Virginia is for Virginians
A patent infringement suit against Facebook, YouTube, LinkedIn, and Photobucket is headed to California, after the defendants prevailed on their motion to transfer venue. The opinion reinforces a trend against giving choice of forum deference to patent holding companies, particularly if those companies formed shortly before the lawsuit. The opinion also makes clear that compliments about the Rocket Docket do not help a plaintiff stay in Virginia.
District Judge Leonie M. Brinkema transferred Pragmatus AV, LLC v. Facebook, Inc. et al, case no. 1:10cv1288, from the U.S. District Court for the Eastern District of Virginia to the U.S. District Court for the Northern District of California, by memorandum opinion and order dated January 27, 2011.
The case involves three patents related to the storage, distribution, and playback of media files. The inventors, the owners of the IP while the patents were pending, and lawyer who prosecuted the original applications are located in California. Three of the four defendants are headquartered in the Northern District of California, and the fourth has offices in Denver and San Francisco. None have any relevant personnel or evidence in Virginia. Pragmatus, the plaintiff, is a patent holding company that was incorporated in Virginia one week after acquiring the patents in June 2010. Suit was filed in November 2010. One of the two owners of Pragmatus has lived in Alexandria, Virginia, four days per week since 2007.
If these facts don’t sound like they show much of a connection to Virginia to you, you are getting the picture. After proceeding through the 28 U.S.C. 1404(a) two-step analysis and factors, Judge Brinkema concludes that they “weigh overwhelmingly” in favor of transfer.
Two interesting points emerge along the way.
First, following a January 5, 2011, Federal Circuit order in the In re Microsoft case, Judge Brinkema concludes that where a patent holding company was created in the forum shortly before the lawsuit, its choice of its “home” forum gets “minimal” weight (at least in the absence of other meaningful connections). The nature of the plaintiff – its lack of a business other than enforcing IP rights, often through litigation – explicitly is part of what leads the Court to discard deference to the plaintiff’s choice.
Second, the plaintiff argued that the Eastern District’s “Rocket Docket” status should weigh in its favor. On its face, this seems like a good tactic – after all, “docket conditions” are explicitly part of the 1404(a) analysis, and how can you go wrong complimenting a court?. The plaintiff noted that the average time to resolution is 10 months in the Eastern District of Virginia and 26 months in the Northern District of California and said that it wanted a “quick and efficient” resolution of its claims. The Court was unmoved. It explained that if it allowed those with “minimal” connections to the forum, like Pragmatus, to choose the forum because of the Court’s speed, that could lead to the Court being swamped with patent cases and unfairly slow cases for parties with “genuine connections” to the forum. Thus, the interests of justice favor transfer.
As we've noted in other posts, the Rocket Docket's procedures impose special challenges that can help or hurt a patent plaintiff or defendant. This opinion does not change those considerations, but it does shed light on what patent litigation properly can be maintained in the Eastern District of Virginia. In sum, if a patent plaintiff wants to take advantage of the Rocket Docket, the case needs a real connection to the forum, and patent holding companies in particular raise this concern. Moreover, in part to defend the Rocket Docket itself, complimenting the Court for its efficiency will not save such a plaintiff from transfer.
