Case 2:12-cv-02781-JPM-cgc Document 34 Filed 02/19/13 Page 1 of 13 PageID 235
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF TENNESSEE
`WESTERN DIVISION
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`B.E. TECHNOLOGY, L.L.C.,
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`Plaintiff,
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`v.
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`GROUPON, INC.,
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`Defendant.
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`Civil Action No. 12-cv-02781-JPM-cgc
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`Hon. Jon Phipps McCalla
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`
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`DEFENDANT GROUPON, INC.’S REPLY MEMORANDUM IN SUPPORT OF ITS
`MOTION TO TRANSFER VENUE PURSUANT TO 28 U.S.C. § 1404(a)
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`

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`Case 2:12-cv-02781-JPM-cgc Document 34 Filed 02/19/13 Page 2 of 13 PageID 236
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`I.
`II.
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`III.
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`IV.
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`TABLE OF CONTENTS
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`B.E. TECH’S CHOICE OF VENUE IS NOT ENTITLED TO DEFERENCE. ............... 2
`THE PRIVATE FACTORS FAVOR TRANSFER. .......................................................... 3
`A.
`The Location of Proof in California Favors Transfer. ........................................... 3
`B. Witness Convenience Favors Transfer. ................................................................. 4
`C.
`Availability of Compulsory Process in California Favors Transfer. ..................... 5
`D.
`B.E. Tech Does Not Face a Material Burden......................................................... 7
`THE PUBLIC INTEREST FACTORS FAVOR TRANSFER. ......................................... 7
`A.
`Court Congestion Is Neutral. ................................................................................. 7
`B.
`The Northern District of California’s Strong Local Interest Favors
`Transfer. ................................................................................................................. 7
`CONCLUSION .................................................................................................................. 8
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`Case 2:12-cv-02781-JPM-cgc Document 34 Filed 02/19/13 Page 3 of 13 PageID 237
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`FEDERAL CASES
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`TABLE OF AUTHORITIES
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`Droplets, Inc. v. Amazon.com, Inc.,
`2:11-CV-392, 2012 WL 3578605 (E.D. Tex. June 27, 2012) ...................................................6
`
`Hunter Fan Co. v. Minka Lighting, Inc.,
`No. 06-2108 Ml/P, 2006 WL 1627746 (W.D. Tenn. June 12, 2006) ........................................2
`
`In re Acer Am. Corp.,
`626 F.3d 1252 (Fed. Cir. 2010)..............................................................................................3, 8
`
`In re Genentech, Inc.,
`566 F.3d 1338 (Fed. Cir. 2009)..................................................................................................4
`
`In re Link_A_Media Devices Corp.,
`662 F. 3d 1221 (Fed. Cir. 2011).................................................................................................4
`
`In re Microsoft Corp.,
`630 F.3d 1361 (Fed. Cir. 2011)..................................................................................................6
`
`In re Volkswagen of Am., Inc.,
`545 F.3d 304 (Fed. Cir. 2008) (en banc)....................................................................................4
`
`Int’l Commodities Exp. Corp. v. N. Pac. Lumber Co.,
`737 F. Supp. 242 (S.D.N.Y. 1990) ............................................................................................5
`
`Network Prot. Scis., LLC v. Juniper Networks, Inc.,
`2:10-CV-224-JRG, 2012 WL 194382 (E.D. Tex. Jan. 23, 2012) ..............................................3
`
`Nissim Corp. v. Time Warner, Inc.,
`No. 07-20624CIV, 2008 WL 540758 (S.D. Fla. Feb. 25, 2008) ...............................................5
`
`Rinks v. Hocking,
`No. 1:10-CV-1102, 2011 WL 691242 (W.D. Mich. Feb. 16, 2011) .........................................5
`
`Robocast, Inc. v. Apple, Inc.,
`No. CIV.A. 11-235-RGA, 2012 WL 628010 (D. Del. Feb. 24, 2012) ......................................6
`
`Tuna Processors, Inc. v. Hawaii Int’l Seafood, Inc.,
`408 F. Supp. 2d 358 (E.D. Mich. 2005) .....................................................................................2
`
`U.S. Ethernet Innovations, LLC v. Acer, Inc.,
`6:09-CV-448-JDL, 2010 WL 2771842 (E.D. Tex. July 13, 2010) ............................................6
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`RULES
`RULES
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`Fed. R. Civ. P. 45(b)(2)(C) ..............................................................................................................5
`Fed. R. Civ. P. 45(b)(2)(C) ............................................................................................................ ..5
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`Cal. Code Civ. P. § 1989..................................................................................................................5
`Cal. Code Civ. P. § 1989 ................................................................................................................ ..5
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`B.E. Technology, L.L.C. (“B.E. Tech”) admits that the threshold inquiry as to whether
