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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION CATCH CURVE, INC.,
vs. GRAPHNET, INC.,
: : Plaintiff, : : : : : : Defendants. :
CIVIL ACTION NO. 1:06-CV-2386-CC
ORDER This matter is before the Court on Defendant Graphnet, Inc.’s Motion to Dismiss or in the Alternative to Transfer [Doc. No. 5]. For the reasons set forth herein, the Court hereby DENIES the Motion in its entirety. I.
BACKGROUND Plaintiff Catch Curve, Inc. (“Plaintiff” or “Catch Curve”) is a Delaware
corporation with its principal place of business in Atlanta, Georgia. (Compl. ¶ 4.) Catch Curve owns, by assignment, five patents that it alleges Defendant Graphnet, Inc. (“Defendant” or “Graphnet”) has infringed and continues to infringe. (Id. ¶ 5, 9-13.) The patents-in-suit relate to enhanced facsimile technology. (Declaration of Michael W. McLaughlin “McLaughlin Decl.” ¶ 4.) Since 1997, Catch Curve and its predecessors in interest in the patents-in-suit have been engaged in an active licensing program that makes the patented technology available to all persons coming within the scope of the patents-in-suit. (Id. ¶ 5.) The patents-in-suit have been licensed on a non-exclusive basis to approximately fifty companies in the enhanced fax/unified messaging market. (Id.) Since acquiring the patents-in-suit, Catch Curve has continued the previous owners’ policy of making the patents available on a non-exclusive basis to any company that needs a license. (Id.) Graphnet is a Delaware corporation with its principal place of business in
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New York, New York. (Declaration of Guy J. Conte “Conte Decl.” ¶ 4.) All services, development, marketing, sales, and accounting take place in the New York office. (Id.) Graphnet is in the data messaging industry and has developed its own proprietary store and forward hardware and software technology.
(Id. ¶5.)
According to Catch Curve’s Complaint, Graphnet’s XclusiveFAX, IVFS and Inbound Messaging solutions infringe upon the patents-in-suit. (Compl. ¶¶ 9-13.) XclusiveFAX is a broadcast fax solution that delivers personalized faxes to multiple recipients by merging recipient information into a fax template. (Conte Decl. ¶ 6.) The customer provides the fax template and the recipient information and attachments via e-mail to Graphnet in New York. (Id.) Graphnet’s software then merges the information into a personalized fax that is delivered directly from Graphnet in New York to each recipient. (Id.) IVFS, an Inbound Messaging solution, converts voice mails and faxes into attachments delivered via e-mails. Graphnet’s function is essentially to forward message files sent by third parties to its customers. (Id. ¶ 7.) All processing by Graphnet’s computer equipment occurs in New York. (Id.) Graphnet attaches the message file to an e-mail and sends it to a third-party ISP provider, which forwards it to the destination designated by the original sender. (Id.) Graphnet does not deliver, sell or license any hardware, software, or other products to its customers. (Id. ¶ 8.) For use of its proprietary solutions, Graphnet charges a fee (calculated by minutes) for access to its servers and facilities, all of which are located in New York. (Id.) All of Graphnet’s sales activities and subsequent customer-service activities take place in New York. (Id.) All payments for services are received and/or processed in New York. (Id.) Graphnet does not physically visit the customer and does not provide any hardware, equipment, or dedicated connection to the customer. (Id.) Graphnet does not target customers (via print, electronic, or any other -2-
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advertising or promotional media) in Georgia or any other particular state or region. (Id. ¶ 9.) Graphnet, however, does operate a website, www.graphnet.com, that is available via the internet throughout the world. (Id.) All sales inquiries are handled by Graphnet employees located in New York. (Id. ¶ 14.) Potential customers can apply to become Graphnet customers over the telephone or by accessing Graphnet’s website, where they are directed to an e-mail address or to fill out an on-line application form. (Id.) Customers must call a toll-free number or send an e-mail to Graphnet in New York to order services or solutions. (Id.) Customers also must submit to personal jurisdiction in New York or New Jersey and agree that New York or New Jersey law will govern any disputes. (Id.) As of November 2006, Graphnet had generated about $4,500.00 in gross revenues for the year from seven customers in Georgia, one of which is part of a national account originating out of the state of New York. (Id. ¶12.) During that same period, Graphnet had generated U.S. gross revenues of over $6 million. (Id.) Graphnet’s 2006 revenues from Georgia customers thus represented only .00075% of its total revenues as of November. (Id.) All of the records and documents regarding the research, testing, development, marketing and sales of Graphnet’s solutions are located in New York. (Id. ¶ 13.) All of the Graphnet employees and former employees with knowledge of the research, development, testing, marketing, and sales of Graphnet’s solutions work in New York and live in the surrounding area. (Id.) In addition to calling these persons as witnesses, Graphnet anticipates calling employees from the New York offices of its competitors as witnesses, including RCA, ITT, and Western Union. (Id.) Graphnet moves the Court to dismiss this patent infringement action pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3) or, in the alternative, to transfer the action to the United States District Court for the Southern District of New York. Graphnet asserts that it lacks sufficient contacts with the State -3-
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of Georgia for this Court to exercise personal jurisdiction. Graphnet further argues that venue is improper under the Patent Act venue provision, 28 U.S.C. § 1400(b). Even if the Court finds that jurisdiction and venue are proper, Graphnet maintains that a transfer for the convenience of the parties and witnesses is warranted under 28 U.S.C. § 1404(a). II.
