NOT FOR PUBLICATION
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
MICROSOFT CORPORATION,
Plaintiff, Civil Action No.: 12-ev-0848 (CCC)(JAD) v.
OPINION AND REPORT AND
LBS INNOVATIONS LLC, A NEW RECOMMENDATION
JERSEY LLC and LBS INNOVATIONS, LLC A TEXAS LLC
Defendants.
I. BACKGROUND
In this motion, defendants LBS Innovations, LLC, a New Jersey Limited Liability Company and LBS Innovations, LLC, a Texas Limited Liability Company (togethe -
do “Defendants” or “LBSI’) seek dismissal and/or transfer of this action, wherein plaintiff Microsoft Corporation (“Plaintiff’ or “Microsoft”) sought a declaratory judgment ¢@f noninfringement and invalidity of U.S. Patent No. 6,091,956 (the “956 Patent”).'
By way of background, Plaintiff contends that LBSI sued at least twelve Microsoft customers in the United States District Court for the Eastern District of Texas,” alleging thét
' The ‘956 Patent purports to disclose a “wireless system for providing services and time-critical information abopt places and events to mobile computers and their users.” (Opp. Br. 2, ECF No.28). According to the ‘956 Patent, t disclosed system provides up-to-date information “including travel distances and transit times, entertainmerg, merchants’ messages, area attractions, communications, current locations of system users and traffic congestionf” (Id.). * These actions include: LBS Innovations LLC v. Aaron Brothers, Inc, et_al. Civil Action No. 2:1 1-cv-00142-MH
a ew LBS Innovations LLC v. BP America Inc., et_al., No. 2:11-cv-407-MHS; LBS Innovations LLC v. Sally Beauly ]
2Microsoft’s customers infringed the ‘956 Patent by using Microsoft’s Bing Maps web-mappi services on their websites.’ (Opp. Br. 1, ECF No. 28). Microsoft filed this action to “protect i product” by obtaining a declaratory judgment that its Bing Maps Services do not infringe t ‘956 Patent. (Id.). Microsoft brought the action in New Jersey because, at the time of filin LBSI held itself out as a New Jersey limited liability company. (Id. at 7). However, accordi to Microsoft, LBSI “shuttered its business and ‘relocated’ to Texas” within a few days aft ) Microsoft filed the Complaint. (Id.).
In the instant motion, LBSI argued that dismissal is appropriate because LBSI nevér contended that the defendants in the Texas Actions infringed the ‘956 patent “based upon the use of any product or service provided by Microsoft.” (Mem. Law Supp. Mot. Dismiss 11, ECF 26-1) (emphasis added). Accordingly, Defendants argued that there is no case or controvers’ * Plaintiff, however, essentially argued that Defendants did allege such infringement of the ‘9 Patent by Microsoft’s customers in the Texas Actions. (Opp. Br. 5, ECF No. 28). For examplé, in one Texas Action complaint, Defendants alleged that two Microsoft Bing Maps Servic customers “have been and now [are] directly infringing one or more claims of the ‘956 Patent J]. . by making and/or using in the United States the computer implemented website...which has B store or dealer location interface.” (Id.). Plaintiff argued that this “accused store or locatioh
Supply LLC, et al., No. 2:11-cv-00409-MHS; and LBSI, Inc. v. CITGO Petroleum Corp. et al., No. 2:1 1-cv-00404 MHS (collectively, the “Texas Actions”). (Mem. Law. Supp. Mot. Dismiss 3, ECF No. 26-1). > Microsoft provides web-based mapping services used by its customers to put store locators and interactive maps their websites. (Opp. Br. 5, ECF No. 28). Microsoft provides these services through Bing Maps Services a MapPoint Web Services (together, “Bing Maps Services”). (Id.). Microsoft’s customers use Bing Maps Services provide store-locator applications on their websites. (Id.). These applications allow
users of the customer’ websites to find nearby stores by entering their zip code or city. (Id.) (citation omitted).
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3interface” showed that the accused web-mapping services are provided by Bing Maps Service. (Ida.t 13).
