It is fast becoming clear that it is very difficult to transfer a patent infringement case out of the United States District Court for the District of Delaware when the defendant is incorporated in Delaware. In this case, Netgear sued Ruckus Wireless for patent infringement in the District of Delaware. Ruckus is a Delaware corporation with its principal of business in California. Netgear is also a Delaware corporation with its principal place of business in California.
Ruckus moved to transfer the case to the Northern District of California based on the arguments that both it and Netgear have their headquarters and primary places of business in the Northern District, nearly all key events, parties, documents and third party witnesses are in the Northern District, there are already two patent infringement lawsuits involving related technologies pending between the parties in the Northern District and there is significant court congestion in Delaware.
After citing the standards for transfer under section 1404(a), the district court emphasized the importance of incorporation in Delaware. "As always, the court stresses that, because defendant is a Delaware corporation, it has no reason to complain about being sued in Delaware."
The district court then examined Ruckus' points. In considering the previously filed patent infringement actions filed in the Northern District between the parties, the district court found that the cases were not similar because they involved different inventors and different families than the patents-in-suit. The district court also noted that the Northern District action was stayed pending an inter partes reexamination.
The district court also rejected Ruckus' argument regarding court congestion. Although the district court noted that patent cases, "perhaps more often than in other districts are given a trial date and tried to resolution," the district court stated that it is rare for counsel to request earlier trial dates than those supplied by the court and even rarer for the court not to accommodate such a request to some extent.
Turning to the argument regarding convenience, the district court stated "[i]n this electronic age, there are no substantial burdens associated with discovery or witness availability that support the need for transfer. With respect to discovery, documents generally are stored, transferred and reviewed electronically . . . Given these realities, this factor is outdated, at best, and should be given little weight, if any, except for those rare exceptions where truly regional defendants are litigating."
Finally, the district court concluded that "[g]iven that the defendant is incorporated in Delaware, the litigation pending in California involves patents unrelated to those at issue here, and defendant has not articulated any compelling justification for transfer, defendant's motion for transfer is denied."
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With the recent transfer rulings from the District of Delaware, it is plain that it is very difficult to transfer a case out of Delaware if the defendant is incorporated in Delaware. The only two exceptions to this general rule are where there is closely related litigation already pending in another district or if the defendant's operations are truly regional and not nationwide. Absent those two exceptions, the case will remain in Delaware and arguments regarding convenience of the parties and witnesses, court congestion and public interest are highly unlikely to succeed.
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.