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2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 1 of 19 Pg ID 1280
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`FORD MOTOR COMPANY,
`
`Plaintiff,
`
`
`
`
`
`v.
`
`VERSATA SOFTWARE, INC. et al.
`
`Defendants.
`
`_________________________________/
`
`Case No. 15-cv-10628
`(consolidated with Case No. 15-11624)
`Hon. Matthew F. Leitman
`
`OPINION AND ORDER DENYING DEFENDANTS’ MOTION TO
`DISMISS, OR ALTERNATIVELY TO TRANSFER THIS ACTION TO THE
`EASTERN DISTRICT OF TEXAS (ECF #18)
`
`INTRODUCTION
`
`
`
`For roughly
`
`ten years, Defendants Versata Software, Inc., Trilogy
`
`Developmental Group, Inc., and Trilogy, Inc. (collectively, “Versata”) licensed a
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`sophisticated computer software system called “ACM” to Plaintiff Ford Motor
`
`Company (“Ford”). Last year, Ford decided that it would not renew its license
`
`with Versata and would, instead, develop its own software to replace the ACM
`
`software. Ford primarily directed the development of the replacement software
`
`from its offices in this judicial district; performed much of the actual development
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`work here; and operates the replacement software on its computer servers here.
`
`Ford and Versata dispute whether Ford’s replacement software infringes
`
`Versata’s software patents. That dispute has resulted in two federal civil actions:
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`1
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`FORD 1224
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`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 2 of 19 Pg ID 1281
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`this action filed by Ford against Versata (the “Ford Action”) and a related action
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`filed by Versata against Ford in the United States District Court for the Eastern
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`District of Texas (the “Versata Action”). In the Ford Action, Ford seeks a
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`declaratory judgment that it “has not infringed any intellectual property rights
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`owned by [Versata].” (Ford’s First Amended Complaint, ECF #6 at 1, Pg. ID 150.)
`
`In the Versata Action, Versata alleges that Ford infringed its patents and
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`misappropriated its intellectual property. (See Versata’s Complaint, ECF #18-6 at
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`3-34, Pg. ID 409-440.) The two actions are substantially similar and address much
`
`of the same subject matter.
`
`
`
`Versata now asks this Court to either (1) dismiss the Ford Action or (2)
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`transfer the action to the Eastern District of Texas so it can be consolidated with
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`the Versata Action (the “Motion to Dismiss/Transfer”). (See ECF #18.) Versata
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`argues that the Eastern District of Texas is a more appropriate forum. This Court
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`disagrees. This dispute is fundamentally about conduct undertaken by Ford within,
`
`and/or directed by Ford from, this district. Moreover, many important witnesses
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`reside in this district, and the Court sees no meaningful connection between this
`
`dispute and the Eastern District of Texas. Accordingly, for the reasons explained
`
`in more detail below, Versata’s Motion to Dismiss/Transfer is DENIED.
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`
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`2
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`FORD 1224
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`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 3 of 19 Pg ID 1282
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`RELEVANT FACTUAL BACKGROUND AND PROCEDURAL HISTORY
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`
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`Ford is an automobile manufacturer with its headquarters and principal place
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`of business in Dearborn, Michigan. (See Frist Am. Compl. at ¶1.) Versata is a
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`software developer with its headquarters and principal place of business in Austin,
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`Texas. (See Declaration of Greg Gunwall, Versata’s Vice President of Product
`
`Development, ECF #18-2 at 2, ¶3, Pg. ID 349.) Dearborn is located in the Eastern
`
`District of Michigan. Austin is located in the Western District of Texas.
