JOHN G. KOELTL, District Judge.
The plaintiff, Mirror Worlds Technologies, LLC ("Mirror Worlds"), filed this suit in the Southern District of New York against the defendant, Facebook, Inc. ("Facebook"), alleging that various features of Facebook's well-known social media website violate three patents owned by Mirror Worlds. Facebook has moved pursuant to 28 U.S.C. § 1404(a) to transfer this action to the Northern District of California, where Facebook's headquarters is located. Mirror Worlds opposes the motion. For the reasons that follow, the motion to transfer is
The relevant background facts, as alleged in Mirror Worlds's complaint and as contained in the affidavits, declarations, and exhibits submitted in connection with this motion, are as follows.
This case involves three patents that together allegedly protect a technology that organizes computerized information in a searchable "time-ordered stream[]" rather than a "traditional folder and directory structure." Compl. ¶¶ 15, 16. The patents-in-suit are U.S. Patent No. 6,006,227 (the "'227 Patent"), U.S. Patent No. 7,865,538 (the "'538 Patent"), and U.S. Patent No. 8,255,439 (the "'439 Patent"). Compl. ¶¶ 7-9.
The protected technology was invented in the 1990s. Compl. ¶ 14. Dr. David H. Gelernter, a professor of computer science at Yale University, and Eric Freeman, then a Ph.D student studying under Dr. Gelernter, are named as inventors on all three of the patents-in-suit. Compl. ¶¶ 7-9, 10, 24. Two of the patents-in-suit also name Randy Prager, Peter Sparago, and Stephen Marcaurele as inventors. Compl. ¶¶ 8-9.
After 2001, an entity named "Mirror Worlds, LLC," a Texas limited liability corporation with its principal place of business in Texas, acquired exclusive ownership rights to the '227 Patent and related patents.
Mirror Worlds is a Texas limited liability corporation. Compl. ¶ 1. In 2013, Mirror Worlds's principal place of business was located in Tyler, Texas. Damstedt Decl. Ex. E ¶ 4. Today, Mirror Worlds has a place of business in New York City. Compl. ¶ 1. Mirror Worlds is a wholly owned subsidiary of Network-1 Technologies, Inc., which is a Delaware corporation with its principal place of business in New York City. Wang Decl. Ex. 6, at 17. Mirror Worlds has three officers, two of whom serve as the sole members of the board of directors. Wang Decl. ¶ 2. Corey Horowitz, president and a board member, resides in Westport, Connecticut, and works in New York City and New Canaan, Connecticut. Niv Harizman, vice president, secretary, and a board member, resides and works in Westport, Connecticut. David Kahn, treasurer, resides and works in Long Island, New York.
On May 9, 2017, Mirror Worlds filed the present action against Facebook, alleging that Facebook's social media website infringes the patents-in-suit.
Facebook is a Delaware corporation with its principal place of business in Menlo Park, California. Duffey Decl. ¶ 2. Many of Facebook's employees work at its Menlo Park headquarters. Duffey Decl. ¶¶ 2-4. Facebook also has at least one New York City office. Duffey Decl. ¶ 6. Although Facebook's New York City office is "growing rapidly," Wang Decl. Ex. 1 ("Duffey Dep."), at 126-27, Facebook employs far fewer people in New York than in Menlo Park. Duffey Decl. ¶ 6. In New York City, Facebook employs "engineers, data analysts, [and a] design team" for various products, as well as a "sales team, global sales operations, recruiting, creative design, human resources, facilities, [and a] culinary [team]." Duffey Dep. 126.
Facebook has moved pursuant to 28 U.S.C. § 1404(a) to transfer this action to the Northern District of California. Section 1404(a) provides that, "[f]or 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." There is no dispute that this action "might have been brought" in the Northern District of California.
The Court of Appeals for the Federal Circuit directs district courts to apply regional circuit law when deciding whether to transfer a patent infringement case pursuant to § 1404(a).
In the Second Circuit, the following seven factors guide a court's decision on a transfer motion:
In ruling on a motion to transfer under § 1404(a), a court should also consider the interest of the litigants and the public interest.
After balancing the seven factors enumerated by the Second Circuit Court of Appeals and considering the interests of the parties and the public interest, the Court concludes that Facebook has failed to carry its burden to establish that this action should be transferred to the Northern District of California.
Mirror Worlds's choice of forum is entitled to deference.
A plaintiff's choice of forum is generally entitled to considerable weight on a motion to transfer pursuant to § 1404(a).
Mirror Worlds's forum choice is plainly entitled to deference. There is no indication that Mirror Worlds engaged in improper forum shopping. Rather, this District is a convenient forum for the officers and directors of Mirror Worlds, and some operative facts occurred in this District. Whatever the previous location of Mirror Worlds or its alleged predecessors were, today Mirror Worlds and its parent company both have a substantial presence in New York City. Mirror Worlds is therefore entitled to deference on the basis of its connection to this District.
Facebook argues that Mirror Worlds's forum selection should not be afforded deference because Mirror Worlds is a patent-holding company. In support of this argument, Facebook cites two cases from this District in which both (1) the plaintiffs were patent-holding companies and (2) the plaintiffs' claims "lack[ed] a meaningful connection to the Southern District of New York."
