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Pragmatus AV, LLC v. Yahoo! Inc.

United States District Court, Third Circuit

August 28, 2013

PRAGMATUS AV, LLC, Plaintiff,
v.
YAHOO! INC., Defendant.

REPORT AND RECOMMENDATION

CHRISTOPHER J. BURKE, Magistrate Judge.

Plaintiff Pragmatus AV, LLC ("Pragmatus" or "Plaintiff') filed this action for patent infringement against Defendant Yahoo! Inc. ("Yahoo!" or "Defendant"). Presently pending before the Court is Defendant's Renewed Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) Or, In the Alternative, Motion for Injunction ("Renewed Motion to Transfer"). (D.I. 130) For the reasons that follow, the Court recommends that the Renewed Motion to Transfer be DENIED.[1]

I. BACKGROUND

A. The Parties

Plaintiff Pragmatus is a Virginia limited liability company with its principal place of business in Alexandria, Virginia. (D.I. 160 at ¶ 1) Defendant Yahoo! is a Delaware corporation with its principal place of business in Sunnyvale, California. ( Id. at 2; D.I. 30 at 2)

B. Background

On November 15, 2010, Pragmatus filed two separate actions in the United States District Court for the Eastern District of Virginia alleging infringement of five patents against Facebook, Inc. ("Facebook") and other defendants (collectively, the "Facebook Actions"). (D.I. 130 at 5 n.4) In one of the suits, Pragmatus accused Facebook and other defendants of infringing U.S. Patent Nos. 7, 730, 132 ("the '132 patent"); 7, 822, 813 ("the '813 patent"); and 7, 831, 663 ("the '663 patent"). ( Id. ) In the second, Pragmatus filed suit only against Facebook, alleging infringement of U.S. Patent Nos. 7, 421, 470 ("the '470 patent"); and 7, 433, 921 ("the '921 patent"). ( Id. ) The Facebook Actions were subsequently transferred to the United States District Court for the Northern District of California ("Northern District") on February 3, 2011 and May 6, 2011, where they are currently stayed pending reexamination. ( Id. ; D.I. 154 (hereinafter, "Tr.") at 41)

On October 4, 2011, Plaintiff filed this action against Defendant asserting infringement of five patents[2] (collectively, the "Delaware Patents"). (D.I. 1) In lieu of answering, on December 1, 2011, Defendant filed a Motion to Dismiss for Failure to State a Claim.[3] (D.I. 7) On January 18, 2012, Judge Leonard P. Stark entered a Scheduling Order in the case. (D.I. 18) On April 6, 2012, Judge Stark referred the case to the Court "to hear and resolve all pretrial matters, up to and including the resolution of case-dispositive motions." (D.I. 32)

On March 27, 2012, Defendant filed a Motion to Transfer Venue to the United States District Court for the Northern District of California ("First Motion to Transfer"). (D.I. 28) In a Report and Recommendation dated October 15, 2012, the Court recommended denial of Defendant's Motion. (D.I. 52) Defendant timely objected, (D.I. 58), and on January 16, 2013, the District Court overruled the objections, adopted the Report and Recommendation, and denied the Motion, (D.I. 87).

On March 15, 2013, Plaintiff filed a separate lawsuit against Yahoo! in the Northern District (the "California Action") alleging infringement of the '470 and '921 patents (the "California Patents")-two of the patents that are also being litigated in one of the Facebook Actions. (D.I. 130 at 5) Yahoo! moved to relate the California Action to the Facebook Actions and to stay the California Action pending completion of reexamination. (Tr. at 41) However, on June 27, 2013, the Northern District determined that the California Action against Yahoo! and the Facebook Actions are not related. (D.I. 166)[4]

On April 2, 2013, Defendant filed the Renewed Motion to Transfer, (D.I. 130), and a related Motion to Stay Proceedings Pending Resolution of Yahoo! Inc.'s Motions to Transfer and Enjoin ("Motion to Stay"), (D.I. 131). Briefing was completed as to the Motions on April 29, 2013, (D.I. 143), and oral argument was held as to both on May 23, 2013, (Tr. at 1). On May 30, 2013, the Court issued a Memorandum Order denying the Motion to Stay. (D.I. 155)

II. DISCUSSION

With its Renewed Motion to Transfer, Yahoo! requests that the Delaware Action be transferred to the Northern District or, in the alternative, that Pragmatus be enjoined from prosecuting the California Action. (D.I. 130) The Court will address each of these requests in turn.

A. Motion to Transfer

1. Standard of Review

Section 1404(a) of Title 28 provides the statutory basis for a transfer inquiry. It provides that "[fJor 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).

"[S]ection 1404(a) was intended to vest district courts with broad discretion to determine, on an individualized, case-by-case basis, whether convenience and fairness considerations weigh in favor of transfer." Jumara v. State Farm Ins. Co., 55 F.3d 873, 883 (3d Cir. 1995) (citing Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 30-31 (1988)). The United States Court of Appeals for the Third Circuit has clearly emphasized the hurdle that a defendant faces when it seeks to have a matter transferred to another jurisdiction pursuant to Section 1404(a), explaining that "courts normally defer to a plaintiff's choice of forum" and thus "the plaintiffs choice of venue should not be lightly disturbed." Jumara, 55 F.3d at 879-80 (internal quotation marks and citation omitted).[5] This general principle, drawn from the historic respect accorded a plaintiff's choice of venue, suggests that "a transfer is not to be liberally granted." Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970) (internal quotation marks and citation omitted).

The party seeking a transfer has the burden "to establish that a balancing of proper interests weigh[s] in favor of the transfer." Id. ; see also Jumara, 55 F.3d at 879. That burden is a heavy one: "unless the balance of convenience of the parties is strongly in favor of defendant, the plaintiff's choice of forum should prevail." Shutte, 431 F.2d at 25 (internal quotation marks and citation omitted) (emphasis ...


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