Espn, Inc. v. Quiksilver, Inc.

• Decision Date: 15 September 2008
• Docket Number: No. 08-CV-4222 (CM)(HBP).,08-CV-4222 (CM)(HBP).
• Citation: 581 F.Supp.2d 542
• Parties: ESPN, INC., Plaintiff, v. QUIKSILVER, INC., Defendant. Quiksilver, Inc., Counterclaimant, v. ESPN, Inc., Counterdefendant.
• Court: U.S. District Court — Southern District of New York

581 F.Supp.2d 542

ESPN, INC., Plaintiff, v. QUIKSILVER, INC., Defendant.

Quiksilver, Inc., Counterclaimant, v. ESPN, Inc., Counterdefendant.

No. 08-CV-4222 (CM)(HBP).

United States District Court, S.D. New York.

September 15, 2008.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Eileen Mary Cunningham, Frank W. Ryan, Tamar Y. Duvdevani, Nixon Peabody LLP, New York City, for Plaintiff.

Sara Jaclyn Goldfarb, Jennifer L. Barry, Kenneth Conboy, Mark Andrew Finkelstein, Latham & Watkins, LLP, New York City, for Defendant.

MEMORANDUM DECISION AND ORDER DENYING MOTION TO TRANSFER VENUE TO THE CENTRAL DISTRICT OF CALIFORNIA

McMAHON, District Judge.

On May 2, 2008, ESPN, INC. ("ESPN") filed a complaint against Quiksilver, Inc. ("Quiksilver") alleging trademark infringement under Section 32(a) of the Lanham Trademark Act, 15 U.S.C. § 1114(a), trademark infringement and unfair competition under 15 U.S.C. § 1125(a), anti-dilution under New York GBL § 360-1, and trademark infringement under New York common law. On June 16, 2008, Quiksilver filed an answer denying many of the allegations, asserting affirmative defenses, and counterclaims for declaratory relief, trademark infringement under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), trademark dilution under N.Y. GBL § 360-1, unfair competition under New York common law, and cancellation of federal registrations under 15 U.S.C. § 1064 and 15 U.S.C. § 1119.

ESPN, a Delaware corporation with a principal place of business in Bristol, Connecticut, is a multinational sports entertainment company. (Compl. ¶ 2.) In the mid-1990's, ESPN created the X Games, an international alternative sports competition featuring sports such as skateboarding, snowboarding, and surfing. (Id. ¶ 4-5.) ESPN owns pending trademark applications for its stylized X Games mark, which it affixes on goods for sale at X Games events, on the internet, and in department stores. (Id. ¶ 13-16.)

Quiksilver, a Delaware corporation with a principal place of business in Huntington Beach, California, is a manufacturer of boardshorts and other clothing products for surfers. (Answer ¶ 6-7.) Quiksilver products are sold throughout the world, primarily in surf shops, snow shops, skate shops, and department stores. (Id. ¶ 11.) Quiksilver claims that it began using the "X" symbol on its products since no later than 1986. (Id. ¶ 15.)

Quiksilver has filed a motion for transfer of venue to the Central District of California. For the reasons set forth below, this motion is DENIED.

Analysis

28 U.S.C. § 1404(a) provides, "For the convenience of the 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 through." Thus, in order to obtain a transfer of venue, "the moving party bears the burden of establishing 1) that the action is one that `might have been brought' in the district to which the movant seeks to have it transferred, and 2) that transfer is appropriate based on the convenience of the parties, the convenience of witnesses, and the interests of justice." Posven, C.A. v. Liberty Mut. Ins. Co., 303 F.Supp.2d 391, 400-01 (S.D.N.Y.2004); see also Reliance Ins. Co. v. Six Star, Inc., 155 F.Supp.2d 49, 56 (S.D.N.Y.2001). In determining whether to transfer venue under § 1404(a), "courts employ an individualized, case-by-case consideration of convenience and fairness." Posven, C.A., 303 F.Supp.2d at 401 (internal citations omitted). This determination is within the "sound discretion" of the district court. Id.

1. This Action Might Have Been Brought in the Central District of California

ESPN does not dispute that this action could have been filed in the Central District of California, because "the transferee court would have had subject matter jurisdiction and personal jurisdiction over" Quiksilver, and "venue would have been proper in the transferee court." Id. Quiksilver's Huntington Beach, California, headquarters are located in the Central District of California. Thus, Quiksilver is clearly subject to personal jurisdiction in California, and venue is proper under 28 U.S.C. § 1391(b)(1)-(2).

