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Finjan, Inc. v. Sophos Inc.

United States District Court, N.D. California

June 20, 2014

FINJAN, INC., Plaintiff,
v.
SOPHOS INC., Defendant.

ORDER DENYING MOTION TO TRANSFER VENUE Re: Dkt. No. 26

WILLIAM H. ORRICK, District Judge.

Finjan, Inc. alleges that Sophos Inc. has infringed eight of its patents. The companies have squared off in litigation before in the United States District Court for the District of Delaware, where Sophos prevailed at trial in 2012. Sophos wants to transfer this action to the District of Delaware, arguing that the judicial economy of transfer outweighs any consideration in favor of maintaining the action here. But both companies have offices in the Northern District of California, and this is one of six lawsuits Finjan has filed here. I heard argument on June 18, 2014 and conclude that Sophos has not met its burden of demonstrating that the convenience and justice factors favor transferring this case to the District of Delaware. Its Motion to Transfer is DENIED.

BACKGROUND

Finjan, Inc. ("Finjan") alleges that Sophos Inc. ("Sophos") infringed United States Patent Nos. 8, 141, 154 ("the 154 patent"), 6, 154, 844 ("the 844 patent"), 7, 757, 289 ("the 289 patent"), 7, 613, 926 ("the 926 patent"), 7, 613, 918 ("the 918 patent"), 6, 804, 780 ("the 780 patent"), 8, 677, 494 ("the 494 patent"), and 8, 566, 580 ("the 580 patent") (collectively the "patents in suit"). First Amended Complaint ("FAC") (Dkt. No. 15) ¶ 40.[1] The patents in suit address technology for computer and network security. Id. Finjan contends that Sophos indirectly and directly infringed the patents in suit through the sale and use of Sophos computer and network security products, including antivirus and firewall protection, in the Northern District of California and elsewhere in the United States. FAC ¶¶ 40-42.[2]

Finjan is incorporated in Delaware. Declaration of Phil Harstein (Dkt. No. 27-1) ¶ 10. The parties dispute the location of Finjan's principal place of business. Sophos claims Finjan's headquarters is in Wilmington, Delaware or New York, New York. Reply Declaration of Summer Krause (Dkt. No. 29-2), Exs. AA-BB. Finjan has an office in New York, but asserts that in March 2014 it closed the Delaware office and established its principal place of business in Menlo Park, California. Declaration of James Hannah (Dkt. No. 27-2), Ex. A.; Harstein Decl. ¶¶ 6, 10. Finjan's president, vice president for intellectual property licensing, and vice president for legal operations work out of the Menlo Park office. Harstein Decl. ¶¶ 6-10; Hannah Decl., Exs. B-D. Additionally, Finjan states it stores and maintains files regarding daily operations at the Menlo Park office. Harstein Decl. ¶ 10. Finjan notes the move marked a return to the Northern District because from 1997-2009, Finjan was headquartered in San Jose, California. Id. ¶ 4.

Sophos is a Massachusetts corporation with headquarters in Burlington, Massachusetts and Oxford, United Kingdom ("UK"). Reply Declaration of Jared Sharp (Dkt. No. 29-1) ¶ 2. In January 2014, Sophos opened an office in Santa Clara, California, which serves as the base for Sophos' president and chief executive officer ("CEO"), vice president of worldwide sales, chief marketing officer, and vice president of global technical support. Hannah Decl., Exs. E-H, K-P.[3] The parties dispute whether the senior vice president of global technical services is based in Santa Clara or the UK. Id., Exs. I, J; Sharp Decl. ¶ 5. The Santa Clara office houses approximately 21 of Sophos' 2100 employees. Sharp Decl. ¶¶ 2-3. Sophos sells its software and merchandise through channeling partners, some of which are based in the Northern District of California. Hannah Decl., Exs. S, T. Sophos does not have an office or channeling partners in Delaware. Id., Ex. U. The Massachusetts office is the base for its vice president for North American sales, vice president for technology solutions, vice president of global field and channel marketing, and general counsel. Sharp Decl. ¶ 4. Development of the accused products occurs in the UK, Germany, and Vancouver, Canada. Deposition of Richard Jacobs (Dkt. No. 26-23), Ex. V.

The six patent infringement suits that Finjan has pending in the Northern District of California are assigned to four different judges. Krause Decl. (Dkt. No. 26-1), Exs. J-N.[4] Finjan previously litigated three patent infringement cases in the District of Delaware. Krause Decl., Exs. A-H. Chief Judge Gregory M. Sleet presided over each one. Id. Two were tried in front of a jury. Id. As part of Finjan's successful 2007 trial against Secure Computing Corporation, Judge Sleet construed the 780 patent, which is also asserted in this case. Krause Decl., Ex. C. Finjan's suit against Aladdin Knowledge Systems, Inc. also included the 780 patent, but the case was resolved before claim construction in 2009. Id., Ex. F. In 2010, Finjan named Sophos as one of five defendants in the case Finjan v. McAfee, Inc. Id., Ex. G. The McAfee jury found two of Finjan's patents were invalid and not infringed in December 2012, and Finjan has appealed. Krause Decl., Ex. H. None of the patents in suit here were asserted in McAfee. Id.

LEGAL STANDARD

A court may transfer an action to another district: (1) for the convenience of the parties; (2) for the convenience of the witnesses; and (3) in the interest of justice. 28 U.S.C. § 1404(a). An action may not be transferred to a district where venue would have been improper if it originally had been filed there. Id .; Van Dusen v. Barrack, 376 U.S. 612, 613 (1964).

The Ninth Circuit requires that courts consider a variety of factors in determining whether to transfer an action. See Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000); Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). The relevant factors are:

(1) plaintiff's choice of forum, (2) convenience of the parties, (3) convenience of the witnesses, (4) ease of access to the evidence, (5) familiarity of each forum with the applicable law, (6) feasibility of consolidation of other claims, (7) any local interest in the controversy, and (8) the relative court congestion and time of trial in each forum.

Barnes & Noble v. LSI Corp., 823 F.Supp.2d 980, 993 (N.D. Cal. 2011) (Chen, J.). District courts have broad discretion to consider convenience and justice factors on a case-by-case basis. Jones, 211 F.3d at 498 (citation and internal quotation marks omitted).

The burden is on the party seeking transfer to show that when these factors are applied, the balance of convenience clearly favors transfer. Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 279 (9th Cir. 1979). It is not enough for the defendant to merely show that it prefers another forum, and transfer will also not be allowed if the result is merely to shift the inconvenience from one party to another. Van Dusen, 376 U.S. at 645-46.

DISCUSSION

Sophos moves to transfer venue to the District of Delaware under section 1404(a). Neither party contests that venue for this action is proper in the Northern District or that it could not have been brought in the District of Delaware. Therefore, this motion turns on (i) whether convenience factors favor transfer and (ii) whether interests of justice, ...


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