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Virginia Innovation Sciences, Inc. v. Amazon.Com, Inc.

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

July 15, 2019

VIRGINIA INNOVATION SCIENCES, INC.
v.
AMAZON.COM, INC., et al INNOVATION SCIENCES, LLC
v.
RESIDEO TECHNOLOGIES, INC. INNOVATION SCIENCES, INC.
v.
HTC CORPORATION INNOVATION SCIENCES, INC.
v.
VECTOR SECURITY, INC.

          MEMORANDUM OPINION AND ORDER

          AMOS L. MAZZANT, JUDGE

         Pending before the Court are Motion of Defendant Amazon.com, Inc. to Transfer Venue to the Eastern District of Virginia (“Amazon's Motion to Transfer”), Virginia Innovation Sciences, Inc. v. Amazon.com, Inc. (“Amazon III”), 4:18-cv-474, (Dkt. #9); Plaintiff's Contested Motion to Substitute Party (“Motion to Substitute”), Amazon III, 4:18-cv-474, (Dkt. #22); Motion to Stay of Amazon.com, Inc., Amazon Digital Services, LLC, and Amazon Web Services, Inc.[1] Pending Decision on Their Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) (“Motion to Stay”), Amazon III, 4:18-cv-474, (Dkt. #105); Honeywell International Inc.'s Motion to Dismiss for Improper Venue Under 28 U.S.C. § 1406, or, in the Alternative, to Transfer to a More Convenient Forum Under 28 U.S.C. § 1404 (“Honeywell's Motion to Dismiss or Transfer”), Innovation Sciences, LLC v. Resideo Technologies, Inc. (“Resideo”), 4:18-cv-475, (Dkt. #15); Motion of Defendant HTC Corporation to Transfer Venue to the Eastern District of Virginia (“HTC's Motion to Transfer”), Innovation Sciences, LLC v. HTC Corporation (“HTC III”), 4:18-cv-476, (Dkt. #22); and Motion of Defendant Vector Security, Inc. to Transfer Venue to the Eastern District of Virginia Pursuant to 28 U.S.C. § 1404(a) (“Vector's Motion to Transfer”), Innovation Sciences, LLC v. Vector Security, Inc. (“Vector”), 4:18-cv-477, (Dkt. #16). Having considered the motions and the relevant pleadings, the Court finds that Amazon's Motion to Transfer, Honeywell's Motion to Dismiss or Transfer, HTC's Motion to Transfer, and Vector's Motion to transfer should be denied, that the Motion to Stay should be denied as moot, and the Motion to Substitute should be granted.

         BACKGROUND

         The four above-mentioned patent lawsuits presently before the Court have been consolidated for pretrial purposes. The patent infringement allegations include U.S. Patent No. 9, 723, 443 (“the '443 Patent”) and the '798 Patent Family, including U.S. Patent Nos. 9, 942, 798 (“the '798 Patent”), 9, 912, 983 (“the '983 Patent”), and U.S. Patent No. 9, 729, 918 (“the '918 Patent”) (collectively “the patents-in-suit”). Plaintiff asserts the '443 Patent and the '798 Patent Family against Defendant Amazon.com, Inc. (“Amazon”), the '983 Patent against Honeywell International, Inc. (“Honeywell”), the '798 Patent Family against HTC Corporation (“HTC”), and the '983 Patent against Vector Security, Inc. (“Vector”).[2]

         Plaintiff alleges that Amazon infringes the '798 Patent Family with the Amazon Echo, Echo Plus, Echo Show along with Amazon's Alexa Voice Service and associated back-end servers (the “Accused Echo Instrumentalities”), the Amazon Dash Button, Dash Replenishment Service (the “Accused Dash Instrumentalities”), and the Amazon Fire TV and family of devices associated and back-end servers (the “Accused Fire TV Instrumentalities”). Amazon III, 4:18-cv-474, (Dkt. #1). Plaintiff alleges Amazon infringes the '443 Patent with Accused Dash Instrumentalities. Amazon III, 4:18-cv-474, (Dkt. #1). Plaintiff alleges that Honeywell infringes the '983 Patent with its wireless hub system, which includes the L5200 and L7000 series security systems, the C2 Wi-Fi Security Camera, Honeywell Smart Home Security System, and associated mobile apps (the “Accused Honeywell Instrumentalities”). Resideo, 4:18-cv-475, (Dkt. #1). Plaintiff alleges that HTC infringes the '798 Patent Family with a wireless hub system and wireless apparatus, including the HTC U 11 and U 12 smartphones (the “Accused HTC Instrumentalities”). HTC III, 4:18-cv-476, (Dkt. #1). Plaintiff alleges Vector infringes the '983 Patent with its wireless hub system, which includes the Vector Security Home Security System, the Vector Security Home Security Video System, the Vector Security Voice Control with Amazon's Echo Dot, and the Vector Security Mobile App (the “Accused Vector Instrumentalities”). Vector, 4:18-cv-477, (Dkt. #1).

         On October 1, 2018, Amazon filed Amazon's Motion to Transfer Venue. Amazon III, 4:18-cv-474, (Dkt. #9). Plaintiff sought five extensions of time to file a response to the motion. Amazon III, 4:18-cv-474, (Dkt. #11; Dkt. #13; Dkt. #15; Dkt. #17; Dkt. #20). As they were filed unopposed, the Court granted the motions. Amazon III, 4:18-cv-474, (Dkt. #12; Dkt. #14; Dkt. #16; Dkt. #18; Dkt. #21). On December 4, 2018, Plaintiff filed its response to Amazon's motion to transfer. Amazon III, 4:18-cv-474, (Dkt. #24). Amazon filed a reply on December 18, 2018 (Dkt. #28) and Plaintiff filed a sur-reply on December 26, 2018. Amazon III, 4:18-cv-474, (Dkt. #30). Further, on May, 10, 2019, Amazon filed its Notice of Supplemental Evidence in Support of Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a). Amazon III, 4:18-cv-474, (Dkt. #113). Plaintiff filed a response to the supplemental evidence on May 15, 2019. Amazon III, 4:18-cv-474, (Dkt. #117).