ANALYSIS A.
Motion to Dismiss for Lack of Personal Jurisdiction
In deciding a jurisdiction question in a patent infringement case, this Court must follow the standard of review set forth by the Federal Circuit and apply the law of the Federal Circuit. Hildebrand v. Steck Mfg. Co., 279 F.3d 1351, 1354 (Fed. Cir. 2002); Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1564-65 (Fed. Cir. 1994). Deciding whether personal jurisdiction exists in a patent case requires a court to determine (1) whether jurisdiction exists under the forum state’s long-arm statute and (2) whether exercising such jurisdiction is consistent with the federal due process clause. Trintec Indus., Inc. v. Pedre Promotional Prods., Inc., 395 F.3d 1275, 1279 (Fed. Cir. 2005). Where the parties have not conducted discovery, the plaintiff “is required ‘only to make a prima facie showing’ of jurisdiction to defeat the motion to dismiss.” Id. at 1282-83 (citations omitted). The court “must accept the uncontroverted allegations in the plaintiff’s complaint as true....” Electronics for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed. Cir. 2003). If the court concludes that the existing record is inadequate to support personal jurisdiction, then the court may order jurisdictional discovery if “‘a party demonstrates that it can supplement its jurisdictional allegations through discovery.’” Trintec, 395 F.3d at 1283 (quoting GTE New Media Servs., Inc. v. BellSouth Corp., 199 F.3d 1343, 1351-52 (D.C. Cir. 2000)). In the case at bar, Plaintiff’s Complaint predicates personal jurisdiction over Graphnet on the following allegations: This Court has personal jurisdiction over Defendant for at least the -4-
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reasons that Defendant sells significant quantities of products and services that infringe the ‘926 patent, the ‘302 patent, the ‘584 patent, the ‘034 patent, and the ‘021 patent to customers in Georgia and in this district and division; Defendant maintains a website at www.graphnet.com that is accessible in Georgia and in this district and division through which Defendant sells its products and services to Georgia residents; and Defendant derives significant revenues from sales in this district and division. (Compl. ¶ 7.) Graphnet, for the most part, has controverted these allegations. Nevertheless, the evidence of record satisfies the Court that Plaintiff still has made a prima facie showing of jurisdiction, which is all that applicable law requires in the absence of jurisdictional discovery. 1.
