United States District Court, D. Delaware, Wilmington
MITCHELL S. GOLDBERG, District Judge.
This is a patent infringement action instituted by Plaintiff, MoneyCat Ltd, against Defendant, PayPal, Inc. MoneyCat generally alleges that PayPal's electronic payment processing services and related products infringe three of MoneyCat's patents. Discovery is currently underway as directed by a Scheduling Order entered on November 25, 2013.
PayPal has moved to transfer this case to the Northern District of California, arguing that litigation there would be far more convenient given the scope of the allegations and the amount of evidence and witnesses that PayPal will be required to produce. Although transfer of this case could further delay its resolution, I conclude that convenience and the interests of justice dictate that this case should proceed in the Northern District of California. I will therefore grant PayPal's motion.
I. Factual Background
MoneyCat is an Israeli corporation without a business presence in the United States. (Def. Br. Ex. D, at 21.) It does, however, own three patents entitled "Electronic Currency, Electronic Wallet Therefor and Electronic Payment Systems Employing Them." (Compl. ¶¶ 9-18.) The named inventor on these patents, Kfir Luzzatto, is a resident of Israel, as is his wife Esther, who provided input during the invention process and is a likely witness in this case. (Def. Br. Ex. D, at 10; Def. Br. Ex. F, at 2-3.) The thrust of this lawsuit is that the bulk of PayPal's electronic payment and credit systems infringe upon these three MoneyCat patents. (Compl. ¶¶ 26-65.) The Complaint was filed on July 30, 2013, in the District of Delaware.
PayPal is incorporated in Delaware, but maintains its principal place of business in San Jose, California. (Compl. 3.) PayPal has "approximately 2700 permanent employees in California, " makes the majority of its management and development decisions in or near its San Jose office, and maintains the bulk of its business records there. (Dwight Decl. ¶¶ 4, 6, 8.) The Northern District of California, where PayPal proposes to transfer this case, has a courthouse in San Jose. In contrast, PayPal has no offices or employees in Delaware, although its services are undoubtedly used by Delaware residents. (Dwight Decl. ¶ 10.) "Bill Me Later, " one of the accused services, was acquired by PayPal in 2008, and is headquartered in Maryland. (Dwight Decl. ¶ 11.) Two other accused infringers, Braintree and Venmo, were acquired by PayPal even more recently, and have offices on both coasts. (Pl. Br. Ex. B-C.)
II. Legal Standards
This motion is governed by 28 U.S.C. § 1404(a), which provides that:
For 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 or to any district or division to which all parties have consented.
The threshold inquiry is whether the proposed transferee district is one in which the case could have been brought originally. Shutte v. Armco Steel Corp. , 431 F.2d 22, 24 (3d Cir. 1970). Here, there is no dispute that MoneyCat could have sued PayPal in the Northern District of California. PayPal does not argue that venue is improper in Delaware, only that the Northern District of California would be a far more convenient forum.
Once the threshold requirement of a proper transferee venue is met, the question is whether the factors identified in 28 U.S.C. § 1404(a) weigh "strongly" in favor of transfer. Id . at 25. In other words, the Plaintiff's choice of forum is presumed reasonable, and it is the movant's burden to show that a transfer is warranted. Id . Because interests like "convenience" and "justice" are not capable of quantification with anything approaching mathematical precision, the transfer analysis grants the district court significant discretion and is "at least to some extent, subjective." Affymetrix, Inc. v. Synteni, Inc. , 28 F.Supp.2d 192, 208 (D. Del. 1998).
I am guided here by the Supreme Court's articulation of the statute's core purpose:
The idea behind section 1404(a) is that where a civil action' to vindicate a wrong-however brought in a court-presents issues and requires witnesses that make one District Court more convenient than another, the trial judge can, after findings, transfer the whole action to the more convenient court.
Continental Grain Co. v. The FBL-585 , 364 U.S. 19, 26 (1960). The Court in Continental Grain affirmed an order transferring a case from New Orleans to Memphis, where a related case was pending, based in part on the district court's finding that "[t]he convenience of the great majority of witnesses in this case dictates that this case be tried in Memphis." Id . at 21.
To assist courts undertaking the transfer analysis, the United States Court of Appeals for the Third Circuit elaborated on the text of section 1404(a). Jumara v. State Farm Ins. Co. , 55 F.3d 873, 879-80 (3d Cir. 1995). The court set out six "private interest" factors and six "public interest" factors that should guide the trial judge's discretion. The private interest factors are: (1) the plaintiff's forum preference as manifested in the original choice; (2) the defendant's preference; (3) whether the claim arose elsewhere; (4) the convenience of the parties as indicated by their relative physical and financial condition; (5) the convenience of the witnesses-but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; (6) the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum). Id . The public interest factors are: (1) the enforceability of the judgment; (2) practical considerations that could make the trial easy, expeditious, or inexpensive;
(3) the relative administrative difficulty in the two fora resulting from court congestion; (4) the local interest in deciding local controversies at home; (5) the public policies of the fora; (6) the familiarity of the trial ...