Smart Audio Techs., LLC v. Apple, Inc.

• Citation: 910 F.Supp.2d 718
• Decision Date: 16 November 2012
• Docket Number: Civil Action No. 12–134–GMS.
• Parties: SMART AUDIO TECHNOLOGIES, LLC, Plaintiff, v. APPLE, INC., Defendant.
• Court: U.S. District Court — District of Delaware

910 F.Supp.2d 718

SMART AUDIO TECHNOLOGIES, LLC, Plaintiff,

v.APPLE, INC., Defendant.

Civil Action No. 12–134–GMS.

United States District Court, D. Delaware.

Nov. 16, 2012.

Richard Charles Weinblatt, Esq., and Stamatios Stamoulis, Esquire of Stamoulis & Weinblatt LLC, Wilmington, DE, for Plaintiff.

Susan Morrison Coletti, Esquire of Fish & Richardson, P.C., Wilmington, DE, and Benjamin C. Elacqua, Esq., and Michael R. Rueckheim, Esquire of Fish & Richardson, P.C., Houston, TX, and Ruffin B. Cordell, Esquire of Fish & Richardson, P.C., Washington, DC, for Defendant.

OPINION

SLEET, Chief Judge.

I. INTRODUCTION

On February 3, 2012, the plaintiff, Smart Audio Technologies, LLC (“Smart Audio”), initiated this action against the defendant, Apple, Inc. (“Apple”). (D.I. 1.) Smart Audio alleges that one or more products manufactured and sold by Apple infringe United States Patent No. 6,158,163 (the “'163 Patent”). ( Id. at ¶¶ 6–10.) Presently before the court is Apple's April 19, 2012 motion to transfer this action to the Northern District of California pursuant to 28 U.S.C. § 1404(a). (D.I. 10.) For the reasons that follow, the court will deny Apple's motion to transfer.

II. BACKGROUND

Smart Audio is a Texas limited liability company with its principal place of business in Tyler, Texas. (D.I. 1 at ¶ 1.) Apple is a California corporation having its principal place of business in Cupertino, California. ( Id. at ¶ 2.)

Smart Audio is the owner of the '163 Patent, entitled “Vehicle Audio System Having Random Access Player With Play List Control.” ( Id. at ¶ 7.) Smart Audio brought this suit claiming that Apple has infringed and continues to infringe the '163 Patent through its manufacture and sale of one or more products, including the iPod nano. ( Id. at ¶ 8.) On April 19, 2012, Apple filed a motion to transfer venue to the Northern District of California. (D.I. 10.)

III. STANDARD OF REVIEW

28 U.S.C. § 1404(a) provides: “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 or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). This provision “was intendedto vest district courts with broad discretion to determine, on an individualized, case-by-case basis, whether convenience and fairness considerations weigh in favor of transfer.” Jumara v. State Farm Ins. Co., 55 F.3d 873, 883 (3d Cir.1995).

Section 1404(a) sets forth a two-step transfer analysis. The court first asks whether the action could have been brought in the proposed transferee venue and then determines whether transfer to a different forum would best serve the interests of justice and convenience. Mitek Sys., Inc. v. United Servs. Auto Ass'n, No. 12–462–GMS, 2012 WL 3777423, at *4 (D.Del. Aug. 20, 2012). The burden rests with the defendant to demonstrate that transfer is appropriate at each step, Jumara, 55 F.3d at 879–80, and, “unless the balance of convenience of the parties is strongly in favor of defendant, the plaintiff's choice of forum should prevail,” Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir.1970).

IV. DISCUSSION

Both parties recognize that the court looks to “the interests of justice and convenience” in deciding a motion to transfer, but they disagree sharply regarding several elements of that inquiry. In particular, they dispute the weight to be accorded Smart Audio's forum preference in light of its decision to file this suit outside its “home turf” of Texas. The court believes that the parties' confusion may be explained by the fact that, since Jumara was decided, judges within this district have made subtle adjustments to the language employed in performing the transfer analysis. While the substance of the inquiry has remained constant, the terminology and even the basic steps of the analysis have evolved over time. These inconsistencies are neither surprising nor problematic given the advisement of the Jumara court itself that “there is no definitive formula or list of the factors to consider” in determining whether a motion to transfer should be granted.¹55 F.3d at 879. Nevertheless, the court believes that, in the interest of clarity, some further discussion of the transfer inquiry is warranted here.