Georgia Long-Arm Statute
The Georgia long-arm statute provides, in pertinent part, that a court may assert personal jurisdiction over a nonresident defendant who: (1) Transacts any business within this state; (2) Commits a tortious act or omission within this state ... [or]; (3) Commits a tortious injury in this state caused by an act or omission outside this state if the tort-feasor regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state. O.C.G.A. § 9-10-91. In this case, Plaintiff contends that Defendants have transacted business within this state, as contemplated by section (1) of the long-arm statute. (See Pl.’s Mem. in Opp’n to Def.’s Mot. to Dismiss or in the Alternative to Transfer at 4, 6.) The Supreme Court of Georgia has held that because section (1) of the longarm statute contains no explicit limiting conditions, such as the requirement of physical presence, a literal construction “grants Georgia courts the unlimited authority to exercise personal jurisdiction over any nonresident who transacts any business in this State.” Innovative Clinical & Consulting Servs., LLC v. First Nat’l Bank, 279 Ga. 672, 675, 620 S.E.2d 352 (2005). This provision of the statute confers jurisdiction “to the maximum extent permitted by procedural due process.” Id. The Court will therefore bypass the statutory analysis and proceed directly to the minimum contacts analysis under the Due Process Clause. See Trintec, 395 F.3d at -5-
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1279 (stating that where the reach of a state’s long-arm statute is the same as the limits of the due process clause, the personal jurisdiction inquiry reduces to a due process analysis because the state’s limitation collapses into the due process requirement); see also Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1358 (Fed. Cir. 1998) (same). 2.
Federal Due Process Clause
Federal courts have recognized two kinds of personal jurisdiction that satisfy the requirements of due process. General jurisdiction exists where the defendant has substantial, continuous and systematic contacts with the forum such that the forum has personal jurisdiction over any cause of action brought against that defendant, regardless of whether the cause of action arises from the defendant’s contacts with the forum. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984). Specific jurisdiction may be found when a foreign defendant “has purposefully directed his activities at residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985) (internal citation and marks omitted). In the instant case, Plaintiff makes no argument that this Court has general jurisdiction over Graphnet. (See generally Pl.’s Mem. in Opp’n to Def.’s Mot. to Dismiss or in the Alternative to Transfer.) Therefore, the Court’s analysis focuses only on whether specific jurisdiction exists over Graphnet. The Federal Circuit has developed a three-factor test to determine whether asserting specific jurisdiction over a defendant comports with due process: (1) whether the defendant “purposefully directed” its activities at residents in the forum; (2) whether the claim “arises out of or relates to” those activities; and (3) whether assertion of personal jurisdiction is “reasonable and fair.” Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1201-02 (Fed. Cir. 2003). The nonresident defendant’s availment must be such that the defendant “should reasonably -6-
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anticipate being haled into court” in the forum state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1980). This test “ensures that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts, or of the ‘unilateral activity of another party or a third person.’” Burger King, 471 U.S. at 475 (internal citations omitted). The plaintiff bears the burden to establish that the defendant has minimum contacts with the forum state. Coyle, 340 F.3d at 1350. “[U]pon this showing, defendants must prove that the exercise of jurisdiction is unreasonable.” Id. (citing Akro Corp. v. Luker, 45 F.3d 1541, 1546 (Fed. Cir. 1995)). In this case, the Court finds that Graphnet has purposefully directed its activities at Georgia residents. As an initial matter, Graphnet operates a website that is accessible in Georgia and in this district and division. While the website does not target Georgia residents in any way, the website is commercial and interactive, despite Graphnet’s position to the contrary. As the declaration of Graphnet’s Executive Vice President and Chief Financial Officer indicates, individuals can apply to become Graphnet customers by accessing Graphnet’s website and filling out an on-line application form. (Conte Decl. ¶ 14.) Insofar as a website that permits a user to exchange information with the host computer is properly considered “interactive,” Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997), this Court easily finds that Graphnet’s website is interactive. Further, insofar as users are transmitting information via the website to become customers of Graphnet, the informational exchange is most certainly commercial in nature. Applying the “sliding scale” test created in Zippo to analyze whether a defendant’s website supports the exercise of personal jurisdiction over that defendant, the Court answers that question in this case in the affirmative, recognizing that Federal Circuit law suggests that the operation of a website alone may not be sufficient to assert personal jurisdiction over a defendant, particular when the website is not directed