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`
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`From 2004-2015, Ford licensed a software system from Versata called
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`“ACM” pursuant to an annual licensing agreement. (See id. at 3, ¶¶ 8-9, Pg. ID
`
`350.) Versata says that the ACM software allowed Ford to “create, manage, and
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`store configuration models [of automobiles] and enable[d Ford to conduct] …
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`transactions based on [the] configuration models.” (Declaration of Seth Krauss,
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`former Versata consultant and software developer, ECF #18-3 at 2-3, ¶5, Pg. ID
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`398-399.) In mid-2014, Ford and Versata began negotiating a renewal of the
`
`annual license for the ACM software. (See Gunwall Decl., ECF #18-2 at 3, ¶10,
`
`Pg. ID 350.) Ford and Versata were unable to reach an agreement and the
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`negotiations “ultimately broke down.” (Id.) Ford then developed its own software
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`to replace Versata’s ACM software. According to Ford Program Manager Michael
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`Sullivan, “[t]he design, development and administration of Ford’s replacement
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`configuration software … took place primarily at Ford in southeast Michigan.”
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`3
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`(Sullivan Declaration, ECF #33 at 2, ¶9, Pg. ID 906-907; see also Sullivan
`
`Deposition at 308, ECF #48-2 at Pg. ID 1126.) In addition, Sullivan says that the
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`“source code” for Ford’s new software is “located in Dearborn” and the software
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`“runs on a server located at a secure Ford data center in Dearborn.” (See id. at 3,
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`¶¶ 11-12, Pg. ID 907; see also Sullivan Dep. at 308, ECF #48-2 at Pg. ID 1126.)
`
`
`
`On December 19, 2014, during a meeting between Versata and Ford at
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`Ford’s Dearborn, Michigan headquarters, Ford informed Versata that it “had
`
`decided to decommission ACM and replace [it] with software Ford had developed
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`internally.” (Declaration of Lance Jones, outside counsel for Versata, ECF #18-5
`
`at 2, ¶4, Pg. ID 405; see also Declaration of Jennifer Qussar, Ford Contracts
`
`Manager, ECF #36 at 2, ¶¶ 3-4, Pg. ID 940.) According to Ford, during this
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`December 19 meeting, Versata’s outside counsel Lance Jones (“Jones”) “made
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`statements to the effect that Ford’s replacement software ‘must’ violate Versata’s
`
`intellectual property including trade secrets and confidential information.” (Qussar
`
`Decl., ECF #36 at 2, ¶5, Pg. ID 940.)1 Jones denies making those statements and
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`further contends that Versata never “threatened Ford with litigation” during that
`
`meeting. (Jones Decl., ECF #18-5 at 3, ¶7, Pg. ID 406.)
`
`                                                            
`1 Ford insists this was not the only time Versata accused Ford of infringing its
`patents. Ford says Versata made a similar accusation during a February 2014
`meeting. (See Declaration of Ford Direct employee Jeffrey Krupp, ECF #35 at 2,
`¶5, Pg. ID 938.)
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`4
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`FORD 1224
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`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 5 of 19 Pg ID 1284
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`
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`On February 19, 2015, Ford filed the Ford Action against Versata in this
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`Court. (See ECF #1.) Ford did not immediately serve Versata with its Complaint.
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`Instead, Damian Pocari (“Pocari”), who works for a Ford subsidiary, e-mailed a
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`courtesy copy of the Complaint to Jones and “invited Jones to call [him] the
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`following day to discuss the matter.” (Declaration of Damian Pocari, ECF #32 at
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`2, ¶2, Pg. ID 903.) Jones and Pocari then spoke by phone on February 20.
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`According to Jones, during this conversation Pocari said that “Ford had sued
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`Versata to establish venue in Michigan because Ford was concerned about Versata
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`filing suit first in Texas.” (Jones Decl., ECF #18-5 at 3, ¶9, Pg. ID 406.) Pocari
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`“do[es] not recall making” those statements. (Pocari Decl., ECF #32 at 2, ¶3, Pg.
`
`ID 903.)
`
`
`
`For approximately the next eight weeks, the parties engaged in settlement
`
`negotiations, but they failed to resolve their dispute. (See id. at 2, ¶4, Pg. ID 903.)
