EDVA Patent Case Against Virginia Companies Transferred to New York
Typically, a plaintiff can feel confident that a patent infringement claim filed in the Eastern District of Virginia against Virginia-based defendants will not be transferred – but that’s not always the case, as shown by Judge Hudson’s recent decision, found here, to transfer venue in Augme Tech’s., Inc. v. Gannett Co., Inc., et al., Case No. 3:11CV282, 2011 U.S. Dist. LEXIS 81605 (E.D.Va. July 26, 2011) (Hudson, J.).
Augme Tech's is an example of the increasingly common tactic of filing a “mass patent” case in which a plaintiff asserts infringement of the same patents against multiple independent defendants who are acting separately.
Despite some case law to the contrary, most EDVA judges are reluctant to sever individual defendants in such cases because of the risk of inconsistent claim constructions and verdicts. Thus, a plaintiff can draw out-of-state defendants into the EDVA’s faster docket by including Virginia defendants in the suit and using the presence of the Virginia defendants to defeat a motion to transfer venue.
That strategy did not work for Augme, which sued two defendants, Gannett and LucidMedia Networks, which were based in Virginia, and a third defendant, AOL, which has a substantial presence in Virginia, for infringement of patents for adding function to Internet web pages. Regardless of the Virginia defendants, Judge Hudson found that other factors required transfer of venue to New York.
The key considerations cited by the Court were:
- Virginia was not Augme’s home forum, and so Augme’s choice of forum was not entitled to any deference;
- Augme and AOL had been litigating a closely related action involving the same family of patents in the Southern District of New York for four years – which gave a strong appearance of forum-shopping to Augme’s Virginia action;
- New York was Augme’s (and AOL’s) home forum, and Augme was actively litigating claims there
In ordering transfer, Judge Hudson relied primarily on the interest of justice, particularly the risk of inconsistent judgments and the New York Court’s familiarity with the technology and the patent family at issue.
In the end, Augme will be forced to litigate in both forums, as Judge Hudson agreed to sever LucidMedia’s cross-claim for infringement of a separate patent and retain venue over that dispute.