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at individuals in the foreign jurisdiction in question. Trintec, 395 F.3d at 1281.1 Graphnet not only operates a website that is commercial and interactive, but Graphnet also has sold services to Georgia residents and entered into contracts with those Georgia residents.2 (Conte Decl. ¶ 14.) While Graphnet had generated only about $4,500 in gross revenues from a total of seven customers in Georgia from January through November 2006, Graphnet consciously processed applications of Georgia residents, knowing that the result would be the electronic transmission of converted fax and voice mail messages directed to Georgia residents and the receipt of revenue from Georgia customers. See Zippo, 952 F. Supp. at 1126-27 (holding that the assertion of jurisdiction was proper because the defendant, among other things, consciously chose to process applications from individuals who resided in the foreign jurisdiction and pursued profits from the foreign jurisdiction, knowing that the results of its contracts with the individuals would be the transmission of electronic messages into the foreign jurisdiction). Graphnet admittedly interacts with its Georgia customers on an ongoing basis each time one of the customers While the Federal Circuit has not expressly adopted the Zippo analytical framework, most circuit courts addressing the issue of whether a website can provide minimum contacts have adopted the Zippo analytical framework. See, e.g., Lakin v. Prudential Securities, Inc., 348 F.3d 704 (8th Cir. 2003); Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446 (3d Cir. 2003); Revell v. Lidov, 317 F.3d 467 (5th Cir. 2002); ALS Scan, Inc. v. Digital Serv. Consults., Inc., 293 F.3d 707 (4th Cir. 2002); Gorman v. Ameritrade Holding Corp., 293 F.3d 506 (D.C. Cir. 2002); Soma Medical Intern. v. Standard Chartered Bank, 196 F.3d 1292 (10th Cir. 1999); Bensusan Rest. Corp. v. King, 126 F.3d 25 (2d Cir. 1997); Cybersell, Inc., v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997); CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996). 1
Insofar as Graphnet actually has had Georgia customers, the instant case is distinguishable from Barton Southern Co. v. Manhole Barrier Sys., Inc., 318 F. Supp. 2d 1174 (N.D. Ga. 2004), on which Graphnet relies, as the defendant in Barton Southern had no customers located in Georgia, had never received a purchase order from anyone in Georgia, had never received an e-mail from anyone in Georgia, and had never sent an email via its website to anyone in Georgia. Id. at 1177. There was absolutely no evidence that any Georgia residents had done business with the defendant, either through the internet or otherwise. Id. 2
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sends a fax via the XclusiveFAX service or receives a fax via the IVFS Inbound Messaging service. (Conte Decl. ¶¶ 6-7).3 If Graphnet did not want to make itself subject to jurisdiction in Georgia, it could have chosen not to contract with Georgia residents.4 See JB Oxford Holdings, Inc. v. Net Trade, Inc., 76 F. Supp. 2d 1363, 1367 (S.D. Fla. 1999) (holding that defendant was not subject to personal jurisdiction in Florida because defendant had prohibited the sale of its services to Florida residents); Zippo, 952 F. Supp. at 1126-27 (noting that “[i]f Dot Com had not wanted to be amenable to jurisdiction in Pennsylvania, the solution would have been simple – it could have chosen not to sell its services to Pennsylvania residents”). The Court next finds that the patent infringement claims asserted in this lawsuit do relate to Graphnet’s above-mentioned activities and contacts with Georgia residents. The converted facsimile and voice mail messages that Graphnet’s Georgia customers received via e-mail are the products of the services and processes that Catch Curve alleges infringe its patents. While the evidence submitted by Graphnet indicates that those processes did not actually take place in the State of Georgia, there remains a sufficient nexus between Graphnet’s Georgia-related
Graphnet mentions that third-party telecommunications and internet service providers actually provide the telecommunications services. However, the involvement of the third-party telecommunications carriers and third-party internet services providers does not preclude the electronic contacts from being attributed to Defendants. See Beverly Hills Fan, 21 F.3d at 1565-66 (“stream of commerce” is applicable if a product is introduced into stream with an “expectation” the product will end up in forum state); Honeywell, Inc. v. Metz Apparatewerke, 509 F.2d 1137, 1144 (7th Cir. 1975) (“[I]t is not within the contemplation of the concepts of fairness and due process to allow a wrongdoing manufacturer to insulate himself from the long arm of the courts by using an intermediary or by professing ignorance of the ultimate destination of his products.”). 3
Graphnet did attempt to avoid becoming subject to jurisdiction in Georgia by requiring all of its customers to submit to jurisdiction in New York and New Jersey. However, this forum selection clause binds only Graphnet’s customers and does not preclude a third party, such as Catch Curve, from bringing Graphnet into a Georgia court to have Graphnet answer for allegedly infringing activities related to Graphnet’s Georgia contacts. 4