`
`On May 7, 2015, Versata filed the Versata Action against Ford in the United States
`
`District Court for the Eastern District of Texas. (See ECF #18-6 at 3-34, Pg. ID
`
`409-440.) Versata served Ford with a copy of the Versata Action that same day
`
`(May 7). (See Declaration of Steven Mitby, ECF #18-6 at 2, ¶2, Pg. ID 408; see
`
`also Pocari Decl., ECF #32 at 3, ¶6, Pg. ID 904.) Ford thereafter served Versata
`
`with the Ford Action.
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`5
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`FORD 1224
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`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 6 of 19 Pg ID 1285
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`
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`On June 29, 2015, Versata filed the Motion to Dismiss/Transfer in which it
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`asks this Court to either (1) dismiss the Ford Action or (2) transfer the action to the
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`Eastern District of Texas, where the Versata Action is pending. (See ECF #18.)
`
`Ford filed a response (see ECF #31); Versata filed a reply (see ECF #45); Ford
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`filed a surreply (see ECF #48); and, finally, Versata filed a sur-surreply (see ECF
`
`#49.) The Court then held a hearing on the Motion to Dismiss on September 22,
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`2015.
`
`A.
`
`
`GOVERNING LEGAL STANDARD
`
`Federal Circuit Law Controls the Motion to Dismiss/Transfer
`
`When presiding over a patent case, a district court applies “the law of the
`
`circuit in which the district court sits” to non-patent issues and the law of the
`
`Federal Circuit “to issues of substantive patent law and certain procedural issues
`
`pertaining to patent law.” In Re Cambridge Biotech Corp., 186 F.3d 1356, 1368
`
`(Fed. Cir. 1999). More specifically, a district court applies Federal Circuit law to
`
`procedural matters that arise “from substantive issues in areas of law within the
`
`unique jurisdiction of [the Federal Circuit].” Texas Instruments, Inc. v. Tessera,
`
`Inc., 231 F.3d 1325, 1328 (Fed. Cir. 2000).
`
`
`
`The Federal Circuit has squarely held that its law governs whether a first-
`
`filed action seeking a declaration of non-infringement should give way to a later-
`
`filed patent infringement action. See Electronics for Imaging, Inc. v. Coyle, 394
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`6
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`FORD 1224
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`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 7 of 19 Pg ID 1286
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`F.3d 1341, 1345-1346 (Fed. Cir. 2005); Genentech, Inc. v. Eli Lilly and Co., 998
`
`F.2d 931, 937 (Fed. Cir. 1993) overruled on other grounds by Wilton v. Seven Falls
`
`Co., 515 U.S. 277 (1995). And at least two district courts in this Circuit have
`
`applied Federal Circuit law when considering whether to dismiss a first-filed
`
`declaratory judgment action. See Healthspot, Inc. v. Computerized Screening, Inc.,
`
`66 F. Supp. 3d 962, 972 (N.D. Ohio 2014) (concluding that “Federal Circuit law
`
`governs [the] question” of whether court had jurisdiction over first-filed
`
`declaratory
`
`judgment action); Veteran Medical Products, Inc. v. Bionix
`
`Development Corp., 2006 WL 2644985, at *2 (W.D. Mich. Sept. 14, 2006) (“For
`
`purposes of deciding whether this Court should decline to exercise jurisdiction
`
`over [p]laintiffs’ first-filed [declaratory judgment] action in favor of [the
`
`defendants’] subsequently-filed [patent infringement] action, the Court must apply
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`Federal Circuit law”).
`
`
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`As counsel for both Ford and Versata acknowledged at the motion hearing,
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`these clear holdings require the application of Federal Circuit law to the questions
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`currently before the Court.
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`B.
