Magistrate Judge Burke Recommends Denial of Transfer Motion

Magistrate Judge Christopher Burke has issued a report in patent litigation between patent-holding company Pragmatus and internet giant Yahoo!, recommending that Yahoo’s motion to transfer venue to the Northern District of California be denied. See Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-902-LPS-CJB (D. Del. Oct. 15, 2012). Judge Burke wrote a lengthy opinion analyzing the various public and private interest factors of Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995) in great depth and explaining how those factors are typically applied in the District of Delaware. Ultimately, Judge Burke found that two factors weighed against transfer, four favored transfer, and six were neutral: “[T]he plaintiff’s choice of forum and practical considerations weigh against transfer. The defendant’s forum preference and whether the claim arose elsewhere weigh in favor of transfer. Two other factors—the convenience of the witnesses and the location of books and records—also weigh in favor of transfer, though only slightly, and not sufficiently to make a material impact on the Court’s decision.”
In reaching this conclusion, Judge Burke clarified several disputes among the parties as to the proper application of transfer precedent in the District of Delaware. He first stated that the Federal Circuit in In re Link_A_Media Devices Corp., 662 F.3d 1221 (Fed. Cir. 2011) “noted that a party’s state of incorporation is not one of the factors listed in Section 1404 or in Jumara, and stated that it would be inappropriate for a court to place ‘heavy reliance’ on this fact, such that it became ‘dispositive’ in the venue transfer analysis.” Nevertheless, he noted, “nothing in Link _A_ Media suggests that a defendant’s place of incorporation is irrelevant to the transfer analysis.” Rather, “in many circumstances, the Federal Circuit has found that the location of a defendant’s incorporation in a forum can be a fact supporting the conclusion that a lawsuit is properly venued in that same forum.” Next Judge Burke considered Yahoo!’s suggestion that when considering the availability of witnesses factor, “it is sufficient for purposes of venue transfer analysis if the witness is not subject to a court’s subpoena power.” He explained that the precedent relied on for this proposition in turn relied on precedent “where the Court intently considered whether there was evidence that the non-party witnesses at issue would actually be unavailable for trial.” He therefore concluded that “to automatically consider a witness unavailable, simply because they reside outside of this District’s subpoena power, would render the inquiry required by this factor unduly wooden.” Rather, a court must consider whether there is evidence that witnesses would actually be unavailable for trial. Finally, in considering the court congestion factor, Judge Burke noted that “for the first time in years, this Court now has a full bench of four U.S. District Judges (and, for the first time ever, three U.S. Magistrate Judges). In light of that . . . [he was] not persuaded by [the] argument that difficulties relating to court congestion favor transfer.”
Based on these and other factors, Judge Burke concluded that while “the issue is a close one . . . Yahoo! has not demonstrated that the balance of convenience of the parties tips strongly in its favor, as is required by Third Circuit precedent.” He refuted Yahoo!’s suggestion that “‘there isn’t a strong showing’ required of defendants in order to obtain a transfer of venue,” stating instead that Third Circuit and District precedent requires “that a defendant bear the ‘heavy burden’ to show that the balance of convenience tips ‘strongly in favor’ of transfer.” Yahoo! did not meet that burden in this case in part because Pragmatus “brought suit . . . in a district that is very near to its place of business and to the location of its employees, a district where it had a legitimate basis to file the litigation (in light of the fact, among other things, that Yahoo! is itself incorporated here), and where the same Court is overseeing myriad other litigation matters involving the patents-in-suit.” Accordingly, Judge Burke recommended denial of the motion to transfer.

Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-902-LPS-CJB (D. Del. Oct. 15, 2012).

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