There is at least some material connection between this District and the patents-in-suit. While the technology at issue was not invented in New York, it was invented in nearby Connecticut. Moreover, all of the investment bankers and patent prosecutors who worked on acquiring and prosecuting the patents-in-suit are located in New York. Wang Decl. ¶ 4 & Exs. 2, 4, 20;
There is also at least some material connection between this District and the accused technology. Facebook has at least one office in New York City, where some engineers work on some of the accused products. Duffey Dep. 78-79, 84-85, 87, 92-93, 104. There is some support for the proposition that Serkan Piantino, a former Facebook engineer who reportedly "played a major role" in developing News Feed and Timeline, moved to New York City at Facebook's direction in 2010 and worked on those products in New York. Wang Decl. Ex. 14. Mirror Worlds has also submitted evidence indicating that the engineering director in charge of creating Graph Search, another former Facebook engineer named Lars Rasmussen, is currently located in Brooklyn, New York, which is located in the nearby Eastern District of New York. Wang Decl. Exs. 2, 16.
Facebook has submitted evidence of its substantial presence in the Northern District of California and the operative facts that are likely to have occurred in that District. A declaration signed by Michael Duffey, one of Facebook's in-house lawyers, states that a vast majority of the engineers who currently work on News Feed, Timeline, Activity Log, Events, and Graph Search are located at the Menlo Park headquarters. Duffey Decl. ¶¶ 10-11. Duffey also asserts that TAO, News Feed, Timeline, Activity Log, Events, and Graph Search were developed at "Facebook's Northern California headquarters." Duffey Decl. ¶¶ 8, 10-11. But Mirror Worlds need not establish that more operative facts occurred in this District to warrant deference for its choice of forum — it need only establish "some material relation" between the underlying facts of its claim and the forum.
Accordingly, Mirror Worlds's selection of this forum is entitled to deference.
The convenience of the witnesses and the parties, as well as the availability of compulsory process, all weigh against transferring this case to the Northern District of California. The convenience of the witnesses is ordinarily the most important factor in § 1404(a) analysis.
The potential third-party witnesses in this case live much closer to this District than to the Northern District of California. Dr. Gelernter currently resides in Connecticut and has difficulty traveling far distances because he suffers from a disability. Wang Decl. ¶ 4. Prager currently resides in New York City. Wang Decl. ¶ 4. Sparago and Marcaurele are both residents of Connecticut. Wang Decl. ¶ 4.
It would be much more convenient for these third-party witnesses to travel to this District than to the Northern District of California. And in the event that any of these witnesses are unwilling to testify, this Court would have the power to issue a subpoena compelling their attendance, whereas a district court in the Northern District of California would not.
The location of the potential party witnesses varies. All of Mirror Worlds's officers live and work in either New York or Connecticut. Wang Decl. ¶ 2. As noted above, some Facebook engineers who currently work on some of the accused features are located in New York City. Duffey Dep. 78-79, 84-85, 87, 92-93, 104. Far more Facebook engineers currently working on the accused features are located in Menlo Park. Duffey Decl. ¶¶ 10-11.
The location of Facebook's party witnesses is of limited significance to the transfer analysis in this case. Facebook is more than capable of transporting its Menlo Park employees to this District in the event that Facebook sought to call them to testify at trial. Indeed, courts in this District have routinely rejected arguments by large, multinational corporations that a case should be transferred to the District where most of the corporate employees are located.
Indeed, it is plain that this District would be more convenient for Mirror Worlds's party witnesses than the Northern District of California. To the extent the Northern District of California would be more convenient for Facebook's party witnesses, that would simply be transferring inconvenience from Facebook to Mirror Worlds. That is not a basis to overcome Mirror Worlds's choice of forum.
Accordingly, the convenience of the witnesses and the ability to compel any unwilling witnesses to testify both weigh against transferring this action.
The remaining considerations — the means of the parties, the accessibility of records and evidence, the locus of operative facts, and the public interest — weigh neither for nor against transfer, and therefore do not support overcoming Mirror Worlds's choice of forum.
Facebook concedes that the relative means of the parties is a neutral consideration.
With regard to the accessibility of records, Facebook asserts that its documentation and source code are managed at its Menlo Park headquarters, Duffey Decl. ¶ 3, but identifies no reason why the relevant documents and other forms of proof would not also be accessible in this District. Duffey Dep. 63-65, 71-72. It would not be a significant inconvenience to either party to transmit the relevant evidence electronically to this or any District.
While Facebook's headquarters has always been located in Northern California, the locus of operative facts in this case is not clearly fixed there. Mirror Worlds and its predecessors-in-interest, the inventors named in the patents-in-suit, the attorneys who have prosecuted the patents-in-suit, and those who played a role in the acquisition of the patents-in-suit are all located in this District or a nearby District. Relevant third-party witnesses are located in or around this District. Facebook has offices in this District. Evidence submitted in connection with this motion indicates that Piantino developed News Feed for Facebook while working in this District. The locus of operative facts consideration therefore does not support overriding Mirror Worlds's choice of forum.
Facebook asserts that Mirror Worlds should be amenable to litigate anywhere in the United States because in 2008, Mirror Worlds, LLC — Mirror Worlds's predecessor-in-interest to the '227 Patent — sued Apple, Inc., in the Eastern District of Texas for infringement of the '227 Patent,
Finally, the public interest considerations do not favor transfer. Facebook has identified no substantial administrative difficulties of maintaining this action in this District, nor is there any conflict of laws or legal expertise issue in this patent dispute.
Accordingly, these considerations do not weigh in favor of overcoming the deference accorded to Mirror Worlds's choice of forum and the other factors that weigh against transfer.
The Court has considered all of the arguments raised by the parties. To the extent not specifically addressed, the arguments are either moot or without merit. For the foregoing reasons, Facebook has failed to establish that this case warrants a transfer to the Northern District of California, and its motion pursuant to § 1404(a) is