         Also, during this time, on November 29, 2018, prior to filing its response to Amazon's Motion to Transfer, Plaintiff filed its Motion to Substitute. Amazon III, 4:18-cv-474, (Dkt. #22). Amazon filed a response on December 13, 2018. Amazon III, 4:18-cv-474, (Dkt. #25). On December 20, 2018, Plaintiff filed a reply to the motion. Amazon III, 4:18-cv-474, (Dkt. #29). No. sur-reply was filed.

         On October 2, 2018, Honeywell filed Honeywell's Motion to Dismiss or Transfer. Resideo, 4:18-cv-475, (Dkt. #15). Plaintiff sought four extensions of time to file a response. Resideo, 4:18-cv-475, (Dkt. #20; Dkt. #22; Dkt. #24; Dkt. #27). As they were filed unopposed, the Court granted the motions. Resideo, 4:18-cv-475, (Dkt. #21; Dkt. #23; Dkt. #25; Dkt. #28). Plaintiff filed its response on December 4, 2018. Resideo, 4:18-cv-475, (Dkt. #31). On December 7, 2018, Honeywell field a supplemental brief in support of the motion. Resideo, 4:18-cv-475, (Dkt. #35). Plaintiff filed a response to the supplemental brief on December 14, 2018. Resideo, 4:18-cv-475, (Dkt. #38). Additionally, on December 18, 2018, Honeywell filed its reply to the motion. Resideo, 4:18-cv-475, (Dkt. #43). Finally, Plaintiff filed its sur-reply on December 26, 2018. Resideo, 4:18-cv-475, (Dkt. #46).[3]

         On December 27, 2018, HTC filed HTC's Motion to Transfer. HTC III, 4:18-cv-476, (Dkt. #22). On January 11, 2019, Plaintiff filed its response. HTC III, 4:18-cv-476, (Dkt. #30). Then, HTC filed its reply on January 18, 2019. HTC III, 4:18-cv-476, (Dkt. #32). Finally, on January 28, 2019, Plaintiff filed a sur-reply. HTC III, 4:18-cv-476, (Dkt. #34).

         On November 15, 2018, Vector filed Vector's Motion to Transfer. Vector, 4:18-cv-477, (Dkt. #16). Plaintiff filed its response on November 29, 2018. Vector, 4:18-cv-477, (Dkt. #21). Vector filed its reply on December 7, 2018, and Plaintiff filed its sur-reply on December 17, 2018. Vector, 4:18-cv-477, (Dkt. #27; Dkt. #30).

         On April 29, 2019, Amazon filed its Motion to Stay pending the resolution of the motion to transfer venue. Amazon III, 4:18-cv-474, (Dkt. #105). Vector, HTC, and Honeywell joined in the motion. Amazon III, 4:18-cv-474, (Dkt. #106; Dkt. #107; Dkt. #110). On May 13, 2019, Plaintiff filed a response to the motion. Amazon III, 4:18-cv-474, (Dkt. #115). On May 14, 2019, Defendants filed their Joint Notice of Ripeness Regarding Motion to Stay Pending Decision on Motions to Transfer Venue Pursuant to 28 U.S.C. § 1404(a). Amazon III, 4:18-cv-474, (Dkt. #116).

         On July 2, 2019, Defendants filed their Joint Notice of Ripeness Regarding Pending Motions. Amazon III, 4:18-cv-474, (Dkt. #149). Further, on July 3, 2019, Amazon filed its Notice of Relevant Federal Circuit Determination in Support of Motions to Transfer Venue Pursuant to 28 U.S.C. § 1404(a). Amazon III, 4:18-cv-474, (Dkt. #156). On July 8, 2019, Plaintiff filed a response to the notice. Amazon III, 4:18-cv-474, (Dkt. #159). On July 12, 2019, Plaintiff filed a supplemental response to the notice. Amazon III, 4:18-cv-474, (Dkt. #160).

         ANALYSIS

         I. Motion to Substitute

         Plaintiff seeks to substitute Innovation Sciences, LLC (“Innovation”) for Virginia Innovation Sciences, Inc. (“VIS”) as plaintiff in this case because VIS merged into Innovation. VIS was terminated and all issued and outstanding stock of VIS was converted into limited liability company membership interests in Innovation. Plaintiff maintains that VIS no longer exists, and holds no right, title, or interest in the patents-in-suit. Innovation now holds all rights, title, and interest in the patents-in-suit. Therefore, according to Plaintiff, Innovation is the proper plaintiff in this case. Amazon[4] contests the Motion to Substitute, arguing that the merger is a sham to manipulate venue. However, the Court finds these arguments more appropriate for a discussion on the motions to transfer venue, as opposed to the Motion to Substitute.[5] Instead, the Court focuses on the law surrounding party substitution.

         Federal Rule of Civil Procedure 25(c) dictates that “[i]f an interest is transferred, the action may be continued by or against the original party unless the court, on motion, orders the transferee to be substituted in the action or joined with the original party.” As has previously been identified in the Eastern District of Texas, “[a] ‘transfer of interest,' as described in Rule 25(c), includes circumstances where a corporation is the successor to the original corporate party by merger.” IDQ Operating, Inc. v. Aerospace Commc'ns Holding, 6:15-cv-781, 2016 WL 6877772, at *1 (E.D. Tex. July 5, 2016). This is a permissive rule that is generally left to the Court's discretion. See id.

         Here, a merger occurred and “the separate existence” of VIS “ceases” to exist. Rosenbrock v. Deutsche Lufthansa, A.G., Inc., No. 6:16-cv-3, 2016 WL 2756589, at *7 (S.D. Tex. May 9, 2016), report and recommendation adopted by, 2016 WL 11088850 (S.D. Tex. June 21, 2016) (quoting Tex. Bus. Org. Code § 10.008(a)(1)). At that time, “‘all liabilities and obligations of [VIS was] allocated to [Innovation] in the manner provided by the plan of merger.'” Jacob v. BAC Home Loan Servicing, LP, No. MO-14-cv-36, 2014 WL 11531132, at *2 (W.D. Tex. Aug. 11, 2014) (quoting Tex. Bus. Org. Code § 10.008(a)(3)). As there is an active proceeding pending, the litigation may continue as if the merger did not occur or Innovation, the party “‘to which the liability, obligation, asset, or right associated with that proceeding is allocated to and vested in under the plan of merger[, ] may be substituted in the proceeding.'” Id. (quoting Tex. Bus. Org. Code § 10.008(a)(5)). The Court finds the latter course of action is appropriate here as Innovation is the real party-in-interest and is the party that has all substantial rights in the patents-in-suit. See id.; IDQ Operating, 2016 WL 6877772, at *1.