Accordingly, Plaintiff contended that, relying on Arris Group, Inc. v. Briti Telecommunications PLC, 639 F.3d 1368 (Fed. Cir. 2011), there is a justiciable controversy. Arris Group, Inc., the Federal Circuit held that a supplier, like Plaintiff in this case, has standi to sue for a declaratory judgment when (1) the “supplier is obligated to indemnify its customegs from infringement liability;” or (2) “there is a controversy between the patentee and the supplidr as to the supplier’s liability for induced or contributory infringement based on the alleged acts df direct infringement by its customers.” Id. at 1375.
Plaintiff argued that it met both prongs of Arris Group, Inc.. First, Plaintiff argued that its customers demanded indemnification.’ Second, Plaintiff argued that Defendants asserted the Texas Actions that Plaintiff's customers infringed the ‘956 patent by using a “store, dealer, station location interface.” (Opp. Br. 21, ECF No. 28). This location interface, Plaintiff allege > is Microsoft’s Bing Maps Services. Accordingly, Plaintiff argued, it “is implicitly — if ndt explicitly — in [LBSI’s] crosshairs.” (Id. at 22).
The parties disagree over whether Arris Group, Inc. requires an express accusation ¢f infringement by the manufacturer’s product. Furthermore, Defendants asserted that Plaintiff improperly submitted evidence outside of the pleadings in this facial challenge to the Amended Complaint. (Mem. Law Supp. Mot. Dismiss 15-16, ECF No. 26-1); (Reply Br. 6-7, ECF N@. 29).
* Plaintiff supported the general allegations of its Complaint with a declaration setting forth the details of th
)aL indemnification demand. Although Defendants argued that such a supplementation of the record is inappropriat
yr the Court need not decide this issue in light of its ultimate ruling regarding transfer.
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This Court’s review of Arris Group, Inc., as it applies to this matter, reveals that there js no way that this Court can conclude whether or not the second prong has been met. Plaintiff contended, somewhat convincingly, that it has. Defendants asserted that Microsoft’s produc are not specifically targeted. Clearly, the question cannot be definitely answered withogt resorting to a close review of the contentions, claims, defenses and ultimate rulings made in t Texas Actions. Such an exercise by this Court seems contrary to judicial efficiency.
This leads to the next point of contention. Defendants moved in the alternative to transf@r venue of this matter pursuant to 28 U.S.C. §1404(a) to the Eastern District of Texas, which is t venue where the Texas Actions are pending.
The decision of whether to transfer a case is committed to the trial court’s sou discretion. Cadapult Graphic Sys. v. Tektronix, Inc., 98 F. Supp. 2d 560, 564 (D.N.J. 200 Days Inns Worldwide, Inc. v. RAM Lodging, LLC, No. 09-2275, 2010 WL 1540926, at (D.N.J. April 14, 2010). Pursuant to 28 U.S.C. § 1404(a), the Court may transfer a case to a venue where it may have been brought “[f]or the convenience of parties and witnesses, in t interest of justice.” 28 U.S.C. § 1404(a). “The purpose of § 1404(a) is to avoid the waste @f time, energy and money and, in addition, to safeguard litigants, witnesses, and the public againgt avoidable inconvenience and expense.” Rappoport v. Steven Spielberg, Inc., 16 F. Supp. 2d 48
ev 497 (D.N.J. 1998).
The three factors a court must consider when determining whether to transfer a matt pursuant to § 1404(a) are: (1) the convenience of the parties, (2) the convenience of t witnesses, and (3) the interests of justice. Id. In addition to these statutory factors, the Thi Circuit established a list of public and private interests that should also be considered wh deciding whether to transfer an action:
5The private interests have included: plaintiff's forum preference as manifested in the original choice; the defendant's preference; whether the claim arose elsewhere; the convenience of the parties as indicated by their relative physical and financial condition; the convenience of the witnesses—but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum). The public interests have included: the enforceability of the judgment; practical considerations that could make the trial easy, expeditious, or inexpensive; the relative administrative difficulty in the two fora resulting from court congestion; the local interest in deciding local controversies at home; the public policies of the fora; and the familiarity of the trial judge with the applicable state law in diversity cases.
