Fuji Photo Film Co., Ltd. v. Lexar Media, Inc.

• Decision Date: 14 February 2006
• Docket Number: No. 05 Civ. 8038(CM).,05 Civ. 8038(CM).
• Parties: FUJI PHOTO FILM CO., LTD., and Fuji Photo Film U.S.A., Inc., Plaintiffs, v. LEXAR MEDIA, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

415 F.Supp.2d 370

FUJI PHOTO FILM CO., LTD., and Fuji Photo Film U.S.A., Inc., Plaintiffs, v. LEXAR MEDIA, INC., Defendant.

No. 05 Civ. 8038(CM).

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

February 14, 2006.

Robert Craig Scheinfeld, Eliot D. Williams, Baker Botts LLP, New York City, for Plaintiffs.

Timothy Edward Demashi, Weil, Gotshal & Manges LLP, New York City, for Defendant.

ORDER AND DECISION GRANTING DEFENDANT'S MOTION TO TRANSFER VENUE

MCMAHON, District Judge.

Plaintiffs Fuji Photo Film Co., Ltd. ("Fuji Ltd.") and Fuji Photo Film U.S.A., Inc. (Fuji U.S.A.) filed this patent infringement action against Lexar Media Inc. ("Lexar") in the Southern District of New York. Lexar moves to transfer the action to the Northern District of California, pursuant to 28 U.S.C. § 1404(a), asserting, inter alia, that transfer is appropriate due to the pendency of related patent actions in the transferee district. Plaintiffs oppose Lexar's motion to transfer venue. For the reasons discussed below, defendant's motion is granted and this action is hereby transferred to the Northern District of California.

Facts and Related Proceedings

Plaintiff Fuji Ltd., the sole owner of the three patents-in-suit, is a Japanese corporation, with its principal place of business in Tokyo, Japan. Plaintiff Fuji U.S.A., the exclusive U.S. distributor of Fuji Ltd.'s products and the exclusive licensee within the United States under the patents-insuit, is a New York corporation with its principal place of business in Valhalla, New York.

Lexar is a Delaware corporation with its principal place of business in Fremont, California, which is located within the Northern District of California.

On September 15, 2005, plaintiffs filed the present action, asserting three counts of patent infringement. The patents-insuit include U.S. Patent No. 5,303,198, entitled "Method of Recording Data in Memory Card Having EEPROM and Memory Card System Using the Same," U.S. Patent No. 5,386,539, entitled "IC Memory Card Comprising an EEPROM with Data and Address Buffering for Controlling the Writing/ Reading of Data to EEPROM," and U.S. Patent No. 5,390,148, entitled "Method of Rewriting Data in EEPROM, and EEPROM Card." Each of the three patents is owned by Fuji Ltd., and relates to a specific type of memory device, called Flash memory, and to cards and systems using Flash memory.

On January 9, 2006, Lexar filed an Answer and Counterclaims for Declaratory Judgment. On the same date, Lexar moved to transfer this action to United States District Court for the Northern District of California.

Several related patent infringement suits are pending in the Northern District of California. In December 2000, Lexar brought an action against Pretec Electronics Corporation and others in the Northern District of California, alleging infringement of four patents relating to Flash memory technology ("the Pretec Action"). Memtek Products, Inc. then filed a declaratory relief action in the Central District of California against Lexar on two of those patents, as well as a third Lexar patent not asserted in the Pretec Action ("the Memtek Action"). Upon Lexar's motion, the Memtek Action was transferred to the Northern District of California on July 12, 2001.

In July 2002, Lexar brought an action against Fuji U.S.A. and others in the Eastern District of Texas alleging that Fuji U.S.A.'s manufacture and/or sale of Flash memory cards (including Flash memory cards manufactured by Toshiba Corporation and supplied to Fuji U.S.A.) and cameras designed for use with Flash memory cards infringed eight Lexar Flash memory patents ("the Lexar Action"). Fuji U.S.A. moved to transfer the action to the Northern District of California. The motion was granted and the action was transferred on January 8, 2003.

Prior to Lexar's serving Fuji U.S.A. with its complaint in the Lexar Action, Toshiba Corporation filed a declaratory relief action against Lexar in the Northern District of California, seeking a declaration of noninfringement and invalidity of fourteen Lexar Flash memory patents, including certain patents overlapping with those in the Lexar and Pretec Actions. Toshiba then filed an affirmative patent infringement action against Lexar in January 2003, alleging infringement of eight Toshiba patents relating to Flash memory technology ("the Toshiba Action").

Each of these actions is currently pending before Judge Jenkins in the Northern District of California.