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activities and the patent infringement claims asserted in this case. Plaintiff having satisfied the first two factors of the due process analysis, the burden now shifts to Graphnet to convince the Court that the exercise of personal jurisdiction over them is not “reasonable and fair.” Akro, 45 F.3d at 1545-46. Courts may look to several factors to determine reasonableness or fairness, including the burden on the defendant, the forum State’s interest in adjudicating the dispute, the plaintiff’s interest in obtaining convenient and effective relief, the interstate judicial system’s interest in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies. World-Wide Volkswagen Corp., 444 U.S. at 292 (citations omitted). Having considered the above-mentioned factors, the Court concludes that exercising personal jurisdiction over Graphnet in this case would not be unreasonable or unfair. As an initial matter, the State of Georgia would have a strong interest in adjudicating the parties’ dispute, as Catch Curve maintains its principal place of business in this forum. Graphnet attacks Catch Curve as not being an operating company but simply a professional litigant. However, the fact that part of Catch Curve’s business involves licensing does not alter or diminish Georgia’s interest in ensuring the protection of a Georgia resident’s intellectual property rights. Catch Curve’s interest in obtaining convenient and effective relief would likewise be substantially advanced by hearing the case in this Court. Graphnet argues that forcing it to litigate in this district would be unnecessarily burdensome, as its business, witnesses, and documents are in New York, but “often the interests of the plaintiff and the forum in the exercise of jurisdiction will justify even the serious burdens placed upon the alien defendant.” S & Davis Int’l v. The Republic of Yemen, 218 F.3d 1292, 1305 (11th Cir. 2000).5 Any burden placed on Graphnet
The Court acknowledges that the case cited is not binding, but the Court finds the reasoning in the case persuasive. 5
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does not rise to the level of being a violation of due process, particularly given the ease with which documents may now be transported or electronically transmitted and the advances in modern transportation. Graphnet’s conclusory arguments in this regard are really arguments about inconvenience, and issues of inconvenience are more appropriately resolved through a motion for change of venue, which the Court will address infra. Graphnet also points out that New York law governs the relationship between Graphnet and its customers, but this argument carries little weight, since this action has been initiated by a third party that is not bound by the choice-of-law provisions agreed to by Graphnet’s customers. Graphnet mentions that a dismissal of the case would not preclude Catch Curve from litigating its claims in another jurisdiction, such as New York. However, inasmuch as at least one other case brought by Catch Curve involving the same patents-in-suit is pending before the undersigned and will proceed in this district, the judicial system’s interest in obtaining the most efficient resolution of the controversy favors not dismissing the case just to have Catch Curve re-file the case in another jurisdiction. In short, the Court concludes that Graphnet has not met its burden to “present a compelling case that the presence of some other considerations ... render jurisdiction unreasonable.” Burger King, 471 U.S. at 477. Based on the foregoing, the Court holds that the exercise of specific personal jurisdiction over Defendants comports with constitutional requirements and is therefore proper. The Court denies Defendants’ Motion to Dismiss for Lack of Personal Jurisdiction. B.
Motion to Dismiss for Improper Venue
Venue in a patent action against a corporate defendant exists wherever there is personal jurisdiction. Trintec, 395 F.3d at 1280; VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1584 (Fed. Cir. 1990). Because this Court has personal jurisdiction over Graphnet, venue in this district is proper. The Court therefore denies Defendant’s Motion to Dismiss for Improper Venue. - 11 -
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Motion to Transfer Venue
Pursuant to 28 U.S.C. § 1404(a), a district court may transfer a civil action to any other district in which it might have been brought “for the convenience of parties and witnesses, [and] in the interest of justice.” In analyzing a motion to transfer venue, the Court applies the law of the Eleventh Circuit, not the Federal Circuit. See Storage Tech. Corp. v. Cisco Sys., Inc., 329 F.3d 823, 836 (Fed. Cir. 2003). For transfer of venue to be proper, the court must find that the case might have been brought in the proposed transferee district and that the transfer is for the convenience of parties and witnesses and in the interest of justice. First Federal S&L Ass’n v. Berger, 672 F. Supp. 1454, 1456 (M.D. Ga. 1987). The United States Supreme Court has interpreted the former requirement to mean that “(1) the suggested forum must have proper subject matter jurisdiction, (2) the suggested court must be able to exercise personal jurisdiction over all defendants, and (3) venue must be proper in the suggested forum. Id. (citing Hoffman v. Blaski, 363 U.S. 335, 343-44, 81 S. Ct. 1084, 4 L. Ed. 2d 1254 (1960)); see also Berger, 672 F. Supp. at 1456. The burden rests with the movant to show that transfer is appropriate and warranted, and “[t]he plaintiff’s choice of forum should not be disturbed unless it is clearly outweighed by other considerations.” Robinson v. Giamarco & Bill, P.C., 74 F.3d 253, 260 (11th Cir. 1996). The Court first finds that this case could have been brought in the United States District Court for the Southern District of New York. The New York court indisputably would have subject matter jurisdiction over the patent infringement action brought by Catch Curve. See 28 U.S.C. § 1338 (“The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks.”). Further, insofar as Graphnet maintains its principal place of business in New York, Graphnet would clearly be subject to personal jurisdiction in New York and in the Southern District
