Beam Laser Systems, Inc. v. Cox Communications

• Decision Date: 23 October 2000
• Docket Number: No. 200CV195.,200CV195.
• Citation: 117 F.Supp.2d 515
• Court: U.S. District Court — Eastern District of Virginia
• Parties: BEAM LASER SYSTEMS, INC., Frank L. Beam, Plaintiffs, v. COX COMMUNICATIONS, INC., Cablerep, Inc., Coxcom, Inc., and Seachange International, Inc., Defendants.

117 F.Supp.2d 515

BEAM LASER SYSTEMS, INC., Frank L. Beam, Plaintiffs, v.COX COMMUNICATIONS, INC., Cablerep, Inc., Coxcom, Inc., and Seachange International, Inc., Defendants.

No. 200CV195.

United States District Court, E.D. Virginia, Norfolk Division.

October 23, 2000.

Raymond H.J. Powell, Jr., Steven Eugene Adkins, Louis S. Mastrinani, Robert A. Westerlund, Alfred M. Haas, Adduci, Mastrinani & Schaumberg, LLP, Washington, DC, for Plaintiffs.

Walter D. Kelly, Jr., Frank A. Edgar, Jr., Willcox & Savage, Norfolk, Lars C. Golumbic, David E. Mills, Dow, Lohnes & Albertson, Washington, DC, Robert Noah Feldman, Steven M. Bauer, Eva M. Marceau, Testa, Hurwitz & Thibeault, LLP, Boston, MA, Stephen E. Noona, Kaufman & Canoles, PC, Norfolk, VA, for Defendants.

OPINION AND ORDER

REBECCA BEACH SMITH, District Judge.

This matter came before the court on October 11, 2000, for a hearing on three pending motions: (1)SeaChange International, Inc.("SeaChange"), an intervenor in this action, joined by Cox Communications, Inc.("CCI"), CoxCom, Inc., and CableRep, Inc.(collectively, "the Cox Companies"), filed a motion to transfer venue from the Eastern District of Virginia to the District of Massachusetts; (2)Plaintiffs filed a motion for an award of costs and attorneys' fees incurred in a prior action brought by SeaChange in Massachusetts, pursuant to Federal Rule of Civil Procedure 41(d); and (3) the Cox Companies filed a motion to dismiss Frank L. Beam from the action for lack of standing.As discussed below, the court determines that Frank Beam should be dismissed as a party from the action and the motions to transfer venue and for attorneys' fees should be denied.

I.Factual and Procedural History

On March 17, 2000, Beam Laser Systems, Inc. and Frank L. Beam(collectively, "Beam") brought this action alleging patent infringement against CCI, and seeking to enjoin CCI from infringing two patents owned by Beam Laser Systems and to recover monetary damages for previous infringements.Frank Beam is the sole shareholder of Beam Laser Systems ("Beam Laser").The patents at issue are U.S. PatentNo. 4,814,883, entitled "Multiple Input/Output Video Switch for Commercial Insertion System," and U.S. PatentNo. 5,200,825, entitled "Commercial Insertion System Remotely Controlling Multiple Video Switches."

On May 16, 2000, SeaChange, which manufactures and sells advanced digital video equipment for the broadcast industry, brought a declaratory judgment action in the United States District Court for the District of Massachusetts, seeking, inter alia, a declaration that the Beam patents were invalid and/or not infringed by SeaChange or its customers, including CCI.

On May 19, 2000, SeaChange filed a motion with this court to intervene in the action brought here by Beam, and to transfer venue to the District of Massachusetts.SeaChange alleges that it is the real party in interest in this action, because it has agreed to indemnify its customers in any suit brought by Beam for infringement of the patents by its Ad Insertion Product—the allegedly infringing device, according to SeaChange, but just one component of the overall system, according to Beam.On May 24, 2000, CCI filed a motion to dismiss for lack of personal jurisdiction, which was ultimately withdrawn.

On June 16, 2000, Beam amended its complaint to add CoxCom and CableRep— subsidiaries of CCI—as defendants.This court held a motions hearing on June 22, 2000, and granted SeaChange's motion to intervene.The court reserved ruling on the motion to transfer until the newly-added defendants could respond.The court gave all parties additional time to file simultaneous supplemental briefing on the transfer issue.

On June 23, 2000, SeaChange filed a complaint against Beam in this action, seeking declaratory judgments of non-infringement, invalidity, and unenforceability of the Beam patents, as well as tortious interference with advantageous relations based on Beam's filing of this action.Beam had filed a motion to dismiss in the Massachusetts action on June 7, 2000, based on several grounds, including lack of personal jurisdiction and improper venue.On June 27, 2000, the Massachusetts court granted SeaChange's motion for jurisdictional discovery.On July 10, 2000, SeaChange filed a notice of voluntary dismissal of its action in the District of Massachusetts.

