Case 2:12-cv-02823-JPM-tmp Document 39 Filed 02/13/13 Page 1 of 11 PageID 205
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TENNESSEE
`MEMPHIS DIVISION
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`B.E. TECHNOLOGY, L.L.C.,
`Plaintiff,
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`v.
`BARNES & NOBLE, INC.,
`Defendant.
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`Case No. 2:12-cv-02823-JPM-tmp
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`JURY TRIAL REQUESTED
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`DEFENDANT BARNES & NOBLE, INC.’S REPLY MEMORANDUM IN SUPPORT OF ITS
`MOTION TO TRANSFER VENUE PURSUANT TO 28 U.S.C. § 1404(a)
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`Case 2:12-cv-02823-JPM-tmp Document 39 Filed 02/13/13 Page 2 of 11 PageID 206
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`The Federal Circuit recently emphasized “the importance of addressing motions to
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`transfer at the outset of litigation,” noting that “Congress’ intent to prevent the waste of time,
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`energy and money and to protect litigants, witnesses and the public against unnecessary
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`inconvenience and expense” would be thwarted if “defendants must partake in years of litigation
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`prior to a determination on a transfer motion.” In re EMC Corp., No. 13-142 (Fed. Cir. Jan. 29,
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`2013) (attached as Ex. A). This especially apropos here where the factors weigh heavily in favor
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`of transfer.
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`B.E. does not dispute the fact that the vast majority of activities related to Barnes &
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`Noble’s accused NOOK® products take place at Barnes & Noble’s offices in Palo Alto,
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`California, where the accused NOOK products were designed and developed. It also does not
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`dispute that the majority of witnesses with knowledge regarding those subjects, including third-
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`party witnesses, are located in the Northern District of California, as are the majority of
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`documents related to the research, design and development of the accused NOOK products.
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`These facts alone warrant transfer of this case to the Northern District.
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`B.E.’s argument to avoid transfer rests almost entirely on the presence in Memphis of
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`Mr. Hoyle, CEO of B.E. and inventor of the 6,771,290 patent (“the ’290 patent”). B.E.’s
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`arguments against transfer do not and cannot overcome the substantial evidence favoring
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`transfer. Contrary to B.E.’s apparent belief, the location of a single witness in this district does
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`not outweigh the numerous party and third-party witnesses and documents located in the
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`transferee forum. Nor does the location of that one witness outweigh the clear evidence that B.E.
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`itself has no real presence in this district. B.E. is a non-practicing entity whose business consists
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`of attempting to license and/or litigate its patents rather than making or selling anything in this
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`district. B.E.’s principal address in Memphis is Mr. Hoyle’s home address, whereas it maintains
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`an office in Michigan and has since at least 2001. B.E. had 74 employees as of the filing of this
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`lawsuit, yet only one of them, Mr. Hoyle, is alleged to live in Tennessee. Finally, B.E.’s lead
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`counsel in this litigation is actually located in the Northern District of California. In short, B.E.’s
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`presence in this district is de minimus and entitled to little weight if any in the transfer analysis.
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`These facts, as explained in Barnes & Noble’s opening brief, demonstrate that the
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`Northern District of California is an overwhelmingly more convenient forum in which to litigate
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`this case than the Western District of Tennessee.
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`I.
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`ARGUMENT
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`A.
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`B.E.’s Choice of Forum is Not Entitled to Deference
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`B.E. argues that, as the plaintiff in this action, its choice of venue is entitled to deference.
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`However, that is not so when, as here, the plaintiff’s connections to the chosen forum are
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`minimal. In Hunter Fan Co. v. Minka Lighting, Inc., a case that B.E. itself cites, the Court
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`explained that a plaintiff’s “choice of forum is not entitled to the ordinary degree of deference
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`[if] Plaintiff maintains little connection to the [plaintiff’s chosen forum].” No. 06-2108 M1/P,
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`2006 WL 1627746 at *3 (W.D. Tenn. June 12, 2006) (quoting Tuna Processors, Inc. v. Hawaii
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`Int’l Seafood, 408 F. Supp. 2d 358, 260 (E.D. Mich. 2005). Furthermore, a plaintiff’s selection
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`of forum is entitled to less deference than usual if it chooses a forum that is not its home. Id.
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`B.E.’s connections to this district are so minimal that its selection of this forum should
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`not be accorded deference. B.E.’s entire argument to avoid transfer centers on the fact that
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`Mr. Hoyle resides in this district and has since 2006. Notably, however, the plaintiff in this
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`litigation is not Mr. Hoyle, but B.E. The Western District of Tennessee is not B.E.’s home
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`forum; B.E. is incorporated in Delaware and has maintained an office in Michigan since 2001.