The court will first discuss how the language employed in the § 1404(a) analysis has evolved. After determining that no meaningful substantive changes have occurred, the court will proceed with its consideration of Apple's motion to transfer.

A. Evolution of the Transfer Analysis

While it is undisputed that the Third Circuit's decision in Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir.1995), guides the court's transfer analysis, two facially disparate approaches to that inquiry have emerged in this district. The court first will introduce the Jumara decision and the two approaches that have developed. After taking note of the common elements that these methodologies share, the court will turn to a more thorough examination of the differences between them, concluding ultimately that only minor substantive discrepancies exist.

1. The Jumara Standard

In Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir.1995), the Third Circuit provided guidance as to the application of 28 U.S.C. § 1404(a).² As noted above, courts confronting a motion to transfer first ask whether the action could have been brought in the proposed transferee venue and then determine whether transfer to a different forum would best serve the interests of justice and convenience. See Mitek Sys., Inc., 2012 WL 3777423, at *4. With regard to the second step of this inquiry, Jumara instructed district courts look to the various private and public interests protected by § 1404 rather than to any “definitive formula.” 55 F.3d at 879. These private interests may include:

plaintiff's forum preference as manifested in the original choice; the defendant's preference; whether the claim arose elsewhere; the convenience of the parties as indicated by their relative physical and financial condition; the convenience of the witnesses—but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum).

Id. The public interests may include:

the enforceability of the judgment; practical considerations that could make the trial easy, expeditious, or inexpensive; the relative administrative difficulty in the two fora resulting from court congestion; the local interest in deciding local controversies at home; the public policies of the fora; and the familiarity of the trial judge with the applicable state law in diversity cases.

Id. at 879–80.³

Despite the many relevant considerations set forth by the Third Circuit, a transfer decision remains fundamentally case-specific, and Jumara provides little indication as to how a district court should weigh each factor. Over time, judges in Delaware have altered their approach to this analysis, with decisions splitting roughly along two methodological branches. The court will refer to these branches as the “Affymetrix approach” ⁴ and the “modern approach.” ⁵ While the two methods are substantively quite similar, the court fears the several formalistic differences that do exist have complicated the discussion of § 1404(a) in this district.

2. Common Elements

In resolving this confusion, it is perhaps useful to begin with an examination of the key elements that these approaches do share. First, both rest upon the same fundamental inquiry: has the movant demonstrated that the balance of convenience tips strongly in favor of transfer? Compare Intellectual Ventures I, LLC v. Altera Corp., 842 F.Supp.2d 744, 750–51 (D.Del.2012), and Mitek Sys., Inc., 2012 WL 3777423, at *8,with Affymetrix, Inc. v. Synteni, Inc., 28 F.Supp.2d 192, 198 (D.Del.1998). Additionally, each method looks to the various Jumara factors—or a subset thereof—in assessing the aforementioned “balance of convenience.” Compare Intellectual Ventures I, 842 F.Supp.2d at 752–61,and Mitek Sys., Inc., 2012 WL 3777423, at *5–8,with Affymetrix, 28 F.Supp.2d at 197–208. Thus, under both approaches, the court effectively engages in a two-step inquiry. It examines the balance of convenience by looking to some or all of the Jumara factors (the “balance of convenience analysis”) and then determines if that balance of convenience strongly favors transfer (the “ ‘strongly favors' standard”). With these similarities in mind, the court now turns to a more thorough description of the two methods and the facial differences between them.

3. Differences Between the Approaches

The Affymetrix approach begins from an observation that a plaintiff's choice of forum is the paramount consideration in determining whether to transfer an action under § 1404(a). Affymetrix, 28 F.Supp.2d at 197. This observation, however, is separated from the weighing of the various Jumara factors. Rather than considering the mere fact of the plaintiff's forum preference within the balance of convenience analysis, the court shows deference to the plaintiff's selection by requiring the defendant to demonstrate that the interests of justice and convenience weigh strongly in favor of transfer.⁶Id. at 199. In other words, while the plaintiff's forum preference does make transfer less likely, it does so not as an individual Jumara factor but rather by “establishing the burden that a defendant must overcome in order to prevail on its motion to transfer.” ⁷Id. The Affymetrix court emphasized that this burden remains constant regardless of whether the plaintiff chooses to bring the action on it “home turf” or can offer “rational and legitimate” reasons for its forum selection.⁸See id. at 199–200.The plaintiff's forum choice is always the paramount consideration, and, as such, the ultimate inquiry remains...