         Not only will substitution allow the real party-in-interest to be the plaintiff in this suit, but it also simplifies the case, which is a “primary consideration” in deciding this motion. Advanced Mktg. Grp., 269 F.R.D. at 359 (quotations omitted). Here, the other three defendants in the pending cases, which have been consolidated for pretrial purposes, have agreed to the substitution and granting the motion as to Amazon will allow the plaintiff to be the same in all four cases. Considering these facts, the Court finds substitution is appropriate. See Jacob, 2014 WL 11531132, at *2; IDQ Operating, 2016 WL 6877772, at *2; Advanced Mktg. Grp., 269 F.R.D. at 359.

         II. Motion to Dismiss or Transfer Based on Improper Venue

          Honeywell first moves to dismiss or transfer this case arguing that venue is improper in the Eastern District of Texas. Plaintiff maintains that venue is proper in the Eastern District of Texas.

         Federal Rule of Civil Procedure 12(b)(3) allows a party to move to dismiss an action for “improper venue.” Fed.R.Civ.P. 12(b)(3). It has been held “as a matter of Federal Circuit law that, upon motion by the Defendant challenging venue in a patent case, the Plaintiff bears the burden of establishing proper venue.” In re ZTE (USA), Inc., 890 F.3d 1008, 1013 (Fed. Cir. 2018). The Court “must accept as true all allegations in the complaint and resolve all conflicts in favor of the plaintiff.” Mayfield v. Sallyport Glob. Holdings, Inc., No. 6:13-cv-459, 2014 WL 978685, at *1 (E.D. Tex. Mar. 5, 2014) (citing Ambraco, Inc. v. Bossclip, B.V., 570 F.3d 233, 237- 38 (5th Cir. 2009)). In determining whether venue is proper, “the [C]ourt is permitted to look at evidence in the record beyond simply those facts alleged in the complaint and its proper attachments.” Ambraco, 570 F.3d at 238 (quotations omitted). If venue is improper, the Court “shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.” 28 U.S.C. § 1406(a); Fed.R.Civ.P. 12(b)(3).

         Venue in patent infringement actions is governed by 28 U.S.C. § 1400(b). Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 229 (1957); TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514, 1519 (2017) (holding § 1400(b) “is the sole and exclusive provision controlling venue in patent infringement actions”). Under § 1400(b), venue is only proper (1) in the district in which the defendant resides or (2) in a district “where the defendant has committed acts of infringement and has a regular and established place of business.” 28 U.S.C. § 1400(b). In TC Heartland, the Supreme Court reiterated that, under the first prong, “for purposes of § 1400(b) a domestic corporation ‘resides' only in its State of incorporation.” 137 S.Ct. at 1517. Under the second prong, a regular and established place of business must be (1) “a physical place in the district, ” (2) that is “a regular and established place of business, ” and (3) “it must be the place of the defendant.” In re Cray, Inc., 871 F.3d 1355, 1360 (Fed. Cir. 2017).

         In the present case, the parties agree that venue is not proper under the first “residence” prong of § 1400(b). The dispute lies in the second “regular and established place of business” prong. There are four facilities involved in the present dispute, which are located the Eastern District of Texas, specifically in Plano, [6] Richardson, Orange, and Beaumont. Honeywell contends that, despite these four locations, venue is not proper in the Eastern District of Texas. As to the Richardson, Orange, and Beaumont facilities, Honeywell does not challenge that these locations are physical locations, of regular and established places of business, or of the defendant, instead admitting that it maintains these addresses.[7] Regardless, Honeywell contends that they cannot serve as a basis for venue because they are not pleaded and are not related to the alleged infringement. The Court addresses both arguments in turn.

         First, Honeywell avers that because Plaintiff did not plead the Richardson, Orange, and Beaumont facilities as a basis for venue in its complaint, the Court cannot consider these locations in its analysis. Plaintiff counters that it did not exclusively plead Plano as the basis for proper venue.[8] The Court agrees with Plaintiff. Plaintiff did not base its venue allegations solely on the Plano facility. While Plaintiff only specifically listed the Plano facility, it maintained its right to assert other facilities as well: “Honeywell . . . has a regular and established place of business within this District, including, without limitation, at [the Plano facility].” Resideo, 4:18-cv-475, (Dkt. #1 ¶ 6) (emphasis added). As such, although not specifically pleaded, these three facilities are not excluded by Plaintiff's pleadings. While it is Plaintiff's burden to plead and prove venue, in determining whether venue is proper “the [C]ourt is permitted to look at evidence in the record beyond simply those facts alleged in the complaint and its proper attachments.” Ambraco, 570 F.3d at 238. Both Honeywell and Plaintiff have now provided evidence of these three locations inside the Eastern District of Texas, and there is no reason for the Court not to consider them. Thus, the Court considers the Richardson, Orange, and Beaumont facilities, even though not referenced in the complaint, in determining whether venue is proper.

         Additionally, Honeywell argues that the three locations within the Eastern District of Texas are not related to the infringement, [9] and thus, cannot serve as a basis for venue in this case pursuant to § 1400(b).[10] Plaintiff disagrees, arguing that § 1400(b) does not require this.