2. Transfer is Not Appropriate Based on Convenience to the Parties and Witnesses, and the Interest of Justice

Since this action might have been brought in the Central District of California, the only question is "whether transfer is appropriate based on the balance of convenience to parties and witnesses, and the interests of justice." JFP Touring, LLC v. Polk Theatre, Inc., 2007 WL 2040585, at *13, 2007 U.S. Dist LEXIS 51388, at *36 (S.D.N.Y.2007). In balancing the convenience and fairness of a proposed transfer, courts in this Circuit look to eight factors: "(1) the convenience of witnesses; (2) the location of relevant documents and the relative ease of access to sources of proof; (3) the convenience of the parties; (4) the locus of the operative facts; (5) the availability of process to compel attendance of unwilling witnesses; (6) the relative means of the parties; (7) a forum's familiarity with the governing law; (8) the weight accorded to plaintiffs choice of forum; and (9) trial efficiency and the interests of justice, based upon the totality of the circumstances," Posven, C.A., 303 F.Supp.2d at 404. "There is no rigid formula for balancing these factors and no single one of them is determinative." Citigroup Inc. v. City Holding Co., 97 F.Supp.2d 549, 561 (S.D.N.Y.2000). "Instead, weighing the balance is essentially an equitable task left to the Court's discretion." Beatie and Osborn LLP v. Patriot Scientific Corp., 431 F.Supp.2d 367, 395 (S.D.N.Y.2006) (internal quotations and citation omitted). However, plaintiffs choice of forum should be accorded deference in the event that other factors do not weigh strongly in favor of transfer. "[U]nless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Aerotel, Ltd. v. Sprint Corp., 100 F.Supp.2d 189, 197 (S.D.N.Y.2000) (internal quotations and citation omitted).

Here, the other factors do not weigh strongly enough in favor of transfer.

a. The Convenience of Witnesses

"Convenience of both the party and non-party witnesses is probably the single-most important factor in the analysis of whether transfer should be granted." Fuji Photo Film Co., Ltd. v. Lexar Media, Inc., 415 F.Supp.2d 370, 373 (S.D.N.Y. 2006) (internal citation omitted). Moreover, "[t]he convenience of non-party witnesses is accorded more weight than that of party witnesses." Indian Harbor Ins., Co. v. Factory Mut. Ins. Co., 419 F.Supp.2d 395, 402 (S.D.N.Y.2005) (internal citations omitted). When weighing this factor, "a court does not merely tally the number of witnesses who reside in the current forum in comparison to the number located in the proposed transferee forum. Instead, the court must qualitatively evaluate the materiality of the testimony that the witnesses may provide." Herbert Ltd. Partnership v. Electronic Arts Inc., 325 F.Supp.2d 282, 286 (S.D.N.Y.2004); accord Fuji Photo Film Co., Ltd., 415 F.Supp.2d at 373.

In an infringement action, the most critical witnesses may be "those officers and employees who were involved in the design, production, and sale of the [allegedly infringing] products." AEC One Stop Group, Inc. v. CD Listening Bar, Inc., 326 F.Supp.2d 525, 529 (S.D.N.Y.2004); see also International Securities Exchange, LLC v. Chicago Bd. Options Exchange Inc., 2007 WL 1541087, at *3 (S.D.N.Y. May 24, 2007); Kwik Goal. Ltd. v. Youth Sports Publishing, Inc., 2006 WL 1517598, at *4 (S.D.N.Y. May 31, 2006).

The party witnesses from both sides would obviously find it more convenient to appear close to where they work (New York for ESPN; Huntington Beach, California for Quiksilver). Therefore, the convenience of non-party witnesses is the crucial issue. On the record before me, this factor weighs in favor of transfer.

No X. Games events have ever been held in New York, and ESPN does not assert that any non-party witnesses reside in of close to this district. Nor does ESPN identify a single non-party witness who would be inconvenienced by litigating in California. In fact, the non-party witnesses it mentioned—those participants who have worn allegedly infringing clothing—all live closer to California than New York.

However, of the 10 former Quiksilver or ESPN employees that the defendant identified as expected witnesses, nine were located in California and the 10th resided in Hawaii. See Defendant Memorandum in Support of Motion for Transfer at 7-8. Additionally, Quiksilver cited two witnesses who have refused to travel to New York, another who may not be inclined to travel there, another who may not be able to get permission from his employer to travel, there and yet another—a former ESPN employee—who was unwilling to speak to defendant without an attorney and hence may not agree to voluntary travel. Id. at 7-8. Finally, in its complaint ESPN mentioned four current or former X Games participants who wore allegedly infringing Quiksilver clothing, and Quiksilver anticipates calling some or all of these people at trial. See Compl. ¶ 22; Def. Mem. at 9. Of these participants, two live in Hawaii (one who has an office in California), one lives in Australia and one lives in Wyoming. See Def. Mem. at 9. Thus, all four are closer to California than New York.

ESPN argues that allowing a transfer on such grounds, taken to its logical conclusion, would allow a transfer not only to any location where the X Games are held—including Aspen, Colorado, China, Brazil, Dubai and Mexico—but also in any locale where retail stores sell ESPN X Games merchandise. This argument misses its mark. First, sales outside the United States are beyond the purview of the Lanham Act. Second, Aspen employees are closer to California than New York. Third, the matter of merchandise sales is secondary to the primary...