United States District Court, D. Delaware
Blackbird Technologies (“Blackbird”) has brought
the present actions against Defendants Cloudflare Inc.
(“Cloudflare”) and Fastly, Inc.
(“Fastly”) alleging patent infringement in
connection with Blackbird's U.S. Patent No. 6, 453, 335
(the “‘335 patent”), entitled
“Providing an Internet Third Party Data Channel.”
Defendants have jointly moved to transfer venue to the United
States District Court for the North District of California.
As I find the balance of conveniences weighs in favor of
transfer to the Northern District, I will grant the Motions.
FACTS AS SET FORTH IN THE AMENDED COMPLAINTS
The Underlying Patent Claim
to the Amended Complaints filed in both actions, the
‘335 patent represents an improvement to the
technologies that make the internet work. The invention is
more fully described as follows:
to the ‘335 patent, internet communication protocols,
such as the hypertext transfer protocol (HTTP), allowed for
the exchange of data, such as documents encoded in the
hypertext markup language (HTML), over the internet. These
protocols generally permitted only two parties to the
communication, the client and the server. As a result,
third-party participation in the existing client-server
communications was problematic. (Am. Compl., No. 17-283,
¶ 10; Am. Compl., No. 17-284, ¶ 10.)
inventions claimed in the ‘335 patent constitute novel
ways of providing an internet third-party data channel,
address shortcomings of existing internet communications
protocols, and extend those protocols to communications
involving three parties. These results are achieved by
introducing a distinct processing device, located physically
and logically between the client and server, which monitors
client-server data communications having predetermined
properties, such as HTTP status codes. Upon detection of such
communications, the device accesses a distinct data source to
obtain third-party data, modifies or replaces the original
data communication in response to the third-party data, and
then provides the resulting data communication to the
intended recipient. (Am. Compl., No. 17-283, ¶ 11; Am.
Compl., No. 17-284, ¶ 11.)
March 2017, Blackbird sued both Cloudflare and Fastly for
infringing the ‘335 patent. The Amended Complaints in
both cases allege that Defendants infringe one or more claims
of the ‘335 patent by importing, making, using,
selling, and/or offering to sell certain web content systems
and services as part of their content delivery networks. (Am.
Compl., No. 17-283, ¶ 12; Am. Compl., No. 17-284, ¶
Blackbird is a Delaware LLC formed on July 1, 2014, with its
principal place of business in Concord, Massachusetts.
Blackbird obtains rights to patents and uses its in-house
expertise to litigate patent claims at reduced costs.
According to the company's web page, Blackbird's
“team” includes twelve individuals, none of whom
reside in Delaware. (Am. Compl., No. 17-283, ¶ 1; Decl.
of Grayson Cassada (“Cassada Decl.”), Exs. 1,
Cloudflare is a Delaware corporation with its principal place
of business in San Francisco, California. Cloudflare provides
content-delivery, proxy, and DNS services to customers in the
United States and around the world. (Decl. of Chris Merritt
(“Merritt Decl.”) ¶ 4.) The Amended
Complaint accuses Cloudflare of maintaining a network of data
centers- many of which are in the United States-that contain
processing devices for monitoring data communications between
user systems and origin services. (Am. Compl., No. 17-283,
¶¶ 15, 18.) In general, when a customer signs up
and activates Cloudflare's services, internet users cease
connecting with customer servers and are instead directed to
an IP address that establishes a connection to a Cloudflare
server. These servers are responsible for much of the accused
functionality at the center of the patent infringement claim.
(Merritt Decl. ¶¶ 4, 6.)
Fastly is also a Delaware corporation with its principal
place of business in San Francisco, California. (Decl. of
Charles Neerdaels (“Neerdaels Decl.”), ¶ 3.)
The infringement allegations against Fastly are largely
identical to those against Cloudflare. (Am. Compl., No.
17-284, ¶¶ 15, 18.)
initiated suit against Defendants on March 16,
2017. On May 26, 2017, this case was
reassigned to the undersigned's docket. On June 20, 2017,
Cloudflare filed a Motion to Transfer Venue to the United
States District Court for the Northern District of
California. Fastly thereafter filed a Motion to Transfer and
Joinder in Cloudflare's Motion to Transfer Venue.
Plaintiff responded to both Motions on August 3, 2017, and
Cloudflare filed a reply brief on August 10, 2017. I held
oral argument on the Motion on September 21, 2017.
