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Opentv, Inc. v. Netflix, Inc.

United States District Court, D. Delaware

March 31, 2014

OPENTV, INC., Plaintiff,
v.
NETFLIX, INC., Defendant.

MEMORANDUM

GREGORY M. SLEET, Chief District Judge.

I. INTRODUCTION

On December 19, 2012, the plaintiff OpenTV, Inc. ("OpenTV") filed suit against the defendant Netflix, Inc. ("Netflix"). (D.I. 1.) In its complaint, OpenTV alleged that Netflix infringed U.S. Patent Nos. 6, 018, 786, 6, 233, 736, 7, 055, 169, 7, 409, 437, 7, 490, 346, 7, 949, 722, and 8, 107, 786 (collectively, "the Patents-in-Suit"). ( Id. at ¶¶ 12, 14.) The Patents-in-Suit relate to technologies that facilitate over-the-top ("OTT") delivery of movies, television, and other media over the internet. ( Id. at ¶ 14.)

Presently before this court is Netflix's motion to transfer to the United States District Court for the Northern District of California. (D.I. 13.) Because the court concludes there is sufficient reason to transfer the instant action to the Northern District of California, the court will grant the motion to transfer.

II. BACKGROUND

OpenTV is a Delaware corporation with its principal place of business in San Francisco, California. (D.I. 1 at ¶ 24.) It claims that it has been responsible for developing many of the underlying technologies that facilitate OTT delivery of content over the internet. ( Id. at ¶¶ 14, 22.) In its complaint, OpenTV describes its presence, both in terms of offices and use of its technology, as "worldwide" and states that it has approximately 450 employees throughout the United States, France, Australia, and China. ( Id. at ¶¶ 10, 31, 33.)

Netflix is a Delaware corporation with its principal place of business in Los Gatos, California. ( Id. at ¶ 43; D.I. 11 at ¶ 43.) Netflix also has an office in Beverly Hills, California. (D.I. 15 at ¶ 2.) Netflix's business consists of providing users with a subscription service that allows them to search for and watch video content over an internee connection. (D.I. 1 at ¶ 44; D.I. 11 at ¶ 44.) Part of its service is sometimes described as OTT. ( Id. )

III. STANDARD OF REVIEW

28 U.S.C. § 1404(a) provides that "[for 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." Id. Under Section 1404(a), the court undertakes a two-step inquiry in order to resolve a motion to transfer. First, the court determines "whether the action could have been brought originally in the proposed transferee forum." Linex Technologies, Inc. v. Hewlett-Packard Co., No. 11-400-GMS, 2013 WL 105323, *1 (D. Del. Jan. 7, 2013). Second, the court looks to private and public interests protected by Section 1404(a), to determine "whether transfer would best serve the convenience of the parties and witnesses as well as the interests of justice." Smart Audio Technologies, LLC v. Apple, Inc., 910 F.Supp.2d 718, 724 (D. Del. 2012).

In Amara v. State Farm Insurance Company, the Third Circuit provided various private and public interests for district courts to consider. 55 F.3d 873, 879 (3d Cir. 1995). According to the Third Circuit, the private interests may include the plaintiffs original choice, the defendant's choice, where the claim arose, the parties' physical and financial conditions, the convenience of witnesses involved, and the location of the books and records related to the Patents-in-Suit. Id. The public interests include the enforceability of the judgment, practical considerations, any administrative difficulties in the two fora, and the trial judges' familiarity with applicable state law in diversity cases. Id.

IV. DISCUSSION

Netflix asserts that this action could have been brought in the Northern District of California, (D.I. 14 at 8), and OpenTV does not deny this, (D.I. 19). Thus, the court proceeds to consider the Jumara public and private interest factors.

Regarding the parties' forum choices, OpenTV contends that its preference of Delaware should be accorded substantial weight. (D.I. 19 at 3.) Netflix asserts that OpenTV's preference should not be accorded substantial weight because OpenTV chose to litigate in a state in which OpenTV is not physically located. (D.I. 23 at 2.) This court concludes that Netflix is correct. Although the plaintiffs choice of venue is ordinarily entitled to deference, see Jumara, 55 F.3d at 879, its preference is "entitled to less than the paramount consideralion" when it files suit where it is incorporated but not physically located, see Linex Technologies, 2013 WL 105323, at *3. See also In re Link-A -Media Devices Corp., 662 F.3d 1221, 1223 (Fed. Cir. 2011). Here, OpenTV's preferred forum is Delaware, where it is incorporated, but OpenTV's principal place of business is in Northern California. (D.I. 1 at ¶ 24.) Therefore, the court will not accord substantial weight to OpenTV's choice of Delaware. Unlike OpenTV, Netflix's preferred forum is Northern California. This is a legitimate choice because California is where both parties' principal place of business is located. Ultimately, the court concludes that the parties' forum choice weighs slightly in favor of transfer.

Regarding where the claim arose, Netflix contends that 141 of the accused Netflix functionality was designed and developed by Netflix in the Northern District of California." (D.I. 14 at 10.) For its part, OpenTV does not deny Netflix's assertion, but suggests that OpenTV's infringement claim arises in all districts because Netflix delivers its video streaming service nationwide. (D.I. 19 at 5.) Although a claim for patent infringement arises wherever someone has committed acts of infringement, which in this case can be viewed as occurring in all districts, "infringement claims have even deeper roots in the forum where, the accused products were developed." Linex Technologies, 2013 WL 105323, at *4; see Smart Audio Techs., 910 F.Supp.2d at 730; Wacoh Co. v. Kionix, Inc., 845 ...


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