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Diem LLC v. BigCommerce, Inc.

United States District Court, E.D. Texas, Tyler Division

December 28, 2017

DIEM LLC, Plaintiff,



         Before the Court is Defendant BigCommerce, Inc.'s (“BigCommerce”) Motion to Transfer Venue Pursuant to 28 U.S.C. §1404(a). (Doc. No. 48.) Plaintiff Diem LLC (“Diem”) filed a response (Doc. No. 50) to which BigCommerce has filed a reply (Doc. No. 51). After considering the parties' arguments, the Court DENIES BigCommerce's Motion to Transfer Venue (Doc. No. 48).


         On March 27, 2017, Diem filed this action against Defendant BigCommerce alleging infringement of United States Patent No. 7, 770, 122 (“the '122 Patent”). (Doc. No. 1.) On April 13, 2017, BigCommerce filed a Motion to Dismiss for Failure to State a Claim for Relief pursuant to Federal Rule of Civil Procedure 12(b)(6). (See Doc. No. 7.) The Court reviewed the briefing and ultimately ordered Diem to file an Amended Complaint consistent with the pleading requirements of Rule 8 on May 11, 2017. (Doc. No. 12.) On May 26, 2017, Diem filed its First Amended Complaint. (Doc. No. 13.) Five days later, BigCommerce filed a second Motion to Dismiss the allegations, this time citing improper venue pursuant to Rule 12(b)(3). (Doc. No. 14.) On July 6, 2017, the undersigned issued a Report and Recommendation recommending that the Motion to Dismiss for improper venue be denied (Doc. No. 21), and on July 26, 2017, District Judge Rodney Gilstrap resolved BigCommerce's objections and issued an Order Adopting, denying BigCommerce's Motion to Dismiss (Doc. No. 24). At that same time, the Court held its scheduling conference pursuant to Rule 16(b) and thereafter entered a scheduling order, a discovery order, and a protective order in this case. (Doc. Nos. 28, 29, 35.) Thereafter, on August 16, 2017, BigCommerce filed a letter brief requesting an early claim construction hearing, arguing that construction of certain claim terms in the only asserted claim of the '122 Patent are dispositive of infringement under Diem's infringement theory. (Doc. No. 36-1.) The Court considered the letter briefing and ultimately denied BigCommerce's request for an early claim construction hearing. (Doc No. 44.) Nearly two months later, and almost 8 months from the filing of the original complaint, on November 7, 2017, BigCommerce filed the instant motion to transfer venue to the Northern District of California based upon convenience. (Doc. No. 48.)


         Section 1404(a) provides that “[f]or the convenience of the 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.” 28 U.S.C. § 1404(a). The goals of § 1404(a) are to prevent waste of time, energy, and money, and also to protect litigants, witnesses, and the public against unnecessary inconvenience and expense. Van Dusen v. Barrack, 376 U.S. 612, 616 (1964). Ultimately it is within a district court's sound discretion to transfer venue pursuant to 28 U.S.C. § 1404(a), but the court must exercise its discretion in light of the particular circumstances of the case. Hanby v. Shell Oil Co., 144 F.Supp.2d 673, 676 (E.D. Tex. 2001); Mohamed v. Mazda Corp., 90 F.Supp.2d 757, 768 (E.D. Tex. 2000). The party seeking transfer must show good cause for the transfer. In re Volkswagen of America, Inc., 545 F.3d 304, 315 (5th Cir. 2008) (en banc) (“Volkswagen II”). To show good cause, the moving party must demonstrate the transferee venue is clearly more convenient. Id.

         When deciding whether to transfer venue, a district court balances the private interests of the parties and the public interests in the fair and efficient administration of justice. The private interest factors the court considers are: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious, and inexpensive. In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) (“Volkswagen I”). The public interest factors are: (1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict laws or in the application of foreign law. Id.