`
`The Federal Circuit’s Forum-Selection Framework
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`
`
`When confronted with a motion to dismiss a first-filed declaratory judgment
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`action in favor of a later-filed infringement action, the Federal Circuit applies the
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`“general rule favoring the forum of the first-filed case, unless considerations of
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`7
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`FORD 1224
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`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 8 of 19 Pg ID 1287
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`judicial and litigant economy, and the just and effective disposition of disputes,
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`requires otherwise.” Electronics for Imagining, 394 F.3d at 1347 (emphasis
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`added). Under this rule, the party seeking dismissal of a first-filed declaratory
`
`judgment action has the burden to show a “sound reason that would make it unjust
`
`or inefficient to continue the [] action,” and the declaratory judgment action should
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`give way to the later-filed infringement action only if the latter action is pending in
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`“the forum in which all interests are best served.” Genentech, 998 F.2d at 937-938.
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`
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`The Federal Circuit has instructed that district courts have “unique and
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`substantial discretion” in applying the first-filed rule to declaratory judgment
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`actions, Electronics for Imaging, 394 F.3d at 1345, and it has directed district
`
`courts to consider the following factors in exercising that discretion:
`
`While it is true that a district court may consider whether
`a party intended to preempt another's infringement suit
`when ruling on the dismissal of a declaratory action, we
`have endorsed that as merely one factor in the analysis.
`Other factors include the convenience and availability of
`witnesses, or absence of jurisdiction over all necessary or
`desirable parties, or the possibility of consolidation with
`related litigation, or considerations relating to the real
`party in interest. The considerations affecting transfer to
`or dismissal in favor of another forum do not change
`simply because the first-filed action is a declaratory
`action.
`
`Id. at 1347-1348 (internal citations and punctuation omitted).
`
`
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`8
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`FORD 1224
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`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 9 of 19 Pg ID 1288
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`ANALYSIS
`
`A.
`
`
`
`The Court Will Not Dismiss the Ford Action Because Versata Has Not
`Shown it Would Be Unjust or Inefficient For the Parties to Proceed in
`This Forum or That the Eastern District of Texas is the Forum in
`Which All Interests Are Best Served
`
`This district is the most sensible forum in which to adjudicate the dispute
`
`between Ford and Versata. The fundamental disagreement between the parties is
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`whether Ford, acting in or from the Eastern District of Michigan2, infringed
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`Versata’s patents and/or misappropriated Versata’s trade secrets. Because the
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`alleged wrongdoing is centered in this judicial district, it was logical for Ford to
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`file the Ford Action here, and it is logical for the parties to litigate their dispute
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`here. Versata has not provided a “sound reason” as to why it would be “unjust or
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`inefficient” to continue the Ford Action in this district, nor has Versata shown that
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`the Eastern District of Texas is “the forum in which all interests are best served.”
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`Genentech, 998 F.2d at 937-938. Accordingly, the Court will not dismiss the Ford
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`Action
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`
`
`
`
`1.
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`Ford’s Alleged “Procedural Fencing”
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`The first factor in the Federal Circuit’s forum-selection framework is
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`“whether a party intended to preempt another’s infringement suit” by filing an
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`action seeking a declaration of non-infringement. Electronics for Imaging, 394
`                                                            
`2 To the extent Ford – or those working on Ford’s behalf – acted in other
`jurisdictions, Ford directed those actions largely from the Eastern District of
`Michigan. (See Sullivan Decl., ECF #33 at 2, ¶9, Pg. ID 906-907.)
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`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 10 of 19 Pg ID 1289
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`F.3d at 1347. Versata argues that this factor weighs strongly in favor of dismissal
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`because Ford filed the Ford Action in this Court solely to preempt Versata from
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`filing its infringement action in its chosen forum. (See Versata’s Motion to
`
`Dismiss, ECF #18 at 12-14, Pg. ID 333-335.) Versata insists that the Court should
`
`not reward Ford’s “rac[e] to the courthouse.” (Id. at 12, Pg. ID 333.)
