Case 2:14-cv-00762-RWS Document 181 Filed 08/25/15 Page 1 of 12 PageID #: 3934
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`NEXUS DISPLAY TECHNOLOGIES
`LLC,
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`Plaintiff,
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`vs.
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`DELL, INC., et al.,
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`Defendants.
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`CIVIL ACTION NO. 2:14-CV-762
`LEAD CASE
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`MEMORANDUM AND ORDER
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`Before the Court is Defendant Dell, Inc.’s (“Dell”) Motion to Transfer (Docket No. 64).
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`For the reasons stated herein, Dell’s motion is DENIED.
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`BACKGROUND
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`On July 11, 2014, Plaintiff Nexus Display Technologies, LLC (“NDT”) filed the above-
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`styled action against Dell alleging its various monitors, desktop, and notebook computers
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`(collectively, “Accused Products”) infringe United States Patent Numbers 5,835,498 (“ ’498
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`Patent”), 7,143,328 (“ ’328 Patent”), 7,295,578 (“ ’578 Patent”), and 7,599,439 (“ ’439 Patent”)
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`(collectively, the “Asserted Patents”). On January 22, 2015, Dell filed its motion requesting
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`transfer to the Northern District of California. Docket No. 64 at 1. In its reply brief, filed on
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`April 23, 2015, Dell instead argues that the Central District of California is a more appropriate
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`venue than the Northern District of California, but that either district is more convenient than the
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`Eastern District of Texas. Docket No. 109 at 1–2. NDT is a Texas limited liability company,
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`with its principal place of business in Plano, Texas. Docket No. 98 at 3. Dell is a Delaware
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`corporation with its headquarters in Round Rock, Texas. Docket No. 64 at 7.
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`1
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`Case 2:14-cv-00762-RWS Document 181 Filed 08/25/15 Page 2 of 12 PageID #: 3935
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`LEGAL STANDARD
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`Section 1404(a) provides that “[f]or the convenience of the parties and witnesses, in the
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`interest of justice, a district court may transfer any civil action to any other district or division
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`where it may have been brought.” 28 U.S.C. § 1404(a). The first inquiry when analyzing a
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`case’s eligibility for section 1404(a) transfer is “whether the judicial district to which transfer is
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`sought would have been a district in which the claim could have been filed.” In re Volkswagen
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`AG, 371 F.3d 201, 203 (5th Cir. 2004) (“In re Volkswagen I”).
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`Once that threshold is met, courts analyze both public and private factors relating to the
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`convenience of parties and witnesses as well as the interests of particular venues in hearing the
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`case. See Humble Oil & Ref. Co. v. Bell Marine Serv., Inc., 321 F.2d 53 (5th Cir. 1963); In re
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`Nintendo Co., 589 F.3d 1194, 1198 (Fed. Cir. 2009). The private factors are: 1) the relative ease
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`of access to sources of proof; 2) the availability of compulsory process to secure the attendance
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`of witnesses; 3) the cost of attendance for willing witnesses; and 4) all other practical problems
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`that make trial of a case easy, expeditious, and inexpensive. In re Volkswagen I, 371 F.3d at
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`203; In re Nintendo, 589 F.3d at 1198. The public factors are: 1) the administrative difficulties
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`flowing from court congestion; 2) the local interest in having localized interests decided at home;
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`3) the familiarity of the forum with the law that will govern the case; and 4) the avoidance of
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`unnecessary problems of conflict of laws or in the application of foreign law. In re Volkswagen
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`I, 371 F.3d at 203; In re Nintendo, 589 F.3d at 1198.
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`The plaintiff’s choice of venue is not a factor in this analysis. In re Volkswagen of Am.
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`Inc., 545 F.3d 304, 314–15 (5th Cir. 2008) (“In re Volkswagen II”). Rather, the plaintiff’s choice
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`of venue contributes to the defendant’s burden in proving that the transferee venue is “clearly
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`more convenient” than the transferor venue. Id. at 315; In re Nintendo, 589 F.3d at 1200.
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`Furthermore, though the private and public factors apply to most transfer cases, “they are not
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`necessarily exhaustive or exclusive,” and no single factor is dispositive. In re Volkswagen II,
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`545 F.3d at 314–15.