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`In fact, according to the Tennessee Department of State, B.E.’s only Tennessee address is
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`actually Mr. Hoyle’s home address. B.E. was not even registered to do business in Tennessee
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`until September 6, 2012, the day before it began filing this and 18 similar lawsuits in the Western
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`District of Tennessee. Though B.E. employs 74 people, B.E. has not identified any of them,
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`except for Mr. Hoyle, as being located in Tennessee. See Google’s Mem. in Supp. of Its Mot. to
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`Transfer, Case No. 2:12-cv-2830, Dkt. No. 22 (“Google Transfer Mem.”), at Ex. C. Finally, as a
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`non-practicing entity existing only to license patents, B.E. does not actually manufacture or sell
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`any products here in the Western District of Tennessee.
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`B.
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`Private Interests Weigh Strongly in Favor of Transfer
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`Even if this Court determines that B.E.’s selection of forum is entitled to some deference,
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`transfer should still be granted because “the balance of convenience strongly favors transfer.”
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`Plough, Inc. v. Allergan, Inc., 741 F. Supp. 144, 148 (W.D. Tenn. 1990).
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`1. Witness Convenience Favors Transfer
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`The convenience of the witnesses in this case favors transfer. Barnes & Noble has
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`established that most of its witness, including the “employees most knowledgeable of the design,
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`development, and operation” of the accused products, are located within the Northern District of
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`California while no such witnesses are located in Tennessee. Declaration of Daniel Gilbert
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`(“Gilbert Decl.”) at ¶¶ 3, 5.
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`Additionally, since the filing of this motion, Barnes & Noble has learned that the
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`connection of this action to the Northern District is even stronger than previously realized. In its
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`infringement contentions, B.E. implicated, for the first time, Barnes & Noble products and/or
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`services with “programs, features, firmware, or applications” from two third-party companies,
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`Netflix and Hulu, both of which are headquartered in California. See Exs. B & C (printouts from
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`the California Secretary of State website on February 13, 2013, showing entity addresses for
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`Netflix and Hulu). In particular, Netflix is headquartered in the Northern District of California.
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`Hulu is headquartered in the Central District of California, within the subpoena power of the
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`Northern District of California.1 Witnesses with knowledge of those companies’ “programs,
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`features, firmware, or applications” are more likely to be located in California than anywhere
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`else.
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`By contrast, B.E.’s entire witness convenience argument rests on a single interested
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`witness, Mr. Hoyle, in spite of the fact that B.E. apparently has no other employees in Tennessee
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`and multiple employees in Michigan. As the CEO of a company that retained lead counsel in the
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`Northern District of California to initiate suit against Barnes & Noble and a number of other
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`companies located there, and a named inventor on the asserted patent, Mr. Hoyle has every
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`incentive to travel to California for trial and any inconvenience that would be occasioned by
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`requiring him to do so would be minimal compared to requiring Barnes & Noble to litigate in
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`this district.
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`B.E. criticizes Barnes & Noble for failing to identify specific party witnesses; however,
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`such specificity is not required at this early stage of the litigation. See Rinks v. Hocking,
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`No. 1:10-cv-1102, 2011 WL 691242, at *3 (W.D. Mich. Feb. 16, 2011) (stating that a party
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`asserting witness inconvenience “has the burden to proffer, by affidavit or otherwise, sufficient
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`details respecting the witnesses and their potential testimony to enable the court to assess the
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`materiality of evidence and the degree of inconvenience.”) (citing Koh v. Microtek Int’l, Inc.,
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`250 F. Supp. 2d 627, 636 (E.D. Va. 2003)). Barnes & Noble has provided sufficient details to
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`allow this Court to make that assessment. In its complaint, B.E. accuses the “Nook Simple
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`1 See Fed. R. Civ. P. 45; Brackett v. Hilton Hotels Corp., 619 F. Supp. 2d 810, 821 (N.D. Cal.
`2008) (explaining that “California district courts have the power to subpoena witnesses
`throughout the state pursuant to” Federal Rule 45(b)(2)(C) and state civil procedure); Cal. Civ. P.
`§ 1989.
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`Touch; Nook Simple Touch with GlowLight; Nook Color; Nook Tablet.” In its infringement
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`contentions, B.E. accuses several additional NOOK products. Barnes & Noble submitted the
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`Declaration of Daniel Gilbert, which explains that the employees responsible for “design,
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`development, and operation of NOOK products,” including “selecting and sourcing
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`components,” “developing the specifications,” and “developing software” for NOOK products
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`work at Barnes & Noble’s offices in Palo Alto, California. Gilbert Decl. ¶ 3. Mr. Gilbert also
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`declared that he is unaware of any employees with that information who are located in
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`Tennessee. The testimony of such material witnesses, no matter which individual employees are
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`ultimately identified, is plainly relevant to the issues in this case.