STANDARD FOR TRANSFER OF VENUE
28 U.S.C. § 1404(a), a district court may transfer an
action to any other district “where it might have been
brought” if this transfer is “for the convenience
of parties and witnesses” and “in the interest of
justice.” 28 U.S.C. § 1404(a); see also In re
Genentech, Inc., 566 F.3d 1338, 1341-42 (Fed. Cir.
2009). The determination of whether to transfer venue
pursuant to § 1404(a) is governed by federal law.
See Jumara v. State Farm Ins. Co., 55 F.3d 873,
877-878 (3d Cir. 1995).
of a request for a § 1404(a) transfer has two
components. First, both the original venue and the requested
venue must be proper. Jumara, 55 F.3d at 879. Venue
in a patent infringement action is governed solely and
exclusively by the patent venue statute, 28 U.S.C. §
1400(b). See TC Heartland LLC v. Kraft Foods Grp. Brands
LLC, 137 S.Ct. 1514, 1519 (2017). In such a case, venue
is proper both where a corporate defendant
“resides” and “where the defendant has
committed acts of infringement, and has a regular and
established place of business.” Bristol-Myers
Squibb Co. v. Mylan Pharms., Inc., No. 13-379, 2017 WL
3980155, at *1 (D. Del. Sept. 11, 2017) (summarizing 28
U.S.C. § 1400(b)).
the purpose of allowing § 1404(a) transfers is
“‘to prevent the waste of time, energy and money
and to protect litigants, witnesses and the public against
unnecessary inconvenience and expense.'” Mosaid
Techs., Inc. v. Sony Ericsson Mobile Commc'ns (USA),
Inc., 885 F.Supp.2d 720, 723 (D. Del. 2012) (quoting
Van Dusen v. Barrack, 376 U.S. 612, 616 (1964)).
Accordingly, the court must undertake a balancing test
comprised of various public and private interest factors.
Jumara, 55 F.3d at 879. The burden falls on the
moving defendant to show the desirability of transferring
venue. Boston Sci. Corp. and Boston Sci. SciMed, Inc. v.
Cook Grp. Inc. and Cook Med. LLC, No. 15-980, 2017 WL
3996110, at *4 (D. Del. Sept. 11, 2017).
of transfers under § 1404(a) are “flexible and
must be made on the unique facts of each case.” Job
Haines Home for the Aged v. Young, 936 F.Supp. 223, 227
(D.N.J. 1996) (internal quotations omitted). In weighing the
various factors, the court should not grant a motion to
transfer unless the moving party can demonstrate that the
transferee venue is “clearly more convenient”
than the venue chosen by the plaintiff. In re Nintendo
Co., Ltd., 589 F.3d 1194, 1197 (Fed. Cir. 2009)
(quotations omitted). Such motions are “not to be
liberally granted.” Intellectual Ventures I LLC v.
Altera Corp., 842 F.Supp.2d 744, 750 (D. Del. 2012)
(quoting Shutte v. Armco Steel Corp., 431 F.2d 22,
25 (3d Cir. 1970) (internal quotation marks omitted)).
Nonetheless, the court's discretion is broad in deciding
whether to transfer. See Plum Tree, Inc. v.
Stockment, 488 F.2d 754, 756 (3d Cir. 1973).
move to transfer this case, pursuant to 28 U.S.C. §
1404(a), to the United States District Court for the Northern
District of California. Plaintiff challenges any venue
transfer, alleging that: (1) the case could not have been
brought in the Northern District of California; and (2) the
Jumara factors weigh against transfer. Considering
each argument individually, I find that transfer is both
possible and proper.
Whether the Case Could Have Been Brought in the Northern
Section 1404(a) permits the court to transfer an action to
“any other district or division where it might have
been brought.” 28 U.S.C. § 1404(a).
“Accordingly, the court may only transfer to . . .
[another district] if venue would have been proper there and
if that district court could have exercised personal and
subject matter jurisdiction over this action.”