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`DISCUSSION
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`At the time Dell filed its motion, it moved to transfer this case from the Eastern District
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`of Texas (“E.D. Tex.”) to the Northern District of California (“N.D. Cal.”) under 28 U.S.C.
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`§ 1404(a). Docket No. 64 at 1. In its reply brief, Dell requests to transfer this case to the Central
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`District of California (“C.D. Cal.”), and insists that either the C.D. Cal. or the N.D. Cal. are more
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`appropriate than the E.D. Tex. Docket No. 98 at 2. As the Court is to consider the
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`circumstances at the time the motion was filed, the following analysis will focus on Dell’s
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`request to transfer to the N.D. Cal.1
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`I. Threshold – Eligibility for Transfer
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`Dell is organized under Delaware law and headquartered in Round Rock, Texas, within
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`the Western District of Texas. Id. at 7. Dell contends that its commercial activity in the N.D.
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`Cal.—selling the Accused Products—subjects it to personal jurisdiction in the N.D. Cal. Id. at
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`10. NDT does not dispute whether or not this case could have originally been brought in the
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`N.D. Cal. Thus, the threshold inquiry is satisfied, and the Court turns to the public and private
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`interest factors.
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`1 In its reply brief, Dell does not fully analyze the venue factors with respect to its request to transfer venue to the
`C.D. Cal. The Court is not in a position to project its own reasons whether venue in the C.D. Cal. would be more
`proper than the E.D. Tex.
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`3
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`II. Convenience
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`A. Private Factors
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`i. Relative Ease of Access to Sources of Proof
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`This factor is a relevant part of the transfer analysis despite technological advances that
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`make transporting large volumes of documents across the country more convenient. In re
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`Volkswgen II, 545 F.3d at 316. Consequently, courts analyze the distance documents must be
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`transported from their physical location to the trial venue, acting under the assumption that
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`electronically stored documents are, in fact, physical. See id. In addition, courts presume that
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`the bulk of all relevant evidence will come from the accused infringer. In re Genentech, Inc.,
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`566 F.3d 1338, 1345 (Fed. Cir. 2009). Finally, parties must identify sources of proof with some
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`specificity such that the court may determine whether transfer will increase the convenience of
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`the parties. J2 Global Commc’ns, Inc. v. Proctus IP Solutions, Inc., No. 6:08-CV-211, 2009 WL
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`440525, at *2 (E.D. Tex. Feb. 20, 2009).
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`Dell contends that the bulk of all relevant documents pertaining to infringement are
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`located in California. Docket No. 64 at 11–12. Dell contends that as an Acacia Research Group
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`subsidiary, NDT’s documents on licensing, standing, and validity will come from Acacia’s
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`headquarters in Newport Beach, California. Id. at 11. Additionally, documents related to the
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`prosecution of the Asserted Patents are located in the N.D. Cal. Id. Dell states that only limited
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`information on the Accused Products are located at its headquarters in Round Rock, Texas. Id.
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`at 12. Dell argues that NDT’s only basis for infringement is the Accused Products’ operative
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`components’ compliance with the DisplayPort standard. Id. Dell contends that those operative
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`components are designed and sourced by third parties located in the N.D. Cal., and those
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`documents are what should be considered the primary source of proof. Id.
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`4
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`NDT responds that, as the accused infringer, it is Dell’s documents involving the
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`Accused Products that are most important. Docket No. 98 at 3. NDT argues that documents
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`relating to the Accused Products are more accessible to the E.D. Tex. than the N.D. Cal. because
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`Dell is headquartered in Texas. Id. NDT contends that being a subsidiary of Acacia Research
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`Group has little relevance to this litigation because there are 12 employees in Plano whose work
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`involves business development, engineering, licensing, management, office management, and
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`administrative functions. Id. at 4.
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`The Court is mindful that Dell asserts it does not have the bulk of information, but that
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`several different third-party entities (“like NVIDIA, Intel, AMD, and VESA”) are located in the
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`N.D. Cal. and are in possession of the pertinent documents. Docket No. 64 at 12. While Dell
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`alleges that these third-party entities have “technical documents” relating to operative
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`components in the Accused Products, it does not identify which documents relating to the
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`operative components would be attributed to a specific third-party. Although such evidence
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`might be relevant, it cannot be the sole focus of the venue analysis because it is Dell’s Accused
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`Products that are subject to this litigation, not a group of third-parties’ operative components.