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`But “the stakes of a race to the courthouse are less severe” in a patent action
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`because the creation and existence of the Federal Circuit “has in large part
`
`tempered the impact of traditional forum shopping.” Serco Services Company, L.P.
`
`v. Kelley Company, Inc., 51 F.3d 1037, 1039-40 (Fed. Cir. 1995). Indeed, the
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`Federal Circuit’s appellate jurisdiction over patent actions from all of the regional
`
`circuits has “create[d] national uniformity” in patent law that makes the choice of
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`forum far less significant. Veteran Medical Products, 2006 WL 2644985, at *3.
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`Thus, the mere fact that a declaratory judgment plaintiff filed first in order to
`
`secure a particular forum does not weigh heavily in favor of dismissal. See id. at
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`**3-4. It is “merely one factor in the analysis.” Electronics for Imaging, 394 F.3d
`
`at 1347.
`
`
`
`However, an anticipatory declaratory judgment filing may weigh more
`
`heavily in favor of dismissal “where the first-filer’s conduct was in bad faith or
`
`where the first-filer otherwise engaged in inequitable conduct.” Veteran Medical
`
`Products, 2006 WL 2644985, at *4. For example, “a court may permit a second-
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`10
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`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 11 of 19 Pg ID 1290
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`filed action to proceed ‘where the plaintiff in the first-filed action was able to file
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`first only because it had misled the filer of the second-filed action as to its
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`intentions regarding filing suit in order to gain the advantages of filing first.’” Id.
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`(quoting Brower v. Flint Ink Corp., 865 F. Supp. 564, 569 (N.D. Iowa 1994)).
`
`But that did not happen here. Ford did not say or do anything that lulled
`
`Versata into believing that (1) it (Ford) would not file its own action and/or (2)
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`Versata could refrain from filing suit secure in the knowledge that it could file first
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`in its chosen forum. Indeed, the Court does not consider Ford’s conduct in filing
`
`the Ford Action in this forum to have been in bad faith or inequitable. Ford had a
`
`good-faith basis to seek a declaratory judgment, and it filed the Ford Action in a
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`logical forum at a time the parties were not engaged in active settlement
`
`negotiations. Moreover, Ford did not act in bad faith by, for instance, hiding from
`
`Versata the fact that it filed the Ford Action. See, e.g., Zide Sport Shop of Ohio,
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`Inc. v. Ed Tobergate Associates, Inc., 16 Fed. App’x 433, 438 (6th Cir. 2001)
`
`(concluding that declaratory judgment plaintiff acted in bad faith where plaintiff
`
`“did not inform defendants that a federal action had been filed against them”)3. On
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`the contrary, Ford sent Versata a courtesy copy of the Complaint as soon as Ford
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`                                                            
`3 Zide Sport Shop of Ohio did not apply the Federal Circuit forum-selection
`framework applicable here, but its conclusion that a declaratory judgment plaintiff
`acted in bad faith by not informing the defendants that it had filed suit has some
`relevance to the Court’s analysis of whether Ford acted in bad faith here.
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`11
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`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 12 of 19 Pg ID 1291
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`filed it, and Ford then engaged in settlement discussions with Versata. (See Pocari
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`Decl., ECF #32 at 2, ¶2, Pg. ID 903.) That is not bad faith.4
`
`Two decisions from district courts in this Circuit (applying Federal Circuit
`
`law) confirm that Ford’s act of filing first does not amount to bad faith and does
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`not weigh heavily in favor of dismissal. In Veteran Medical Products, supra, the
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`declaratory judgment plaintiffs received a letter from the defendant threatening to
`
`file suit if the plaintiffs did not accept the terms of a proposed consent judgment by
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`a specific deadline. See Veterans Medical Products, 2006 WL 2644985, at *2.