         The Federal Circuit has not answered the question of whether a defendant's acts of infringement need to be related to the defendant's regular and established place of business in the district. Courts have reached different conclusions in answering this question. The Court, along with the majority of courts, finds that the better reasoned approach is that no relation is required between the two. See, e.g., Raytheon Co. v. Cray, Inc., 258 F.Supp.3d 781, 791 (E.D. Tex. 2017), mandamus granted on other grounds, In re Cray, 871 F.3d 1355; Bristol-Myers Squibb Co. v. Mylan Pharms. Inc., No. 17-379-LPS, 2017 WL 3980155, at *20-21 (D. Del. Sept. 11, 2017) (collecting cases); 14D Charles Alan Wright & Miller, Federal Practice and Procedure § 3823 (4th ed. 2019) (collecting cases) (explaining “[i]f a division of a corporation has a regular and established place of business with a district, the test is satisfied, even though the acts of infringement were committed by a different division of the corporation that has no regular place of business there.”). Section 1400(b) requires only that “the defendant has committed acts of infringement and has a regular and established place of business.” 28 U.S.C. § 1400(b) (emphasis added); accord Raytheon, 258 F.Supp.3d at 791 (quotations omitted). “So long as the two requirements are satisfied in a particular district-that is, so long as the defendant has committed acts of infringement in the district and has a regular and established place of business in that same district-venue is proper.” Bristol-Myers, 2017 WL 3980155, at *20. “Nothing in the language of [§] 1400(b) justifies the conclusion that a defendant's place of business in the district must have some connection with the accused device.” Raytheon, 258 F.Supp.3d at 791 (quotations omitted).

The statute does not state that in order for venue to be proper the defendant is to have committed acts of infringement in a district “arising from” a regular and established place of business in that district. The statute is silent as to any necessity of relationship or connection between the two requirements. The Court does not read this statutory silence to contain an implicit nexus requirement. See generally Cent. Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 183-85 (1994) (“[I]t is not plausible to interpret the statutory silence as tantamount to an implicit congressional intent to impose . . . liability.”).

Bristol-Myers, 2017 WL 3980155, at *20 (alteration in original).

         Honeywell asserts that this holding goes against the Federal Circuit's holding in In re Cordis, Corp., 769 F.2d 733 (Fed. Cir. 1985). The Court is unconvinced. Like the Bristol-Myers court, the Court does not ignore the fact that In re Cordis contains language that might suggest a relationship requirement. In re Cordis, 769 F.2d at 737 (stating “while there was evidence that the sales representative therein conducted seminars with distributors to promote his employer's products, there was no evidence to demonstrate that such activities were carried on concerning the specific product which was the subject of the infringement action.”). However, the Court agrees with the holding in Bristol-Myers that while the Federal Circuit alludes to a relationship in In re Cordis, “its statement does not purport to impose a requirement that such a relationship must exist.” Bristol-Myers, 2017 WL 3980155, at *20. As such, the Court concludes that no relationship is required. Therefore, regardless of whether the Richardson, Orange, or Beaumont facilities are actually involved with or related to the accused products, they are regular and established places of business located within the Eastern District of Texas and, thus, make venue proper in the Eastern District of Texas.

         Although the Court has decided that venue is proper based on the Richardson, Orange, and Beaumont facilities, the Court must address the effect of a spin-off Honeywell completed after Plaintiff initiated suit. Honeywell has four different business segments: Aerospace; Safety and Productivity Solutions; Performance Materials and Technology; and Home and Building Technologies. Within the Home and Building Technologies segment, Honeywell has what it calls the Homes business unit. On December 7, 2018, Honeywell filed a supplement, notifying the Court that Honeywell completed a spin-off of Honeywell's Homes business unit into a new corporate entity called Resideo Technologies (“Resideo”). Resideo, 4:18-cv-475, (Dkt. #35). Resideo is now responsible for the design, development, marketing, and distribution of the Accused Honeywell Instrumentalities, as this was a responsibility of the Homes business unit. The spin-off includes former Honeywell International subsidiaries ADI Global Distribution (“ADI”) and AlarmNet, Inc. (“AlarmNet”). However, it does not include Intermec, which is the subsidiary of Honeywell that maintains an office in Plano, Texas. It also did not include the facilities located in Richardson, Orange, and Beaumont.

         Plaintiff claims that, at that time, the parties were attempting to work out an agreement to substitute Resideo for Honeywell in the present lawsuit. Plaintiff represented it would not agree unless Resideo would stand in the shoes of Honeywell for purposes of jurisdiction, venue, and determination of the most convenient forum, but no agreement had been reached at that time. Related to this discussion, on November 29, 2018, Plaintiff filed a motion to substitute party to reflect VIS merging into Innovation. Resideo, 4:18-cv-475, (Dkt. #29). At the time filed, the motion was contested. Resideo, 4:18-cv-475, (Dkt. #29). However, on December 18, 2018, Honeywell filed a notice of non-opposition, representing to the Court that after meeting and conferring, the parties reached an agreement that Honeywell would not oppose Plaintiff's motion to substitute party and Plaintiff would not oppose Honeywell's motion to substitute. Resideo, 4:18-cv-475, (Dkt. #44). Subsequently, Honeywell filed its unopposed motion to substitute, explaining the spin-off to the Court. Resideo, 4:18-cv-475, (Dkt. #47). There was no explanation in any of these filings if the parties' agreement regarding the motions to substitute included an agreement to have Resideo stand in the shoes of Honeywell for purposes of proper venue. The Court granted both motions on January 3, 2019. Resideo, 4:18-cv-475, (Dkt. #51; Dkt. #52).[11]

         Regardless of any agreement, when determining whether venue is proper, the Court is to look at the time the complaint is filed. Norsworthy v. Mystik Transp., Inc., 430 F.Supp.2d 631, 633-34 (E.D. Tex. 2006) (citing Harris v. Black Clawson Co., 961 F.2d 547, 549-50 (5th Cir. 1992); Horihan v. Hartford Ins. Co. of the Midwest, 979 F.Supp. 1073, 1076 (E.D. Tex. 1997)); see also Pers. Audio, LLC v. Google, Inc., 280 F.Supp.3d 922, 931 (E.D. Tex. 2017) (reaching the same conclusion in a patent case interpreting 28 U.S.C. §1400(b) and referring to Federal Circuit and Supreme Court of the United States guidance). Based on this rule, venue is not affected by events that occur subsequent to filing, such as the spin-off that occurred in this case. Accordingly, the Court does not consider any post-filing facts in its venue analysis and its analysis remains unchanged.