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`this case should be transferred is satisfied. Namely, that this case could have been brought in the
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`Northern District of California. B.E. Tech also does not dispute that the Northern District of
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`California is the real “center of gravity” for this case, with many Groupon and third-party
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`witnesses identified within the Northern District of California. B.E. Tech further does not, and
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`cannot, dispute that the Northern District of California is: a.) the location of relevant Groupon
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`witnesses who develop and maintain the accused products, b.) the more convenient forum for at
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`least 10 non-party witnesses; c.) the only district with subpoena power over at least 6 non-party
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`witnesses; d.) the more convenient forum for at least 11 of the other defendants B.E. Tech has
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`sued in this district,1 e.) the more convenient forum for even B.E. Tech’s own counsel who is
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`located in the N.D. of California; and f.) a district with comparable trial statistics to those of the
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`Western District of Tennessee. For all these reasons, the Northern District of California has a
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`more significant interest in this dispute than the Western District of Tennessee, and is the more
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`convenient forum in which this litigation should progress.
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`Rather than deny or rebut many of the facts and argument supporting transfer to the
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`Northern District of California, B.E. Tech merely argues that a single employee (its CEO, Mr.
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`Hoyle) and the location of that single employee’s documents,2 combined with the fact that B.E.
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`Tech registered to do business in Tennessee days before filing suit, support maintaining this case
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`in the Western District of Tennessee. B.E. Tech further suggests that the Court consolidate 19
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`different patent litigations, a majority of whom seek transfer to the Northern District of
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`1 These defendants include Facebook, Inc., LinkedIn Corp., Groupon, Inc., Pandora Media, Inc., Barnes & Noble,
`Apple, Inc., Motorola Mobility Holdings LLC, Twitter, Inc., Sony Computer Entertainment America LLC,
`SonyMobile Communications (USA) Inc., and Sony Electronics Inc. Two additional defendants moved to transfer
`to the West Coast: Spark Networks (Central District of California) and Microsoft (Western District of Washington).
`2 B.E. Tech has likely already produced many, if not all, relevant documents pursuant to its production in this case
`of roughly 220 documents related to the patents and Mr. Hoyle’s prior attempts at forming a business.
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`-1-
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`California or elsewhere on the West Coast. However, the issue of consolidation is one that a
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`court in the Northern District of California can equally address, and it is not a factor that weighs
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`against transferring this case to the more convenient forum. Transfer of this case to the Northern
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`District of California should be granted.
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`I.
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`B.E. Tech’s Choice of Venue Is Not Entitled to Deference.
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`Deference may be accorded to a plaintiff’s selection of a forum as a “general rule,” but
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`“Plaintiff’s choice of forum is not entitled to the ordinary degree of deference [where] Plaintiff
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`maintains little connection to [the forum].” See Hunter Fan Co. v. Minka Lighting, Inc., No. 06-
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`2108 Ml/P, 2006 WL 1627746, at *3 (W.D. Tenn. June 12, 2006) (citing Tuna Processors, Inc.
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`v. Hawaii Int’l Seafood, Inc., 408 F. Supp. 2d 358, 361 (E.D. Mich. 2005)). In Hunter Fan Co.,
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`the Court denied transfer because the plaintiff was a Tennessee based company with design,
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`engineering, manufacturing facilities, and relevant patent records in the state. However, this
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`Court expressly distinguished its holding in Hunter Fan Co. from that in Tuna Processors, where
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`transfer was granted and no deference was accorded to plaintiff because plaintiff had “little
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`connection” to the chosen forum. Id. at *1, 4; Tuna Processors, 408 F. Supp. 2d at 360.