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of New York, specifically. For the same reason, venue would also be proper.6 While this case could have been brought in the Southern District of New York, Graphnet has not satisfied its burden of establishing that this case represents one of those rare situations that warrants disturbing a plaintiff’s choice of forum. In reaching this conclusion, the Court has considered the following factors: (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. Manuel v. Convergys Corp., 430 F.3d 1132, 1135 n. 1 (11th Cir. 2005). As an initial matter, although Catch Curve has only been registered to do business in Georgia since May of 2006, Catch Curve still has brought suit in its home state. Catch Curve’s principal place of business and the office of its President, Treasurer, and Secretary are all in Atlanta, Georgia. (McLaughlin Decl. ¶ 2.) As such, for purposes of venue, Catch Curve is a resident of the Northern District of Georgia. See 28 U.S.C. § 1332(c) (“[A] corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.”). Catch Curve’s choice of forum is therefore entitled to substantial deference. See Lasalle Bank N.A. v. Mobile Hotel Props., LLC, 274 F.
Catch Curve argues that this case could not have been brought in the Southern District of New York because Catch Curve is not subject to personal jurisdiction in the Southern District of New York. However, whether Catch Curve is subject to personal jurisdiction in the Southern District of New York is irrelevant to the issue of whether Catch Curve could have brought this action there. See Murray v. Scott, 176 F. Supp. 2d 1249, 1255-56 (M.D. Ala. 2001) (rejecting the plaintiff’s argument that transfer should not occur simply because the transferee court might lack jurisdiction over the plaintiff). 6
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Supp. 2d 1293, 1301 (S.D. Ala. 2003) (“Courts will accord great deference to the plaintiff’s choice of forum if the forum is in the district in which it resides.”). Consideration of the convenience of the parties favors retaining the action in this district. While it would be more convenient for Graphnet to litigate in New York, it would be more convenient for Catch Curve to litigate here in Georgia. Looking strictly at the convenience of the parties, transferring the action to the Southern District of New York would merely shift the inconvenience from Graphnet to Catch Curve, which is improper as a matter of law. See Robinson, 74 F.3d at 260 (affirming district court’s decision not to transfer venue where the transfer would simply have shifted the inconvenience from the defendant to the plaintiff). The Court accordingly finds that consideration of convenience to the parties does not weigh in favor of transfer. The convenience of the witnesses also does not favor transfer. “The party seeking the transfer must support its motion by clearly specifying the key witnesses to be called and particularly stating the significance of their testimony.” Mason v. Smithkline Beecham Clinical Labs., 146 F. Supp. 2d 1355, 1362 (S.D. Fla. 2001); see also In re Holmes, 306 B.R. 11, 15 (Bankr. M.D. Ga. 2004) (“The party seeking the transfer must clearly specify the key witnesses to be called and must make a general statement of what their testimony will cover.... If a party has merely made a general allegation that witnesses will be necessary, without identifying them and indicating what their testimony will be[,] the application for transfer will be denied.”). Graphnet states that its employees and former employees work in New York and live in the surrounding area and that these individuals will be crucial witnesses providing evidence to support its positions relating to non-infringement, unenforceability and invalidity of the patents-in-suit, but Graphnet has not specifically identified any of its employees and former employees who it expects to call as witnesses and has not even stated how many of its employees might be called as witnesses. Similarly, Graphnet states that it anticipates calling employees from - 14 -