Smart Audio Techs., LLC v. Apple, Inc., 910
F.Supp.2d 718, 728 (D. Del. 2012) (citing 17 James Wm. Moore
et al., Moore's Federal Practice §
111.12[b] (3d ed. 2012)).
in patent infringement suits is governed solely and
exclusively by 28 U.S.C. § 1400(b). TC
Heartland, 137 S.Ct. at 1519. This statute provides that
“[a]ny civil action for patent infringement may be
brought 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).
first prong of § 1400(b)-where defendant resides-was
recently interpreted by the United States Supreme Court in
TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137
S.Ct. 1514 (2017). Rejecting the notion that a party
“resides” where it has its principal place of
business, the Court found that for purposes of §
1400(b), a domestic corporation “resides” only in
its state of incorporation. Id. at 1521. In the
present case, both Cloudflare and Fastly are incorporated in
Delaware. As such, venue in the Northern District of
California would not be proper under the first prong of
second prong of § 1400(b), not addressed in TC
Heartland, contains two prerequisites to establishing
proper venue: (1) the defendant must have committed acts of
infringement in the proposed district and (2) the defendant
must have a regular and established place of business in the
proposed district. Magee v. Essex-Tec Corp., 704
F.Supp. 543, 545 (D. Del. 1988). What constitutes an act of
infringement is determined by reference to the definition of
patent infringement in 35 U.S.C. § 271(a), which states
that patent infringement occurs whenever one “without
authority makes, uses or sells any patented invention within
the United States during the term of the patent
therefor.” 35 U.S.C. § 271(a). It is well
established that performance of only one of the three
statutorily enumerated activities of manufacture, use or sale
constitutes patent infringement. Magee, 704 F.Supp.
at 545 (citing Roche Products v. Bolar Pharm. Co.,
733 F.2d 858, 861 (Fed. Cir. 1984)). In other words, an
“act of infringement” may consist of the
manufacture, use, or sale of the patented invention.
Id. (citing 1 Moore's Federal Practice
0.144 at 1509-10 n.39).
it is undisputed that both Defendants' headquarters are
in San Francisco, California, which is where they maintain
their regular and established places of business. Thus, the
only remaining question, under the second prong of §
1400(b), is whether Defendants committed “acts of
infringement” in California. Plaintiff argues that
Defendants fail to show that infringement “occurs
entirely within the Northern District of California.”
(Pl.'s Resp. Opp'n Mot. to Transfer 8.) Plaintiff
notes that, under section 1400(b), a method claim is
infringed within a district only if the whole system is put
into service there. Id. (citing NTP, Inc. v.
Research in Motion, Ltd., 418 F.3d 1282, 1318 (Fed. Cir.
2005) (“A method or process consists of one or more
operative steps, and, accordingly, ‘[i]t is well
established that a patent for a method or process is not
infringed unless all steps or stages of the claimed process
are utilized.'”)). Plaintiff goes on to contend
that claim 8 of the ‘335 Patent is directed to
“[a] method for providing an internet third party data
channel, ” while claim 24 covers “[a]n
apparatus” for doing the same. (Id.) Thus,
according to Plaintiff, although some portion of the accused
system is located in the Northern District of California, the
data channels connecting the various network elements are
found throughout the country. (Id. at 9.) Plaintiff
therefore urges that California is not clearly the situs of
to Plaintiff's argument, not all of the alleged
infringing activity needs to have occurred within California
so long as some act of infringement took place there. The
Amended Complaint alleges that Defendants infringe the
‘335 patent, “by importing, making, using,
selling and/or offering to sell certain web content systems
and services as part of its content delivery network
(‘CDN').” (Am. Compl., No. 17-283, ¶ 13;
Am. Compl., No. 17-284, ¶ 13.) It further avers that
both Cloudflare's and Fastly's “CDN performs a
method, and also includes an apparatus, ‘for providing
an internet third party data channel, said party data channel
being established within an existing data channel between an
internet server and an internet client, said third party data
channel connecting a data source distinct from said internet
server to said internet client.'” (Id.
to both Defendants, the “making” of the alleged
infringing technology occurred in California.
Cloudflare's Chief Revenue Officer, Chris Merritt, has
averred that the precise services accused of being infringing
were “designed and developed in San Francisco, ”
Cloudflare employees who are responsible for
“implementing the accused functionality work in San
Francisco, ” and “Cloudflare uses the accused
functionality from its regular and established place of
business in San Francisco.” (Id. ¶¶
6-7.) Likewise, Charles Neerdaels, Fastly's Senior Vice
President of Engineering, has attested to the fact that most
of the members of the technical team responsible for the
development of Fastly's accused technology reside in San
Francisco, and two of the three data centers which Plaintiff
alleges to be part of the Content Delivery Network are
located in California. (Neerdaels Decl. ¶ 5.) The
declarations of Merritt and Neerdaels are uncontested. As
such, Defendants make or use the accused functionality in
California, thereby constituting “acts of
infringement” in satisfaction of § 1400(b).
Because Defendants maintain a regular place of business in
California and have allegedly committed acts of infringement
in California, I find that this case could have been brought
in the United States District Court for the Northern District