Odom v. Microsoft Corp.

• Decision Date: 30 January 2009
• Docket Number: No. 6:08-CV-331.,6:08-CV-331.
• Parties: Gary ODOM v. MICROSOFT CORPORATION.
• Court: U.S. District Court — Eastern District of Texas

596 F.Supp.2d 995

Gary ODOM v. MICROSOFT CORPORATION.

Civil Action No. 6:08-CV-331.

United States District Court, E.D. Texas, Tyler Division.

January 30, 2009.

COPYRIGHT MATERIAL OMITTED

Edward W. Goldstein, Corby R. Vowell, Goldstein Faucett & Prebeg, Houston, TX, Sidney Calvin Capshaw, III, Elizabeth L. Derieux, Nancy Claire Abernathy, Capshaw Derieux, LLP, Longview, TX, Collin Michael Maloney, Otis W. Carroll, Jr., Ireland Carroll & Kelley, Charles Ainsworth, Robert Christopher Bunt, Parker, Bunt & Ainsworth, P.C., Tyler, TX, for Gary Odom.

Christopher Scott Morrow, Joseph A. Micallef, Matthew N. Bathon, Arnold & Porter, Washington, DC, Richard Alan Sayles, Eve L. Henson, Sayles Werbner, Dallas, TX, for Microsoft Corporation.

MEMORANDUM OPINION AND ORDER

JOHN D. LOVE, United States Magistrate Judge.

Before the Court is Defendant Microsoft Corporation's Motion to Transfer Venue, (Doc. No. 19), Reply in Support, (Doc. No. 32), and Plaintiffs' Memorandum in Opposition, (Doc. No. 26), and Surreply in Opposition, (Doc. No. 34). The Court held a hearing on the motion on January 12, 2009.

For the reasons stated below, Defendant's Motion is GRANTED.

BACKGROUND

In this suit, Plaintiff Gary Odom, the sole inventor and owner of U.S. Patent No. 7,363,592 ("the '592 patent"), alleges that Microsoft infringes the '592 patent by the manufacture and distribution of Microsoft's Office 2007 software. Microsoft asserts that during the time period in which Odom filed and prosecuted the patent applications underlying the '592 patent, Odom was a technical consultant for Microsoft, and also for Microsoft's outside counsel, on Microsoft patent matters, including at least one litigation that involved Microsoft's Office line of software.

Since at least 1999, Odom has resided in Oregon and operated an Oregon consulting company, Patent Hawk, LLC, with its principal place of business in Portland. From 1999 until 2001, Odom was employed by the law firm Klarquist Sparkman LLP, ("Klarquist"). From 2001 until 2003, Plaintiff provided independent consulting services for Klarquist. During this time, Klarquist represented Defendant Microsoft in various patent disputes. From 2001 to 2004, Plaintiff provided independent consultation directly to Microsoft.

Microsoft is a Washington corporation with its principal place of business in Redmond, Washington. Microsoft claims that the development team for the accused Office 2007 software is located in Redmond, and the documents, witnesses, and source code related to that software will likely all be found in Redmond. (Harmon Decl. at ¶ 4.) Moreover, Microsoft's in-house legal team, including the individual lawyers who worked with Plaintiff, is located in Redmond. (Harmon Decl. at ¶ 5.)

Microsoft has submitted a Confidentiality and Non-Disclosure Agreement signed on August 31, 1999 between Odom and Klarquist. The agreement states that, in order to avoid conflicts of interest, Odom would give Klarquist notice before bringing an infringement action against a Klarquist client, and that Klarquist would have an opportunity to investigate his allegations before suit was brought. The agreement also contains a clause designating Oregon as the forum for litigation arising out of the agreement.

Microsoft insists that Odom never gave notice to or sought the approval of Klarquist before filing this infringement action. Microsoft also claims that Odom signed a number of other agreements specifically tailored to patent cases brought by Klarquist on behalf of Microsoft. For example, one such contract, covering Odom's work on litigation between Microsoft and Martin Reiffin, required that Odom inform Klarquist before he filed or prosecuted any patent application relating to the subject matter on which he consulted under the agreement: "you agree to let us know before you file or prosecute any patent applications relating to subject matter you consult with us on (or for any reason publish in such areas)." Id. at Ex. 2. The Reiffin case, which is still pending, includes allegations of patent infringement by versions of Microsoft Office software. See Reiffin v. Microsoft Corp., 214 F.3d 1342, 1345 (Fed.Cir.2000). At the time Odom agreed to this provision, and began to work on the Reiffin matter, he was prosecuting the parent application underlying the '592 patent that he alleges is infringed in this case.¹ Microsoft contends that Odom's agreements with Klarquist are relevant to its defenses of unclean hands and equitable estoppel. Microsoft has now filed a motion to transfer venue to the District of Oregon under section 1404(a).