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`The situation presently before the court is similar to that in Tuna Processors. B.E. Tech
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`has little connection to the Western District of Tennessee. B.E. Tech attempts to deflect its lack
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`of connection by pointing to the fact that its single employee has lived within the district for a
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`period of time longer than B.E. Tech’s registration to do business within the district. However,
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`Mr. Hoyle is not the plaintiff in this case, B.E. Tech is. The fact that Mr. Hoyle lives within the
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`district does not change the fact that B.E. Tech has no real presence in this district, it has no
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`offices in the Western District of Tennessee, it continues to operate in Michigan, it claimed
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`Michigan as its principal place of business until filing suit in this district, it offers no products or
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`-2-
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`services in Tennessee, and it has additional employees in Michigan, not Tennessee. (See Hoyle
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`Decl. (Doc. 27-1).) Indeed, Mr. Hoyle’s own declaration makes clear that the only reason B.E.
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`Tech ever registered to do business in Tennessee was to file the currently pending lawsuits. (See
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`id. ¶ 8.) As such, B.E. Tech has no real, meaningful connection to the Western District of
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`Tennessee.
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`II.
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`The Private Factors Favor Transfer.
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`Even if B.E. Tech’s choice of forum were entitled to deference, which it is not, transfer
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`should still be granted because “the balance of convenience strongly favors transfer.” Hunter,
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`2006 WL 1627746, at *2 (internal quotes and citations omitted).
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`A.
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`The Location of Proof in California Favors Transfer.
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`B.E. Tech’s opposition ignores the fact that the overwhelming majority of highly relevant
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`documents in this case is located in the Northern District of California, not in the Western
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`District of Tennessee. As described in Groupon’s Motion, the design and development of much
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`of the accused products took place in the Northern District of California; thus, much of the
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`documents related to the design, development, and overall functionality of the accused products
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`exists in the Northern District of California. In contrast, B.E. Tech can only point to a collection
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`of documents in the Western District of Tennessee related to the patent it has asserted against
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`Groupon. Since the bulk of relevant documents is in the Northern District of California, this
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`factor still favors transfer. See Network Prot. Scis., LLC v. Juniper Networks, Inc., 2:10-CV-
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`224-JRG, 2012 WL 194382 (E.D. Tex. Jan. 23, 2012) (transfer favored where “there is no
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`indication that Plaintiff’s documents in [transferor forum] are substantial enough, whether in
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`terms of volume or importance, to counter […] documents in [transferee forum]”); see also In re
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`Acer Am. Corp., 626 F.3d 1252, 1256 (Fed. Cir. 2010) (“[I]t is unreasonable to suggest that
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`[plaintiff’s] evidence alone could outweigh the convenience of having the evidence from
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`multiple defendants located within the transferee venue of trial.”).
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`Furthermore, the Federal Circuit has expressly rejected B.E. Tech’s argument that the
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`location of documents “is increasingly less important in deciding motions to transfer” due to the
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`electronic nature of most documents. See In re Genentech, Inc., 566 F.3d 1338, 1346 (Fed. Cir.
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`2009) (describing how the electronic storage and transmission of documents should not play a
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`substantial role in the venue analysis, noting that if it did, it “would render this factor
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`superfluous”); see also In re Volkswagen of Am., Inc., 545 F.3d 304, 316 (Fed. Cir. 2008) (en
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`banc) (“That access to some sources of proof presents a lesser inconvenience now than it might
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`have absent recent developments does not render this factor superfluous.”). Indeed, In re
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`Link_A_Media Devices Corp., 662 F. 3d 1221 (Fed. Cir. 2011), a case B.E. Tech cites, makes
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`clear that “it is improper to ignore [this factor] entirely,” and that a district court’s refusal to
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`consider the location of sources of proof on the ground that the issue was “outdated, irrelevant,
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`and should be given little weight” amounts to a clear abuse of discretion. 662 F.3d 1221, 1224
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`(Fed. Cir. 2011). Moreover, even if B.E. Tech were correct that the location of documents is
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`entitled to little weight, that would only further cut against B.E. Tech’s alleged connections
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`between this case and the Western District of Tennessee, leaving the location of a single B.E.
