Transfer from Wisconsin to Eastern District of Texas Appropriate Where Cases Involving the Same Patent Were Proceeding in Texas

February 20, 2013

TravelClick, Inc. ("TravelClick") filed a declaratory judgment action against defendants Variant Holdings, LLC and Variant, Inc. ("Variant"), seeking a declaration that its iHotelier online hotel reservation system did not infringe Variant's patent number 7,626,044 (the '044 patent). Variant filed a motion to transfer the case to the Eastern District of Texas based on the "first-filed" rule or 28 U.S.C. ยง1404(a) on the grounds that the Eastern District of Texas is a more convenient forum and transfer will serve the interests of justice.

In analyzing the motion, the district court found that the convenience factor did not weigh heavily in either direction. "Plaintiff does not identify any connection to Wisconsin that would make litigating in this state more convenient for it. Plaintiff is a Delaware corporation, headquartered in New York, with offices in Schaumburg, Illinois; Atlanta, Georgia, Orlando, Florida; Houston, Texas and Philadelphia, Pennsylvania. Only 16 of plaintiff's 2000 customers that use the iHotelier system are located in Wisconsin. One of the defendants, Variant, Inc. is headquartered in this district, though it has no employees or present activities in this district and supports a transfer to Texas. (Its sole employee recently moved from Missouri to Texas.) The other defendant, Variant Holdings, LLC is headquartered in Nevis and has no employees. No matter where the case proceeds, the venue will be more convenient for some parties than others."

Instead, the district court found that the determinative factor in the case was the interest of justice and, in particular, the existence of related cases in the Eastern District of Texas. "At least seven infringement cases involving the '044 patent are proceeding in the Eastern District of Texas before the same judge, Judge Rodney Gilstrap."

As explained by the district court, "Defendant filed the first three of those cases more than one year before plaintiff filed its lawsuit in this court. In those cases, defendants accuse 85 defendants of infringing the '044 patent, including 13 of plaintiff's customers who are accused of infringement of the'044 patent in connection with their use of plaintiff's iHotelier system. Those three cases have proceeded to the claims construction stage. Thus, Judge Gilstrap will already have significant familiarity with the technology of the '044 patent and plaintiff's technology."

Finally, the district court rejected TravelClick's argument that it would be prejudiced by the transfer because it would be more likely to obtain a speedy trial in Wisconsin. "Plaintiff argues that it will be prejudiced by a transfer because it is more likely to obtain a speedy resolution of the case in this court. Plaintiff cites statistics showing that this court has a medium time to trial of 1.05 years, while the Eastern District of Texas has a medium time to trial of 2.22 years. However, in this case, a trial date has been set already for June 9, 2014, approximately 18 months from the date plaintiff filed this case. Further, plaintiff has not developed any argument explaining why a delay of a few months would be particularly detrimental. Accordingly, I conclude that defendants have met their burden to show that the case should be transferred to the Eastern District of Texas."

Travelclick, Inc. v. Variant Holdings, LLC and Varian, Inc., Case No. 12-cv-708-bbc (W.D. Wisc. Feb. 11, 2013)