APPLICABLE LAW

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." 28 U.S.C. § 1404(a). The goals of § 1404(a) are to prevent waste of time, energy, and money, and also to protect litigants, witnesses, and the public against unnecessary inconvenience and expense. Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964). Ultimately it is within a district court's sound discretion to transfer venue pursuant to 28 U.S.C. § 1404(a), but the court must exercise its discretion in light of the particular circumstances of the case. Hanby v. Shell Oil Co., 144 F.Supp.2d 673, 676 (E.D.Tex.2001); Mohamed v. Mazda Corp., 90 F.Supp.2d 757, 768 (E.D.Tex. 2000). The party seeking transfer of venue must show good cause for the transfer. In re Volkswagen of America, Inc., 545 F.3d 304, 315 (5th Cir.2008) ("Volkswagen II"). The moving party must show that transfer is "clearly more convenient." Otherwise, a plaintiffs choice of venue must be respected. Id.

When deciding whether to transfer venue, a district court balances two categories of interests: the private interests, i.e., the convenience of the litigants, and the public interests in the fair and efficient administration of justice. Id. at 315. The private interest factors weighed by the court include: "(1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious and inexpensive." Id. The public interest factors include: "(1) the administrative difficulties flowing from court congestion, (2) the local interest in having localized interests decided at home, (3) the familiarity of the forum with the law that will govern the case, and (4) the avoidance of unnecessary problems of conflict of laws or in the application of foreign law." Id.; In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir.2004) ("Volkswagen I"). None of the factors are dispositive on their own. Id.

Two recent appellate opinions must be addressed in determining whether transfer is appropriate in this case. Volkswagen II involved a products liability claim stemming from an automobile collision in Dallas. 545 F.3d at 307. In that case, the Fifth Circuit granted a writ of mandamus requiring the Eastern District of Texas to transfer the case to the Northern District of Texas. Id. at 307. It found that the trial court had erred by giving inordinate weight to the Plaintiffs choice of venue, and by not giving appropriate weight to, among other things, the location of proof, the cost of attendance of willing witnesses, the availability of compulsory process and the localized interest of the fora. Id. at 318. Thereafter, the Federal Circuit, relying on Volkswagen II, granted a writ of mandamus requiring the Eastern District of Texas to transfer a patent case to the Southern District of Ohio. In re TS Tech USA Corp., 551 F.3d 1315, 1321-22 (Fed. Cir.2008). It found that, in the underlying case Lear Corp. v. TS Tech USA, Inc., No. 2:07-CV-406 slip op. (E.D.Tex. Sept. 10, 2008), the trial court erred by (1) giving too much weight to the plaintiffs choice of forum, (2) failing to recognize the cost of attendance of witnesses, (3) failing to recognize the ease of access to sources of proof, and (4) disregarding Fifth Circuit precedent in analyzing the public interest in having localized interests decided at home. Id. These cases will be discussed in more detail below.

ANALYSIS

The first question a court must address when ruling on a motion to transfer venue under 28 U.S.C. § 1404 is whether the suit could have been filed originally in the destination venue. There is no dispute that this case could have been filed in the District of Oregon.

I. The Private Interest Factors The Relative Ease of Access to Sources of Proof

In Volkswagen II, the Fifth Circuit held that although technological advancements have generally reduced the discovery burden on parties, this factor is still important, and must be considered carefully. Volkswagen II, 545 F.3d at 316. In TS Tech, the Federal Circuit, citing Volkswagen II, held that because the physical evidence, headrests and documents, were found in Ohio, Michigan and Canada, the trial court erred in not weighing this factor in favor of transfer. At the hearing in this case, Defendant argued that TS Tech's source of proof analysis controls. 551 F.3d at 1320-21. It contends that the location of documentary evidence must be considered even if the evidence is in electronic form and can easily be sent to any location in the country. It points out that in Lear, the trial court stated that this factor was neutral because many of the documents were stored electronically and that documents can be easily transported to Texas. No. 2:07-CV-406 slip op. at *5. The Federal Circuit found this conclusion to be clear error. TS Tech, 551 F.3d at 1320-21.

In this Court's view, TS Tech's conclusion is distinguishable from this case. The accused product is software with source code being a key component of each side's case. Defendant has not made any showing that documentary physical...