Webroot, Inc. v. AO Kaspersky Lab.

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WEBROOT, INC. and OPEN TEXT, INC., Plaintiffs, v. AO KASPERSKY LAB, TREND MICRO, INC., SOPHOS LTD., FORCEPOINT, LLC, Defendants.

Nos. W-22-CV-00239-ADA-DTG, W-22-CV-00243-ADA-DTG (LEAD), W-22-CV-00240-ADA-DTG, W-22-CV-00342-ADA-DTG

United States District Court, W.D. Texas, Waco Division

January 5, 2024

ORDER DENYING DEFENDANT'S MOTION TO TRANSFER VENUE [ECF NO. 58], MOTION FOR RECONSIDERATION [ECF NO. 119] AND MOTION TO STAY [ECF NO. 123]

DEREK T. GILLILAND, UNITED STATES MAGISTRATE JUDGE

Before the Court is a motion, filed November 11, 2022, by Trend Micro to transfer this suit (22-cv-239) to the Northern District of California (“NDCA”) for convenience under 28 U.S.C § 1404. ECF No. 58. Plaintiffs filed their opposition on February 6, 2023. ECF No. 81. Trend Micro filed a reply in support of its motion on February 21, 2023. ECF No. 89. Plaintiffs filed a sur-reply on March 1, 2023. ECF No. 93. Trend Micro filed a sur-sur-reply on March 2 2023. ECF Nos. 96, 97. The Court held a hearing on the motion on March 7, 2023. The Court considered the issues and arguments presented and DENIED the motion to transfer at the hearing.

On November 14, 2023, Trend Micro filed a motion for reconsideration of the ruling on transfer and an opposed motion to stay pending issuance of a written order. ECF No 119. Plaintiffs filed a response to the motion for reconsideration on December 1, 2023. ECF No 130. Trend filed its Reply in support of its motion for reconsideration on December 8, 2023. ECF No. 134. Trend filed a motion on November 20, 2023, to stay the case pending a written order on transfer. ECF No. 123. Plaintiffs responded to the Motion to Stay on November 27, 2023. ECF No. 127. Trend filed a reply in support of its motion to stay on December 4, 2023. ECF No. 131.

This order memorializes the Court's ruling at the hearing on March 7, 2023. The Court has considered the arguments presented in the motion for reconsideration and motion to stay and finds that it should be DENIED. For the reasons discussed herein, the Court concludes that the NDCA is not a clearly more convenient venue to try this case; thus, it is not in the interest of justice for the Court to transfer this case. Therefore, the Court DENIES Trend Micro's Motion to Transfer.

I. FACTUAL BACKGROUND

This suit (22-cv-239) was filed on March 4, 2022, by plaintiffs Webroot, Inc. (“Webroot”) and Open Text, Inc., (“OTI”)^[1] alleging patent infringement against defendant Trend Micro, Inc. (“Trend”). This suit has been consolidated with three other cases against three defendants as captioned above. Plaintiffs filed an Amended Complaint on September 7, 2022. ECF No. 53. In the amended complaint, Plaintiffs allege infringement of eleven U.S. Patents.^[2] ECF No. 53 ¶ 13.

Trend's counterclaims allege plaintiffs have committed infringement of five U.S. Patents.^[3] ECF No. 49 ¶ 2. Inventors of the patents that Plaintiffs asserted against Trend are located in California, Illinois, Colorado, Great Britain, Italy, and Austria. ECF No. 81 at 5.

Plaintiff Webroot's^[4] headquarters are in Broomfield, Colorado. Plaintiff OTI^[5] is a Delaware corporation with its U.S. Headquarters in Menlo Park, California, and an office in Pleasanton, California. OTI has four Texas offices, all either within this District or within 100 miles of the Waco Division Courthouse. ECF No. 81 at 1-2. OTI has (Redacted) employees in Texas. Id. at 2. OTC is based in Waterloo, Ontario. Overall, Plaintiffs have (Redacted) R&D employees in Texas, and (Redacted) remote workers in NDCA, who perform various types of work on the research, design, and development of products that Trend has accused of infringement. Id. at 2-3.

The Complaint identifies the Trend Micro Security Suite as infringing, with the Accused Products said to include Apex One; Apex Central; Smart Protection Network; Deep Discovery XDR-Detection and response; Deep Discovery Endpoint Sensor; DeepSecurity; Cloud One-Workload Security; Cloud One Network Security; Deep Discovery; Deep Security; Vision One; Network One; Endpoint Protection with Detection and Response; and Trend's EDR/XDR and Cloud Products. ECF No. 53 ¶¶ 15, 114.