Johnson v. RiteAid, No. 10-2012, 2011 WL 2580375, at *2-3 (D.N.J. June 28, 2011) (citi Jumara v. State Farm Ins. Co., 55 F.3d 873, 879-80 (3d Cir. 1995)) (the “Jumara factors”).
Thus, the Court must engage in a two part analysis to determine whether a motion transfer venue should be granted. As a threshold matter, the Court must decide whether t transferee district has proper jurisdiction and venue, such that the case could have been brouglit in the transferee district in the first instance. Lawrence v. Xerox Corp., 56 F. Supp. 2d 442, 4 (D.N.J. 1999). The Court must then conduct an “individualized, case-by-case consideration ¢f convenience and fairness” regarding which forum is most appropriate to consider the case. Ig. “There is no rigid rule governing a court’s determination; ‘each case turns on its facts.’” Id. (citing Lacey v. Cessna Aircraft Co., 862 F.2d 38, 43 (3d Cir. 1988) (internal citations omitted)}. This Court easily concludes that this matter could have been brought in the Eastern District df Texas. Indeed, the underlying patent litigation is already pending there.
Defendants assert that transfer is appropriate because Plaintiffs choice of forum does n¢
oo receive paramount consideration when Plaintiff has not chosen its “home turf.” Am. Tel. & Te.
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6Co. v. MCI_ Communications Corp., 736 F. Supp. 1294, 1306 (D.N.J. 1990). Furthermoré, Plaintiff's choice is given less deference when the operative facts occur outside New Jersey. Id. Finally, Defendants argue that the first filed rule works in its favor. The Court finds the arguments compelling.
Addressing the Jumara factors, the parties, not surprisingly, disagree. Suffice it to s that the Court finds neither party to be seriously prejudiced in either venue. The infringemegt witnesses and documents are located in Texas. Defendants’ business is located in Texas and @t least now certainly wants to be there. The Court finds no hardship will befall Microsoft if th action is transferred to the Eastern District of Texas. Furthermore, the public interests satisfied in either jurisdiction.
Plaintiff also makes a point that Defendants’ new found home state of Texas is improper ploy to escape the jurisdiction of New Jersey, citing Dainippon Screen Manufacturin Co, Ltd., et_al. v; CFMT, Inc., et_al., 142 F.3d 1266 (Fed. Cir. 1998). It is curious thét Defendants chose to ignore Plaintiff's argument that Defendants has “shuffled paper’ in ba “cynical ploy to avoid this Court’s jurisdiction.” (Opp. Br. 17, ECF No. 28).° Ultimately~~, however, the issue is where this litigation should be venued.
This Court finds that this action could have properly been brought in the Eastern Distrigt of Texas. In addition, the issues raised by Plaintiff in its Complaint will be better resolved by court, i.e., the Eastern District of Texas, that has already begun the process of determini whether Plaintiff's customers have infringed Defendants’ ‘956 patent. The issue of wheth@r there is indeed a case or controversy because Defendants’ infringement contentions ultimate ° The Court finds it equally curious that Plaintiff filed in New Jersey rather than Texas when the infringemeft litigation, which forms the basis of the declaratory relief sought by Plaintiff, is currently pending in the Easte District of Texas.
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challenge Plaintiff's Bing Map Services is a clear issue for the court that is already reviewing t infringement allegations. The question of Plaintiff's indemnification vel non should be decid by the Court who has the indemnitee as a defendant party.® All of these issues are bett resolved in one forum to avoid duplicative judicial effort and potential inconsistent rulings. Il. (CONCLUSION
For the foregoing reasons, Defendants’ motion to transfer the case to the United | District Court for the Eastern District of Texas is GRANTED. It is further recommended th@t Defendants’ motion to dismiss be denied without prejudice.
als. ce. Hon. Claire C. Cecchi, U.S.D.J.
°Although it is unclear whether the indemnitees are necessary parties for purposes of an Arris Group. ve evaluation, it would seem most convenient for the parties, putative parties, and the Court to have this issue resolv: where the litigation giving rise to any claim for indemnification is already pending.