DAVID M. EBEL, District Judge.
This matter comes before the Court on Defendant Francis P. Knuettel II's "Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a)" (Doc. 6), seeking to have this case transferred to the United States District Court for the Eastern District of Texas. Plaintiff PLX Technology, Inc. ("PLX") opposes transfer. For the following reasons, the Court GRANTS the transfer.
Briefly stated, PLX alleges the following: Internet Machine Corporation ("IM Corp."), while a member of the Peripheral Component Interconnect Special Interest Group ("PCI-SIG"), developed several inventions for which it eventually obtained five patents: United States Patent Nos. 7,945,722 (the "722 Patent"), 7,454,552 (the "552 Patent"), 7,421,532 (the "532 Patent"), 7,814,259 (the "259 Patent"), and 7,539,190 (the "190 Patent"). By agreement, IM Corp. was obligated to offer other PCI-SIG members, including PLX, "a license to those [patented] claims under reasonable terms and conditions." (Doc. 1, ex. 12 ¶ 8.) But IM Corp. never did so.
Defendant Knuettel was the chief financial officer for IM Corp. IM Corp. ceased operations in 2004 and sold its assets. Knuettel, with his father and a patent attorney, then formed three new business entities: Topside Research LLC ("Topside"), Internet Machines LLC ("IM LLC"), and Internet Machines MC LLC ("IMMC"). IM Corp. assigned the five patents at issue here to Topside. Topside, in turn, assigned four of those five patents, Patents 552, 532, 259, and 722, to IM LLC. And Topside assigned the remaining patent, No. 190, to IMMC. PLX alleges that Knuettel, by transferring the patents to IM LLC and IMMC, tortiously interfered with PLX's contract rights as a member of the PCI-SIG. PLX further alleges that Knuettel further interfered with its contractual rights by causing IM LLC and IMMC to "initiate[] baseless patent infringement litigation against PLX in the United States District Courts of the Eastern District of Texas." (
Knuettel moves, pursuant to 28 U.S.C. § 1404(a), to transfer venue of this case to the United States District Court for the Eastern District of Texas, where the patent infringement litigation between IM LLC, IMMC and PLX, among others, is ongoing. "Under 28 U.S.C. § 1404(a), [this] court may transfer an action `[f]or the convenience of parties and witnesses, [and] in the interest of justice, . . . to any other district or division where it might have been brought.'"
Section 1404(a) permits transfer to another district where the case "might have been brought." PLX argues that it could not have brought this case in the Eastern District of Texas because that district does not have personal jurisdiction over Knuettel. More specifically, PLX argues that Knuettel does not have sufficient contacts with Texas to permit a court in Texas to exercise personal jurisdiction over him consistent with the requirements of due process.
"The due process analysis is . . . two-fold: First, [Knuettel] must have minimum contacts with [Texas], demonstrating that he purposefully availed himself of the protections or benefits of [that] state's laws and should reasonably anticipate being haled into court there."
Second, a Texas court's exercise of jurisdiction over Knuettel must not offend "traditional notions of fair play and substantial justice."
For these reasons, then, the Texas courts have specific jurisdiction over Knuettel in this case. Therefore, PLX "might have been brought" this case in the Eastern District of Texas.
In determining which venue would be most convenient for the witnesses and the parties, the Court weighs the following factors,
PLX chose to file suit in Colorado and, ordinarily a plaintiff's choice of forum is entitled to significant weight,
To demonstrate inconvenience to witnesses, Knuettel has to "(1) identify the witnesses and their locations; (2) indicate the quality or materiality of their testimony; and (3) show that any such witnesses were unwilling to come to trial, that deposition testimony would be unsatisfactory, or that use of compulsory process would be necessary."
Nonetheless, Knuettel does argue generally that the cost of presenting proof other than witnesses will be lessened by transferring this case to Texas because documents from IM LLC and IMMC will be located in their Texas offices, as will any relevant documentary evidence from the Texas infringement litigation. This favors transfer.
Knuettel has not shown, with any specificity, how the cost of litigating in Texas will be less than litigating in Colorado.
In opposing the requested transfer, PLX asserts, but only generally, that if it obtains a judgment for money damages against Knuettel in this action, it will be easier for PLX to enforce that judgment against Knuettel in Colorado. Knuettel has failed to show that this is not the case and so this factor weighs against a transfer.
Knuettel do not invoke this factor in support of his transfer motion.
"When evaluating the administrative difficulties of court congestion, the most relevant statistics are the median time from filing to disposition, median time from filing to trial, pending cases per judge, and average weighted filings per judge."
In a federal action which will be governed by state substantive law, "courts prefer the action to be adjudicated by a court sitting in the state that provides the governing substantive law."
"When the merits of an action are unique to a particular locale, courts favor adjudication by a court sitting in that locale."
This factor weighs heavily in favor of transferring this case to the Eastern District of Texas because of the pending patent infringement litigation between IM LLC, IMMC and PLX going on there. In this case, PLX alleges that IM Corp. was obligated to offer PLX, under reasonable terms and conditions, a license to practice the Patents at issue here because those Patents "would be infringed by practicing any of the subject matter contained in industry specifications that are published and adopted by the PCI-SIG." (Doc. 1, ex. 12 ¶ 7.) While that is apparently not the precise question at issue in the ongoing patent-infringement litigation in the Eastern District of Texas, it is clear that that court has had to, and will have to, construe those patents during that patent-infringement litigation. For instance, the Eastern District of Texas has already conducted a
Moreover, in support of its contract-interference claim, PLX alleged that Knuettel caused IM LLC and IMMC to initiate the "baseless" patent-infringement litigation in the Eastern District of Texas. The district court in that district, of course, is much more familiar with the patent-infringement litigation than this court currently is. For these reasons, then, this factor weighs heavily in favor of granting the transfer.
PLX chose to file this lawsuit in Colorado. But the only established connection to Colorado is that Knuettel lives here. And he apparently moved to Colorado only after the events underlying this litigation occurred. On the other hand, PLX has alleged that Knuettel interfered with its contract rights by taking several actions in Texas, including forming IM LLC and IMMC, transferring the patents at issue here to those Texas companies, and then causing those companies to initiate patent-infringement litigation in the Eastern District of Texas against PLX. In light of the ongoing patent-infringement cases, the Eastern District of Texas will be the more convenient forum for the parties and the witnesses to litigate this contract-interference case.
For similar reasons, the Court concludes that transferring this case to the Eastern District of Texas will serve the interest of justice. PLX does not offer any compelling reason to conclude otherwise.
The Court thus GRANTS Knuettel's motion to transfer this case to the Eastern District of Texas, but STAYS this order for fourteen days to permit PLX to seek appellate review, if it so chooses.