         III. Motion to Transfer Based on Convenience and in the Interest of Justice

         While only Honeywell moves to dismiss, all Defendants ask the Court to transfer the cases to the Eastern District of Virginia because they argue that it is the clearly more convenient forum. Plaintiff responds that the Eastern District of Virginia is not clearly more convenient.

         Section 1404 permits a district court to transfer any civil case “[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 or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). “Section 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer according to ‘an individualized, case-by-case consideration of convenience and fairness.'” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). The purpose of § 1404 “is to prevent the waste ‘of time, energy and money' and ‘to protect the litigants, witnesses and the public against unnecessary inconvenience and expense . . . .'” Van Dusen, 376 U.S. at 616 (quoting Cont'l Grain Co. v. Barge FBL-585, 364 U.S. 19, 26-27 (1960)).

         The threshold inquiry when determining eligibility for transfer is “whether the judicial district to which transfer is sought would have been a district in which the claim could have been filed, ” or whether all parties consent to a particular jurisdiction. In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) (“Volkswagen I”). Once that threshold inquiry is met, the Fifth Circuit has held “[t]he determination of ‘convenience' turns on a number of public and private interest factors, none of which can be said to be of dispositive weight.” Action Indus., Inc. v. U.S. Fid. & Guar. Co., 358 F.3d 337, 340 (5th Cir. 2004) (citations omitted). These enumerated factors are neither exhaustive nor exclusive, and no single factor is dispositive. In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (en banc) (“Volkswagen II”).

         The party seeking transfer of venue must show good cause for the transfer. Id. The moving party must show that the transferee venue is “clearly more convenient” than the transferor venue. Id. The plaintiff's choice of venue is not a factor in this analysis, but rather contributes to the defendant's burden to show good cause for the transfer. Id. at 314, 314 n.10 (“[W]hile a plaintiff has the privilege of filing his claims in any judicial division appropriate under the general venue statute, § 1404(a) tempers the effects of the exercise of this privilege.”). However, “when the transferee venue is not clearly more convenient than the venue chosen by the plaintiff, the plaintiff's choice should be respected.” Id. at 315. And while the multi-factor analysis is informative, ultimately, “‘the district court has broad discretion in deciding whether to order a transfer.'” Balawajder v. Scott, 160 F.3d 1066, 1067 (5th Cir. 1998) (quoting Caldwell v. Palmetto State Sav. Bank, 811 F.2d 916, 919 (5th Cir. 1987)).

         The Court addresses the Defendants' motions with these guidelines in mind, first looking to the threshold inquiry, then moving to the private interest factors, and concluding with the public interest factors. The Court addresses the motions together when it is appropriate to do so, but analyzes the motions separately when required to do so.

         A. Threshold Inquiry

         As a threshold matter, the Court must first determine whether venue is proper in the Eastern District of Virginia. Vargas v. Seamas Drivers Int'l, LLC, No. 2:10-cv-178, 2011 WL 1980001, at *3 (E.D. Tex. May 20, 2011) (citing In re Volkswagen I, 371 F.3d at 203). Plaintiff does not dispute that this suit could have originally been filed in the Eastern District of Virginia. Therefore, the threshold inquiry is satisfied, and the Court will turn to whether the Eastern District of Virginia is the more convenient forum.

         B. The Effect of Merging, Relocating, or Creating a Spin-Off

         Before discussing the convenience factors, the Court must address post-filing events and their effect on the convenience analysis.[12] There have been two post-filing actions: Plaintiff merged and relocated and Defendant Honeywell completed a spin-off, which resulted in a new, separate entity-Resideo. The Court addresses both in turn.

         As to Plaintiff's relocation, a common argument presented throughout all Defendants' motions and in several different factors is that the Court should not consider the fact that Plaintiff relocated to Texas in its convenience analysis. Defendants maintain that Plaintiff moved to manufacture and manipulate venue and, thus, the Court should consider the facts as they existed when the lawsuit was filed. Plaintiff responds that the move was not made to manufacture venue because venue was already proper prior to the move. Moreover, according to Plaintiff, VIS merged into Innovation, which was formed in Texas to benefit from Texas' tax laws, as opposed to attempting to manipulate venue.

         The Court first notes that it agrees with Plaintiff-that any arguments claiming Plaintiff is manufacturing venue are unpersuasive. Whether venue is proper is not premised on whether Plaintiff is located in Texas or in Virginia. As noted earlier, venue in patent cases is governed by 28 U.S.C. § 1400(b), which states venue is proper based on the location or actions of the defendant and makes no mention of a plaintiff's location.[13]

         As to the claims that the Court should consider the facts presented at the time Plaintiff filed suit based on Plaintiff's alleged venue manipulation, the Court notes that there is a bright line rule for courts in the Fifth Circuit determining proper venue; that is, Courts are to look at the facts as they existed at the time the lawsuit was filed. Norsworthy, 430 F.Supp.2d at 633-34 (citing Harris, 961 F.2d at 549-50); Horihan, 979 F.Supp. at 1076. However, when a motion to transfer is at issue, the rule is not as bright.[14] “The Supreme Court has long urged courts to ensure that the purposes of jurisdictional and venue laws are not frustrated by a party's attempt at manipulation.” In re Microsoft Corp., 630 F.3d 1361, 1364 (Fed. Cir. 2011). As such,

the Supreme Court explained that Section 1404(a) “should be construed to prevent parties who are opposed to a change of venue from defeating a transfer which, but for their own deliberate acts or omissions, would be proper, convenient and just.” A plaintiff's attempts to manipulate venue in anticipation of litigation or a motion to transfer venue falls squarely within these prohibited activities.

In re Hoffman-La Roche Inc., 587 F.3d 1333, 1337 (Fed. Cir. 2009) (quoting Van Dusen, 376 U.S. at 625) (discussing converting evidence into an electronic format and transferring the evidence to litigation counsel in Texas, with that being the only connection to Texas). Accordingly, “[t]he Federal Circuit cautions that where a plaintiff's ‘presence in Texas appears to be recent, ephemeral, and an artifact of litigation,' courts should not be misled.” Seven Networks, LLC v. Google LLC, No. 2:17-cv-442, 2018 WL 4026760, at *6 (E.D. Tex. Aug. 14, 2018). However, “timing alone . . . is not sufficient to establish venue manipulation.” Id.

