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Texas Association of Realtors, Inc. v. Pdffiller, Inc.

United States District Court, W.D. Texas, Austin Division

August 4, 2017

TEXAS ASSOCIATION OF REALTORS, INC., Plaintiff,
v.
PDFFILLER, INC., Defendant.

          ORDER

          SAM SPARKS UNITED STATES DISTRICT JUDGE

         BE IT REMEMBERED on the 4th day of August 2017, the Court held a hearing in the above-styled cause and the parties appeared through counsel. Before the Court are Defendant PDFfiller, Inc. (PDFfiller)'s Motion to Transfer Venue [#31], Plaintiff Texas Association of Realtors, Inc. (TAR)'s Response [#34] in opposition, and PDFfiller's Reply [#37] in support. Having considered the aforementioned documents, the case file as a whole, and the applicable law, the Court enters the following opinion and order.

         Background

         Texas Association of Realtors (TAR) is a non-profit organization based in Austin, Texas. Am. Compl. [#29] at 1-2. TAR aims to promote and protect private-property rights by advocating for Texas realtors and property owners. Id. at 2. Additionally, TAR is a professional membership association for Texas realtors. Id. Among other things, TAR provides real estate forms, which it has copyrighted, and restricts the use of these forms to its members only. Id. at 2-3. Each form features the TAR logo and the word marks "Texas Association of Realtors®" and "TAR." Id. at 3-4.

         PDFfiller is a start-up company providing an online system for filling in, editing, and modifying electronic PDF forms. Mot. Transfer [#31] at 1. PDFfiller has its headquarters and principal place of business in Massachusetts. Id. at 2.

         TAR filed this lawsuit on December 12, 2016. See Compl. [#1]. TAR claims PDFfiller has wrongfully obtained TAR's forms and enables customers to use and edit them, thereby infringing on TAR's copyrights and trademarks as well as unfairly competing with TAR in violation of Texas law. Am. Compl. [#29] at 11-15. TAR seeks injunctive relief preventing PDFfiller from using TAR's forms; disgorgement of the profits PDFfiller has derived from the use of TAR's forms; compensation for damage to TAR's business, reputation, goodwill, and sales; statutory damages; and attorneys' fees. Id. at 15-20.

         About six months before this case was filed, California Association of Realtors, Inc. (CAR) filed suit against PDFfiller, the CEO of PDFfiller, and the President of PDFfiller in the United States District Court for the District of Massachusetts (Massachusetts Lawsuit). Mot. Transfer [#31-2] Ex. A (CAR Compl.) at 1-2. CAR is a California non-profit trade association representing real estate professionals in California with its principal place of business in Los Angeles, California. Id. at 2, 4. CAR's name and logo are registered trademarks. Id. at 4. CAR also maintains a variety of forms, which it copyrighted, for use in all types of residential and commercial real estate transactions. Id. The use of these forms is restricted to CAR's members. Id. at 5.

         In the Massachusetts Lawsuit, CAR asserts PDFfiller and its executives are engaging in a "counterfeiting operation." Id. at 9. Therefore, CAR claims PDFfiller and its executives are liable to CAR for copyright infringement; trademark infringement; violation of the Digital Millennium Copyright Act, 17 U.S.C. § 1201; and violation of Massachusetts Unfair Trade Practices Act (MUTPA). Id. at 15-24. CAR seeks injunctive relief, "an accounting" of PDFfiller's profits, statutory damages, and treble damages, and attorneys' fees. Id. at 17, 20-24.

         Analysis

         PDFfiller moves to transfer this case to the United States District Court for the District of Massachusetts under the first-to-file rule and, alternatively, under 28 U.S.C. § 1404(a). The Court examines each of these alleged grounds for transfer in turn.

         I.First-to-File Rule

         A. Legal Standard

         "Under the first-to-file rule, when related cases are pending before two federal courts, the court in which the case was last filed may refuse to hear it if the issues raised by the cases substantially overlap." Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599, 603 (5th Cir. 1999). This rule serves principles of comity, requiring federal district courts to exercise care to avoid interfering with one another's affairs. W. Gulf Mar. Ass 'n v. ILA Deep Sea Local 24, 751 F.2d 721, 728-29 (5th Cir. 1985). "The concern manifestly is to avoid the waste of duplication, to avoid rulings which may trench upon the authority of sister courts, and to avoid piecemeal resolution of issues that call for a uniform result." Id.

         Whether the first-to-file rule applies is within the district court's discretion. Cadle, 174 F.3d at 603. In order for the rule to apply to transfer or dismiss a case, "the two pending actions [must be] so duplicative or [they must] involve substantially similar issues such that one court should decide the subject matter of both actions." Granado v. Quality Energy Servs., Inc., SA-15-CV-1061-XR, 2016 WL 705228, at *1 (W.D. Tex. Feb. 18, 2016). This inquiry does not require the same legal issues or identity of parties, but instead requires "substantial overlap" between cases. Int'l Fid. Ins. Co. v. Sweet Little Mexico Corp., 665 F.3d 671, 678 (5th Cir. 2011) ("Instead, the crucial inquiry is one of substantial overlap.'" (internal citations and quotations omitted)). "Courts have noted that a substantial relationship exists between two suits where the issues, though not identical, are similar enough that the cases would be consolidated if filed in the same [c]ourt." Rooster Prod. Int'l, Inc. v. Custom ...


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