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`Tech. employee as the only remaining connection.
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`B. Witness Convenience Favors Transfer.
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`Groupon has established, and B.E. Tech does not appear to dispute, that most of its
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`relevant witnesses, including, specifically, at least three current Groupon employees and
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`including one relevant third-party former employee, are located in the Northern District of
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`California. In response, B.E. Tech has identified only a single witness in an attempt to overcome
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`transfer: Mr. Hoyle. B.E. Tech urges that this Court find that a single witness outweighs the
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`convenience of what are likely to be dozens of witnesses in California. B.E. Tech’s logic should
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`be rejected. See Nissim Corp. v. Time Warner, Inc., No. 07-20624CIV, 2008 WL 540758, at *2
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`(S.D. Fla. Feb. 25, 2008) (granting transfer where the only potential witness in the forum state
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`was the CEO/inventor but where “[d]efendants ha[d] numerous potentially critical witnesses
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`residing in the Central District of California”); see also Int’l Commodities Exp. Corp. v. N. Pac.
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`Lumber Co., 737 F. Supp. 242 (S.D.N.Y. 1990) (granting transfer where plaintiff identified only
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`one witness in transferor district).
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`B.E. Tech also alleges that “Groupon offers no evidence about what the witnesses
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`identified in its Motion may testify and why they are important to this case.” However, that is
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`simply untrue. Groupon included the detailed declaration of Mr. David Thacker with its Motion
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`that identifies, by name and title, witnesses most knowledgeable about the “design, development,
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`maintenance, and operation of Groupon’s products and services” with regards to the accused
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`products. (See Thacker Decl. (Doc. 21-2).) Clearly the design, development, maintenance, and
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`operation of the accused products will be relevant in this patent infringement case. The level of
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`information provided by Groupon is more than sufficient “to enable a court to assess the
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`materiality of evidence and the degree of inconvenience.” Rinks v. Hocking, No. 1:10-CV-1102,
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`2011 WL 691242, at *3 (W.D. Mich. Feb. 16, 2011).
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`C.
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`Availability of Compulsory Process in California Favors Transfer.
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`B.E. Tech does not dispute, and cannot dispute, that the Northern District of California
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`holds subpoena power over numerous third-party witnesses, including at least one former
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`Groupon employee with information material to this case.3 Instead, B.E. Tech again attacks the
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`3 Notably, Fed. R. Civ. P. 45(b)(2)(C) in conjunction with Cal. Code Civ. P. § 1989 provide that compulsory process
`would be available within the entire state of California if this case were transferred to the N.D. California.
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`sufficiency of Groupon’s proof that third-party prior art witnesses actually still reside in
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`California, while completely ignoring Mr. Thacker’s declaration as to the location of potential
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`witness Suneel Gupta in San Francisco, based on personal knowledge. With regards to the third-
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`party prior art witnesses, Groupon has indeed provided sufficient evidence to infer that these
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`witnesses are located in California. See Robocast, Inc. v. Apple, Inc., No. CIV.A. 11-235-RGA,
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`2012 WL 628010, at *3 (D. Del. Feb. 24, 2012) (finding factor in favor of transfer where
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`defendants relied on last known locations for prior art witnesses, and where there was
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`“statistically greater likelihood that such witnesses would be within the subpoena power of the
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`Northern District of California than within the subpoena power of the District of Delaware”).
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`Clearly, many of the inventors cited in Groupon’s Motion are more likely to be in California than
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`in the Western District of Tennessee considering that they previously resided there. Courts
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`routinely acknowledge the importance of a prior art inventor’s testimony, and rely on the
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`location of prior art inventors in the transferee district in favoring transfer. See, e.g., In re
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`Microsoft Corp., 630 F.3d 1361, 1363 (Fed. Cir. 2011) (“[A]ll of [defendant’s] witnesses relating
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`to…prior art…technology reside in the [transferee district].”); U.S. Ethernet Innovations, LLC v.