         Based on this law “the Court takes allegations of venue manipulation seriously” and must decide whether such manipulation occurred in this case. Id. This, however, is a fact intensive inquiry. Accordingly, the Court compares the facts of this case to the facts presented in other cases-a sample of the cases cited by Defendants-to determine whether this case falls into the realm of concern posed by the Supreme Court of the United States and the Federal Circuit.

         In In re Hoffman-La Roche, Inc., the Federal Circuit determined that the transfer of 75, 000 pages of documents from the plaintiff's counsel in California to the plaintiff's litigation counsel in Texas was an action that was made purely in anticipation of litigation. 587 F.3d at 1337. The Federal Circuit determined that the action was “a fiction[, ] which appear[ed] to be [] created to manipulate propriety of venue” and determined it was entitled to no weight in the court's venue analysis. Id.

         In In re Microsoft, Corp., the plaintiff incorporated under the laws of Texas prior to filing suit and maintained an office in Texas. 630 F.3d at 1363. However, the office in Texas did not employ any individuals and was not the basis of the operations. Id. at 1362. All operations attributed to the office in Texas were actually directed by and operated from the United Kingdom. Id. The Federal Circuit also noted that

“[u]nder modern conditions corporations often obtain their charter from states where they no more than maintain an agent to comply with local requirements, while every other activity is conducted far from the chartering state.” The Court further explained that the “[p]lace of corporate domicile in such circumstances might be entitled to little consideration” under the doctrine of forum non conveniens, “which resists formalization and looks to the realities that make for doing justice.”

Id. (alterations in original) (quoting Koster v. Lumbermens Mut. Cas. Co., 330 U.S. 518, 527-28 (1947)). Based on the realities in that case-that the plaintiff actually was operating out of the United Kingdom and not Texas-the Federal Circuit found that the district in which the plaintiff maintained this office was not the clearly more convenient forum. Id.

         Finally, in In re Zimmer, the plaintiff claimed that the Eastern District of Texas was the more convenient forum because that was where it maintained its principal place of business. In re Zimmer Holdings, Inc., 609 F.3d 1378, 1381 (Fed. Cir. 2010). However, upon looking at the facts of the case, the Federal Circuit determined that the plaintiff's claim was unsubstantiated, as it appeared the plaintiff had merely transported patent prosecution files to an office located in Texas that it shared with another of the plaintiff's counsel's clients. Id. Further, the plaintiff was an LLC with a registered office in Michigan, and the two corporate officers resided in Michigan. Id. Accordingly, the Federal Circuit determined the plaintiff's “presence in Texas appear[ed] to be recent, ephemeral, and an artifact of litigation.” Id. The Federal Circuit found this to be “a classic case where the plaintiff [was] attempting to game the system by artificially seeking to establish venue by sharing office space with another of the trial counsel's clients.” Id.

         These cases present different scenarios than what is presently before the Court. The Court does not ignore the fact that the move is recent. Plaintiff filed suit against Defendants on July 5, 2018. At this time, Plaintiff was actually its former company, VIS, and located in Virginia. Defendants filed their motions on October 1, 2018, October 2, 2018, November 15, 2018, and December 27, 2018. As to the motions filed in October, Plaintiff sought several extensions[15] of time to respond to the motions, representing conflicts with schedule, seeking new counsel, and the new counsel then gaining familiarity with the case. The last of these extensions was filed on November 13, 2018. Plaintiff then, on November 29, 2018, filed its motions to substitute party based on VIS's merger into Innovation. Plaintiff then filed responses to the motions to transfer starting on November 29, 2018, with its final response being filed on January 11, 2019, using its merger and new location to respond to the motions. “The Court does find the timing [of the merger] to be worthy of questioning, but [again] timing alone . . . . is not sufficient to establish venue manipulation.” Seven Networks, 2018 WL 4026760, at *6.

         Although the merger and relocation were recent, after suit was filed, and after some of the motions to transfer were filed, the Court finds the evidence does not support a finding that it is an artifact of litigation. In her sworn declaration, Dr. Anne Wong, CEO of Innovation, states that the merger was contemplated prior to filing this action. Amazon III, 4:18-cv-474, (Dkt. #24, Exhibit 23 ¶ 9). This statement was made under the penalty of perjury. Amazon III, 4:18-cv-474, (Dkt. #24, Exhibit 23 at p. 6). As such, the Court accepts the statement as a fact of the case. Other than the timing of the merger, Defendants presented no concrete evidence to the contrary. Moreover, not only were documents moved to Texas, as in In re Zimmer and In re Hoffman-La Roche, but the entire company relocated. VIS merged into Innovation, and VIS no longer exists. Innovation offices in Plano, not in Virginia. Unlike in In re Hoffman-La Roche, all documents are stored in the actual office of Innovation, not of its litigation counsel. Moreover, the office is operated from CEO Dr. Anne Wong's residence, and she is not sharing a residence with any of Innovation's counsel's other clients, like the facts presented in In re Zimmer. Innovation is actually operated out of Plano, instead of being operated from another state or country like the facts presented in In re Microsoft. As such, the Court does not find this move to be an artifact of litigation.

         Finally, there is no evidence to suggest that this move is ephemeral. There are no facts to suggest that the company or Dr. Anne Wong will move back to Virginia as soon as litigation is complete. The evidence actually suggests the opposite. Dr. Anne Wong has moved herself[16] and her business to Texas. She rented out her apartment in Virginia and listed her home in Virginia for sale. Amazon III, 4:18-cv-474, (Dkt. #117, Exhibit 2; Dkt. #117, Exhibit 3). Finally, Dr. Anne Wong also obtained a Texas driver's license, thereby surrendering her Virginia driver's license. Amazon III, 4:18-cv-474, (Dkt. #117, Exhibit 4). Based on these facts, the Court does not find this move to appear ephemeral.