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`Moreover, Barnes & Noble could not have reasonably been asked to identify specific
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`witnesses at the time it filed its transfer motion on January 7, 2013. B.E. did not provide Barnes
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`& Noble with a full list of the accused products until that same day, when B.E. served its
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`infringement contentions. In fact, because B.E.’s infringement contentions fail to specify the
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`accused features and functionality of those products, they fail to satisfy the requirements of the
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`Local Patent Rules, and Barnes & Noble is still not fully able to identify specific material
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`witnesses and features that are actually accused of infringing the patent-in-suit. See Ex. D
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`(Letter from James Blackburn to counsel for B.E.).
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`2.
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`The Availability of Compulsory Process Favors Transfer
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`Various potential non-party witnesses have already been identified in this action,
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`including employees of Netflix and Hulu, as mentioned above, as well as at least ten prior art
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`witnesses. See Google Transfer Mem. at Ex. B. Most of these witnesses are located in
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`California and would thus be subject to the Northern District’s subpoena power should the case
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`be transferred. See fn. 1 supra. These non-party witnesses are outside the subpoena power of
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`this Court. By contrast, B.E. has not identified a single non-party witness located in Tennessee.
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`Accordingly, this factor weighs in favor of transfer. See In re Genentech, Inc., 566 F. 3d 1338,
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`1345 (Fed. Cir. 2009) (“The fact that transferee venue is a venue with usable subpoena power
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`here weighs in favor of transfer, and not only slightly.”)
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`3.
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`The Location of Sources of Proof Favors Transfer
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`B.E.’s assertion that “the majority of B.E.’s documents are and for years have been
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`maintained in the Western District of Tennessee” does nothing to shift the balance in its favor.
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`(Opp. 12). The volume of Barnes & Noble’s potentially relevant documents located in
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`California far exceeds the volume of B.E.’s potentially relevant documents maintained in
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`Tennessee. California is the locus of operative facts in this dispute. The location of the vast
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`majority of the documents related to the design, development and operation of the accused
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`NOOK products is the Northern District of California. Gilbert Decl. ¶ 4.2 In contrast, Tennessee
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`is the asserted location of B.E.’s documents related to the ’290 patent. Because the number and
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`volume of Barnes & Noble’s documents in California clearly must exceed those of B.E.’s
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`documents in Tennessee, this factor weighs in favor of transfer. See In re Acer Am. Corp., 626
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`F.3d 1252, 1256 (Fed. Cir. 2010); see also In re Genentech, Inc., 566 F.3d at 1345 (“In patent
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`infringement cases, the bulk of the relevant evidence usually comes from the accused infringer.
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`Consequently, the place where the defendant’s documents are kept weighs in favor of transfer to
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`that location.”).
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`B.E.’s argument that the location of documents “is increasingly less important in deciding
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`motions to transfer” because of the electronic nature of modern document production has been
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`2 Moreover, because B.E. has now implicated “Barnes & Noble products and/or services with
`programs, features, firmware, or applications” from Netflix and Hulu, both headquartered in
`California, even more of the potentially relevant documents in this case are located in California.
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`expressly rejected by the Federal Circuit on multiple occasions. Specifically, the Federal Circuit
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`has declared that even in the era of electronic storage and transmission of documents, the
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`location of documents should still play a substantial role in the venue analysis. In re Genentech,
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`Inc., 566 F.3d at 1346 (noting that an emphasis on electronic document storage and transmission
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`rather than document location “would render this factor superfluous.”) (citing In re Volkswagen
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`of Am., Inc., 545 F.3d 304, 316 (Fed. Cir. 2008) (en banc). Indeed, In re Link_A_Media Devices
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`Corp., a case B.E. cites, makes clear that “it is improper to ignore [this factor] entirely,” and that
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`a district court’s refusal to consider the location of sources of proof on the ground that the issue
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`was “outdated, irrelevant, and should be given little weight” amounted to a clear abuse of
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`discretion. 662 F.3d 1221, 1224 (Fed. Cir. 2011) (vacating and transferring to the Northern
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`District of California.)3
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`4.
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`The Convenience of Parties Favors Transfer
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`B.E. contends that the convenience of the parties weighs against transfer because
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`Mr. Hoyle resides in this District, and because it is “reasonable” to require large and wealthy
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`companies to litigate in jurisdictions in which they regularly conduct business. The relevant
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`inquiry is not, however, the relative wealth of the parties or the reasonableness of subjecting
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`Barnes & Noble to litigation in this District. Instead, the inquiry focuses on the “relevance and
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`materiality of the information the witness[es] may provide” and balancing the convenience of
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`those witnesses who have relevant and material information. In re Genentech, Inc., 566 F.3d at
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`1344-45. As previously demonstrated, this case centers on Barnes & Noble’s operations in
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`3 Plaintiff also suggests that the possibility that Barnes & Noble will produce documents to
`B.E.’s counsel in Northern California should render this factor neutral. This, of course, is
`irrelevant and would in no way lessen the inconvenience of litigating in Tennessee. (If anything,
`the fact that Plaintiff’s lead counsel is based in Northern California makes clear that litigating in
`Northern California is not inconvenient for Plaintiff.)
