Patent "by making, using, providing, offering to sell and/or selling database applications capable of processing XML data, including systems running IBM DB2 software, " id. ¶ 28. They allege that Defendants infringed the '409 Patent "by making, using, providing, offering to sell and/or selling their Credit Card, Debit Card and related Payment Services that use PCI Data Security Standard technology for protecting customer information and account data and their Automated Clearing House (ACH') services in accordance with NACHA Operating Rules and Guidelines, " id. ¶ 31, and "by inducing others to infringe or contributing to the infringement of others, including in this District and elsewhere in the United States, " id. ¶ 32. Additionally, Plaintiffs claim that Defendants infringed the '084 Patent "by making, using, providing, offering to sell and/or selling their Financial Institution Services that use PCI Data Security Standard compliant network intrusion detection and prevention technologies, including networks protected by CheckPoint gateways and/or Cisco ASA or similar intrusion detection implementing technologies, " id. ¶ 63.

As noted, Plaintiffs previously filed suit against Defendants in the United States District Court for the Eastern District of Virginia, Alexandria Division. See Va. Compl., ECF No. 30-1. There, Plaintiffs alleged infringement of five different patents, including the "'382 Patent. Relevantly, they claimed that Defendants infringed the '382 Patent "by making, using, providing, offering to sell and/or selling its shareBUILDER system/service, " id. ¶ 29, and "by inducing others to infringe or contributing to the infringement of others, including third party users of its shareBUILDER system/service in this judicial district and elsewhere in the United States, " id. ¶ 30. The case is set for trial in the Alexandria Division in April 2014. Defs.' Mem. 1; Pls.' Opp'n 30.

II. DISCUSSION

A district court may transfer a civil action to another district or division pursuant to 28 U.S.C. § 1404(a), which Congress enacted "to prevent the waste of time, energy and money as well as to protect litigants, witnesses and the public against unnecessary inconvenience and expense.'" Topiwala v. Wessell, No. WDQ-11-543, 2012 WL 122411, at *6 n.21 (D. Md. Jan. 12, 2012) (quoting Dicken v. United States, 862 F.Supp. 91, 92 (D. Md. 1994)). Section 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 have been brought...." Whether to transfer is a matter of the district court's discretion. In re Ralston Purina Co., 726 F.2d 1002, 1005 (4th Cir. 1984); Topiwala, 2012 WL 122411, at *6.

The Court's first consideration is "whether the action could have been brought in the transferee district." Topiwala, 2012 WL 122411, at *6. Here, it is undisputed that Plaintiffs could have brought this action in the Eastern District of Virginia. Defs.' Mem. 7; Pls.' Opp'n 10. Therefore, "the Court considers: (1) the weight accorded plaintiff's choice of venue, (2) witness convenience and access, (3) convenience of the parties, and (4) the interest of justice." Topiwala, 2012 WL 122411, at *6 (footnotes omitted). Other relevant considerations include (1) "relative ease of access to sources of proof'"; (2) "availability of compulsory process for attendance of unwilling witnesses, and the cost of obtaining attendance of willing and unwilling witnesses'"; and (3) "other practical problems that make a trial easy, expeditious, and inexpensive.'" Laureate Educ., Inc. v. Megahed, No. AW-10-749, 2010 WL 2651895, at *10 (D. Md. July 1, 2010) (quoting Stratagene v. Parsons Behle & Latimer, 315 F.Supp.2d 765, 771 (D. Md. 2004)). The Court weighs these factors, considering the specific facts of the case to determine whether "the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different forum." Topiwala, 2012 WL 122411, at *6 (quoting Byerson v. Equifax Info. Servs., LLC, 467 F.Supp.2d 627, 632 (E.D. Va. 2006)). Notably, the burden is on Defendants to demonstrate, "by a preponderance of the evidence, ... that transfer to another forum is proper." Tse v. Apple Computer, No. BEL-05-2149, 2006 WL 2583608, at *2 (D. Md. Aug. 31, 2006).

