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Realtime Adaptive Streaming LLC v. Netflix, Inc.

United States District Court, D. Delaware

October 12, 2018

REALTIME ADAPTIVE STREAMING LLC, Plaintiff,
v.
NETFLIX, INC., and NETFLIX STREAMING SERVICES, INC., Defendants.

          REPORT AND RECOMMENDATION

          Sherry R. Fallon United States Magistrate Judge

         I. INTRODUCTION

         Presently before the court in this patent infringement action is defendants' Netflix, Inc. and Netflix Streaming Services, Inc.'s (collectively, "Netflix") motion to transfer pursuant to 28 U.S.C. § 1404(a).[1] (D.I. 20) For the following reasons, I recommend that the court deny Netflix's motion to transfer.

         II. BACKGROUND

         On November 21, 2017, Realtime Adaptive Streaming LLC ("Realtime") originally filed this patent infringement action against Netflix, asserting infringement of United States Patent Numbers 8, 934, 535 ("the '535 patent"), 9, 769, 477 ("the '477 patent"), 9, 762, 907 ("the '907 patent"), and 7, 386, 046 ("the '046 patent") (collectively, the "Fallon patents"). (D.I. 1 at ¶ 8) Additionally, Realtime asserts Netflix's infringement of United States Patent Numbers 8, 634, 462 ("the '462 patent") and 9, 578, 298 ("the '298 patent") (collectively, the "Non-Fallon patents"). (Id.) Realtime is the owner by assignment of the patents-in-suit, which relate to the concept of encoding and decoding data, and the digital compression of data. (Id. at ¶¶ 9-14; D.I. 21 at 1; D.I. 29 at 2)

         Netflix has both its principal place of business and headquarters in Los Gatos, California, which is within the Northern District of California. (Id. at ¶¶ 2-3) Netflix is a Delaware corporation and offers services and products in the District of Delaware. (Id. at ¶¶ 2-4) Realtime, a Texas limited liability company, maintains its principal place of business in Tyler, Texas. (Id. at¶l)

         On February 5, 2018, Netflix filed a motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that Realtime failed to allege plausible claims of infringement as to the Non-Fallon patents and challenging the patentability of the Fallon patents under 35 U.S.C. § 101. (D.I. 11; D.I. 13) As of the date of this Report and Recommendation, Netflix's motion to dismiss remains pending.[2]

         On April 10, 2018, Realtime filed a motion to transfer pursuant to 28 U.S.C. § 1407 with the United States Judicial Panel on Multidistrict Litigation ("the Panel") to consolidate in the District of Colorado actions it originally brought in Delaware, California, Texas, Massachusetts, and Colorado. (D.I. 19, Ex. A) On May 1, 2018, Netflix filed this pending motion to transfer the case to the Northern District of California. (D.I. 20) On August 1, 2018, the Panel denied Realtime's motion due to the need for defendant-by-defendant analysis of individual design elements. (D.I. 37)

         III. LEGAL STANDARD

         Section 1404(a) of Title 28 of the United States Code grants district courts the authority to transfer venue "[f]or the convenience of parties and witnesses, in the interests of justice ... to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). In accordance with the analytical framework described in Helicos Biosciences Corp. v. Illumina, Inc., 858 F.Supp.2d 367 (D. Del. 2012), the court starts with the premise that a defendant's state of incorporation has always been "a predictable, legitimate venue for bringing suit" and that "a plaintiff, as the injured party, generally ha[s] been 'accorded [the] privilege of bringing an action where he chooses.'" 858 F.Supp.2d at 371 (quoting Norwood v. Kirkpatrick, 349 U.S. 29, 31 (1955)). The Third Circuit in Jumara v. State Farm Ins. Co. reminds the reader that "[t]he burden of establishing the need for transfer .. . rests with the movant" and that, "in ruling on defendants' motion, the plaintiffs choice of venue should not be lightly disturbed." 55 F.3d 873, 879 (3d Cir. 1995) (citation omitted).

         The Third Circuit goes on to recognize that,

[i]n ruling on § 1404(a) motions, courts have not limited their consideration to the three enumerated factors in § 1404(a) (convenience of parties, convenience of witnesses, or interests of justice), and, indeed, commentators have called on the courts to "consider all relevant factors to determine whether on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different forum."

Id. (citation omitted). The Court then describes some of the "many variants of the private and public interests protected by the language of § 1404(a)." Id.

The private interests have included: plaintiffs forum of preference as manifested in the original choice; the defendant's preference; whether the claim arose elsewhere; the convenience of the parties as indicated by their relative physical and financial condition; the convenience of the witnesses - but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum).
The public interests have included: the enforceability of the judgment; practical considerations that could make the trial easy, expeditious, or inexpensive; the relative administrative difficulty in the two fora resulting from court congestion; the local interest in deciding local controversies at home; the public policies of the fora; and the familiarity of the trial judge with the applicable state law in diversity cases.

Id. (citations omitted).

         IV. DISCUSSION

         Netflix moves to transfer this case, under 28 U.S.C. § 1404(a), to the United States District Court for the Northern District of California. (D.I. 20) Realtime opposes Netflix's motion arguing that that the Jumara factors weigh against granting the transfer. (D.I. 29) After considering the Jumara factors, I recommend that the court deny Netflix's motion to transfer.

         A. Whether the Case Could Have Been Brought in the ...


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