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`Before the deadline expired, the plaintiffs filed their own suit in their preferred
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`forum seeking a declaration of non-infringement. See id. The court concluded that
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`the filing was not an act of “bad faith” and that the declaratory judgment plaintiffs
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`“were entitled, rather than to continue to negotiate, to file suit seeking a declaration
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`that they have neither infringed on [the declaratory judgment defendant’s] patent
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`nor misappropriated its trade secrets.” Id. at *4. Likewise, in Healthspot, supra,
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`the district court concluded that a declaratory judgment plaintiff did not act in bad
`
`faith when it filed its declaratory action in response to a deadline presented by the
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`                                                            
`4 Versata argues that “[t]he Court cannot allow a party to secure a more favorable
`forum by filing an action for declaratory judgment when it has notice that the other
`party intends to file suit involving the same issues in a different forum.” (Versata
`Mot. to Dismiss at 12, Pg. ID 333, quoting Innovation Ventures, L.L.C. v. CB
`Distributors, Inc., 652 F. Supp. 2d 841, 844 (E.D. Mich. 2009) (emphasis added).)
`But Versata specifically denied that it threatened to file suit. (See Jones Decl.,
`ECF #18-5 at 3, ¶7, Pg. ID 406.)  
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`defendant but never said that it would “refrain from filing suit.” Healthspot, 66 F.
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`Supp. 3d at 973-974 (denying motion to dismiss first-filed declaratory judgment
`
`action in favor of second-filed infringement action).
`
`Furthermore, Ford’s actions here pale in comparison to the actions taken by
`
`the plaintiffs in the cases cited by Versata in which courts have held that first-filers
`
`acted in bad faith. For example, in AmSouth Bank v. Dale, 386 F.3d 763 (6th Cir.
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`2004), the declaratory judgment plaintiff “race[d] to the courthouse” after it “had
`
`signed a tolling agreement, indicating some willingness to negotiate a settlement
`
`rather than forcing a legal action, had engaged in preliminary negotiations, and had
`
`in fact asked for a formal settlement demand that was being prepared as it filed
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`suit.” Id. at 787. Likewise, in Foundations Worldwide Inc. v. Oliver & Tate
`
`Enterprises, 2013 WL 4054636 (N.D. Ohio Aug. 12, 2013), the declaratory
`
`judgment plaintiff engaged in a “series of delay tactics” – including asking the
`
`declaratory judgment defendant, on multiple occasions, to push back the filing of
`
`its own infringement suit while the parties negotiated a potential settlement – in
`
`order to “buy [itself] enough time to file [its] own Complaint to secure [its]
`
`preferred forum.” Id. at **3-4.5 Ford never took any of these actions. On balance,
`
`Ford’s act of filing first – even if done to secure this forum – does not weigh
`
`heavily in favor of dismissal.
`                                                            
`5 Moreover, AmSouth and Foundations Worldwide did not involve patent disputes,
`and the courts in those cases applied Sixth Circuit law, not Federal Circuit law.
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`
`
`
`
`2.
`
`The Convenience and Availability of Witnesses
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`The next factor the Court must consider is the convenience and availability
`
`of witnesses. This factor strongly favors adjudicating the parties’ dispute in this
`
`forum. As described above, the conduct at issue in this action is Ford’s
`
`development and implementation of software to replace Versata’s ACM software,
`
`and Ford largely completed that process within, and/or directed it from, this
`
`district. (See Sullivan Decl., ECF #33 at 2, ¶9, Pg. ID 906-907; see also Sullivan
`
`Dep. at 308, ECF #48-2 at Pg. ID 1126.) In addition, Ford has provided the Court
`
`the names of 33 third-party witnesses “who assist[ed] Ford in the design,
`
`development and launch of Ford’s replacement software” and who “reside in and
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`around” this district. (See Sullivan Decl. at 4-5, ¶15, Pg. ID 908-909.) Finally,
`
`Versata’s “primary point of contact with Ford,” Michael Richards, lives in Novi,
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`Michigan, less than thirty miles from the Court. (See id. at 5-6, ¶16, Pg. ID 909-
`
`910.) The location of so many potentially important witnesses in this district
`
`weighs strongly in favor of adjudicating the parties’ dispute here.
