United States District Court, N.D. Illinois, Eastern Division
July 7, 2004.
VPS, LLC, d/b/a VIRTUAL PHOTO STORE, LLC, Plaintiff,
SHUTTERFLY, INC., Defendant.
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff, Virtual Photo Store, LLC ("VPS"), filed suit in the
United States District Court for the Northern District of
Illinois against Defendant, Shutterfly, Inc. ("Shutterfly"),
alleging patent infringement. Defendant has counterclaimed
regarding the validity of VPS's patents, while also seeking a
declaration that VPS may not enforce its patents. Defendant has
moved to transfer venue to the United States District Court for
the Northern District of California.
VPS is the owner of two patents (U.S. Patent Nos. 6,321,231 and
6,332,146) and has its principal place of business at 3500 Sears
Tower, Chicago, Illinois. Shutterfly has its principal place of
business at 2800 Bridge Parkway in Redwood City, California. VPS
alleges that Shutterfly infringed on it patents, causing
unspecified damages to VPS. Shutterfly has customers in a myriad
of locations, including the Northern District of Illinois, and
roughly 3.8% of its business is derived from this district.
Several high-level executives from Shutterfly are expected to
testify, as well as the inventors of VPS's patents (most of whom
are currently with VPS). The Defendant seeks to have the present case transferred to the
United States District Court for the Northern District of
California pursuant to 28 U.S.C. § 1404(a). In general, "[f]or
the convenience of the parties and witnesses, in the interest of
justice, a district court may transfer any civil action to any
other district or division where it might have been brought."
28 U.S.C. § 1404(a). A transfer is proper if: (1) venue is proper in
both the transferee and transferor courts; (2) it is for the
convenience of the parties or witnesses; and (3) it is in the
interest of justice. Law Bulletin Publishing Co. v. LRP
Publications, Inc., 992 F. Supp. 1014, 1017 (N.D. Ill. 1998)
(Law Bulletin). District courts have broad discretion to grant
or deny motions to transfer, and the burden is on the moving
party to establish that the transfer is warranted. Heller
Financial, Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1293
(7th Cir. 1989) (Heller).
Venue is proper in both the United States District Court for
the Northern District of Illinois and the United States District
Court for the Northern District of California. Both courts may
exercise personal jurisdiction over the claims asserted.
When evaluating the relative convenience of the parties and
witnesses, the court considers: (i) the plaintiff's initial forum
choice, (ii) the convenience of the witnesses, (iii) the relative
ease of access to other evidence, (iv) the situs of material
events, and (v) the relative convenience of the parties in
litigating in the respective forums. Amoco Oil Co. v. Mobil Oil
Corp., 90 F. Supp.2d 958, 960 (N.D.Ill. 2000) (Amoco);
Georgouses v. Natec Resources, Inc., 963 F. Supp. 728, 730 (N.D.
Ill. 1997) (Georgouses).
The plaintiff's initial choice of forum is usually afforded
substantial deference, particularly when it is the plaintiff's
home forum. Kamel v. Hill-Rom Company, Inc., 108 F.3d 799, 802
(7th Cir. 1997). However, there are other factors to consider;
and the weight given to the plaintiff's choice can vary, depending on the circumstances of each individual case.
Georgouses, 963 F. Supp. at 730; Law Bulletin, 992 F. Supp. at
1017. For example, where the plaintiff's choice of forum is not
the situs of the material events, plaintiff's choice of forum is
entitled less deference. See Heller Fin., Inc. v. Riverdale Auto
Parts, Inc., 713 F. Supp. 1125, 1129 (N.D. Ill. 1989).
In the instant case, VPS chose to bring suit in the Northern
District of Illinois as it has brought a previous case in the
court and its lawyers are conveniently located. See VPS, LLC v.
Eastman Kodak Company, et al., Case No. 02 C 1641. Defendants
are incorporated in California. The situs of the material events
the alleged infringement of the patents occurred in
California, where Shutterfly is incorporated and conducts their
business. Since deference is granted to VPS's initial forum
choice, this factor weighs in favor of denying Defendant's Motion
to Transfer. However, because only one of the parties resides in
the Northern District of Illinois and the situs of the material
events took place outside of Illinois, deference to VPS's choice
of forum is diminished.
