In a recent decision from the Eastern District of Texas, Droplets, Inc. v. E-Trade Financial Corp., et al., Magistrate Judge Caroline Craven granted Defendants' Motion to Transfer the case to the Southern District of New York, finding the case analogous to the Federal Circuit's decision in In re Zimmer Holdings Inc.
By way of background, Droplets Inc. brought this patent infringement suit in May 2011 against a number of defendants, including E-Trade Financial Corp., The Charles Schwab Corp. and Merrill Lynch & Co. Inc.
The plaintiff asserted U.S. Patent No. 6,687,745, titled "System and Method for Delivering a Graphical User Interface of Remote Applications Over a Thin Bandwidth Connection" and U.S. Patent No. 7,502,838, titled "System and Method for Delivering Remotely Stored Applications and Information."
Later in 2011 the plaintiff filed two other suits in the Eastern District of Texas asserting the same two patents.
In deciding whether to transfer the case, the court examined several private and public factors. The court found three factors– location of sources of proof, availability of compulsory process, and the convenience of witnesses– weighed in favor of transfer and two factors –judicial economy and court congestion– weighed against transfer. The remaining factors were neutral.
The court concluded that "considerations of judicial economy and court congestion are outweighed by the location of sources of proof, the availability of compulsory process, and the convenience of witnesses," and thus granted defendants' motion to transfer.
A notable aspect of this decision is the court's discussion of whether the existence of the co-pending cases filed by plaintiff warranted denial of transfer for the sake of judicial economy. To make this determination, the Court relied upon the Federal Circuit's decision in In re Zimmer Holdings Inc.
Although the same patents were asserted in all three cases, the court noted that the co-pending cases differed with respect to the allegations pled and the types of defendants.
The instant case was brought against a number of financial firms and "alleges infringement by systems that 'transmit and display financial information.'"
The first co-pending case was brought against such parties as Amazon.com, Apple Inc., Google Inc. and Facebook Inc., alleging "infringement by systems that 'transmit and display information.'"
The second of the co-pending cases named retailers such as Nordstrom Inc., Overstock.com and Sears Roebuck & Co., alleging "infringement by systems that 'transmit and display search suggestions.'"
In view of the different allegations and grouping of defendants into three cases, the court found the instant case "sufficiently distinct" from the two co-pending cases and analogous to In re Zimmer.
This decision represents an interesting resolution to defendants' Motion to Transfer, particularly in view of the existence of the other two co-pending cases in the Eastern District of Texas involving the same patents-in-suit.
Anthoula Pomrening is a partner with McDonnell Boehnen Hulbert & Berghoff LLP in Chicago, Ill. She has experience in all areas of patent and trademark practice. She can be contacted at (312)935-2366 (direct) or pomrening@mbhb.com.