`
`
`
`Versata counters that “important witnesses regarding Versata’s patent and
`
`trade secret claims,” including many third-party witnesses, “live and work in
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`Austin, Texas” where Versata is located and where the ACM software was
`
`designed. (Versata Mot. to Dismiss at 20, Pg. ID 440; see also Gunwall Decl.,
`
`ECF #18-2 at 2-3, ¶¶ 4-5, Pg. ID 349-350.) Versata also points out that its
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`headquarters is in Austin, and that all of its key employees, such as its CEO, CFO,
`
`and COO are located in Austin. (See Gunwall Decl., ECF #18-2 at 2-3, ¶¶ 4-5, Pg.
`
`ID 349-350.) But Versata did not file the Versata Action in Austin (or even in the
`
`judicial district that includes Austin, the Western District of Texas). Instead,
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`Versata filed suit in Sherman, Texas – which lies in the Eastern District of Texas,
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`approximately 250 miles from Austin.6
`
`
`
`Versata has not identified a single witness who is located in the Eastern
`
`District of Texas. And while Versata highlights that Ford has a regional sales
`
`office in the Eastern District of Texas, it has not shown that any Ford employees
`
`from that office have any meaningful connection to the current dispute between the
`
`parties. Moreover, Versata acknowledged at the motion hearing that many of its
`
`own witnesses have agreed to fly to Sherman, if necessary, to testify at potential
`
`hearings and trials in the Versata Action. It would not be substantially more
`
`inconvenient for these witnesses to fly to Detroit instead.
`
`
`
`Considering the many witnesses who reside in this judicial district, the
`
`absence of any relevant witnesses in the Eastern District of Texas, and the fact that
`
`                                                            
`6 To put the distance between Sherman, Texas, and Austin, Texas, in some
`perspective, Detroit, Michigan (the home of this Court) is closer to Toronto,
`Ontario, Canada
`(approximately 230 miles), Niagara Falls, New York
`(approximately 240 miles), and Cleveland, Ohio (approximately 170 miles), than
`Sherman is to Austin. The distance between the courthouses in Austin and
`Sherman thus lives up to Texas’s unofficial state motto: “Everything is bigger in
`Texas.”
`
`15
`
`FORD 1224
`
`

`
`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 16 of 19 Pg ID 1295
`
`Versata’s witnesses will have to fly to judicial proceedings even if they were held
`
`in Versata’s chosen forum, the convenience-of-witnesses factor weighs strongly in
`
`favor of litigating the parties’ dispute in this district.
`
`3.
`
`The Absence of Jurisdiction Over All Necessary or Desirable
`Parties
`
`
`It is undisputed that this Court has personal jurisdiction over both Ford and
`
`Versata. Therefore, this factor does not favor dismissal of the Ford Action.
`
`4.
`
`The Possibility of Consolidation with Related Litigation
`
`
`
`The Versata Action could be consolidated with, and made part of, the Ford
`
`Action pending here. Thus, the entire dispute between the parties could be
`
`resolved in this judicial district. This factor therefore does not weigh in favor of
`
`dismissing the Ford Action.
`
`
`
`
`
`5. Other Relevant Factors in the Court’s Forum Selection Analysis
`
`Versata presents two additional arguments as to why the Court should
`
`decline to exercise jurisdiction over the Ford Action. Neither persuades the Court
`
`that dismissal is appropriate here.7
`
`
`
`First, Versata argues that it “maintains its corporate books and records in
`
`Texas” and that the “accessibility of physical evidence favors Texas.” (Versata
`
`Mot. to Dismiss at 21, Pg. ID 442.) But Versata concedes that “the physical
`                                                            
`7 Neither party has addressed the final factor of the Federal Circuit’s forum-
`selection framework – considerations relating to the real party in interest – and the
`Court does not find that factor particularly relevant here.
