Long Delay in Moving to Transfer Results in Denial of Motion

by Jeffer Mangels Butler & Mitchell LLP

The Defendant QxQ Inc. ("QxQ"), which is a California company, moved to transfer a patent infringement case from the Eastern District of Wisconsin to the Northern District of California. QxQ asserted that the connections between the Eastern District of Wisconsin and the case were so limited that litigating the action in Wisconsin would be less convenient than litigating in the Northern District of California. Plaintiff Circuit Check Inc. ("Circuit Check"), which is a Minnesota company, opposed the motion, in part, because QxQ delayed filing the motion to transfer.

QxQ moved to transfer based on 28 U.S.C. § 1404(a), which, as explained by the district court, authorizes changes of venue "for the convenience of parties and witnesses, in the interest of justice." As noted by the district court, "[w]ith respect to the convenience evaluation, courts generally consider the availability of and access to witnesses, and each party's access to and distance from resources in each forum. Other related factors include the location of material events and the relative ease of access to sources of proof." Research Automation, Inc. v. Schrader-Bridgeport Intern., Inc., 626 F.3d 973, 978 (7th Cir. 2010) (citations omitted). In assessing the interest of justice, "courts look to factors including docket congestion and likely speed to trial in the transferor and potential transferee forums, each court's relative familiarity with the relevant law, the respective desirability of resolving controversies in each locale, and the relationship of each community to the controversy." Id. (citations omitted).

Turning to the analysis of the convenience factor, the district court began with Circuit Check's argument that its choice of forum should be entitled to deference. "Here, that presumption is eroded somewhat by the fact that the Eastern District of Wisconsin is not Circuit Check's first choice of forum. Originally, it filed an action in the District of Minnesota (where it is located), and that action was dismissed after QxQ filed a motion to dismiss for lack of personal jurisdiction. It only filed in this district after receiving QxQ's motion to dismiss. Some courts note that the plaintiff's choice of forum is to be given less weight when the plaintiff brings suit outside its home state. 15 Charles Alan Wright & Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE § 3848 (3d ed. 2007); Sinochem Intern. Co. Ltd. v. Malaysia Intern. Shipping Corp., 549 U.S. 422, 430 (2007) ("When the plaintiff's choice is not its home forum, however, the presumption in the plaintiff's favor 'applies with less force,' for the assumption that the chosen forum is appropriate is in such cases 'less reasonable.'") (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255-56 (1981)).

Accordingly, the district court gave little weight to Circuit Check's second choice of forum.

The district court then explained that "[t]he rest of the § 1404 factors would appear to support a transfer of venue. With the case having no obvious connection to this district, Circuit Check relies on the fact that a witness (it describes it as a "key" witness) is located in this district. Specifically, the Plexus Corporation of Neenah is a customer of Circuit Check. Plexus is also a customer of QxQ, and QxQ admits that it has sold some of the allegedly infringing products to Plexus. In fact, QxQ sold some 122 "Plate B" test fixtures (nearly $1 million worth) to Plexus after Circuit Check's patent was issued. Circuit Check of course will claim that whatever its profits would have been on these sales are its damages, and it has a Wisconsin salesman who would testify to that effect. In addition to the damages question, Circuit Check argues that Plexus is important in determining patent validity. In particular, QxQ has alleged that two documents Plexus published constitute prior art that would invalidate the patents in-suit. Thus, this constitutes an additional link to the Eastern District of Wisconsin."

Based, in part, on this analysis, the district court determined that the connections to the Western District of Wisconsin were minimal but modern technology would minimize the traditional inconveniences. "Given these advances in technology, the fact that one forum might be somewhat more convenient than another is not a compelling reason to transfer unless the interests of justice also strongly support transferring the case."

The district court then addressed the interests of justice factor and the district court found that the key factor is the speed to trial. The district court found that the delay to file the transfer motion was significant. "Here, the motion to transfer was filed nearly ten months after the case was filed in this District and six months after the scheduling order was issued. Dispositive motions are due in less than two months. It is unclear whether a transferee court would accommodate that schedule. Moreover, parties requesting changes of venue should be encouraged to act with reasonable promptness or forfeit their right to do so. Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir. 1989). Here, there is no explanation for why the motion to transfer was not brought earlier. If the other forum were truly so convenient, one would expect much swifter action to transfer the case there."

Accordingly, based on this delay, the district court denied the transfer motion. "Although some of the delay in this case was due to the fact that Circuit Check originally filed in a forum that lacked personal jurisdiction over QxQ, compounding matters by transferring a case nearly a year after it was filed does not seem to be a wise solution. In sum, the interests of justice do not warrant transferring this action, even if the convenience factors might otherwise favor a change of venue. Because both convenience and the interests of justice are required in order to transfer a case under § 1404, the motion will be denied."

Circuit Check Inc. v. QXQ Inc., Case No. 12-C-1211 (E.D. Wisc. Nov. 20, 2013)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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