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`Acer, Inc., 6:09-CV-448-JDL, 2010 WL 2771842 (E.D. Tex. July 13, 2010) (“[T]here are
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`potentially important non-party witnesses such as inventors, prior art witnesses, and the
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`prosecuting attorney [in the transferee district].”); Droplets, Inc. v. Amazon.com, Inc., 2:11-CV-
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`392, 2012 WL 3578605, at *4 (E.D. Tex. June 27, 2012) (finding “many prior art inventors with
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`knowledge and documents relevant to the validity issue reside in the Northern District of
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`California,” which “weighs heavily in favor of transfer”).
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`-6-
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`D.
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`B.E. Tech Does Not Face a Material Burden.
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`B.E. Tech also argues that it will be “materially burdened” if forced to bear the expense
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`of traveling to the Northern District of California. However, B.E. Tech appears to ignore the fact
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`that its own lawyers are located in the Northern District of California. Thus, any cost of a plane
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`ticket or hotel for Mr. Hoyle to travel to California would have to be offset by the cost of a plane
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`ticket and hotel for one or more of its lawyers to travel from California to Tennessee. Further,
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`Groupon is likely to have multiple witnesses, and possibly numerous willing third-party prior art
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`witnesses, who would need to travel to the Western District of Tennessee for trial. Whatever
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`financial loss that Mr. Hoyle may endure, it is likely outweighed by the inconvenience to the
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`multiple Groupon and third-party witnesses. Furthermore, if Mr. Hoyle is required to travel, it is
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`only as a direct result of his role as CEO of B.E. Tech, which chose to initiate this lawsuit.
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`III. The Public Interest Factors Favor Transfer.
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`A.
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`Court Congestion Is Neutral.
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`B.E. Tech argues that the Western District of Tennessee has a shorter median time from
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`filing to trial, and fewer intellectual property cases, but ignores that the average docket of
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`pending cases per judge is actually higher in the Western District of Tennessee than in the
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`Northern District of California. Regardless, as this case would be governed by local patent rules
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`in both districts, this factor is neutral, and is outweighed by all the other factors which favor
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`transfer.
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`B.
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`The Northern District of California’s Strong Local Interest Favors
`Transfer.
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`Plaintiff has not disputed that the Northern District of California is the center of gravity
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`of the accused activity in this case, arguing instead that the Court should ignore this fact because
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`of B.E. Tech’s allegedly strong connections to this forum. As discussed above, B.E. Tech’s ties
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`to this District are weak, and were created primarily for purposes of this litigation. Moreover,
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`B.E. Tech’s claim that this District has a strong interest in this case because “Groupon makes its
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`daily deal website available to Tennesseans on a massive scale” should also be rejected, because
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`“the sale of an accused product that is offered nationwide does not create a substantial interest in
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`any venue.” In re Acer Am. Corp., 626 F.3d at 1256. Because Groupon and the center of its
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`activities relevant to this case are located in the Northern District of California, the Northern
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`District of California has a stronger local interest in this case.
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`IV. Conclusion
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`For all these reasons, Groupon has demonstrated that the Northern District of California
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`is the more convenient forum for this case, and this Court should grant Groupon’s Motion.
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`Respectfully submitted,
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`
`
`/s/ John S. Golwen
`John S. Golwen (TN BPR #014324)
`Annie T. Christoff (TN BPR #026241)
`BASS, BERRY & SIMS, PLC
`100 Peabody Place, Suite 900
`Memphis, Tennessee 38103
`Telephone:
`(901) 543-5900
`Facsimile:
`(901) 543-5999
`Email: jgolwen@bassberry.com
`achristoff@bassberry.com
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`
`Of counsel:
`Jeanne M. Gills
`Jason J. Keener
`FOLEY & LARDNER LLP
`321 North Clark Street, Suite 2800
`Chicago, Illinois 60654
`Telephone:
`(312) 832-4500
`Facsimile:
`(312) 832-4700
`Email: jmgills@foley.com
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`jkeener@foley.com
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`Attorneys for Defendant, Groupon, Inc.
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`CERTIFICATE OF SERVICE
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`The foregoing document was filed under the Court’s CM/ECF system, automatically
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`effecting service on counsel of record for all other parties who have appeared in this action on
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`the date of such service.
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`/s/ John S. Golwen
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`11622230.3
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`-9-