`
`16
`
`FORD 1224
`
`

`
`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 17 of 19 Pg ID 1296
`
`evidence in this case largely consists of electronically-stored information” (id.),
`
`and this information can easily be accessed anywhere. Moreover, to the extent
`
`Versata maintains records in “Texas,” it does so in Austin which is 250 miles away
`
`from the court in which the Versata Action is pending. Thus, the location of
`
`physical evidence does not favor dismissing the Ford Action.
`
`
`
`Second, Versata argues that “[s]ubstantial activity has already occurred in
`
`the Texas case.” (Id. at 23, Pg. ID 444.) Versata explains that the court in the
`
`Eastern District of Texas set a scheduling conference and “proposed a scheduling
`
`order with a trial setting of January 2017.” (Id.) Versata also contends that the
`
`dispute could be resolved in that court much faster than it would be resolved here.
`
`But the district court in the Versata Action adjourned the scheduling conference,
`
`and it is not clear that the January 2017 trial date remains a firm date. And even if
`
`the court in the Eastern District of Texas will be in a position to try this case before
`
`this Court, that timing would not outweigh the many other factors that support
`
`keeping the action here.
`
`
`
`Versata has failed to satisfy its burden to show that the Court should not
`
`exercise its jurisdiction over the Ford Action. The Court will therefore deny
`
`17
`
`Versata’s motion to dismiss.
`
`
`
`FORD 1224
`
`

`
`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 18 of 19 Pg ID 1297
`
`B.
`
`
`
`
`The Court Will Not Transfer the Ford Action to the Eastern District of
`Texas
`
`Versata has also asked the Court to transfer the Ford Action to the Eastern
`
`District of Texas pursuant to 28 U.S.C. § 1404(a). As Versata’s counsel
`
`acknowledged at the motion hearing, the analysis of Versata’s transfer request
`
`closely parallels the analysis of Versata’s request that the Court dismiss the Ford
`
`Action. Indeed, “when the discretionary determination of whether to entertain a
`
`declaratory judgment action is presented after the filing of an infringement action,
`
`the jurisdiction question is basically the same as a transfer action under 28 U.S.C. §
`
`1404(a).” Healthspot, 66 F. Supp. 3d at 973 (internal brackets omitted) (quoting
`
`Micron Technology, Inc. v. Mosaid Technologies, Inc., 518 F.3d 897, 904 (Fed.
`
`Cir. 2008)).
`
`
`
`For all of the reasons stated above, the Court does not believe that transfer is
`
`warranted here. Accordingly, this district is the more appropriate forum in which to
`
`adjudicate this action. The Court will therefore deny Versata’s request to transfer.
`
`CONCLUSION
`
`
`
`For the reasons stated above, IT IS HEREBY ORDERED that Versata’s
`
`Motion to Dismiss or Alternatively to Transfer This Action to the Eastern District
`
`of Texas (ECF #18) is DENIED.
`
` 
` 
` 
` 
` 
`
`
`
`
`
`Dated: October 14, 2015
`
` 
`
`
`
`
`s/Matthew F. Leitman
`MATTHEW F. LEITMAN
`UNITED STATES DISTRICT JUDGE
`
`
`
`
`
`
`
`18
`
`FORD 1224
`
`

`
`2:15-cv-10628-MFL-EAS Doc # 55 Filed 10/14/15 Pg 19 of 19 Pg ID 1298
`
`I hereby certify that a copy of the foregoing document was served upon the
`
`parties and/or counsel of record on October 14, 2015, by electronic means and/or
`ordinary mail.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`s/Holly A. Monda
`Case Manager
`(313) 234-5113
`
`
`
`
`
`
`
`19
`
`
`
`
`
`
`FORD 1224

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