The convenience of the witnesses who will testify at trial is
one of the most important factors when deciding on an appropriate
forum. Law Bulletin, 992 F. Supp. at 1018. However, the
defendant will not be granted a transfer merely by presenting a
long list of witnesses and claiming their inconvenience in
testifying in the challenged forum. Law Bulletin, 992 F. Supp.
at 1018. Courts go beyond simply looking at the number of
witnesses and weighing the quality and nature of their proposed
testimony. Law Bulletin, 992 F. Supp. at 1018. The defendant is
obligated to specify particular witnesses to be called and
explain the nature of their testimony. Heller, 883 F.2d at
1293. In order to overcome the deference to the plaintiff's forum
choice on the issue of witness convenience, the defendant must
show that the testimony of these particular witnesses is
necessary to his case. General Portland Cement Co. v. Perry,
204 F.2d 316, 319 (7th Cir. 1953) (General Portland). As a practical matter, it is usually assumed that
witnesses within the control of the parties will appear
voluntarily. Therefore, more attention should be given to the
location of the non-party witnesses and those witnesses not
within the control of the parties. Spherion Corp. v. Cincinnati
Financial Corp., 183 F. Supp.2d 1052, 1058 (N.D. Ill. 2002)
Here, Shutterfly is incorporated in California, and their
principal place of business is in California. The principal
witnesses on the patent infringement claim would be coming from
Northern California. These witnesses are also high-level
executives for Shutterfly, and their testimony is expected to be
highly pertinent to the relevant issues. However, for the issues
regarding Shutterfly's counterclaims, VPS has identified
witnesses that may be called to testify that are in the Northern
District of Illinois; and most of these witnesses were involved
in the creation of the patents and, as such, have highly relevant
testimony as well. Shutterfly has also documented personal and
professional hardships that its party's witnesses would endure if
the venue persisted in Northern Illinois.*fn1 VPS alleged no
such hardships; and its distinction between party and non-party
witnesses holds little weight, as it failed to allege that the
named non-party witnesses cannot be compelled to appear. It also
appears that it is in these non-party witnesses' interests to
attend trial. As such, this factor, on balance, weighs in favor
of granting the Defendant's motion.
Regarding the ease of access of other evidence, most evidence
for this litigation is likely to be found in Northern California,
primarily at the Defendant's principal place of business. While
modern technology has made it now easier and less expensive to
transfer information, this factor still weighs in favor of
granting Defendant's motion. Regarding the counterclaims about
the validity of the patents, the evidence will consist mainly of lay and expert
witness testimony; the vast majority of documents and facilities
are to be found in Northern California. The situs of the material
events of the instant case is in Northern California. As such,
this factor weighs in favor of a transfer.
As to the relative convenience of the parties in litigating in
the respective forums, as stated above, many of the witnesses are
located in Northern California, though not all; and Shutterfly
has showed hardships for witnesses while VPS has not. Nor does
VPS clarify what it contends to be actual hardship in terms of
missing work or family. Accordingly, this factor weighs in favor
of transferring venue.
The analysis of the interest of justice focuses on the
efficient administration of the court system, as opposed to the
private considerations of the litigants. Amoco, 90 F. Supp.2d at
961. This includes considering: (i) the relative familiarity of
the courts with the applicable law, (ii) the relation of the
respective forums with the issue in the case, and (iii) the
relative congestion of the court dockets. Amoco, 90 F. Supp.2d
at 961; Georgouses, 963 F. Supp. at 730.
Both the Northern District of Illinois and the Northern
District of California are familiar with the substantive law.
Accordingly, this factor weighs neither in favor of nor against a
The Defendant does not address the relative congestion of each
district's dockets. In light of Defendant's burden in
establishing that transfer is warranted, this factor weighs
against a transfer. In sum, the above factors weigh in favor of granting
Defendant's Motion to Transfer Venue to the Northern District of
California. Shutterfly's Motion for Change of Venue to the
Northern District of California is granted.