The statute does not indicate how much weight the Court should give to each factor. See Byerson, 467 F.Supp.2d at 632; Topiwala, 2012 WL 122411, at *6 n.22. Of import, "[s]ome courts consider convenience the most important factor; others have stated that [t]he interest of justice may be decisive... even though the convenience of the parties and witnesses point in a different direction.'" Topiwala, 2012 WL 122411, at *6 n.22 (quoting Byerson, 467 F.Supp.2d at 635; citing 15 Wright, Miller & Cooper, § 3854 (collecting cases)). Additionally, a court typically should not transfer a case out of the plaintiff's choice of forum "[u]nless the balance of these factors is strongly in favor of the defendant.'" Id. (quoting Collins v. Straight Inc., 748 F.2d 916, 921 (4th Cir. 1984) (citation omitted)) (footnote omitted).

A. The Weight Accorded to Plaintiffs' Choice of Venue

A plaintiff's choice of venue typically receives "substantial weight.'" Topiwala, 2012

WL 122411, at *7 (quoting Lynch v. Vanderhoef Builders, 237 F.Supp.2d 615, 617 (D. Md. 2002)). The exception is "when the chosen forum is not the plaintiff's home or has little connection to the events giving rise to the litigation." Id. Then, the court gives "less weight... to the plaintiff's choice." Id. Further, "[i]n patent infringement actions, "as a general rule, the preferred forum is that which is the center of gravity of the accused activity."'" Tse, 2006 WL 2583608, at *3 (quoting Ricoh Co., Ltd. v. Honeywell, Inc., 817 F.Supp. 473, 481 n.17 (D.N.J. 1993) (quoting S.C. Johnson & Sons, Inc. v. Gillette Co., 571 F.Supp. 1185, 1188 (N.D. Ill. 1983)) (emphasis in original)). This means that the court hearing the case ""ought to be as close as possible to the milieu of the infringing device and the hub of activity centered around its production. "'" Id. (quoting Ricoh Co., 817 F.Supp. at 481 n.17 (quoting S.C. Johnson, 571 F.Supp. at 1188) (emphasis in original)). In Tse, this Court concluded that California was the "hub of activity" because "[t]he software and products alleged to violate Tse's patent were designed and produced in California, " with one exception, which still was not designed or produced in Maryland. Id. In so concluding, the Court observed that "[t]he only connection that this case has to Maryland is the fact that Defendants sell their products and digital files to Maryland residents, " but, "[a]s Tse recognize[d], Defendants sell their products and files all over the nation, " such that the case had "no more connection to Maryland than it [did] to the other fortynine states." Id.

Here, it is undisputed that Maryland is not Plaintiffs' home. Defs.' Mem. 2; Compl. 1. Defendants have not produced any evidence showing the location for design or production of any of their systems that allegedly violate Plaintiffs' patents. See Tse, 2006 WL 2583608, at *3. But, they have offered the Affidavit of Jeffrey D. Elgin, who declares that "[a]ll of Capital One's back-end database, server, and security technologies supporting its mobile banking products are housed outside of Maryland and are primarily split between [] Capital One's Virginia-based operations and Texas-based operations, " and "the bulk of Capital One's servers are located in Virginia and Texas, " although "Capital One does maintain servers in Maryland." Elgin Aff ¶ 8, ECF No. 24-2. This suggests that "the milieu of the infringing device" would be either Virginia or Texas. See Tse, 2006 WL 2583608, at *3.

However, according to Plaintiffs, some of the alleged infringement occurred at the hands of Defendants' customers, "thousands of [whom] are located in Maryland, " such that Maryland has a connection to the action. Pls.' Opp'n 18; Compl. ¶¶ 32-44, 48-60. Yet, it is undisputed that Defendants' systems are available to customers throughout the United States, Elgin Aff. ¶ 10; Pls.' Opp'n 18-19 & n.13. Indeed Defendants "serve banking customers through branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virigina and the District of Columbia." Capital One Financial Corp.'s Annual Report to U.S. Securities & Exchange Comm'n 8, Pls.' Opp'n Ex. 7, ECF No. 30-7; see Pls.' Opp'n 17 (noting that "Maryland is one of Capital One's seven largest markets in the United States") (emphasis added). Given that Plaintiffs have not shown that the alleged infringement was more endemic to Maryland than to Virginia or any of its other primary markets, Plaintiffs' connection to the ...


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