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the New York offices of its competitors as witnesses, including RCA, ITT, and Western Union. However, as with its own employees and former employees, Graphnet has not identified any particular individuals from these companies it expects to use as witnesses. Moreover, Graphnet has not even hinted at the relevance or significance of their testimony. Catch Curve, on the other hand, has specifically identified three witnesses who reside and work in Atlanta and have information relevant to the instant dispute. These witnesses are fairly characterized as party witnesses or witnesses closely aligned with Catch Curve. The Court consequently does not attach much weight to the location of these witnesses, but their location is a relevant consideration. See Ramsey v. Fox News Network, LLC, 323 F. Supp. 2d 1352, 1356 (N.D. Ga. 2004) (stating that non-party witnesses, rather than party witnesses or those witnesses closely aligned with a party, “weigh[] most heavily on the Court in deciding a motion to transfer venue”). Catch Curve has also specifically identified three non-party witnesses with information relevant to the dispute, but all of these witnesses will be forced to travel whether the case proceeds here in the Northern District of Georgia or is transferred to the Southern District of New York. In light of the foregoing, the Court cannot attach much weight, if any, to the location of these witnesses. In sum, however, the convenience of the witnesses does not favor transfer. At best, a transfer of the action would merely shift the balance of inconvenience from Graphnet’s witnesses to Catch Curve’s witnesses. With respect to the location of relevant documents and the relative ease of access to sources of proof, transfer of the action to the Southern District of New York is slightly preferable. Documents relating to Graphnet’s development and use of its technology alleged to infringe the patents-in-suit are all in New York. (Conte Decl. ¶ 13.) None of the documents in the possession, custody or control of Catch Curve that bear relevance to the patents-in-suit or this litigation are located in New York, (McLaughlin Decl. ¶ 18), but Catch Curve fails to specify where these documents are - 15 -
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located. In any event, courts have recognized that the location of documents is accorded only little weight due to advances in copying technology, the ease of transporting documents, and the ease of transmitting documents electronically. See Mohamed v. Mazda Motor Corp., 90 F. Supp. 2d 757, 778 (E.D. Tex. 2000) (noting that accessibility and location of sources of proof “have been given decreasing emphasis due to advances in copying technology and information storage”); Wesley-Jessen Corp. v. Pilkington Visioncare, Inc., 157 F.R.D. 215, 218 (D. Del. 1993) (“Computers, modems, scanning machines, photocopiers, facsimile machines, video tapes, video discs, CD ROMs and express mail services have changed dramatically how we store, produce and exchange information.
These technologies have
shortened the time it takes to transfer information, reduced the bulk or size of the documents or things on which the information is recorded and can be transferred, and have lowered the cost of moving that information from one place to another.”). Accordingly, the location of the relevant documents and access to sources of proof weigh only slightly in favor of transfer in this action. The availability of process to compel the attendance of unwilling witnesses appears to be a neutral factor in this case. Graphnet does not aver that any of its witnesses are unable or unwilling to travel to Atlanta to testify, or that compulsory process will be necessary in this case. See Symbol Techs., Inc. v. Metrologic Instruments, Inc., 450 F. Supp. 2d 676, 679 (E.D. Tex. 2006) (holding that the availability of compulsory process in another district does not favor transfer when it is not anticipated that compulsory process will be necessary). Three of Catch Curve’s witnesses reside in Atlanta and would not be subject to compulsory process in New York. However, these witnesses are either party witnesses or closely aligned with Catch Curve and are therefore also likely to make themselves available voluntarily wherever the litigation proceeds. See Ramsey, 323 F. Supp. 2d at 1356 (presuming that parties and those closely aligned with a party are willing to testify in a different forum). Catch Curve’s other three witnesses are outside the reach of - 16 -
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compulsory service from both districts. Thus, upon the Court’s review of the record, the Court finds no reasonable basis to find that this factor weighs in favor of or against transferring venue. Graphnet places much emphasis on New York as being “the center of gravity of the accused activity” and thus the preferred forum for litigation. See S.C. Johnson & Son, Inc. v. Gillette Co., 571 F. Supp. 1185 (N.D. Ill. 1983) (stating that litigation in patent infringement suits should proceed where the case finds its center of gravity). However, when a plaintiff has brought suit in its home forum, the fact that another location may be the center of the allegedly infringing activity does not necessarily outweigh the plaintiff’s choice of forum. See Aearo Co. v. Bacou-Dalloz USA Safety, Inc., No. 1:03-CV-01406-DFH-VS, 2004 WL 1629566, at *2 (S.D. Ind. July 21, 2004) (“The site of the alleged infringing activity may be entitled to consideration by the court, but it alone is not determinative as a matter of law. If it were, the defendant in such cases would ‘almost always be allowed to transfer the case to its home forum’.... Instead, the site of the alleged infringing activity is one factor for the court to take into account.”) (quoting Lucent Techs., Inc. v. Aspect Telecomms. Corp., No. Civ. A. 97-1618, 1997 WL 476356, at *3 (E.D. Pa. Aug. 20, 1997)); Optima, Inc. v. Republic Indus., Inc., No. Civ. A. 94-3919, 1995 WL 72430, at *3 (E.D. La. Feb. 21, 1995) (“Examination of the “center of gravity” cases ... reveals that the test is generally applied in cases in which the plaintiff does not bring suit in its home forum. In such instances, the court gives less weight to the plaintiff’s choice of forum.”).