The Cox Companies formally joined the motion to transfer venue by filing a motion to that effect on August 8, 2000.Both Beam and the defendants, jointly, have filed supplemental memoranda on the issue of whether transfer of venue to the District of Massachusetts is appropriate.

II.Analysis

A.Motion to Transfer Venue

"For 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)."Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business."28 U.S.C. § 1400(b).A corporate defendant resides "in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced."28 U.S.C. § 1391(c).

The decision whether to grant a motion to transfer venue is within the sound discretion of the district court.SeeSouthern Ry. Co. v. Madden,235 F.2d 198, 201(4th Cir.1956).In making the determination whether to transfer an action to an alternative forum where venue is proper, the court"must consider and balance a number of factors, including ease of access to sources of proof; the convenience of the parties and witnesses; the cost of obtaining the attendance of witnesses; the availability of compulsory process; the interest in having local controversies decided at home; ... and the interest of justice."Cognitronics Imaging Sys., Inc. v. Recognition Research Inc.,83 F.Supp.2d 689, 696(E.D.Va.2000).The "interest of justice" factor encompasses all those factors that are unrelated to witness and party convenience.See, e.g., GTE Wireless, Inc. v. Qualcomm, Inc.,71 F.Supp.2d 517, 519(E.D.Va.1999).

There is authority for the proposition that, as an intervenor, SeaChange may not question venue.SeeTrans World Airlines, Inc. v. Civil Aeronautics Bd.,339 F.2d 56, 63-64(2d Cir.1964)("Venue is a privilege personal to a defendant in a civil suit and a person intervening on either side of the controversy may not object to improper venue.");Asbury Glen/Summit Ltd. Partnership v. Southeast Mortgage Co.,776 F.Supp. 1093, 1096(W.D.N.C.1991)(stating as a general rule that an intervenor cannot question venue);Commonwealth Edison Co. v. Train,71 F.R.D. 391, 394(N.D.Ill.1976)(denying intervenor's motion to transfer venue because an intervenor enters an action "subject to the venue which already exists"); 7C Charles Alan Wright, Arthr R. Miller & Mary Kay Kane, Federal Practice and Procedure§ 1918, at 485 (2d ed. 1986)("By voluntarily bringing himself into the action [the intervenor] has waived his privilege not to be required to engage in litigation in that forum.");see alsoid. at 485 n. 6(citing cases).The court finds this authority persuasive.¹Moreover, SeaChange brought an action for declaratory judgment in Massachusetts, but after this court granted its motion to intervene in the present action, SeaChange voluntarily dismissed the Massachusetts action.SeaChange had its opportunity to litigate against Beam in its chosen forum, but forwent that opportunity in favor of joining in this action.

Although the Cox Companies have joined in the motion for transfer of venue, the strongest reasons given by the defendants in support of transfer concern SeaChange.The strongest statement that can be made with regard to the Cox Companies is that it would be no more inconvenient for them to try the case in Massachusetts than in Virginia, as they are located in Atlanta.This is clearly insufficient to warrant a transfer of venue.See, e.g., Board of Trustees, Sheet Metal Workers Nat'l Fund v. Baylor Heating & Air Conditioning, Inc.,702 F.Supp. 1253, 1258(E.D.Va.1988).

Even if the court did not favor the rule that an intervenor may not question venue, the court would exercise its discretion to deny the motion to transfer venue, because the factors controlling that decision do not weigh in favor of transfer.²The movant has the burden to show that a transfer of venue pursuant to 28 U.S.C. § 1404(a) is warranted.SeeCognitronics,83 F.Supp.2d at 696.The court has determined that the defendants have not met their burden.

Despite defendants' contentions to the contrary, Beam has asserted significant ties to the Eastern District of Virginia, and therefore Beam's choice of forum is entitled to "substantial weight."GTE Wireless,71 F.Supp.2d at 519.Under patent law, "whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States ... during the term of the patent therefor, infringes the patent."35 U.S.C. § 271(a)(emphasis added).Beam alleges that the Cox Companies infringed its patents by using Beam's patented commercial insertion system in the Cox Companies' operations in the Eastern District of Virginia.Although the truth of these allegations ultimately must be proved, the cause of action, as pleaded by Beam, asserts that infringement occurred in this district.

SeaChange argues that the preferred forum in patent infringement cases is where "the hub of activity centered around [the infringing device's] production" lies.GTE Wireless,71 F.Supp.2d at 519(internal quotation marks omitted).This may be true for a patent infringement action alleging violation of the "makes" prong of the statute, but, more generally, the preferred forum in a patent infringement action is "that which is the center of accused activity."Id.(...