Trend's global headquarters is located approximately 100 miles from the Waco Courthouse in Irving, Texas (in the NDTX), with (Redacted) employees. ECF No. 81 at 3; ECF No. 58-1 ¶ 4. Trend has an office in WDTX, with (Redacted) employees in Austin. ECF No. 58-1 ¶ 5. As of August 2022, Trend's San Jose office employed approximately (Redacted) people, plus around (Redacted) remote employees who live in California. ECF No. 58 at 3. But Trend (Redacted) its office at least as of December 30, 2022, which was also between the time that the opening transfer motion was filed and the response was due to be filed. ECF No. 81 at 1. Trend has brought counterclaims of patent infringement against 40 products from Plaintiffs Webroot, OTI, and Open Text Corp. Id. at 5 (citing Lead case (-243), ECF No. 78).

II. LEGAL STANDARD

A party who seeks transfer under § 1404 “must show good cause.” In re Volkswagen of Am., 545 F.3d 304, 315 (5th Cir. 2008) (en banc) [hereinafter Volkswagen II] (quoting Humble Oil & Refin. Co. v. Bell Marine Serv., Inc., 321 F.2d 53, 56 (5th Cir. 1963)).^[6] The burden is not simply that the alternative venue is more convenient, but that it is “clearly more convenient.” Id. Although a plaintiff's choice of venue is not a distinct factor in the venue transfer analysis, it is nonetheless taken into account as “it places a significant burden on the movant” to show good cause for the transfer. Id. at 314 n.10. The change of venue statute provides a district court authority to “transfer any civil action to any other district or division where it might have been brought” for “the convenience of parties and witnesses” and “in the interest of justice.” 28 U.S.C. § 1404(a). To “show good cause” means that a moving party “must satisfy the statutory requirements and clearly demonstrate that a transfer is ‘[f]or the convenience of parties and witnesses, in the interest of justice.'” Volkswagen II, 545 F.3d at 315 (quoting 28 U.S.C. § 1404(a)). “Thus, when the transferee venue is not clearly more convenient than the venue chosen by the plaintiff, the plaintiff's choice should be respected.” Id. While “clearly more convenient” is not the same as the “clear and convincing” standard, the moving party must still show “more than a mere preponderance.” Quest NetTech Corp. v. Apple, Inc., 19-cv-118, 2019 WL 6344267, at *7 (E.D. Tex. Nov. 27, 2019).

“The determination of ‘convenience' turns on a number of public and private interest factors, none of which can be said to be of dispositive weight.” Action Indus., Inc. v. U.S. Fid. & Guar. Co., 358 F.3d 337, 340 (5th Cir. 2004) (footnote omitted). The private interest factors include: “(1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious and inexpensive.” In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981)). The public factors include: “(1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws of the application of foreign law.” Id. A trial court's evaluation of these factors and determination of whether the alternate forum is clearly more convenient is subject to an abuse of discretion standard on appeal. In re Monolithic Power Sys., Inc., 50 F.4th 157, 161 (Fed. Cir. 2022).

III. ANALYSIS

As to the threshold inquiry, the Court considers where this suit “might have been brought.” 28 U.S.C. § 1404(a). The Federal Circuit held in a controlling case applying Fifth Circuit law, “[t]here is no requirement under § 1404(a) that a transferee court have jurisdiction over the plaintiff or that there be sufficient minimum contacts with the plaintiff; there is only a requirement that the transferee court have jurisdiction over the defendants in the transferred complaint.” In re Genentech, 566 F.3d at 1346. The Federal Circuit extended that aspect of the Genentech holding to counterclaims. Elcommerce.com, Inc. v. SAP AG, 745 F.3d 490, 497 (Fed. Cir. 2014) (affirming district court holding that transferee court “possesses jurisdiction to decide the issues raised by the complaint, including the defenses and declaratory counterclaims”), vacated on other grounds, 564 Fed.Appx. 599, 600 (Fed. Cir. 2014).^[7]

The parties disagree over whether this case could have been brought in NDCA. Trend argues that this suit could have brought this action in NDCA. ECF No. 58 at 6 & n.3. Trend alleged in its transfer motion that Webroot had an office in San Jose. Id. at 1. The parties disputed this point throughout the response, reply, sur-reply, and sur-sur-reply briefing filed on this motion. Plaintiffs argue that the “permissive” counterclaims against Webroot could not have been brought in NDCA because Webroot does not have “an office or employees in the NDCA.” ECF No. 81 at 1. Plaintiffs argue, therefore, that “NDCA is not a proper venue for Webroot for Trend's permissive patent infringement counterclaims.” Id. at 16. While Trend acknowledges that Webroot's new address out of California was registered during the venue briefing of this case, Trend insinuates that it was done only for venue manipulation purposes, and that the newly registered principal place of business address is no place of business at all. ECF No. 97 at 1.

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