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`Indeed, it is the accused infringer and producer of the Accused Products, Dell, that most likely
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`has the bulk of the information relating to infringement. Dell is headquartered in Round Rock,
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`Texas, significantly closer to the E.D. Tex. than the N.D. Cal. Finally, NDT states its documents
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`related to the Asserted Patents are located in Houston and Plano, Texas, and in Southern
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`California. Docket No. 98-6 at ¶ 8 (Decl. of Marvin Key). Accordingly, this factor weighs
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`5
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`against transfer.
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`ii. The Availability of the Compulsory Process to Secure the Attendance of
`Witnesses
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`This factor weighs in favor of transfer when more third-party witnesses reside within the
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`transferee venue and when the transferee venue is said to have “absolute subpoena power” over
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`these third-party witnesses. In re Volkswagen II, 545 F.3d at 316. “Absolute subpoena power”
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`is subpoena power for both depositions and trial. In re Hoffmann-La Roche Inc., 587 F.3d 1333,
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`1338 (Fed. Cir. 2009). Additionally, courts give more weight to those specifically identified
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`witnesses and afford less weight to vague assertions that witnesses are likely located in a
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`particular forum. See Novelpoint Learning v. Leapfrog Enter., No. 6:10-CV-229, 2010 WL
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`5068146, at *6 (E.D. Tex. Dec. 6, 2010) (stating that the Court will not base its conclusion on
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`unidentified witnesses); see also West Coast Trends, Inc. v. Ogio Int’l, Inc., No. 6:10-CV-688,
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`2011 WL 5117850, at *3 (E.D. Tex. Oct. 27, 2011).
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`The amended Rule 45 provides the presiding court with the power to issue nationwide
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`deposition subpoenas and compel testimony so long as the trial, hearing, or deposition is to take
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`place within 100 miles of the witness’s residence or regular place of business. FED. R. CIV. P.
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`45(a)(2), 45(b)(2), 45(c)(1)(A); see Committee Notes on Rules—2013 Amendment (“The [2013]
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`amendments recognize the court where the action is pending as the issuing court, permit
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`nationwide service of subpoena and collect in a new subdivision (c) the previously scattered
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`provisions regarding place of compliance.”). The proffering party now has the option to depose
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`the non-party witness near that witness’s residence or regular place of business, and later present
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`the witness’s deposition testimony at trial without the involvement of a second district court. See
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`FED. R. CIV. P. 32(a)(4) (“A party may use for any purpose the deposition of a witness, whether
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`or not a party, if the court finds…that the witness is more than 100 miles from the place of
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`hearing or trial ….”).
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`Dell contends it will be prejudiced if this case remains in the E.D. Tex. because it will not
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`be able to compel non-party witnesses to appear for trial. 2 Docket No. 64 at 13. Dell argues it
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`will be prejudiced by videotaped deposition testimony because a jury may “respond[] negatively
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`to prolonged viewings, with little interaction from those present in the courtroom.” Docket No.
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`64 at 13–14. Dell also contends NDT will suffer prejudice because NDT will be denied the
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`ability to cross examine these third-party witnesses live. Id.
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`NDT responds that Dell failed to identify a single third-party witness by name in its
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`motion. Docket No. 98 at 5. NDT contends that any Intel witness will assist Dell regardless of
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`forum because of their indemnification agreement. Id. NDT argues that because of Dell and
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`Intel’s agreement, “subpoena power over Intel is unnecessary and irrelevant to the transfer
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`analysis.” Id. NDT further argues that it is rare for third-party witnesses to appear in a patent
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`trial. Id.
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`Dell’s motion only makes vague assertions that witnesses are likely located in the N.D.
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`Cal. However, even if Dell had specifically identified witnesses in the N.D. Cal., as it did in its
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`reply brief, under amended Rule 45(c)(1)(A), only in the N.D. Cal. may Dell secure its non-party
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`witnesses to attend trial. Both the E.D. Tex. and the N.D. Cal., however, may instruct these
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`witnesses to attend and subject them to being deposed. FED. R. CIV. P. 45(a)(2) and 45(c)(1)(A).
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`Dell acknowledges the Fifth Circuit observed that a videotape deposition would serve as an
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`acceptable substitute for live testimony. Docket No. 64 at 13–14, see Battle ex rel. Battle v.