         The Court finds this case aligns with the facts in Cookteck Induction Systems, where even though the relocation and merger did not occur until after the commencement of the lawsuit, “[p]laintiff had intent to merge and relocate” “[p]rior to the initiation of this lawsuit” and “Defendants ha[d] not demonstrated that Plaintiff's physical relocation after the initiation of this suit was an attempt to manufacture venue.” Cooktek Induction Sys., LLC v. I/O Controls Corp., 4:15-cv-548, 2016 WL 4095547, at *3 (E.D. Tex. Aug. 2, 2016) (citing Core Wireless Licensing S.a.r.l. v. LG Elecs. Inc., No. 2:14-cv-911, 2015 WL 5143395, at *5 n.6 (E.D. Tex. Sept. 1, 2015)); accord Adaptix, Inc. v. HTC Corp., 937 F.Supp.2d 867, 872-73 (E.D. Tex. 2013). Because Defendants have not met their burden, the Court will consider the consequences of Plaintiff's relocation when addressing the motions to transfer, as opposed to considering the facts as they existed at the time of filing.

         Moreover, as previously mentioned when discussing Honeywell's motion to dismiss for improper venue, Honeywell completed a spin-off of its Homes business unit into a new corporate entity called Resideo, which includes ADI and AlarmNet. This presents a relevant fact for venue considerations, as Resideo is now responsible for the design, development, marketing, and distribution of the Accused Honeywell Instrumentalities. ADI is a wholesale distributor of the Accused Honeywell Instrumentalities. AlarmNet is responsible for certain communication aspects related to the Accused Honeywell Instrumentalities. Similar to Defendants, Plaintiff does not meet its burden to suggest that the spin-off was accomplished to manipulate convenience, and thus, the Court considers the spin-off and the location of the witnesses and documents of Resideo where they are located at this point.

         C. Private Interest Factors

         Defendants maintain that the private interest factors support transfer. Plaintiff disagrees. The private interest factors 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 a trial of a case easy, expeditious, and inexpensive.” Volkswagen II, Inc., 545 F.3d at 315 (quotations omitted). The Court addresses each in turn.

         1. The Relative Ease of Access to Source of Proof

          The first private interest factor is the relative ease of access to the sources of proof. Volkswagen I, 371 F.3d at 203. In examining this factor, the Court considers the location of documentary and physical evidence, as opposed to witnesses. In re Volkswagen II, 545 F.3d at 316. “The Fifth Circuit has cautioned this factor remains relevant despite technological advances having made electronic document production commonplace.” DataQuill, Ltd. v. Apple Inc., No. A-13-CA-706-SS, 2014 WL 2722201, at *3 (W.D. Tex. June 13, 2014) (citing Volkswagen II, 545 F.3d at 316)). “‘The Federal Circuit has observed that [i]n patent infringement cases, the bulk of the relevant evidence usually comes from the accused infringer, and therefore the location of the defendant's documents tends to be the more convenient venue.'” Cooktek Induction Sys., 2016 WL 4095547, at *3 (alteration in original) (quoting DataQuill, Ltd., 2014 WL 2722201, at *3). “However, where evidence is dispersed across venues, this private interest factor will be neutral.” Id. (citing Principal Tech. Eng'g, Inc. v. SMI Cos., No. 4:09-cv-316, 2009 WL 4730609, at *5 (E.D. Tex. Nov. 12, 2009)). The Court addresses each Defendant separately.

         a. Amazon

          The Amazon briefing on this factor centers on Plaintiff's merger from VIS into Innovation and relocation from Virginia to Texas. According to Amazon, when VIS existed and was located in Virginia, the vast majority of all corporate records were located five miles from federal courthouse in Alexandria, which is part of the Eastern District of Virginia (“Alexandria Courthouse”). Amazon III, 4:18-cv-474, (Dkt. #9, Exhibit 5 ¶ 17). However, VIS no longer exists, and Plaintiff's documents are maintained at Plaintiff's office in Plano, Texas. Amazon III, 4:18-cv-474, (Dkt. #24, Exhibit 23 ¶ 15). Amazon acknowledges that the burden on Amazon is relatively the same in either forum. However, Amazon argues that this factor weighs in favor of transfer because the Court should not consider the merger and should act as if the documents are still in Virginia. As previously discussed, the Court finds that Defendants did not meet their burden to show that Plaintiff is attempting to manipulate venue.[17] As such, regarding Amazon, this factor weighs slightly against transfer.

         b. Honeywell

          Honeywell presents arguments regarding documentary evidence maintained by both Plaintiff and Honeywell. As to Plaintiff's documents, Honeywell presents the same or similar arguments as Amazon, which the Court has already addressed. As to its own evidence, Honeywell argues that the Eastern District of Virginia is more convenient.

         Plaintiff responds[18] that the Court should not transfer the case because a transfer would merely shift the burden from Honeywell to Plaintiff. However, the Court is not persuaded. While the Court acknowledges that it should not transfer a case if it merely shifts the burden from one party to another, it also has to acknowledge the fact that in patent cases, it is presumed that the bulk of the evidence comes from the accused infringer. See Goodman Co., L.P. v. A & H Supply, Inc., 396 F.Supp.2d 766, 776 (S.D. Tex. 2005); Cooktek Induction Sys., 2016 WL 4095547, at *3. Thus, more weight must be attributed to the accused infringer's evidence and a transfer would not be simply shifting the burden. As such, the Court looks to where Honeywell's evidence is located to determine whether transferring the case to the Eastern District of Virginia is the more convenient venue. Honeywell asserts that it has evidence in both the Eastern District of Virginia and also Melville, New York, which Honeywell maintains is closer to the Eastern District of Virginia than the Eastern District of Texas.