Significantly, none of the cases relied on by Graphnet to support
transferring the case to New York based on this “center of gravity” argument involved a plaintiff who had sued in its home forum. See Thermal Techs., Inc. v. Dade Serv. Corp., 282 F. Supp. 2d 1373 (S.D. Fla. 2003); LG Electronics Inc. v. Advance Creative Computer Corp., 131 F. Supp. 2d 804 (E.D. Va. 2001); S.C. Johnson & Son, Inc., 571 F. Supp. at 1188. Therefore, while the center of the allegedly infringing activity is one factor that the court considers and the factor does weigh - 17 -
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in favor of transferring the action to the Southern District of New York, this factor is not determinative. As the parties in this case have submitted no evidence regarding the relative means of the parties, this is a factor that the Court does not consider in its analysis. The factor of familiarity of the forum with the law governing the case does not apply in this instance given that federal patent law will govern Plaintiff’s patent infringement claims. These claims can be addressed and resolved just as easily in the Northern District of Georgia as in the Southern District of New York. Finally, the trial efficiency and expense to justice system factor weighs in favor of retaining the action in this district. As mentioned supra, there is at least one other case brought by Catch Curve involving the same patents-in-suit that is pending before the undersigned and will proceed in this district. One additional case may proceed in this district, depending on the Court’s resolution of a motion to dismiss or transfer pending in that case. For these reasons, the Court finds that the interest of justice and expense to the justice system factor tips in favor of the Court retaining the case.7 See Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 26, 80 S. Ct. 1470, 4 L. Ed. 2d 1540 (1960) (“To permit a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy and money that § 1404(a) was designed to prevent.”); accord Cambridge Filter Corp. v. International Filter Co., 548 F. Supp. 1308, 1310 (D. Nev. 1982) (“Litigation of related claims in the same tribunal is favored in order to avoid duplicitous litigation, attendant unnecessary expenses, loss of time to courts, witnesses and litigants, and inconsistent results.”); National Super
The Court is aware that there is related Catch Curve litigation pending in other district courts as well. However, the Court is not aware of any such litigation pending in the Southern District of New York. As such, transferring the case to the Southern District of New York would only further weigh on judicial resources and further increase the potential for inconsistent results. 7
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Spuds, Inc. v. New York Mercantile Exchange, 425 F. Supp. 665, 667 (S.D.N.Y. 1977) (“Litigation of related claims in the same tribunal is strongly favored because it facilitates efficient, economical and expeditious pre-trial proceedings and discovery and avoids duplicitous litigation and inconsistent results.”). Having carefully weighed and considered the relevant factors, the Court concludes that Plaintiff’s choice of forum is not “clearly outweighed by other considerations.” Robinson, 74 F.3d at 260 (emphasis added). Therefore, the Court denies Graphnet’s alternative request that this action be transferred to the Southern District of New York. III.
CONCLUSION For the foregoing reasons, the Court DENIES Defendant’s Motion to Dismiss
or in the Alternative to Transfer [Doc. No. 5]. SO ORDERED this 28th day of September, 2007.
s/ CLARENCE COOPER CLARENCE COOPER UNITED STATES DISTRICT JUDGE
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