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`Mem'l Hosp. at Gulfport, 228 F.3d 544, 554 (5th Cir. 2000) (citing United States v. Tunnell, 667
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`F.2d 1182, 1188 (5th Cir. 1982)). While there is some benefit to providing live witnesses at trial,
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`the Court is not convinced that using the non-party witnesses’ deposition as opposed to live
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`2 Dell identifies two third-party witnesses by name in its reply brief. Docket No. 109 at 3. The two witnesses are
`located in the N.D. Cal. Id.
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`testimony at trial would seriously inconvenience Dell or NDT. See In re Genentech, 566 F.3d at
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`1346 (“The Supreme Court has long held that § 1404(a) requires individualized, case-by-case
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`consideration of convenience and fairness.”) (internal quotation omitted). If the parties know
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`beforehand that depositions will be used at trial, any inconvenience of not having the witnesses
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`appear live is reduced even further. Separately, Dell has not addressed how the indemnification
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`agreement factors into this analysis. Thus, this factor is neutral.
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`iii. The Cost of Attendance of Willing Witnesses
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`In analyzing this factor, all parties and witnesses must be considered. Volkswagen I, 371
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`F.3d at 204. District courts should assess the relevance and materiality of the information the
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`witness may provide, but there is no requirement that the movant demonstrate that the witness
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`has anything more than relevant and material information. In re Genentech, Inc., 566 at 1343–
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`44.
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`The Fifth Circuit established a “100 mile rule” to assist with analysis of this factor. See
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`In re Volkswagen I, 371 F.3d at 204–205; see also In re TS Tech USA Corp., 551 F.3d 1315,
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`1320 (Fed. Cir. 2008) (“Because it generally becomes more inconvenient and costly for
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`witnesses to attend trial the further they are away from home ….”). The threshold question is
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`whether the transferor and transferee venues are more than 100 miles apart. See In re
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`Volkswagen II, 545 F.3d at 217. If so, then a court compares the respective distances between
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`the residences of all the identified material and relevant witnesses and the transferor and
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`transferee venues. Id. Transfer is favored if the transferee venue is a shorter average distance
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`from witnesses as compared to the transferor venue. See id.
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`Dell argues that this factor favors transfer. Docket No. 64 at 15. Dell states that third-
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`party witnesses are located within 100 miles to the district courthouse in San Francisco, making
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`the N.D. Cal. more convenient for third-party witnesses. Id. Dell argues that travel to San
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`Francisco is more convenient than travel to Marshall for its witnesses in Round Rock, Texas
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`because of daily non-stop flights from Austin to San Francisco. Id. NDT argues that both sides’
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`party witnesses are from Texas, making the E.D. Tex. is clearly more convenient than the N.D.
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`Cal. Id. at 7.
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`In sum, potential witnesses exist within or near both the N.D. Cal. and the E.D. Tex. It is
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`unclear whether Dell’s unidentified third-party witnesses are willing or not. On balance, party
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`witnesses are located in Texas, while non-party witnesses are generally in California.
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`Accordingly, this factor weighs slightly against transfer.
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`iv. Other Practical Problems
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`Practical problems include those related to judicial economy. In particular, multiple suits
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`involving the same or similar issues may create practical problems that will weigh in favor of or
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`against transfer. In re Volkswagen of Am., Inc., 566 F.3d 1349, 1351 (Fed. Cir. 2009).
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`Additionally, co-pending litigation before the court involving the same patent and underlying
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`technology provides a substantial justification for maintaining the suit in the transferor venue.
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`Id.
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`Dell contends that despite other pending actions involving the Asserted Patents within the
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`E.D. Tex., this factor strongly favors transfer given the early state of the case, and that NDT has
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`other pending lawsuits involving the Asserted Patents in the C.D. Cal. Docket No. 64 at 16.
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`NDT responds that judicial economy weighs heavily against transfer because transfer to the N.D.
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`Cal. will result in a third court being involved with the Asserted Patents, which will waste
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`judicial resources and enhance NDT’s risk of inconsistent claim constructions. Docket No. 98 at
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`8.
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`At the time of filing, there were multiple related actions3 pending in the E.D. Tex. and the
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`C.D. Cal., and none in the N.D. Cal. The Court sees no reason—based on judicial economy—to
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`add a third court involved with the Asserted Patents. Accordingly, this factor strongly disfavors
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`transfer.