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`Northern California, where witnesses with information regarding the design and development of
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`the accused products are employed. Additionally, two non-parties based in California have been
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`specifically identified in B.E.’s infringement contentions and at least ten prior art witnesses are
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`also located there. Finally, most of the defendants in the other 18 related cases B.E. has filed in
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`this district are located or based in California and all have also moved or are expected to move
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`for transfer. This factor weighs heavily in favor of transfer.
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`C.
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`Public Interests Weigh Strongly in Favor of Transfer
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`1.
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`Court Congestion Does Not Weigh Against Transfer
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`B.E. argues that because of docket congestion, transfer to the Northern District of
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`California would “likely delay trial of this case by at least one year.” (Opp. 14-15). B.E. fails to
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`mention that the average docket of pending cases per Judge was actually higher in this District.
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`Furthermore, the previous year’s statistics do not provide an accurate snapshot of court
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`congestion. In 2010, this District actually had a longer than median time to trial than the
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`Northern District of California. See Google Transfer Motion Mem. at Ex. E (Judicial Caseload
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`Profile). Therefore, it appears that no adverse impact due to court congestion would result from
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`transfer. In any event, court congestion is “the most speculative” of the factors in the transfer
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`analysis and “should not alone outweigh all of those other factors.” In re Genentech, 566 F.3d at
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`1347.
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`2.
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`The Northern District of California Has a Strong Local Interest
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`B.E. has not disputed that the Northern District of California is the center of gravity of
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`the accused activity in this case. “If there are significant connections between a particular venue
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`and the events that gave rise to a suit, this factor should be weighed in that venue’s favor.” In re
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`Acer Corp., 626 F.3d at 1256. As mentioned, the vast majority of activities related to Barnes &
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`Noble’s accused NOOK products take place at Barnes & Noble’s offices in Palo Alto, in the
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`Northern District of California: The accused NOOK products were designed and developed
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`there, the majority of documents related to the research, design and development of the accused
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`NOOK products are located there, and the majority of witnesses with knowledge regarding those
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`subjects are located there. Likewise, at least seven of the defendants in the similar cases B.E. has
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`filed in this District also have offices, operations, and employees in the Northern District of
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`California. Thus, the Northern District of California has a strong localized interest in this case.
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`On the contrary, as explained here and in Barnes & Noble’s opening brief, B.E.’s ties and
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`the ties of this case to this District are very weak. B.E.’s claim that Barnes & Noble “sells goods
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`and services to Tennesseans on a massive scale” adds nothing to the analysis because “the sale of
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`an accused product that is sold nationwide does not create a substantial interest in any venue.”
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`Id. (citing In re Hoffmann-La Roche, Inc., 587 F.3d 1333, 1338 (Fed. Cir. 2009)).
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`3.
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`Judicial Efficiency Does Not Weigh Against Transfer
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`B.E. does not argue, nor could it, that judicial efficiency weighs against transfer. Any
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`such argument would be based on the familiarity with the ’290 patent this Court has gained since
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`the time that this lawsuit was filed. However, “[m]otions to transfer venue are to be decided
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`based on ‘the situation which existed when suit was instituted.’” In re EMC Corp., No. 13-142
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`at 5 (quoting Hoffman v. Blaski, 363 U.S. 335, 343 (1960)). Thus, “considerations of judicial
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`economy arising after the filing of a suit do not weigh against transfer.” Because this Court had
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`no familiarity of the patent-in-suit at the time these lawsuits were filed in this District (in fact, it
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`appears that the ’290 patent had never been sued upon previously in any District Court), no
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`judicial efficiencies weigh against transfer of this action.
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`II.
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`CONCLUSION
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`Barnes & Noble has met its burden in demonstrating that the Northern District of
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`California is by far the more convenient venue in which to litigate this matter. Barnes & Noble
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`respectfully requests that the Court grant its motion to transfer.
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`Respectfully submitted,
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`s/Mark Vorder-Bruegge, Jr.__________
`Mark Vorder-Bruegge, Jr. (#06389)
`WYATT, TARRANT & COMBS, LLP
`1715 Aaron Brenner Drive, Suite 800
`Memphis, TN 38120-4367
`Phone: 901.537.1010
`Facsimile: 901.537.1010
`mvorder-bruegge@wyattfirm.com
`Attorneys for Defendant
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