         Honeywell argues that it has evidence pertinent to the Accused Honeywell Instrumentalities in the Eastern District of Virginia. ADI is headquartered in Melville, New York, but maintains four locations in the Eastern District of Virginia: Alexandria; Norfolk; Richmond; and Sandston. Resideo, 4:18-cv-475, (Dkt. #35, Exhibit 1 ¶ 7). ADI is a wholesale distributor of the Accused Honeywell Instrumentalities and is responsible for sales and distribution of the Accused Honeywell Instrumentalities. Resideo, 4:18-cv-475, (Dkt. #35, Exhibit 1 ¶ 7). However, Honeywell does not specify any evidence that is maintained in these facilities. While the Court recognizes the ADI division may contain documents concerning damages, this was not argued by Honeywell. It is critical for a movant to identify specific evidence that is likely to be present in a district for the Court to conduct a proper analysis. See Seven Networks, 2018 WL 4026760, at *4. Moreover, Honeywell did not suggest that this information is not also kept in Honeywell's principal executive offices and major operations, which are located in Golden Valley, Minnesota and Melville, New York-primarily Melville, New York for the Accused Honeywell Instrumentalities. It is presumed that the bulk of the discovery material related to a corporate party is located in that party's corporate headquarters or primary offices. See In re Acer Am. Corp., 626 F.3d 1252, 1256 (Fed. Cir. 2010). Without any argument otherwise, the Court presumes this information is available in New York and does not consider its facilities in the Eastern District of Virginia.

         As to the evidence maintained in New York, Honeywell likewise does not specifically identify evidence present in New York. However, Honeywell argues that

[t]he vast majority of . . . evidence relevant to the design, development, manufacture, marketing, offering, and sales of the [Accused Honeywell Instrumentalities], including technical, financial, and marketing evidence . . . are based in Melville, New York, approximately 280 miles from the Eastern District of Virginia, as opposed to 1, 570 miles from [the Eastern District of Texas].

Resideo, 4:18-cv-475, (Dkt. #15 at pp. 27-28). The Court finds this argument, along with the presumption that the bulk of a company's evidence is located in its headquarters, is sufficient to demonstrate that a majority of relevant evidence in this case will likely come from New York. See Seven Networks, 2018 WL 4026760, at *4.

         However, Honeywell is not seeking to transfer the case to New York, where the bulk of its evidence is likely located. Rather, Honeywell, along with the other Defendants, asks the Court to transfer the cases to the Eastern District of Virginia. The Court only looks to where Honeywell's evidence is located because of the Federal Circuit's determination that the bulk of the relevant evidence comes from the accused infringer and is not shifting the convenience because “the place where the defendant's documents are kept weighs in favor of transfer to that location.” In re Genentech, 566 F.3d at 1345 (emphasis added). The Federal Circuit did not hold the same for a location that the accused infringer's documents are close to.

         Nevertheless, the Court does not discount the fact that Honeywell's sources of proof are closer to the Eastern District of Virginia than the Eastern District of Texas. The Court compares this to Plaintiff's sources of proof being located in the Eastern District of Texas, within the Sherman Division specifically. The Court also notes that neither Plaintiff's nor Honeywell's headquarters are located in the Eastern District of Virginia and, as such, transferring this case would result in the suit being litigated where neither party is located. Accordingly, the Court finds this factor to be neutral as to Honeywell.

         c. HTC

         HTC's briefing is similar to Amazon's in that it focuses on the merger and relocation of Plaintiff. However, as opposed to acknowledging that the burden for HTC would be neutral in either location, HTC simply does not mention its own burden in relation to this factor. Accordingly, for the same reasons mentioned in Amazon's analysis, this factor weighs slightly against transfer as to HTC.

         d. Vector

         Vector presents arguments regarding documentary evidence maintained by both Plaintiff and Vector. As to Plaintiff, Vector presents the same or similar arguments as the other Defendants, which the Court has already addressed.

         Regarding its own evidence, Vector argues that it “maintains its potentially relevant technical, marketing, and financial documents outside of [the Eastern District of Texas], in Fairfax, Virginia and Warrendale, Pennsylvania.” Vector, 4:18-cv-477, (Dkt. #16 at p. 11). Accordingly, Vector maintains that the burden to transport physical documents or evidence is less with respect to the Alexandria Courthouse, than the courthouse in Sherman, Texas of the Eastern District of Texas (“Sherman Courthouse”). Plaintiff responds that the Court should not transfer the action to simply shift the burden from Plaintiff to Vector, resulting in trial occurring where neither party is located.[19]

         As analyzed above, the Court does not consider finding in favor of transfer on this factor to be simply shifting the inconvenience from one party to the other based on the fact that the bulk of the relevant evidence comes from the accused infringer in patent cases. The difference in the analysis for Vector is some of Vector's relevant evidence is located in the Eastern District of Virginia, which is where it is requesting the Court to transfer this case.[20] The Court does note, however, that it is merely some of the evidence, as some of it is also in Pennsylvania.[21] Moreover, again, the Court acknowledges the fact that Plaintiff has evidence in the Eastern District of Texas, and Vector's headquarters are not located in the Eastern District of Virginia; as such, the Eastern District of Virginia is not home to any party. Considering all these facts, the Court finds that, as to Vector, this factor weighs in favor of transfer, but only slightly.

         2. The Availability of Compulsory Process to Secure the Attendance of Witnesses

          The second private interest factor is the availability of compulsory process to secure the attendance of witnesses. Volkswagen I, 371 F.3d at 203. Under Federal Rule of Civil Procedure 45, a court may enforce a subpoena issued to any nonparty witness in the State of Texas to appear at trial, provided the party does not incur substantial expense. Fed.R.Civ.P. 45(c)(1)(B). Similarly, a court may enforce any subpoena for a deposition to be taken within its boundaries, provided that the deposition is taken no more than 100 miles from a location where the person resides, is employed, or regularly transacts business in person. Fed.R.Civ.P. 45 (a)(2); Fed.R.Civ.P. (c)(1)(A). Moreover, party witnesses do not require compulsory process for trial and are not given much weight in this factor. Rather, the focus of this factor is on witnesses for whom compulsory process to attend trial might be necessary. See Ingeniador, LLC v. Adobe Sys. Inc., No. 2:12-cv-805, 2014 WL 105106, at *2 (E.D. Tex. Jan. 10, 2014).

         The Court addresses each Defendant separately for this analysis in order to weigh the factor accurately; however, as there is strong overlap between the arguments, the Court references arguments, analysis, and ...


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