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`B. Public Interest Factors
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`Dell maintains that all of the public interest factors are neutral except local interest.
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`Docket No. 64 at 17. NDT contends that the local interest and court congestion factors weigh
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`against transfer and the remaining two factors—familiarity with the relevant law and avoiding
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`unnecessary conflicts of law—are neutral. Docket No. 98 at 10.
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`i. The Local Interest in Having Localized Interests Decided at Home
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`The Fifth Circuit explained that “[j]ury duty is a burden that ought not to be imposed
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`upon the people of a community which has no relation to the litigation.” In re Volkswagen I, 371
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`F.3d at 206. Interests that could apply to any district in the United States, for example the sale of
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`infringing products, are disregarded in favor of particularized local interest. In re Volkswagen II,
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`545 F.3d at 218. Local interests may favor transfer when the transferee venue is home to a party
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`because the suit may call into question the reputation of individuals that work and conduct
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`business in the community. See Hoffman-La Roche, 587 F.3d at 1336.
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`Dell contends that the E.D. Tex. has no local interest in this case, and the N.D. Cal. “has
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`a strong and particularized local interest” because of the third-parties involved in this case.
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`Docket No. 64 at 17. Dell argues that NDT’s ties to Texas should not be given consideration
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`because they are “thin.” Docket No. 109 at 5. NDT responds that it is “absurd and inaccurate”
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`for Dell to argue that the E.D. Tex. has no interest in this litigation given Dell’s presence in
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`Texas—specifically in Round Rock and Plano. Docket No. 98 at 10.
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`3 Currently, there is only one related action in the E.D. Tex.
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`Given that Dell maintains its headquarters in Round Rock and has an office in Plano, it is
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`somewhat disingenuous for Dell to argue the E.D. Tex. has “no connection” or interest to this
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`litigation. Ignoring Dell’s attempt to mischaracterize this factor, the fact remains that the N.D.
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`Cal. is not home to either party involved in this litigation. Accordingly, this factor weighs
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`against transfer.
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`ii. Administrative Difficulties Flowing from Court Congestion
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`Dell does not dispute NDT’s assertion that the E.D. Tex. will likely resolve this case
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`faster than the N.D. Cal. Accordingly, this factor disfavors transfer.
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`iii. The Remaining Public Interest Factors
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`The parties maintain that the familiarity with the relevant law and avoiding unnecessary
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`conflicts of law are neutral. Docket Nos. 64 at 17 and 98 at 10.
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`CONCLUSION
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`For the reasons stated above, Dell failed to establish that the Northern District of
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`California is a clearly more convenient forum. Based on the evidence presented, five
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`convenience factors weigh against transfer, and three factors are neutral. Thus, Dell has not
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`proved that the Northern District of California is clearly more convenient. Accordingly, the
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`Court DENIES Defendant Dell, Inc.’s Motion to Transfer (Docket No. 64).4
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`4 On August 20, 2015, Dell filed a Petition for Writ of Mandamus for failure to rule on this motion (Docket No.
`179). The Court has been working diligently on this motion for the last several weeks. On August 10, 2015, Dell’s
`counsel contacted the Court to inquire about the status of its motion to transfer. Dell’s counsel was informed the
`Court was aware of the motion and was working toward providing a ruling within two weeks, despite preparing for
`and being in trial from August 17, 2015 to August 21, 2015. A three-month delay after the completion of briefing
`does not seem unreasonable given that Dell waited six months to file its initial motion and did not oppose a
`two-month extension for NDT to respond. See, Docket No. 74. The Court notes that the schedule governing this
`case has been in place since November 21, 2014, and that Dell could have requested a stay of any of the previous
`deadlines—or discovery, for that matter—pending a ruling on its motion. When Dell filed its petition, the Court
`became faced with a dilemma. The Court was ready to issue this Order, but did not want to appear disrespectful to
`the Federal Circuit, given the pending petition. Similarly, the Court did not want to encourage the filing of petitions
`by giving the impression that doing so is a way to get the Court to rule quickly on an underlying motion. At the end
`of the day, the merits, rather than appearances, should guide the Court’s actions. Therefore, the Court managed its
`docket as normal, and issued this Order in due course.
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`____________________________________
`ROBERT W. SCHROEDER III
`UNITED STATES DISTRICT JUDGE
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`So ORDERED and SIGNED this 25th day of August, 2015.