Transfer Motion Denied Where Defendants Did Not Show That Case Could Have Been Filed in Proposed Transferee Jurisdiction

July 25, 2011

Defendants moved to transfer a multi-defendant patent infringement case from the Eastern District of Texas to the Eastern District of Michigan. The defendants asserted that transfer was appropriate under 28 U.S.C. §1404(a) due to factors of convenience. The plaintiff opposed the motion on the ground that the defendants had not shown that the case could have originally been filed in the Eastern District of Michigan. The court agreed with the plaintiff and denied the motion to transfer.

The court began its analysis by examining whether the action could have originally been filed in the Eastern District of Michigan. Noting that "[w]ell established authority makes clear that a transferee court must have specific jurisdiction over the defendants in the transferred complaint," the court found that the moving parties had not established that the case could have been brought in Michigan. The court stated that the moving parties had attempted to establish jurisdiction over all the defendants in Michigan by arguing a stream of commerce theory, i.e., that defendants products were sold in the state of Michigan.

The court found that the declarations submitted by the moving parties were insufficient in that they provided no evidence that the accused products were available in Michigan. The moving parties had apparently relied on the fact that because the products were at issue were cars it was apparent that they were sold in the Eastern District of Michigan without making that affirmative evidentiary showing. Therefore, the court found that the moving parties failed to meet their burden to show that personal jurisdiction is appropriate in Michigan under a stream of commerce theory.

The court also found that the moving parties only set forth a tenuous basis of showing defendants' ties to Michigan. The court found that it was insufficient to show that a parent company (the defendant) had a subsidiary in Michigan. The court also found that the moving parties' declarations were insufficient to support a basis for jurisdiction over a number of the other defendants because the declarations made no effort to show how the foreign corporations named in the complaint had a connection that would subject them to personal jurisdiction in Michigan.

Accordingly, the court found that the moving parties had not carried their burden to show that the cause of action could have originally been brought in the Eastern District of Michigan.

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The lesson here is to have all of the defendants, if possible, state in a declaration that each of them consents to personal jurisdiction in the proposed transferee court. Absent that it is important to lay out a detailed factual basis to convince the court of the basis for jurisdiction in the transferee court. The failure to do that here proved fatal to the motion to transfer the case to Michigan.

Stragent LLC v. AUDI AG, Case No. 6:10 cv 227 LED-JDL


The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.