Discussion

"Motions to transfer venue lie within the broad discretion of the courts and are determined upon notions of convenience and fairness on a case-by-case basis." Linzer v. EMI Blackwood Music, Inc., 904 F.Supp. 207, 216 (S.D.N.Y.1995).

Pursuant to 28 U.S.C. § 1404(a), "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 brought." 28 U.S.C. § 1404(a). The purpose of this provision is to "prevent waste `of time, energy and money' and `to protect litigants, witnesses and the public against unnecessary inconvenience and expense.'" AEC One Stop Group, Inc. v. CD Listening Bar, Inc., 326 F.Supp.2d 525, 528 (S.D.N.Y.2004) (internal citations omitted).

A motion to transfer venue requires a two-part inquiry: first, "whether the action to be transferred `might have been brought' in the transferee court"; and second, whether "considering the `convenience of parties and witnesses,' and the `interest of justice,' a transfer is appropriate." Berman v. Informix Corp., 30 F.Supp.2d 653, 656 (S.D.N.Y.1998) (internal citations omitted). In determining whether transfer is warranted for the convenience of parties and witnesses and in the interests of justice, courts consider the following factors: (1) the convenience of the witnesses, (2) the convenience of the parties, (3) the location of relevant documents and the relative ease of access to sources of proof, (4) the locus of operative facts, (5) the availability of process to compel the attendance of unwilling witnesses, (6) the relative means of the parties, (7) the forum's familiarity with governing law, (8) the weight accorded to plaintiff's choice of forum, and (9) trial efficiency and the interests of justice, based on the totality of the circumstances. See, e.g., id. at 657.

In this case, both prongs of the requisite two-part inquiry weigh in favor of transfer.

1. This Action Could Have Been Brought In the Transferee Court

Plaintiffs concede that this action could have been brought in the United States District Court for the Northern District of California, as Lexar, having its primary place of business in Fremont, California, is subject to personal jurisdiction in that district and venue is proper there. See 28 U.S.C. § 1400(b); 28 U.S.C. § 1391(c); Walker v. Jon Renau Collection, Inc., 2005 WL 3147864, *1 (S.D.N.Y., Nov. 23, 2005).

2. The Balance of Factors Weigh In Favor of Transfer

Transfer is appropriate in the interests of justice and for the convenience of the parties and witnesses.

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." Berman, 30 F.Supp.2d at 657 (internal citations omitted). When weighing the convenience of the witnesses, "[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. P'ship v. Elec. Arts Inc., 325 F.Supp.2d 282, 286 (S.D.N.Y.2004); see also Millennium, L.P. v. Hyland Software, Inc., 2003 WL 22928644, *3 (S.D.N.Y. Dec. 10, 2003).

The key issues in a patent infringement suit involve the technology of the inventions claimed in the patents-in-suit. Lexar identifies four individuals that it anticipates calling to testify about the design and development of Lexar's Flash memory technology. (Whitaker Decl. ¶ 2). Each of these potential witnesses works for Lexar and resides in California. (Id.). The individuals identified by Fuji U.S.A. as key witnesses have knowledge about the supply, distribution, marketing and/or sales of stand-alone packages of Flash memory cards and digital cameras employing Flash memory cards, not about the patent technology issues themselves. Moreover, Fuji U.S.A.'s potential witnesses are located in New York, New Jersey, Texas, California, and Georgia. (Bock Decl. ¶¶ 10, 12). While Fuji Ltd. does not identify which witnesses it intends to call, those individuals with technical knowledge of the patents-in-suit likely reside in Japan.

The convenience of the witnesses weighs in favor of transfer. California is a more convenient forum for Lexar's witnesses, who will testify about the design and development of the allegedly infringing products. Because California is significantly closer to Japan than is New York, it is also more convenient for Fuji Ltd.'s witnesses, who will testify about infringement and enforceability of the patents-in-suit. The testimony of Fuji U.S.A.'s witnesses, on the other hand, will be limited to Fuji U.S.A.'s marketing and sales activities— evidence that relates to damages and becomes relevant only after the infringement issues are resolved. Further, New York is not necessarily more convenient for Fuji U.S.A.'s witnesses, as only some of them reside in or near New York.

b. The Convenience of Parties

The Northern District of California is a more convenient forum for Lexar, which resides in the transferee district. Likewise, for Fuji Ltd., litigating this case in California is as—if not more—convenient than litigating it in New York. While representatives of Fuji Ltd. will have to travel from Japan to the United States to litigate this case regardless of whether defendant's motion is granted, transfer...