         The threshold issue in a § 1404(a) analysis is “whether the judicial district to which transfer is sought would have been a district in which the claim could have been filed.” Volkswagen I, 371 F.3d at 203. In a patent infringement action, venue is proper 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.” 28 U.S.C. § 1400(b). In this case, Diem does not contest that venue would be proper in the Northern District of California and transfer is permissible under § 1404.

         I. The Private Interest Factors

         (a) The Relative Ease of Access to Sources of Proof

         For this factor to weigh in favor of transfer, the movant must demonstrate that transfer will result in more convenient access to sources of proof. The Federal Circuit requires the Court to assume that the bulk of all relevant evidence will come from the accused infringer. In re Genentech, 566 F.3d 1338, 1345 (Fed. Cir. 2009). As a result, “the place where the defendant's documents are kept weighs in favor of transfer to that location.” Id. (quoting Neil Bros. Ltd. v. World Wide Lines, Inc., 425 F.Supp.2d 325, 330 (E.D.N.Y. 2006)). To meet its burden, Defendants must identify their sources of proof with some specificity such that the Court may determine whether transfer will increase the convenience of the parties. In re Apple, 743 F.3d 1377, 1379 (Fed. Cir. 2014); see also Invitrogen v. Gen. Elec. Co., No. 6:08-CV-113, 2009 WL 331889 at *3 (E.D. Tex. Feb. 9, 2009) (finding that general statements that relevant documents were located in either England or New Jersey “fail to show that transfer would make access to sources of proof either more or less convenient for the parties”).

         BigCommerce is a Texas corporation with its principal place of business in Austin, Texas. (Doc. No. 13, at ¶ 2; Doc. No. 31, at ¶ 2.) BigCommerce identifies its only places of business in the United States in Austin, Texas and San Francisco, California. (Doc. No. 48-1, at ¶3, Declaration of Jeff Mengoli (“Mengoli Decl.”).) Through its declarations, BigCommerce maintains that five of its senior technical executives are located in its San Francisco office; that fourteen additional employees who report to the senior executives work in San Francisco, with five reporting employees in Sydney and two in Austin, Texas; and that its Chief Marketing Officer and Senior Vice President of Corporate Development are also located in its San Francisco office. Id. at ¶¶ 4-7. BigCommerce further states that is corporate and finance leadership is in its Austin, Texas headquarters. Id. at ¶ 8.

         As to the location of its relevant documents, BigCommerce is silent. BigCommerce only contends that the parties agreed that its source code would be produced in San Francisco, but is silent as to where its technical documents are physically stored. (Doc. No. 48, at 4.) BigCommerce's silence is concerning given that its headquarters are in Austin, Texas. See Innovative Automation, LLC v. Audio Video & Video Labs, Inc., No. 6:11-CV-234 LED-JDL, 2012 WL 10816848, at *5 (E.D. Tex. May 30, 2012) (“[t]ypically, a party's documents are located at its principal place of business.”) (citing In re Acer Amer. Corp., 626 F.3d 1252, 1256 (Fed. Cir. 2010)). Moreover, as this Court has previously held, a failure to identify documents with specificity as to the documents and the location of the documents is a failure of the moving party to meet its burden on transfer. U.S. Ethernet Innovations, LLC v. Konica Minolta Bus. Sols. Inc., No. 6:12-CV-329 MHS-JDL, 2013 WL 12139091, at *3 (E.D. Tex. Mar. 28, 2013) (…the failure to adequately identify the location of relevant documents…precludes the Court from weighing this factor in its convenience analysis”); Core Wireless Licensing, S.A.R.L. v. Apple, Inc., No. 6:12-CV-100 LED-JDL, 2013 WL 682849, at *3 (E.D. Tex. Feb. 22, 2013) (finding defendant's “vague assertions and seemingly unknown relevance and location of potential sources” insufficient) aff'd In re Apple Inc., 743 F.3d at 1379 (“we will not overturn the court's conclusion that Apple failed to submit ...

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