Judge Albright Grants Defendants’ Motions To Transfer Venue When Only Practical Considerations and Court Congestion Weighed Against Transfer

Topia Tech, Inc. v. Dropbox Inc., et al., No. W-21-CV-01373-ADA, is a case brought by Topia, alleging that Dropbox infringes several patents related to sharing electronic files between multiple devices. After responding to Topia’s complaint, Dropbox moved to transfer venue to the Northern District of California (NDCA) and emphasized that potential witnesses and relevant records would be located in its headquarters there. On January 3, Judge Albright granted the defendant’s motion to transfer venue to the Northern District of California.

In related cases filed by Topia, Judge Albright severed and stayed cases against Defendants Sailpoint, Vistra, and Clear Channel under the customer suit exception and granted Defendant Dropbox’s motion to transfer to the NDCA.

In patent cases, motions to transfer under 28 U.S.C. § 1404(a) are governed by the law of the regional circuit. In the Fifth Circuit, “the preliminary question under § 1404(a) is whether a civil action ‘might have been brought’ in the [transfer] destination venue.” If the destination venue would have been a proper venue, then “[t]he determination of ‘convenience’ turns on a number of public and private interest factors, none of which can be said to be of dispositive weight.”

Dropbox argued that the case could have been brought in the NDCA, but Topia argued that it could not have because Dropbox failed to show whether venue would be proper for its codefendants. However, because the court severed the claims against the codefendants, the court found that venue would have been proper there. The court then proceeded to its analysis of the public and private factors.

The private factors include (i) the cost of attendance and the convenience for willing witnesses; (ii) the relative ease of access to sources of proof; (iii) the availability of compulsory process to secure the attendance of witnesses; and (iv) all other practical problems that make trial of a case easy, expeditious, and inexpensive.

The public factors include (i) the administrative difficulties flowing from court congestion; (ii) the local interest in having localized interests decided at home; (iii) the familiarity of the forum with the law that will govern the case; and (iv) the avoidance of unnecessary problems of conflict of laws with the application of foreign law.

The court first examined the private factors. The cost of attendance and convenience for willing witnesses is “[t]he most important factor in the transfer analysis.” Here, Dropbox argued that most of the relevant witnesses were located in the NDCA, and that the only other relevant Dropbox employees were located in Boston, Colorado, New York, Seattle, and outside the United States. Dropbox also argued that Topia’s witnesses were located in Washington and Nevada and were therefore closer to the NDCA than the Western District of Texas (WDTX). Topia argued that relevant witnesses from the codefendants were located in the WDTX, but the court held that because it severed the claims against the codefendants, it would consider potential witnesses from those entities under the “compulsory witness” factor.

The court found that the presence of Dropbox employees in the NDCA weighed in favor of transfer, and that the presence of Dropbox employees in the WDTX identified by Topia did not weigh against transfer because it “failed to show that these witnesses possess relevant knowledge of the accused products.” The court found that the presence of Dropbox employees in Seattle, California, and Oregon weighed slightly in favor of transfer and that employees in New York and Pennsylvania did not impact the analysis. The court likewise found that the presence of a Topia party witness in Tacoma, Washington, weighed in favor of transfer. Overall, the court found that this factor weighed in favor of transfer.

The court likewise found that the “relative ease of access to sources of proof” factor weighed in favor of transfer because even though some relevant documentation may be stored with Dropbox’s customers in the WDTX, both Topia’s and Dropbox’s relevant documents are likely located in or near the NDCA.

The court also found that the “availability of compulsory process to secure the attendance of witnesses” factor favored transfer because Dropbox identified a significant number of witnesses located in the NDCA. While Topia identified witnesses from Dropbox customers, including from the severed codefendants in Texas that they may want to call, Dropbox customers are available in both districts.

For the final private factor, the court held that practical considerations weighed against transfer because there was co-pending litigation in the WDTX involving the same patents. Dropbox argued that because both cases were in their early stages of litigation and involved different defendants and different accused products, this factor should not weigh against transfer. The court disagreed, holding that judicial economy would favor keeping related cases together in the same court, and that a court’s familiarity with the technology would expedite the cases, even though they involved different products and defendants.

The court then examined the public factors. First, the court held that the “administrative difficulties” factor weighed against transfer because the median time to trial in the WDTX was only 28.3 months, while it was 34.7 months in the NDCA. The court held that the “local interests” factor weighed slightly in favor of transfer because most of the events giving rise to the litigation took place in the NDCA. The court held that the “familiarity of the forum with the law that will govern the case” and “avoidance of unnecessary problems with conflicts of law” factors would be neutral.

The court continued its recent trend of summarizing its holdings regarding each factor in a table in its conclusion: